Sitting of 15 July 1991

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

  Imprisonment of a Member
  Mr. Speaker: I have received a letter from a magistrate from the petty sessional division of South Sefton informing me that Mr. Terry Fields, the hon. Member for Liverpool, Broadgreen, has been sentenced to a period of imprisonment of 60 days. I shall cause the text of this letter to be published in the Votes and Proceedings and in the Official Report.
  Following is the letter:
  Dear Mr. Speaker,
  I must advise you that Mr. Terence Fields, Member of Parliament for Liverpool, Broadgreen, appeared before this Court yesterday in relation to non-payment of the community charge for the period ending 31st March, 1991.
  The Court found that he had wilfully refused to pay the outstanding sum and as a consequence he was committed to prison for sixty days, the sentence to commence forthwith.
  This information is provided in accordance with the requirement imposed by Home Office Circular 103/1982.
  Yours sincerely,
  G. W. Budd
  Justice of the Peace
  South Sefton P. S. D.

Oral Answers to Questions
  ENERGY

    Alternative Energy Sources
    Mr. Colvin: To ask the Secretary of State for Energy what is his present target for the percentage of electricity to be generated from alternative energy sources; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Energy (Mr. Colin Moynihan): The Government are working towards a figure of 1,000 MW of new renewable electricity generating capacity by the year 2000.
    Mr. Colvin: Will my hon. Friend confirm that the Government are obviously doing their stuff in that regard, because, through expenditure on research and development and through the non-fossil fuel obligation. the Government and the Department of Energy are doing more than any other Government to help renewable energy? However, should not that be part of an overall strategy for energy encompassing all sources of energy? Is not that particularly important with the proposed privatisation of British Coal and the need for manufacturers in the industry to plan their R and D and commercial developments so that they can capitalise on the opportunities that will be offered in the future?
    Mr. Moynihan: I am grateful for my hon. Friend's contribution and I agree with him completely. More than £180 million has been invested to date in the R and D programme with a record budget allocation of about £24 million for 1991–92. Through that sum, 300 projects are currently supported under the Department's R and D programme.
    Mr. Alton: Does the Minister agree that it remains the Government's firm conviction that one of the best

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    non-renewable schemes would be the construction of the Mersey barrage? Will the feasibility study continue to be financed?
    Mr. Moynihan: I confirm the point that the hon. Gentleman has just made. With regard to the Mersey barrage, the Government are supporting, on a 50–50 basis, a third phase of feasibility studies and are contributing £1·5 million.
    Dr. Michael Clark: Is my hon. Friend aware that members of the Select Committee on Energy recently visited Scandinavia to look at alternative energy sources such as power from wind, from burning refuse and from the use of waste hot water? Is he aware of the fact that despite this Government having devoted more money to encouraging alternative energy than any previous Government, it still appears that we are behind some of our continental neighbours? Is he satisfied that the Department of Energy is doing all that it can to sponsor research and to encourage the creation of commercial alternative energy sources from those developments?
    Mr. Moynihan: I can confirm that and not least through the non-fossil fuel obligation which permitted the creation of a market for exactly the type of projects mentioned by my hon. Friend. When my hon. Friend was travelling with his colleagues, I hope that he emphasised that the United Kingdom's wind energy R and D programme is second to none and is creating enviable expertise and a sound basis for exactly what my hon. Friend wants—the commercial exploitation of wind.
    Mr. Redmond: Will the Minister agree to set up a full inquiry into energy needs, paying particular attention to the demise of the British coal industry, because British coal will fall into the category of alternative energy sources? Does he agree that something needs to be done to ensure that future needs are met from within this country and not from abroad?
    Mr. Moynihan: I draw the hon. Gentleman's attention to the question, which concentrates on alternative energy sources. He asked whether there would be an inquiry and then deviated to coal. However, I assure him that, with regard to alternative energy sources, we are setting up a major review to ensure that the environmental benefits of renewables are fully exploited.

    Independent Gas Suppliers
    Mr. Rost: To ask the Secretary of State for Energy if he is satisfied with progress towards the development of a competitive gas market by independent suppliers.
    The Secretary of State for Energy (Mr. John Wakeham): I shall announce shortly the results of my Department's monitoring of gas contracted over the past two years. I am encouraged by the progress made so far, although there is still some way to go to achieve a fully competitive gas market.
    Mr. Rost: Is my right hon. Friend aware that the Director General of Gas Supply has expressed the view that there will be no meaningful competition in gas until at least 30 per cent. of the industrial market is offered by the new independent suppliers? Will my right hon. Friend do everything that he can to encourage those efforts?
    Mr. Wakeham: The review is into the first two years of the new system and I hope shortly to be able to publish that and to report on it. We want there to be as fully competitive a market as possible. The advice given to us by Ofgas is important in formulating that opinion.
    Mr. Hardy: Does the Minister accept that history is likely to find cause for deep regret in the unseemly haste with which British Gas reserves are being exploited? Does he realise that the unseemly haste is emphasised by the fact that that premium fuel is largely being used for steam-raising purposes? The Government will stand charged with gross irresponsibility when a wiser generation is in charge of this country's energy affairs.
    Mr. Wakeham: I do not accept that at all. Gas has an important part to play in power generation, not least because of the good environmental effects of using gas.
    Mr. Hannam: My right hon. Friend will be aware of the difficulties over the supply of gas to some independent private power project companies. Can he give an update on the latest stage of the negotiations between British Gas and the companies concerned?
    Mr. Wakeham: British Gas is soon to introduce a new price schedule for all power generation customers. I hope that the new schedule will help to resolve the current difficulties not only between British Gas, Coryton and Thames Power, but for other operators.
    Mr. Doran: The Secretary of State will be aware that one of the main tools in aiding competition onshore is the regulation of the gas transmission system. There is growing concern about the Government's failure to use their powers to regulate the transmission system offshore. That is leading to an inhibition of development of some of our vital gas supplies. Does he have any proposals to use the powers contained in the Petroleum and Submarine Pipelines Act 1975 to encourage development offshore?
    Mr. Wakeham: I have no such proposals at present, but we are especially studying the development of some satellite fields. There may be a possibility of improving some of them.

    Alternative Energy Sources
    Mr. Knox: To ask the Secretary of State for Energy when he proposes to have discussions in the European Council of Ministers about alternative sources of energy.
    Mr. Moynihan: Alternative sources of energy will continue to be important and relevant in future Council discussions. The next Energy Council meeting is planned for 29 October.
    Mr. Knox: Can my hon. Friend say which specific area of research into alternative sources of energy is likely to be most fruitful? Does the European Community propose to devote additional funds to research in that area?
    Mr. Moynihan: Grants are available for projects in a wide range of areas on renewables, not least energy efficiency, renewables across the board, clean coal technology and gas and oil exploration and development. We very much welcome the recent announcement that there will be an inclusion of wave power projects under the

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    non-nuclear energy sub-programme of the third framework programme in view of that technology's potential contribution to energy supplies in Europe.
    Mr. Janner: In recent meetings of the European Council of Ministers on energy matters, have the Government discussed the problem that is afflicting the Government and worrying the Opposition—the payment of those who make the decisions on these matters, such as the chairman of East Midlands Electricity, who has received a 63 per cent. pay increase at a time when industrial workers in the area have been held to 8·9 per cent? Surely that matter has a European dimension. Does any other European country have miseries that are similarly scandalous to those with which we contend here?
    Mr. Moynihan: The hon. and learned Gentleman asks whether we have discussed that point at Energy Council meetings and the answer is no.
    Mr. Michael Morris: As alternative energy sources are environmentally friendly, when my hon. Friend meets his colleagues in Europe, is not there a strong case for reviewing progress on clean coal technology, which is also an environmentally friendly source of electricity generation?
    Mr. Moynihan: I agree with my hon. Friend. That is why the Commission and the Community, through its Thermie programme, have made grants available for projects on clean coal technology.
    Mr. Morgan: When the Minister next discusses alternative energy at the European level, will he take the opportunity of separating nuclear energy and the Government's support through the nuclear levy and the non-fossil fuel obligation, which is justifiably due to finish in 1998 given that it is a mature industry that is now more than 30 years old, from the similar protection of the non-fossil fuel levy that is given to alternative energy, which should certainly not be terminated in 1998 as that is an infant industry? Will he confirm that, at some point or other, he will extend the protection of the two-tier price system that he has instituted beyond 1998 for non-fossil, non-nuclear energy?
    Mr. Moynihan: I accept the importance of the hon. Gentleman's point. This year, despite the 1998 issue, which the hon. Gentleman raised, many projects for the second tranche of the NFFL obligation have come forward to be contracted and are thus financially viable. As I said, I recognise the importance of the hon. Gentleman's point, which will be discussed in detail by the group that is shortly to meet for the first time to consider the strategy of renewable energy projects.

    Energy Saving
    Mr. Cohen: To ask the Secretary of State for Energy what grants his Department gives to organisations to undertake energy-saving measures in homes.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Heathcoat-Amory): My Department gives grants under the home energy efficiency scheme, which provides insulation measures to low-income households. Some £26 million is available under the scheme this year.
    Mr. Cohen: The Minister did not say how much is being spent, so his answer is cold comfort for the many householders on low incomes. Have not the Government punctured energy efficiency efforts in the home by voluntary and public organisations and the electricity and gas companies? Does he agree that there is scope for much more home insulation and for more energy-saving measures and would not it make environmental sense to do that? Are not the Tories too bloody mean to be green?
    Mr. Speaker: Order. Those are not unparliamentary words, but they are distasteful and unnecessary in the Chamber.
    Mr. Cohen: They are too mean to be green.
    Mr. Heathcoat-Amory: I agree with the hon. Gentleman that it makes environmental sense to be more energy efficient. Our home energy efficiency scheme will enable 200,000 houses a year to receive insulation and energy efficiency advice, which is a substantial advance on any other year and on what was done by any previous Government.
    Mr. Dickens: Does my hon. Friend agree that we need no lectures from the Opposition on energy efficiency, because the last time there was a Labour Government, they spent £2·4 million on energy efficiency, whereas today, under the Conservative Government, the figure stands at £40 million? Does my hon. Friend agree that we are doing something about energy efficiency, which was always neglected by Labour Governments?
    Mr. Heathcoat-Amory: That is a typically sound point from my hon. Friend. I confirm that my Department's expenditure on energy efficiency has increased eightfold since 1979 when the Government took office.

    Landfill Gas Projects
    Mr. Tredinnick: To ask the Secretary of State for Energy how many landfill gas projects are in operation in the United Kingdom and other EC member states.
    Mr. Moynihan: There are 34 landfill gas projects currently in operation in the United Kingdom. The latest approximate figure that I have for other EC member states indicates a total of 150 projects.
    Mr. Tredinnick: I am grateful to my hon. Friend, who will be aware of the great interest in my constituency in all projects that support the environment. Can he give us some idea of the savings that can be made in conventional energy by the use of landfill gas projects and can he project what savings he thinks we will have made by the turn of the century?
    Mr. Moynihan: The existing 34 schemes save some 160,000 tonnes of coal equivalent a year. In response to my hon. Friend's second point, as well as the existing schemes, nine others are under construction and 25 are proposed. When all 68 schemes are in operation, the energy saving will be equivalent to about 500,000 tonnes of coal equivalent per annum.

    Electricity Generation
    Mr. Butler: To ask the Secretary of State for Energy how many independent electricity generation projects have been announced since the passage of the Electricity Act 1989.
    Mr. Wakeham: Under section 36 of the Electricity Act 1989 I have given consent for four independent power stations to be constructed. They are at Coryton, Deeside, Keadby and Wilton, Cleveland.
    Mr. Butler: Is not this excellent news for consumers? Can my right hon. Friend give a guarantee that we shall not return to a monolithic monopoly supply, which would be the case if we followed the advice of Opposition Members?
    Mr. Wakeham: I have considerable expectations that we shall not return to such a system. Competition in generation is good for not only consumers but the environment. It should be very much encouraged.
    Dr. Kim Howells: Does the Secretary of State agree that the dominance of National Power, PowerGen and Nuclear Electric precludes any real competition in electricity generation? Does he further agree that the monopolistic powers which have been handed to PowerGen and National Power in particular threaten to destroy Europe's most efficient coal industry, as those powers have all but destroyed the coal industry of south Wales and wasted a great national asset?
    Mr. Wakeham: I do not accept that for a moment. First, competition in generation will be widespread. Apart from the four projects that I have announced, four other projects were applied for and received planning permission before the 1989 Act came into force. We have been advised about several other projects which, at this stage, are confidential. Secondly, I do not believe that the coal industry will be ruined, as the hon. Gentleman made out, as a result of the privatisation of the electricity generating industry. The industry has a significant and important future in the provision of coal for generation in Britain. If it continues to improve its productivity as it has done in recent years, it will stand to have a larger share of the market.
    Sir Trevor Skeet: Will my right hon. Friend give some idea of not merely the number of projects but those which, in his estimation, are likely to materialise? Will he also tell us how many projects out of the total number are gas turbine projects and how many are coal? Are not they all gas turbine?
    Mr. Wakeham: With the best will in the world, as the applications have to come to me and I have to consider them and decide whether to give planning approval, it would be unwise for me to speculate about which projects are good runners and which are not.

    Electricity Supply
    Mr. Flynn: To ask the Secretary of State for Energy what plans he has to meet the chairs of the statutory electricity consumer committees to discuss the regulation of the electricity supply industry.
    Mr. Wakeham: This matter falls within the responsibility of the Director General of Electricity Supply, who meets the chairmen of the consumers' committees on a regular basis.
    Mr. Flynn: When the meeting with the chairs of the Merseyside and North-Western and the South-Western electricity boards takes place, will they be reminded that the Government knew in advance that the directors' salaries would be doubled and trebled and that the Government deliberately gagged the companies and forbade them to reveal that fact last autumn? Will the Secretary of State take advantage of the fact that today is a day of national penitence to confess the Government's and the Prime Minister's shameful complicity in this orgy of greed which scandalised the whole nation?
    Mr. Wakeham: If any penitence is required it is from the hon. Gentleman, who has just made a statement which he knows to be untrue. The statement in the prospectus was the position and that position was set out. What was said at a meeting was subsequently withdrawn by those concerned. The hon. Gentleman should be ashamed of himself.
    Mr. John Marshall: Will my right hon. Friend confirm that the privatised industries have had much more effective control of their prices than was ever the case when they were in the public sector? Does he agree that privatisation has led to much higher investment, productivity and revenue to the tax authorities than ever occurred when the industry was in the public sector?
    Mr. Wakeham: My hon. Friend makes his point well. He is correct.
    Mr. Dobson: Will the Secretary of State end this pretence that he and the rest of the Government were not involved in the massive pay increases for electricity bosses? In particular, will he confirm that the Government paid City advisers Coopers and Lybrand no less than £360,000 for advice on the pay and perks of electricity bosses? That sum is so large that it would almost pay for one of the chairmen. As the taxpayers paid for the advice that the Secretary of State received, will he now publish it so that they can see whether they got value for money?
    Mr. Wakeham: In recent times we have had a number of exchanges and a debate on these matters and there is not much more that I want to say. I will just add this: Coopers and Lybrand produced one of several reports on executive pay. Naturally, the companies pressed for increases. The Government decided that salaries should be restrained while the companies were in the public sector. Thereafter it was a matter for the companies.
    Mr. Simon Hughes: Will the Secretary of State look again at the regulation of privatised industries, such as the electricity industry? Does he recognise that it is unacceptable for the industries to be able to offer their chairmen and other executives such enormous pay increases when that goes contrary to Government policy? Does he accept that the House of Lords Select Committee, which is about to report, makes it clear that the new structure of the industry adds to the possibility of generation and supply, but goes against energy efficiency? The regulative powers of the new industry are not effective. What will he do about it?
    Mr. Wakeham: First, I will not add anything to what I said about directors' pay. I have already expressed my view, as has my right hon. Friend the Prime Minister. I merely add that salary increases do not affect the price to the consumer, because of the regulation. That is important. I disagree with the hon. Gentleman about energy efficiency in the privatised system. Competition in generation is one of the single most important steps that we have taken to improve energy efficiency. The generators now have a direct financial incentive to reduce the costs of producing electricity. As their principal cost is the fuel that they use, they have a powerful reason for wanting to improve efficiency.

    Energy Efficiency
    Mr. Holt: To ask the Secretary of State for Energy what is the current level of investment in energy efficiency.
    Mr. Heathcoat-Amory: It is not possible to separate out a national figure for total investment in energy efficiency because it is often part of wider capital expenditure in industry, transport and the public sector. However, since 1983 the amount of energy used per unit of national output has fallen faster in the United Kingdom than in the majority of other EC countries.
    Mr. Holt: However much we try to save energy, we are concerned about its creation in the first place. We on Teesside are getting worried that there is no strategy for the number of power plants that will be sited there, that there are no controls and, more particularly, that there is no concern about the transportation of that electricity by cables once the plants are in operation. Is not it time that the Government gave that some thought instead of just leaving it to the roulette wheel?
    Mr. Heathcoat-Amory: My hon. Friend will appreciate that new and modern generating stations can mean new transmission networks. He will also know that any proposals for substantial overhead lines introduced by the National Grid Company must be accompanied by an environmental statement which balances the need for energy with the environmental concerns of my hon. Friend and others.
    Mr. Bermingham: Does the Minister agree that any investment in energy conservation, whether by insulation or otherwise, creates employment for people in other industries? Surely now, when the whole of industry is in recession, any Government-led investment of that nature must be welcome?
    Mr. Heathcoat-Amory: I agree about the importance of energy efficiency measures, which is why my Department is spending more than £40 million on promoting energy efficiency.
    Mr. John Browne: I welcome my hon. Friend's answer. May I ask him whether he has any plans to encourage—[HON. MEMBERS: "Put your hat on."] individuals and corporations to invest in energy-saving devices, such as PL lightbulbs? Their use could be encouraged even at retail level through rebates, which are used in the United States and Canada.[Interruption.]
    Mr. Speaker: Order. Perhaps that will encourage the hon. Gentleman not to wear his hat.
    Mr. Heathcoat-Amory: I am sorry about my hon. Friend's hat—as a result I have already forgotten part of my hon. Friend's question. There are plenty of incentives to invest in energy efficiency measures, because, by saving fuel and electricity, the customer is also saving money. For those low-income households where such savings may not apply we have a separate scheme which I have already described to the House.

    Electricity Supply (Sharing)
    Mr. Dykes: To ask the Secretary of State for Energy if he will make a statement on the operation of the EC Energy Council's development of electricity supply sharing arrangements.
    Mr. Heathcoat-Amory: I understand that the European Commission expects to bring forward proposals for opening up electricity markets in Europe very soon. I welcome that development and look forward to such discussions with other EC countries in the Energy Council.
    Mr. Dykes: I thank my hon. Friend for that answer. Will he confirm that Her Majesty's Government will press that campaign and policy vigorously, bearing in mind that there are rumours of tardiness by other member states as well as some of the officials in the Commission dealing with that policy? Notwithstanding that the single market has not yet begun—[Interruption.]—if I had a hat I could take it off to hear my hon. Friend's answer—does my hon. Friend agree that a single market for electricity supply is vital so that we can sell some of our electricity to the continent?
    Mr. Heathcoat-Amory: I agree, but there is resistance in some other member states to the proposals for a freer market in electricity. Their state monopolies are, inevitably, somewhat resistant to competition, but we strongly believe that a true internal market requires a freer market in electricity. We have introduced proposals to that end.
    Mr. Douglas: Will the Minister exercise some care in examining the internal market within Britain? Would he care to comment on the progress that has been made on the interconnector between Scotland and England? That would facilitate the use of Scottish energy generated from coal and other means in England.
    Mr. Heathcoat-Amory: I cannot comment on specific proposals, because my right hon. Friend the Secretary of State may be required to authorise such developments in due course. It is a sign of the developing market in electricity in the United Kingdom that trade from one part of the United Kingdom to another is an increasing possibility.

    Photovoltaic Electricity
    Mr. Page: To ask the Secretary of State for Energy what is his estimate of the potential for photovoltaic electricity generation in the United Kingdom.
    Mr. Moynihan: I have recently reviewed the scope for photovoltaic electricity generation in the United Kingdom and concluded that there is a significant opportunity for photovoltaic power to contribute to United Kingdom

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    energy needs in certain applications. For that reason I recently announced a new research programme into the technology.
    Mr. Page: I thank my hon. Friend for that reply. It is obvious that that form of energy production has considerable usage not only for stand-alone purposes, but as an environmentally clean form of energy. So that we can get a handle on the size of the power that could be generated, can my hon. Friend tell the House and the nation what volumes of energy in gigawatts could be produced by that form of electricity generation into the early years of the next century?
    Mr. Moynihan: I assume that my hon. Friend is including consumer products—it is estimated that 170 GW hours could be produced by the year 2025.

    Nuclear Power Stations
    Mr. Alan W. Williams: To ask the Secretary of State for Energy if he will make a further statement on the decommissioning of nuclear power stations.
    Mr. Wakeham: Decommissioning is a matter for nuclear power station operators to consider within the guidelines on safety and environmental protection set by the Health and Safety Executive's nuclear installations inspectorate and Her Majesty's inspectorate of pollution.
    Mr. Williams: In its proposals for "deferred dry store", is it right that Nuclear Electric should consider postponing the decommissioning of nuclear power stations by 30 years, which would leave the problem to future generations to tackle? Is not the idea of simply "mounding over" spent nuclear power stations to create massive nuclear tombs environmentally irresponsible? Does the Minister agree that Nuclear Electric's proposals amount to an admission of defeat, because it simply does not know how to dismantle nuclear power stations and is terrified of the cost?
    Mr. Wakeham: I do not accept that. When considering decommissioning it is important to ensure the continued safety of the workers, the public and the environment. That will be ensured by continued control by the regulators. Nuclear Electric's proposals demonstrate its commitment to seeking the most cost-effective strategy, which takes account of safety and environmental concerns.
    Mr. Ian Bruce: Will my right hon. Friend reflect that, when those nuclear power stations, particularly the Magnox power stations, were first built, it was intended—it was Government policy—that the sites should be mounded in that way? Does he agree that to do anything other than that would be a total waste of what will probably become taxpayers' rather than private operators' money?
    Mr. Wakeham: I always listen to my hon. Friend with considerable care when he is talking about such matters. However, the nuclear installations inspectorate is considering those proposals and it would not be right for me to comment further.
    Mr. Barron: When the Government privatised the electricity supply industry they agreed that a levy of 10·6 per cent. would be added to people's electricity bills to pay
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    for the difference between the cost of expensive nuclear power and fossil fuel. That levy has now increased to 11 per cent. Given that, at that stage, it was meant to cover the total decommissioning of power stations over 100 years and that the nuclear industry now talks about decommissioning over 130 years, why has there been no decrease in electricity bills?
    Mr. Wakeham: The levy was set for the first five years on a declining basis. It has gone up from 10·6 to 11 per cent. because of estimated differences in the take off. However, I confirm that there is still a trend downwards over the eight years.

    British Coal (Output)
    Mr. John Marshall: To ask the Secretary of State for Energy if he will make a statement about the change in output per man shift in British Coal since 1984.
    Mr. Wakeham: In 1983–84, British Coal's putput per manshift was 2·43 tonnes. Figures just received for the year to 29 June 1991 indicate that this has more than doubled to 4·87 tonnes.
    Mr. Marshall: Does my hon. Friend agree that those magnificent figures underline the great benefits to the country from winning the coal strike in 1984–85? Does he also agree that they underline the potential for the speedy privatisation of that industry?
    Mr. Wakeham: I agree with my hon. Friend. the improvements in productivity have been remarkable, and they must continue if the industry is to have a long-term, competitive base. I remind my hon. Friend that since 1979 the Government have approved more than £7 billion of new investments and grant aid of about £17 billion, including provision of more than £6 billion in deficiency grants under last year's Coal Industry Act. Improvements in productivity, financial support and long-term contracts with the generators are all part of the improvements to the coal industry.
    Mr. Eadie: Does the right hon. Gentleman agree that those output figures in a publicly controlled industry far surpass the productivity rate in, for example, Germany, which has a privatised coal industry? Although the right hon. Gentleman said that he had high hopes that the coal industry would win contracts from the power companies, is he aware that a statement was made this weekend to the effect that the power companies are reluctant to give long-term contracts? Indeed, they are still hell bent on importing 50 per cent. of their coal.
    Mr. Wakeham: I hope that the hon. Gentleman is not falling into the same trap as some of his colleagues who, whenever a discouraging statement is made by the electricity generators in the run up to a renegotiation, treat it as the gospel truth according to St. Neil. The renegotiation for the coal industry is extremely important and the generators will take into account all the factors to which I have referred many times from the Dispatch Box. They include security of supply and questions of exchange rate risks. It is not a question of contract based purely on price and British Coal has a great deal to offer in those contracts.

    Electricity Disconnections
    Mr. Carrington: To ask the Secretary of State for Energy what was the level of disconnection for debt of electricity customers in (a) 1976, (b) 1986 and (c) 1990.
    Mr. Heathcoat-Amory: In the year ending 31 March 1976, disconnections for domestic electricity debt in England and Wales totalled 125,000. In the year to 31 March 1986, they had dropped to 102,000. In the year to 31 March 1991, they had fallen to 51,637—the lowest recorded level.
    Mr. Carrington: Does my hon. Friend agree that that significant drop in disconnections demonstrates the success of the privatised electricity companies in looking after customers who can, temporarily, least afford to pay their bills? Does my hon. Friend agree that the privatised electricity companies should be congratulated on their efforts to assist people who get into financial trouble? Will he encourage those companies to continue that policy in future?
    Mr. Heathcoat-Amory: Yes, Sir. The fact remains that, under Labour, more than twice as many people were having their supplies cut off because of electricity debts. That shows that the privatisation programme that we have pushed through is good for the customer, particularly low-income households that would otherwise be disconnected. I can confirm that, under the codes of practice agreed between the newly privatised companies and the regulator, the figures should drop even further.

  DUCHY OF LANCASTER

    Duchy Visit
    Mr. Hayward: To ask the Chancellor of the Duchy of Lancaster when he next intends to visit the county palatine.
    The Chancellor of the Duchy of Lancaster (Mr. Chris Patten): I am sorry to be the bearer of bad news, but I have no plans to visit the county palatine in the near future.
    Mr. Hayward: When my right hon. Friend next goes to the county palatine, will he visit Blackburn? When he does so, will he go via Newham and Marlow, where the Conservatives recently took seats off the Labour party, Clwyd where last week the Labour party was denied control of the county council, and so arrive at Blackburn, where the Conservatives also recently took a seat off the Labour party? Are not those results a clear sign that the public at large are seeing through Labour party proposals, particularly on issues such as defence—today, the Government announced an invitation to tender for a fourth Trident nuclear submarine.
    Mr. Patten: I am sure that one reason that we have done so well in recent local government by-elections is because the public do not trust the Labour party on either the economy or defence. I am equally sure that people in Barrow will have been delighted by today's announcement that we are going ahead with building the fourth Trident which is essential to the credibility of our deterrent. The public will know that the Labour party is opposed to the building of that Trident vessel and will be interested to
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    know what Labour's overall defence policy is. I am sure that the public can look forward to an intensely interesting discussion at the Labour party conference.
    Mr. Grocott: Can the Minister confirm that, in view of his disastrous record since taking up his present job, he must be pretty nervous about visiting the north-west or anywhere else, when part of the reason for his visit is to manage a Tory party by-election campaign? May I ask him the following question termed in his own colourful language: which of the two results in the north-west left him feeling the most gobsmacked—the Tory party's performance in Ribble Valley, where it lost a safe Tory seat, or its performance in the Walton division of Liverpool, where its candidate lost his deposit?
    Mr. Patten: I think that the television coverage of events in Liverpool reminded people throughout the country that, as the Labour party could not run Liverpool, it certainly would not be able to run Britain. The result in Walton reminded us that extremism in the Labour party, which we were told years ago had been wiped out, is still rife. I look forward to securing the same 10·9 per cent. swing in our favour as we achieved in Blackburn the other day.
    Mr. Simon Coombs: To ask the Chancellor of the Duchy of Lancaster when he next intends to visit the Duchy on official business.
    Mr. Chris Patten: I refer my hon. Friend to the answer that I gave some moments ago.
    Mr. Coombs: May I urge my right hon. Friend to consider an early visit to the Duchy to tell his tenants about the disastrous consequences of a national minimum wage policy? Is it not extraordinary that there was no mention whatever of that policy by the Leader of the Opposition on his recent visit to Blackpool to the Transport and General Workers Union conference?
    Mr. Patten: As I understand it, before the Leader of the Opposition went to Blackpool his office was telling people that in his speech he would make strong references to a national minimum wage because he was so proud of Labour's policy on that. In the event he kept mum, and one can only draw one's own conclusions.

    Parliamentary Questions
    Mr. Winnick: To ask the Chancellor of the Duchy of Lancaster how many parliamentary questions he has answered since he last answered questions orally in the House.
    Mr. Chris Patten: Five, Sir.
    Mr. Winnick: That must have kept the right hon. Gentleman pretty busy. Although the Tory vote in Walton was the lowest Tory percentage vote this century—a new record—is it not of some consolation to the right hon. Gentleman that at least the Tory candidate in that by-election got a few more votes than Lord Sutch?
    Mr. Patten: It was a great comfort to us that all Conservative Members who were asked supported the Conservative candidate in Walton. I understand that that was not the case for the Opposition.

  PUBLIC ACCOUNTS COMMISSION

    National Audit Office
    Mr. Dickens: To ask the Chairman of the Public Accounts Commission what representations he has received regarding the sufficiency of the National Audit Office's funding to ensure adequate coverage of all Government Departments.
    Sir Peter Hordern (on behalf of the Public Accounts Commission): In considering the adequacy of funding for the National Audit office, the Public Accounts Commission takes into account the proposals of the Comptroller and Auditor General as set out in the National Audit Office corporate plan, together with the views of the Public Accounts Committee and the Treasury. The Commission has received no other representations.
    Mr. Dickens: I am obliged to my hon. Friend for that answer. Will he confirm that the quality of audits is beyond dispute and that they are absolutely first class? Nowadays shoppers and everybody else seek value for money. Is my hon. Friend satisfied that sufficient value-for-money audits take place? Are people getting value for money from Government Departments, and is my hon. Friend satisfied that they have sufficient audits?
    Sir Peter Hordern: I agree with my hon. Friend that value for money from Government Departments is at least as important for Government Departments as it is for the consumer. I am happy to tell him that there were 43 value-for-money exercises last year and 47 this year, and that there will be 50 next year and each year thereafter. The House can be grateful to the Comptroller and Auditor General, his staff and other firms for the time and experience that they devote to value-for-money exercises in Government Departments.
    Mr. Franks: Will my right hon. Friend inquire of the Audit Commission whether it has recently investigated the activities of a well-known firm of local bookmakers in Cumbria called Barrow city council? This organization—
    Mr. Speaker: Order. The hon. Gentleman must ask questions relating to the Public Accounts Commission.
    Mr. Franks: I am asking my hon. Friend to inquire of the Audit Commission about this firm of bookmakers which has managed—
    Mr. Speaker: Order. Questions must relate to the Public Accounts Commission.
    Mr. Franks: Surely the Public Accounts Commission has an interest in this firm of bookmakers which over the past three years has managed to blow £4·5 million, including recently £1·2 million on the Bank of Credit and Commerce International. Perhaps that firm of bookmakers did not realise that a horse which was doped in the United States should not be running in local races in Cumbria.
    Sir Peter Horden: I have to tell my hon. Friend, with some disappointment, that the Public Accounts Commission has no authority over the Audit Commission, which looks after local government. We are responsible for
    16
    the National Audit Office. Much as I think that the Public Accounts Commission would like to look at a firm of bookmakers, that does not come within its ambit.
    Mr. Butler: Does the National Audit Office have enough money to look into the premature closure of the nuclear structure facility at Daresbury, which seems to involve a scandalous waste of taxpayers' money?
    Sir Peter Horden: I have not heard about this one, but I shall draw the attention of the Comptroller and Audit General to it, and write to my hon. Friend.

  DUCHY OF LANCASTER

    Duchy Business
    Mr. Cohen: To ask the Chancellor of the Duchy of Lancaster what proportion of his time he spent on official Duchy business in the last month.
    The Chancellor of the Duchy of Lancaster (Mr. Chris Patten): I spend up to a quarter of my time carrying out my duties as Chancellor of the Duchy of Lancaster. Thanks to the hon. Gentleman getting in with his question, the percentage has increased slightly.
    Mr. Cohen: As part of those duties, the Chancellor must be getting lots of representations about saving the regiment in his area. What about the regiments that run our hospitals and schools, work on our buses and trains and manufacture our goods and products? Has not the Conservative party shown that it is incapable of saving those regiments? Even without the right hon. Member for Finchley (Mrs. Thatcher) at the helm, are not the Conservatives still a monstrous regiment?
    Mr. Patten: I hope that that is the end of regimental metaphors for the time being. I have had none of the representations that the hon. Gentleman suggests I have, although I have had some representations that the country should be saved from Labour's defence policy, whatever that may be.

  HOUSE OF COMMONS

    Telephone Directory
    Dr. Goodson-Wickes: To ask the Lord President of the Council when the design and lay-out of the Palace of Westminster telephone directory was last revised for the benefit of its users.
    The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The present design and layout of the Palace of Westminster telephone directory have not changed substantially for a number of years, but the format and content are reviewed and modified on each occasion it is published.
    Dr. Goodson-Wickes: I hope that my right hon. Friend does not feel that this is a trivial matter, because I know that I am not alone in finding the document physically unwieldy and appallingly indexed and laid out, to the extent that many colleagues telephone the operator rather than wade through it. Is this not a ridiculous state of affairs? Will my right hon. Friend initiate a redesign of the document, preferably by a user?
    Mr. MacGregor: My hon. Friend may have ideas of his own and I shall ask the Serjeant at Arms to consult him about the improvements that he may wish to suggest for future editions.
    Mr. Dykes: On the design and layout of the European destination envelopes, will my right hon. Friend confirm that they are commencing today, that supplies are available and that they are properly designed?
    Mr. Speaker: Order. The question is about telephone directories.

    Palace of Westminster (Access)
    Mr. Simon Coombs: To ask the Lord President of the Council what plans he has to extend public access to the Palace during recesses.
    Mr. MacGregor: I have no plans to extend the present arrangements that enable parties of visitors sponsored by Members of both Houses to tour the Line of Route during recesses.
    Mr. Coombs: Will my right hon. Friend give some consideration to the fact that the Palace of Westminster is a most attractive proposition for all tourists who come to London during the summer? Will he consider the implications of making access to the Palace during the summer recess available on a commercial basis so that some of the costs of the upkeep of the Palace can be defrayed by the substantial income that would be received?
    Mr. MacGregor: My hon. Friend will know that there are security implications about general access. Any decision to reopen the Line of Route to the general public, other than under the arrangements that we have at present, would have security implications that would need to be considered by the relevant Committees of both Houses before being put to the three authorities responsible for Westminster Hall. Succesive Administrations have accepted that the costs of upkeep of the Palace should be a charge on public funds. I understand the Accommodation and Administration Sub-Committee, when it last looked at the proposal that my hon. Friend made, rejected it. However, I accept that it could look at the suggestion again.
    Mr. Corbyn: When the recess comes, will the Leader of the House spend some time finding out why so little has been done to improve access to the building for those with disabilities, particularly those in wheelchairs or using crutches and those with sight difficulities? Will he also look at the lack of Braille editions of the guides and other literature available for visitors? Does he accept that, until we can give people with disabilities full access to this building, we cannot say this is truly a public place, as it ought to be?
    Mr. MacGregor: A number of improvements have recently been agreed by the Accommodation and Administration Sub-Committee. It is proposed that a comprehensive study should be carried out to identify other practicable and acceptable proposals for further access for the disabled.
    Sir John Stokes: Before my right hon. Friend considers making further proposals for access to the Palace of
    18
    Westminster, will he find time to consider the standard of dress of visitors who are now coming in here? Recently some of them have appeared to be practically naked.
    Mr. MacGregor: I assume that my hon. Friend is not referring to hon. Members in this place. I do not know what proposals he has in mind. If there are any particular matters that he wishes to raise, I shall be happy to consider them.

    Natural Heritage (Scotland) Bill
    Mr. Dalyell: To ask the Lord President of the Council how many hours were spent on each of Second Reading, Committee stage, Third Reading, and consideration of Lords amendments of the Natural Heritage (Scotland) Bill.
    Mr. MacGregor: The time spent on each stage of the House of Commons consideration of the Natural Heritage (Scotland) Bill [Lords] was as follows: Second Reading, six hours and three minutes; Standing Committee, 19 hours and 43 minutes; Report, four hours and 50 minutes; Third Reading, one hour and 23 minutes, and consideration of a Lords amendment to a Commons amendment and Lords amendments in lieu of Commons amendments, four hours and six minutes.
    Mr. Dalyell: And what squandering of parliamentary time it proved to be after a group of self-interested peers had inserted an amendment into the Bill that changed its very nature at the 1lth hour and 59th minute. Does not the Leader of the House feel just a tinge of shame that he could not even get the hon. Member for Dumfries (Sir H. Monro) to vote for it and that Sir Fred Holliday, who was appointed by the Government during April of this year—a man whom the right hon. Gentleman must have known when he was Minister of Agriculture, Fisheries and Food and Secretary of State for Education and Science—resigned on a point of principle? What has happened is appalling.
    Mr. MacGregor: I do not accept that the Lords amendment changed the very nature of the Bill as it was introduced on Second Reading.

    Air Conditioning
    Mr. Butler: To ask the Lord President of the Council if he has any plans to improve the air conditioning system of the House.
    Mr. MacGregor: I have no plans to make any immediate improvements.
    Mr. Butler: I have to report to my right hon. Friend that there is great stuffiness in Commons Court, especially for the new boys who do not have a window. I have had to buy an auxiliary unit. Can my right hon. Friend offer any comfort?
    Mr. MacGregor: I am aware of the problem that arose recently for my hon. Friend and for other hon. Members on both sides of the House in what is known as the Tea Room block, where my hon. Friend's office lies. The compressor is in a hermetically sealed unit and so there are access problems. A new compressor was installed last year and it failed in early June of this year. The specialist firm

    19
    failed to meet the timetable for manufacturing a replacement unit. I am glad to say that the equipment is now working again.

    Premium Rate Telephone Services
    Mr. Flynn: To ask the Lord President of the Council if he will make it his policy to bar House of Commons telephones from connections to premium rate services.
    Mr. MacGregor: Access to premium rate telephone services will be barred for the duration of the summer recess, and the issue will be considered again by the Accommodation and Administration Sub-Committee when the House returns.
    Mr. Flynn: Does the Leader of the House think that much will be achieved by barring the services during the summer recess? Will he give us a guarantee that like most Government Departments that already have a bar on these services, the bar will continue when we return? Surely it is right that the House shows its disapproval of the majority of the services, which are extremely damaging and run by soft pornographers.
    Mr. MacGregor: In view of the hon. Gentleman's request, I thought that he would welcome the fact that the chairman of the Accommodation and Administration Sub-Committee has decided to bar access to the services during the summer recess. It is a matter for the Committee to reconsider and then to take a full decision.

    Victoria Tower
    Mr. Harry Greenway: To ask the Lord President of the Council when he expects the cleaning of Victoria Tower to be completed; at what cost; and if he will make a statement.
    Mr. MacGregor: In 1994, at an estimated cost of £7·5 million.
    Mr. Greenway: Will my right hon. Friend confirm that some years ago we could have had Victoria Tower cleaned for £3 million? It is sad that the cleaning will now cost £7·5 million. Will he ensure that when it is cleaned, the Union Jack that flies proudly on top of the Tower is always a clean one. Sometimes we have a dirty flag.
    Mr. MacGregor: On my hon. Friend's second point, I shall ensure that his request is noted. On the first point, of course the cost has increased, partly because the scope of the work has changed and partly because of noise problems. However, it is a major undertaking: for example, the scaffolding weighs more than 700 tonnes, the bars measure about 70 miles and the piling had to go down 21 m. It is a major undertaking and by far the largest phase of the project of cleaning the Palace.
    Mr. Grocott: Do not the towers of this building represent some of the last few unused wasted spaces? I refer in particular to the tower above the Central Lobby which would be an ideal location for a central control room for television cameras. Now that cameras are an integral part of our democracy, should not the location for television crews and for the House's own facilities be somewhere central within the Palace of Westminster?
    Mr. MacGregor: That question goes wider than the cleaning of the Victoria Tower, but, as the hon. Gentleman knows, the issue was discussed by a Committee on which we both served and it will come before the Services Committee this week. Speed and cost must be considered in relation to whether that part of the Palace should be used for the central control room for the broadcasting of the House, as he knows, but I agree that it is right to make full use of every available space in the Palace.
    Mr. Jopling: Does the Leader of the House realise that the restoration of Victoria Tower will mark the completion of the fundamental and far-reaching changes instigated by the late Sir Robin Cooke, many of which have been hugely to the advantage of hon. Members, of those who work here and those who merely pass by? Does he accept that the changes are comparable to the work done by Harcourt which has been commemorated by part of the Palace being named after him? Does not the Leader of the House think that it would be appropriate for the work of Sir Robin Cooke to be given similar recognition?
    Mr. MacGregor: I agree that the outside and the inside of the Palace have been vastly improved and I think that the improvements are widely welcomed by all hon. Members and by those outside. I also agree that the work of the late Sir Robin Cooke deserves the highest praise for the improvements that it has achieved and which we all enjoy. I shall bear in mind the point that my right hon. Friend made in the last part of his question.

Points of Order
3.32 pm
Mr. Richard Holt: On a point of order, Mr. Speaker. I am sure that it has been brought to your attention that on Friday the debate ended in considerable acrimony because of the actions of the Opposition Front-Bench spokesman, who broke with the tradition of the House and refused to allow the Minister any time to reply to the debate. When Back Benchers had finished speaking, there were 20 minutes left and it had been agreed that each Front-Bench speaker would have 10 minutes. The Opposition Front-Bench spokesman deliberately spoke out his time because he did not want the Minister to answer the debate. If that happens, law and order in the Chamber will break down because anyone who succeeded in catching your eye, Mr. Speaker, could go on speaking ad infinitum and no one else would get a chance to speak. It is very important that we do not allow Front-Bench spokesmen of any party to behave in such a way at the end of a very important debate.
Mr. Speaker: Order. I read in Hansard what the Deputy Speaker who was in the Chair at the time had to say. I understand that it was alleged that agreements made through the usual channels had not been kept. That is what Hansard reports, but certainly I think that the Government Front Bench should have an opportunity to reply to a debate.
Mr. Tam Dalyell: On a point of order, Mr. Speaker. At the risk of incurring your intense disapproval, may I ask you, as inscrutably as I can, on what authority in "Erskine May" you made a judgment, however much you may have deplored doing so, on an hon. Member wanting to raise an important subject—in this case, the threat of military action against Iraq—under Standing Order No. 20? I would like to argue very succinctly that—
Mr. Speaker: Order. I do not think that I can allow the hon. Member to do that, because then he will raise my— [HON. MEMBERS: "Dander"?] If the hon. Member had been available during the lunch hour to discuss the matter with me, I could have explained. I think that the whole House agrees that the Standing Order No. 20 procedure gives Back Benchers a prize opportunity to raise matters of great importance in prime time. Some time ago, I had to rule that I could not hear applications that did not even reach first base. It would not be right on any day for right hon. or hon. Members to take three minutes in prime time to discuss matters that they think are particularly important. If the hon. Gentleman had come to see me at lunch time, I would have explained to him why I could not hear his Standing Order No. 20 application today—and I am not going to hear it now.
Mr. Dalyell: Further to that point of order, Mr. Speaker. As to the question of certain debates, as I understand it, the problem is one of urgency. It is not just a question of wanting three minutes; some of us desperately feel that, given the situation in which our country may be involved—
Mr. Speaker: Order. I do not think that it would be right for me to have an argument with the hon. Member,
22
in the Chamber. Perhaps he will reflect that the United Nations deadline runs out on 25 July, and that gives us a little time.
Mr. Donald Thompson: Further to that point of order, Mr. Speaker. Are you not required by the House not to give reasons for your rulings?
Mr. Speaker: Sure.
Mr. Peter Shore: On a point of order, Mr. Speaker, on your selection of amendments to the Finance Bill. You will be aware that a large number of hon. Members on both sides of the House want to discuss the appalling decline of the British Merchant Navy, and have put their names to two new clauses that would have made such a discussion possible. I see that yours is a provisional list of amendments, Mr. Speaker, so am I right in assuming that there could be a revised and final list that might enable discussion on the new clauses to which I referred? Failing that—which I hope will not be the case—will you inform the House whether you selected any amendment on which a realistic debate about the plight of the British shipping industry could be mounted?
Mr. Speaker: The hon. Member for Calder Valley (Mr. Thompson) has just explained to the House that I should not give reasons for my rulings. In fact, it would be very dangerous to do so. I think that the right hon. Member knows why, in that particular case, it was not possible for me to select the two new clauses to which he referred. I will not go beyond that. However, the issue could be raised on Third Reading.
Sir Ian Gilmour: Further to that point of order, Mr. Speaker. You will be aware that that subject was not debated in Committee. A vast number of hon. Members want it to be debated, and it will not be understood outside the House if it is not. I refer to a letter that you, Mr. Speaker, sent to an hon. Member—which I believe is not confidential—in which you stated that because there was so much pressure upon you, and such urgent concern was felt about the matter, you felt that such a debate would be counter-productive. I venture to suggest that in reaching that decision, Mr. Speaker, you misdirected yourself. It may be that some of the letters that were sent to you were not properly phrased, and no doubt that is the fault of the hon. Members concerned. However, surely that should not have affected your judgment.
Mr. Speaker: As the right hon. Gentleman mentioned my letter, and said that my decision might not be understood outside the House, perhaps I should explain that I received a great many letters on the subject. Some of them included a copy letter that stated, "Please put this in your own words." When the Speaker receives letters of that kind, he is led to believe that there is some kind of organised lobbying, trying to persuade him to take certain action. Against that background, I could not possibly have selected the new clauses in question.
Mr. Win Griffiths: On a point of order, Mr. Speaker. May I reply to the hon. Member for Langbaurgh (Mr. Holt)? He did not tell me that he intended to raise the matter here this afternoon, but I suspected that someone would.
I want to make it absolutely clear that, when I rose to speak at 2·7 pm on Friday, I was still under the impression

23
that the original agreement had been that the winding-up speeches would begin at 1·45 pm. I thought that the three consecutive Conservative speakers had taken time set aside for their own Minister. I said that I was going to finish when I was first interrupted by the Minister, but, following that, some seven minutes were taken up by Conservative Members raising points of order. If they had not been, I should have been able to finish my speech and to allow the Minister time to speak.
Mr. Speaker: It sounds as if there was a breakdown in communications between the usual channels. I think that we should leave it at that.
Mr. Bernie Grant: On a point of order, Mr. Speaker. It has been suggested that I use the emergency written question procedure to deal with an urgent matter that has arisen in my constituency.
Over the past few days, new evidence has come to light that shows that Winston Silcott, of the Tottenham Three, is innocent, and that confessions were forged by police officers. Is there any means, apart from the written question procedure, of dragging the Home Secretary to the House, given the urgency of the matter?
Mr. Speaker: The hon. Gentleman and I had a conversation about that too, and he knows what advice I gave him.
Mr. Greville Janner: On a point of order, Mr. Speaker. Have you received any request for a full debate—or, at the very least, a ministerial statement—on the growing scandal of BCCI? Should not the Government be required to make a statement, and should there not be a procedure to allow that, given that it is clear that the relationship between the Bank of England—
Mr. Speaker: Order. This is taking time out of the debate on the Finance Bill—which, indeed, will give hon. Members an opportunity to discuss the matter that the hon. and learned Gentleman has raised, provided that they do not raise too many points of order. It can be discussed on new clauses 3, 35 and 37.
Mr. Brian Wilson: Further to that point of order, Mr. Speaker. I welcome what you have said. During Prime Minister's Question Time on Thursday, however, the Prime Minister stated—no doubt inadvertently—that the Bank of England had acted as soon as it was given notice that there was evidence of fraud. We now know—
Mr. Speaker: Order. I cannot answer for what the Prime Minister said. This is not a matter for me. I think that it should be raised on new clause 3 of the Finance Bill. No doubt those responsible—that is, the Government—may be able to give an answer, but I cannot.
Mr. Jeremy Corbyn: On a point of order, Mr. Speaker. In view of the statement that was made over the weekend about the new evidence surrounding Winston Silcott's conviction, do you not accept—
Mr. Speaker: Order. I had a conversation about that with the hon. Member for Tottenham (Mr. Grant), and I explained the correct procedure then. I give procedural advice in private, and I cannot hear points of order on the subject now.
Mr. Gerald Bermingham: On a point of order, Mr. Speaker. This afternoon, the Chancellor of the Duchy of Lancaster confirmed that he had answered only six questions. Up to 25 per cent. of his time was spent in saying that he did not intend to visit the County Palatine, or to carry out any Duchy business. Which Select Committee should I approach to find out whether the right hon. Gentleman's job is really worthwhile, or whether he should go?
Mr. Speaker: As I said, I give procedural advice in private.
Mr. Anthony Beaumont-Dark: On a point of order, Mr. Speaker. You mentioned new clause 3 of the Finance Bill. The new clause is about the future of banking. However, the chief worry of more than 200,000 people in this country concerns what has happened in the past. The BCCI problem is not about the future, but about something awful that happened in the past. Why should there not be a separate debate?
Mr. Speaker: There will be an opportunity to consider the matter, and lessons for the future can be drawn from the past. The hon. Gentleman should not find it too difficult to refer to it later.

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I will put together the Questions on the motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3)(Standing Committees on Statutory Instruments, &c.),
That the draft Social Security (Severe Disablement Allowance) Amendment Regulations 1991 be referred to a Standing Committee on Statutory Instruments, &c.—
That the draft Disability Living Allowance Advisory Board Regulations 1991 be referred to a Standing Committee on Statutory Instruments, &—c.—[Mr. John M. Taylor.]
Question agreed to.

WAYS AND MEANS

  EMPLOYEE SHARE SCHEMES
  Resolved,
  That provision may be made about savings-related share option schemes and profit sharing schemes.—[Mr. Maude.]

Orders of the Day
  Finance Bill
  Not amended in the Committee and as amended (in the Standing Committee), considered.
  Finance Bill
    New Clause 11

      EMPLOYEE SHARE SCHEMES: NON-DISCRIMINATION
      .'—(1) The Taxes Act 1988 shall be amended as follows.
      (2) In Part III of Schedule 9 (requirements applicable to savings-related share option schemes) in paragraphs 19(b) and 20 for "pensionable age" there shall be substituted "the specified age".
      (3) In Schedule 10 (further provisions relating to profit sharing schemes) in sub-paragraph (b) of paragraph 2 and in sub-paragraph (c)(ii) of paragraph 3 for "pensionable age" there shall be substituted "the relevant age", and at the end of each of those paragraphs there shall be inserted—
      "In this paragraph, the reference to the relevant age is a reference, in the case of a scheme approved before the day on which the Finance Act 1991 was passed, to pensionable age and, in the case of a scheme approved on or after that day, to the specified age".
      (4) In section 187(2)(definitions for the purposes of provisions relating to employee share schemes) after the definition of "shares" there shall be inserted—
      "'specified age', in relation to a scheme, means the age specified in pursuance of paragraph 8A of Schedule 9 as the specified age for the purposes of the scheme;".
      (5) In Part II of Schedule 9 (requirements generally applicable to employee share schemes) after paragraph 8 there shall be inserted—
      "8A.—(1) In the case of a savings-related share option scheme or a profit sharing scheme, the scheme must specify what age is to be the specified age for the purposes of the scheme.
      (2) The age specified—

      (a) must be the same for men and women, and

      (b) must not be less than 60 and not more than 75."

      (6) Subsections (2) and (5) above shall have effect in relation to a scheme not approved before the day on which this Act is passed.'.
      Brought up, and read the First—[Mr. Maude.]
      3.46 pm
      The Financial Secretary to the Treasury (Mr. Francis Maude): I beg to move, That the clause be read a Second time.
      The new clause will replace the term "pensionable age" in the approved all-employee share scheme legislation with a new term, "specified age". The change will apply to schemes approved on or after Royal Assent. The effect of the change is to ensure that schemes approved after Royal Assent provide equal treatment for men and women.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

New Clause 12

  EXPENSES OF ENTERTAINERS
  '.—(1) Section 201A of the Taxes Act 1988 (deduction of fees paid by entertainer to employment agency) shall be amended as follows.
  (2) In subsection (1)(a) after "subsection (2)" there shall be inserted "or (2A)".
  (3) The following subsection shall he inserted after subsection (2)—
  "(2A) Fees fall within this subsection if—

  (a) they are paid by the employee in pursuance of an arrangement under which a bona fide co-operative society agrees, or the members of such a society agree, to act as agent of the employee in connection with the employment,

  (b) they are calculated as a percentage of the emoluments of the employment or as a percentage of part of those emoluments, and

  (c) they are defrayed out of the emoluments of the employment falling to be charged to tax for the year concerned."

  (4) The following subsection shall be inserted after subsection (3)—
  "(3A) Subsection (3) of section I of the Industrial and Provident Societies Act 1965 (co-operative society does not include profit-making society) shall apply for the purposes of subsection (2A)(a) above as it applies for the purposes of that section."
  (5) The following subsection shall be inserted after subsection (4)—
  "(4A) Subject to subsection (4) above, a deduction by virtue of this section as regards a particular employment and a particular year of assessment may be based on fees falling within subsection (2) above or fees falling within subsection (2A) above, or both."
  (6) The amendments made by this section shall apply for the year 1990–91 and subsequent years of assessment.
  (7) Any such adjustment (whether by way of discharge or repayment of tax, the making of an assessment or otherwise) as is appropriate in consequence of this section may be made.'—[Mr. Maude]
  Brought up, and read the First time.
  Mr. Maude: I beg to move, That the clause be read a Second time.
  In the debate on the taxation of actors in Committee, I proposed a change to the relief that we introduced last year which allows actors and other theatrical artistes taxed under schedule E to claim tax relief on fees that they pay to theatrical agents. Those fees can amount to 10 to 15 per cent. of an actor's income and it is therefore a valuable relief for those starting out in the theatre.
  It was not appreciated at the time, although we consulted with the industry's tax working group, that the provision did not cover the position of actors who, rather than employ a traditional agent, preferred to get together with colleagues and to form their own co-operative agencies. We did not intend that group to be excluded. Indeed, they represent some of the newcomers to the theatre whom we particularly wish to help.
  New clause 12 extends the relief introduced last year to agency fees paid to co-operative societies. The new relief will apply to fees paid out of earnings taxed under schedule E where a bona fide co-operative society acts as an agent in finding work for a theatrical artiste. Fees up to the

  27
  present limit of 17·5 per cent. of earnings can qualify for relief. On this occasion it seemed appropriate to back-date the new relief so that, as with the relief that we introduced last year, it will apply to fees paid after 5 April 1990.
  Mr. Chris Smith: We welcome new clause 12 and we will be happy to speed it on its way. We argued strongly during the Committee stage of last year's Finance Bill, and we argued strongly again this year in our deliberations upstairs, that the Government and the Inland Revenue were being unfair to actors, especially those who are just starting out in the profession in the switch from schedule D to schedule E consideration of their tax treatment which has taken place since last year.
  As a result of our representations, and of those of the hon. Member for Beaconsfield (Mr. Smith) on behalf of actors, the Government have sought to make some ameliorations to the new tax regime to which new actors are subjected. Last year relief was introduced for the agents' fees that actors pay up to a percentage limit. This year, the Government have gone a little further and, with the small step in new clause 12, they are giving relief where the agency to which an actor belongs is a co-operative agency. It provides some additional and welcome relief.
  However, the Government have not gone far enough and they have yet to address a number of specific issues. We want the Government to restore the position that existed before last year. When we take over on the Government Benches, we will do that. In the meantime, we want to raise two matters. The first is the touring allowances that are paid to actors, and the second is the audition fees that are paid by actors, both of which deserve better consideration. We hope that the Government will now use their breathing space to consider those two further items. Agents' fees are one thing and co-operative agency fees are another, and the new clause is a welcome step on those matters. We want the Government to take some more steps to restore the position for actors who are not only a hard-pressed profession, but who form part of our heritage and part of our distinctive cultural strength, which we must preserve at all costs.
  Dame Elaine Kellett-Bowman: I thank my hon. Friend the Minister for introducing the alterations that we sought from him last year. Will he join me in congratulating the founder of the actors' co-operative in Lancaster, Mr. Stephen Allen, who has just become this country's Mastermind?
  Mr. Peter Bottomley: I join in welcoming the new clause, which was admirably moved by my hon. Friend the Financial Secretary. Most hon. Members will not take the threat of the hon. Member for Islington, South and Finsbury (Mr. Smith) too seriously because one of the groups who have prospered in the past 12 years of Conservative government have been people involved in culture, the arts and literature. However, we agree that the hon. Gentleman is right in saying that we have not gone far enough in restoring the position of young actors.
  Will my hon. Friend take advice from our hon. Friend the Member for Richmond and Barnes (Mr. Hanley), who might be able to get together a group of leading actors who could speak not on their own behalf, but on behalf of the many hundreds of young actors who each year are in the position that they were in when they started? It might then
  28
  be possible to go further, either in terms of Inland Revenue procedures or in terms of next year's Finance Bill, so that new actors have the chance to come into the profession without adverse tax treatment.
  Mr. Maude: I join my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman) in her tribute to the new Mastermind, whose connection with the new clause I am glad to acknowledge.
  I take the point of my hon. Friend the Member for Eltham (Mr. Bottomley. When we discussed the matter in Committee, I said clearly that I would consider carefully whether practical steps could be taken to meet the pressing anxieties especially of those starting out in the acting profession. That examination is under way and I will pursue it. I made it clear in Committee that I was by no means unsympathetic to the points that had been made.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 18

  INVESTMENT EXCHANGES AND CLEARING HOUSES: STAMP DUTY
  '.—(1) The Treasury may make regulations providing as mentioned in this section with regard to any circumstances which—

  (a) would (apart from the regulations) give rise to a charge to stamp duty,

  (b) involve a prescribed recognised investment exchange or a prescribed recognised clearing house, or a member or nominee (or member or nominee of a prescribed description) of such an exchange, or a nominee (or nominee of a prescribed description) of such a clearing house, or a nominee (or nominee of a prescribed description) of a member of such an exchange, and

  (c) are such as are prescribed.

  (2) The regulations may provide that the charge to stamp duty shall be treated as not arising or (depending on the terms of the regulations) as reduced.
  (3) Regulations under this section—

  (a) shall be made by statutory instrument subject to annulment in pursuance of a resolution of the House of Commons;

  (b) may include such supplementary, incidental, consequential or transitional provisions as appear to the Treasury to be necessary or expedient;

  (c) may make different provision for different circumstances;

  (d) may make any provision in such way as the Treasury think fit (whether by amending enactments or otherwise).

  (4) In this section—

  (a) "prescribed" means prescribed by the regulations,

  (b) "recognised investment exchange" means a recognised investment exchange within the meaning of the Financial Services Act 1986, and

  (c) "recognised clearing house" means a recognised clearing house within the meaning of that Act.'.—[Mr. Maude.]

  Brought up, and read the First time.
  Mr. Maude: I beg to move, That the clause be read a Second time.
  Mr. Speaker: With this it will be convenient to take Government new clause 17.
  Mr. Maude: New clauses 17, 18 and 19 flow from the proposed merger of the London traded options market and the London international financial futures exchange,

  29
  which, it is hoped, will take place later this year to form the London derivatives exchange. New clauses 17 and 18 give power to the Treasury to make regulations about stamp duty in connection with the proposed merger. At present, the traded options market is part of the stock exchange and present legislation reflects that. The merger of the options and futures markets will change that basic structural fact. The legislation will have to be adapted to fit the new exchange if the existing tax reliefs are not to be lost. We are giving careful consideration to exactly what changes may be required. Given that the new structures are not yet totally clear, it is not possible to form final judgments on that point.
  The new clauses provide enabling powers so that we can make the necessary changes by regulation at the appropriate time.
  Dr. John Marek: Before asking the Minister a brief question about the new clauses, I should like to advise him that the Opposition recognise the need for them given that the London derivatives exchange will be different and, unless the new clauses are passed, will operate under a different tax regime from the existing two institutions. As the notes on clauses state, the powers that will be sought and the regulations that will be applied are rightly wholly relieving, as the London derivatives exchange will be liable to extra tax without such relieving powers. We recognise, therefore, that the new clauses are necessary to ensure that the position does not change.
  What does the Financial Secretary intend to do under the regulations? Does he intend to bring in new reliefs or does he intend that the position should be broadly the same? Stamp duty and stamp duty reserve tax are due to be abolished in any case when TAURUS—the transfer and automated registration of uncertified stock—comes on stream, so I am not including that in my question. I should, however, appreciate any help that the Financial Secretary can give on this point.
  Mr. Maude: I can confirm to the hon. Gentleman that it is our intention simply to reflect existing reliefs in the provisions because if we did not make provisions, such as we are giving ourselves the power to make under the new clauses, under the merger that we expect to take place, the reliefs might disappear and would not be available. Our intention is simply to replicate the existing provisions as far as possible and to enable them to be applied sensibly to the new circumstances of the new derivatives exchange.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 17

  INVESTMENT EXCHANGES AND CLEARING HOUSES: SDRT
  .—(1) The Treasury may make regulations providing as mentioned in this section with regard to any circumstances which—

  (a) would (apart from the regulations) give rise to a stamp duty reserve tax,

  (b) involve a prescribed recognised investment exchange or a prescribed recognised clearing house, or a member or nominee (or member or nominee of a prescribed description) of such an exchange, or a nominee (or nominee of a prescribed description) of such a clearing house, or a nominee (or nominee of a prescribed description) of a member of such an exchange, and

  30

  (c) are such as are prescribed.

  (2) The regulations may provide that the charge to stamp duty reserve tax shall be treated as not arising or (depending on the terms of the regulations) as reduced.
  (3) Subsections (3) and (4) of section (Investment exchanges and clearing houses: stamp duty) above shall apply for the purposes of this section as they apply for the purposes of that.'.—[Mr. Maude.]
  Brought up, read the First and Second time, and added to the Bill.

New Clause 19

  BOND WASHING
  '.—(1) In section 732 of the Taxes Act 1988, after subsection (2)(exemption for market makers) there shall be inserted—
  "(2A) Subsection (1) above shall not apply in prescribed circumstances if—

  (a) the first buyer is—

  (i) a prescribed recognised clearing house, or

  (ii) a member, of a prescribed class or description, of a prescribed recognised investment exchange, and

  (b) the subsequent sale is carried out by the first buyer after a prescribed date and in the ordinary course of his business."

  (2) At the end of that section there shall be added—
  "(7) For the purposes of subsection (2A) above—
  "prescribed" means prescribed in regulations made by the Treasury;
  "recognised clearing house" means a recognised clearing house within the meaning of the Financial Services Act 1986;
  "recognised investment exchange" means a recognised investment exchange within the meaning of that Act.".'.— [Mr. Maude.]
  Brought up, and read the First time.
  Mr. Maude: I beg to move, That the clause be read a Second time.
  The new clause addresses the issue of representations from the exchanges that we have just discussed. It has been put to us that the exemption for market makers under section 732(2), covering bond washing, will be too limited in the context of the operations of the new merged market.
  The substantive point, of whether an extension should be made to the exemption for market makers to include London derivatives exchange dealers, is still under review. The new clause simply provides the enabling power for regulations to extend the exemption. That has to be done in this year's Finance Bill because it is intended that the LDE will be operational by the end of the year. The case for making the substantive change has yet to be made and considered. The taking of the powers does not imply a Government view at this stage on the desirability of extending the exemption. Parliament will have an opportunity in the normal way to scrutinise any regulations implementing any substantive change that we seek to make.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill

New Clause 20

  AUDIT POWERS IN RELATION TO NON-RESIDENTS
  '. The following section shall be inserted after section 482 of the Taxes Act 1988—
  "Audit powers in relation to non-residents.
  482A.—(1) The Board may make regulations with respect to the exclusion, in relation to investments of persons who are not ordinarily resident in the United Kingdom, of powers conferred by regulations made by virtue of section 477A (2)(a) or 482(11)(aa)("audit powers").
  (2) Regulations under subsection (1) above may in particular—

  "(a) make provision for the exclusion of audit powers in the case of any building society or deposit-taker to be dependent on whether the society or deposit-taker is approved by the Board for the purposes of the regulations and on the scope of that approval;

  (b) make provision with respect to the approval of building societies and deposit-takers by the Board for the purposes of the regulations;

  (c) make provision with respect to, and with respect to alteration of, the scope of approval by the Board for the purposes of the regulations;

  (d) make provision with respect to the termination of approval by the Board for the purposes of the regulations; and

  (e) make provision with respect to appeals against decisions of the Board with respect to approval for the purposes of the regulations, including decisions with respect to the scope of such approval.

  (3) Regulations under subsection (1) above may—

  (a) make different provision for different cases; and

  (b) contain such supplementary, incidental, consequential or transitional provision as appears to the Board to be appropriate.

  (4) In this section "deposit-taker" has the meaning given by section 481(2).".'.—[Mr. Maude.]
  Brought up, and read the First time.
  Mr. Maude: I beg to move, That the clause be read a Second time.
  The purpose of the new clause is to enable banks and building societies to make special arrangements with the Revenue on maintaining records relating to accounts held by their non-ordinarily resident depositors. Where satisfactory internal procedures for self-regulation are introduced, the Inland Revenue's power to audit those accounts will cease to apply. The new clause responds to some genuine anxieties about a provision in last year's Finance Bill. It follows exhaustive discussions between the Revenue and the banks. I hope that the provision meets with the approval of the House.
  4 pm
  Mr. Nicholas Brown: We should like an assurance from the Financial Secretary that the Revenue will not in any way be disadvantaged by the new clause in its eternal pursuit of those who evade their obligations to pay tax.
  Mr. Maude: There is always a balance to be struck between the proper interests of the Revenue and, indeed, of this House in ensuring that tax which is properly due is paid and the interest of retaining proper confidentiality. I have considered the matter carefully and I am satisfied that that balance is properly struck in this case.
  Mr. D. N. Campbell-Savours: Will this new clause affect the affairs of the company that purchased Westminster cemeteries, which operates in the United Kingdom as well as abroad?
  Mr. Maude: I cannot comment on that without being given any notice whatever. It is an interesting and fascinating question, but one to which I am afraid that I must deny the hon. Gentleman an answer.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 23

  CAPITAL ALLOWANCES: HIRING MOTOR CARS
  '.—(1) Section 35 of the Capital Allowances Act 1990 (motor cars) shall be amended as mentioned in subsections (2) and (3) below.
  (2) In subsection (2)(reduction of allowance for hiring cars whose retail price when new exceeds £8,000) at the end there shall be inserted the words "; but this subsection shall have effect subject to subsection (3) below."
  (3) The following subsections shall be inserted after subsection (2)—
  "(3) Subsection (2) above shall not apply where the hiring is under a hire-purchase agreement under which there is an option to purchase exercisable on the payment of a sum equal to not more than 1 per cent. of the retail price of the motor car when new.
  (4) In subsection (3) above 'hire-purchase agreement' has the meaning given by section 784(6) of the Income and Corporation Taxes Act 1988."
  (4) This section shall have effect in relation to any chargeable period or its basis period ending on or after the day on which this Act is passed.'.—[Mr. Maude.]
  Brought up, and read the First time.
  Mr. Maude: I beg to move, That the clause be read a Second time.
  The new clause makes a minor and technical amendment to a provision in the Capital Allowances Act 1990 which discriminates between businesses that use hire-purchase arrangements and those that use other methods of finance. It removes hire-purchase transactions from the scope of rules that restrict tax relief for rental payments on the hire of cars costing more than £8,000. Those rules prevent the circumvention of the capital allowances restriction which applies to such cars.
  A straightforward hire-purchase agreement is in essence equivalent to an outright purchase financed by a loan. That fact is recognised in the general application of the capital allowances legislation by the granting of capital allowances on the asset in question to the hire purchaser. As a result, the capital allowances restriction for cars bites directly on the hire purchaser and therefore there is no need for the leasing restriction to apply to hire purchase.
  The original 1961 legislation on cars made it explicit that hire-purchase agreements were not to be subject to the leasing restriction. But the relevant legislation has gone through several reconstructions and consolidations since then. It appears that the law may inadvertently have been changed in the process. The Revenue has received legal advice that in its existing form the leasing restriction applies to the finance charge element of a hire-purchase payment. If that were allowed to continue, businesses and traders who bought cars on hire purchase would face additional tax and compliance burdens. It is likely that

  33
  among them would be smaller businesses, the credit status of some of which might require them to obtain finance through hire purchase rather than a straightforward loan.
  The new clause will take straightforward hire-purchase agreements—that is those with a nominal purchase option—outside the scope of the leasing restriction, thereby restoring the legislation to its original intention and bringing hire purchase back into line with outright purchase. It is a minor but nevertheless helpful change for businesses which meets anxieties voiced by the leasing industry. We thought it right to introduce legislation at this, the earliest opportunity. I commend the new clause to the House.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 3

  MANDATORY REPORTS TO BE MADE BY BANKS
  '(1) Each bank carrying on a bona fide banking business in the United Kingdom shall, within six months of the end of each of its accounting periods, prepare a report which shall be sent to the Treasury and to the Bank of England, giving details of—

  (i) the average interest rate charged on all of its loans in aggregate to small businesses, the average aggregate principal of such loans and the average number thereof;

  (ii) the average interest rate charged on all of its loans in aggregate to large businesses, the average aggregate principal of such loans, and the average number thereof;

  (iii) each loan made during the year or in existence at the beginning of the year where the average percentage rate of interest charged on the loan exceeded such rate as is specified for the purposes of this section, not being less than 3% above base rate for the year as a whole;

  (iv) the average level of provisions made against loan interest due and against loan principal for loans of the sorts described at (i) and (ii) above, and the provisions, if any, made against each loan falling within (ii) above, and

  (v) such other matters as may be prescribed by regulations made under this section.

  (2) The Treasury shall make such regulations as are needed to give effect to this section; and in particular such regulations shall define the terms "small businesses" and 'large businesses" mentioned in subsection (1) above and the specified rate of interest, and shall state the extent to which loans to a single borrower or associated borrowers may be regarded as a single loan for the purposes of this section.'.—[Mr. Chris Smith.]
  Brought up, and read the First time.
  Mr. Chris Smith: I beg to move, That the clause be read a Second time.
  Mr. Speaker: With this it will be convenient to take the following: new clause 35—Statement of interest and charges—
  '(1) This section applies to any bank operating in the United Kingdom.
  (2) When a bank sends a customer a bank statement detailing recent debits from and credits 'to the account of that business customer, the bank must publish on that statement the following items:

  (a) the interest rate or interest rates that have been applied to borrowings by that business over the period covered by the statement;

  (b) an itemised list of charges levied by the bank on the account of that business over the period covered by the statement.'.

  New clause 37—Reports by banks as to enquiries
  '—.(1) Any bank granted authorisation to receive deposits under section 9(1) of the Banking Act 1987 shall publish within one month of each accounting period a statement detailing—

  (a) the nature of any enquiries of which it is aware that are taking place or have taken place during that same accounting period into its affairs or the affairs of any associated company where those enquiries are being or have been carried out by supervisory or regulatory authorities, auditors appointed by such authorities, authorities responsible for investigation of fraud, or the Bank of England; and

  (b) the results of such enquiries.

  (2) Publication of the results of such enquiries shall include all information as to communications and all correspondence to and from the authorities as defined in subsection (1)(a) unless such information as to communications or correspondence has not been approved for publication by those authorities.
  (3) Where, pursuant to subsection (2) above, information as to any communication or correspondence has not been approved for publication by the appropriate authorities, a report shall be submitted to Mr. Chancellor of the Exchequer detailing the reasons why that information has not been published.'.
  Mr. Smith: This debate on new clause 3, new clause 35 tabled by the Liberal Democrats and new clause 37 tabled by my hon. Friend the Member for Workington (Mr. Campbell-Savours) will enable us to discuss two particular and important issues that are of great public concern and relate to the procedures and practices of the banking industry.
  The first issue is the treatment by banks of small businesses, especially in relation to the interest charged on loans that are taken out by small businesses, and the procedures followed by banks in the light of a falling base rate and not so rapidly falling interest rates which are charged to businesses that are borrowing money. The second issue relates to the regulatory system of banks, investigations of banks and the information that the public have about those investigations. That is uppermost in our mind in relation to the practices and record of the Bank of Credit and Commerce International.
  Mr. Terence L. Higgins: I am a little uncertain about the exact status of new clause 3, as it appears in the name of the shadow Chief Secretary to the Treasury, but not in the name of the shadow Chancellor of the Exchequer. Is it official Opposition policy?
  Mr. Smith: I am surprised that the right hon. Gentleman, who is normally very perceptive in these matters, should have made such an elementary error. During the proceedings on the Finance Bill, both in Committee upstairs and on the Floor of the House, it is usual practice for the shadow Chief Secretary to lead for the Opposition on amendments and speeches. The new clause which she, other colleagues and I have tabled has the full endorsement of the shadow Chancellor. We are simply following the normal practice in ensuring that her name stands at the top of the list.
  Mr. Higgins: I fully understand that point, but it does not answer my question. Is new clause 3 official Opposition policy?
  Mr. Smith: The right hon. Gentleman again betrays a certain degree of ignorance, which suprises me. As I have said, the Opposition tabled the new clause to the Finance

  35
  Bill with the full support of the shadow Chancellor. It is an official Opposition new clause. If the Government were minded to support it in the Division Lobbies at the end of our proceedings, we should be only too delighted to see it on its way into the Finance Bill. In so doing, it might ensure that some of our practices were improved generally.
  The primary issue identified in new clause 3—
  Mr. Higgins rose—
  Mr. Smith: I must proceed. I have answered the right hon. Gentleman twice on that point.
  Mr. Higgins: Is new clause 3 official Opposition policy?
  Mr. Smith: If the right hon. Gentleman wishes me to repeat the answer a third time, I am happy to do so, but other hon. Members wish to contribute to the debate.
  The first matter raised in new clause 3 is the fundamental issue of the relationship between banks and small businesses. In recent weeks we have heard a lot about the concern among small businesses about the way in which the banking system has treated them. The case has been most strongly put by the National Federation of Self Employed and Small Businesses in a submission to the Treasury which contained more than 100 case histories of member businesses that thought that they had been badly treated by the banks. One of those businesses claimed to have suffered recently a 250 per cent. increase in charges, while another was charged a £50 fee for being overdrawn for one day in the previous 18 months.
  Despite the fact that the high street banks claimed that most small businesses were paying only 4 per cent. or less above the base rate, the submission included details of businesses that were paying 6, 9 or even 15 per cent. over the base rate. Such are the concerns that have been clearly identified by the National Federation of Self Employed and Small Businesses.
  Further concerns were identified two years ago in the Jack report published by the review committee on banking services. A significant number of recommendations were made in that report on the need to ensure a more friendly culture among banks in their dealings with small businesses.
  Such is the scale of the concern that has been voiced by people in industry. However, the banks protest that they are not the guilty party. Recently, Shearson Lehman Brothers conducted an investigation into the rates charged by banks, especially the four large United Kingdom clearing banks, to small businesses. Its findings were, perhaps surprisingly, remarkably kind to the practices of the banks. It reported that some banks were better than others, but none the less it believed that some of the criticisms levelled at the banks were somewhat overstated.
  All we have to go on is the claims that are made, on the one hand, by small businesses and, on the other, the claims made by the banks. We understand that the Treasury has conducted an analysis of what is going on and perhaps we will hear a little more about the Treasury's findings during the debate.
  The new clause seeks to ensure that, at the very least, the public can have access to information about precisely what the banks are up to. So long as businesses claim that they are being unfairly penalised by the banks, while the banks say that they are in no way unfairly treating those
  36
  small businesses, there is an obvious need for clear information about what is happening. That information should be available to the public, the small business sector and those who are considering starting up a small business.
  Sir Ian Stewart: The new clause states that a report should be:
  "sent to the Treasury and the Bank of England".
  Does that also imply that the report should be made public at the same time?
  Mr. Smith: It states in the new clause that the report should be
  " sent to the Treasury and the Bank of England,"
  because there may conceivably be items of commercial confidentiality included in such a report. However, we would confidently expect that the Treasury—at least under a Government who cared about public access to information—would wish to make public whatever useful findings that could be made on a comparative basis from the report submitted to it. It was with that in mind that we drafted the new clause.
  A recent example illustrates the banks' understanding of small businesses. A constituent who happens to be an adviser to a number of small businesses drew my attention to a company that supplies high-quality shop fittings and employs 20 or 25 people, mainly skilled workers, in Somerset. Its order book contained orders amounting to some £1·25 million to a major customer on a cost-plus basis, so there was no risk of the company making a loss on the deal. Its marketing had attracted a DTI grant and sales of the firm's products were increasing. Therefore, on a cursory analysis, the firm was conducting its affairs with considerable success. However, National Westminster bank has now stepped in to reduce its overdraft arbitrarily by some 25 per cent. on the basis that the value of properties has decreased nationwide. About five months after the bank reduced the overdraft, it brought in Cork Gulley to close down the business overnight, dismissing all the staff and returning the equipment, because it believed that the company was no longer viable.
  4.15 pm
  The way in which National Westminster bank acted in that incident is not only a tragedy for the company and employees concerned but serves to highlight how little the banks in this country understand about the practicalities and realities of the business world which those in industry and the market place face each day. An improvement in understanding between the banks and their customers in the small business sector is desperately needed and I hope that the new clause will help to bring it about.
  Mr. Michael Latham: Where not such decisions taken, not so long ago, by local bank managers who knew their customers and worked with them? Now they are often arbitrarily determined decisions made much higher up the line and the local bank manager has no control.
  Mr. Smith: The hon. Gentleman makes an extremely pertinent point. It is borne out by the decision taken by National Westminster bank to reduce overdraft facilities on the basis of a national assumption about the value of property without looking at the circumstances of individual companies or the different regions of the country. We strongly endorse the need for much greater local input into such decision making.

  37
  Having said that we want to know precisely what the banks are up to and that we want the banks to treat businesses properly and in a sensible and user-friendly way, we must not let the main culprit go unremarked. The main culprit in the problems faced by small businesses are the Government, whose policy of high interest rates has been the root cause of the difficulties faced by small businesses, whatever the banks may have been up to.
  Even after last Friday, interest rates are 11 per cent. in Britain compared with 9 per cent. in Germany and France, and 5.5 per cent. in Japan and the United States. Interest rates in this country have been at 11 per cent. or more since August 1988, and were held at 15 per cent. for an entire year while the present Prime Minister was Chancellor. In the first half of this year, there were 23,000 business failures—a rise of 66 per cent. on the same period a year earlier and the highest level ever recorded. According to the Dun and Bradstreet figures, 900 business are going out of business every week in this country.
  That is the Government's precise record, and it is directly attributable to the high interest rate policy that they have followed. They have used high interest rates as the only weapon to try to take demand out of the economy. We know from the savage experience of the recession that that taking out of demand has been belatedly, but all too substantially, successful. It has meant that we have been plunged into recession, which has dramatically affected the small business sector.
  The Government should not seek to evade their responsibility for the problems faced by small businesses in this country. The Government are the principal culprits; the banks may or may not be secondary culprits in the affair. We will not know whether they are unless and until they are required to provide the information, as they would have to do under our new clause. We strongly believe that new clause 3 would represent an improvement in the availability of information and highlight the way in which Government policies have been operating to the detriment of the small business sector in this country.
  New clause 37 was tabled by my hon. Friend the Member for Workington as a direct result of the enormous concern that is felt, and has been felt in the past week, at the closure of the Bank of Credit and Commerce International a week ago last Friday. It raises two primary issues, the first of which my right hon. and learned Friend the Chancellor drew attention to a week ago—[Laughter.] My right hon. and learned Friend the shadow Chancellor, I should say. I am running ahead of myself, but before too long we shall be referring to him as the Chancellor—the sooner that day comes, the better.
  Last Monday, my right hon. and learned Friend raised the fundamental issue of the inadequacy of the depositors' protection scheme as it stands. It effectively places a cap of £15,000 on compensation available to those people and businesses that have put money into BCCI. That sits oddly alongside the investors' protection scheme, run under the auspices of the Securities and Investments Board, which has much more generous limits on the protection offered. The investors' compensation scheme pays up to the first £30,000 in full, and 90 per cent. of losses between £30,000 and £50,000.
  Last week, we asked the Economic Secretary to the Treasury why the depositors' protection scheme was so much less generous than the investors' protection scheme, but received no answer. We should like an answer now. We also drew the attention of the Economic Secretary to the
  38
  example of other countries where deposit protection schemes are more generous than those available here. For example, the Canadian scheme offers 100 per cent. compensation up to Canadian $60,000. That is substantially more generous than the scheme that is in place here. The first issue is whether the deposit protection scheme is adequate and, if not, why not. Many small businesses, especially in the Asian community, have been badly hit by the closure of BCCI. The relief offered by the scheme, much delayed as I fear it will be, seems to be inadequate.
  The second question raised by the affairs of BCCI and to which new clause 37 refers is perhaps even more fundamental. It is when the Bank of England and the Government knew that the affairs of BCCI required investigation and why they did not carry out such an investigation at an earlier stage. If the investigation that was clearly necessary had taken place earlier, much of the pain caused to depositors and employees of BCCI could have been avoided.
  We know that doubts were expressed by Ernst and Young when they were BCCI's auditors some two or three years ago. We know that considerable doubts were raised in the marketplace for months before the Bank of England acted. We also know that doubts arose as a result of the prosecutions in Florida last year and that the present auditors, Price Waterhouse, delivered a report to the Bank of England in March 1990 which raised serious questions about the way in which BCCI was operating.
  If reports in The Sunday Times yesterday are correct, the question of what information was provided to the Bank of England and the Treasury and why they failed to act upon it becomes urgent.
  Mr. Campbell-Savours: Does my hon. Friend accept that the statement by Lord Henley in April last year in the other place is significant? When he made that statement, what did the noble Lord know that was not revealed to the other place in the debate?
  Mr. Smith: I cannot answer that question, which is an important one. I hope that we shall get an answer from the Government. If we do not get a satisfactory answer I am sure that my hon. Friend will wish to press the matter if he speaks in the debate. My hon. Friend will be aware that whatever the noble Lord may have said at that time was said after the Price Waterhouse report of March 1990 was delivered to the Bank of England.The Sunday Times tells us that that report,
  "had already revealed that BCCI was in serious financial trouble, with major gaps in its accounts raising the possibility of misuse of funds, a large number of questionable loans outstanding and lax internal controls."
  If that catalogue of impropriety was suspected at that stage, why did the Economic Secretary tell us last week that the Bank of England had sufficient information to act only 10 days before last Monday? Why was it that, in March 1990, the Bank of England did not commence serious investigations? That is a most important point. It is not only a question whether there is misuse of funds or potential fraud, or whether the Bank of England has powers to take action if it suspects fraud. The Bank of England is also supposed to reassure itself about whether someone running a bank is a "fit and proper person" to do so. Under that provision, there must have been scope for

  39
  questions to be raised, for investigations to be started and for the Bank of England to begin to take action earlier than it did.
  4.30 pm
  Mr. Gerald Bermingham: Is not one of the duties of the Bank of England to reassure itself about the liquidity of banks? In other words, it has to be sure that, if there is a run, each bank can meet its obligations. Bearing in mind the Price Waterhouse report of March 1990, was not it clear that the Bank of England could not properly have reached that conclusion?
  Mr. Smith: My hon. Friend raises an important point. It seems that BCCI was adept at shuffling funds around among its various national identities to disguise the true position of its liquidity. Only a thorough investigation could have shown the true position. That is why a thorough investigation should have taken place sooner than it did.
  Mr. Anthony Nelson: I am obliged to the hon. Member for Workington (Mr. Campbell-Savours) both for his remarks and for new clause 37, which raise reasonable questions that should be addressed. I have a question for the hon. Member for Islington, South and Finsbury (Mr. Smith), which must be addressed, as his party has pretensions to government. Is not it important for any Government, and the Bank of England, to ensure that there is neither a run on a bank nor a lack of confidence in the banking system? An extremely difficult balance must be struck between precipitating a run on a bank, and thus closing it peremptorily, and leaving it too long and allowing people to be defrauded. In that difficult balance of judgment, where does the hon. Gentleman stand? The Bank of England instituted inquiries properly, dealt with the matter exemplarily and, when it had clear evidence, closed the bank.
  Mr. Smith: The hon. Gentleman is right to identify the difficult balance which the banking regulatory authorities have to undertake. It is a balance between raising too many public questions too early, and therefore undermining confidence in part of the banking system, and ensuring that, where bad practice is taking place, it is immediately investigated. Although we have our suspicions, we do not yet have enough information to answer our question about whether the Bank of England got the balance right with respect to BCCI. The reports of the past week leave us with no certainty that it did.
  If the hon. Member for Chichester (Mr. Nelson) has read new clause 37 closely, he will know that it addresses this point. It requires that if a bank has been cleared of any wrong doing, the Chancellor of the Exchequer can require the report of the investigations to be made to him rather than be made public. That is a substantial protection against the confidence problems that the hon. Gentleman has identified. It is our belief that my hon. Friend the Member for Workington has addressed precisely that issue in his carefully worded new clause.
  I shall draw my remarks to a close, because I know that many hon. Members wish to contribute to this important debate. It seems to us that we have still to hear a satisfactory response from the Government to the two overwhelming questions that must be directed to the
  40
  tragedy of the BCCI closure, which has caused so much difficulty for so many in this country. First, why is the deposit protection scheme so inadequate? Secondly, what did the Bank of England know, when did it know, how soon did it know and how rapidly or slowly did it seek to investigate? It is our impression from the information that is available to us that there are serious question marks about the way in which the Bank of England, the regulatory authorities and the Government have acted.
  Mr. James WallaceIt is obvious that new clause 35, in the names of my right hon. and hon. Friends, is linked with new clauses 3 and 37. I shall take up later the final comments of the hon. Member for Islington, South and Finsbury (Mr. Smith), but first I shall direct my remarks to the nub of the original problem, to the publicity that that has been given in recent weeks to exceptionally high interest rates allegedly being charged by several clearing banks, including Scottish banks, and to the damage that those rates have done, especially to small businesses.
  As the hon. Member for Islington, South and Finsbury has reminded us, the high interest rates that are being charged are a regrettable and damaging symptom of the general regime of high interest rates that we have suffered for a long time. Life has not been made any easier for small businesses by the Government opting for the highest charge available to them for this year's uniform business rate in England and Wales. The Government are taking more from the business sector, particularly from small businesses, than they are putting back into it by means of the measures in this Bill.
  There has been a dramatic and record increase in the failure of small businesses in recent times. Nine out of 10 of the businesses that have gone under employed fewer than 100 people. The major redundancies that are announced by household-name companies tend to attract news headlines, but the cumulative effect of small businesses going under is one of the principal causes of an increasing rate of unemployment. It is important, therefore, that we examine the implications of the Government's high-interest-rate policy and the way in which the banks have dealt with small businesses.
  The main criticism and focus of attention has been on the rates of interest that are charged by banks to small businesses, but that is not the sole problem that small businesses face in their relationships with banks. I have heard complaints about the fact that a bank can increase the interest rate that is paid by a small business when the owner of the business reaches his current overdraft limit and has to negotiate an increase. That is often taken as an opportunity to increase the lending rate.
  Another factor is the deduction of bank charges at source, invariably without notification to the business concerned. As that happens when it is least expected, or even when it is unexpected, the business can find that it has exceeded its overdraft limit and that charges are being applied at punitive rates.
  Some bank managers restrict borrowing to bring discipline to bear upon a business if it is not going about its business in the way that the bank would like. There are banks that charge an arrangement fee if a business takes the bank's advice and reduces its level of borrowing. Non-negotiable charges are imposed unilaterally by the bank and the unfortunate customer becomes aware of them only when he is told to pay up.

  41
  Another problem is that of the collateral demanded from small businesses which seek to take out loans, If one studied law, as I did, one worked out the respective advantages of limited liability companies or of unincorporated firms. We were told that one of the advantages of a limited liability company was that if the business went under, the authorities could not come after one's home or other assets. However, the truth is that many limited liability companies are family firms and they are asked to put their homes on the line as collateral. There are many examples of banks asking for homes as collateral as a sign that the person involved is committed to the business although that person has already put on the line his savings, his way of life arid his energy. I fear that the use of such collateral may have a damaging effect in the long term because, if so much personal risk is involved, it may inhibit a business's growth, or make it think twice about diversifying or taking up new ideas.
  Those are examples of the banking sector not necessarily being in harmony with the small business sector. However, there are also problems with the small businesses themselves. Some go over their overdraft limit and some are not especially good at keeping the bank provided with information. Some perhaps use overdraft expenditure for capital investment when it might be much better to examine other ways of raising capital. Perhaps the recent furore over interest rate charges has given some focus to the search for a way in which the relationship between banks and small businesses can be improved. In some respects, that is a matter not for the House or for the Government but for good practice, and that can often be achieved without regulation.
  New clause 35 proposes that, when making interest rate charges, the banks would be obliged to stipulate the rates at which the charges are made and the period of the loan or overdraft in respect of which they have been matte. The same would apply to bank service charges: the bank would be obliged to stipulate the various component parts of the bank charges. I should not assume that you pay bank charges on your account, Madam Deputy Speaker, but I am sure that many hon. Members do and that they sometimes merely accept them without bothering to find out the precise detail of those charges.
  4.45 pm
  Mr. Kenneth Hind: Has the hon. Gentleman also considered the penalties that are paid? I am sure that many hon. Members know of businesses which have exceeded their overdraft limits and whose interest rates have shot into the sky. In those circumstances, the proprietor of a small business had not anticipated what would happen and yet he automatically faces the bill. It is important that the public are made aware of that.
  Mr. Wallace: I agree with the hon. Gentleman. One of the complaints made by small businesses is that the charges are often applied without notification and can, as a result, push the business above its overdraft limit and into the realm of punitive interest rates.
  We must seek a contract between small businesses and the banks, but the uneven negotiating position of the banks and small businesses often stands in the way of such a contract.
  Mr. Bermingham: Does the hon. Gentleman agree that another danger is what is known as uncleared effects? The small business man pays into the bank a cheque that he has been given by his supplier—
  Mr. Hind: Uncleared funds.
  Mr. Bermingham: Yes, uncleared funds, or whatever they may be called. The cheque is as safe as houses because it is often drawn on state bodies and will not bounce. However, cheques take three to five days to clear and a business must pay a penalty during that time. That can materially affect a business's cash flow and ultimately its solvency.
  Mr. Wallace: I could not agree more with the hon. Gentleman. That applies to my account and my salary cheque from the Paymaster General. One hopes that such cheques would not bounce and, if they did, we would have worse problems than those relating to small businesses and banks. As the hon. Gentleman says, when cheques are drawn, often on public bodies, and therefore will not be dishonoured, we must seek a way of speeding up the clearing process, especially as the company may draw on the strength of that cheque.
  The relationship between small businesses and the banks is skewed because of the difference in their bargaining positions. If competition could encourage good practice, I am sure that it would benefit not only small businesses but the banks. Banks will do what they can to win the account of a large business and there are no doubt ways of offering an attractive package. The same can apply to individual customers. Loyalty to a particular bank is probably not such that if one did not receive a good service one would not switch to another bank or to a building society. If in future building societies and foreign banks were encouraged to enter the business loans market, the clearing banks and their Scottish counterparts might do much more to provide a better service for their small business customers. The Government, who are committed to competition, might wish not only to call in the banks and ask them about their policy with regard to small businesses, but to investigate how banking services for small businesses might be opened up to more competition which would, I believe, be for the greater benefit of all.
  Although I believe that much should be done by good practice instigated by the banks themselves and by some contractual understanding and negotiation with the small business sector, if the banks were not prepared to take the initiative, the two modest proposals contained in new clause 35, which provide for the stipulation of a breakdown of bank and interest charges, would perhaps encourage them along the way. There would be resistance from the banks, but every other business is expected to give details when invoicing customers, so it is not unreasonable to expect banks to do the same.
  Another issue raised by the hon. Member for Islington, South and Finsbury, and which is the subject of a new clause tabled by the hon. Member for Workington (Mr. Campbell-Savours), is the Bank of Credit and Commerce International. The hon. Member for Islington, South and Finsbury was right to focus his attention on why rumblings and suspicions were allowed to fester for so long before the Bank of England finally pulled the plug at the expense of many people in the business community—especially the Asian business community—of individual

  43
  investors and of a number of local authorities, not least that of the Western Isles which had invested perhaps more than any other authority in BCCI.
  The House will be aware that my noble Friend Lord Harris of Greenwich raised the matter in another place in April last year. If one reads the report of that debate, one can say only that the Government's response was stonewalling as a refined art. It was clear that the Government were unwilling to give away what the Bank of England might have made of convictions across the Atlantic, but we can conclude that the Government must have been on notice—the Bank of England was certainly on notice. One wonders why such a state of affairs was allowed to continue for so long before the failure occurred and the plug was pulled, with the consequences of which hon. Members have been given examples over the past week to 10 days.
  What sort of help will it be possible to provide to depositors? One amendment that has not been selected argued for an increase in the safety net incorporated in the Banking Act 1987. However, even an increase in that figure from £20,000 to £50,000 would have gone only a small way. It might have been a saving grace for some businesses, but it would have been of only minor assistance to the worst affected.
  There is a prima facie case for protection to meet lost deposits. If the Government can say, even at this stage, that they are prepared to raise the compensation ceiling, that would come as welcome news to many.
  Ms. Marjorie Mowlam: Is the hon. Gentleman suggesting that increased compensation should be paid by the Government or by the banks?
  Mr. Wallace: If there is to be immediate help, I suspect that it would have to come from the Government rather than from the banking sector.
  One must consider the effect of those losses on not only the firms immediately involved but the entire small business sector. The initial outlay could well be recouped because of the difficulties that would be prevented from occurring further down the line.
  Last Thursday, the Prime Minister said during Question Time:
  "Local authorities have a duty of care over the funds entrusted to them".—[Official Report, 11 July 1991; Vol, 194, column 1082.]
  The Prime Minister is not a lawyer, but the phrase "a duty of care" implies a certain relationship. One wonders whether local authorities have a duty of care to their poll tax payers. If no Government assistance is forthcoming, poll tax payers may have grounds for legal action against their local authorities, and have a right to pursue through the courts the argument that they are not obliged to pay any increase in poll tax that is a consequence of local authority financial negligence. The phrase "a duty of care" was an interesting one for the Prime Minister to use, and perhaps the Economic Secretary can enlighten the House as to what was in the Prime Minister's mind when he uttered it.
  Returning to new clause 35, let me say that the small business sector has a tremendous contribution to make to the economy. Over the past two or three years, it has been prevented from doing so by high interest rates, and for even longer by a banking sector that is not particularly
  44
  well attuned to the needs and expectations of small firms. If the Government would make a positive response to some of the suggestions that are made today—many of which would not require legislation—that would show the way forward, and would be of considerable encouragement to small businesses.
  Mr. Nigel Forman: The hon. Members for Islington, South and Finsbury (Mr. Smith) and for Orkney and Shetland (Mr. Wallace) make a sympathetic argument. Hon. Members in all parts of the House are concerned about the current plight of small businesses and have considerable sympathy with them—so one starts with a favourable disposition towards the proposed new clauses. However, on closer examination one discovers that new clause 3 in particular contains much that is not sensible—which leads one to believe that the amendments ought not to be supported in the Lobby.
  New clause 3 makes at least two references to
  "the average interest rate charged"
  in respect of various categories of borrowing, which is not a sensible concept. That would give the House and the country only a rough idea of what was happening, and would be comparatively meaningless information in trying to monitor the terms and conditions of such loans.
  The range of obligations imposed by new clause 3 implies a considerable burden of compliance costs on banks and other lenders in providing such information, and that would be at the expense of shareholders or customers, or both.
  Subsection (1)(v) introduces a provision which a future Government of a different disposition and attitude towards banks and other financial institutions could use as a trojan horse in placing on banks and other financial institutions burdens far greater than could legitimately be justified. For those technical reasons, I find myself unable to support the new clause.
  That does not take away from the concern that lies behind the arguments made by the hon. Members for Islington, South and Finsbury and for Orkney and Shetland, which is common to both sides of the House. There can be no doubting that the interest rates recently charged on loans, especially to small businesses, have been penal. Some might describe them almost as usury. The banks argue, justifiably, that the interest charged must relate to the risk involved in each case. However, it is not always easy for small businesses to understand or to accept that rationale.
  One must acknowledge also that the banks themselves have been in some difficulty. That is recognised by the media and by the public. Banks have been understandably anxious to restore their balance sheets, and that has often been done at the expense of their clients—notably, their small business clients. The wide spread of interest rates charged to different borrowers should be more fully explained. To that extent, I have considerable sympathy with the argument of the hon. Member for Orkney and Shetland, that more timely information on the charges levied, and on the other terms and conditions insisted upon, would be useful. The best way to achieve that is, as the hon. Gentleman said, by good banking practice—spurred on by the power of publicity, which is to some extent enhanced by debates in the House.
  When my hon. Friend the Economic Secretary replies, I hope that he will be able to tell the House the outcome of the discussions between my right hon. Friend the

  45
  Chancellor of the Exchequer and the managements of our leading banks, which I hope will serve to point the way to better and more responsible banking practices.
  According to many small firms in my constituency, almost a greater problem than varying interest rates and the other terms and conditions on which loans are made is the late payment of large bills by major customers—which is sometimes deliberate, but often accidental. Delayed settlement and a change of policy in respect of payments to small firms can completely ruin their cash flow. I hope that my hon. Friend the Economic Secretary and his Treasury colleagues will reconsider adopting some of the measures used in other countries to encourage the earlier payment of bills to small businesses.
  Mr. Nelson: My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) may be aware that our hon. Friend the Member for East Hampshire, (Mr. Mates) introduced some time ago a private Member's Bill that sought to overcome the problem of overdue settlement, but that it received precious little support from the Department of Trade and Industry— despite the fact that many of us emphasised, long before delayed payment became a real problem, that something ought to be done. Ministers appeared reluctant to do anything at that time, but I urge them to reconsider that aspect, and I ask my hon. Friend the Economic Secretary to answer that point when he winds up.
  Mr. Forman: I would expect my hon. Friend to endorse the thrust of my argument. It is time that Ministers gave us a full explanation of why they do not think it appropriate to act now.
  I have much less sympathy with new clause 37. The hon. Member for Islington, South and Finsbury said that the depositors' protection scheme was markedly less generous than the investors' protection scheme, and that it should therefore be made more generous. Surely, however, the extra money could come only from either the banks or the taxpayer. I was interested by the challenge offered to the hon. Member for Orkney and Shetland; I do not believe that any more should be taken from the taxpayer. It has been asked why the Bank of England did not intervene earlier. The critical point is, in my view, the problem of balance alluded to by my hon. Friend the Member for Chichester (Mr. Nelson).
  5 pm
  Ministers should consider two other points. First, those who deposit their funds with such institutions as BCCI and Barlow Clowes should realise that a greater return probably implies a greater risk. That should be stamped on every such venture. Secondly, depositors should be wary of advice that comes not independently, from people who charge a straightforward fee, but from people who are on commission. It is well known that larger-than-average commissions were earned by those whose advice favoured BCCI. Advice that comes on commission should be regarded with some suspicion.
  Mr. Latham: Will my hon. Friend give way?
  Mr. Forman: I hope that my hon. Friend will forgive me if I do not. I want to be brief.
  Obviously, much more will be said about the auditors, and I shall not say much about them now. At present, auditors have the right to draw the attention of the supervisors and regulatory agencies to any shortcomings
  46
  that could amount to fraud in certain circumstances, but no duty is imposed on them to do so. Ministers should take that into account when considering any changes in the law.
  I appreciate the problems of small businesses, but I do not think that new clause 3 would solve them. Everyone should be extremely careful not to become involved in circumstances such as those that gave rise to the tragedy of BCCI.
  Mr. Campbell-Savours: New clause 37 combines self-regulation with political accountability, and establishes an early-warning system to operate when banks are experiencing difficulties. Its objective is to construct a balance between the need for investors to be given some information about the nature and development of inquiries into the affairs of banks, and the need to avoid unforeseeable outflows of capital—otherwise known as "runs on the bank".
  The idea was prompted by the comments of Ian Brindle, a senior partner at Price Waterhouse, in the Financial Times last week. When asked why BCCI accounts had not been qualified more promptly, Mr. Brindle replied:
  "You simply cannot go round qualifying the accounts of a bank without creating all sorts of problems and without the whole thing collapsing."
  Unpalatable though they may appear at first glimpse, Mr. Brindle's remarks contain a grain of truth. What action can we take? We have a duty to maintain confidence in the banking system, as it oils the wheels of industry; but we must have a well-supervised banking system. I appeal to treasurers and institutional depositors who are considering pulling out of the secondary and fringe banking sectors to think twice before they do so. A quick pull-out could wipe out a sizeable part of Britain's small-business industrial base, doing immeasurable harm in regions such as mine.
  Responsible institutional investors should do their homework before taking any precipitate action. They should check with their financial advisers and with sectoral advisory bodies, and perhaps collectively approach the Bank of England. They must not aggravate the current difficult situation.
  Mr. Anthony Beaumont-Dark: Is there not a paradox in what the hon. Gentleman is saying? Local authorities' money should never be put at risk in any way: it is not their own money to invest in schemes that will earn interest. Some extra risk must be incurred by those who invest in the smaller, marginal banks, rather than in A or B banks. Why should community charge payers' money be endangered? The hon. Gentleman cannot have it both ways; either local authorities take a risk, or they do not.
  Mr. Campbell-Savours: The small banking sector plays an important part in the funding of British industry, and it cannot be written off. The question is, what constitutes a risk? I shall deal with that later.
  Pending reform of the Bank of England's supervisory arrangements, which should follow any inquiry such as that called for by my hon. Friends the Members for Dunfermline, East (Mr. Brown) and for Derby, South (Mrs. Beckett), we must maintain confidence in the banking system as it exists today, warts and all. My new clause would establish an early-warning system: it would require a bank to publish, within one month of its

  47
  accounting period, information about inquiries that have been, or are being, made into its affairs or those of an associate by the relevant supervisory or regulatory authorities.
  Such a disclosure could be avoided only if the bank could convince the supervisory authority that, for whatever reason, it should not be made—or that a full disclosure should not be made. If it succeeded in persuading the authority that no disclosure should be made, the authority would have to inform the Chancellor of the Exchequer of its decision.
  In the spirit of self-regulation, banks would have a real incentive to keep their affairs squeaky-clean. Not to do so would invite inquiry on the part of the relevant supervisory authority, and possibly require a public statement. The supervisory authority, recognising the critical nature of its decision to approve— or not approve—publication, would have to balance the need-to-know requirements of the discerning investor with the publicity that such a disclosure might engender. Furthermore, the authority, aware of the procedure triggering notification of the Chancellor, would be extremely sensitive to the political embarrassment that would arise if a decision to approve non-disclosure was followed by a collapse, as happened with BCCI.
  The Chancellor would not be empowered to instruct the supervisory authority about disclosure or non-disclosure decisions. Nevertheless, he would be able to exert considerable pressure beyond assuming a supervisory responsibility himself. The fact that a Chancellor might at some stage have to stand at the Dispatch Box, held accountable to Parliament and the country, would certainly concentrate his or her mind on the decision being taken by the supervisory authority. I believe that the Chancellor would demand assurances that the most detailed inquiries were being undertaken into a bank's affairs before he would be prepared to sit back and let matters take their course under the cloak of confidentiality.
  I want now to consider the question of adverse publicity that would arise where a bank had been obliged to issue a statement. The supervisory authorities are frequently called in to query the affairs of the banking community. To some extent, that frequency would insulate banks from the danger of a precipitate run and collapse. Rumours surrounding BCCI seem to have contributed little to undermining the credibility of and confidence in that bank. That is why the treasurers of local authorities continued to invest in it. The heavy hand of the Bank of England announcement triggered the bank's closure and, in other conditions, that could have led to a run on the bank.
  Ms. Mowlam: My hon. Friend has referred to the attitude of local authorities and I invite him to comment on the minutes of a Treasury meeting of the committee of local authority borrowing. Back on 10 May, before BCCI issues were raised, the local authorities raised three points with the Treasury in which they were particularly interested. Their first point related to Chancery which was still on the Bank of England's authorised list. The local authorities raised the issue of the list of approved bodies on which Chancery still appeared. They said:
  "If authorised banks were unsound, the list should carry a health warning."
  48
  The local authorities asked for that back in May. In addition—
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. The hon. Lady is making an intervention, not a speech.
  Mr. Campbell-Savours: The health warning to which my hon. Friend refers is embodied in my new clause in so far as I provide for an early-warning system.
  I believe that the disclosure procedure that I have outlined, in so far as a number of banks might be required to use it and where such inquiries are under way, would act as no more than a signal to depositors that they should be alert and sensitive to a bank's affairs. The effects would be no more undermining than the rumouring in the City in recent months about BCCI's affairs. However, it would enable institutional depositors such as local authorities to enjoy the benefits of what has hitherto been insider information available only to those who are more informed in the City.
  Mr. Dick Douglas: The House is indebted to the hon. Member for Workington (Mr. Campbell-Savours) for proposing his new clause. Why should local authorities be in a privileged position over and above other investors in the hon. Gentleman's scheme of things?
  Mr. Campbell-Savours: Local authorities would not be in a privileged position. When the bank made a statement one month after the end of its accounting period, that would be a public statement to which anyone would have access.
  I want now to consider BCCI's affairs and my knowledge of the events and to pose a number of questions which the Government should answer. My authority of Allerdale was the first authority in the United Kingdom to reveal that it had lost £1 million. That arose as a result of a policy decision taken by the Labour-controlled council when it was elected in May this year. It decided that at every stage, and whatever the matter, it would pursue a policy of full disclosure in the spirit of freedom of information legislation at local authority level. I pay tribute to my local authority for deciding to announce what happened in the way that it did.
  5.15 pm
  The Government claim that the list of which I have a copy is not an authorised list. Hon. Members should note the size of the list which contains the names of all the banks that are authorised deposit-taking institutions and banks within the United Kingdom under the terms of the Banking Act 1987. The banks says that the list is only a list of authorised institutions. If that is the case, why are Chancery and Edington on that list when one of them went into liquidation earlier this year and the other is the subject of an administration order? Why were they on that list when my authority received a copy of that list on 28 June this year, two days after the Government had been informed in the Price Waterhouse report—
  Mr. Sumberg: Will the hon. Gentleman give way?
  Mr. Campbell-Savours: No, I do not intend to give way again. Why did my authority receive a copy of that list two days after the Government had been informed formally of fraud in the bank?

  49
  I want the Government also to comment on a statutory instrument which I managed to dig out last week entitled the Local Authorities (Capital Finance)(Approved Investments) Regulations 1990. I draw those regulations to the attention of the House because the Department of the Environment has insisted repeatedly in press briefings that in no way was it approving the investments of local authorities. According to the explanatory note,
  "These regulations contain a list of investments which are approved by the Secretary of State".
  Under 2 it states
  "the following investments are approved".
  Under 2(b) it states
  "any deposit made with an authorised institution or Bank of England"
  and it defines deposit as having
  "the same meaning as in the Banking Act 1987."
  Having received a letter a week and a half ago which referred to a revised list, having received the list to which I have just referred, and knowing of the existence of the regulations to which I have just referred, local authorities believed that they were acting with the approval of the Bank of England and with the approval—
  Mr. Sumberg: Will the hon. Gentleman give way now?
  Mr. Campbell-Savours: I have no intention of giving way to the hon. Gentleman. Judging from his ill-conceived comments at the beginning of this debate when the revelations were first made public and his comments about Bury metropolitan district council, comments of which he should be deeply ashamed, he should make a point later of apologising to his local authority.
  Mr. Sumberg: On a point of order, Madam Deputy Speaker.
  Madam Deputy Speaker: I have the impression that the hon. Gentleman's point of order is not a point of order for me but a point of frustration. I will try to call him later.
  Mr. Sumberg rose—
  Mr. Campbell-Savours: It is not a point of order.
  Madam Deputy Speaker: Well, if it is a point of order to me, I must hear it.
  Mr. Sumberg: On a point of order, Madam Deputy Speaker, is it in order for the hon. Member for Workington (Mr. Campbell-Savours) to make comments about my conduct in this matter and then to refuse to give way? Is that not a disgraceful way to behave?
  Madam Deputy Speaker: Order. It is for the hon. Member who has the Floor to decide whether to give way. I will do my best to ensure that the hon. Member for Bury, South (Mr. Sumberg) is called later.
  Mr. Campbell-Savours: I want now to consider why local authorities invested in the way that they did. First, they were given assurances that the bank was being restructured. Secondly, they were given assurances that a major cash injection into the bank had taken place. Thirdly, the terms offered by the bank were special not only with respect to the premium interest rate on deposit accounts, but they provided an arrangement under which local authorities could put their money into the bank overnight and draw it out in the morning. A call arrangement existed at that bank which, I am told, is not generally available in all the institutions. The fourth
  50
  reason was that BCCI was on the banking list that the local authorities regarded as approving investment. Fifthly, the local authorities justify their actions on the basis of the regulations to which I referred.
  I want to ask Ministers about the role of the brokers. If we cannot have an answer today, I should like to think that we can have an answer within the next couple of weeks. Were the brokers paid inflated commissions? Do Ministers know the answer to the question? Have they set out to establish the truth? If the brokers were paid inflated commissions, do Ministers believe that the size of those inflated commissions should have been revealed to the local authorities that were placing such large sums on deposit? What is the role of the Sterling Brokers Association which was drawn in over the Chancery affair? To what extent are the recommendations or statements that it makes to be taken seriously by local authorities? Will the Bank of England carry out its own inquiry into the actions of the money brokers involved in the affair?
  I understand that BCCI purchased insurance from a Pakistani insurance company based in Karachi called Adamjee Insurance. To some extent, that insurance should cover losses. I ask the Minister whether it is effective. We are told that the policies that were taken out with Adamjee were reinsured on the London market through a subsidiary of Commercial Union—British and European—and were also reinsured in Italy through the Company Generali. May we also be told what were the links between BCCI and the life assurance London-based holding company CCL? I understand that CCL had money on deposit with the bank. It is a life assurance company. Will the collapse of BCCI affect the liquidity of CCL? Policy holders would like to know the answer to that question.
  May we also be told about the position of Westminster city council? The treasurer there has drawn a distinction between lending and placing money on deposit. I am unable to understand the distinction.
  May we also be told about the status of the Bank of England in the affair? Mr. Ian Brindle of Price Waterhouse has said that the Bank of England was repeatedly informed of irregularities. There must be a stage in the unwinding of the whole affair at which the substance of the reports—I understand that there were 10—from Price Waterhouse to the Bank of England is made public and certainly at which it is made available to the Government so that we can hold Ministers accountable at the Dispatch Box on those matters.
  Did the Bank of England ask Ernst and Whinney why it gave up its £2 million lucrative BCCI auditing contract in 1988? That is an important question. Had Ernst and Whinney found evidence of fraud which it felt that it did not want to reveal by qualifying the accounts? Perhaps it gave up the auditing contract to place on its successor. Price Waterhouse, the responsibility for qualifying. Did Ernst and Whinney tell Price Waterhouse why it gave up the contract? Is it true that Sheikh Zayed Bin Sultan al-Nahayan sent £375 million to the bank only two weeks ago? Is it true that Ghanem Al Mazrui, the secretary general of the Abu Dhabi investors' authority, offered to invest £2·3 billion in the bank immediately prior to its collapse? If that is true, is it fair to say that the bank was trading insolvent?
  May we have an assurance from the Dispatch Box that none of the 10 Price Waterhouse reports warranted earlier intervention? I am sure that Ministers have had access to the reports—at least, I hope that they have—so may we

  51
  have that assurance today? A BCCI director has said that Price Waterhouse was informed as early as 1988 of fraud in the bank and he says that his evidence for that is that Price Waterhouse was asking questions about fraud at that time.
  May we have assurances about deeds held in the bank as security against mortgages? May we have an assurance that those who have mortgaged their properties will receive back their deeds? Furthermore, should mortgagees be paying money to the bank now? They need to know the answer.
  Another question has been raised with me repeatedly, although I have no evidence in connection with it. Did the Foreign Office press for a delay in the appointment of Price Waterhouse? It may have pressed for a delay in the appointment of Price Waterhouse to carry out the inquiry into fraud until after the Gulf war had ended. I ask the Minister whether that is true; if it is not, I am sure that he can give the House assurances.
  What is the position of local authorities affected by what has happened? They have few options open to them, although I will outline some. Some local authorities will have to sell assets to cover their losses. Some local authorities will use reserves, if they are available, to overcome the immediate funding crises. In some local authorities, a higher poll tax may be levied. I hope that that is not the case because it would have a severe effect on much of our community. The Government may decide to increase the borrowing limits of local authorities to help them to supplement their losses. Who should pay the servicing costs of those borrowings? I have no answer to that and I remain strictly neutral. It will have to be either the Government or the local authorities. In my local authority, if my local poll tax payers have to pay off the £1 million debt which has been incurred as a result of what I can only regard as negligence on behalf of the Government and of the Bank of England authorities, they will pay £3 a year extra in poll tax for the next 10 years, if the loan extends over a 10-year period.
  Mr. Nelson: The hon. Member for Workington (Mr. Campbell-Savours) does a service to the House in raising these matters and in tabling new clause 37. I oppose the new clause for reasons that I shall adduce, but I believe that his questions and the respect that he has paid to the integrity and security of the banking system in our economy are well made, responsible and worthy of the House.
  I shall confine my remarks almost exclusively to new clause 37. My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) dealt extremely well with new clause 3, although I pay respect to the hon. Member for Islington, South and Finsbury (Mr. Smith) who raised a number of important points about small businesses.
  I do not share the view of the hon. Member for Workington that his new clause is timely or worth while. Far from showing that the system of regulating our banks has been brought into question, this latest episode, tragic, hurtful and loss-making as it is for many individuals, has shown that that system is actually working and that the Banking Act 1987, which was introduced to redress the inadequacies in the supervision of our banking system, is also working, because it is bringing to book and closing down banking businesses that are acting fraudulently.
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  5.30 pm
  The question that the House is addressing—not, I hope, in an unduly party political fashion—is when one should blow the whistle. Does one blow the whistle too soon and risk a run on the banks and bringing into question confidence in our entire banking system, or does one blow the whistle too late and jeopardise the deposits and interests of many people which otherwise might have been saved? If the whistle had been blown a year ago, many individuals would have lost out then, just as many have lost out now. On the other hand, many individuals have been saved because it happened a year later.
  It is important for the House, which talks incessantly about accountability, to be sure that when we call people to account we can do so with justification. How can we ask the Bank of England to close down an authorised bank, a private enterprise or a company unless there are sound reasons for taking such action so that we can then hold it accountable? If the Bank of England were to take such action on the basis of suspicion, and if either the House or one of its Select Committees brought that into question how could we pillory the Bank for taking such action peremptorily?
  In my judgment, and in so far as I observe these matters, it appears that the Governor of the Bank of England and the department of banking supervision at the Bank of England have behaved in an exemplary and wholly proper fashion in this matter, as have the Government of the day—
  Mr. Greville Janner: Does the hon. Gentleman consider that, as part of behaving in an exemplary fashion, the Governor of the Bank of England owed any—and, if so, what—duty to pass on his suspicions to the Government of the day, and did the Government of the day have any—and, if so, what—duty to investigate those suspicions?
  Mr. Nelson: The Banking Act 1987 deals clearly with those matters. The important matter to which the hon. and learned Gentleman has drawn attention was the subject of an extensive debate when that Bill was in Standing Committee and subsequently when it was considered on Report—
  Mr. Janner: What is the answer to the question?
  Mr. Nelson: The answer is that the primary responsibility for banking supervision rests with the Governor and with the department of banking supervision at the Bank of England. Undoubtedly, some informal discussion takes place—it is not required by statute—with the Treasury and with Ministers. To stiffen that process and to ensure that decisions would not be taken in a laggardly or neglectful fashion, this House and that Act established a board of banking supervision in the Bank of England, which is quite different from the department of banking supervision at the Bank. I am sorry that this is so esoteric, but it is an important point. To try to ensure greater accountability and greater supervision in our banking system, the House established—[Interruption.] I suggest that this is an answer to the hon. Gentleman's question—a board of banking supervision in the Bank of England to stand alongside the Governor, of which he would be a member, to which he would report, and the composition of which we discussed at length, as I am sure my hon. Friends will agree.

  53
  The Bank of Credit and Commerce International has a considerable history beyond the last year of suspicion. Many hon. Members will know that when it was first established in this country its wholesale expansion within a matter of months on some prime sites throughout the capital gave rise to suspicions about the way in which it was financed. When assurances were forthcoming that major depositors from the Gulf states were supporting it, the matter was laid to rest for some time. However, some doubts remained about the bank's ethics, objectives and deposit base.
  Until 1987, this country differentiated between major authorised banks that could offer the whole range of banking services and the secondary or fringe banks that were licensed deposit-takers. It was only in 1987 that one category of bank was established—authorised banks. One major problem was that when authorising banking status we could not differentiate between domestic banks and foreign banks with branches in this country. That involved some risk, but there had previously been a risk with the licensed banking system.
  The position of BCCI, however, was special, if not unique. To some extent and to some people, it was rather objectionable, because it tried to establish a banking basis that was different from all others. It sought to move beyond the financial facts of life and to talk about "moral profits" and "spiritual growth". It persuaded employees to work overtime for no remuneration at the weekend so that it could pay their moneys elsewhere. It was a crusading bank—a new phenomenon—which was attached to an ethnic background in this country and had an understandable appeal. I do not decry the sentiments behind it, although, in retrospect, we see that it was a scam like many others. In reality, it appears that those "moral profits" were being siphoned off into Grand Cayman and into a so-called charitable foundation that itself had an interest in BCCI. This and other irregularities subsequently brought about the downfall of that bank. The disappearance of significant funds which undermined the security of depositors and customers alike.
  Therefore, although one rightly has enormous sympathy with those who, as employees, as well as depositors put their trust in that company, one must conclude that there can be no departure from the financial facts of life. Cardinal rules are that one should look at the spread of assets and liabilities of a banking organisation. One has to trust to the authorisation of the regulatory system and one should ensure that, when it comes to investing money, one does not put all one's eggs in one basket.
  The United Arab Emirates and Sheikh Zayed al-Nahayan have behaved completely honourably. They may have been ripped off by Mr. Abedi. Time and time again, the sheikh has been asked to pay up to that bank. Let it not be forgotten that he donated generously and willingly to our country when we came to the aid of the Gulf militarily. He, personally, has behaved generously and honourably. I believe that, up to a certain level, he may yet be prepared to act again in that way towards the bank's non-sterling depositors. However, why should we limit our own liability and yet call upon him to idernnify without limit all others who have lost in this case? He may do more, but he has behaved entirely properly and we should be grateful for the role that he has played in stabilising the international banking system.
  54
  The hon. Member for Islington, South and Finsbury asked why there should be a differentiation between the depositor protection scheme that operates for the banking system and the investor protection scheme that operates in the financial services industry. There is a difference between liquid money and any equity investment. It is fair enough for the House to decide—as it did—that those who invest in banks shall be indemnified up to a certain level to try to protect the small depositors who may not have the benefit of reading the Financial Times every day and who cannot be expected to know which bank might be dodgy.
  In 1987 we set that limit at £20,000 and for the time being decided that 75 per cent. of that should be the limit of the amount against which any individual depositor could be indemnified. So the sum was £15,000. That was not unreasonable at the time and it is not unreasonable now. It could perhaps be increased to £20,000, but it should not be increased to significantly more than that.
  However, in the case of equity investments, the financial services industry and the vast range of organisations that operate as authorised businesses under a variety of recognised professional bodies and self-regulating organisations, people are probably entitled to greater recompense and security. But let us never forget one important factor. In both cases, it is not the taxpayer who indemnifies or guarantees the investor. It is not us or those whom we represent who pay depositors or loss" makers in the banking or investment sectors. It is the rest of the banking industry which, under the depositors' protection scheme, have to pay up or, under the Financial Services Act 1986, as authorised investment businesses have to pay into compensation funds.
  If the House took a decision significantly to increase the amount of compensation made available to depositors, the cost would fall on the banks and their customers rather than our constituents. Therefore, it is a decision about which we should be careful—
  Mr. Paul Boateng: People would pay higher bank charges.
  Mr. Nelson: Well, it would cost the rest of the industry money. Let us take the banking sector as an example. If we raised the compensation under the scheme from £15,000 to, say, £50,000 or £100,000, on whom would the cost fall? It would fall not on the taxpayer or the Government but on the banks and their customers. Let us consider for a moment the consequences of that, not only the benefits for unlucky depositors. Let us consider the principle of the matter.
  Surely the reputable, the conservative, the trusty and the responsible banks and financial service companies would end up indemnifying the least responsible, riskiest and fraudulent businesses in the same industry. The banks may well be prepared to cover that to a certain extent. So they should, because things can go wrong and there are bad apples in every tray. However, there must be a limit to the extent to which we can ask any bank or investment business to provide massive subvention to cover the losses of people who seek to take business away from them. It is true that banking is a market, that it is competitive and that there will be good as well as bad. However, it is impossible to create a failsafe system in which no one loses.
  If bad decisions are made and if fraud takes place, someone must carry the loss. This House and the relevant industries can go too far in indeminifying people. At the

  55
  end of the day, we as well as the industries must send out the firm message, "Depositors beware. Investors beware. Nothing that this House can do can indemnify you against the possibility of loss. We will do our best to authorise institutions and ensure that fit and proper persons run them, but you must balance and cover your risks, and make your own judgment about with whom you invest."
  I have sought strenuously today and on previous occasions to defend, indeed strongly to back, what the Governor of the Bank of England and the Government have done in this matter. Their action was absolutely responsible and right. As far as I can assess, their timing was wholly right.
  However, I wish to make one point that I have made previously. It could be the answer to this difficulty. I urge the Government to listen to what I say, because I am sure that it will attract support from hon. Members on both sides of the House. There is a way of improving significantly the protection of depositors, investors and shareholders in businesses. It is called audit committees. Sir Brandon Rhys Williams, a former Member of the House, campaigned for years for the boards of companies to have a sufficient number of independent non-executives who would be forced by statute to form a cabal in order to ask difficult questions of the board and, in particular, sometimes of an autocratic chairman of a company. They could ask questions about extensive loans, faulty security for loans and the spread of risks. At the annual meeting of shareholders they could stand up and say what they had or had not asked during the year and what they received or did not receive by way of a reply.
  5.45 pm
  I challenge anyone to suggest that in the cases of Blue Arrow, Johnson Matthey, BCCI or virtually any other collapse in the past 10 years a stronger, more independent, forthright audit committee of non-executive directors could not have saved many ordinary people from losing out.
  Mr. Beaumont-Dark: Although my hon. Friend's idea sounds good, is not there a flaw in it? BCCI had worldwide ramifications and hundreds of thousands of customers. Would not his idea end up with non-executive directors who were almost full-time directors and a large staff to serve them? My hon. Friend's idea sounds good, but I do not believe that it would work in practice.
  Mr. Nelson: I understand my hon. Friend's intervention and the motives behind it. International companies have a better reputation than us for appointing non-executive directors and audit committees. They do not seem to have the apocalyptic scandals and collapses that we have from time to time. Where such committees exist in Britain and elsewhere they seem to have an extremely good record of looking after shareholders' funds, as well as the security of depositors and employers.
  It is extraordinary to hear from the Opposition Benches calls which seem to be for the bailing out of an offshore banking organisation and for people to be defended from losses which they should be expected to incur. Often they are big enough to incur such losses and sufficiently wise to make their own judgments.
  My right hon. Friend the Prime Minister was absolutely right to come to the House last week and say that local
  56
  authorities that, for a marginal increase in the interest rate which they could obtain on deposits, decided to hold 100 per cent. of the value of the capital at risk could not be indemnified at public expense. It is not the job of the House or the Government to underwrite every local authority treasurer who runs amok. One can only question the motives of treasurers who put enormous sums of money—millions of pounds of local communities' money—into banks which were previously licensed deposit takers and were long regarded as dubious. It is extraordinary that such decisions were made with the public's money.
  The Prime Minister and the Government were absolutely right to say that there was a limit to our competence and the extent to which the taxpayer can bail banks or local authorities out. That is why I hope that the Government will take a reluctant and resistant attitude to the new clause.
  Mr. Robert Sheldon: The hon. Member for Chichester (Mr. Nelson) should be careful that he does not go too far. Contrary to the views of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), the smaller banks have a role. If we end up with everyone putting their money into the top four banks, it would play the devil with the City of London.
  Like the hon. Member for Chichester, I intend to speak mainly to new clause 37, for which we are grateful to my hon. Friend the Member for Workington (Mr. Campbell-Savours). Not only is it a good new clause but he made a fine speech. However, first, I wish to comment briefly on new clause 35.
  The charges that banks impose on their customers are an outrage. The first a customer knows that he is being charged anything is when the statement shows a deduction. That is a scandal. If I buy anything or incur any cost, I expect, first, an invoice, and, secondly, the details of what I have purchased, giving me the cost of each item. Then I pay after a certain time. All right, the banks are paid a bit quicker, but they give no detailed information of any kind. It is an outrage that we have got used to. I have had discussions with the chairmen of the main banks who all accept that and say, "Yes, eventually we must move in that direction." I say, "Not in that direction; we must give an itemised list of what the charges are for and some justification for them."
  The Banking Act 1979 was the first legislation to lay responsibility on the Bank of England for granting a licence to a bank to take money from depositors. Section 3(3)(b) states:
  "the Bank shall not grant a full licence to an institution unless it is satisfied that the criteria in Part II of that Schedule are fulfilled with respect to the institution."
  The said schedule 2 states that a licence shall be granted if
  "the institution enjoys, and has for a reasonable period of time enjoyed, a high reputation and standing in the financial community."
  Nobody could ever have said that the BCCI ever qualified in that respect. Right from the start—this is not something new; we all knew it at the time—it was astonishing that the Bank of England accepted that the BCCI was a responsible institution and gave it power to expand all over London. It was a scandal.
  That having been done, it is clear from the debate of 23 November that it was understood that the Bank of England would supervise the activities of such banks. When the hon. Member for East Lindsey (Sir P. Tapsell) asked about that, he was assured that everything would be

  57
  all right because the Bank of England would be supervising the banks. That allayed some of our doubts. We knew that the BCCI had been given these powers, but we were reassured by the supervisory role of the Bank of England. Moreover, as the BCCI was such a fraudulent concern—it was fraudulent in so many ways—we assumed that the Bank of England would watch carefully over all its activities. The Bank of England failed to carry out that elementary, continuing supervision. That was the burden on the Bank of England which it should have carried.
  It is almost insulting to talk about all the treasurers of local councils and all the business men who were taken in when it was the Bank of England that was taken in. It is insulting to talk about those treasurers, including the treasurer of Westminster city council who is so close to all these events, being so naive, when the one body that was failing in its duty and was being naive was the Bank of England. We should understand that important point.
  The Bank of England knew of the bank's actions on the other side of the Atlantic, yet it said nothing to anybody about them. The treasurers of our great local authorities and the business men of some standing assumed that such actions happened elsewhere. If the Bank of England thought that the actions would have these consequences, it should have done something there and then. It had a long period of notice that it was not dealing with ordinary bankers as we have traditionally come to expect them to be; it was dealing with people who were trying to make money for themselves and, at the very least, to bend the rules.
  We cannot leave the matter as it stands. We know that the Bank of England had a greater responsibility than it now admits. We see that it is trying to dodge the responsibility that we always assumed and that we were told by Ministers at the time that it had. If the Bank of England is trying to dodge its responsibilities, we need new provisions in a new banking Act.
  Sir Ian Stewart: I declare an interest as for most of my working life I have been either a manager or a director of a bank, except when I was a member of the Government. My reasons for wanting to speak in this debate are not so much because of that connection as because in 1978–79 I was the Opposition spokesman on the then Banking Bill and in the last Parliament I was responsible for introducing the Banking Act 1987, which has been much in discussion this afternoon.
  I do not want to spend more than a moment on one or two of the issues raised about the relationship between banks and their customers, but I wish to take this opportunity to support the general purpose behind new clause 35. It suggests that banks should state on statements of account to their customers the rates of interest being charged and provide some explanation of bank charges. It is not necessarily time for that to be embodied in statute, but I hope that when my right hon. Friend the Chancellor of the Exchequer meets representatives of the banks shortly he will make it clear that there is a general feeling in the House that banks' customers have grounds for suspicion about how they are being treated by banks merely because such information is not readily available.
  I shall give the House one practical example of that. Recently, a person came to me suspecting that the interest charges on an account were excessive. After I made some calculations, it looked as though the rate of interest was several per cent. above any reasonable rate that should
  58
  have been charged on that account. I contacted the bank and after a considerable period it was established that the rate of interest had been much too high. It then took a great deal of time to work back over a long period to find out how much the bank had overcharged and to correct it. Had there been a simple statement on any of the statements of account in the interim showing what rate of interest was being charged, it would not have taken so long to resolve the matter. It is in the interests of the banks to avoid the misunderstanding and mistrust that can arise and to be more open with their customers about their charges.
  My second point about the relationship between banks and their customers concerns the nature of the list of authorised banks. The very fact that some people can misunderstand the list to be some sort of guarantee of the automatic integrity of the banks listed suggests that some sort of health warning needs to be applied to it. I shall not suggest the form of words. In bare terms the list states that it is a list of the institutions authorised under the Banking Act. It would not come amiss if additional words made it clear that the statement did not go further than the bare words represented. There is no harm in giving people more information, particularly if a shortage of that information can mislead.
  My third point about the relationship concerns the vexed question of deposit protection. My hon. Friend the Member for Chichester (Mr. Nelson) has just made a speech about that and I agreed with much of what he said. I must confess that during the passage of the Banking Act I was responsible for trying to prevent the deposit protection arrangement being set at too high a figure, because I believed that if we were not careful a version of Gresham's law would apply to banking. Hon. Members will recall that Gresham's law states that bad money drives out good.
  I fear that if deposit protection is too extensive, bad deposits will drive out good. The reason for that is simple and has been dramatically illustrated by events of the past few years in America where deposits of up to $100,000 have been protected up to 100 per cent. Therefore there was no greater risk to the depositor from placing his money with a badly run organisation that paid higher interest rates than there was from placing his money with a well-run organisation that paid lower interest rates. Therefore, in that sense, bad deposits could drive out good.
  6 pm
  The end result of the protection offered in the United States was that the deposit-taking institutions, which are the equivalent of our building societies—the savings and loans institutions—were faced with comprehensive bankruptcy. In order to pay higher and higher rates of interest those institutions had to take on riskier and riskier business until the whole financial sector collapsed. It was beyond that sector to provide any deposit protection and that obligation will fall on the United States' taxpayers. They will have to finance that problem for many years to come.
  I caution those who say, for perfectly understandable reasons, that more and more deposit protection should be provided. If one enables depositors to place their money without disadvantage with an institution that is less responsible, one will end up taking serious risks with the banking system as a whole.

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  The BCCI case has raised a number of serious issues that have been aired this afternoon by a number of hon. Members. The big question that any supervisory authority must face is when it should act. When doubts have become apparent about an institution, at what point should the regulatory body move in and take disciplinary action? That will always be a difficult decision, but we must make sure that the necessary framework is available for the regulators to take such action when they deem it right.
  From having read the published reports on the BCCI case, I believe that the Bank of England is to be greatly commended for mobilising international agreement at a difficult time on the contentious subject of the cessation of business in BCCI. However, one must ask a more difficult question—was it open to the regulatory authority to do something about the problem in the United Kingdom? It is especially timely to ask that question because we are about to be bound by the second European banking directive, which automatically extends mutual authorisation from one member state in the Community to all the others. I do not want to pick out Luxembourg as being particularly irresponsible, but the BCCI case has demonstrated that the regulatory authority in that country was not in a position to ensure that the worldwide business of a bank as complicated and as extensive as BCCI could be comprehensively and effectively regulated from one centre—let alone the smallest centre in the EC.
  Once that second banking directive is implemented we must ask about its implications for branches of banks in countries other than those where those banks are authorised. We do not have long to think about that because the directive is coming in next year. The regulators and my right hon. and hon. Friends at the Treasury will have to think carefully about whether some adjustment must be made to our statute or whether we should propose some changes within the Community to ensure that we do not expose ourselves unwittingly to the risk of further problems with international banks where there is an obligation in this country or any other country to accept the authorisation granted elsewhere on grounds with which we may not be thoroughly satisfied.
  I had a most unfortunate experience a few years ago because, in 1985, I was the Treasury Minister who had to look at the affairs of Barlow Clowes. At that time I wrote to the Department of Trade and Industry to say that, in my view, if the answers coming from that body were not entirely satisfactory it would be better to face the unpleasantness of a cessation of business than to risk collapse at any time. Those words were not drafted for me by any official in the Treasury and I wrote them because I felt so strongly. I felt that if one had a badly run company and if one knew that there were serious deficiencies in the way in which its business was conducted, it was likely that fraud would soon take place—if it had not yet taken place—because of the great opportunities to exploit inadequate accounts and a badly-managed business. In the financial sector that temptation is all the greater. Unfortunately, it seemed to me absolutely clear that it was right to close Barlow Clowes at that time. However, there was a natural reluctance on the part of the regulators and supervisors to allow things to be corrected. However, the danger is that by the time one gets sufficiently clear evidence that something is seriously wrong, it is too late to protect the money of investors or depositors. That serious problem has been highlighted again by BCCI.
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  By the time that one can prove anything, the time to act has probably gone, and yet how can one identify what intermediate action one should take? I commend the hon. Member for Workington (Mr. Campbell-Savours) for his suggestions in new clause 37. I do not necessarily agree with them in the technical sense, as I do not know whether they would achieve the right result, but they certainly point to the crucial issue. How can one take intermediate action when one thinks things may be going wrong, when one does not have absolute proof that would stand up in a court of law?
  It was because of my concern about such a problem that I pressed for the inclusion—I use those words carefully—in the Banking Act 1987 of a special provision, now section 12, for restricted authorisation. Under that section the Bank of England could impose conditions on the authorisation of a body about which it was unhappy without going to the length of requiring it to close its doors. At that time there was some resistance to the inclusion of that provision, but I had in mind exactly the sort of circumstances which have now arisen. In other words, a good deal of negative information would have been forthcoming that raised suspicion in the minds of those responsible for the regulatory system. Such information could be made available about any bank, but the fact that, in this case, it related to BCCI made things more difficult because that bank was not controlled directly in this country.
  If the regulators are not satisfied with the answers that they are given in a particular country, they should be able to require that bank to incorporate in their own country so that there is an incorporated body that then comes under the direct control of the regulatory authority in the country concerned. If we have to "borrow" the authorisation made in other countries for the sake of our own control, we are never likely to be able to get all the information we need quickly enough about banks which have widespread business throughout the world, and which can move funds rapidly from one centre to another.
  If a bank has dedicated capital in this country, an identifiable board of directors and management, and if its affairs can be supervised as intensively as those of any domestic bank, we could be more confident that the international banking system, as applied in this country, would not pose risks for depositors and investors of the kind that we have unfortunately witnessed in the BCCI case.
  I believe that there are urgent questions to ask about the way in which anticipatory steps can be taken before we reach the point at which a deposit-taking institution is likely to go bust or to close its doors. I hope that the inclusion of section 12 in the Banking Act 1987 offers a route that could be exploited in such cases. In the fullness of time, I shall be interested to learn whether it was invoked in that case and, if not, why not. Perhaps it was my fault because I did not ensure that the section was drawn up in such a way that it could be implemented in such a case. If so, we should revise the statute. The thinking behind the section covered just the circumstances that have arisen in the case of BCCI, where the supervisors were left with the difficult balance of judgment to which my hon. Friend the Member for Chichester referred. We were not in a position to know all the relevant information because of the world-wide nature of the business concerned.
  Mr. Dick Douglas: This has been an interesting debate and I am sure that the whole House is indebted to the hon. Member for Workington (Mr. Campbell-Savours) for tabling new clause 37.
  Two former Treasury Ministers have spoken—one on each side of the House. I wonder what advice they would have given to local authorities that said that they were about to invest in the Bank of Credit and Commerce International. It is all very well to be careful and guided on the basis of 20:20 hindsight, but a treasurer of a local authority, especially a small local authority. I see that the hon. Member for Western Isles (Mr. Macdonald) is in his place—would not necessarily ask two former Treasury Ministers for advice, but would ask the Bank of England. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) was perfectly right to say—I hope that I am paraphrasing him correctly—that in this instance the organisation within the British constitution with a duty of care was the Bank of England. Local authority treasurers would have asked the Bank of England what sort of organisation BCCI was, given that it had been authorised to take deposits. The Bank of England has issued a long list—the hon. Member for Workington has trailed that list, of which we all have copies—and BCCI is on it.
  Local authority members asking whether they should place such a deposit would be confronted with a treasurer who would consider the list as an indication from the Government's banker of organisations that have been examined and with which deposits can be placed. Although one should not put all one's eggs in one basket, and it is not for me to defend the actions of local authorities, the local authorities' public representatives, who are the custodians of local probity—local councilors were— placed in an extremely difficult position.
  6.15 pm
  Although new clauses 3, 35 and 37 have been linked on the amendment paper, they are not necessarily linked in reality, except in one sense. The Government have caused much of the difficulty. The Prime Minister speaks of a "duty of care" but the real thrust of the difficulties Faced by the financial sector and small businesses relates to runaway inflation. The former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), used to say that inflation was a crime and that it was cheating. That is absolutely true. Small businesses are placed in difficulties by other institutions and organisations because of the high rate of inflation and the fact that money falls in value, especially when inflation is high. That is why small businesses often encounter difficulties when they are waiting for payment from those to whom they supply goods and services. Most large companies find that it is to their advantage to delay payment because the value of money 100 or 200 days later is less than it is at the present time. The higher the rate of inflation, the less that value will be. The Government have a responsibility in terms of duty of care.
  I represent a Scottish constituency and the Scottish National party and I want to know what the Government's intentions are in relation to their duty of care. Will they rest on the Prime Minister's argument and say that local authorities should know that if a premium is offered on a rate of interest, the risk is higher and that that should have been taken into consideration by the local
  62
  authority treasurers and others? If so, that does not seem to be a safe case, because a health warning should have appeared on the list issued by the Bank of England.
  I recall what auditors have done in some of the institutions with which I have been associated, particularly the Co-operative movement. Without wishing to blame Price Waterhouse for all the difficulties, auditors have dodged their responsibilities. Their responsibilities are not simply to protect the shareholders. They have a wider responsibility, and it is not good enough for Price Waterhouse and other companies simply to say that they were investigating the matter and told people about the results of their investigation. I should imagine that if a local authority treasurer looked at the auditors' docket on any of those institutions, he would find that they had used the common accepted phraseology "a true and fair view". Although I would not go as far as saying that we should have an internal audit within a bank or joint stock company, we should examine the role of auditors further.
  Enormous difficulties are involved in monitoring financial institutions because of the international electronic transfer of money. What resources do the Treasury and the Bank of England have to get ahead of the game? My knowledge on this matter is limited to the public print, but there seems to have been an enormous swindle going on for many years. It was deeply hidden within the organisation on an international scale. It is extremely difficult to get ahead of that game unless the House, through the Treasury and the Bank of England, has resources such as international collaboration to keep ahead of the game.
  I trust that the Treasury will not simply rest on the Prime Minister's words about a duty of care. Local authority councillors and treasurers will have relied on a view expressed through the Government's publications. Therefore, although I do not expect the Government wholly to indemnify local authorities, I hope that, in consultation with local authorities, they will look at the burden that will be placed on poll tax payers within the local authority concerned if the Government wash their hands of that affair.
  Mr. Beaumont-Dark: I do not want to say too much about the Bank of England now as I have the honour to sit on the Treasury and Civil Service Select Committee and I am confident that next week we shall be making some inquiries of the Governor himself. It is easy, off the cuff, to say that it must be someone else's fault—that it must be the fault of the Bank of England. It may well be that the Bank of England will prove to have been somewhat at fault.
  However, 20 years ago I had the pleasure of being the chairman of the finance committee of the city of Birmingham council. I followed that by being the chairman of West Midlands county council finance committee. All those years ago, we had rules and regulations. The sums that we had available then would amount to hundreds of millions of pounds today. We had rules about the sort of banks with which the money could be lent and the percentages of money that could be lent. If those rules were sensible then, surely they would be sensible today. To say that the county treasurers and finance directors depended, in all their innocence, on the wicked Governor on the hill in the Bank of England is nonsense because all those treasurers are members of the

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  Chartered Institute of Public Finance and Accountancy, are all qualified public accountants, have all, I hope, been in other jobs before and all know about finance.
  I am amazed that speakers in today's debate have used the word "authorised" by the Bank of England as though it were the same word as "guaranteed". It is not in any way. "Authorised" means that the Bank of England or anyone else gives a list; "guaranteed" means that, whatever happens, someone will make a guarantee.
  In this country and in America there is a list—the Standard and Poors-Bank rating system—which gives a number of banks. There are two organisations in this country that list banks and their credit worthiness. I am a director and adviser of Touch Remnant, which is only an investment trust, not a great local authority dealing with other people's money. It deals with shareholders' money. At the board meeting every month a list of banks and their credit rating is produced and we discuss whether a million pounds here or there should be lent to such banks.
  Are hon. Members trying to tell me that a public official who is paid £60,000 or £70,000 a year should not show the same propriety with public money as other people use with shareholders' money? It is nonsense to talk as though there were some wicked plot. In the case of the Western Isles council, it is either criminal or folly, or both, that someone could lend £23 million—£750 per head of community charge payers' money—to such an irresponsible organisation.
  Mr. David Shaw: I take my hon. Friend's point and agree that a number of local authority treasurers may well have made mistakes. I agree that to lend about half the council's total financial resources, as the Western Isles council did, seems to show a high degree of negligence. However, has not my hon. Friend read reports that, apparently, the auditors did not qualify the accounts but insisted only on an amendment to the first note to BCCI accounts, which normally deals with accounting policies and would be the last place anyone would expect to have to pay serious attention to a question mark about the company's financial health? Does not that suggest that there may be something a little wrong, and some treasurers may have been innocently taken in?
  Mr. Beaumont-Dark: I rarely come across financial innocence, but I come across incompetence daily. Anyone in his right mind who heard what happened in Florida a few months ago, when Noriega drug money was talked about, who still thinks that a local authority should lend money in that way is incompetent in his job.
  I was taught early, as an articled clerk, that one should never borrow long and lend short. That is precisely what some of the highly geared, fringe banks are doing, which is why they get into terrible trouble. Everybody should look not just at the bank balance sheet, but at the quality of the loan book—the rating system is involved when one checks the quality of the loan book.
  I shall not say too much about BCCI because that has already been done and I agree with most of the comments. I shall deal with a suggestion that was mentioned last Monday. Many of us know that we cannot expect the ordinary bank depositor, particularly if there is a language problem, totally to understand the system. I am always frightened in foreign banks because I do not speak a
  64
  foreign language. Many Asian investors and depositors have money in BCCI and under the bank deposit scheme they will get back 75 per cent., up to a maximum of £15,000, of it.
  I hope that we can agree that the Government and the Bank of England could pay out money where deposits can be proved. That would help people in crucial difficulty and the money would then come back through the bank deposit scheme. The only loss involved would be the interest on the money—a small sum when set against the amount of suffering that could be caused. Such a scheme might also provide a saving in unemployment benefit. We could help distressed depositors in the short term in such a way without actually bailing them out. We would not be breaking rules or setting precedents, but would save many people a tremendous amount of the tragic suffering which, to my certain knowledge as a Member of Parliament, exists.
  Ms. Mowlam: I shall try to be brief and not repeat the comments of many hon. Members, particularly the long list of questions of my hon. Friend the Member for Workington (Mr. Campbell-Savours). We look forward to answers from the Economic Secretary to those questions.
  Much of today's debate has focused on the nature of systemic risk to the banking system. The Opposition have made it clear that they understand the arguments about systemic risk and getting sufficient information to take a case to the Serious Fraud Office with the legal backing and status to make it stick. We also understand the time needed for the Bank of England to put together a sufficient case. There is no disagreement about that.
  However, the Opposition believe that fraud at BCCI was possibly ignored for far too long while the importance of avoiding systemic risk to the system was considered paramount. The Economic Secretary must explain that this evening. It would also be helpful if, when responding, he could clarify a number of issues raised in the press. There has been nowhere else to debate the matter during the past four or five days.
  First, can the Price Waterhouse report of March 1990 be made public? It seems that the Wall Street Journal has more influence and the American press have better copies of that report than we do on this side of the Atlantic. Secondly, in last Monday's debate the Economic Secretary said that information came to light at the beginning of this year. He referred to a manager in the bank and used the pronoun "she".
  The Economic Secretary to the Treasury (Mr. John Maples): I saw the record, and it was a mistake. I do not think that I said "she". I certainly did not mean to imply any gender.
  Ms. Mowlam: What information was it that that genderless person, or person of doubtful gender, provided in January of this year? The press seemed to suggest that the Price Waterhouse report of March 1990 was a pretty damning indictment of BCCI. If the Economic Secretary could give the House that sort of information tonight, we would then know whether the Bank of England acted with due diligence or was too tardy in its behaviour. As my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said, it would be useful to hear about why Ernst and Whinney, now Ernst and Young, switched to Price Waterhouse in 1987–88. That debate between the two big accounting firms has been reported in the press.

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  The bar protocol of 1983, the international banking settlement, gave the option for a college of regulators to be set up when a banking problem was pan-national. In relation to BCCI, that college was set up in 1987–88. If it was set up in response to the bar protocol of 1983, why did it take so long? If it was not, what was there about BCCI in 1987–88 that led to the setting up of the college of regulators? Such clarification would make a great difference to the debate.
  6.30 pm
  It would be interesting to know about the keenness of local authorities to get to the bottom of some of the difficulties. As I said in an intervention, the Treasury had a meeting with the committee on local authority borrowing on 10 May this year at the Treasury chambers in Parliament street. The minutes of that meeting show that a representative of the Bank of England, Miss Jean Noble,
  "commented that the bank had a statutory duty to step in as soon as depositors' funds appeared to be at risk."
  I am sure that the Minister will quibble over the word "appeared". The minutes continued:
  "They acted on the behalf of depositors to minimise losses even though it might take time for depositors to get their funds back."
  There is therefore a clear commitment by the Treasury that the bank should step in as soon as depositors' fund are at risk. At that meeting local authorities voiced their concern. The Association of British Counties said:
  "They worried about the risks for smaller banks' liquidities if local authorities lost confidence in this area of small banking as they switched deposits in larger banks."
  We should not blame local authorities if, as a result of the speech by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark), they shift their deposits to mainland banks and cause problems. Local authorities were aware of such problems and asked about them in May.
  One issue has not been debated since 5 July. Local authorities, small investors and small businesses had money in BCCI. It is odd to say the least that none of the big clearers had any open exchange trade with BCCI at the time of its closure at 3 pm on 5 July. Why was that? Normally there are open exchange trades of deposits and lending between clearers and secondary banks. There have been no reports of any of the clearers sustaining losses. We can either conclude that the clearers had spoken to the Bank of England some time ago and were well aware of BCCI's problems and were not exposed in the same way as local authorities, or—a more damning indictment, although I am sure that the Minister will clarify the matter—the clearers were tipped off and told to get out by 5 July because there would be a closure and local authorities would be left to stew. I am sure that the Minister will tell us whether some of the clearers got out 18 months ago. If they did, the message that prompted them to do so should have been passed to others in the financial system.
  Some Conservative Members spoke about the role of brokers. Does the Treasury intend to look again at the grey code governing brokers and their actions? Is there a need to look at the regulations on brokers or to publish the rates that brokers are paid? It would be useful to know whether the Minister proposes even to look at such matters. A Conservative Member said that auditors should have a duty rather than a right to report fraud or
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  potential fraud. I put that question last week to the Department of Trade and Industry and was told that the Department had no intention of examining the issue.
  As hon. Members have said, we are facing a serious banking crisis and some knock-on questions should be examined. Auditing and the question of duty versus right to report fraud is one of them. The other question relates to qualified reports by accountants on companies. The hon. Member for Dover (Mr. Shaw) nods. He raised that matter. Price Waterhouse is on record as saying that it could not qualify accounts because the whole system would crack up. Surely it is incumbent on the Treasury or the DTI to say that if qualifying will rock the boat the Government will look at an alternative way to send a signal to local authorities and others about problems with accounts. We either change the system and have another flag, another indicator, or say to Price Waterhouse that it has not acted within the present legislation and is at fault. The Minister cannot have it both ways. Either Price Waterhouse has not done the job properly or the Government's legislation is inadequate.
  Hon. Members have spoken about the status of the bank list and the hon. Member for Selly Oak said that Opposition Members are arguing that that list should authorise the deposits of local authorities. Even if the hon. Gentleman had been here for the whole of the debate, he would not have heard one Opposition Member argue for that. Local authorities thought that that list had some meaning. Why should they not? The Department of the Environment sent it to them and it had the Department's imprimatur. I do not suggest that the list guarantees deposits, but it indicates which banks are authorised.
  Surely the hon. Member for Selly Oak can see that there was confusion and misunderstanding. Local authorities thought that it meant more than the bank thought it meant. Plainly the bank did not think much of it because by June it had not removed from the list Chancery or Edington, although they were in liquidation or administration. As the right hon. Member for Hertfordshire, North (Sir I. Stewart) said, we should look at that again. We should also look at the quality of the advice that the Bank of England gives to local authorities. We are asking only that the quality of information on the list should be examined.
  The right hon. Member for Hertfordshire, North raised an issue that has not been mentioned much in the debate or in the press, although it is crucial for the future, and that is the whole question of Europe. In a year there will he a single passport on banking, and banking systems in other countries may not have even the bare necessities of banking regulations that exist in Britain. The Minister must tell us whether he is prepared to support a push for the levelling of banking regulations throughout Europe so that we are not exposed to the weakest link in the European chain.
  We must also examine compensation schemes throughout Europe. We do not say that they should all be the same, but there should be convergence and understanding and the present consolidated supervision directive on compensation throughout Europe, which is in the bowels of the Commission, should be brought to light and politically backed so that when we are in the single market we are not faced with banking problems.
  My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) spoke about the compensation scheme. Conservative Members tried to portray us as if we

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  were saying that people should have 100 per cent. protection and that we would then get into the savings and loan position of the United States Government. Not one Opposition Member argued for that. The least that any of us has asked for is an increase in the investment protection scheme so that in real terms it will be at the 1979 level when the £15,000 maximum was set. That maximum was reintroduced in the Banking Act 1987 and the original maximum was set 12 years ago. Surely that should be index linked in line with inflation. That is asking not for 100 per cent. protection but for a basic improvement in the investment compensation scheme.
  Small investors and Asian business people in particular have been exposed to great problems. If the Government are committed to small businesses, the least that they can do for small businesses, which are going to the wall as a result of this banking collapse, is to give them a package. They need more than helplines, which are merely a sign of blowing in the wind. The only sensible part of the speech of the hon. Member for Selly Oak was his call for a package. Such a commitment would mean something to people.
  Mr. Calum Macdonald: I was not a member of the Committee that examined the Finance Bill, and I speak as a Member who represents a constituency that has been badly affected by the collapse and the crisis.
  I was dismayed by the attitudes shown by Conservative Members, which were exemplified in the speech of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark). Labour Members and local authorities are not denying that mistakes and errors were made and that there were misjudgments, but, despite what the hon. Member for Selly Oak said, it has to be remembered that local authorities and their finance divisions are amateurs in the money markets. I do not know what the finance director in Selly Oak is paid. If it is £70,000, that is not the case in the Western Isles. The only people earning that kind of money of whom I know are those who are supposed to be running the Bank of England and looking after the interests of the depositors.
  The professionals dealing with the money markets are the Bank of England regulators, who look after the interests of the public. As my hon. Friend the Member for Redcar (Ms. Mowlam) said, brokers who gave advice to local authorities in these matters have some responsibility as well. If it is a matter of surprise and concern that a local authority such as Western Isles placed £23 million in a bank like BCCI, what about the nature of the professional advice received by that local authority, particularly when it now emerges that the local authority expressed to its brokers doubt and concern about the bank? The brokers came all the way to Stornoway to persuade the local authority that BCCI was a legitimate bank and that it was all right to leave the £23 million in the account there.
  It is no surprise that people whose day-to-day expertise is that of a director of finance in a local authority have had their fingers burnt in a crisis of this sort. The real surprise, and the cause for concern and dismay, is that the much-vaunted financial professionals in London and in Edinburgh also got their fingers burnt, and that their advice caused local authorities to get their fingers burnt.
  There is a contrast between the attitude taken by local authorities in the middle of the crisis and that taken by the regulators, the Government and the brokers involved. In every local authority, there is a searching inquiry as to why
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  things went wrong and money was lost, nowhere more so than in the Western Isles where there has been an honest admission of error, self-criticism and a determination to put things right so that such mistakes are not made again. However, the professional brokers who advised the local authorities have produced nothing but a stone wall of silence. There has been no hint of self-criticism or admission of failure or an apology for the bad advice that they gave. The Bank of England and the Government have exhibited the same stone wall of silence. It is not good enough for the Government and the Bank of England to wash their hands of the matter and to claim that it is up to the local authorities.
  The people who will suffer if that attitude is taken will be the only innocents in this affair—the old folk who rely on home services, the children in schools who rely on continuing levels of expenditure to provide them with an adequate education, and poll tax payers. The impact of these losses will fall on their backs unless the Government take a more positive and constructive attitude. Somebody will have to pick up all the bills for this. Either the receivers of local authority services and poll tax payers will pay for all, or the burden will be shared so that the Government and the general public take on some of it. The Government will have no moral or political credit if they continue stonewalling in the way shown by the Prime Minister last Tuesday and Thursday and by Ministers today.
  6.45 pm
  Ms Diane Abbott: There are several categories of losers from the BCCI collapse, and I believe that this debate has not sufficiently distinguished between them. One of the big losers is the Sheikh of Abu Dhabi. I have read that his father was accustomed to keeping his money in a suitcase under the bed. The present sheikh may wish that he had stuck to that. Another category is local authorities. I do not intend to repeat all that has been said about them, but I shall point out that the finance department of one local authority had the presence of mind, the expertise and the skill to withdraw its money from BCCI—that of the London borough of Lambeth. That borough is much maligned in the Chamber, so I am glad to put that fact on record.
  A third category of loser is distinct from the first two categories. It encompasses ordinary small business men and depositors, notably Asian business men and shopkeepers. Conservative Members and those speaking from the Treasury Bench have adopted a sneering tone towards the depositors in BCCI. The hon. Member for Chichester (Mr. Nelson) said that anybody who had put his money into BCCI would need his head examined, and that everybody knew about BCCI. But how were ordinary shopkeepers in Southall, Bradford, east London and Glasgow supposed to know the gossip at City cocktail parties?
  Furthermore, those people banked with BCCI not because they wanted a greater return but because BCCI, literally and figuratively, spoke their language. They received what they saw as a more welcoming and supportive service than that offered by the main clearing banks. It was not greed that led Asian small business men to bank with BCCI but the fact that they found it a supportive and understanding environment. Those shopkeepers do not go to the same cocktail parties as the

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  Economic Secretary or the hon. Member for Chichester. They were in the hands of the supervisory and regulatory authorities. And there is a growing suspicion among commentators and amongst Labour Members that those authorities failed this category of loser.
  We have read in the newspapers today that, before this wave of Bank of England and Price Waterhouse investigations, United States regulators had complained about the Bank of England's reluctance to co-operate in investigations on BCCI. Last week, the Economic Secretary said that the Bank of England could not be expected to act on rumour. It cannot be stressed enough that BCCI's problems were not rumours. In 1988, it was indicted in the US for laundering drug money. It was indicted for fraudulently acquiring a US bank. There were well-documented connections with Noriega. Furthermore, as my colleagues have pointed out, Ernst and Young, the bank's former auditors, voluntarily gave up a huge account. As my hon. Friend the Member for Workington (Mr. Campbell-Savours) wondered, did the Bank of England ask why Ernst and Young chose to give up BCCI?
  This scandal raises a number of questions, and it is as well to put them on record again. One involves the role of the auditor. Several hon. Members have suggested that, in future, the auditor should have not just the right but the duty to point to fraud. There are questions about the role of the Bank of England and about the powers of the Serious Fraud Office, which can act only on referrals. There have also been questions about the deposit protection scheme and suggestions that it should be raised in line with inflation. Thousands of ordinary, hardworking Asian people throughout the country with small businesses put their trust in BCCI. They believed that if the bank had the support of the Bank of England it was safe to do so. These people have contributed greatly to our economy in extremely difficult times. We believe that they deserve more from the Government than an assumption that they should have known about City gossip.
  Mr. Ian McCartney: As the House will know, Wigan metropolitan borough council has been caught up in the demise of the Bank of Credit and Commerce International. Many Conservative Members represent banking, but they seem not to realise the damage that banking can inflict on local authorities by making short-term political attacks upon them. In this instance the local authorities do not, in the main, represent the political party with which banking is associated.
  Last year, Wigan metropolitan borough council handled over £400 million, and it will probably handle even more than that this year. The only money that it will lose this year will be what it invested in BCCI, having taken the advice of brokers in the City and the advice contained in circulars submitted to local authorities by the Department of the Environment. Local authority treasurers act with professional integrity and give proper advice to councillors, but on this occasion they have found themselves misled and misinformed.
  Only one class of person had the opportunity in the City to receive a nod and a wink or advice in advance about the position of BCCI. Local authorities, people with small businesses and other ordinary depositors are the innocent victims. Conservative Members argue that individuals have a duty of care and must be mindful of that responsibility. In terms of reasonable action, there is the individual depositor and the local authority treasurer who
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  places moneys in a bank. Do Conservative Members suggest that if a marginally higher rate of interest is paid there must be additional risk? Why is it that every night on television the big four banks and building societies are advertising marginal increases in interest rates to encourage depositors to place their money with them? Is it suggested that anyone who deposits with the big four banks and building societies is running a risk?
  Mr. Barry Porter: Will the hon. Gentleman give way?
  Mr. McCartney: I think that the hon. Gentleman has been downstairs somewhere looking at his deposits. I shall not give way to him. I normally allow others to intervene in my speeches, but I shall not give way to someone who has come into the Chamber at the tail end of the debate to cat-call hon. Members who are speaking on behalf of their constituents.
  Surely it is not being suggested that a marginal increase in the rate of return is a sign that a deposit is less safe than it would be with any of the other 499 banks on the list submitted by the Bank of England. If the list that was prepared by the Treasury and the Bank of England and submitted to local authorities on 28 June was meaningless, why was it ever issued? Why was it not issued along with a letter from the Department of the Environment asking local authority treasurers to set out by return of post the investments made in the previous quarter with the banks on the list? Such a request would show that the Department of the Environment and the Treasury regularly seek information that is based on the banks on the list that is sent to local authorities. It would be reasonable for local authority treasurers to take the view that, on that basis, the risk of placing a deposit with a bank on the list would be minimal.
  We are not talking about share speculation, when a share can increase in value or lose value. We are talking about individuals making deposits in a bank that was recognised by the Bank of England as one that was operating effectively, though we know now that it was not. As far back as 1987, shortly after the publication of the Banking Act 1987—section 12 is especially relevant—advice was being given to the Bank of England that showed that the BCCI was operating in a fraudulent manner, or that that could be so. Ernst and Young decided to stop acting for the bank. It decided that it would forgo £2 million a year because it was not prepared to continue with the cover-up of the bank's activities. In March 1990, Price Waterhouse suggested clearly to the Bank of England that there was serious fraud taking place within BCCI. It believed that in the circumstances it was unable to make such a statement in its report.
  Individual depositors, local authorities and even finance directors of large private companies have to rely on information that is gained in the public domain when it comes to making deposits. Since 1987, the Bank of England has deliberately conspired to ensure that information that should properly be available in the public domain would not be disclosed. As my hon. Friend the Member for Redcar (Ms. Mowlam) said, that was done to protect the secondary banking system.
  New clause 37, in the names of my hon. Friend the Member for Workington (Mr. Campbell-Savours) and others, provides an opportunity to protect the banking system from a bank or a group of banks when information

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  that is made available in an investigation is found to be incorrect. The new clause would also provide protection for depositors, be they institutional depositors such as local authorities or individuals, such as people running small businesses. If the relevant information is available at an early stage, logical decisions will be made about deposits and the Bank of England will be able to step in to protect depositors.
  At the end of the day, the Bank of England is the regulator, and it must be an effective one. Instead, we have seen a failure of regulation. Individuals, many of whom deposited hundreds of thousands of pounds, which was hard earned, have not been protected. As a result, they have seen their businesses fail and their lives have been ruined. Local authorities' trust in the banking system has been undermined. The Government must not underestimate the capacity of institutional depositors, such as local authorities, to remove their deposits from other areas of the secondary banking system, particularly when they are being vilified constantly by Conservative Back-Bench Members. Their integrity is being attacked as their banking practices are criticised.
  If the attacks continue, there could be an immediate political response. Institutions could withdraw substantial funds from the secondary banking system, causing further problems for banking and the City. Surely Conservative Back-Bench Members are acting irresponsibly in what is already a crisis. They are making attacks on local authorities in the short term which in the long term will undermine the banking system and the way in which it is operated.
  Mr. Roger Stott: The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) has been highly critical of the behaviour of local authority treasurers. Does my hon. Friend agree that under current regulations and legislation local authority treasurers have a duty to maximise the amount of money that is at their disposal? That applies especially to the Wigan authority, which is poll tax capped. It cannot raise any extra money because it is capped, so the borough treasurer, under the relevant reguations, has to maximise the amount of money that is at his disposal. That is precisely what he was doing when he invested in BCCI.
  Mr. Beaumont-Dark: It is not true.
  7 pm
  Mr. McCartney: Will my hon. Friend let me answer the hon. Gentleman who is heckling from a sedentary position? Perhaps he is on your deaf side, Mr. Deputy Speaker.
  My hon. Friend said that local authorities have a duty to maximise their funds, and in 1990 the Government introduced capital finance regulations to ensure that that happened. At that time, my right hon. Friend the Leader of the Opposition prayed against the regulations in order to allow the Opposition an opportunity to question the Government about their scope and effect and about whether the list of institutions issued on a quarterly basis by the Bank of England had some validity. However, the Government did not allow a debate and the regulations were put into effect without being publicly scrutinised; thus preventing the Opposition from questioning directly
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  the consequences and practical effects of regulations which are now operated by local authorities, irrespective of their political colour.
  I shall be brief, because many hon. Members may wish to make further contributions to the debate. If the Minister does not respond today, the Government need to respond at the highest level before the House rises for the summer recess. It would be intolerable—if not negligent—if the House did not consider further Government proposals between now and the summer recess but left over the summer not only local authorities, which will cope one way or another, but individuals who are affected by the banking collapse with no idea of what is happening. It will be intolerable if people have no idea whether there will be an investigation, why the failure occurred, no idea of the Government's position or of the decisions taken by the Bank of England and no idea whether the Government are prepared to mount a rescue operation such as that following the Barlow Clowes affair or to accept the necessity of protecting small business people for the sake of jobs and of the long-term future of communities and of protecting individuals who have other forms of deposit with BCCI, including deposits relating to their private dwellings. It is absolutely essential that those people are not left to sit—as it were—sweating until the House resumes in the autumn or until there is a general election and a change of Government—the new Government would never allow such a situation to arise.
  Finally, those who are interested in protecting the integrity of the City of London or the banking institutions should look not to Tory bankers, but to the Opposition.
  Mr. Bob Cryer: The collapse of the Bank of Credit and Commerce International has raised a number of awkward questions, not least that raised by the Economic Secretary to the Treasury who is now lounging on the Front Bench. If a bank is registered within the Common Market, it apparently has immunity to establish itself in any other member state and to rip off its customers. I do not agree with that and I suspect that many other people would be critical of such a view. It has raised some serious questions about the position of banks within the Common Market and, because of the greater integration proposed by the Government and the move towards 1992, something should be done quickly before it gets worse.
  The list issued by the Department of the Environment has been mentioned several times, and rightly so. There is no point in the Department of the Environment sending out a list to seek information about how local authorities are investing their money unless some credibility is given to that list. Although the information was provided by the Bank of England, the list of approved institutions sent out by the Department of the Environment must have carried some weight with local authorities. Moreover, two banks on that list were in grave financial difficulties—and were known to be so—and were near liquidation, and yet they were incorporated in the Department of the Environment's list. There is a legitimate argument for saying that the Government should make a contribution to the local authorities that have been affected since they invested in BCCI because the Government implied that it was safe to invest in that institution. It was merely an indication, but the Government cannot escape the fact that if they issue a list of institutions, it is likely that those

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  institutions will be taken to be sound in wind and limb. The Government are at fault as far as local authorities are concerned.
  I support new clause 37 because many people affected by the collapse are not professional investors. They are small business men and business women who are absorbed in the operation of their company, which arises as a matter of course in small businesses because the managing director is also the major shareholder, or the sole proprietor is also the marketing manager, the planner, the designer and the production engineer all rolled into one. Such people cannot be expected also to be financial experts. The provisions thrown up by the liquidation facilities to protect depositors are inadequate.
  A Conservative Member said that it was not for us to pick up the pieces and that people must make their own way. That is arrant nonsense because the community as a whole picks up the pieces. If small businesses or medium-sized businesses—and I use the term "small businesses" in the sense of the Bolton committee report to mean companies employing up to 200 people—go into liquidation because of the collapse of the bank, the community as a whole picks up the pieces through unemployment benefit, income support and other benefits provided by the nation. The community will be called upon to save from abject poverty the people who are thrown out of work. It will not be good on the dole but at least it will not mean abject poverty. Why do riot the Government consider whether they can save some of the small businesses and prevent them from going into liquidation by providing better protection for them and for small deposit holders? I am not suggesting a blanket indemnity—I am stating merely that if a lot of businesses go to the wall, the Government will have to provide support through unemployment benefit.
  Another issue is what the Bank of England did. It is amazing that the people on telephone number salaries—such as the Governor of the Bank of England who recently received a 17 per cent. increase—never bear the responsibility when something goes wrong. That is certainly true in this case. Under the front page heading "CIA challenged on BCCI role", the Financial Times makes it clear that the information received from the United States Federal Reserve and the Bank of England about BCCI had been singularly lacking. It states:
  "Mr. von Raab's complaints about official stonewalling have been echoed"—
  Mr. von Raab is a former United States commissioner of Customs—
  "by Mr. Robert Morgenthau, the New York district attorney who for several months has vented his frustration at the lack of co-operation he has received from the US Federal Reserve and the Bank of England."
  Why is that so? Why did not the Bank of England co-operate with the United States authorities to ensure proper and adequate scrutiny and information? Was it because the Bank of England wanted to keep the bank alive and dared not provide the information in case the United States authorities pulled the plug in view of the Bank of England's inactivity and in case it was exposed as being less than zealous in the performance of its duties?
  Mr. Barry Porter rose—
  Mr. Cryer: I will not give way, because I am sure that everyone wants to hear the Minister's detailed replies to all the points that have been made.
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  Curiously enough, it appears from a story on the front page of the Financial Times that there has been a degree of fraud even at one of the joint stock banks. Under the headline,
  "Midland operated secret defence offshoot",
  is this report:
  "A trade finance arm of the Midland Bank, one of whose subsidiaries had secret links with Britain's security services, incurred losses of at least £75 million over the past decade. The losses arose in part from undisclosed fraud at one of the trade offshoot's customers."
  It seems that fraud is to be found not only in the secondary bank system, but the Midland. Sir Kit McMahon's reign as chairman of the Midland bank was not exactly distinguished, and apparently he did not know of the existence of that subsidiary. Nevertheless, he left the bank with telephone number compensation. He was described as a marvellous banker, but they still got rid of him. The same has happened with other people—such as the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher). The Government put their faith in the Bank of England, but it seems slow and unwieldy, and failed to take action for far too long.
  In the case of BCCI's collapse, which affected thousands of people, the Government and the Bank of England were apparently taken by surprise, while auditors turned a blind eye. However, when it was suggested that two trade union officials were not handling comparatively paltry sums of money absolutely properly, there was an outcry. The Government told the certification officer to prosecute Arthur Scargill and Pete Heathfield and to leave no stone unturned. However, they were vindicated on every charge.
  There is a stark contrast between the way that National Union of Mineworkers' officials were dragged through court after court, largely at the Government's instigation, and the attitude taken towards BCCI—where fraud was known of by Ministers, Government officials, the Bank of England, and Price Waterhouse. The fear was that if someone made a statement, the whole thing would collapse like a pack of cards. That is why there was so much inactivity for so long.
  The Government must take some responsibility for that mess, and it is time that they exercised it in respect of small depositors, small businesses, and local authorities that took the Government's implicit advice. The lesson for anyone is, never trust a single word that the Government say.
  Mr. Maples: We are all concerned about the stories we have heard in our own constituencies of the somewhat high-handed and insensitive way—to say the least—that many banks have treated their small business customers. As a result, the Treasury and the banks undertook a study. We are finalising our conclusions. That has taken time, but we expect to make a statement soon. I cannot say now what those conclusions are, but we have found no evidence of collusion, or any suggestion that the major banks are conspiring with one another to treat small businesses in the same way. Certainly most businesses received the 3·5 per cent. cut in the base rate up to last Friday.
  7.15 pm
  Although there have been many complaints, when one remembers that the banks have 4 million small business customers—about half of which are in credit, and half in debit—they still represent a small overall percentage. Nevertheless, there is clear evidence that some customers

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  have been treated insensitively, and perhaps even outside the terms of their contractual arrangements with their banks. We will address that problem in any recommendations that we make.
  We also found in some instances that what the banks told us was that their policy has not necessarily translated into action at branch level. However, there is a fair amount of competition, and customers can move their accounts. I appreciate that at present, in the middle of a recession, it is probably impossible for a firm to move if it owes money to its bank. However, when that time ends, banks which treated their customers in a high-handed way will suffer for it. One must remember also that the relationship is the subject of a commercial agreement between banks and their small customers.
  Mr. McCartney: Is the Government's intervention an indication that the banking ombudsman scheme is a farce and a failure, and has done nothing to protect individual depositors with complaints about their banks or individual branches?
  Mr. Maples: As the hon. Gentleman may know, the recent Jack report recommended a code of conduct, and I will deal with that in the context of new clause 35.
  Mr. Nigel Griffiths: The Economic Secretary said that central bank policy may not have filtered down to branch level, but that is the very level at which businesses and individuals transact their borrowing. It is at that level that businesses and individuals suffer, if not malpractice, then unfair practices that penalise their interests. What explanation did the banks give in that regard? Why did they allow that breakdown in communications to affect their customers so badly?
  Mr. Maples: If that is the impression that the hon. Gentleman gained, I could not have expressed myself very well. I meant to convey the information that we did not always find that that which head offices told us was their policy was happening on the ground. In some cases, activity at branch level did not accord with what the head office thought was happening or intended to happen. We shall draw such instances to the attention of the banks concerned.
  New clause 3 would impose huge administrative burdens on banks, for little discernible benefit. Those burdens would inevitably be reflected in higher costs, which would have knock-on effects for the banks.
  Mr. Campbell-Savours: Will the Minister give way?
  Mr. Maples: I have listened to the debate for three and a half hours. If I am not allowed to respond without an intervention every 45 seconds, we will be here for a very long time. The hon. Gentleman made an extremely long speech.
  Mr. Campbell-Savours: I am sorry to press the Economic Secretary, but could it be that the targets set for bank managers are such that the only way that they can be met is by ignoring the advice given by their central offices?
  Mr. Maples: It is for the banks concerned to diagnose the causes and decide what to do.
  New clause 3 would impose expensive burdens on banks, and there is a likelihood that the added administrative burden of handling loans at higher interest rates might make banks unwilling to lend on riskier
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  projects, which often involve small companies. Where information is needed, it can readily be gathered by the Government, and I hope that, on reflection, and in view of my following comments on the Jack report, the House will agree that it is not necessary to pursue that clause.
  New clause 34 seeks an inquiry into competition. As I said, we have found no evidence of anti-competitive practices. However, as one of his duties, the Director General of Fair Trading constantly keeps an eye out for anti-competitive practices and behaviour. If he were to find any, I am sure that he would act. In the absence of convincing evidence, to undertake a study of the kind proposed would involve unnecessary time and expense. Again, I hope it is felt that enough is being done not to require a statutory inquiry into competition.
  I have some sympathy with new clause 35 and the suggestion that bank charges should be more transparent. As the House knows, the Jack report recommended a code of conduct. The banks have published a draft, and expressed willingness to institute a code of conduct.
  The banks are thinking again, and are talking constructively to consumer bodies. Although no timetable has been established, we regard the matter as important. If a satisfactory voluntary code is not forthcoming, we shall seriously consider implementing a statutory code: we feel that people are entitled to know how interest and bank charges are calculated.
  I hope that those who tabled the new clauses will decide that enough is already being done to make it unnecessary to press them. Several of my hon. Friends spoke about new businesses. I hope that they, and Opposition Members, will forgive me if I do not deal with every point that was raised. I shall try to deal with most of them, but hon. members should let me know if they feel that I have left out anything about small businesses.
  I think that the purpose of tabling new clause 37 was to institute a debate about bank regulation and BCCI. The BCCI fraud was complex and sophisticated, and took place within a group that operated in some 65 countries. Several companies sought to arrange the bank's affairs in a way that made it difficult to regulate. For a long time it had two auditors, and the arrangement was difficult to police. All that made the fraud easier to perpetuate than it would have been had the operation been limited to one country. It is not surprising that the auditors were fooled, and that it took a long time to discover the fraud.
  We are not discussing whether a banking licence should have been granted. Under the legislation of the 1970s, the bankers were entitled to come to this country and open branches. We are discussing whether the licence should have been revoked earlier. As several of my hon. Friends have pointed out, the position is very difficult. We—or, at least, the Bank of England—should, apparently, have acted earlier; we are being criticised by many Opposition Members for not having done so. According to others, however—given that a restructuring arrangement was being negotiated, and given that the major shareholder had indicated a willingness to invest additional funds—the problems might have been sorted out if the situation had been allowed to continue for longer.
  In such circumstances, we always hear the same conflicting arguments. If, however, the Bank of England goes to the extent of revoking a banking licence and applying for a liquidation order against a company, it effectively puts that company out of business. Once the step has been taken, the company cannot possibly be put

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  back on its feet. When they are in liquidation, a bank's assets nearly always turn out to be worth less than they are worth on paper. It is therefore difficult for a bank in such a position to be solvent. Action can be taken only when it is certain that the bank is insolvent, and there must be hard evidence, because the bank has the right to appeal against the Bank of England's decision. If its licence is revoked, it can appeal to a banking appellate body, and it has the right to a court hearing in respect of a liquidation order. The Bank of England has made it clear that it is satisfied that it acted as soon as it felt that it had the necessary evidence.
  Mr. Sheldon: Why was the bank authorised to be covered by the Bank of England in the first place? During the passage of the Banking Act 1979, we were given specific assurances that nobody would be given such authorisation unless it was composed of fit and proper people—and these were certainly not fit and proper people. A further obligation was imposed: that of continuing supervision. Neither of those requirements was met in this instance.
  The Minister said that problems would arise once it was known that a bank was acting fraudulently. But the position could have been dealt with much earlier. Why was it not?
  Mr. Maples: The right hon. Gentleman says that there has been inadequate supervision. According to him, the failure of a bank may be a definition of inadequate supervision, but he could not possibly know what the Bank of England has been doing since 1974, or whenever BCCI set up in this country.
  When the bank set up here, it did not need any authorisation. It had been authorised in another European country, and was entitled to establish branches here in the mid-1970s. Under the Banking Act 1979 its licence could have been revoked, but I have already mentioned the difficulties involved in providing the necessary evidence. I have heard no one suggest that there was any evidence at the time of the problems that have now come to light. Under the Banking Act 1987, the bank was "grand-fathered", and, as a bank that was already in existence, it was entitled to continue in existence. I do not believe that the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) can have any evidence that the Bank of England has failed in its supervision.
  Hon. Members have asked why no action was taken earlier. None of the earlier rumours, and none of the work that was done, brought any fraud to light; all that we were told was that the bank had made losses.
  Mr. Denzil Davies: Will the Minister give way?
  Mr. Maples: I cannot take an intervention in the middle of replying to an intervention from the right hon. Member for Ashton-under-Lyne.
  All the questions that were raised at that earlier stage concerned whether the bank had adequate financial controls, whether it had bad loans, and the fact that it had made losses. It was felt that the losses endangered the bank's liquidity and its equity base. In every case, the shareholders injected further funds to deal with the problems. The Price Waterhouse investigation, whose findings were given to the Bank of England on 27 June, provided the first evidence of fraud. It was on that
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  evidence that the Bank of England acted. It could not have acted on rumours, or on the basis that the bank was inadequately capitalised and that, whenever losses were made, additional capital was injected.
  Mr. Davies rose—
  Mr. Maples: I will give way, but I am afraid that this cannot go on. I am not getting around to answering any of the points that have been raised.
  Mr. Davies: I am grateful. I do not know whether I should admit it, but I was the Minister responsible for the Banking Act 1979. Does not the Economic Secretary agree that, under that Act, the Bank of England had greater and better powers to police institutions such as BCCI than were conferred by the Act that followed it, which the present Government invoked to repeal the 1979 Act?
  Mr. Maples: No, I do not agree. When the 1987 legislation was going through the House, every hon. Member agreed that it gave the Bank of England greater powers and tightened up the regime. I am not criticising the 1979 Act, which was a considerable step forward; indeed, I gave way to the right hon. Member for Llanelli (Mr. Davies) because I knew that he had been a Treasury Minister at the time. The only difference of which I am aware is that, under that Act, the banks were not automatically "grandfathered", and the Bank of England was able to remove licences more easily than it could have done under the 1987 Act. Revoking licences involves problems, however, in relation both to obtaining evidence and to the consequences of such action.
  Many people seem to think that the Government, or the Bank of England, can provide a guarantee. I am not ascribing that view to any specific Member, but some of the comments, especially those about local authorities, suggested that the Government or the Bank of England could guarantee that a bank would never go broke. It must be clear to the hon. Members for Workington (Mr. Campbell-Savours) and for Redcar (Ms. Mowlam) that that is not the case.
  If it is accepted that a bank can fail, it must be accepted that people must bear the costs of that failure. The alternative is for the Government or the Bank of England to step into the breach and pay all the money—which is exactly the same as guaranteeing that the bank could not be insolvent, or go into liquidation, in the first place. we accept that it can, and that it is not reasonable to expect public funds to guarantee every liability of every bank, we must also accept that the creditors must bear some of the costs.
  Because that would have harsh consequences, successive Governments have introduced deposit protection schemes. The limit under the 1979 Act was £10,000, not £20,000; it was raised in 1987, partly as a result of overtures from Opposition Members, although the Government readily agreed to the move. Some could argue that the limit was too high, although others argue that it was too low. It could be said that a moral hazard must be created, and that the aim was to protect small depositors who could not be expected to be aware of the position. I believe that 75 per cent. of £20,000 is a reasonable scheme. We have no intention of making proposals to raise or change that sum. I am afraid that it is important that such a hazard is involved in doing business with banks.

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  7.30 pm
  As several hon. Members have explained, there is a risk-reward ratio in dealing with investments. If the Government were effectively to underwrite a far greater percentage, or if we had an American system whereby the first $100,000 in an account was underwritten by the Government, people would place their money with the institution offering the highest rate of return knowing that it was guaranteed by the Government. The Government would not be allowing the market to create any distinction between banks running their affairs conservatively and well and those running their affairs irresponsibly and taking greater risks.
  It has been said that the deposit protection scheme could be more generous. I have now explained the consequences of that. In my statement last Monday, I was asked whether we should have a scheme like the American scheme and I have tried to explain how that could create problems in the United States which we would not want to repeat here.
  Other hon. Members suggested that the Government should be responsible for standing behind local authorities. We cannot be. Others asked whether the scheme should be made more generous, and I have tried to explain why it cannot be. We should all realise that the collapse of any bank, particularly one with as many customers as BCCI, is clearly a tragedy for the customers, for the businesses doing business with them, for the depositors and for those who borrowed money, because I suspect that they will be called upon to repay it sooner than they expected.
  The deposit protection scheme will be activated as soon as is conceivably possible. The Bank of England is taking steps with the full co-operation of the liquidators to compile lists of depositors and their addresses even in advance of the liquidation order. The bank has an accelerated hearing for the liquidation order; it will now be heard on Monday 22 July. That is about as soon as it could conceivably have been heard. If it is granted—and I have no reason to suspect that it will not be granted, but it is a court order that is being sought—letters and claim forms will be sent to depositors as soon as possible. It should therefore be possible to pay the vast majority of depositors extremely quickly. I cannot give a timetable because we do not know how many people are involved. It may amount to 100,000. Clearly there is a logistical problem in processing 100,000 applications.
  Ms. Abbott: Will the Economic Secretary give way?
  Mr. Maples: This is an important point. If the hon. Lady will allow me to deal with it, I will give way later.
  I have made it clear to the Bank of England that the utmost priority should be given to dealing with the claims as soon as possible and that the bank should have the necessary temporary staff to deal with the applications. I am confident that the bank will do that, and I will stay in touch with the operation to ensure that everything is being done as fast and as efficiently as possible. However one looks at it, it will be difficult to process 100,000 applications and it will take a little time.
  There will also be some difficult cases. The vast majority of the cases will be simple. People will have one account at one branch, that person's identity will be clear, that person will not have other borrowings or dealings with the bank and the account will not be held in trust for someone else.
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  That kind of person can be dealt with quickly. As we found with the British Commonwealth merchant bank case, in other cases there will be complications. We do not expect more than a minority of the depositors to be involved in such cases, but there will have to be investigations in some cases.
  With regard to small businesses, I outlined on Monday a scheme which the Bank of England was trying to establish. Considerable progress has been made with that and at least one clearing bank has nominated several of its branches specifically to help former customers of BCCI, to deal with their applications, to process with the liquidator the status of accounts, how they had been run and whether it is possible to release security. The best way to deal with the problem is to arrange for other banks to step into the breach. So far as I am aware, the attitude of the other big clearing banks is positive. Undoubtedly some extremely good businesses banked with BCCI and they offer good business opportunities for the other banks. As I have said, the Bank of England is actively helping to establish those arrangements.
  Ms. Abbott: The Economic Secretary has spent considerable time answering arguments that Opposition Members have not put to him. Does he have any intention of answering our specific questions, particularly about the auditors? Why is the 1990 Price Waterhouse report not to be published? Did the Bank of England ask Ernst and Young why it gave up the lucrative BCCI account of its own volition?
  Mr. Maples: If the hon. Lady would allow me to make my speech in my own way, she will discover that I have a raft of answers for the points that were raised. If I may say so, the hon. Lady made an intemperate intervention. Most of the points that I have answered were raised, if not in this debate today, then in the newspapers. There was considerable discussion on the Opposition Benches about whether the deposit protection scheme was adequate and whether the Government should stand behind local authorities.
  Mr. Gerald Howarth: Will my hon. Friend acknowledge that there will be a widespread welcome in the country for the restatement of the Government's resolve not to bail out BCCI's creditors in any other way than is already provided for by statute? Does he accept that local authorities, such as Lichfield district council, which have been prudent and have forgone the extra one eighth of 1 per cent. in order to ensure that they are investing in proper institutions understand that if the Government were to follow the Opposition's advice that would simply encourage imprudence on a wide scale and penalise the authorities that have looked after their charge payers' money?
  Mr. Maples: I agree with my hon. Friend. I tried to make that point earlier.
  I want now to deal with some of the specific points that were raised. The compensation scheme under the Financial Services Act 1986 is more generous because, in general, ordinary investors tend to have larger sums invested in unit trusts, investment trusts or pension funds than in bank deposits. Paying a percentage of £20,000 is probably the right way to deal with bank deposits with its slightly more generous scheme for investors.

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  I was asked about the 1.990 Price Waterhouse report. I understand that there have been a number of reports in recent years relating to the financial condition of BCCI. The response to those reports was a need for additional capital, usually at the prompting of the supervisory authorities, and that capital was always forthcoming and the bank was always adequately capitalised. At least, when a request for additional capital was made, it was forthcoming. Those previous reports related to financial controls, bad debt, and the bank's operating losses. They stated that in all cases the problems could be corrected through the bank being adequately capitalised and additional capital was forthcoming.
  None of the earlier reports contained evidence of fraud or other wrongdoing of the kind that prompted the action which the regulators took earlier this month. That was the first occasion when there was hard evidence on which the Bank of England could act.
  Mr. McCartney: What about the soft evidence?
  Mr. Maples: I explained earlier the need for hard evidence. If there is no hard evidence, the Bank of England would lose the case on appeal and would essentially have ruined the bank because it would not be able to continue to operate.
  Mr. Wallace: The Economic Secretary has been very good at giving way. I understand what he said about hard evidence and the difficulties about rumours of fraud. However, how did the Bank of England react to the guilty plea in the American courts in connection with serious charges involving drug trafficking? When the matter was raised in another place, we could get no answers from Ministers.
  Mr. Maples: I dealt with that issue last Monday. The bank pleaded guilty in the United States because in America companies can be vicariously liable for the criminal acts of their employees. It was thought at the time—it may be true, and I do not know that any evidence to the contrary has since come to light—that those activities were confined to the Tampa branch of the bank and that the people concerned were not associated with the senior management of the bank in London. There was no evidence of fraud. There was evidence of illegal activities in laundering drug money, but there was not evidence of what has given rise to the revocation of the bank's licence, namely, that the bank was being systematically defrauded of funds by its senior executives. No evidence of that was contained in those matters in the United States.
  I was asked some specific questions by the hon. Members for Workington and for Redcar. Mortgagees have a liability to continue to pay, but they will be entitled to have their property back once the deed has been paid off. They are simply debtors of the bank, and part of the liquidators' task will be to collect the assets of the bank—of which mortgages will be one.
  I was asked why Ernst and Whinney gave up the audit. I do not know and I cannot speculate about that. I know that the regulators in various countries wanted one company—in this case Price Waterhouse—to take on the whole audit. They were worried that there were two separate auditors—a situation that was deliberately created and perpetuated by the bank itself. The fact that there were two separate auditors must have made it far
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  easier to conceal the frauds because money could be moved from one section of the group to another when an audit or inspection was taking place.
  I was asked about the insurance company CCL. I am told that, although BCCI acted as one of the company's principal bankers and as one of its appointed representatives for the sale of life policies, CCL held no shares in BCCI and is not a subsidiary of BCCI. I cannot give the hon. Member for Workington any further information about the connection. Neither is a subsidiary of or a shareholder in the other. The regulation of insurance companies is a matter for the Department of Trade and Industry, which is fully aware of all that we know about the problems surrounding the bank and is looking into the matter. As the hon. Gentleman knows, under the Policyholders Protection Act 1975, policyholders would get compensation up to a high level of any liabilities of a failed insurance company. There is no evidence that it will be necessary to invoke that Act.
  I was asked why Chancery and Edington remained on the list. Whether that was unfortunate and misled anyone or not, there was no way in which either bank could have taken deposits. Both were in administration at the time and had had their licences suspended. I understand that they were not removed from the list because their licences had not been cancelled and, at some stage in the future, they could have been reauthorised or had their licences reactivated. That could not have endangered any depositor's money because the banks could not have taken deposits at that stage.
  It was a most peculiar suggestion and I cannot understand why I was asked whether the Foreign Office tried to stop the Bank of England launching a section 41 inquiry earlier. I am told that the answer is categorically no. I was asked about the investigation of money brokers and their commissions.
  Mr. Campbell-Savours: The Pakistani insurers.
  Mr. Maples: I do not know the answer to whether the insurers of the bank's liabilities are active. The liquidators will look into that. If those insurers are active, that will be a source of some protection for the depositors. I am afraid that I have no knowledge of that.
  The hon. Gentleman raised the question of the money brokers. Money broking is a deregulated area of the market, so people are entitled to negotiate their own commissions. If money brokers pushed depositors, especially local authorities, towards the bank because they were being paid over-the-odds commissions and were not disclosing that to the local authorities, and if the local authorities had reason to think of the money brokers as their advisers, local authorities may have some recourse against their money brokers. I do not know. I am, on the whole, in favour of the disclosure of commissions. That makes for a much cleaner market and cleaner arrangements between people. However, local authorities could have asked the money brokers to disclose their commissions. If they had refused to do so, the local authorities would have had some cause for complaint.
  I was asked about the college of regulators. It was not really set up under the formal Basle procedure. It was the first example of an international college of regulators being put together, and it was put together by the Bank of England. Whether it could have been put together earlier or whether it could have waited slightly longer are difficult

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  questions. I do not know the answer. The bank would say that it was put together as soon as it thought that it was appropriate to do so.
  I have dealt with most of the points that were raised in debate. If any hon. Member feels that there are points with which I have not dealt—
  Ms. Mowlam: The Minister did not answer one important point. When the bank was closed on 5 July, the local authorities were in and the small investors were in. However, there seems to be no sign that the clearers had any exchange trading going on. Why did the clearers seemingly not get caught too?
  7.45 pm
  Mr. Maples: It has been commented that anybody would realise that people paying slightly over the odds were incurring a higher risk. The other clearers may have been a more sophisticated group of counter parties. The premise of the hon. Lady's question is not necessarily true. It is not the case that there were no outstanding transactions with the clearers. There must have been many outstanding transactions in the market because the bank was closed in the middle of the day. Some of the clearers may have been on the other end of the transactions. It is clear that people could assess the risks of dealing with different counter parties. I know that large banks and large financial institutions, as my hon. Friend said, have rules about the exposure that they may have to particular institutions. I expect that their permitted exposure to BCCI was fairly small.
  Mr. Campbell-Savours: The Minister said that he would answer all outstanding questions. May I remind him of what they were? We asked him about the £2·3 billion offered to the bank by Ghanem Al Mazrui from Abu Dhabi in the hours immediately before the closure. Is that correct? We also asked about the £375 million which was sent to the bank by Sheikh Zayed Bin Sultan al-Nahayan two weeks before the closure of the bank. We also asked about—[HON. MEMBERS: "Come on."] These are very important matters. The Minister asked us to set out our position. I also asked about the distinction being drawn by Westminster city council between lending and deposit making. I asked about the statement made by Ian Brindle of Price Waterhouse. He said that Price Waterhouse repeatedly informed the Bank of England of irregularities.
  Mr. Maples: I have already dealt with the question of irregularities. I said that they were all related to loan losses, lack of financial controls, and the need for additional equity capital which was injected on every occasion on which it was required. The first hard evidence of fraud emerged in the Price Waterhouse inquiry, the report of which was delivered to the Bank of England on 27 June.
  In my own mind, I am aware of no distinction between lending to a bank and making a deposit with it. I do not know what the treasurer of Westminster city council had in mind. I am responsible for many things, but not for what he says.
  There were certainly additional injections of equity capital. I am not sure whether the hon. Gentleman's figures are right. There were several occasions on which additional injections of capital were requested and made.
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  It is not for me to comment on what the shareholders might have done if the restructuring had gone ahead. Additional injections of capital might have been made. However, the evidence of fraud was so pervasive and involved the senior management of the bank to such an extent that the regulators came to the conclusion that there was no way in which the management could be allowed to operate, whether additional capital was injected or not.
  If there are points with which hon. Members think I have not dealt, I hope that they will write to me and I will seek to answer them. In the circumstances, I hope that they will feel that at this stage it is not in the interests of banking regulation to pass new clause 37.
  Mr. Paul Boateng: This has been a good debate, although it is a pity that the response from the Economic Secretary was so very inadequate. He gave few answers to the many Opposition questions. It is clear from the response of Conservative Members to those answers that they are only too anxious to mull over them in the course of a good supper.
  The Opposition, however, recognise only too clearly that the Minister's responses provide particularly thin gruel for the many deposit holders who are concerned about interest rates and about bank charges. We believe that the answers provide very thin gruel indeed for those who have suffered as a result of the collapse of BCCI. We want our questions to be answered.
  It was instructive to hear the Economic Secretary's response to the important points that were raised by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon). It revealed the arrogance and, I am bound to say, the complacency—I use those words with a degree of sadness—that have characterised the Government's response throughout the BCCI farrago. The response from the Economic Secretary was that my right hon. Friend did not know what the Bank of England had been doing since the 1970s. That is precisely our point. This House does not know what the Bank of England has been doing since the 1970s, although we have a pretty strong suspicion about what BCCI has been doing since the 1970s.
  We ask—we reiterate our demand tonight—that in the interests not only of the many small business men throughout the country who have suffered as a result of the collapse and whose lives are in ruins, not only in the interests of the people who have been put out of work and whose homes and security have been threatened by the collapse of the bank, but on behalf of all those who are concerned about the probity of our banking sector, the way in which it is regulated and the way in which our supervisory system works, that there should be a full inquiry into the collapse of BCCI. Nothing less will satisfy the House or the people of this country. Then, perhaps, we shall have the answers to the questions that my hon. Friend the Member for Workington (Mr. Campbell-Savours) so eloquently asked when speaking to his new clause 37. They are important questions that need to be answered. We intend to continue to ask them day in, day out in the House until they are answered to the satisfaction of the House and the country as a whole.
  I turn now to an examination of the important new clause 3, which, unfortunately, has not received the attention that it might have, for understandable reasons. There is a crisis of confidence among the customers and consumers of the banking sector about bank charges and the transparency of the market in banking services. That

  85
  crisis is due to the banks' failure to come clean about the impact of their charges and costs on the ordinary consumer. Our mailbags provide evidence of that, as do the columns of both popular and serious newspapers. Again, the public are entitled to reassurance.
  Having set the hare running and sought to obtain a scapegoat for their own abysmal economic performance and the impact of high interest rates, the Government have sought to blame the banks for the suffering of the many small businesses that have gone under during the past six months. Small businesses failures are at a record level and are more than 50 per cent. higher than the level at this time last year.
  The Government's response has been to set in train a Treasury study, of which they have leaked the conclusion without making the body of its findings available to the public or the House. We want those findings to be made public and to be the subject of a debate in the House. It is interesting that, as our proceedings draw to a close and we look forward to the recess, we are told that we shall have the report "some time". Why can we not have it now'? Why can we not have a clear undertaking from the Economic Secretary that we shall have the report before the end of the Session? If we had it, we could ensure that it receives the full glare of public scrutiny that it deserves. What have the Government got to hide? Why are they not prepared to have an open debate? They do not like it, do they?—[HON. MEMBERS: "No."] No, they do not like it, but by jove we shall make sure that this one does not get away. We want a clear and unequivocal undertaking tonight that there will be a debate on this issue. Is that too much to ask?—[HON. MEMBERS: "No."] No, and that is what we are asking for, and we shall ask again and again.
  One important point to which all those outside the House will want to hear a response is the issue of the new banking code. It was put out in draft form by the banks and received a unanimous thumbs down from consumer groups. The National Consumer Council described it as wholly inadequate. A whole range—a "raft" to use the Economic Secretary's word—of consumer-oriented bodies is seeking amendments and changes to it. When will the code be published? If we do not have a clear undertaking from the banks that it will be published before the end of the summer, let me make one thing crystal clear: after the next general election, a Labour Government will introduce a statutory banking code to protect the interests of consumers—
  Mr. Maude: More regulations.
  Mr. Boateng: The Financial Secretary says, "More regulations." Yes, we shall regulate when it is necessary to protect consumers. It is the absence of proper, prudent regulation which has led to the current abuses. Yes, we shall regulate to ensure that there is full consultation on any change in the terms of an overdraft facility or account. Customers should not have to discover by accident that their margins or charges have been raised. If that requires regulation, we shall introduce such regulation. Any change in the terms that customers are obliged to endure should be fully justified. They should not have to pay higher margins because of an increase in risks across the bank's loan book, and we shall introduce regulations to ensure that they do not. There should be a reasonable time for the repayment of an overdraft or loan. How many of us, of all parties, have received letters from small business men
  86
  protesting about the way in which they have suffered at the banks' hands in this regard? How many small businesses have been brought to an end needlessly because the business man has not been given an opportunity to deal with the problem of the overdraft or loan?
  If the banks do not put their own house in order, we shall put it in order for them—no one should be under any illusions about that—and the sooner, the better.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 213, Noes 316.

  Division No. 209]

  [7.58 pm

  AYES

  Abbott, Ms Diane

  Evans, John (St Helens N)

  Adams, Mrs Irene (Paisley, N.)

  Ewing, Harry (Falkirk E)

  Allen, Graham

  Ewing, Mrs Margaret (Moray)

  Anderson, Donald

  Fatchett, Derek

  Archer, Rt Hon Peter

  Fearn, Ronald

  Armstrong, Hilary

  Field, Frank (Birkenhead)

  Ashley, Rt Hon Jack

  Fisher, Mark

  Ashton, Joe

  Flannery, Martin

  Banks, Tony (Newham NW)

  Flynn, Paul

  Barnes, Harry (Derbyshire NE)

  Foot, Rt Hon Michael

  Barnes, Mrs Rosie (Greenwich)

  Foster, Derek

  Barron, Kevin

  Foulkes, George

  Battle, John

  Fraser, John

  Beckett, Margaret

  Fyfe, Maria

  Bell, Stuart

  Galloway, George

  Bellotti, David

  Garrett, Ted (Wallsend)

  Benn, Rt Hon Tony

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Benton, Joseph

  Godman, Dr Norman A.

  Bermingham, Gerald

  Golding, Mrs Llin

  Blair, Tony

  Gordon, Mildred

  Blunkett, David

  Gould, Bryan

  Boateng, Paul

  Graham, Thomas

  Boyes, Roland

  Grant, Bernie (Tottenham)

  Bradley, Keith

  Griffiths, Nigel (Edinburgh S)

  Bray, Dr Jeremy

  Griffiths, Win (Bridgend)

  Brown, Gordon (D'mline E)

  Grocott, Bruce

  Brown, Nicholas (Newcastle E)

  Hain, Peter

  Brown, Ron (Edinburgh Leith)

  Hardy, Peter

  Buckley, George J.

  Hattersley, Rt Hon Roy

  Caborn, Richard

  Heal, Mrs Sylvia

  Callaghan, Jim

  Henderson, Doug

  Campbell, Menzies (Fife NE)

  Hinchliffe, David

  Campbell, Ron (Blyth Valley)

  Hogg, N. (C'nauld & Kilsyth)

  Campbell-Savours, D. N.

  Hood, Jimmy

  Canavan, Dennis

  Howarth, George (Knowsley N)

  Carr, Michael

  Howell, Rt Hon D. (S'heath)

  Cartwright, John

  Howells, Geraint

  Clark, Dr David (S Shields)

  Howells, Dr. Kim (Pontypridd)

  Clarke, Tom (Monklands W)

  Hoyle, Doug

  Clelland, David

  Hughes, John (Coventry NE)

  Clwyd, Mrs Ann

  Hughes, Robert (Aberdeen N)

  Cohen, Harry

  Hughes, Roy (Newport E)

  Cook, Frank (Stockton N)

  Illsley, Eric

  Corbett, Robin

  Ingram, Adam

  Corbyn, Jeremy

  Janner, Greville

  Cousins, Jim

  Jones, Barry (Alyn & Deeside)

  Cox, Tom

  Kaufman, Rt Hon Gerald

  Crowther, Stan

  Kilfoyle, Peter

  Cryer, Bob

  Kinnock, Rt Hon Neil

  Cummings, John

  Lambie, David

  Cunliffe, Lawrence

  Lamond, James

  Dalyell, Tam

  Leadbitter, Ted

  Darling, Alistair

  Leighton, Ron

  Davies, Rt Hon Denzil (Llanelli)

  Lestor, Joan (Eccles)

  Davies, Ron (Caerphilly)

  Lewis, Terry

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

  Loyden, Eddie

  Dewar, Donald

  McAllion, John

  Dixon, Don

  McCartney, Ian

  Doran, Frank

  Macdonald, Calum A.

  Douglas, Dick

  McFall, John

  Dunnachie, Jimmy

  McKay, Allen (Barnsley West)

  Eadie, Alexander

  McKelvey, William

  Eastham, Ken

  McLeish, Henry

  Edwards, Huw

  McMaster, Gordon

  87

  McNamara, Kevin

  Rooney, Terence

  Madden, Max

  Ross, Ernie (Dundee W)

  Mahon, Mrs Alice

  Rowlands, Ted

  Marek, Dr John

  Ruddock, Joan

  Marshall, David (Shettleston)

  Salmond, Alex

  Marshall, Jim (Leicester S)

  Sedgemore, Brian

  Martin, Michael J. (Springburn)

  Sheerman, Barry

  Martlew, Eric

  Sheldon, Rt Hon Robert

  Maxton, John

  Shore, Rt Hon Peter

  Meacher, Michael

  Short, Clare

  Meale, Alan

  Skinner, Dennis

  Michael, Alan

  Smith, Andrew (Oxford E)

  Michie, Bill (Sheffield Heeley)

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

  Michie, Mrs Ray (Arg'l & Bute)

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

  Molyneaux, Rt Hon James

  Smith, J. P. (Vale of Glam)

  Morgan, Rhodri

  Soley, Clive

  Morley, Elliot

  Spearing, Nigel

  Morris, Rt Hon A. (W'shawe)

  Steinberg, Gerry

  Morris, Rt Hon J. (Aberavon)

  Stott, Roger

  Mowlam, Marjorie

  Strang, Gavin

  Mullin, Chris

  Straw, Jack

  Murphy, Paul

  Taylor, Mrs Ann (Dewsbury)

  Nellist, Dave

  Thompson, Jack (Wansbeck)

  Oakes, Rt Hon Gordon

  Trimble, David

  O'Brien, William

  Turner, Dennis

  O'Hara, Edward

  Wallace, James

  O'Neill, Martin

  Walley, Joan

  Orme, Rt Hon Stanley

  Warden, Gareth (Gower)

  Parry, Robert

  Wareing, Robert N.

  Patchett, Terry

  Watson, Mike (Glasgow, C)

  Pendry, Tom

  Welsh, Michael (Doncaster N)

  Pike, Peter L.

  Williams, Rt Hon Alan

  Powell, Ray (Ogmore)

  Williams, Alan W. (Carm'then)

  Prescott, John

  Wilson, Brian

  Primarolo, Dawn

  Winnick, David

  Quin, Ms Joyce

  Wise, Mrs Audrey

  Radice, Giles

  Worthington, Tony

  Randall, Stuart

  Wray, Jimmy

  Redmond, Martin

  Young, David (Bolton SE)

  Rees, Rt Hon Merlyn

  Richardson, Jo

  Tellers for the Ayes:

  Robertson, George

  Mr. Frank Haynes and Mr. Thomas McAvoy.

  Rogers, Allan

  Rooker, Jeff

  NOES

  Adley, Robert

  Braine, Rt Hon Sir Bernard

  Alison, Rt Hon Michael

  Brandon-Bravo, Martin

  Allason, Rupert

  Brazier, Julian

  Amess, David

  Bright, Graham

  Amos, Alan

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

  Arbuthnot, James

  Browne, John (Winchester)

  Arnold, Jacques (Gravesham)

  Bruce, Ian (Dorset South)

  Arnold, Sir Thomas

  Buck, Sir Antony

  Ashby, David

  Budgen, Nicholas

  Aspinwall, Jack

  Burns, Simon

  Atkins, Robert

  Butcher, John

  Atkinson, David

  Butler, Chris

  Baker, Rt Hon K. (Mole Valley)

  Butterfill, John

  Baker, Nicholas (Dorset N)

  Carlisle, John, (Luton N)

  Baldry, Tony

  Carrington, Matthew

  Banks, Robert (Harrogate)

  Cash, William

  Batiste, Spencer

  Chalker, Rt Hon Mrs Lynda

  Beaumont-Dark, Anthony

  Channon, Rt Hon Paul

  Bellingham, Henry

  Chapman, Sydney

  Bendall, Vivian

  Chope, Christopher

  Bennett, Nicholas (Pembroke)

  Churchill, Mr

  Benyon, W.

  Clark, Dr Michael (Rochtord)

  Bevan, David Gilroy

  Clark, Rt Hon Sir William

  Blackburn, Dr John G.

  Colvin, Michael

  Blaker, Rt Hon Sir Peter

  Conway, Derek

  Body, Sir Richard

  Coombs, Anthony (Wyre F'rest)

  Bonsor, Sir Nicholas

  Coombs, Simon (Swindon)

  Boscawen, Hon Robert

  Cope, Rt Hon Sir John

  Boswell, Tim

  Cormack, Patrick

  Bottomley, Peter

  Couchman, James

  Bottomley, Mrs Virginia

  Cran, James

  Bowden, Gerald (Dulwich)

  Currie, Mrs Edwina

  Bowis, John

  Davis, David (Boothferry)

  Boyson, Rt Hon Dr Sir Rhodes

  Day, Stephen

  88

  Devlin, Tim

  Irvine, Michael

  Dickens, Geoffrey

  Irving, Sir Charles

  Dicks, Terry

  Jack, Michael

  Dorrell, Stephen

  Jackson, Robert

  Douglas-Hamilton, Lord James

  Janman, Tim

  Dover, Den

  Jessel, Toby

  Durant, Sir Anthony

  Johnson Smith, Sir Geoffrey

  Dykes, Hugh

  Jones, Gwilym (Cardiff N)

  Eggar, Tim

  Jones, Robert B (Herts W)

  Emery, Sir Peter

  Jopling, Rt Hon Michael

  Evans, David (Welwyn Hatf'd)

  Kellett-Bowman, Dame Elaine

  Evennett, David

  Kilfedder, James

  Fairbaim, Sir Nicholas

  King, Roger (B'ham N'thfield)

  Fallon, Michael

  Kirkhope, Timothy

  Farr, Sir John

  Knapman, Roger

  Fenner, Dame Peggy

  Knight, Greg (Derby North)

  Field, Barry (Isle of Wight)

  Knight, Dame Jill (Edgbaston)

  Finsberg, Sir Geoffrey

  Knowles, Michael

  Fishburn, John Dudley

  Lang, Rt Hon Ian

  Fookes, Dame Janet

  Latham, Michael

  Forman, Nigel

  Lawrence, Ivan

  Forsyth, Michael (Stirling)

  Lee, John (Pendle)

  Forth, Eric

  Lennox-Boyd, Hon Mark

  Fowler, Rt Hon Sir Norman

  Lester, Jim (Broxtowe)

  Fox, Sir Marcus

  Lloyd, Sir Ian (Havant)

  Franks, Cecil

  Lloyd, Peter (Fareham)

  Freeman, Roger

  Lord, Michael

  French, Douglas

  Luce, Rt Hon Sir Richard

  Fry, Peter

  Lyell, Rt Hon Sir Nicholas

  Gale, Roger

  McCrindle, Sir Robert

  Gardiner, Sir George

  MacGregor, Rt Hon John

  Garel-Jones, Tristan

  MacKay, Andrew (E Berkshire)

  Gill, Christopher

  Maclean, David

  Gilmour, Rt Hon Sir Ian

  McLoughlin, Patrick

  Glyn, Dr Sir Alan

  McNair-Wilson, Sir Michael

  Goodhart, Sir Philip

  McNair-Wilson, Sir Patrick

  Goodlad, Alastair

  Madel, David

  Goodson-Wickes, Dr Charles

  Malins, Humfrey

  Gorman, Mrs Teresa

  Mans, Keith

  Gorst, John

  Maples, John

  Grant, Sir Anthony (CambsSW)

  Marlow, Tony

  Greenway, Harry (Ealing N)

  Marshall, John (Hendon S)

  Greenway, John (Ryedale)

  Marshall, Sir Michael (Arundel)

  Gregory, Conal

  Martin, David (Portsmouth S)

  Griffiths, Sir Eldon (Bury St E')

  Mates, Michael

  Griffiths, Peter (Portsmouth N)

  Maude, Hon Francis

  Grist, Ian

  Mawhinney, Dr Brian

  Ground, Patrick

  Maxwell-Hyslop, Robin

  Grylls, Michael

  Mayhew, Rt Hon Sir Patrick

  Hague, William

  Mellor, Rt Hon David

  Hamilton, Neil (Tatton)

  Meyer, Sir Anthony

  Hampson, Dr Keith

  Miller, Sir Hal

  Hanley, Jeremy

  Mills, lain

  Hannam, John

  Miscampbell, Norman

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

  Mitchell, Andrew (Gedling)

  Hargreaves, Ken (Hyndburn)

  Mitchell, Sir David

  Harris, David

  Moate, Roger

  Haselhurst, Alan

  Monro, Sir Hector

  Hawkins, Christopher

  Montgomery, Sir Fergus

  Hayes, Jerry

  Moore, Rt Hon John

  Hayhoe, Rt Hon Sir Barney

  Morris, M (N'hampton S)

  Hayward, Robert

  Morrison, Sir Charles

  Heathcoat-Amory, David

  Morrison, Rt Hon Sir Peter

  Hicks, Mrs Maureen (Wolv' NE)

  Moss, Malcolm

  Hicks, Robert (Cornwall SE)

  Moynihan, Hon Colin

  Higgins, Rt Hon Terence L.

  Mudd, David

  Hill, James

  Neale, Sir Gerrard

  Hind, Kenneth

  Needham, Richard

  Hogg, Hon Douglas (Gr'th'm)

  Nelson, Anthony

  Holt, Richard

  Neubert, Sir Michael

  Hordern, Sir Peter

  Newton, Rt Hon Tony

  Howard, Rt Hon Michael

  Nicholls, Patrick

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

  Nicholson, David (Taunton)

  Howarth, G. (Cannock & B'wd)

  Nicholson, Emma (Devon West)

  Howe, Rt Hon Sir Geoffrey

  Norris, Steve

  Howell, Rt Hon David (G'dford)

  Onslow, Rt Hon Cranley

  Howell, Ralph (North Norfolk)

  Oppenheim, Phillip

  Hughes, Robert G. (Harrow W)

  Page, Richard

  Hunt, Sir John (Ravensbourne)

  Paice, James

  Hunter, Andrew

  Patnick, Irvine

  89

  Patten, Rt Hon Chris (Bath)

  Stewart, Allan (Eastwood)

  Patten, Rt Hon John

  Stewart, Andy (Sherwood)

  Pawsey, James

  Stewart, Rt Hon Sir Ian

  Peacock, Mrs Elizabeth

  Sumberg, David

  Porter, Barry (Wirral S)

  Summerson, Hugo

  Porter, David (Waveney)

  Tapsell, Sir Peter

  Powell, William (Corby)

  Taylor, Sir Teddy

  Price, Sir David

  Tebbit, Rt Hon Norman

  Raffan, Keith

  Temple-Morris, Peter

  Raison, Rt Hon Sir Timothy

  Thompson, D. (Calder Valley)

  Redwood, John

  Thompson, Patrick (Norwich N)

  Renton, Rt Hon Tim

  Thorne, Neil

  Rhodes James, Sir Robert

  Thurnham, Peter

  Riddick, Graham

  Townend, John (Bridlington)

  Ridley, Rt Hon Nicholas

  Townsend, Cyril D. (B'heath)

  Rifkind, Rt Hon Malcolm

  Tracey, Richard

  Roberts, Rt Hon Sir Wyn

  Tredinnick, David

  Rossi, Sir Hugh

  Trippier, David

  Rost, Peter

  Trotter, Neville

  Rowe, Andrew

  Twinn, Dr Ian

  Rumbold, Rt Hon Mrs Angela

  Viggers, Peter

  Ryder, Rt Hon Richard

  Wakeham, Rt Hon John

  Sackville, Hon Tom

  Walden, George

  Sayeed, Jonathan

  Walker, Bill (T'side North)

  Scott, Rt Hon Nicholas

  Waller, Gary

  Shaw, David (Dover)

  Walters, Sir Dennis

  Shaw, Sir Giles (Pudsey)

  Ward, John

  Shaw, Sir Michael (Scarb')

  Wardle, Charles (Bexhill)

  Shelton, Sir William

  Watts, John

  Shephard, Mrs G. (Norfolk SW)

  Wells, Bowen

  Shepherd, Colin (Hereford)

  Wheeler, Sir John

  Shepherd, Richard (Aldridge)

  Whitney, Ray

  Sims, Roger

  Widdecombe, Ann

  Skeet, Sir Trevor

  Wiggin, Jerry

  Smith, Sir Dudley (Warwick)

  Wilkinson, John

  Smith, Tim (Beaconsfield)

  Wilshire, David

  Speed, Keith

  Winterton, Mrs Ann

  Speller, Tony

  Winterton, Nicholas

  Spicer, Sir Jim (Dorset W)

  Wolfson, Mark

  Spicer, Michael (S Worcs)

  Wood, Timothy

  Squire, Robin

  Yeo, Tim

  Stanbrook, Ivor

  Younger, Rt Hon George

  Stanley, Rt Hon Sir John

  Steen, Anthony

  Tellers for the Noes:

  Stern, Michael

  Mr. David Lightbown and Mr. John M. Taylor.

  Stevens, Lewis

  Question accordingly negatived.

New Clause 9

  CAPITAL ALLOWANCES
  'In section 24 of the Capital Allowances Act 1990, for subsections (2)(a)(i) and (ii) there is substituted "33⅓ per cent. of the qualifying expenditure per annum.".'.—[Mr. David Shaw.]
  Brought up, and read the First time.
  Mr. David Shaw: I beg to move, That the clause be read a Second time.—[Interruption.]
  Madam Deputy Speaker: Order. Hon. Members who are leaving the Chamber should do so quietly so that the hon. Member can be heard.
  Mr. Frank Haynes: Buzz off.
  Mr. Shaw: I thank you, Madam Deputy Speaker, and the hon. Member for Ashfield (Mr. Haynes) who has assisted in quietening the Chamber.
  New clause 9 would change the rate of corporation tax allowance from a current writing down allowance of 25 per cent. on a reducing balance to a one third per annum allowance on a straight line basis. That would mean that all fixed assets purchased by business would be written off
  90
  over a three-year period instead of the current arrangement whereby the writing down allowance goes on virtually for ever if the asset remains in the business.
  The proposal would help in particular the shipping industry, which was the subject of another amendment, manufacturing industry, farming and small businesses, all of which in one way or another depend on purchasing capital items. As the proposal is worded, it would not be a subsidy to investment. The old allowance of 100 per cent. in the first year was recognised as a subsidy for certain types of investment, although in the case of shipping there was a strong argument that it would not be a subsidy. Certainly, a one third per annum allowance would not be a subsidy for investment.
  The new clause is necessary because it would be an incentive to invest in the United Kingdom. We have a problem, because although we are competitive internationally in the rate of corporation tax, we are no longer competitive in the writing down allowances that are given for investment in British industry. The basis on which I rely for that statement is a research paper produced by the Federal Reserve bank of New York. It completed a considerable piece of work on comparisons between the United Kingdom, Japan, Germany and the United States of America. We were immensely competitive in capital allowances until the changes in the mid-1980s. Since then we have become less competitive. It is necessary to restore that position.
  One may be tempted to ask why we are uncompetitive in capital allowances. It is because of a ridiculous attitude in the Inland Revenue that goes back some years. I spent some time as an auditor in the 1970s trying to understand this. It is a strange attitude. In the United States of America the capital allowance regime works on the principle that, whatever the company decides should be its accounting depreciation rate, the Internal Revenue Service will go along with it. In some companies that means that the tax allowances are up front nearer to the time when the investment is made, and in other companies they are deferred. Industry has the option of determining its own allowances according to the conditions within the business. Any company in this country would probably enjoy that sort of tax regime and the Government should consider it, because it fits in with the free market philosophy. If a company is writing off its investments at a certain rate, surely the tax system should also accept that rate.
  8.15 pm
  Mr. Richard Page: My hon. Friend's remarks are extremely interesting, but I have been concerned for some years about a particular point. The Government, rightly, reduced corporation tax on the argument that that would give more money to industry to invest as it thought fit. At the same time, we have the lowest percentage of investment in manufacturing industry among the G7 countries. We vie with the United States of America for the lowest figures and we are considerably behind Japan, Germany and France. How can we overcome that without some form of direct tax incentive to make sure that people invest?
  Mr. Shaw: I agree with my hon. Friend and he makes a strong point. International comparisons for investment are not favourable, although they are favourable for the corporation tax rate. It is certainly necessary, when we

  91
  consider that the United Kingdom has been going through a recession and is, I hope, in the first stages of coming out of it, to look at how we can encourage businesses to invest, not only to bring us out of the recession more quickly, but, funnily enough, to prevent inflation from recurring. If we do not invest, we will not have additional capacity. If there is a shortage of capacity, inflation will return. It is necessary, in coming out of a recession, especially one induced to prevent inflation, to encourage more investment. There are several reasons why it is appropriate to change the capital allowances rate. My argument is that a one third, one third, one third principle would be a highly desirable change.
  One must also consider the cash-flow cost of investment, which is incurred on day one. The current tax regime defers tax allowances for that investment over many years. It goes too far into the future to act as an incentive for the industries that need to be helped.
  My proposal would cost nothing in terms of tax revenue. Ultimately the tax would be repayable to the Treasury. The only cost to the Treasury would be that of tax deferral as a certain amount of tax would be deferred into the future. There are various estimates of how much that interest cost will be. For the shipping industry the estimate is thought to be only about £30 million or £40 million if there were 100 per cent. allowances in year one.
  Dr. Marek: The hon. Gentleman must remember that some years ago his Administration reduced the rate of corporation tax and that as a quid pro quo there was a much more stringent policy on capital allowances. Does he believe that that policy was wrong? If not, how much revenue would be forgone by the Treasury as a result of his proposal, for which I have some sympathy? One cannot consider the proposal in isolation.
  Mr. Shaw: I can assure the hon. Gentleman that I have never believed that the Government's changes to capital allowances and the corporation tax rate were wrong in principle, but, having had time to study how capital allowances are operating relative to the corporation tax rate, I think that the change, although right in principle, went too far in practice. We need a straight line basis for writing off capital allowances. That is what my proposal would achieve.
  As I understand it, the proposal would cost nothing. I am not proposing that industry should be given any tax subsidies; nor am I proposing any hand-outs for industry. I am proposing a deferral of the tax being collected on the basis that in any case British industry must pay 100 per cent. of the cost of the investment up front.
  British industry is already paying out in terms of the effect on its cash flow. I ask the Government to help British industry to overcome its investment problems by accepting that it should have a deferral on its cash flow receipts. At the moment, British industry has a cash flow problem when it invests because it must pay that money up front.
  I should like to draw attention to the way in which the new clause would help shipping—the subject of another new clause that was not selected. If the Government are averse, as suggested in Committee, to 100 per cent. capital allowances for shipping, they should seriously consider the benefits that would accrue from my new clause by accepting a one third, one third, one third write-off for tax
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  allowances on British shipping. Although the new clause would apply to all British industry, it would provide a significant benefit for British shipping.
  The Government have been through two wars—the Falklands and the Gulf. It should be apparent to everyone that the defence needs of our country are greatly assisted by the merchant fleet and the many people who serve in it who are prepared to support our Navy in one form or another. It is apparent that we must maintain a considerable defence requirement. It has been suggested that that should be achieved through a private subsidy to assist the maintenance of certain types of ships. I do not believe that that would be sensible, as it would encourage the shipping industry to invest in a particular type of ship which is solely suited to military purposes or has a heavy bias towards military purposes. It would be more appropriate to have a tax allowance to ensure that for most of the time we could use normal merchant ships, which could be adapted for defence needs.
  Shipping also contributes some £5 billion per annum to our balance of payments. It is a highly successful business, although in recent years the British merchant marine fleet has been forced to contract. That has been caused by factors that are often beyond Government control, such as the UNCTAD—the United Nations conference on trade and development—code. That code means that our shipping must compete with foreign shipping lines which are encouraged by those countries involved in the trade between the nations subject to that code. The opportunities for outsiders to trade with those countries has been severely limited in recent years as a result of the UNCTAD code.
  The average age of the United Kingdom fleet is 14 years, which is older than the world average. In addition to that, 75 per cent. of the United Kingdom's shipping fleet will need to be replaced by 2000. Therefore, it is necessary to consider the means by which the British fleet will be able to replace its ships in the next few years. It is important that some form of capital allowance changes are made. My new clause would greatly help the shipping industry, as well as the rest of British industry.
  The international competition in shipping and shipping allowances means that the United Kingdom is unfavourably placed in relation to Norway, Denmark and Germany, where it is possible to have limited partnerships. It is also unfavourably placed in relation to Denmark, Finland, France, Germany, Italy and Sweden where the capital allowances are 25 per cent. or better. My new clause proposes a one third, one third, one third principle which would bring the United Kingdom's shipping industry into a favourable position relative to those countries. Greece has no corporation tax on shipping. Therefore, it is necessary to consider capital allowances and the way in which individual industries are handicapped on the international market.
  My new clause was discussed briefly in Committee and the argument used against it and the new clause on shipping was that 90 per cent. of tax reliefs are obtainable in seven to eight years. I put it to the Minister that that period is too long. Anyone who has done any form of discounted cash flow calculations will know that, after seven or eight years, £1 then is worth only 50p today. Therefore, the tax relief has changed from the days when 100 per cent. capital allowance existed and when £1 of relief was available on day one. In some cases £1 of tax

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  relief is worth only 50p. The shipping industry and British industry in general would benefit from a change to a one third, one third, one third regime.
  I was disappointed that the argument in Committee was not based on the serious effect on British industry of the current tax regime, which results in a cash flow disadvantage. The new clause is desirable, because failure to take action and to implement a better capital allowance regime will probably delay recovery from the recession. It will cause disadvantages to those United Kingdom companies that trade on the international market and to those companies in the United Kingdom that face international competitors. At the moment, companies must borrow much more money than they might otherwise in order to make capital investment.
  If 100 per cent. allowances obtained, more of the investment costs could he drawn from a company's resources rather than from borrowed finance. Even if a one third, one third, one third allowance existed, British industry would not have to borrow so much and therefore its cash flow position would be healthier.
  Mr. Ted Garrett: If ever there were two industries that have been casualties of the ideological warfare that has taken place in this Chamber during my time in it they are the shipping and shipbuilding industries.
  We now have just three major yards left in the United Kingdom that could build ships of the type that are required as a result of the depreciation of our merchant fleet. The hon. Member for Dover (Mr. Shaw) is right to say that the average age of the British fleet is 14 years. As a ship gets older the insurance rates increase.
  I shall not detain the House for long, but I believe that the new clause is an opportunity for the Government to redeem themselves and their interest in the shipbuilding industry. It is a fact that we are now down to just over 900 ships registered under the British flag, which is extremely unsatisfactory.
  The hon. Member for Dover also referred to the Falklands and Gulf wars. Those wars proved that we had to pay enormous charter rates. We were held to ransom by allegedly neutral or friendly countries when we had to charter ships to get our equipment and manpower to the correct place at the correct time.
  Swan Hunter, the shipbuilding yard in my constituency, built the Atlantic Conveyor. Basically it is an air-support ship, but it does an enormous amount of work trading the oceans carrying containers.
  The new clause presents an opportunity for the Treasury and the Ministry of Defence to get together to ascertain whether it is possible for them to provide support for British shipping through a proposal that would ultimately give additional finance to the British shipbuilding industry. To that end, I warmly support the new clause.
  8.30 pm
  Mr. Martin Redmond: I support this sensible amendment and, if the Government have any common sense. they too will support it. Not to do so would be stupid and irresponsible. I have often criticised Government policy and I hope that the Government will apply common sense on this occasion.
  May I speak briefly about the effect that the amendment will have on shipping? If we allow shipping to
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  decline, jobs will be lost throughout the country. We would then be unable to defend our national interests and that would not be patriotic.
  Madam Deputy Speaker: Order. The hon. Gentleman is straying too far away from capital allowances. If he would keep his remarks more general, he would stay in order.
  Mr. Redmond: I shall certainly seek your guidance on that, Madam Deputy Speaker. The amendment mentions a 30 per cent. capital allowance. If that allowance is not applicable to the shipping industry, it affects that and other aspects of productivity. Although it is applicable throughout industry, I wish to emphasise the impact that it would have on shipping. I am well aware that Mr. Speaker declined to accept an amendment on the shipping aspect—
  Madam Deputy Speaker: Order. That is why I shall not allow a debate on shipping.
  Mr. Redmond: And rightly so, Madam Deputy Speaker.
  Unless the Government take the necessary steps to bring about a change and accept this sensible amendment, the country will run into trouble. Our competitors abroad are not inhibited by protection of their national interests. Allowances for all industries, including shipping, will enhance the country's economic future. If the Minister says that he is prepared to accept the clause, I shall congratulate him on his common sense. I regret that the Government operate market forces, which are fine except when the national interest is at stake. If the Government were to accept the same philosophy as Japan, America, Germany and other countries throughout the world, we would at least be in with a chance to compete on the same terms as those countries that seek to demean the British people. I do not know why the Government should seek to shy away from taking a step that would help to build up the British fleet.
  Reference has already been made to the impact of the Falklands and the Gulf wars because of lack of investment. The clause would enable British ship owners to make investments that would bring about improvements in that industry. One of the consequences of the Government's lack of help to industry is that companies tend to try to reduce their losses. If the Government were interested in uplifting the British economy, I am confident that they would accept this sensible amendment but, I regret, I do not see the Minister having that little bit of common sense.
  I do not normally support amendments tabled by Conservative Members, for a variety of reasons that I shall not go into. However, because our national interest is at stake, I feel that the whole House should support this new clause. I hope that the House will divide to ensure that people stand up to be counted so that industry knows precisely where it can lay the blame.
  Mr. Denzil Davies: I, too, support the new clause. After 12 years of Tory Government it is refreshing to have a Conservative Member introduce a new clause, albeit modest, that will provide some support for British industry. He may have got there by the route of shipping—I do not object to that—but the new clause relates to all plant and machinery. The manufacturing industry uses far more plant and machinery than the service industry, the financial sector or the property industry. As the hon.

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  Member for Dover (Mr. Shaw) said, in the long term the Inland Revenue will not lose any money. However, because it thinks only in annual terms, it feels that it may lose money. The cash flow of the manufacturing industry may be slightly improved and, as the hon. Gentleman rightly said, there will be a reduction in the reliance on borrowing which has been the scourge of British industry, and the service, financial and manufacturing industries are now paying the price.
  The hon. Member for Dover also asked why we do not adopt the American system if a company wishes, for accounting purposes, to set off its depreciation against its profits in year one or year two. Why not allow the same for investment allowances? I suspect that the Inland Revenue does not like that suggestion. I remember years ago when Trafalgar House bought P & O, and I suspect that it did so for investment allowances. [Interruption.] I am sorry, the company that it bought was Cunard. I knew that it was a shipping and building company. Perhaps the Inland Revenue does not like the idea because it presents opportunities for avoidance. However, the new clause seeks simply to bring forward relief if a company so wishes. The Chief Secretary may argue against the amendment but I do not see what he can say against it. He may argue that it will cost more money in the first year, but he cannot be sure that it will because he does not know how the companies will react.
  I shall not introduce the EC into the debate because you would rule me out of order, Madam Deputy Speaker. National taxation and investment allowances may soon be the only way in which the House can support the manufacturing industry. We have read about the problems that the French are having with subsidies to their computer industry and there are EC regulations in that respect. However, in this area of taxation—probably the last one left to us—we are still able to assist our manufacturing or any other industry by providing allowances.
  I hope that my hon. Friends on the Opposition Front Bench will support the new clause. I do not want to berate the hon. Member for Dover—I am happy that he proposed the new clause—but it is a slight admission that the blanket reduction in corporation tax, covering all industries, whether they invested in plant and machinery or not, helps service and financial sectors more than the manufacturing sector. Perhaps that blanket reduction in corporation tax was not entirely wise.
  The Opposition do not want to support manufacturing industry because they like dark, satanic mills and do not like the service sector. However, while, we do not have a common currency, to pay its way in the world the United Kingdom has to sell its goods abroad for foreign currency. The service industry and the financial sector in the main do not provide the revenue that we need to pay our way in the world. That is why the Opposition want to provide some modest assistance, and I think from what he has said that the hon. Member for Dover agrees with that.
  I would have thought that, in this new age and with the new world order emerging from No. 10 Downing street—which is different from the order that we have had during the past 12 years—the Government would want to
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  help manufacturing industry a little. The Government would be wise to do so because that is the only way that we, as a country, will balance our books.
  I am sure that the Chief Secretary has a large "no" written by the Inland Revenue on his brief, but he should throw away his brief. I am sure that he would love to do so, especially with his public expenditure brief, which he does not have with him at present. Despite the fact that the Chief Secretary's constituency is Putney, where there are few manufacturing industries, he should take the larger view of the subject, compliment the hon. Member for Dover on his splendid new clause and accept it.
  Mr. Robert Banks: I had not intended to speak in the debate. I have previously given my support to the shipbuilding industry, especially the merchant fleet, and felt that my hon. Friend the Member for Dover (Mr. Shaw) could do with some support from other Conservative Members. As I listened to Opposition speeches some doubts were sown in my mind as to whether I was on the right course. However, I realise that I would be straying from the realms of order if I were to talk too much about merchant shipping.
  There comes a period in every industry's history when it needs some stimulus and help from Government. The measure, modest though it is, would be of considerable help, particularly to the merchant fleet. As our defence commitments are being reduced—which is a matter for great joy—and as our forces are being cut back, nothing could be more important than having British ships on the world's oceans. The Merchant Navy has one of the greatest histories and reputations in the world for the way in which it carries out its duties. I believe that a measure of help is particularly appropriate now because of the aging fleet, as was described by my hon. Friend the Member for Dover. Therefore, I hope that my right hon. and learned Friend the Chief Secretary will be able to say something tonight that will help the merchant fleet.
  8.45 pm
  Dr. Marek: I am amazed that the hon. Member for Dover (Mr. Shaw) can table such an amendment because it was only a few months ago that I remember him as being so far to the right that, if we had a wall chart with a spectrum of people from the left of the Conservative party and the right of the Conservative party, he would be off the chart on the right. He was more Thatcherite than the right hon. Member for Finchley (Mrs. Thatcher). Clearly, he has been on the road to Damascus. I wonder why he was on that road. I do not think that I should dwell on that matter for too long but leave it to hon. Members to make up their own minds.
  I shall make two succinct points. First, we as a country will not survive unless industry prospers and manufactures. For that to happen, there is no doubt that industry must invest. Secondly, it is absolutely vital for us to have a shipping industry and help must be given to allow ships to be built in British shipyards, ships to be flagged with the British flag and ships to retain British crews.
  The new clause would go some way towards fulfilling both those aims. I do not completely accept the seductive and good speech of my right hon. Friend the Member for Llanelli (Mr. Davies). He was partly right, but we need a package of measures to achieve all the ends, not just one clause alone. Therefore, I wish to suspend judgment and make the plea that more must be done for industry to

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  invest. We must safeguard our British fleet, but I wonder whether the new clause would be appropriately targeted. How much would it cost to implement the new clause and how well would it be targeted?
  The Chief Secretary to the Treasury (Mr. David Mellor): First, I thank all those who have participated in the debate, not only for the eloquence of their speeches, but for the brevity and discipline with which they made them. I appreciate that and shall seek to emulate it. The points that have been raised are important and I am certainly more than willing to give an account of myself at the Dispatch Box, although the right hon. Member for Llanelli (Mr. Davies) will be sad to know that I am as attached to my brief as Linus is to his blanket.
  It was a particular pleasure to hear the hon. Member for Wallsend (Mr. Garrett); I hope I shall not embarrass him too much if I say that he is one of my favourite Members of Parliament. I understand why he said what he did because, in his lifetime, he has seen tremendous changes in a great industry. I assure him that we are well aware of what that means. The difficulty—as I shall seek to demonstrate—is that well-intentioned arrangements designed to deal with the problems do not and will not necessarily do so, and we must be fairly rigorous in our analysis of what is proposed.
  My hon. Friend the Member for Dover (Mr. Shaw) acknowledged that the Government took a conscious decision in 1984 to alter the rules on capital allowances and move from a 100 per cent. first-year system to one allowing investments to be written off over seven to eight years—a provision that is still generous as most pieces of equipment last for longer than that. We have heard much about the shipping industry—rightly so as it is important. I know that many hon. Members feel strongly about it. I do not want to stray out of order, but it is worth considering that most ships have an average life of 15 to 20 years, so the capital allowance system, even as it exists, is not ungenerous, particularly when one considers that there are special rules to deal with the depreciation of short-life assets.
  In 1984, a decision was taken to move to the new system. There was a striking quid pro quo for that change in the dramatic cut in corporation tax from 52 to 35 per cent., which the Budget proposes to reduce further to 33 per cent., thereby restoring this country's claim to have one of the keenest corporation tax rates in the world.
  We must not underestimate the tremendous benefits that have come from that change. In the last three years of the 1980s there was an increase in investment of more than 40 per cent. I shall not recount all the statistics and weary the House with them tonight, but they all show that Britain's exceptionally good performance in the 1980s made it the country of choice for the investment of a. large amount of money from key industrial overseas countries, with one third of Japanese investment world wide coming to the United Kingdom, two thirds of American inward investment coming into the European Community and a European Community total of inward investment from outside of almost 40 per cent. That is well ahead of countries such as France which has 14 per cent. and West Germany which has 2 per cent. That was a tremendous boom in investment. Even with the recognition in the Budget statement that investment will fall this year, it will still be about 58 per cent. more than it was at the beginning of the last decade. In constant money terms, business
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  investment has risen from £35 billion at the end of the 1970s to £55 billion or £56 billion at the end of the 1980s. That is a tremendous increase.
  Against that background there would have to be a striking and compelling case for moving back to capital allowances. To do that would be enormously expensive. I do not criticise my hon. Friend the Member for Dover for not having access to figures. I would not have them either were it not for the service provided by the Inland Revenue.
  The hon. Member for Wrexham (Dr. Marek) asked about cost. For the reasons given by the right hon. Member for Llanelli from his experience as a Treasury Minister I can give only an estimate. The Inland Revenue's best estimate for 1992–93—bearing in mind that in the new clause the enhanced rate of allowances would apply not only to new investment but to unrelieved past expenditure—is £2·15 billion; for 1993–94, £1·95 billion; for 1994–95, £1·6 billion; for 1995–96, £1·4 billion; and for 1996–97 £1·25 billion. That is a total of about £8·5 billion over five years. The right hon. Member for Llanelli suggested that I should throw away my brief. To do so would be an expensive chuck.
  I do not want to stray out of order, but I should like to deal briefly with shipping. The new clause would not necessarily help British shipbuilding because capital allowances are available wherever ships are built and cannot be restricted by European Community and other rules to the United Kingdom. One hundred per cent. capital allowances would open a whole range of potentially attractive dodges. For example, a bank in Britain could buy a ship made in Japan, obtain the allowances, and lease the ship to a company in Korea or Taiwan where it would compete with British ships. I am anxious to look after the best interests of the British merchant marine, but this is not a guaranteed way to help. There were 100 per cent. capital allowances in the decade from the mid-1970s to the mid-1980s and the British merchant fleet shrank from 32 million tonnes to 13 million tonnes. That statistic straddles two Governments, so it is not partisan.
  Where we can help we do and we have. For example, important changes were made in 1985 to the rules on writing down allowances, and in 1986 the business expansion scheme was extended to include ship chartering. Clause 44 of the Bill makes further changes to the tax arrangements for British seamen, increasing the number who can qualify to pay no tax as a result of being out of the jurisdiction for the qualifying period of the year. That is an attempt to make it more economical to employ British seamen.
  Undoubtedly, some issues on the United Kingdom register need to be addressed because any ship that benefited from the capital allowances scheme proposed by my hon. Friend the Member for Dover would not have to be given a British flag but could be flagged out. Therefore, the problems of flagging out need to be addressed separately. They are being addressed, and the report of a technical working party is being carefully studied. An important defence issue is being addressed by Ministers and in due course more can be said about it.
  Mr. Den Dover: Will the Minister confirm that the reduction from the 1970s to the 1980s in the British fleet from 30 million tonnes to 13 million tonnes owed more to flagging out than to the availability of capital allowances?
  Madam Deputy Speaker: Order. We are straying far from the point, as I know the Minister appreciates.
  Mr. Mellor: I do, and I am grateful for your guidance, Madam Deputy Speaker.
  Mr. Nicholas Brown: Will the Minister give way?
  Mr. Mellor: The hon. Gentleman is not as appealing as you, Madam Deputy Speaker, but provided that he allows me to stay in order I shall give way to him.
  Mr. Brown: I shall not debate whether I am as appealing as you, Madam Deputy Speaker, because there is absolutely no contest. I found beguiling the Chief Secretary's point about ships taken up from trade. That is an important issue because it affects the merchant fleet. May we expect a statement on the issue before the House rises or will we have to wait until the autumn?
  Mr. Mellor: The hon. Gentleman refers to defence. The matter is being considered and a statement will be made when a proper conclusion is reached. I cannot say whether that will be before the House rises but I wanted hon. Members to know that the defence issue, which is unrelated to these fiscal matters, has the serious attention of Ministers.
  I am sorry to give my hon. Friend the Member for Dover a somewhat dusty answer. It is important for these Matters to be ventilated, but in moving to a low corporation tax regime and away from capital allowances we are, in the longer term, doing the business man a great favour. We have allowed him to retain the resources to make his own investment decisions rather than distorting matters by a system of capital allowances. Under our regime it is the quality of the investment that matters and not the amount, which is the case under a regime based on capital allowances. Having properly ventilated the matter, I hope that my hon. Friend will agree to withdraw his new clause.
  Mr. David Shaw: It is often said in the House that short debates are among the best, and this debate has given the issue a wide airing. I regret that I did not have access to Treasury counsel in drafting my new clause, but such is the problem of the Back Bencher in drafting detailed amendments. I would certainly have intended it to be only for new investment to assist industry at a time of recession. Therefore, I accept that the cost would probably be much higher than the clause intends.
  The Chief Secretary produced figures to show a cost of £8 billion. He should be careful to separate the interest costs in terms of tax deferred from the actual cost of tax, because in the long term there is no loss of tax revenue. I notice that he stopped his example at year five. Had he gone on to year 10, the cost must be significantly reduced, and reducing towards zero.
  However, I accept that the new clause as drafted is not perfect. When the economy is such that the Treasury counts every pound carefully, putting my new clause to the vote would be inappropriate. Therefore, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 10

  DEVELOPER'S SELF-SUPPLY
  .—(I) Schedule 6A to the Value Added Tax Act 1983 shall be amended as follows.
  At the end of paragraph 6(2)(b) there is inserted—
  "except that, if the supply is treated as made on or after 1st April 1991, the value of it shall be calculated so that, to the extent only that grants and other supplies were made to the developer before 1st April 1991, the tax payable in respect of those grants and other supplies shall be calculated as if the supply had taken place on 31st March 1991.".'.—[Dr. Marek]
  Brought up, and read the First time.
  Dr. Marek: I beg to move, That the clause be read a Second time.
  Madam Deputy Speaker: With this it will be convenient to take new clause 36—VAT: Developer's self-supply (No. 2)—after paragraph 6(2) of Schedule 6A to the Value Added Tax Act 1983 there shall be added
  "6(2A) Where the supply is treated as made by sub-paragraph (1) above, on or after 1st April 1991, the value of that supply shall exclude the value of all grants and the value of all taxable supplies set out in sub-paragraph 2(a) and (b) above, where those supplies were made to the developer before 1st April 1991.
  6(2B) Where sub-paragraph (2A) applies, the value of all grants and taxable supplies referred to in sub-paragraph (2)(a) and (b) and excluded from the value in sub-paragraph (1) by sub-paragraph (2A), shall be deemed to be supplied for the purposes of sub-paragraph (I) on 31st March 1991.".'.
  Dr. Marek: The Opposition have tabled these new clauses to remedy a fault that has occurred as a result of the increase in value added tax from 15 to 17·5 per cent. in the last Budget. It may be for the convenience of the House if I cover a little of the background so that it can appreciate the aim of the clauses.
  The European Court judgment in June 1988 did not cover building land, although it covered non-domestic buildings. The then Economic Secretary, the right hon. Member for St. Albans (Mr. Lilley), who is now Secretary of State for Trade and Industry, in the Committee that considered the Finance Bill in 1989—I remember the occasion well—decided to abolish land exemption once it was clear that, as a result of the European Court judgment, the Government would be required to tax new domestic buildings. As a result, the developer's self-supply charge provisions were born and are now paragraphs 5 and 6 of schedule 6A of the Value Added Tax Act 1983.
  9 pm
  Those paragraphs provide that, on completion of development, the self-supply charge is triggered and output tax is paid, based on the historic cost of land, together with the value of all goods and services. I have some quibbles about the historic costs of land which I believe should be on a different value, but that is neither here nor there in the debate on the new clauses. In practice, VAT is imposed only on the land element as goods and services output tax can be offset by an input tax rebate. The VAT levied on the charge may be treated as input tax subject, for example, to partial exemption and to the capital goods scheme provisions. However—and this is the crux of the problem—the increase in the VAT rate from 15 to 17·5 per cent. has given rise to an anomaly in cases where developers are exempt—for example, those

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  developing schools and hospitals—and where work on those projects has taken place on either side of the 1 April 1991 deadline, when VAT was increased.
  The land cost will be subject to VAT at 17·5 per cent. if the self-supply charge is triggered after 1 April 1991, but so will the goods and services. That is fine if the service was performed on or after 1 April 1991, as input tax can be reclaimed at the same rate. However, that is not the case if the goods were delivered or the services were carried out before 1 April 1991. Then VAT can still be reclaimed, but only at 15 per cent., while output VAT has to be paid at 17·5 per cent.
  Mr. Denzil Davies: This is extremely complicated and I do not understand it. However, my hon. Friend said that developers would benefit. What kind of developers does he mean? I hope that it is not nasty property developers.
  Dr. Marek: I seek not to make any distinction between nice and nasty developers. It is simply a question of equity, and the equity has always been that any developer, as a result of the introduction of the self-supply regime, ought to be able to recover his input tax for goods and services, and then have to pay output tax when the self-supply charge is triggered. The problem is that, because VAT was increased to 17·5 per cent., the amount of output tax may be greater than the amount of input tax.
  My right hon. Friend may also care to dwell on the fact that if a future Government decided to reduce VAT the amount of tax that could be recovered by developers would exceed the amount of tax that they had had to pay. That would cause a general uproar as it would be manifestly unfair. The Opposition believe that it is unfair that allowance should not be made for this problem—which was probably unforeseen when the Government decided to increase VAT only a few days before the Budget was delivered, or so we are given to understand—for developers whose goods and services straddle both sides of 1 April 1991.
  I do not want to prolong the debate because I am aware of the many new clauses and amendments with which we must deal. That being so, I shall be concise.
  What is the solution? Happily it is a straightforward one, and the answer is apportionment. The Opposition, ever wanting to please and to help the House, have tabled not one new clause but two. I invite the Government to take their pick. The two clauses are worded differently, but they seek to achieve the same object. I hope that one of them will be acceptable to the Government. That being so, I hope that the Minister will regard one of them favourably and will accept it.
  The Minister of State, Treasury (Mrs. Gillian Shephard): I accept that the hon. Member for Wrexham (Dr. Marek) has a point, and I am grateful to him for drawing it to the Government's attention. I wish to help, but this is a hideously difficult subject. I understand that that is accepted by the right hon. Member for Llanelli (Mr. Davies).
  The self-supply charge was introduced only in 1989, so it is not surprising that there may be some teething troubles. I think that I am right in saying that the developers who are subject to the charge are the only people who pay value added tax who have, or have had, no choice about their tax point, which to my mind is probably the nub of the matter.
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  I am sure that the hon. Member for Wrexham will understand that the new clauses are not quite right. I do not criticise him for that, because if one thing is clear it is that the self-supply charge is extremely complex. As the new clauses are drafted, they would apply a 15 per cent. rate of VAT to all land acquired before the Budget, no matter how far in the future the land comes to be developed. I am sure that that was not the hon. Gentleman's intention. It would make no more sense to do that than to say that land acquired before June 1979 should always be liable to VAT at 8 per cent., whenever it comes to be developed.
  The new clauses would apply only to the change in the VAT rate that has just occurred. That may or may not be the intention of the hon. Member for Wrexham.
  Dr. Marek: It is not the Opposition's intention that a VAT rate of 15 per cent. should be retained for land. If the VAT rate changes, the rate on land must change. I hope that my intervention clarifies the issue.
  Mrs. Shephard: I thank the hon. Gentleman for that clarification. He will wish to know, however, that I am advised that there are other, more technical, problems with the drafting of the new clauses. As it happens, it would not be necessary to introduce primary legislation to amend the self-supply rules. The Government have the power under section 35 of the Value Added Tax Act 1983 to amend the rules by order. It would be sensible, of course, to take time to try to get these matters right.
  If the House is content, I am prepared to consider the subject again, and to write to the hon. Member for Wrexham. I cannot give a commitment, but I am happy to say that if we can be convinced that it would be fair and reasonable to amend the self-supply provisions governing the construction element of the charge, if it proves technically possible to do so and if—this is important—that need not upset other relationships within the tax system, I would propose to bring forward an order. If for any reason we come to the conclusion that that could not be done, I undertake to explain that fully to the hon. Gentleman. I hope that on that basis he will be prepared to withdraw the new clause.
  Mr. Denzil Davies: I am slightly worried about my Front-Bench colleagues. I hope that they are riot backsliding from the faith. A previous new clause was designed to support manufacturing industry, and my hon. Friend the Member for Wrexham (Dr. Marek) slightly—I do not know whether this is possible—poured cold water upon it. The new clause that is now before us seems to support the property industry, which is quite dominant in Britain and which has done well over the past 10 or 12 years. I know that it is facing some difficulties now, but I shall not weep if it has over-borrowed or geared too much—I think that "geared" is the vogue word for borrowing. That is a matter for the industry. The Minister has promised some action, as I understand it, and if the new clause is refined and accepted it will support the property industry.
  I have nothing against the property industry, but I wonder which pressure group briefed my hon. Friend. Whichever group it was, it did not draft the new clause very well according to the Minister, but it must have been a group representing property interests. I am rather worried. I read in the newspapers about the debates on Lloyd's in the Standing Committee on the Finance Bill.

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  Clearly, we do not believe everything that we read in the newspapers, but I hope that my hon. Friends on the Front Bench are not accepting the new age—or the new vogue—of market-based economies which, we are told, will solve our problems in the 1990s. I should have hoped that my hon. Friend would give more support to the new clause that favoured the manufacturing industry and that he would not have been so keen to support this new clause which, as I understand it, is aimed at and will eventually give some money to property interests.
  Mr. Den Dover: I support the new clause. I do not agree with the right hon. Member for Llanelli (Mr. Davies) that there are good and bad property developers and that to chase and make a profit is necessarily bad in itself. Property development brings enormous investment into this country across the range of property—industrial, residential and commercial. It is a high-risk industry and, although profits have been made, there are also enormous losses and high interest charges, despite the reductions of recent months.
  I welcome the attitude of the Opposition Front Bench in trying to create circumstances that are fairer for the property industry, and I must declare my interest. I am delighted that the Opposition are trying to correct an anomaly. I also welcome the Minister's constructive response. In addition to some of the changes that she is thinking of, I ask her to simplify the legislation. I also ask her and the Inland Revenue to be sensible about imposing misdeclaration penalties. The Chancellor mentioned that in the Budget, but self-supply is a legislative minefield for construction, development, land and buildings and I hope that the Minister will try to simplify the taxation regime in her future efforts.
  Sir Geoffrey Finsberg: I wish to probe what the Minister of State, Treasury said. She mentioned three possible scenarios adding to each the phrase "if technically possible". She will know that I am not wholly happy at the way in which Ministers are forced to accept the views of officials who deal with value added tax. For example, they—and not Ministers—have decided that VAT is to be imposed on Jaffa cakes, because they believe that they are not cakes, but biscuits. Ministers have no control over that. I ask my hon. Friend to take the decisions and not to let the mindless bureaucrats in Customs and Excise impose this decision on her.
  Dr. Marek: I hope that my right hon. Friend the Member for Llanelli (Mr. Davies) will accept that we are passionately in favour of British manufacturing industry and of providing the prosperity that the country needs to survive, but I hope that he will also accept that we are equally as passionate about trying to be fair. From what the Minister says, I hope that we can leave the matter in her hands and that if anything can be done, she will see that it is done.
  Mrs. Gillian Shephard: It would be a pity not to mention the domestic dispute on the Opposition Front Bench—let us hope that it simmers elsewhere. I thank my hon. Friends for their contributions and I assure my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg) that Jaffa cakes are never far from my mind.
  Dr. Marek: I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 13

  TAX EXEMPTIONS FOR CERTAIN SPORTING AND RECREATIONAL ASSOCIATIONS
  '(1) Where—

  (a) an Association which has as its object the encouragement, development and governance on a national level of any sport or other form of recreational activity (or which has as its object the representation of such Associations) is approved for the purposes of this section by the Secretary of State; and

  (b) the memorandum of association or other similar instrument regulating the functions of the Association precludes the direct or indirect payment of transfer to any of its members of any of its income or property by way of dividend, gift, division, bonus or otherwise howsoever by way of profit,

  there shall, on a claim in that behalf to the Board, be allowed in the case of the association—

  (i) exemption from tax in respect of income, and

  (ii) exemption from tax in respect of chargeable gains.

  (2) In Sections 338 and 339 of the Income and Corporation Taxes Act 1988, "qualifying donation" shall include a payment under a disposition or convenant made by a company in favour of an Association approved for the purposes of this section under subsection (1) above.
  (3) The conditions specified in paragraph (b) of subsection (i) above shall not be deemed not to be complied with in the case of any Association by reason only that the memorandum or other similar instrument regulating its functions does not prevent the payment to its members of reasonable remuneration for goods or facilities supplied, or for services rendered, of reasonable interest for money lent, or of reasonable rent for any premises.'.—[Ms. Hoey.]
  Brought up, and read the First time.
  9.15 pm
  Ms. Kate Hoey: I beg to move, That the clause be read a Second time.
  I feel like saying, "Here we go again", because this issue comes up year after year. New clause 13 narrows the focus of our attempts to meet points that have been made in the past, when debating Finance Bills in Committee and on the Floor of the House, in arguing against exempting governing bodies of sport from corporation tax.
  The amendment refers specifically to national governing bodies, and does not relate to sports clubs or to any organisations other than governing bodies. It is important to stress that, because, in the past, Ministers asked whether it was our intention also to exempt tiddlywinks clubs, and so on.
  Ultimately, I should like to go further and to examine the business rate burden on sports clubs and all the other problems that they encounter. However, tonight's debate concerns only exemption for national governing bodies. The new clause seeks also to avoid any involvement in charity law, because—as was said by the hon. Member for Berwick-upon-Tweed (Mr. Beith) in Committee—attempts to make legislative changes in that regard can be a nightmare.
  After consulting national governing bodies and the Central Council of Physical Recreation, we devised a new clause that will allow the Secretary of State to decide which

  105
  governing bodies would benefit. In the event of any dispute, and if the CCPR's ruling proved unacceptable, the Secretary of State would have the final say.
  The new clause is aimed at boosting the morale of sport and at ensuring that the money raised by governing bodies in different ways can all be used to benefit sport. At present, some of it must be paid to the Government in corporation tax. Sometimes the amount is small, but sometimes the sum involved is fairly large.
  The Minister and other hon. Members may dispute the cost of such a change to the Exchequer. We calculate that it will be in the region of £10 million—which, in the context of the Treasury's national revenues, is not a large figure. The amount saved in the case of the Amateur Swimming Association, for example, would be £15,000. Why should that organisation be required to pay that sum when the moneys that it raises do not profit any individual but are used to fund swimming?
  A large proportion of the profits from next autumn's forthcoming rugby union world cup will go in corporation tax, but no other country competing in that event will be similarly taxed.
  The corporation tax paid by the British Olympic Association is raised largely through voluntary effort and donations. People work extremely hard to ensure that our Olympic team has the necessary support. It is quite a large amount—some £2 million—but it does not seem so much in the overall context of the sum that is taken from sport.
  The Lawn Tennis Association pays about £1 million. I am not talking about Wimbledon; I am talking about the need to promote and improve grassroots tennis for young people, so that we can produce some future Wimbledon champions.
  The Minister may say that the money that has just been taken from the football pools will be given back to sport. In the past, the Government have always said that they want people to be able to decide for themselves how to spend their money. We shall debate later the way in which the new sports trust has been set up; let me say now, however, that we should not take with one hand and, with the other, try to give indirectly, in a different way. That would not enable the governing bodies to spend the money in the way that they consider best to develop sporting activities.
  The Minister may feel that some of those bodies would not spend the money in the way in which the Government would like them to spend it. My new clause, however, would not preclude the Chancellor of the Exchequer from deciding on a criterion that might exempt, for example, the Lawn Tennis Association, on condition that the resulting savings were spent in a way that would improve tennis at a basic level—on improving coaching, for instance. There is no reason why that should not be defined, if the Government work closely with sporting bodies.
  Last autumn I went to see the Financial Secretary, along with a cross-section of the governing bodies. The results were disappointing. We were received quite well; the Financial Secretary seemed to be listening to what we said, and it appeared from some of the questions that he asked—some of which were followed up through the Central Council of Physical Recreation—that the door was beginning to open. Informal conversations with the Minister for Sport suggested that he felt that a concession would be made. Then, just before the Budget, we suddenly heard that nothing would be given.
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  I ask the Treasury to reconsider. The amount concerned is not huge, and it would boost morale to a significant extent, allowing the governing bodies to expand the self-help that they are already carrying out.
  After all the work that has gone into Sheffield, the world student games are going ahead, and we shall try very hard to get the Olympic games to Manchester. A boost for the governing bodies would convince people that the Government and Members of Parliament care about sport, rather than being interested only when the finale of a tournament is taking place, involving a specific team or event. Many Ministers and other Members support such events, but I am thinking of the ordinary, day-to-day work that is done by people who really care about sport at grassroots level. I hope that the House will support the new clause.
  Mr. Peter Hain: I am delighted to support new clause 13, which was moved by my hon. Friend the Member for Vauxhall (Ms. Hoey), who is widely respected in the sporting world for her expertise and diligence. She is one of sport's finest friends.
  The Government are keen on instructing people to stand on their own two feet. However, in respect of corporation tax for sport, the Government are clobbering sport with a late tackle on the referee's blind side. According to the Sports Council, sport generates an income to the Treasury that is five times the figure that the Government spend on sport. It is not as if sport is freeloading from the Treasury's coffers. It is a net contributor many times over to the provision of its own general funding across the country.
  The present situation is full of anomalies. Some sports such as cricket are subject to look-through status whereby the national governing bodies are not subject to taxation, as is rugby. The burden falls on clubs and that is what the new clause seeks to redress.
  Having referred to rugby, I want to use that sport to make my case. Of the 16 countries involved in the rugby world cup this autumn, only England, Scotland and Wales have substantial tax assessments against them. One wonders whether that is part of the reason why our rugby teams, particularly over the past weekend, have not been doing brilliantly in international terms. That must be a contributory factor.
  Perhaps I should dwell for a moment on the problems facing Wales. I hesitate to do that, although my friend Ron Waldron is an excellent coach who has coached Neath to great success over the years. However, after Wales were defeated 71 points to 8 by New South Wales, I searched for the name of the Economic Secretary to the Treasury among those who scored the nine tries against Wales. The taxation that the Government are exacting from the Welsh Rugby Union is punitive to say the least. The WRU must pay VAT which is currently projected at £440,000 for this year; it must also pay an exorbitant business rate bill of £220,000 this year. On top of that, the WRU must also pay corporation tax of £330,000.
  The WRU is not a profit-making organisation. None of its members is seeking to join Lloyd's. They do not expect dividends or benefits from the income generated by the sport. There is no personal gain in rugby in Wales or elsewhere in the United Kingdom. Why should the WRU be subjected to corporation tax in this anomalous and punitive fashion?

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  In effect, the WRU's income from international matches is its sole source of surpluses. That income is severely raided by the Treasury through corporation tax. As a result of that, there is underprovision and the WRU is unable to invest the resources that it wants to invest in local clubs. Given the way in which the game in Wales has slid over the past few years, that is a real issue.
  I hope that Conservative Members and, preferably, Treasury Ministers will address the crisis facing our school and youth sports. It is not surprising that British sports men and women face problems in competing successfully abroad in rugby and other sports, given the crisis in school sport.
  I have two young sons. If it were not for the diligence of a few amateur voluntary helpers outside the school, the facilities for them would not be the same. The Government have destroyed teachers' confidence and morale and their commitment and willingness to work all hours under the sun for little or no reward while their professionalism was attacked from left, right and centre. That has created a crisis at school level whereby it is difficult to get the training, support and resourcing that school sport so desperately needs.
  For years, schools in Wales were virtual factories for rugby. Now the burden in youth rugby falls on local clubs. The WRU has to sponsor and invest in those clubs. The £330,000 that the Treasury is nicking—if I may use that colloquialism—from the WRU's income this year is preventing it from investing that money in the provision of youth sport and club sport, which are the backbone of the game in Wales and throughout the United Kingdom.
  9.30 pm
  We must consider how rugby is organised in Wales. It is organised by volunteers who are not out for personal gain. They put in long hours with no reward and with virtually no support from the Government. Indeed, there is an attack on their resources. My local club, Resolven rugby football club, suffers from the problem of lack of Government support and it has to pay exorbitant water charges. A new pipe has been put in for some new showers. As a result of the way in which water charges have catapulted upwards since privatisation, the connection charge for a 1-ft pipe connecting one pipe to another is £850, compared with the £30 which it would have cost when Welsh Water was under public ownership a couple of years ago. The club faces business rates, and exorbitant and punitive water charges. Those involved in the club have no personal gain and are determined to provide the best possible facilities for young people in particular. Surely with the rising rate in youth crime—
  Mr. Robert Hayward: I ask my question as, I think, the only qualified rugby referee in the House. Will the hon. Gentleman concede that he did far more damage to the sport of rugby than the Government and the proposal on corporation tax ever have?
  Mr. Hain: I was wondering when such a constructive intervention would be made by a Conservative Member. The changes now occurring in rugby and in sport generally in South Africa are a vindication of the strategy that many of us pursued of forcing those changes over the years.
  The hon. Gentleman's intervention was an attempt to divert us from the central point. I hope that he does not
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  belittle the real issue which I sought to address—the burden under which local rugby clubs work and suffer, which has been imposed by the Government's financial regime. I sought to make an important point about one of the real problems that we face as youth crime virtually gets out of hand and as young people roam listlessly round the streets because they have nothing to do. With a small concession by the Government, we could assist the Welsh Rugby Union—and this applies to other sports as well—and its local affiliates to provide the resourcing and investment necessary to inspire an interest and sense of enthusiasm in those young people.
  My hon. Friend the Member for Vauxhall reviewed the way in which the debate has progressed over the years. The new clause is different from the one moved last year and the one moved the year before. It does not seek charitable status for national governing bodies, as has previously been sought.
  Equally important—I hope that the Economic Secretary will address this point in his reply—is the fact that the new clause gives the Secretary of State considerable discretion to determine what is or is not an eligible sport. On 13 April 1991, the Financial Secretary wrote to the secretary of the Welsh Rugby Union:
  "There is, however, no agreed definition of what constitutes a sport".
  Frankly, that is weak. I invite the Economic Secretary or the Financial Secretary to talk to the Neath pack and to ask its members whether they are involved in a sport or are playing at model making for the Treasury. What is and what is not a sport is quite clear to those involved in rugby or any other sport in the United Kingdom.
  If there is any doubt, the new clause provides the Secretary of State with that discretion and gives him the opportunity to draw a ring fence around legitimate sports to ensure that nobody can get away with a slipshod definition of sport. I fail to understand why all those mandarins and officials at the Treasury, who, with the parliamentary draftsmen, spend long hours devising clauses and regulations to ensure that people cannot escape the scope of the definitions relating to taxation and the financial sector, cannot provide a suitable definition of sport when the thousands, if not millions, of people who enjoy sport every day of the week could do so. Or is this an excuse so that the Government do not have to act to give relief, not only to rugby in Wales and elsewhere but to sport in general?
  Finally, the cost of implementing the provisions would be minimal. It has been estimated by those in the sporting world who are expert at such things as being between £10 million and £12 million, which is nothing compared with the £2 billion that the Exchequer takes from sport every year.
  The new clause provides a small concession, but, properly directed and targeted—to use one of the Government's favourite words—it could give considerable support to those sports, and especially to rugby, which desperately need it to provide them with the resources to make the investment that they could not make otherwise.
  Mr. Menzies Campbell: The House will want to record its admiration for the hon. Member for Neath (Mr. Hain) for coming here, so soon after the events in Australia, to advocate the cause of Welsh rugby. His anxiety to ensure that yet more funds are channelled into the cause of Welsh rugby may have been directly

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  stimulated or provoked by those events in Australia. Hon. Members representing English constituencies should not feel any great sense of comfort, because the result obtained by their team on the same day was hardly any more comforting.
  This debate has become something of an annual fixture in the sporting calendar. It is noteworthy that two former Ministers for Sport are in their places. I hope that one or other of them may feel compelled to catch your eye, Mr. Deputy Speaker. Three years ago, in a useful debate on this subject, the then Economic Secretary, now catapulted to fame as Chancellor of the Exchequer, made a sympathetic response to what was thought to be a constructive debate. To some extent, the form of the new clause that we are debating is less relevant than the principle that it seeks to establish. Different amendments, in different forms, have been tried over the years. Last year, in the Law Reform (Miscellaneous Provisions)(Scotland) Act 1990, which one may think an unlikely vehicle, we tried to persuade the Government to accept that sport in Scotland at least should have charitable status. That must have followed too hard upon the success of the Scottish team at Murrayfield, when they won the grand slam, to succeed in persuading everyone on the Treasury Bench that it was necessarily a good idea.
  The issue comes to this—to what extent are the Government willing to recognise the importance of sport in many people's lives and its contribution to health? That is an element of the work of the governing bodies of the sports associations to which insufficient regard has been ascribed until now. It is also noteworthy that the philosophy of the sports councils has become less to direct governing bodies and more to regard them as independent bodies with more devolved responsibilities and powers. If that is so, surely it would be only right and proper to release to governing bodies a far greater level of resources than they presently enjoy.
  As the hon. Member for Neath hinted, since the disruption in schools both north and south of the border, the opportunities for individuals to take part in school sport have been substantially reduced. That is why the Scottish Sports Council, under the prompting of the Minister of State, Scottish Office, who has responsibility for sport in Scotland and provided the funds, has launched a campaign the purpose of which is to fill the gap that has been created. That gap must be filled by the governing bodies of sport.
  Some governing bodies are extremely professionally run. They have paid administrators and substantial staffs. They are sophisticated about attracting sponsorship. They know their way around government. They know how to lobby. But in many cases governing bodies are run by unpaid amateurs who devote their whole life to their particular sport and often run the affairs of the United Kingdom national sporting association from a spare room at the top of their house. In many cases the effort of a governing body is entirely amateur. If that effort was not produced in the committed and energetic way in which it is, those governing bodies would either not exist or at least would operate at a much lower level of activity than at present.
  The issue is not so much the precise substance of the new clause. I have looked back at the Official Report of similar debates on previous occasions and I have no doubt that the Treasury Bench will take refuge in some didactic, nit-picking point about the form of the new clause.
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  However, the issue is one of principle. How far do the Government recognise the contribution of sport? The Prime Minister seems to be an enthusiast for sport. The Minister for Sport appears to be someone whose red rose may not be in the right place, but whose heart is certainly in the right place.
  This is an opportunity for the Government to recognise and acknowledge the extraordinary contribution that sport makes and the tremendous efforts of unpaid individuals who work, as the word "amateur" necessarily implies, for the love of their sport. How much more redoubled will their efforts be if the Government say generously this evening, "You no longer have to pay corporation tax"?.
  Mr. Richard Tracey: I rise to speak briefly particularly in response to the last few sentences uttered by the hon. and learned Member for Fife, North-East (Mr. Campbell). As he mentioned, I and my hon. Friend the Member for Dumfries (Sir H. Monro), as former Sports Ministers, have subscribed very much to the principle of new clause 13. As he said, two or three years ago we received a favourable and sympathetic response from my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), the present Chancellor of the Exchequer, who was then a junior Minister at the Treasury. That response was the result of several years of lobbying Treasury Ministers. We lobbied a whole series of my right hon. and hon. Friends who occupied various positions at the Treasury. They received us courteously and, indeed, gave us good reason to believe that one of these years the philosophy behind the new clause might just be accepted.
  This year, as you know, Mr. Speaker, this new clause has been tabled by the hon. Members for Vauxhall (Ms. Hoey) and for Neath (Mr. Hain). At an even lower scale in terms of cost, new clause 8, which unfortunately you were not able to select, was tabled by my hon. Friend the Member for Dover (Mr. Shaw), the hon. Member for Stalybridge and Hyde (Mr. Pendry) and me. It called for some tax relief for the British Olympic Association—one specific sporting body which should most certainly receive some tax relief in line with every other Olympic committee in the world. I want my hon. Friend the Economic Secretary to the Treasury to know that this philosophy is accepted across the parties in the House. It would have been wrong for me not to put that on the record tonight. In his response, will he give us some idea of which direction we should be going to achieve tax relief for sport?
  As I said, we have presented the minimum position with the British Olympic Association. The new clause tabled by the Opposition asks for rather more. Surely the time has now come for the Treasury to give some indication of when we can hope that sport's governing bodies can gain tax relief.
  9.45 pm
  Mr. Maples: Before my hon. Friend the Member for Surbiton (Mr. Tracey) intervened, I was going to say that it was nice for an Englishman to get a word in, if only to remind the House that we do not have to go quite so far back in history to find an occasion when we won the grand slam. It is not surprising that if one wanted an example of a sport in a terrible mess, one would pick the Welsh Rugby Union. If one is to chuck public money around, even the Labour party now believes in throwing money at winners, not losers.

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  This is a difficult problem to solve. There is no easy solution. The fact that over the years people have tried to find a solution but none has been found shows how difficult it is. The relief proposed by the new clause is both extremely generous and wide ranging. The new clause would give complete exemption from corporation tax to any recreational association organised nationally which did not distribute its profit. Compare that with the current position where the only bodies wholly exempt from corporation tax are local authorities and health service bodies. Even the exemption enjoyed by charities is conditional on income being applied solely to charitable purposes. There is no such restriction in the new clause.
  One must realise that such an exemption would confer an unfair advantage on these bodies. Where, for example, they sold sports equipment or refreshments, they might well be in direct competition with other local traders who do not enjoy similar tax privileges. There is no definition of "sport" or "recreational", and it would be almost impossible to devise a satisfactory one.
  It is hard to see any good reason for granting an exemption to sport but not to other equally worthwhile activities. Therefore, any such relief would create considerable pressure for an extension to other bodies and could give rise to endless disputes about whether particular bodies or activities should qualify.
  The new clause goes further than one might have expected in containing provisions designed to allow tax relief on covenanted donations or on donations under gift aid to such bodies. Relief on that sort of payment is designed to benefit charities. It is well established that sport is not a charitable activity. Charities would be deeply concerned at a proposal which threatened to divert money from them to new bodies.
  The Government have considered possible reliefs for sports or sport's governing bodies several times, but it has been difficult to identify an acceptable proposal. Any exception would be arbitrary and difficult to confine, and it would not be possible to accept the new clause. I understand the problem, but there is no acceptable or easy solution to it, although we have looked hard for one.
  If it is any consolation, the sports and arts foundation, which has been set up in association with this Budget, will provide valuable help for sport. We expect it to distribute some £250 million over the next four years. At least two thirds of that must go to sport, so there should be £160 million or £170 million from that, as well as all the other resources going into sport. I am sorry that it is not possible for the Government to accept the new clause.
  Ms. Hoey: I rather expected that response from the Economic Secretary to the Treasury, because, as the hon. and learned Member for Fife, North-East (Mr. Campbell) suggested, it was unlikely that we would hear anything new. We have simply had a repetition of what has been said, ad nauseam, in Committee after Committee, year after year. I am disappointed that the Minister said absolutely nothing new. He continues to say that the Government have tried, but that they cannot find a way round the problem. However, if Back-Bench Members can come up, year after year, with new ways in which to tackle the problem, how many more ways do we have to find
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  before the Government, with all their machinery of civil servants and support, can find a mechanism to accept the principle?
  I should have been happy if the Minister had even accepted the principle and said that the Government would like to find a way in which to provide money. However, there seems to be no give from the Government and, therefore, I want to press the new clause to a vote.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 68, Noes 252.

  Division No. 210]

  [9.50 pm

  AYES

  Abbott, Ms Diane

  McFall, John

  Barnes, Harry (Derbyshire NE)

  McKay, Allen (Barnsley West)

  Bellotti, David

  Madden, Max

  Benn, Rt Hon Tony

  Mahon, Mrs Alice

  Blunkett, David

  Marshall, Jim (Leicester S)

  Caborn, Richard

  Meale, Alan

  Callaghan, Jim

  Michie, Bill (Sheffield Heeley)

  Campbell, Menzies (Fife NE)

  Mitchell, Austin (G't Grimsby)

  Campbell-Savours, D. N.

  Morley, Elliot

  Canavan, Dennis

  Nellist, Dave

  Carlile, Alex (Mont'g)

  Paisley, Rev Ian

  Carr, Michael

  Patchett, Terry

  Cohen, Harry

  Pendry, Tom

  Cousins, Jim

  Pike, Peter L.

  Cox, Tom

  Powell, Ray (Ogmore)

  Cryer, Bob

  Primarolo, Dawn

  Dalyell, Tarn

  Redmond, Martin

  Dixon, Don

  Robinson, Peter (Belfast E)

  Dunnachie, Jimmy

  Rooney, Terence

  Eadie, Alexander

  Salmond, Alex

  Eastham, Ken

  Skinner, Dennis

  Fearn, Ronald

  Spearing, Nigel

  Fyfe, Maria

  Steel, Rt Hon Sir David

  Godman, Dr Norman A.

  Taylor, Mrs Ann (Dewsbury)

  Gordon, Mildred

  Trimble, David

  Graham, Thomas

  Wallace, James

  Grocott, Bruce

  Wardell, Gareth (Gower)

  Haynes, Frank

  Welsh, Michael (Doncaster N)

  Hood, Jimmy

  Wigley, Dafydd

  Howell, Rt Hon D. (S'heath)

  Wise, Mrs Audrey

  Hughes, John (Coventry NE)

  Wray, Jimmy

  Illsley, Eric

  Young, David (Bolton SE)

  Janner, Greville

  Leighton, Ron

  Tellers for the Ayes:

  Lewis, Terry

  Ms. Kate Hoey and Mr. Peter Hain.

  Loyden, Eddie

  NOES

  Aitken, Jonathan

  Bright, Graham

  Alison, Rt Hon Michael

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

  Allason, Rupert

  Browne, John (Winchester)

  Amess, David

  Buck, Sir Antony

  Amos, Alan

  Budgen, Nicholas

  Arbuthnot, James

  Burns, Simon

  Arnold, Sir Thomas

  Butler, Chris

  Atkinson, David

  Butterfill, John

  Baker, Rt Hon K. (Mole Valley)

  Carrington, Matthew

  Baker, Nicholas (Dorset N)

  Cash, William

  Baldry, Tony

  Chalker, Rt Hon Mrs Lynda

  Banks, Robert (Harrogate)

  Chapman, Sydney

  Beaumont-Dark, Anthony

  Chope, Christopher

  Bellingham, Henry

  Clark, Dr Michael (Rochford)

  Bennett, Nicholas (Pembroke)

  Clarke, Rt Hon K. (Rushcliffe)

  Benyon, W.

  Colvin, Michael

  Bevan, David Gilroy

  Coombs, Anthony (Wyre F'rest)

  Blackburn, Dr John G.

  Coombs, Simon (Swindon)

  Blaker, Rt Hon Sir Peter

  Cope, Rt Hon Sir John

  Boscawen, Hon Robert

  Couchman, James

  Boswell, Tim

  Cran, James

  Bottomley, Mrs Virginia

  Currie, Mrs Edwina

  Bowden, Gerald (Dulwich)

  Davis, David (Boothferry)

  Bowis, John

  Day, Stephen

  Brandon-Bravo, Martin

  Devlin, Tim

  Brazier, Julian

  Dicks, Terry

  113

  Dorrell, Stephen

  Lee, John (Pendle)

  Douglas-Hamilton, Lord James

  Lennox-Boyd, Hon Mark

  Durant, Sir Anthony

  Lester, Jim (Broxtowe)

  Emery, Sir Peter

  Lilley, Rt Hon Peter

  Evennett, David

  Lloyd, Sir Ian (Havant)

  Fallon, Michael

  Lloyd, Peter (Fareham)

  Fenner, Dame Peggy

  Lord, Michael

  Field, Barry (Isle of Wight)

  Luce, Rt Hon Sir Richard

  Finsberg, Sir Geoffrey

  McCrindle, Sir Robert

  Fishburn, John Dudley

  MacGregor, Rt Hon John

  Fookes, Dame Janet

  MacKay, Andrew (E Berkshire)

  Forman, Nigel

  Maclean, David

  Forsyth, Michael (Stirling)

  McNair-Wilson, Sir Michael

  Forth, Eric

  McNair-Wilson, Sir Patrick

  Fox, Sir Marcus

  Malins, Humfrey

  Franks, Cecil

  Mans, Keith

  Freeman, Roger

  Maples, John

  French, Douglas

  Marlow, Tony

  Fry, Peter

  Marshall, Sir Michael (Arundel)

  Gale, Roger

  Martin, David (Portsmouth S)

  Gardiner, Sir George

  Mates, Michael

  Garel-Jones, Tristan

  Maude, Hon Francis

  Gill, Christopher

  Mawhinney, Dr Brian

  Gilmour, Rt Hon Sir Ian

  Maxwell-Hyslop, Robin

  Glyn, Dr Sir Alan

  Mayhew, Rt Hon Sir Patrick

  Goodhart, Sir Philip

  Mellor, Rt Hon David

  Goodlad, Alastair

  Meyer, Sir Anthony

  Goodson-Wickes, Dr Charles

  Miller, Sir Hal

  Gorman, Mrs Teresa

  Mills, Iain

  Gorst, John

  Mitchell, Andrew (Gedling)

  Greenway, John (Ryedale)

  Mitchell, Sir David

  Gregory, Conal

  Moate, Roger

  Griffiths, Sir Eldon (Bury St E')

  Monro, Sir Hector

  Griffiths, Peter (Portsmouth N)

  Montgomery, Sir Fergus

  Grist, Ian

  Morris, M (N'hampton S)

  Ground, Patrick

  Moss, Malcolm

  Grylls, Michael

  Moynihan, Hon Colin

  Hague, William

  Neale, Sir Gerrard

  Hamilton, Neil (Tatton)

  Needham, Richard

  Hanley, Jeremy

  Neubert, Sir Michael

  Hannam, John

  Nicholls, Patrick

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

  Nicholson, David (Taunton)

  Hargreaves, Ken (Hyndburn)

  Norris, Steve

  Harris, David

  Onslow, Rt Hon Cranley

  Hawkins, Christopher

  Oppenheim, Phillip

  Hayes, Jerry

  Page, Richard

  Hayward, Robert

  Paice, James

  Heathcoat-Amory, David

  Patnick, Irvine

  Hicks, Mrs Maureen (Wolv' NE)

  Patten, Rt Hon Chris (Bath)

  Hicks, Robert (Cornwall SE)

  Patten, Rt Hon John

  Hill, James

  Pawsey, James

  Hind, Kenneth

  Peacock, Mrs Elizabeth

  Holt, Richard

  Porter, Barry (Wirral S)

  Hordern, Sir Peter

  Porter, David (Waveney)

  Howard, Rt Hon Michael

  Rattan, Keith

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

  Raison, Rt Hon Sir Timothy

  Howarth, G. (Cannock & B'wd)

  Rathbone, Tim

  Howell, Rt Hon David (G'dford)

  Riddick, Graham

  Hughes, Robert G. (Harrow W)

  Ridsdale, Sir Julian

  Hunt, Sir John (Ravensbourne)

  Rifkind, Rt Hon Malcolm

  Hunter, Andrew

  Roberts, Rt Hon Sir Wyn

  Irvine, Michael

  Rossi, Sir Hugh

  Irving, Sir Charles

  Rowe, Andrew

  Jack, Michael

  Rumbold, Rt Hon Mrs Angela

  Jackson, Robert

  Ryder, Rt Hon Richard

  Janman, Tim

  Sackville, Hon Tom

  Jessel, Toby

  Sayeed, Jonathan

  Jones, Gwilym (Cardiff N)

  Scott, Rt Hon Nicholas

  Jones, Robert B (Herts W)

  Shaw, David (Dover)

  Jopling, Rt Hon Michael

  Shaw, Sir Giles (Pudsey)

  Kellett-Bowman, Dame Elaine

  Shaw, Sir Michael (Scarb')

  Kilfedder, James

  Shelton, Sir William

  King, Roger (B'ham N'thfield)

  Shephard, Mrs G. (Norfolk SW)

  Kirkhope, Timothy

  Shepherd, Colin (Hereford)

  Knapman, Roger

  Sims, Roger

  Knight, Greg (Derby North)

  Skeet, Sir Trevor

  Knight, Dame Jill (Edgbaston)

  Smith, Sir Dudley (Warwick)

  Lang, Rt Hon Ian

  Smith, Tim (Beaconsfield)

  Latham, Michael

  Speed, Keith

  Lawrence, Ivan

  Speller, Tony

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  Spicer, Sir Jim (Dorset W)

  Walden, George

  Squire, Robin

  Walker, Bill (T'side North)

  Stanbrook, Ivor

  Waller, Gary

  Stanley, Rt Hon Sir John

  Ward, John

  Stern, Michael

  Wardle, Charles (Bexhill)

  Stevens, Lewis

  Watts, John

  Stewart, Andy (Sherwood)

  Wells, Bowen

  Stewart, Rt Hon Sir Ian

  Wheeler, Sir John

  Summerson, Hugo

  Whitney, Ray

  Taylor, Ian (Esher)

  Widdecombe, Ann

  Taylor, Sir Teddy

  Wiggin, Jerry

  Tebbit, Rt Hon Norman

  Wilkinson, John

  Thompson, D. (Calder Valley)

  Wilshire, David

  Thompson, Patrick (Norwich N)

  Winterton, Mrs Ann

  Thorne, Neil

  Winterton, Nicholas

  Thurnham, Peter

  Wolfson, Mark

  Townend, John (Bridlington)

  Wood, Timothy

  Townsend, Cyril D. (B'heath)

  Yeo, Tim

  Tredinnick, David

  Trippier, David

  Tellers for the Noes:

  Trotter, Neville

  Mr. David Lightbown, and Mr. John M. Taylor.

  Viggers, Peter

  Wakeham, Rt Hon John

  Question accordingly negatived.

New Clause 15

  FINANCING OF BRITISH FILMS UNDER BUSINESS EXPANSION SCHEME
  'Where a company carrying on a trade qualifying under section 297 of the Taxes Act 1988 is engaged throughout the relevant period (for the purposes of that section) in the production of relevant films within the meaning of section 3(7) of the Films Act 1985, subsections (1) and (4) of section 290A of the Taxes Act 1988 (restriction of relief under business expansion scheme where amounts raised exceed permitted maximum) shall have effect as if for the amount there specified there were substituted £5 million.'.—[Sir Anthony Durant.]
  Brought up, and read the First time.
  Sir Anthony Durant: I beg to move, That the clause be read a Second time.
  I begin by declaring an interest: I am the chairman of the Back-Bench committee on the film industry, which is why I am moving the new clause.
  The new clause seeks to exempt film companies from the upper limit for tax relief in the business expansion scheme. The current limit of £750,000 is inadequate for would-be investors in film production—the average cost for a medium-budget film is closer to £5 million. The new clause aims to make it easier and more attractive to invest in British films. That is an urgent need. Investment in our film industry has slumped badly.
  Film is increasing in importance—there were about 100 million attendances at the cinema last year. People are watching films on television, satellite broadcasts and videos, both bought and rented. In the past 10 years, expenditure on video alone increased from less than £100 million a year to more than £1,000 million a year.
  The British film industry has expertise and creative talent. Blockbusters such as the "Indiana Jones" trilogy and "Batman" were made in this country with largely British crews and "The Last Emperor" was written and produced by British talent. But because there is no finance and investment from the United Kingdom the profits from those films returned to the countries which put up the money.
  The British film industry is too small to compete effectively with our European rivals. The decline in investment has, of course, affected production levels. Last

  115
  year fewer than 30 films were made here and that total is set to go down still further this year. This low level of production does not provide enough throughput for an industry with a high risk factor, uncertain returns and high unit costs.
  The industry comprises many small production companies, each incurring development costs without economies of scale, trying to produce prototypes for an unpredictable market. Sustained commercial success depends on being able to produce a continuing flow of films over a wide range of styles and audience appeal, so that the few successes pay for the ones which do not cover their costs. Other countries with small domestic markets bridge the gap with a range of subsidies, fiscal incentives and investment schemes which ensure a reasonable product flow and create a mass of film activity. There is therefore an overwhelming case for some form of Government action through tax incentives.
  The stakes are high. Film is a key British industry with the ability to create products which can succeed in the European market place and can reach across the Atlantic to the American market. After 1992, the single European market will be larger than the US market and Britain will need to be well placed to exploit the opportunity. Presently, the United Kingdom cannot participate in European co-productions because we have no money to bring to the negotiating table. However, given that success often depends on selling one's film to the Americans, we have the advantage of language which should make the United Kingdom a natural partner in most European co-productions. We have the entrepreneurial and creative talent, the facilities and the commitment to make the industry successful. We can be certain that the film industry has the potential to compete effectively in Europe and in the USA. It could be as important to the United Kingdom's economy as Hollywood is to the US Exchequer.
  The amendment is a simple but effective step which the Government could take to assist and stimulate the industry. It is one of the suggestions that arose from the former Prime Minister's working party following the meeting at No. 10 Downing street. I shall listen with interest to the Financial Secretary's response to my new clause.
  Mr. Tom Clarke: I support the new clause which the hon. Member for Reading, West (Sir A. Durant) so eloquently addressed. This is a crucial time for the film industry and the new clause would ease and encourage the industry. However, I think that the hon. Gentleman would be the first to concede that the new clause could be regarded only as a first step.
  The new clause appears not a minute too soon. My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) and I served on the Standing Committee dealing with what is now the Films Act 1985. That followed a declaration by the present Home Secretary, at that time one of the many Ministers responsible for films at the Department of Trade and Industry, who said in responding to an Adjournment debate that the Act would lead to the renaissance of the British film industry. We have not seen a renaissance, quite the reverse.
  Last year's Downing street seminar was regarded by many as highly successful. It is a great pity that it has not
  116
  been followed up. The Minister may have some more information for us this evening. There were high hopes at that time, encouraged by the right hon. Member for Finchley (Mrs. Thatcher), but since then there has been little encouragement for the British film industry.
  It is important that we address these problems because we have seen the industry weaken badly. In 1985, £272 million was invested, but in 1989 it was only £79 million. No industry can withstand that lack of investment, of training and of opportunity. This was once a great industry, and it is an industry that still offers enormous potential. In many ways The Observer yesterday told us a great deal. It said that there is to be a new version of the film "Wuthering Heights". This was given enormous prominence in that such a film would boost the British film industry. That is splendid news. We all welcome it, but it is a sad reflection on the state of the industry and it shows how little we have achieved and how few films there have been that a remake is greeted with the excitement that The Observer understandably thought was appropriate. It said:
  "Paramount's decision is the most important for the British film industry for many years."
  However, a great deal more needs to be done. Scotland also has reason to be worried, for only one feature-length film has been made there in the past 18 months—"Tickets for the Zoo" by Brian Crumlish. It is the only Scottish film to be shown at the Edinburgh film festival.
  I hope that, if this worthy new clause is accepted, the Minister will ensure that it encourages investment in this vital industry. As the hon. Member for Reading, West said, the industry is facing a great deal of change and competition, not all of it fair. The new Europe that will come in 1992 is all about competition and opportunities. The Department of Trade and Industry is letting the world go by in the film industry. It does not seem to realise that there are splendid opportunities there and that we should be encouraging indigenous talent within Britain and Europe, in competition with the United States, in an industry that has been sadly neglected for several years.
  In 1990, United Kingdom film production was at its lowest level since 1981. A strong film industry influences overseas earnings and the balance of payments, and that is quite apart from the attraction of seeing a vibrant film and cinema industry. Whereas blockbusters like "Superman" and "Batman" were made with British expertise, over the past two years there have been times when there has been no major film production in the United Kingdom. Both as a source of new features and as a service centre for making foreign films, the industry is in a parlous state. We are reaping the cost of neglect.
  As the hon. Member for Reading, West courageously suggested, our Government, unlike those of other countries, have treated film as an interesting luxury rather than as an industry and a producer of wealth. They have done this in the face of some unfair competition. The fiscal policies of other European Governments do not match ours and the concession that the new clause would introduce would help us to meet such competition from Europe and elsewhere. That is the very least that our filmakers are entitled to expect.
  Even if the new clause is accepted, as it should be, there should be more encouragement for the film industry. The new clause is a first step in revitalising an industry in which there has not been a strategy for many years. The industry is facing the reality that many people are out of the habit of going to the cinema. Attendances have, I am happy to

  117
  say, increased in recent times but the trend not to visit the cinema is one that we must try firmly and steadfastly to reverse in the interests of this indigenous industry. For the most part we rely on fiscal incentives, and that is why the new clause is so important.
  10.15 pm
  There has been an absence of strategy. With the Films Act 1985, which is mentioned in the new clause, we rightly abolished the Eady levy. It had had its day. It was appropriate to patterns of cinema-going when it was in operation, but we have not replaced it with a modern approach to film production in Britain now or in future. I believe that it is vital to introduce a realistic replacement.
  When we come to think of the future of the industry we must think also of those who use it. In the days of the Eady levy we thought that those who went to the cinema to see a film should make a contribution to the production of the next film. It seems remarkable, especially given the Government's fiscal policies and demands on a difficult industry, that television contributes so little to investment in the film industry and to film production.
  I do not believe that there is a need for a permanent subsidy for our film industry, and I know few people who think otherwise. However, films should be recognised as the products of a key British industry. The industry should have the resources to create products that will succeed in the European market place. When we talk of Europe it is vital that we remember eastern Europe and the new influence that it will have on our ability to export and to make a contribution in a wider European scene. Our industry should have the potential to reach into the United States market and to reap the rewards that are available there. We have the talent and I believe that we have the commitment. The industry has the potential to be as important to the United Kingdom industry as Hollywood is to the United States' Exchequer.
  Given incentives and a commitment by the House to some of the best film talent that is available anywhere in the world, progress can and should be made. By encouraging that we would see restored to Britain a once-great industry that would still give joy and pleasure to many millions.
  Mr. Alex Carlile (Montgomery): I support the new clause of the hon. Member for Reading, West (Sir A. Durant) and the remarks of the hon. Member for Monklands, West (Mr. Clarke).
  You will know, Mr. Speaker, that many celebrated feature films have come from popular television programmes. After the televising of the proceedings of this place for some considerable time now we might be seeing as competition to Superman III and Rocky IV, House of Commons V or even, dare one say it, Mr. Speaker VI. I say that merely to highlight the fact that there are many programmes on British television, apart from the proceedings of the House, and many aspects of British life that have been dramatised for television that lend themselves to British film making.
  As Oscar ceremonies have shown in recent years, we in the United Kingdom have proportionately the richest array of talent of any country in the world. We have actors who can stand with the best. We have writers who are sought after in the United States to write films for Americans. We have the best film music makers, ranging from the traditional to the avant garde. We have
  118
  photographers, camera people and editors who have won prizes for the very best of films. We have directors who are in daily demand throughout the world.
  British film excellence applies not only to blockbusters which were mentioned by the hon. Member for Reading, West; British directors have produced films which are perhaps of minority interest but which would have great potential if they received just a little more funding. We have produced film makers such as Peter Greenaway who is regarded as being among the best in the world even though he has hitherto made his films on a small budget.
  It is perhaps also worth noting that for shipping companies the business expansion scheme limit has been raised to £5 million. Therefore, what the new clause seeks is not exclusive to the film industry. We are asking for something which is perhaps analogous to the shipping industry—the opportunity to invest more favourably in an industry which, like the shipping industry, was once very large and great but which has declined significantly in recent years for economic reasons and because of competition from elsewhere.
  The new clause does not seek short-term measures. The idea behind the raising of the BES limit is to enable the film industry in the United Kingdom to regenerate itself over a period of years. My understanding of the proposal is that the film industry hopes to establish a £100 million fund for film making channelled through 20 BES production companies, each with a £5 million budget. The five-year plan would merge the 20 companies at the end of that period into one over-arching film production business with large investment funds and a "slate" of 25 films a year.
  Although one might not see the BES funds on the approved list of funds in which local authority treasurers should invest their local government money, they would nevertheless catch the imagination of the public. There is plenty of evidence from the video boom and from the increasing attendances at many cinemas that the British public still want to see films. I believe that the British public would take pride in seeing more British films and that, above all, they would be prepared to invest in more British films. The French film industry is, relatively speaking, thriving and it produces many excellent films. That is an example of just one film industry elsewhere in the world which is galloping away from the British film industry.
  People are prepared to invest in schemes as chancy as football pools and horse racing, and the BES is certainly a better bet than they are. I believe that the public would regard investing small amounts of money tax free in the film industry as well worth the gamble and if it is, indeed, a gamble it would be one which for some would bring the highest possible rewards imaginable if a British film became a blockbuster success at the box office.
  The BES is tailor made for financing an industry such as the film industry, although I hope that the Minister will agree that it is self-evident that the present financial limit would not buy one fifth of a decently financed film which means that it is not a reality for the British film industry in its present form.
  Mr. Chris Smith: As the joint secretary of the all-party group on the film industry, I support the new clause which was moved so ably by the chairman of that group. As always on these occasions, I must declare an interest, because the Association of Cinematograph, Television and

  119
  Allied Technicians, now transmogrified into BECTU, makes an annual contribution to my constituency Labour party.
  For many years, I have criticised the Government for neglecting the British film industry. It is ironic that at the very time when British cinema attendance is flourishing, investment in British-made films has effectively collapsed. In 1985, the figure was £220 million. In 1989, it was just £79 million. As a result, film production in this country is at its lowest level in a decade. Overseas earnings have fallen from £104 million in 1986 to a mere £42 million in 1988, and the figure is still falling.
  It is not that we do not have the talent to make good films in this country, but that sufficient investment income is not available to allow that talent to be put to good use in film production.
  Labour wants to create a long-term British film fund for the purpose of investing in domestic film production, matched by private sector finance. That would provide certainty of funding, which would assist producers to plan and to raise private capital. It would also allow production on a sufficiently large scale to overcome the problems inherent in making films for a market as small as that of the United Kingdom.
  Much of the money required for such a fund could come from the industry itself. However, the proposal in new clause 15 to introduce business expansion scheme funds, with tax incentives, as part of a much larger scale strategy to aid British film production would go a long way to ensuring that the fund could get off the ground and operate effectively.
  The fund's income would need to be matched by private capital from outside the industry, which is why fiscal incentives are so important.
  Lords Commissioner to the Treasury (Mr. Irvine Patnick): At what cost?.
  Mr. Smith: The Conservative Whip mutters from the Treasury Bench.
  Mr. Boateng: And somewhat incoherently.
  Mr. Smith: My hon. Friend is right. The hon. Member for Sheffield, Hallam (Mr. Patnick) would do well to acknowledge that 30 per cent. of film production costs return to the Treasury through value added tax, PAYE, and corporation tax. Before the hon. Member for Hallam jumps to any rapid conclusions about the supposed cost of such a proposal, he should do his sums more carefully than Conservative Members appear to have done so far.
  My hon. Friend the Member for Monklands, West (Mr. Clarke) stressed the importance of expanding the British film industry's geographical base. At present, the industry is heavily concentrated in London. Labour local authorities in places such as Birmingham and Sheffield understand much better than the Government the potential role that the film industry has to play in the economy, and they have introduced media development agencies that encourage and assist the growth of film making in their areas. Those are innovative ideas, and we would do better to build on them nationally.
  The Scottish Development Agency has already helped to establish Scottish Screen Locations—which attracts film makers to Scotland for individual productions. I hope that
  120
  will help to reverse the decline in Scottish film making to which my hon. Friend the Member for Monklands, West rightly drew attention.
  The Government should also realise that training is a vital factor in the recovery of our film industry. The industry has traditionally depended on loose apprenticeships in which people have learnt on the job, earning little or no pay. A number of initiatives have helped—not least the establishment of the North East Media Training Centre, which has pioneered new courses as part of an ambitious attempt to use the audio-visual media in regional development. The Labour party is committed to a training policy allowing employers to invest in their work forces, as they should in other parts of British industry.
  10.30 pm
  The new clause proposes exactly what Labour proposed when we debated last year's Finance Bill: the raising of the business expansion scheme limit for investment in the film industry from £750,000 to £5 million. What is good enough for private property under the present Government should be good enough for the film industry. It is very difficult to make a feature film for £750,000—extremely difficult, for any film maker worth his salt. A more reasonable BES limit should be introduced. If it is good enough for shipping and for private rented property, it must surely be good enough for the film industry.
  Our film industry ought to be one of the most flourishing parts of British industry as a whole. We have the talent, the audiences, the traditions and the people—people with skills, ready to make the films. The new clause would provide the finance that would ensure that the industry could indeed flourish.
  Mr. Maude: I sympathise with many of the sentiments expressed in this short debate. I congratulate my hon. Friend the Member for Reading, West (Sir A. Durant) on the way in which he presented the proposal. Many tributes have already been paid to the skills, talents and abilities of those who work in the British film industry; let me pay my own warm tribute to those people, whose performance—as has been mentioned—has been regularly recognised in various award ceremonies.
  What should be done to assist the industry, and, in particular, to encourage British investors? We would all applaud an increase in British investment. The new clause proposes an increase in the business expansion scheme limit from £750,000 to £5 million. As far as I am aware, no investment in films through the BES has been prevented by the existing limit, although I should be glad to hear from hon. Members who have any evidence to the contrary. The hon. Member for Islington, South and Finsbury (Mr. Smith) implied that there was a huge, dammed-up demand for investment, which had been frustrated by the limit.
  Mr. Chris Smith: Surely the Financial Secretary realises that the present level is so low in relation to the normal costs of producing a film that the great majority of film-makers would not begin to consider establishing a BES fund. The problem is that the limit acts as a disincentive. If the limit is raised, I suspect that we would see more interest in using the BES as a vehicle.
  Mr. Maude: The hon. Gentleman may well be right. I can say only that before the £500,000 was introduced in

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  1988, there was virtually no investment in films through the BES. That may be different now and I do not reject the interesting proposition.
  When my right hon. Friend the Chancellor of the Exchequer presented his Budget in March, he said that we could not introduce any specific taxation measures to help the film industry, but that we recognised the strength of the case and would look sympathetically at any taxation propositions by the industry and a proposition has now been made. As I have said, we are not fundamentally out of sympathy with the approach. There may be a means, through the proposition, of tapping into funds that would otherwise be funnelled into the film industry, but which are being prevented or discouraged from doing that at the moment.
  Mr. Tom Clarke: Nineteen eighty eight was three years ago. Some of us believe that the reference to that in the Chancellor's speech was a slip of the tongue. I do not know whether that was the case, but will the Financial Secretary tell us about the progress made by the Department of Trade and Industry's working party? If he cannot, the high hopes that were raised at the Downing street summit will have been dashed. We have heard nothing in the debate so far to offer us encouragement.
  Mr. Maude: The hon. Gentleman will hear plenty about the work of the Department of Trade and Industry working party from my right hon. Friend the Secretary of State for Trade and Industry. I cannot report to the House about that this evening. I can report to the House about the state of the Government's mind on taxation issues and I am ready to do that.
  My right hon. Friend the Chancellor of the Exchequer said that we would continue to pursue and discuss with the film industry what taxation measures might be introduced to assist the industry. It appears that the industry would support the measure. As I have said, we are not fundamentally out of sympathy with it. I am prepared to look carefully with the industry at the possibilities to discover whether the proposition offers an answer.
  Sir Anthony Durant: My hon. Friend the Financial Secretary's response was not as forthcoming as I had hoped, but at least there was some sign that the proposal would be examined as part of the general examination of fiscal measures to help the industry. On the strict understanding that the proposal will not be lost in the discussions, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 16

  UNITED KINGDOM AUTHORISED UNIT TRUSTS
  'Authorised unit trusts: unfranked income trusts
  468G—(1) This section applies where—

  (a) as regards a distribution period ending alter 31st December 1991 a dividend is treated by virtue of section 468(2) as paid to a unit holder (whether or not income is in fact paid to the unit holder), and

  (b) all or part (in this section the "appropriate portion") of the dividend is paid from sources other than franked investment income, and

  (c) the dividend is treated as paid by the trustees of a unit trust scheme which is an authorised unit trust as respects the accounting period in which the distribution period falls, and

  (d) arrangements with the Board as provided in section 468H are in force in respect of such unit trust scheme.

  (2) Where this section applies, if the unit holder to whom the dividend is treated as paid is not resident in the United Kingdom for the whole of the year of assessment in which the dividend is treated as paid and is resident in a qualifying country, he shall be entitled, on the payment (or deemed payment) of the appropriate portion of the dividend, to payment by the trustees of such unit trust scheme of the tax credit (if any) to which an individual resident in the United Kingdom would have been entitled had he received such dividend, and no United Kingdom tax shall be payable in respect of such dividend or the amount of the tax credit so paid.
  (3) For the purposes of subsection (2) above, a person shall be treated as not resident in the United Kingdom and resident in a qualifying country for a year of assessment if this is proved on a claim in that behalf made to the Board.
  (4) Where units are held under a trust and the person who is the beneficiary in possession under the trust is the sole beneficiary in possession and can, by means either of the revocation of the trust or the exercise of any power under the trust, call upon the trustees at any time to transfer the units to him absolutely free from the trust, that person shall, for the purposes of this section, be treated as the unit holder.
  (5) The trustees shall certify in writing to the investor the appropriate portion of the dividend together with the amount of the tax credit referable thereto and to which a recipient is entitled to a payment as provided in this section.
  (6) In this section "qualifying country" means any country which is at any time during such year of assessment a member state of the European Economic Community or any other country which is for the time being designated for the purposes of this section as a qualifying country by order made by the Board.

  Authorised unit trusts: payment by trustees
  468H—(1) The trustees of an authorised unit trust may enter into arrangements with the Board in respect of unit holders who would, if such arrangements were in force, be entitled to payment of the associated tax credit under section
  468G.
  (2) Under such arrangements where a dividend falling within section 468G is treated by virtue of section 468(2) as paid to unit holders in respect of whom the arrangements have been made—

  (a) the trustees may pay to such unit holders the amount of the associated tax credit in respect of the appropriate portion of the dividend (the "additional amount"); and

  (b) all additional amounts so paid shall be set against advance corporation tax which the trustees are liable to pay for the return period in which the dividend was paid and shall discharge a corresponding amount of

  that liability.
  (3) The Board shall not make arrangements under this section unless they are satisfied that the payment of the additional amounts shall not enure to the benefit of persons other than those entitled thereto.
  (4) The effective period of such arrangements shall begin with the date on which the arrangements are made, or such later or earlier date as may be specified in the arrangements, and shall end with the date on which either party receives notice in writing from the other terminating the arrangements, or such later date as may be specified in the notice.
  (5) The trustees shall render the Board an account at such time, and containing such particulars relating to the dividend as the Board may require.'.—[Mr. Watts.]
  Mr. John Watts: I beg to move, That the clause be read a Second time.
  New clause 16 would introduce two new sections into the Income and Corporation Taxes Act 1988–468G and 468H. I am moving the clause on behalf of the Unit Trusts Association, although I have no financial interest in that association.

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  My hon. Friend the Financial Secretary to the Treasury will have seen the same new clause in the Committee of last year's Finance Bill. I will therefore be brief in rehearsing the arguments because they are well known to him. I am moving the new clause again tonight to elicit what progress has been made in the discussions between my hon. Friend the Financial Secretary and the unit trust industry about changes in the tax regime to improve the competitive position of the British unit trust industry in the export market, particularly in the European Community. I know that my hon. Friend has an aversion to the phrase "level playing field", so I will avoid using it. The whole underlying purpose of the new clause is to provide a better basis on which the United Kingdom industry can compete and sell into what is an important investment market.
  Without going into the detail of the drafting, which is unnecessary, the new clause would allow a foreign investor in a United Kingdom unit trust to receive dividends gross without deduction of tax. Such investors, perhaps in France or in Germany, would already be entitled to a tax credit and would be able to recover at a subsequent date tax deducted at source. If they invested in a domestic vehicle—in a French or German fund—they would not suffer that initial deduction. From the point of view of cash flow, the investor is better placed if a United Kingdom fund is able to pay dividends gross than he is under the present taxation arrangements. I know that in the past the Treasury has argued that that is a small part of the United Kingdom unit trust industry's business and that there is insufficient justification for changing the law to provide a better tax regime.
  The industry, of course, argues that one of the reasons why it is currently a small area of business is that the existing tax regime is unfavourable to the development of the business and that if the changes that I propose were made it would be far easier for it to sell its products into the European market and to add to our invisible export earnings. The industry argues that it would generate additional revenue for the Treasury because, although the investment vehicle itself would not generate tax income for the Treasury, the management activities of the unit trust managers would be more profitable and, therefore, they would pay more tax.
  I have described the argument in essence. At present, the industry cannot compete in international income funds on the same terms as some of its European competitors. That sector of funds is critical to United Kingdom fund managers' export success because it combines the strengths of London as an international fund management centre with the increasing demand in Europe from the aging population for such investment vehicles which means that there is a large and growing market. I hope that my hon. Friend can give some encouraging reply to the debate today.
  Mr. Maude: I am grateful to my hon. Friend the Member for Slough (Mr. Watts) for raising the matter in the way that he has. I know that he has had a long-term interest in the matter and has, with my hon. Friend the Member for Beaconsfield (Mr. Smith), pursued it consistently and effectively. All hon. Members share my hon. Friends' concern that United Kingdom unit trusts should be able to compete effectively with their continental counterparts.
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  The special lower rate of corporation tax which we introduced for unit trusts in 1989 removed a serious disadvantage faced by unit trusts. The main beneficiaries were bond funds and it is encouraging to see recent advertisements for newly set up unit trusts investing in bonds. Moreover, an individual in this country who wants to invest in a collective investment fund cannot generally do better than to invest in a unit trust.
  In the rest of the European Community, unit trusts investing in United Kingdom equities and in international equities growth are in a good position to compete with their continental counterparts. That is important given that those unit trusts account for the bulk of existing funds under management. The United Kingdom industry has most experience of running equities funds.
  I recognise that the Unit Trust Association is concerned about the competitive position of unit trusts invested in bonds, and those that are invested in international equities for income. As I understand it, the new clause is aimed at improving the competitive position of these funds by allowing them to pay income to continental investors free of United Kingdom tax.
  10.45 pm
  The benefits, however, would not be as great as has been suggested. First, Britain is already a better place to set up income funds in international equities than Luxembourg, which is often seen as London's main competitor. However, in some cases a home country fund of this sort, for example, a French fund for a French investor, can produce a better return for investors. That would remain the case even if the new clause were adopted.
  Second, taxpaying investors in other European Community countries, such as France, which give full credit for British tax would not end up with any more income from unit trusts after tax. They would simply end up paying extra home country tax that would cancel out the British tax that was saved.
  Third, it is far from clear that tax is the main constraint on more sales by unit trusts on the continent. There are also the problems of the unfamiliarity of the trust vehicle in many Community countries and the difference in pricing methods. The Department of Trade and Industry is considering the case for company law changes to permit open-ended investment companies which might be more familiar to continental investors. But, as my hon. Friends accept, that is a complex exercise which will inevitably take some time.
  The new clause is lengthy, and I fear it would be lengthier still once some extra parts had been added to make it workable. The end result would inevitably be a more complicated tax regime for unit trusts. It would mean a greater administrative burden for unit trust managers.
  Overall, therefore, the new clause's disadvantages outweigh any benefits that it might bring, which might be more limited than has been suggested.
  One of the disadvantages would be that there could be problems over foreign tax for equities funds on income from abroad which, in an extreme case, could mean that United Kingdom investors were worse off.
  I know that the UTA is shortly to respond to an invitation from the DTI to put forward suggestions as to the form open-ended investment companies might take. It seems to me that the best way forward would be to see whether my right hon. Friend the Secretary of State for

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  Trade and Industry decides companies of this sort should be allowed. If so, we can then move on to look at how open-ended investment companies should be taxed, once we know what they look like. At that stage, we would of course be glad to have the industry's views on their tax treatment, including any comments on how continental investors should be dealt with.
  I assure my hon. Friends that this is something that we take seriously. I have discussed this matter personally with the UTA on at least one occasion, if not several. It is certainly not something that we are allowing to go by default. We are concerned that British fund management,
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  which is, after all, a great British success story, should not suffer competitive disadvantages by comparison with competition elsewhere in the European Community.
  Mr. Watts: I am grateful to my hon. Friend for his acknowledgement of the importance of the role of the unit trust movement and his clear willingness to continue to examine with it the ways in which its competitive position might be improved.
  On that basis, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 22

  CAR TAX: AMENDMENT OF CAR TAX AcT 1983
  'For section 52(2) of the Car Tax Act 1983 there shall be substituted the following:
  "(2) Car tax on any vehicle shall be charged for vehicles recording a touring fuel consumption in the following categories:

  (a) 40 m.p.g. and above—zero

  (b) 30 m.p.g. to 39 m.p.g.—5‥

  (c) 25 m.p.g. to 29 m.p.g.—7½‥

  (d) zero to 24 m.p.g.—10‥

  (2A) For the purpose of determining the Touring Fuel Consumption, official Government economy figures will be used as follows:

  50 per cent of urban cycle

  25 per cent of 56 m.p.h.

  25 per cent of 75 m.p.h. steady speed cycles.".'.—[Mr. Roger King.]

  Brought up, and read the First time.
  Mr. Roger King: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Harold Walker): With this, it will be convenient to consider also new clause 31—Car tax: reduction where pollution control devices fitted—
  — After section 1(2) of the Car Tax Act 1983 there shall be added
  "(2A) Where a chargeable vehicle other than a caravan is fitted with a catalytic converter (or such other pollution control device as the Treasury may specify in regulations made under this section) at the time car tax falls to be paid under section 5 below and that time is not earlier than 1st July 1991, subsection (2)(b) above shall have effect as if the reference to 10 per cent. was a reference to 7½ per cent.".'.
  Mr. King: It will come as no surprise to my hon. Friend the Minister that I rise again in a Finance Bill debate to raise the issue of the special car tax, which has been with us for many years—since value added tax was introduced—and which is a strong bone of contention with the motor industry belt of the west midlands where we feel that this element of taxation, which is unique to one type of product in the United Kingdom, detrimentally affects the sales of our products within the United Kingdom. At a time when the car industry is facing a downturn in its home market, we believe that the special car tax is long overdue for some reform.
  A study of taxation of cars throughout Europe shows that in the United Kingdom the present level of taxation on a new car is in excess of 27 per cent., compared with 14 per cent. in Germany and about 22 per cent., which is falling rapidly and will fall further shortly, in countries such as France. Elsewhere the level of taxation is lower than in the United Kingdom.
  Recently, car production in Britain has enjoyed a record level of output. That is because the industry has found a ready market overseas, principally in Europe, because of the improved quality of the product and its desirability in the marketplace. But it must be remembered that in connection with competitive pricing terms in the European market, the industry needs a strong home market. A strong home market gives it viability and competitiveness in the export market. While it is possible to make up for a shortfall in the home market by diverting products to the overseas market, that is not a long-term solution.
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  In addition, the retail sector is feeling the effects of the prolonged recession to a greater degree than perhaps any other industry, save the construction industry. Many retail businesses have gone out of business as a result of the downturn in United Kingdom sales, which are expected to fall this year to 1·5 million or even 1·4 million, from a peak of 2·2 million in 1989.
  Another factor that we must bear in mind is the Government's desire to improve on the green aspect of their policies. We all understand and applaud that. The trouble is that if one does not tackle the problem of the car, one's green policies are somewhat suspect. If we do not encourage the sale of new cars in the United Kingdom, we shall be left with a growing elderly fleet of cars which, by their nature, are obsolete in design and have inferior emission standards. So it is in every one's interests to ensure that there is a ready market for new environmentally acceptable motor cars in the United Kingdom. That means that we should do what we can to stimulate sales.
  There is no doubt that, along with manufacturers, the retail sector is playing its part in reducing prices as much as possible and offering financial incentives to encourage those important sales. But whatever the retail sector and the manufacturers do, we are still left with the 27 per cent. level of taxation.
  We understand the Government's problems in eliminating the 10 per cent. special car tax. The tax brings in a large sum of money. However, this year that income will be much reduced as a result of the downturn in the United Kingdom market. But we see some clear linkage between providing environmental incentives and reducing the 10 per cent. special car tax.
  My right hon. and learned Friend the Secretary of State for Transport put it clearly on Tuesday 9 July. He called on car makers to produce more fuel-efficient engines because
  "We cannot waste any time getting to grips with this challenge … It is, of course, for the Chancellor to decide whether any further changes in motoring taxation are appropriate to encourage greater fuel efficiency.
  But fiscal incentives are a flexible instrument which require no new bureaucracy for their administration.
  They leave motorists with complete freedom of choice while providing an incentive for them to choose economical cars and drive less aggressively.
  At the same time they concentrate the minds of vehicle manufacturers on the importance of fuel economy."
  We understand that fact. He was alluding there to possible changes in duty on fuel, but there are other ways. The 10 per cent. special car tax is one matter to which we should address ourselves. New clause 22 goes a long way to giving a clear indication of how the Government should think about encouraging the use of more environmentally friendly, fuel-efficient motor cars. We accept that it may not be possible to do something this year, but due consideration should be given in the next Budget to tackling the particular difficulty of the 10 per cent. special car tax.
  We have devised a formula and a method to implement it. It establishes a touring fuel consumption using the Government's fuel figures, which are well known and well documented, to categorise cars into four fuel-consumption classes. Cars that achieve 40 miles to the gallon and above on the formula would attract a zero rate of the 10 per cent. special car tax. The car tax would rise to the level of the car that achieved only 24 miles per gallon or below, on which the full 10 per cent. special car tax would be payable.

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  The formula has the attraction of linking new car sales with environmentally acceptable vehicles, which it is the Government's aim to achieve. The Government have set themselves the target of restricting CO2 emissions to present levels in the year 2005. Given the growth in motor transport, that will prove very difficult indeed. If we can make a sea change in the marketplace by attracting drivers to buy more fuel-efficient cars, the levels that the Government seek to achieve can be met by the motor car industry. Naturally, the Government must also take steps to deal with emissions from power stations, factories and so on, but, given the potential growth in road traffic, this formula is the one way in which the Government can in a businesslike way set about attracting consumers to buy more fuel-efficient cars. In that spirit, I commend the new clause.
  Sir Hal Miller: It gives me great pleasure to second the new clause so ably moved by my hon. Friend the Member for Birmingham, Northfield (Mr. King). Indeed, we consulted on its terms.
  I have previously described the Budget as an unhelpful and unpleasant surprise for the motor industry—unhelpful in that the industry was singled out for additional taxation, whether through national insurance contributions on company cars and fuel, the increase in taxation on company cars or the unique impost arising from the special car tax uprated to 27 per cent. by the increase in VAT, which no other consumer durable bears.
  Tonight I wish to approach the subject in a more constructive spirit. On Friday I said:
  "The motor industry is anxious and willing to make its contribution to improving the environment for all of us, as well as giving us the advantages of mobility and security."—[Official Report, 12 July 1991; Vol. 194, c. 1271.]
  I said that the industry needed targets towards which to work. This is not just a sudden rush to green the industry. I was personally responsible for the motor industry's contribution to the Government's original White Paper. I arranged discussions between the Secretaries of State for the Environment, for Transport and for Energy and Treasury Ministers, and the Society of Motor Manufacturers and Traders. Since then we have been trying to obtain from the Government some targets to give the White Paper teeth. The only targets that we could light on were fiscal ones, which we believe are necessary.
  I welcome the proposal of the Secretary of State for Transport in his recent White Paper on the environment and transport that market signals and incentives, apart from regulation and the provision of infrastructure, are the routes to adopt to improve the environment. Since the publication of the White Paper, my hon. Friend and I have been trawling all those Departments, seeking methods to improve the environment.
  The first line of approach that we adopted was the suggestion that, in the short term, the only way to achieve the Government's target of stabilising CO2 emissions was by the wider use of diesel engines until further research had been undertaken to make cars running on alternative fuels practicable. There has been some recent publicity about the potential of the hydrogen cell. However, its use is still 10 years away on the most optimistic forecasts, or perhaps 20 years away on a more realistic time scale.
  In the meantime, how do we cut CO2 emissions? The catalyst cannot help because it aggravates the problem. The new clause tabled by the Opposition is a case of Johnny-come-lately. Their attempts to persuade the
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  motorist that they are on his side are laughable in view of the remarks made by their spokesman on the environment in the debate on Friday. The Opposition's proposals are of no practical purpose because manufacturers have already made arrangements to meet the statutory requirements for the installation of catalysts in cars in the next model year. There is nothing to be gained from the Opposition's new clause.
  11 pm
  We are still trying to enable the industry to undertake the contribution that it is willing and anxious to make towards environmental improvements. My hon. Friend the Member for Northfield was rebuffed in Committee on the use of diesel fuel, which would have been a significant help to the environment. However, I understood from the various Secretaries of State I met that that option was their preferred choice. That is why the Budget was an unpleasant surprise.
  Now we are trying to introduce targets and inducements for people to purchase more economical cars to cut down on the use of carbon. The use of diesel is much the quickest way to do that, but the Treasury has apparently developed new-found environmental skills that have eluded other Departments and it claims that diesel does not contribute towards reducing environmental harm. The Government's reasoning is obscure, but, even accepting the Treasury at its own word, we have presented yet another proposal to reduce the use of carbon. We aim to switch the public preference to more economical cars, which means more economical driving. At the same time we seek to reduce the obvious bias against the motor industry in our taxation system.
  I am sorry to have to take issue with Treasury Ministers at this time of night. I have warm personal regard for them, but some of the correspondence I have received recently from the Treasury is so ignorant as to be breathtaking. One cannot sustain the assertion that our cars are not more heavily taxed than those on the continent. That is not true except for a few luxury models. As my hon. Friend the Member for Northfield has established, that assertion flies in the face of the facts. However, I do not wish to be vindictive.
  We are trying to make our contribution towards improving the environment. We need to have targets. Tonight we are talking about fuel consumption as opposed to emissions, but I have suggested targets for improving the quality of fuels. In the past I have asked why we are wasting time trying to deal with what comes out of the engine instead of what goes in.
  I have argued for greater research on alternative fuels, but there are things that we could do now in this Budget, and certainly in the next, to improve the position. What is incomprehensible is the fact that every time one tries to make that effort the Treasury dreams up some ill-founded reason for opposing it. That goes against the thrust of Government policy as set out by the Prime Minister in his speech on Monday last, as set out by the Secretary of State for Transport in his White Paper, and as set out in the White Paper produced by the Secretary of State for the Environment to which the motor industry—through my agency—made a significant contribution. We are not harking back, being vindictive or trying to rub people up the wrong way; we are trying to make progress. I hope that the Minister will say something to show that that effort to

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  improve the environment and provide signals to purchasers and drivers of cars is understood and will go some way towards being accepted.
  Dr. Marek: If those Conservative Members who have spoken really want to do something for the environment and limit carbon dioxide emissions from motor cars, an obvious way to do so is to insist that every car has a governor to stop it going more than 70 mph. I do not know whether that suggestion would find much favour in the House, but if it were adopted, big cars simply would not be bought. Legally, no one should travel at more than 70 mph.
  Sir Hal Miller: In America, where speed limits are lower than in this country, people still buy large cars.
  Dr. Marek: That may be to do with the fact that petrol in the United States is much cheaper than in this country.
  I sympathise with the new clauses. Although new clause 31 represents no commitment by a future Labour Government, it seeks to show a commitment to caring for the environment, which will be at the forefront of the actions of the next Labour Government. There is a deadline for catalytic converters anyway, and if a general election is delayed for too long, that deadline may overtake events.
  I wonder whether the new clause is properly targeted. it must cost many hundreds of millions of pounds. There must be a certain amount of special pleading by the Conservative Members who have spoken—
  Mr. Roger King: What?
  Dr. Marek: The hon. Member for Birmingham, Northfield (Mr. King) is laughing and pretending to look nonplussed, but I think that he realises what I am saying.
  I need to be convinced that the targeting of the new clause would achieve the environmental benefits better than any other method. There are other ways of achieving the same aim. The new clause would result in a major loss to the Revenue but would not have much effect on the environment. However, I remain to be convinced and if the Minister of State thinks that I am wrong I hope that she will say so. I insist that we need to pay more attention to the environment. There is no doubt that carbon dioxide problems are important. We may have to get rid of the car tax eventually anyway because of European legislation. If so, I should like to look at that because our car industry should not have to compete at a disadvantage with other European car manufacturers. This country will be prosperous and healthy only if the British car industry is properous and healthy. However, I have some doubts and reservations about the new clause and shall be interested to hear what the Minister has to say.
  Mr. Wallace: The intention of both the new clauses in relation to improving the environment is laudable, and to that extent we should support them. I always think that if we were serious in our intent to tackle environmental problems involving cars, the first step that we could take within the powers of the House would be to change our mileage allowance scheme, which currently gives a greater incentive to those who run bigger cars. It is interesting that their Lordships did so—I think that they have a standardised mileage allowance, regardless of the car's size—[Interruption.] I can see to what controversy such a
  132
  proposal would give rise. However, if we wish to be serious about the problem, and to be taken seriously about it, we could set that example.
  I do not think that there is too much dispute about the car's contribution to pollution. Although leaded petrol may be on the decline, road traffic produces carbon dioxide, nitrogen oxides, hydrocarbons and carbon monoxide. Road traffic accounts for 18 per cent. of Britain's emissions of carbon dioxide—a major greenhouse gas. Nitrogen oxides—of which 45 per cent. of total emissions originate from cars—are a major cause of acid rain.
  Clearly, this issue must be tackled, but I fear that if it is to be tackled in an effective way, the consequences will be difficult for any political party to face. Over time, tackling the problem will lead to an increase in petrol taxation. The sooner that all parties face that and plan for the solution over a period, rather than allowing the solution to be forced on us by sheer force of circumstances, the better it will be for the consumer.
  We should not forget the costs to the average household of traffic congestion. An estimate from the Confederation of British Industry showed that each household pays £10 a week extra for goods and services as a result of traffic congestion. The growing traffic congestion on our roads has not only an environmental effect, but a general effect in terms of the cost to industry.
  I said that the measure was modest, and I suspect that, in the longer term, vehicle excise duty may be more geared to the environmental friendliness of a particular car. We should enter into discussions with car manufacturers and other interested organisations to develop specifications for achievable levels of fuel efficiency and emissions of pollutants. Those specifications should become stricter over a period, and perhaps it would be possible to vary the vehicle excise duty according to the degree of specification cars attain and abolish it for cars that meet a high specification.
  We must be alert to the problems of rural districts, where a car is not a luxury, but often an essential. Many car drivers in rural regions already tend to drive smaller models. While it is often thought that the mileages are higher, many of them are necessary. If we were to switch from vehicle excise duty to petrol tax, it would not necessarily be as disadvantageous as is sometimes thought.
  One of the main reasons for higher petrol prices in rural districts is that the throughput of traffic at many rural garages is low, so the mark-up for the retail petrol has to be that much greater. Value added tax is put on top of that price and on top of the duty. To some extent, the Government are receiving revenue through the disadvantages with which many motorists in rural regions have to cope.
  I do not think that the new clause will be put to a vote, but I think that we are discussing the initial stages of something that, over a period, will have to be dealt with by something more radical than any proposals made this evening.
  Mrs. Gillian Shephard: I pay tribute to my hon. Friends the Members for Birmingham, Northfield (Mr. King) and for Bromsgrove (Sir H. Miller), both for their contributions this evening and for their continuing, vigorous support of the British car industry. They advanced valid arguments about the need for green measures and said that such measures could encourage the

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  home market for cars. I hesitate to take issue with either of them because they are such experts in their field, but I am told that Holland, Portugal, Spain, Ireland, Greece, Denmark and Belgium all have roughly equal or higher rates of tax on non-luxury cars. If my hon. Friends know otherwise, I would be pleased to look into it further.
  Sir Hal Miller: Will my hon. Friend give way?.
  Mrs. Shephard: My hon. Friend is about to tell me.
  11.15 pm
  Sir Hal Miller: I said that Treasury officials have speciously seized on luxury rates of tax for larger cars. For volume cars in the middle range the taxation is demonstrably factually much higher in this country.
  Mrs. Shephard: I said that I would look into the matter further, and I certainly shall. I should be grateful to receive those exact details from my hon. Friend.
  There are some problems with the proposals set out by my hon. Friends the Members for Bromsgrove and for Northfield. First, there is no conclusive evidence that reducing car tax rates would lead to consumers switching to more fuel-efficient vehicles because only switching at the lower margin of each tax band would incur a tax incentive.
  One of the major problems is cost. Car tax yields £1·3 billion a year and the proposal in new clause 22 would cost about £880 million. Obviously, it would be necessary to discover how that might otherwise be raised. Some 95 per cent. of cars are in the 25-miles-per-gallon or better category, so there would be a considerable dead weight in the proposed tax incentive.
  As I have said, the current car tax yield is £1·3 billion. That is a large amount of revenue for the Government, and careful thought would have to be given to finding the nearly £1 billion that would be given over by the clause. Both my hon. Friends the Members for Bromsgrove and for Northfield said that fuel consumption was determined by the type of vehicle and driving conditions. The manner in which the vehicle is driven is also significant.
  The Government have not been inactive in the introduction of green measures for motoring. The difference in pump prices between leaded and unleaded petrol is more than 18p per gallon, and 40 per cent. of all petrol that is sold is unleaded. There is also a considerable difference at the pumps between the price of diesel and leaded petrol. I note what my hon. Friend the Member for Bromsgrove said about diesel. There is no doubt that diesel is certainly more efficient than petrol. Diesel-powered cars can travel more miles per gallon than their petrol-driven counterparts. However, my hon. Friends may be prepared to concede that there is some evidence that the emissions from diesel may be as polluting as those from petrol vehicles.
  Sir Hal Miller rose—
  Mrs. Shephard: I have trailed my coat again.
  Sir Hall Miller: Because the efficiency and economy of diesel are so much greater, the environmental advantage of emissions is about 20 per cent., quite apart from the carbon consumption.
  Mrs. Shephard: I certainly accept that diesel-driven cars are more efficient. I conceded that.
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  In response to the Opposition clause, I can do no better than quote from a Finance Bill debate of two years ago. The hon. Member for Wrexham (Dr. Marek) said:
  "As we must change our exhaust systems and introduce catalytic converters in a few years' time, what is the point of having an incentive? … There is no question of providing an incentive to fit catalytic converters. It has to be done. We have agreed it with the EC. There are cases for incentives in certain circumstances, but they should be argued on their merits."—[Official Report, 11 July 1989; Vol. 156, c. 902.]
  I could not make a better argument in answer to new clause 31 than he did then about financial incentives for fitting catalytic converters.
  The Government recognise the importance of the motor industry and wish to see the advances made in the past few years maintained. The market situation is not easy, and it is a tribute to the industry's strength and flexibility that it has been able to increase production this year compared with last year, despite the downturn in the domestic market. Production is up 6 per cent. in the first four months of 1991 over the same period last year. There has been a massive surge in exports, with a 101 per cent. increase in the number of cars produced for export over the same period.
  I thank my hon. Friends the Members for Northfield and for Bromsgrove for their contributions, for their continuing effort and for their vigorous support of this important industry. They will know that my right hon. Friend the Chancellor has said that he will look carefully at the impact of this year's measures on the industry when he is considering next year's Budget. I am sure that they will encourage him to do so.
  Mr. Roger King: We all listened with great interest to my hon. Friend's comments. We shall inwardly digest what she has said. There is no escaping the fact that embracing environmental incentives—the Government have done so admirably with their policy on leaded fuel, which has cost the Exchequer considerable sums of money, although leaded fuel has gone up in price to compensate—it costs a great deal of money. We are well aware that the motor car is one of the main contributing factors to pollution and if we take up the challenge of containing that pollution, we have to look at arrangements such as those suggested in new clause 22. The challenge will not go away and until the Government produce a programme of environmental incentives along the lines of that which we have set out, I am not sure that they will meet the targets that they have set.
  The challenge will be an expensive one to meet. However, our proposals will not be as expensive as my hon. Friend the Minister suggested. Not everybody will buy an economy car in year one or year two. Plenty of people will still wish to buy cars in the other bands. Given the downturn in the market from 2·2 million to 1·5 million, and below, this year, the Exchequer has lost an enormous amount of money. The modest tickle up of the industry that we are suggesting may be just what the Chancellor needs to bring money into his coffers.
  As I said in my opening speech, we are probing, pushing, trying to find a way to encourage the Government to move along the lines that we are suggesting. We shall renew our attempts next year. Therefore, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 25

  EQUITY RELEASE PRODUCT
  '. In section 656 of the Taxes Act 1988 the following subsection shall be inserted after subsection (4):—
  "(4A) Where—

  (a) the entire consideration given for the grant of an annuity consists of an amount payable on the death of the person purchasing the annuity,

  (b) that person has attained the age of 65 years at the date of the grant, and

  (c) the aggregate of that amount and of all other amounts (if any) payable on the death of that person and falling within this subsection does not exceed £100,000,

  the value of the consideration given for the grant of the annuity for the purposes of subsections (2) and (3) above shall be deemed to be the amount payable on the death.".'—[Mr. Norris.]
  Brought up, and read the First time.
  Mr. Steve Norris: I beg to move, That the clause be read a Second time.
  The new clause addresses a serious problem facing many elderly people. I start by declaring an interest as a director of Haven Services Ltd, a company which manages sheltered housing for more than 4,000 elderly people and their families. The company is 49·9 per cent. owned by Commercial Union, which has provided me with the technical information in this brief.
  We live in an aging society. The number of people who were over 75 in 1985 was 3·8 million. In five years' time, there will be 4·2 million over 75, and when we are a short way into the next millennium, this will have risen to nearly 5 million.
  Many of those elderly people will rely upon the state for their welfare. Some of the more prudent will have tried to provide for themselves in retirement, but they will have seen their savings eroded by the passage of time or by inflation to a point where their entire upkeep will have been thrown on to the state. There are some who do not have families on which they can rely, and there are some families that are not in a position to provide for their older relatives.
  An OECD conference three years ago identified three principal ways of funding the rising costs of aging populations. First, it suggested that state benefits could become larger. Secondly, it was suggested that we could keep people at work longer. Thirdly, it was suggested that we could encourage elderly people to provide better for themselves, and the new clause is designed to provide that encouragement. It would ensure that a way was opened to enable an elderly person's own resources to be used better to provide cash for living.
  As pressure on public funds grows, every effort must be made to allow those who could help themselves to do so. That in turn will allow public funds to be used to help those who have no other resources and more immediate needs. The Government recognise that need through the National Health Service and Community Care Act 1990, which envisages more private funding of care and the greater provision of care in the home.
  We all know how much old people would prefer to stay in their own home. That was made clear in the Griffiths report of 1988, which led to legislation in 1989. Many elderly homeowners sadly become frail or lose their mobility, but they could stay in their own home if nursing and other relevant care were available to them. All too
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  often, tragically, they cannot afford that care and they lose their independence far more quickly than they need. The tragedy is that when the need is at its greatest, the wherewithal to meet the need is not available in ready cash. The huge irony is that many elderly people own their own houses. Currently 46 per cent. of retired people are in that position, and the percentage is increasing. Incidentally, most of the properties of these people are owned outright.
  The house that is owned by an elderly person may represent a sizeable capital asset. It makes eminent sense to use its value while still allowing the elderly person to live in it. That encourages self-reliance, and it is consistent with the Government's policy to encourage privately funded age care. In present circumstances, however, these people—classically asset rich but cash poor—are compelled to sell up and part with their chief asset, losing along the way the increasing value of their property, of course, or they are forced to become a drain on their family or on the state.
  There are options already. There are mortgages that are linked to annuities or investment bonds. There are home reversion schemes where the house is sold and the occupant continues as a tenant. There are roll-up loans, where a mortgage has its interest rolled up until death. All these are known broadly as equity release schemes, but each of them currently suffers considerable disadvantages.
  As the Building Societies Association said in 1988, the low take-up of the schemes, in spite of the keen interest in them, was due to the limitations of the mechanisms rather than a lack of underlying demand. More seriously, recently two companies were expelled from FIMBRA for effectively promoting unworkable schemes. There are instances, sadly, of participants ending up paying out more money than the scheme delivers back to them.
  With a minor change to the tax rules—this is the subject of the new clause—an equity release scheme that would be truly valuable could be available. In essence, the scheme would work as follows. An elderly householder would promise an insurance company that after his death a sum agreed between the two would be paid to the insurance company. The promise could be secured on the house or on other assets. In return, the insurance company would pay a regular and increasing amount to the participant. Companies operating such schemes would fund the payments from the pool of funds reverting to the company after the deaths of the participants. The key is that no borrowing is involved, hence there would be no interest payments to participants. Such schemes are immune to interest rate fluctuations and are therefore dependable and effective as a source of income.
  If such schemes are to work, current tax rules need alteration. The new clause widens their scope to make it entirely clear that a participant would receive no interest element in his equity release income. The income is, in effect, an advance repayment of his own capital—that is, part of his estate. Technically, the participant will use part of the value of the house to buy a monthly sum until he dies, which amounts, in effect, to an annuity.
  Such a scheme is therefore governed by the tax rules on annuities and the new clause would modify the relevant section—section 656—of the Taxes Act 1988. The payments received by the participant are in two parts—first, capital because it returns to him his purchase price over time and, secondly, income representing interest on the capital before it is paid back to him.

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  If the new clause were accepted, it would allow for schemes that would give participants predictable payments for their lifetime.
  11.30 pm
  Mr. Charles Wardle: Is my hon. Friend aware that his proposal would be especially attractive to people who retired before 1978 and the introduction of the state earnings-related pension scheme? As he will know, in Bexhill in my constituency 46 per cent. of the population is 65 years of age or over. Many people retired before 1978 and the average statistic of an uplift in income over the past decade of 23 per cent. above the rate of inflation does not apply to them because they do not have additional earnings over and above their basic state old-age pension. My hon. Friend's scheme is especially attractive to people who wish to stay in their houses but do not have that additional income.
  Mr. Norris: My hon. Friend is entirely right. He recognises the desperately sad phenomenon in his constituency of people who are asset rich and cash poor, who are keen to stay in their homes and who could have the wherewithal to do so if the Government were minded to consider the new clause with favour.
  If the new clause were accepted, it would allow for schemes that would give participants predictable payments for their lifetime, which would increase at a rate expected to exceed inflation. Participants would retain full ownership of their assets and not be at risk of losing them. They would also benefit from the rising value of their house during their life.
  When the present law was drafted, no one had contemplated such a scheme. Its wording enables the Inland Revenue to interpret part of the payment received by the participant as coming from interest and thus be subject to tax. I submit that no interest is involved and, subsidiarily, that such a tax liability would make the scheme decidedly unattractive and, in effect, unworkable.
  Mr. Rupert Allason: Will my hon. Friend be kind enough to explain what would happen if the new clause were accepted and if a person in either sheltered accommodation or in his own property—which is what the new clause would provide—had to go into residential accommodation and had to sell his property?
  Mr. Norris: I hope that my hon. Friend will forgive me, because I can give him only what should be a long answer. In brief, however, what happens in general is that, sadly, the entire value of the asset is consumed by local authority charges in a relatively short time. One of the ironies is thus that, in the end, the public purse must contribute far more towards the eventual upkeep of the elderly person than if the insurance company funded what remained of his life out of the pool of participants' income. If insurance companies were able to offer such a tax-efficient scheme, my hon. Friend's constituent in sheltered housing would be infinitely better off as would the local authority which would otherwise have to fund the person.
  The Economic Secretary and the Financial Secretary were extremely helpful to me when I discussed the outline of the proposal with them. The Exchequer would not lose revenue if the new clause were accepted. It involves a zero interest annuity, no income is involved and only capital is paid out. As I said to my hon. Friend the Member for Torbay (Mr. Allason), there is a potential for substantial
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  public sector saving of community care costs, and the proposition is also in line with Government policy on encouraging independence. It is especially appropriate in dealing with the elderly who can manage in their own homes and whom we clearly want to encourage to do so.
  On that basis, I invite the Minister to consider the advantages of extending the relief as I have outlined.
  Mr. Maples: My hon. Friend's proposal is extremely interesting. I have considerable sympathy for the idea of enabling elderly people to release equity from their homes so that they are not, to use my hon. Friend's phrase, asset rich and cash poor. However, his amendment would create considerable possibilities for tax avoidance. I will not go into detail, but my hon. Friend is aware of them because we have discussed them.
  It would be necessary to include in any such provision safeguards against such practices. I am, therefore, unable to accept my hon. Friend's new clause, but we will examine his proposal further, without commitment, to ascertain whether there might be worth while public expenditure savings if the proposed new annuity became available. I will ask the Inland Revenue to discuss the possibilities with bodies representing the insurance industry.
  Mr. Morris: I take my hon. Friend's point concerning tax avoidance. I have no desire to see the scheme used as an avoidance device, but I believe that a mechanism could be devised to prevent that from happening, which would cap the amount made available under such a scheme.
  I am grateful to my hon. Friend the Economic Secretary for his otherwise constructive acceptance of my general proposition. The concept of allowing people to release the large amount of equity that they have stored up for their own benefit, to provide for themselves in their old age, is an important one. In view of my hon. Friend's assurance, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 26

  RELIEF FOR DISABLED PERSONS
  '(1) The following section shall be inserted after section 265 of the Taxes Act 1988—
  "265(B).—(1) Where a disabled person who is self-employed requires the services of a personal assistant or assistants in order to undertake his employment, any payment to that assistant or assistants shall be deducted from or set-off against the income of the said person from that employment.
  (2) For the purposes of this section person is a person in receipt of an attendance allowance, a care component of a disability living allowance or a constant attendance allowance under the industrial injuries or war pensions schemes.".'.—[Mr. Alfred Morris.]
  Brought up, and read the First time
  Mr. Alfred Morris: I beg to move, That the clause be read a Second time.
  The Government's acceptance of new clause 26 would be a small but significant step in enriching the lives of a number of severely disabled people by enabling them to live independently in their own homes.
  It is good to see the hon. Member for East Hampshire (Mr. Mates) in his place, and I hope that he will catch your eye, Mr. Deputy Speaker, as the debate proceeds. I understand that it was the issue of principle raised by a case involving a constituent of the hon. Member for East

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  Hampshire that first led the legal and parliamentary committee of the Royal Association for Disability and Rehabilitation to press for the change in the Taxes Act 1988 for which new clause 26 provides.
  RADAR has liaised very closely with me over the drafting of the new clause, which has its full support. I refer the House to the details of the case brought to my attention by RADAR to exemplify the need for the new clause. For many years, the disabled person concerned—a mouth artist—was a resident of Le Court Cheshire home. Originally, he was able to pay his fees out of his earnings, but with rising inflation he was unable to continue doing so.
  That individual's local authority refused to sponsor him, and consequently the charity had to foot the deficit. Eventually, the health authority agreed to sponsorship—which was more satisfactory, as its rules for the treatment of earned income are more beneficial to him than those of local authorities.
  About five years ago, the individual in question—like so many other disabled people—decided that he wanted to leave residential care and to live independently. His work as an artist flourishes, but he has to pay £17,000 a year in fees to a nursing agency, which he believes should be treated as a work expense.
  If that individual gave up his work, all his care costs would fall on the state, and the Treasury would receive no income tax. Equally, if the new clause encouraged other disabled people to set up in business, the state would gain considerable sums. For the Treasury to ignore the unavoidable extra costs of disabled living is unjust and self-defeating. For disabled people, hardship is piled on hardship as they try to compete with non-disabled people whose living costs are much lower than their own. The new clause is supported not only by RADAR but by the Disablement Income Group, Arthritis Care and many other admirable organisations of and for disabled people that are held in the highest regard by hon. Members on both sides of the House.
  On 12 February, the Chancellor said that he could not then be expected to comment on the case for the change in the law that I am proposing owing to the proximity of his Budget statement. That was five months ago, and the Budget did nothing to remove the injustice to which the new clause is addressed. I urge him now to accept what is—as he must surely agree—a modest but none the less important amendment to the Bill.
  Mr. Michael Mates: I am pleased to be able to support the right hon. Member for Manchester, Wythenshawe (Mr. Morris). I do not feel that this is a party matter; it is, above all, a human matter.
  The right hon. Gentleman outlined the case of my constituent, Mr. Albert Baker, who, because of a very severe handicap, has been institutionalised all his life— latterly, during my time as his Member of Parliament, in the excellent Le Court Cheshire home. Five years ago, because he had developed such a tremendous skill in painting with his mouth—he cannot use his hands, his legs are in calipers and he is practically immobile without help—he decided that he wanted to lead an independent life. His income from his painting would just allow that. Accordingly, he moved out, and we all raised a cheer: that was precisely what the Government wanted. He is now on
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  the point of having to return to institutional care, because he simply cannot afford the cost of care, with which he is receiving no help. Moreover, he cannot claim it as an allowance against his income.
  Five or six months ago, I spoke to the Financial Secretary about the matter. He promised that he would examine it closely, and he did so. However, he brought back the answer that—alas—we hear so often from the Treasury: "I am full of sympathy, but it is too difficult."
  If nothing is done, my constituent will have to go back into institutional care, and then—oddly enough—it will be the Treasury that loses. My constituent is making an income, paying his taxes and doing what we want all disabled people to do—living as much in the community as possible. He has that most precious of things, his independence.
  It is not enough simply to say, "It is too difficult. If we make an exception in this instance, we shall open the floodgates to others." There must be a way in which to define those who are so severely disabled that they must have full-time care, thus giving some allowance to people such as my constituent, who is doing his best to make his own way despite his dreadful handicaps. We should help such people, rather than shutting the door on them by making the tax regime under which they suffer much less fair than it is for the rest of us.
  Mr. Maples: I am sure that we all sympathise enormously with the case that has just been described to us. In normal circumstances we would want to encourage those who have the guts to try to look after themselves, and to assist them, but there are difficulties in this instance.
  I am afraid that I am going to say exactly what my hon. Friend the Member for East Hampshire (Mr. Mates) says that he is fed up with hearing from Treasury Ministers. There are some rules governing what can be deducted by self-employed people in business—expenses that are wholly and exclusively incurred for the purpose of their trade. If a self-employed person in the circumstances that my hon. Friend has described—whether disabled or not—employed someone wholly and exclusively in connection with his business, any payment made to that person would be deductible, but relief for expenses that are purely personal are not deductible.
  However, if a disabled self-employed person employed someone who provided him with assistance—both personal assistance and assistance with his work—and if it was possible to define the proportions in which the expenditure fell, the Inland Revenue would be prepared to allow a deduction for the appropriate proportion when computing the business profits.
  Mr. Mates: I did not raise that argument, because I was trying to be brief. However, according to that argument, people are encouraged to cheat. There is an invitation to deduct 10, 20 or 30 per cent. We do not want to go down that route. We want to be able to define such severe disablement so that care is an essential part of that person's making a living. That care is related to work, because the person to whom I referred cannot work without that care.
  11.45 pm
  Mr. Maples: To the extent that expenses are incurred in enabling him to do that work, they would be deductible under the normal rules that apply at the moment. I was

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  about to say that the proposal extends wider than the right hon. Member for Manchester, Wythenshawe (Mr. Morris) and my hon. Friend the Member for East Hampshire suggested.
  The new clause is confined to people who are self-employed. I am not sure whether that is logical. Why should the proposal not apply to employees as well? Why should it be confined to a personal assistant and the services of an individual who essentially works for the disabled person? Why should it not apply to other forms of expenditure such as special equipment, a car or special adaptations to a home?
  The issue of the kind of expenses in which disabled people become involved to enable them to work could range much wider than new clause 26. We would quickly find ourselves in other areas. I wonder whether a tax relief of the kind proposed is the way to address the problem.
  The right hon. Member for Wythenshawe and my hon. Friend the Member for East Hampshire should consider the wider issues. I do not believe that it is possible to deal just with the self-employed and personal assistants. If we believe that the tax system can be amended to help those people, we must be prepared to consider a wider group of costs and people. Although I make no commitments, perhaps we could consider that.
  I understand that the problem is very important to those involved. However, by definition, perhaps only a relatively small number of people would be able to take advantage of the proposal. If the proposal were available, other people could take advantage of the other things that I said might be made tax deductible and we would no doubt face calls for those. If we were to face the problem, we would want to face the whole issue and not just a part of it, only to find that someone raised another aspect next year.
  There are difficulties with trying to deal with the problem through the tax system. On the other hand, no one could fail to be full of admiration for the people referred to by the right hon. Member for Wythenshawe and my hon. Friend the Member for East Hampshire. I invite them to consider whether all the areas that I mentioned could be brought together in some way and I would offer to look at the matter again. There are difficulties, but I cannot offer to accept a proposal focused on the narrow area of a self-employed person employing a personal assistant. I would be prepared, without commitment, to consider the wider aspect to see whether something more generally could be done for disabled people to enable them to work and look after themselves, whether or not they are self-employed and whether the expense was related to personal assistance or otherwise.
  Mr. Alfred Morris: The Economic Secretary will not be surprised to learn that we find his response very disappointing. He seems to argue at one and the same time that perhaps the new clause does not go far enough and yet it goes too far. He has agreed to look at what he calls the wider area. I am grateful for any further consideration that he is prepared to give to what is a very important amendment.
  I am sure that the House was moved by the statement of the hon. Member for East Hampshire (Mr. Mates) about his constituent.
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  The Royal Association for Disability and Rehabilitation is well deserving of consultation by the Treasury. I hope that the Minister will consult RADAR and other appropriate organisations.
  It is not my intention to press the new clause tonight, but I emphasise again that it is unjust and self-defeating of the Treasury not to help people who are trying as hard as the constituent of the hon. Member for East Hampshire to achieve the dignity of staying as a taxpayer instead of moving towards the dependence of social security payments.
  I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 27

  AMENDMENT OF FINANCE ACT 1990
  '.—(1) The Finance Act 1990 shall be amended as follows:
  "(2) In section 25(2)(g) leave out £600 and insert £250.".'.—[Mr. Alex Carlile.]
  Brought up, and read the First time
  Mr. Alex Carlile: I beg to move, That the clause be read a Second time.
  The new clause relates to gift aid. Gift aid has been a success. We were told in Committee that in the eight months to the end of May this year, tax repayments of more than £19 million had been made to charities. In Committee, the Economic Secretary promised to keep the minimum limit under careful review, having agreed and included in the Bill a provision that raised the maximum limit.
  It is disappointing that, thus far at least, the Government remain determined to keep the minimum limit as high as £600. There must be many people who would be prepared to enter the gift aid scheme if it were possible to give £250 or a figure between £250 and £600, but who cannot give as much as £600. I appreciate, of course, that tax relief can be obtained for small donations given, for example, under deeds of covenant. However, many people find the gift aid scheme simpler, more attractive and more straightforward than giving under deeds of covenant, which they regard as a legal procedure involving a legal document which they feel binds them for a number of years in circumstances that may well change.
  I suggest that the reduction of the limit from £600 to £250 would lead to a considerable increase in charitable giving while maintaining the threshold high enough so that the administrative costs are not disproportionate. We know that charities have had to absorb a real blow as a result of the 2·5 per cent. increase in VAT which was announced in the Budget. We know that the Government express support for the voluntary sector—indeed, we have heard many exhortations from the Government that people should be more self-reliant and that the voluntary sector, especially charities, should carry greater burdens. We know of the tremendous support which the public are prepared to give charities in relation not only to poverty and other domestic considerations, but to worldwide challenges which they see in their newspapers and on their television screens.
  The total unreclaimable VAT bill met by charities in England and Wales this year will amount to as much as £250 million. That places not only a financial burden, but an administrative burden on the charities.
  As I said in Committee, there is a strong case for the reform of charity law. I encourage the Government to

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  consider whether that reform can be included in the next Gracious Speech. I hope that that will be the case. Perhaps the Government can give a commitment now that they will consider lowering the lower threshold for gift aid so that charities can enjoy, as we approach the general election, the double bonus of being able to receive far more under gift aid and to work in a less mysterious and hostile framework.
  Mr. Maples: The hon. and learned Member for Montgomery (Mr. Carlile) has had two bites at this cherry because exactly the same points were raised in Committee.I am afraid that I shall give him pretty much the same answer. This is an example of how, when a Government introduce what is universally acknowledged to be a good scheme, within a year people are saying that it is not generous enough. However, the charities are saying that they widely welcome it. This month's issue of Charity magazine states that it is
  "universally acclaimed as being the best thing that a Chancellor could have done to unlock new money".
  By the end of May, charities had claimed tax repayments on some 17,000 gifts by both individuals and companies, which provided charities with income of £57 million, and a further £19 million in tax repayment claims. It is a pretty successful scheme.
  The aim of gift aid is to encourage substantial gifts to charity. Tax relief is available for smaller gifts made under deeds of covenant or for gifts up to £600 a year made under the payroll giving scheme. Those are valuable assured sources of income and it is important not to undermine them. There is a danger that reducing the limit for gift aid to, say, £250 would undermine the payroll giving scheme and covenants and thereby remove an assured source of income—a flow of income over a period—from charities.
  It is not practical to give relief for all small one-off gifts to charity. Covenants, which continue for a period and for which the tax paperwork can generally be processed by the donee, or payroll giving, where it can be done by the donor, are relatively easy things to administer. Enabling people to give individual gifts of about £250 would create an administrative problem. It is for a combination of those reasons that we decided to set a minimum limit of £600 net of basic rate tax to single gifts to charity under the gift aid scheme.
  I understand why the hon. and learned Gentleman feels that it might be beneficial to charities to reduce the limit. However, the arguments are not all on one side and, as the scheme has been in existence for only one year, I am reluctant to concede any amendments now. I am giving him pretty much the same answer as I gave in Committee, but I can assure him that we shall keep the minimum limit in mind when we consider the results of the scheme and whether there are ways in which it can be improved.
  Mr. Alex Carlile: It is disappointing that, despite strong representations from many charities, the Government are unwilling to reduce the limit at this stage. However, it is welcome to hear that the Government will keep the matter under review. Many of us who take a close interest in charities are waiting and hoping for a much more substantial law reform in relation to charities very soon. Bearing in mind what has been said, for the time being I am content to beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 30

  ADDITIONAL PERSONAL ALLOWANCE —NON-DISCRIMINATION
  '—(1) Section 259 of the Income and Corporation Taxes act 1988 shall be amended as follows:
  "and the section as amended shall have effect for the year 1990-91 and subsequent years.
  (2) In paragraph (c) of subsection (1) the word "man" shall be replaced by the word "individual" and the word "wife" shall be replaced by the word "spouse".
  (3) In subsection (4) after the words "husband unless" shall be inserted the words "either relief is available by virtue of subsection (1)(c) above or".'.—[Mr. Chris Smith.]
  Brought, up and read the First time
  Mr. Chris Smith: I beg to move, That the clause be read a Second time.
  In Committee we drew the attention of the Government to an example of discrimination of the tax system in relation to the additional personal allowance. The allowance is available to someone who has a child living with him, if that person is a man and is married and living with a wife who herself is totally unable to look after herself throughout the year to which the allowance applies because of illness or disability. The tax relief is available to a man in such a position but not to a woman living with a totally disabled or ill husband. I believe that in Committee the Minister voiced her sympathy with our point that that is grossly discriminatory. I repeat that a man can claim the additional personal allowance but a woman in identical circumstances cannot. We believe that there should be equity between husband and wife. That is why we have tabled the new clause on Report.
  In Committee the Minister said that she was sympathetically inclined towards an examination of the problem that we had identified. The problem was first drawn to my attention by my hon. Friend the Member for Dundee, West (Mr. Ross), who has a constituent who cannot avail herself of the additional personal allowance, whereas if her husband had been in her circumstances, he could have done so.
  The Minister said that she was sympathetic and that she would consider the issue. She gave no absolute commitment to come back on Report to put matters right. Very helpfully, she wrote to me on 11 July to say that the Government had further considered the matter but were not yet ready to make specific proposals. I was disappointed to receive that response. Of course, I appreciate that the Government may wish to take a wider look at the issue; they may want to consider it in the context of the benefits system as well as of the tax system. I appreciate that a tax allowance benefits only those who are taxpayers. It does not benefit everyone who might be in this particular circumstance.
  12 midnight
  However, to put right the discrimination now would, at least for this year, get rid of an example of discrimination in our taxation system. The Government could then spend the rest of the year considering the issue more carefully and fully and could produce more fully worked up proposals next year. But to accept the new clause now would enable us to put on the statute book, for this year at least, a measure to remove a blatant example of discrimination in the availability of the additional personal allowance.

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  I hope that at this eleventh hour, as we approach the closing stages of the Finance Bill, we might just persuade the Minister of State to have another look at our new clause and to say just for once, "Yes, the Government will do something right now", and not put off doing so for fear of avoiding doing something better in the future. I hope that the Government will find it in their heart to accept the new clause and put right the discrimination. They could then perhaps go on to look more fully at how to remedy other wrongs within the system.
  Mrs. Gillian Shephard: As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, the new clause is essentially the same as the one that we discussed in Committee. The only real difference is that the change would apply from 1990–91 instead of 1991–92.
  I said in the debate in Committee that the difference in the treatment of men and women was an anomaly and that I would give further consideration to this important issue. As the hon. Gentleman said, I have written to him on the matter. I am not certain whether the new clause was tabled before or after he received the letter. I said in my letter and I repeat now that the Government want to look at the issue thoroughly and carefully and that it is not possible to review the matter properly in time to reach a decision before this Report stage. However, I assure the hon. Gentleman, as I assured him in my letter, and I assure the House that we take the issue seriously. It needs to be tackled and tackled thoroughly.
  Mr. Chris Smith: Of course, I appreciate the sympathy with which the Minister of State approaches the issue. I remain disappointed that she did not feel able to go that little bit further tonight and make a change in the Bill. We shall continue to press the Government on this matter because it remains an outstanding anomaly within the system. Although perhaps it does not act against the interests of many people, for those who are affected it means a lot. We shall continue to press the Government on the matter. We look forward to a specific proposal within the next few months that the Government will introduce measures to deal with this anomaly. In that hope, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 39

  RATE OF VEHICLE EXCISE DUTY (No. 2)
  'In determining the rate of vehicle excise duty for the year 1991–92 and subsequent years for any class of vehicle the Chancellor of the Exchequer shall have regard to the principle that all classes of vehicle shall cover their track costs by broadly the same factor and that any variation for any particular class of vehicle may only be justified because of a comparative benefit with respect to other classes of vehicles to the environment.'.—[Dr. Marek]
  Brought up, and read the First time.
  Dr. Marek: I beg to move, That the clause be read a Second time.
  I shall be brief as it has gone midnight and we have many more amendments to get through. I could speak at length on the new clause—[HON. MEMBERS: "The hon. Gentleman has done that before."] Yes, but I shall confine my remarks to table 9, entitled, "Road taxation revenue and road costs in 1990–91: by vehicle class" from the pamphlet, "The allocation of road track costs 1990–91,
  146
  United Kingdom", which was issued by the Department of Transport in April 1990. That is the only table to which I shall refer in my remarks.
  The new clause is simple. It asks the Chancellor of the Exchequer, before he makes his Budget judgments on vehicle excise duty and costs for road users, to level out the taxes-to-costs ratio. Any differences should be accounted for by the environmental benefits that certain vehicles bring to the roads. The reason for that is simple. Table 9 shows that for cars, light vans and taxis the taxes-to-costs ratio is 3£2:1, whereas for goods vehicles over 3·5 tonnes the ratio is only 1·3:1.
  We certainly need roads and heavy goods vehicles because we must transport goods, and most goods are transported by road. We must also be mindful that we do not disadvantage our industry through taxation policy compared with industry elsewhere in Europe. I am aware that transport in Germany is always that bit cheaper than it is in this country. In some ways I should like the Minister to worry not just about what goes on in the United Kingdom, but about what goes on within Europe to ensure that our industry is not disadvantaged by transport costs.
  The difference between the ratios is large. Owners of large vans and motors will pay fuel tax and vehicle excise duty, and they will more than cover their costs on the road by a factor of 3·2:1, whereas some HGVs only just cover their road track costs. Table 9 shows that all goods vehicles over 3·5 tonnes just cover their costs by 1·3:1.
  Let me put this in figures so that it is absolutely clear. There are 22,622,000 cars, light vans and taxis. The cost of the damage that they do to roads comes to £3,075 million. There are only 471,000 heavy goods vehicles, yet the damage that they do to roads comes to £1,510 million. Although the number of HGVs is much smaller, they do half the damage that is done by all the cars, light vans and taxis. If the House considers that, and that the HGVs' taxes-to-costs ratio is only 1·3:1 compared with 3·2:1 for cars, light vans and taxis, it will agree that something is wrong.
  When we had a discussion on an associated subject in Committee, the Minister said that she would consider the matter carefully in the ensuing year. That is important. I hope that the Minister will reaffirm that commitment. I also hope that she will consider the issue in terms of the environment. If the transport of goods is unnecessary, it is obviously environmentally friendly not to undertake such a journey. It is environmentally friendly to move goods by rail or water whenever that is possible. However, I appreciate that most goods are transported by road. Little thought has been given to this issue by the Government.
  Mr. Peter Bottomley: I speak with three and a half years' experience of dealing with such matters. A great deal of thought has been given to the issue. The Transport and General Workers Union would be upset if HGVs, which many of its members drive, were subject to three times their current tax. It would be reasonable to take the surplus raised from private motorists for use on pensioners, hospitals and education. However, to try to load the costs on industry when the rest of the European Community is not even taking the track costs from its HGVs suggests that the remarks of the hon. Member for Wrexham (Dr. Marek) should be directed at the EC rather than at my hon. Friend the Minister.
  Dr. Marek: Perhaps the hon. Gentleman has just entered the Chamber, but I have already mentioned the EC. The Minister must lobby in Europe to ensure that our industry is not disadvantaged. The record will show that I have now said that for the second time, and I have already said that I do not want to delay the House.
  The disparity is too large and not enough is being done to look after the environment and to introduce green policies in transport taxation. If the hon. Member for Eltham (Mr. Bottomley) had regard for such matters when he was at the Department of Transport, his efforts were obviously unsuccessful. I do not want to be deprecatory, but it is evident that he may have worried so much about such policies that he is now on the Back Benches—again I do not intend to be deprecatory.
  A problem exists, and I hope that the Government will consider it urgently.
  Mr. Michael Jopling: I have listened with considerable interest to the hon. Member for Wrexham (Dr. Marek), but, with respect, his speech was grossly deficient in one aspect. He did not mention the vehicle excise duty on motor cycles.
  Dr. Marek: The next set of amendments address that issue.
  Mr. Jopling: I am aware of that, but it is as well to raise the matter.
  I must declare an interest as I am the president of the Auto-Cycle Union, which is the governing body of motor cycle sport.
  The Budget caused considerable resentment among the motor cycling community, of which, as the House may know, I am a member. That statement did not refer to the fact that the vehicle excise duty on motor cycles had been increased by a far greater extent than that on motor cars. That should have been declared in the statement. If the Treasury and Chancellor should ever feel inclined to impose such a disproportionate increase in excise duty in the future, that should be made clear to the House during the course of the Budget statement. This year that duty increased considerably and I have not heard any adequate explanation as to why that was necessary.
  The hon. Member for Wrexham referred to damage to roads. That is an important factor of which the House should be aware. Motor cycles cause practically no damage to roads. Given the number of people that they transport, they cause proportionately less damage to roads than any other mode of transport. Their effect on the environment with regard to congestion, the parking space that they take up, the space that they occupy in general, and the fuel that they use in proportion to the number of people that they transport make them an environmentally friendly form of transport.
  I am interested in the new clause and shall listen carefully to what my hon. Friend the Minister of State says. However, in framing the Budget and the Finance Bill, proper regard has not been paid to the motor cycle community's claims. On the whole, it has been dealt a pretty dirty deal during the course of these amendments.
  12.15 am
  Mr. Peter Bottomley: I do not want to take the new clause too seriously because I do not think that the hon. Member for Wrexham (Dr. Marek) takes it too seriously. It is important to realise that it means either that the
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  taxation on heavy goods vehicles should be tripled or that the vehicle excise duties for cars should be cut to one third of its present rate. Neither of those propositions can be seriously floated past the hon. Member for Derby, South (Mrs. Beckett).
  I hope that we shall continue to see a degradation in the value of the vehicle excise duty for cars—the figure should not change—and that the extra cost will be put on the marginal use of cars. That is the only sensible way to look at motor taxation. We should raise the marginal cost of using a private car both in terms of cost and time, rather than going for the road pricing theory, which is a space for every car for which someone must pay with a fistful of fivers. We should also continue to try to reduce the cost of the damage that heavy goods vehicles cause to the roads by introducing better suspension systems and by trying to ensure that lorries are kept outside residential and shopping areas.
  Even before I intervened the hon. Member for Wrexham spoke about the track cost in the rest of the European Community. I emphasised that in my intervention because it needs emphasising more and more. Only when other European countries begin to realise the damage that those vehicles cause will we see fair competition between hauliers. British hauliers will do better in that competition because we have better co-operation between drivers and management and, unlike most other hauliers in Europe, our management is used to competition.
  I hope that the new clause is not pressed. The hon. Member for Wrexham probably regrets having spoken on it.
  Mrs. Gillian Shephard: Clearly, in constructing a policy for motor taxation a balance needs to be struck between environmental considerations, revenue received and practicalities. In that respect, although I know of the enthusiasm and expertise of the hon. Member for Wrexham (Dr. Marek) on the comparative tax paid by certain types of heavy goods vehicles, his proposals involve practical problems which he has not addressed.
  For example, to bring the tax-cost ratio of HGVs up to that of cars and light vans would involve, on average, sevenfold increases in their vehicle excise duty. That means that some lorries would pay £21,000 VED a year, which might not be welcomed by British industry. Alternatively, to bring cars down to the same ratio as lorries would require us to cut their overall tax burden by £6·6 billion. As VED brings in only about £2·5 billion, abolishing it altogether would bring the ratio down to 2·4:I rather than 1·26:1 that the hon. Gentleman seeks.
  However, motoring taxation, fuel duty and vehicle excise duty are mainly about raising revenue, which amounts to nearly £14 billion, though it is clearly sensible to adopt a policy so that all classes of vehicle should at least cover their share of the public expenditure costs of the road network. All vehicles now do so as a result of the changes in VED and fuel duty that we have made over the years. I know that my hon. Friend the Minister for Roads and Traffic wrote to the hon. Member for Wrexham after the debate in Committee to explain how those duties were calculated.
  I welcomed the contribution of my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who is a distinguished motor cycle enthusiast. In his Budget speech, my right hon. Friend the Chancellor of the

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  Exchequer did not have time to mention all the measures, but details of the VED increase for motor cycles were mentioned in the "Financial Statement and Budget Report", and in the Department of Transport press notice. Motor cycle riders pay less tax on fuel and a lower VED than car drivers.
  Environmental issues have been mentioned. We can sometimes use taxation to bring positive environmental benefits. In earlier debates we mentioned the differential between leaded and unleaded petrol which has boosted unleaded petrol's share of the market to more than 40 per cent. We also switched the balance of taxation for both private vehicles and lorries from fixed to variable costs, thus ensuring that those who pollute most, pay most. In 1980, the Armitage inquiry recommended that the excess for each sub-class of heavy goods vehicles should reflect their relative impact on the environment. It is difficult to achieve that perfectly, and we never do as well as the hon. Member for Wrexham would like, but VED paid by those using heavier rigids has, in general, increased by more than that for articulated lorries.
  My right hon. Friend the Chancellor and my right hon. and learned Friend the Secretary of State for Transport pay serious attention to the needs of the environment because we all benefit from that. We have achieved much through our taxation policy, but we have been able to do so only while still having regard to fiscal policy overall, because our policy leaves my right hon. Friend the Chancellor with the flexibility to respond to new situations and concerns.
  The Government's aim is to achieve a fair system of taxation that takes account of all factors, not just the environment. That can best be achieved by leaving the present and future Chancellors flexibility to respond to new situations and concerns, not by restricting their room for manoeuvre.
  Dr. Marek: The new clause simply proposed that the Chancellor of the Exchequer should have regard to the principle, and then enunciated the principle. The hon. Member for Eltham (Mr. Bottomley) is a man of extremes. He said that the policy had to be on the extreme left or the extreme right, but there are all sorts of possibilities in between. One can have regard to the principle, but it is sometimes hard to adopt the principle and implement it immediately. I am under no illusions about that.
  We have had a useful debate. I am glad that the Minister said that the Government have regard to the environment, and the vehicle excise duty on some classes of heavy goods vehicles has risen a little more. I hope that the Treasury will ensure that the Department of Transport turns its attention to that before the next Budget because it does not look as though there will be a general election before next May or June, and there will be another Budget under the present Administration. In those circumstances, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

Clause 4

  VEHICLE EXCISE DUTY
  Dr. Marek: I beg to move amendment No. 18, in page 3, line 6, leave out '15.00' and insert '11.00'.
  Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
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  No. 19, in page 3, line 12, leave out '30.00' and insert '22.00'.
  No. 20, in line 13, leave out '50.00' and insert '42.00'.
  No. 21, in line 14, leave out '50.00' and insert '42.00'.
  Dr. Marek: The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) referred in the previous debate to motor cycles. The amendments are an example of how the Treasury has gone the opposite way in terms of looking after the environment—motor cycles are reasonably environmentally friendly machines, at least when they have proper baffles fitted to their exhausts so that they cannot be heard from two or three miles away. Motor cycles travel a great many miles to the gallon. That means that they are environmentally friendly. Although vehicle excise duty on motor cars was not changed, the duty on motor cycles and some other vehicles was increased, and that is unfair.
  The amendments are modest. They seek to raise the duty on motor cycles from £10 to £11 and not to £15. Where the duty was £20 we propose an increase to £22. Duty on the highest cubic capacity is to be raised from £40 to £50, but the amendments suggest an increase to £42. There is much concern that vehicle excise duty on motor cycles is being increased simply because there was much evasion. The last substantive paragraph in a letter from the Chancellor of the Exchequer to Mr. Peter Ryder of the British Motorcyclists Federation states:
  "The widespread evasion of VED is of concern to Government because of both the revenue loss and the effective reduction in checks for MOT and insurance. It would appear that the penalties for evasion at the current level of VED are not a sufficient deterrent and I hope that the increase will help stop the slide."
  What does that mean? The letter continues:
  "I know that as a responsible organisation you do not condone the activities of those who ignore the law, and I hope you will understand that the Government cannot tolerate them either."
  What does the Chancellor mean when he says
  "the increase will help stop the slide"?
  Does he mean that the extra excise duty paid by motor cyclists will stop the decline in the Treasury's revenue? If he does mean that, he is advancing the unfair principle that simply because some people evade paying excise duty—and it is not only some motor cyclists who are guilty of that—a punitive increase in vehicle excise duty should be imposed to make up for the shortfall.
  The ratio of motor cycle duty to car duty has remained constant for many years. Without notice the Chancellor decided to pick on motor cyclists and to increase vehicle excise duty, and he has not offered a rational or logical explanation for doing so. I do not expect the Government to admit that they were wrong and that they will cancel the increases, but I hope that the Minister will give a logical explanation for the increases or at least admit that the changes were for completely spurious fiscal reasons and that not enough attention was paid to the impact of the increases.
  The Minister should ask the Department of Transport to look at the environmentally friendly aspects of motor cycles, cars and heavy goods vehicles and submit better proposals next year.
  Mr. Jopling: I apologise to the House for jumping the gun and speaking about motor cycles during discussion on the last amendment. When the Minister of State, Treasury replied to that debate she said that the Chancellor did not

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  have time in his Budget statement to refer to this massive increase in the excise duty on motor cycles. All that I can say is that if he had time to refer to the contentious issue of mobile telephones, it is difficult to believe that he did not have time to refer to an increase in excise duties on motor cycles that was proportionately far larger than that for cars, and that affected far more people than a tax on mobile telephones. That argument will not wash, so I hope that neither she nor any of her colleagues on the Treasury Bench will use that argument again.
  12.30 am
  I have yet to hear a proper explanation of why it was felt necessary to increase the excise duty on motor cycles by so much. In the previous debate, I declared my interest in this matter. Until today, I was the owner of a large capacity motor cycle, and I hope that I shall have another one the day after tomorrow.
  Sir Philip Goodhart (Beckenham): While my right hon. Friend can undoubtedly ride his machine with the greatest of skill, is he not aware that it is 12 times as dangerous to ride a motor cycle as it is to drive a car? It may be that the desire to reduce the appalling rate of casualties among motor cyclists inspired the Treasury.
  Mr. Jopling: I understand my hon. Friend's point, and, like him, I am greatly concerned about the number of deaths and injuries among young people who ride powerful motor cycles when they are not particularly experienced. This is a matter of as much concern to me and to many involved in the motor cycling sport as it is to him. The Government are not backward in coming forward to tell us that they are putting up cigarette duty for much the same prevention reason. If this is why they are increasing the excise duty on motor cycles, let them tell us. As far as I am aware, that argument has not been used.
  The hon. Member for Wrexham referred to evasion. I was not going to mention that because I did not think that it was worth mentioning, but as he has, I should say that it is irrelevant when it comes to deciding at what level to pitch the duty. I see no point in penalising those who pay to make up for those who do not pay. I should have thought that if one pushes up the price of a road licence on a motor cycle, one encourages people not to pay it, so that is not the way to go about it.
  I do not want to press this matter this year, but I should tell my hon. Friend the Minister that I feel miffed about the way that it has been handled. I feel miffed about the logic behind it, which I do not understand. This has been a raw deal for those who ride motor cycles. I hope that people will not again be given the opportunity for criticising the Government for picking on the motor cycling community by clobbering it with an excise duty. I hope that it will not happen again.
  Mr. Wallace: The right hon. Member for Westmorland and Lonsdale (Mr. Jopling) was right to say that motor cyclists have been clobbered. The percentage increases are startling, especially when the vehicle excise duty for motor cars was not increased. The Minister tried in Committee to explain away the percentage increases by saying that the actual amounts were increases of £5 or £10, but for many motor cyclists the increases are not neglible. We are talking of sizeable increases for vehicles that are environmentally
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  friendly. Mopeds, especially, are very economical in their use of fuel, and for many young people who live in rural areas they provide an essential lifeline. I am sure that the right hon. Member for Westmorland and Lonsdale, who represents a rural constituency, will appreciate that. Motor cycles and mopeds enable young people to enjoy social facilities and to undertake journeys to places of further education and training.
  I have received a petition from Mr. Victor Thomas of the Old Manse, Stove, Sandwich, Shetland and some of his friends and neighbours. It emphasises that the motor cycle is an environmentally friendly vehicle and is a necessity to many. In most instances a motor cycle uses less fuel than a motor car.
  The Minister sought to give an assurance in Committee that the Government were not seeking to penalise the honest motor cyclist by raising the cost of VED to cover the loss of revenue because one third of motor cyclists do no pay VED, but one cannot help feeling that that is precisely what the Government are doing. The hon. Member for Wrexham (Dr. Marek) read out correspondence that seemed to give that impression. He read out correspondence in Committee in which a Treasury spokesman was quoted as saying that it was a measure of inflation and that the higher rate would recompense the many evasions in the form of unpaid licences. If that is the Government's approach—a hidden agenda that means that those who are honest are having to bear the burden of subsidising those who are dishonest—their weak case is undermined.
  The right hon. Member for Westmorland and Lonsdale protested against such a principle being incorporated in our taxation. I have no doubt that many people will welcome his support for local authorities that find that they have to place an added poll tax burden on many payers because of the non-payment of others.
  Two months have passed since the increases in VED for motor cyclists were discussed in Committee. I hope that the Minister has been made well aware of the strong feelings of motor cyclists. They have been singled out, as it were, for increases in VED. In percentage terms, the increases will be punitive. I hope that the Minister has had a chance to reconsider her position.
  Mr. Cryer: I, too, have received many letters from constituents about the unfairness with which the Government have levied an extra tax on motor cyclists.
  Motor cyclists attract a good deal of prejudice because sometimes their machines are not sensibly used. The exhaust systems of some machines are not properly fitted and are ineffective, and we know that motor cycles with defective silencers are ridden late at night. To criticise motor cyclists on that basis, however, is to criticise at one fell swoop all the keen motor cyclists who behave properly, who keep their cycles well maintained, who take pleasure in their use and who in many instances find them to be a necessity.
  The Government's deregulation of bus services—not only in rural areas—has meant that a service can no longer be provided if a profit cannot be made. No bus company will be willing to tender if it is impossible to make a profit, and a passenger transport authority is not permitted to provide a subsidy for a service. There is therefore a greater emphasis on personal transport, and the cheapest form of that transport is a motor cycle or moped.

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  The Government are militating against its use. It has been suggested that an increase in the licence fee for a motor cycle will act as a deterrent and will reduce the high rate of accidents, but that is not the correct approach. If that were the Government's attitude, I am sure that they would have increased it to try to obtain some shadow of virtue from a situation which has very little virtue attached to it.
  If the Government are concerned—as we all are—about the rate of accidents involving motor cycles, other measures are required. They include better training, although a fairly comprehensive training scheme has been introduced in the past few years; a more comprehensive motor cycle test involving details of mechanical efficiency if lack of such knowledge is a contributory factor to accidents; and more courtesy from the other vehicles that we have discussed—the HGVs—which, by virtue of their size, are sometimes involved in accidents with motor cyclists because of the comparatively diminutive size of the latter. Those factors must be tackled separately. The increase in vehicle excise duty should not be used as an excuse to deter people who wish to take up motor cycling.
  Hundreds of thousands of motor cyclists are sensible and careful; they operate their machines well and find them of great use and importance in gaining access to work and leisure activities. We must take those people into account, especially when they use British motor cycles—and not, as I suspect that the right hon. Member for Westmorland and Lonsdale does, imported BMWs—and when they take a specific interest in maintaining the vestiges of what was once, I suppose, the strongest and most powerful motor cycle manufacturing industry in the world, although, along with much other manufacturing industry, it has, alas, been reduced to a shred of its former glory. Such people have our added support, but in general, whatever machines motor cyclists ride, they deserve a better deal from the Government. I hope that, even at this late stage, the Minister will try to wrest some justice from an unjust decision.
  Mrs. Gillian Shephard: It is interesting and perhaps rewarding to see that at this time of the morning the House can become emotional about this issue. I shall make three main points.
  First, I fully accept that, although one third of motor cyclists evade paying vehicle excise duty, that means that two thirds pay it. The vast majority of motor cyclists are responsible, careful and, in view of this debate, very enthusiastic drivers. However, much mention has been made of motor cyclists receiving a raw deal, and swingeing and unfair increases of 50 per cent. have been bandied about. We are in fact talking about increases of £5 a year or £10 a year. They are not inconsiderable sums, but, balanced out over the weeks, they represent 10p or 20p a week which is less than the cost of a packet of crisps. Other people might more easily be able to equate that figure to fractions of the cost of a pint of beer or of a packet of cigarettes. I do not accept that such figures represent swingeing increases that cannot be met.
  Secondly, part of our purpose was to restore the balance between cars and motor cycles by raising the VED by a modest amount to bring the two taxes more into line.
  Thirdly, part of our purpose was to increase the VED paid by motor cyclists because a result of a decision taken in 1985 to freeze VED has been to reduce the real value to such an extent that the evasion rate has increased
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  unacceptably. As I said, the latest estimate is that one third of all users avoid paying tax, and the consequential loss of £9 million is not inconsiderable. Some hon. Members might applaud the solution of abolishing VED, but to do so would create considerable difficulties in maintaining a vehicle register and making effective insurance and MOT checks.
  12.45 pm
  I made it clear in Committee that it is not our intention to recoup from the honest motor cyclist the revenue lost through evasion, or to penalise the motor cyclist relative to the car driver. Motor cyclists still pay less tax than car drivers in proportion to their share of the cost of the road network.
  It is argued that as motor cycles are generally more fuel-efficient than cars, and usually use unleaded petrol, we should encourage their use. My answer is that they already pay considerably less in fuel duty per mile travelled. I do not disagree with the claim that motor cycles cause less wear and tear on the roads than cars, which is why their VED is still, at most, half that of cars.
  People choose to use either a motor cycle or a car for a host of reasons, of which the tax payable is only one. Comfort, capital cost, running costs, and safety all play their part in their decision.
  We have tried to achieve a more neutral taxation regime as between the car and motor cycle, and it is now less weighted towards motor cycles than it was. The increase of £5, or £10 a year at most, is small. The fact that motor cycles cause less wear and tear on the roads is reflected by the low rates of VED that they still attract in comparison with cars. Motor cycles that are more fuel-efficient pay less in fuel duty per mile—and that is another incentive. The proposed increase is modest, and I hope that the House will accept it.
  Dr. Marek: The Minister said that the increase is designed to bring motor cycle tax more into line with that charged in respect of motor cars. As far as VED is concerned, the ratio has been fixed for five or six years, but the Government have now altered it, so that motor cycles will attract an increased ratio of road tax in comparison with motor cars.
  The Minister justifies that change by saying that motor cycles use less fuel, so she is effectively taxing an environmentally friendly mode of transport. The new tax reflects the Government's anti-green policy, and it is extremely disappointing that they show no regret or contrition, and can offer no logical explanation for their action.
  Amendment negatived.

Clause 7

  BEER DUTY
  Mrs. Gillian Shephard: I beg to move amendment No. 22, in page 8, line 4, at end insert—
  '"the Commissioners" means the Commissioners of Customs and Excise;'.
  This technical amendment removes any possible uncertainty, and it is one about which I have written to the hon. Member for Newcastle upon Tyne, East (Mr. Brown). It defines the commissioners mentioned in the two freestanding provisions as
  "the Commissioners of Customs and Excise".

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  No difficulties arise in respect of the clause's other references to the commissioners, because a definition is already provided for in the legislation being amended.
  Amendment agreed to.

Clause 19

  VEHICLES LEASED TO THE HANDICAPPED
  Amendments made: No. 16, in page 14, line 42, leave out 'the lessor is a charity'.
  No. 17, in page 14, line 43, at end insert
  'the lessor is—

  (a) a charity, or

  (b) a person used by a charity for the purpose of making supplies which attract relief under this section."'….

Clause 52

  INCOME TAX (BUILDING SOCIETIES) REGULATIONS I986
  Mr. Peter Bottomley: I beg to move amendment No. 45, in page 36, line 31, leave out from beginning to 'this' in line 32 and insert
  "In relation to any building society whose accounting period ended before 1st October in the year of assessment 1985–86.'.
  Mr. Deputy Speaker: With this, we may take the following amendments: No. 29, in page 36, line 31, leave out from 'society' to 'this' in line 32, and insert—

  '(a) which commenced proceedings to challenge the validity of the regulations before 18th July 1986, or

  (b) which, after 18th July 1986 but before 19th March 1991, commenced proceedings for the recovery of money paid by it, being proceedings taken as a result of the outcome of earlier proceedings of the kind to which paragraph (a) of this subsection relates, or

  (c) which, after 18th July 1986 but before 19th March 1991, made any payment as provided for by the regulations, and which, in relation to such payment, gave written notice that it disputed the validity of the regulations.'.

  No. 30, in page 36, line 32, leave out 'before 18th July 1986' and insert
  'or to recover money paid by it on the basis of such a challenge made by it or by any other building society before the date on which this Act received Royal Assent.'
  No 31, in page 36, line 32, after '1986', insert
  'or in relation to a building society which since 18th July 1986 but before 19th March 1991 commenced proceedings for the recovery of money paid by it, being proceedings taken as a result of the outcome of earlier proceedings to which this subsection relates'.
  No. 32, in page 36, line 32, after '1986', insert
  'or which was referred to in an affidavit sworn before that date as expressly supporting such proceedings and lodged in the Court in the course of such proceedings.'.
  No. 46, in page 36, line 32, after '1986', insert
  'or would have done so but for its reliance in good faith on the view that the liability of every building society under the regulations would be determined according to the decision of the court in proceedings which were commenced before that date.'.
  Mr. Bottomley: If I am given an opportunity, I shall seek to divide the House on amendment No. 29, which brings together a number of the ways in which building societies could reasonably expect to take the benefit of the result of the judicial review that followed the Finance Acts 1985 and 1986, the regulations under the 1985 Act and the
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  application for judicial review made by the Woolwich building society in the High Court, the Court of Appeal and the House of Lords.
  I do not intend to try to rally as many hon. Members as possible to join me in the Lobby, although if Labour Members chose to do so that would be very nice. I want it to be made clear in any subsequent judicial review proceedings—others have been instituted, meaning that the saga that has continued for the past five years may continue for a further five—that the House of Commons was not told in 1985, when the proposals for the change were made, that the Revenue intended to take a tax advantage. That is a neutral expression used recently by my hon. Friend the Economic Secretary. The Revenue proposed to take advantage of six months' tax on the Woolwich, the Leeds and some other building societies.
  There are three ways of describing the taxation that is at issue. One is to call it "double taxation". To an extent, my hon. Friend the Economic Secretary conceded that in the fifth sitting of the Standing Committee. Another way is to call it "the gap"; my hon. Friend has described it thus on other occasions. He has often used the form of words employed by counsel for the Treasury in the High Court, who argued that the tax under consideration had been deducted from depositors and members of building societies.
  The third description—used recently in a letter, from which I think I have permission to quote, from my hon. Friend the Economic Secretary to the president of the Leeds building society—is "tax advantage"; we could, indeed, mention tax disadvantages as well. Whatever expression we use, and whether our chosen expression is pejorative or merely matter-of-fact, we are talking about between £250 million and £400 million.
  In the past few days, it has emerged that discussions were held between either the Revenue or the Treasury and building society representatives in 1985. I do not intend to go into the details, because I do not know them. Besides, confidential discussions should remain confidential unless there is good reason to refer to them. I do not accuse my hon. Friend of not having good reason.
  Let me say to my hon. Friend—and, through him, to his officials in the Treasury and the staff of the Inland Revenue board—that I am grateful for many of the replies that they have given. In the civil service, it is very difficult to be accountable in detail, and to be able to set out in detail all the reasons why any particular action was taken, especially if it was taken six years earlier. That is one of the differences between public service and the private sector.
  We heard in the 1985 Budget statement that there would be no additional revenue from the sensible change that was proposed—that building societies, instead of paying in each tax year a sum to satisfy their tax liabilities or those of their members, would make payments quarterly based on what had happened in the actual financial year.
  It was clearly understood in the House previously that the payment made on 1 January in each tax year would satisfy a society's liabilities in that tax year, although the sum came out of a society's dealings with its members and depositors in the previous year. That much is common ground. It is also common ground that the press notice put out by the Treasury, or the Inland Revenue—I forget which, but it does not really matter—at the time of the 1985 Budget said that there would be transitional arrangements.

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  Many people could have believed that those transitional arrangements were used to refer to the fact that under the new system of accounting for tax quarterly—14 days after the end of each quarter—the system would begin in a quarter starting on 1 March, not in a quarter starting on 6 April. It would have been perfectly reasonable for building societies and others to assume that the transitional arrangements reference was to that and not necessarily to going after extra taxation for a year for which many building societies had already fully satisfied their tax liability.
  The only other reference appeared in a footnote to the Red Book issued on Budget day stating that there would be some public sector borrowing requirement effect. The Committee considering section 41 of the Building Societies Act 1986 and the extension of powers to the building society commissioners did not believe that the phrase "some effect on PSBR" was a full way of describing what may have been in some senses a deficit of £76 million to the Inland Revenue in the coming year or a tax advantage to the Revenue of between £250 million and £400 million.
  There was a debate on the matter during the Committee stage of the 1985 Finance Bill and I have referred to the debate in the Committee considering the statutory instrument dealing with section 41 and the powers of the building society commissioners. Dr. Oonagh McDonald was wrong when she referred to the effect of £50 million.
  I want to refer to some of the parliamentary answers that I have received recently on the matter. I asked my right hon. Friend the Chancellor of the Exchequer
  "what would be the effect of the removal of Clause 52 of the Finance Bill on the ability of the Inland Revenue to retain certain disputed tax paid by building societies."
  The answer from my hon. Friend the Economic Secretary was:
  "Whether or not tax paid under the transitional provisions in the 1986 Building Societies Regulations is repayable would, in the absence of Clause 52, depend on the particular facts of each case."
  People outside this place have told me that it would have been far better if the Government had not announced in the 1991 Budget that they were going to introduce what started out as clause 50 and is now clause 52. It would have been much better to have left it the way Patrick Jenkin left it on Report during proceedings on the Finance Bill of 1986 to have the matter fought out in the courts. We have a situation that is created by retrospective or retroactive, or both, amendments to the Finance Act 1986 which gave effect to regulations that were misdrawn under the Finance Act 1985.
  As a result of lack of full description about what was happening in 1985 and together with the debate on the Floor of the House on 17 July 1986 and the cascading decisions of the High Court, the Court of Appeal and the House of Lords, we have had a mixture of debate and legal decision. That was revealed in discussions upstairs in Committee on this Bill when my hon. Friend the Member for Beaconsfield (Mr. Smith) and the hon. Member for Brent, South (Mr. Boateng) quizzed my hon. Friend the Economic Secretary. There was a mixture of what the courts held was in law and what the courts and others believed was in Parliament's mind. Very little of that had anything to do with what happened in 1985 when we began to allow for some potential consequential decisions following the change in the basic way in which building societies pay taxation.
  158
  We are talking about substantial sums. In a reply to me dated 8 July, my hon. Friend the Financial Secretary refers to the Inland Revenue statistics for each year since 1985 and recounts the schedule for composite rate of tax on building society interest for each year since 1980–81. I will cite the figures to give some idea of the sums involved. In 1980–81 the figure was £1,217 million. It rose the following year to £1,425 million and in the following year, 1982–83, it was £1,583 million. It was roughly the same in 1983–84. In 1984–85, it was up to £1,844 million. There is then a run of four years—1985–86 to 1988–89—in which it was approximately £2,600 million. In the most recent year for which figures are available-1989–90—it was £3,713 million. We are talking about very large sums.
  1 am
  The amount of money changes because of a number of factors, including interest rates, tax rates and the level of deposits. In the long term, if building societies become a popular medium through which to accumulate savings, that will be one influence.
  From year to year, the dominant influence is the interest rate. It is difficult to decide how much of the change in the amount raised by the Revenue from building societies on the composite rate tax changed between 1985–86 and 1986–87. My hon. Friend has said that it would be disproportionately expensive to work that out. However, we need to find out what is likely to have happened.
  I return for a moment to 1985. It is clear from the Budget speech that there was not a full explanation. It is clear that there was not a full debate in Committee and it is clear that there was not a full debate on Report.
  The first bit of information that we have available to us is an article which I was grateful to my hon. Friend for drawing to my attention. It was written by Richard Northedge and appeared in The Daily Telegraph on 29 July 1985. The headline was
  "Societies fight £500 million double tax demand."
  The article went on in fair detail, dealing mainly with the Woolwich and with the Leeds, and talks about the societies with a 30 September year end which would have to pay double tax for six months.
  I have asked Treasury Ministers whether either the Treasury or the Inland Revenue responded in public at the time of The Daily Telegraph report. My hon. Friend has told me that he is not aware of any such response. That is an accurate answer, because he is saying not that there was not a response, but that he is not aware of one. It is regrettable, because if the issue turns on whether the tax advantage, or the tax that people were going to go after for six months from the Woolwich, from the Leeds and from others for a year in which the tax liability—and there is no dispute about this—had been fully satisfied by the payment made on 1 January, it would have been better if there had been a public response, and if the argument about what is double taxation or what is taxing the gap had started at the time when the issue first came forward in public.
  Mr. Maples: The Treasury is not in the business of responding to every article that is written in newspapers. My hon. Friend cannot read anything into what he has described. My hon. Friend has sought, through his parliamentary questions and correspondence with me, to establish that it was not the intention of the Government at the time of the 1985 Budget to tax what I call the "gap

  159
  period". I gave him the article, which was a clear sign that in July of that year the matter was raised in The Daily Telegraph. Everyone who reads that paper and every building society must have been aware of it. In those circumstances, it would be appropriate for my hon. Friend to agree that it was clear to all the building societies at that time that it was the Government's intention to tax that period.
  Mr. Bottomley: Nothing that my hon. Friend has said is in disagreement with what I have said. I have said that it is regrettable that the issues were not brought out into the public debate. I was not criticising anyone.
  If my hon. Friend wants me to give way again, I will happily do so, because I am trying to put a fair exposition to the House bringing together the various things that have happened over the past six years.
  I asked my right hon. Friend the Chancellor whether he would list all other newspaper, parliamentary or ministerial reports before 29 July 1985—that is, before the Richard Northedge article—which made explicit reference to a proposal to claim tax from building societies in relation to any period from their year end to the end of the financial year 1985–86 separate from the tax payments that had satisfied the liability for that full financial year. My hon. Friend has responded today. It is important to acknowledge my gratitude for the speed with which he has responded to a number of these questions, and to say that I understand his comment that the information is not readily available and cannot be provided without disproportionate cost.
  However, before the article of 29 July 1985, there is no record of any explicit reference to this issue, despite the fact that we had had the Budget, and the Second Reading, Committee and Report stages of the Finance Bill. The only reference was when Oonagh McDonald raised it in Committee when, apparently, the figures were so different from those that may or may not have been available at the time that that cannot be regarded as a full and open discussion. My hon. Friend may say that officials or Ministers had been having full discussions with the building societies. That is fine—but it is not discussions with the House of Commons. I do not think that there is any reference on the Floor of the House or in Committee to what was going on. That became clear only later.
  We move on to when it was decided to propose legislation to obtain what I call "additional tax" from building societies for the financial year 1985–86 and when and how an estimate was published of the financial effect on total tax receipts and on the tax to be paid by societies. My hon. Friend repeats his view that the 1986 legislation, changing the way in which building societies account for the tax on interest and dividends paid, did not involve additional tax. I am still trying to move us forward from 1985 which is when we were looking at the consequential provisions tied to the generally accepted switch in the method of taxation.
  We have had some useful information today from my hon. Friend, showing calculations that produce a reduction in the revenue received of £76 million. I am not sure how it will be designated in Hansard but it may be Question 159. It deals with the available information, listing, for the building societies with their year end in each
  160
  quarter, an estimate of the gains and/or losses respectively from the transitional arrangements and from the change to the new tax system in 1986–87.
  I hold the view that that minus £76 million may be based on the fact that the year in question does not have 12 months of tax receipts. There is a switch from one system to another, with the new system starting on 1 March, and with that tax not being received until the subsequent year. The table purports to show that, although some societies, including the Leeds and the Woolwich with their September year-ends, were hurt by the change to the new system, the building society movement in the aggregate benefited to the tune of £76 million or 3 per cent. of what would otherwise have been raised under the old system.
  Presumably, there is a short and total answer to this. I suggest that the amount of tax that would have been due in 1986–87 if the old system had continued would have discharged all liability upon interest paid to the investors up to and including 5 April 1987. That is a 12 month-period. Under the new system, the amount due in 1986–87 discharged only liabilities on interest paid to investors up to and including 28 February 1987. In other words, the table compares the cost of 12 months' liability with the cost of less than 11 months' liability or—to put it in a way that will be recognisable to those who drafted the regulations—the table may recognise the double tax effect of regulation 11, but not of regulation 3.
  Some of this is clearly supposition, because the information on which I am working has been available to me—and through me, to the House—only recently. It is regrettable—I am not blaming anyone, but it is regrettable—that that is so in 1991 when we are dealing with a saga that started in March 1985. It would have been better to have had this out and to have discussed it at that time. The tax in respect of the stub of one month and five days—from 1 March 1987 to 5 April 1987—did not have to be paid until 14 June 1987, but was it payable at the composite rate of tax for 1986–87? This takes us into one of the invalid regulations that is dealt with by clause 52(2) and (3). The necessary adjustment to compare like with like is to pro-rata the total figure for the new system—the 1986–87 receipts, which amount to £2,868 million—to reflect the missing 36 days. We are talking about over £240 million a month, so 36 days will give us more than a month's worth of tax.
  Assuming that interest payments are spread evenly throughout the year, the sum of which may be generous because the March quarter is likely to be a heavy payment, the calculation is £2,868 times the ratio of 365 divided by 324, which has been calculated to be £3,182 million. That would be an extra £238 million or an 8·1 per cent. increase in taxation for the building societies movement in aggregate, instead of a 3 per cent. reduction.
  The suppositions and assertions that I am making may not be right, but they are the best that can be done with the information made available to the House in the past few days or hours. There are some uncertainties that I shall not go into about whether the figures include the Woolwich and what percentage of composite rate tax has been employed to calculate the old system and new system receipts respectively.
  There are also various other doubts. It is suggested that regulation 12 outbalances regulation 11, which deals with what one might call the gap or double taxation issues. There are discrepancies, which I am sure can be explained,

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  between the figures and those quoted in the Inland Revenue statistics in the Chancellor's answer to me in Hansard of 8 July.
  I suggest to the House that what has happened up to now has been clearly unsatisfactorily in several ways. First, the parliamentary draftsmanship was imperfect. That is clear from the need to introduce the amendment in the 1986 Finance Bill at a late stage. That was done to trump the Woolwich application for judicial review. It did not succeed. In the debate on 17 July 1986, when Patrick Jenkin raised the issue, two—[Interruption.] Madam Deputy Speaker, if I go on hearing barracking from behind me, my speech may get longer rather than shorter. It would be helpful to have—
  Madam Deputy Speaker: I assure the hon. Gentleman that I can hear him very clearly.
  Mr. Bottomley: I can hear those behind me very clearly.
  The aim of my last remark was to draw the attention of the House to the two references in the debate on Report on 17 July 1986, that is to say, one day before the cut-off point in clause 52, to the fact that the Leeds was taking proceedings. I do not know whether it commenced proceedings or not, but it may turn out that those references have some substance that would stand up in court. We may find that not only the Woolwich was able to keep its £70 million plus. We may discover that the Leeds could keep its £57 million if it had done anything that could have been construed as opening legal proceedings before the cut-off point. We would then be left with what might be called the minnows and some of the other small societies such as the Greenwich, which proportionately were hit even harder than the Leeds or the Woolwich.
  We have already established from the information how building societies have their years end in different quarters and how some of them gained by what have been called the transitional changes—the changes in the timings of their payments of tax. We end up with what is clearly hybridity except that the way in which it is covered in clause 52 is to deal with classes of building societies which include the Woolwich alone or the Woolwich and the Leeds, if my references to the Report stage of 1986 are correct.
  The position is highly unsatisfactory. The draftsmanship is unsatisfactory. The near hybridity is clearly unsatisfactory. We then come to whether the Government are seriously encouraging all building societies to join in duplicate judicial review proceedings along the lines of those started by the Leeds Permanent building society last week. There is a clear difference between a tax appeal and judicial review. I am not aware of other occasions when either the Treasury or the Inland Revenue has not allowed judicial review to be regarded as a statement of the law.
  To say that a tax appeal applies only to the people who appeal may or may not be reasonable, depending on the circumstances. Most people would accept that one application for judicial review should state the law for each of those affected by the law itself. That is clearly a view which is shared by my right hon. and learned Friend the Attorney-General. When I asked him—I may have got the words slightly wrong—whether it was normal or appropriate for many people to apply for judicial review, he said that it was not necessary. That is a fair comment. If we pass clause 52 and the second application for a judicial review, by the Leeds, is not overturned, judicial
  162
  review appeals will be duplicated by the whole class of people who could be affected. It is unsatisfactory to have drawn the line at 18 July, which is a reason why it is appropriate to vote on amendment No. 29.
  1.15 am
  People will see in tomorrow's Hansard the useful answer from my right hon. Friend the Prime Minister. I asked
  "if Ministers at the time of the 1985 Budget intended to lay regulations to create liability for tax relating to a year for which the building societies Composite Rate Tax liability had been fully discharged; what estimate of the money involved was available to Ministers at the time; and what, and when, an estimate was first made available to Parliament."
  He replied in part:
  "No estimate was made at the time, of tax on interest accruing between the end of societies' accounting periods ending in 1985–86 and paid before the end of that tax year."
  I may be contradicted by those who were Ministers at the time and I would not want to challenge them, but I believe that if at the time of the 1985 Budget there had been a clear intention, it would have been stated, the sums would have been calculated, there would have been an estimate and the House would not be in this predicament.
  My final point is to warn the House about getting into the habit of letting double taxation or a tax advantage of £250 million go by, even after judges have said that a highly peculiar thing has happened, but presumed Parliament knew what it was doing at the time.
  I want to assert strongly that as a Member of the House in 1985 I did not have a clue that that was going on, although I had had friendly relations with the Woolwich building society ever since I was elected in 1975. If I did not know that then and if the conclusion to the 1986 debate was that the matter should be tested by the courts because it would not be fully fought through during the late stage of the Finance Bill here, what with the courts saying "No" and Parliament not saying "Yes", I am glad that at least one Member of this House, with support from various others during the past few weeks, has been pursuing this point.
  If ever Back-Bench Members, whether on the Government or Opposition side, start allowing Parliament to be treated as it undoubtedly was treated in 1985, what with the conclusions of the 1986 debate, which was not satisfactory, and this near hybrid approach to the results of judicial review, this Parliament might as well scrap its work and go home.
  Anyone can provide a Government. There are 160 countries with a Government. It is easy to be in government. It is far better to work in partnership with Parliament. That is why I am grateful to my hon. Friend the Economic Secretary and his officials who provided the information so that tonight at least we could have the debate that we should have had in 1985—six years ago.
  I hope that this saga will not continue for the next five years. The way to stop it is for the Government to get together with building societies and sort out an acceptable compromise. It may be rough justice to the Government, but they are dealing with only 1·5 per cent. of the income that they have had from building societies in the past seven years. It will put an unsatisfactory situation right.
  Mr. Bowen Wells: I shall be brief. This is a worrying matter which should concern the House greatly, first, because of the accusation of double taxation and, secondly, because of the retrospective nature

  163
  of the clause that the Government want to enact in the Bill. Therefore, together with my hon. Friend the Member for Eltham (Mr. Bottomley) and many others, I have been into the matter in some detail.
  I have put strongly to building societies that they should set out for the House and in their publicity exactly how they have been double taxed. I have asked them to provide a worked-out example showing where they have deducted tax once and then have had to pay another tax on the same sum to the Government. They have failed to reply and I do not believe that they can, otherwise they would have done so. I am inclined to believe the Government's contention that it is not double taxation. They are merely trying to collect the money that was deducted by the building societies for payment to the Inland Revenue to pay it over to the Revenue.
  Mr. Tim Devlin (Stockton, South): Will my hon. Friend give way?
  Mr. Wells: No, I will not.
  The only thing to which my hon. Friend the Economic Secretary should reply is the recently revealed information to which my hon. Friend the Member for Eltham referred about the building societies paying more money to the Revenue as a result of the calculation on an 11-month year, not a 12-month one. That is extremely worrying because it suggests that the clause has been wrongly administered. I hope that my hon. Friend the Minister will be able to satisfy the House that all he is trying to collect is that which the building societies have deducted from their members, which is due to the Inland Revenue.
  Mr. Devlin: The speech of my hon. Friend the Member for Hertford and Stortford (Mr. Wells) simply will not do. My hon. Friend has not even addressed the House of Lords judgment on the matter. The issue has been through the courts and examined by some of the best legal brains in the country. They have come to the conclusion that double taxation has occurred.
  It is not good enough to say that, because the building societies will not give a simple worked example, they do not have a case. It will not do for my hon. Friend the Minister to repeat what he has said in correspondence. He cannot, simply by assertion, say that there has not been double taxation.
  Mr. Maples: I think that I must be one of the few people who have read the House of Lords judgments—I read them all again this morning because I thought that they might be mentioned. If my hon. Friend the Member for Stockton, South (Mr. Devlin) can find for me in the House of Lords judgment where it is held to be double taxation, I shall be extremely interested. There is one reference to it in the leading judgment that states that the effect was
  "in a sense, to tax them twice."
  That judgment did not criticise the Court of Appeal that comprehensively overruled the court of first instance on that point.
  I dealt with this matter at considerable length in Committee and I do not intend to bore the House by going over it again. At the end of the Committee proceedings I believe that most members of the Committee found that they were convinced by, or at least reasonably happy with, the Government's position.
  164
  I should deal with a couple of issues raised in the debate. I am grateful to my hon. Friend the Member for Hertford and Stortford (Mr. Wells) for the points that he raised, and his criticism of the building societies is a telling one. No one has been able to show me any pound of income that is being taxed twice.
  Mr. Peter Bottomley: What about the 11 -month year?
  Mr. Maples: In 1986–87 there were four quarters. The period taxed was from 1 March 1986 to 28 February 1987. Therefore, it was a 12-month period, although it did not coincide with the tax year. It started a month earlier and finished a month earlier, but there were four quarterly payments in that year. My hon. Friend the Member for Eltham (Mr. Bottomley) is not right to say that the figure of £76 million less revenue that I gave was not an accurate figure because 11 months only had been taken into account. Four full quarters were taken into account. Even though they did not coincide with the tax year, four quarterly payments were made during that year. As a result, as we said in 1985, no additional revenue was generated as a result of the proposal—£76 million less was collected.
  My hon. Friend the Member for Eltham has tried to make a lot of the House not being told what was happening in 1985. As I have said to my hon. Friend in correspondence, there were clear minutes of meetings before the Budget between the then Economic Secretary and members of the Building Societies Association. From those minutes it is perfectly clear what was intended.
  In view of the furore that has developed over that matter this year, I am surprised that none of those building societies briefed a Member of Parliament like my hon. Friend the Member for Eltham. They could not have briefed him then because he was a member of the Government who passed the proposals, so I suppose that they would have had to have briefed some other Member of Parliament. I am surprised that they did not do so because they were aware of what would happen.
  My hon. Friend the Member for Eltham suggests that clause 52 is not necessary because the general law could simply be applied. There is considerable doubt about that. The matter has been raised in the past and was not first raised by the Leeds building society the other day. It would rely on the defence that money paid under a mistake of law cannot be reclaimed. That would turn on the details of documentary evidence which, for arbitrary reasons, might differ according to the case. It is better to set the matter to rest by enacting clause 52.
  The final point that my hon. Friend the Member for Eltham made was that there was a difference between a tax appeal and a judicial review. Clearly, they are different procedures but it is difficult to see the substantive difference in this case.
  Mr. Devlin: Will my hon. Friend give way?
  Mr. Maples: Let me deal with that point.
  Previously, a taxpayer may have won a case and the Government would have then changed the law. For example, in the Padmore case the Inland Revenue sued Mr. Padmore for some tax that he declined to pay on the ground that he was not entitled to pay it. Mr. Padmore won the case, but that is not how the Woolwich building society wanted to behave. It did not want to refuse to pay the tax. Instead, it paid the tax and had an explicit

  165
  agreement with the Revenue that it would challenge it by a process of judicial review and that, if it won, the Revenue would refund the tax. No other building society made that agreement. It would have been open to them to bring judicial review proceedings of their own and have those joined with the proceedings of the Woolwich, or to make an agreement with the Revenue that they would pay under protest and would get a refund of the tax if the Woolwich won its case. That is what happened in the Padmore case. Three other taxpayers made an agreement with the Revenue that they would be bound by the decision in that case. They benefited from the judgment, as did Mr. Padmore, whereas the law was changed for everyone else. Therefore, we are not departing from a fairly standard practice.
  Mr. Devlin: Will my hon. Friend give way?
  Mr. Maples: I should just like to finish the point.
  It may interest the House to know that, when the first tax payments for that period were made, the Woolwich and two or three other small building societies paid under protest. Only the Woolwich said that it would contest the case and it was as a result of that that this agreement was made. No other building society made those arrangements or paid under protest.
  The building societies that have been at the forefront of some of the arguments that we are debating did not pay under protest or make any protest until after the Woolwich had won its High Court case, so I did not have much sympathy for those other societies. It seems reasonable that the Woolwich should be allowed to have its tax refunded because it won the case, but it is inconsistent with the practice that this Government and many previous Governments have adopted. Where the law has been held by the court not to be what it was thought to be, the taxpayer involved in that case benefits from that decision, but it is proper retrospectively to amend the law to catch everyone else. That is what we are doing in this case.
  Mr. Devlin: In English law, a judicial review is and always has been a statement of public law. Any other person is entitled to rely on that statement. My hon. Friend the Minister is wrong to say that there is no distinction between a tax decision, which is the arbitration in a particular tax case, and a case of public law, which a statement that any other taxpayer, individual member of the public or corporation may fairly rely upon.
  Mr. Maples: When the law is decided by the Court of Appeal or the House of Lords it is exactly the same, whether it is the result of a judicial review proceeding or a case brought by the Revenue against a taxpayer. Although the judicial review has existed for a long time, it is a proceeding that has been developed in the past few years. It has been used largely in connection with administrative rather than tax laws.
  I have explained why the case was dealt with by a judicial review. It was because the Woolwich did not want to litigate the matter by refusing to pay the tax and then invite the Revenue to sue it. I understand why it did not want to behave in that way. One cannot argue that the law is different because it was decided as a result of a judicial review proceeding rather than any other way.
  1.30 am
  Mr. Bottomley: My hon. Friend mentioned an agreement made with the Woolwich to accept the result of the judicial review case. Did my hon. Friend mean to say that there was a formal agreement so that if the Woolwich won the case in the House of Lords it could keep the money?
  Mr. Maples: My understanding is that the Woolwich paid the original tax owed for the gap period under protest and made an agreement with the Inland Revenue that the Woolwich would take the case to litigation and, if it won, the Revenue would refund the tax to it. There was an agreement to that effect, and no other building society made a similar agreement, although it would have been open to it to do so.
  In the circumstances, unless there is any particular point that any hon. Member wishes me to develop on general aspects, I shall not continue. I invite the House to reflect on the amendments as they would allow societies other than the Woolwich to take advantage of the Woolwich judgment.
  1.30 am
  Mr. Bottomley: The simplest way to sum up the debate, which was valuable, but would have been better if it had taken place in 1985, is to refer to what Sir Nicolas Browne-Wilkinson said at the Court of Appeal. He said:
  "It is unnecessary to consider in detail the judge's"—
  Mr. Justice Nolan's
  "reasons for rejecting the Revenue's argument since, in this court,"—
  the Court of Appeal—
  "the Revenue has reversed its position."
  The argument that the Revenue won in the Court of Appeal was exactly the opposite of the argument that it had put in the High Court.
  It seems that if the Revenue is allowed to change its argument totally, and argue in the Court of Appeal that a building society was not accounting for the tax for building society members, the House should be able, not to change its argument, but to stick to the following two principles. The first is that one should not distinguish between the people affected by an application for a judicial review, especially when the Leeds was explicitly referred to in the affidavit proposed by the Woolwich—the two societies shared lawyers. I could not hear a lawyer telling the Leeds or any other building society to go to the expense of carrying out parallel judicial review proceedings. I think that such an occurrence was unprecedented—my hon. Friend the Minister may tell me that I am wrong.
  Secondly, in the debate on the Floor of the House on the day before the cut-off debate in 1986, the Leeds was extensively referred to. It was twice assumed in that debate that the Leeds had commenced proceedings. It seems that it is wrong for the Treasury to come forward with a new amendment at a late stage of a second Finance Bill one year after the first to change the law, especially as it is now becoming clearer that those building societies at the year end in December gained from the provisions. The House should regard that as unsatisfactory.
  My reason for calling for a vote on amendment No. 29 is not necessarily to win. I have not tried to organise a gang to defeat the Government, because I think that the Government should change their mind and acknowledge that the probing has led to the exposure of an

  167
  unsatisfactory position. In subsequent judicial proceedings, it should be possible for the High Court, the Court of Appeal or the House of Lords to understand that the House knew nothing of the implications of the affair in 1985, even though the Revenue and some building society officials may have done. Hon. Members are supposed to know what they are doing. Some of the judgments in the judicial review show that the judges had to decide the law as written by the House, and could not look behind it to see what hon. Members had in their minds.
  Mr. Devlin: Would it not have been a great help to the workings of the House tonight if the Attorney-General had come to give us a statement of the law as it stands on judicial reviews? My hon. Friend the Minister, while well-meaning, is totally wrong.
  Mr. Bottomley: I do not want to suggest that my hon. Friend the Economic Secretary is wrong on anything. He has a hard enough job anyway and has been put to some test in this debate and others. He has done better than any other Minister could have done, but I still believe that the Government are defending an unsatisfactory position.
  Therefore, it is with great reluctance that I shall call for a vote on amendment No. 29, not amendment No. 45.
  Amendment negatived.
  Amendment proposed: No. 29, in page 36, line 31, leave out from 'society' to 'this' in line 32, and insert—

  (a) which commenced proceedings to challenge the validity of the regulations before 18th July 1986, or

  (b) which, after 18th July 1986 but before 19th March 1991, commenced proceedings for the recovery of money paid by it, being proceedings taken as a result of the outcome of earlier proceedings of the kind to which paragraph (a) of this subsection relates, or

  (c) which, after 18th July 1986 but before 19th March 1991, made any payment as provided for by the regulations, and which, in relation to such payment, gave written notice that it disputed the validity of the regulations.'.—[Mr. Peter Bottomley]

  Question put, That the amendment be made:—
  The House divided: Ayes 6, Noes 119.

  Division No. 211]

  [1.34 am

  AYES

  Cryer, Bob

  Wallace, James

  Maxwell-Hyslop, Robin

  Paisley, Rev Ian

  Tellers for the Ayes:

  Robinson, Peter (Belfast E)

  Mr. Peter Bottomley and Mr. David Trimble

  Skinner, Dennis

  NOES

  Alison, Rt Hon Michael

  Chapman, Sydney

  Amess, David

  Chope, Christopher

  Amos, Alan

  Colvin, Michael

  Arbuthnot, James

  Coombs, Anthony (Wyre F'rest)

  Arnold, Jacques (Gravesham)

  Coombs, Simon (Swindon)

  Baker, Rt Hon K. (Mole Valley)

  Couchman, James

  Baker, Nicholas (Dorset N)

  Cran, James

  Bennett, Nicholas (Pembroke)

  Currie, Mrs Edwina

  Bevan, David Gilroy

  Davis, David (Boothferry)

  Boscawen, Hon Robert

  Day, Stephen

  Boswell, Tim

  Douglas-Hamilton, Lord James

  Bowis, John

  Durant, Sir Anthony

  Brandon-Bravo, Martin

  Emery, Sir Peter

  Brazier, Julian

  Fallon, Michael

  Bright, Graham

  Forsyth, Michael (Stirling)

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

  Franks, Cecil

  Burns, Simon

  Freeman, Roger

  Butterfill, John

  French, Douglas

  Carrington, Matthew

  Gale, Roger

  Cash, William

  Garel-Jones, Tristan

  168

  Goodhart, Sir Philip

  Neubert, Sir Michael

  Goodlad, Alastair

  Nicholls, Patrick

  Goodson-Wickes, Dr Charles

  Nicholson, David (Taunton)

  Greenway, John (Ryedale)

  Norris, Steve

  Gregory, Conal

  Oppenheim, Phillip

  Ground, Patrick

  Paice, James

  Hague, William

  Patnick, Irvine

  Hamilton, Rt Hon Archie

  Peacock, Mrs Elizabeth

  Hamilton, Neil (Tatton)

  Porter, David (Waveney)

  Hanley, Jeremy

  Riddick, Graham

  Hargreaves, Ken (Hyndburn)

  Roberts, Rt Hon Sir Wyn

  Harris, David

  Rowe, Andrew

  Hayes, Jerry

  Ryder, Rt Hon Richard

  Hicks, Mrs Maureen (Wolv' NE)

  Sackville, Hon Tom

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

  Sayeed, Jonathan

  Howarth, G. (Cannock & B'wd)

  Shaw, David (Dover)

  Hughes, Robert G. (Harrow W)

  Shephard, Mrs G. (Norfolk SW)

  Irvine, Michael

  Shepherd, Colin (Hereford)

  Jackson, Robert

  Stanley, Rt Hon Sir John

  Janman, Tim

  Stern, Michael

  Jones, Robert B (Herts W)

  Stevens, Lewis

  King, Roger (B'ham N'thfield)

  Stewart, Andy (Sherwood)

  Kirkhope, Timothy

  Summerson, Hugo

  Knapman, Roger

  Taylor, Ian (Esher)

  Knight, Greg (Derby North)

  Thorne, Neil

  Knight, Dame Jill (Edgbaston)

  Thurnham, Peter

  Lawrence, Ivan

  Townsend, Cyril D. (B'heath)

  Lennox-Boyd, Hon Mark

  Twinn, Dr Ian

  Lord, Michael

  Viggers, Peter

  Maclean, David

  Waller, Gary

  Malins, Humfrey

  Wardle, Charles (Bexhill)

  Mans, Keith

  Watts, John

  Maples, John

  Wells, Bowen

  Maude, Hon Francis

  Wheeler, Sir John

  Mawhinney, Dr Brian

  Widdecombe, Ann

  Mellor, Rt Hon David

  Wolfson, Mark

  Mills, Iain

  Wood, Timothy

  Mitchell, Andrew (Gedling)

  Moate, Roger

  Tellers for the Noes:

  Moss, Malcolm

  Mr. David Lightbown and Mr. John M. Taylor.

  Moynihan, Hon Colin

  Needham, Richard

  Question accordingly negatived.
  1.45 am

Clause 72

  DEFINITION OF "NORMAL COMMERCIAL LOAN"
  Amendment made: No. 23, in page 52, line 39, leave out from 'effect' to end of line and insert—

  (a) so far as concerns the application of section 64(2) for the purposes of section 136A of the Capital Gains Tax Act 1979, in relation to claims on or after 1st April 1991, and

  (b) so far as concerns any other application of section 64(2), in relation to disposals on or after that date.'.—[Mr. Maples.]

Clause 84

  NON-RESIDENT SETTLEMENTS WHERE SETTLOR HAS AN INTEREST
  Amendment made: No. 1, in page 60, leave out lines 31 to 34 and insert—
  '(a) chargeable gains, whether of one amount or of two or more amounts, are treated as accruing by virtue of paragraph 2 of Schedule 16 to the Finance Act 1991 (gains of non-resident settlements chargeable on settlor), and'.—[Mr. Maude.]

Clause 93

  CORPORATE BONDS
  Amendments made: No. 24, in page 63, line 14, leave out subsection (1) and insert—
  '(1) Section 64 of the Finance Act 1984 shall be amended as follows.'.
  No. 25, in line 29, at end insert—
  '(4) This section shall have effect—

  (a) so far as concerns the application of section 64 for the purposes of section 136A of the Capital Gains Tax Act 1979, in relation to claims on or after 19th March 1991, and

  (b) so far as concerns any other application of section 64, in relation to disposals on or after that date (and, in relation to such disposals, shall be regarded as always having had effect).'.—[Mr. Maples.]

Clause 114

  POOLS PAYMENTS TO SUPPORT GAMES ETC.
  Mr. Denis Howell: I beg to move amendment No. 52, in page 79, line 34, after 'to', insert 'independently appointed'.
  I shall detain the House as briefly as possible at this hour, but there are one or two matters that should be raised. I am glad that the appropriate Minister is in his place, the Chief Secretary to the Treasury. The right hon. and learned Gentleman is well known to be much concerned about the health of the arts and of sport, as I am.
  I welcome the new trust proposal. I do not seek to oppose it or denigrate it. Indeed, the Government are worthy of great credit for having introduced it. It is the third trust to be established by means of reducing betting duty. One of the earlier developments was the establishment of the Football Trust, which might be regarded as the Howell trust, though it never is. I had some responsibility for implementing the scheme, having established it with the good co-operation of the Pools Promoters Association.
  The second trust might be described as the Major trust. The Prime Minister, when Chancellor of the Exchequer, properly reduced betting tax after the terrible disaster at Hillsborough to produce money to try to implement the recommendations of the Taylor report to improve safety at sports grounds.
  We now have a third trust for sport and the arts, which I suppose should bear the name of the Chancellor of the Exchequer. I welcome all the additional resources that are coming into sport. I think that everyone would agree that the Football Trust has done excellent work. It should be remembered that when it was established its objectives and its membership were properly agreed between the PPA and the appropriate Minister, which was me. That will not happen with the new trust which we shall establish under clause 114.
  It is important to establish the purpose of a trust and the independence of the trustees. That was never better illustrated than by the remarks of the Minister for Sport last week on the proposed super league that is to be controlled by the Football Association. As the House may know, the Minister for Sport said that the second of the trusts to which I have referred, the Major trust, was created to provide money for football teams in the football league or the Scottish football league. As I understand it,
  170
  the Minister said on "Question Time" last week—and I gather that he has repeated it in a statement—that if clubs left the football league the Major money would no longer be available to them. That is a statement of profound importance. I understand why the Minister made it, and it is right that he did so in order that no one should doubt that the trust was for a specific purpose and that if that purpose no longer existed because teams took themselves out of the football league they would lose that support from the Treasury.
  The trust established under clause 114 will, I understand, provide £40 million for sport and £20 million for the arts—all of which I welcome—as a result of a 2·5 per cent. reduction in betting duty. Although there is a reduction in betting duty, it will be taxpayers' money, as I am sure the Minister will agree and would like me to emphasise. When the concession was made, that was made clear at the time in public statements but not in the House. I believe that this is our first opportunity to discuss the issue.
  We are establishing a new trust with considerable sums of money from the public purse—£60 million in all—without, as far as I can see, any consultation or co-ordination with the Arts Council or the Sports Council. That is one of the main reasons why I have raised the issue. When I went to the Sports Council the other day before tabling the amendment, I discovered that not only did it not know what policy the new trust would implement, but that it had been told by Treasury officials—I hope that the Minister will deny this or put us right—that there would be no co-ordination between the new trust, with its £40 million to spend on sport, and the Sports Council and certainly no cross-membership between the Sport Council and the trust.
  That cannot be right. It would be ludicrous if there were no co-ordination between two separate trusts that provided public money—one created by the Bill and one a statutory body, the Sports Council. An organisation could apply for a grant to the Sports Council and be turned down—probably on good policy grounds—but could then make the same application to the independent trust. That would be nonsense. There must be a co-ordination of policy and strategy between the Arts Council and the Sports Council on the one hand and the new trust on the other. I accept that the new trust must have some financial independence, but it must also have regard to the existence and policies of the other statutory bodies which, in large measure, will be carrying out Government policy.
  My second concern is the appointment of trustees, which is covered by the amendment. I mentioned the Minister's intervention—a very proper intervention—in the affairs of the trust set up to deal with the Hillsborough disaster. I appears that the trustees will be chosen entirely by the Pools Promoters Association, which is currently inviting nominations—which suggests that the Government have no input. It cannot be right that the members of a so-called independent trust that will get all its money from the public purse should be nominated by the PPA. I would prefer the trustees to be appointed by organisations specified in the Bill or by the Secretary of State. Persons wanting to nominate trustees would know how to approach the matter and that their candidates would be objectively assessed.
  I am sure that no right hon. or hon. Member would think it correct for bookmakers or the tote to apply for membership of the Horserace Betting Levy Board, yet that

  171
  is a relevant comparison to draw to the attention of the Chief Secretary. There has been no public or parliamentary debate on that issue, but as taxpayers' money will be involved, perhaps there could be a requirement that the trust reports annually to Parliament. We could then review its policy in respect of both the arts and sport.
  By and large, the Arts Council provides money for revenue purposes, not capital, whereas the reverse is true in the case of the Sports Council: it provides funds for capital requirements, not revenue. The two organisations' policies are diametrically opposed, but they must relate in future to the new trust.
  I hope that the Treasury does not view the new trust as a substitute for a national lottery. This is not the hour to debate the merits of a lottery, but some of our friends in the Pools Promoters Association—which co-operates with the present Government as it did with me in providing money for sport and now for the arts—feel that the reason for the Government's enthusiasm is that they view the trust as a substitute for a national lottery. I believe that the two can run in parallel. The PPA's members, with their experience and technical ability, might be the best people to run a national lottery. In any event, I know that such a lottery has the approval of some Ministers, particularly the Minister for the Arts, who contributed an interesting article to the Birmingham Post last week.
  In general, I support the trust, but I hope that the Chief Secretary will be able to provide further information, and set our minds at rest, in respect of some of the points that I have raised.
  Mr. Mellor: I am grateful to the right hon. Member for Birmingham, Small Heath (Mr. Howell) for raising this subject, and for making a good many points very succinctly. I applaud all that he has done for sport over the years, and appreciate his interest and involvement.
  2 am
  I am also grateful for the warm welcome that the right hon. Gentleman has given the foundation, which is indeed an exciting venture. For us to have £60 million a year to disburse on sport and the arts represents a major development, and I am sure that we all wish the foundation well.
  It is important to recognise that some £20 million of that £60 million is revenue forgone from the reduction in pools betting duty; the rest reflects changes in the stake money, and is a contribution from the Pools Promoters Association. It was apparent to the Government that both sport and the arts needed more funds. Various fiscal changes were suggested in relation to sport, particularly youth sport, but it was extremely difficult to bring them about without distorting the tax system. The foundation seemed a good alternative.
  The right hon. Gentleman mentioned relationships with the Sports Council and the Arts Council. I hope that there will be rapport between the various organisations. However, the fact that an arts organisation does not qualify for support from the Arts Council does not mean that it is not worthy of support. Although the Arts Council's funds have been increased, it always has to establish priorities. I recall my involvement with the National Youth Orchestra, which lost its grant because the Arts Council felt obliged to support professional rather
  172
  than amateur youth activities. The fact that the foundation will provide an alternative source of revenue need not prevent sensible understandings from being reached between the various bodies.
  The foundation is private. It is not intended to be a public body, for the reasons that I have already given—although there will be a link with the Department of Education and Science, and, in particular, the Minister for the Arts. A representative of the Department will sit in on trust meetings.
  I shall not go into detail about the appointments. Let me tell the right hon. Member for Small Heath, however, that his efforts in regard to the Football Trust were not in vain. Many of the arrangements made for the trust are mirrored in the arrangements being made for the foundation, and the appointments broadly follow the model of the new Football Trust set up last year. There will be 11 trustees, four of them nominated by the individual pools companies and seven nominated by the Pools Promoters Association. The Minister for Sport will be consulted on the appointment of the chairman.
  Because—as the right hon. Gentleman said—some of the foundation's resources come from duty forgone, we shall want to be satisfied that the trusteees are fit and proper persons before agreeing that the cut in betting duty should go ahead. When we know who the trustees are, we shall know whether the foundation can command support and confidence. I believe that it can and will, and that it will be none the worse for being independent of Government, in at least as crucial a way as the right hon. Gentleman advocated.
  Quite plainly, the Pools Promoters Association understands that the trustees must be fit and proper persons in order to merit the reduction in betting duty. I hope that we shall be able to make a more substantive announcement about the foundation before the recess so that the foundation can get down to work at the beginning of the next football season. In the meantime, if the right hon. Gentleman has any further suggestions, I would be pleased to consider them.
  Mr. Howell: I am grateful to the Minister, but I cannot understand why the further announcement, which I welcome, is to made before the new football season because I understand that the trust cannot spend any of its money on football. I understand that horse racing and football were excluded as proper objectives for the new trust.
  Mr. Mellor: That is not so. I appreciate that many hon. Members feel that we could be discussing this at another time and in another place—[HON. MEMBERS: "Hear, hear"] I am glad that at least something that I have said has met with agreement. However, league football is excluded because it is already the beneficiary of the 2·5 per cent. reduction. That does not prevent amateur or non-league football being supported, and that is right.
  Mr. Howell: That may be, but the Chief Secretary to the Treasury's comment about the beginning of the football season was odd because the proposal does not apply to professional football. The money comes from pools betting that operates for 12 months and not just for the football season.
  I will get on with it as I do not want to play extra time. In welcoming the Chief Secretary's comments, one of the difficulties is that there have been no public statements

  173
  about how the trust is to be constructed. The issue should be debated publicly if four of the trustees are to be appointed by the pools companies and seven from the Pools Promoters Association. They seem to be the same people wearing different hats.
  I hope that there will be further statements so that we can discuss the details. Having expressed my satisfaction with this short debate, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Schedule 10

  BUILDING SOCIETIES: QUALIFYING SHARES
  Amendment made: No. 26, in page 123, line 33, at end insert—
  '(5) This paragraph shall not have effect in relation to the application of section 64 for the purposes of section 136A of the Capital Gains Tax Act 1979.'.—[Mr. Maude.]

Schedule 13

  MANUFACTURED DIVIDENDS AND INTEREST
  Amendments made: No. 34, in page 131, line 25, at end insert—
  "'recognised clearing house" means a recognised clearing house within the meaning of the Financial Services Act 1986;'.
  No. 35, in page 131, line 27, leave out
  'the Financial Services Act 1986' and insert 'that Act'.
  No. 36, in page 131, line 30, after 'payment", insert
  'subject to any regulations under sub-paragraph (2) below'.
  No. 37, in page 131, line 34, leave out from beginning to end of line 45 and insert—
  '(b) any manufactured dividend or manufactured interest not falling within paragraph (a) above which is paid in respect of United Kingdom securities or United Kingdom equities by a person other than one who is—

  (i) a market maker in relation to United Kingdom securities or United Kingdom equities of the kind in question, or

  (ii) in such circumstances as may be prescribed, a member, of a prescribed class or description, of a prescribed recognised investment exchange, or

  (iii) in such circumstances as may be prescribed, a prescribed recognised clearing house,

  and which is so paid otherwise than in connection with an approved stock lending arrangement;'.
  No. 38, in page 140, line 51, leave out 'and' and insert—
  '"recognised investment exchange" means a recognised investment exchange within the meaning of the Finacial Services Act 1986"; and'.
  No. 39, in page 141, line 2, after 'manufacturer', insert '(a)'.
  No. 33, in page 141, line 4, after 'Kingdom', insert 'or
  (b) is a member, of a prescribed class or description, of a prescribed recognised investment exchange,'.
  No. 40, in page 141, line 8, leave out from le to 'may' in line 9 and insert—
  '(7B) Without prejudice to the generality of subsection (7A) above, dividend manufacturing regulations made by virtue of that subsection'.
  No. 41, in page 141, line 16, leave out from 'paid' to 'for' in line 17 and insert—
  'and, without prejudice to the generality of paragraph (c) above, any regulations made for the purpose specified in that paragraph may include provision, in a case falling within subsection (7A)(a) above,'.—[Mr. Maude.]

Schedule 15
  RELIEF FOR COMPANY TRADING LOSSES
  Amendment made: No. 27, in page 154, line 16, leave out '1st April' and insert '14th June'.—[Mr. Maude.]
Schedule 16

  SETTLEMENTS: SETTLORS
  Amendments made: No. 2, in page 158, line 11, at end insert
  'but nothing in the preceding provisions of this sub-paragraph shall prevent deductions being made in respect of losses accruing in a year of assessment in which the conditions mentioned in paragraph 1(1)(a) to (d) and (f) above are fulfilled as regards the settlement.'.
  No. 3, in page 159, line 7, leave out sub-paragraph (4).
  No. 4, in page 159, line 32, at end insert—
  '(8) In sub-paragraph (3) above "child" includes a stepchild.
  (9) For the purposes of sub-paragraph (3) above the question whether a company is controlled by a person or persons shall be construed in accordance with section 416 of the Taxes Act 1988; but in deciding that question for those purposes no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.
  (10) For the purposes of sub-paragraph (3) above the question whether one company is associated with another shall be construed in accordance with section 416 of the Taxes Act 1988; but where in deciding that question for those purposes it falls to be decided whether a company is controlled by a person or persons, no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.
  (11) In sub-paragraphs (9) and (10) above "participator" has the meaning given by section 417(1) of the Taxes Act 1988.'.
  No. 5, in page 161, line 39, leave out '(a)'.
  No. 6, in page 161, line 41, at end insert
  'but in deciding that question for those purposes no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.'
  No. 7, in page 161, leave out line 42 and insert—
  '(9A) In this paragraph "participator" has the meaning given by section 417(1) of the Taxes Act 1988.'.
  No. 8, in page 162, line 9, leave out
  'by way of a bargain made'
  and insert
  'under a transaction entered into'.
  No. 9, in page 162, line 11 at end insert
  'but if the settlement's expenses relating to administration and taxation for a year of assessment exceed its income for the year, property or income provided towards meeting those expenses shall be ignored for the purposes of this condition if the value of the property or income so provided does not exceed the difference between the amount of those expenses and the amount of the settlement's income for the year.'.—[Mr. Maude.]
  Mr. William Cash: I beg to move amendment No. 49, in page 162, line 12 at end insert
  'and
  (c) otherwise than in respect of the expenses of the trustees'.
  The amendment complements Government amendment No. 9, but it takes it a little further. It comes from consultations between a number of tax practitioners, one of whom is operating as a consultant. The problem with the Government amendment is that it provides only a

  175
  partial solution to dealing with settlement expenses. In a nutshell, the capital-related expenses are paid out of income. The amendment will amount to an addition to the settlement by a life tenant, which will bring the trust within the new rules covered by the schedule.
  Mr. Maude: We have accepted that there is a case for allowing the expenses properly chargeable for an existing trust to be met without bringing it within the new provisions. Government amendment No. 9, with which we have just dealt, covers the situation. I cannot accept amendment No. 49, essentially on the basis that it goes wider than is necessary or desirable for the purpose.
  Mr. Cash: I beg to ask leave to withdraw the amendment.
  Amendment by leave, withdrawn.
  Amendments made: No. 10, in page 162, line 27, leave out
  'at matters before that date) might be expected to enjoy'
  and insert
  'only at the terms of the settlement immediately before 19th March 1991) would be capable of enjoying'.
  No. 11, in page 162, line 39, leave out sub-paragraph (8) and insert—
  '(8) In sub-paragraph (7) above "child" includes a stepchild.
  (9) For the purposes of sub-paragraph (7) above the question whether a company is controlled by a person or persons shall be construed in accordance with section 416 of the Taxes Act 1988; but in deciding that question for those purposes no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.
  (10) For the purposes of sub-paragraph (7) above the question whether one company is associated with another shall be construed in accordance with section 416 of the Taxes Act 1988; but where in deciding that question for those purposes it falls to be decided whether a company is controlled by a person or persons, no rights or powers of (or attributed to) an associate or associates of a person shall be attributed to him under section 416(6) if he is not a participator in the company.
  (11) In sub-paragraphs (9) and (10) above "participator" has the meaning given by section 417(1) of the Taxes Act 1988.
  No. 12, in page 163, line 4, leave out
  'by way of a bargain made'
  and insert
  'under a transaction entered into'.
  No. 13, in page 164, line 36, leave out
  'any provision other than the paragraph concerned'
  and insert
  'the paragraph concerned or of any other provision'.
  No. 14, in page 164, line 44, leave out
  'any provision other than the paragraph concerned'
  and insert
  'the paragraph concerned or of any other provision'.—[Mr. Maude.]

Schedule 18

  SETTLEMENTS: BENEFICIARIES (MISCELLANEOUS)
  Amendment made: No. 15, in page 172, line 37, leave out
  'by way of a bargain made'
  and insert
  'under a transaction entered into'.—[Mr. Maude.]
  Bill to be read the Third time this day.

  Fair Employment (Northern Ireland)
  2.11 am
  The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Richard Needham): I beg to move,
  That the draft Fair Employment (Amendment)(Northern Ireland) Order 1991, which was laid before this House on 4th July, be approved.
  Fair employment is a most important issue in Northern Ireland. It is of concern to everyone and it affects relationships between and within both sides of the community. The order addresses one of its key aspects—the equitable, prompt and effective processing of individual complaints of alleged discrimination.
  It may be helpful to the House if I outline briefly the background to the order and its consequential draft monitoring regulations, copies of which have been provided to assist hon. Members. When the Fair Employment (Northern Ireland) Act 1989 was passing through Parliament, the Government undertook to watch how the new legislation worked out in practice and to review its operation.
  The Fair Employment Commission's monitoring report for 1990 is encouraging. For one thing, statutory monitoring has established facts—hard and concrete evidence—about the actual employment situation. In doing so, it has helped to dispel the myths, prejudices and misinformation that so often surround the topic. It has shed much-needed light on the reality of the overall situation. That is a most significant contribution to objective debate on the subject, as is the gathering of evidence that shows that there are disadvantages and under-representation in both communities.
  Statutory monitoring has also revealed some very positive features, such as the almost equal representation of both communities in higher professional posts such as teachers, lawyers and doctors. It has revealed the small differential between Protestants and Catholics in the broad managerial and technical group of occupations. It suggests that Northern Ireland is moving far closer to fair employment in aggregate terms than has been generally believed.
  Of course, we are not complacent. Catholic under-representation in such industrial sectors as engineering, banking, finance and insurance, and in the skilled manual, clerical and sales occupations, is not acceptable. The same applies to Protestant under-representation in certain management and professional occupations. But there is no doubt that the first statutory returns show a more positive, and certainly a far more complex and sophisticated, picture than the simplistic crude and misleading caricatures painted by the MacBride proponents. So, overall, there is encouraging evidence that the 1989 Act is already helping us to move in the right direction. Progress is being made and areas for further improvement are being identified and quantified so that they can be selected for future action.
  However, the House will be aware that in October 1990, a decision of the fair employment tribunal disclosed a serious problem in relation to the operation of a single but important aspect of the Act. It relates to the handling of individual discrimination cases. The problem is that the protection afforded by section 30 of the 1989 Act to information used for monitoring purposes, or from which the community background of an employee or job

  177
  applicant could be deduced, is too wide. Individuals are unable to pursue cases and employers are unable to bring forward evidence to answer complaints.
  When we canvassed possible solutions in a consultative paper in November 1990, views were divided. On the one hand, there were those who wanted total repeal of section 30 and on the other there were those who supported amendment to allow disclosure of monitoring information, but only in very carefully defined and limited circumstances.
  Total repeal would be clear cut, but it would mean removing the specific offence of releasing information obtained during monitoring. There is considerable concern that such information should remain confidential except in very limited circumstances. At the same time, it is not easy to define all the circumstances in which such confidential information should be disclosed, while ensuring that the fair employment tribunal is not overburdened with cases about disclosure.
  After careful consideration of the comments received on their consultative paper, the Government proposed a further approach. That approach set out a reasonable compromise between the requirements of disclosure and confidentiality.
  The main elements of the Government's approach are repealing section 30 of the 1989 Act and adding to section 28 a new provision which will provide for the confidentiality of monitoring information through regulations. The regulations will preserve the confidentiality of monitoring information obtained under the three principal methods of monitoring. They will remove confidentiality from information obtained under the residuary method of monitoring. They will permit the disclosure of confidential information in limited circumstances, for example, to the Fair Employment Commission, the Labour Relations Agency, the Equal Opportunities Commission, the fair employment tribunal, the courts and industrial tribunals.
  The comments received on the Government's draft order and regulations, and the debate on them in the Northern Ireland Committee, showed that all parties appreciated the need to ensure that individual cases—330 are currently pending—could proceed quickly. But it was clear that the basic division remained between those favouring total repeal of section 30 and those favouring limited disclosure.
  As a result of that Northern Ireland Committee debate, the Government were persuaded of the need to amend our draft order in a number of ways. It now ensures that, neither the Fair Employment Commission nor the Equal Opportunities Commission are unnecessarily limited in their ability to seek information from monitoring returns—nor does the order preclude disclosure to consultants or trade union officials; it contains appropriate retrospective provisions to permit the processing of cases affected by the tribunal's ruling last October; and it corrects an omission from the 1989 Act about time limits for bringing a complaint where an act of discrimination has taken place over a period.
  The order addresses two key objectives: first, the need for individual complainants to have ready access to the relevant information necessary to pursue their cases; and, secondly, the need for all who hold protected information to have a clear appreciation of what information is
  178
  protected by the legislation and what is not, and to have the necesssary statutory backing for the release of confidential information under the exceptions provided in the order and regulations.
  I am very conscious of the particular sensitivities aroused in Northern Ireland by permitting the disclosure of information on perceived religious belief or community affiliation, or on the names and addresses of specific individuals. I recognise those sensitivities and know that they can be considerably heightened by the terrorist activities in both communities. But it is important to maintain a sense of proportion. The reality is that in the vast majority of cases the only information in which the commission or tribunal are likely to have an interest is that which discloses the community affiliation of an individual. It is most unlikely that, in most cases, more detailed information about, for example, address, occupation, or club membership will be requested. Even in the most unlikely event of its being requested—and this is the important point—the order does not require or compel the release of such information. So it is important not to overegg the sensitivity issue; and it is equally important to keep in mind that the order is permissive. It does not insist on the release of information whether sensitive or
  Ultimately, it is for the fair employment tribunal to determine what information it is reasonable for an employer to provide or withhold, in response to a request from a complainant. The tribunal has absolute legal discretion in this matter and the Fair Employment Commission, without in any way compromising the tribunal's discretion, has said that it stands ready to provide employers with guidance on how they should respond to requests for information in individual cases. It is prepared to advise employers on the content, nature and timing of the release of information. So I suggest that all employers make use of it when they are concerned about how best to respond to a particular request.
  Turning to points of detail, it may be useful to the House to focus on the primary reason for this amending order and to point out clearly what it does and does not do. At present the confidentiality provisions under section 30 of the 1989 Act are so wide that individual cases cannot proceed and employers cannot bring forward information to defend themselves. As a result, no information likely to disclose community affiliation can be divulged. Clearly, this is unacceptable to both complainants and employers. So the order effectively breaks this logjam on individual cases taken by members of both communities and it enables employers to know clearly what information is, and what is not, covered by confidentiality.
  It is important to emphasise that the amending order does not require the divulging of confidential information about Royal Ulster Constabulary or Ulster Defence Regiment members, for example, or indeed any other individuals. It does not give complainants or the FEC the right to demand specific information and to have this supplied. Complainants and the Fair Employment Commission can, as at present, request information, but employers are still not obliged or required to provide it.
  So at present, the release of requested information remains voluntary. Criminal sanctions also remain to protect confidentiality. The amendment focuses confidentiality on information supplied by one of the three principal methods of monitoring and on the determination by the employer of community affiliation.

  179
  It follows that if a complainant asks for any information including the name and address of an individual who happens to be a member of the RUC or UDR, the employer could still refuse to provide it; an employer is not obliged to provide any information in response to a question from a complainant or the Fair Employment Commission. So an employer could still, as at present, refuse to provide that information.
  The Government are determined to enforce the best practice of fair employment in Northern Ireland on behalf of both communities. Too many firms in Northern Ireland are still either almost totally Protestant or almost totally Catholic—242 concerns employ more than 90 per cent. Protestants and 142 more than 90 per cent. Catholics. This shows the need for better integration of work forces in Northern Ireland. It shows the need to continue to provide equality of opportunity and fair employment for both Protestants and Catholics.
  By working more closely together—by playing on the same team within the work force—people get to know, trust and respect each other better. Residual suspicions and outdated myths about people from different communities and cultural traditions are challenged and eroded. This is what the Government's fair employment legislation aims to do. I hope that we can all agree that the better integration of the work force throughout Northern Ireland is good for not only fair employment but the economic, social and political well-being of the region.
  These objectives, particularly the fair employment and economic priorities, are linked. There must be substantial job creation and inward investment. Jobs for all requires jobs in the first place. That is what those who support the MacBride campaign tend to forget. The only political party in Northern Ireland that supports the MacBride campaign is Sinn Fein. And the House knows what the Sinn Fein policy on job creation amounts to in practice: the use of the bomb and the bullet to destroy jobs, threaten both the lives and the livelihoods of workers and to keep whole communities and families deprived of economic opportunity and hope.
  I am sure that all those with a genuine interest in equality of opportunity in Northern Ireland will wish to renew their call for increased investment and job creation in the region as an important complement to fair employment. This order is a further stage in the encouraging progress that has been made since the passage of the 1989 Act. It will enable the equitable, effective and expeditious processing of individual cases by the fair employment tribunal. I commend the draft order to the House.
  2.22 am
  Mr. Kevin McNamara: The order seeks to correct an error which was made when the Fair Employment (Northern Ireland) Bill was passed. It is an error in the important area of monitoring. In the past year the final responses of employers to the monitoring procedures have been obtained. I take issue with the Minister on what the monitoring has shown. It is argued that, because the monitoring returns show that Catholics and Protestants are employed in relation to their numbers in the population, there is no discrimination. That is profoundly misleading.
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  The monitoring returns do not tell us the respective proportions of Catholics and Protestants within the work force. They tell us the number of employees only in firms of 25 or more staff. They give no indication of the state of employees who work for fewer than 16 hours each week. They produce only aggregate results for multi-site employers. Therefore, the statistics perhaps require more careful examination than that suggested by the Minister.
  As long as large gaps remain in the statistics, there will be difficulty in ascertaining the true picture, especially as it applies to both communities, to people in part-time jobs and, above all, to female employees. Nevertheless, the final responses of employers to the monitoring requests have given us a basis on which we can work from year to year to build up a picture of what is happening in the work force.
  The Opposition welcome the fact that the Government have decided to address the problem of the Fair Employment (Northern Ireland) Act 1989 that was identified in the case of Pryce v. University of Ulster. Although, as we are amending a Westminster statute, we consider that such matters should usually properly be dealt with by public Bill procedure, we recognise the need for urgency in this case. The decision of the fair employment tribunal in the Pryce case was the only legally correct one, so no useful purpose would be served by any further delay in resolving the difficulty. The urgency of action on this issue is clear since the Pryce verdict has paralysed the operation of the fair employment tribunals and the industrial tribunals. We hope that the adoption of the order will lead to a rapid clearance in the backlog of the cases before the tribunals. We hope that the Government will facilitate the tribunals with all the assistance that they may consider necessary to achieve that objective.
  I should point out that the order does not follow the direct approach to the disclosure problem which the Opposition sought and which was originally requested by the Fair Employment Commission, the Equal Opportunities Commission and the Standing Advisory Commission on Human Rights. We all advocated the simple repeal of section 30 of the 1989 Act. The Government decided, for reasons that the Minister gave us, that they could not follow that particular road. We can hope, therefore, only that the order does not lead to further as yet unforeseen problems in the implementation of the legislation. Nevertheless, it would be ungracious not to commend the Government on their positive response to many of the suggestions and arguments advocated by the Opposition during Committee when we discussed the principles of the Bill. Many of them were part of the proposals of the various organisations to which I have already referred—SACHR, the Fair Employment Commission and the Equal Opportunities Commission.
  In particular, we welcome the Government's decision to allow full disclosure of the information to the tribunals. Similarly, the fact that the order will be retrospective is of great importance in ensuring access to justice. The definition of "recurrent discriminatory practices" at the last rather than the first instance of discrimination is also to be commended. We also recognise the Government's good sense in allowing for a disclosure to equal opportunities consultants, trade unions and other negotiators. Although we accept that the confidentiality of monitoring information on individuals must be protected, we do not believe—the Government also seem to accept

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  this—that such protection should be so inflexible as to subvert the purpose of the Fair Employment Acts. We welcome the fact that the Government have accepted that.
  The importance of the fair employment issue cannot be overestimated. I regret that its degree of importance has certainly not been reflected in the scheduling of this order for consideration by the House tonight in what might be called less than peak viewing period. The search for equality and justice is vital in the struggle to make Northern Ireland like any other part of these islands, and of Europe. The Opposition hope that we can put this unfortunate episode behind us and that the Pryce case is now history. We must get on with the task of establishing genuine equality of opportunity for all sections of the community. We hope that the order will now permit the effective implementation of fair employment legislation. In that hope, should the order be challenged, the Opposition will support it in the Lobby.
  2.28 am
  Rev. Ian Paisley: On behalf of the people of Northern Ireland, I should like to make the strongest possible protest in the House at the way in which the legislation has been introduced. First, we had a charade in Committee when neither the Whips nor the Opposition evidently understood that if the matter was referred to the House a gag would be put on all further debate in the Committee. Therefore, it was only possible for two Members representing Northern Ireland to make contributions in Committee.
  We are now considering the matter at this ridiculous hour of the morning. The legislation is important: it covers new ground, it is not applicable to any other part of the United Kingdom, and it is retrospective. Information gathered under the Fair Employment (Northern Ireland) Act 1989 which was considered confidential is now to be taken out of the arena of confidentiality and made public in certain circumstances. We are called at this late hour to debate the matter. If this is the way in which Ministers responsible for Northern Ireland think that they should proceed with such issues, it is nothing less than a disgrace.
  The 1989 Act and the order flow from the Anglo-Irish Agreement and statements made in Dublin. The Government in Dublin have made strong representations to the Secretary of State for Northern Ireland that legislation should be introduced immediately to rectify the so called grave and terrible discrimination against Roman Catholic work people in Northern Ireland. Those accusations are not true. It would do hon. Members good to study the people who are making such accusations.
  I read with great interest a recent article by Noel Browne, a veteran figure of left-wing politics in the Republic, who was Minister for Health between 1948 and 1951. He wrote of the Irish Republic:
  "It is a carefully-cocooned, well-preserved fly in amber, a unique relic of pre-Reformation, mediaeval Europe. In both eastern and western Europe, the republic is the last remaining vestige of Philip II's infamous Roman Catholic Empire, 'on which the sun would never set' … Lest the corrupting influence of free-thinking Lutheran Protestants should corrupt the Catholic Irish, separate development was established to keep Catholics distinct. As well, Protestants were denied the right to earn a living in the republic, and were driven out. Three out of four Protestants fled what is now the Republic in the last hundred years."
  We can see the attitude to the employment of Protestants in the Irish Republic. That attitude was
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  described not by a Unionist or someone who is known for right-wing politics, but by a veteran socialist who was driven out of politics in the south of Ireland by the pressures of the Roman Catholic hierarchy. Yet those in the south of Ireland make accusations about discrimination and call for legislation against it in the north of Ireland.
  Recently I wrote to the British ambassador in Dublin to inquire how many Protestants are employed in the civil service in the Irish Republic and in the Gardai. Her Majesty's ambassador to the Irish Republic, Sir Nicholas Fenn KCMG, replied:
  "We have spoken to the Central Statistical Office; the office of Census and Population Studies; the Civil Service Commission; the Employment Equality Agency; and the Department of Finance, but have drawn a blank on your constituent's enquiry. The information is simply not available here".
  The people who call for legislation on fair employment to apply in Northern Ireland do not do anything about the matter in their own country.
  I believe in fair employment, but I do not believe that people should be employed because of their religious affiliation. People should be employed because of their qualifications to do the job. When this legislation was first brought before the House we were told that there would be no such thing as quotas. We were told that everything would be confidential and that it was just a monitoring system. Increasingly, a regimentation of religious affiliation is being carried out. The strange thing is that, if the Government decide that someone is a Roman Catholic or a Protestant, that affiliation can never be changed.
  I have raised with the Minister the issue of a constituent of mine who, because she happened to have attended a maintained school, was registered for ever as a Roman Catholic. A letter from the Northern Ireland Health and Social Services Board says that that does not really matter and that my constituent should not be concerned about it. I do not see why wrong or misleading facts should be put into the monitoring system without providing a way to change them. The Government should seek to be truthful in their information.
  In the past, I was told that all the information would eventually be destroyed, but we are now told that it will be kept and can be asked for by the courts. May I put forward my party's opposition in principle to the disclosure of anyone's religious affiliation to any third party, and to the entire monitoring procedure set up by the fair employment legislation. People should not be required by law to state their religion, nor should employers be required by law to inquire into their employees' affiliation.
  The Fair Employment Commission seems eager to highlight what it calls discrimination against Roman Catholics, but it is less eager even to investigate what happens with regard to companies that employ more Roman Catholics than they should. I have in my possession an interesting document that has been much quoted in the press. Some time ago, the British Broadcasting Corporation decided to put on what was to be the show of all shows and spent almost £1 million on it. Naturally, it was a complete and awful flop, the money was poured down the drain and many people were consequently put out of work.
  The document, which is a complete record of all that happened in that show, was found on a rubbish heap in Belfast. The floppy disk reference number on the document is REGFM12.011. I purposely quote that

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  reference to the House because Mr. Cooper cannot find a way to investigate the matter. He now has the number of the floppy disk, so he has the power to ask the BBC for the records. He did not do so because the record shows that the ratio of employment in that show was seven Roman Catholics to one Protestant at the best, or worst, whichever way one looks at it, and five Roman Catholics to one Protestant at the worst, or the best. But Mr. Cooper is not prepared to do the job that he is supposed to do. Unless the Fair Employment Commission is fair, no one will have any faith in what it carries out.
  The Fair Employment Commission published an investigation into the Post Office a short time ago. As I have already made clear, I do not hold any brief for the FEC, but its figures show that Protestants were under-represented in Belfast, Ards, Londonderry, Magherafelt and Strabane. If Roman Catholics had been under-represented, what a furore there would have been and what accusations would have been made. But the FEC seems to be endeavouring to stage a cover-up.
  So serious was the under-representation of Protestants in the north-west that the Post Office must treble the number of Protestants on the payroll to give them the same percentage as exists in the local community. But instead of recruiting Protestants, the Post Office has been recruiting even higher percentages of Roman Catholics in recent days. The FEC examined Ulsterbus and City Bus that employ almost 2,900 people, and again found that the Protestant community was under-represented. The more recent the recruitment, the higher the percentage of Roman Catholics employed.
  Those are the FEC's own figures. We heard about managerial posts not being given to Roman Catholics. Sometimes attempts are made to establish that, when Roman Catholics get jobs, they get less skilled posts, while Protestants tend to be given the managerial and salaried positions. But Anthony Murphy and Graham Gudgin of the Northern Ireland Economic Research Centre recently commented on the fact that the FEC's annual report showed that Catholics are ahead of Protestants in the managerial, technical and professional occupations. The House should make itself aware of those facts.
  The FEC report on the University of Ulster dealt another heavy blow to the myth. It found that the higher the salary scale, the greater the percentage of Roman Catholics employed. The same report also showed that the difference between Catholic percentages in established posts as opposed to new positions was startling.
  Many leading researchers in Northern Ireland are now being faced with demands from Protestants about the treatment of their community. When a company in Northern Ireland expands its business and takes on hundreds of additional staff, it is usual practice for a Minister to make a statement and tell the good news—I agree with that because employment in Northern Ireland is good news. United Technologies of Londonderry had an increase of 300 jobs. How many of them went to Protestants? As far as we can ascertain, not one. Those are the facts, and the House should be aware of them.
  Dublin makes many accusations about the way that Protestants treat Roman Catholics in the north. But it is not a one-way street and Northern Ireland Ministers should be as enthusiastic about fighting for jobs for
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  Protestants as they are about fighting for jobs for Roman Catholics. There is in the Fair Employment Commission a tendency—more than a tendency, a bias—not to let the full facts be known.
  Today Mr. Cooper was sought by the press because this wonderful document which was discovered on a rubbish tip was to be mentioned in the House. Mr. Cooper was conveniently unavailable, but when a report states that Roman Catholics are not getting a fair crack of the whip in some places of employment he is on the radio and television and making statements galore running down Protestant employers.
  I noted what the Minister said about Protestants and Roman Catholics. He should crusade equally for both and should see to it that Protestants get as fair a crack of the whip as Roman Catholics. According to the Fair Employment Commission, there is a great variation. Something is wrong and steps must be taken to ensure fair play. The answer to problems about fair employment is to have plenty of employment. But when there is not plenty of employment the House must be even-handed, because if it is not there will be no confidence in legislation on this matter.
  I am seriously alarmed about confidentiality being breached, although some hon. Members may say that that does not really matter. In the Committee examining the order I and the hon. Member for Kingston upon Hull, North (Mr. McNamara), who led for the Opposition, were amused by some of the goings on. The right hon. Member for Strangford (Mr. Taylor) said:
  "Two points arise. First, does the Opposition Front-Bench spokesman—he is a Roman Catholic—[Interruption]—…"
  it seemed that that was a terrible thing to say—
  "recognise the conclusion of the Fair Employment Commission that it has many more more Roman Catholics on its staff than is reflected in the general population of Northern Ireland,".
  I raised a point of order and said:
  "It is strange that we are discussing an order that makes it the responsibility of everyone who is employed to state where he stands as between Protestantism and Romanism only. Yet when a right hon. Member referred to a member of the Committee as a Roman Catholic there were protests."
  The Committee was deciding that everybody must be religiously labelled, but when a member of the Committee was referred to as a Roman Catholic there was an interruption and anger.
  The hon. Member for Kingston upon Hull, North made clear what he was and said that he did not get his job because he was a Roman Catholic. He was not in the quota system. He said:
  "I am a Labour Member of Parliament who happens to be a Roman Catholic. I was elected on a Labour ticket and no other. If I were to stand on any other ticket, I would be soundly beaten by a Labour candidate and deservedly so."—[Official Report, Northern Ireland Committee, 16 May 1991; c. 15–16.]
  The hon. Gentleman would not get a job in Northern Ireland under the order. That shows the hypocrisy in this matter, and how the Ulster people look on that hypocrisy.
  Confidentiality is important. What we need to fight in Northern Ireland is fear. People are afraid. Only today, we had another report that information from the Army, with photographs, had got into the wrong hands. People are worried about safety. I want to know how there will be confidentiality if we go on releasing these monitoring procedures, and what they bring out in all places where

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  they can under the order. Who will have the information? Will there be a religious roll call of everybody in Northern Ireland?
  Many in Northern Ireland feel that the House has not had enough time adequately to consider the order. I must finish my speech soon because other hon. Members wish to speak, and we have only an hour and a half for the debate. Usually, on a debate such as this, we would have three hours, but when the Government decided to put the order before the House at this late hour Ministers did not want to be having their breakfast before they went to work. They want to have their cornflakes at home, not here. Some of us cannot get home, so we would be happy to talk all night on this theme. We are not chained or tied to anything. I see the Minister of State the hon. Member for Peterborough (Dr. Mawhinney) sadly nodding his head. All that I can say is that, if the Government put such measures before the House at this hour, he cannot expect us to do anything other than use the full hour and a half for the debate.
  All the information gathered last year in the monitoring exercise was gathered under the provisions of section 30. People co-operated under the law as it then was. They were told that the information would be confidential. Tonight, we are being asked to breach the very foundation on which this information was given. The Order in Council will enable employers to disclose information that was given to them on the basis of confidentiality. Thus, the Order in Council is retrospective, as the Minister made clear. That is a serious bar to our acceptance of the order. If section 30 is to be done away with, in the sense that it is to be altered by the order, then no information should be released until a new monitoring exercise has been carried out, and every employee is told that the information will not be kept confidential because in certain circumstances it will be made public, and his religion will be made public to a third person.
  These people should now be told the new circumstances under which the information about them can be released, and to whom. There should be an amendment so that if an employer proposes to disclose information about an employee, that employee has the right to be notified that that information will be disclosed. It is not right that the employer can disclose information, gathered on the basis of confidentiality, without telling the person concerned that that information will be released. What have the Government to say about those two matters?
  This monitoring is not done in England or Scotland or in Wales. We are on new ground, and we should be doing something tonight that will regiment the work force of Northern Ireland. As the hon. Member for Kingston upon Hull, North said, later it will go down to smaller firms as well.
  There has been no difficulty on the work floors of Northern Ireland during all the troubles. That is a big thing to say, but it is a fact. There are some who would lead others to believe that people are at loggerheads on the work floors, but the troubles in our country have been kept away from areas of work almost entirely. That is to be commended. I have been worried for a long time, however, that, when objections are made by the Fair Employment Commission about the flying of the Union Jack or the putting up of poppies on Remembrance day, disaster will be brought into places of employment. These are matters to which the Government must pay heed. We need to keep the troubles away from the workplace in Northern Ireland.
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  When we pass the order tonight, we should realise how serious are the matters that it raises. I trust that Mr. Cooper will be sacked and that we shall get someone in Northern Ireland who people can trust and in whom they have confidence. It matters not whether that person is Roman Catholic or Protestant. It does not matter what his religion is as long as people can put their faith and trust in him. Whether the Government like it or not, the people have lost all trust in Mr. Cooper.
  Why was it that the report on industries and shops in Londonderry was not brought forward quickly? Why did Mr. Cooper drag his feet? When the report was completed, why did he put it under wraps? He did so because it was an indictment of the way that Protestants were being treated in Londonderry. Let us have fair play. If we have fair play all round, people will have some confidence in what is happening.
  Information was gathered in confidence and people were told that it would never be used. Now we are asked to accept that there should be a breach of confidentiality and that confidential information can be used without telling the person who co-operated fully, thinking that the information would remain confidential. That is an indictment of the order.
  2.59 am
  Mr. David Trimble: We are considering a significant piece of legislation and, as other hon. Members have said, it is disgraceful that it is being debated at nearly 3 am under a procedure that prevents proper detailed discussion of the measure. I know that we discussed the matter during one sitting of the Northern Ireland Committee. Members who attended that sitting will know that we never got down to the details of the legislation, even in that context. There was not a proper debate on the details, and there has not been one tonight.
  The use of the Order in Council procedure for this legislation is especially inappropriate. It introduces—not for the first time—confusion between the two statute books. The Order in Council made on the Northern Ireland Acts is a form not of secondary legislation but of primary legislation. The question that arises—it is a point that I put to the Minister during a meeting that was held to discuss the matter—is which statute book the order will go into.
  The order amends the Fair Employment (Northern Ireland) Act 1989 which is contained in the United Kingdom statute book which is appropriate. Where will the Fair Employment (Amendment)(Northern Ireland) Order go? It amends the 1989 Act, so in which statute book will it appear? We have a Northern Ireland statute book—so-called—but it contains only Orders in Council and is, generally speaking, confined to transferred matters and is said to be intended to maintain continuity. However, there is no question of continuity with regard to the Fair Employment (Amendment)(Northern Ireland) Order because the Act that it amends is not in the Northern Ireland statute book, but in that of the United Kingdom. Logically, the Order in Council should appear in the United Kingdom statute book. It will be interesting to see how that is made up at the end of the year.
  This is not merely a technical point or a matter of curiosity; it is a question of which interpretation Act is to be applied. Being drafted as an Order in Council, it looks as though the draftsman has followed the usual form for

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  Northern Ireland Orders in Council and has applied to it the Interpretation Act (Northern Ireland) 1954. Of course, the interpretation Act that applies to the United Kingdom statutes is the United Kingdom Interpretation Act 1978, and the two Acts are not the same. It is ludicrous that the order inserts new sections into the 1989 Act, but should the question of interpretation arise when reading the greater part of that Act one applies the United Kingdom interpretation Act. However, in some sections and subsections one will have to switch from the United Kingdom Interpretation Act to the Interpretation Act (Northern Ireland) if the person interpreting the Act appreciates that there is a difference.
  Anomalies are created not just in respect of the Interpretation Act. Orders made under the Northern Ireland Act 1974 are subject to vires limitations by reference to the provisions of the Northern Ireland Constitution Act 1973, which apply to this Order in Council and to the regulations made under it, which will then be inserted into a United Kingdom Act to which there are no vires limitations. It is a constitutional monstrosity, and I am amazed that it is being carried out by Order in Council, which states that it must be done for reason of urgency. If it were a matter of urgency, there has been plenty of time to vote the matter through as a Bill and to have debated it if the Government considered it urgent enough and were prepared to make time available. This is July and the matter arose in November. There has been consultation and discussion, and there has been more than enough time to push the issue through in the normal way, That should have been done, but it has not been done.
  The use of the Order in Council procedure reveals another matter of interest. It exposes the fraudulence of the argument used to deny us proper legislation. When we complain about the Order in Council procedure we are told that it must be maintained to maintain the integrity of the statute book. There is no integrity in the statute book in this case. That shows that the integrity of the statute book is not the reason why the procedure is maintained.
  The use of the Order in Council procedure is also bad in this case because it reinforces the fact that the legislation is confined to Northern Ireland because Orders in Council can legislate only for Northern Ireland. If legislation of this nature is considered appropriate, it should apply on a United Kingdom-wide basis. It is said that there is disadvantage in employment in Northern Ireland on what might be called ethnic grounds. There is also disadvantage in the United Kingdom on ethnic grounds. If it is wrong to discriminate against a person on the grounds of his national or ethnic origin, it should be wrong throughout the kingdom. If legislation of this nature is considered necessary in Northern Ireland, it should also apply in England and Wales where there is significant disadvantage for ethnic minorities—but not only for them.
  A few months ago, an interesting survey revealed that Roman Catholic university graduates from Northern Ireland who sought employment in England and Wales fared less well than Protestant graduates from Northern Ireland who did the same. That fascinating survey showed that Roman Catholic graduates seeking employment in England did worse than those remaining in Northern Ireland, which implies that there is greater discrimination
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  against Northern Ireland Catholics in England than in Northern Ireland—though any one set of figures must be treated with some reservation.
  If sufficient time had been available to me, I would have examined the origins of the 1989 legislation, which can be found in the problem that was said to have arisen in the case of Pryce v. University of Ulster. I am not convinced that the problem did stem from that case. If that case had been properly pursued at the time, the alleged difficulty in the 1989 Act would have disappeared. However, it would take more time to make that argument than is at my disposal this evening.
  If the Pryce case did reveal a problem in respect of section 30, it could have been resolved by a short and simple amendment. It was held that section 30 confined disclosure for the purposes of the 1989 Act, whereas the Pryce case was brought under the provisions of the 1976 Act. If that was true, all that was needed was an amendment to section 30, substituting for the words "this Act" a phrase such as "the Fair Employment (Northern Ireland) Acts".
  When the Minister was consulted last November, it was said that the problem related to the tribunal case. We pointed out that that could be cured by a minor change, and that the more radical changes to the law on confidentiality that would be made by the order would then be unnecessary. The disparity between the limited nature of the problem and the extent of the proposed changes made us suspect that the Government and the Fair Employment Commission had a hidden agenda.
  Replying to those points in his letter of 21 February, the Minister said:
  "I should say too that the decision to seek an amendment of the 1989 Act was not made simply on the basis of the ruling of the tribunal president, but on the clear view that the case brought to light a quite complicated problem, which required speedy resolution."
  Unfortunately, the Minister did not state what the problem was. However, in our consultations with him a few weeks ago, he said that it was feared that the offence of disclosure created by section 30 was so wide that if a person who was aware of an item of information about an individual—such as the school that he attended—happened to disclose it, even though the information had not been gained in connection with classification under the legislation, that person would be committing an offence.
  The solution to that problem would be a provision on the lines of the new subsection (7) that will be added to section 19 of the 1989 Act by article 4 of the order. However, the disparity between the alleged problems and the extent of the proposed alterations makes us wonder why the order considerably widens the disclosure provisions in the way that it does. No explanation was offered by the Minister on past occasions or more recently.
  Article 4 also imports a new subsection (1)(a) into section 19 of the 1989 Act, which provides for disclosure "necessary or expedient for the proper discharge of the functions of the Commission".
  Subsection 1(b) refers to such a disclosure that
  "is made for the purpose of, or in connection with—

  (i) any actual or prospective proceedings before the Tribunal, or an industrial tribunal; or

  (ii) any actual or prospective civil or criminal proceedings before a court."

  I contrast the wording of the new subsection (1)(a), which refers to a disclosure that is
  "necessary or expedient for the proper discharge of the functions of the Commission"—

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  which is not present in subsection (1)(b)—with the existing section 19(1)(b) of the 1989 Act, which refers to a disclosure that is
  "necessary—

  (i) for the purposes of any proceedings".

  Originally, disclosure was to be limited to where it was "necessary"; now, the word "necessary" has been omitted.
  The changes in the legislation permit disclosure not just to the Fair Employment Commission—we might feel some sympathy with that—but to the Labour Relations Agency and the Equal Opportunities Commission, and for the purpose of any other proceedings. To demonstrate that my comments are not politically motivated, let me quote the Belfast Solicitors Association, which said:
  "If there is reason in that these bodies may be legitimately involved in the investigation of a Fair Employment complaint, then disclosure to that extent should be permitted, but specifically limited to their involvement in such investigations. If there is reason why such bodies should have more general access to such information, then that should be debated and provided for in their own enabling legislation."
  No one could disagree with that. This is fair employment legislation, and the disclosure provisions in it should be for the purposes of such legislation. Instead, much wider provision has been made for disclosure, and—as the Minister said in the letter that accompanied the most recent alterations—it is permitted wherever it is required for the purposes of any legislation. That, surely, is taking things too far.
  There is also provision for disclosure in connection with any civil or criminal proceedings. At the meeting to which I referred, we asked the Minister if he could provide any example in which disclosure would be necessary in connection with fair employment proceedings. He was unable to do so, and I shall be interested to see whether he can do so on this occasion.
  People are sensitive about the disclosure of such information. Many do not like the classification that results from the legislation; many are concerned for safety reasons, as identification of a person's religion is significant. For that reason, the protection of confidentiality is important. The hon. Member for Antrim, North (Rev. Ian Paisley) raised the issue when the original Bill was debated, asking what provision would be made in that regard. The then Secretary of State replied:
  "Although the hon. Member for Antrim, North … dressed it up in rather more lurid colours, he made an important point about confidentiality. He will know that confidentiality of information has been a clear concern of the Government in the preparation of this legislation. He knows that clause 19 is directed specifically to that important point. Clause 19 makes it an offence to disclose information from which a person's religious beliefs could be deduced."— [Official Report, 26 July 1989; Vol. 157, c. 1104.]
  That important point has been substantially eroded in the new legislation. Not only has the provision for disclosure been widened, but protection has been transferred from the legislation to regulations.
  The Belfast Solicitors Association commented on that, too. It said:
  "As the provisions regarding confidentiality, even though wrongly drafted, were originally, and rightly, considered to be of sufficient importance to be contained in the 1989 Act, it is wrong that the amending provisions should not also be contained in the primary legislation. They should not be delegated to the subordinate legislation of the Department of Economic Development.
  This is not just a technical point. It is actually undesirable that the provisions regarding confidentiality should be contained only in the Department's regulations, because these are not subject to any mandatory voting or other scrutiny
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  procedure at Westminster other than the negative resolution procedure—the requirement of laying before Parliament under paragraph 3(3) of Schedule 1 to the Northern Ireland Act 1974.
  This means that the Regulations are not subject to scrutiny at Westminster by the Houses Joint Committee on Statutory Instruments. Nor is there any procedure of scrutiny in Northern Ireland. Because these Regulations are subject to the negative resolution procedure at Westminster they would not come before the Examiner of Statutory Rules. (In any case apparently his post became vacant some years ago, and has not subsequently been refilled.)
  Accordingly, if the amendments are to be contained in the Monitoring Regulations there will be insufficient scrutiny or protection."
  Where there are sensitivities about disclosure, to remove protection is not a good idea. It should have been achieved in primary legislation that should have been enacted properly.
  It is ironic that the apartheid regime in South Africa has been applauded for removing legislation that requires people to be monitored and their ethnic origin to be registered at a time when we are reinforcing this procedure in Northern Ireland. Many people find it objectionable, even though it must be conceded that that monitoring occasionally produces information that is of assistance in rebutting some of the wilder allegations.
  None the less, the monitoring is objectionable in principle because it obscures the merit principle that should underlie the legislation and employment. It leads to a form of excessive head counting that is unhealthy for employment. It leads also to a surreptitious introduction of quotas by the back door which is the vice of the Fair Employment Commission, something which the commission's chairman understands and about which he is encouraging people to act illegally although he does not have the courage to admit that openly.
  The monitoring also leads people to the fallacy of believing that we should be dealing with equality of outcome. In terms of the legislation, it would be perfectly proper for us to be dealing with equality of opportunity. It is important that there should be equality of opportunity, but only a fool would think that there must therefore be equality of outcome in every branch of industry and grade of employment. A series of factors will interpose between equality of opportunity and the outcome. Some of the factors are social, but it would be foolish to search for a perfect equality of outcome in every respect of employment, and that is what monitoring leads to.
  3.16 am
  Mr. Needham: The hon. Member for Kingston upon Hull, North (Mr. McNamara) said that monitoring until now dealt only with a certain proportion of the work force and did not involve companies employing fewer than 25 people. He was quite right. However, it covers two thirds of the total work force. I have no reason to believe that as it spreads out to companies employing fewer than 25 employees it will show any difference.
  The figures show that the numbers in employment match closely the proportions in the communities although not as perfectly as one might wish, but very much in line with the proportions in the population as a whole. That is very important. The hon. Member for Upper Bann (Mr. Trimble) referred to the advantages of monitoring.
  The hon. Member for Antrim, North (Rev. Ian Paisley) made a point about the lateness of the hour for the debate and I agree with him about that. However, that is not

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  necessarily a matter for me. Other hon. Members have kept the House talking tonight. We had a full debate on Northern Ireland business last week although some of that was rather detailed and perhaps this debate would have been better earlier in the day and perhaps a week earlier as well.
  I do not agree with the hon. Member for Antrim, North about the Anglo-Irish Agreement having any involvement in this. I am determined to administer the economy of Northern Ireland so that we have fair employment for Protestants and Catholics alike. The hon. Gentleman made great play about that and he was right to do so; it should be fair on both sides.
  At the moment 68 per cent. of Protestant males are in employment and 32 per cent. of Catholic males are employed. There is an imbalance. In a certain area 142 companies employ 90 per cent. Catholics. However, there are about 240 who employ 90 per cent. Protestants. I do not want to make too much of an issue of that except to say that matters have to be balanced equally, which is what the legislation is about. I think that the hon. Gentleman accepts that.
  Mr. Peter Robinson: Should we take the Minister's denial of the comments of my hon. Friend the Member for Antrim, North (Rev. Ian Paisley), who suggested that the fair employment legislation was a child of the Anglo-Irish Agreement, as a rebuke for Mr. Gerry Collins, who claimed that it was?
  Mr. Needham: Mr. Collins can take it any way he likes. The fact is that fair employment legislation was introduced in the House in 1976, long before the Anglo-Irish Agreement was in anybody's eye. The hon. Member for Antrim, North cannot have it both ways. He cannot say that he dislikes monitoring and fair employment legislation in principle and then attack—and I do not deny that he does so with some justification—the imbalance that exists in certain areas or companies in Northern Ireland. He is right to point out where imbalances exist. The very fact that the places that he quoted, such as the Post Office and the BBC, come out of the monitoring process shows that the Act is having effect. I agree that it is vital that the Fair Employment Commission is seen to be even-handed and balanced in the way in which it carries out its investigations. I am sure that Mr. Cooper will look carefully at the blue document that the hon. Member for Antrim, North found on the rubbish tip.
  Rev. Ian Paisley: Is the Minister prepared to say in the House that he would direct Mr. Cooper, as I understand he has the power to do, to look at the document? As he already has the floppy disk number, he can get the information from the BBC.
  Mr. Needham: I do not like directing people. As I have said, I am sure that Mr. Cooper will look closely into the points that the hon. Gentleman makes. Mr. Cooper can also read Hansard and see the points that have been made about him. He is as aware as anybody of the need to ensure that the Fair Employment Commission has a reputation in Northern Ireland for balance and even-handedness.
  The hon. Member for Upper Bann raised a series of technical points on the legislation, and it was fair enough for him to do so. The Government do not accept that the
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  fact that this legislation is an order and that the act is on a different statutory basis is any reason why lawyers looking at the two parts of the legislation will not be able to work in harmony. I listened to what the hon. Gentleman said. We have no evidence to suggest that the order and the Act should not work in harmony.
  I understand the hon. Gentleman's point about the reason why we introduced the order. As he rightly says, the reason was that we wanted to make good the omissions from the 1989 Act as soon as we could because we did not wish a back-log of cases to grow and so undermine the basis of the fair employment legislation and how it is seen in the United States and in many parts of Europe—as a way forward which all of us in the House accept gives the image of Northern Ireland a boost for inward investment and economic potential.
  Mr. Trimble: The Minister said that he saw no difficulty in the order and the Act being together in harmony. Does that mean that they will be in harmony on the same statute book?
  Mr. Needham: The answer is that they cannot be in harmony on the same statute book because, as the hon. Gentleman has rightly pointed out, they come under transferred matters and other matters.
  Mr. Trimble rose—
  Mr. Needham: I will not give way to the hon. Gentleman again. There is no reason, other than the technical points that he made, to believe that the legislation should not continue to work effectively. I am not clear whether the hon. Gentleman is trying to undermine the legislation through a series of technical quibbles on the basis that he disagrees with it in principle. He has admitted that he feels that monitoring has benefits, but he then said that head-counting is unhealthy. He should tell that to the hon. Member for Antrim, North who spent most of his speech talking about head-counting and nothing else.
  The hon. Member for Upper Bann then said that merit and equality of opportunity should be the criteria. I agree entirely. The whole basis of the legislation is to ensure that merit can be seen to be the basis on which jobs are gained in Northern Ireland and that equality of opportunity is what we are about. The hon. Gentleman then talked about the fact that equality of opportunity does not exist in certain companies and that there is no balance. He was perfectly right to address that point—it must be addressed. Nevertheless, the legislation shows that after a long history in both communities, where it cannot be argued that there has not been discrimination and unfair employment, the Government are determined to attack and remedy the problem. In so doing, they will set an example to others.
  Mr. Trimble rose—
  Mr. Needham: I conclude by saying that I read Dr. Browne with some interest on these matters.
  Rev. Ian Paisley: Surely the Minister must understand that certain employment sectors in Northern Ireland have always been wholly in the hands of either the Protestants or the Roman Catholics. Tiling and slating, for example, have always been in the hands of the Roman Catholics. Is he saying that he should break into that and into sectors that have always been either predominantly Protestant or Roman Catholic? Surely history must have some influence,

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  as should the areas where people live. We cannot ask Protestants to go into a Roman Catholic area to work. Surely the Minister must keep those things in mind.
  Mr. Needham: I absolutely agree with the hon. Gentleman. There should be no quotas and no compulsion, but we must ensure under the legislation—
  Mr. Trimble rose—
  Mr. Needham: I have not finished answering the hon. Gentleman yet.
  We must ensure that what is done is done on the basis of fairness and balance and that the policies that employers follow are not discriminatory. The hon. Member for Antrim, North made a fair point when he talked about Londonderry and about United Technologies. He has shot his own fox because that is a good example of a company that is located in a specific place and where it would be extremely difficult—I am not saying impossible; we all want to work towards this—to get a balance in a certain travel-to-work area. We all know what the difficulties are, but that does not mean that we do not do whatever we can to try to ensure that the policies that companies and employers adopt are seen clearly to be within the framework of fair employment legislation so that everyone in Northern Ireland knows that they have a reasonable opportunity when they try to get a job.
  Mr. Trimble: I thank the Minister for eventually giving way—I had been seeking to raise a point with him before the hon. Member for Antrim, North (Rev. Ian Paisley) intervened.
  The Minister affected to be confused about the argument that I was making towards the end of my speech. I am sorry if it was a little rushed, but I was speaking quickly to try to assist the House. The point that I was making, which I repeat, is that the monitoring process, and especially the way in which it is applied by the Fair Employment Commission, undermines the merit principle, which is good and should be vindicated. The way that monitoring operates is undermining that principle by surreptitiously introducing quotas. The targets and all the rest are effectively quotas, whereas the merit system should apply.
  The Minister said that I was raising technicalities. I am not, but I am waiting to find out why the disclosure provisions could not be confined to the purposes of the Act.
  Mr. Needham: I shall not weary the House at this late hour with examples under fair employment legislation where religious or community affiliation would be necessary for a civil or criminal action. I am happy to write to the hon. Gentleman. I assure him that there are cases. I will give examples to him.
  On the hon. Gentleman's first point on monitoring, I do not accept that it is a surreptitious way of introducing quotas. Nor do I accept that monitoring which shows the religious composition of the work force undermines the merit principle. I believe that when the work force in a travel-to-work area shows a balance between the two communities, whatever the composition of the population
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  in that area, that is much more likely to show that the merit principle is operating than a total imbalance one way or the other. That is unless the hon. Gentleman argues that there is a particular degree of intelligence in one community in one area or in another community in another area. We know that that is not the case.
  We are trying to show that companies and employers are using the best possible recruitment and personnel practices to ensure that they recruit for jobs in a balanced way. I believe that that is what everyone in Northern Ireland wants. People do not want to see discrimination any more than the hon. Member for Antrim, North does. I commend the order to the House.
  Question put and agreed to.
  Resolved,
  That the draft Fair Employment (Amendment)(Northern Ireland) Order 1991, which was laid before this House on 4th July, be approved.

  Statutory Instruments, &c.
  Madam Deputy Speaker (Miss Betty Boothroyd): By the leave of the House, I will put together the Questions on motions Nos. 4, 5, 6 and 7 on the Order Paper.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5)(Standing Committees on Statutory Instruments, &c.),

  HOUSING
  That the draft North Hull Housing Action Trust (Area and Constitution) Order 1991, which was laid before this House on 10th June, be approved.
  COMPANIES
  That the draft Companies (Disclosure of Interests in Shares)(Orders imposing restrictions on shares) Regulations 1991, which were laid before this House on 19th June, be approved.
  NORTHERN IRELAND
  That the draft Access to Personal Files and Medical Reports (Northern Ireland) Order 1991, which was laid before this House on 6th June, be approved.

  ROAD TRAFFIC
  That the draft Motor Vehicles (International Circulation)(Amendment)(No. 2) Order 1991, which was laid before this House on 20th June, be approved—[Mr. Greg Knight.]
  Question agreed to.

  European Community Documents
  Motion made, and Question put forthwith pursuant to Standing Order No. 102(9)(European Standing Committees),

  ENERGY EFFICIENCY REQUIREMENTS FOR HOT WATER BOILERS
  That this House takes note of European Community Document No. 9791/90 and the supplementary Explanatory Memorandum submitted by the Department of Energy on 1st July 1991 relating to energy efficiency requirements for new hot water boilers; and supports the Government's intention of ensuring that the Community's action in this field takes full account of the interests of consumers and others in the United Kingdom.—[Mr. Greg Knight.]
  Question agreed to.

  Gibraltar
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Greg Knight.]
  3.33 am
  Mr. David Young: I am vice-chairman of the British Gibraltar, group, but I speak for myself on this occasion, as will the chairman, the hon. Member for Romsey and Waterside (Mr. Colvin), later in the debate.
  The 1980 Lisbon agreement and the 1984 Brussels agreement, which followed the opening of the border between Spain and Gibraltar, restored communications and free movement of persons and vehicles across the border. However, the Brussels agreement permits discussion of the sovereignty of Gibraltar between Spain and Britain. That is at odds with the spirit of the preamble to the 1969 constitution, in which the Government make it clear that they will never enter into arrangements under which the people of Gibraltar would pass to the sovereignty of another state against the free and democratic expression of their will. That was based on the 1967 referendum when, of a total electorate of 12,762, 12,132 opted to remain under Britain and only 44 to go under Spanish rule. Subsequent opinion polls have endorsed that finding. What is unique about the Crown colony of Gibraltar is that the people there are, indeed, British citizens.
  What is worrying even to this day is the consistent avowed intention of Spain to gain sovereignty over Gibraltar, albeit by peaceful means. No doubt the closure of the frontier by Franco in 1969 was described as being done by peaceful means, although it was highly provocative. Obviously, the Brussels agreement, where it allows for the discussion of sovereignty between the British and Spanish Governments, rubs salt into the raw and all too recent wounds of the people of Gibraltar.
  I am concerned not with the past but with the present. What gives me great concern is the apparent harassment that is now taking place on the border. It is because of alleged tobacco smuggling. There is, indeed, tobacco smuggling, as I observe and other observers seem to agree, mainly by unemployed Spanish nationals who, stuffing lots of cigarettes and tobacco into their voluminous clothing, cross and recross the border five or six times a day without, apparently, let or hindrance. However, when it comes to vehicular traffic there is no green channel and every car that passes across that frontier is searched. In practical terms, that means a wait of an hour and a half.
  The House can imagine the position of a business man who tries to go from Gibraltar to Spain in the morning—an hour and a half's wait going and a further hour and a half's wait coming back. The waiting time can increase to as much as four hours. I can describe that only as a Franconian approach. It gives me great concern that British citizens are consistently harassed in that way. If it is not the political intention of Spain to disrupt the commerce and economy of Gibraltar, that certainly is the effect. Of course, it is disrupted in other ways, too. Much of the building on Gibraltar is now carried out by Spanish contractors.
  Spain has not stopped there. It has made allegations about Gibraltar turning a blind eye to drug trafficking and money laundering. The Foreign Office acknowledges that that is completely untrue. It might be better described in
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  less parliamentary terms as a bare-faced lie. All those add up to the continuing harassment of Gibraltar by Spain. It is with much sorrow that I say that those issues should have been sorted out before Spain was granted admission to the Common Market. It is difficult to rid one's mind of the conclusion that the acts of Franco appear to be continuing, but this time they are carried out by a democratically elected Government.
  As the House is aware, the economy of Gibraltar was entirely dependent on the dockyard and the forces and the money that they brought in. With the closure of the dockyard and the removal of the Army, Gibraltar was struck tremendous economic blows. It intends to become self-sufficient. It is making great commercial strides and it is seeking the establishment of an offshore financial centre. For those attempts to be viable there must be freedom of movement and travel for those operating in Gibraltar as business men.
  The harassment of British citizens at the frontier is unhelpful. The failure to re-establish the Gibraltar-Algeciras ferry also hinders economic development. Of greatest concern is the issue of air transport. The Gibraltar Assembly legitimately refuses to ratify the vague, short airport agreement. Because of that vagueness, that agreement appears to give the Spanish the opportunity to interfere in the sovereignty issue over Gibraltar. That legitimate refusal is used to block the admission of Gibraltar to the European Economic Community liberalisation process. Without that, Gibraltarians cannot fly direct to either Spain or any other EEC country.
  I cannot better express the concern felt than by quoting the annual report of 1990 from the Chamber of Commerce of Gibraltar, which states:
  "The contention of the Chamber is that the people of Gibraltar should enjoy the inclusion of Gibraltar's airport in the EEC's air liberalisation process, as of right. Gibraltar's rights to this process were firmly established by the airport's inclusion in the 1983 Inter-Regional Air Services Directive, and were supported by HMG up to July 1987 in Luxembourg when Spain first sought to exclude Gibraltar on the grounds of disputed sovereignty."
  What discussions are now taking place between the Foreign Office and the Ministry of Defence about the Royal Air Force in Gibraltar? The airport, which will be the lifeline of Gibraltarian commerce, depends to a large extent on the support and the resourcing of the RAF. During defence questions the Government have expressed their concern to keep the RAF in Gibraltar, but there is great anxiety in Gibraltar that that support will be withdrawn.
  What active steps are the Government taking to help Gibraltar to become economically self-sufficient? Have discussions been held on Gibraltar exhibiting at Expo 92? Is not the section of the Brussels agreement that permits bilateral discussion of sovereignty between Brussels and Spain counter-productive as it causes great concern among Gibraltarians? It also undermines their confidence in Britain's intentions, which does not encourage their co-operation.
  Britain has repeatedly reiterated its commitment to support the 1969 constitution, but when one sees other documents such as the Brussels agreement, one begins to wonder whether the Government are talking with a forked tongue.
  We owe the Gibraltarians a considerable debt for their support in many conflicts, including most recently the Falklands and the Gulf. Are the British citizens in

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  Gibraltar—that means all Gibraltarians—to be treated as second-class EC citizens? We must support the 1969 constitution not only with words but with actions. We must support Gibraltar in its economic endeavours and work to allow Gibraltarians to be not only politically but economically free.
  3.45 am
  Mr. Michael Colvin: I congratulate the hon. Member for Bolton, South-East (Mr. Young) on being rather more successful than I have been in the ballot for this Adjournment debate. He knows of my considerable interest in Gibraltar as chairman of the British Gibraltar group, and I thank him for leaving me a couple of minutes to endorse what he has said, especially about frontier delays and air services, and to add three points.
  First, Gibraltar still rejects the 1987 airport agreement, arguing—with some justification—that the Government proceeded during the negotiations in the face of known Gibraltarian opposition to what was eventually agreed with Spain. It is felt in Gibraltar that, by providing for special arrangements for Spain under a joint use regime, the agreement represents a de facto infringement of British sovereignty. As a result, there is now an impasse, which is causing considerable frustration on all sides.
  It is in the interests of all concerned, especially those living on both sides of the frontier—in Gibraltar and La Linea—that the matter be speedily resolved. As a first step, it is important to clear up the ambiguities that arise from differences in interpretation of the airport agreement by Britain and by Spain. For instance, a similar agreement on an international airport at Basle requires some 2,000 pages to explain precisely what it means. There is no question of a dispute between any of the parties in that case, so it seems illogical that the Gibraltar airport agreement runs to only some three pages. That is obviously part of the reason why such misunderstandings have arisen. Although it accepts that its airport must remain under British authority, Gibraltar would welcome its use by Spanish or, for that matter, any other foreign airlines.
  Secondly, Gibraltarians rightly resent their exclusion from the EC air liberalisation packages. There have been two and a third is on its way. It is a negation of Gibraltar's right to benefit unconditionally from its membership of the EEC, which it has by virtue of article 227 of the treaty of Rome. When my right hon. Friend the Member for Southend, West (Mr. Channon) was Secretary of State for Transport, he said that all Community legislation applies to Gibraltar unless, like the common agricultural policy or value added tax, they are specifically exempted.
  When my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) was Foreign Secretary, he said that the Government could not contemplate anything that undermined Community law or the legitimate rights of Gibraltar as part of the European Community. Yet Gibraltar is still excluded from the air liberalisation packages despite the fact that it is making great strides in changing to a free market economy rather than being so dependent on the Ministry of Defence for its national income. I believe that the Gibraltar development corporation is taking the case to the European Court of Justice. I shall be interested to hear from my hon. Friend the Minister about the position of her Majesty's Government in relation to that case.
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  Thirdly, Gibraltar should now participate in the so-called Brussels process. By doing so, it will enhance its sovereignty if sovereignty means having control over its own affairs. If it does not take part, Gibraltar's sovereignty will be diminished. It should be made clear to Spain that, if Gibraltar is expected to participate in the Brussels process—it is high time that it did—the subject of sovereignty must come off the Brussels agenda. A recent opinion poll showed that 60 per cent. of the people in Gibraltar favour participation, but the issue of whether sovereignty should be discussed was not included on the questionnaire.
  The hon. Member for Bolton, South-East and I visited Gibraltar with four of our parliamentary colleagues from 2 to 5 June, and I should like to place on the record our appreciation of the warm welcome that we received from everyone in Gibraltar. There was no doubt that they liked seeing British Members of Parliament on the Rock. It enabled us to see Gibraltarians' problems from their view rather than through the rose-tinted spectacles of Westminister and it gave Gibraltarians the opportunity to remind us that they still feel strongly that they wish to remain British.
  3.52 am
  The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-Jones): I begin by thanking the hon. Member for Bolton, South-East (Mr. Young) and my hon. Friend the Member for Romsey and Waterside (Mr. Colvin), first, for having remained in the House until nearly 4 am to discuss this important subject and, secondly, for giving me the first opportunity that I have had since I became the Minister responsible for Gibraltar to comment in the House on the position in Gibraltar and the policies of the Government towards this dependent territory.
  There are two basic pillars on which our relationship rests. The first—to which the hon. Member for Bolton, South-East has referred—is the Gibraltar Constitution Order 1969. That sets out the constitutional provisions for the dependent territory and specifically states in the preamble that
  "Her Majesty's Government will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes".
  That undertaking remains, and it means what it says. The Government stand by it and this Minister of all people—and the House will understand why—has no intention of presiding over any hedging on that undertaking.
  The second pillar of our relationship rests on the fact that Gibraltar is a democracy—and a rather lively one at that. I shall come to our relations with Spain later on in my remarks, but I would just say that it simply will not do for Spain to refer to Gibraltar as the "last colony in Europe". Our relationship with Gibraltar has lasted nearly 300 years—considerably longer than the lifespan of many of our EC partners. That relationship has developed in a way that has enabled Gibraltar to have its own Government with democratic credentials which no one can call into question.
  Since 1969, a number of significant events have taken place. First, the United Kingdom has joined the European Economic Community and, with that accession, Gibraltar became a part of the Community while remaining outside the customs union. Secondly, over the years, Gibraltar's direct economic dependency on the United Kingdom has

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  diminished to a point where this year the last Overseas Development Administration programme in Gibraltar should run out. Economically, Gibraltar is looking for ways of standing on its own feet—and the people and Government deserve every congratulation on that. As the hon. Member for Bolton, South-East requested, the Gibraltarian people and Government have the full support of Her Majesty's Government in those endeavours.
  Thirdly, the changing military and strategic position we face in Europe has meant that Gibraltar is no longer the military garrison that it used to be—a sort of Aldershot in the Mediterranean. The resident battalion has been withdrawn. Most of the dockyard has been transferred to the Gibraltar Government. Thirty years ago the Ministry of Defence owned 60 per cent. of the land area. Today it owns 28 per cent. These are, of course, matters for my right hon. Friend the Secretary of State for Defence, but it is difficult to see this trend being reversed. My hon. Friend the Member for Romsey and Waterside spoke about the airport. I must also refer that matter to my right hon. Friend.
  The fourth important change is that Spain has become a member both of the Community and of the NATO alliance. She is a valued partner and a trusted ally of the United Kingdom. I was sorry to hear a Labour Member make wholly unwarranted comparisons between the Spanish Government and the former regime. I hope that on reflection he will feel that such comparisons are unwise.
  It has become increasingly clear to me—and I think that I can say that this view is shared by the Chief Minister of Gibraltar and by Gibraltarians themselves—that the future for the Rock lies within the Community, as it does for Britain herself. That future is promising. Gibraltar is the southern gateway to the largest single market in the world and the doorway to one of the most popular and thriving tourist markets anywhere.
  As I said earlier, Gibraltar has already made enormous strides in preparing herself for this role for which she is uniquely qualified by her geographic position and by the ingenuity and acumen of her people. But the House will know that Spain has a territorial claim over Gibraltar. The fact that we reject that claim does not make it go away.
  I shall try to sum up for the House the nature of the Spanish claim. Spain accepts—acquiesces to might be a more accurate phrase—the terms of the treaty of Utrecht, which ceded the town and castle of Gibraltar to the British Crown in 1713. She does not accept our sovereignty over the isthmus which Spain regards as having been usurped over the years. I make no comment on the Spanish claim other than to say that it does not change our right to administer Gibraltar, that it exists as a claim, and that it will not go away. Equally, we accept that independence for Gibraltar is not an option.
  It is against that background that Gibraltar's future in the Community must be built., The fact of Community membership is crucial to Gibraltar's future, but the fact of Spain's membership is crucial, too. Already, as a Community member, Spain plays her part in framing EC
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  regulations and laws which have effect in Gibraltar. I have to tell the House bluntly—and Gibraltarians are all too well aware of this—that from time to time Spain either pursues or seeks to safeguard her claim and the bilateral negotiating process between Britain and Spain as she sees them from within the Community. Gibraltar's exclusion from the aviation liberalisation packages, to which my hon. Friend referred, bears witness to this, as does Spain's current refusal to agree to the external frontiers convention which has been agreed by all other EC partners.
  In my judgment, the current position is unsatisfactory for Gibraltar, for Spain and for the United Kingdom. But I repeat that I am not prepared to contemplate reneging on the undertaking given by this House to the Gibraltar people in 1969; nor am I prepared to ignore the fact of Gibraltarian democracy.
  A year ago when I visited Gibraltar I called on the people themselves to initiate a debate about their own future. We will listen to that debate and we will look seriously at any proposals that emerge from it, but we will not seek to impose any ideas upon the people. They have their undertaking in the 1969 constitution order and they have their democracy as a framework within which to discuss their future.
  Last May when the Spanish Prime Minister came to the United Kingdom he called for an "effort of imagination" on this subject. I say that this effort must come not just from Gibraltar but from Spain, too. It is not enough to talk about "the last colony". Spain has only to look across the Straits of Gibraltar to appreciate that these things are never quite as simple as they seem. Spain is a big and secure enough democracy to recognise that the democracy of the Gibraltarians merits respect, too.
  The House will be well aware of my personal affection for Spain. Not surprisingly, throughout my life, I have come into contact with many British hispanophiles. Nearly all of them carry in their rucksack some ingenious scheme that purports to solve the Gibraltar problem. I believe that it cannot be "solved" in the simple sense of the word, but there is just a chance that it may be dissolved within the EC. There is a sea change taking place in Europe, involving more co-operation, fewer barriers and a greater understanding generally. That tide of new thinking has the capacity to break through the tensions and mistrust that have for so long bedevilled Gibraltar's relationship with Spain. Gibraltar's duty, and Spain's duty too, must be to make sure that these opportunities do not pass them by.
  We in Britain cannot, will not, repudiate the undertakings that we have given. That would be a denial of everything we claim to stand for in the world. But we are willing to show all the imagination that may be required of us.
  If Gibraltarian democracy is to mean anything—I believe that it does—progress depends on the freely and democratically expressed wishes of the Gibraltarians. If Gibraltar makes that effort of imagination, I hope that Spain will do so, too.
  Question put and agreed to.
  Adjourned accordingly at one minute past Four o'clock.

ATTORNEY-GENERAL

  Serious Fraud Office
  Mr. Cousins
  To ask the Attorney-General what is the number of cases for investigation that have been referred to the Serious Fraud Office by company auditors since its establishment.

  The Attorney-General
  None.

  Probate Services
  Mr. Carrington
  To ask the Attorney-General when the Lord Chancellor intends to publish his regulations under sections 54 and 55 of the Courts and Legal Services Act 1990.

  The Attorney-General
  My noble and learned Friend the Lord Chancellor is today issuing a consultation document setting out draft regulations for probate complaints schemes under sections 54 and 55 of the Courts and Legal Services Act 1990. Under the provisions of that Act, membership of such a scheme will be compulsory for financial institutions and other persons wishing to provide probate services to the public. The draft regulations require all probate practitioners to belong to an ombudsman scheme with powers to award compensation. Copies of the consultation document and draft regulations will be placed in the Libraries of both Houses, are available in the Vote Office, and have been sent to representatives of the financial institutions, the legal profession and others who have an interest in the content of the regulations.

FOREIGN AND COMMONWEALTH AFFAIRS

  Slovenia
  Mr. Beggs
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Yugoslav Government concerning the need to prevent risk of ecological catastrophe or human suffering arising from the threatened attack by terrorists on the nuclear power plant at Krsko near Zagreb; and if he will make a statement.

  Mr. Douglas Hogg
  Countries that operate civil nuclear power programmes are responsible for ensuring the safety of plants. The restoration of peace in Slovenia and Croatia would be the best guarantee of the safety of the nuclear power plant at Krsko. The plan agreed between the European Community troika and Yugoslav representatives at Brioni on 8 July offers a basis upon which negotiations for a peaceful resolution of the Yugoslav crisis can restart.

  Baltic States
  Mr. Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has received on behalf of the Baltic states regarding requests by the Soviet Government for economic aid; and if he will make a statement.

  Mr. Douglas Hogg
  We have received representations from members of the public and Baltic emigré associations about economic assistance to the Soviet Union. In our approach to assistance for Soviet economic reform we will be sensitive to wider political developments, including the Soviet authorities' approach to the Baltic republics.

  Iraq (Weapons)
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 2 July,Official Report, columns 124–25, what analysis has been completed at Porton Down in relation to Iraq's chemical and biological weapons.

  Mr. Douglas Hogg
  A vapour sample from the United Nations special commission's first chemical weapons inspection at the Muthanna establishment in Iraq from 9 to 14 June 1991 was analysed for the Commission by the Chemical and Biological Defence Establishment at Porton Down. While details of the results are confidential to the special commission, they are consistent with the press statement made by the United Nations on 24 June 1991 that nerve agents of the types GB and GF were present at Muthanna.

  European Community Co-operation Agreements
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs whether the European Community has signed any other co-operation agreements similar to that signed with Morocco on 27 April 1976.

  Mr. Garel-Jones
  The European Community signed similar co-operation agreements with Algeria in 1976, Tunisia in 1977, Egypt in 1976, Israel in 1976, Lebanon in 1977, Syria in 1977, Jordan in 1977 and Yugoslavia in 1980.

  Arms Control
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining recent progress achieved with other Governments in the direction of arms control.

  Mr. Douglas Hogg
  We are committed to verifiable arms control agreements which enhance our security. We participate actively in the follow-on negotiations to the conventional forces in Europe treaty of November 1990 and in negotiations on further confidence and security-building measures. We also participate in negotiations for a global ban on chemical weapons. We are promoting my right hon. Friend the Prime Minister's proposal for a United Nations register of arms transfers and consulting other major arms suppliers, in particular the other permanent members of the United Nations Security Council, on how best to strengthen controls on all forms of arms proliferation.
  3
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he next plans to discuss arms control with the United Nations and his EC counterparts.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has no immediate plans to discuss arms control with the United Nations. Some of this Department's senior officials recently met other members of the permanent five at the United Nations Security Council in Paris on 8 and 9 July to review issues related to conventional arms transfers and to the non-proliferation of weapons of mass destruction. This group will next meet in London in September. It is possible that my right hon. Friend will discuss arms control issues with his European Community counterparts during the next Foreign Affairs Council on 29 July.

  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what further plans he has to introduce new international controls on arms sales.

  Mr. Douglas Hogg
  We are actively participating in efforts to introduce greater responsibility to the international transfer of conventional arms. The five leading arms exporters met in Paris on 8 and 9 July and agreed to work together to develop guidelines for restraint in arms transfer, and to set up a mechanism for continual consultation and exchange of information on these issues. This work will be taken forward at further meetings in London in the autumn.

  Arms Sales
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what progress he has made in securing agreement for an international register of arms sales.

  Mr. Douglas Hogg
  Our initiative for a UN register has received wide support. President Bush, President Mitterrand and Prime Minister Kaifu have endorsed the idea, and the European Council on 28 and 29 June decided that the Twelve should put forward a joint resolution to the next UN General Assembly proposing a register. At their meeting in Paris on 8 and 9 July the five permanent members of the Security Council also expressed their support for further work to this end. We are pleased that the recent report of the UN expert study group on transparency has recommended the prompt establishment of a register.

WALES

  M4
  Mr. John Morris
  To ask the Secretary of State for Wales what steps he is taking to minimise road works and the limitation on road lanes on the M4 for the remainder of the holiday period and particularly at weekends.

  Sir Wyn Roberts
  Two contracts are in progress on the M4. No additional schemes are to be carried out until September. Present restrictions required for these schemes will continue, but are unlikely to cause unnecessary delay to the public.

  A5
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales, pursuant to his reply of 8 July,Official Report, column 265, if he will state the year in which it is expected that the work in building the A5 across Ynys Mon will commence.

  Sir Wyn Roberts
  The 1991 supplement to "Roads in Wales: Progress and Plans for the 1990s" shows the A5 improvements as planned to start after April 1994. It is not possible to give a firmer indication of timing at this stage.

  Special Educational Needs
  Mr. Win Griffiths
  To ask the Secretary of State for Wales if he will publish a list of all infant and junior schools in each local education authority which have integrated units for children with special needs, together with their funding requirements under local management of schools; and whether each integrated unit receives all of the funding allocated to it under the local management of schools formula.

  Sir Wyn Roberts
  Information on infants and junior schools with integrated units for children with special needs is not available centrally.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales if he will make it his policy to give local education authorities the statutory duty to provide places for pupils with special needs up to the age of 18 years at least.

  Sir Wyn Roberts
  At present local education authorities are required to secure the provision of suitable full-time education for pupils up to the age of 18, including those with special educational needs. For 16 to 18-year-olds, the Government intend that this duty will transfer to further education funding councils for England and Wales in a new independent further education sector. Our plans are set out in the White Paper "Education and Training for the 21st Century", Cm 1536.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many pupils with special needs were in schools and colleges, by year group, from five to 18 years in each of the last five years.

  Sir Wyn Roberts
  Information in respect of pupils with statements of special educational needs in schools is given in the table. Data on special needs by year group are not available. Local education authorities are not required to maintain statements for young people in colleges of furrther education.

  Number of pupils in schools1

  Number

  1986–87

  9,916

  1987–88

  11,549

  1988–89

  11,340

  1989–90

  10,965

  1990–91

  12,647

  1 At January of each year. Includes pupils receiving education within and outside their own local education authority in primary, Secondary, special and independent schools and special units.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales if he will publish a list of all secondary schools in each local education authority which have integrated units
  5
  or other provision for children with special needs, together with their funding requirements under local mangement of schools; and whether each integrated unit, or other provision, receives all of the funding allocated to it under the local management of schools formula.

  Sir Wyn Roberts
  Details on the secondary schools with LEA designated special classes and their respective LMS budgets are given in the table. Information on schools with integrated units for children with special needs is not held centrally. Formula funding under LMS is based on two key principles—that the resources available should be allocated to schools on a clear and objective basis related to their relative need to spend, and that schools' budgets should depend mainly on the numbers and ages of their pupils. Whether or not factors for integrated units or other provision are included in the formulae is for LEAs to decide. LEAs retain their responsibilities in respect of children with statements of special educational need.

  School Name

  Local Management of Schools Budget(1) £

  Clwyd

  Rhyl High School

  1,881,310

  Denbigh High School

  1,478,990

  The Groves High School

  1,447,240

  Dyfed

  Fishguard County Secondary School

  1,315,469

  Ysgol Y Preseli

  1,164,472

  Pembroke Comprehensive School

  2,227,550

  Cardigan County Secondary School

  1,183,228

  Penglais Comprehensive School

  1,652,523

  Ysgol Gyfun Maes Yr Yrfa

  1,026,535

  Gwendraeth Valley Comprehensive School

  1,079,200

  Gwent

  St. Julians Comprehensive School

  1,986,631

  Hartridge Comprehensive School

  1,614,260

  Newbridge Comprehensive School

  1,183,073

  Pontllanfraith Comprehensive School

  1,336,205

  Llantarnam Comprehensive School

  1,706,110

  Glanyrafon Junior Comprehensive School

  669,801

  Cwmcarn Comprehensive School

  730,367

  Chepstow Comprehensive School

  1,677,119

  Caldicot Comprehensive School

  2,194,349

  Abersychan Comprehensive School

  1,374,224

  Abertillery Comprehensive School

  1,447,560

  Gwynedd

  Ysgol John Bright

  1,763,941

  Ysgol Dyffryn Conwy

  1,493,505

  Ysgol Friars

  1,703,648

  Mid Glamorgan

  Afon Taf High School

  2,118,000

  Cyfarthfa High School

  1,850,000

  Vaynor and Penderyn Comprehensive School

  695,000

  Bryn Celynnog Comprehensive School

  2,476,000

  Hawthorn Comprehensive School

  1,744,000

  Ysgol Gyfun Rhydfelen

  1,744,000

  Blaengwawr Comprehensive School

  1,233,000

  Tonyrefail Comprehensive School

  2,010,000

  Cynffig Comprehensive School

  1,724,000

  St. Cenydd Comprehensive School

  1,622,000

  St. Ilan Comprehensive School

  1,599,000

  Bryntirion Comprehensive School

  1,670,000

  Ynysawdre Comprehensive School

  1,910,000

  Pencoed Comprehensive School

  2,078,000

  Lewis Girls Comprehensive School

  1,686,000

  Brynteg Comprehensive School

  2,698,000

  Ferndale Comprehensive School

  1,866,000

  Tonypandy Comprehensive School

  1,989,000

  Bedwellty Comprehensive School

  1,101,000

  6

  School Name

  Local Management of Schools Budget (1) £

  Archbishop McGrath School

  830,000

  Powys

  Caereinion High School

  882,275

  Llanidloes High School

  838,497

  Newtown High School

  1,817,623

  Welshpool High School

  1,293,060

  South Glamorgan

  Rumney High School

  1,787,357

  Willows High School

  1,176,007

  Fitzalan High School

  2,182,776

  Llanedeyrn High School

  1,579,164

  Cantonian High School

  1,687,323

  Llanrumney High School

  1,565,969

  Llanilltud Fawr Comprehensive School

  1,684,498

  Barry Boys Comprehensive School

  2,421,338

  Bryn Hafren Comprehensive School

  2,390,428

  St. Cyres Comprehensive School

  2,308,914

  St. Illtyds High School

  1,247,509

  Mary Immaculate High School

  1,141,442

  West Glamorgan

  Olchfa Comprehensive School

  2,862,000

  Sandfields Comprehensive School

  1,488,000

  Gowerton Comprehensive School

  1,960,000

  Cwmtawe Comprehensive School

  2,107,000

  Cwrt Sart Comprehensive School

  1,243,000

  1 These details have been taken from LEAs' section 42 financial statements for 1991–92.

  Education Support and Training Programme
  Mr. Win Griffiths
  To ask the Secretary of State for Wales (1) how many applications were made for grants under the education support and training programme 1992–93; and how many were successful;

  (2) if he will publish his programme of grants awarded under the education support and training programme 1992–93 and the conditions under which grants were awarded in each section.

  Sir Wyn Roberts
  We will be publishing details of the 1992–93 GEST programme for Wales this month. Local education authorities will have until October to submit bids for grant support. Information on how many applications were successful and the grants awarded will not be available until we have had an opportunity to consider these bids.

  Standard Assessment Tasks
  Mr. Win Griffiths
  To ask the Secretary of State for Wales, pursuant to his answer of 1 July,Official Report, column 33, if he will place in the Library copies of the representations he has received on the standard assessment tasks completed by children aged six-and-a-half to seven years this year.

  Sir Wyn Roberts
  The representations received about the implementation of the assessment arrangement for the first statutory SATs undertaken this year were unsolicited and as such cannot be made public without consent.

  Abattoirs
  Dr. David Clark
  To ask the Secretary of State for Wales if he will list the abattoirs in Wales which slaughter fewer than 12 livestock units or cattle each week.
  7
  Mr. David Hunt
  It would not be appropriate to list the information requested, in view of its commercial sensitivity. However, information on throughput derived from annual advisory visits by state veterinary staff to local authority licensed abattoirs is recorded in size bands. The 1990 figures for Wales are as follows:

  Livestock units

  Abattoirs

  0–5

  10

  6–10

  3

  11–15

  4

  Private Nursing Home Residents
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales whether residents of private nursing homes whose only income is from income support are eligible for additional benefits to cover the costs of support services including physiotherapy and chiropody where such services are not wholly provided by the health authority.

  Prep

  P1

  P2

  P3

  P4

  P5

  P6

  P7

  BELB n/a

  1·20

  1·0

  1·0

  1·10

  1·0

  1·00

  1·10

  NEELB 0·5 of P1–P7 values

  1·23

  1·09

  1·0

  1·09

  1·0

  1·09

  1·09

  SEELB 0·45

  1·20

  1·20

  1·1

  1·20

  1·1

  1·20

  1·20

  SELB 0·47

  1·10

  1·00

  1·0

  1·10

  1·0

  1·00

  1·10

  WELB 0·5

  1·00

  1·00

  1·0

  1·00

  1·0

  1·00

  1·00

  The cash value of each age-weighted pupil unit reflects the different approaches in each board area and are not, therefore, directly comparable. The figures are:

  AWPU £

  BELB

  813·79

  NEELB

  788·75

  SEELB

  730·92

  SELB

  852·35

  WELB

  812·25

  Prior to local mangement of schools—LMS—the Department paid 50 per cent. of approved teachers' costs

  Mr. Brooke

  Lord Belstead

  Dr. Mawhinney

  Mr. Needham

  Mr. Hanley

  Total

  January

  5

  10

  8

  10

  12

  45

  February

  13

  7

  8

  8

  11

  47

  March

  9

  12

  9

  5

  8

  43

  April

  6

  10

  12

  9

  13

  50

  May

  10

  7

  17

  12

  13

  59

  June

  10

  12

  14

  9

  10

  55

  Total

  53

  58

  68

  53

  67

  299

  Publications
  Mr. Mallon
  To ask the Secretary of State for Northern Ireland if he will give details for each of the last five years of all booklets, pamphlets, promotional literature, annual reports, statements of accounts, and other printed matter required by statute to be made publicly available by all (i) Government Departments, (ii) statutory bodies, (iii) other public agencies or authorities; the total cost in each case; and whether printing was carried out in Northern Ireland.

  Dr. Mawhinney
  The information is not held centrally and can be provided only at disproportionate cost.
  8
  Miss Widdecombe
  I have been asked to reply.

  No additional benefits are available to cover these services.

NORTHERN IRELAND

  Schools
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland if he will publish details of the cash value and age-weighted pupil units allocated by each education and library board in Northern Ireland under the scheme for local management of schools to(a) preparatory school pupils and (b) primary school pupils; how much the difference is between the weighting for pupils attending preparatory and primary schools; and what is the reason for the difference.

  Dr. Mawhinney
  Primary pupil age-weightings depend on the class being attended. The range of age-weightings in each education and library board is as follows:

  with all remaining costs being met by fees payable by parents. The reduced weighting under the LMS arrangements continue to reflect the ongoing contribution from fees.

  Ministers (Overnight Stays)
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland on how many nights in each of the months of January, February, March, April, May, June 1991 each of the Ministers at the Northern Ireland Office remained overnight in Northern Ireland.

  Dr. Mawhinney
  The information is

  Advertising Campaigns
  Mr. Dobson
  To ask the Secretary of State for Northern Ireland (1) if he will list the commencement dates and duration of each publicity campaign given in his answer of 3 July,Official Report, column 145;

  (2) if he will list the advertising, promotional or public relations companies employed by, or on behalf of, his Department who are involved in the campaigns given in his answer of 3 July, Official Report, column 145.

  Dr. Mawhinney
  [holding answer 11 July 1991]: The information is:
  9

  Campaign

  Commencement date

  Duration

  Company

  Crime Prevention Public Awareness Campaign

  Launch Autumn 1991

  Media element 4 weeks

  Cannot be disclosed on security grounds

  Environmental Awareness and Energy Efficiency

  22 August 1991

  3 months

  A. V. Browne Advertising Limited

  Job Training Programme

  Not finalised

  Not finalised

  Anderson Advertising Limited

  Pedestrian Safety

  26 June 1991

  1 month

  Chrysalis TV

  16 September 1991

  1 month

  Public Opinion Surveys
  Mr. Dobson
  To ask the Secretary of State for Northern Ireland if he will list the public opinion surveys carried out by his Department since his answer of 20 December,Official Report, column 280.

  Dr. Mawhinney
  [holding answer 11 July 1991]: The surveys since the answer on 20 December are:

  Entrance to Youth Training Programme

  Training and Employment Agency: Attitude and Awareness Survey

  Northern Ireland Museums Advisory Committee's Survey of Public Attitudes and Views of Museums in Northern Ireland

  Job Staff Satisfaction in DHSS

  Northern Ireland Continuous Household Survey

  Vehicle Testing Customer Survey 1991

  Customer Attitude 1991

ENVIRONMENT

  Planning Inquiries
  Dr. Hampson
  To ask the Secretary of State for the Environment (1) on the latest year's figures available for England and Wales, what were the mean, median, longest and shortest lengths of time between the closing of a public inquiry and the subsequent announcement of his decision;

  (2) on the latest year's figures available for England and Wales, what were the mean, median, longest and shortest lengths of time from notification of a public inquiry to the announcement of the decision, following a call-in under section 77 of the Town and Country Planning Act 1990, previously section 35 of the Town and Country Planning Act 1971, or as the result of an appeal against a planning authority's decision, or for any other reason.

  Mr. Yeo
  The information is not available in the form requested, and could only be obtained at disproportionate cost. The table sets out available information on the median periods between the opening of inquiries and the issue of decisions in respect of planning appeals made under section 78 of the Town and Country Planning Act 1990 and listed building consent appeals made under section 20 of the Planning (Listed Buildings and Conservation Areas) Act 1990.

  England 1990–91

  Section 20 appeals (weeks)

  Section 78 appeals (weeks)

  Inspector inquiries

  7

  7

  Secretary of State inquiries

  24

  28

  Comparable information for advertisement and enforcement appeals, and for Wales, is not available.

  Crown Suppliers
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many staff were in the Crown Suppliers furnishing business on 15 August 1990.

  Mr. Yeo
  There were 493 industrial and non-industrial staff in post in TCS Contract Furnishing on 15 August 1990.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many Crown Suppliers staff who transferred into Property Services Agency building management have now left the civil service on principal civil service pension scheme early retirement and severance terms.

  Mr. Yeo
  Seventy-six of the Crown Suppliers staff who transferred to building management have left the civil service on early retirement or severance terms.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what auditing arrangements apply to the preparation of Crown Suppliers Contract Furnishing for privatisation and eventual closure.

  Mr. Yeo
  The accounts of the Crown Suppliers, and costs in respect of any residual activities, are subject to audit by the Comptroller and Auditor General. An internal audit presence remained throughout the closure process.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many Crown Suppliers furnishing staff left the civil service under the principal civil service pension scheme early retirement and severence scheme terms in the first seven months of 1990 prior to the closure announcement.

  Mr. Yeo
  From 1 January to 14 August 1990, 85 Crown Suppliers furnishing staff left on early retirement and severence terms.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what is the projected cost excluding index-linking of annual compensation payments to design and furnishing staff until their retirement age.

  Mr. Yeo
  A total of £7,916,000.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what was the purchase value of all stocks of furniture and equipment held by Crown Suppliers furnishing business on 15 August 1990.

  Mr. Yeo
  A total of £7,873,000, excluding VAT.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many Crown Suppliers staff have left the civil service on principal civil service pension scheme early retirement and severence terms from 15 August 1990 to date.
  11
  Mr. Yeo
  From 15 August 1990 to date the following industrial and non-industrial staff have the Crown Suppliers on early retirement and early severence terms:

  Number

  TCS Contract Furnishing

  256

  The Buying Agency

  15

  TCS Transport Services

  69

  340

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what has been the cost of annual compensation payments made under the early retirement rules of the principal civil service pension scheme to design and furnishing staff, Crown Suppliers staff generally, and Crown Suppliers furnishing staff separately, since 1 January.

  Mr. Yeo
  The information is as follows:

  £

  Design and Furnishing Staff

  471,000

  Crown Suppliers Staff generally

  4,000

  Crown Suppliers Furnishing Staff

  42,000

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many design and furnishing, professional and technical officers transferred out of Crown Suppliers Contract Furnishing into Property Services Agency Building Management on 1 January 1989.

  Mr. Yeo
  A total of 108 design and furnishing, professional and technical officers were transferred to PSA Building Management on 1 January 1989.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what the cost has been so far, excluding early retirement and severance payments, of closing down the Crown Suppliers Contract Furnishing business.

  Mr. Yeo
  The cost to the end of June 1991 was £10,400,000.

  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what money was realised from the sale of Crown Suppliers Contract Furnishing stocks of furnituree and equipment disposed of after the closure announcement.

  Mr. Yeo
  A total of £6,460,000, excluding VAT.

  PSA Building Management
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment how many design and furnishing staff are left in Property Services Agency Building Management; and what plans there are for compulsory redundancies.

  Mr. Yeo
  Thirteen design and furnishing staff are left in PDS Building Management; four of these may have to be considered for compulsory redundancy.

  EC Supplies Directive
  Mr. Campbell-Savours
  To ask the Secretary of State for the Environment what steps he has taken to ensure that arrangements and contracts between Government Departments and the Property Services Agency comply with the European supplies directive.
  12
  Mr. Yeo
  While the PSA is part of the Government, the arrangements that it has with other Departments do not fall within the terms of the directive. The parts of the PSA that are proposed for privatisation are not suppliers of goods on any major scale. However, all PSA divisions have been reminded of the EC/GATT rules relating to public procurement.

  Housing Associations
  Mr. French
  To ask the Secretary of State for the Environment if he will discuss with the chairman of the National Federation of Housing Associations a new format for the presentation of housing association annual accounts, with a view to making them more easily understood.

  Mr. Yeo
  The Housing Corporation is reviewing the prescribed format for housing association accounts in consultation with the National Federation of Housing Associations. In considering what proposals for revision to put to my right hon. Friend, it will certainly have in mind the need to ensure that the accounts are clear and readily understood.

  Pollution Inspectorate
  Mrs. Ann Taylor
  To ask the Secretary of State for the Environment which district offices of Her Majesty's inspectorate of pollution have closed in the last year, or are scheduled to close in the future.

  Mr. Trippier
  The former district offices in Bristol and Leeds closed in 1990–91 when new regional headquarters offices were opened in those centres. The former district offices in Luton will close shortly following the opening of the new eastern regional headquarters at Bedford. The position on other offices is being reviewed in the light of the Government's proposal to create an environment agency.

  Mrs. Ann Taylor
  To ask the Secretary of State for the Environment what is the forecast expenditure for 1991–92 by Her Majesty's inspectorate of pollution on(a) staff dealing with authorisations and (b) staff undertaking inspection work.

  Mr. Trippier
  The forecast Her Majesty's inspectorate of pollution staff—salary related—costs for 1991–92 for dealing with authorisations and registrations, and for carrying out inspection work, are as follows:

  £

  Authorisation

  2,150,000

  Inspection

  3,275,000

  Mrs. Ann Taylor
  To ask the Secretary of State for the Environment what is the forecast expenditure for 1991–92 by Her Majesty's inspectorate of pollution on research work; and what proportion of this will be(a) undertaken by outside contractors and (b) devoted to radioactive substances work.

  Mr. Trippier
  Her Majesty's inspectorate of pollution plans to spend about £8 million on research work in 1991–92. All research is undertaken by outside contractors and about 80 per cent. of the total relates to radioactive waste.

  "Black Country Bright Future"
  Mrs. Maureen Hicks
  To ask the Secretary of State for the Environment if his Department has considered an application for an exhibition relating to "Black Country Bright Future" to be displayed in the Upper Waiting Hall.

  Mr. Key
  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 28 October to 1 November.

  City Challenge
  Mr. Madden
  To ask the Secretary of State for the Environment when he intends to announce successful bids under the city challenge programme; and if he will make a statement.

  Mr. Key
  We intend to announce the successful authorities by the end of July.

  Traveller Sites
  Mr. Madden
  To ask the Secretary of State for the Environment how many permanent traveller sites or pitches are provided currently by each local authority in west Yorkshire; what was the figure for the comparable period last year; how many additional pitches or sites are expected to become available during the coming year; and if he will make a statement.

  Mr. Yeo
  The number of permanent traveller pitches provided by each local authority in west Yorkshire at this time last year, the current provision and the likely provision by next year are as follows:

  Number of pitches

  Authority and site

  Last year

  This year

  Next year

  Bradford

  Mary Street

  24

  24

  28

  Esholt Lane

  16

  16

  19

  Calderdale

  Nil

  Nil

  Nil

  Kirklees

  Nil

  Nil

  Nil

  Leeds

  Cottingley Springs A

  20

  20

  20

  Cottingley Springs B

  Nil

  36

  36

  Wakefield

  Heath Common

  52

  52

  38

  Mr. Madden
  To ask the Secretary of State for the Environment how many permanent traveller sites are currently available in Bradford; how many pitches are available; when improvement work to sites is expected to be completed; what is the total cost of improvement work to date; what is the total estimated cost of improvement work; how much of this improvement work is paid for by grant from his Department; and if he will make a statement.

  Mr. Yeo
  There are currently two permanent local authority gypsy sites in Bradford, one at Mary street and the other at Esholt lane.
  14
  Phase I improvement works to the Mary street site costing £183,449 were given approval in February 1988 and these works have been completed. The site currently provides 24 pitches.

  Phase II and III improvement works to the same site costing £549,983 were approved in February 1991. These works will produce further site improvements and an additional four new pitches bringing the total number of pitches on this site to 28.

  The total estimated cost of improvement works to the Mary street site is £733,432.

  The Esholt lane site at present provides 16 pitches. Improvement works costing £549,481 were approved in March 1991. These will result in a total of 19 pitches on this site.

  Grants are available to local authorities towards the capital cost of providing gypsy caravan sites. The rate of grant on admissible costs on schemes approved by the Secretary of State is 100 per cent.

  Housing
  Mr. Nicholas Winterton
  To ask the Secretary of State for the Environment what plans are currently being made by his Department to deal with the growth in demand for public and private sector housing which will arise when the establishment of the armed forces is reduced and service men and women cease to be entitled to Ministry of Defence housing.

  Mr. Yeo
  My Department is in touch with the Ministry of Defence about the likely effects of "Options for Change". The final form that the changes will take has still to be decided, but I know my right hon. Friend the Secretary of State for Defence will be taking into account the housing implications.

  Humberside
  Mr. Morley
  To ask the Secretary of State for the Environment (1) what weight he intends to give to the Boundary Commission's interim report "The Future of Humberside" in the full national local government review;

  (2) what account he is taking of the proportion of the public response to the Boundary Commission's interim report "The Future of Humberside" which favours retaining the present county of Humberside.

  Mr. Key
  Due consideration will be given by my right hon. Friend to all the views expressed in the course of the review of Humberside.

  Empty Properties
  Ms. Gordon
  To ask the Secretary of State for the Environment if he will list the figures for empty properties by tenure for each London borough annually since 1979.

  Mr. Yeo
  [pursuant to the reply, 9 July 1991, c. 312–20]: Local authorities report the number of their own dwellings which were empty at 1 April, and estimates of empty dwellings owned by other public sector bodies, housing associations and the private sector, in their annual housing investment programme returns (HIP 1). The available figures for London boroughs appear in the "HIP1 All Items Print" for each year since 1979, at the column references given in the table.

  15

  "HIPI All Items Print"—column references

  Year

  Local authority

  Housing association

  Other public sector*

  Private sector

  1979

  B41

  B42+B43**

  B44

  B45

  1980

  A81

  A82 + A83**

  A84

  A85

  1981 to 1984

  A71

  A72

  A73

  A74

  1985 to 1989

  A81

  A82

  A83

  A84

  1990

  A71

  A72

  A73

  A74

  Notes:

  * Other public sector includes dwellings owned by other boroughs, the GLC (up to 1985), government departments and other public sector agencies.

  ** For 1979 and 1980 there were separate estimates for local authority funded housing association dwellings and others.

  Copies of all the documents are in the Library.

  Housing Grants
  Mr. Fearn
  To ask the Secretary of State for the Environment (1) how many discretionary grants were awarded to private sector owners and tenants in the years 1989, 1990 and 1991 to date;

  (2) how many mandatory grants were awarded to private owners and tenants in the years 1989, 1990 and 1991 to date.

  Grants paid to private owners and tenants under the Housing Act 1985: England

  (numbers of dwellings)

  Year

  Mandatory

  Discretionary

  All grants

  1988–89

  20,823

  81,624

  102,447

  1989–90

  17,729

  82,750

  100,479

  1990–911

  n.a.

  n.a.

  70,475

  Notes: Mandatory grants are composed of all intermediate, some special and some repair grants.

  1 Provisional.

  A new system of grants under the Local Government and Housing Act 1989 began in mid-1990. The number of mandatory and discretionary grants approved and paid is shown in the following table.

  Grants to private owners and tenants under the Local Government and Housing Act 1989: England

  (number of grants)

  Year

  Approvals

  Grants paid

  Mandatory

  Discretionary

  Mandatory

  Discretionary

  19901

  5,148

  13,834

  611

  7,009

  1991 (first quarter)1

  9,950

  11,761

  3,390

  9,477

  Notes: Discretionary grants include minor works assistance.

  1 Provisional.

  Rural Development Commission
  Mr. Flynn
  To ask the Secretary of State for the Environment if he will make a statement on the work of the Rural Development Commission since its inception.

  Mr. Baldry
  [holding answer 11 July 1991]: The work of the Rural Development Commission is described in its annual reports which are in the Library of the House.

  East London Transport (Inspectors' Reports)
  Mr. Cartwright
  To ask the Secretary of State for the Environment whether he expects to receive the inspectors' reports on the east London river crossing and the London City airport before 31 August.

  Mr. Yeo
  Both reports have now been delivered.
  16
  Mr. Yeo
  [holding answer 12 July 1991]: For the period up to June 1990 grants to private owners and tenants were made under the Housing Act 1985, although payments for grants approved are still continuing. The available information distinguishing mandatory and discretionary grants relates to payments for financial years up to 1989–90 appears in the table.

  Tenex Elbow
  Mr. Win Griffiths
  To ask the Secretary of State for the Environment (1) what assessment his Department has made of the dangers present to individuals and the environment by the Tenex Elbow shock absorber; and what safety tests have been carried out on the absorber;

  (2) whether his Department will take steps to ban the sale of the Tenex Elbow shock absorber until he is satisfied that no danger exists for the public or the environment either whilst it is in use or when it has been disposed of.

  Mr. Baldry
  The Tenex Elbow shock absorber has been examined by the Laboratory of the Government Chemist.

  It contains 30 grammes of mercury, a substance which is a well known environmental hazard and may pose a threat to the environment when discarded. I am therefore considering whether their supply should be prohibited. I have asked officials to contact the suppliers.

HOME DEPARTMENT

  Obscene Publications (Prosecutions)
  Sir Michael McNair-Wilson
  To ask the Secretary of State for the Home Department how many prosecutions for breaches of the Obscene Publications Act 1959 have taken place in the past five years; and how many have been successful.

  Mr. John Patten
  The information requested is given in the table. Data for 1990 are not yet available.

  Defendants proceeded against and found guilty of offences under the Obscene Publications Act 19591

  England and Wales

  Year

  Total proceeded against

  Total found guilty

  1985

  275

  226

  1986

  129

  126

  1987

  121

  93

  1988

  158

  130

  1989

  125

  96

  1 Obscene Publications Act 1959, section 2 as amended by the Obscene Publications Act 1964, section 1.

  Mr. Kanagerotnom Jeyabolasingam
  Mr. Cartwright
  To ask the Secretary of State for the Home Department when he expects to reply to the letter dated 5 November 1990 from the hon. Member for Woolwich about the case of Mr. Kanagerotnom Jeyabolasingam of 15 Goldfinch road, SE28, reference No. J/134460.

  Mr. Peter Lloyd
  I will write to the hon. Member shortly.

  Mr. Abdulahi Osman Jama
  Mr. Cartwright
  To ask the Secretary of State for the Home Department when he expects to provide a substantive reply to the letter of 25 June 1990 from the hon. Member for Woolwich about the case of Mr. Abdulahi Osman Jama, reference TN2/1581/12236/89, which was acknowledged by his Department on 31 July 1990.

  Mr. Peter Lloyd
  A reply was sent to the hon. Member today.

  Political Asylum
  Mr. Fraser
  To ask the Secretary of State for the Home Department how much will be the extra expenditure on the United Kingdom immigrant advisory service, following his statement on political asylum on 2 July.

  Mr. Peter Lloyd
  I refer the hon. Member to the reply given to a question from the hon. Member for Edinburgh Central (Mr. Darling) on 9 July at columns 324–25.

  Prisons (Parcels)
  Mr. Cormack
  To ask the Secretary of State for the Home Department what proportion of parcels addressed to prisoners held in high security prisons are opened and searched by prison staff before delivery.
  18
  Mrs. Rumbold
  The current instruction to governors at all establishments on the handling of inmates' correspondence requires all incoming parcels to be opened by a member of staff in the presence of the inmate and examined for illicit enclosures.

  British Nationals
  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many British nationals have absconded from home leave in each of the last five years and have not been recaptured.

  Mrs. Rumbold
  Since details of the nationality of prisoners who fail to return from home leave are not routinely collected, the information requested is not readily available and could be provided only at disproportionate cost.

  Remand Prisoners
  Mr. Gareth Wardell
  To ask the Secretary of State for the Home Department if he has any plans to transfer the holding of remand prisoners from police cells to military camps.

  Mrs. Rumbold
  Remand prisoners have to be held in secure accommodation near the courts which have remanded them so that they may be escorted to and from the court for remand hearings. Military accommodation is not generally suitable for this role, although it has been used to hold sentenced prisoners in times of severe overcrowding. The present position is that industrial action has prevented the prison service from using existing prison places in order to avoid using police cells. But prison service management continues to work to gain access to accommodation and to use the prison estate flexibly.

  Police Pursuit
  Mr. Shersby
  To ask the Secretary of State for the Home Department if he will discuss with the chairman of the Association of Chief Police Officers the policy of chief constables in relation to the pursuit of suspects driving away vehicles; whether any limits are imposed on the freedom of police officers to enter into pursuit and on the maximum speed of police vehicles while engaged in pursuit duties; and if he will make a statement.

  Mr. Peter Lloyd
  The pursuit of suspects driving away vehicles is an operational matter for individual chief officers of police. The Association of Chief Police Officers, in a recent review of police driver training, has produced a recommended code of practice on pursuit management and driving.

  All the emergency services, including the police, are exempt from the speed limits if observing them would hinder the purpose for which the vehicle was being used.

  Women's Issues
  Mr. Andrew Bowden
  To ask the Secretary of State for the Home Department what studies the ministerial group on women's issues has made into issues affecting older women.

  Mrs. Rumbold
  Most of the issues discussed by the ministerial group on women's issues affect women of all
  19
  ages. Topics in which the interests of older women have been more specifically addressed have included a review of the needs of carers and training opportunities for women returners.

  Harmondsworth Detention Centre
  Mr. Madden
  To ask the Secretary of State for the Home Department how many people are currently detained at the Harmondsworth detention centre in London; why these people are detained; what was the(a) minimum, (b) average and (c) maximum period of detention, to date, during 1991; what the comparable figures are for the same period in 1990; and if he will make a statement.

  Mr. Peter Lloyd
  At 10 July 1991, a total of 94 people were detained at the Harmondsworth detention centre. Of these, 66 were detained pending further examination of their applications for leave to enter the United Kingdom. Of the others, 13 have been refused leave to enter, seven have been served with notices that they are illegal entrants and eight are the subject of deportation action. These 28 people are detained while representations are considered, appeal rights exercised, or arrangements for removal from the United Kingdom made.

  Consideration is given in all case to whether release on temporary admission is possible; but the particular circumstances of each case makes this inappropriate.

  Records of those detained at Harmondsworth over the course of a year are not held centrally and it would be possible to provide all the information requested only at disproportionate cost. However, the minimum period of detention in 1991 to date has been less than 24 hours. The minimum period of detention in 1990 was also less than 24 hours.

  Other available information is as follows.

  The average period of detention of those held at Harmondsworth on 10 July 1991 was 24.6 days. This compares with an average of 10 days for those held on 10 July 1990.

  The maximum period spent by anyone in Harmondsworth in 1990–91 was 406 days—between 13 January 1990 and 22 February 1991.

  Mr. Madden
  To ask the Secretary of State for the Home Department on how many days in the past month persons detained at the Harmondsworth detention centre in London have refused food; how many detainees are currently refusing food; what reasons have been given by detainees for refusing food; how frequently detainees refusing food are medically examined; and if he will make a statement.

  Mr. Peter Lloyd
  As at 11 July, no detainee at the Harmondsworth detention centre was refusing to take meals. In the period 12 June to 10 July 1991, detainees declined meals on a total of seven days, the details being shown in the table.

  Dale

  Number of persons

  Reason

  26 June

  2

  Not hungry

  30 June

  1

  Protest

  2 July

  2

  Not hungry

  2 July

  1

  Protest

  3 July

  1

  Not hungry

  4 July

  11

  Protest

  4 July

  2

  Stomach upset

  20

  Date

  Number of persons

  Reason

  8 July

  4

  Protest

  9 July

  1

  Protest

  All detainees who refuse meals are referred to the detention centre's medical practitioner's daily surgery for examination.

  The fact that a detainee is refusing meals does not necessarily mean that he or she is not taking nourishment. A range of confectionery is available for purchase within the centre and visitors are allowed to bring in certain items, including fruit.

  Illegal Immigrants
  Mr. Steen
  To ask the Secretary of State for the Home Department if he will list for each of the past three years the fines imposed on British Airways relating to the arrival of illegal immigrants at United Kingdom airports; and how many fines remain outstanding.

  Mr. Peter Lloyd
  The Immigration (Carriers' Liability) Act 1987 makes carriers who bring improperly documented passengers to the United Kingdom liable to a charge. It is not the practice to disclose information on the record of individual airlines under the Act.

  Hillsborough Football Stadium
  Mr. Shersby
  To ask the Secretary of State for the Home Department if he will call for a report from the chairman of the Police Complaints Authority on the reasons for the delay since the result of the inquest on the Hillsborough football stadium disaster and any decision being made on the bringing of disciplinary charges against those police officers under investigation; and if he will make a statement.

  Mr. Peter Lloyd
  No. My hon. Friend will be aware that on Friday 12 July the Police Complaints Authority issued a statement announcing their decision to direct that disciplinary charges be brought against two officers of the South Yorkshire police.

  Police and Prison Manpower
  Mr. John Browne
  To ask the Secretary of State for the Home Department if he will make a statement on the incident at Winchester crown court on Tuesday 9 July and set up an inquiry to report specifically upon security of building construction and security procedures and on the manning levels of the local police and prison service.

  Mrs. Rumbold
  At 13.40 hours on 8 July at Winchester Crown Court, six prisoners created a disturbance in the custody area. All were already serving sentences, and it is believed that their actions were in protest at the prisons to which they might be allocated when their current trial was over. They armed themselves with items of broken furniture in order to resist or prevent intervention by prison staff, and two climbed into the roof space above the cells area. All had surrendered to prison staff by 19.16 hours that day. There were no injuries to staff or to prisoners. The Hampshire police force is conducting a criminal investigation into the incident.

  An investigation into the design and construction of the custody area at Winchester Crown Court will be carried

  21
  out by members of prison service headquarters. The detailed security procedures in the custody area of the court are a matter for the governor, in consultation with the Lord Chancellor's Department.

  The current strength of the Hampshire police force is fully up to its authorised complement, and Winchester prison has sufficient staff to carry out its work.

  Winchester Prison
  Mr. John Browne
  To ask the Secretary of State for the Home Department if he will make a statement about the overcrowding and staffing at Winchester prison and the reason why he decided not to invite the local hon. Member to attend his visit to Winchester prison.

  Mrs. Rumbold
  The certified normal accommodation of Winchester prison is 458 and its operational capacity 623. On 10 July 1991, the latest date for which figures are available, the population was 556. This compares well with other local prisons. As far as staffing is concerned, I am satisfied that Winchester prison has been provided with enough staff to carry out its work.

  My hon. Friend will be informed of any future plans for Ministers to visit Winchester prison, and my right hon. Friend very much regrets that though a misunderstanding this was not done on the occasion of his visit on 6 March 1991.

CIVIL SERVICE

  Civil Service College
  Mr. McAllion
  To ask the Minister for the Civil Service (1) how many staff were in post on the date that the Civil Service college was established as an executive agency; and how many staff are in post now;

  (2) what group bonus schemes are in operation in the Civil Service college; and if he will state the cash amount per person awarded in the last year for which figures are available, and the conditions attached to its award;

  (3) how much was spent on events and publicity surrounding the launch of the Civil Service college as an executive agency; and whether the cost was borne by the parent Department or the new agency;

  (4) if he will list those new facilities for staff including nurseries and health care schemes which have been introduced in the Civil Service college since its establishment as an executive agency;

  (5) if he will list the new forms of alternative working patterns introduced into the Civil Service college since its establishment as an executive agency; and a breakdown by grade of the numbers of staff taking up each new working pattern;

  (6) what appointments from the private sector have been made to the Civil Service college at grade 7 or above since its establishment as an agency; and if he will list the post, grade and maximum salary payable, including any performance related element.

  Mr. Renton
  These are matters for the chief executive and I have asked her to write to the hon. Gentleman direct.

  Mr. McAllion
  To ask the Minister for the Civil Service when the last annual report for the Civil Service college was published; and when the next one is due.

  Mr. Renton
  The Civil Service college's annual report and accounts for the year ended 31 March 1990 were 22
  published on 20 August 1990. Copies were placed in the Libraries of both Houses in that week. It is planned to publish the 1990–91 report and accounts by 31 July 1991.

  Public Opinion Surveys
  Mr. Dobson
  To ask the Minister for the Civil Service if he will list the public opinion surveys conducted by, for or on behalf of his Office since his answer of 20 December,Official Report, column 293.

  Mr. Renton
  [holding answer 11 July 1991]: No public opinion surveys have been conducted by my office since 20 December 1990.

TRADE AND INDUSTRY

  Accountancy Practices
  Mr. Austin Mitchell
  To ask the Secretary of State for Trade and Industry whether under the proposed recognised supervisory body regime, investors will be able to take legal action against the Auditing Standards Board for(a) adopting and (b) issuing passive auditing guidelines.

  Mr. Redwood
  The Auditing Practices Board will have no functions under the supervisory regime in part II of the Companies Act 1989, so the question of legal action against the board by virtue of the introduction of part II does not arise. Whether the board could be liable for damages under the general law would be for the courts to determine.

  Salmon
  Mrs. Ray Michie
  To ask the Secretary of State for Trade and Industry what assessment he has made of the impact EFTA being given access to the EC free trade area will have on the Scottish salmon farming industry.

  Mr. Sainsbury
  [holding answer 8 July 1991]: The negotiations between the EC and EFTA to create a European economic area continue. EFTA has not been offered improved access to the EC market for salmon.

  Mrs. Ray Michie
  To ask the Secretary of State for Trade and Industry if he will make it his policy that no agreement will be signed between EFTA and the EC until the current trade dispute with Norway is resolved.

  Mr. Sainsbury
  [holding answer 8 July 1991]: I assume that the hon. Member is referring to the recent anti-dumping investigation by the EC into farmed salmon products from Norway. This case was dropped by the Commission following the receipt of assurances from Norway. I am aware of the salmon farming industry's concerns about imports of salmon or salmon products from Norway to the Community. These concerns are being borne in mind in the current discussions between the EC and EFTA on the European economic area.

  EC Trade
  Mr. Denzil Davies
  To ask the Secretary of State for Trade and Industry (1) what was the value in ecu of the total imports into the EC of manufactured goods in each of the last three available years;
  23
  (2) what was the value in ecu of the total exports of manufactured goods from the EC in the last three available years.

  Mr. Sainsbury
  [holding answer 11 July 1991]: The information is available in table 3 of the External Trade Statistical Yearbook published by EUROSTAT, which is held in the Library.

  Mr. Denzil Davies
  To ask the Secretary of State for Trade and Industry (1) what was the total value in ecu of the total exports of imported goods from(a) Germany, (b) France and (c) Italy in each of the last three available years;

  (2) what was the value in ecu of the total exports of imported goods from the United Kingdom in the last three available years.

  Mr. Sainsbury
  [holding answer 11 July 1991]: The information is not available.

  Units of Measurement
  Ms. Quin
  To ask the Secretary of State for Trade and Industry, pursuant to the answer to the hon. Member for Fulham (Mr. Carrington) on units of measurement, of 2 July,Official Report, column 99, when his Department will begin consultation about the implementation and timing of the EC directive on units of measurement referred to in the debate on European Communities Document No. 4102/89 on 11 April 1989, Official Report, column 858.

  Mr. Lilley
  [holding answer 12 July 1991]: My Department has already consulted interested parties about implementing the units of measurement directive and the timing of phasing out certain imperial units. The Department is preparing drafts of the implementing legislation. There will be further consultation when this work has been completed.

PRIME MINISTER

  Building Societies
  Mr. Peter Bottomley
  To ask the Prime Minister, if Ministers, at the time of the 1985 Budget, intended to lay regulations to create liability for tax relating to a year for which building societies composite rate tax liability had been fully discharged; what estimate of the money involved was available to Ministers at the time; and what, and when, an estimate was first made available to Parliament.

  The Prime Minister
  The 1985 Budget day press release announced that there would be transitional provisions to deal with the changeover for building societies from an annual to a quarterly accounting system in line with that for the banks.

  The announcement followed confidential discussions with building society representatives during which Ministers made it clear that the provisions would cover payments between the end of societies' accounting periods in 1985–86 and 5 April 1986 that would otherwise fall out of account.

  No estimate was made at the time of tax on interest accruing between the end of societies' accounting periods ending in 1985-86 and paid before the end of that tax year. No estimate covering all societies has subsequently been
  24
  made available to Parliament. For societies other than the Woolwich Equitable, I refer my hon. Friend to the reply given to him by the Economic Secretary on 21 June at column 341.

  Additionality
  Mr. Colvin
  To ask the Prime Minister what arrangements exist for co-ordination between the Treasury, the Department of the Environment, the Scottish Office and the Welsh Office, on the question of additionality in respect of RECHAR funding from the European Community; and which Minister has the lead responsibility for policy regarding additionality.

  The Prime Minister
  My right hon. Friend the Secretary of State for Trade and Industry has lead responsibility for all matters concerning the European Community structural funds.

  Former Prime Ministers
  Mr. Alan Williams
  To ask the Prime Minister, pursuant to his answer of 27 March,Official Report, column 428, whether income arising from a former Prime Minister's special position in public life was taken into account in assessing their eligibility for the allowance to former Prime Ministers for the additional costs which they are liable to incur from their special position in public life.

  The Prime Minister
  No. The full amount of the allowance is available to all former Prime Ministers.

  Mr. Alan Williams
  To ask the Prime Minister, pursuant to his answer of 27 March,Official Report, column 428, what is the former Prime Ministers' total annual allowance; whether it includes travel expenses (a) within the United Kingdom and (b) abroad; and if he will make a statement on the restrictions on the use of money under the scheme.

  The Prime Minister
  The maximum amount of the allowance available to former Prime Ministers during 1991–92 is £28,986 plus £2,899 for secretaries' pension contributions. Former Prime Ministers may draw on the allowance to offset the secretarial and other office expenses they incur because of their special position in public life, but not the cost of their travel either in the United Kingdom or abroad.

  Mar Lodge
  Mr. Dalyell
  To ask the Prime Minister if he will set up an interdepartmental working group to consider the future of Mar lodge.

  The Prime Minister
  My right hon. Friend the Secretary of State for Scotland has already established the Cairngorms working party to present options for the integrated management of the Cairngorms as a whole. Mar lodge estate is central to the area under consideration. The relevant Government Departments and agencies are represented on, or act as technical assessors to, the working party.

  I understand, moreover, that the Nature Conservancy Council for Scotland and the Countryside Commission for Scotland are giving consideration to the future management of the natural heritage interest on the estate.

  Cairns Group
  Mr. Alfred Morris
  To ask the Prime Minister what consideration he has given to the communique issued following the meeting of Cairns group of ministers in Manaus, Brazil, on 9 July; if there is any action he will be taking; and if he will make a statement.

  The Prime Minister
  The communique rightly points to the need to bring the Uruguay round of trade negotiations to an early conclusion, and the crucial importance of agreement on agriculture in order to do so. As the communique says, the need now is to move from technical discussions to decisions on the framework within which agricultural support and protection are to be reduced. I hope that the London economic summit this week will give a strong push to the Uruguay round, and that Heads of Government will remain personally involved, with the aim of reaching a successful conclusion this year.

EDUCATION AND SCIENCE

  Play Areas
  Ms. Walley
  To ask the Secretary of State for Education and Science (1) what guidelines he has issued to local authorities concerning the safety of children's play areas;

  (2) what specific advice he has given to local authorities concerning the synthetic surfacing of children's play areas; and what standards are required.

  Mr. Atkins
  My predecessor the then Minister for Sport, commissioned the national children's play and recreation unit to prepare a booklet on playground safety for distribution to local authorities. The Department is also producing a booklet on safety in school playgrounds and related matters. Both will include advice on the safety of surfaces and will be published as soon as possible. I regard it as essential that playgrounds should be as safe as possible. Playground operators are required to consider actively how best to discharge their duties of care under the Health and Safety at Work etc. Act 1974. In addition, non-statutory guidance exists in the form of British standards, BS 5696—play equipment intended for permanent installation outdoors—and BS 7188—methods of test for impact absorbing playground surfaces.

  Her Majesty's inspectorate visits to grant-maintained schools from September 1989 to June 1991

  Grant-maintained school

  Her Majesty's inspectorate visits

  Audenshaw

  December 1989

  February 1990

  February 1991

  Bacup and Rawtenstall Grammar

  January 1990

  November 1990

  Baverstock

  February 1990

  October 1990

  February 1991

  Heckmondwike

  November 1989

  January/June 1990

  November 1990

  London Oratory

  September 1989

  February 1990

  February/March 1991

  Old Swinford Hospital

  November 1989

  March 1990

  November 1990

  Queen Elizabeth's Grant-Maintained Grammar

  November 1989

  June 1990

  March 1991

  Queensbury

  November 1989

  May 1990

  February 1991

  Her Majesty's Inspectorate
  Mr. Straw
  To ask the Secretary of State for Education and Science when his review of the future role and functions of Her Majesty's inspectorate is to be completed; and when, and in what form, it will be published.

  Mr. Kenneth Clarke
  I have now received the report from the review team and am considering its recommendations. I shall announce my decisions in due course.

  Grant-maintained Schools
  Mr. Straw
  To ask the Secretary of State for Education and Science what is his policy for the publication of reports of inspections and other visits by Her Majesty's inspectors to grant-maintained schools.

  Mr. Kenneth Clarke
  The policy for the publication of reports on schools which have GM status is the same as for all other institutions. Only a proportion of the inspection visits made to schools by Her Majesty's inspectors are planned and carried out with the intention of producing a report for publication. Those that do not come within that category conclude with HMI providing an oral report of the findings to the head and chairman of governors, where he or she is able to attend. This policy is applied consistently to all schools, whether GM, LEA maintained or independent.

  Mr. Straw
  To ask the Secretary of State for Education and Science if he will list(a) the inspections and (b) other visits made by Her Majesty's inspectors to grant-maintained schools since September 1989 giving details of the schools concerned and dates, and whether reports of the inspections or visits have been issued to the governors, or made public.

  Mr. Eggar
  The table lists details of HMI visits to grant-maintained schools between September 1989 and June 1991. At the end of this period, there were 62 schools operating with GM status. The frequency of HMI visiting reflects the newness of the status of these schools.

  All visits to schools by HMI are for the purpose of inspection. However, only a proportion of these visits are intended to produce a report for publication. None of the visits listed in the table came into that category and I will not therefore be publishing reports of any of the visits. In all cases HMI's findings were reported orally to the head and to the chairman of the governors where he or she was able to be present.
  27

  Grant-maintained school

  Her Majesty's inspectorate visits

  Skegness Grammar

  November 1989

  November 1990

  Small Heath

  September 1989

  June 1990

  October 1990

  St. James Church of England

  September 1989 January 1990

  October 1989 March 1990

  December 1989 July 1990

  Wilmington Girls Grammar

  October 1989

  February/October 1990

  May 1991

  King's

  November 1989

  June 1990

  March 1991

  Wilson's

  November 1989

  May 1990

  March 1991

  Castle Hall

  October 1989

  January 1990

  January 1991

  Hendon

  June 1990

  February 1991

  Queen Elizabeth's Grant-Maintained Boys

  November 1989

  June 1990

  May 1991

  Colyton Grammar

  November 1989

  March 1990

  October 1990

  Bankfield High

  January 1990

  March 1990

  March 1991

  St. Francis Xavier's College

  January 1990

  November 1990

  Cardinal Vaughan Memorial

  June 1990

  February 1991

  Claremont High

  April 1990

  October 1990

  Lancaster Royal Grammar

  November 1990

  London Nautical

  September 1990

  Netherthorpe

  November 1990

  Ribston Hall

  April 1990

  Southfield Girls

  April 1990

  January 1991

  Southlands

  June 1990

  Beechen Cliff

  April 1990

  Long Field High

  October 1990

  February 1991

  Bishopshalt

  October 1990

  Bournemouth Grammar

  October 1990

  December 1990

  Bridgewater Hall

  January 1991

  Brindley Hall

  February 1991

  Carre's Grammar

  March 1991

  Ecclesbourne

  March 1991

  Guildford

  October 1990

  Marling

  January 1991

  Pate's Grammar

  January 1991

  Rickmansworth

  March 1991

  Stroud High

  October 1991

  Watford Boys' Grammar

  March 1991

  Wolverhampton Girls' High

  January 1991

  Bullers Wood Girls

  March 1991

  Francis Bacon

  January 1991

  Handsworth Boys' Grammar

  March 1991

  Wymondham College

  April 1991

  28

  29

  Grant-maintained school

  Her Majesty's inspectorate visits

  Crossley Heath

  June 1991

  Lancaster Girls' Grammar

  June 1991

  North Halifax High

  April 1991

  Stratford

  April 1991

  Mr. Norris
  To ask the Secretary of State for Education and Science if he will list, for each grant-maintained school, the number of places and the number of pupils(a)

  Name of school

  Indicated physical capacity

  Pupils at application

  Pupils at January 1990

  Pupils at January 1991

  Adams Grammar School

  506

  445

  n.a.

  457

  Audenshaw High School

  778

  724

  714

  758

  Bacup and Rawtenstall Grammar School

  738

  746

  717

  734

  Bankfield High School

  778

  436

  428

  452

  Baverstock Grant-maintained School

  1,052

  975

  1,037

  1,084

  Beechen Cliff School

  1,100

  865

  n.a.

  760

  Bishopshalt School

  1,083

  917

  n.a.

  957

  Bournemouth Grammar School

  941

  882

  n.a.

  872

  Bridgewater Hall School

  1,398

  1,265

  n.a.

  1,089

  Brindley Hall School

  881

  995

  n.a.

  1,081

  Bullers Wood School for Girls

  1,006

  942

  n.a.

  976

  Cardinal Vaughan Memorial School

  588

  614

  n.a.

  629

  Carre's Grammar School

  627

  385

  n.a.

  403

  Castle Hall Grant-maintained School

  567

  382

  394

  434

  Chalvedon School

  1,696

  1,284

  n.a.

  1,334

  Claremont High School

  1,307

  888

  n.a.

  853

  Colyton Grammar School

  371

  433

  421

  462

  Crossley Heath School

  790

  690

  n.a.

  685

  Ecclesbourne School

  1,056

  1,223

  n.a.

  1,196

  Francis Bacon School

  844

  469

  n.a.

  441

  Great Barr School

  2,271

  2,010

  n.a.

  2,005

  Guildford County School

  641

  733

  n.a.

  740

  Handsworth Grammar School for Boys

  738

  766

  n.a.

  772

  Hardley Secondary School

  941

  729

  n.a.

  669

  Heckmondwike Grammar School

  600

  565

  584

  614

  Hendon School

  1,085

  841

  805

  820

  King Edward VI Grammar School

  572

  540

  n.a.

  528

  Kingsley Park Middle School

  495

  337

  n.a.

  331

  Lancaster Girls Grammar School

  651

  642

  n.a.

  644

  Lancaster Royal Grammar School

  831

  847

  n.a.

  864

  London Nautical School

  434

  393

  n.a.

  391

  London Oratory School

  1,045

  890

  1,184

  1,178

  Long Field High School

  460

  392

  n.a.

  347

  Marling School

  881

  735

  n.a.

  737

  Netherthorpe School

  725

  553

  n.a.

  616

  North Halifax High School

  769

  692

  n.a.

  640

  Old Swinford Hospital

  828

  544

  525

  544

  Pate's Grammar School

  920

  1,010

  n.a.

  977

  Queen Elizabeth's Grant-maintained Grammar School

  412

  334

  329

  336

  Queen Elizabeth's Grant-maintained School for Boys

  957

  1,054

  1,036

  1,074

  Queensbury School

  1,060

  647

  641

  676

  Reading School

  771

  651

  n.a.

  645

  Ribston Hall High School

  682

  482

  n.a.

  405

  Rickmansworth School

  898

  933

  n.a.

  961

  Skegness Grammar School

  808

  567

  539

  568

  Small Heath School

  1,173

  771

  780

  758

  Southfield School for Girls

  915

  615

  n.a.

  598

  Southlands School

  930

  542

  n.a.

  504

  St. Francis Xavier's College

  1,247

  1,008

  1,012

  1,014

  St. George's School

  822

  870

  n.a.

  864

  St. James Church of England School, Bolton

  778

  657

  655

  687

  Stratford School

  1,195

  765

  n.a.

  393

  Stroud High School

  881

  735

  n.a.

  698

  The Cornwallis School

  1,280

  805

  n.a.

  798

  The Grammar School for Girls, Wilmington

  553

  451

  415

  426

  30
  at the date on which grant-maintained proposals were published or approved, (b) in January 1990 and (c) in January 1991.

  Mr. Eggar
  [holding answer 5 July 1991]: The information requested by my hon. Friend is as follows:
  31

  Name of school

  Indicated physical capacity

  Pupils at application

  Pupils at January 1990

  Pupils at January 1991

  The Kings School, Grantham

  854

  747

  762

  764

  The Maplesden Noakes School

  754

  651

  n.a.

  715

  Watford Boys Grammar School

  1,055

  1,032

  n.a.

  1,043

  Wilmington Grammar School for Boys

  550

  352

  n.a.

  307

  Wilsons School

  747

  730

  753

  745

  Wolverhampton High School for Girls

  593

  563

  n.a.

  584

  Wymondham College

  1,483

  831

  n.a.

  827

  Key:

  Column 1: indication of capacity as on the statement of capacity form submitted with proposal for grant-maintained status.

  Column 2: number on roll at time of application.

  Column 3: number on roll as submitted to the Department by the school on Form 7 in January 1990.

  Column 4: number on roll as submitted to the Department by the school on Form 7 in January 1991.

  n.a.—School not operating as Grant-maintained in January 1990.

  Observatories
  Dr. Bray
  To ask the Secretary of State for Education and Science what has been the outcome of the review of the future of the Royal Greenwich Observatory and the Royal Observatory Edinburgh; and whether he will make a statement on the future provision for research in astronomy in the United Kingdom.

  Mr. Alan Howarth
  A review of the respective roles of the two Royal Observatories, commissioned by the Science and Engineering Research Council, will be considered by the council at its meeting on 17 July. No final decisions will be taken before them. The SERC will continue to support a high-quality programme of research in astronomy. The

  Pupils and students with special needs in schools and colleges in England

  thousands

  Academic year

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Maintained

  Primary1

  18·1

  19·3

  23·2

  26·0

  29·2

  Secondary1

  11·9

  14·0

  17·7

  21·2

  25·1

  Independent1

  n/a

  n/a

  6·1

  5·6

  5·6

  Special schools2

  age 5

  3·7

  3·7

  3·6

  3·8

  3·6

  6

  4·1

  4·3

  4·2

  4·2

  4·3

  7

  5·0

  5·0

  5·3

  5·2

  5·1

  8

  5·9

  5·8

  6·0

  6·3

  6·2

  9

  7·3

  6·7

  6·7

  6·9

  7·2

  10

  8·5

  7·9

  7·3

  7·2

  7·6

  11

  9·9

  9·3

  8·8

  8·2

  8·2

  12

  11·3

  10·4

  10·0

  9·4

  8·8

  13

  13·0

  12·1

  11·3

  10·6

  10·1

  14

  14·2

  13·5

  12·6

  11·7

  10·9

  15

  14·3

  14·4

  13·5

  12·5

  11·6

  16

  4·5

  4·3

  4·3

  4·2

  3·8

  17

  2·9

  2·9

  2·8

  3·0

  2·9

  18

  1·7

  1·9

  1·9

  1·9

  2·0

  Maintained colleges

  age 16

  n/a

  n/a

  n/a

  4·4

  3·9

  17

  n/a

  n/a

  n/a

  3·7

  3·3

  18

  n/a

  n/a

  n/a

  1·3

  1·8

  1 Pupils with statements of special educational needs only. Age breakdown not available.

  2 Includes maintained and non-maintained special schools, general hospital schools and hospital special schools.

  n/a = not available.

  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will publish a list of infant and junior schools in each local education authority which have integrated units for children with special needs, together with their funding requirements under local management of schools; and whether each integrated unit receives all of the funding allocated to it under the local management of schools formula.
  32
  allocation of funds for this and other areas of science within the overall resources available is for the council to decide.

  Special Needs
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science how many pupils with special needs were in schools and colleges, by year group, from five to 18 years in each of the last five years.

  Mr. Fallon
  The table shows the numbers of pupils with special needs in schools and colleges in England for the academic years 1985–86 to 1989–90, the latest date for which information is available.

  Mr. Fallon
  This information is not available centrally.

  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will make it his policy to give local education authorities a statutory duty to provide places in full time education for pupils with special needs up to 18 years of age at least.

  Mr. Fallon
  At present, local education authorities are required to secure the provision of suitable full-time
  33
  education for pupils up to the age of 18, including those with special educational needs. For 16 to 18-year-olds, the Government intend that this duty will transfer to further education funding councils for England and Wales in a new independent further education sector. Our plans are set out in the White Paper "Education and Training for the 21st Century", Cm. 1536.

  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science if he will publish a list of all secondary schools in each local authority area which have integrated units or other provision for children with special needs, together with their funding requirements under local management of schools; and whether each integrated unit, or other provision, receives all of the funding allocated to it under the local management of schools formula.

  Mr. Fallon
  This information is not available centrally.

  Support and Training Programme
  Mr. Win Griffiths
  To ask the Secretary of State for Education and Science how many applications were made for grants under the education support and training programme 1992–93; and how many were successful.

  Mr. Fallon
  The circular setting out the grants for education support and training programme for 1992–93 and inviting applications for grant support was issued on 1 July. Local education authorities in England are invited to submit applications by 18 October 1991.

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for Education and Science whether he intends to issue guidance to head teachers, governors and parent teachers associations about responsibilities under the Data Protection Act; and whether he will make a statement.

  Mr. Fallon
  Guidance on the implications of the Data Protection Act for schools is currently being prepared and will be sent to all local education authorities and maintained schools in England as soon as possible.

AGRICULTURE, FISHERIES AND FOOD

  Monofilament Fishing Nets
  Mr. Cohen
  To ask the Minister of Agriculture, Fisheries and Food pursuant to his answer of 3 July,Official Report, column 162, about the amount of evidence on the impact of monofilament nets on sea birds, if he will make a statement on his recent meeting with environmental groups on this matter.

  Mr. Curry
  My meeting on 4 July with Wildlife Link was focussed primarily on large-scale drift net fishing and the effect on small cetaceans and did not refer to sea birds.

  Irradiated Spices
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food when he expects irradiated spices to be on sale in the shops; and if he will make a statement.

  Mr. Gummer
  I announced the issue of the first licence to irradiate spices and condiments on 12 June. The 34
  marketing of any products irradiated under the licence is a matter for manufacturers and retailers, not for the Government.

  Monosodium Glutamate
  Mr. Ron Davies
  To ask the Minister of Aggriculture, Fisheries and Food what assessment he has made concerning the safety of monosodium glutamate as a food additive; and if he has any proposals to regulate its use.

  Mr. Curry
  The flavour modifier monosodium glutamate has been assessed by the Government's independent expert advisory committees and found to be safe for use in food. Conditions of use are set out in the Miscellaneous Additives in Food Regulations 1980, as amended. The substance is not permitted in foods specially prepared for infants and young children.

  Abattoirs
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food if he will list the abattoirs in England which slaughter fewer than 12 livestock units or cattle each week.

  Mr. Gummer
  It would not be appropriate to list the information requested in view of its commercial sensitivity. However, information on throughput derived from annual advisory visits by my veterinary staff to local authority licensed abattoirs is recorded in size bands. The 1990 figures for England are as follows:

  Livestock units

  Abattoirs

  0–5

  =

  76

  6–10

  =

  70

  11–15

  =

  38

  Veterinary Investigation Centres
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what is the nearest veterinary investigation centre to the Humber ports following the closure of the Lincolm veterinary investigation centre.

  Mr. Maclean
  Thirsk veterinary investigation centre.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what consultations were carried out with local veterinary surgeons over the closure of Lincoln veterinary investigation centre.

  Mr. Maclean
  The review of the veterinary investigation service was an internal review. Initial discussions were held with the trade unions and during the review views were submitted from a number of interested parties including the British Veterinary Association and National Farmers Union. These views were carefully considered before any final decisions were taken. Subsequent to the announcement of the outcome of the review discussions have been held with the British Veterinary Association including a representative of the Lincolnshire division of the BVA. As I have explained, full discussions will be held with local veterinary surgeons on alternative arrangements for the submission of material to the veterinary investigation service and the proposed van service before the closure of the Lincoln VI centre.
  35
  Mr. Morley
  To ask the Minister for Agriculture, Fisheries and Food whether the veterinary investigation centre quality control centre will remain at Lincoln veterinary investigation centre.

  Mr. Maclean
  The review of the veterinary investigation service recommended that the veterinary investigation service quality control unit currently accommodated at the Lincoln VI centre be relocated at an alternative site. The quality control unit will remain on the Lincoln site until the alternative accommodation is available next year.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food if he will give figures for all investigations the Lincoln veterinary investigation centre has carried out involving notifiable diseases.

  Mr. Maclean
  Responsibility for the investigation of notifiable diseases rests with the veterinary field service operating through the divisional veterinary officer and is not a responsibility of the veterinary investigation service.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food how many salmonella tests were carried out at Lincoln; and what proportion this was of all tests carried out by veterinary investigation centres.

  Mr. Maclean
  It is not possible to supply the specific information requested. The information could be obtained only at disproportionate cost. However, I refer the hon. Member to the replies I gave to the hon. Member for South Shield (Dr. Clark) on 20 June, at column 258, and on 1 July, at column 74.

  Animal Disposal, Lincoln
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food what consideration he has given to setting up a modern animal disposal facility at Lincoln with individuals or companies prepared to run one on a contract basis.

  Mr. Maclean
  My Ministry has contracts with a number of private companies for the incineration of suspect bovine spongiform encephalopathy carcases. In general, however, it is up to the agricultural sector, as with other industries, to deal with the waste it creates. A number of companies have plans to construct purpose-built incineration plants to handle fallen animals and other animal waste.

  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food if he will give details of the proposed van collection for dead animals and samples following the closure of the Lincoln veterinary investigation centre; whether the van will be refrigerated; whether it can carry full carcases; how many vehicles will be provided; and what response time farmers can expect from their initial request.

  Mr. Maclean
  The details of the proposed van service will be fully discussed with local veterinary surgeons before the closure of the Lincoln veterinary investigation centre.

  Food Imports
  Dr. David Clark
  To ask the Minister of Agriculture, Fisheries and Food when he expects to publish his review on import penetration into the United Kingdom of food from overseas.
  36
  Mr. Gummer
  The outcome of this review will be announced in due course.

  BSE
  Mr. Cousins
  To ask the Minister of Agriculture, Fisheries and Food what proportion of the total number of cattle reaching slaughter houses come from herds where an indication of bovine spongiform encephalopathy exists.

  Mr. Maclean
  This information is not available.

  Blue-eared Pig Disease
  Mr. Morley
  To ask the Minister of Agriculture, Fisheries and Food which veterinary investigation centre carried out the preliminary work on the identification of blue-eared pig disease; and which other centres have experience in this field.

  Mr. Maclean
  In the period up to 13 June 1991 possible incidents of blue-eared pig disease were reported to the Winchester, Truro, Lincoln, Preston, Newcastle and Reading veterinary investigation centres who carried out the investigations which comprised the preliminary work on the identification of blue-eared pig disease. As from 13 June 1991, blue-eared pig disease was made a notifiable disease and the responsibility now rests with the veterinary field service operating through the divisional veterinary officer. The divisional veterinary officer and his staff are now responsible for carrying out the investigation of reported incidents and samples are sent to the central veterinary laboratory at Weybridge for examination.

NATIONAL FINANCE

  Bank of Credit and Commerce International
  Mr. George
  To ask the Chancellor of the Exchequer if he will make it his policy to give special consideration to registered charities which deposited money with the Bank of Credit and Commerce International in the compensation scheme for the bank's investors.

  Mr. Maples
  As I said in the House on Monday 8 July,Official Report, columns 660–74, it would not be right or possible to make special arrangements within the deposit protection scheme for one group of depositors. The terms of the deposit protection scheme are set by part II of the Banking Act 1987.

  Ms. Mowlam
  To ask the Chancellor of the Exchequer what consideration was given by the Bank of England when Price Waterhouse were appointed as fraud investigators at BCCI in 1987, to appointing a different company as auditors.

  Mr. Maples
  [holding answer 12 July 1991]: I am advised that the Bank of England did not appoint Price Waterhouse as fraud investigators at BCCI in 1987. I understand that Price Waterhouse was appointed by BCCI itself as financial auditors for the whole group, with the encouragement of the relevant supervisors. It was this that facilitated the auditors' understanding of intra-group transactions and contributed to a fuller financial assessment of the group. This in turn facilitated the ultimate discovery of the fraud.

  Mr. Cryer
  To ask the Chancellor of the Exchequer if he will introduce a scheme to provide 100 per cent.
  37
  compensation for depositors in the Bank of Credit and Commerce International with individual accounts of up to £100,000 and small businesses employing up to 200 employees; and if he will make a statement.

  Mr. Maples
  [holding answer 11 July 1991]: I explained in my statement to the House on Monday 8 July, Official Report, columns 660–74, the arrangements that are in place for depositors and small businesses who had accounts with the Bank of Credit and Commerce International. There are no plans to change the present deposit protection fund arrangements.

  Mr. Cryer
  To ask the Chancellor of the Exchequer when the Bank of England first received information that the Bank of Credit and Commerce International was the subject of an organised fraud; and if he will make a statement.

  Mr. Maples
  [holding answer 11 July 1991]: I understand that the Bank of England received information suggesting serious irregularities in the Bank of Credit and Commerce International at the beginning of this year and shortly afterwards commissioned a report under the Banking Act 1987. This report was received about two weeks ago.

  Banks
  Mr. French
  To ask the Chancellor of the Exchequer if he has received any representations about(a) the time taken for and (b) the efficiency of the transfer of funds between banks.

  Mr. Maples
  Yes, but very few.

  Mr. French
  To ask the Chancellor of the Exchequer what is his estimate of the level of depositors' balances in transit between one deposit taking institution and another which remains as uncleared funds at the close of each day's business.

  Mr. Maples
  Items in sterling in the course of transmission between one deposit-taking institution and another which are uncleared at the end of each day are estimated to be in excess of £10 billion.

  Civil Service Expenditure
  Mr. McWilliam
  To ask the Chancellor of the Exchequer what proportion of total Government spending was spent on the administration of the civil service in each year from 1979–80 to 1989–90; and what was the proportion spent on wages and salaries of civil servants.

  Mr. Mellor
  The precise information asked for is not readily available. Information on total central Government and general government, including local authorities, expenditure and on wages and salaries of central Government employees is included on the CSO database in the following series, identified by their database codes. The CSO database is accessible through the Library of the House.

  ABAB—total general Government expenditure

  ABAC—central Government own expenditure

  GILN—central Government pay including employers' contributions

  Data on central Government expenditure on running costs—that is, current expenditure on personnel, goods and other services used in Departments' administration—are
  38
  given for the years since 1986–87, in table 4.10 of the Statistical Supplement to the 1990 Autumn Statement (Cm. 1520). Consistent data for earlier years could be provided only at disproportionate cost.

  Share Shops
  Mr. French
  To ask the Chancellor of the Exchequer if he will list all the organisations which have responded to his request for views on high street share shops as a distribution method for privatisation issues and other equities.

  Mr. Maude
  I have received a number of proposals from the private sector for a new retail distribution arrangement. It is for the companies concerned to disclose their interest in this initiative.

  Business Expansion Scheme
  Mr. John Marshall
  To ask the Chancellor of the Exchequer how many business expansion schemes have been floated in each year since they were introduced; how many of the companies are still trading; and how many failed to provide an exit route for investors after the expiry of five years.

  Mr. Maude
  Information is not available in the form requested.

  The number of companies receiving business expansion scheme investment in each year where the year of investment is within five years of the date of incorporation is as follows. Information for 1990–91 is not yet available.

  Number

  1983–84

  514

  1984–85

  615

  1985–86

  600

  1986–87

  658

  1987–88

  703

  1988–89

  2,429

  1989–90

  1800

  1 Provisional

  Building Societies
  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer what would be the effect of the removal of clause 52 of the Finance Bill on the ability of the Inland Revenue to retain certain disputed tax paid by building societies.

  Mr. Maples
  Whether or not tax paid under the transitional provisions in the 1986 Building Societies Regulations is repayable would, in the absence of clause 52, depend on the particular facts of each case.

  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer pursuant to the replies to the hon. Member for Eltham, on 15 April,Official Report, columns 9–10, 22 April, Official Report columns 300–1, and 8 July, Official Report, column 258, if he will make clear to the House by Monday 15 July when and how Treasury Ministers first explicity informed the House that it intended to lay regulations that would have the effect of obtaining tax payments from building societies for the year 1985–86 for which payments had been made to the Inland Revenue satisfying in full the liability for that year; and if he will

  39
  give the range of estimate and the best estimate made by the Inland Revenue and the Treasury of the revenue effect at that time.

  Mr. Maples
  Authority for the Revenue to make regulations was included in clause 38 of the 1985 Finance Bill and referred to in the Revenue press release issued on 15 March 1985 which also referred to transitional provisions. The regulations were laid before Parliament on 14 March 1986 and included provisions for building societies to account for tax on payments of interest and dividends made in the period between the end of their accounting years in 1985–86 and 5 April 1986 which had not previously been brought into account for tax. No estimate was made of the revenue arising from tax on interest accruing between the end of societies accounting periods ending in 1985–86 and paid before the end of that tax year. However, at the time of the 1985 Budget it was estimated that the proposal to move from an accruals to a paid basis of accounting for tax on building society interest would reduce receipts of income tax in 1986–87 by about £25 million. This estimate assumed that all transitional payments of tax would be received in 1986–87.

  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer, pursuant to his letter of 11 July, if he will list all other newspaper reports or any parliamentary or ministerial reports before 29 July 1985 that made explicit reference to a proposal to claim tax from building societies

  Accounting periods ending

  Number of societies

  Amount of tax that would have been due in 1986–87 if old system had continued

  Amount of tax due in 1986–87 under new system plus instalments of transitional tax not due till later

  Increase or decrease in tax payable under new system

  £ million

  £ million

  £ million

  as percentage of old

  April 6 to 30 August (end of first complete quarter)

  6

  8

  13

  +5

  +62

  September to November

  7

  340

  432

  +92

  +27

  December to 5 April

  131

  2,596

  2,423

  –173

  –7

  Total

  144

  2,944

  2,868

  –76

  –3

  of which instalments due after 1986–87

  35

  The tax due from societies with accounting periods ending in September to November includes amounts subsequently repaid as a result of decisions by the courts and amounts which were withheld pending these decisions.
  40
  in relation to any period from their year end to the end of the financial year 1985–86, separate from the tax payment that had satisfied the liability for that full financial year.

  Mr. Maples
  This information is not readily available and could not be provided without disproportionate cost.

  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer, pursuant to his letter of 11 July, if either the Treasury or the Inland Revenue responded in public at the time to The Daily Telegraph report, 29 July 1985, headed "Societies Fight £500 million Double Tax Demand" written by Richard Northedge.

  Mr. Maples
  I am not aware of any such response.

  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer if he will estimate the three most significant causes for the increase between 1984–85 and 1985–86 in the tax receipts from building societies.

  Mr. Maples
  Tax receipts from building societies depend upon a number of factors including interest rates, tax rates and the level of deposits.

  Mr. Peter Bottomley
  To ask the Chancellor of the Exchequer if he will, for the groups of building societies with their year end in each quarter, estimate the gains and/or losses, respectively, from(a) the transitional arrangements and (b) the change to the new tax system in 1986–87.

  Mr. Maples
  Available information is shown in the table:

  Data Protection
  Miss Emma Nicholson
  To ask the Chancellor of the Exchequer what level of inquiries under the Data Protection Act 1984 the Inland Revenue expects in the next(a) one year, (b) five years and (c) 10 years.

  Mr. Maude
  The Inland Revenue has to date received very few inquiries under the Data Protection Act, with 20 in the last 12 months. The Department has no reason to expect the level to increase materially in the foreseeable future.

  Special Tax Allowances (Piper Alpha)
  Mr. Cousins
  To ask the Chancellor of the Exchequer what is his estimate of the total cost in 1989–90 and 1990–91 of the revenue forgone in special tax allowances for companies associated with losses in the Piper Alpha platform disaster.

  Mr. Maude
  No "special" tax allowances—other than those available to other companies involved in the North sea—have been available for companies associated with losses in the Piper Alpha platform disaster. There was a concessional relaxation in the rules that would have required petroleum revenue tax instalments to be paid by reference to profits made before the disaster. Such instalments would in any event have been repaid.

  Civil Service Pay
  Mr. Dunnachie
  To ask the Chancellor of the Exchequer what response his Department has given to the 1991 pay claim submitted by the National Union of Civil and Public Servants on behalf of its members; and if he will make a statement.

  Mrs. Gillian Shephard
  The pay of staff represented by the National Union of Civil and Public Servants is set by negotiation under the terms of the pay agreement with that union. This year's offer was for a 7·8 per cent. across-the-board increase, plus other increases, amounting to 0·2 per cent., giving a total pay bill increase of 8 per cent. The offer has been accepted by the NUCPS following a ballot of their membership, and the new rates are now in payment.

  VAT
  Mr. David Porter
  To ask the Chancellor of the Exchequer if he will make it his policy to implement a sliding rate of VAT registration threshold limits to reflect the number of employees and partners each business has; and if he will make a statement.

  Mrs. Gillian Shephard
  I have no plans to do so. VAT is a transaction-based tax. The registration threshold is based on the taxable turnover of a business and the United Kingdom Government are constrained by the provisions of the EC sixth directive which requires member states to operate a threshold based upon turnover.

  Medicine Imports
  Mr. Dalyell
  To ask the Chancellor of the Exchequer what is the value of medicine imports from eastern European countries in terms of finished products or bulk active ingredients.
  42
  Mrs. Gillian Shephard
  Detailed statistics of United Kingdom imports are contained in the monthly and annual volumes of "Business Monitor—Overseas Trade Statistics of the United Kingdom", published by the Central Statistical Office; copies are available in the Library. Within that publication the country grouping of eastern Europe and USSR now comprises Poland, Czechoslovakia, Hungary, Romania, Bulgaria, Yugoslavia, Albania and USSR. Before 1 January 1991 Yugoslavia appeared in the "Rest of Western Europe" grouping.

  The figures required are shown under standard international trade classification (SITC) Division 54 "Medical and Pharmaceutical Products". The value of imports is recorded as follows:

  £

  1 January 1990–31 December 1990

  4,837,000

  1 January 1991–31 May 1991

  1,655,000

  However, the phrase "bulk active ingredients" is not recognised within the structure of the nomenclature and statistics of trade in some chemicals which may be active ingredients in medicinal products will appear under other chemical divisions in the Overseas Trade Statistics.

  Excise Duties
  Sir Hector Monro
  To ask the Chancellor of the Exchequer if he will make it his policy to support the interests of manufacturers of Scotch whisky and British gin during his discussions on excise duties within the EC.

  Mrs. Gillian Shephard
  In the further EC discussions due later this year on excise duty rates, my hon. Friend can be assured that my aim will be to secure arrangements which are acceptable both to the Exchequer and to the United Kingdom spirits industry.

  Accounting Firms
  Mr. Cousins
  To ask the Chancellor of the Exchequer if he will list the accounting firms in which heads of the Government Accounting Service since 1980 have been partners.

  Mr. Mellor
  Following is the information:

  Armstrong, Watson & Co;

  Baker, Tilley & Co;

  Price Waterhouse & Co;

  KPMG Peat Marwick McLintock;

  Holders of the post of head of the Government accountancy service retired from the firms of accountants in which they were partners before taking up the post.

  Rateable Values
  Mr. Knox
  To ask the Chancellor of the Exchequer what was the total rateable value of industrial and commercial property in the Staffordshire Moorlands district on 1 April 1989, 1 April 1990 and 1 April 1991.

  Mr. Maples
  The information is as follows:

  Industrial and Commercial Property as at 1 April

  Rateable Value £ thousands

  1989

  2,387

  1990

  16,786

  1991

  16,940

  43
  Rateable values as at 1 April 1989 are based on the 1973 valuation list, those at 1 April 1990 and 1991 on the 1990 rating list. The 1990 rating list which came into force on 1 April 1990 contains properties valued as at 1 April 1988, whereas the 1973 valuation list contains properties valued as at 1 April 1973. These are also differences in coverage and, for certain types of property, differences in the method of valuation, between the 1973 valuation list and 1990 rating list.

  GDP
  Mr. Rowlands
  To ask the Chancellor of the Exchequer what is his latest estimate of the gross domestic product per head for(a) Wales, (b) Scotland and (c) the other regions of the United Kingdom.

  Mr. Maples
  Provisional figures for 1989 have been published by the Central Statistical Office in "Economic Trends" No. 450, April 1991 at page 128, and also in the 1991 edition of "Regional Trends". Both publications are available in the Library.

  Currency Exchange
  Mr. Kirkwood
  To ask the Chancellor of the Exchequer if he will introduce legislation to prevent organisations operating currency exchange retail outlets in the United Kingdom from charging commission rates when exchanging Scottish banknotes for Bank of England notes; and if he will make a statement.

  Mr. Maples
  We do not propose to introduce any such legislation.

  Scottish Banknotes
  Mr. Kirkwood
  To ask the Chancellor of the Exchequer what is Her Majesty's Government's policy on commission rates charged when Scottish banknotes are exchanged for Bank of England notes within the United Kingdom.

  Mr. Maples
  The charging of fees for the exchange of banknotes is a matter for the banks and their customers. Some banks will exchange Scottish banknotes free of charge whereas others find it necessary to recover costs of repatriation and other overheads connected with handling notes which are not regularly reissued.

  Written Answers
  Mr. Spearing
  To ask the Chancellor of the Exchequer what is the current minimum threshold sum used to justify declining to answer fully a written parliamentary question on the grounds of disproportionate cost.

  Mr. Maples
  The current advisory cost threshold beyond which an answer to a written question can be declined on the grounds of disproportionate cost is £250.

  Foundation for Sport and the Arts
  Mr. Pendry
  To ask the Chancellor of the Exchequer, further to his written answer of 18 April,Official Report, columns 243–44, if he will list in full the organisations or individuals with which ministers or officials in his Department have held meetings since 16 April with regard to establishing the proposed foundation for sport and the arts announced in his Budget statement; on what date such meetings took place; and what further meetings are planned.
  44
  Mr. Mellor
  [holding answer 11 July 1991]: I met representatives of the pools promoters on 4 and 13 June. My hon. Friend the Minister of State, Treasury discussed the foundation with the hon. Members for Wrexham (Dr. Marek) and for Newcastle upon Tyne, East (Mr. Brown) on 21 May. Treasury officials also met the pools promoters on 22 April and 24 April. No firm plans exist for further meetings.

  Mr. Pendry
  To ask the Chancellor of the Exchequer further to his written answer of 28 March,Official Report, columns 516–17, what suitable arrangements for monitoring and audit have been agreed for the proposed foundation for sport and the arts announced in his Budget statement.

  Mr. Mellor
  [holding answer 11 July 1991]: Customs and Excise will be responsible for monitoring that the proceeds of the proposed cut in pool betting duty and the agreed contributions to the foundation from the pools companies actually pass to the trustees, by checking the accounts of the pools companies as part of their normal work in administering the pool duty.

  Under the proposed trust deed, a copy of the auditors' annual report on the trust will be sent to the Minister of Sport. The Minister will also have the right to nominate an observer to attend all meetings of the trustees and to be supplied with all relevant papers.

  Mr. Pendry
  To ask the Chancellor of the Exchequer whether(a) non-professional, (b) semi-professional or (c) professional football clubs outside the current structure of the four divisions of the Football League will be eligible to apply for financial help from the funds of the proposed Foundation for Sport and the Arts to which he referred in his letter of 31 May to the Secretary of the GM Vauxhall Conference.

  Mr. Mellor
  [holding answer 12 July 1991]: Football clubs outside the Football League will be eligible to apply for financial help from the proposed Foundation for Sport and the Arts like any other athletic sport.

  Banks (Regulation)
  Mr. Cryer
  To ask the Chancellor of the Exchequer (1) if he has any plans to increase the Bank of England's powers to regulate banking where banks have their main offices in offshore islands; and if he will make a statement;

  (2) if he has any plans to increase the Bank of England's powers to regulate banking where banks have their main offices in other EC member states; and if he will make a statement.

  Mr. Maples
  [holding answer 11 July 1991]: There are no plans to increase the Bank of England's regulatory powers, but the Government and the Bank of England will be reflecting on any lessons which can be learnt from the BCCI case for the framework of regulation, both at home and internationally.

TRANSPORT

  Vehicle Inspectorate
  Mr. McAllion
  To ask the Secretary of State for Transport (1) if he will list the new forms of alternative working patterns introduced into the vehicle inspectorate
  45
  since its establishment as an executive agency; and if he will publish a breakdown by grade of the numbers of staff taking up each new working pattern;

  (2) how many staff were in post on the date that the vehicle inspectorate was established as an executive agency; and how many staff are in post now;

  (3) if he will list those new facilities for staff including nurseries and healthcare schemes which have been introduced in the vehicle inspectorate since its establishment as an executive agency;

  (4) how many appointments from the private sector have been made to the vehicle inspectorate at grade 7 or above since its establishment as an agency; and if he will list the post, grade and maximum salary payable including performance related element in each case;

  (5) if he will give details of all group bonus schemes in operation in the vehicle inspectorate;

  (6) what was the first degree obtained by the chief executive of the vehicle inspectorate; and from which university or polytechnic it was awarded;

  (7) when the last annual report for the Vehicle Inspectorate Agency was published; and when the next one is due;

  (8) if he will list the quality of service performance indicators adopted by the Driving Standards Agency since its establishment as an executive agency; and if he will identify separately those quality of service performance indicators already operative prior to agency status;

  (9) if he will give details of all group bonus schemes in operation in the Driving Standards Agency;

  (10) what was the first degree obtained by the chief executive of the Driving Standards Agency; and from which university or polytechnic it was awarded;

  (11) when the last annual report for the Driving Standards Agency was published; and when the next one is due;

  (12) how many staff were in post on the date that the Driving Standards Agency was established as an executive agency; and how many staff are in post now;

  (13) if he will list those new facilities for staff including nurseries and healthcare schemes which have been introduced in the Driving Standards Agency since its establishment as an executive agency;

  (14) how much was spent on events and publicity surrounding the launch of the Driving Standards Agency as an executive agency; and whether the cost was borne by his Department or the agency;

  (15) if he will list the new forms of alternative working patterns introduced into the Driving Standards Agency since its establishment as an executive agency; and if he will publish a breakdown by grade of the numbers of staff taking up each new working pattern;

  (16) how many appointments from the private sector have been made to the Driving Standards Agency at grade 7 or above since its establishment as an agency; and if he will list the post, grade and maximum salary payable including performance related element in each case.

  Mr. Chope
  The chief executive of the Driving Standards executive agency will be writing to the hon. Member.

  Executive Agencies
  Mr. McAllion
  To ask the Secretary of State for Transport what is the maximum salary payable to the chief executive of the vehicle inspectorate, including performance related element; and what is the length of time of the chief executive's contract.

  Mr. Chope
  The chief executive of the Vehicle Inspectorate agency was initially appointed on a three-year contract from 1 August 1988 to 31 March 1991 which was renewed on 1 April 1991 for a further three years until 1 April 1994. The maximum salary that the chief executive could be paid in 1991–92, depending on performance, is £44,996 per annum, but a further general increase is expected on 1 August 1991. In addition he is eligible for special bonus payments amounting in total to a maximum of £10,000 over the current three-year period.

  Mr. McAllion
  To ask the Secretary of State for Transport what is the maximum salary payable to the chief executive of the Driving Standards Agency including the performance related element; and what is the length of time of the chief executive's contract.

  Mr. Chope
  The chief executive of the Driving Standards Agency has been appointed from 2 April 1990 to 1 April 1993.

  The maximum salary that the chief executive could be paid in 1991-92 depending on performance, is £41,681 per annum, but a further general increase is expected on 1 August 1991. In addition he is eligible for special bonus payments amounting in total to a maximum of £6,500 over the three-year period.

  Mr. McAllion
  To ask the Secretary of State for Transport what is the maximum salary payable to the chief executive of the DVLA, including performance related element; and what is the length of time of the chief executive's contract.

  Mr. Chope
  The chief executive of the DVLA has been appointed from 2 April 1990 to 1 April 1995.

  The maximum salary that the chief executive could be paid in 1991–92 is £48,000 per annum. In addition he is eligible for special bonus payments amounting in total to a maximum of £9,000 over the first two-year period. The special bonus payments which may be payable for the remaining three years of the appointment have yet to be determined.

  Mr. McAllion
  To ask the Secretary of State for Transport (1) how much was spent on events and publicity surrounding the launch of the vehicle inspectorate as an executive agency; and whether the cost was borne by his Department or the agency;

  (2) if he will list the quality of service performance indicators adopted by the vehicle inspectorate since its establishment as an executive agency; and if he will identify separately those quality of service performance indicators already operative prior to agency status.

  Mr. Chope
  The chief executive of the Vehicle Inspectorate executive agency will be writing to the hon. Member.

  Mr. McAllion
  To ask the Secretary of State for Transport (1) if he will list those new facilities for staff including nurseries and healthcare schemes which have been introduced in the driver and vehicle licensing agency since its establishment as an executive agency;
  47
  (2) how much was spent on events and publicity surrounding the launch of the driver and vehicle licensing agency as an executive agency; and whether the cost was borne by his Department or the agency;

  (3) how many staff were in post on the date that the driver and vehicle licensing agency was established as an executive agency; and how many staff are in post now;

  (4) if he will list the new forms of alternative working patterns introduced into the driver and vehicle licensing agency since its establishment as an executive agency; and if he will publish a break-down by grade of the numbers of staff taking up each new working pattern;

  (5) how many appointments from the private sector have been made to the driver and vehicle licensing agency at grade 7 or above since its establishment as an agency; and if he will list the post, grade and maximum salary payable including performance related element in each case;

  (6) when the last annual report for the driver and vehicle licensing agency was published; and when the next one is due;

  (7) if he will list the quality of service performance indicators adopted by the driver and vehicle licensing agency since its establishment as an executive agency; and if he will identify separately those quality of service performance indicators already operative prior to agency status;

  (8) what was the first degree obtained by the chief executive of the driver and vehicle licensing agency; and from which university or polytechnic it was awarded;

  (9) if he will give details of all bonus schemes in operation in the driver and vehicle licensing agency.

  Mr. Chope
  The chief executive of the Driver and Vehicle Licensing executive agency will be writing to the hon. Member.

  Mr. McAllion
  To ask the Secretary of State for Transport what is the maximum salary payable to the chief executive of the Vehicle Certification Agency including the performance related element; and what is the length of time of the chief executive's contract.

  Mr. Chope
  The chief executive of the Vehicle Certification Agency has been appointed from 2 April 1990 to 1 April 1993.

  The maximum salary that the chief executive could be paid in 1991-92, depending on performance, is £38,610 per annum, but a further general increase is expected on I August 1991. In addition he is eligible for special bonus payments amounting in total to a maximum of £6,500 over the three-year period.

  Mr. McAllion
  To ask the Secretary of State for Transport (1) when the last annual report for the Vehicle Certification Agency was published; and when the next one is due;

  (2) how many appointments from the private sector have been made to the Vehicle Certification Agency at grade 7 or above since its establishment as an agency; and if he will list the post, grade and maximum salary payable including performance related element in each case;

  (3) what was the first degree obtained by the chief executive of the Vehicle Certification Agency; and from which university or polytechnic it was awarded;
  48
  (4) how much was spent on events and publicity surrounding the launch of the Vehicle Certification Agency as an executive agency; and whether the cost was borne by his Department or the agency;

  (5) if he will give details of all bonus schemes in operation in the Vehicle Certification Agency;

  (6) if he will list the new forms of alternative working patterns introduced into the Vehicle Certification Agency since its establishment as an executive agency; and if he will publish a break-down by grade of the numbers of staff taking up each new working pattern;

  (7) if he will list the quality of service performance indicators adopted by the Vehicle Certification Agency since its establishment as an executive agency; and if he will identify separately those quality of service performance indicators already operative prior to agency status;

  (8) how many staff were in post on the date that the Vehicle Certification Agency was established as an executive agency; and how many staff are in post now;

  (9) if he will list those new facilities for staff including nurseries and healthcare schemes which have been introduced in the Vehicle Certification Agency since its establishment as an executive agency.

  Mr. Chope
  The chief executive of the Vehicle Certification executive agency has written to the hon. Member.

  Correspondence
  Sir Dudley Smith
  To ask the Secretary of State for Transport when the hon. Member for Warwick and Leamington can expect a response to his letter of 5 April, proposing a meeting with a deputation about noise in the Shrewley and Hatton areas of Warwickshire emanating from the M40 motorway.

  Mr. Chope
  My hon. Friend will know that the meeting which he requested is being arranged.

  British Rail
  Mr. French
  To ask the Secretary of State for Transport what progress has been achieved by British Rail towards the targets set out in its commercial plan for divesting itself of surplus land.

  Mr. Freeman
  On 24 October 1983 the then Secretary of State published the objectives that he had agreed with the chairman of British Rail, which asked the board to continue to pursue a vigorous policy of property development and disposal. British Rail has been successful in divesting itself of its surplus land. Since 1 January 1984, British Rail has disposed of over 23,000 acres.

  Mr. David Nicholson
  To ask the Secretary of State for Transport what record he has of or what representations he received from British Rail about its inability to recruit the most suitable applicants for posts in top and middle management or skilled scientific and professional grades owing to inadequate or non-competitive salaries.

  Mr. Freeman
  None. The British Railways Board is responsible for salaries and recruitment of its staff.

  Motor Insurance
  Mr. French
  To ask the Secretary of State for Transport if he will make it obligatory for evidence of third party motor insurance cover to be displayed in vehicle windscreens in the same way as vehicle excise duty.
  49
  Mr. Chope
  No. Compulsory motor insurance in the United Kingdom focuses on the driver rather than a particular vehicle. A windscreen disc would not prove, therefore, whether a vehicle was being driven in accordance with the terms of a valid insurance policy.

  Road Safety, Blackburn
  Mr. Straw
  To ask the Secretary of State for Transport when he expects to make decisions on recommendations from the Lancashire constabulary and Lancashire county council as to road safety on the A6119 Brownhill drive, Blackburn; and if he will make a statement.

  Mr. Chope
  As soon as possible after receiving the recommendations. I shall then write to the hon. Gentleman.

  Scheme

  Region

  Year

  Assessor

  East London River Crossing

  LRO

  1985–86

  G. Heath, CTP, FRTPI, FBIM, JP

  A406: East of Falloden Way to East of High Road Finchley

  LRO

  1986–87

  G. B. Cummings, CEng, FICE, FIHT

  A65 Burley Bypass

  YHCPD

  May 1987

  P. J. Amblin, CEng, MICE, MIWES, MPTPI

  A6(M) Stockport North/South Bypass

  NWCPD

  November 1987/March 1988

  Professor E. A. Rose, MSc, Dip. Arch., ARIBA, FRTPI, FRSA

  A34 Newbury Bypass

  SECPD

  1988

  A. Langton, CEng., DipTP, MICE, MRTPI, MIHT

  A3 Milford Bypass

  SECPD

  1989

  Dr. George A. Goutty, JP, MA, MSc, MPhil., PhD AA Dip., DipTP, MRTPI, ALI

  A406 Regents Park Road Junction Improvement

  LRO

  1988–89

  E. R. Emery, VRD, CEng., MICE, MIHT, DipTE

  A17 Wigtoft-Sutterton Bypass

  EMRO

  January 1990

  J. R. Coward, MCD, BA(Arch.) Hons., RIBA

  A638 Doncaster North Bridge Relief Road

  YHCPD

  1990–91

  G. A. Goulty, JP, MA, MSc., MPhil., PhD, AAdip., ARIBA, ALI

  East London River Crossing

  LRO

  1990–91

  M. Astrinsky, RIBA, MRTPI, DipTP

  Ms. Walley
  To ask the Secretary of State for Transport if he will list those public inquiries into trunk road proposals since 1985 which have involved consideration of the effect of the proposed scheme on(a) sites of special scientific interest, (b) national parks, (c) areas of outstanding natural beauty, (d) heritage coast, and (e) scheduled ancient monuments; and in which of these cases an assessor was appointed to assist the inspector to consider the environmental consequences.

  Mr. Chope
  The information on individual schemes is not readily available and could be obtained only at disproportionate cost. All schemes in the national trunk road programme have for many years been subjected to a very full environmental appraisal. Landscaping, ecological and other environmental aspects of scheme design are always important factors in route selection to ensure that the minimum of disturbance is caused by new roads to the surrounding environment. The advice of interested bodies such as English Nature, the Countryside Commission, English Heritage, the National Trust, the Landscape Advisory Committee and the Royal Fine Art Commission is sought and their views are made available to the public inquiry. Specialist advice is also sought wherever appropriate and if necessary specialist consultants are appointed.

  Road Inquiries
  Ms. Walley
  To ask the Secretary of State for Transport (1) if he will list those people appointed as assessors to assist the panel inspectorate over the last five years; and if he will list their relevant qualifications;

  (2) in how many trunk road inquiries since 1985 an assessor has been appointed to assist the inspector.

  Mr. Chope
  There have been 10 occasions since 1985 when an assessor has been appointed to assist the inspector conducting the inquiry into a trunk road scheme. The assessors and the inquiries in which they were involved are as follows:

  Since 1985 specialist assessors have been appointed to assist inspectors at public inquiries into the following trunk road proposals where environmental or aesthetic factors were a major consideration:

  East London River Crossing (1985–86 and 1990–91) Burley Bypass

  A6(M) Stockport North/South Bypass

  A3 Milford Bypass

  A17 Wigtoft Sutterton Bypass

  A638 Doncaster North Bridge Relief Road

  Ms. Walley
  To ask the Secretary of State for Transport how many public inquiries there have been into trunk road proposals in each year from 1985 to 1991.

  Mr. Chope
  The information is as follows:

  Number

  1985–86

  41

  1986–87

  44

  1987–88

  29

  1988–89

  31

  1989–90

  40

  1990–91

  34

  Motorways
  Mr. Ashdown
  To ask the Secretary of State for Transport if he will give the latest available figures for the numbers of vehicles crossing over the central reservation of motorways and dual carriageways in the last year for which these figures are available.

  Mr. Chope
  Information is available only in cases where the vehicle was involved in an accident resulting in personal injury. In 1989, the latest year for which data are available, there were 111 such vehicles on motorways which left the carriageway offside and crossed the central reservation. The equivalent figure for dual carriageways was 742.

  Mr. John Morris
  To ask the Secretary of State for Transport what restrictions there are for the use of fast lanes on three lane motorways by coaches and lorries.

  Mr. Chope
  Coaches of over 12 m long and goods vehicles with an operating weight exceeding 7·5 tonnes are banned from using the outside lane of motorways.

  A41 Bypass
  Mr. Page
  To ask the Secretary of State for Transport what is his estimate of the cost of constructing the A41 bypass from the M25 to the junction to the west of Berkhamsted.

  Mr. Chope
  The A41 bypass is divided into two schemes, Kings Langley and Berkhamsted.

  The contract for the construction of the Kings Langley bypass has been awarded to A. F. Budge (Contractors) Ltd. and is worth about £20 million. Tenders have been invited for the construction of the Berkhamsted bypass which has been estimated to cost £25·8 million.

  Cyclists
  Mr. Rathbone
  To ask the Secretary of State for Transport what steps the Government have taken recently to improve the safety of cyclists using public roads.

  Mr. Chope
  Recent initiatives are detailed in the Department's memorandum to the Transport Select Committee hearing on cycling. The Committee's minutes of evidence have now been published.

  We are continuing to add to the body of published technical advice for local authorities on means of providing for cyclists, which now exceeds 30 traffic advisory leaflets and four more detailed local transport notes.

  We are encouraging the use by local authorities of urban safety management techniques, which can make a significant contribution to reducing accidents to the most vulnerable road users such as cyclists. This effort has been underpinned by the introduction of more flexible road hump regulations, and an increasing number of authorisations for the use of 20 mph speed limits.

  Our recent child safety campaign was designed to raise the awareness of the potential dangers to child cyclists on the road, and to encourage the wearing of cycle helmets. This has been supported by complementary campaigns by the private sector.

  Stansted Airport
  Sir Fergus Montgomery
  To ask the Secretary of State for Transport if he will make it his policy not to grant additional licences for the United States or other carriers for services from Stansted airport, in preference to or separate from such licences being available to all airports in the United Kingdom.

  Mr. McLoughlin
  No. While we aim to facilitate balanced development of services to all airports, we must retain the flexibility to respond to the specific circumstances of particular negotiations.

  Air Routes (Competition)
  Mr. Kirkwood
  To ask the Secretary of State for Transport what representations he has had to date about the need for increased competition on major air routes from Heathrow to western Europe.

  Mr. McLoughlin
  My right hon. and learned Friend the Secretary of State for Transport has received a number of recent representations concerning aviation competition in Europe.

  Mr. Kirkwood
  To ask the Secretary of State for Transport what plans he has to conduct a further review of competition policy on western European air routes; and if he will make a statement.

  Mr. McLoughlin
  My right hon. and learned Friend the Secretary of State for Transport has no present plans to undertake a review of competition policy on air routes in western Europe.

  A primary United Kingdom objective in the liberalisation of air transport within Europe remains the creation of conditions in which fair and open competition between carriers can flourish. Progress towards this objective has already been achieved. Current EC regulations together with our bilateral arrangements presently provide the scope for more than one airline of each country concerned to serve the major western European routes.

  We expect the EC Commission's proposals for the third stage in the creation of the single market to provide further opportunities for airlines by opening up all intra-Community routes to competition. It is for Governments to create these opportunities and for airlines to take them up.

  Air Fares
  Mr. Kirkwood
  To ask the Secretary of State for Transport what steps he proposes to take to reduce air fares on western European air routes operated on a bilateral basis by two national airlines.

  Mr. McLoughlin
  We believe that airlines should be free to set their own fares with a minimum of regulatory intervention. As a safeguard, however, European Community measures already exist which provide that fares may not be excessive in relation to the relevant costs. The introduction of the single European market in 1993 will provide greater freedom for setting fares responding to market forces, and we shall continue to urge that safeguards are provided against excessive fares.

  Second Severn Crossing
  Mr. Alan Williams
  To ask the Secretary of State for Transport if falling interest rates result in any reduction in the total sum which was agreed with the concessionaire for the second Severn crossing in 1989; what was the prevailing relevant interest level at the time of that agreement; and what is its equivalent level today.

  Mr. Chope
  Under the concession agreement with Severn River Crossing plc, SRC bears the risk of changes in interest rates. Changes in rates, in either direction, do not affect SRC's tolls or revenue entitlement under the agreement. The concession agreement was executed on 29 October 1990, when the clearing bank rates was 14 per cent.; the rate is now 11 per cent.

  Greater Manchester Relief Road
  Mr. Lewis
  To ask the Secretary of State for Transport when he intends to publish his Department's preferred routes for the greater Manchester western and northern relief road; and when he expects the public consultation process to start.

  Mr. Chope
  Public consultation on stage 2 of the relief road (M56–M62) is planned for the autumn. It is hoped to follow with consultation on route options for stage 3 (M62–M66) in the winter. Preferred route announcement would follow consideration of the consultation response at each stage.

  Motorway Slip Roads
  Dr. Marek
  To ask the Secretary of State for Transport how many vehicles per day use the slip roads in each of the directions between the M53 and M56.

  Mr. Chope
  [holding answer 12 July 1991]: The information is as follows:

  Slip road

  Number of vehicles

  M56 westbound to M53 northbound

  9,533

  M56 westbound to M53 southbound

  9,618

  M53 southbound to M56 eastbound

  9,522

  M53 northbound to M56 eastbound

  9,939

  Dr. Marek
  To ask the Secretary of State for Transport whether the slip roads joining the M53 and the M56 were originally constructed to the specified standard.

  Mr. Chope
  [holding answer 12 July 1991]: Yes. The opportunity has been taken to resurface these slip roads during the reconstruction of the main carriageway.

  A259, Kent
  Mr. Speed
  To ask the Secretary of State for Transport what improvements are planned for the A259 road in Kent over the next three years.

  Mr. Chope
  [holding answer 11 July 1991]: The national roads programme includes five schemes, at various stages of preparation, for improving most of the A259 trunk road in Kent. Subject to the satisfactory completion of the statutory procedures, I hope it will be possible to start construction of the Brookland diversion, within the next three years, and of bypasses to New Romney, St. Mary's
  54
  Bay, Dymchurch and Hythe, together with an improvement at Walland Marsh in the mid to late 1990s. The regional programme provides for small-scale works, mostly aimed at improving traffic flow and/or safety, which can usually be implemented more quickly. Eleven such schemes on the A259 in Kent are at present firmly programmed for 1991–93.

  Diesel Engines
  Mr. Gill
  To ask the Secretary of State for Transport whether he will make a statement about the potential benefits to the environment of encouraging the greater use of diesel engines in motor cars.

  Mr. Chope
  [holding answer 10 July 1991]: Compared with their catalyst petrol-engined counterparts, diesel cars are generally worse emitters of NOx and particulates, but better on carbon monoxide and CO2. Given that diesel cars usually enjoy a 20 to 30 per cent. advantage in fuel economy, and that duty on diesel fuel is slightly less than on petrol, there is already an implicit encouragement towards diesels, particularly for high-mileage users.

EMPLOYMENT

  Disablement Advisory Service
  Mr. Wigley
  To ask the Secretary of State for Employment what is his Department's policy towards the training and guidance given to individual disablement advisory service managers; and what plans he has to improve this guidance and to ensure national consistency and quality.

  Mr. Jackson
  Disablement advisory service managers currently undertake a six-month nationally designed training programme which includes a mix of distance learning, off-the-job training modules, a development workshop and personal development projects.

  Written guidance about operational procedures is provided centrally. Further guidance is provided by the Employment Service's head and regional offices as required.

  The training programme is currently being examined and will be revised to reflect the planned changes, which my right hon. and learned Friend announced on 16 April, to the services provided by the Department for people with disabilities. The training programme for managers in the new service will continue to be delivered to nationally defined standards. Written guidance will also be revised to reflect the roles and functions of the new assessment and counselling teams.

  Officials will continue to monitor the effectiveness of the training programme and will establish competencies to enable them to measure the effectiveness of those providing the service. They will also devise a set of qualitative performance measures to ensure that those providing the new arrangements deliver a more professional and coherent service for people with disabilities.

  Mr. Wigley
  To ask the Secretary of State for Employment what appeal procedure is available to disabled people who are dissatisfied with the decisions of the local disablement advisory service manager regarding aids and equipment for employment.
  55
  Mr. Jackson
  Questions on operational matters in the Employment Service executive agency are the responsibility of Mike Fogden, the agency's chief executive, to whom I have referred this question for reply.

  Mr. Wigley
  To ask the Secretary of State for Employment if he will make a statement on his plans to restructure the disablement advisory service; how many staff were employed before the restructuring; and how many will be employed once it is completed.

  Mr. Jackson
  In a statement on 16 April my right hon. and learned Friend announced plans to restructure the way in which the Department provides employment services for people with disabilities. The plans include the formation of new, local teams incorporating the present functions of the disablement advisory service, disablement resettlement officers and the employment rehabilitation service's assessment teams. The aim of the new teams will be to provide a more professional, coherent service for people with disabilities. The service will operate to nationally defined standards, but in a way which will allow for the development of more flexibility in meeting local needs.

  Information about the number of people employed within the disablement advisory service is not at present collected on a regular basis. The number of disablement advisory service personnel in post on 11 June 1990, the latest date for which information is available, was 181.

  The resource currently used to provide the disablement advisory service will be transferred to the new teams. Added to it will be the resource currently used to provide the disablement resettlement officer service and the employment rehabilitation assessment service.

  Officials are presently engaged in taking forward action to implement the new service.

  Training Schemes
  Mr. Clelland
  To ask the Secretary of State for Employment if he will list all current training schemes and measures to reduce unemployment; and if he will give any details of(a) the number of people participating at any one time and (b) the separate and overall expenditure in each case.

  Mr. Jackson
  Most of the current training schemes and Employment Service measures to reduce unemployment are detailed in the Employment Department's annual report (Cm 1506) published on 13 February 1991, copies of which have been placed in the House of Commons Library. Planned expenditure for 1991–92 on training schemes is also given.

  Currently it is estimated that there are 157,000 adults and about 300,000 young people on Government training programmes. Around 50,000 people are assisted by enterprise allowance at any one time.

  Information on the numbers currently participating on ES measures is not available. However, planned expenditure for ES programmes in 1991–92, together with the number of places available is as follows:

  Programme

  1991–92 programme (£ millions)

  Places/numbers helped

  Jobclubs

  27·5

  156,000

  Job Interview Guarantee

  4·1

  39,000

  Restart Courses

  8·1

  90,000

  56

  Programme

  1991–92 programme (£ millions)

  Places/numbers helped

  Jobsearch Seminars

  2·5

  40,000

  Travel to Interview Scheme

  1·2

  25,000

  Jobshare

  0·6

  1132

  Joblink (Pilot)

  0·3

  900

  Programme Development Funds

  3·0

  2—

  Employment Rehabilitation

  8·6

  43,700

  Sheltered Employment Programmes (including Remploy)

  121·5

  20,900

  Special Programmes for People with Disabilities

  13·0

  9,400

  In addition to the sums shown above and those published in the annual report, further funding has been provided, as follows:
  In February 1991 a further £120 million was made available for Employment Training.
  In March 1991 an extra £55 million was also provided for the ES to maintain customer service standards and to provide an enhanced placings service, through job referral teams, for recently unemployed people who are job ready and do not need further advice on how to look for work.
  On 19 June an extra £100 million was announced to provide a comprehensive package of measures including:

  a new programme, employment action, which will help 40,000 people at a cost of £48·5 million;

  Employment Training to be increased by a further £35 million to help a further 15,000 people;

  an expansion of Employment Service measures to help 135,000 people through expansion of job clubs (places for extra 40,000 people), Restart courses and assessment/counselling activities (to help 95,000 people).

  In total we are providing 840,000 opportunities this year and 900,000 opportunities next year to help get people back into work as quickly as possible. This represents the most comprehensive range of help and advice ever made available to the unemployed.

  (1) This is the number currently being supported.

  (2) Programme development funds are used by the ES to participate in and develop local initiatives to help reduce unemployment in areas of particular need. They are not directly linked to particular schemes or programmes.

  (3) Table shows GB total.

  Construction Training
  Mr. Leighton
  To ask the Secretary of State for Employment what training the TECs are providing in London and the south-east in plumbing, wall and floor tiling, roofing and slating.

  Mr. Jackson
  The information is not available in the form requested. It is a matter for individual TECs to design and deliver provision which meets the needs of the local labour market. I know, for example, that LETEC is providing training in plumbing and plans to introduce training in wall and floor tiling in the autumn.

  Mr. Leighton
  To ask the Secretary of State for Employment what percentage of cash for construction training on employment training is spent in London and the south-east.

  Mr. Jackson
  The figures are not available in the format requested.

  Mr. Leighton
  To ask the Secretary of State for Employment how many people are waiting for a place at Laings and Mowlems construction industry courses in east London.
  57
  Mr. Jackson
  Information of this kind is held by the TECs and I have asked the chief executive of East London TEC to write to the hon. Gentleman with this information.

  Jobs (Travel and Subsistence)
  Mr. Morgan
  To ask the Secretary of State for Employment if he will institute a study into the numbers of registered unemployed in receipt of travel and interview expenses to pursue work in other areas of the country who are subsequently offered employment, but are unable to accept it due to the lack of funds for travel to the place of work and subsistence, pending their initial pay packet.

  Mr. Jackson
  Questions on operational matters in the Employment Service executive agency are the responsibility of Mike Fogden, the agency's chief executive, to whom I have referred this question for reply.

  Mr. Morgan
  To ask the Secretary of State for Employment what assistance is available from (i) the social fund and (ii) other public sources for those on income support who, after securing employment in other areas of the country, require temporary financial assistance for(a) travelling expenses to reach their place of work and (b) subsistence pending their initial pay packet.

  Mr. Jackson
  The information is not available in the form requested. Many of the TECs in London and the south-east include the provision of construction training opportunities as one of their priorities. Nationally, the construction industry training board is providing over 10,000 places on youth training.

  Graduate into Enterprise Project
  Mr. Clelland
  To ask the Secretary of State for Employment if he will list the differences between the graduate into enterprise project and employment training with particular reference to any formal and written agreement drawn up between trainees on each of the relevant schemes and their training managers or providers.

  Mr. Jackson
  The graduate into enterprise 'project comprises a series of programmes operated by Durham university business school in collaboration with other universities and polytechnics in the north-east. Including among these programmes are some, for example, graduate enterprise and graduate gateway, on which participants are supported by local training and enterprise councils through employment training. ET is for unemployed people and includes enterprise training for those wishing to become self employed. All trainees in ET must receive full information in writing about their individual training plan and the terms and conditions of training.

  Training and Enterprise Councils
  Mr. Clelland
  To ask the Secretary of State for Employment what the projected cost for training and enterprise councils when they are fully established was estimated at on 1 January; and what the current estimate for that cost is.

  Mr. Jackson
  At the beginning of the year, the administrative cost for TECs and remaining Employment Department area offices for 1991–92 was estimated at £124·3 million. It is expected that all TECs will be fully operational this year. This estimate still stands.

  Barking Skill Centre
  Mr. Leighton
  To ask the Secretary of State for Employment what training is now taking place on the site of the Barking skill centre; and what uses the land and building have been put to.

  Mr. Jackson
  Barking skill centre was purchased by Astra Training Services Ltd. and is now in the private sector. Issues relating to training undertaken at the skill centre and what use the land and buildings located on the site are put to, are now matters for the owners.

  Earnings, Scotland
  Mr. Maxton
  To ask the Secretary of State for Employment pursuant to his answer of 10 June,Official Report, columns 435–38, on employees earning less than £3·40 hourly, if he will provide the information given in percentage form in terms of the absolute number of employees affected in each category.

  Mr. Jackson
  The information requested is not available.

  Rehabilitation Centres
  Mrs. Heal
  To ask the Secretary of State for Employment whether he has given any further consideration to the number of employment rehabilitation centres required in London and the south-east.

  Mr. Jackson
  My right hon. and learned Friend the Secretary of State announced on 16 April, in a written reply to a question from the hon. Member for Wyre (Mr. Mans),Official Report, columns 157–59, that employment services for people with disabilities are to be improved and developed.

  It was also announced that greater use will be made of the voluntary sector and others to provide employment rehabilitation and that nine Employment Service centres of excellence, including one in London and the south-east, were to be established over, approximately, the next five years.

  Operational responsibility for the development of the centres of excellence and for the range of employment services for people with disabilities rests with the chief executive of the Employment Service, Mike Fogden, to whom I have referred the hon. Lady's question for a more detailed reply.

  Earnings
  Mr. Barry Jones
  To ask the Secretary of State for Employment if he will state separately for full-time workers, part-time workers and all workers (i) the number and (ii) the percentage earning less than £130 for(a) women, (b) men and (c) all workers, excluding overtime pay in (1) Wales, (2) each county in Wales and (3) Great Britain, for the last year for which figures are available.

  Mr. Jackson
  The information available from the April 1990 new earnings survey is shown in the tables. The results of the April 1991 survey will be published this November and December.
  59

  Earnings in April 1990: New earnings survey

  A. Full time employees on adult rates with weekly earnings excluding overtime less than £130

  Number in the sample

  Percentage of total

  Women

  Men

  Total

  Women

  Men

  Total

  Wales

  564

  397

  961

  30·7

  11·1

  17·7

  Clwyd

  91

  52

  143

  34·7

  9·7

  17·9

  Clywd-West

  1—

  1—

  1—

  1—

  1—

  1—

  Clwyd-East

  58

  36

  94

  34·9

  9·0

  16·7

  Dyfed2

  58

  33

  91

  38·7

  14·2

  23·8

  Gwent

  86

  69

  155

  33·5

  11·3

  17·8

  Gwynedd

  39

  46

  85

  31·7

  17·2

  21·8

  Mid Glamorgan

  94

  52

  146

  28·5

  9·8

  16·9

  Powys

  27

  19

  46

  37·0

  15·7

  23·7

  South Glamorgan

  78

  57

  135

  21·4

  8·4

  12·9

  West Glamorgan3

  91

  69

  160

  33·0

  11·3

  18·0

  Great Britain

  10,056

  6,308

  16,364

  23·0

  7·6

  13·0

  1 Sampling error too large or numbers too small for reliable estimate.

  2 Excluding Llanelli.

  3 Including Llanelli.

  Source: New Earnings Survey 1990.

  B. Part time employees on adult rates with weekly earnings excluding overtime less than £130

  Number in the sample

  Percentage of total

  Women

  Men

  Total

  Women

  Men

  Total

  Great Britain

  22,763

  3,117

  25,880

  89·8

  85·0

  89·2

  Source: New Earnings Survey 1990.

  C. All employees on adult rates with weekly earnings excluding overtime less than £130

  Number in the sample

  Percentage of total

  Women

  Men

  Total

  Women

  Men

  Total

  Great Britain

  32,819

  9,425

  42,244

  47·6

  10·9

  27·2

  Source: New Earnings Survey 1990.

  Industrial Tribunals
  Mr. Graham
  To ask the Secretary of State for Employment (1) if he will take steps to ensure that the results of industrial tribunals are notified to the appellants before being released to the media;

  (2) if he will investigate the recent leaks of the results of industrial tribunals; and if he will make a statement.
  60
  Mr. Forth
  In accordance with the Industrial Tribunal (Rules of Procedure) (Scotland) Regulations 1985 decisions are entered in the register and then sent to the parties. The register is open to the public, as required by the regulations. I am not aware of any problems arising from this procedure, but if the hon. Member has a specific case in mind perhaps he will let me have the details so that I can examine it.

PUBLIC ACCOUNTS COMMISSION

  House of Commons Commission
  Mr. Tony Banks
  To ask the Chairman of the Public Accounts Commission if the Public Accounts Commission has considered the staffing implications of a requirement to examine the value for money spending of the House of Commons Commission.

  Sir Peter Hordern
  No. It is for the National Audit Office to identify its staffing requirements in the light of its programme of value-for-money studies. The Comptroller and Auditor General determines the actual programmes of value-for-money studies, and in so doing he takes account of the views of the Public Accounts Committee. The Comptroller and Auditor General is able to decide whether or not to include House of Commons Commission expenditure among his value-for-money studies.

HOUSE OF COMMONS

  New Parliamentary Building
  Mrs. Gorman
  To ask the Lord President of the Council if he will make a statement on the criteria used in assessing the allocation of new accommodation in phase I of the new parliamentary building.

  Mr. MacGregor
  The New Building Sub-Committee resolved at its meeting on 21 May 1991 the allocation of offices in phase I as between Members of political parties.

  Individual offices will be allocated to Members by the accommodation Whips of the Government and official Opposition parties on behalf of the Services Committee in the usual way.

  Current Appointment Rounds

  Type of Appointment

  Next Review

  Number

  Appointments made

  M

  F

  Regional Health Authority Chairmen

  31 July 1991

  2

  2

  —

  Regional Health Authority Non-Executives

  31 October 1992

  11

  —

  —

  District Health Authority Chairmen

  31 March 1992

  108

  —

  —

  NHS Trust Chairmen

  30 November 1991

  1

  —

  —

  NHS Trust Non-Executives

  30 November 1991

  3

  —

  —

  Basildon Community Health Council
  Mrs. Gorman
  To ask the Secretary of State for Health if he has any plans to increase the funding of the community health council for Basildon and Thurrock; and if he will make a statement.

  Mr. Dorrell
  The funding of community health councils is a matter for the relevant regional health authority.

  Partially Sighted Register
  Mrs. Wise
  To ask the Secretary of State for Health what benefits are available to people on the partially sighted register.

  Mr. Dorrell
  People who are registered as partially sighted are entitled to free sight tests. Local authority

  Envelopes
  Sir Geoffrey Finsberg
  To ask the Lord President of the Council, pursuant to his oral answer of 3 June,Official Report, column 18, to the hon. Member for Ealing, North (Mr. Greenway), what reasons account for the delay in providing the European envelope facility due to be made available in June; and when it will be available.

  Mr. MacGregor
  Initial samples of envelopes provided for use by Members in correspondence to official destinations in the European Community were found not to be sufficently strong. I am assured that supplies of higher quality envelopes will be available from the Serjeant at Arms' stores on Monday 15 July.

  Parliamentary Regional Sittings
  Mr. Hind
  To ask the Lord President of the Council if he has any plans to hold sittings of Parliament in regional centres other than London; and if he will make a statement.

  Mr. MacGregor
  No.

HEALTH

  NHS Trust Board
  Mrs. Gorman
  To ask the Secretary of State for Health how many regional health authority, district health authority, and national health service trust board posts are due to be filled in the current round of appointments; how many appointments have been made to date; and what proportion of the appointees are women.

  Mrs. Virginia Bottomley
  The information requested is set out in the table.

  We envisage that the second wave of NHS trusts will be established in the autumn. The appointment of chairmen and non-executive directors will be announced at the same time.

  social services departments have a duty to provide services to people who are partially sighted, whether or not they are registered, if there is an established need. A range of services or concessions for people who are partially sighted is available from opticians, libraries, voluntary organisations, transport authorities and other public and private bodies, some of which may make registration a condition of eligibility. There is no specific social security provision for people who are registered as partially sighted.

  Food Businesses (Training)
  Mr. Ron Davies
  To ask the Secretary of State for Health when he intends to use those powers available to him under the Food Safety Act 1990 to make regulations requiring training for those employed in food businesses.
  63
  Mr. Dorrell
  I shall be making an announcement shortly.

  Pharmaceutical Companies
  Mr. Michael Morris
  To ask the Secretary of State for Health what is the impact on(a) profitability of pharmaceutical companies supplying medicines to the national health service and (b) the national health service drugs bill of the pharmaceutical price regulation scheme.

  Mrs. Virginia Bottomley
  The pharmaceutical price regulation scheme seeks to strike a balance between securing the supply of drugs to the national health service at an acceptable cost to the taxpayer and offering pharmaceutical companies a reasonable level of profitability on their NHS sales.

  It is not possible to estimate the impact of the PPRS on companies' profitability or the NHS drugs bill since that would depend on what the level of drug prices might be or what other expenditure controls might exist in the absence of the agreement.

  NHS Consultants
  Mr. Butler
  To ask the Secretary of State for Health what is the average earnings level of an NHS consultant net of expenses.

  Mrs. Virginia Bottomley
  The consultant's whole-time salary ranges from £34,960 to £45,130 with the majority of consultants being on the maximum point. In addition, approximately one third of consultants have distinction awards. The value of a distinction award ranges from £7,955 to £42,870 per year. Consultants may also be paid fees and allowances for work outside the basic NHS contract. The salary includes no allowance for expenses.

  Waste Incinerators
  Mr. Wray
  To ask the Secretary of State for Health what is the minimum temperature needed for waste incinerators in national health service hospitals adequately to burn all waste, in particular that resulting from treatment to patients who suffer from serious infectious diseases.

  Mr. Dorrell
  Health authorities and NHS trusts are required to comply with my right hon. Friend the Secretary of State for the Environment's guidelines, issued under the Environmental Protection Act 1990, which specify operating temperatures for incinerators. The minimum temperature for new plant installed after 1 April 1991 is 1000 deg. C. Under the interim arrangement provided by the Act, existing plants may operate at a minimum temperature of 850 deg. C. for a maximum of five years, but I have stressed to NHS management the importance of meeting the higher minimum temperature standard as quickly as possible.

  Dental Care
  Mr. Rathbone
  To ask the Secretary of State for Health how he is encouraging better dental care and dental hygiene among children in advance of completion of the consultation period on the health strategy Green Paper.

  Mr. Dorrell
  Under the new contract general dental practitioners are paid on a capitation basis for their child 64
  patients. This is designed to encourage dentists to place emphasis on preventative measures including advice on oral hygiene and a healthy diet.

  The redesigned role of the community dental service is also intended to help improve dental health education and preventive measures.

  More than £1 million has already been spent in support of oral health education projects since the publication of the White Paper "Promoting Better Health", and my right hon. Friend the Secretary of State announced on 9 May that up to £750,000 would be available from the Department to support oral health education projects this year.

  In addition, funding is provided to the health education authority which has a long-established programme of providing education to patients and children on matters relating to nutrition and dental health.

  Medicine Imports
  Mr. Dalyell
  To ask the Secretary of State for Health (1) how many umbrella product licences for parallel imported medicines that can be exploited by all its members have been granted to the Association of Pharmaceutical Importers;

  (2) whether he has any plans to discontinue issue of umbrella product licences for parallel imported medicines to the Association of Pharmaceutical Importers, as an alternative to issuing licences to individual importers.

  Mrs. Virginia Bottomley
  The Association of Pharmaceutical Importers is not a parallel import licence holder. Licences can be issued to any company or individual meeting the criteria laid down in the Medicines Act 1968; related regulations and European guidelines may provide for a product to be placed on the market by named distributors.

  We have no present plans for changing these arrangements.

  Mr. Dalyell
  To ask the Secretary of State for Health whether all persons or organisations involved in the parallel importing of medicines hold wholesale dealers licences.

  Mrs. Virginia Bottomley
  No. Not all importers are wholesale dealers, but those that are should either hold a wholesale dealer licence or operate from premises which are registered as pharmacies.

  Mr. Dalyell
  To ask the Secretary of State for Health how many organisations hold product licences to engage in the parallel importing of medicines; and how many such organisations hold wholesale dealers' licences.

  Mrs. Virginia Bottomley
  As at 30 June 1991 there were 38 parallel import licence holders of which 32 held wholesale dealers' licences.

  Mr. Dalyell
  To ask the Secretary of State for Health whether the premises of all parallel importers of medicines who hold wholesale dealers' licences have been inspected by the United Kingdom medicines inspectorate.

  Mrs. Virginia Bottomley
  Yes, the premises of all wholesalers who are licensed to import medicines are inspected regularly.

  Mr. Dalyell
  To ask the Secretary of State for Health how many product licences have been granted for generic
  65
  medicines where the finished product of the active ingredient has been produced in former COM ECON countries.

  Mrs. Virginia Bottomley
  This information is not readily available and could be provided only at disproportionate cost.

  Indian and Chinese Medicines
  Mr. Dalyell
  To ask the Secretary of State for Health if his Department has any plans to commission research into the number of traditional Indian and Chinese medicines that are available in the United Kingdom without a product licence, and the number of people who have been treated with such products.

  Mrs. Virginia Bottomley
  Medicinal products are evaluated for safety, quality and efficacy when an application for a product licence is made. This action would be taken on any such application in respect of a traditional Indian or Chinese medicine.

  Mr. Dalyell
  To ask the Secretary of State for Health what measures the Medicines Control Agency is taking to evaluate and license traditional Indian and Chinese medicines.

  Mrs. Virginia Bottomley
  Before a medicinal product can be marketed in the United Kingdom it must be covered by a product licence obtained under the Medicines Act 1968. All product licence applications, including any for traditional Indian or Chinese medicines, have to be evaluated for safety, quality and efficacy by the licensing authority before a product licence can be granted.

  Rent Subsidies
  Mr. Andrew Smith
  To ask the Secretary of State for Health what powers health authorities have to subsidise the rents of tenants in their employment; whether such subsidy can be differentiated according to income; and whether such subsidy can exceed applicable levels of housing benefit.

  Mrs. Virginia Bottomley
  In many localities successful recruitment and retention of NHS staff depends on authorities providing subsidised residential accommodation. The level of the subsidy will be a matter for each individual authority.

  Some staff are required to occupy NHS accommodation as a condition of employment. Where this is so, authorities abate rent or lodging charges in accordance with centrally negotiated agreements.

  With the lifting of Crown immunity on 1 April, staff who occupy NHS accommodation can now apply to their local authority for housing benefit in the same way as non-NHS tenants. Detailed guidance on all these matters was issued by the Department to all health authorities in March this year in HG(91)9, a copy of which is available in the Library.

  The payment of housing benefit is a matter for my right hon. Friend the Secretary of State for Social Security.

  Abortion
  Mr. Hind
  To ask the Secretary of State for Health (1) in considering granting a licence for RU486 how many studies financed by the manufacturers Roussel Uclaf were 66
  considered by the Medicines Control Agency; by whom they were carried out; how large the samples were; what the results showed; and if he will make a statement;

  (2) if he will publish the number of independent research projects commissioned by the Medicines Control Agency into RU486, the names of the research units involved and the results;

  (3) how many of the studies commissioned by the Medicines Control Agency into RU486 included post-abortion syndrome studies and follow up studies on the mothers; and if he will make a statement.

  Mrs. Virginia Bottomley
  The Medicines Control Agency does not commission research projects into drugs. The MCA's role is to evaluate the data submitted in support of an application for a licence for a drug in respect of its safety, quality and efficacy for the indication proposed. For all new drugs, the MCA seeks the advice of the Committee on Safety of Medicines and its expert sub-committees. Section 118 of the Medicines Act 1968 precludes both Ministers and the MCA on grounds of commercial confidentiality from disclosing any information on data submitted by manufacturers in support of clinical trials or product licence applications.

  I would, however, draw my hon. Friend's attention to the well-documented studies in the British Journal of Obstetrics and Gynaecology, June 1990, Vol. 97, pages 480 to 486, and in the New England Journal of Medicine, 8 March 1990, Vol. 322, No. 10, pages 645 to 648, copies of which are in the Library.

  Mr. Hind
  To ask the Secretary of State for Health if he is setting up a special fund along the French lines to provide damages for children born deformed because their mothers have taken RU486 but then refused to take prostaglandin; and if he will make a statement.

  Mrs. Virginia Bottomley
  No. Both the licence holder's data sheet for Mifegyne, for use by the doctor, and the patient information leaflet stress the importance of completing the course of treatment.

  Mr. Hind
  To ask the Secretary of State for Health what financial provision he is making in the budgets of regional and district health authorities for legal costs and damages against the possibility of deformed victims of RU486 suing the national health service; and if he will make a statement.

  Mrs. Virginia Bottomley
  No such action is necessary.

  Waiting Lists
  Mr. Cousins
  To ask the Secretary of State for Health if he will list the number of health authorities and hospital trusts that have received payments from the national waiting list initiative fund in the present financial year.

  Mrs. Virginia Bottomley
  Allocations from the waiting list fund are made to regions, which in turn allocate sums to their constituent health authorities. Information is not available centrally on regions' allocation to districts except for the 80 target lists being investigated by Qa Business Services. The available information is shown in the tables.
  67

  Waiting list fund 1990–91

  Table 1. Allocations to regions from main wailing list fund

  Region

  Allocation (to 30 June 1991) (£000)

  Northern

  375

  Yorkshire

  520

  Trent

  500

  East Anglian

  340

  North West Thames

  433

  North East Thames

  658

  South East Thames

  440

  Table 2. Allocations to regions from £9 million reserved for target lists

  Region

  District

  Specialty

  Allocation (to 30 June 1991) (£000)

  Trent

  Sheffield

  Trauma and Orthopaedics

  123

  North East Thames

  Tower Hamlets

  Oral Surgery

  24

  Tower Hamlets

  Trauma and Orthopaedics

  24

  West Essex

  General Surgery/Urology

  9

  West Essex

  Trauma and Orthopaedics

  61

  City and Hackney

  Ear, Nose and Throat

  62

  North East Essex

  General Surgery

  63

  South West Thames

  West Surrey

  Ophthalmology

  31

  North West Surrey

  Trauma and Orthopaedics

  60

  West Midlands

  North Staffordshire

  Trauma and Orthopaedics

  50

  Total allocations to target lists

  507

  Mr. Hinchliffe
  To ask the Secretary of State for Health what discussions his Department has held with the Yorkshire regional health authority about the authority's scheme with regard to the identification by general practitioners of patients on hospital waiting lists for more than 12 months; and what is the estimate of the likely cost of this scheme.

  Mrs. Virginia Bottomley
  The Department has had no specific discussions with the regional health authority on this. However, I understand that as part of the drive to reduce long waiting times, the region has asked purchasing health authorities and GP fund-holders to check the details of patients who have been waiting over a year. The regional health authority has told the Department that the costs are minimal.

  It is a key regional management task to ensure that purchasers know how many of their patients are waiting, at which hospitals and for how long, so that arrangements can be made, using the waiting list fund, to secure early treatment for long wait patients. The waiting list fund is expected to be used to reduce the number of long wait patients of both health authorities and GP fund-holders.

  Creutzfeld-Jakob Disease
  Mr. Cousins
  To ask the Secretary of State for Health what was the date on which his Department, his medicine control bodies or his public health services first became aware of a possible link between growth hormone and Creutzfeld-Jakob disease.

  Mr. Dorrell
  On 11 April 1985 the chairman of the health services human growth hormone committee informed the Department that he had learned from the United States of America of the death from CreutzfeldJakob disease of three patients who had received human growth hormone therapy. A meeting of the committee was 68

  Region

  Allocation (to 30 June 1991) (£000)

  South West Thames

  388

  Wessex

  380

  Oxford

  258

  South Western

  323

  West Midlands

  713

  Mersey

  575

  North Western

  475

  Total allocation to regions

  6,378

  arranged for 9 May. At that meeting it was reported that the Untied States Federal Drugs Agency had withdrawn the use of human growth hormone therapy on 19 April. The committee decided to withdraw the therapy from use in the United Kingdom; human growth assessment centres were notified immediately. Regional health authorities were informed of the decision and the background to it on 10 June 1985.

  Mr. Cousins
  To ask the Secretary of State for Health when he expects the study into the incidence of Creutzfeld-Jakob disease he is funding to be completed; and if he will make it his policy to place it in the Library.

  Mr. Dorrell
  It will be necessary to continue the study into the incidence of Creutzfeld-Jakob disease (CJD) for a decade or more. The author, Dr. R.G. Will, is expected to make the full results available through the usual scientific channels. We have agreed to make an annual report on the incidence of CJD available to the House. The available data on suspected cases who died in 1990 shows that 10 have been confirmed as CJD with a further nine probable and 13 possible cases, most of which are awaiting the results of neuropathology. Reliable data on the previous incidence of CJD is limited, but there is no evidence to show it is increasing.

  Mr. Cousins
  To ask the Secretary of State for Health what is the policy of the blood transfusion service on the donation of blood by sufferers from Creutzfeld-Jakob's disease.

  Mr. Dorrell
  There is no evidence that Creutzfeld-Jakob disease can be transmitted in blood or blood products, but people who suffer from CJD or are at special risk of contracting the disease are not accepted as blood donors.

  Performance-related Payments
  Mr. Hinchliffe
  To ask the Secretary of State for Health if he will list for each year since its introduction the total amount of performance-related payments made to regional or district health authority staff and break this figure down to identify the amounts paid each year in respect of individual districts and regions.

  Mrs. Virginia Bottomley
  This information is not held centrally.

  Nursery Places
  Mr. Hinchliffe
  To ask the Secretary of State for Health if he will list those health authorities which provide nursery places for use by national health service staff and detail the number of nursery places available.

  Mrs. Virginia Bottomley
  The information requested regarding nursery provision is not collected centrally at present.

  We anticipate some information being available by the autumn and 1 will arrange for details to be placed in the Library.

  It is our understanding that somewhere in the region of half of health authorities have some provision at present.

  Patients (Contracting)
  Mr. Hinchliffe
  To ask the Secretary of State for Health what guidance he has given to regional and district health authorities and trusts with regard to the action which should be taken when patients from a particular purchaser require elective procedures in excess of the agreed ceiling of in-year activity.

  Mrs. Virginia Bottomley
  General guidance on contracting was given in "Contracts for Health Services: Operational Principles" and "Contracts for Health Services: Operating Contracts"—copies of which are in the Library.

  District health authorities will lay contracts which they judge will best meet the needs of local people within the resources available. Hospitals and other units will, as in the past, have to take management action, in close consultation with clinicians, to ensure that levels of activity do not run ahead of the resources available. They may, however, be able to agree with the purchaser an extension to the contract in year to cover additional services.

  Medical Manpower
  Mr. Bowden
  To ask the Secretary of State for Health what plans he has to review future United Kingdom medical manpower.

  Mr. Waldegrave
  Following my announcement to the Joint Consultants' Committee earlier this year, I am setting up a new standing advisory committee, to advise on the future balance of medical manpower supply and demand in the United Kingdom and to make recommendations as to the appropriate medical school intake.

  The Committee's terms of reference will be:
  To advise the Secretary of State for Health on future developments in the balance of medical manpower supply and demand in the United Kingdom, taking account of
  70
  resource assumptions and other guidance which the Secretary of State, in consultation with other Health Ministers, may give to the Committee; and
  To make recommendations about the medical school intake including the balance between home and overseas students, and the timing of any changes, taking into account the resources available within the Universities Funding Council's aggregate funding and from overseas students' fees as well as the facilities for clinical students.

  I have appointed Professor Colin Campbell, Vice Chancellor of Nottingham University, to be the first chairman of the Committee. The membership of the Committee will be announced shortly.

DUCHY OF LANCASTER

  Duchy Visit
  Mr. Jacques Arnold
  To ask the Chancellor of the Duchy of Lancaster when he expects to pay his next visit to the Duchy.

  Mr. Chris Patten
  I have no plans to do so.

  Mr. Dykes
  To ask the Chancellor of the Duchy of Lancaster when he next intends to visit the Duchy of Lancaster in his official capacity.

  Mr. Mans
  To ask the Chancellor of the Duchy of Lancaster when he next plans to visit the Duchy of Lancaster.

  Mr. Chris Patten
  I have no plans to visit the Duchy of Lancaster in the immediate future.

  Bolton
  Mr. Thurnham
  To ask the Chancellor of the Duchy of Lancaster if he will make an official visit to Bolton; and if he will make a statement.

  Mr. Chris Patten
  I have no plans to visit Bolton in the immediate future.

SCOTLAND

  Nairn Bypass
  Sir Russell Johnston
  To ask the Secretary of State for Scotland what progress there has been on the proposal for a bypass for Nairn.

  Lord James Douglas-Hamilton
  We have no proposals for a bypass of Nairn. Works are currently under way to upgrade the road within the town by a local diversion at Nairn railway bridge.

  Hospital Consultants
  Mr. Galbraith
  To ask the Secretary of State for Scotland how many appeals have there been from hospital consultants under general Whitley council conditions of service, section 40, since 1961; and in each case, what was the time between the appeal board's decision and its announcement by him.

  Mr. Michael Forsyth
  Records are available only from 1973. In that period there have been three appeals by hospital consultants under section 40 of the general Whitley council conditions of service. In only one case was
  71
  an independent appeal panel constituted and the time between the submission of the appeal panel's recommendations to the Secretary of State and the announcement of his decision was six months.

  Tayside Health Board
  Mr. Galbraith
  To ask the Secretary of State for Scotland what funds are available to Tayside health board to pay travel costs for re-deployed staff.

  Mr. Michael Forsyth
  Tayside health board receives an annual allocation of revenue to meet recurrent expenditure. In 1991–92 £204.066 million was made available to Tayside health board for this purpose. These resources are not allocated centrally to specific areas of expenditure and it is for the health board to decide how they should be deployed.

  Meigle Cottage Hospital
  Mr. Galbraith
  To ask the Secretary of State for Scotland what is the cost per bed for keeping and treating an in-patient at Meigle cottage hospital for the last five years for which figures are available.

  Mr. Michael Forsyth
  The cost of keeping and treating an in-patient for one week at Meigle cottage hospital for the last five years is as follows:

  Year

  Actual cost per In-Patient Week

  1990–91

  549·09

  1989–7;90

  517·96

  1988–89

  452·37

  1987–88

  410·61

  1986–87

  401·00

  Greater Glasgow Health Board (Children)
  Mr. Galbraith
  To ask the Secretary of State for Scotland if he will give for each general dental practice within the Greater Glasgow health board area the number of children registered under capitation arrangements.

  Bridging Finance for Community Care

  £'s

  1991–92

  1992–93

  1993–94

  Capital

  Revenue

  Capital

  Revenue

  Capital

  Revenue

  ARGYLL AND CLYDE

  Elderslie

  195,000

  22,000

  125,000

  254,000

  0

  168,000

  Bute Day Hospital

  185,000

  175,000

  0

  175,000

  0

  175,000

  Community MHT

  2,100

  126,416

  0

  126,416

  0

  126,416

  Inverclyde Phys Dis

  150,000

  0

  0

  0

  0

  95,577

  Dumbarton and Dunoon

  32,875

  42,545

  0

  42,545

  0

  42,545

  Total

  564,975

  365,961

  125,000

  597,961

  0

  607,538

  AYRSHIRE AND ARRAN

  None at present

  BORDERS

  St. Mary's

  47,100

  86,250

  0

  103,250

  0

  16,750

  Galashiels

  50,000

  0

  0

  0

  0

  0

  Total

  97,100

  86,250

  0

  103,250

  0

  16,750

  DUMFRIES AND GALLOWAY

  Sheltered Housing

  32,000

  85,000

  0

  58,000

  0

  62,000

  72
  Mr. Michael Forsyth
  The information is not available centrally.

  Blairgowrie Cottage Hospital
  Mr. Galbraith
  To ask the Secretary of State for Scotland what is the cost per bed for keeping and treating an in-patient in the acute ward/geriatric wing at Blairgowrie cottage hospital for the last five years for which figures are available.

  Mr. Michael Forsyth
  The cost of keeping and treating an in-patient for one week at Blairgowrie cottage hospital for the last five years is as follows:

  Year

  Actual cost per in-patient week £

  1990–91

  383·82

  1989–90

  367·46

  1988–89

  337·42

  1987–88

  330·00

  1986–87

  333·00

  Community Care
  Mr. Dewar
  To ask the Secretary of State for Scotland if he will list the agencies and professional organisations which have been given details about the bridging finance awards that have been made under the announcement of 12 June concerning care in the community.

  Mr. Lang
  On 11 June 1991, each health board general manager was notified of the details of approved projects in their board area.

  Mr. Dewar
  To ask the Secretary of State for Scotland if he will list the successful bridging finance applications announced on 12 June to develop and expand care in the community, broken down by revenue and capital in each health board area and for each of the three years 1991–92, 1992–93 and 1993–94.

  Mr. Lang
  The information is included in the following table.
  73

  1991–92

  1992–93

  1993–94

  Capital

  Revenue

  Capital

  Revenue

  Capital

  Revenue

  Community Home

  0

  95,000

  0

  0

  0

  0

  Total

  32,000

  180,000

  0

  58,000

  0

  62,000

  FIFE

  None at present

  FORTH VALLEY

  Mental Illness

  216,000

  137,000

  0

  0

  0

  0

  Mental Handicap

  0

  50,000

  30,000

  30,000

  100,000

  0

  Total

  216,000

  187,000

  30,000

  30,000

  100,000

  0

  GRAMPIAN

  Richmond Fellowship

  24,000

  0

  0

  0

  0

  0

  Peterhead Supp Ace

  5,000

  0

  0

  0

  0

  0

  Inverurie Supp Ace

  10,000

  0

  0

  0

  0

  0

  Room to care

  0

  15,000

  0

  0

  0

  0

  Aberdeen Supp Ace

  80,000

  39,123

  80,000

  45,995

  80,000

  45,995

  Forensic Rehab

  0

  39,208

  0

  47,050

  0

  47,050

  Rehab/Outreach

  0

  59,508

  0

  62,290

  0

  62,290

  Rehab/Day centre

  0

  166,666

  0

  250,000

  0

  250,000

  SAMH Supp Housing

  20,000

  19,583

  0

  23,500

  0

  23,500

  SAMH Rehab

  50,000

  32,792

  0

  78,700

  0

  78,700

  Woodlands Hospital

  0

  50,000

  0

  17,800

  0

  17,800

  Moray

  100,000

  80,000

  0

  165,239

  0

  165,239

  Manor

  21,000

  0

  0

  0

  0

  0

  Total

  310,000

  501,880

  80,000

  690,574

  80,000

  690,574

  GREATER GLASGOW

  Mental Handicap II

  71,000

  296,000

  0

  107,000

  0

  0

  Comm MH Team Bases

  150,000

  0

  0

  0

  0

  0

  Comm MHT Dom Ser

  0

  100,000

  0

  100,000

  0

  0

  Mental Illness II

  345,000

  901,000

  0

  173,000

  0

  0

  EMI

  12,000

  52,000

  0

  0

  0

  0

  Comm MH Team Bases

  50,000

  0

  0

  0

  0

  0

  Comm MHT Dom Ser

  0

  90,000

  0

  90,000

  0

  0

  Total

  628,000

  1,439,000

  0

  470,000

  0

  0

  HIGHLAND

  None at present

  LANARKSHIRE

  Mental Handicap

  314,000

  353,514

  0

  707,028

  0

  707,028

  Mental Illness

  120,000

  95,200

  0

  190,400

  0

  190,400

  Total

  434,000

  448,714

  0

  897,428

  0

  897,428

  LOTHIAN

  Hopetoun House

  0

  15,000

  0

  20,000

  0

  20,000

  Penumbra

  375,000

  64,000

  375,000

  64,000

  0

  0

  Total

  375,000

  79,000

  375,000

  84,000

  0

  20,000

  ORKNEY

  No schemes submitted

  SHETLAND

  No schemes submitted

  TAYSIDE

  Fresh Start

  60,000

  125,000

  30,000

  125,000

  0

  0

  WESTERN ISLES

  Mental Handicap

  45,000

  112,700

  0

  0

  0

  0

  Mental Illness

  0

  39,118

  0

  0

  0

  0

  Total

  45,000

  151,818

  0

  0

  0

  0

  1991–92

  1992–93

  1993–94

  Capital

  Revenue

  Capital

  Revenue

  Capital

  Revenue

  Total of all schemes

  2,762,075

  3,537,623

  640,000

  3,056,213

  180,000

  2,294,290

  Total per year

  6,299,698

  3,696,213

  2,474,290

  Grand Total

  12,470,201

  74 75
  Mr. Dewar
  To ask the Secretary of State for Scotland what consultation took place on the proposals for bridging finance announced on 12 June to develop and expand community care.

  Mr. Lang
  In assessing applications for bridging finance from health boards, prior to allocation on 12 June 1991, the Government took into account the extent to which the proposals had been agreed with local authorities and voluntary agencies involved.

  Tourist Signposting
  Mr. Kirkwood
  To ask the Secretary of State for Scotland (1) what progress has been made in the review of signposting for tourist purposes; and if he will viake a statement;

  (2) when he expects to publish his Department's circular on tourist signposting;

  (3) if he will publish a list of those individuals and bodies who were consulted and who submitted evidence to the body undertaking the review of signposting for tourist purposes;

  (4) on what date did the review of signposting for tourist purposes commence; and what are the reasons for the delay in producing the circular.

  Lord James Douglas-Hamilton
  A range of new signs for tourist attractions was first proposed in 1988 in the context of the review of the Traffic Signs Regulations and General Directions 1981. The bodies who were consulted in Scotland included local roads authorities, the Scottish tourist board, the Highlands and Islands development board, police forces, motoring organisations, road safety organisations and bus and transport associations. Comments received were mostly from regional and islands councils, but also from the STB, the HIDB, the AA and bus interests. Subsequently, a review of tourist signposting was taken forward in seminars arranged respectively by the Scottish Office (in October 1989), the Scottish tourist board (in February 1990) and the Highlands and Islands development board, in conjunction with Highland regional council (in September 1990). Close to 250 delegates attended these seminars in total, representing the widest possible range of interests in the tourism sector.

  As a consequence of all the input obtained from the exchanges of views at these seminars and thereafter, comprehensive guidelines have been drawn up in close consultation with the Scottish tourist board, the Scottish Confederation of Tourism and Highlands and Islands Enterprise. These guidelines will be sent out in draft for comment by the various interests in the very near future. It has been a long process, but the subject is complex and the views are many, and often conflicting.

  Residential Care Allowance
  Mr. Kirkwood
  To ask the Secretary of State for Scotland if he will list all those regional and island authorities that top up care costs for residents in receipt of residential care allowance and who stay in residential accommodation for people with learning difficulties.

  Mr. Michael Forsyth
  The information requested is not held centrally.

  Tranent-Macmerry Bypass
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will make a statement on the fatal accident on the Tranent-Macmerry bypass on 6 July; and if he will take further steps to warn motorists that that section of the A 1 road is not a dual carriageway.

  Lord James Douglas-Hamilton
  This appalling accident took place in the early morning of 6 July in darkness and fog on a stretch of the A1 between Tranent and Haddington. It is too early to draw conclusions as to the causes of the accident or the factors which may have contributed to its exceptional severity. A report on the accident will be made by the police to the procurator fiscal. The stretch of road in question has a good safety record with an accident rate well below the national average for a road of its type. The signs and road markings provided exceed national standards.

  The steering group which I set up to carry out a programme of improvements to the A 1 as part of a route action plan has been examining the whole length of the route between Edinburgh and Newcastle to identify accident remedial measures which might be taken. Their examination has included this and other single carriageway sections of the route. I am now asking the group to re-examine these sections in the light of this accident to consider whether there are any signing or other remedial measures which could further improve the safety of these sections and which could be implemented at an early date.

  I have asked the police to advise me of any issues relevant to road safety relating to this section of the road which have become apparent from their investigation of the accident and I will, of course, give urgent consideration to any recommendations they may make.

  My hon. Friend the Parliamentary Under-Secretary of State for Transport has already indicated that following the accident his Department will also be reviewing the requirements relating to the seating for passengers carried in vans.

  Electoral Register
  Mr. Wray
  To ask the Secretary of State for Scotland what is, for each year since 1975, the number of people on the electoral register in(a) Greater Glasgow, (b) Strathclyde and (c) Scotland.

  Lord James Douglas-Hamilton
  Information on the number of people on the electoral register in Scotland by parliamentary constituency is contained in the annual series "Electoral Statistics" compiled by the Office of Population Censuses and Surveys. Copies of the entire series since 1974 are available in the House Library.

  A1
  Mr. Home Robertson
  To ask the Secretary of State for Scotland if he will make a statement on the programme for dualling the Al road from Musselburgh to Haddington and onwards to Dunbar, giving projected start and completion dates, and the relevant financial details from his Department's capital programme for roads.

  Lord James Douglas-Hamilton
  Following our routes south of Edinburgh study, I announced that consultants would be appointed to prepare the AI dualling scheme from Bankton (Tranent) to Haddington and the further
  77
  dualling to Dunbar. The necessary preparatory work is progressing well and we are on course to meet the commitment given for a start to construction of the Bankton to Haddington dualling scheme by the mid-1990s. I expect the consultants to report later this summer on selected route options. The consultants report on the further dualling scheme between Haddington and Dunbar is expected in the latter part of 1992. In view of the uncertainty surrounding the time needed to complete the necessary statutory procedures start and completion dates are not available at this stage in the preparation of the schemes. Scheme costs will depend upon the complexity of the works and the line followed which cannot be predicted with any certainty at this stage.

  Erskine Bridge
  Mr. Graham
  To ask the Secretary of State for Scotland what is the cost of maintaining the Erskine bridge.

  Lord James Douglas-Hamilton
  The latest published accounts show that the operating and maintenance costs of the bridge were £326,247 in 1989–90.

  Mr. Graham
  to ask the Secretary of State for Scotland how much was taken in tolls on the Erskine bridge each year since the bridge was opened.

  Lord James Douglas-Hamilton
  The latest published accounts are for 1989–90. The tolls collected each year since the bridge was opened are as follows:

  Financial year

  Tolls collected £

  1971–72

  194,775

  1972–73

  312,273

  1973–74

  359,570

  1974–75

  380,557

  1975–76

  417,495

  1976–77

  471,743

  1977–78

  524,666

  1978–79

  583,760

  1979–80

  525,059

  1980–81

  679,171

  1981–82

  843,467

  1982–83

  1,194,705

  1983–84

  1,257,592

  1984–85

  1,373,882

  1985–86

  1,394,421

  1986–87

  1,506,547

  1987–88

  1,627,605

  1988–89

  1,786,179

  1989–90

  2,360,403

  Mr. Graham
  To ask the Secretary of State for Scotland how many staff are employed to collect the toll on the Erskine bridge; and if he will break it down by all staff grade involved.

  Lord James Douglas-Hamilton
  There are at present 30 full-time and one part-time members of staff employed at Eskine bridge. They comprise the bridge manager, three administrative staff, six toll supervisors, 20 toll collectors and a part time handyman. Temporary toll collectors are also employed as necessary to cover for annual leave and sickness so as to maintain the service to the public.

  Mr. Graham
  To ask the Secretary of State for Scotland how many letters the Government have received complaining about the Erskine bridge toll since 1979.
  78
  Lord James Douglas-Hamilton
  No record has been created and the information requested is not available.

  Abattoirs
  Dr. David Clark
  To ask the Secretary of State for Scotland if he will list the abattoirs in Scotland which slalughter fewer than 12 livestock units or cattle each week.

  Mr. Michael Forsyth
  It would not be appropriate to list the information requested in view of its commercial sensitivity. However, information on throughput derived from annual advisory visits by state veterinary service staff to local authority licensed abattoirs is recorded in size bands. The 1990 figures for Scotland are as follows:

  Livestock units

  Abattoirs

  0–5

  9

  6–10

  2

  11–15

  Nil

  Mar Lodge
  Mr. Dalyell
  To ask the Secretary of State for Scotland what response he has made to the letter from the director general of the International Union for the Conservation of Nature, Dr. Martin Holdgate FRS, relating to Mar lodge; and if he will put copies of the correspondence in the Library.

  Lord James Douglas-Hamilton
  I have arranged to have copies of Dr. Holdgate's letter of 16 May to my right hon. Friend, and the Scottish Office Environment Department's reply of 5 June, placed in the Library.

  Mr. Dalyell
  To ask the Secretary of State for Scotland pursuant to his answer of 19 June,Official Report, column 279, what further proposals he has received relating to the future of Mar lodge; and what response he had made.

  Lord James Douglas-Hamilton
  On 27 June I met representatives of the World Wide Fund for Nature, The Royal Society for the Protection of Birds and the Chris Brasher trust who outlined their proposals for the purchase of the Mar lodge estate.

  My response was that private ownership can and does provide for effective management of the natural heritage in Scotland. In this context, the proposal that the Government provide 50 per cent. of the purchase price of the Mar lodge estate is inconsistent with Government policy.

  Student Support
  Mr. Wray
  To ask the Secretary of State for Scotland what measures he is now taking in order to provide financial support to students, following the ending of their entitlement to welfare benefits.

  Mr. Michael Forsyth
  [holding answer 12 July 1991]: We are already providing such support through student loans and access funds. Loans and grants together provided an increase of 25 per cent. in the resources available to students in session 1990-91 and the loan element more than compensated the average student claimant for the loss of benefits. The average student's likely entitlement to

  79
  benefits was estimated to be about £327, whereas the average full year loan rate for session 1990–91 is £420. Eligible students who have not already done so can still apply for a loan for 1990–91 provided their completed application reaches the Student Loans Company Ltd. by 31 July.

  For session 1991–92 the overall provision for student maintenance has been increased by a further 6 per cent. on average, giving a loan facility of £580 for students living away from the parental home.

  In addition to student loans, discretionary assistance may be available in cases of need through the access funds which are administered by the individual academic institutions.

  Red Deer
  Mr. Wilson
  To ask the Secretary of State for Scotland how many estates have killed(a) fewer than five, (b) six to 10, (c) 11 to 50, (d) 51 to 100, (e) 101 to 250, (f) 251 to 500 and (g) more than 500 red deer in each year from 1986 to 1990.

  Mr. Michael Forsyth
  [holding answer 9 June 1991]: The information is as follows:

  1986–87

  1987–88

  1988–89

  1989–90

  Less than 5

  51

  45

  46

  46

  6 to 10

  47

  28

  41

  37

  11 to 50

  193

  208

  178

  191

  51 to 100

  97

  108

  117

  123

  Expenditure on trunk road maintenance

  1 April 1980 to 31 March 1990

  £ thousands

  Region

  1980–81

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Borders

  764

  1,247

  1,825

  1,618

  1,227

  1,371

  1,145

  1,307

  1,640

  1,565

  Central

  1,336

  1,913

  2,415

  2,614

  2,204

  2,190

  1,710

  1,377

  2037

  2,254

  Dumfries and Galloway

  1,256

  2,414

  2,327

  2,130

  3,118

  1,762

  2,433

  2,847

  3,111

  3,736

  Fife

  604

  914

  1,165

  1,893

  1,099

  1,221

  1,707

  1,045

  2,154

  3,034

  Grampian

  1,635

  2,739

  1,982

  2,291

  1,800

  2,402

  3,344

  3,313

  2,812

  3,075

  Highland

  3,163

  3,977

  4,148

  5,530

  5,528

  6,783

  7,561

  7,093

  8,797

  9,063

  Lothian

  930

  1,394

  1,362

  2,005

  1,302

  1,928

  1,939

  2,306

  2,441

  2,214

  Strathclyde

  6,140

  11,115

  8,346

  10,692

  9,663

  9,766

  10,324

  12,140

  13,360

  15,707

  Tayside

  1,474

  3,375

  2,727

  3,969

  2,423

  2,745

  3,297

  2,508

  3,046

  4,621

  Expenditure on trunk road construction

  1 April 1980 to 31 March 1990

  £ thousands

  Region

  1980–81

  1981–82

  1982–83

  1983–84

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–90

  Borders

  2,656

  3,247

  2,677

  1,656

  1,013

  902

  1,964

  1,320

  1,117

  3,478

  Central

  2,901

  6,565

  4,784

  2,351

  1,321

  923

  1,672

  2,424

  2,078

  10,374

  Dumfries and Galloway

  1,408

  3,994

  7,181

  5,590

  8,096

  11,110

  8,793

  17,925

  19,919

  24,158

  Fife

  2,304

  3,789

  3,857

  5,303

  6,014

  6,163

  4,030

  2,499

  7,940

  8,304

  Grampian

  8,009

  4,839

  4,016

  8,580

  16,603

  5,744

  2,147

  10,714

  17,170

  16,613

  Highland

  21,922

  24,499

  15,309

  11,783

  11,408

  5,234

  9,238

  16,008

  14,237

  14,085

  Lothian

  286

  783

  1,143

  881

  4,900

  12,320

  12,246

  4,208

  3,035

  5,761

  Strathclyde

  4,482

  9,805

  16,904

  20,377

  16,354

  23,589

  17,293

  22,681

  20,248

  23,651

  Tayside

  27,416

  15,525

  26,098

  15,274

  17,718

  21,045

  21,239

  16,095

  3,353

  7,128

  Anti-speeding Measures
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland what steps he is taking to monitor the effects of the measures recently taken to reduce speeding through Gateside, Fife.

  Lord James Douglas-Hamilton
  [holding answer 11 July 1991]: Accident prevention measures at Gateside were
  80

  1986–87

  1987–88

  1988–89

  1989–90

  101 to 250

  72

  84

  93

  94

  251 to 500

  20

  20

  22

  20

  More than 500

  3

  3

  5

  7

  Auchtermuchty Bypass
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will make a statement about the Auchtermuchty bypass.

  Lord James Douglas-Hamilton
  [holding answer 11 July 1991]: I will be writing to the hon. Member very shortly in reply to his letter on this subject. I can state however that completion of the final elements of the necessary preparatory work on this scheme will be undertaken only when there is a reasonable prospect of early funding being available. The present indications are that this is unlikely to be the case within the next five years.

  Trunk Roads
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland what sums have been spent on trunk roads in each region in Scotland for(a) maintenance and (b) new building in the last 10 years for which information is available.

  Lord James Douglas-Hamilton
  [holding answer 11 July 1991]: The information is set out in the following tables:

  completed within the last month. Speed checks were carried out prior to commencement of the works and further checks are currently taking place. In addition, as before and after accident analysis will be carried out 6 months following the implementation of the works.
  81
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will bring forward proposals to permit local authorities to reduce speed limits in the neighbourhood of schools.

  Lord James Douglas-Hamilton
  [holding answer 11 July 1991]: The Road Traffic Bill contains provisions to allow the introduction of variable speed limits in appropriate circumstances. This would enable, for example, an authority to reduce the speed limits outside a school during those times when children are arriving and leaving. In addition, a consultation paper was issued by the Scottish Office earlier this year about the introduction of 20 mph speed limit zones. It is envisaged that 20 mph zones would be most effective in residential areas and in the vicinity of schools. Guidance on both these initiatives will be given to local authorities as soon as practicable.

  Cupar Bypass
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will make a statement on the Cupar bypass.

  Lord James Douglas-Hamilton
  [holding answer 11 July 1991]: We have no proposals at present for a bypass for Cupar. Fife regional council has conducted a traffic study of the town and its findings are expected this autumn. A traffic management scheme providing medium term measures to reduce the traffic problems in Cupar is currently being prepared by Fife regional council.

SOCIAL SECURITY

  Departmental Agencies
  Mr. McAllion
  To ask the Secretary of State for Social Security what is the maximum salary payable including the performance related element to the chief executive of each agency in his Department; and what is the length of time of each chief executive's contract.

  Miss Widdecombe
  Taking each agency in turn, the details are as follows:

  Resettlement Agency
  Salary, exclusive of London weighting, £33,970. An annual pay review is due in August 1991, details of which are not yet available. Additionally, if all targets are met, a bonus of up to 7.5 per cent. of salary at end of year two, and up to 10 per cent. of salary at end of year three. There is no fixed length of contract.

  Information Technology Services Agency
  Salary, exclusive of London allowance, £48,380—rising to £49,300 in December 1991. Additionally, if all targets are met, an annual bonus of up to 12·5 per cent. of salary. The length of contract is three years from 2 April 1990.

  Benefits Agency
  Salary £75,250 rising to £76,650 from December 1991. Additionally, if all targets are met, an annual bonus of up to 12·5 per cent. of salary. The length of contract is five, years from 1 April 1991.

  Contributions Agency
  Salary £44,996. An annual pay review is due in August 1991, details of which are not yet available. Additionally, if all targets are met, an annual bonus of up to 12·5 per cent. of salary. The length of contract is three years from 1 April 1991.

  Pension Age
  Mr. Foulkes
  To ask the Secretary of State for Social Security (1) pursuant to his answer of 2 June,Official Report, column 112, to the hon. Member for Thanet, South (Mr. Aitken) what assessment he has made of the implications for the state earnings-related pension of the Barber judgment in the European Court of Justice;

  (2) whether he will establish a consultative committee to consider equalisation of the state pension age.

  Miss Widdecombe
  The Barber judgment concerned an occupational pension scheme, but I refer the hon. Member to the statement made by my right hon. Friend, the Secretary of State, on 26 June at columns 997–1006.

  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security what response he has made to the House of Lords European Communities Select Committee inquiry of Session 1988–89 into equal treatment in pensions and other benefits.

  Miss Widdecombe
  Our response is set out in the reply to the 10th report from the House of Lords Select Committee on the European Communities Session 1988–89 on equal treatment for men and women in pensions and other benefits (Cm. 1038).

  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security what progress has been made towards equalisation of the state pension age.

  Mr. Widdecombe
  I refer my hon. Friend to the statement made by my right hon. Friend, the Secretary of State, on 26 June at columns 997–1006.

  Mr. Andrew Bowden
  To ask the Secretary of State for Social Security what studies he has commissioned from the Office of Population Censuses and Surveys into equalisation of the state pension age; and when he expects the results to be available.

  Miss Widdecombe
  No studies have been commissioned from OPCS which deal specifically with the equalisation of state pension age, but research has been commissioned into retirement behaviour. The results of this research are due to be published later this year and will provide information in areas relevant to the equalisation of state pension age, such as trends in retirement age and the reasons for early and late retirement.

  Housing Benefit
  Mr. French
  To ask the Secretary of State for Social Security (1) if he has any plans to review the procedure whereby housing benefit paid on behalf of tenants directly to landlords for accommodation provided can be subject to clawback at a later date when the tenant has ceased to be eligible to receive housing benefit but has not so informed the landlord;

  (2) if he has any proposals to review the application of regulations 99 to 102 of the Housing Benefit (General) Regulations 1987.

  Miss Widdecombe
  Regulations 97 to 105 of the Housing Benefit (General) Regulations 1987 are currently under review. The need for amendments will be considered carefully in the light of the findings.

  Income Support
  Mr. French
  To ask the Secretary of State for Social Security if he will modify income support regulations to enable the calculation of housing costs to take into account compulsory mortgage-related insurance premiums.

  Miss Widdecombe
  We have no plans to do so. Under present rules an amount may be included in the assessment of income support for mortgage interest payments, but no help is given with capital repayments or with the premiums on endowment policies taken out to repay the capital loan. This reflects our policy of helping people keep the roof over their heads without the benefit system being used to acquire a capital asset. No specific amounts are included for house insurance, but income support personal allowances are intended to cover normal day-to-day living expenses such as these.

  Jobs (Travel and Subsistence)
  Mr. Morgan
  To ask the Secretary of State for Social Security, what assistance is available from (i) the Social Fund and (ii) other public sources for those on income support who, after securing employment in other areas of the country, require temporary financial assistance for(a) travelling expenses to reach their place of work and (b) subsistence pending their initial pay packet.

  Mr. Scott
  A new employee may be able to obtain help from his employer with expenses on taking up employment.

  Work-related expenses are outside the scope of the social fund. However, a crisis loan may be considered for living expenses to tide a person over until he receives his first wage, where there are no other means of preventing serious risk to health or safety.

  Residential Care Allowance
  Mr. Kirkwood
  To ask the Secretary of State for Social Security what plans he has to make adequate provision for those who qualify for residential care allowance-mental handicap rates after the introduction of the care in the community changes planned for 1993.

  Miss Widdecombe
  We intend to preserve the present scheme of special income support limits for existing claimants who are resident in most homes when the new funding structure is introduced on 1 April 1993. As now, under those arrangements there will be limits to the level of benefit available for different types of care. Subject to the normal qualifying conditions, those whose fees are at or below the limit will have their charges met in full. Existing arrangements for reviewing the level of the limits will continue.

  Mr. Kirkwood
  To ask the Secretary of State for Social Security if he will estimate how much it would increase public expenditure totals in his Department's budgets for expenditure in the year 1992–93 if he were to increase the residential care allowance mental handicap levels of income support available to people with learning difficulties in residential homes by 15 per cent.

  Miss Widdecombe
  Expenditure would depend on the number of claimants in receipt of the mental handicap 84
  limit and the level of that limit at the time. Information about expected numbers of income support customers as well as expenditure, is published in the public expenditure White Paper (Cm 1014). It has never been the practice to make separate forecasts about any individual group within the planning totals.

  War Injuries
  Mr. Kirkwood
  To ask the Secretary of State for Social Security if he will take steps to change the existing legislation governing eligibility for pension as a result of war injuries to enable discretion to be exercised, in exceptional circumstances, where former service men or service women who were wounded on active service make late claims, to allow those claims to be backdated to the date of their original injury, where the circumstances suggest that they were not made aware of their entitlement to claim when their injuries were sustained.

  Miss Widdecombe
  Awards of war disablement pensions are normally paid from the date of claim. Where a person is invalided from the armed forces a claim for war pension is automatically instituted. There is no onus on the individual to claim in such circumstances. When people are otherwise discharged from the armed forces the onus is on them to claim any war pension to which they think they may be entitled; on discharge they are provided as a matter of routine with information about claiming a war pension.

  War pensions legislation already provides discretion to award war pension from a date earlier than the date of claim, where the circumstances of the case are considered to be exceptional. Awards may not, in any case, be paid before a service man or service woman leaves the armed forces.

  Social Fund
  Mr. O'Hara
  To ask the Secretary of State for Social Security how many applications for loans from the social fund have been(a) made and (b) granted on Merseyside to (1) individuals on state income support, (2) individuals in receipt of disability allowance, (3) individuals who receive a pension higher than the state income support level and (4) others for each of the last three years of operation of the fund.

  Mr. Scott
  I understand from Mr. Michael Bichard, the chief executive of the Benefits Agency, that the information is not available and could be obtained only at disproportionate cost.

  Income Support
  Mr. Kirkwood
  To ask the Secretary of State for Social Security what factors contributed to the change in the number of people receiving income support in comparison with supplementary benefit.

  Mr. Scott
  Many factors will have contributed to the change but paragraph 26 of the departmental report (Cm 1514), a copy of which is available in the Library, identifies the fall in unemployment as the main reason. This confirms the view expressed at the time of the reforms, that the rate of unemployment was a key factor.

ENERGY

  United Kingdom Continental Shelf
  Mr. Hague
  To ask the Secretary of State for Energy what is his latest estimate of the potential level of capital funding on the United Kingdom continental shelf over the next two years.

  Mr. Moynihan
  A recent report of company intentions for capital investment showed that expenditure could increase by a third to £4.7 billion in 1991 and £4.8 billion in 1992.

  Power Lines
  Mr. Ted Garrett
  To ask the Secretary of State for Energy what is his policy on routing overhead power lines underground in environmentally attractive areas.

  Mr. Wakeham
  It is the Government's policy that the routing of overhead power lines should have full regard to the preservation of amenity. That is why the Electricity Act 1989 places environmental duties on those responsible for proposing and building overhead lines and on myself in considering applications for consent.

  British Coal (Productivity)
  Mr. Lester
  To ask the Secretary of State for Energy what has been the change in British Coal's productivity since 1979.

  Mr. Heathcoat-Amory
  From 1978–79 to 1990–91 British Coal's output per manshift increased by over 109 per cent.

  Mr. Roger King
  To ask the Secretary of State for Energy when he next intends to meet the chairman of British coal to discuss productivity in British Coal.

  Mr. Wakeham
  I meet the chairman of British Coal on a regular basis to discuss all aspects of the coal industry, including the remarkable improvements they have been making in productivity.

  Oil and Gas Exploration
  Dr. Godman
  To ask the Secretary of State for Energy, pursuant to his oral answer to the hon. Member for Greenock and Port Glasgow on Monday 17 June,Official Report, column 9, how many production licences were awarded in (a) 1990 and (b) in the current year so far; and what is the number currently being negotiated.

  Mr. Moyniihan
  As I indicated to the hon. Member in my answer of 17 June, important safety considerations are considered not at the initial licence award round but at the development project, annex B, or production plans stage of the licence.

  In 1990, 18 development projects were approved by my Department; 12 projects have been approved up to the middle of June this year. Several other projects are presently under consideration.

  Mr. Morley
  To ask the Secretary of State for Energy if he will list all blocks of the United Kingdom continental shelf which have held a presumption against oil and gas licensing on the grounds of fisheries interests.
  86
  Mr. Moynihan
  Before deciding which blocks to offer in offshore licensing rounds, my Department consults the Ministry of Agriculture, Fisheries and Food, the Scottish Office Agriculture and Fisheries Department and national fishermen's organisations for advice on fishing matters.

  In recent rounds, the Ministry of Agriculture, Fisheries and Food, the Scottish Office Agriculture and Fisheries Department and its predecessor, the Department of Agriculture and Fisheries for Scotland, have advised that certain blocks in the following quadrants should not be offered for licensing:

  3, 8, 9, 11 to 14, 17, 18, 20 to 22, 30, 34, 40 to 43. 48, 52, 97, 99, 100, 107, 109, 110, 112 to 114.

  It would not be appropriate to list the individual blocks concerned as fish stocks and fishing patterns vary over time within these areas. Blocks in these and other quandrants have been licensed, by agreement with the relevant fisheries Department, with conditions and restrictions on oil and gas activity to safeguard fishing interests.

  Mr. Morgan
  To ask the Secretary of State for Energy if he will list all blocks within the United Kingdom continental shelf not submitted for licensing for oil and gas exploration on grounds(a) of interference with shipping and navigation, (b) of nature conservation and (c) other reasons.

  Mr. Moynihan
  We do not hold the information in the form requested. It is often the case, especially in areas close to the coast, that the concerns and priorities of differing interests are taken together in considering the exclusion of a block or blocks from licensing rounds.

  Electricity Generation
  Mrs. Gorman
  To ask the Secretary of State for Energy if he will make a statement on the development of new generating capacity outside the duopoly.

  Mr. Wakeham
  The Government welcome the proposed entry of the independents into the new competitive electricity market. The introduction of competition will increase the pressure on those in the market place, both to produce electricity more efficiently, and to serve their customers to the best of their ability.

  Mining Industry
  Mr. Hardy
  To ask the Secretary of State for Energy if he will discuss the funding structure and organisation of the mining industry with the chairman of British Coal.

  Mr. Wakeham
  I meet the chairman of British Coal on a regular basis to discuss all aspects of the coal industry.

  Wind Energy
  Mr. Conway
  To ask the Secretary of State for Energy what has been the average annual level of investment into the research and development of wind energy(a) between 1974 and 1979 and (b) since 1979.

  Mr. Moynihan
  Prior to 1979–80 Government expenditure on wind research and development was directed at a few low-cost preliminary studies, with total expenditure amounting to about £146,000. In addition there was expenditure on IEA research and development
  87
  projects, including renewables, amounting to about £4 million. Since 1979 average annual expenditure on the wind programme has been £3·2 million.

  Sizewell B
  Mr. Irvine
  To ask the Secretary of State for Energy if he will make a statement on the progress of the construction of the Sizewell B nuclear power station.

  Mr. Wakeham
  I am pleased to say that progress of the construction of the Sizewell B project is now about eight months ahead of the committed 72-month programme and remains within the estimated cost to completion.

  Staff Relocation
  Mrs. Margaret Ewing
  To ask the Secretary of State for Energy what stage his consideration of the relocation of Department of Energy staff out of London has reached; and if he will make a statement.

  Mr. Wakeham
  My Department is currently carrying out its annual relocation review as required by the public expenditure survey committee. The results will be available next year.

  Poole Bay (Oil Reserves)
  Mr. Atkinson
  To ask the Secretary of State for Energy what is the value of the oil reserves known to be under Poole bay.

  Mr. Moynihan
  The operator estimates that recoverable reserves within the Poole bay licence are some 100 million barrels of oil. At current prices this would be worth around £1·2 billion.

  Coal Imports
  Mr. Barron
  To ask the Secretary of State for Energy what discussions he has had with National Power and PowerGen concerning coal imports; and if he will make a statement.

  Mr. Wakeham
  I have discussions from time to time with National Power and with PowerGen on all issues of mutual interest. Decisions on coal purchases, whether from United Kingdom or imported sources, are a matter for the parties involved.

  Offshore Oil and Gas
  Mr. Bowis
  To ask the Secretary of State for Energy how many jobs in Scotland are supported, both directly and indirectly, by the offshore oil and gas industries.

  Mr. Moynihan
  Direct and indirect employment in 1990 by the offshore oil and gas industry in Scotland was 97,400.

  Energy Consumption
  Dame Peggy Fenner
  To ask the Secretary of State for Energy what has been the annual average consumption of energy in the United Kingdom(a) between 1974 and 1979 and (b) since 1979.

  Mr. Heathcoat-Amory
  The annual average total final consumption of energy in the United Kingdom on a heat supplied basis was:88

  (a)58·5 billion therms between 1974 and 1979

  (b)56·8 billion therms between 1980 and 1990

  At the same time the United Kingdom's gross domestic product rose from an annual average level for the years 1974 to 1979 of £267 billion to an annual average level of £311 billion for the years 1980 to 1990. This combination reflects a substantial and welcome improvement in energy efficiency between the two periods.

  Kuwait (Oil Well Fires)
  Mr. Dalyell
  To ask the Secretary of State for Energy if he will make a statement on action taken to extinguish oil well fires in Kuwait as a result of his visit.

  Mr. Wakeham
  My visit to Kuwait reflected the Government's deep concern regarding the situation and demonstrated out willingness to support the continuing efforts of United Kingdom industry to become involved in the fire fighting process.

  Those efforts continue.

  Fuel Efficiency
  Mr. Tony Banks
  To ask the Secretary of State for Energy what further proposals he has to encourage efficient fuel use in the United Kingdom.

  Mr. Heathcoat-Amory
  The home energy efficiency scheme was started earlier this year. A domestic publicity campaign will be launched with the Department of the Environment in the autumn; energy efficiency advisory services are being introduced by the gas and electricity companies; some 80 Government seminars have been organised to promote energy efficiency throughout the public and private sectors.

  Oil and Ethylene Pipelines
  Mr. Hind
  To ask the Secretary of State for Energy how many applications he has received to lay oil and ethylene pipelines in England and Wales in the last 12 months; how many have been granted; and if he will make a statement.

  Mr. Moynihan
  Only one application for an oil pipeline has been received by my Department in the last 12 months. One application for an ethylene pipeline was granted in the same period.

  Electricity Privatisation
  Mr. Morgan
  To ask the Secretary of State for Energy what consultations he had with the Securities and Association concerning his delayed settlement of commission owing to Diameter Stockbrokers for services rendered in the course of the flotation of the electricity supply industry; and if he will make a statement.

  Mr. Heathcoat-Amory
  My Department's independent auditors, Touche Ross, had written to Diameter seeking information to support Diameter's claim for selling commission in respect of the regional electricity companies' flotation. An official of the Securities and Futures Association then subsequently contacted my Department drawing attention to Diameter's financial position: following further urgent discussions with Diameter, a payment was made available to them the same day.

  Electricity Use
  Mr. Harry Greenway
  To ask the Secretary of State for Energy what figures he has for the consumption of electricity in(a) March 1991 and (b) the most recent month for which information is available.

  Mr. Heathcoat-Amory
  Data on the consumption of electricity are collected on a quarterly basis only. The latest figure available for total electricity consumption from the public supply system in the United Kingdom is 78·78 TWh for the first quarter of 1991.

  Figures for the amounts of electricity available for consumption through the public supply system, that is, before excluding transmission, distribution and other losses, are collected monthly. Figures for March 1991 and May 1991, the most recent month for which information is available, are as follows:

  TWh

  March 19911

  31·13

  May 19911

  21·91

  1 It should be noted that the figure for March covers a five-week period, whereas the figure for May covers a four-week period.

  These data are routinely published in the monthly statistical bulletin Energy Trends, copies of which are available in the Library. The July edition, containing the above data, will be published on Thursday 25 July.

  Coal Privatisation
  Mr. Eadie
  To ask the Secretary of State for Energy how many meetings he has had with the advisers he appointed to advise him on the privatisation of the coal industry; and what was the involvement of the chairman of British Coal at such meetings.

  Mr. Heathcoat-Amory
  I and my right hon. Friend are having regular meetings with my advisers on coal privatisation, and also with the chairman of British Coal.

DEFENCE

  RAF Stornoway
  Mr. Macdonald
  To ask the Secretary of State for Defence what further new military facilities are planned at RAF Stornoway; and what is the timescale for their construction.

  Mr. Archie Hamilton
  Future military construction at RAF Stornoway is under consideration in the light of discussions with NATO authorities.

  Mr. Macdonald
  To ask the Secretary of State for Defence what alterations have been made in the past two years to the plans for future use of RAF Stornoway for military exercises.

  Mr. Archie Hamilton
  Exercise plans for RAF Stornoway are formulated each year, but the only change to the general pattern over the last two years has been a decision not to activate the airfield for military flying earlier this year in the light of our commitments in the Gulf.

  Mr. Macdonald
  To ask the Secretary of State for Defence what military exercises are planned for RAF Stornaway during the remainder of 1991.
  90
  Mr. Archie Hamilton
  Routine air defence exercises are planned to take place at RAF Stornoway from 9 to 20 September and from 10 to 23 November 1991.

  Mr. Macdonald
  To ask the Secretary of State for Defence what is his assessment of the effect of cancellation of the hardened aircraft shelters project on the capability of RAF Stornoway to support(a) realistic peacetime training and (b) war operations.

  Mr. Archie Hamilton
  I refer the hon. Member to the answer I gave him on 20 June 1991, at column 318. No decision has been taken to cancel this project.

  Artillery Range, Hebrides
  Mr. Macdonald
  To ask the Secretary of State for Defence what are the reasons for the recent period of inactivity at the Royal Artillery range, Hebrides.

  Mr. Archie Hamilton
  The recent short-term reduction in live fire activities at the Royal Artillery range, Hebrides was due to the rescheduling of training periods as a result of the Gulf conflict. The range used this time to complete maintenance projects.

  Civilian Guard Force
  Mr. Cohen
  To ask the Secretary of State for Defence (1) what is the planned establishment of the proposed Ministry of Defence guard force;

  (2) what is the estimated annual equipment budget for the proposed Ministry of Defence civilian guard force; and from which subheads of which votes these funds will be taken;

  (3) what is the estimated total annual running cost of the proposed Ministry of Defence civilian guard force; and from which subheads of which votes these funds will be taken;

  (4) what is the estimated annual personnel cost of the proposed Ministry of Defence civilian guard force; and from which subheads of which votes these funds will be taken.

  Mr. Cartwright
  To ask the Secretary of State for Defence when his Department's new guard force is planned to come into operation; how many staff will be employed; on what terms and conditions; and at what estimated annual cost.

  Mr. Archie Hamilton
  As I announced on 26 April 1991, at columns 572–73, in an answer given to my hon. Friend the Member for Hampshire, East (Mr. Mates), the new Ministry of Defence guard service will come into being on 1 April 1992.

  Its initial strength will be drawn from some 3,000 civilian personnel in existing patrolling, watching and similar grades including the present Ministry of Defence headquarters guard force. The ultimate size of the service is uncertain at present because account will need to be taken of the consequences of "Options for Change" on the number of locations to be guarded in the longer term.

  The terms and conditions on which the guard service personnel will serve are currently being negotiated. It is estimated that the annual running costs of the new service, predominantly personnel, but including clothing and some equipment, will be about £37·5 million but there are compensating savings notably in personnel costs of existing staff who will be assimilated into it.
  91
  Mr. Cohen
  To ask the Secretary of State for Defence what is the estimated cost of setting up the proposed Ministry of Defence civilian guard force; and from which subheads of which votes these funds will be taken.

  Mr. Archie Hamilton
  The estimated cost of setting up the MOD guard service is £.2·5 million in the current financial year. This falls within vote sub heads 1A1, 1BI, ICI, 1D1, 1D2, 1E1, 1G1, 1L2 and 1L9 and relates to the formation of an implementation team to plan the adminstration and training of the service, and to the provision of clothing and equipment in readiness for its introduction on 1 April 1992.

  Salisbury Plain
  Mr. Cohen
  To ask the Secretary of State for Defence how much has been paid in each of the last 10 years in compensation for damage caused by his Department's activities to property on, or in the vicinity of, Salisbury plain.

  Mr. Archie Hamilton
  The following amounts of compensation have been paid in each of the last 10 years by the MOD in respect of claims arising from training and manoeuvre activities in the vicinity of Salisbury Plain. Information relating to any other type of claim could not be provided without incurring disproportionate cost.

  Years

  £

  1981–82

  4,847

  1982–83

  2,121

  1983–84

  7,645

  1984–85

  8,837

  1985–86

  32,887

  1986–87

  6,504

  1987–88

  4,278

  1988–89

  8,215

  1989–90

  5,642

  1990–91

  2,223

  Mr. Cohen
  To ask the Secretary of State for Defence what compensation has been paid to members of the public for damage caused to property by the firing of AS90 guns on Salisbury plain.

  Mr. Archie Hamilton
  Only one incident giving rise to claims can be specifically traced to the firing of the AS90 gun on Salisbury plain. That incident gave rise to two claims. One has been settled for £150·65; the other is still being negotiated.

  RAF Waddington
  Mr. Cohen
  To ask the Secretary of State for Defence what planning applications have been placed with the relevant local authority for new construction at RAF Waddington in the last five years.

  Mr. Archie Hamilton
  In the past five years 23 planning applications have been submitted to the local authority, North Kesteven district council, in respect of new construction at RAF Waddington. These are listed in the table.

  August 1986

  Erection of storage building

  October 1986

  Construction of fuel store

  October 1986

  Siting of portacabins

  November 1987

  Erection of hangar

  February 1988

  Extension to existing building

  92

  April 1988

  Erection of radar building

  November 1988

  Erection of 16·3 metre high mast

  January 1989

  Erection of safety equipment store

  November 1989

  Construction of new shower/toilet block

  November 1989

  Construction of new office building

  November 1989

  Modifications to barrack block

  December 1989

  Extension to car park and installation of improved lighting

  January 1990

  Refurbishing of officers mess

  May 1990

  Installation of new fuel store

  September 1990

  Construction of office building

  October 1990

  Use of land for storage of servicemen's private caravans

  November 1990

  Erection of new security fences/gates

  January 1991

  Construction of new telecommunications building

  April 1991

  Erection of traffic control barriers and guard huts

  May 1991

  Construction of pump house

  May 1991

  Erection of security fence

  July 1991

  Construction of new shower block

  July 1991

  Erection of security fence

  Main Battle Tank
  Mr. Cohen
  To ask the Secretary of State for Defence what has been the total cost to date of the studies carried out by his Department to evaluate the tanks in competition for the replacement of the Chieftain tank; and from which subheads of which votes these funds will be taken.

  Mr. Alan Clark
  This information could be assembled only at disproportionate cost.

  Accommodation
  Sir Alan Glyn
  To ask the Secretary of State for Defence what guidelines his Department has issued to local authorities on the priority to be given to rehousing service men after leaving the services, particularly for those who are on the waiting lists of garrison towns.

  Mr. Archie Hamilton
  My right hon. Friend the Secretary of State for the Environment will answer shortly.

  London Custody Service
  Mr. Cartwright
  To ask the Secretary of State for Defence why he has decided to replace guards provided by the London custody service with his Department's own guard force at London buildings.

  Mr. Archie Hamilton
  The MOD has reduced its use of the London custody service because recruitment in its own guard force has improved and we prefer those guarding our buildings to be members of MOD and trained and equipped to our standards. There are also savings to the defence budget.

  Mr. Cartwright
  To ask the Secretary of State for Defence what has been the cost to his Department of security guards provided by the London custody service during each of the past five years.

  Mr. Archie Hamilton
  The cost to the Ministry of Defence of security guards provided by the London custody service during each of the past five years has been as follows:

  £

  1986–87

  3,607,597·66

  1987–88

  4,529,811·46

  1988–89

  4,841,283·26

  93

  £

  1989–90

  5,205,886·35

  1990–91

  5,873,158·060

  Mr. Cartwright
  To ask the Secretary of State for Defence if he will list those Ministry of Defence buildings at which it is planned to replace the London custody service by his Department's new guard force indicating the starting date for each change, and the numbers to be employed at each building.

  Mr. Archie Hamilton
  London custody service guards were replaced by MOD guards at 3–5 Great Scotland Yard in 1990. Those at Northumberland house and the Old Admiralty buildings will be replaced on 1 October. For security reasons, it would not be appropriate to reveal the numbers of guards at each location.

  Low Flying
  Mr. Foulkes
  To ask the Secretary of State for Defence if he will list the number of low-flying sorties over the United Kingdom in each month from January to date.

  Mr. Kenneth Carlisle
  For the number of low-flying sorties carried out in January 1991 I refer the hon. Member to the reply that I gave to the hon. Member for Leyton (Mr. Cohen) on 8 March 1991 at column 332. The number of low-flying sorties carried out in the United Kingdom in each month from February to May, the most recent date for which figures are available, is as follows:

  Number

  February

  7,471

  March

  10,814

  April

  12,300

  May

  12,556

  Mr. Foulkes
  To ask the Secretary of State for Defence if he will list all past, current and planned RAF participation in low-flying training exercises overseas during 1991, specifying the number and types of aircraft in each case.

  Mr. Kenneth Carlisle
  To date in 1991, the RAF has participated in the following overseas exercises involving an element of low-flying training:

  Exercise

  Country

  Dates

  Number and type of aircraft

  Snow Falcon 91–1

  Norway

  2–16 March

  6 Harrier GR5

  Agder

  Norway

  11–15 March

  4 Tornado GR1

  Red Flag 91-X

  USA

  27 March-8 June

  10 Harrier GR5

  Blue Moon

  Denmark

  2–3 April

  4 Jaguar 4 Tornado GR1

  Ardent Ground

  Portugal

  29 April-10 May

  6 Jaguar GRla

  Snow Goose 91–2

  Norway

  1–14 June

  6 Jaguar GRla

  Brown Falcon

  Denmark

  12 June

  8 Jaguar 8 Harrier GR5

  Exercises in the central region involving RAF participation are not included.

  As in previous years, further overseas exercises are planned, but it would be premature to give detailed information at this stage.

  Mr. Foulkes
  To ask the Secretary of State for Defence how many applications for low-flying avoidance area status have been received by his Department since 1 January.
  94
  Mr. Kenneth Carlisle
  I regret that such applications are not recorded separately and it would require disproportionate effort to identify them. Since 1 January, however, some 250 temporary or permanent avoidance arrangements have been made.

  Mr. Foulkes
  To ask the Secretary of State for Defence how many complaints about low-flying in each of the last five years came from addresses located within(a) low flying area 16, (b) low flying area 13, (c) low flying area 17 and (d) low flying area 12.

  Mr. Kenneth Carlisle
  The numbers of inquiries or complaints about low-flying training which my Department received in each of the last five years from addresses located within low flying areas 12, 13, and 16 and 17 were as follows:

  Low flying area

  Year

  12

  13

  16

  17

  1986

  132

  23

  213

  445

  1987

  117

  11

  304

  400

  1988

  136

  21

  341

  449

  1989

  238

  32

  592

  836

  1990

  270

  42

  498

  754

  Mr. Foulkes
  To ask the Secretary of State for Defence how many complaints about low flying were received in each month since March 1990 from addresses in(a) Scotland, (b) England and (c) Wales.

  Mr. Kenneth Carlisle
  The numbers of inquiries or complaints relating to military low flying training which my Department received over the period 1 March 1990 to 30 June 1991 from addresses in England, Scotland and Wales were as follows:

  Month

  England

  Scotland

  Wales

  1990

  March

  366

  96

  84

  April

  303

  67

  39

  May

  546

  80

  119

  June

  477

  118

  147

  July

  930

  107

  226

  August

  775

  143

  192

  September

  344

  71

  35

  October

  414

  70

  107

  November

  206

  106

  19

  December

  98

  40

  38

  1991

  January

  74

  17

  15

  February

  28

  8

  11

  March

  96

  30

  25

  April

  228

  38

  49

  May

  463

  72

  84

  June

  274

  52

  95

  Mr. Foulkes
  To ask the Secretary of State for Defence if he will list the number of low-flying movements authorised at less than 250 ft in each of the tactical training areas in each month from January 1991 to date.

  Mr. Kenneth Carlisle
  The numbers of movements authorised for flying below 250 ft within the three United Kingdom tactical training areas between January and May 1991, the most recent date for which figures are available, were as follows:
  95

  Northern Scotland

  Central Wales

  Borders

  January

  111

  39

  180

  February

  107

  12

  127

  March

  12

  2

  324

  April

  7

  0

  0

  May

  45

  0

  8

  Mr. Foulkes
  To ask the Secretary of State for Defence on what date notification of the disestablishment of the Humberside low-flying transit area was sent by his Department to(a) hon. Members and (b) local authorities in the area; and if he will list the parliamentary constituencies and local authorities concerned.

  Mr. Kenneth Carlisle
  As the hon. Member will be aware, when significant changes are made to the United Kingdom low flying system, hon. Members whose constituencies are affected are given appropriate notification.

  Mr. Foulkes
  To ask the Secretary of State for Defence what plans he has to measure the noise levels generated by aircraft using afterburners at low level.

  Mr. Kenneth Carlisle
  The report on the "External Noise of MoD Military Aircraft", a copy of which was placed in the Library of the House in November 1987, contains some such data but there are no plans for further work. As set out in my predecessor's answer of 12 June 1990, at column 140, to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), aircraft are instructed to use reheat as little as possible overland at low level and use would be unusual unless required for flight safety reasons.

  Tornado Crews
  Mr. Foulkes
  To ask the Secretary of State for Defence what was the minimum altitude authorised for peacetime training flying by RAF Tornado GR1 crews from Muharraq, Bahrain, in the period following the Gulf war.

  Mr. Kenneth Carlisle
  The normal minimum authorised altitude for flying training by RAF Tornado GR1 crews based at Muharraq following the Gulf conflict was 250 ft. A small number of sorties were, however, authorised down to 100 ft to enable designated aircrews to maintain currency in operational low-flying techniques.

  Aircraft Noise
  Mr. Foulkes
  To ask the Secretary of State for Defence what plans he has to make changes to his policy of purchasing any dwelling in the vicinity of a military airfield found to be subjected to noise levels greater than 125 dB(A) from military aircraft.

  Mr. Archie Hamilton
  It is planned to review the MOD's aircraft noise compensation policy in relation to military airfields once the current programme of noise surveys has been completed. The review should take place next year and will take into account the practical effects of applying existing policy since the programme began in 1985.

  Tornado Exercise
  Mr. Foulkes
  To ask the Secretary of State for Defence what was the title of the exercise in which RAF Tornado GRI participated in Alaska in June 1990; how many 96
  aircraft took part; and if he will provide details of any subsequent or planned RAF participation in exercises in Alaska.

  Mr. Archie Hamilton
  Four Tornado GRI aircraft deployed to Alaska in June 1990 for a training exercise, titled Distant Frontier. The possibility of a further such exercise is under discussion with the United States authorities.

  Tornados (Goose Bay)
  Mr. Foulkes
  To ask the Secretary of State for Defence how many RAF Tornado GRls are currently deployed to Goose bay, Canada; on what date they deployed there; and what is their expected date of departure from Goose bay.

  Mr. Kenneth Carlisle
  None.

  Army Manpower
  Mr. Home Robertson
  To ask the Secretary of State for Defence if he will publish a table showing(a) the nominal manpower establishment, (b) the actual manpower strength, (c) the percentage of nominal establishment achieved, (d) the number of recruits becoming available each year and (e) the rate of retention of recruits and trained soldiers, for each infantry regiment in the British Army for which such information is not classified.

  Mr. Archie Hamilton
  I will write to the hon. Member.

  "Options for Change"
  Mr. Nicholas Winterton
  To ask the Secretary of State for Defence what plans which are currently being made by his Department to assist in meeting demand for housing for personnel and their families who cease to be entitled to his Department's housing as a result of redundancy under "Options for Change".

  Mr. Archie Hamilton
  The extent to which redundancies may be necessary as a result of the force reductions announced in the "Statement on the Defence Estimates" on 9 July, is still being examined. The housing implications of any redundancy programme will be taken into account as part of this work.

  HMS Endurance
  Mr. David Young
  To ask the Secretary of State for Defence, pursuant to his answer of 8 July,Official Report, columns 283–84, to the hon. Member for Macclesfield (Mr. Winterton) if he will announce the result of the structural survey on HMS Endurance before Parliament adjourns for the summer; and if he will make a statement.

  Mr. Archie Hamilton
  The survey results should be available in the near future. When the work is complete we will have to assess its conclusions before reaching any decisions. We will make an announcement on the future of Endurance as soon as we are in a position to do so.

  HMS Illustrious
  Mr. Robert Hicks
  To ask the Secretary of State for Defence when the contract between Devonport Management Ltd. and his Department for the refit of HMS Illustrious is to be signed; and when work will begin.
  97
  Mr. Kenneth Carlisle
  A final decision is to be taken as soon as possible.

  Gurkhas
  Mr. John Browne
  To ask the Secretary of State for Defence on what date his highness the Sultan of Brunei signified his agreement to meet the costs of two Gurkha battalions; and for how long the agreement will apply.

  Mr. Archie Hamilton
  A Gurkha battalion has been stationed in Brunei since independence in 1983 under an agreement whereby the full cost of the battalion is met by the Government of Brunei. This agreement is subject to periodic review and renewal.

  Foot Guards
  Mr. John Browne
  To ask the Secretary of State for Defence what is his estimate of the annual cost of maintaining a Foot Guards battalion in London.

  Mr. Archie Hamilton
  I refer my hon. Friend to the reply I gave to the hon. Member for Clackmannan (Mr. O'Neill) on 11 July,Official Report, column 487.

  Infantry Manpower
  Mr. John Browne
  To ask the Secretary of State for Defence if he will list, by individual battalion tasks, the present infantry deployments of the British Infantry, including Gurkhas, and the changes in tasks he envisages following his proposed cuts in infantry manpower.

  Mr. Archie Hamilton
  I refer my hon. Friend to the reply I gave him on 11 July,Official Report column 492) and to that given to the hon. and learned Member for Fife, North-East (Mr. Campbell) also on 11 July, Official Report, column 487–89.

  Royal Fleet Auxiliary
  Mr. Sayeed
  To ask the Secretary of State for Defence what assessment he has made of the cost effectiveness of the present arrangements for running the Royal Fleet Auxiliary; and if he will make a statement.

  Mr. Archie Hamilton
  Like all aspects of MOD business, the cost effectiveness of the RFA is kept under review. The RFA continues to provide afloat support to the Royal Navy effectively and efficiently.

  Mr. Sayeed
  To ask the Secretary of State for Defence what role was played by the Royal Fleet Auxiliary in the build up of forces during Operation Granby, during hostilities in the Gulf region, and in related operations such as the Kurdish relief efforts; and if he will make a statement.

  Mr. Archie Hamilton
  I refer my hon. Friend to chapters 1 and 2 of the "Statement on the Defence Estimates 1991", volume 1, Cm. 1559–1.

  Eleven Royal Fleet Auxiliary ships were tasked on Operation Granby in a variety of roles, including supply, medical support and heavy engineering. The ships involved were:
  Orangeleaf—which was already supporting the Armilla patrol and was subsequently relieved by Bayleaf

  Onla

  Argus

  98

  Diligence

  Resource

  Fort Grange

  Sir Galahad

  Sir Percivale

  Sir Tristram

  Sir Bedivere

  The outstanding support provided by the RFA was instrumental in the success of Operation Granby.

  RFA Resource subsequently made a significant contribution to the Kurdish relief effort and Fort Grange has provided support in the Bangladesh relief operation.

  Mr. Sayeed
  To ask the Secretary of State for Defence if he has any plans to change the management or manning of the Royal Fleet Auxiliary; whether it is his intention to retain the Royal Fleet Auxiliary as an essentially civilian part of the British merchant navy; and if he will make a statement.

  Mr. Archie Hamilton
  There are no plans to change the current manning of the Royal Fleet Auxiliary by Merchant Navy personnel. Future management arrangements are under review as part of the MOD's continuing efforts to maximise efficiency. No decisions have been taken, and any proposals affecting staff will be the subject of consultation with the trade unions in the usual way.

  Rail Vehicles and Connections
  Mr. Grocott
  To ask the Secretary of State for Defence (1) how many(a) electric locomotives and (b) diesel locomotives were owned by his Department in (i) 1979, (ii) 1985 and (iii) the latest year for which figures are available;

  (2) how many rail freight vehicles were owned by his Department in (a) 1979, (b) 1985 and (c) the latest year for which figures are available;

  (3) how many of his Department's depots were provided with rail connections in (a) 1979, (b) 1985 and (c) the latest year for which figures are available.

  Mr. Archie Hamilton
  The figures are as follows:

  1979

  1985

  1991

  Electric locomotives

  3

  3

  3

  Diesel locomotives

  176

  139

  106

  Rail freight vehicles

  142

  130

  130

  MOD depots with rail connections

  38

  38

  21

  Departmental Freight
  Mr. Grocott
  To ask the Secretary of State for Defence what proportion of his Department's freight within Great Britain is consigned by(a) road and (b) rail.

  Mr. Archie Hamilton
  The vast majority of the Department's freight is consigned by road. A detailed breakdown of the proportions of freight moved by road and rail could be provided only at disproportionate cost.

  Recruitment
  Mr. Win Griffiths
  To ask the Secretary of State for Defence if he will publish the recruitment figures for each of the regiments within the Prince of Wales division for each of the last five years; and whether any regiments have not done any recruitment in this period because they were already at full complement.

  Mr. Archie Hamilton
  The information requested is set out in the table. None of the regiments in the Prince of
  99
  Wales Division were fully manned during this period.

  Prince of Wales's Division officer and soldier1 intakes to trained strength 1987 to 1991

  1987

  1988

  1989

  19903

  19913 4

  Officers

  Soldiers2

  Officers

  Soldiers

  Officers

  Soldiers

  Officers

  Soldiers

  Officers

  Soldiers

  The Devonshire and Dorset Regiment

  6

  —

  4

  84

  1

  61

  5

  70

  5

  24

  The 22nd (Cheshire) Regiment

  6

  —

  2

  58

  3

  85

  5

  103

  1

  48

  The Royal Welch Fusiliers

  4

  —

  7

  65

  5

  66

  5

  56

  3

  37

  Royal Regiment of Wales

  8

  —

  4

  43

  10

  72

  8

  100

  4

  43

  The Gloucestershire Regiment

  3

  —

  3

  64

  4

  51

  5

  39

  7

  34

  The Worcestershire & Sherwood Foresters

  7

  —

  3

  85

  2

  74

  4

  80

  3

  32

  The Royal Hampshires

  1

  —

  1

  64

  6

  45

  5

  42

  4

  23

  The Staffordshire Regiment

  3

  —

  7

  90

  8

  62

  —

  83

  2

  41

  Duke of Edinburgh's Royal Regiment

  7

  —

  8

  63

  5

  41

  6

  36

  —

  15

  1 Soldier figures include apprentices and young soldiers and juniors.

  2 Soldier figures unavailable for 1987.

  3 Recruiting capped for officers and soldiers.

  4 Latest figures to 30 June 1991.

  Royal Navy Rugby Union
  Mr. Hinchliffe
  To ask the Secretary of State for Defence what is the full cost to his Department of the Royal Navy rugby union and how many full or part-time posts there are within the Royal Navy rugby union.

  Mr. Archie Hamilton
  The cost to the Department of the Royal Navy rugby union is in the region of £30,000 per annum. A retired officer acts as part-time secretary. He is assisted part-time by a service chief petty officer.

  Rehousing
  Sir Alan Glyn
  To ask the Secretary of State for Defence what guidelines his Department has issued to local authorities on the priority to be given to rehouse service men after leaving the services, particularly for those who are on the waiting lists of garrison towns.
  100
  However, the allocation of recruits to regiments is influenced by the overall manning priorities of both the whole Army and the infantry.

  Sir George Young
  [holding answer 9 July 1991]I have been asked to reply since my Department is responsible for issuing guidance to local housing authorities about the treatment of personnel leaving the services. It is for the local authority to decide what priority to give to rehousing service personnel, having considered the circumstances of each individual case. We advise local housing and service authorities to offer appropriate advice and assistance to service personnel well in advance of discharge. Local authorities are asked to act upon a certificate of impending homelessness issued by a senior officer up to six months before discharge.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read In the Lord Bishop of Liverpool.

NHS Low Income Scheme
Lord Stallard Lord Stallard asked Her Majesty's Government:
Whether they will abolish the health benefits low income scheme and simultaneously widen the grounds for exemption from dental, optical and prescription charges.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper): My Lords, we have no plans to do either. The National Health Service low income scheme ensures that no one is called upon to pay more than they can afford and complements the existing charge exemption arrangements which are available on the grounds of health or status.
Lord Stallard: My Lords, I thank the noble Baroness for that fairly disappointing reply. Is she aware that the grounds for exemption under the low income scheme are inconsistent? For example, a pregnant woman can get help with some charges but not for a visit to hospital. Pensioners are exempt from prescription charges but not from other charges. The help available rarely covers the charges, the scheme is too complicated and the claim form is 19 pages long. As we know from experience, that automatically deters very many needy claimants. Does the noble Baroness not accept that what is needed is a review of the whole scheme, with particular emphasis on the cost-effectiveness of the low income scheme? I am sure that the result of such a review would be the abolition of the scheme and an extension of the exemptions.
Baroness Hooper: My Lords, the present arrangements have been in place since 1968 but the method of assessment was changed to its present form in 1987. We conducted an internal scrutiny during last year and as a result my honourable friend the Minister for Health has announced a review of the administration of the low income scheme. It is intended to complete the review and to consider proposals before the end of this year.
Lord Ennals: My Lords, the Minister replied as if the National Association of Citizens' Advice Bureaux had not already published its study of this matter. Has she noted that the CAB report shows that, because people on low incomes are failing to receive assistance with NHS charges, poor people are doing without or are not fully receiving the health care to which they are entitled? Does she agree with the CAB report that the grounds for exemption are inconsistent and that the claim form, at 19 pages, is absurdly complicated? Why are not the Government prepared to take serious note of the CAB study and re-examine the scheme, which the CAB says is not working?
Baroness Hooper: My Lords, it so happens that it was shortly after the Government announced their intention earlier this year to have a review that the National Association of Citizens' Advice Bureaux produced its report. It has been welcomed. We find the recommendations helpful. We are looking at a scheme which handles in excess of I million claims each year and cases of dissatisfaction represent overall a very small percentage of the total.
Lord Ennals: My Lords, are the Government considering the recommendations made in the CAB report?
Baroness Hooper: Yes, indeed, my Lords. The recommendations will be carefully examined as part of the review.
Lord Molloy: My Lords, will the review of which the noble Baroness has informed the House consider the possibility of changing the way the current system

3
is administered? Such a change in the procedure might prove less expensive. Maintaining the rules is a burden on the NHS, whereas when the procedure was reasonably free the burden of administration was reduced.
Baroness Hooper: My Lords, the review will examine all aspects of the administration of the scheme, including the length and content of the claim leaflets, publicity and current procedures.

Economic Recovery: Forecasts
2.41 p.m.
Lord Ezra Lord Ezra asked Her Majesty's Government:
When they consider that the economic recovery is going to start.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, the timing of turning points in the economy cannot be forecast precisely, though it remains though the Government's view that the recovery should begin in the second half of the year and gather momentum in 1992.
Lord Ezra: My Lords, is the noble Lord aware that many forecasts have been made about the start of the recovery? In fact, in March of last year the Government were estimating that it would start in the first half of the year. The noble Lord is now suggesting that it should begin in the second half of the year. Is he aware that the Engineering Employers Federation takes a rather more pessimistic view and thinks that its members, who represent a large part of manufacturing industry, will still see a fall in their activity in the first half of next year? In those circumstances, do the Government not agree that they should accelerate recovery by introducing further cuts in interest rates and by stimulating more investment in industry?
Lord Henley: My Lords, we shall make further cuts in interest rates as and when we are able. The noble Lord draws the attention of the House to other forecasts of growth in the latter half of this year and next year. We remain of the view that there will be growth next year. Our figures show growth next year of some 2.1 per cent. Some forecasts suggest higher estimates of growth; others suggest lower estimates. I can give the noble Lord one estimate of 1.9 per cent. which is achieved from an average of 26 independent forecasts. Some have forecasted much higher estimates of growth. The most optimistic is that from the Henley Centre for Forecasting, with which I have no connection, which forecasts growth of 3 per cent.
Lord Barnett: My Lords, apart from the forecast from the Henley Centre, what other evidence are the Government using to forecast an upturn at the end of the year? What will be the source of that recovery? If it comes primarily from domestic consumption, how does the noble Lord think the Government will be able to sustain it, given the current balance of payments deficit?
Lord Henley: My Lords, there are many signs that the recovery is on its way. Inflation was down to 5.8 per cent. in May and was 5.8 per cent. in June, after peaking at 10.9 per cent. during last September and October. I can also say that an EC Gallup survey shows consumer confidence on a slowly rising trend and retail sales prices in the past three months are I per cent. up on the previous three months. Further, the results of a recent CBI survey point to an improving trend in business confidence.
Lord Hailsham of Saint Marylebone: My Lords, is it not possible that the end of the recession would he brought closer if we all stopped talking ourselves into a state of gloom and tried to instil a note of confidence and optimism into our public utterances?
Lord Henley: My Lords, I totally agree with my noble and learned friend. I should like to remind him of the words used by President Roosevelt many years ago when talking about a recession in another age. He said that there was nothing to fear but fear itself.
Lord Jenkins of Putney: My Lords, when will the Government indicate their confidence in the recovery by announcing the date of the next general election?
Lord Henley: My Lords, that is another question. The date of the next general election is not a matter for me.
Lord Stallard: My Lords, does the Minister accept that his replies this afternoon smack of complacency? We have been told that we should not talk ourselves into gloom. But let us try to tell that to the 900 small businessmen who are going bankrupt each week, the thousands who have already gone bankrupt and many others who are on the brink of it and living in dread of the next few weeks. Tell them that the recovery is on the way.
Lord Henley: My Lords, obviously I do not wish to sound complacent. There are still high figures as regards unemployment and insolvency. However, these lag behind the changes in output and do not indicate that the recession is getting any steeper.
Lord Bruce of Donington: My Lords, taking into account the remarks made by the noble and learned Lord, Lord Hailsham, on the subject of confidence, will the Minister explain to the House and to the country how it is possible for there to be a return to confidence so long as the present Government remain in office?
Lord Henley: My Lords, I, and many other people, have a great deal of confidence in Her Majesty's Government as presently constituted.
Lord Marlesford: My Lords, does my noble friend agree that one of the least helpful proposals to encourage economic recovery would be the introduction of a national minimum wage? It would price many people out of work, greatly reduce spending and cause a considerable economic decline.
Lard Henley: My Lords, my noble friend is absolutely correct. I do not believe that many people—except, of course, a few misguided people opposite—believe in a national minimum wage.
Lord Holme of Cheltenham: My Lords, the Minister predicts recovery in the second half of the year. However, are the Government aware that we are already in the second half of the year? Further, does he agree with the remarks made this weekend by his honourable friend Mr. Maude who said that there are no current signs of recovery?
Lord Henley: My Lords, the first part of the noble Lord's remarks was somewhat naive. We have never said that the recovery would start on the 1st July; that is, the beginning of the second half of the year. We said that the recovery would come some time in the second half of the year and that is somewhat different from saying that it would start on 1st July. I have not seen the reports of the remarks made by my honourable friend Francis Maude, but I understand that he was misquoted. However, I can quote the words of one of his colleagues in the Treasury, Mr. John Maples, who said:
"Cur forecast has been that the economy will start to grow again in the second half of this year. We made that forecast at the time of the Budget. Nothing that has happened since makes us want to change that and we believe that events are starting to bear that out".
Lord Desai: My Lords, does the Minister agree that he has as much to fear from the recovery happening as he has from it not happening? Surely inflation will return as soon as the economy revives.
Lord Henley: My Lords, inflation must be kept down. We shall continue to keep the pressure on inflation to ensure that it moves downwards. We wish to see steady growth that will not cause the pressures on inflation which occurred in the past.
Lord Tordoff: My Lords, is it not the case that the underlying rate of inflation is rising at present?
Lord Henley: No, my Lords; it is not.
Lord Peston: My Lords, I was interested to hear the Minister's reference to Franklin Roosevelt. Perhaps he is aware that it took the Second World War to get America out of the recession about which he was talking. I hope that there is nothing similar waiting for us. However, can the Minister tell those of us who are interested in this subject what we should be looking at? How will we know when the economic recovery is under way? Further, can he tell us when we should look at it? I accept that it is a difficult matter, but can he tell us what and when?
Lord Henley: My Lords, a simple statistic at which to look as regards what happened in the past will be growth in the GDP.
Lord Stoddart of Swindon: My Lords, is it not a fact that the Government have the wrong priorities at present? Should not the priority at this time be to secure growth in the economy rather than to protect the exchange rate? Further, is not the protection of the exchange rate now taking precedence over growth and
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unemployment? Is not that where the Government have gone wrong? Therefore, surely they should now reduce interest rates very sharply and by a large amount.
Lord Henley: No, my Lords; the Government's first priority must be the battle against inflation. There is no painless way of reducing inflation. However, the recession has come after years of very rapid growth. Low inflation will mean a return to stable growth.
Lord Williams of Elvel: The noble Lord invited us to look at statistics for gross domestic product to see when the economy would recover. Is he aware that the statistics for gross domestic product are made up well after the event? They refer to time past, not to time future. Will the noble Lord be kind enough to tell the House precisely what indicators the Government seek—since Ministers make statements almost every weekend—which will tell us that the economic recovery is occurring and what exactly the Government mean by "economic recovery"?
Lord Henley: My Lords, of course I realise, as I thought I made clear, that statistics merely recognise what has happened. The forward indicators will show what will happen. I can, for example, draw the noble Lord's attention to the CSO longer leading cyclical indicator which is consistent with recovery in the second half of this year.

NHS: Patient Confidentiality
2.50 p.m.
Lord Ennals Lord Ennals asked Her Majesty's Government:
Whether they are satisfied that the operation of the contract system in the NHS provides sufficient safeguards for patient confidentiality.
Baroness Hooper: My Lords, the National Health Service has an excellent record in protecting patient confidentiality. Staff are aware that breaches are a serious disciplinary matter. Health authorities have been told to put in place safeguards which are to the satisfaction of their senior medical staff. Action is in hand to strengthen further the security of personal health data in contracting.
Lord Ennals: My Lords, I am most grateful to the Minister for her reply. Does she accept that the new NHS billing system is creating an open breach of confidentiality? NHS finance officers are now well acquainted with information, for example, about abortions or people with diseases which are sexually transmitted. In consequence, many doctors are now refusing to provide the information that is requested of them in order to protect the confidentiality of the information about their patients. Did the noble Baroness notice that confidentiality was one of the series of complaints made by 600 consultants who stated their views about the NHS reforms clearly in the Observer yesterday?
Baroness Hooper: My Lords, there is a need for named data to facilitate the new contracting arrangements. However, the examples quoted by the

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noble Lord are already taken care of. Statutory regulations are in force which do not permit the use of named contract data in some areas, including sexually transmitted diseases and AIDS. The abortion regulations of 1991 also restrict the disclosure of information provided to the CMO. Thus, steps are being taken to ensure that the anxieties that have been expressed are not valid.
Lord Tordoff: My Lords, is it not the case that the BMA believes that the present system which collates information in Liverpool, or at any rate on a centralised computer, contains people's names in plain? However, the BMA would greatly prefer some kind of coding system to be introduced so that extraneous people could not look at the documents.
Baroness Hooper: My Lords, as I said, all National Health Service staff have a duty to maintain confidentiality. Where it is essential within the contracting process for the identity of the patient to be known, this information should only be disclosed to authorised persons on a need to know basis. Any dangers of the information being widely disseminated are being taken into account.
Lord Ennals: My Lords, I am sorry to return on the matter, and I am grateful to the noble Baroness, but does she recognise that if names and addresses are always given then the breach has already taken place? Following the point made by the noble Lord, Lord Tordoff, will her department examine the coding in order to give that protection which does not exist even for the types of condition to which she referred?
Baroness Hooper: Yes, my Lords. Perhaps I may go further in answering the previous supplementary, as well as that of the noble Lord. All contract minimum data set items other than name and address must be in code. This is of special importance for diagnoses and operations where free text is not permissible. For computer medium and fax machines, the practicalities of encryption of name—that is, scrambling the data in a coded manner—are being studied. Advice on the introduction of these techniques will be issued as soon as practicable.
Lord McColl of Dulwich: My Lords, does my noble friend agree that having the names of patients in a computer is much more confidential than the systems we have had in the past?
Baroness Hooper: My Lords, that may be so, but clearly we must ensure that safeguards are in place.
Lord Tordoff: My Lords, surely that depends on who has access to the computer records. Whereas in the past access to the records was limited, it may be much more widespread now.
Baroness Hooper: No, my Lords. I have already said that it is only on a need to know basis.

High Court Judges
2.55 p.m.
Lord Mishcon Lord Mishcon asked Her Majesty's Government:
What is their response to the statement of the Lord Chief Justice concerning the inadequate number of High Court judges and the immediate threat that this poses to the administration of justice.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, like my noble and learned friend the Lord Chief Justice, I am concerned to keep the High Court Bench up to its appropriate strength. I was glad therefore to be able to inform my noble and learned friend and the other Heads of Division on 25th June that an extra Chancery Division judge was to be appointed. That brings the total number of additional High Court judges since I took office to five, the number of additional Lord Justices in the same period being four.
While waiting times in some parts of the court are a good deal higher than I should like, in the ordinary list of the Queen's Bench Division waiting times have been reduced to two months on the warned list, 13 months on the fixtures list and seven months on the after fixtures list. Despite the number of long cases being heard in London, the waiting times for Crown Court trials in London on average are the lowest they have been for 14 years.
Lord Mishcon: My Lords, I note with pleasure the announcement that the noble and learned Lord has been good enough to make in regard to one additional judge. However, does he recollect that the Lord Chief Justice said in his Mansion House speech that the whole situation of the adequacy of judges was critical; that this was causing the administration of justice to be in peril; and that part-time judges were trying important cases when it was not suitable for them to do so? Does the noble and learned Lord agree that, if accurate, that is an alarming picture? If it is accurate, what are the Government doing about it?
The Lord Chancellor: My Lords, when my noble and learned friend the Lord Chief Justice spoke at the Mansion House the other evening he dealt with a number of these matters. I believe that it is right to consider the waiting times as an indication of the situation. I have pointed to the important reduction in the level of waiting times.
It is also worth pointing out that a great deal of the work of the Crown Court is carried out by circuit judges. In the period from November 1987 to the present there was an increase of 49 circuit judges. I believe that it is right to keep these matters under review. I see the Heads of Division regularly, once a month, and of course I take account of their anxieties.
Lord Ackner: My Lords, is my noble and learned friend aware that the situation described by the Lord Chief Justice last week will become dramatically worse? More deputies—58 per cent.—than High Court judges—42 per cent.—were trying cases in the non-jury list and in the chambers list. As from next

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term, October, there will be no High Court judges available to try any cases in the non-jury list or the chambers list. Thus, 100 per cent. deputies will be required to do High Court work which, since the remission of a great bulk to the county court, will involve cases of £1 million or more, as the Lord Chief Justice said. Does the noble and learned Lord agree that this situation should not be tolerated and that it requires urgent action?
The Lord Chancellor: My Lords, the priority that is accorded to different types of work within the High Court is a difficult and important matter. When the appointment that I have just mentioned is given effect there will be a total of 84 judges in the High Court. The way in which the services of those judges are allocated will be an important factor in considering whether the prophecy of my noble and learned friend Lord Ackner will be fulfilled. For many years in the High Court in this country opportunities have been given to deputy High Court judges—that is, senior Silks—to undertake High Court trials. That is a way of dealing with the workload and giving them appropriate experience in work that they are qualified to undertake. Circuit judges who are competent to do so sit from time to time in the High Court and deal with important cases.
Lord Oliver of Aylmerton: My Lords, will the noble and learned Lord explain to the House how the regular and consistent use of deputy judges under what I believe are the terms of Section 9(4) of the Supreme Court Act is reconcilable with the terms of that section which prescribe such action only as a temporary measure?
The Lord Chancellor: My Lords, I have a degree of difficulty with that question. However, it is a temporary measure. As my noble and learned friend Lord Oliver knows much better than I—he has been closely associated with the High Court of Justice for much longer—this practice has continued for a long time. As far as I am aware, it has had the effect of providing experience and qualifications to those who will ultimately attain the High Court Bench.
Lord Hailsham of Saint Marylebone: My Lords, will my noble and learned friend give the House an assurance that whatever other remedy is found it will not be one of reducing the quality of those who are given pensionable employment in the High Court? Is that not an overriding consideration in the appointment of High Court judges?
The Lord Chancellor: My Lords, where it is within my responsibility, I will certainly do my best to nominate to Her Majesty's service those of the highest quality. I believe that those who have been nominated during the terms of office of my noble and learned friend Lord Hailsham and Lord Havers and myself, and prior to that, have been people of the highest calibre. They have been able to carry out the onerous and demanding responsibilities that fall on members of the High Court Bench.
Lord Morris: My Lords, does my noble and learned friend recall that at the end of the 1950s there were
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approximately 20 High Court judges whereas nowadays there are approximately 100? Is that because as a nation we have become more litigious, more criminal and less competent in administering justice, or is it because of the insidious economic effect of legal aid?
The Lord Chancellor: My Lords, I am perhaps more capable of recognising facts than of analysing the reasons behind them. The workload of the High Court and of other courts has increased markedly over the period that my noble friend has referred to. It is a considerable tribute to the members of the High Court Bench as well as to the members of the Court of Appeal—I must not omit to mention Members of your Lordships' House who sit as Lords of Appeal in Ordinary—and to members of the Circuit Bench that that workload has been covered without an undue increase in the total judicial strength.
Lord Mishcon: My Lords, will the noble and learned Lord dissociate himself—and, I hope, also the Government—from the remarks made by the noble Lord opposite who referred to the insidious economic effect of legal aid? I believe I heard him correctly. Does the noble and learned Lord agree with those comments?
The Lord Chancellor: My Lords, I have already said that I am better at recognising facts than analysing the reasons behind them. The galaxy of reasons that my noble friend gave obviously form his opinion. I do not think it is necessary for me to enter into the field that he referred to. However, I believe it is appropriate that legal aid should be available in appropriate cases and that we must try to ensure that where it is available it is available at an appropriate level and at an affordable cost. We in this country provide legal aid at a level which bears comparison with any other country in the entire world.
Lord Cledwyn of Penrhos: My Lords, is it not clear from what noble and learned Lords have said that a critical point has been reached in relation to the manning of the High Court Bench? In those circumstances, is there not a strong case for setting up a commission to examine the position without delay and also to examine the legal aid system? We on this side of the House fully support the legal aid system so I hope the noble and learned Lord will consider that suggestion very carefully.
The Lord Chancellor: My Lords, we have already announced the setting up of a Royal Commission to deal with matters connected with the criminal law. I have no doubt that the matter of long trials to which my noble and learned friend the Lord Chief Justice referred in his Mansion House speech will be considered by the Royal Commission. As regards the workload of the High Court and the appropriate manning of the High Court Bench, I believe that those matters can be dealt with in the same way as in the past. One can reach an appropriate decision having regard to the nature of the workload and the way in which the judicial resources of the High Court and the Circuit Bench are deployed.

Standing Orders (Private Business)
3.7 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper. This Motion gives effect to certain recommendations of the Joint Committee on Private Bill procedure which reported in July 1988. That committee recommended that each House should incorporate an environmental impact assessment into Private Bill procedure by making new standing orders for Bills which authorise the carrying out of works.
The Joint Committee also recommended that promoters of Private Bills should be required by standing order to deposit and advertise with their Bills an explanatory memorandum setting out in plain language the effect of the Bill and of its clauses. The necessary amendments to standing orders were agreed by another place in March and May of this year and now come before your Lordships for approval. If your Lordships approve the Motion, the amended standing orders will take effect from the beginning of the next Session of Parliament. I also propose, if the House agrees to this Motion, to have all the private business standing orders edited and reprinted as amended. I hope your Lordships will welcome this proposed new edition of the private business standing orders. It will be the first comprehensive reprint since 1982.
Finally, I take this opportunity to thank those Members of the House who offer their services on Select Committees on opposed Private Bills. That work is an essential function of the House and is quasi-judicial in nature. It can be onerous and time consuming work. I am grateful to those noble Lords who offer to serve on those Select Committees and have done so this Session.
Moved, That with effect from the beginning of the next parliamentary session the standing orders relating to private business be amended as follows—
After Standing Order 27, insert the following new Standing Order—
("27A—(1) Subject to paragraph (8) below, in the case of a Bill authorising the carrying out of works the nature and extent of which are specified in the Bill on land so specified. there shall be deposited on or before 4th December in the Private Bill Office and at the Public Departments at which copies of the Bill are required to be deposited under Standing Order 39, either—

(a) a copy or copies (as specified by paragraph (2) below) of an environmental statement containing, in relation to the works authorised by the Bill, the information set out in Schedule 3 to the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 (referred to below as "Schedule 3") or such of that information as the Secretary of State may in any particular case direct, or

(b) a copy or copies (as so specified) of a direction by the Secretary of State that no such statement is necessary in relation to the works authorised by the Bill.

(2) The number of copies required to be deposited under paragraph (1) (a) or (b) above shall be three in the case of a deposit at the Department of the Environment and one in any other case.
(3) Where any such works authorised by a Bill relate to two or more distinct projects each project may be treated separately for the purposes of paragraph (1) above; and the
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references in sub-paragraphs (a) and (b) of that paragraph to the works authorised by the Bill shall accordingly be construed, where the paragraph applies separately to each project, as references to the works comprised in that project.
(4) Notwithstanding any direction given as mentioned in paragraph (1) (a) above, any environmental statement of which copies are deposited under this Order shall contain the summary (referred to below as "the non-technical summary") required by paragraph (2) (e) and, where material, paragraph 4 of Schedule 3.
(5) Where the Secretary of State has given a direction as mentioned in paragraph (1) (a) above, a copy of the direction shall be deposited with every copy of the environmental statement deposited under this Order; and every copy of a direction so deposited or deposited under paragraph (1) (b) above shall be accompanied by a statement by the Secretary of State of his reasons for giving the direction.
(6) Copies of every environmental statement deposited under this Order shall be made available for inspection, and for sale at a reasonable price, on and after 4th December, at the offices at which copies of the Bill are required to he made available under Standing Order 4A; and there shall also be made available separately on and after that date at those offices, for inspection and for sale at a reasonable price, copies of the non-technical summary.
(7) The reference to Schedule 3 in this Order is a reference to that Schedule as amended from time to time and includes a reference to the corresponding provision of any regulations which re-enact the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988, with or without amendment; and references to particular paragraphs of Schedule 3 shall be construed accordingly.
(8) This Order does not require the deposit of copies of an environmental statement in relation to any works for which planning permission has been granted.")
Standing Order 38, line 4, at end insert—
("( 1A) There shall be attached to every copy of a Bill—

(a) delivered under this Standing Order,

(b) deposited, delivered or sent under any of the Standing Orders following this Order,

(c) made available for inspection and sale under Standing Order 4A,

a printed memorandum describing the Bill generally and, subject to paragraph (1B) below, every clause in the Bill.
(1B) Related clauses may be dealt with together in the memorandum and it shall not be necessary to describe clauses providing only for the short title, commencement, interpretation, extent or costs of promotion of the Bill.").—(The Chairman of Committees.)
Lord Shackleton: My Lords, your Lordships should be grateful to the noble Lord for that explanation. This is an important procedure. The Joint Committee's report was published over two years ago. It has taken quite a long time for it to come into effect. The proposal reflects the recommendation set out in paragraph 40—or perhaps it was paragraph 80—of the report.
We do not often have an opportunity to consider our procedure, and I should like to ask some questions. First, why does the Secretary of State have power to rule that the environmental statement should not be deposited? Secondly, it is stated that:
"This Order does not require the deposit of copies of an environmental statement in relation to any works for which planning permission has been granted".
I fully appreciate that if planning permission has been granted in a sense it is unnecessary to publish it, but it would be useful to colleagues and to the general public who want to know what the environmental statement says. Finally, why is it Standing Order 27A? Why is it not Standing Order 28, since there is a gap in the standing orders?
The Chairman of Committees: My Lords, I am grateful to the noble Lord for those penetrating questions. Perhaps I may congratulate him on his 80th birthday.
Noble Lords: Hear, hear!
The Chairman of Committees: My Lords, in answer to the noble Lord's first question, the Secretary of State can give a direction that no such statement is necessary if, in his opinion, the works involved are not of sufficient importance to have any significant environmental effect. However, as the noble Lord will see from paragraph (5), if he does so he has to give reasons.
As regards planning permission, the object of this standing order is to extend to Private Bills the arrangements under the Town and Country Planning (Assessment of Environmental Effects) Regulations 1988 which now apply in the case of planning permission.
The number 27A will disappear when we re-edit the standing orders.
On Question, Motion agreed to.

Business of the House: PARBUL Membership
3.11 p.m.
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That as proposed by the Committee of Selection (4th report, HL Paper 67) the following Lord; be named as members of the Parliamentary Broadcasting Unit Ltd. (PARBUL)—

L. Aberdare,

L. Boston of Faversham,

V. Davidson.—(The Chairman of Committees.)

On Question, Motion agreed to.

Mental Health (Detention) (Scotland) Bill
Lord Mackie of Benshie: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Mackie of Benshie.)
On Question, Motion agreed to.

School Teachers' Pay and Conditions (No. 2) Bill
3.13 p.m.
Report received.
Clause 1 [Establishment of review body to consider statutory conditions of employment of school teachers]:
Baroness David Baroness David moved Amendment No. 1:
Page 1, line 13, at end insert:
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("(2A) From the relevant date in considering the statutory conditions of employment of teachers of pupils in sixth forms, the review body shall have regard to the prevailing conditions of employment (including remuneration) of persons occupying teaching posts in sixth form colleges carrying out the same or similar duties in respect of the teaching of sixth formers.
(2B) For the purpose of subsection (2A) above, the Principal of the sixth form college shall after the relevant date notify the review body of the conditions of employment (including remuneration) in that academic year of persons occupying teaching posts in the college, together with such other relevant information and by such date as the review body may determine.
(2C) For the purpose of subsection (2A) above, the relevant date shall be the date (if any) determined by the Secretary of State under separate provisions from which persons employed in teaching posts and sixth form colleges shall cease to be defined as school teachers.").
The noble Baroness said: My Lords, at Committee stage we discussed the position of teachers in sixth form colleges and the strange situation in which they will find themselves when the new arrangements come into force. In particular, the point was made that teachers in sixth form colleges will be paid on a different scale from those doing identical work in sixth forms in schools.
At col. 1129 of the Official Report of 4th July the Minister said:
"The aim is to bring coherence to an area of education vital for the future both of the nation and of the students themselves".
It does not seem to us that the arrangements are coherent if teachers doing the same work are to be paid on different scales and to have different conditions of work.
The original amendment, which was moved by the noble Lord, Lord Rochester, at Committee stage, aimed to ensure that after the control of sixth form colleges was transferred in April 1993 from the LEAs to the new councils the pay and conditions of those teaching in sixth form colleges would continue to be determined by the pay review body. That amendment was defeated on a vote. We are now adopting a slightly different approach.
The purpose of the amendment which I am now moving is to ensure that the review body considers the pay and other conditions of service of teachers in sixth form colleges when making its recommendations on the pay and other conditions of employment of teachers in sixth forms once legislation is introduced to separate sixth form colleges from LEAs.
The Government's decision to remove the further education sector from LEAs and to include sixth form colleges in that change means that from April 1993 teachers in sixth form colleges will no longer be covered by the review body. At Committee stage the noble Lord, Lord Cavendish, said:
"the Government firmly believe that sixth form colleges have more in common with FE colleges than they do with the schools sector".—[Official Report, 4/7/89; cols. 1129–1130].
That is clearly not the case. The work carried out by teachers in sixth form colleges is much closer to the work carried out by teachers in sixth forms than that of lecturers in further education colleges. Teachers in both sixth forms and sixth form colleges teach primarily GCE A-levels covering recognised subject

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areas. Lecturers in further education colleges are involved in a very different range of work, including BTEC and vocational courses.
At present all teachers in sixth form colleges are school teachers and therefore qualified as such, unlike further education lecturers who are not required to possess the same qualifications. Therefore, since the work is similar and the qualifications are the same, the same kinds of applicants are attracted to jobs in each sector. Those who are qualified to teach in sixth form colleges are also qualified to teach in schools, and vice versa.
Once the sixth form colleges are separated from LEAs responsibility for determining their pay will rest with the individual governing body. The danger is that conditions of employment, including pay, of teachers in sixth form colleges could become very different from those in sixth forms in schools. That could well result in teacher shortages in one sector or another. It is, therefore, important that the review body, in considering its recommendations for the pay of teachers in the schools sector who teach sixth formers for part or all of their time, should take into account the pay and conditions of service of teachers in sixth form colleges.
As I said in Committee, I am a governor of a sixth form college. There is a good deal of anxiety and uncertainty about what the teachers' position will be. It has not yet been made clear what teachers' pay and conditions will be. They are anxious about that and I believe that clarification is required. I hope that the approach set out in the amendment will be acceptable to the Government. I beg to move.
Lord Rochester: My Lords, in opposing the amendment which, as the noble Baroness, Lady David, said, I moved in Committee, the noble Lord, Lord Cavendish of Furness, said that in the Government's view the pay and employment conditions of teachers in both sixth form colleges and colleges of further education should in future be settled by negotiation between employer and employee. He acknowledged that much of the work done by teachers in sixth form colleges was the same as the work of teachers in sixth forms in schools. However, he also claimed that in large measure teachers in the two sectors did different work.
The amendment has been drafted with the Government's view in mind. The noble Baroness, Lady David, has explained its terms and I do not need to cover that ground again. It will be plain to your Lordships from what the noble Baroness said that we continue to feel that, in terms of the work the teachers do and the qualifications that are needed to do it, teachers in sixth form colleges have more in common with sixth form teachers in schools than with teachers in further education colleges.
It follows that in considering the remuneration and other statutory conditions of employment that should apply to sixth form teachers in schools, the review body should have regard, as the amendment suggests, to the pay and employment conditions of teachers in sixth form colleges. If that is not done, conditions of service in the two sectors might come to differ
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significantly. Sixth form colleges now recruit staff mainly from the secondary school sector. Differing employment conditions would necessarily impose constraints on the movement of staff between the centres and recruitment might well become difficult for the sector that is perceived to have the less advantageous conditions.
At present where I live in Cheshire there is healthy movement of teaching staff between those in schools for 11 to 16 year-olds, 11 to 18 year-olds and those in sixth form colleges. That is particularly valuable in ensuring that sixth form college teachers have experience of the national curriculum and of work for the GCSE exam. Acceptance of the amendment would help to ensure that that freedom of movement was not impaired. For those reasons I am glad to support the amendment.
Baroness Phillips: My Lords, there is another aspect of the matter which might not be covered by the amendment but must be considered. In the Catholic sector in London—I cannot speak for the others—the sixth form college has taken the place of the sixth form in secondary schools with the result that teachers in secondary schools have had their work downgraded. If I know the system, because they are not teaching sixth form subjects their pay will probably be downgraded. The teachers who have been left behind as a result of the creation of the sixth form colleges will therefore be at risk. Westminster—my un-favourite borough—has made all heads of department redundant following the creation of sixth form colleges, but the real reason for those teachers being made redundant is that they were the highest paid. The council says that it still needs teachers, but it wants cheap teachers—those who come straight from college.
All those factors must be taken into account when we consider teachers' pay. It must be protected as never before, particularly under the system with which the Government have now landed us. I am sorry to say that, so far as I understand it, the creation of sixth form colleges—I do not know whose bright idea they were—has merely complicated matters in London.
Baroness Seear: My Lords, will the Minister clarify a point made by the noble Baroness, Lady David? Is it not the case, as I think the noble Baroness said, that the people in the sixth form colleges will be teaching for exactly the same examinations as the people in the sixth forms? Presumably, if they are preparing students or pupils, or whatever one must call them, for exactly the same exams, and they are doing the job properly, they will be doing the same job. If that is so, how can we justify paying them differently?
Lord Renton: My Lords, the difficulty that I find with the amendment is that it does not appear to fit in with the scheme and purpose of the Bill which is to establish a review body to consider statutory conditions of employment of school teachers. It will have a general remit relating to the whole of the teaching profession, including the teachers of children at schools of various kinds. At the time of each review, the review body will consider the latest information

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available to it. It therefore seems unnecessary to do as the amendment proposes and to introduce a rather elaborate set of provisions fixing a relevant date, stating that the review body must be bound by things as they are at that date and enabling the Secretary of State to say what the date shall be. Therefore, on the matter of timing, I should have thought that the amendment was strictly speaking unnecessary and I cannot see the advantage of it.
However, new subsection (2B) states that:
"the Principal of the sixth form college shall after the relevant date notify the review body of the conditions of employment".
When the review body is to have a general remit I wonder what is the purpose of referring to the principal of the sixth form college? To which sixth form college does the amendment refer? There will be a number of them. I shall listen, as will all noble Lords, to what my noble friend on the Front Bench says about the amendment, but at the moment I cannot see how it will fit into the scheme of the Bill.
Lord Kilmarnock: My Lords, I, too, should like to seek clarification on one point. In moving the amendment, the noble Baroness, Lady David, said that the work of sixth form colleges was much closer to that of normal sixth forms than to the work of FE. However, at the sixth form college at which I was once a governor the tendency was to move towards a broader mix of A level and BTEC subjects which was found to be much more attractive to the local youth of the region and gave rise to much higher staying-on rates to 17 and even 18. The Government wish to give a further impetus towards a lowering of barriers between school subjects and FE subjects. My worry about the amendment is that it might imperil that mix by imposing a rigid scale of remuneration which would make matters more difficult. I shall be interested to hear whether the Minister shares that worry with me.
Lord Cavendish of Furness: My Lords, the noble Lord, Lord Rochester, expressed anxiety in Committee about the position of teachers in sixth form colleges and moved an amendment designed to ensure that such staff would remain within the ambit of the review body after their institution joined the FE sector. This amendment would not give the review body responsibility for making recommendations on the pay and conditions of sixth form college teachers, but it would require the review body to have regard to changes in the conditions of employment of teaching staff in sixth form colleges when recommending changes in the statutory conditions of employment of teachers who teach pupils in secondary school sixth forms.
I do not find the arguments that the noble Lord and the noble Baroness have advanced very persuasive. I accept that there is room for a genuine disagreement about whether sixth form colleges should remain part of the schools sector, or whether they and their students would be better served as part of the new, unified FE sector. The Government firmly believe that sixth form colleges have more in common with FE colleges and should enjoy the same freedoms. Others
18
may disagree, but, as the White Paper Education and Training. for the Twenty-First Century makes clear, this is the Government's position.
As I explained in Committee, staff in sixth form colleges will initially be transferred to the employment of the institution in the new sector on their existing pay and conditions. Thereafter, it will be for the staff themselves and their employers to decide on changes in pay and conditions. The noble Lord's amendment is, I think, based on the premise that because A levels will continue to be taught in both schools and sixth form colleges some kind of read-across should be established, so far as these teaching staff are concerned, between the two sectors. The proposed solution in the amendment is to require all 120 or so sixth form colleges to tell the review body what changes have been made to the pay and conditions of their staff, and for the review body to have to take that into account when making recommendations on school teachers.
I do not see the logic in that, nor how the arrangements would work in practice. A levels are already taught in FE colleges, yet there has not been any suggestion that the staff concerned should be other than on FE pay and conditions. The case for requiring a link between a particular category of employees in the FE sector and some, though not all, teachers in schools rests on comparisons between the duties and responsibilities of the staff concerned. But there are important differences between the two groups of teachers.
I address that remark in reply to a number of noble Lords who raised this issue during the debate today. A person referred to in Committee by the noble Baroness, Lady Blackstone, as a "sixth form teacher" is likely to be someone who spends about 80 per cent. of his or her time teaching children below the age of 16 in an institution which is primarily responsible for the education of pupils of statutory age. I hope that answers the question posed by the noble Baroness, Lady Seear. These distinctions are enormous. Teachers in sixth form colleges, like teachers in FE colleges, teach only students over that age. The institutions are organised very differently as a result. That seems to me to be a crucial distinction and one reason why the institutions and their staff should be part of the new FE sector.
Baroness Blackstone: My Lords, perhaps I may interrupt the noble Lord who is spokesman for the Government. The point I made in Committee was that the work undertaken by schoolteachers in sixth forms was virtually identical to that undertaken by full-time teachers in sixth form colleges. Of course, I am perfectly aware that they may spend up to 80 per cent. of their time teaching young pupils, but the real point is that their sixth form work differs very little from that going on in sixth form colleges.
Perhaps the Minister could address the problem faced by the Government. Does he consider that it will be acceptable for teachers in sixth form colleges who are doing the same work as teachers in schools, in so far as they are involved in sixth forms, to be paid quite different salaries under quite different conditions'? My

19
view is that it will cause us considerable difficulties in the teaching profession in regard to both recruitment and retention.
Lord Cavendish of Furness: My Lords, I understand what the noble Baroness is saying. I acknowledge that the work in sixth forms in both sectors is the same. I have drawn attention to the vast differences outside. I do not say that that fact precludes some kind of harmonisation between people doing similar work in different areas. But we are coming to the point of not agreeing on what the Government consider to be a very considerable difference between a teacher who is teaching in a sixth form college and a teacher who is teaching a sixth form in a school.
The problem of recruitment has been raised. I believe it will be for the review body to consider the recruitment needs of all secondary schools, including those with sixth forms. In the new FE sector it will be for the employers to take the necessary action to recruit and retain. The needs of the two sectors may well be different. It will be for those concerned to respond as they think best. I believe it does not help to require some kind of read-across between the two sectors.
The review body will be able to take into account any evidence it wishes and draw upon such information as it thinks fit in making recommendations on school teachers' pay and conditions. I have argued that there is a very real distinction between school teachers and those who will be employed in the new FE sector. On the other hand, it would be impossible—or very nearly so—for the review body to distinguish between teachers in secondary schools with some sixth form responsibilities and those with none. Even if they were able to do so, I cannot think it desirable that they should be asked to make different recommendations for different groups of secondary school staff who may be teaching in the same school and whose timetables can, and do, vary from year to year. One of the most important achievements of recent years has been the creation of a simple, unified structure of pay and conditions for all school teachers. I cannot think that the review body will want to turn the clock back.
I believe this amendment to be misdirected and, as my noble friend Lord Renton said, fundamentally unworkable. For the reasons I have given, I ask that the amendment be withdrawn.
Baroness David: My Lords, we do not seem to have a meeting of minds on this matter. Clearly, there is an anomaly here which in my view has not been sufficiently recognised by the Government. There is a real danger that if pay and conditions between two sets of teachers who are doing the same work are different there will be a difficulty about recruitment. If conditions are very much better in sixth form colleges when teachers are working under their own college arrangements it is likely that teachers of sixth forms in schools will gradually drift across. In many ways, I think it would have been very much better had the Government taken the bull by the horns and got rid of the sixth forms in schools, putting all 16 to
20
19-year-olds into one sector. That would have been the sensible and logical thing to do. However, the Government have not chosen to do that and have therefore left themselves in a muddle. Since we are not going to agree upon the matter, I think we should test the opinion of the House.
3.36 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 67; Not-Contents, 124.

Division No. 1

CONTENTS

Ardwick, L.

Lockwood, B.

Blackstone, B.

Longford, E.

Boston of Faversham, L.

Mackie of Benshie, L.

Bottomley, L.

Mason of Barnsley, L.

Briginshaw, L.

Milner of Leeds, L.

Bruce of Donington, L.

Milverton, L.

Carmichael of Kelvingrove, L.

Mishcon, L.

Cledwyn of Penrhos, L.

Molloy, L.

Cocks of Hartcliffe, L.

Nicol, B.

David, B.

Northfield, L.

Dean of Beswick, L.

Ogmore, L.

Desai, L.

Peston, L.

Ennals, L.

Prys-Davies, L.

Ewart-Biggs, B.

Rea, L.

Ezra, L.

Redesdale, L.

Fisher of Rednal, B.

Richard, L.

Foot, L.

Ritchie of Dundee, L.

Gallacher, L.

Rochester, L. [Teller.]

Galpern, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Shackleton, L.

Shepherd, L.

Gregson, L.

Stallard, L.

Hampton, L.

Stoddart of Swindon, L

Hanworth, V.

Strabolgi, L.

Hayter, L.

Taylor of Blackburn, L.

Hilton of Eggardon, B.

Taylor of Gryfe, L.

Hollis of Heigham, B.

Tonypandy, V.

Houghton of Sowerby, L.

Tordoff, L.

Jenkins of Putney, L.

Turner of Camden, B.

John-Mackie, L.

Underhill, L.

Kearton, L.

Wallace of Coslany, L.

Kilbracken, L.

White, B.

Leatherland, L.

Williams of Elvel, L.

Llewelyn-Davies of Hastoe, B.

Wilson of Rievaulx, L.

NOT-CONTENTS

Ailesbury, M.

Cottesloe, L.

Alexander of Tunis, E.

Craigavon, V.

Ampthill, L.

Craigmyle, L.

Astor, V.

Cullen of Ashbourne, L.

Auckland, L.

Cumberlege, B.

Aylestone, L.

Davidson, V. [Teller.]

Belhaven and Stenton, L.

De Freyne, L.

Belstead, L.

Denton of Wakefield, B.

Blatch, B.

Effingham, E.

Blyth, L.

Elibank, L.

Boardman, L.

Elles, B.

Borthwick, L.

Elliot of Harwood, B.

Boyd-Carpenter, L.

Elliott of Morpeth, L.

Brabazon of Tara, L.

Elton, L.

Brigstocke, B.

Faithfull, B.

Brougham and Vaux, L.

Ferrers, E.

Butterworth, L.

Flather, B.

Caithness, E.

Fraser of Kilmorack, L.

Campbell of Alloway, L.

Gainford, L.

Campbell of Croy, L.

Gray of Contin, L.

Carnock, L.

Gridley, L.

Cavendish of Furness, L.

Hailsham of Saint Marylebone, L.

Clanwilliam, E.

Cockfield, L.

Halsbury, E.

Coleraine, L.

Harmsworth, L.

Colnbrook, L.

Havers, L.

Constantine of Stanmore, L.

Henley, L.

21

Hesketh, L. [Teller.]

Oppenheim-Barnes, B.

Hood, V.

Orkney, E.

Hooper, B.

Oxfuird, V.

Howe, E.

Park of Monmouth, B.

Hylton-Foster, B.

Pender, L.

Ironside, L.

Plumb, L.

Jeffreys, L.

Porritt, L.

Johnston of Rockport, L.

Rankeillour, L.

Joseph, L.

Renton, L.

Killearn, L.

Renwick, L.

Kilmarnock, L.

Sainsbury, L.

Kinloss, Ly.

Saint Oswald, L.

Kinnaird, L.

Saltoun of Abernethy, Ly.

Knollys, V.

Sharples, B.

Lauderdale, E.

Shaughnessy, L.

Long, V.

Stedman, B.

Lyell, L.

Strange, B.

McColl of Dulwich, L.

Strathclyde, L.

Mackay of Clashfern, L.

Strathmore and Kinghorne, E.

Macleod of Borve, B.

Strathspey, L.

Manton, L.

Sudeley, L.

Mar, C.

Tenby, V.

Margadale, L.

Terrington, L.

Marlesford, L.

Teviot, L.

Merrivale, L.

Thomas of Gwydir, L.

Mersey, V.

Thorneycroft, L.

Middleton, L.

Thurlow, L.

Monteagle of Brandon, L.

Trumpington, B.

Montgomery of Alamein, V.

Vaux of Harrowden, L.

Morris, L.

Waddington, L.

Mowbray and Stourton, L.

Wade of Chorlton, L.

Munster, E.

Wedgwood, L.

Murton of Lindisfarne, L.

Westbury, L.

Nelson, E.

Wise, L.

Norrie, L.

Wynford, L.

Nugent of Guildford, L.

Resolved in the negative, and amendment disagreed to according.
3.44 p.m.
Lord Peston Lord Peston moved Amendment No. 2:
Page 1, line 18, after ("considerations") insert ("including, subject to subsection (4A) and section 2(1A) below, financial considerations").
The noble Lord said: My Lords, in moving this amendment, which stands in my name and that of the noble Lord, Lord Rochester, I should like to speak also to Amendments Nos. 4, 7 and 8. They are related. The first question to which we must address ourselves is the meaning of the word "considerations" as set out in the Bill. I must confess that only as the Bill progressed did I fully begin to understand—or look into and try to understand—what might be meant here by "considerations".
First and foremost, the Bill must be regarded as simply derivative from a general objective; namely, the education of pupils at school. Therefore, the main purpose of any provision under the School Teachers' Pay and Conditions (No. 2) Bill is that it must be judged according to its likely effect on education. Therefore I assume that the considerations which the Secretary of State will draw to the attention of the review body will include matters of a purely educational nature.
But beyond that there will be specific matters to do with teachers. Obviously—I shall not deal with the point in detail now because it comes under Amendment No. 3—the question of teacher scarcity and so on will be relevant considerations. Other considerations that come to mind relate to teachers receiving additional training and bringing themselves up to date and so forth. When listening to the debate
22
on the first amendment, it occurred to me on reflection that perhaps one answer which the Government might have given but did not give was that the Secretary of State, when setting the pay of teachers in sixth forms, would include in the considerations the need to take into account what is happening in sixth form colleges and further education. That is quite a good consideration, and I am surprised that the Minister's brief did not include it in his answer.
Considerations can cover a lot of useful items. As an economist I feel that the most obvious one to come into the list would be financial considerations. Earlier, when we debated finance we argued that it should not be set down as a constraint. It seems to me more reasonable—I strongly believe this—that the review body should take into account financial considerations and that the Secretary of State should guide it in that regard. Therefore I view the amendments tabled by the noble Lord, Lord Rochester, and myself as coming well within the spirit of the Bill. They are meant to be helpful and sensible and to lead to a rational outcome of the review body's deliberations.
In that connection, another point which has not been given enough weight in our discussions of the matter is that those who are affected by the review body must have confidence in it. In other words, however we argue about the details, if in the end there is a review body, it must be a body which teachers feel will give them a proper, reasonable and fair deal when it comes to pay and conditions. It would be hopeless, after having gone through so much discussion, if we end up with provisions which teachers themselves feel on a year-on-year basis constantly betray them. In other words, the considerations must be such as to give confidence to teachers.
While the considerations of a financial nature that the Secretary of State will bring to bear should give teachers confidence, I hasten to add—for all sorts of reasons, not least because of my own profession—that taxpayers must also have confidence in the deliberations of that body. They must believe that while, on the one hand, such a body takes into account the need for our schools to have sufficient numbers of teachers of quality, at the other extreme taxpayers' money must not be wasted. Financial considerations must be brought to bear so that the money is sufficient but not excessive. Financial considerations are important. It will be enormously helpful if the Secretary of State indicates the financial considerations that he has in mind and their statistical and economic underpinning.
Finally, we need a commitment from the Secretary of State which will help to give the confidence that the review body should achieve. The Secretary of State having placed various financial considerations before the review body, and the review body having taken them properly into account—in other words, it has not in any meaningful sense departed from them—there ought to be some definite presumption that the Secretary of State will not arbitrarily change his mind and reject the review body's recommendations. I emphasise the word arbitrarily because, wearing my economist's hat, I understand that having placed financial considerations before the review body the

23
economy could be hit by some adverse shock. The Secretary of State might have to say, "Although broadly speaking we believed that this was the sum of money you ought to be considering, the economy has deteriorated". In other words, I do not say that the decision should be automatic. I say that at all times the Secretary of State's response should be reasoned and based on evidence. That is the nature of the amendments.
I anticipate one possible answer; namely, that the Secretary of State's response will be so anyway. The Government always play that answer when they wish to agree with some issue for which they do not want to make provision. Placing such a provision on the face of the Bill has one specific, good consequence; namely, it gives the people affected confidence in what has occurred. The result is a specific provision on the face of the Bill. I beg to move.
Lord Rochester: My Lords, in Committee the noble Lord, Lord Peston, moved a probing amendment aimed at establishing the Government's intention on the financial side. In supporting that amendment, I stated that its terms accorded with the undertaking that the Government had earlier given: that the review body would not be bound by any financial constraints. We wished that undertaking to be included on the face of the Bill. The noble Lord, Lord Cavendish of Furness, considered that there was no need for such an amendment because under the Bill the review body could simply ignore any attempt by the Secretary of State to constrain it in that way. The amendment that the noble Lord, Lord Peston, moved today takes the matter a stage further. He explained its purpose; I shall not do so again.
The Government may claim that when the Secretary of State gives any direction to the review body as to financial considerations, there is no need for him to justify such a direction by reference to economic criteria, as the amendment proposes, because the Office of Manpower Economics can supply the review body with relevant statistical data and any advice that it needs on the economic effects of such a direction. I hope that that will not be the Government's response. I believe that the Secretary of State should be prepared to justify on economic grounds any direction he may give to the review body concerning financial considerations. I support all that the noble Lord said.
Lord Renton: My Lords, I agree with what my noble friend Lord Cavendish said in Committee: that an amendment on these lines is not necessary. However, the amendment before us—I hope the noble Lord, Lord Peston, will not mind my saying this—is one which may lead to controversy and indeed uncertainty. If we were to have anything written into the Bill about financial considerations, I should have thought that it would be undesirable to refer to economic criteria. Every good schoolboy knows, and every good schoolgirl knows better, that every department of state has to go along with the Treasury in financial matters so that the country does not
24
become bankrupt. Therefore any provisions with regard to financial considerations would be of the simplest kind.
However, to say that economic criteria should be brought in is an invitation to controversy and uncertainty. The noble Lord, Lord Peston, once disagreed with me when I ventured to describe economics as an inexact science. He could not understand why I said that. I am only a rusty old lawyer. I am not an economist. But if we were to go into the various economic criteria which change every week, and which affect the attitude of the Treasury from time to time, then there could he no end to the arguments into which the Secretary of State and the review body could be plunged. I suggest that their minds could be diverted from the real issues: to secure a good teaching profession which is well paid according to the needs of the rising generation. But to have controversy thrown in regarding the issues that affect the national economy would be wrong.
Lord Desai: My Lords, I beg to differ slightly from the noble Lord, Lord Renton. There are financial considerations and economic criteria. It is important to note that not only recently but for a long time we have run the education system on short-term narrow financial criteria rather than on longer-term good economic criteria. It is recognised on all sides—the Prime Minister recognises this—that education is an important but sorely neglected area which is vital for our economic betterment.
Economic criteria do not necessarily change from day to day. It is important that we do not have a shortage of teachers and that our teachers should perform to the best of their ability in order to build up the human capital of this country for the future.
Baroness Denton of Wakefield: My Lords, I speak from experience on an advisory committee rather than a review body. However, I believe that there are many factors in common. I agree with the noble Lord, Lord Peston, that the confidence of teachers is critical to the success of the body. That was a factor at which we always aimed.
I make the assumption that a review body is a step forward and therefore that anything that an advisory committee was doing would be better undertaken by a review body. I am surprised, for example, that we ask for restrictions on a review body relating to statistical data. I should have thought that a review body would, where necessary, call for whatever material it needed. In the advisory committee reports, not only did we call for statistical evidence in many areas, but on many occasions we criticised the data which were available. It is important that we stop talking about teachers in terms of numbers and start talking about them in terms of quality. A great deal of research needs to be done in that direction.
I agree with my noble friend that in talking about economic criteria we were asking for a view inside the crystal ball. Even had we been given that, should we have believed it? I do not say lightly that in looking forward I believe that the judgment of the review body must be considered. As regards Amendments Nos. 7

25
and 8. I strongly believe that if teachers are to have a review body it should be on the same lines as those of other professions.
4 p.m.
Baroness Cumberlege: My Lords, I am grateful to the noble Lord, Lord Peston, for explaining the amendment, which I did not immediately understand. I too support his comments about there being confidence in the review body not only as regards those who will benefit but also those who will fund it. I have experience of review bodies. Those with which I have been acquainted have established that confidence without the measures proposed in the amendment.
I am responsible for a demand-led service and I know that it is extremely difficult to live within a defined budget when review bodies can produce adjudications. We must absorb the settlements and must also keep the show on the road. However, that is a matter for the skills of management. People are paid reasonable salaries—I do not include myself—to take on that job. They have the knowledge and the skills to do so. That should be recognised as a part of local management.
Clearly decisions must be made. In some of the locally-managed schools which has gripped this philosophy already I see governors using a whole range of skills in order to absorb increases in costs, to obtain better value for money and to generate income. By using their local knowledge they are tying in schools more closely to the local community and we should welcome that. Although I understand what the noble Lord, Lord Poston, is trying to achieve I do not think that the amendment is necessary, as he may have anticipated.
The Paymaster General (Lord Belstead): My Lords, I shall answer this short debate by commenting first on Amendments Nos. 2 and 4. Clause 1(5) requires the review body to give notice to various representative bodies both of the matters referred to it by the Secretary of State and of any relevant directions that he may give. Therefore, right from the start all interested parties will be aware of what the amendments describe as a "financial consideration", should there be one. The noble Lord, Lord Peston, reflected on the different types of considerations which might form a direction under the Bill. Whatever type of direction the review body may be asked to pay regard to—for instance, financial—everyone will know about it from the beginning.
The next stage is for the review body to invite evidence from the local authorities, the teacher associations and others; the Bill requires the review body to do that. The Department of Education and Science will submit its own evidence to the review body just as it has done in each of the past four years to the Interim Advisory Committee. Without plunging down the road which my noble friend Lord Renton warned against, the evidence from the department will comment on and explain any direction that has been made about affordability. No doubt that will include:
26
"statistical data or other information on which economic criteria may have been based",
as Amendment No. 4 states. Such material forms an important part of the evidence given by the Government to the existing review bodies. The noble Lords, Lord Peston and Lord Rochester, said that the department should give evidence which can explain why a direction has been given, and I hope that will be possible through this process.
It is the practice of the other review bodies, as it has been the regular practice of the Interim Advisory Committee, to provide each of the main interested parties which submit written evidence with copies of the others' submissions. Thus it has been possible for any of the representative bodies concerned not only to challenge the statements of other parties, but also to comment in detail on the data on which it has been based. It is not for me to give any undertakings on behalf of an independent review body which we are seeking to set up under the Bill. However, I join with my noble friend Lady Denton in saying that I should be surprised if the School Teachers' Review Body were to depart from that sensible working practice. Copies of the evidence will be made available to Members of your Lordships' House.
I believe therefore that the Bill will meet the point made by the noble Lord, Lord Peston, that there must be confidence in the review body. The steps that I have outlined should engender confidence. However, there is a further step. In scrutinising the evidence that is put before it, the review body will have the help of the expert secretariat provided by the Office of Manpower Economics. The noble Lord, Lord Rochester, warned me against making that statement, but I do so because it is an important step. The initiative to use the secretariat was taken and clarified in another place. It has been widely welcomed and goes some way to meet the important points made by the noble Lord, Lord Desai—
Lord Rochester: My Lords, I did not mean to criticise the work of the Office of Manpower Economics. I am sure that it fulfils a most valuable function. I said merely that the use of the secretariat does not mean that the Secretary of State should not be prepared to supply his own data.
Lord Belstead: My Lords, I take the noble Lord's point. I hope that I have made clear that the department will expect to continue to give evidence. As my noble friend Lady Denton made clear, one would be surprised if the review body did not want such evidence to come forward from the department, without plunging off down the road against which my noble friend Lord Renton warned and into the whole economic scene. However, in addition, as icing on top of the cake, there will be an expert secretariat which will be able to continue to quarry out further information for the review body as is required.
I turn now to Amendments Nos. 7 and 8. One of the themes running through the debates in this House and in another place has been the nature of the directions which the Bill empowers the Secretary of State to give the review body. I hope that we are now at one in

27
seeing a fundamental difference between a constraint—which is binding—and a consideration to which the review body may be asked to have regard.
These amendments, though they certainly refer to considerations, seem, nonetheless, to be more about constraints. If the Government were to set a binding financial constraint, and the review body were to recommend in accordance with that constraint, I agree that under the amendment it could be argued that the Government should never reject those recommendations on cost grounds. But this is not how the new arrangements under the Bill will work. It is important that they are in line with the way in which other review bodies work.
The Government have said that they will direct the review body to have regard to affordability as expressed in the level of education standard spending. The review body must have regard to that but then it will be free to form its judgment. No doubt there will be those giving evidence who will argue that the review body should give a much higher priority to considerations which have nothing to do with the cost of the review body's recommendations. There will probably be a whole cross-current of views given by different people to the review body and there will be many different thoughts going on within it.
However, at the end of the day the review body must reach decisions. In that context, I simply do not believe that there can be hard and fast rules which provide, in effect, that if the review body makes a particular set of recommendations, having been asked to take particular matters into consideration, then the Government will or, as the case may be, will not implement those recommendations. I emphasise that that is not how any of the existing review bodies work.
They work in this way. When the Prime Minister receives the report of a review body—in this case the School Teachers' Review Body—he and his colleagues must consider very carefully the recommendations that it contains and the arguments that support them. The Government must look at the changes which the review body recommends on teachers' pay and conditions and the cost of those changes. The Prime Minister and his colleagues must take account of all relevant facts.
At this point the noble Lord, Lord Peston, said that he expected to hear those sort of remarks but he wished to have an assurance that the Secretary of State of the day would not arbitrarily turn down the review body's recommendations. However, the Government will implement the recommendations of a review body unless they conclude—and I repeat an assurance which has been given many times by my right honourable friend the Secretary of State—that there are clear and compelling reasons for not doing so.
That is how the Government look at the recommendations of all the review bodies in this country. The difficulty here is that that is not the effect which these amendments would have. Because that is not the case, I hope that the noble Lord will not press his amendment.
Lord Peston: My Lords, I thank the noble Lord, Lord Belstead, and all noble Lords who have joined in
28
the short debate. There is not a great deal between us on this matter. The noble Lord, Lord Renton, said that the science of economics is inexact. In fact, all sciences are inexact. Although I agreed with much of what the noble Baroness, Lady Denton, said, she made it worse because she implied that economists are crystal ball gazers. However, I shall save my ammunition on that subject for another debate. This is all a question of restrictive practices. I must make sure that economists are kept fully employed and that their professionalism is not undermined.
We agree that financial and economic considerations will be brought to bear. There is no possibility that the review body could deal with these matters except in such terms. The question is how they will be brought to bear. The noble Lord, Lord Belstead, clarified an important matter when he made a distinction between considerations and evidence. He said that the Department of Education and Science would bring its economic and financial considerations to bear. That would be in the form of evidence rather than considerations but that would still take place.
I believe that this is an important group of amendments because it would be helpful if, instead of relying on evidence from many different sources, the Department of Education and Science placed rather more of its cards on the table. That is the point of the amendment.
There must be—and I believe that this was implicit in what the noble Lord, Lord Belstead, said—a presumption in favour of the review body. If there is no presumption in favour of the review body's recommendations, why should a review body be set up in the first place? If the Prime Minister thinks he knows better, then he does not need a review body but will just announce the outcome. There must be a presumption in favour of the review body, which is the point of the amendment.
The noble Lord, Lord Belstead, concluded by saying that there would be such a presumption except for clear and compelling reasons. I shall not press the point but I do not understand—perhaps because I am not an expert on review bodies—why that should not be written into the Bill. He says that the Prime Minister has given a pledge that the review body's recommendations will be implemented except for clear and compelling reasons. The point of this amendment is concerned with clear and compelling reasons. However, I am willing to take the Government's words rather than have this matter written into the Bill although that is what I should prefer. Having said that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Lord Peston Lord Peston moved Amendment No. 3:
Page 1, line 20, at end insert:
("(4A) Where the Secretary of State proposes to issue any direction as to financial considerations to the review body under subsection (4) above, he shall first satisfy himself that no such considerations would be likely if given effect under section 2(1A) below to any shortages of teachers (whether in one or more subjects) in any local education authority area, and shall lay before Parliament a statement that he is so satisfied.").
The noble Lord said: My Lords, I am not sure why this amendment was not grouped with the others.
Lord Belstead: My Lords, I believe that we offered a different grouping but the noble Lord's party favor: red the present grouping. However, I should be delighted to do whatever the noble Lord wishes.
Lord Peston: My Lords, I am merely anxious to make progress and the noble Lord will be delighted to know that I have little more to say on this amendment. When considering the considerations it seems to me essential to the review body's purposes that it looks at the question of scarcity as regards the aggregate of teachers within both subject groupings and areas.
That arises only because this is a managed market. In ordinary free enterprise conditions in a competitive market, scarcity is in principle impossible because prices rise to make supply equal to demand. However, that is not allowed to happen as regards teachers. In other words, the Government or education authorities do not increase the price until scarcity appears. The essential point of the amendment is to emphasise scarcity as a central criterion in assessing what happens. I beg to move.
Lord Rochester: My Lords, I commend to the House the thought which underlies this amendment. In my view, its great merit is that it seeks to ensure that any direction which the Secretary of State gives to the review body relating to affordability fulfils the Government's own test as recorded in the Secretary of State's words on 17th April. He said:
"school teachers' pay should be such as to recruit, retain and motivate sufficient staff of the appropriate calibre within what can be afforded, as expressed at present in the level of education standard spending set by the Government". [Official Report, Commons, 17/4/91; col. 434.]
That must mean that directions should be such that as the amendment proposes, they will not lead to any teacher shortages. I am pleased to support that principle.
Lord Belstead; My Lords, in moving the amendment, the noble Lord, Lord Peston, said that he felt that scarcity should be one element of the review body's considerations. The noble Lord, Lord Rochester, said much the same, quoting the remarks made by my right honourable friend the Secretary of State, who said that he would not only expect to require the review body to take affordability into account but also would be likely to direct it to have regard to the need to recruit, retain and motivate sufficient teachers of the right quality within what can he afforded nationally.
The amendment suggests that these two considerations might sometimes pull in opposite directions. Of course, he is perfectly correct. However, this amendment does not simply acknowledge this potential conflict, but seeks to impose a single solution. It is possible that the effect of this amendment, whether the noble Lord intended it or not, would be that, wherever there is such a conflict, affordability must always take second place.
The amendment seeks to require the Secretary of State, when giving a financial direction, to lay before Parliament a statement that, if the review body were to
30
act in accordance with that consideration and its subsequent recommendations were to be implemented by the Government, the effect, in the Secretary of State's judgment, would not be such as to make it more difficult for authorities to fill vacant teaching posts.
That is becoming somewhat complicated and I believe the position to be more straightforward. The Government said that they will ask the review body to take into account the need to recruit, retain and motivate teachers, and also to take into account the resources available to local education authorities through education standard spending.
Those who will be giving evidence while the review body is deliberating will be free to suggest that the review body should attach more importance to one or other of those considerations or should pay greater heed to quite different factors. But the Government will be looking to the review body to exercise its own independent judgment in the light of all the evidence placed before it. That is exactly the purpose of all review bodies in this country. Amendments to the Bill should not alter that fact.
When the review body reports to the Prime Minister it will be for the Government to exercise their own judgment. At the risk of being tedious I repeat once again the assurances given many times by my right honourable friend the Secretary of State in another place, that the review body's recommendations will be accepted unless there are clear and compelling reasons why they should not be.
Perhaps I may remind your Lordships that the Government have taken a significant step in offering a review body to teachers, and that step has been widely welcomed. Existing review bodies are free to make up their own minds about the evidence available to them. The school teachers' review body ought to be allowed to operate in exactly the same way.
Although the amendment gave rise to what has been from my point of view an interesting exchange—it was interesting to hear noble Lords on the other side—and there was a great deal of what the noble Lord, Lord Peston, said with which I agreed, it would entrench upon the freedom of the review body to make up its mind because it imposes a precondition. It is on that ground that I resist it.
Lord Peston: My Lords, I thank the noble Lord, Lord Belstead, for his reply. Teacher shortage and the way the labour market works is a difficult subject and I am not sure that there is an easy solution to the problem. The anxiety felt by the noble Lord, Lord Rochester, and myself was that we did not want the review body to operate in a way which exacerbated the shortages. We want to go further; we hope that one outcome of the review body is that sooner rather than later we may move away from the era of teacher shortages. In a sense it is a kind of irrationality that one defines the demand—in this case the need—for teachers and then one does not provide a pay structure to enable that demand to be met; in other words, we end up with this peculiar phenomenon called shortages. Shortages do not occur in trade in most

31
goods and services. They seem to occur in one or two specific areas, usually in the public sector and usually to do with occupations like teaching.
The point we were attempting to emphasise was the desirability for the pay review body to move forward and come to grips with the shortage problem, which involves some fundamental thinking. The amendment was not concerned with the technicalities of that; it was an attempt to tease out some commitment from the Government side as well as ours in favour of dealing with shortages. We have at least learnt a little. I speak as a non-expert, but it was not the aim of the amendment to make the problem worse rather than better.
Having said that, and having commented on the shortages and accepted that there will be a pay review body, we shall keep an eye on the situation as something that interests us when looking at the outcome. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Lord Ritchie of Dundee Lord Ritchie of Dundee moved Amendment No. 5:
Page 1. line 20, at end insert:
("( ) The review body may consider matters other than those specifically referred to it by the Secretary of State").
The noble Lord said: My Lords, I raised this issue at Committee stage but withdrew it because I felt we should discuss also the issue contained in Amendment No. 6, to which I shall speak presently. I feel that the two are connected.
We on these Benches and the profession accept the principle of a review body not because we believe it to be an ideal solution but because it is perhaps the best in the circumstances. We do not like the centralisation involved and the profession will only be reassured when it sees the scheme in action and believes in it. Here we come up against the all important point made by the noble Lord, Lord Peston, and others, regarding the absolute need for confidence on the part of all those involved—the teachers and the taxpayers.
The teachers' position at the moment is sensitive. On the one hand, a great many of us have in the background of our minds the unfortunate events of the 1980s when certain sections of the profession were perhaps ill advised enough to enter upon industrial action. Therefore, the profession tends to be regarded as needing to be watched closely; the headmaster must be at hand with the cane at the ready. On the other hand, we are all well aware that the great plans for education which all three main political parties have in mind are absolutely and quintessentially dependent upon the willing co-operation of the teachers. Without that everything will come to naught.
It is in order to ensure the teachers' co-operation and bolster their confidence in the review body that Amendment No. 5 is advisable. I cannot see any objection to it. I am sure that I shall be told that it is not necessary. I cannot accept that because it can do no harm and will inspire confidence.
At Committee stage the noble Lord, Lord Cavendish, said,
32
"the review body can decide to address matters other than those specifically referred to it by the Secretary of State".— [Official Report, 4/7/91; col. 1140.]
Amendment No. 5 contains virtually those exact words. As far as I can see there can be no objection to that. A little later the noble Lord said,
"The Bill defines duties. In this case the Prime Minister's duty is to set up the schoolteachers' review body for this purpose, and the review body's duty is to examine and report on the matters referred to it within a specified time".
I would argue that it should also be the duty of the review body to discuss any other matter which it considers to be relevant. If that is also its duty, why not state it in the amendment? I beg to move.
Baroness Blackstone: My Lords, we on these Benches support the amendment. It is a simple and straightforward change to the Bill and one that everybody in the House should have little difficulty in accepting. As the noble Lord, Lord Ritchie, said, it contains the very words used by the noble Lord, Lord Cavendish, at Committee stage.
It may be argued that the amendment is unnecessary. But governments change, Secretaries of State change and if it is the case that the Government believe that the review body should be allowed to address matters other than those specifically referred to it by the Secretary of State, then that should be included on the face of the Bill. I argue in favour of doing that for two reasons. The first relates to the confidence question referred to by the noble Lord, Lord Ritchie. The amendment is likely to make the teaching profession, parents, students and all those affected by the nature and quality of our education system, feel greater confidence if they believe that it is not simply a review body that must respond to central diktats by the Secretary of State. I know that not only did the noble Lord, Lord Cavendish, deny at Committee stage that that was the case, but at Second Reading the noble Lord, Lord Belstead, said:
"Can the Secretary of State prevent the review body from considering any matter? Again it is important for me to say that from my reading he cannot. Clause 1 defines the review body's duty to make recommendations on any specific matter referred to it and to report within a set time. But its report will be able to range more widely if it considers that to be appropriate".—[Official Report, 21/6/91; col. 361.]
If the Minister believes that, surely it is acceptable to write this small but sensible amendment into the Bill, the purpose of which everyone seems to accept.
The second reason for doing so, besides building confidence in the education world, is that it will go a long way to completely guarantee the independence and integrity of the review body. That again is something that everybody in the House feels is important. Therefore, I very much hope that the Government will be able to accept the amendment.
4.30 p.m.
Lord Renton: My Lords, I have some sympathy with the noble Baroness over this matter for a purely technical reason. It could be construed that, when the Secretary of State has given reasons under Clause 1(4), those reasons should be the only ones which the review body is to consider. I hope I shall be forgiven for expressing an old Latin tag which lawyers still use; namely, expressio unius est exclusio alterius—if we

33
express one thing we are deemed to exclude another. It would be very unfortunate—if it is the intention that the review body may consider matters in addition to those referred to it by the Secretary of State—for someone to come along, perhaps on judicial review, and say, "No, you cannot consider those other matters because you have been given the directions as to the matters that you are to consider". Although I do not expect an answer at this moment from my noble friend on this very technical point, I hope that it will be considered. If the Government agree in substance with what the noble Lord, Lord Ritchie, and the noble Baroness, Lady Blackstone, have said, they need not necessarily show it in the form of Amendment No. 5. The matter could be put by saying at the beginning of subsection (4):
"Without prejudice to the power of the review body to consider other matters, the Secretary of State may give directions to the review body",
and so forth. Something on those lines could save trouble in future. Therefore, I hope that my noble friend will consider that proposition.
Baroness Phillips: My Lords, I have listened very carefully to the movers of the amendment. I am still trying, to assess what kind of "other matters" need to be referred to the review body. Clearly, we are dealing with remuneration and conditions of employment for school teachers. I was a little disturbed during the last debate because we were talking in terms that if there is not enough money presumably one then juggles with salaries. I do not know what other interpretation can be, put on the matter. Surely it is unwise to have too many matters referred to the review body, which has very definite terms of reference. Perhaps the noble Lord, Lord Ritchie, would like to explain to me what he has in mind and what kinds of other matters he would like referred to the review body.
Baroness Denton of Wakefield: My Lords, it is implicit in the setting up of the review body that it should consider other matters should they become apparent. There is little point in a review body being set up, listening to the evidence presented to it, and not examining all the matters that come through. That is one or the most important factors for the review body. Giver, that the report is delivered on time, which is crucial for school teachers, I ask my noble friend the Minister whether that is implicit in the Bill.
Lord Cavendish of Furness: My Lords, I thank noble Lords for taking part in the discussion on this amendment. I thank the noble Lord, Lord Ritchie of Dundee, for his broad welcome for the principle of the review body, whatever other reservations he may have. This amendment pursues an issue which has been given a thorough airing in your Lordships' House both during debate on Second Reading of the Bill and in Committee. It has also been the subject of debate on several occasions in another place. On all those occasions we have made it as clear as we could that the amendment is unnecessary because it confers on this body a power which it already enjoys. However, I recognise that the question continues to trouble your Lordships.
34
I ask your Lordships to forgive me if I appear to be covering old ground. I fear that that is exactly what I am going to do, and there is little I can do to light up the landscape despite my own words being used in the text of the amendment. The Government fully accept, as noble Lords have argued, that the review body should be free to consider issues which go outside the specific matters referred to it by the Secretary of State. They have no difficulty with the notion that, having decided to consider other matters relating to statutory conditions of employment, the review body may see fit to make recommendations on those matters. They accept that the Secretary of State should be able to put those recommendations into effect through a pay and conditions order; and the Bill gives him the power to do so.
Where noble Lords opposite and I part company is over the fear that the review body may not have those powers unless they are written on to the face of the Bill. I confirm, once more, that it does have such powers. Certain matters need to be written on to the face of the Bill and others do not. The Bill certainly needs to specify duties. It must place a clear duty on the Prime Minister to appoint the review body and require it to report on specific matters referred to it by the Secretary of State within a set time. Where a power is given which is to be constrained, that too must be on the face of the Bill. So, if the Secretary of State is to be given the power in certain specific circumstances to make a pay and conditions order without reference to the review body, those circumstances must be specified in the Bill.
But it should not be thought that specifying the duties of the review body, of the Prime Minister and of the Secretary of State, necessarily constrains the power which the review body, as an assembly of individuals, has to consider and to make recommendations as it wishes on such additional matters relating to the statutory conditions of employment of school teachers. These recommendations would have exactly the same status as those which address matters referred to it by the Secretary of State. It may help noble Lords if I emphasise that the Government's commitment to implement recommendations, unless there are clear and compelling reasons for not doing so, applies to all recommendations.
The noble Lord, Lord Renton, raised a technical question which I hope I can answer by saying that Clause 1(4) is about the directions given to the review body and the amendment is about the matters to be considered. As to the matters referred, the review body would need to be expressly constrained to prevent it from considering whatever it wished.
Lord Renton: My Lords, before my noble friend goes any further, perhaps I may say that it seems to me that that is a good answer to the purely technical point that I made.
Lord Cavendish of Furness: My Lords, I thank my noble friend. The words contained in the amendment are a statement of fact. Putting them on the face of the Bill will add nothing to their force. In those circumstances, I ask the noble Lord to withdraw the amendment.
Lord Peston: My Lords, before the noble Lord sits down, and so that I can understand, essentially, his answer to the noble Lord, Lord Renton, is he saying categorically that, having said that the amendment is a statement of fact, the worries of the noble Lord, Lord Renton, as applied to that amendment, cannot possibly arise and that, as long as the review body is dealing with matters to do with the pay and conditions of teachers, no problem of judicial review or anything like that can arise? I am a layman in these matters. Is the noble Lord saying categorically that no problem can arise along the lines suggested by the noble Lord, Lord Renton, in connection with the matter in the amendment? Is that what he is saying?
Lord Cavendish of Furness: My Lords, with the leave of the House, I should like to read what my noble friend Lord Renton said. I shall read everything, but I think I am saying precisely that. It cannot arise.
Baroness Seear: My Lords, before the noble Lord sits down, is he saying that because he has asserted that it is the intention of the Government it should be so, or is he saying it because he reckons that it is covered in the words of the Bill? That is a very different matter. It is the old, old story. What is said in the House is of no significance when it comes to a case. What is important is what is in the Bill. If the noble Lord can tell us that the Bill provides that this matter cannot be challenged or be subject to judicial review, that is one thing, but however much we believe the noble Lord—and we do—that would have no force of law.
Lord Cavendish of Furness: My Lords, with the leave of the House, I believe I covered that point when I said that it should not be thought that specifying the duties of the review body, of the Prime Minister and of the Secretary of State necessarily constrains the power which the review body, as an assembly of individuals, has to consider and to make recommendations as it wishes on such additional matters relating to the statutory conditions of employment of school teachers. Those recommendations would have exactly the same status as those which address matters referred to it by the Secretary of State.
Lord Ritchie of Dundee: My Lords, I have not followed all the intricacies of the argument but it seems that the Government have still not given the assurances that we should like for the sake of the confidence of the teachers. The noble Baroness, Lady Phillips, asked what other matters the review body could possibly have to consider. The Bill states that it will consider only what the Secretary of State asks it to consider. Other matters of equal importance also related to remuneration and to conditions of service of teachers may not have been referred to it. It is the intention of the amendment that it should be on the face of the Bill that the review body may consider such matters. In the circumstances, I should like to press the amendment and test the opinion of the House.
4.42 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 69; Not-Contents, 123.

Division No. 2

CONTENTS

Addington, L.

Kilbracken, L.

Ardwick, L.

Lawrence, L.

Beaumont of Whitley, L.

Llewelyn-Davies of Hastoe, B.

Blackstone, B.

Lockwood, B.

Blease, L.

Longford, E.

Boston of Faversham, L.

Lovell-Davies, L.

Bottomley, L.

McIntosh of Haringey, L.

Brooks of Tremorfa, L.

Mackie of Benshie, L.

Bruce of Donington, L.

Mar, C.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Cledwyn of Penrhos, L.

Nathan, L.

Clinton-Davis, L.

Nicol, B.

David, B.

Ogmore, L.

Desai, L.

Peston, L.

Ennals, L.

Phillips, B.

Ewart-Biggs, B.

Prys-Davies, L.

Ezra, L.

Rea, L.

Falkland, V.

Redesdale, L.

Fisher of Rednal, B.

Ritchie of Dundee, L. [Teller.]

Foot, L.

Rochester, L.

Galpern, L.

Scanlon, L.

Gladwyn, L.

Seear, B.

Graham of Edmonton, L. [Teller.]

Sefton of Garston, L.

Shackleton, L.

Grey, E.

Shepherd, L.

Hampton, L.

Stoddart of Swindon, L.

Hanworth, V.

Strabolgi, L.

Hilton of Eggardon, B.

Taylor of Blackburn, L.

Hollis of Heigham, B.

Taylor of Gryfe, L.

Howie of Troon, L.

Tordoff, L.

Jenkins of Hillhead, L.

Turner of Camden, B.

Jenkins of Putney, L.

Underhill, L.

John-Mackie, L.

Wallace of Coslany, L.

Kearton, L.

White, B.

Kennet, L.

Williams of Elvel, L.

NOT-CONTENTS

Alexander of Tunis, E.

Denham, L.

Astor, V.

Denton of Wakefield, B.

Auckland, L.

Derwent, L.

Aylestone, L.

Downshire, M.

Beaverbrook, L.

Eccles, V.

Belhaven and Stenton, L.

Elibank, L.

Beloff, L.

Elles, B.

Belstead, L.

Elliot of Harwood, B.

Bessborough, E.

Elliott of Morpeth, L.

Birdwood, L.

Elton, L.

Blake, L.

Erroll, E.

Blatch, B.

Faithfull, B.

Blyth, L.

Ferrers, E.

Boardman, L.

Flather, B.

Borthwick, L.

Fraser of Carmyllie, L.

Boyd-Carpenter, L.

Fraser of Kilmorack, L.

Brabazon of Tara, L.

Grantchester, L.

Brougham and Vaux, L.

Gray of Contin, L.

Butterworth, L.

Gridley, L.

Caithness, E.

Haig, E.

Campbell of Alloway, L.

Hailsham of Saint Marylebone, L.

Campbell of Croy, L.

Carnock, L.

Halsbury, E.

Cavendish of Furness, L.

Harlech, L.

Clanwilliam, E.

Harmsworth, L.

Cockfield, L.

Havers, L.

Coleraine, L.

Henley, L.

Colnbrook, L.

Hesketh, L.[Teller.]

Constantine of Stanmore, L.

Hood, V.

Cottesloe, L.

Hooper, B.

Craigmyle, L.

Howe, E.

Cullen of Ashbourne, L.

Hylton-Foster, B.

Cumberlege, B.

Jeffreys, L.

Davidson, V. [Teller.]

Johnston of Rockport, L.

37

Joseph, L.

Oppenheim-Barnes, B.

Kitchener, E.

Orkney, E.

Lauderdale, E.

Orr-Ewing, L.

Lindsay, E.

Park of Monmouth, B.

Long, V.

Pender, L.

Lucas of Chilworth, L.

Prior, L.

McColl of Dulwich, L.

Rankeillour, L.

Mancroft, L.

Renton, L.

Mantor, L.

Renwick, L.

Margadale, L.

Richardson, L.

Marlesford, L.

Sainsbury, L.

Merrivale, L.

Saint Albans, D.

Mersey, V.

Saint Oswald, L.

Middleton, L.

Saltoun of Abernethy, Ly.

Milverton, L.

Seccombe, B.

Monk Bretton, L.

Sharples, B.

Monteagle of Brandon, L.

Stedman, B.

Montgcmery of Alamein, V.

Strathclyde, L.

Mottistone, L.

Strathmore and Kinghorne, E.

Mountevans, L.

Sudeley, L.

Mowbray and Stourton, L.

Terrington, L.

Munste, E.

Thomas of Gwydir, L.

Murton of Lindisfarne, L.

Trumpington, B.

Nelson, E.

Vaux of Harrowden, L.

Newall. L.

Waddington, L.

Norrie, L.

Wade of Chorlton, L.

Nugent of Guildford, L.

Westbury, L.

O'Brien of Lothbury, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.51 p.m.
Lord Ritchie of Dundee Lord Ritchie of Dundee moved Amendment No. 6:
Page 2, line 16, at end insert:
("(6A) Any of the relevant persons referred to in subsection (6B) below may request the Secretary of State to refer to the review body under subsection (1) above such matters relating to statutory conditions of employment of school teachers as that person may consider appropriate, and the Secretary of State shall not refuse such a request without clear and compelling reasons stated in writing to the person concerned.
(6B) For the purposes of subsection (6A) above, the relevant persons shall be—

(a) any association of local education authorities;

(b) bodies representing the interests of governors of voluntary schools; and

(c) bodies representing school teachers.").

The noble Lord said: My Lords, I have spoken of our misgivings about too much centralisation. The review body is to consider not merely pay but also conditions of service. That includes hours of work, days of work, duties, class sizes, and so on. That is not the case with any other review body. Therefore, we do not know how it will work in practice. For example, it is not the case with nurses. These matters are to be considered by a body outside the profession. Decisions may be imposed upon the profession by those who are possibly not well enough informed. Our urging that it ought to be stipulated that the review body should include those with relevant knowledge of education has been rejected. We have to accept that fact. However, we feel that at least the profession, or its representatives, should be able to initiate discussion on issues which it considers important.
Under the terms of the Bill, the review body must refer to certain bodies proposed in Clause 1(5) (a). We feel that it should be a two-way process. How may these same bodies refer to the review body any matters which they think need discussion? We think that they should have this express right and that the Secretary of State should have the duty of giving his reasons if he refuses that right. For those reasons, I beg to move.
Baroness Blackstone: My Lords, we support the amendment. Under the current wording of Clause 1, the review body is only able to consider,
"matters relating to the statutory conditions of employment of school teachers in England and Wales as may from time to time be referred to the review body by the Secretary of State".
However, many other organisations have an interest in teachers' pay, especially in conditions of service. The associations of local education authorities, the governors of voluntary schools and school teachers and their organisations all have a particular interest in the statutory conditions of employment of school teachers. We believe it important that such organisations should be allowed to refer matters to the review body for its consideration.
Education in this country has always been seen as a kind of partnership involving central government, local government and the professions involved. In Standing Committee in another place, the Minister of State accepted that, in submitting their evidence, teacher associations and employers will be able to suggest issues which they believe the review body should consider. That is a helpful reassurance. But, again, we believe that it would be right to place this entitlement on the face of the Bill.
The amendment still gives the Secretary of State the right of veto if there are "clear and compelling reasons" for him to use that power. However, it also ensures that the main interested parties can refer matters to the review body if they so wish. I hope very much that the amendment will be acceptable to the Government.
Lord Cavendish of Furness: I understand the sentiment behind the noble Lord's amendment. But I hope that I shall be able to convince the House that it is both unnecessary and inappropriate.
The noble Lord remains concerned that the review body will be hemmed in by the Secretary of State's references and that there may be matters which LEAs or the teacher associations think should be addressed by the review body but which can be left off the agenda. He therefore wants the various interested parties to be able, as it were, to plug any gaps in the Secretary of State's references to the review body by requiring him—unless he has "clear and compelling reasons" not to do so—to refer such other matters as they may request.
We covered much of this ground in Committee and in discussing the last amendment. As I explained, the review body is under a duty to consider and report on matters referred to it by the Secretary of State. But that does not mean that it cannot report on other matters as well. If the unions or employers believe that there are specific issues which the review body ought to address they can, and no doubt will, make that clear in their evidence to the review body—or earlier than that if they wish. As Ministers made clear during the debates in another place, the Secretary of State intends to remind the review body each year that it can make recommendations across the whole range of statutory conditions of employment, not just on the specific issues identified by the Secretary of State.
The Secretary of State has made it perfectly clear that he intends to make references to the review body

39
on a regular basis. I accept that there may be occasions when a mid-year reference would be appropriate to deal with a specific technical matter or to consider an urgent problem which had arisen. It would, of course, be open to any association or individual to approach the Secretary of State and ask for a particular matter to be referred to the review body in mid-year: that goes without saying. If my right honourable friend were to receive such a request in writing he would of course reply in writing. Moreover, if he were unwilling to grant the request, he would of course give his reasons.
The review body is to be established by the Prime Minister to advise him and the Secretary of State on the pay and conditions of school teachers. The decision whether to ask for advice on a particular matter must therefore rest with the Government and not with the unions or employers. But of course the review body will take evidence from all interested parties and give careful consideration to that evidence. It will, as I have said, be able to make recommendations on any matter concerned with teachers' statutory pay and conditions.
There is a further point I should like to make. Existing review bodies operate on a regular, cyclical timetable. They receive written evidence from September, hear oral evidence over the following weeks, and report in January each year. While it may very occasionally be necessary to give an in-year reference, we would expect the school teachers' review body to operate for the most part in exactly the same way. It would clearly be very disruptive for any review body to be constantly bombarded with requests to look at this or that specific issue which happened to be of concern to one or other of the interested parties. The amendment would open the door to that kind of situation and I cannot see how it could be beneficial to the smooth operation of the review body system.
As I said, there may sometimes be circumstances in which the Secretary of State may make a mid-year reference following representations from unions or employers. There is nothing in the Bill to prevent that happening. But the role of a review body is to give the Prime Minister independent advice when he requests it. The amendment adds nothing to the Bill and is, I suggest, a misunderstanding of the role of a review body. In the circumstances, I hope that the noble Lord will feel able to withdraw his amendment.
5 p.m.
Lord Ritchie of Dundee: My Lords, again we only have assurances. The Minister said something to the effect that any body or gathering of interested parties can at any time make reference to the review body on any issue which it thinks should be discussed. We must accept that to be the case and I appreciate that if constant references were made throughout the year it might be disruptive to the work of the review body. Again, it is a matter of confidence on the part of the profession and all involved. On this occasion, we must accept the assurances of the Minister that any matter can be discussed by the review body and that that will include matters that the interested parties we have
40
named consider should be discussed. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5 p.m.
Clause 2 [Orders relating to statutory conditions of employment]:
[Amendments Nos. 7 and 8 not moved.]
Lord Rochester Lord Rochester moved Amendment No. 9:
Page 4, line 30, leave out from ("case") to end of line 32 and insert ("no such order shall be made unless a draft of the instrument containing the order has been laid before, and approved by a resolution of each House of Parliament").
The noble Lord said: My Lords, this amendment is in precisely the same form as that which I moved in Committee. I make no apology because at the end of our discussion on that occasion I said that I was not altogether satisfied with the reply of the noble Lord, Lord Belstead. Accordingly, I gave notice that I might well wish to return to the matter at a later stage, and that is what I am doing.
It is plain from Clause 2(9) that if the Secretary of State decides to make any material modification to recommendations of the review body his decision will be subject to annulment only by a negative resolution of either House of Parliament. In contrast, we feel keenly that a decision to modify materially the review body's findings should be validated by an affirmative resolution in both Houses.
In replying to our earlier debate, the noble Lord, Lord Belstead, said that he thought that the noble Baroness, Lady Blackstone, and I had to a considerable extent overlooked the procedures followed in implementing settlements in other public sector pay groups. For example, the Home Secretary made regulations on police pay subject only to the negative resolution procedure. Perhaps the most significant point, in the noble Lord's view, was that both the pay and conditions of staff in the National Health Service—whose remuneration is the subject of recommendations by two review bodies—were simply approved by the Secretary of State without any parliamentary procedure at all.
The noble Lord also gave instances of how, under the Bill, the review body would be subject to what he called a wealth of consultation. He said that at its conclusion the Secretary of State may decide to implement the majority of the recommendations in full, but make one or two changes at the margins, perhaps in response to points made in consultations. He questioned the desirability of then having to resort to an affirmative resolution. I hope that that is a fair summary of what he said in Committee.
I readily acknowledge the validity of the points he made about both other review body procedures and the provisions in the Bill for consultation before decision making. Taken together, however, they do not in my view count for as much as what I believe to be the conclusive argument in favour of the use of the affirmative resolution procedure in this case. It is simply that the review body for school teachers, unlike all the others, is to be a body set up by Parliament. It is therefore Parliament that should positively take responsibility if the body's recommendations are in

41
any respect to be overturned by the Executive. That is all the more desirable because in the case of other public services covered by review bodies the Government are themselves both the paymaster and the employer. In this case, the circumstances are quite different because in making any material modifications to the recommendations of the review body the Government would impose their view on other employing organisations.
No doubt that consideration led to the provision in the Remuneration of Teachers Act 1965 that the Secretary of State could set aside the recommendations of an arbitration body only if each House of Parliament resolved that national economic circumstances so required. That precedent was followed in the Teachers' Pay and Conditions Act 1987 which established the procedures that were adopted in the case of orders giving effect to recommendations of the interim advisory committee. This amendment therefore provides for what we regard as the maintenance of an essential constitutional safeguard. I beg to move.
Baroness Blackstone: My Lords, in supporting the amendment I wish to draw the attention of the House to one other matter in addition to what the noble Lord, Lord Rochester, has already said. The pay and conditions of teachers are of fundamental importance in the education system. They are far more important than almost any other legislation. So much else hangs on both the conditions of service and teachers' pay in terms of the quality of education that we deliver in our primary and secondary schools that it seems to me particularly important that the affirmative procedure should apply in this case. Education is a highly labour intensive industry where the costs of staff as against other costs account for a huge proportion of expenditure.
I also wish to support what the noble Lord, Lord Rochester, said about the differences between this review body and others. First, it was set up by Parliament and, secondly, it covers conditions of service. I know that Ministers may reply that this has already had a thorough airing. However, I hope that they will think again and perhaps explain why their views in 1991 are different from those put forward in 1987 in relation to the interim advisory committee. I am still unclear as to why there should be a different approach in that case from the one adopted for this Bill.
Lord Belstead: My Lords, in moving the amendment, the noble Lord, Lord Rochester, and the noble Baroness, Lady Blackstone, have invoked the precedent of the 1987 Act in arguing that there ought to be an affirmative resolution procedure in the Bill. Before trying to reply to the noble Baroness in a little more detail, perhaps I may generally remind your Lordships that we are not now considering the 1987 Act. We are considering something different. The Bill is concerned with the review body, not the continuation of the Interim Advisory Committee. The relevant precedent is not the 1987 Act but the existing review bodies.
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None of the review bodies has its pay increases approved by Parliament in the way that noble Lords opposite suggested should apply to teachers, even though their pay rates, if not the review bodies which make the recommendations, have a statutory basis. Individual procedures vary in detail; but as regards other review bodies in each case pay settlements are approved by the relevant Minister and promulgated sometimes without reference to Parliament.
The noble Lord, Lord Rochester, has mentioned my next point. As regards the Home Secretary putting into effect police pay recommendations, the Secretary of State for Scotland putting into effect or overriding the arbitration recommendations for school teachers' pay or the Secretary of State for Health putting or not putting into effect recommendations for the health service, we do not agree that the procedure urged upon us today is relevant to the review bodies concerned with the professions I have just mentioned.
I have difficulty in understanding why we should wish teachers to be in a different position from the other review body groups that both the noble Lord, Lord Rochester, and I have mentioned, particularly as a wealth of consultation has been built into this Bill. I referred to that in Committee and I do not wish to weary the House by reiterating it today. However, the essential point is that my right honourable friend the Secretary of State would modify or reject the recommendations of the review body only where, after full consultation with all the interested parties, he were to decide that there were clear and compelling reasons to do so. That is exactly the procedure that is followed with other review bodies in this country at the present time.
On a purely practical level—this point was not mentioned in Committee or today—the affirmative resolution procedure could lead to delays in pay awards reaching teachers' pockets. Because the implementation of this year's Interim Advisory Committee recommendations was staged, the order putting the pay increases into effect was subject to affirmative resolution. Arguably there is a perfectly good case for that procedure with the IAC which is definitely not a review body and which is subject to cash limits. But although the order for the increase in teachers' pay this year was laid before the House at the beginning of May, we were not able to debate it until towards the end of June. That has meant that employers were not obliged to pay teachers their salary increases until the end of June, some three months after the salary increases were due to take effect.
It is not therefore just philosophical or political differences which lead me to resist this amendment. I have practical reasons for doing so. The noble Baroness said that she could not wholly understand why in 1987 I stood at the Dispatch Box and argued in favour of the affirmative resolution procedure, whereas I am not doing so today. That is the case because the two bodies we are discussing are clearly different. The Interim Advisory Committee set up under the 1987 Act was a body subject to cash limits. It was not a review body. In the case we are discussing today noble Lords are trying to set up a review body.

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In the case of other review bodies—at least in the case of the examples I and the noble Lord, Lord Rochester, have mentioned—the Government do not have to resort to affirmative resolution. In addition, this Bill bends over backwards to include consultation. There is a difference of view over this matter. I am sorry that I am not being helpful, but I hope that the noble Lord will not press the amendment.
Lord Rochester: My Lords, I am disappointed but not surprised at the noble Lord's comments. It is fair to add that neither he, I, nor the noble Baroness, Lady Blackstone, have said anything very different to what was said in Committee. On the other hand, I feel—I am sure I speak for others on this side of the House—that the teachers' review body is sufficiently different from other bodies as it is a statutory body. I mentioned that in moving the amendment. In this case we feel it is appropriate to have an affirmative resolution procedure. I do not wish to waste any further time of your Lordships' House, but I feel strongly enough about this matter to wish to press the amendment to a Division.
5.15 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 64; Not-Contents, 109.

Division No. 3

CONTENTS

Addington, L.

John-Mackie, L.

Ardwick, L.

Kilbracken. L.

Aylestone, L.

Llewelyn-Davies of Hastoe, B.

Beaumont of Whitley, L.

Lockwood, B.

Birk, B.

Longford, E.

Blackstone, B.

McIntosh of Haringey, L.

Blease, L.

Mackie of Benshie, L.

Boston of Faversham, L.

Mason of Barnsley, L.

Brooks of Tremorfa, L.

Mayhew, L.

Bruce of Donington, L.

Northfield, L.

Carmichael of Kelvingrove, L.

Peston, L.

Cledwyn of Penrhos, L.

Phillips, B.

Clinton-Davis, L.

Pitt of Hampstead, L.

David, B.

Prys-Davics, L.

Desai, L.

Rea, L.

Ewart-Biggs, B.

Redesdale, L.

Ezra, L.

Ritchie of Dundee, L.

Fisher of Rednal, B.

Rochester, L. [Teller.]

Foot, L.

Seear, B.

Galpern, L.

Sefton of Garston, L.

Gladwyn, L.

Shackleton, L.

Graham of Edmonton, L. [Teller.]

Shepherd, L.

Stedman, B.

Grey, E.

Stoddart of Swindon, L.

Grimond, L.

Strabolgi, L.

Hampton, L.

Taylor of Blackburn, L.

Hanworth, V.

Tordoff, L.

Harris of Greenwich, L.

Turner of Camden, B.

Hilton of Eggardon, B.

Underhill, L.

Hollis of Heigham, B.

Wallace of Coslany, L.

Houghton of Sowerby, L.

White, B.

Howie of Troon, L.

Williams of Elvel, L.

Jenkins of Putney, L.

NOT-CONTENTS

Alexander of Tunis, E.

Belstead, L.

Ampthill, L.

Bessborough, E.

Astor, V.

Blake, L.

Bauer, L.

Blatch, B.

Belhaven and Stenton, L.

Blyth, L.

Beloff, L.

Boardman, L.

44

Boyd-Carpenter, L.

Joseph, L.

Brabazon of Tara, L.

Killearn, L.

Brougham and Vaux, L.

Kimball, L.

Butterworth, L.

Kinloss, Ly.

Caithness, E.

Kitchener, E.

Campbell of Alloway, L.

Lauderdale, E.

Campbell of Croy, L.

Long, V.

Carnegy of Lour, B.

Lucas of Chilworth, L.

Carnock, L.

Lyell, L.

Cavendish of Furness, L.

McColl of Dulwich, L.

Clanwilliam, E.

Macleod of Borve, B.

Coleraine, L.

Mar, C.

Colnbrook, L.

Margadale, L.

Constantine of Stanmore, L.

Marlesford, L.

Craigmyle, L.

Merrivale, L.

Cullen of Ashbourne, L.

Middleton, L.

Cumberlege, B.

Milverton, L.

Davidson, V. [Teller.]

Monk Bretton, L.

Denton of Wakefield, B.

Monteagle of Brandon, L.

Derwent, L.

Mottistone, L.

Downshire, M.

Mountevans, L.

Eccles, V.

Munster, E.

Elibank, L.

Murton of Lindisfarne, L.

Elliot of Harwood, B.

Nelson, E.

Elton, L.

Norrie, L.

Erroll, E.

Orkney, E.

Faithfull, B.

Orr-Ewing, L.

Fanshawe of Richmond, L.

Park of Monmouth, B.

Flather, B.

Pender, L.

Fraser of Carmyllie, L.

Rankeillour, L.

Fraser of Kilmorack, L.

Renton, L.

Grantchester, L.

Renwick, L.

Gray of Contin, L.

Saint Albans, D.

Haig, E.

Saint Oswald, L.

Hailsham of Saint Marylebone, L.

Saltoun of Abernethy, Ly.

Seccombe, B.

Halsbury, E.

Sharples, B.

Harlech, L.

Somerset, D.

Harmsworth, L.

Strange, B.

Havers, L.

Strathclyde, L.

Henley, L.

Strathmore and Kinghorne, E.

Hesketh, L. [Teller.]

Sudeley, L.

Holderness, L.

Teviot, L.

Hood, V.

Trumpington, B.

Hooper, B.

Vaux of Harrowden, L.

Howe, E.

Waddington, L.

Hylton-Foster, B.

Wade of Chorlton, L.

Jeffreys, L.

Westbury, L.

Johnston of Rockport, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.22 p.m.
Clause 5 [Interpretation, orders and application of provisions of Education Act 1944]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 10:
Page 5, line 42, at end insert:
("(3A) For the purposes of subsection (3) above, the Secretary of State shall by order make provision for the exclusion from statutory conditions of employment of the following—

(a) conditions of service set out in the "Conditions of Service for Schoolteachers in England and Wales" (the Burgundy Book);

(b) agreements between local education authorities and representatives of teachers as notified to the Secretary of State by the date of Royal Assent relating to—

(i) local arrangements for the allocation of working time;

(ii) local arrangements for the allocation of duties;

(iii) local arrangements for teacher appraisal;

(iv) contractual terms giving effect to regulations issued under race relations legislation; and

(v) contractual terms giving effect to regulations issued under sex discrimination legislation;

(c) such other agreements which may be reached from time to time between local education authorities and

45
representatives of teachers which relate to agreements notified to the Secretary of State under paragraph (b) above;

(d) such other agreements which may be reached from time to time between local education authorities and representatives of teachers relating to conditions other than duties and working time.").

The noble Baroness said: My Lords, I apologise in advance for taking a little longer over this amendment than over some of the previous amendments, but it raises a number of rather complicated issues, some of which emerged at Committee stage.
Perhaps I may begin by setting out what I believe to be the present position concerning local flexibility with respect to conditions. On the one hand, the LEA employers have a clear policy on school teachers' pay of developing a national framework which allows for local flexibility. On the other hand, that policy has been broadly accepted by the Government. At the same time the role of the LEAs in setting conditions of service for staff employed in schools following the introduction of local management of schools has been accepted by the Government. It has not, as I understand it, been the policy of the Government since LMS was introduced to prevent local authorities negotiating with the teachers in their areas particular conditions of employment. Nor am I aware of any complaints from the schools to which local management conditions apply that that has constrained them in any way. Perhaps the Minister will tell me if I am wrong about that.
Since putting down the amendment we have received a helpful letter from the noble Lord, Lord Cavendish. He claims in his letter that local management of schools will provide individual school:; with the flexibility to offer different levels of pay as required locally. However, the problem is that individual schools could, as a result, suffer at the expense of schools offering better conditions. I hope that the noble Lord who speaks for the Government will be able to take up that point and let us know the Government's view.
What worries us about the new arrangements is that the wording of Clause 2(7) of the current Bill rules out any local flexibility on conditions of service even though that has been allowed under the Teachers' Pay and Conditions Act 1987. Given the nature of the debate at Committee stage I should like to take a little time to go through the existing legislation, and I apologise if it may be a little technical.
Under Section 3(6) of the 1987 Act local author ties' contracts can cover conditions of service issues provided they are consistent with the provisions of the statutory pay and conditions document. Clause 2(7) of the Bill states that the contract of employment of a school teacher shall contain no terms other than those set out in a pay and conditions order. In other words, the flexibility which has been allowed up to now under the 1987 Act is removed by Clause 2(7).
At Committee stage the noble Lord, Lord Cavendish, made reference to other clauses in the Bill, pointing to areas where local flexibility might be safeguarded. However, that does not answer the main point of why Clause 2(7) is written in such a restrictive way. We are still concerned about that.
The Minister referred at Committee stage to Clause 2(4), which would allow the pay and conditions order to confer discretions on local education authorities or governing bodies in respect of pay and conditions of service. However, to achieve that local discretion local authorities would have to persuade the review body then to persuade the Secretary of State to give them back the flexibility which they currently have. That does not appear to be a sensible way to go about matters.
The amendment deals with Clause 5(3), which has been pointed to as the power which would enable the Secretary of State to allow various conditions of service matters to be regarded as being outside the remit of the review body. That is the central issue of concern. It has two shortcomings. First, it involves the Secretary of State in conditions of service areas which have not been his concern up to now. Indeed, in 1987 the Secretary of State had the clear option of incorporating all conditions of service but chose, sensibly, to concentrate on the key issues of specifying professional duties and working time and not to go into other details.
It is accepted that Clause 5(3) contains key powers for the Secretary of State to act as a watchdog over any action of the local authorities. Under that power the Secretary of State would be able to rule out any agreements reached on issues such as class size and teacher contact time which the Government regard as being within the purview of local management. As with the debate on Clause 2(4), it is difficult to see the logic in the Government taking powers from local authorities in Clause 2(7) only apparently to give them back through the device of issuing exclusion orders under Clause 5(3).
The amendment points to a further difficulty. It is one thing for the Secretary of State to be able to legalise existing conditions of service agreements. However, it is far from clear how future local decisions on issues such as equal opportunities, on which changes in the law in Europe are taking place rapidly, could be sensibly accommodated under the proposed arrangements.
Clause 1(2) defines statutory conditions of employment to include pay and such other conditions of employment related to teachers' professional duties and working time. That is a wide remit and covers a number of areas currently dealt with by local or national agreements.
On working time, paragraph 36(1) (c) of the statutory pay and conditions document states that the provisions on working time do not apply to teachers working in residential establishments. Those are areas where local authorities should expect to be able to reach agreements that are binding on teachers. In terms of working time, the following are examples of issues currently covered by collective agreements: leave of absence on maternity, paternity, adoption and compassionate grounds; in connection with religious festivals and when fulfilling public duties, as in the case of magistrates, councillors and governors; and in instances of illness or health and safety inspections. The examples are numerous.
On the question of school teachers' duties, the pay and conditions document merely sets a framework of duties. A good example of how that framework operates can be found in paragraph 27 of the document. That sets out the overriding requirements for the job of head teacher and specifies the ground rules under which he or she must carry out his or her professional duties by recognising, for example, the role of governing bodies, LEAs and the law in relation to the duties of head teachers. Clearly, that paragraph sanctions the development of local rules and policies to build on the professional duties of head teachers which are set out in the statutory document.
Paragraph 35 of the document, which deals with the professional duties of teachers, begins by stating:
"The following duties shall be deemed to be included in the professional duties which a school teacher may be required to perform".
That makes it clear that the list is not exclusive.
Although the pay and conditions document sets a broad framework of duties, it has often been the case that, in allocating particular duties to school teachers, authorities will use various devices—for example, job descriptions—as part of the contract of employment of the individual teacher. Additional duties may be required to be specified in relation to working in residential establishments or on jobs such as the provision of school-based youth and community activities—another important area—which are not fully covered by the pay and conditions document. Those are just a few illustrations of areas in which local flexibility is important.
That brings me back to the helpful letter of the noble Lord, Lord Cavendish. With reference to the pay and conditions order to which I have referred, the Minister claims that nothing in the Burgundy Book will be included in the order. However, the Association of Metropolitan Authorities has received a letter from a Department of Education and Science official claiming that the department is still considering what to include from the book. Do the Government intend—I ask the Minister directly and I hope to receive a reply—to exclude everything contained in the Burgundy Book from the terms of the order? If that is the case, what will the Government do when revising the Burgundy Book? Will it have to be checked with the order each time to make sure that it does not contain the same matters as the order?
Perhaps I may make one further point in relation to the letter. The noble Lord, Lord Cavendish, says in his final paragraph that an order on race and sex discrimination may be necessary. Does that mean that orders will be necessary every time the Government realise that the terms of reference of the pay review body conflict with the requirements of local flexibility? If the Government, as we argue, were to allow local flexibility, which is not inconsistent with the Bill, such orders would not be necessary. I should have thought that we would all be saved a great deal of trouble. As I stressed, the list of examples could become much longer. If the Secretary of State intends to use the powers under Clause 5(3) rather than restoring the local flexibility in Clause 2(7), the amendment is the only sensible way forward.
In conclusion, when my noble friends moved amendments to Clause 2(7) in Committee, the noble Lord, Lord Cavendish, was unwilling to accept many of the arguments. We are now trying an alternative approach to get round the problem by moving this new amendment to Clause 5. Notwithstanding the letter sent to my noble friend Lady David in which the Government make it clear that they are prepared to make orders under Clause 5(3) defining those matters to be excluded from statutory conditions of employment, we believe that it would be better if the main exclusions were on the face of the Bill. That is the aim of the amendment. I beg to move.
5.30 p.m.
Baroness Seear: My Lords, the noble Baroness, Lady Blackstone, has delivered a comprehensive and detailed speech in moving the amendment and I do not intend to say much more. However, I should first like to thank the noble Lord, Lord Cavendish, for his careful and comprehensive reply even if it does not meet all our anxieties. Our overriding anxiety—we want to have this incorporated into the Act so that we know it is certain—is that there should be the considerable flexibility that is needed if the different conditions of schools in different parts of the country, be they inner city compared with rural, north compared with south, or however one likes to measure it, are to be catered for. There is no question but that the conditions in schools, the requirements, the shortages of teachers and the problems of recruitment and retention are so different in different parts of the country that, if we are to fulfil our obligations to ensure that there is proper education for all children everywhere, there must be a maximum degree of flexibility in the power to recruit and remunerate in order to retain staff. That may mean, as I mentioned in Committee, that there are quite considerable differences in what is offered, not only in money but in other ways.
As I understood it, the burden of the Minister's letter was that all is well and that the Government believe in and always have believed in flexibility. If that is so—perhaps I am being very stupid about this—why on earth do we have Clause 2(7) which states that a teacher's contract of employment may contain no terms
other than those which have affect by virtue of a pay and conditions order".
That boils down to what I want to say: why has the clause been incorporated if everything is to be as flexible as the noble Lord's letter implies that it has been in the past and will be in the future? If there is a guarantee of flexibility, we shall be satisfied, but what is the point of Clause 2(7) if that flexibility is to be included?
I also wish to echo the point made by the noble Baroness, Lady Blackstone, that, although there is an assurance as regards conditions that exist at present, what will happen to changes in the future in relation to the Burgundy Book? I must confess that I am not as familiar with the Burgundy Book as perhaps I should be. I do not even know whether it is a colour

49
or a place, but that is neither here nor there. I am glad to support the amendment as this is a matter of such importance.
Baroness David: My Lords, I should like to say that, as I raised this matter and moved an amendment in Committee, the letter from the noble Lord, Lord Cavendish, was written to me. I should like to thank him 7or the length of his letter and for the fact that he took a great deal of trouble in trying to cover the points. I shall not go into those points about which we are still not clear because that has been done admirably by my noble friend Lady Blackstone and by the noble Baroness, Lady Seear, but I wanted to put my thanks on record.
Lord Cavendish of Furness: My Lords, I thank the noble Baroness and others who acknowledged my long letter. Having listened to the long, technical debate, I realise that there may be even longer letters going round.
Before dealing with the details of the amendment, it may be helpful if I recall once again the reason why the Bill is drafted as it is. As was said in Committee, there is an important difference between the Bill and the 1987 Act. The 1987 Act allowed employers to include in teachers' contracts provisions in the areas of professional duties and working time provided that those provisions were not inconsistent with the terms of the statutory school teachers' pay and conditions document 1991. Under the Bill, however, employers will no longer be able to do this. The only provisions relating to duties and working time which will have effect as terms of contracts of employment will be those which have effect by virtue of a pay and conditions order.
The noble Baronesses, Lady Seear and Lady David, expressed concern in Committee. As they have acknowledged, I have written to try to explain the Government's position. Not all of the explanations have been found entirely satisfactory. For the benefit of noble Lords, that letter is in the Library.
The world has changed quite significantly since 1987. The advent of local management of schools means that whilst LEAs remain in the majority of cases the employers of teachers, the day-to-day management of schools is a matter for governing bodies. The Government believe that governing bodies should have the maximum possible flexibility to respond to their own needs and priorities within the budgets available to them. Among other things, that means taking their own decisions on the balance to be struck between numbers of staff, class sizes and non-contact time.
The question of class sizes was raised and it was asked why LEAs could not retain existing terms in teachers' contracts of service setting out a maximum class size. The size of classes has a direct relationship with a school's staff complement. When delegation is complete in 1993 for secondary schools, and 1994 for primary schools, all staffing complements will be determined not by the LEA but by the governing body of the school. That is the power which Parliament in its wisdom has expressly given to governing bodies. It would scarcely be reasonable to permit LEAs to
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override that power by striking local deals with their teaching forces. The noble Baroness, Lady Blackstone, said there were no difficulties. I believe that there have been difficulties. Several LEAs have attempted to include class size provisions in their schemes of local management. These have been judged unacceptable precisely because they would have pre-empted the power of governing bodies to determine the staff complement of their own schools.
The Government recognise that there may be some areas where LEAs could be able to make national or local agreements with teachers but which, as matters stand, might be construed as falling within the definition of "professional duties and working time". That is why Clause 5(3) gives the Secretary of State the power to make orders specifying that a given matter is or is not to be regarded as falling within the professional duties or working time of teachers for the purposes of the Bill.
As I said in Committee, the Secretary of State is willing to exercise this power where necessary and will give very careful consideration to representations from employers or others that particular matters should be covered in the order.
I understand that the noble Baroness and other noble Lords are keen to know the Government's intentions with regard to the various issues listed in the amendment. I shall therefore turn to the detailed points that noble Lords have raised.
I turn to the Burgundy Book. Beginning with paragraph (a), I am happy to confirm the Government's view that matters currently covered in the Burgundy Book should continue to be so. But it would be inappropriate to make an order along the lines suggested in the amendment, since the majority of matters covered by the Burgundy Book clearly do not relate to duties or working time and therefore automatically fall outside the scope of the Bill. It is only those areas where there may be some doubt about the employers' right to include supplementary provisions in contracts which need be dealt with by an order under Clause 5(3). The list of local and national agreements relating to working time, maternity leave etc. referred to by the noble Baroness, Lady Blackstone, is standard Burgundy Book territory. We have already made clear that the Burgundy Book would not be covered by the review body.
I turn to existing contracts of employment. Paragraph (b) (i) and (ii) and paragraph (c) of the amendment are not, I have to say, acceptable to the Government. The intention appears to be to allow existing local agreements in the areas of professional duties and working time to stand, and in addition to allow all future agreements relating to those agreements to be incorporated into contracts of employment. But that would inevitably reduce the scope for governing bodies to manage their schools effectively. It would cut right across the policy I have outlined both today and in Committee.
As to teacher appraisal, paragraph (b) (iii) is also inappropriate but for a different reason. As I made clear in Committee and in my letters to the noble Baronesses, Lady Seear and Lady David, the Government do not believe there to be any

51
inconsistency between the drafting of the Bill and the intention behind the forthcoming appraisal regulations. LEAs will be able to put in place local arrangements for appraisal and require their teachers to behave in accordance with them, provided that such arrangements conform to the framework set out in the appraisal regulations and that the statutory pay and conditions document requires teachers—as it does now—to participate in arrangements made in accordance with those regulations. There is no need for an order under Clause 5(3) to address those issues.
I turn to race and sex discrimination. Paragraph (b) (iv) and (v) refer to race and sex discrimination. Again, we discussed these in Committee. I am pleased to confirm today that it is the Government's firm intention to make an order under Clause 5(3) enabling individual employers to place teachers under a duty not to act in a way which would amount to discrimination by their employer under existing race and sex discrimination legislation. That is clearly right. The Government are grateful to the noble Baroness, Lady David, for drawing the issue to their attention.
I refer to other conditions of employment. I confess to being a little confused by paragraph (d). The purpose seems to be to exclude from the scope of statutory conditions of employment all conditions of service matters other than professional duties and working time. But there is no need to make such a provision in a Clause 5(3) order. Such matters are already excluded from the Bill's scope by virtue of Clause 1(2) which defines the statutory conditions of employment of teachers as:
"their remuneration and such of their other conditions of employment as relate to their professional duties and working time".
That means that LEAs will continue to be able to include in teachers' contracts of employment provisions relating to matters other than pay, duties and working time.
I should like to refer to one further point raised during the debate. The noble Baroness, Lady Blackstone, commented on Clause 2(4) (a) which is about allowing government bodies etc. to exercise pay discretion. That is what they do now, and we look to the pay review body to ensure that that happens in future.
This debate has been an interesting one. I may not have covered everything. I will most certainly read what has been said and write to noble Lords.
Baroness Seear: My Lords, before the noble Lord sits down, he said that he had not covered everything. I do not believe that he has covered the point that I raised. I asked him specifically why, if variation was to be allowed, the clause was there, as it prohibited variation.
Lord Cavendish of Furness: My Lords, if I understand the question aright, it goes to the heart of the matter of local management of schools and different perceptions of how it will work. We believe that we have transferred that responsibility to schools, giving greater flexibility than otherwise would have been the case.
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I do not know how far I have gone in convincing noble Lords that the issues raised with these amendments can be more appropriately dealt with through secondary rather than primary legislation. Even so, I feel that the amendment is inappropriate and I hope that it will be withdrawn.
Baroness Blackstone: My Lords, I should like to thank the noble Lord for his reply to what is an extremely complex set of issues. At the heart of the problem is Clause 2(7). It still gives rise to problems and confusion and will continue to do so unless it is amended. This side of the House would like to reconsider the matter. We shall examine what the noble Lord said in reply to the proposal to list some exclusions under Clause 5 and decide whether to come back at Third Reading. I shall want to read his remarks in detail.
At the heart of the problem is the fact that local education authorities hold the contracts of employment of teachers and determine what is in them. Yet the Government are utterly committed—in a somewhat obsessional way, if I may say so—to giving governing bodies of schools even more control than they have at present over the way in which teachers are deployed in schools. I am entirely in favour of some devolution to schools and delegation of powers, but to concentrate on the opportunity given to governing bodies to manage the staff in schools to the complete exclusion of local authorities from managing the staff that they employ—in other words, school teachers—is likely to give rise to problems and difficulties. It is a pity that the Government appear to be so ideological on this point; they should look at the issue somewhat more pragmatically. For example, with reference to such matters as shortage subjects, I should have thought that it was desirable to allow local authorities to plan the deployment of teachers in their areas. I suspect that the route that the Government are taking will make that rather difficult.
I am grateful to the noble Lord for accepting and recognising that local education authorities ought to be able to make some agreements with teachers about such matters as working time, special dispensations for leave, and so on. That seems to me to be in some conflict with what is said in Clause 2(7). I still believe that the problem is unresolved.
I do not consider that my questions in relation to the Burgundy Book have been properly answered. I should be grateful if the noble Lord would write to me before Third Reading and answer my questions so that we have further clarification. However, I am grateful to him for what he said about teacher appraisal. Those comments were helpful. I am also grateful for his comments with respect to race relations legislation.
In the light of what has been said and my response, I beg leave to withdraw the amendment and wait for Third Reading.
Amendment, by leave, withdrawn.

Social Security (Contributions) Bill
5.54 p.m.
Lord Henley: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Henley.)
Lord Mottistone: My Lords, in the course of this Bill passing through your Lordships' House, I sought to show that its effects will be grave for industry in a period of deep recession. On Report my noble friend the Minister in one of his answers said that those effects will need to he measured against the various benefits to industry which were given in the Budget.
It is not the opinion of the CBI that the benefits are anything like as great as my noble friend sought to persuade the House. But that is not the main burden of what I want to say at this last stage of the Bill. As noble Lords will know, since the Bill was debated at previous stages, evidence has become available to show that the British car industry is in a very serious position. In various ways this Bill will make matters even worse.
In recent years the Government have set out on the Long March towards fiscal neutrality as between cash in kind and the pay packet. So far that march has been relatively painless. The British car industry has continued to thrive. Employers have continued to buy company cars and the Government have benefited from increased income. This time changes have come during the first major recession for over a decade. It is hurting. Businesses are very cost conscious and are actively reconsidering company car policies. That has a particular effect on our domestic car industry because companies prefer to buy British. When these changes were announced in April, it may have looked as though exports could take up the slack; but with world sales now expected to fall by over 1 million this year, And sales in Europe down by 2 per cent. overall, despite the enormous boost from the East Germans abandoning their Trabants, it is now clear that our car manufacturers' best efforts abroad cannot make up for what is lost at home.
We now see the results. When the Ford workers at Halewood return from their summer break, they will not be making cars. Supply has outstripped demand. For two weeks they will be engaged only in training and maintenance. After that they are expected to manufacture for only three days a week. The Cardiff Business School estimates that 100,000 new car sales will be lost this year as a direct result of the changes made by this Bill and other related moves in the Budget. Lost revenue to the Exchequer from that lost 100,000 motor cars will be at least £215 million. So over half the net gains that the Government expected from this measure will simply not now materialise. There will be further lost revenue from workers right across the automotive industry who, like those at Halewood, will spend less because their earnings have been affected.
Perhaps the Government were not looking mainly for revenue but for change in behaviour. The lesson that we have learnt as these debates have progressed is
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that, if we want businesses to move away from company car provision, whether for environmental or other reasons, the signals that they receive should be clearer. When companies reconsider their car policy, it usually confirms to them that the vast majority of cars—over 80 per cent. according to one survey—are straightforward business tools and not perks. There is a myth, which is widely fostered in the press, that business executives are swanning around at company expense in luxury cars which are loaded with every conceivable gadget. It may come as a surprise to noble Lords to learn that more than half the number of company cars are Escorts, Fiestas or their equivalents; in other words, small functional cars. Only one in eight cars is at the large end of the range.
Firms who read the message from the Government as meaning that they are being urged to cut back on car provision find that whichever way they turn they are inhibited by the interpretation of the VAT legislation by the Customs and Excise. That has been the subject of informed press comment. An offer of a cash alternative which is accepted by one employee will lead to that consideration being taken as the basis for charging VAT on company cars provided to the remainder of the workforce.
"Proceed with caution" is the message from these debates, my Lords. Before going any further, whether next year or later, the Government must consult all those affected. The Government's package for industry this year will clearly produce different results from those expected. I have described them. When the Government make impositions on industry such as those referred to in the Bill, they tend to be read as a signal to change behaviour. They indicate that the whole picture needs to be considered. General government policy should be so framed that it offers a path to tread, rather than a minefield in which a move in any direction is fraught with danger.
I conclude with one plea. The world has moved on since the Bill was first drafted, as I and others have sought to demonstrate. Now that the recession will be longer than we had originally hoped, and recovery slower, the widespread anxiety is that delay even until next spring—which the Bill embodies—will not be long enough to avoid real damage in terms of the national insurance costs already accruing. I hope that that fear may yet be recognised by regulations now in preparation and that thought may be given to how the timing of payments will be handled in the first difficult year of living with this watershed Bill. Small though the Bill is, it is also a watershed.
I suggest that ideally thee Government should seriously consider delaying Royal Assent while they discuss whether the Bill will do more harm than good—I have endeavoured to show that it will. The Government could use the Summer Recess for such considerations and, it is hoped, for discussions with interested parties. After that, if those deliberations confirm my doubts, they could withdraw the Bill. If not, it could receive Royal Assent in the autumn.
I hope that my noble friend will give serious consideration to the points that I have made and will bring all that I have said to the attention of his right honourable friend.
6 p.m.
Baroness Turner of Camden: My Lords, I have considerable sympathy with the view expressed today by the noble Lord, Lord Mottistone. However, I have a problem about giving him complete support. On this side of the House we wish to see a strong National Insurance Fund. We are not happy about anything that could result in less money going into the fund than that which is now proposed by the Government. We also object to the way in which the Government's own policies have depleted the fund. For example, the bribe of national insurance rebates given to people to leave SERPS and to take out personal private pensions has cost over £6.75 billion. There has also been the failure over years to maintain the supplement from the Treasury.
However, we have to consider the current situation and not the one that we would have wished existed. We believe that the Government have failed adequately to consult over the Bill. I agree completely with the noble Lord that there should have been more consultation with the CBI. I remain unconvinced that enough has been done to draw a distinction between a car provided as a perk and cars which have to be used by people such as sales representatives, district nurses and health visitors as a necessary tool of the trade. I would prefer, too, to see senior executives provided with safe and efficient transport as part of the tool of their jobs rather than the substantial salary increases that have been recently reported.
I share the misgivings voiced on the other side of the Chamber as to the burden now being placed on small firms, in particular small industrial firms. We are in a recession. There could well be a knock-on effect on employment. I am concerned about that too. The noble Lord is quite right to emphasise the importance of the motor car industry in the British economy.
Those are anxieties that we have voiced on various occasions during the passage of the Bill through the House. On this side of the Chamber we shall not and have not opposed the Bill for the reasons that I have stated. However, I believe that there should have been much fuller consultation. I support the view that in future there ought to be consultation with all concerned before such a Bill is rushed through both Houses of Parliament.
Lord Boyd-Carpenter: My Lords, it is certainly the case that the Bill has not been received with any manifest enthusiasm in any quarters of the House. It is a misdescribed Bill. It is not, as its title suggests, a Bill designed simply to improve social security contributions. It is a measure of taxation levied on employers as the result, no doubt, of some deal between government departments for the raising of additional substantial sums. It is not, as is normal with social security contribution Bills, one directly financing an improvement in social benefits. It is simply designed to raise money by way of taxation. I shall return to that point later.
Any Minister supporting a good Bill, and with good briefs, can do so fairly easily. However, it requires a Minister of very conspicuous ability, when very badly briefed—as my noble friend has been—to
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support what everyone who has spoken on it regards as a thoroughly bad Bill; and to continue to support it with vigour, panache, drive and decision, whatever his real thoughts may be. As has been often said, anyone can argue a good case, but to argue a really bad case demands conspicuous ability in an advocate. I am glad to be able to say—because I am a great admirer of my noble friend—that his handling of this disagreeable, inadequate and unpopular measure has given him the opportunity to demonstrate his very distinguished abilities which I am sure will carry him much further in the service of this House and this Government.
It is significant, as the noble Baroness, Lady Turner, said, that the Bill is not opposed by Her Majesty's Opposition. Of course it is not. They basically like the idea of imposing an additional charge upon employers. I believe that the more subtle of them realise that they are being presented with what in certain circumstances they might feel is a very helpful precedent: that is, the provision of retrospective taxation. As a result of earlier discussions, we now know that there has been no legal provision yet enacted to cover the raising of this money. Simply to say that there is reference in the Budget, or that it was referred to in the Budget speech, simply ignores the fact that putting some factor in the Budget or in the Budget speech has no legal effect unless it is covered by the Provisional Collection of Taxes Act and by the resolutions under that Act taken on Budget day.
Liability to pay that impost is being accumulated and has been so accumulated over the past three months. Until the Bill is law that is a liability that is being imposed without any parliamentary authority to date and simply retrospectively. Many people, in particular in another place, have condemned retrospective taxation as oppressive, unfair and to some extent unconstitutional. One could be left with a certain suspicion that a Labour Government which would substantially wish to increase taxation—indeed, in order to carry out half of their pledges they would have so to do—would find the measure a helpful precedent. A net revenue of more than £400 million per year is proposed to be raised under a measure which is not yet law and when imposing a similarly unfair impost a Labour Government might find it convenient to be able to say, "Well, the Government did it under the Social Security (Contributions) Bill 1991". I fully understand the fact that the Opposition have not found it desirable to oppose the Bill.
The Bill has other technical defects. I shall not waste the time of the House because the matter was discussed earlier in full. It contains two provisions under which it can itself be amended by regulations made under it. In other words, the power to legislate is taken away from Parliament and given to the Government with full capacity to amend what Parliament has enacted. Those provisions are contained in Clause 1(7) and Clause 2(5). That is another thoroughly bad example of legislation.
The practical objection to the Bill is on even broader grounds, although the previous grounds are significant. It is true that the measure could hardly be

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more ill-timed being introduced at a time of recession. The motor car industry is already in difficulties and there is no disputing the fact that the Bill has done additional harm. If one accepts the estimates of the Cardiff Business School it has substantially reduced the purchase of cars just when the industry is in deep recession. The Bill will add substantially to the costs of most employers again just at the time when the Government are rightly urging employers to keep their costs down and urging restraint in wage claims. They are pointing out the necessity of keeping costs down in order to preserve our competitiveness and to counter inflation. Yet, at this very moment the Government have come forward with a Bill which has the direct consequence of increasing industrial costs. Not even the eloquence of my noble friend Lord Henley has enabled them to explain that.
I am glad that your Lordships' House has taken it upon itself to discuss the measure. It will be no secret to some noble Lords that the Government's business managers, in co-operation with those of the Opposition, had planned to take the Bill straight through to Third Reading without a Committee stage or a Report stage. It is to the credit of this House that this measure was not permitted to have that treatment but has been fully discussed.
There arises the question of what the attitude of your Lordships' House should be. In reality this is a measure of taxation. If we were to reject the Bill we should be departing from the conventional understanding between the two Houses. On merit there is a strong case for rejection, but that would breach the understanding and arrangements that exist between the two Houses and would therefore be a considerable mistake. Accordingly, your Lordships' House is right to send the Bill back to another place, if that is the case, with comments that it is ill-conceived, ill-timed and a mistake.
It is no pleasure to me—one who is a whole-hearted supporter of the present Government and a great admirer of so much of their work—to feel bound to make such comments about a measure, not of the first importance, which the Government have brought forward. But the best of governments slip occasionally. Sometimes, in particular during times of transition, deals are done between departments which do not reflect favourably on the Government's policy as a whole. This is such an example.
Having expressed our views on the measure we should send it back to another place indicating that if its Members are foolish enough to disagree with this House it is up to them. We should let the Bill go either to another place or to the statute book with our comments on ill judgment. We should stress once again that measures of this kind should not be introduced by any government without full consultation with those concerned. That point, which I am sure is right, was made so well by the noble Baroness, Lady Turner. If one wants an awful warning of the effects of neglecting that point one has it in this Bill. We are parting with the Bill but not with the feeling that we are parting with an old friend.
6.16 p.m.
Lord Henley: My Lords, I am sorry that my noble friend does not feel that he is parting with an old friend. First, I assure the noble Baroness, Lady Turner, that the state of the balance of national insurance funds is perfectly healthy. I totally reject her allegation that the incentive to opt out of SERPS should be seen as a bribe. I ask the noble Baroness to congratulate the Government on the success of our personal pensions policy which has seen some 4 million people take out personal pensions during the past few years. That will dramatically reduce the burden of national insurance contributions on future generations to pay for the levels of SERPS which are so irresponsibly promised by the party opposite.
During our detailed consideration of the Bill a number of important matters were raised to which I shall turn in a moment. Before doing so it is worth repeating the basic principle on which the Bill is based. As I have already explained, its purpose is to plug a gap in the national insurance system by ensuring that an employer who provides his employee with the benefit of a car for private use—and I stress the words "for private use"—faces a contribution liability in the same way as if he had paid that employee in cash. The Bill is designed to produce greater fiscal neutrality between cars and cash and to achieve a more level playing field for employers. The choice between the provision of a car or the payment of cash will no longer be distorted by national insurance considerations. I believe that there is widespread support for that principle.
I turn first to the allegations made by my noble friends Lord Mottistone and Lord Boyd-Carpenter that the measure will cause damage to the United Kingdom car industry at a particularly sensitive time. We always consider carefully the impact on industry of any such changes. I recognise that the change is unwelcome to the car industry and to retailers at a time when sales have in any event fallen sharply from their recent record levels. However, we do not believe that the proposals will have any significant effect on United Kingdom car producers.
The United Kingdom car industry is healthy. In 1990 exports were 45 per cent. higher than those for 1989, largely balancing out the effects of the recession on domestic sales. The levels of interest rates and business confidence are far more important factors. My noble friends and other noble Lords will know that interest rates have fallen from their peak and are close to the average for the past decade. That is already having a beneficial effect on business confidence.
In any event, company cars are by no means all produced in Britain; many are foreign. Employers are increasingly buying a wider range of company cars rather than merely buying British cars. I do not believe it to be right that the National Insurance Fund should subsidise the British car industry.
Nevertheless, my noble friend Lord Mottistone raised an important point. I confirm that my right honourable friend the Chancellor of the Exchequer has made it clear to the car industry that when he makes next year's Budget judgments, he will bear in

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mind the effect of this year's measures in particular as regards national insurance, and he is very conscious of the importance of the car industry to the economy as a whole.
There have been allegations about the lack of consultation before this measure was introduced. As I have said on many occasions, this was introduced as part of the Budget Statement by my right honourable friend the Chancellor of the Exchequer. Therefore, there was no opportunity to make consultations beforehand. However, noble Lords will remember that, during our Second Reading debate, I said that we had had one round of consultation with the department's employers' panel. The two month period for submitting comments has now come to an end and a total of 32 letters from individual firms and employers' organisations have been received. Among those putting forward views have been the Engineering Employers' Federation; the Retail Consortium; the British Computer Society; and Sainsbury's, together with accountancy firms and the Institutes of Chartered Accountants of England and Wales, and of Scotland. There have been many very useful ideas and we are now looking closely at these with the aim of devising a payment and collection system which meets employers' requirements. I should like to take this opportunity of thanking all those who wrote to us; I am confident that the comments we have received will enable us to produce something which meets employers' requirements.
Anxiety has been expressed at the threshold which determines when a car is to be treated as a "tool of the trade". I do understand why this anxiety has arisen; but I think it is important to remember two points. First, the contribution charge arises because of a company car's availability for private use. Bearing in mind what my noble friend Lord Mottistone said about the public's perception of company cars being large limousines, and so on, I should point out that it is entirely irrelevant whether the car is small or large. It is its availability for private use which is important.
Secondly, we know that the level of private use is not affected all that much by the number of business miles. Against this background, I can see no justification for lowering the present threshold. It was introduced in recognition of the argument that where business mileage is exceptionally heavy, there may be some effect on the availability of a car for private purposes. At 18,000 miles, the threshold is intended to deal with the exceptional category of cars where business mileage is very high. Lowering the threshold would mean that the essential link between an employer's contribution liability and the value of the private benefit enjoyed by the employee had been lost.
I now turn to the allegations made by my noble friend Lord Boyd-Carpenter that the Bill contains two Henry VIIIth clauses and that those are unwelcome and should not be allowed. I can go no further than my remarks which I made in Committee. I do not accept that the second clause is a Henry VIIIth clause. As regards the first clause, I gave an adequate justification for its use and I repeat what my noble and learned friend the Lord Chancellor said; namely, that
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there are occasions when the use of such clauses can be an acceptable means of effecting consequential amendments without the need to require Parliament to consider primary legislation. I believe I justified that in Committee and I hope that my noble friend will accept it.
Finally, I turn to the question of retrospection. Here again, I believe that the anxieties expressed by my noble friends are misplaced. The provisions of the Bill were announced before the present tax year and employers were notified of what would be involved. Although liability will begin from the commencement of the tax year, no contributions will be collected until the tax year which commences after Royal Assent has been given.
Lord Boyd-Carpenter: My Lords, although, as my noble friend says, the contributions will not be collected until the end of the tax year, the liability to pay has been accumulating now for three months.
Lord Henley: My Lords, my noble friend is correct and I was about to come to that point. This matter was dealt with in Committee and on Report. My noble friend said that in finance Bills, all such measures would be covered by Provision of Collection of Taxes Act resolutions. As I said on Report, that is not so. I cited precedents. Such resolutions are not necessary. Liability can arise from the beginning of the financial year. There may be no charge or no collection of those taxes until the end of that year and I cited the example of capital gains tax. However, in those cases no Provisional Collection of Taxes Act resolutions were necessary.
Lord Boyd-Carpenter: My Lords, before making such a statement, perhaps my noble friend will study rather more closely how those capital taxes have been imposed. He will find that in respect of most of them, not being covered by the Provisional Collection of Taxes Act, liability arose from about 5th or 7th August.
Lord Henley: My Lords, perhaps my noble friend and I can continue this discussion through correspondence. However, I believe that my noble friend will find that he is incorrect and that liability arose from the beginning of the financial year. However, it is obvious that I am not able to convince my noble friend on this matter. The examples which I cited in Committee were not covered by the Provisional Collection of Taxes Act, and therefore the tax became liable from the beginning of the financial year.
I reject entirely what my noble friend said as regards this not being a social security Bill. It is a social security Bill. It increases the resources available in the National Insurance Fund. Therefore, having considered that increase in resources, it will be a matter which my right honourable friend can take into account when setting levels of contributions for future years.
I thank my noble friend Lord Boyd-Carpenter for his personal praise. I regret his criticism of my officials in the department who have given me the utmost

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support on a Bill which I believe is just, valuable and long overdue. I believe that we have given the Bill due consideration and I commend it to the House.
On Question, Bill read a third time, and passed.

Companies (Disclosure of Interests in Shares) (Orders imposing restrictions on shares) Regulations 1991
6.28 p.m.
Lord Henley Lord Henley rose to move, That the draft regulations laid before the House on 19th June be approved [23rd Report from the Joint Committee].
The noble Lord said: My Lords, the draft regulations laid before the House are made under Section 135 of the Companies Act 1989. They amend those sections of the Companies Act 1985 which provide for the imposition of orders, either by the Secretary of State or by the court, restricting rights over shares.
These regulations are intended to ensure that the courts and the Secretary of State have the flexibility to make orders in such a way that innocent third parties will not be affected by the restrictions on the shares. I beg to move.
Moved, That the draft regulations laid before the House on 19th June be approved [23rd Report from the Joint Committee].—(Lord Henley)
Baroness Turner of Camden: My Lords, I thank the Minister for his usual lucid explanation of the regulations. This seems to be another case in which quite important matters are coming before the House in the form of regulations rather than primary legislation. Perhaps the Minister will deal with that point. It is not the first time that that issue has been raised not only on these Benches but also from other parts of the House. Other than that, I do not oppose the order.
Lord Henley: My Lords, the noble Baroness was right in saying that there has been opposition to such orders previously. The order was not made under a Henry VIII power. She will be aware that I have had opposition from behind me to the alleged use of Henry VIII powers. There is a power to make this change. It will take considerable time to introduce primary legislation. The secondary power exists and therefore we believe that it is right to make the regulations.
On Question, Motion agreed to.

Adult Education
6.30 p.m.
Baroness David Baroness David rose to ask Her Majesty's Government to explain their plans for the future of adult education.
The noble Baroness said: My Lords, I am delighted for two reasons to introduce the Unstarred Question. The first is that my noble friend Lady Hilton has chosen this opportunity to make her maiden speech to which we are much looking forward. The second
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reason is that we have a substantial list of speakers. There are many more speakers than one normally expects on an Unstarred Question. That shows the importance of the subject.
Questions about adult education were asked in the House on 7th June and 17th June after the publication of the White Papers in May. The dismay and outrage at the proposals, or lack of proposals, for adult education became obvious. It is for that reason that I am asking the Unstarred Question. I thought that a further exploration of the Government's ideas would be useful before legislation is drawn up. Responses to the White Paper had to be in by last Friday; so I suppose that we cannot expect to hear a summary of those responses or the Government's response to them. I have been sent a number of them. The general dissatisfaction and amazement at the Government's lack of understanding of what is going on, and has been going on, in the adult education world for many years is clear.
One gathered from the original Statement in March that the Secretary of State was unaware that a great deal of adult education went on in further education colleges. Most enrolments in those colleges are of adults over the age of 21. Two excessively glossy volumes costing, I am told, £50,000 contain no mention of adult education in the section on aims; and the section on achievements makes no mention of successes in the field of adult learning through the Replan and Pick-up initiatives and the remarkable work of the Adult Literacy and Basic Skills Unit during International Literacy Year.
The White Paper concentrates on 16 to 19 year-olds; but important though better education and training for them is, they are a declining minority of the workforce and of the population. Adult learners are not marginal. Most of the workforce in the year 2000 is already part of the labour market and its further training is essential. The question is how to encourage more adults to embark upon some form of education, no matter what.
We welcome the plan to end the artificial divide between vocational and academic learning (although we have grave doubts how far that will be achieved without a reform of A levels), but in the education of adults a new and equally artificial and unhelpful distinction between vocational and non-vocational learning will be a consequence of the present proposals.
The experience of all involved in adult education teaching shows non-certificated adult learning (what the Government like to call leisure classes) makes a direct contribution to the economic health of the country. How else do we explain the enthusiasm with which the example set by Ford has been followed by other firms—for example, Lucas, Rover and Mars? At Ford, the Employee Development and Assistance Programme was set up, with the support of the TGWU, to provide general education opportunities for employees. They are funded from company profits as a product of collective bargaining and a joint determination between the workforce and management. Employees starting with language courses go on to maths and computer studies. Greek and philosophy

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were among the subjects chosen. As the National Institute of Adult Continuing Education stated in its response to the Government:
"Whilst the White Paper focuses on the major tasks facing Britain's needs as an economy and its people's needs as workers, the role of education and training in a civilised, developed and democratic society with an ageing population are broader than this: to stimulate active citizenship; to support family life: to foster creativity and appreciation of the arts; to make and take pleasure in culture are proper concerns of a learning society and are worthy of public investment".
We must make Ministers understand that the terms "vocational" and "leisure" are unreliable ones in adult education, especially when applied to classes. I give some examples that I have been sent from an adult education college in Hounslow. I am sure they are typical of many other colleges. In a Spanish class there is a student learning the language to be able to communicate with his grandchildren and another who is an immigration officer at Heathrow. He needs the language for his job. Both intend to go on to take GCSE. Others will continue, but not take exams. Is that class vocational or leisure? Will it be funded under the new arrangements as part of a GCSE course? The college received funding from the health authority to act as the resource centre for the Care in the Community programme and wishes to encourage people to join in classes such as "cooking for one". How will such classes be defined?
I have two more examples. Louise joined a sculpture class when her child was old enough to go to a play group. She is now compiling an art portfolio and intends to become an art therapist. Michael joined a life drawing class when he became redundant. He went on to take A level art. He obtained a grade A and has now retrained as a teacher. Many students, especially women, gain confidence from returning to study in a familiar area and can only then contemplate more formal study and progression.
All those examples are designed to show that we cannot draw a firm line and say that what is on one side is leisure and what is on the other is vocational. That distinction is artificial. It is impossible to draw in reality and damaging in its underlying assumptions. That raises the whole subject of funding. It cannot and must not be left entirely to the individual, especially when the need for such classes is overwhelming in a time of high and rising unemployment. The Government must see that enough funding is supplied through the RSG for that essential educational purpose. If not, reduced or impoverished local services will he offered at sharply increased costs.
It is important to remember for how much LEAs are responsible at the moment. The recent HMI publication—Education for Adults—showed that LEAs deliver three-quarters of current provision, two-thirds of which takes place in free-standing colleges and one-third in further education colleges. The remaining one-quarter takes place under the auspices of the responsible bodies (the university extra-mural departments), WEA, higher education institutions, including the Open University, and adult residential colleges. I have heard from one extra-mural department, from the WEA and from three residential colleges. They all share the same dismay and horror at
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the Government's proposals. I do not have time to enlarge upon them now, but I am aware that other speakers are covering at least some of them.
If the Open University is forced to increase its fees, as is rumoured, that will inevitably reduce the chances of the less well-off in the community. The National Extension College in Cambridge, of which I am a trustee, provides open learning and offers courses which prepare students to embark upon an Open University course. The largest proportion of students there had a household income of less than £10,000 a year and stated that they found the course fees a burden.
To return to the LEAs: 79 per cent. of them enrol adults at the rate of one for every 20 in the population. The figure rises where the authority primarily organises its adult education through free-standing colleges. It is that sector which is most seriously threatened by the White Paper. LEAs are now experiencing difficulty in maintaining the non-statutory service in the face of severe resource constraint. Once a service is fragmented it will be impossible for the LEAs to maintain the comprehensive provision that has hitherto been provided with the very small sums of residual RSG available to them.
The White Paper is vague about exactly how education for adults will be funded and organised. It is clearly envisaged that further education colleges will play a role but it is nowhere stated that they will have a duty to secure comprehensive provision outside the specific areas identified as being within the remit of the funding council. By the same token, it is not clear whether LEAs will be allowed to bid to the funding council to provide resources for relevant services that local colleges are unwilling or unable to provide. The cost to local people who will be expected to buy leisure courses at full cost will be further increased by 17.5 per cent. Such courses will automatically lose their exemption from VAT by their identification by central government as self-financing leisure activities. I hope that the Minister can clarify those matters.
More than 40 per cent. of LEA career services have an explicit commitment to advise adult clients as well as young people. It is an anxiety that that is neither considered nor acknowledged in the White Paper. There is a recognised need for services offering impartial learning and vocational guidance to adults wishing to undertake educational training and career development. As the Unit for the Development of Continuing Education (UDACE) said in its response,
"We believe that impartial education and vocational guidance is an essential underpinning of the education and training market and that responsibility for providing and financing it should be clearly allocated".
It goes on to say that the demand for guidance is growing and will become more and more essential—I would say at every level. I hope that the Minister can throw some light on that.
I hope that I have clarified many of the anxieties regarding the future of adult education under the White Paper proposals. The HMI publication makes clear the extent of adult part-time participation with a total of 3,400,000 enrolments each year, 1,600,000 of which are in adult education centres. They are an important body of people and we do not want the

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chances and opportunities taken away from them. Whatever the White Paper may do to solve the nation's need for a better educated and trained work force, there is the danger—and a very grave one in my view—that it will bring about the break-up of many of the pathways to learning now available and used by many adults to improve both their lives and their careers.
6.43 p.m.
Lord Beloff: My Lords, we must all be grateful to the noble Baroness, Lady David, for giving Her Majesty's Government an opportunity to explain some of the extraordinary gaps in White Papers previously referred to in the House, as the noble Baroness stated. A range of speakers is assembled to add further details to those which the noble Baroness so abundantly gave us. We on this side look forward to the maiden speech of the noble Baroness, Lady Hilton.
My contribution will be of a slightly different kind. A rehearsal of my own experiences, lecturing from an extramural department in Lancashire in the blackout, may by now be thought old hat. I prefer to take the House further back. In recent years we have heard remarks for and against Victorian values. On this topic, we should perhaps look back with some appreciation to what was done in the 19th century.
We experienced a growth of various institutions—mainly voluntary and eventually partly focused on local government. They were intended for those who had not benefited within the narrowly confined possibilities of further or, still less, higher education available at that time and anyone else who felt the need to understand the society in which he lived and the possibilities that existed for personal development. Out of that grew the provision—largely part-time and often in the evenings for people at work—of educational opportunities to which the noble Baroness referred.
Perhaps I may link this debate with the Question asked recently about libraries. The growth of a public library system went hand in hand with the growth of facilities for adult education. It was hoped that people would be stimulated to read and that their reading would take them to the various institutions through which they could obtain instruction or guidance. We had a vision of a country in which although, by 20th century standards, not everyone was highly educated, education was nevertheless regarded as being important for adults as well as for the young.
The ability of people who had followed that path to contribute to the economy is clear proven. But it was not on the basis of a narrow commitment merely to acquring some additional practical skill. The document, Education and Training for the 21st century, contains a good deal about training, most of which is agreeable, but little about education. Yet it is education that makes people value training. It is through education that they perceive the advantages which they personally and society as a whole gain through training.
What appears to have been omitted in the rush to produce a national system of funding for the colleges,
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as well as for the organs of higher education, is any serious consideration of where all this activity fits in. As the noble Baroness pointed out, we find only two or three references to adult education. The first relates to the role of the colleges which will be centrally financed by the new funding council but which are specifically confined to either practical instruction or to preparation for further and higher education through the acquisition of the necessary qualification certificates and so forth. As the noble Baroness pointed out, the rest of it is dismissed as leisure.
It is said that people should pay for their own leisure pursuits irrespective of whether or not they benefit the community as a whole. Unless we hear to the contrary from the Minister, therefore, it appears that those pursuits will have to be paid for. One can bank on the Treasury to put its oar in as awkwardly as possible in any activity with which one happens to be involved. That is a pity, and it is unnecessary. However, it is certainly something that must be looked at before legislation is proposed following the White Papers. Unless legislation imposes duties either on the local authorities, the colleges, a combination of both, or on central government to fund centrally organised institutions, whether residential colleges or voluntary societies, they are bound to be neglected by hard pressed organs of local government and colleges since everyone's resources are understandably limited. It is common experience and common sense that those activities which are prescribed by law will always get preference over those which are of a voluntary nature. So, faced with sacrificing an evening course on a general topic or some other compulsory objective, the former is always likely to go.
It is very important that the whole matter should be looked at again. Although we can hardly expect the Government's response to the various comments made on the White Papers, we would at least like to hear that those comments will be very carefully considered before there is any progress from White Papers to legislation. As I pointed out to your Lordships when the White Papers were first discussed, there has grown up a confusion in public, and occasionally in ministerial discourse, about different branches of education. I refer to the different functions of higher and further education which are and should be distinct, and between further education involving adults and adult education as we have understood it in this country for a century and a half or more.
Before legislation comes before us there is an opportunity for the Government and their advisers to clear their own minds and to take account of what your Lordships and others have said. I received today a letter from a pensioners' association in Hackney—not among my most frequent correspondents. The association says, "They are going to take away from us one of the things that is available to us. Please speak up for our needs in adult education." I do so.
6.53 p.m.
Lord Beaumont of Whitley: My Lords, by the number of noble Lords who have put down their names on the list of speakers we have shown how

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grateful we are to the noble Baroness, Lady David, for asking this Question. I am particularly grateful to find my speech sandwiched between the speech made by the noble Lord, Lord Beloff—I agree with all of it—and the maiden speech of the noble Baroness, Lady Hilton, to which I look forward.
I, too, look forward to hearing the Government's plans about adult education. It is time that governments looked well into the future and considered what the society in which we live is likely to be and what education organisations and arrangements will need to be established not only for the immediate but for the rather more distant future.
We now take it for granted that education is for life. We believe that people should be encouraged to go on learning as they grow older, but not just in the sense that one sometimes feels that the Government consider it, as expressed by my late father-in-law. When one produced some esoteric fact he always said, "Well, one learns something new everyday". I am not actually suggesting that the Government learn something new everyday and there also seems to be a lack of looking forward to something rather deeper.
We need structures to help us to take advantage of the enormous amount of expertise which is available in our society, a great deal of which is now wasted. The Open University has been a great step forward in that respect and its efforts must not be underrated or hampered. But more needs to be done. Perhaps arrangements need to be made that are not so seemingly middle-class and daunting as even the Open University sometimes seems to be. If the question "more of what?" is asked, the answer must be "more of everything" and less division into academic, vocational and non-vocational skills.
We live in a age when full employment of the traditional kind will probably never be seen again. That is widely agreed and that opinion is not simply the property of one side of the House. But what are those who are not conventionally employed to do with themselves? What kind of lives will they lead? All philosophies—certainly the humanist and Christian ones—would equally answer that they should be
encouraged to develop skills and to use them for the benefit of society and also for their own fulfilment. That, in turn, will contribute to the fulfilment of society.
Such skills may be found in almost anything. They may be found in matters academic; in matters vocational or in matters which might be regarded as rather trivial. In my last parish there was a lady who was a flower arranger. She carried out that task every Sunday and particularly for weddings. When she arranged the flowers for weddings she refused to take any payment whatever. To my chagrin she refused to accept payment even on behalf of the church. She insisted on doing it free. She was the best flower arranger I have known. She arranged flowers in the church which people remembered the whole week. She gave pleasure and uplift through her skills.
It is that kind of skill which we need to encourage. As I hope noble Lords will realise as I go on, it is not that I believe that many of the people for whom I am
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going to plead, will be able to pursue or will need that kind of skill. I am not conjuring up a middle-class vision of the deprived 15 to 20 per cent. of the population of this country queuing up to learn flower arranging. Neither do I believe that it would be a particularly good thing if they did so. We have a submerged section of our society. I live on the edge of an estate with which I am slightly involved at the moment. The estate is going gradually downhill and it is becoming what I suppose may be called a "sink estate". I know the difficulties of helping people to learn skills who live in that kind of environment and who come from that kind of background. As it is, they have skills which they do not use. A good many of the repairs which need to be done and which are disgracefully neglected by the council concerned could be done by many of the people on the estate, but they are not done from lack of motivation. To tackle this kind of problem will need a great deal of energy, a great deal of work and a great deal of money.
I do not see why the Government should so strongly resist the use of money in this field. We have people being laid off who have skills who are capable of teaching. On the other hand, we have a real shortage of such people where they are desperately needed. It is no use the Government saying that this would need more taxation. Of course it would. There is nothing wrong with more taxation. The Government have concentrated on less taxation—and look at the state Britain's economy is in now. What is more, they now propose, so far as we can see, to put taxation on the acquisition of skills in what they call the leisure sector. If we concentrated on the welfare of people as measured by the "life chances" that we gave to members of our society, we would give up taking too seriously the Treasury attitude in assessing cost benefit.
In a finite and overcrowded island we shall have to join the rest of the world in reorientating the values which govern our society. The party opposite which constitutes the Government will have to join us in this effort. In this particular field the Government could well start making their first advance, because they, too, value skills and they, too, value excellence where they find it. They, too, must wish to encourage a growth of excellence in every part of society, which includes the worst off and possibly particularly the worst off. I certainly hope that they will bear that in mind as they proceed with their proposals.
7.3 p.m.
Baroness Hilton of Eggardon: My Lords, I, too, am grateful for the opportunity presented by my noble friend Lady David in initiating this debate on adult education. I am also very grateful to noble Lords who have shown me such kindness and encouragement since my introduction to the House.
My qualifications for speaking on this subject may not be immediately apparent to your Lordships but they are, I believe, twofold. First, for the last two years of my police service I was responsible for all training in the Metropolitan Police. On the campus at Hendon I was running the equivalent of a further education college for 1,000 students aged between 18 and 45,

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with about 200 members of staff, all of whom were responsible for training cadets, recruits, detectives and middle managers in a variety of skills ranging from community relations to crime protection and the driving of police cars. My second qualification for speaking to the House on this topic is as a consumer of adult education for nearly 30 years. Since first attending Toynbee Hall in 1963 I have attended courses at more than a dozen colleges throughout London and studied a range of subjects from art to criminology.
Apart from the great pleasure and benefit that I have personally derived from these excursions into the nightlife of London, I have also observed at first hand the benefits of our current adult education system for many of those who have been failed by, or who have not taken advantage of, our schooling system. For many reasons, able and intelligent young people fail to obtain adequate qualifications, and the provision of widespread and affordable opportunities for education has offered a second chance for many adults.
Many such able people join the police service. The Metropolitan Police has a system of financial support for private study and for full-time scholarships which has enabled many, such as myself, to obtain degrees and other qualifications. Last year, for example, more than 600 metropolitan officers received financial assistance for their own time study. Some of those were police staff from the training school who attended the local college in Hendon to study for teaching certificates. All the frontline police recruit trainers now have such teaching certificates or higher diplomas or degrees.
Men and women joining the police service are much better educated now than they were 20 years ago. Two-thirds of all those joining the Metropolitan Police have the equivalent of five O levels, and many have degrees. This is a dramatic change since 1968 when, in the whole of England and Wales, only 168 officers had degrees. Last year, 1990, there were 7,000 graduates in the police service of whom 1,600 were in the Metropolitan Police. Many of those have obtained their degrees through part-time study with financial assistance, and some will have had, as I did, full-time police scholarships.
I know many police officers who left school without qualifications but who restarted their education in small ways—attending evening classes to pursue an interest such as conversational French or English litersature—and with increasing confidence have gone on to take exams and gain a variety of substantial qualifications. Confidence, my Lords, is, I believe, a key feature in acquiring knowledge and skills. Therefore, I view with disquiet any suggestion that leisure study should be divorced from study leading to academic or vocational qualifications. All study increases not only knowledge but also intellectual skills of analysis and understanding. It is moreover difficult to distinguish between "leisure" and other forms of study. In Kent, for example, 100 police officers have been attending French conversation classes at their force's expense. This is in anticipation
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of the opening of the Channel Tunnel, but will also no doubt greatly enhance the enjoyment of their summer holidays.
Most people in this country do not have the support of organisations as generous or enlightened as the police service, but nevertheless the number of part-time students in higher education in this country—no doubt in part due to that excellent institution, the Open University—has increased by 134 per cent. in the past 20 years. Government expenditure on further and adult education in the United Kingdom has doubled in real terms since 1970 and in 1989–90 more than 900,000 people enrolled for adult education classes. These are important gains which should not be jeopardised by future plans.
The recently published White Paper on Education and Training for the 21st Century draws what I believe is an artificial distinction between leisure study and study leading to formal qualifications. It suggests that the only kind of education that should be supported by public money is that leading to academic or vocational qualifications. The White Paper says that, in disadvantaged areas, there,
"can be a case for local authorities subsidising this work".
That is welcome. My main concern is the projected division of adult education into separate colleges or institutions since for many people the initial bridge back into formal education may well be through their leisure interests and studies. It is also, however, important not to erect financial barriers that are too high for the young or unemployed to surmount.
Adult education is an essential if rather frayed safety net to catch those who fall through our education system. Every opportunity for education at all ages should be preserved, so that people may acquire the knowledge, skills and flexibility to cope with the new challenges presented by our entry into Europe and by social, technological and environmental change.
7.10 p.m.
Baroness Cumberlege: My Lords, perhaps I may first thank the noble Baroness, Lady David, for initiating the debate and for her clarity in introducing it. Secondly, it is my great privilege tonight—and I am sure that the whole House will wish to join me—to congratulate the noble Baroness, Lady Hilton of Eggardon, on her maiden speech. If I may say so, it was appropriate, cogent and erudite. The noble Baroness brings to your Lordships' House a range of experience which stretches from the streetwise to one of the most esteemed academies of higher education. As the most successful woman in the Metropolitan Police force, her knowledge, intelligence and skills are much welcomed. Unfortunately, the one skill she will have to foresake is the taking of accurate notes—at least in your Lordships' Chamber. On her elevation to the peerage, the noble Baroness was quoted as saying that one of the best things she could do in the House of Lords was to show by "just being here" that the police service is not the Right-wing, macho and chauvinist organisation that people think it is. I believe that the noble Baroness has today achieved much more than "just being here". She has made us

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aware that vocational courses can be the foundation for a high flying career, and that the Government have set a minelaying course for beginners.
I agree very much with my noble friend Lord Beloff. I believe that the debate will prove to be most valuable if the Government listen and learn from the wealth of experience here in your Lordships' House and thereby reach the right decisions for the future of adult education. The Government are right to set their priorities. This country still lags behind other European countries in investment in further education. On average, people join their companies in Britain at the age of 22, whereas in Germany they join at 27. The proof of the value of five years' extra education and training is the strength of Germany's economy.
Further education has been dogged by status. Great emphasis has been placed on academic education in the past. It has received all the status and the accolades; whereas, as we know, it is the depth of training running through every part of the economic activity of the nation's workforce which is important to a successful economy.
The Government's resolve to help people in their careers, and explicitly their daily lives, by wider access to further education must be applauded. But their resolve to withdraw funding from purely leisure activities means demarcation lines being drawn. Much concern has been expressed by speakers on this issue here tonight.
While serving as a county councillor, I remember when the council drew the line. We drew the line at tap dancing on the rates. I do not know how many Fred Astaires or Ginger Rogers were lost. Indeed, we shall never know. It always seems that flower arranging dogs this debate. However, I know that flower arranging can be a route to a successful career. An example was given to me the other day of a young West Indian who was inspired to set up a florists' business after having taken adult education classes. That business now employs about eight black people in Brixton. The noble Baroness, Lady David, gave us many other such examples.
I believe that the Government's demarcation between vocational courses and those which lead to a qualification; and those which do not, is right. In my view, it is a form of leisure to spend £40 on learning to arrange flowers for one's home, especially where there are courses enough for those who attend and who want to proceed and receive a professional qualification.
Adult education can provide startlingly good value. I have with me the pamphlet from my local education college. It lists bridge for beginners at a cost of £1 per class per week. That is less than the cost of a pack of playing cards. There are many other examples which I could quote. I contend that some of them are leisure pursuits. Of course, there is provision through local determination for subsidising people who cannot afford to pay but who need to take leisure courses. The Government have recognised the fact that they can provide a valuable social function.
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I can think particularly of two areas where subsidies should be used if the financial need is evident. I refer to people who have recently been bereaved and people suffering great social deprivation, perhaps as a result of long term unemployment or through unexpected redundancy. People who become depressed put their health at risk; preventing this from happening is a marvellous investment.
I do not think that we should be totally concerned in this debate with the demarcation which is causing a problem. I believe that we should look closely at the positive commitment that the Government are making to training the country's workforce and to retraining people when that is necessary. This is of the greatest importance to women who have had children and who want either to refresh their skills and return to work or to retrain for different careers.
Industry also has an obligation in this respect, not only to train its employees in workplace skills but also as regards personal development. As the noble Baroness, Lady David, pointed out, some companies have a good record. For example, Ford allocates £200 per person per year to each individual. It is interesting to note that 25,000 employees accept the challenge annually. Rover, Glaxo, IBM, Jaguar and many others also have personal development schemes. Nevertheless, whereas half the largest companies in the USA provide five days training a year for each manager for personal development, the equivalent time given in the UK among the largest half of our companies is one day a year. I think that there is room for improvement.
I am especially pleased to see the positive stance taken by the National Institute of Adult Continuing Education, although it does have reservations. It feels that too much emphasis is being put on the 16 to 19 year age group. The institute has made specific recommendations for adult education which I hope the Government will consider carefully.
The White Paper makes the point that it is the Government's intention to help people in their careers and also in their daily lives. I have a particular concern for the people we have traditionally called "carers". I prefer to call them "free workers". Many of them spend years acquiring the skills and the confidence to care for either a dying or a dependent relative or friend. I welcome the modular form of NVQ which will allow such people to have their skills assessed. The results of the assessment will go towards a qualification giving them due recognition for the work that they have done and the expertise that they have acquired. That will mean that their commitment over many years in caring for a relative or friend will not go unrecognised. It will be valued and it may provide a springboard for work in caring for others in a paid capacity outside the home, once their current responsibilities have been discharged.
Finally, in every area of our daily lives we need people with great knowledge and skill. Employers need a pool of skilled people. We have not done well enough in training and adult learning, but I believe that we should welcome the Government's initiative as a step forward.
7.18 p.m.
The Earl of Longford: My Lords, I join the noble Baroness, Lady Cumberlege, in paying a heartfelt tribute to the noble Baroness, Lady Hilton of Eggadon. The trouble with this House is that we now have such a strong convention that every maiden speaker is congratulated. Therefore, when a new Member makes a deeply impressive speech there are no words left which sound sincere. I can only say that if the noble Baroness can maintain that standard, as I am sure she will, she will bring honour not only on herself but also on the House. We are glad to have her among us.
As a person who has become identified somewhat with criminals, it was a peculiar pleasure for me to applaud a former police commander. As I understand it, she is the only commander who has ever served on the Labour Benches in this or the other place; or, indee1, on any Benches. Of course, I am aware of the fact that, without the police we would have no law and order and no civilisation. As I said, it is a special joy to be allowed to say these words.
The other speakers in the debate have all spoken from expert and up-to-date knowledge; that is, with the possible exception of the noble Lord, Lord Beloff, who took us back to the last century, which is further hack than I was proposing to go. My experience in adult education takes me back to the time before nearly all noble Baronesses and some of the noble Lords who have spoken tonight were born. I took my WEA class in Longton; not quite in the 19th century, but some time back. Longton was claimed to be the original WEA class, many years before that. I was teaching there and managed to import my wife into the system. We became engaged in the station waiting room at Stoke-on-Trent under the auspices of the WEA, so it has many romantic associations for me.
As the noble Lord, Lord Beloff, said, we must take a historical view on this, but we must also come up to date. What I had intended to say has already been said very well by several speakers, including the noble Baronesses, Lady David and Lady Hilton. It is almost redundant to repeat it, but it is important that the Minister who is to reply should realise that there appears to be a unanimous renunciation of quite an important aspect of the White Paper on adult education; that is, the attempt to draw a line between vocational education and leisure interests.
Leisure has rightly been derided and I join in the howl of derision that greets it. For example, when I taught political theory in Longton, I do not know whether it was leisure for anyone, but it was a form of education. It was sometimes even called political philosophy. It may not have been quite as grand as that, but my wife was teaching Shakespeare and English literature. Should that be called leisure? The distinction would have seemed ridiculous then and it still seems so now. However, from the government's proposals, we read that they believe it important that good quality education should be available to adults to help them improve their qualifications, update their skills and seek advancement in their present career or in a new career. That is the kind of education that the Government quite rightly wish to promote. However,
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leisure and the teaching of what might be called cultural subjects are passed over with apparent contempt. The whole House has up to now derided the attempt to draw a distinction. I am not sure whether that applies to the noble Baroness, Lady Cumberlege, but all others did.
As always, I turn to the polytechnics for up-to-date learning. Since I am being nasty about aspects of the Government perhaps I should take the opportunity of saying what tremendous pleasure it has brought to friends of the polytechnics that the Government took the step announced not long ago of placing the polytechnics on the same footing as the universities. It would be churlish not to mention that. Returning to today's topic, the polytechnics have been at the forefront in opening up access to degree work. All kinds of students, who were not traditionally qualified, have in the end obtained degrees through them. That is one aspect of their work.
I shall quote one story supplied to me from the Polytechnic of Central London. A mature married woman, with no educational qualifications, took up a place with some friends in an embroidery evening class, a leisure interest leading to no qualification. She enjoyed it and in conversation with others fantasised about making a living out of her new interest. She was encouraged to consider this more seriously and entered courses in business and marketing. She now runs a thriving small business, having started going to a leisure—I emphasise the word—class with friends. Under the White Paper proposals the polytechnic understands that such a class will no longer be available to someone of her limited personal means. That would be shocking enough, and it is just one aspect, but leisure classes can possibly lead on to business success.
However, that is not the only reason that I and others support the so-called leisure classes. I regard education as good in itself, not just as something leading to a career. It does that, but education is good in itself. The White Paper has failed badly in that respect.
7.25 p.m.
Baroness Lockwood: My Lords, I too am grateful to my noble friend, Lady David, for putting down this Question tonight. I hope that the Government will be able to throw some light on the future prospects for adult education, as the White Paper seems to raise more questions than it answers. It is full of gaps and, strangely, it makes no reference to the Education Reform Act 1988 which requires local education authorities to secure adequate facilities for adult education. Presumably that responsibility still remains with local education authorities, but the funding is not mentioned in the White Paper. However, it recognises that adult education comes from a number of sources. The bulk has come from local education authorities, mainly through further education colleges. The WEA has also been an important provider, as my noble friend Lady David mentioned.
At the top of the adult education pivot, we have had the seven adult residential colleges which have provided special opportunities to people like myself

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who missed out on formal education in their school days and have had the opportunity of an education in a residential and scholarly setting. The residential colleges also pioneer methods of learning and teaching for adult education generally, which is an important contribution to the education scene.
All these providers of adult education seem to have a question mark hanging over the continuation of their activities, largely by the gaps in the White Paper and also the limited list of providers which can seek funding from the new funding councils. We must add to that list of providers of adult education which I have mentioned an increasing number of universities which are also providing adult education in the way of liberal courses, in addition to their professional courses. However, they often provide them on a part-time basis through the associated student scheme, allowing pensioners, people on shift work and the unemployed to take part in university education on a modular basis. However, of course, like other aspects of adult education, there is no specific funding for this work. Thus there are a number of areas on which we need a great deal more information.
One of the strengths of adult education in the past is that it has never been proscribed or limited before. It has responded to the needs and demands of local communities. Indeed, by its very nature, it is difficult to package adult education into neat, watertight compartments, as noble Lords have mentioned this evening and as everyone involved in adult education knows.
To attempt to distinguish between vocational and non-vocational courses for funding purposes is, to say the least, to oversimplify the problems. Adults are likely to have a multitude of motivations for deciding to start a course. As my noble friend Lord Longford has illustrated, a course that is started as a leisure activity may lead to a professional qualification.
I wish to refer to my local education authority in Bradford which has a policy of providing an integrated and co-ordinated programme of education to meet all needs. The main providers of that education have been the three further education colleges in the metropolitan district. One of the colleges, Bradford College, is one of the biggest colleges in the country. It has over 30,000 students and the courses span basic literacy courses to degree courses. Yet even a college of this size has relied on the local education authority to provide the strategic framework in which it can provide courses.
I am informed by Bradford College that something like 15 per cent. of adult education could be classified as non-vocational education. Non-vocational courses usually last for one to two hours per week. If such courses account for 15 per cent. of adult education, that accounts for a lot of people. We must ask what will happen to this service. A glimpse at the current programme of Bradford College suggests that we certainly cannot afford to lose its services. It provides a great breadth and variety of courses, including some which are specially geared to the different ethnic communities. One might ask whether a course on Asian/Western dressmaking is a leisure or a
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vocational course. It could be either. It could lead to a national vocational qualification or it could mean that an Asian woman who was interested in that course could begin to integrate herself more into the local community.
Are French or German courses for beginners access courses to GCSE or A-levels, or are they simply leisure pursuits? Again they could be either. On the one hand such courses could lead to further language study ending with a qualification but on the other hand they might just constitute an additional skill which someone wanted to acquire to develop their growing European awareness. That is a concept that the Government are keen to foster.
What category do courses on property maintenance fall into? Incidentally, those courses are advertised in Bradford not just in English but also in two Asian languages. Bradford has inner city problems. We must ask the Government where such courses would fit into the priority list of such a city. According to the White Paper, such courses would not assume a very high priority from an educational point of view. However, they should assume a high value in a city such as Bradford from an environmental and social point of view.
One could give further examples of courses that could be vocationally orientated or could be considered to be leisure or liberal activities. They are all part of the important human development that is so essential for our citizens today. The authors of the White Paper have also apparently not understood or have forgotten the definition of disadvantaged adults that was given in the Russell Report of 1973 entitled A Plan for Development. That report defined disadvantaged adults as,
"those who, on account of their limited educational background, present cultural or social environment, age, location, occupations or status, cannot easily take part in adult education as normally provided".
The Government would do well to reconsider that definition and the Russell Report.
In introducing this debate my noble friend asked whether the Secretary of State fully appreciated, when he launched the White Paper, the extent of work that is undertaken by local authorities, the Workers' Educational Association and others in the field of adult education. If the Government do not fully appreciate the extent of that work, I suggest it might be a good idea for Government officials to visit a region such as Yorkshire and study some of the provisions that are available for the local community and for the ethnic groups within that community. Perhaps the Government might then take a different look at their White Paper.
7.36 p.m.
Lord McIntosh of Haringey: My Lords, I find myself speaking, for the first time for six years, without the prop of a Dispatch Box. I have a particular interest in this subject. For the past three-and-half years I have had the privilege of being what is politely referred to as the principal of the Working Men's College in North London. That means that I am the chairman of council of that college. That college is one of the independent

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voluntary adult education institutions which is specifically referred to in the Government's White Parer entitled Education and Training for the 21st century.
The noble Lord, Lord Beloff, referred in his excellent speech to Victorian values. The noble Lord mentioned the motives of those who in Victorian times sought to extend education and training for adults. The Working Men's College does just that. It was founded in 1854 by Frederick Denison Maurice and other Christian Socialists including Tom Hughes of Tom Brown's School-Days. The distinguished teachers of the college have included Ruskin and, at a later stage, Lowes, Dickinson and E.M. Forster. For nearly 150 years the college has been keen to provide liberal education for working people. Originally the college aimed its courses at working men but since the beginning of this century working women have been educated there. Education is provided at a price that working people can afford.
The ideals of the founders of the Working Men's College are still very much before the democratically elected council which runs the college. The council is elected by teachers and pupils. The council has allowed me the privilege of being its principal. At the previous meeting of the council we discussed the Government's White Papers which are the subject of the discussion this evening. The warden, who is the real principal, was invited to write to the Department of Education and Science to express our deep concern at the way in which adult education appears to have fallen off the end of the raft of policies which the Government are proposing for education and training.
I shall discuss in a moment what the college said on this issue but, first, I wish to discuss what I have learnt personally from this involvement with adult education. I wish to consider what effect that experience should have on the policies that should be adopted. The first thing I have learned is that this rather small college of only 2,000 students is just one part of a large movement. The HMI report, which has already been referred to, makes clear that there are 3.4 million students in adult education in this country in any one year. Approximately half of them are studying in adult education institutes, but a considerable number are in further education colleges and extra-mural departments of universities.
In a study on learning and leisure by Professor Naomi Sargant, who is well known to some of my noble friends, it was calculated that 10 per cent. of the adult population was involved in adult education at the time of the questioning and a further 16 per cent. had taken part in adult education in the past three years. A further 10 per cent., while not formally enrolled in any adult education courses, were learning at home. That is 36 per cent. of the population of this country. It is a huge movement and one which ought not to be dismissed in a page and a half of a two-volume White Paper.
I have also learnt from my experience of the Working Men's College that one cannot classify courses, as the White Paper seeks to do, on the basis of the motivations of those who undertake them.
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Many examples have been given, most notably in the excellent maiden speech of my noble friend Lady Hilton, who spoke of the fact that what appear to be leisure interests of police students can very well be vocational interests. It does not matter if they are not. They are still better police officers if they continue learning, whether or not what they are learning is directly related to their present job.
One of the aspects of the White Paper, with its emphasis on 16 to 19 year-olds, which most frightens me is the danger that the vocational education which they are receiving at the age of 16 to 19 is not related to the vocation which they will follow throughout their life but only to their first job. That is the danger which we run if we take too literal a view of vocational education.
When the Working Men's College tries to classify its courses we can say that 80 per cent. of them fall within the definitions of acceptable education and training contained in paragraph 3.2 of Volume 2 of the White Paper—the killer paragraph. However, that does not tell us anything about the students who are taking those courses or why they are taking those courses. Some of them will be doing so purely for leisure; some of them will be doing so purely for vocational purposes related to their present job; some of them will be taking the courses because it will help them with jobs they wish to have in the future. Who is to say whether a class shall be included or excluded from the remit of the funding councils for further education on the basis of the motivation of the student? That does not make any sense at all.
What do we do about it? The first thing which I suggest we can do is not to make matters worse in the way that the White Paper appears to do. We could abandon paragraph 3.2, and we could do so without abandoning any of the rest of the White Paper. The Government could now say that they are thinking again about that particular aspect of the White Paper without in any way reneging on their commitment to improve vocational education and training. Nor should they, but it appears that a mistake has been made which could be corrected.
We could go further than the present emphasis on vocational education and training for 16 to 19 year-olds. In other words, we could treat the education of adults, who are a far larger part of the population, with the same seriousness as the Government now seek to treat 16 to 19 year-olds.
We could do something about the resources available for adult education. We could make it a duty on local authorities to provide adult education. As the White Paper is drafted it appears that there will be no such requirement. Most of the education post-16 will be taken away from local authorities and given to the new funding councils, on which local authorities are not to be specifically represented. It will be small wonder if a number of local authorities, hard pressed by poll tax capping or by the legitimate parsimony of their electors, say, "The rest of it has been taken away from us, so why should we provide adult education? The Government have indicated that much of it, except in disadvantaged areas, should be funded by the students themselves so we, the local authorities,

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will no longer provide it". I suggest that any legislation following the White Paper should require local authorities to provide adult education. It should require them to have a coherent plan of provision to meet the needs and demands of people in their areas. It ought to ensure that the funding of adult education is a proper part of their expenditure and recognised in their standard spending assessment.
Beyond the institutional side of adult education we ought to be moving towards a greater degree of entitlement of individuals to education throughout life. The White Paper and the training credit scheme have given a very good example. Under the training credit scheme 16 and 17 year-old school leavers are entitled to further vocational training over the next few years. It is their entitlement, which they can take where they want. Let us extend that principle later into life. My noble friend Lord Young of Dartington is carrying on his usual very effective campaign for entitlement for those over the age of 50. But why should there be a gap between the 18 and 19 year-olds, on the one hand, and the over 50s on the other? If it is too expensive to carry entitlement into the whole range of education and training—though I do not believe that it is, either in social or economic terms—there should at least be an entitlement to assessment so that people can have free access to advice about what education and training is appropriate for them.
The distinction between education and training is one which can amuse academics until kingdom come. We have to maintain the principle that we must be a learning society. It is learning which is the common element in education and training and it is learning which education for adults can provide.
7.47 p.m.
Lord Dormand of Easington: My Lords, one of the disadvantages of being the last of the Back Bench speakers is that one inevitably has to repeat a number of points. That does not disappoint me: in politics repetition for the sake of emphasis is a good thing, even more so on the subject of adult education where the Government seem a little hard of hearing. Repetition will do no harm.
When the subject of adult education has been raised in this House in recent months and only partial answers given, we have been told, "Wait for the White Paper". Now that it is with us, it is by any standards a disappointing document. Adult education has long been the Cinderella of the education service. We had some hopes that it would emerge from the shadows with the publication of the policy statement.
The first requirement is a stronger statutory basis. I am delighted that my noble friend Lord McIntosh spoke forcefully on that aspect; at one stage I thought that I would be the only speaker in the debate to say it. It is the lack of such provision which has brought about the very wide variation in adult education.
In the HMI report Education for Adults it is stated that the amount spent on general and basic adult education by individual LEAs in 1987–88 varied widely from over £10 per head to just a few pence. That is a devastating comment and demonstrates
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clearly how much needs to be done. If quality provision is to be made and enacted, the local authority standard spending assessment will need to reflect all of the various requirements of adult education.
Like many others, I express my concern about the Government's differentiation between what they call leisure interests and other courses. That is a perfect example of repetition. But it will not do any harm, particularly following upon the excellent speeches that have been made. On the surface, there appears to be a difference between flower arranging and dressmaking on the one hand and the study of the Greek philosophers and French literature on the other. But, as previous speakers have said, you can never be entirely sure as to where learning, whatever it is, can lead. It need not lead to anything; learning is a good thing and valuable in itself.
I can illustrate the point, not by referring to some of the most interesting examples that have been given, but by explaining that I spent two years as a local education authority further education organiser. It was the most satisfying period of my life. I saw people of both sexes and of all ages try all kinds of courses. And it all sprang from the spur of learning, whatever the subject.
Nor should we forget or underrate the valuable social function that some courses provide. For many people, particularly older people, they are a lifeline. The Minister will know that in some areas there has been a drastic reduction in the number of courses. In that connection I make a special plea for specific courses for adults with special educational needs. Adequate funding is essential if the courses are to have any value. The Government have made comments on that aspect of adult education, but the proof of the pudding, as with everything else connected with adult education, will be in the eating.
It is not possible to deal with the many aspects of adult education, but it must be reiterated that the rich variety of providers is of the utmost importance. Here is another repetition. Over 3.4 million adults in England and Wales enrol every year in some form of education which, for many, provides the only experience of post-school education. There should be as many doors as possible through which entrance may be obtained, particularly as the people looking for entrance come from such different circumstances and backgrounds.
I wish to concentrate on one of those providers: the long-term residential colleges. That type of education is provided by, for example, Ruskin College, Fircroft College and the other five similar colleges. The new councils will be responsible for the public funding of those colleges. In providing studies of high academic standard, they perform at least two important functions. First, they stretch the ability of their students, usually in obtaining a qualification of university standard. I am thinking of diplomas in economics, public administration and similar subjects. As the courses are usually of two years' duration, they call for sustained effort of a high order and a

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successful conclusion gives immense personal satisfaction. Secondly, the qualification is usually accepted by universities as an indication that the student can proceed to a degree course.
There is no doubt about the huge demand for that type of adult education. One proof of that is the large number of applicants for the places available in spite of the problems that long-term residential education brings to many of the people concerned, not least the fact c f being separated from their families. An advantage is that the colleges do not require formal educational qualifications for entrance which is one of the essential features of adult education. I wonder whether the Government—perhaps the Minister will comment when he replies—have ever thought of establishing more of those colleges. They are a government of supply and demand, and the demand is certainly there. I see the Minister agreeing with me by nodding his head, so perhaps we shall have some good news at the end of the debate. It would be worthwhile even from the view-point of having more and better qualified people to contribute to the country's economic well-being.
I am dealing with long-term, residential adult education. The residential aspect is very important. However, there are difficulties, not least, as I have mentioned, with married people. The Government should improve facilities for such courses on a non-residential basis. I am aware that polytechnics and some other institutions can and do provide such facilities and they should continue to do so, but I am convinced that adult education colleges provide an environment, if I can so describe it, which is better for that kind of study.
I take this opportunity to ask about a ministerial review of the purpose and function of the long-term reside initial colleges about which I have heard but not read. I understand that one conclusion is that the colleges should limit their courses to one-year access to higher education and to residential short courses for students on non-residential access courses. I hope that that is not correct. It would change completely the nature of the colleges and be a retrogressive step. Perhaps the Minister will deal with the matter when he replies.
Behind it all there is a big question to be asked: how can the factory worker, the miner, the shop assistant or the clerk afford to attend a full-time, two-year or even a one-year course? In his Statement on further and higher education in another place on 20th May, the Secretary of State said at cols. 644 to 645:
"My right hon. Friends and I are committed to open access to higher education for everyone who has the ability and willingness to take advantage of it. We shall not put financial obstacles in their way".
I am surprised to hear that coming from the present Secretary of State, but it is nice to have it on the record. However, the Government's cuts in education and other fields inevitably raise some doubts, at least in my mind. That is the Robbins principle, and many of us are under the impression that that idea was discarded a long time ago by the Government. We look forward to seeing how it will apply to the many hopefuls wishing to undertake full-time, residential adult education.
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The degree of interest, or perhaps I should say lack of interest, in adult education is shown by the Government in a mere five short paragraphs in vol. 2 of the White Paper. It does not even reflect the worry shown by the HMIs in Education for Adults which is an excellent document. One of the greatest criticisms that can be levelled at the Government is that they consistently fail to recognise that adult education students are the most highly motivated in the education system. The Government have failed to capitalise on that most potent factor and that means that they fail people as individuals and, as a result, the country as a whole.
It is evident that the struggle for a decent adult education service comparable with that of our European partners will need to continue for some time yet.
7.58 p.m.
Lord Ardwick: My Lords, I found to my horror when I arrived here this afternoon that, through a misunderstanding, my name was not on the list of speakers. I immediately saw the Whips who agreed that I should intervene at this point in the debate.
I shall speak only of one aspect of adult education; namely, the role of the Workers' Educational Association, generally known for decades as the WEA, now facing an uncertain future in the light of those White Papers on education and training. It looks as though the Government are interested only in vocational education. I was extremely interested in the remarks of the noble Lord, Lord Beloff. Although the association was founded two years after Queen Victoria's death, the WEA was one of those historic, social institutions conceived in the late Victorian age. It was very different from the mechanics' institutes. It was a quasi-religious mission to provide access for men and women without secondary education to subjects such as history, philosophy, economics and literature. It was a set of studies that not only opened people's minds, but equipped many of them to become politicians, magistrates and town councillors.
Sixty years ago I myself found it most rewarding. I decided to go straight into journalism from Manchester Grammar School—a choice regarded as deplorable and eccentric by my schoolmasters. However, at the WEA I found some distinguished scholars of Manchester University eager to educate me. The fee—like my salary in those days—was negligible. Some years later I served with A. P. Wadsworth, editor of the Manchester Guardian who in the pioneering days of the WEA had been a pupil of Tawney. I think that if it had not been for the WEA he would have finished up not as editor of the Manchester Guardian but as editor of the Rochdale Observer.
Times have changed and educational opportunities today are infinitely richer. For example, we now have the Open University and the University of the Third Age for retired people. The WEA itself is different. If you were to attend a class of literature or visual arts in Barnes, (where I live) you would find that most of the members would be well dressed, well educated and well travelled women. That could be misleading. The

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WEA throughout the country is still carrying out its traditional, splendid work among less privileged people in industrial towns and in rural areas where sometimes it is the only form of adult education available. Today, it has an enrolment of 180,000 and is giving educational support to school governors, health advisers, family counsellors, hospitalised people and prisoners. It is still the major voluntary organisation working in adult education in the UK.
There is now a fear that the creative partnership that has developed between local and central government in the voluntary sector is in danger of erosion. No longer are the classes recruited with the bait of the negligible fee which I paid all those years ago. It may cost £30 or £40 to enrol for a 20-week course. That sum covers the cost of the tutor but only one-third of the total cost. Although the WEA is and always has been a shoe-string organisation, its total income per year is £6 million, of which half comes from the Department of Education and Science. There is a fear that that £3 million could now be reduced to £2 million.
If greater resources are given to vocational training for adults—an excellent thing in itself—it could mean less for the rest of adult education, or that is how it looks from these White Papers. Restructuring of the kind the Government have in mind could mean that many adults would not be able to afford to take part in this form of education, particularly the low-paid, those without paid employment and those with families.
The WEA is urging the Government to ensure that all the money now paid by central and local government continues to be paid by the funding councils and the Scottish Education Department. I fervently hope that the Government will set all the fears of the WEA at rest and make it possible for this voluntary educational body to continue its historic work.
8.4 p.m.
Baroness Seear: My Lords, first, it gives me a great deal of pleasure to congratulate the noble Baroness, Lady Hilton, on a most informative and interesting speech. She has already begun to educate us in areas of life of which we are all too ignorant, and I hope she will continue to do so on many occasions. Secondly, I have to apologise to the House and to the noble Baroness, Lady David, that I was not here at the beginning of the debate. I was inadvertently locked into the Gallery and lacked the skills to abseil into your Lordships' House in order to be here for the beginning of the debate. However, I was rescued by the police in time to hear the latter part of noble Lady's speech. Thirdly, I have to declare an interest as I am still chairman of a London adult education centre, Morley College, where, needless to say, we are deeply worried by what we find in the White Paper. In many ways I am echoing what the noble Lord, Lord McIntosh, has said from the standpoint of a sister organisation. But he is better placed than I am because
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the Christian Socialists were good enough capitalists to fund his before they died. Lilian Baylis and her colleagues failed to make any such suitable provision.
As so many other speakers have said this evening, when we look at the White Paper we find reference to what are called "leisure activities"—a brush-off for adult education if ever there was one. What are these "leisure activities"? They include a whole variety of different arts: music, painting and sculpture, as well as philosophy, history. I could go on and on. They also include many perhaps more mundane and practical courses which are available to a wide variety of people. If these are leisure activities, then most of the universities in this country spend a great deal of their time at leisure. However, that is how the position stands at the present time.
Who are the people who are at present taking advantage of what adult education at its best has to offer in this country? One of the great attractions of adult education colleges is that they draw into their student body a wide variety of people. For example, in our choirs at Morley College from time to time we have senior officials from the Treasury (though I am not quoting anybody in particular at the moment) who presumably come to sing their hearts out in the optimistic view that Treasury officials have hearts. On the other hand, we have people who are lacking in basic literacy skills.
People come from both ends of the spectrum. The Treasury officials can afford to pay, and so can some (but by no means all) of the many people working in the City of London who on their way home attend classes from six to eight in the evening on subjects which in many cases are quite different from—though in some cases may be extensions of—their daily work. They provide a stimulus, a contrast, or a relaxation from taxing or boring jobs, as the case may be; but the classes are a very valuable complement to the way some people spend their lives during the day.
There are other people who are deeply in need of basic education. There have been indications from the Government—and it would be very useful if tonight we could have confirmation of it—that basic education for people in need of elementary numeracy and literacy skills, and English as a second language, are going to continue to be funded in those colleges. Can the noble Lord tell us whether that is so or, if it is not, whether the Government will think about it again? That group certainly has a special claim on the resources of the community not only in their own interests but because they are the people who are doomed to be members of that under-class, to which we refer all too often, if they continue to be lacking in numeracy, literacy and the basic skills to enable them to cope in our modern society and in our large cities.
Then there are other groups. When the Education Reform Act of 1988 was passing through this House, those who were connected with it must have received—as I did—some of the most moving letters that they have ever had. For example, I had a letter from a woman who said that she spent all her days and nights looking after an invalid parent. She had managed to

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arrange to get out once a week to attend a class. She wrote, "If I have to abandon that class, that is really the last straw. I cannot go on. It is a lifeline for me".
There are the old. There is an increasing number of old people in society. More and more people are retiring earlier. What do they do? Many of them have started to learn new things. Out of that has come all sorts of skills. Some have turned those new skills, learnt through adult education, into new second careers or partial careers of one kind or another. For some people new doors have been opened on aspects of life that they never contemplated before. Adult education keeps them going. The letters from pensioners are very moving and indeed revealing.
Are we to say to such people that the fees will now be sc much and it will not be possible for them to continue to attend? That is what we are saying to a great many people who exist only on the basic pension. I should be the first to agree that not all pensioners are in that position. I suppose that most of the Feers in your Lordships' House are pensioners, and very few of them exist on the basic pension. It is a different matter to have a good secondary pension. Many pensioners have nothing or practically nothing except the basic pension. If they are to pay the financial cost of classes, it will be the end of attendance for them. They are there and they have a very big demand on adult education. In the past adult education has been extremely successful in meeting those needs.
The noble Lord, Lord McIntosh, put a number of specific suggestions to the Government as to their course of action. I should like to echo his observation that it is surely time that at last adult education is included in the statutory obligations of the authority that will be responsible for it in so far as anybody is to be responsible for it. It has always been a problem that adult education has not been a statutory obligation. If that could be done, to even quite a small extent, it would make a great deal of difference.
Most important of all is for the Government to recognise that such "leisure" activities are of the greatest importance educationally and that they warrant payment support out of public funds. That is the oily way to proceed. In a variety of ways other countries subsidise the arts and music a great deal more than we do. We are a nation of philistines. This Government have been called a philistine government. They have not been falsely so-called. Let them show that they are not as philistine as most people think they are.
Running through the White Paper is the message that so far as the Government are concerned education is about preparing people for jobs. Preparing people for jobs is extremely important. I have spoken of it many times in your Lordships' House. But let us not forget that that is not the primary purpose of education. Education is to turn out people who are capable of thinking for themselves, criticising governments, criticising society and developing the kind of approach and understanding that a civilised society requires. That is what education is about primarily. Skill training is a part of it but it is the smaller part. If the Government will admit that, they
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will do something to restore their reputation and refute the accusation that they are philistine. If the Government destroy adult education, the kindest thing that we can say is: you know not what you do.
Baroness Blackstone: My Lords, like other speakers in this debate I congratulate my noble friend Baroness Hilton of Eggardon on an excellent maiden speech. We very much look forward to hearing her on frequent occasions in the future. I am extremely glad that her policeman managed to rescue the noble Baroness, Lady Seear, who was locked in the Gallery. If the noble Baroness had been to one of the excellent adult education classes in gymnastics—defined no doubt as leisure—she might have been able to abseil into the Chamber and it would have had vocational relevance and advantage for her.
I must declare an interest, as have a number of other speakers. As the Master of Birkbeck College, I am responsible for a very wide range of adult education courses in the London and Greater London areas. Indeed, the largest department of extramural studies in the country is under the auspices of Birkbeck. We serve some 19,000 students studying a wide range of courses. The noble Lord, Lord Beloff, referred to Victorian values in relation to adult education and my noble friend Lord Ardwick referred to the WEA having been set up just at the end of the Victorian period. But Birkbeck goes back to the pre-Victorian period. It was set up in 1823 as the London Mechanics' Institute, as a place where men who work by day could study by night. We are still doing it 180 years later, and long may that be the case.
This has been an excellent debate in which every speaker has commented on how much adult education is valued and how important it is in our society. While it is undoubtedly the case that there is an urgent need to reform and improve 16 to 19 year-old education, the focus of the White Paper on improving education and indeed training for 16 to 19 year-olds has obscured the Government's plans—if indeed they have any—for adult education, by which I mean education of all kinds for mature adults over the age of 21.
What saddens me greatly is that the emphasis on initial education for 16 to 19 year-old students has resulted in a serious failure to consider the importance of continuing education—lifelong education—which is often of its nature intermittent and fragmented, but none the worse for that. Nonetheless, it is highly significant for the education and social wellbeing of the country.
As my noble friend Lord McIntosh said, it is a huge movement and one that we should value. For example, the proportion of mature students aged over 21 in further education colleges is now very substantial. One would not have thought it from reading the White Paper. Those students engage in education for a very wide variety of motives, which may be professional, practical, recreational, or academic. Moreover, on any one course in adult education there will be students in the class who have all those different motives all mixed together. It may

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well be that during the course of such a class their motives will shift from initially being recreational to later being either academic or vocational.
In their main White Paper proposals the Government wish to secure equal status for academic and purely vocational studies. I do not wish in any way to disagree or dispute the approach. In many ways it is long overdue. But it is strangely at odds with the new division that is being introduced. Courses for adults which have a predetermined outcome—NVCQS, GCSEs, A levels, access to higher education, access to higher levels of further education, basic skills, literacy and numeracy and English for speakers of other languages—are to be funded by the new councils; those courses which relate to so-called leisure interests are expected to be self-financing. As many other speakers in this debate have said, that is a totally unrealistic and unworkable separation.
It is extremely interesting to note that those companies to which my noble friend Lady David referred which have started major programmes of education for their workforce are not making this philistine and unworkable distinction. Perhaps I should declare another interest. I am on the board of the Rover Learning Business which provides opportunities for people from the shop floor to senior executives to register for a variety of courses. Such absurd distinctions are not made in that regard.
The study pathways followed by adult students are enormously varied. In my own institution, Birkbeck, there are many students who started by taking general interest courses—which the Government would presumably define as recreational or leisure—in local education authority institutes before going on to an extramural certificate or diploma and on to a degree level course. How do the Government propose to maintain such pathways in the future if those courses are all to be self-financing? That will mean that relatively high fees are to be charged which many people will not be able to afford to pay.
There are many forms of public service and role-related education which do not appear to fit within the framework of the White Paper; for example, parent education, or education for carers of the disabled. There are many such examples. All those activities improve the quality of life of the nation. Can we be assured that those education opportunities which are so important to many people will be supported under future arrangements? Many other examples have been given by noble Lords.
The White Paper mentions the possibility of LEAs financing otherwise non-funded activities in socially disadvantaged areas. However, will the standard spending assessments of the poorer LEAs be adjusted to take account of that? Will the Minister give us an answer to that question? Although there is recognition of the social value of leisure education in advanced areas in vol. 2 of the White Paper, if local authorities are eventually divested of the powers and funding to provide further and adult education it is unclear how they will be able to provide those subsidies. In many
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ways why should they? They are no longer providing the service. I should like clarification on how such a discretionary system might work.
My noble friend Lord McIntosh of Haringey suggested that adult education should be left with the local education authorities and that there should be a statutory requirement by local authorities to provide adult education. Other noble Lords referred to that. I agree with that proposal.
I suggest that the restrictive categorisation of fundable courses must be reconsidered when detailed regulations are worked out. Emphasis on the post-school age group should not have an inadvertently damaging effect on the educational opportunities of much older age groups. That appears to be the net effect of the White Paper.
Many other points in the White Paper are disturbingly vague. Some institutions, such as the four central London colleges currently funded through the London Residuary Body and the WEA, are completely unclear about their future role when funded by the new council. My noble friend Lord McIntosh, who is the principal of one of them, will confirm that. It appears that those institutions are not to be funded to perform what is, and has been for many years, their primary role—to provide general cultural education. I hope that the Minister will be able to provide clarification, if not today in the very near future.
Adult education can be maintained only if there are buildings in which classes can be held. Have the Government taken into account the implications for adult education of the new funding and organisational arrangements? There is not much sign of that in the White Paper. Appropriate capital resources must be provided for the education of adults. The provision of accommodation is a central, not a peripheral, matter. In many areas of the country, adult education takes place in school premises. There is anxiety that adequate facilities will not remain available if LEAs cease to have any responsibility for further education and the schools become increasingly independent under LMS arrangements. It is vital that that aspect of the proposed changes is given serious attention.
Adult educational opportunities are an essential component in a democratic society. It would be short sighted and very foolish if a substantial part of our educational heritage were to be destroyed by inadvertence—perhaps I am being generous to the Government—or worse, by an attempt to achieve rather small economies. I believe that spending on non-vocational adult education is less than 0.5 per cent. of total education expenditure. It is now nearly 20 years since the Russell Report recommended that expenditure on adult education should rise from 1 per cent. to 2 per cent.
Surely in a civilised society we should be able to spend at least that amount on helping adults to continue to learn. Learning should take place over people's entire lives. It should not be confined to the years between the age of three, or perhaps five, through to the early 20s. Staff working in adult education are at present confused and anxious about the White Paper's proposals. They fear that the many

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years spent in building up an adult education system within this country will he thrown away. I agree with my noble friend Lord Dormand of Easington about the importance of having a specialist adult education environment rather than assuming that all adult education can continue in FE colleges, schools or wherever.
The noble Lord, Lord Beloff, referred to teaching in the blackout. We kept our adult education classes going throughout the Blitz and later in the war. Surely this Government will not wish to jeopardise teaching now during a period of peace and relative affluence. I regret to say that the White Paper is an opportunity lost to make a major commitment to adult education, to the need to expand it, and to build on the expertise available. If we want a better educated and better trained society, there are few aspects that provide better value for money than the voluntary network of evening classes around the country.
I hope that on receiving the many concerned responses to the consultation—and, like my noble friend Lady David, I have seen some of them—the Government will think again. Let us hope that they will relent and take a less narrow, less instrumental and less philistine view in their approach to adult education. Full cost fees will lead to the collapse of many of the so-called leisure courses around the country. When that occurs, it will not be the privileged middle-classes which lose out but some of the less advantaged members of the community to whom the noble Baroness, Lady Seear, referred—the elderly, those who missed out at school and young mothers seeking the opportunity to escape the relentless demands of small children. Many speakers today have registered their anxieties about the White Paper. The Government must reconsider their position and I hope will do so urgently.
8.30 p m.
Viscount Davidson: My Lords, the House will be grateful to the noble Baroness, Lady David, for asking this Unstarred Question on the important subject of adult education. However, I must say that at times it has sec med more like a two-and-a-half hour debate on a White Paper. The House will also be grateful to her for providing an opportunity for the noble Baroness, Lady Hilton of Eggardon, to make her maiden speech. It was not only an excellent speech but a valuable contribution to a debate, and it was based on her experience as a provider and a receiver of adult education.
This has been a fascinating debate, and I am sure that my right honourable friend the Secretary of State will read the Official Report with great interest. In my reply, I propose first to explain the Government's plans for adult education, and then I shall do my best to answer the specific points that have been raised if I have not already done so.
I must tell the noble Earl, Lord Longford, that my grandfather was closely involved with the Polytechnic of Central London in the days when it was called the Regent Street Polytechnic. Like the noble Earl, I am pleased to learn that under the proposals in the White
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Paper it will be allowed to call itself a university when the necessary legislation is passed. I am sure that my grandfather would also have been delighted.
In explaining our plans I think that it would be useful to place our new policy in the context of the many opportunities in education which are already available to adults and which the Government have been instrumental in providing. Opportunities for adults in both further and higher education have never been so numerous or varied. The evidence is impressive. Figures for November 1989 indicate that some two-thirds of the 1.8 million enrolments in further education establishments were by people aged 19 or over. Between 1979 and 1988 the numbers of mature home first-year students in higher education increased by 55 per cent. from 131,000 to 203,000.
The facts speak for themselves. Adults are occupying their place in the education system with increasing confidence. I shall explain how this confidence has been built up. It is partly by increasing flexibility of provision in FE institutions through schemes such as accumulated credit transfer. This enables students to gain exemption from study for the qualifications that they already have. It also introduces greater flexibility by allowing students to put together programmes to meet their own particular needs.
The Council for National Academic Awards has taken the lead in this field through its credit accumulation and transfer scheme, which was launched in March 1986. The CNAA is now proposing to set up a national framework for the recognition of general academic credit. This would enable locally determined credit ratings to achieve wider general currency. It would be used by students, educational institutions, employers and professional bodies.
The DES has also been prominent in this area in its funding for the educational counselling and credit transfer information service developed at a cost of nearly £5 million to provide a national computerised information service about opportunities in further and higher education and to assist counselling and careers guidance services.
There has also been a significant increase in the number of access courses which represent an important route into higher education for mature entrants without traditional qualifications. There are now, for example, something like 600 access courses throughout the country compared with some 130 in 1984. So a demand is clearly being met. Although a relatively recent development, they have matured rapidly. The early courses were in the social sciences and humanities—traditional disciplines for the mature student. The provision has rapidly spread to other areas, including law and business studies. Twenty per cent. of access course provision is now in mathematics and science-based disciplines.
Both the DES and the Department of Employment have supported research and development work aimed at improving access opportunities. We have sought to safeguard standards and establish the currency of access courses through support for a national access courses recognition scheme. I must

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mention the Open University which has done an unprecedented amount in bringing university education to a large number of adults with a wide range of qualifications. The Open University is teaching some 75,000 undergraduate students, 40 per cent. of whom lack standard entry qualifications, and last year awarded a degree to its 100,000th graduate.
Those in employment are increasingly taking opportunities to update their skills and acquire new ones. The PICKUP programme, supported by the Government, has been highly successful in encouraging colleges, polytechnics and universities to improve and increase their provision to meet the training needs of the adult workforce. Enrolments to PICK UP courses have been increasing by an average of 20 per cent. a year during the past five years.
The further education and higher education White Papers build on these achievements. The HE White Paper, for instance, lays great emphasis on the importance of both access and of flexible learning opportunities. But I want today to pay special attention to further education where there are exciting opportunities to provide an even better deal for adults than exists at the moment. The recent White Paper Education and Training for the 21st century signals the Government's firm commitment to the further education of adults. It outlines our clear goal—to secure a highly-skilled and well-qualified adult population.
A substantial amount of money is already available to LEAs for the further education of adults. This year's local authority financial settlement allows for local education authorities to spend some £150 million on adult education centres. In addition, the £1.7 billion to be spent on further and higher education colleges includes their provision for adults. A great deal is being achieved. But I must admit that provision remains patchy. Our aim is to ensure that resources are concentrated on priority areas of provision and that those kinds of education are uniformly available.
We propose to achieve this by channeling resources through new further education funding councils in England and Wales into crucial areas of education which will be of lasting, worthwhile and practical benefit to adults in their jobs, certainly and as citizens too. Let me make it plain that the Government are concerned about securing the future of both vocational and non-vocational education for adults. The duty will remain to secure adequate provision of all kinds of further education; but in future it will be divided between the funding councils and the LEAs.
On the council side a very wide range of provision will be supported. It will embrace courses leading to both academic and vocational qualifications. It will also include education leading to the acquisition of basic skills (that is, literacy and numeracy); to proficiency in English as a second language; and provision which meets special educational needs. I hope that answers the anxieties expressed by the noble Baroness, Lady Seear.
We believe that it is crucial to give every encouragement to adults aspiring to the higher levels of further education and to higher education. The
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funding councils will in addition therefore support courses giving access at all significant levels. Meanwhile, it is important to emphasise that LEAs will retain the duty to secure the provision of other kinds of further education. This will include recreational and leisure classes; for instance photography, philosophy, holiday Spanish and the rest. We know that these are much valued by local communities and by people of all ages. Their-costs are already met largely from fees and we believe that that should continue to be the case.
The White Paper recognises the case for local education authorities subsidising such classes, particularly in disadvantaged areas, for those who cannot afford the fees. But we do not believe that it is unreasonable to expect most people to pay for education which is intended to meet leisure purposes. In many places adult students are already paying all or most of the cost of such classes. The classes need not be expensive.
Many people fear that our proposals mean the end of LEA education services for adults; that we want to put a stop to a long tradition of courses in creative writing and motor car maintenance. Let us be quite clear that this is not the case. As I have said, local education authorities will retain their duty to secure the provision of that part of further education for adults which will not fall to the duty of the new funding councils. Accordingly the range of duties in relation to further education which is already on the statute book—it is in Section 41 of the 1944 Education Act as amended—will not be diminished.
So there need be no uncertainties about the continuation of recreational and leisure classes. Where there is demand there will be a range of bodies—colleges and voluntary bodies as well as local education authorities—prepared to put on such classes in places readily accessible to local communities. We also propose to extend the range of providers by making it easier for schools to run classes on their own initiative. School governing bodies will be able to admit adults to sixth forms and provide day and evening classes for adults on school premises.
The newly independent further education colleges will be responsible for providing the education for adults which the new funding councils have a duty to secure. They may provide it themselves or they may buy it in from other providers; whichever best suits the local circumstances. Often the education may best come from a local community college, for example, or from a voluntary body. What we want to see, and what we expect to see, is the best use being made of the available resources in each area in the interests of further education opportunities for adults.
We recognise that certain colleges have a special role to play in the new framework. The new funding councils will therefore support directly the seven long-term residential colleges for adults: Ruskin, Plater, Hillcroft, Fircroft, Northern College, the Co-operative College and Coleg Harlech in Wales. The Council for England will also support the four inner London colleges—Morley College, the City Lit,

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the Mary Ward Centre and the Working Men's College. Furthermore, the councils will provide direct funding to the Workers' Educational Association.
The opportunities for adults in Scotland will be equally exciting. The Government's policies are outlined in the White Paper Access and Opportunity—a Strategy for Education and Training. Funding of FE colleges will be made directly from the Scottish Office education department from 1st April 1993. Funding will cover a similar range of activities to that supported by the funding councils for England and Wales.
I shall now reply to the specific points raised in the debar e. The noble Baroness, Lady David, asked if LEAs; would be able to bid to the funding councils for funds for their own institutions. That is not intended. LEAs; will have their own source of funds through the revenue support grant. The noble Baroness quoted a number of cases in Hounslow where adults were progressing from one class to another; for example, to a GCSE in Spanish. The White Paper makes it clear that the funding councils will have a duty to secure provision which will enable adults to progress to higher levels of further education.
The noble Baroness, Lady David, and my noble friend Lord Beloff asked about the imposition of VAT on adult education classes. The Government are aware of that issue and will be looking at it carefully before legislation is brought forward. My noble friend Lord Beloff also asked about response to the White Paper. I assure him that the responses will be carefully considered and analysed before the Government bring forward a Bill. My noble friend mentioned classes for adults; in Hackney. The Government are not proposing to take away those classes. It is now for LEAs to put on those classes and subsidise them so far as they wish. LEAs will retain the duty to secure the provision of those classes and a power to subsidise them so far as they wish.
Baroness Seear: My Lords, I am sorry to interrupt the noble Viscount, but this is an extremely important matter. He used the word "duty". Does that mean that now LEAs will have a statutory obligation? Is that how we should interpret "duty"? I do not know how we shall get the money out of Lambeth, but that is another matter.
Viscount Davidson: My Lords, that is another matter. We must discuss the duty further when we debate the legislation. At present that is the word I use and I can go no further than that.
I welcome the general support which my noble friend Lady Cumberlege gave to the White Paper's proposals. I assure her that the Government have no intention of erecting hurdles for those returning to learn. She spoke also of LEAs taking particular account of the bereaved and socially deprived in subsidising courses for adults. I am sure that that will be done.
The noble Earl, Lord Longford, said that lines should not be drawn. However, lines are always drawn. LEAs decide now which courses they will subsidise and for which courses they will charge higher fees. They decide to whom they will grant
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concessionary fees and to whom they will not. It is not realistic to suppose that all education can be treated in the same way without some priorities being given.
Baroness Blackstone: My Lords, although it is the case that lines must be drawn in certain respects, I do not believe that any local education authority has drawn the kind of lines which are proposed in the White Paper between on the one hand those courses which are defined as leisure or recreational courses and other courses. That is the anxiety which many speakers in this debate have addressed. Perhaps the noble Viscount will elaborate further on that and will reveal whether he is happy for that distinction to continue to be made.
Viscount Davidson: My Lords, with respect, this is an Unstarred Question. The noble Baroness's question is more suited to a debate on the White Paper. I have been asked to give the Government's plans for the future of adult education which I am attempting to do.
Baroness Blackstone: My Lords, I must protest. This is an Unstarred Question about the Government's plans for the future of adult education. This is a central issue to that Question. Therefore, I believe that the House deserves a reply.
Viscount Davidson: My Lords, I am sorry but my understanding of an Unstarred Question is different from that of the noble Baroness.
The noble Baroness, Lady Lockwood, and the noble Lord, Lord Dormand of Easington, asked about the future of long term residential colleges. Following a review of the long term residential colleges, they have been asked to concentrate on access to higher education for the disadvantaged. This is not a cost-cutting exercise. We believe that on education grounds the courses at some of these colleges need to be modified. They need bringing up to date. The Colleges should be well-equipped to provide intensive access courses for those who missed out in early life.
In general, access courses need to last for only one year. LEA access courses usually last for one year, and they are non-residential and less intensive than the courses at the LTRCs.
The noble Baroness, Lady Lockwood, spoke about courses which would be of social value in inner city Bradford. The White Paper makes it clear that LEAs will continue to support courses of social value. There will be no question of the ethnic minorities in Bradford losing educational opportunities.
The noble Lord, Lord McIntosh of Haringey, expressed worries about the future of adult education under the LEAs. I should make it clear to the noble Lord that LEAs will have a duty—and I repeat the word "duty"—to secure adequate provision of those parts of further education for adults which are not the duty of the funding councils.
The noble Lord, Lord Dormand of Easington, asked about provision for adults with special educational needs. The funding councils will have a statutory duty to secure adequate provision of further education for adults with special educational needs.

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They will need to ensure that colleges have adequate resources to make such provision. The noble Lord referred also to access to higher education and the Robbins principle. I reaffirm the Government's commitment to that principle covering access to higher education. That was made clear in the HE White Paper which also stated the Government's continuing commitment to awarding higher education a fair share of public expenditure.
The noble Lord, Lord Ardwick, expressed worries about the future of the Workers' Educational Association. The Government are anxious to secure the future of the WEA. The Council for England will take over some £2 million per year now being paid to the WEA by the Department of Education and
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Science. Local authorities will keep the sums of over £1 million transferred to them for the WEA and we expect them to continue to fund the WEA.
I can tell the noble Baroness, Lady Blackstone, that LEAs will continue to have recognition in their standard spending assessments for adult education. That will be weighted towards disadvantaged areas. The Government will consider carefully the funding of both the new council sector and what is left with LEAs.
We have set our priorities for the further education of adults and we shall set in place the arrangements needed to give them effect. I am confident that under those new arrangements adults will have more educational opportunities than ever before.
House adjourned at thirteen minutes before nine o'clock.

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