Sitting of 11 June 1991

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

    Labour Statistics
    Mr. Martyn Jones: To ask the Secretary of State for Employment if he will make a statement about the current level of unemployment.
    The Secretary of State for Employment (Mr.Michael Howard): Unemployment in the United Kingdom, measured on the consistent seasonally adjusted series, was 2,175,000 in April 1991. It remains the case that there are now 1·3 million more jobs in Britain than in 1979 and over 3 million more jobs than in 1983. Job prospects will again improve following the resumption of economic growth.
    Mr. Jones: The Minister's statement will not offer any hope to the quarter more people in my constituency who have become unemployed since last year. Does he agree with the Chancellor of the Exchequer that such levels of unemployment are a price well worth paying for the faint or, should I say, vague signs of recovery that only his right hon. Friend discerns in the economy?
    Mr. Howard: The point made by my right hon. Friend the Chancellor was that it is essential to overcome inflation if we are to restore competitiveness to our economy and create the conditions in which jobs can once again grow. If the hon. Gentleman is as concerned about unemployment as he claims to be, will he talk to his colleagues on the Opposition Front Bench and get them to abandon their job destruction package, which will destroy so many jobs in Britain?
    Mr. Charles Wardle: Would not the greatest threat to jobs be to let inflation go unchecked or to impose a national minimum wage or, worse still, to do both'? Is not that precisely what would result from the wild promises made repeatedly by the Opposition?
    Mr. Howard: My hon. Friend is absolutely right. The Opposition cling to that absurd policy which is denounced on both sides of the House and which would undoubtedly destroy jobs on a devastating scale; yet they claim to be concerned about the fate of the unemployed.
    Mr. Wallace: With an estimated 5,500 compulsory or voluntary liquidations in the first quarter of this year in England and Wales, can the Secretary of State give us some idea how many jobs have been lost in small businesses this year? As banks are allegedly charging
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    interest rates well above the base rate, what advice does the Minister with responsibility for small businesses give to the banks?
    Mr. Howard: The hon. Gentleman will recognise that one would need to take net figures for job creation if one were considering small businesses separately. The latest figures that we have show that during last year over 800 more businesses a week were starting up than were going out of business. It is typical of Opposition Members that they are keen to talk about businesses closing down, but they consistently fail to recognise the new businesses that are starting up and being created every day in Britain.
    Mr. Ian Bruce: Does my right hon. and learned Friend agree that the minimum wages policy which exists, perhaps in name only, throughout the European Community and America is allowed to exist only because the levels of wages under it are so low and that the entry of the East Germans, whose attempt to raise wages artificially has created enormous unemployment, shows that if the Opposition were to try to impose their policy it would undoubtedly create enormous unemployment and dislocation in the labour market?
    Mr. Howard: I hope that my hon. Friend will forgive me if I take this opportunity of correcting a fabrication that is being put about by the Opposition. It certainly is not the case that a statutory minimum wage exists within the EC. That is far from the truth. A statutory minimum wage exists in only four countries in the Community. In those countries, the points made by my hon. Friend are absolutely right: the minimum wage is honoured more in the breach than in the observance. If Labour Members are interested in reducing unemployment, they would do well to recognise that in socialist France and Spain, which have a statutory minimum wage policy, unemployment is far higher than in this country.
    Mr. Blair: Will the Secretary of State confirm that this country has not only the fastest rising unemployment of any nation in Europe and in the western world, but falling output and investment and it is also cutting training for the unemployed? When will that unique combination of economic failure and political indifference end? When will the Government start to restore the training budget for the unemployed by introducing the work experience programme that they need and taking responsibility for the unemployment that they are creating?
    Mr. Howard: The hon. Gentleman knows that only a short time ago I announced an increase of £120 million in resources for employment training. It is beyond dispute—the hon. Gentleman consistently fails to face up to this—that had Labour been in office over the past few years, unemployment would be much higher than it is today. Were Labour to gain office again in the future, unemployment would be very much higher than it is today. That is why the British people will never make the mistake of electing Labour to government.
    Mr. David Martin: Is my right hon. and learned Friend aware that employment in Portsmouth is much better than it was at the time of the last general election and that the policies of private enterprise are the best to carry forward employment prospects? Will my right hon. and learned Friend keep emphasising that Labour's job-destroying

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    policies are the last thing that the people of Portsmouth want and that every previous Labour Government have left office with higher unemployment than they inherited?
    Mr. Howard: I agree entirely with my hon. Friend. It is true that every Labour Government has left behind higher unemployment than when they took office. My hon. Friend's comments about the fall in unemployment in Portsmouth since the last general election apply across the whole country.[Interruption.]
    Several Hon. Members rose—
    Mr. Speaker: Order. Let us move into calmer waters.

    Rotherham TEC
    Mr. Hardy: To ask the Secretary of State for Employment how many people were employed in training agencies and how many were engaged in full-time courses on 1 February in the area served by Rotherham training and enterprise councils; how many people are now so employed; and what is the change in the number of full-time training places since February.
    The Parliamentary Under-Secretary of State for Employment (Mr. Robert Jackson): On 1 February 1991, there were 2,977 people in training in the area served by Rotherham training and enterprise council. On 30 April 1991, there were 2,392 people in training. The number of people employed by training providers is a matter for the providers themselves.
    Mr. Hardy: A moment, ago the Secretary of State used the word "devastating". Does the Minister accept that areas that have been economically devastated during the past decade, such as South Yorkshire, should benefit from improved and more meaningful training, rather than suffer the cuts and curbs that have been inflicted on them in recent months? Does the Minister accept that we must prepare for the day when we have an intelligent Government who will encourage and revive industrial investment?
    Mr. Jackson: I agree with the hon. Gentleman that we must do everything that we can to help unemployed people. That may involve training, but also other measures, such as helping them to find work through building their confidence and motivation, and so on. The Government are providing a wide range of opportunities, which are leading to 100,000 people being placed in work every month.

    Training Credits
    Mr. Hind: To ask the Secretary of State for Employment if he will make a statement on the measures that he has taken to implement his proposals for training credits for 16 to 19-year-olds.
    Mr. Howard: The first 11 pilot schemes started in April and are offering training credits to around 45,000 young people—about 10 per cent. of the 16 and 17-year-olds leaving full-time education this year. The White Paper presented to the House on 20 May set out our aim that within the lifetime of the next Parliament, every 16 and 17-year-old leaving full-time education will have the offer
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    of a place on a training scheme. I shall shortly be issuing a prospectus inviting bids from TECs to run a second round of schemes to operate from April 1993.
    Mr. Hind: When my right hon. and learned Friend visits west Lancashire and Skelmersdale on Friday, will he point out to the employers whom he will meet that unemployment in west Lancashire is 37୰5 per cent. lower than it was at the last general election? Will he point out also the advantages of his training credit scheme, the flexibility that it offers 16 and 17-year-olds, and the overall improvement in skills that it will offer to the work force in my constituency and in the north-west of England?
    Mr. Howard: I look forward greatly to visiting my hon. Friend's constituency on Friday. I shall certainly take the opportunity of drawing the attention of employers there to everything that he said—although I expect them to know all about it already, as they are probably far too sensible to be taken in by the constant misrepresentations of the Labour party.
    Mr. Madden: Will the Secretary of State visit Bradford, which suffers from soaring unemployment and has been known for years as "low-pay city"? Will he take my advice and refrain from lecturing the unemployed about the inequities of the minimum wage? What they would like is an explanation of why the right hon. and learned Gentleman has cut the city's training budget by £2 million, why training workshops stand idle and why training providers have been made redundant. That is what the unemployed want to hear; they do not want third-rate lectures about the minimum wage.
    Mr. Howard: I have paid many enjoyable visits to Bradford in the past and look forward to visiting it again soon. Bradford has a particularly effective training and enterprise council, which is addressing its training needs in a particularly effective way. I hope that the hon. Gentleman will want to associate himself fully with its excellent work.
    Mrs. Currie: Is my right hon. and learned Friend aware that this year nearly 60 per cent. of 16-year-olds are staying on at school or going to college, which is what they should be doing if we are to catch up with our international competitors? For the minority of youngsters who still leave school at the earliest possible opportunity, my right hon. and learned Friend's training credits proposals are flexible and sensible and will enable those young people to make proper choices about the training that they take up.
    Mr. Howard: I am grateful to my hon. Friend for her support. I entirely agree with her comments.
    The training credits scheme—which is a world first for this country—epitomises the difference between the Government and the Labour party. We believe in giving young people opportunities and placing buying power in their hands; Labour believes in the dead hand of compulsion and that is the only policy that it has to offer.

    Disabled People
    Mr. Ashley: To ask the Secretary of State for Employment what are the latest steps that he has taken to improve the employment prospects of disabled people.
    Mr. Jackson: My Department has continued to develop the wide range of mainstream and specialist services that

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    can help people with disabilities to get and keep employment. From this April, we have given unemployed people with disabilities priority access to four of our main employment and training programmes. In April, we also announced changes to improve the effectiveness of our specialist disability services and our local and national advisory bodies.
    Mr. Ashley: Notwithstanding those steps, is the Minister aware that disabled people suffer from serious discrimination in the jobs market, although they are entitled to the same protection under the law as has been enjoyed by ethnic minorities and women for the past 15 years? The United States has introduced wide-ranging and effective anti-discrimination legislation; when will we follow suit?
    Mr. Jackson: We have attempted to deal with that problem through, for example, the quota system, which has been in place for some 40 years but has not proved particularly effective.
    The Department does not believe that the introduction of the legislation described by the right hon. Gentleman would be effective in combating discrimination, but we are doing a great deal to help people with disabilities. In 1989–90, the most recent year for which we have all the figures, about £400 million was spent to assist people with disabilities. That is a considerable increase on the spending of past years.
    Mr. Hannam: I congratulate my hon. Friend on the increased opportunities that are being given to training and enterprise councils for training the disabled. Is he aware that the main colleges that train people with disabilities for industry—colleges such as St. Loyes in Exeter—rely increasingly on TECs to provide the necessary input? Will he give his full support to the pilot scheme that has enabled some regional TECs to come together to ensure that that input is provided?
    Mr. Jackson: My hon. Friend is absolutely right. It is very important for TECs and colleges—and, Indeed, others representing the interests of disabled people—to work closely together. It is interesting that 11 per cent. of the total spend on employment training carried out by the TECs goes to people with disabilities.
    Mr. Irvine: Can my hon. Friend confirm that nowadays every disabled 16 and 17-year-old youngster has an opportunity to take up a training place? Can he also confirm that such opportunities were not available to disabled youngsters when Labour was last in power?
    Mr. Jackson: My hon. Friend is absolutely right. Disabled young people in the age group to which he referred benefit from the youth training guarantee, which was not available when the Labour party was in office. Furthermore, youth training was not available then, either. Only 6,000 young people had training places in 1979, compared with hundreds of thousands today.

    Labour Statistics
    Mr. Ron Brown: To ask the Secretary of State for Employment how many people under the age of 25 years are currently unemployed; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Employment (Mr. Eric Forth): In April 1991 there were
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    662,078 unemployed claimants under 25. That compares with 1,025,939 in April 1987 and 1,286,182 in January 1985. Latest comparable figures from the European Commission show that United Kingdom unemployment among the under-25s, at 12·3 per cent., is lower than the European Community average of 16·4 per cent.
    Mr. Brown: Is not it true these days that many young people leave school with no job, no hope and no future? The reasons are obvious. In my constituency, for example, Ferranti is closing Bellesk house, Ranks Hovis McDougall is closing the Caledonia mills, and SAI, under Government pressure, is closing its fertiliser plant. That is a disgrace. Would not it be more appropriate if the Government got on their bike and allowed a socialist Government to take over? That is what is being demanded from outside.
    Mr. Forth: I shall leave the hon. Gentleman to decide whether a socialist Government is on offer to the country. He may wish to discuss that with his hon. Friends.
    The hon. Gentleman mentioned his constituency; he would want me to remind the House that when he was last elected, in 1987, 6,635 people were out of work there. He will rejoice with me that today only 4,300 people are out of work in his constituency. I hope that the hon. Gentleman will join me in celebrating that fact and that instead of coming to the House and running his constituency down he will come here with tales of how successful the employers in his constituency can be and say that he will help them to continue that success.
    Sir Robert McCrindle: As white-collar unemployment. not least among the under-25s, appears to be rising, arguably faster than unemployment in other sectors of the economy, will my hon. Friend reconsider some of the training programmes and initiatives—especially, perhaps, some of the advertising by his Department to aid the jobless? There are clear signs that the advertisements seem rather more clearly directed at those seeking jobs in manufacturing industry, whereas the fastest rise in unemployment is in evidence in the service sector, not least in London and the south-east.
    Mr. Forth: I regret that my hon. Friend has got that impression. We have tried to take great care to ensure that advertising by the Department covers the full spread of activities. The answer to my hon. Friend's reasonable request is that the network of training and enterprise councils is almost complete throughout the land and that we are giving TECs the flexibility to identify local training needs in their communities and to tailor training programmes appropriately. Both the Secretary of State and the Department give that aspect great emphasis and my recent contact with TECs has given me enormous confidence that they can deliver a sensitively tailored local package of training for each area. I hope that the TEC in my hon. Friend's area is doing the same—I am sure that it is.
    Mr. McLeish: Why do young people continue to bear the brunt of the Government's incompetence and mismanagement of the economy? Will the Minister tell the House why in the rest of Europe unemployment among the under-25s has been rising at 1 per cent. over the past year, whereas in Britain there has been a spectacular 32 per cent. increase? Will the party of mass unemployment tell us

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    now when it will take that issue seriously, or does it once again agree with the Chancellor of the Exchequer, who said that unemployment was a price well worth paying?
    Mr. Forth: Let us take as an agreed starting point the figure that I gave in my original answer, which was that unemployment among the under-25s in this country is 12·3 per cent. I must tell the hon. Gentleman that, so far from having 12·3 per cent., socialist Spain—a country with which he will no doubt feel an affinity—has 29·9 per cent. unemployment among the under-25s. In Italy, which was run by a coalition Government when I last looked, the figure is 29·4 per cent. In France, a country often cited by the Opposition—at least when it suits them—the figure is 18·7 per cent. Our record may not be perfect, but the record of the continental countries is a jolly sight worse.
    Mr. Rowe: My hon. Friend is far too young to remember what it was like when there was last a Labour Government, but can he remind us from his records what was the usual practice for the majority of 16 and 17-year-olds when the previous Labour Government were in power and what is now on offer for them?
    Mr. Forth: My hon. Friend makes a very good point. I am glad that he reminded me of what happened under the last Labour Government—although I shall have to take his word for it, for reasons that he gave. The Labour Government abandoned young people to the dole queue, whereas this Government have introduced positive and imaginative schemes to ensure that no 16, 17 and 18-year-old need be unemployed except from his own choice. That shows more clearly than anything the difference between this Government and the Opposition in terms of attitudes and policies.

    Training Places
    Mr. Win Griffiths: To ask the Secretary of State for Employment how many training places are available under (a) training and enterprise councils, (b) other Government programmes and (c) local authority programmes; and how many were available under Government and local authority programmes in 1989 and 1990 in the United Kingdom.
    Mr. Howard: The information is not available in the form requested. In March 1991, 547,000 people were in training provided through TECs and local enterprise companies. The corresponding figures for March 1990 and March 1989 were 554,000 and 553,000 respectively.
    Mr. Griffiths: I am sorry that the Minister cannot give me the information in the form in which I requested it. Nevertheless, his reply shows that there has been a reduction in training places. Has there been a massive reduction in TEC-provided training places for the disabled? That has certainly happened with Mid Glamorgan TEC and I have the impression that the disabled have generally been forgotten by the TECs.
    Mr. Howard: I assure the hon. Gentleman that that is not the case. I suspect that he may be confusing training providers with those who benefit from training. It is true that there have been particular difficulties in Mid Glamorgan, arising from the fact that many voluntary providers of training places have failed to achieve
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    approved training organisation status, but I assure the hon. Gentleman that the needs of the disabled are fully taken into account by the TECs.
    Mr. Paice: Does my right hon. and learned Friend agree that one of the most important questions to be taken into account in considering training places is the number of people available for them? Is not it true that we face a substantial decline in the number of young people of school-leaving age and just above, added to which there has been a welcome but substantial increase in the number of young people staying on at school and undertaking further education, and that that is a perfectly understandable reason why there should be less need to have so many training places available for people in that age group?
    Mr. Howard: My hon. Friend is absolutely right. We maintain a guarantee of a youth training place to every young school leaver aged 16 or 17 who is unemployed and we shall continue to honour that guarantee.
    Mr. Leighton: Can the Secretary of State tell us the name of a single chairman of a training and enterprise council or of a single member of a TEC board who supports the cuts that he made in his Department's training budget? At a time when trainers are being made redundant right across the country, why is he sabotaging the TEC movement?
    Mr. Howard: The hon. Gentleman knows very well that the TEC movement is going from strength to strength and is far from being sabotaged. Members of TEC boards would take the hon. Gentleman's criticisms very ill indeed. He knows, as Chairman of the Employment Select Committee, that, as a result of surveys that we carried out, we carefully considered the provision needed. We have adjusted the balance of training places and other provision, and this year we are providing up to 100,000 extra opportunities for unemployed people in job clubs and under the job interview guarantee scheme.
    Mr. Batiste: When evaluating the more than 500,000 training places that are available today, will my right hon. and learned Friend recall how many such training places were available in 1979 under the Labour Government?
    Mr. Howard: I can give my hon. Friend the figures. When the Labour party left office in 1979, 6,000 young people were receiving training; the comparable figure today is 350,000

    Disabled People
    Mr. Tom Clarke: To ask the Secretary of State for Employment what steps are being taken by his Department to encourage training initiatives for people with disabilities.
    Mr. Howard: Training and enterprise councils and local enterprise companies in Scotland are required to set out in their business plans how they intend to provide training for people with special needs, including those with disabilities. These plans form the basis of their contract. From April this year, people with disabilities are being given higher priority than before by being included in the aim group for employment training.
    Mr. Clarke: Will the Secretary of State meet the Royal Association for Disability and Rehabilitation, which will provide him with concrete evidence of how young disabled people are being denied their training rights? Will he inform the training and enterprise councils that they have a contractual responsibility to deal with these matters, and that they should meet it? Will he discourage his ministerial colleague from complaining about the quota system as Departments have an appalling record, and his own is no exception?
    Mr. Howard: I will not answer the last part of the hon. Gentleman's question because the Government's position on the quota was explained fully a few moments ago by my hon. Friend the Under-Secretary of State. My hon. Friend or I would be happy to meet the organisation to which the hon. Gentleman referred. We are happy to discuss these matters with it, and I can confirm that training and enterprise councils are contractually bound to make available training places for people with special needs, including people with disabilities.
    Mr. Bill Walker: Will my right hon. and learned Friend confirm that the Government introduced the legislation that ensures that all 16 and 17-year-olds, including disabled youngsters, are entitled to training, and that that legislation did not exist under the Labour Government? It is humbug to pretend otherwise.
    Mr. Howard: My hon. Friend is right. There was no guarantee for young people, disabled or otherwise, when the Labour party was in office. It is no use Opposition Members parroting from sedentary positions matters relating to unemployment at that time, because we know very well that Ministers in the previous Labour Government wanted to introduce schemes such as we have introduced but did not have the resources to do so because of the abject failure of their economic policy.

    Labour Statistics
    Miss Lestor: To ask the Secretary of State for Employment if he will give the unemployment figures for Eccles for (a) April 1990 and (b) April 1991.
    Mr. Jackson: On the unadjusted basis, there were 3,609 unemployed claimants in the Eccles parliamentary constituency in April 1991, compared with 2,919 in April 1990.
    Miss Lestor: May I remind the Minister that every time the Government change the method by which they calculate unemployment and knock hundreds of people off the register, it does not alter the reality that the people who have been knocked off the register are still unemployed? Furthermore, will he recognise that we do not have a minimum wage in Eccles, in the travel-to-work area of Salford or in the north-west, but we have a growing number of unemployed people, particularly among those under 25? Does he think that that is more likely to be explained by a lack of investment and a lack of training than by anything else?
    Mr. Jackson: As the hon. Lady referred to the minimum wage, she must say whether it would help to improve employment prospects in Eccles.

    Equal Pay
    Mr. Ashton: To ask the Secretary of State for Employment how many women now have equal pay with men.
    Mr. Jackson: The information is not available. Between 1970 and 1990 the differential between men's and women's full-time average hourly earnings narrowed significantly. This demonstrates that the labour market, reinforced by equal pay legislation, is working to the advantage of women.
    Mr. Ashton: Is the Minister aware that when Labour introduced equal pay legislation in 1974, every Tory said that it would cost I million women's jobs and that it would decimate the retail industry and catering? It did not. Is he aware that the minimum wage of £3·40 an hour proposed by Labour would not either? McDonald's would sell just as many hamburgers after the minimum wage is introduced as it does now. The only difference would be that McDonald's employees would receive a damned good pay rise, but there would be the same number of jobs.
    Mr. Jackson: I am sure that the progress that has been made towards equal pay for men and women has occurred because of the operation of the labour market and of demographics rather than legislative intervention. Intervention in the form of a minimum wage as proposed by the hon. Gentleman would certainly reduce the availability of jobs, which would be especially damaging to the interests of women and of disabled workers.
    Miss Emma Nicholson: Does the Minister recognise that women do not wish to be patronised by the Labour party and that the Labour party's commitment to women and to minimum wage levels would better be demonstrated if it gave women minimal opportunity in the trade union movement?
    Mr. Jackson: My hon. Friend is absolutely right.
    Mr. Tony Lloyd: Does the Minister agree with the assessment of the Equal Opportunities Commission that our present equal pay laws are a paradise for lawyers, but hell for women? Will the Government continue with their present line of hypocrisy and incompetence when dealing with equal pay? Most of the gains were made in the early days of the equal pay legislation under the previous Labour Government. Do the Government intend to respond positively to the Equal Opportunities Commission's demand for tougher laws on equal pay and if so, will they do so soon?
    Mr. Jackson: I have discussed these issues with the Equal Opportunities Commission. It is difficult to find a way around the problem of establishing in law what is equal value for equal pay and of applying it in particular cases. It requires extensive advice from experts, which draws out the proceedings. I must say that we have succeeded in improving the position of women workers. We have the second highest proportion of women at work in the European Community and there are more women working in Britain—about 12 million—than in any other country in the European Community. That suggests that we have been doing a good job for women.

    Education and Training
    Mr. Arbuthnot: To ask the Secretary of State for Employment what representations he has received on the White Paper "Education and Training for the 21st Century"; and if he will make a statement.
    Mr. Howard: The White Paper has had a very positive reception. Training and enterprise councils and local education authorities have welcomed our proposals and are keen to contribute to the delivery of education and the development of their responsibilities in this area.
    My Department is making rapid progress in implementing those of the White Paper's proposals for which we are responsible. I shall be sending a prospectus to TECs next week inviting bids to run the 1993 training credit schemes. A prospectus inviting bids for new compacts will follow. Progress is also being made in taking forward partnerships between TECs and LEAs for supervising the careers service.
    Mr. Arbuthnot: Is not it correct that training credits will give our young people choice and incentives in training rather than the incentive to stay on the dole offered by the Opposition? The Opposition's policies would reduce the number of jobs, reduce choice and reduce the incentives to train.
    Mr. Howard: My hon. Friend is absolutely right. He is clear about the difference between the parties on that subject. I wish that the same could be said for the hon. Member for Sedgefield (Mr. Blair) who, when questioning me on the White Paper, said that he would see how the training credits progressed, although he knew perfectly well that training credits were entirely inconsistent with the policy of compulsion pursued by the Opposition.
    Mr. Fatchett: Is not it clear that despite the very expensive public relations launch of the White Paper, it contained no figures on the cost of introducing the measures proposed? Does not that make it clear that the Government, who have already made cuts in training at a time of rising unemployment, have neither the political nor the economic will to ensure that this country secures the best educated and best trained work force in western Europe? The Government need to consider not their White Paper, but their record. If trainers do that, they will realise that they have no future to look forward to.
    Mr. Howard: The hon. Gentleman could not be more wrong. When the White Paper was introduced, I gave the additional cost of the training credit proposal—of £14 million and £35 million—in the first two years of its operation. The hon. Gentleman simply does not know what he is talking about. I had hoped that he would rise to clarify the confusion that exists in the mind of his hon. Friend the Member for Sedgefield (Mr. Blair) on these matters.
    Mr. Simon Coombs: Does my right hon. and learned Friend agree that those who opposed the technical and vocational education initiative, who fought against youth training and who opposed the introduction of the youth training scheme are utterly discredited on any question of education and training? Will he give the Labour party one last chance to come into the 20th century and to recognise the contribution that all those schemes have made to training for young people?
    Mr. Howard: I am not optimistic that the Labour party would take that opportunity. The Labour party has opposed tooth and nail every training initiative that the Government have introduced over the past 12 years. Labour has no credentials to talk about training.

    Labour Statistics
    Mr. Haynes: To ask the Secretary of State for Employment if he will list the unemployment figures for 1979–80 and 1989–90.
    Mr. Howard: On the consistent seasonally adjusted basis, United Kingdom unemployment averaged 1,072,500 in the financial year 1979–80 compared with 1,702,200 in 1989–90.
    Mr. Haynes: Does not the Secretary of State feel ashamed of himself? Is he aware that a Secretary of State not far from him is on his way, according to the newspapers? The whole House will agree that it is time he went.
    Mr. Howard: I hope that the hon. Gentleman, who has long experience of these matters and who has a particular contribution to make, will at least have a word with his right hon. and hon. Friends on the Front Bench and tell them how damaging their proposals for a minimum wage would be. The hon. Gentleman knows that Barbara Castle pointed out in 1969 how devastating such proposals would be. Why cannot he have a word with his hon. Friends and get them to see sense?

    Training and Enterprise Councils
    Mr. Brazier: To ask the Secretary of State for Employment what measures he is taking to increase the role of training and enterprise councils in strengthening the ties between employers and education.
    Mr. Howard: Training and enterprise councils already have a major role in strengthening local ties between employers and education. The White Paper "Education and Training for the 21st Century" creates new opportunities to extend those ties through the extension of training credits, the expansion of compacts and involvement in the careers service, in partnership with local education authorities.
    Mr. Brazier: Will my right hon. and learned Friend join me in sending good wishes to the Canterbury Industrial Consultative Council whose representatives are having lunch today in the House of Commons and several of whose members are active with the new Kent training and enterprise council? Does he agree that the TECs provide the opportunity to bring training closer to the marketplace and to ensure that training in each county is exactly the training needed by local employers and by local industry?
    Mr. Howard: I entirely agree with my hon. Friend. The Kent TEC is one of the 11 pilot schemes for the training credit and that is having a revolutionary effect on the attitude of young people in our county and in other counties.

    Labour Statistics
    Mr. John Evans: To ask the Secretary of State for Employment what is the current level of unemployment in the United Kingdom and the north-west region of England.
    Mr. Jackson: In April 1991, the seasonally adjusted level of unemployment in the United Kingdom was 2,175,100, compared with 275,300 in the north-west region.
    Mr. Evans: Will the huge further increase in unemployment to be announced later this week demonstrate that the Government's economic strategy is working and that unemployment is a worthwhile price to pay to get inflation down?
    Mr. Jackson: The hon. Gentleman might be interested to know that unemployment in his constituency of St. Helens is 34 per cent. lower than it was at the time of the last election.

    Minimum Wage
    Mr. Norris: To ask the Secretary of State for Employment whether he has received any representations from the Fabian Society concerning proposals for a national minimum wage.
    Mr. Howard: I have not received any representations from the Fabian Society but I have a copy of its recent pamphlet "Making a Minimum Wage Work". The Fabians quote an independent estimate that the Labour party's policy for a national minimum wage could destroy up to 880,000 jobs.
    Mr. Norris: As it is now well known that a policy of minimum wages is likely to destroy jobs in their hundreds of thousands, will my right hon. and learned Friend take steps to abolish the remainder of the wages councils, which do nothing to protect employment and everything to destroy jobs?
    Mr. Howard: I have already made it clear that wages councils do not have a permanent place in our system. As to the minimum wage, I want to be fair to the Labour party. I am prepared to make it this offer. If it does not accept our estimates of how many jobs a minimum wage would cost, it can let me have its estimate of how many jobs it would cost. I am prepared to have its estimates examined by my Department's officials. We will publish the results and let the country know them so that everyone knows just how devastatingly damaging the Labour party's proposals would be.

  PRIME MINISTER

    Engagements
    Mr. John Greenway: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister (Mr. John Major): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Greenway: Will my right hon. Friend join me in congratulating the England cricket team on the marvelous
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    win in Yorkshire yesterday? Does he equally welcome the sharp fall in wage increases announced yesterday and in producer prices announced today? Does not that demonstrate that his Government's policies against inflation have what it takes to build a long and successful innings while the whole country knows that under Labour the economy would be for ever trapped leg before wicket?
    The Prime Minister: There are some dangerous metaphors there. I certainly welcome the producer price figures. They are extremely good. The fall in the underlying, as well as the headline, rate of inflation is very welcome news indeed. It shows clearly that we are now well on target for the Budget forecast of a 4 per cent. inflation rate this autumn. It is also encouraging that wage bargaining is beginning to reflect falling inflation and the realities of exchange rate mechanism membership. That is very good indeed for industries' competitiveness. On the first part of my hon. Friend's question, I am happy to congratulate the England team, but, in doing so, I remind him and everyone that the West Indies is a formidable side and there is a long way to go yet.
    Mr. Kinnock: Will the Prime Minister now be asking his right hon. Friend the Member for Finchley (Mrs. Thatcher) to step down as President of the Bruges group?
    The Prime Minister: That is a matter for my right hon. Friend the Member for Finchley (Mrs. Thatcher).
    Mr. Kinnock: Is it not apparent from today's events and yesterday's events that what we are seeing is not Britain at the heart of Europe but deep division at the heart of the Conservative party? [Interruption.]
    Mr. Speaker: Order.
    Mr. Kinnock: Is it not the Prime Minister's duty to clear up the confusion in the ranks of his own Government, which can do nothing but damage Britain's interests?
    The Prime Minister: I am not quite sure what the right hon. Member for Bethnal Green and Stepney (Mr. Shore) might think about the degree of unity that the right hon. Gentleman suggests is on his Benches. We are negotiating in the intergovernmental conferences on exactly the same basis as that on which we first started. The position on economic and monetary union has not changed in any way. I have set out repeatedly the circumstances and conditions under which we are negotiating.
    Mr. Kinnock: Can the Prime Minister tell us why 11 finance Ministers and a couple of Commissioners in a meeting yesterday with the Chancellor got entirely the wrong end of the stick?
    The Prime Minister: I can say categorically to the right hon. Gentleman, as I did a moment ago, that there is no change whatever in our negotiating position on Europe. I have repeatedly set that out over recent months.
    Mr. Adley: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Adley: In welcoming the current ministerial visit to the Lebanon and in recognising the help that the Syiian and Iranian Governments are providing on the hostage problem, may I ask my right hon. Friend whether he

    783
    recognises an additional ingredient in the conundrum, namely, the holding by the Israeli Government of Sheikh Obeid and other Lebanese hostages? Will he please make known on behalf of his Government to Mr. Shamir that that ingredient is a problem, and that we expect the Israelis to be as helpful as possible in resolving it?
    The Prime Minister: I agree with my hon. Friend, and can tell him that the Prime Minister of Israel is aware of my views on that matter. It is wrong for any country to take and hold hostages, and I have communicated that view to Israel on more than one occasion. Our objective is to see the release as soon as possible of all hostages, and we count on any Government with influence to use it for the return of hostages. They should be back with their families where they belong.
    Mr. Beith: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Beith: How will the Prime Minister respond to the demand from those of his supporters who say that he should veto a single currency here and now? Will he back a single currency when it comes before this Parliament for decision, or is he scared to say?
    The Prime Minister: There is no veto as such. There is a requirement that treaty changes can come into effect only if agreed by all member states and by their Parliaments. I have repeatedly said that we will not agree to any treaty on EMU which does not safeguard the interests of this country. I am happy to reiterate that.
    Sir Michael Marshall: Will my right hon. Friend take this opportunity to welcome the visit to the House of Britain's first astronaut, Helen Sharman? Does he agree that her courage and professionalism is a matter of national pride? Will he take this opportunity to urge British industry and science to join with the Government in the careful and continued look at further opportunities for international space collaboration?
    The Prime Minister: I look forward to meeting Miss Sharman shortly and to congratulating her on her courage and on her remarkable achievement. I happily agree with my hon. Friend's other comments.
    Sir David Steel: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Sir David Steel: Is the Prime Minister aware that there are some creatures who, when removed from their settled natural habitat, can turn dangerously unpredictable in their behaviour [Interruption.]
    Mr. Speaker: Order.
    Sir David Steel: Since allowing them to wander freely abroad has caused some difficulty—[Interruption.]
    Mr. Speaker: Order. Interruptions take up a great deal of time.
    Sir David Steel: —has the right hon. Gentleman any proposals to extend the requirements for muzzles and leashes to the right hon. Member for Finchley (Mrs. Thatcher)?
    The Prime Minister: As the right hon. Gentleman knows, every hon. Member has the right and the duty to speak their mind, and that is entirely proper.
    Mr. Tony Banks: She never said that.
    The Prime Minister: That is entirely proper, and it is a freedom which I propose to exercise myself.
    Mr. Cyril D. Townsend: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Townsend: Now that Mr. James Baker's middle east peace mission has fallen into serious trouble, and given that the United Kingdom was the first sponsor of United Nations' resolution 242, would not this be a good moment for the United Kingdom and its European Community partners to start playing a far more positive role in the search for a lasting peace settlement to the Arab-Israeli dispute?
    The Prime Minister: My hon. Friend makes an important point. We have played an important role in that process for many years, and it is right that, in the forthcoming peace conference, the European Community should play a leading role. I welcome the recent Israeli agreement that the European Community presidency should participate in the conference that will be held soon. That is a welcome advance.
    Mr. George Howarth: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Howarth: If the Prime Minister is so confident about the Government's proposal on health service trusts, why is it that the Mersey regional health authority is keeping its expensively produced business plans for the second wave of opt-outs a secret? It will not even release them to Members of Parliament. Why can we not have all this information out in the open, have a proper debate on the subject and then a ballot? Let us find out what the people of Merseyside think.
    The Prime Minister: I believe that there will be many opportunities for Mersey debates in the weeks to come and I look forward to those with great relish. Every reform of the health service has been controversial, but, in due course, each has proved to be irreversible and in the interests of the health service. Our recently introduced changes will follow the same course.
    Mr. Norris: Will my right hon. Friend intervene in the local government review to look at a local authority in Britain where people wait eight weeks to have their bins emptied, where thousands of council houses lie empty and where kids have to run the gauntlet of a picket line to get to school? My right hon. Friend will know that this is not fiction; it is Labour Liverpool under so-called moderate Labour control. If this is how the Labour party runs a city, how will it run a country?
    The Prime Minister: I strongly suspect that the whole country will have observed how Liverpool has been run and drawn appropriate conclusions from that about how a Labour Government would work on a larger scale. Whether the Labour council is far left or moderate, it has done that great city no favours, just as a Labour Government would do this country no favours.
    Mr. McKelvey: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. McKelvey: Will the Prime Minister give some serious consideration to the plight of two brave but unfortunate young men in my constituency, Walter and Ian Baird, of the same family, who are 21 and 16-years-old and who have contracted AIDS through blood transfusion? Although a settlement of over £45,000 for the pair of them was agreed over two months ago, they have yet to be paid. Why is it that 10 per cent. of the payment seems to be held up in Scotland?
    The Prime Minister: If the hon. Gentleman will give me precise details of the cases that he has in mind, I shall be happy to examine them and respond to them.
    Mr. David Evans: To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Evans: Will my right hon. Friend make sure that there are enough funds in the English Heritage budget to ensure that a certain building in the Walworth road is preserved, so that my children and grandchildren can not only read about the demise of socialism but can go and see where the last of the Bolsheviks are working, led by a leader who was a co-producer and director of a play called "Promises, promises"?
    The Prime Minister: My hon. Friend makes his point as only he can.
    Dr. Owen: Will the Prime Minister confirm that he is as determined to strengthen and enlarge the European Community as he is to prevent the emergence of a united states of Europe? Will he tell the European Community that positively negotiating and participating in those
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    negotiations does not in any way surrender a final decision on the overall package to protect the best interests of this country, and that while the devil, as always, is in the detail, so can be the benefits, and that it will probably be December before we can make an overall decision on the package that is negotiated?
    The Prime Minister: The right hon. Gentleman is entirely correct in his latter point and I strongly support his remarks about a wider Europe, which I believe should involve not only the EFTA states hut, in due course, the eastern European states. I agree with him that negotiations on the two conferences are of vital importance to the future of this country. Whatever decisions are made may have a profound effect on our trade and well-being. I have set out often enough to the House that the economic case for monetary union has not been made, that we cannot accept the imposition of a single currency and that any proposed changes to the treaty of Rome—a move to a single currency—would require a separate decision by the United Kingdom Government and Parliament—[Interruption.] If Opposition Members do not wish to hear about the important negotiating position of the Government, that is a matter for them. Against that background, I shall negotiate with our European partners for what I believe to be right for this country. It will then be for this House to decide at the conclusion of those negotiations whether it is content to accept them.

    BILL PRESENTED
      BRITISH NATIONALITY (AMENDMENT)
      Mr. Keith Vaz, supported by Mr. Max Madden, presented a Bill to amend Schedule 1 to the British Nationality Act 1981 so as to remove, for applicants aged over 60, the requirement that an applicant should have knowledge of the English, Welsh or Scottish Gaelic language: And the same was read the First time; and ordered to be read a Second time on Friday 5 July and to be printed. [Bill 174.]

      STATUTORY INSTRUMENTS, &c.
      Ordered,
      That the draft Criminal Justice (International Co-operation) Act 1990 (Enforcement of Overseas Forfeiture Orders) (Northern Ireland) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Wood.]

    Points of Order
    Mr. Graham Riddick: On a point of order, Mr. Speaker. You will recall that, a week or two ago, a number of Opposition Members raised points of order suggesting that questions concerning national health service hospital trusts could not be tabled in the Table Office. At that time I expressed concern about that. The immediate response from the Table Office to me was that that was inaccurate. Since then, I have written to the Principal Clerk of the Table Office, who has replied to me saying, and I quote—
    Mr. Speaker: Order. We do not quote in the Chamber correspondence that we have had with Officers of the House.
    Mr. Riddick: I accept that, Mr. Speaker, so to paraphrase the reply that I received, he confirms that the tabling of questions about NHS trusts is entirely in order and that there has been no question—[Interruption.]—of them not being in order. My point of order is to ask you what can be done to stop entirely bogus and inaccurate points of order being raised by Opposition Members for purely party political reasons. Is it not clearly an abuse of this House—
    Mr. Speaker: Order. I think I can help the hon. Member. It is not just the correspondence that he has had with the Clerk. The Leader of the House himself confirmed it, so I do not know what is the reason for his point of order for me.
    Mr. Riddick: I was asking you, Mr. Speaker—
    Mr. Speaker: Order. The incident took place a few weeks ago, and it was cleared up absolutely by the Leader of the House.
    Mr. Riddick: I am grateful to you, Mr. Speaker, for pointing that out. Following those points of order, I received a letter from a constituent saying that it was disgraceful that questions about NHS trusts could not be tabled and answered in the House. In other words, Opposition Members successfully communicated to people outside—[Interruption.]—inaccurate information through points of order.
    Mr. Speaker: Order. The hon. Member is robust enough to reply to his constituent in straight terms to put the records straight.
    Several Hon. Members rose—
    Mr. Speaker: Order. I remind the House that we sat until 3 o'clock this morning and are likely to have to do the same again tonight. It is all very well for hon. Members to raise points of order at this time, it being prime time from their point of view, but it takes time away from other hon. Members later in the evening.
    Mr. Patrick Nicholls: On a point of order, Mr. Speaker.
    Mr. Speaker: I hope that it is very brief.
    Mr. Nicholls: The point of order concerns the accuracy of Hansard. Early-day motion No. 934 concerns the deplorable behaviour of the hon. Member for Blackburn (Mr. Straw), but the record shows that it is signed by 11 hon. Members, including one member of the Labour
    788
    Whips Office. Although I fully accept that the hon. Member for Glasgow, Pollock (Mr. Dunnachie) is entitled to sign that excellent motion—we must all be grateful to him for doing so—the difficulty is that, of the 11 signatories, only seven are printed. If one member of the Labour party is prepared to sign it, it would be useful to know which other members would be prepared to do so. If all the names were printed, we could find out how many members of the Labour party agree with the motion. We could also discover which members are so careless that they do not even know what they are signing.
    Mr. Speaker: Again, I do not know quite what the hon. Gentleman's point of order is for me. Perhaps he was a Minister when the rules regarding the printing of names on early-day motions were changed. It was done to save costs and time, but the names are available in the Table Office, if required.
    Mr. John McAllion: On a point of order, Mr. Speaker. May I draw your attention to a practice whereby Ministers refer parliamentary questions to be answered by the chief executive of executive agencies? That ensures that the answers do not appear in Hansard, thereby denying the right of hon. Members to read those answers in Hansard. It also denies members of the public who read Hansard in public libraries throughout the country the right to see answers to questions that have been tabled by hon. Members. Such a practice is a serious erosion of parliamentary democracy and I seek your guidance, Mr. Speaker, on what you can do about it.
    Mr. Speaker: That is old hat, too. [HON. MEMBERS: "No".] Well, it has been going on for the best part of a year, and if the hon. Gentleman objects to it—I understand his feelings—he should draw the matter to the attention of the Leader of the House at Business Questions. I cannot deal with the matter.
    Mr. Robert G. Hughes: On a point of order, Mr. Speaker.
    Mr. Speaker: Well, I hope that it is legitimate.
    Mr. Hughes: Naturally, Mr. Speaker. As you know, a by-election is pending. I seek your guidance on the rules of the House about the moving of the writ for the by-election. It has become plain over the past few days in Liverpool, Walton that the Labour party has been split in two. I seek your guidance on which of the warring factions of the Labour party should seek to move the writ for the by-election: the real or the genuine Labour party.
    Mr. Speaker: I have been in the House for long enough —a little longer than the hon. Gentleman—to know that there are divisions on both sides of the House. They are not a matter for me. I consider that every hon. Member in his own right should be able to put the views of his constituents. I could not adjudicate on such a matter.
    We must move on to the ten-minute rule Bill.
    Mr. David Winnick: Let us have some entertainment.
    Mr. Speaker: Well, the television cameras will soon be switched off.
    Mr. John McWilliam: Further to the point of order of my hon. Friend the Member for Dundee, East (Mr. McAllion), Mr. Speaker. The decision about

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    questions being transferred to the chief executives of executive agencies is taken politically by the Government. We were informed by letter—we were not asked. It has given rise to a practice that denies to the House rights that it previously had, without debate in the Chamber or changes to Standing Orders. You, Mr. Speaker, could rule on this matter, or at least consider it, and direct Ministers to answer questions when they are put. We do not care
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    whether the chief executive writes to the Minister to give him the answer, as long as it is printed in Hansard so that we can all read it.
    Mr. Speaker: I understand that point, but I do not have any more to say about it than I have already said to the hon. Member for Dundee, East (Mr. McAllion). The matter should be taken up with the Leader of the House, perhaps most usefully through the usual channels, of which the hon. Gentleman was once a part.

Cohabitation (Contract Enforcement)
3.33 pm
Mrs. Teresa Gorman: I beg to move,
That leave be given to bring in a Bill to make provision for the enforcement of contracts entered into between cohabiting partners; and for connected purposes.
The Bill seeks to encourage people who share a home or property to make proper contractual arrangements about their joint possessions. It sets out the ownership rights to prevent family quarrels and bad feelings if the relationship breaks down, and gives guidance to the courts when dealing with such cases.
In recent times, there has been a considerable change of behaviour in society as many more people set up homes together without making any formal arrangements. They may be two friends who decide to share a house together. They may be elderly people who decide to give up their own homes to move in with younger relatives and who invest all their savings in that new home or they may be young couples. Nowadays, almost 1 million young couples aged between 18 and 40 live together without any formal arrangements about the property that they jointly use and enjoy. Those relationships are particularly important, as they may involve children who may not be protected if those relationships break down.
Friends can fall out, granny can die or a partnership may break up. In those circumstances, all hell often breaks loose, because there is a dispute about who owns what. There is no specific body of law to protect people in those circumstances, even if a contract between the parties exists. For historical reasons, the courts have been loth to recognise the intention behind such agreements even if they exist. That attitude harks back to the time when a man and woman who lived together without a formal marriage were deemed to be living in sin.
Couples who live together may do so through choice, but sometimes they do so because one of them cannot obtain a divorce from a previous partner. Such relationships can break down, as do marriages, but whereas both partners are much better protected under matrimonial law and are usually entitled to equal shares in the joint property, there is no such protection for couples who are simply living together.
It is a commonly held belief that, after living together for some time, people acquire rights as the common-law wife or husband. That is true in Scotland, but it is not true of England and Wales, and has not been for the past 230 years. People do not automatically acquire rights to maintenance or, in the case of the death of one of the partners, to property that was held jointly during that relationship. A woman left in such circumstances often has no right even to remain in what is the family home to care for the children of the relationship. There is a case for the Government to introduce legislation to make matters clear.
In a recent case, a woman who had helped to build up a successful business in partnership with the man with whom she had lived for 10 years was told by a judge that she had no rights to the value of that business because, early on in the relationship, she had refused marriage. In those circumstances, the judge decided that she could not claim any ownership of the business that had been built up.
792
Another couple lived together for 30 years without being married, because the man was married to a Catholic who would not divorce him. That couple had six children and they built up a home. On his death, however, the woman found that she had no rights to that home or to any other property. All the property was claimed by the man's wife.
Such cases cause a great deal of unhappiness. People often seek the help of lawyers, but they are unable to give it, as there is no body of case law from which the lawyer can draw. He therefore has to fall back on the property rights involved. One is told that, if one has a receipt for the house, the three-piece suite, the kitchen cabinet or whatever, one can claim for it. Otherwise, it is usually deemed to be the property of one partner, and not necessarily the partner who paid for it.
Three young women solicitors of Coventry have done a great deal of work on this subject. They have written an excellent book to explain the problem called "Living Together". Those who are interested may well obtain a copy. The authors outline many sad cases. There was a case in my constituency of two policemen who were killed while working as divers. One was married to his partner, so his wife had full rights to pensions and so on. In the other case, the relationship was not a formal marriage so the woman got nothing—no pension, no house, nothing of what she was entitled to.
Increasingly these days, elderly people give up their own homes and go to live with younger relatives. They may put a lot of money into these buildings—perhaps buying a new and larger house—but without a will or a contract, their estate can make no claim on the property that they brought into the relationship. That is another good reason for encouraging contracts of this sort.
In other cases, young people sell their homes and go to live with grandad or granny, but they find that they cannot get on together and that the money that they put into repairs or modernisation is completely lost to them, and they can get nothing of it back.
All these events need regularisation by new legislation. The courts need guidance so that judges dealing with these cases know what Parliament expects of them. Young women especially go into these relationships starry-eyed and come out baggy-eyed and the worse for wear. It is time Parliament considered the matter seriously and introduced some sanity and guidance to the law. There is an urgent need for the Government to give such guidance to the public and the courts.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Teresa Gorman, Mr. Bob Dunn, Mr. Barry Field, Mr. Ivan Lawrence, Mr. David Evans, Mr. Henry Bellingham, Mr. David Shaw, Mr. Andrew McKay and Mr. Jonathan Aitken.

Cohabitation (Contract Enforcement)
  COHABITATION (CONTRACT ENFORCEMENT)
  Mrs. Teresa Gorman accordingly presented a Bill to make provision for the enforcement of contracts entered into between cohabiting partners; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 21 June and to be printed. [Bill 175.]
  Orders of the Day

    Local Government Finance and Valuation Bill
    Considered in Committee.
    [MR. HAROLD WALKER in the Chair.]

    Local Government Finance and Valuation Bill
      Clause 1

        REPEAL OF SECTION WI OF LOCAL GOVERNMENT FINANCE ACT 1988
        3.46 pm
        Mr. David Blunkett: I beg to move amendment No. 12, in page 1, line 6, at beginning insert—
        `( ) This section shall have effect for the period between Royal Assent and a date specified by an Order made by the Secretary of State, such date to be not later than the date of implementation of a scheme of local taxation which shall be based on the occupation of property.'.
        The Chairman of Ways and Means (Mr. Harold Walker): With this it will be convenient to discuss also the following amendments: No 15, in page 1, line 9, leave out from 'shall' to end and insert
        `have no effect during the period specified in accordance with subsection () above'.
        No. 19, in page 1, line 11, leave out from 'also' to end and insert
        'have no effect during the period specified in accordance with subsection () above'.
        No. 20, in page 1, line 17, after 'subsections', insert (),'.
        No. 38, in page 1, line 19, leave out '1992' and insert `1993'
        No. 57, in clause 7, page 7, line 2, leave out 'two' and insert '12'.
        Mr. Blunkett: First, with the indulgence of the Committee, I should like to add the thanks of my hon. Friend the Member for Sheffield, Heeley (Mr. Michie) and of all elected Sheffield Members to the thanks offered to Helen Sharman by the Prime Minister earlier this afternoon for her presence in the House. All of us from Sheffield and across Britain wish her well and congratulate her on her tremendous feat on behalf of the country. [HON. MEMBERS: "Hear, hear."]
        Today and tomorrow, spent in Committee, should and could have been used not to centralise power still further in the hands of the Government but to bring immediate relief to poll tax payers across Britain. We could have used this time to ensure that the poll tax disappeared by 1 April next year and that people who have suffered under it could breathe a sigh of relief knowing that a property tax would be reinstated. Instead, this afternoon, we have a petty little measure which, as can be seen from the Order Paper, seeks to cap all authorities in Britain irrespective of their size or spending power.
        The amendment seeks to limit the range of capping powers to ensure that the proposed future property tax —hopefully, our fair rates—is introduced as quickly as possible. If there is not a general election between now and this date 12 months hence we will have sat through the winter on the proposed council tax. If we are to see a future
        794
        in which people are free to raise and spend money sensibly, it is clear that capping should go at the earliest opportunity.
        The Bill seeks to do the exact opposite—to spread capping to those authorities with budgets of less than £15 million per year, irrespective of their circumstances and the method by which those resources are raised and spent.
        It will be recalled that, originally, capping was not to apply at all under the poll tax. In its original draft, it was conceived to be unnecessary, because the poll tax would bring accountability to every local authority in Britain. It was said that the poll tax would bring accountability by ensuring that the individual paying a flat rate tax would be made aware of exactly what money was being raised and spent in the locality—that it would not be spread across the generality of electors, but would be concentrated on each individual. As a consequence, they would feel the pain—I use the word advisedly—that came from spending on public services, and they would remove elected representatives who were minded to raise and spend money on the very public services that Conservative Members praise one day and do their best to destroy the next.
        When it was discovered that the Prime Minister of the day was minded to keep hold of the bureaucratic central controls which capping had brought from 1985, when it was realised that there were electors throughout the country of all shades of local authority political opinion who would want to spend money on services rather than destroy them, the Government had a change of heart.
        The right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who now occupies the post of Secretary of State for unemployment, decided in a speech on 28 October 1987 that capping would be necessary. But, in introducing the idea that, after all, central controls and bureaucratic power would be needed, he said:
        "Let me make it clear that we are only taking such powers because of the appalling record of a dozen or so authorities in managing their affairs under the present system. I have every confidence that the pressures of accountability will in general deal with the problem of overspending by local councils."
        He went on to say:
        "The new system will be short, sharp and effective."
        It has certainly been short and it has certainly been sharp, but no one in the Chamber would describe it as having been effective. The poll tax has not been effective either in its intentions or in terms of bringing to heel the desires of local people to have their own services.
        Mr. Clive Soley: It got rid of the previous Prime Minister.
        Mr. Blunkett: We must be grateful for small mercies.
        On 17 March 1988, in Standing Committee E dealing with the Local Government Finance Bill—I remember it well, as will my hon. Friend the Member for Hammersmith (Mr. Soley), because we used to sit until 2 am listening to the verbiage that poured out in favour of the poll tax, and it came as a great relief to me shortly after 17 March to enter hospital with pneumonia and have the relief of being at death's doorstep take away the necessity of sitting through the proceedings on the poll tax Bill—the right hon. and learned Member for Folkestone and Hythe, who was one of a number of people who were responsible for the poll tax and all its works who are still in the Prime Minister's Cabinet, said:
        "Its effect is to remove from the field of selection the large majority of authorities, whose total spending is relatively

        795
        insignificant. The community charges levied by those authorities will generally make up only a fraction of total local community charge when the precept of other authorities is taken into account. From the point of view, therefore, of protecting local charge payers, it seems unnecessary to keep such authorities in the field of charge limitation."—[Official Report, Standing Committee E, 17 March 1988; c. 1491.]
        That is about to be overturned by the Bill.
        I realise that Ministers' statements are not worth the paper that they are written on, but it is opportune to remind the right hon. and hon. Gentlemen now seated on the Government Front Bench of what their colleagues said. The simple lesson for the British people is that they should not believe a word of what is said or written by Ministers, because shortly afterwards they will change their minds. As the then Secretary of State for the Environment said in 1985, when chided about the introduction of capping after it had been made clear in the early 1980s that it would never be introduced:
        "That was then, and now is now."
        On Report and Third Reading on 25 April 1988, the Government had an historic opportunity to pass amendments to banding, but they did not do so. Instead, the then Minister for Local Government said:
        "We have made it clear on more than one occasion that we see a capping power introduced in the clause as a reserve measure. It is not a measure to be used as a matter of course". —[Official Report, 25 April 1988; Vol. 132, c. 47.]
        Today, that power will be used as a matter of course. It will be applied to every authority, whatever its level of spending or circumstances.
        I shall be interested to hear the Government's arguments, but there cannot be any economic justification for such a measure. Small authorities with budgets of less than £15 million do not make up a sufficient spending pattern to have any impact on the national economy, even if we accept that such local spending made a difference.
        If we take all the 87 authorities spending £15 million or less that would have been affected by this year's capping criteria, the total sum involved would have reached £102 million. On 3 June 1991, the Secretary of State said that there might well be a de minimis regulation in respect of authorities that spent more than £26 above the standard spending assessment. Therefore, only 40 of those 87 authorities would have been affected. They include Conservative, Liberal and Labour-controlled authorities across the whole country that do not share attitudes of profligacy or unreasonableness or, as the Minister described it in 1988, a tendency towards irrational behaviour. Instead, they seek to provide services for their residents. They do not represent any economic disadvantage to the country as a whole.
        Since 1970, the proportion of revenue spending by local government as a proportion of gross domestic product fell from 8·2 per cent. to 7·2 per cent. The capital figure is even more dramatic. Over the same 21 years, capital spending as a proportion of GDP fell from 3·6 per cent. to 1·8 per cent.—an enormous cut of 50 per cent. in the amount spent on repairing and improving our schools, housing, roads and environment. The Government can advance no economic or moral argument for their action, or justify it in other terms. It will only affect people detrimentally.
        Mr. Ronnie Campbell: Does my hon. Friend agree with Mr. Roy Thomason, chairman of the Association of District Councils? Mr. Thomason has said:
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        "We appear to have a Government that is being run by the Treasury for the sake of Treasury convenience."
        Mr. Blunkett: I think that the Conservative chairman of the ADC knows what he is talking about, given his experience of dealing not only with the Government but with the electorate in the area that he represents and in which he lives. [Interruption.] I think that the Conservative Whip is waiting for his list. "I've got a little list": 87 names would have been on it this year. The Government believe that their own supporters and elected councillors have let them down. That has happened for one simple reason. Those councillors wanted to provide services, and they wanted to spend money to maintain them.
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        The Government, not the local authorities, are primarily responsible for the size, and variation in size, of bills throughout the country, and there is no doubt that the way in which the proposed council tax would protect the rich would worsen the position dramatically. Over the next two days, we shall be debating the gearing effect. That will have a drastic impact on the amount that an authority must spend to raise a single extra pound to spend on services.
        In Tower Hamlets, the ratio will be 11·3:1, while in affluent south Buckinghamshire it will be only 2:1. We have tabled this amendment because of the dramatic difference between the bills that people in different areas would have to pay. The poorer the area, the more money people living there would have to find to enable an extra £1 to be spent to meet their needs.
        That is silly. In such circumstances, capping is not only absurd but positively immoral; it places a much heavier burden on the most deprived areas than on the most affluent. People living in deprived inner-city areas will not only pay more but receive less. This is the new inner-city policy: take from those who have not, and ensure that the benefits go to those who have—unless, of course, the all-ages index of social need to be provided under the council tax arrangements shows Buckinghamshire to be more deprived than Tower Hamlets.
        The distribution of the national business rate has also affected the position—as have the standard spending assessments, which were originally to have been varied and improved but which will now remain the same. My hon. Friends will say more about that when we discuss other amendments.
        All in all, we are in a mess. The mess that the Government are making, and the Conservatives' decision to continue with capping, illustrates their bewilderment about how to deal with local government finance, their despair in not knowing which way to turn and their undoubted disdain for the need to provide decent services.
        The Conservatives want capping, but without pain; centralism, but without the blame; and cuts, but not in their own pet projects or their own areas. That was made clear in the debate that took place immediately before the spring recess. It is very simple: their measures are intended to show some people that they mean business in terms of undermining public services and public spending, while also ensuring that it is the local councillors who must implement the cuts in essential provision.
        This is a petty, unnecessary and anti-democratic measure. Our amendment seeks to modify it, and, at the earliest opportunity, to remove it altogether. Nothing in

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        this afternoon's debate will hide the fact that the Government wish to pass the buck, ignoring the consequences of their actions—the cuts, and the hurt that they intend to cause—and, once again, trying to blame local government for what is of their own making.
        Mr. David Bellotti: I shall speak to amendments Nos. 38 and 57, tabled by the Liberal Democrats.
        The proposals before us attack the heart of local democracy. The Bill is before us because the poll tax failed. We are dealing with it after, rather than before, the local elections, because, the Government would have lost 2,000 seats rather than losing nearly 1,000 at the local elections in May if these proposals had been before the local people then. We are dealing with the Bill as long as possible before a general election, because its provisions are so unpopular.
        The Liberal Democrats oppose capping in principle—we want to make that clear. We want a grant equalisation system devised between the local authorities rather than devised here by central Government. Our long-term aim is to transfer the raising of local government finance to local government, with a consequent reduction in national taxation. Clearly, that cannot be done immediately, especially given that some local authorities, which are controlled by the left, would spend without limit, irrespective of people's ability to pay, while other local authorities would cut services and fail to provide the level and quality of service needed by deprived people in our communities.
        The way round those problems is to make local government more accountable—the Government have often talked about doing that, but they have never achieved it. Liberal Democrats believe that local government could be made accountable by ensuring that all local authorities were fully representative of their local communities. That could be achieved only by proportional representation, so that the Lambeths and the Hackneys, and the low-spending Conservative authorities, could no longer exist.
        Our two amendments would delay the Bill for a year, to take it beyond the general election. We consider that only fair, because the Government have often said that they would not cap small authorities that spend less than £15 million. They have never gone before the people to ask for their endorsement of such a policy. Another reason for wanting 12 months' delay is to enable local authorities to consider the measure and begin to plan for a worst case scenario.
        If our amendments are not accepted, the worst case scenario would be that at least 88 districts would have to examine their services—refuse collection, leisure, street cleaning and so on—to see where they could considerably reduce their costs. It would be a difficult exercise because of Government policy on competitive tendering. Many local authorities have spent much of their money in giving contracts to private companies, and accepting some in-house tenders for many services. Such costs are tied up for periods of more than a year; often they are tied up for three years, and some authorities have given options for longer periods.
        By introducing the Bill immediately, the Government will force local authorities into a situation where they have no room for manoeuvre because of competitive tendering, yet they will be required to make cuts in refuse collection, leisure, street cleaning and so on.
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        Perhaps more important is the fact that, during the next 12 months, when we are trying to get the economy of the country going, local authorities will be denied the spending opportunities that they had planned in order to create wealth in the local economy. For example, many tourist areas are trying to cater for people coming from overseas to spend money in this country, but that requires proactive marketing. The Bill will require local authorities that have planned to spend in that way to cut their proposals, thus cutting the improvements that would have benefited the local economy.
        The Bill is rushed, and has not been thought through. A long list of authorities throughout the country, of all political complexions, will suffer, and people in those communities will suffer too. The least the Government can do to lessen that suffering is to agree to our amendments to delay the Bill for a year. They have made a drastic U-turn. Therefore, it is only fair for them to give the people of the country an opportunity to comment on it. Our amendments would give them that opportunity.
        The Minister for Local Government and Inner Cities (Mr. Michael Portillo): The hon. Member for Sheffield, Brightside (Mr. Blunkett) and I served on the Committee that considered the Community Charges (Substitute Settings) Bill at Christmas. I enjoyed myself so much that it was with a heavy heart that I thought that that was the last Committee on which we would serve for some time. But in local government, one never knows how fortune will smile on one. Since then, we have had the good fortune to be on the Committee that considered the Community Charges (General Reduction) Bill. We thought that that would be the last time that we would serve on a Committee together this year, but here we are joyfully considering this Bill.
        The hon. Member for Brightside began by saying that the Government should have offered immediate relief to community charge payers. I remind him that, under the Community Charges (General Reduction) Bill, we offered immediate relief of £140 on the charges set by local authorities. As I recall it, the Opposition were rather scathing about that measure.
        Mr. Bryan Gould rose—
        Mr. Portillo: The hon. Gentleman has entered the Chamber and wishes to intervene.
        Mr. Gould: I left the Chamber briefly, but have returned to listen to the Minister's first speech. As he mentioned the £140 reduction, and as he must know that many people have discovered to their consternation that they will not receive the full reduction of £140, is he yet in a position to say how many of the 38 million poll tax payers will receive the full £140?
        Mr. Portillo: The hon. Gentleman has been trying to whip up this storm, but it will not be whipped up. The public understand perfectly well that, if they are already receiving considerable help with their community charge, it would not be appropriate for everyone to receive the same reduction on their Bill. For example, many millions of people are paying only 20 per cent. of the community charge, yet the hon. Member for Dagenham (Mr. Gould) proposes that one should take £140 off the community charge bills of people who pay only £60 or £70. That seems to be an absolutely absurd point to make.
        Mr. Gould: The point that I seek to make, which is keenly felt by many millions of people, is that the Government's constant proclamation that bills have been reduced by £140 is wrong. True to form in the history of the poll tax, when we inquire who gets the full benefit it is not those at the lower end of the income scale but those at the top end. All I want to know—I am sure that many others would like to hear the answer from the Minister, who surely must have some idea of it—is how many people receive the benefit that he constantly proclaims is being made available to everybody.
        Mr. Portillo: The hon. Gentleman's premise is incorrect. I have never claimed that everybody's bill would be reduced by £140. If the hon. Gentleman had entered the Chamber in time to hear what I was saying, he would be aware that I said £140 off the community charges that had been set by local authorities. That is a different matter. If people are not paying £140 in community charge—many people are not—it is absurd to think that they should get£140 off their community charge.
        Mr. Blunkett rose—
        Mr. Portillo: I shall not get far with this speech without interruption.
        Mr. Blunkett: I cannot resist asking why that does not apply to the people of Wandsworth.
        Mr. Portillo: The people of Wandsworth benefit from a Conservative administration, which set a community charge of £136. They have been uniquely disadvantaged among the people of Great Britain. Everybody else has enjoyed £140 off the community charge set by their local authority, but the people of Wandsworth have enjoyed only £136 off their community charge. The hon. Gentleman raised a delicate point—I do not know whether he intended to do so—because the people of Wandsworth have a complaint on that matter. It would be wrong to give them —4 each; zero is the appropriate figure.
        The hon. Member for Brightside went through a series of quotations from Ministers—he did not quote me, but he quoted many others—saying that we hoped that we should not have to have capping. I share his disappointment that we have not been able to get by without it. I should have preferred accountability to work its way through. However, we have experience to judge from and we have seen that where local authorities did not face immediate re-election or perhaps where there were two tiers of authority and people were confused about accountability, local authorities did not face the pressure of accountability to the point where they acted responsibly in setting their charges. There has been a vast increase of 14 per cent. in local authority spending in a single year, and community charges have caused great pain to some people.
        Although the Labour party has been willing to proclaim examples of people who have suffered because of high community charges—usually set by Labour authorities—it has not been willing to provide the logical answer to the problem which is that there must be some restraint on local authorities that are imposing such a burden.
        4.15 pm
        Mr. Ronnie Campbell: Will the Minister give way?
        Mr. Portillo: I shall give way in a moment.
        I say to the hon. Member for Brightside that the difference between his party and mine is that we, with sadness, have learnt from experience, but the Labour party has not.
        Mr. Campbell: My local authority in Blyth Valley has increased its budget since 1979 by 236 per cent. I cannot understand why on earth my authority, having not spent any more money in real terms since the Government came to power, will be capped for being a spendthrift authority. Will the Minister explain that?
        Mr. Portillo: I shall deal with the issue of how capping works in a moment, and I want to pick up a point made by the hon. member for Brightside, which is pertinent to the question asked by the hon. Member for Blyth Valley (Mr. Campbell). The hon. Member for Brightside said that it was our aspiration to cap all local authorities, but that is not so. We are bringing all local authorities within the legislation that governs capping, and that is very different. This year we have set out in advance the criteria under which local authorities would be capped if they set excessive budgets absolutely or if they increased their budgets successively from year to year.
        Mr. Harry Barnes: Will the Minister give way?
        Mr. Portillo: I shall give way in a moment.
        The effect has been that all local authorities, with the exception of 14, have been able to set budgets that did not fall within those criteria. Of the 14 that exceeded the criteria and were therefore capped, six accepted without challenge the cap that we imposed. The remaining eight authorities challenged it. Therefore, although the legislation applied to a large number of local authorities, it was necessary to cap only a few because the others, with advance knowledge of the criteria, were able to bring their budgets into line. In the future, as we extend capping to local authorities with budgets of less than £15 million, I expect to see a similar effect. A large number of authorities could potentially be within the capping regime, but I expect that only a small number would cause us to take capping action.
        Mr. Harry Barnes: Is not the Minister making a distinction without a difference? If a capping level is determined beforehand, clearly no district authority can go beyond that level because it would put itself into the most abysmal economic circumstances. In a sense, it is being asked to cap itself so the Government do not need to make use of the capping provisions. However, the authority is being capped whether it has done it itself in advance to avoid being capped or whether the Government have engaged the capping provision.
        Mr. Portillo: It is true that the local authority has to exercise restraint and that it does so under the criteria that are set by the Government. However, it is extraordinary to say that it is a distinction without a difference. Most local authorities will say that the painfulness of having to make changes once a cap has been applied, and especially if they did not know the rules regarding capping in advance, is out of all comparison with the position whereby they have

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        a year in which to adjust their budget. They know in advance what the criteria will be so they can make sensible plans to fit in with them. I remind the hon. Member for Derbyshire, North-East (Mr. Barnes) that we are not capping any local authority below its standard spending assessment. This year, we are allowing those who came in at the SSAs a 9 per cent. increase on their previous budget. We did not regard any budget as absolutely excessive, as opposed to applying the criteria from year to year, unless it was 12·5 per cent. above the SSA.
        Mr. William O'Brien: The Minister said that the Government are not capping authorities that budget within or below the SSA. Can we take it that that is an assurance that will be given for all time and that no authority that spends below its SSA will be capped, as decreed by the Government?
        Mr. Portillo: I have no intention of capping authorities below the SSA.
        The hon. Members for Brightside and for Eastbourne (Mr. Bellotti) seemed to find this extension to local authorities with budgets below £15 million puzzling. As the hon. Member for Brightside said, it is perfectly true that that does not make a huge difference in macro-economic terms. What local authorities with budgets below £15 million spend does not make much difference to the total level of public expenditure. However, I am surprised that the hon. Gentleman is so fixated on that point. Should not he be concerned, as I am, about the effect on individuals and on the bills that people have to pay?
        One could be forgiven for thinking that the hon. Member for Eastbourne is a spokesman for local authorities and their concerns. Time and again, today and in his previous speech on the subject, he mentioned that local authorities were under attack. I never heard him talk for a moment about local people and about the need to defend local people from paying excesssive bills. That is where the Government's concern comes in. Derwentside, whose budget is below £15 million a year, has put £95 extra on people's community charge bills. That is £180 for a couple and progressively more for a larger household. Those are significant sums.
        We often hear the Labour party and the Liberal Democrats complain about the burden that has been placed on people and which is difficult for them to afford. However, the burdens are caused by the authorities putting on extra amounts, such as £95 in the case of Derwentside. The crocodile tears shed by Opposition parties are not followed by a willingness to take action to protect people against having such burdens thrust on them.
        We propose to introduce a council tax. The community charge, which was proposed to come in at levels that would have been broadly acceptable and which people thought were reasonable for individuals to pay, was forced up and up by a spree in local authority spending. The reason why the community charge turned out to be so much more than the Government had predicted was that local authorities chose the moment of its introduction to spend far more.
        I am not prepared to see history repeat itself over the council tax. We have published the figures for what the council tax would have been for this year if it had been in operation. It is not a prediction for the future, but a statement of what would have happened this year. None
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        the less, people will expect when we introduce the council tax that the figures that they are asked to pay will be recognisable and that they will resemble the figures for this year. This time we will oblige local authorities to increase their spending only reasonably. Those that already spend significantly above their SSAs will be obliged progressively to come down towards they so that we can deliver the council tax at figures that people will regard as reasonable and fair.
        The Labour party differs with us in the extreme on this matter. It has made a great deal of its own figures—miscalculated figures, I might say. It stands to reason that if we seek to collect the same amount of money from the same number of people—[Interruption.]—I shall not give way to the hon. Member for Dagenham on this point because he misunderstands it again and again—the average amount will be the same. But I shall let that pass.
        The important point that I want to make to the hon. Gentleman is that he has based his figures on a level of spending by local authorities which has been achieved by the Government only because we had capping powers available to us. We predicted total standard spending by local authorities this year of £39 billion and we have brought it in at £39·2 billion through the use of the threat to cap.
        The hon. Member for Dagenham cannot have it both ways. He resisted the policy that made the level of spending to which I referred possible, yet he now seems to take credit for tax proposals that are based on that level of spending. More particularly for the future, he is not prepared to allow any limitation of local authority spending. The amount that local authorities spend would rise massively if there were a Labour Government intent on not capping local authorities. The bills that the hon. Member for Dagenham believes could be delivered under his rating policy could not be delivered, because local authority spending would rise through the roof.
        When the council tax is introduced under this Government, with the accompaniment of the capping criteria, we shall ensure that we deliver reasonable figures. They will be brought about by the restraint that capping imposes on local authorities. That is the greatest single difference between the Government and the Labour party. We can deliver figures like those which we have proposed to the general public. The Labour party could not deliver them, because it believes that we should return to an era in which local authority spending is allowed to rip.
        What an extraordinary idea it is that we should delay the extension of capping to local authorities with budgets of below £15 million. The protection that we are talking about is needed now, for the coming year. Local authorities that might be capped will want to know well in advance what the criteria are so that they can avoid being brought into the capping net. For that reason, I believe that it is right not only to introduce the extension to budgets below £15 million but to do so as quickly as possible.
        Mr. Blunkett: We believe that the people of a locality should be allowed to protect themselves from this or any other Government. In other words, when people vote in local elections, they should have some chance of seeing their votes matter. If not, and if whatever people do the Government of the day believe that they must protect people from themselves, what is the point of holding local elections? Why not appoint gauleiters? We realise that the

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        Secretary of State had that in mind but that the Cabinet felt that it was not appropriate to admit it before a general election. Largesse would be passed down via an elected mayor to local people and the mayor would have to do a deal with the Secretary of State, presumably over dinner in the evening. Unlike his predecessor, who was in favour of long lunches in the United States where contracts would be made, the present Secretary of State prefers dinners and wine in the evenings.
        It is a pretty poor state of affairs when a Government believe that they have to protect the electorate from the electorate. It is only fair to point out that, far from becoming milder and more consensual—I said consensual, by the way—and far from believing in public service and public spending, the Government's attitude has become worse. On 25 April 1988, the Minister I quoted earlier, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), said:
        "The people of an area certainly will be able to vote for a relatively high-spending authority if they so choose."—[Official Report, 25 April 1988; Vol. 132, c. 51.]
        In the debate on this Bill in June 1991, in the run-up to an election, when we are told that we have a Prime Minister who is more gentle and caring and who believes in public service, quality and spending, we have an even tighter, more bureaucratic and centralist regime in which everyone must be whipped into line. The same is true of the future.
        How are the proposed council tax figures made up and what are the criteria for them? Exactly what will councils be held to? The Minister said that his outline figures, which illustrated what would have been the case this year, will be used in future. He said that councils that levy greater sums than those which have been laid down will be brought into line progressively. He should have said regressively.
        Long-term capping and spending reductions, cuts in education, leisure, the environment, libraries, transport and the social services are all prefaced by the promise made by the Minister. There will be cuts to reduce the figure to the projected council tax level, which the Government dreamed up out of the blue and wrote on the back of an envelope when the chairman of the Conservative party made his amazing pronouncement on the "Today" programme on which my hon. Friend the Member for Dagenham (Mr. Gould) delivered the coup de grace.
        Mr. Portillo: That is wrong.
        Mr. Blunkett: I do not often speak French because, as the Minister says, my accent leaves something to be desired. Unlike some people, I do not spend enough time perfecting it in France. [AN HON. MEMBER: "Would the hon. Gentleman like a villa?"] I accept that offer without equivocation.
        Mr. William O'Brien: It was Aston Villa.
        Mr. Blunkett: Do not mention Aston Villa to me.
        We shall not divide the Committee on the amendment, not because we do not feel strongly about it but because we know that we have to make progress. I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        4.30 pm
        Mr. Paul Murphy: I beg to move amendment No. 2, in page 1, line 7, leave out 'which' and insert 'so far as it'.
        The Chairman: With this, it will be convenient to consider amendment No. 1, in page 1, line 8, leave out 'or Welsh'.
        Mr. Murphy: The amendments seek to exempt Wales from the extension of poll tax capping to authorities with budgets of less than £15 million. It surprises me and my hon. Friends in Welsh constituencies that the legislation is necessary at all, because to date no Welsh local authority has been capped or is likely to be capped. The previous Secretary of State for Wales, the right hon. Member for Worcester (Mr. Walker), announced on 3 April last year that he had determined principles for designating authorities for charge limitation similar to those determined for England.
        On the basis of those principles, about which we never knew, the right hon. Gentleman decided not to designate any Welsh local authorities. Therefore, we never knew which Welsh local authorities might have been designated, because no one was told the principles of the criteria for capping in Wales. We thought that the present Secretary of State for Wales would change everything and would publish the capping criteria for Welsh local authorities, but on 31 October he said that he would not announce such criteria, and we are still effectively in the dark.
        The Minister for Local Government and Inner Cities said that English local authorities would be able to avoid being capped, because they know exactly what caused capping, Welsh councils are not able to do that, because they are not given any details. I sincerely hope that the Under-Secretary will give us some hint whether, as poll tax capping will apply to all Welsh authorities, the Bill will mean that we in Wales will know what the criteria are.
        Until today, only a few districts in Wales—Cardiff, Newport, Swansea and Rhondda—and the county councils were eligible for capping. The Bill will extend that eligibility to every one of the 37 Welsh districts, and to all the Welsh county councils. Many in Welsh local government feel that there are other reasons why no criteria for Wales have been published. We want to know why we have to follow the English example although we have not followed England in publishing criteria.
        The irony is that Welsh local authorities—both district and county—have had responsible and well managed budgets. They have not overspent and they do not have anywhere near the mismanagement that would require capping. They have reacted responsibly to the Government's taunts. Over the past few years, while they have had to respond to the enormous problems created by the poll tax, they have reacted in a way that should be followed by local authorities throughout the United Kingdom, but they have had little thanks for that.
        Now they are being told—to use French in my turn—that they are the betes noires of local government. That is despite their responsible behaviour and despite the tremendous jobs they have done, given the enormous financial and economic pressures under which they have had to operate. Now, they are being told that they cannot be trusted by the Government in the matter of the budgets for which they are responsible over the next couple of years.

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        The right hon. Member for Worcester (Mr. Walker) and the present Secretary of State for Wales have both said, not only on the Floor of the House and in Committee but outside in the Principality, that the relationship between Welsh local government and the Welsh Office has been exemplary. The two have worked together on the local economy, for jobs, and for the valleys initiative.None of that squares with the fact that local authorities have now slavishly to follow England and are regarded as the betes noires of local government.
        There is no demand for capping from local government, electors, institutions, academics or the majority of political parties in the Principality. My hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) referred to the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). Day in and day out, week in and week out, my hon. Friend and I had to listen to the right hon. and learned Gentleman's arguments in favour of the poll tax and to his explanations of why it was so great. He said:
        "The community charges levied by those authorities will generally make up only a fraction of the total local community charge when the precept of other authorities is taken into account. From the point of view, therefore, of protecting local charge payers, it seems unnecessary to keep such authorities in the field for charge limitation."—[0fficial Report, Standing Committee E; 17 March 1988, c. 1491]
        There was a Welshman from Llanelli, albeit one who had gone to Folkestone, telling us that there was no need for the majority of Welsh councils to be subject to this ludicrous poll tax capping.
        Wales is not demanding capping. Nor does it want the Bill. It wants an end to the poll tax in the Principality. There has been in the last couple of years an enormous outcry in the Principality about the unfairness of the poll tax, which has offended the Welsh sense of fair play.
        Of particular concern to Welsh local government—because it could bring them within the criteria for poll tax capping—is the amount of money that has been spent in the Principality to set up, administer and sweeten the poll tax. Over £100 million has been deliberately wasted by the Government in that relatively small country as the Welsh Office and its Ministers tried to administer a tax that had no public support.
        The tragedy of that is that, according to the Council of Welsh Districts, we could he landed with the tax not, as the Government have said, until 1993 but possibly until 1994. The reality of that is perhaps somewhat different, bearing in mind that there will not be a Conservative Government in 1994. From 1992, Labour will be in power. Meanwhile, the present plan of the Welsh Office is to extend the poll tax, and Welsh councils are reporting that it will not be possible for them to change over to the council tax in time for 1993.
        We are told that the whole purpose of the legislation is to increase accountability. The consultation paper, which I assume applies to Wales as well as England, says:
        "It will avoid the risk of a repeat of the substantial increase in spending which accompanied the transition to the community charge."
        What increase? There was no increase in the Principality, other than what had to be spent to set up the poll tax.
        The only accountability, as my hon. Friends have argued, is through the ballot box, and in May, in the one local authority in Wales which Conservative Members had argued should be capped—the capital city, Cardiff—we saw the Conservatives swept out of office. Labour won the city through the ballot box, despite the Conservatives
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        arguing that the city council should be poll tax-capped. If ever there was a case for realising that accountability is through democratic means and not through the nonsense of poll tax capping, that was proved in the capital of Wales in the local elections last May.
        Wales should be exempted from this mean Bill because in the Principality it is unwanted and unnecessary, and it will be unloved. It will do nothing to improve the accountability of Welsh local authorities or their services in education, housing, transport and social services. Nothing in the Bill will improve the quality of life of the people in the Principality. It will sour relations even more between central and local government in Wales.
        The only way to achieve a revitalised Welsh local government structure is proper accountability through annual elections, a proper fair rating system and unitary all-purpose authorities. Within the next two or three years, with the return of a Labour Government, all those things will become a reality.
        The Parliamentary Under-Secretary of State for Wales (Mr. Nicholas Bennett): This group of amendments seeks to confine the practical application of the clause to England. It would deny to the charge payers of Wales the protection afforded by the Bill to the charge payers of England.
        The existing law on charge capping in section 101 of the Local Government Finance Act 1988 applies equally to Wales and England. The provisions of this measure will do the same. There can be no possible justification for treating Wales and England differently. All authorities in Wales, regardless of how large or small their budgets may be, have a duty to their charge payers to exercise prudence and restraint in formulating their expenditure plans.
        The Bill gives my right hon. Friend power to act in the interests of charge payers with any authority in Wales that may not budget sensibly, thereby imposing an unreasonable burden on its charge payers. My right hon. Friend did not cap any Welsh authority in 1991–92, and 1 hope that it will not be necessary for him to do so in future years, but he has made it clear that he will not hesitate to use his powers if he considers it necessary to do so.
        4.45 pm
        The hon. Member for Torfaen (Mr. Murphy) talked in mock indignation about the fury of the people of Wales. That fury is so confined that he has sitting with him on the Opposition Front Bench only one of his hon. Friends from Wales, plus one Back Bencher who has just wandered in. That is the strength of the Labour party's opposition to the clause and support for its amendments.
        Mr. Murphy: How many Conservative Members are here to support the Minister?
        Mr. Bennett: We are content with the Bill as it is. The hon. Gentleman has tabled amendments but few of his hon. Friends are here to support them. That says something for the bogus indignation of the Labour party on this issue.
        The hon. Member for Torfaen asked about the future criteria which may be set. The Secretary of State for Wales did not announce provisional criteria for capping in advance of budget setting by authorities. For 1992–93, my right hon. Friend will wish to consult authorities on the issue in advance of an announcement on the criteria for capping which he is minded to adopt. I should make it

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        clear that that in no way diminishes his determination to take vigorous capping action should it prove necessary to do so.
        The hon. Member for Torfaen said that all authorities in Wales had been moderate. I wish that were true. The average charge set in Wales in 1991–92 was £261, a full £33 above the community charge standard spending—the CCSS—and £29 higher than that set in 1990–91. Within that, districts, including communities, set an average charge of £51, about £13 above their CCSS component; and counties set an average charge of £211, about £21 above their CCSS component.
        It is clear that some authorities have not been as prudent as they might have been. It is vital that in this measure, which applies to England and Wales, we should not exempt local authorities in Wales from being prudent in future years, that community charge payers should have the protection afforded to them now, and that that should be extended to authorities with budgets of £15 million or less.
        These amendments would introduce into the statutory provisions relating to charge capping an inconsistency between England and Wales when none now exists. They would deny to Welsh charge payers the comprehensive protection that the Bill seeks to provide for Wales and England alike. I urge the Committee to reject them.
        Mr. Murphy: What the Minister said did not surprise me. Even so, the majority of Welsh Members do not share his view that Welsh local government is in any sense profligate. Indeed, the Secretary of State has often made play of the fact that the Welsh poll tax figures are considerably lower than those in England. That has happened not as a result of Government grant but because Welsh local authorities are good housekeepers.
        There seems no reason why we should follow the English example and accept these provisions. There is no reason why we should not be inconsistent and have a rule in Wales that is different from that which applies in England. After all, the Welsh local government structure is separate, the revenue support grant is dealt with separately, and there is a separate association level in Wales which apparently has been working well.
        Despite all that, the Minister tells us that threats will continue to be used against Welsh local government. It will do no good for anybody in the Principality slavishly to follow a bad English example. We have tonight an opportunity for hon. Members who represent the Principality, and others, to show clearly that the only way in which local government is accountable to its electors is through the ballot box. That is why we shall divide the Committee on this group of amendments.
        Question put, That the amendment be made:—
        The Committee divided: Ayes 195, Noes 264.

        Division No. 162]

        [4.48 pm

        AYES

        Adams, Mrs Irene (Paisley, N.)

        Armstrong, Hilary

        Allen, Graham

        Ashdown, Rt Hon Paddy

        Alton, David

        Ashley, Rt Hon Jack

        Anderson, Donald

        Ashton, Joe

        Archer, Rt Hon Peter

        Banks, Tony (Newham NW)

        808

        Barnes, Harry (Derbyshire NE)

        Hogg, N. (C'nauld & Kilsyth)

        Barnes, Mrs Rosie (Greenwich)

        Home Robertson, John

        Barron, Kevin

        Howarth, George (Knowsley N)

        Battle, John

        Howells, Dr. Kim (Pontypridd)

        Beckett, Margaret

        Hughes, John (Coventry NE)

        Beith, A. J.

        Hughes, Robert (Aberdeen N)

        Bell, Stuart

        Hughes, Roy (Newport E)

        Bellotti, David

        Hughes, Simon (Southwark)

        Benn, Rt Hon Tony

        Ingram, Adam

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

        Janner, Greville

        Benton, Joseph

        Johnston, Sir Russell

        Bermingham, Gerald

        Jones, Barry (Alyn & Deeside)

        Blair, Tony

        Jones, Martyn (Clwyd S W)

        Blunkett, David

        Kaufman, Rt Hon Gerald

        Boateng, Paul

        Kennedy, Charles

        Bradley, Keith

        Kinnock, Rt Hon Neil

        Bray, Dr Jeremy

        Kirkwood, Archy

        Brown, Gordon (D'mline E)

        Lambie, David

        Brown, Nicholas (Newcastle E)

        Lamond, James

        Bruce, Malcolm (Gordon)

        Leighton, Ron

        Buckley, George J.

        Lewis, Terry

        Caborn, Richard

        Litherland, Robert

        Callaghan, Jim

        Livingstone, Ken

        Campbell, Menzies (Fife NE)

        Lloyd, Tony (Stretford)

        Campbell, Ron (Blyth Valley)

        Loyden, Eddie

        Canavan, Dennis

        McAllion, John

        Carlile, Alex (Mont'g)

        McCartney, Ian

        Carr, Michael

        Macdonald, Calum A.

        Cartwright, John

        McFall, John

        Clark, Dr David (S Shields)

        McKay, Allen (Barnsley West)

        Clelland, David

        McKelvey, William

        Clwyd, Mrs Ann

        McLeish, Henry

        Cohen, Harry

        McMaster, Gordon

        Cook, Robin (Livingston)

        McWilliam, John

        Corbett, Robin

        Madden, Max

        Cryer, Bob

        Mahon, Mrs Alice

        Cummings, John

        Marek, Dr John

        Cunliffe, Lawrence

        Marshall, David (Shettleston)

        Cunningham, Dr John

        Marshall, Jim (Leicester S)

        Davies, Rt Hon Denzil (Llanelli)

        Martin, Michael J. (Springburn)

        Davies, Ron (Caerphilly)

        Martlew, Eric

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

        Maxton, John

        Dewar, Donald

        Meacher, Michael

        Dixon, Don

        Meale, Alan

        Dobson, Frank

        Michael, Alun

        Doran, Frank

        Michie, Bill (Sheffield Heeley)

        Douglas, Dick

        Michie, Mrs Ray (Arg'l & Bute)

        Duffy, A. E. P.

        Morgan, Rhodri

        Dunnachie, Jimmy

        Morley, Elliot

        Dunwoody, Hon Mrs Gwyneth

        Morris, Rt Hon J. (Aberavon)

        Eastham, Ken

        Mowlam, Marjorie

        Edwards, Huw

        Mullin, Chris

        Evans, John (St Helens N)

        Murphy, Paul

        Ewing, Mrs Margaret (Moray)

        Nellist, Dave

        Fatchett, Derek

        Oakes, Rt Hon Gordon

        Field, Frank (Birkenhead)

        O'Brien, William

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

        O'Hara, Edward

        Flynn, Paul

        O'Neill, Martin

        Foot, Rt Hon Michael

        Orme, Rt Hon Stanley

        Foster, Derek

        Owen, Rt Hon Dr David

        Foulkes, George

        Parry, Robert

        Fyfe, Maria

        Patchett, Terry

        Galbraith, Sam

        Pendry, Tom

        Garrett, John (Norwich South)

        Pike, Peter L.

        Garrett, Ted (Wallsend)

        Powell, Ray (Ogmore)

        Godman, Dr Norman A.

        Prescott, John

        Golding, Mrs Llin

        Primarolo, Dawn

        Gordon, Mildred

        Quin, Ms Joyce

        Gould, Bryan

        Radice, Giles

        Graham, Thomas

        Randall, Stuart

        Grant, Bernie (Tottenham)

        Redmond, Martin

        Griffiths, Win (Bridgend)

        Reid, Dr John

        Grocott, Bruce

        Richardson, Jo

        Hain, Peter

        Rooker, Jeff

        Hardy, Peter

        Rooney, Terence

        Hattersley, Rt Hon Roy

        Ross, Ernie (Dundee W)

        Haynes, Frank

        Rowlands, Ted

        Heal, Mrs Sylvia

        Sedgemore, Brian

        Henderson, Doug

        Sheerman, Barry

        Hoey, Ms Kate (Vauxhall)

        Shore, Rt Hon Peter

        809

        Skinner, Dennis

        Watson, Mike (Glasgow, C)

        Smith, Andrew (Oxford E)

        Welsh, Andrew (Angus E)

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

        Welsh, Michael (Doncaster N)

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

        Wigley, Dafydd

        Soley, Clive

        Williams, Rt Hon Alan

        Steel, Rt Hon Sir David

        Williams, Alan W. (Carm'then)

        Steinberg, Gerry

        Wilson, Brian

        Stott, Roger

        Winnick, David

        Straw, Jack

        Worthington, Tony

        Taylor, Matthew (Truro)

        Young, David (Bolton SE)

        Thomas, Dr Dafydd Elis

        Thompson, Jack (Wansbeck)

        Tellers for the Ayes:

        Turner, Dennis

        Mr. Eric Illsley and

        Wardell, Gareth (Gower)

        Mr. Thomas McAvoy.

        Wareing, Robert N.

        NOES

        Adley, Robert

        Devlin, Tim

        Aitken, Jonathan

        Dickens, Geoffrey

        Alexander, Richard

        Dicks, Terry

        Alison, Rt Hon Michael

        Dorrell, Stephen

        Allason, Rupert

        Douglas-Hamilton, Lord James

        Amess, David

        Dover, Den

        Amos, Alan

        Dunn, Bob

        Arbuthnot, James

        Durant, Sir Anthony

        Arnold, Jacques (Gravesham)

        Dykes, Hugh

        Ashby, David

        Evans, David (Welwyn Hatf'd)

        Atkins, Robert

        Evennett, David

        Atkinson, David

        Fairbairn, Sir Nicholas

        Baker, Nicholas (Dorset N)

        Fallon, Michael

        Batiste, Spencer

        Favell, Tony

        Bellingham, Henry

        Fenner, Dame Peggy

        Bennett, Nicholas (Pembroke)

        Field, Barry (Isle of Wight)

        Bevan, David Gilroy

        Finsberg, Sir Geoffrey

        Biffen, Rt Hon John

        Fishburn, John Dudley

        Blackburn, Dr John G.

        Fookes, Dame Janet

        Blaker, Rt Hon Sir Peter

        Forman, Nigel

        Body, Sir Richard

        Forsyth, Michael (Stirling)

        Bonsor, Sir Nicholas

        Franks, Cecil

        Boscawen, Hon Robert

        Freeman, Roger

        Boswell, Tim

        French, Douglas

        Bottomley, Peter

        Fry, Peter

        Bottomley, Mrs Virginia

        Gale, Roger

        Bowden, A. (Brighton K'pto'n)

        Gardiner, Sir George

        Bowden, Gerald (Dulwich)

        Gill, Christopher

        Bowis, John

        Goodlad, Alastair

        Boyson, Rt Hon Dr Sir Rhodes

        Goodson-Wickes, Dr Charles

        Brandon-Bravo, Martin

        Grant, Sir Anthony (CambsSW)

        Brazier, Julian

        Greenway, Harry (Ealing N)

        Bright, Graham

        Gregory, Conal

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

        Griffiths, Peter (Portsmouth N)

        Bruce, Ian (Dorset South)

        Grist, Ian

        Buchanan-Smith, Rt Hon Alick

        Ground, Patrick

        Buck, Sir Antony

        Hague, William

        Burns, Simon

        Hamilton, Hon Archie (Epsom)

        Burt, Alistair

        Hamilton, Neil (Tatton)

        Butler, Chris

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

        Butterfill, John

        Hargreaves, Ken (Hyndburn)

        Carlisle, John, (Luton N)

        Harris, David

        Carlisle, Kenneth (Lincoln)

        Haselhurst, Alan

        Carrington, Matthew

        Hayes, Jerry

        Cash, William

        Hayward, Robert

        Channon, Rt Hon Paul

        Hicks, Mrs Maureen (Wolv' NE)

        Chapman, Sydney

        Hicks, Robert (Cornwall SE)

        Chope, Christopher

        Higgins, Rt Hon Terence L.

        Churchill, Mr

        Hill, James

        Clark, Rt Hon Alan (Plymouth)

        Hind, Kenneth

        Clark, Dr Michael (Rochford)

        Holt, Richard

        Clark, Rt Hon Sir William

        Hordern, Sir Peter

        Clarke, Rt Hon K. (Rushcliffe)

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

        Colvin, Michael

        Howarth, G. (Cannock & B'wd)

        Coombs, Anthony (Wyre F'rest)

        Howell, Rt Hon David (G'dford)

        Coombs, Simon (Swindon)

        Howell, Ralph (North Norfolk)

        Couchman, James

        Hughes, Robert G. (Harrow W)

        Currie, Mrs Edwina

        Hunt, Rt Hon David

        Curry, David

        Hunt, Sir John (Ravensbourne)

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

        Hunter, Andrew

        Davis, David (Boothferry)

        Hurd, Rt Hon Douglas

        Day, Stephen

        Irvine, Michael

        810

        Irving, Sir Charles

        Powell, William (Corby)

        Jack, Michael

        Raison, Rt Hon Sir Timothy

        Janman, Tim

        Rathbone, Tim

        Johnson Smith, Sir Geoffrey

        Redwood, John

        Jones, Gwilym (Cardiff N)

        Rhodes James, Robert

        Jopling, Rt Hon Michael

        Riddick, Graham

        Key, Robert

        Rifkind, Rt Hon Malcolm

        Kilfedder, James

        Roberts, Sir Wyn (Conwy)

        King, Roger (B'ham N'thfield)

        Roe, Mrs Marion

        King, Rt Hon Tom (Bridgwater)

        Rossi, Sir Hugh

        Kirkhope, Timothy

        Rost, Peter

        Knapman, Roger

        Rowe, Andrew

        Knight, Greg (Derby North)

        Ryder, Rt Hon Richard

        Knight, Dame Jill (Edgbaston)

        Sackville, Hon Tom

        Knox, David

        Sainsbury, Hon Tim

        Lang, Rt Hon Ian

        Sayeed, Jonathan

        Latham, Michael

        Scott, Rt Hon Nicholas

        Lawrence, Ivan

        Shaw, David (Dover)

        Lee, John (Pendle)

        Shelton, Sir William

        Leigh, Edward (Gainsbor'gh)

        Shepherd, Colin (Hereford)

        Lennox-Boyd, Hon Mark

        Shepherd, Richard (Aldridge)

        Lester, Jim (Broxtowe)

        Shersby, Michael

        Lightbown, David

        Sims, Roger

        Lilley, Rt Hon Peter

        Skeet, Sir Trevor

        Lloyd, Sir Ian (Havant)

        Smith, Tim (Beaconsfield)

        Lloyd, Peter (Fareham)

        Spicer, Sir Jim (Dorset W)

        Lord, Michael

        Spicer, Michael (S Worcs)

        Lyell, Rt Hon Sir Nicholas

        Squire, Robin

        McCrindle, Sir Robert

        Stanbrook, Ivor

        Macfarlane, Sir Neil

        Stanley, Rt Hon Sir John

        MacGregor, Rt Hon John

        Steen, Anthony

        MacKay, Andrew (E Berkshire)

        Stevens, Lewis

        McNair-Wilson, Sir Michael

        Stewart, Allan (Eastwood)

        McNair-Wilson, Sir Patrick

        Stewart, Andy (Sherwood)

        Madel, David

        Stewart, Rt Hon Ian (Herts N)

        Malins, Humfrey

        Sumberg, David

        Mans, Keith

        Summerson, Hugo

        Maples, John

        Taylor, Ian (Esher)

        Marland, Paul

        Taylor, Teddy (S'end E)

        Marlow, Tony

        Temple-Morris, Peter

        Marshall, John (Hendon S)

        Thompson, Patrick (Norwich N)

        Marshall, Sir Michael (Arundel)

        Thorne, Neil

        Martin, David (Portsmouth S)

        Thornton, Malcolm

        Maude, Hon Francis

        Thurnham, Peter

        Mayhew, Rt Hon Sir Patrick

        Townend, John (Bridlington)

        Mellor, Rt Hon David

        Townsend, Cyril D. (B'heath)

        Meyer, Sir Anthony

        Tracey, Richard

        Mills, Iain

        Tredinnick, David

        Mitchell, Sir David

        Trotter, Neville

        Moate, Roger

        Twinn, Dr Ian

        Monro, Sir Hector

        Vaughan, Sir Gerard

        Montgomery, Sir Fergus

        Viggers, Peter

        Moore, Rt Hon John

        Waldegrave, Rt Hon William

        Morrison, Sir Charles

        Walker, Bill (T'side North)

        Morrison, Rt Hon Sir Peter

        Walters, Sir Dennis

        Moss, Malcolm

        Ward, John

        Neale, Sir Gerrard

        Watts, John

        Nelson, Anthony

        Wells, Bowen

        Newton, Rt Hon Tony

        Wheeler, Sir John

        Nicholls, Patrick

        Whitney, Ray

        Nicholson, Emma (Devon West)

        Widdecombe, Ann

        Oppenheim, Phillip

        Wiggin, Jerry

        Page, Richard

        Wilshire, David

        Paice, James

        Winterton, Mrs Ann

        Parkinson, Rt Hon Cecil

        Wolfson, Mark

        Patnick, Irvine

        Woodcock, Dr. Mike

        Patten, Rt Hon John

        Young, Sir George (Acton)

        Pattie, Rt Hon Sir Geoffrey

        Pawsey, James

        Tellers for the Noes:

        Peacock, Mrs Elizabeth

        Mr. Tim Wood and

        Porter, David (Waveney)

        Mr. John M. Taylor.

        Portillo, Michael

        Question accordingly negatived.
        Mr. O'Brien: I beg to move amendment No. 16, in page 1, line 9, leave out from 'shall' to end and insert
        'have no effect in respect of any authority to which it would otherwise be applicable where the amount calculated by in relation to the year concerned under section 95(4) of that Act

        811
        or the aggregate amount of precepts issued by it for the year (as the case may be) is greater than the total amount in respect of that authority calculable from its Standing Spending Assessment'.
        The amendment refers to the capping of local authorities that have budgets of less than £15 million and who spend below their standard spending assessment. Recently the Minister assured me that he had no intention of capping any authority that spends below its SSA. If we can rely on that assurance, there is little difference between us on the amendment, as it aims to protect from capping those authorities that spend below their budget and below their SSA.
        The Rates Act 1984 provided that no authority that spent below its grant-related expenditure assessment—GREA—would be capped. Poll tax capping is carried out under the Local Government Finance Act 1988 and no corresponding protection is afforded to those authorities that spend below their SSA. The protection previously given to authorities that spent below their GREA has not been offered to authorities that spend below their SSA.
        Small authorities risk being capped even if they spend below their SSA, especially the crude SSA given to shire districts, which is calculated on the basis of the population and the mixed bag of services provided. The SSA, as it applies now, is a means of grant distribution, but it is an inaccurate criterion by which to assess the efficiency of the authorities. That inaccuracy is a special problem for local authorities with small budgets which are not given a specific SSA to cover a wide range of services such as allotments, cemeteries and street cleaning. Smaller authorities have a problem in trying to meet the requirements of the SSA set by the Secretary of State.
        I speak from experience, because I served for 21 years on an urban district authority before the local government reorganisation of 1974. That district authority was similar in size and population to many of the district councils to which the amendment is addressed. Urban district councils undertook similar functions to those now organised under the Association of district councils. In those days there was no call for capping or any of the severe restrictions that the Government are now imposing on small authorities.
        In the old days, rates were assessed on the services required and the electorate were called upon to pay those rates. The Government provided grants, as they do today, and those grants were assessed according to the needs and resources of the local authorities. There was no cause to cap any local authority. The electorate decided whether it was satisfied with the efficiency and work of its local authority. If people were not satisfied and did not appreciate the work done they could change the membership of the council. That principle still applies today, when district councils provide services to their areas.
        We want the Government to preclude from capping those authorities that spend below £15 million and keep below their SSA. I am prepared to allow the Minister to intervene so that he can assure me that the amendment is acceptable. If so, there is no need to pursue the issue further. Perhaps the Minister can give me that assurance now. The Minister seems not to want to give that assurance. I should therefore like to ask what Ministers intend to do about the principle of capping in general in
        812
        1992. The criteria likely to be announced later this year will have a significant effect on the application of capping to local authorities.
        Will the Government undertake not to cap any authority spending below its SSA? I know that the Minister has given me an assurance on that, but we must bear in mind the fact that the Government are introducing the principle of year-on-year expenditure, which could have some effect on the capping procedure. Will the Government assure me that under no circumstances will local authorities that spend below £15 million or which do not exceed their SSAs—set by the Government—be capped?
        Will the Minister clarify how far down the expenditure scale of local authorities the Government are prepared to go? I referred earlier to the smaller urban district authorities that were in being before the reorganisation of 1974. Many of them are now town councils with certain functions in line with those of the former parish councils. They, too, have budgets. What are the Government's intentions towards those budgets? May I take it that they will not be included in any capping procedure that the Government may apply?
        I remind the Minister that, a few days ago when we were discussing local government in a Statutory Instrument Committee, he advised the Committee of his passion and love for local government—emotions which I hope will come to the fore today. If the Minister is sincere he will support this amendment because it protects smaller authorities from the capping rule that the Government want to extend right down to smaller local authorities.
        The Government argue that stronger capping powers are necessary to protect charge payers from excessive spending by local authorities. The Secretary of State said as much when we discussed the extended powers that the Government want to take. The Association of District Councils, which covers these smaller authorities, contends that capping powers are wholly unnecessary and that in practice capping makes true local accountability for local authorities' spending decisions impossible. Authorities with small populations and small budgets cannot be made accountable through the ballot box under capping of the nature proposed by the Government.
        The ADC asks vice-presidents—there are quite a few of them among Conservative Members—to oppose the proposals in the Bill under which the Government seek powers to cap small authorities. Hon. Members should take the ADC's request seriously.
        5.15 pm
        I remind the House that the Secretary of State for the Environment already has powers to cap authorities whose spending or whose increases in spending he considers excessive. Those powers are contained in part VII of the Local Government Finance Act 1988. However, the provisions of that Act also ensure that authorities whose spending is below £35 million, as the Secretary of State may specify, are not subject to the possibility of capping.
        When we discussed this matter in the Committee that considered the 1988 Act, it was established that, if a council had a budget of only £15 million, capping would not take place. Indeed, the ceiling was set more than twice as high—the Secretary of State of the time said that he would reflect seriously before capping local authorities with budgets of below £35 million. If the Secretary of State's promises were sincere and if the speeches of

        813
        Members who served on the Committee in 1988 were sincere, why are we here again tonight defending local government against the capping of budgets below £15 million? The limit below which charge capping should not apply was originally introduced in recognition of the fact that authorities spending below that level did not contribute significantly to spending beyond the Government's targets for local government. That was agreed in Committee in 1988, when the Minister felt that there was no cause to cap authorities with budgets below £15 million—or even as high as £35 million.
        Why the need to reverse the decision taken in 1988?
        Mr. Tony Marlow: The hon. Gentleman has stated that the Government are concerned about the total level of local authority expenditure—and they certainly are. Does the Labour party have a view on whether total spending by local authorities should be controlled—
        The Chairman: Order. That will have to wait for another debate; it is not in order on this one.
        Mr. Marlow: With respect, Mr. Walker, we are talking about charge capping—
        The Chairman: Order. I suggest that the hon. Gentleman do me the courtesy of reading the amendment and then reflecting on whether he has grounds for his intervention.
        Mr. O'Brien: I was making the point that the Government are going against the spirit of the 1988 Act with regard to smaller local authorities, and I should like to know why. The statement of excessiveness is largely related to a comparison of actual spending with the Government's SSA. That is why we include that in the amendment. The SSAs are made on a national formula which, as Ministers accepted in Committee in 1988, cannot be sufficiently finely tuned to reflect the spending needs of low-spending authorities. Therefore, we want to know why the Government want to change the spirit of the 1988 Act. I hope that the Minister will say why local authorities whose budgets are below £15 million should be caught in the capping process.
        I have asked the Minister to clarify how far down the scale the Government intend to go with capping powers. Is there a cut-off point? Is there a limit to how far the Government are prepared to go? Town and parish councils with a budget below £ 15 million need to know why they will be caught in the capping net. There is nothing in the legislation that says where that cut-off point will be.
        Many local authorities will have difficulty meeting the requirements of the Government and the guidelines set down by the Department of the Environment, because of the lower spending base that could operate if the SSAs are not set in line with the needs of the local authorities. That is more important to local authorities whose spending powers are below £15 million, because they have statutory responsibilities and obligations. Low-spending authorities could have difficulty meeting those commitments if we are not prepared to give some guidance, assurance and protection to the local authorities.
        In the preparation of the 1988 Act, the Government acknowledged the problems that I have described and that is why they introduced the £15 million lower limit for charge capping. They also accepted that the limit may need increasing and that is why we have the £35 million ceiling.
        814
        That point was accepted by the House, which granted the Secretary of State the power to more than double the limit set by local authorities before charge capping applied.
        Therefore, the amendment is important if we are to treat fairly district councils with low expenditure. The range of limits that will be set by the application of the Bill to smaller local authorities could have some significance to the services provided by those authorities. I hope that the Minister will address the points that I have made and answer my questions, so that we can see what is in the Government's mind.
        Mr. Harry Barnes: Clause 1 ploughs on with the poll tax. Despite everything that has happened recently—the changes in the Conservative party and the local election results—we are still going down the same path. If there is any reason to distrust the new face of the Government, it is this measure.
        The amendment deals with SSAs, and many district councils will have difficulty in moving below the SSA levels. Districts in shire counties are particularly disadvantaged under the SSAs compared even with shire counties and metropolitan districts. However, I grant that the latter have been badly hit by the poll tax legislation.
        The booklet on the background and underlying methodology of the SSA published in 1990 by the Department of the Environment's local government finance policy directorate sets out the criteria under which the SSA operates. It points out that SSAs are simpler than grant-related expenditure assessments, because they have reduced the categories of assessment from 63 to 13.
        For districts in shire areas, that number of categories is even more dramatically reduced. The 13 categories include education, personal social services, police, fire and civil defence, highway maintenance and so on, and tend to include all other services and capital financing in two general catch-all categories. That concerns the district authorities. If there is something wrong with those limited areas of assessment, the district authorities are placed in considerable difficulty.
        As far as those difficulties affect the counties, they are to some extent overcome by the SSA provision in areas that are mentioned. The counties can operate their accounts in such a way that they get by, although they are getting by badly.
        Therefore, the anomalies in the SSAs hit district authorities worse than other authorities, especially in shire areas. The problem of the SSA structure can be seen in the district authority that covers most of my constituency in north-east Derbyshire. Will the precepts issued by the parish councils which are outside district control be excluded from the assessment? If not, we are in even greater difficulties.
        North-East Derbyshire has a budget this year of £7·3 million, which is £1·5 million, or 27 per cent., in excess of the Government's SSA. Under the Government's chop logic, its council must be one of the most profligate in England. That is nonsense. Independent judgments and the reports of the Audit Commission show it to be an efficient and well-run local authority. By putting services out to tender, it operates in the same way as other authorities, and it also has an efficient and well-run direct labour force.
        However, North-East Derbyshire comes bottom of any league table, and it is starved of grants because of the SSA formula. Its SSA per poll tax payer is the lowest of 26

        815
        comparable authorities identified by the Audit Commission. It has an SSA of £60·30 per head, which is nearly half that enjoyed by Derby, at £150·37—yet that authority is badly treated under the SSA arrangements. A table that formed part of a parliamentary answer that I received on 5 December 1990 showed that Derby was in the bottom half of the league table of revenue support grant in respect of SSA estimates. Derby is in a terrible situation, yet North-East Derbyshire is considerably worse off, receiving nearly half the amount that Derby does per charge payer.
        5.30 pm
        In the table to which I referred, North-East Derbyshire was placed 346 out of 366 for English authorities. Worse still, only one council has a lower SSA per poll tax payer, and that is East Dorset. I know that someone has to finish bottom of any league table, and that does not necessarily tell against the Government's position. However, it indicates that the Government think that North-East Derbyshire, in common with East Dorset, is a kind of ideal authority that can manage on almost no grant, and by raising only a limited amount of funding.
        However, East Dorset's difference from North-East Derbyshire is emphasised by its political control. East Dorset is represented by the hon. Members for Christchurch (Mr. Adley), with a Conservative majority of 22,000, and for Dorset, North (Mr. Baker), with a majority of more than 12,000—whereas North-East Derbyshire is represented by my hon. Friend the Member for Bolsover (Mr. Skinner) and myself. It is a traditionally solid Labour area, and one that has been seriously affected by the decline in the railways and mining, and, in neighbouring Rotherham, in the steel industry.
        It may be that East Dorset does not need much grant—though the hon. Member for Christchurch might argue otherwise. But North-East Derbyshire does, and in the absence of that revenue, the only way that it can maintain its services—many of which are statutory—is by increasing its poll tax. It then places itself at risk of being capped according to the provisions of the Bill.
        Why does North-East Derbyshire have such a small SSA and grant per taxpayer? It can only be because the formula is crazy, does not fit North-East Derbyshire's needs, and has insufficient flexibility to take account of the area's characteristics.
        After allowing for debt charges, interest receipts, and so on, district authorities in shire areas must consider three main criteria in calculating their SSA. Those characteristics, and the weightings that are applied to them, crucify authorities such as North-East Derbyshire and others that have been criticised by Members of the Government Front Bench, such as Derwentshire.
        One consideration is population and the net outflow during the day. North-East Derbyshire loses a considerable number of its population during the day to Sheffield, Chesterfield and pits in Chesterfield and Bolsover. Other towns gain from overnight visitors, particularly in seaside areas, but nothing like that occurs in North-East Derbyshire. That movement out of North-East Derbyshire must have an adverse effect on its weightings.
        Ward density and ward sparsity is another consideration. A thinly populated area may qualify for extra grant, as may a densely populated one. The logic of that is
        816
        reflected in services such as refuse collection and dispersal, when vehicles may either be clogged up in the traffic or have to travel great distances. However, North-East Derbyshire, together with Amber Valley, receives less grant than any comparable authority—£14 per poll tax payer, compared with £30 for Darlington.
        North-East Derbyshire takes the form of a large C-shape surrounding Chesterfield. It is an intricate mixture of densely populated and sparsely populated areas, which together present problems of the kind that I mentioned—yet it fails to qualify under the appropriate criteria. It loses out considerably because it does not match up to the ward figures, and so receives a combined amount less than that which almost any other area receives.
        If North-East Derbyshire is an ideal authority, its shape must also be ideal. However, if one could stretch out its C-shape in some way, it would be 30 miles long and in many places three miles wide. Its district council offices are in Chesterfield, so it is not spread out: it is like the hub of a bicycle wheel from which spokes radiate. People have to move in and out of that area continually to use the services that it provides. The SSA arrangements do not take account of that.
        The third set of social characteristics is represented by the social index, which deals with such matters as the number of houses with no bath or WC, the number of lone-parent families and the number of households in which there is more than one person inhabiting a room. In a host of cases North-East Derbyshire fails to qualify for help, because it is divided into two areas that follow two entirely different patterns. The east is solidly working class, while the west is middle class—although there are, of course, pockets of cross-class occupation.
        North-East Derbyshire, then, is sorely penalised in each of those three respects. For as long as we continue to experience the absurdities of the poll-tax regime, we shall need a formula that takes such problems into account. Unless parish moneys were excluded, it would be difficult for North-East Derbyshire to feature on the list of authorities that fall below SSA levels; but it should be possible for district authorities to do so.
        Such matters have already been discussed when deputations from North-East Derbyshire have met the Minister, but he has just sent me a letter saying that there is to be no argument about this issue. I have therefore had no option but to raise the matter in the House. I hope, however, that there will be a further deputation, because the lessons of North-East Derbyshire have wider applications. I am sure that many other hon. Members could talk about the effect of SSAs on the areas that they represent.
        Like many other district authorities, North-East Derbyshire is obliged to provide a range of statutory services, and it has little room for cuts. If it is operating not profligately but efficiently, in Audit Commission terms, it will have no leeway after spending the necessary amounts on electoral registration, refuse collection, environmental health services, street cleaning, town and country planning, poll tax rebates and the administration of the poll tax system.
        If it is to make cuts, therefore, the authority must cut other services. Spending on other services accounts for £2·5 million. If its expenditure proves to be £1·5 million above SSA, North-East Derbyshire will be expected to destroy hosts of services. It will be forced to slash its contributions to the county's concessionary fares policy

        817
        —thus either ending or severely damaging its operation—and to trading services, cemeteries and crematoria, swimming pools, sports centres, parks and open spaces. Retaining the facilities themselves would involve fantastic loan charges.
        If North-East Derbyshire is to live within the limits dictated by what the Government consider that its means should be, it will have to cut many services by 50 per cent. or more. That is idiotic. North-East Derbyshire is no island; it is by no means unique. It is similar to many other authorities throughout the country, many of them Labour. The SSA formula has been manipulated to the disadvantage of North-East Derbyshire.
        5.45 pm
        According to the booklet that I mentioned earlier, the SSA procedure was intended to be simple and easily understood; the principle of accountability was intended to operate. If I had had more time, I would have read out one of the sections in the booklet, which describes the structure and operation of the system—although no one, including me, would have understood.
        The booklet has a lot to say about judgmental considerations. It even applies such considerations to sparsity of population. Those "judgmental considerations", however, are sheer guesswork, and in many of the Government's calculations the guesswork has gone wrong. It is time that the Government started to pull back, instead of continuing to plough the same furrow and producing more and more unjust poll tax legislation.
        Mr. Michael Latham: I suspect that the hon. Member for Normanton (Mr. O'Brien), who moved the amendment, did not want to take yes for an answer. I expect my hon. Friend the Minister to have little difficulty in accepting the spirit, if not the wording., of this amendment: I cannot believe that the Government intend to cap an authority that does not exceed its SSA.
        Mr. O'Brien: Will the hon. Gentleman give way?
        Mr. Latham: I will, although I think that it is up to my hon. Friend the Minister to answer.
        Mr. O'Brien: I told the Minister at the beginning of my speech that, if he agreed with the content of the amendment, I would leave it at that. He declined to accept my invitation, so I must pursue the matter.
        Mr. Latham: I am sorry if I appeared to criticise the hon. Gentleman; I certainly did not intend to do so. My hon. Friend, however, will make his own speech, and will want to make his own points rather than simply intervening in the hon. Gentleman's speech. Indeed, he is now indicating as much.
        Following what was said by the hon. Member for Derbyshire, North-East (Mr. Barnes), let me make it clear that for me this is not a party political matter. My constituency contains three local authorities, none of them Labour: some councillors are Independent, some SLD, and most—I am glad to say—Conservative.
        Nevertheless, I am slightly worried about the position of Rutland district council—and, as my hon. Friend the Minister knows, so is the council. I do not think that there will be any problem provided that the authority keeps within its SSA, as indeed, it has done ever since the introduction of the system. I fear, however, that in such a small authority a tiny amount of spending could be
        818
        enough to exceed the SSA. [Interruption.] I do not know why Opposition Members are so excited about that; I should have thought that it was obvious.
        I know that my hon. Friend received a deputation of small local authorities the other day. I believe that it was led by Beverley borough council, with which Rutland has been associated. The deputation presented my hon. Friend with a strong case, in writing, which I know he is taking seriously. I am sure that he will continue to do so when drawing up the SSA formula for the coming year.
        I am happy to accept the Government's assurance. I appreciate that they do not want any local authority to exceed its SSA, thus imposing a burden on its charge payers. Although in principle I regret the introduction of Bills of this nature—and I believe that the Government do as well—I recognise that there may be strong reasons for it. I merely ask my hon. Friend for an assurance that he is thinking carefully about the case put to him by Beverley, Rutland and other small district councils, and that he will respond constructively.
        Mr. Allen McKay: I assure the hon. Member for Rutland and Melton (Mr. Latham) that of course the Minister will listen; of course he will consider his case. But after all that the answer will be that he gets nothing. It is as simple as that.
        The Bill represents a further erosion of democracy and local government. To use a fishing analogy, the Government are closing the mesh on their nets. They have caught the whale and the shark; now they are after the minnow. They have carried on in that way since 1979 and now they are turning on the small authorities simply because of their ideological preference for central Government as against local government. They will not save much money, but it is the principle of the thing that is important. They are after the small authorities.
        Ministers may say that, if the small authorities are getting away with it, the large authorities will follow their example. The Government are not exactly running scared—they have not been scared of anything yet, because they have dismissed every logical argument ever put to them in their pursuit of the destruction of democracy in local government.
        I shall use my own local authority as a marker. For generations, Barnsley council went about its business lawfully and supplied services, as many small authorities will have done. But then came charge capping.
        We have never had a quarrel with central Government about what central Government should spend—differences, perhaps, but never a quarrel. It is for central Government to determine what grant local government receives. Our quarrel is not with that principle but with the idea that central Government should determine how a local authority can spend money on behalf of the electorate who voted it into power.
        The Secretary of State and his Ministers argue that they are acting on behalf of the people, but they have never consulted the people on the subject. It is four years since they consulted the people, so they have no authority to say that they are acting on their behalf.
        Small authorities, however, consult the people. My local authority consults the people year in, year out. Every year it consults the electorate for permission to spend the money it wants and to provide the services it wants.
        What has happened to Barnsley will happen to the smaller authorities now, too. First, we lost a music centre

        819
        —36 musicians have been dismissed and one of the finest music centres in Britain has gone out of business. Secondly, only this week I found out that, as a result of the authority's having been capped, no further education is being offered to people in our school areas. Dancing classes, language classes and soft furnishing classes, all for aged people, have gone. One hundred and thirty-six elements of further education have had to go, purely because of poll tax capping. That is taking ideology to extremes.
        What is being done is destroying the very things that local people wanted, that local government could supply, and that central Government will not supply. There is the ridiculous example of the Sheffield supertram. That was something that the Government wanted, but which under the spending criteria the authorities were unable to supply. Central Government gave money to local government to finance the supertram. The four authorities said, "Fine. We will act as your agent and organise the supertram." But then central Government said, "Wait a minute. If you spend the money that we give you, you will have to cut your services even further." So the supertram became a non-runner. Small authorities will soon come up against such problems, too.
        All that we want from central Government is some common sense, rather than an ideological commitment to the pursuit of a vendetta against local authorities, large and small.
        I know that the Minister of State has said that he will see representatives of the authorities concerned. I am sure that he will see them, but with all due respect to him—I would see him at any time, because I like discussing the situation with him, even though we disagree—it is the Secretary of State whom we wish to see. I had a letter telling me that the Secretary of State's diary was full—I should hope that it is full; otherwise, the right hon. Gentleman would not be doing his job. But I shall write back and say that, although we accept that his diary is full, we are willing to wait. The Government could give us the first available date—it could be a Saturday or a Sunday or any other day of the week. The Secretary of State should be able to find at least one hour of his time to consider and discuss the authorities' problems with their representatives.
        For years we have been trying to get through to Ministers and Secretaries of State the concerns of local government. Of course, there are issues on which we differ and others on which we can agree, but we can never agree with the way in which central Government are treating local government and local democracy.
        The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): It is always a pleasure to follow the hon. Member for Barnsley, West and Penistone (Mr. McKay), who, we would all agree, is one of the most reasonable men in the House. We listen to him with particular care and attention. But first I must return to the beginning of the debate and the opening speech of the hon. Member for Normanton (Mr. O'Brien).
        I reiterate what my hon. Friend the Minister of State said: we have no intention of capping local authorities that set budgets below their standard spending assessments. The hon. Member for Normanton said that I had a love and passion for local government. I plead guilty to that.
        820
        Perhaps it is because I want to make it work, but I shall return to that later. My love and passion do not extend quite as far as that of Alan Bleasdale in "GBH", which I am sure the hon. Gentleman enjoys watching as much as I do.
        When rate capping was introduced, we made it clear that the exemption reflected the relatively low expenditure incurred by the authorities concerned, and hence its relatively small effect on total local government spending. At that time, we were determined to concentrate our efforts on the worst overspenders and we believed that the effect on local taxation of such district spending decisions would be small. The hon. Member for Normanton asked what had changed since. The answer is that time has moved on and some authorities with budgets below £15 million have greatly burdened their charge payers. This year there have been about 40 examples of authorities budgeting below £15 million overspending their SSAs by more than £26 per adult, which translates directly into an increase of £26 or more in the charge.
        Mr. John Lee: My hon. Friend will appreciate that my local authority of Pendle could be affected by the measure and that it regards its SSA as unsatisfactory. I have made a number of representations to that effect to my hon. Friend and his ministerial colleagues. Will my hon. Friend give detailed criteria for the factors that would influence his Department in deciding whether to cap a local authority such as Pendle? I fully understand if he would prefer to write to me rather than to reply immediately. Will he also consider visiting Pendle—perhaps during the recess?
        Mr. Key: My hon. Friend makes a tempting offer. I may say that his untiring efforts have had a significant effect on the Government's thinking about local authority finance in the past year and more and I hope that that will be able to continue. I ask my hon. Friend to be patient until we make announcements about the next round of SSAs, at which point we shall be in a position to meet his local authority, if it so wishes, and to listen to its concerns about the SSA methodology and how it may be affected. But I suspect that with regard to this Bill the authority need have no fear. It is unlikely that a sensible and prudent local authority which is not spending above its SSA will be caught by the Bill.
        6 pm
        As I said, time has moved on. We are determined that the substantial extra sums that we are making available to local authorities from this year onwards should be used to keep charges down and not to boost spending further. We recognise changed circumstances and we have taken prompt action, in line with our duty to protect charge payers, to address the realities of the situation. The means of achieving our goals may have had to change because of the actions of some local authorities, but the goal remains the same—a local tax at acceptable levels.
        The hon. Members for Normanton (Mr. O'Brien) and for Derbyshire, North-East (Mr. Barnes) asked about parishes. The cost of providing parish services is included in the districts' SSAs, but parishes themselves fall outside the capping regime. However, as parish precepts do not form part of the calculation that authorities are required to make, under the terms of section 95 of the Local Government Finance Act 1988, in setting their demand on the collection fund for the year, such precepts cannot,

        821
        under the terms of the statute, be considered by the Secretary of State in relation to his capping powers. Parish expenditure cannot, therefore, bring a district into capping. I am happy to be able to give hon. Members that assurance.
        Mr. Peter Hardy: The Minister will recall that a few months ago I raised the question of parish councils and referred to Wentworth parish council in my constituency. I said that the Government had been remarkably remiss in not referring to the position of parishes and parish councils. At that point, the Minister intervened to say that he would be speaking to them at an early date. Does he realise that what he has just said will bring parish councils no great joy and will prolong the real anxiety felt by responsible parish councils—the vast majority are absolutely responsible, as I am sure the Minister will confirm? They will find his comments most unhelpful and not at all encouraging.
        Mr. Key: I am delighted to be able to reassure the hon. Gentleman. Only yesterday, my hon. Friend the Minister for Local Government and Inner Cities met representatives of the National Association of Local Councils, who raised no particular difficulties in that respect. I ask the hon. Gentleman to read what I have said—and, indeed, what I am about to say as I have not quite finished my remarks about councils. I should add that I recall with pleasure my visit to his constituency and to Wentworth.
        Mr. O'Brien: This is an important issue. Is the Minister saying that parish precepts will not influence the SSAs and capping levels of district councils? Can he confirm that precepts set by parishes will be held separately from the expenditure of district councils?
        Mr. Key: Parishes are included within SSAs but, as I said, parish expenditure cannot bring a district into capping. The capping regime bites on the demand made by the district on the collection fund, regardless of the level of precept levied by parishes on the authority.
        Mr. O'Brien: I repeat that this is an important matter. We are talking about district councils' expenditure. Are parish council precepts included in that. The Minister for Local Government and Inner Cities is shaking his head, so presumably they are not included. If he is not, his head must have been shaken by the power.
        I want to be clear that the precept for parish councils will not be included in district councils' total expenditure. Is that correct?
        Mr. Key: I have already tried to explain the position, and I shall continue to try to do so. It has been argued that it is unfair to include parish expenditure in districts' SSAs but not in their budgets, as that treats authorities which have a large number of parishes in their area more favourably than those which do not. The Secretary of State recognised that, in very marginal cases, an authority might avoid designation through certain of its functions being performed by parishes, and that authorities might devolve functions to provide themselves with greater headroom against their SSA. I should point out that parish expenditure accounts for only a very small proportion of local authority spending, and the Secretary of State did not consider that the issues were likely to be of sufficient magnitude to justify any special provision.
        822
        The short answer, then, is that parish expenditure cannot bring a district into capping, and the capping regime bites on the demand made by the district on the collection fund regardless of the level of precept levied by the parishes on the authority.
        Mr. O'Brien: I must press the Minister on this important point. We are talking not only about parishes in the non-metropolitan district areas. The arrangements must also presumably apply to parish and town councils in the metropolitan districts. The principle is exactly the same. Ryedale district council's SSA was £6·21 million. Do I take it that any parishes that precepted upon that council could not influence the level of SSA?
        Mr. Key: The parishes precept not on the council but on the collection fund. In setting SSAs, district and parish spending are considered together, but capping bites only on the district's demand on the collection fund. That is the important point. I acknowledge that this is an important question and, if I discover that I have said anything that is not correct, I shall leap into print with a letter to the hon. Gentleman.
        The amendment would maintain the exemption from capping of authorities in England and Wales setting budgets of £15 million or less for those authorities which set budgets above their standard spending assessments. It is difficult to understand the rationale behind it. That is why I could not help the Opposition by leaping to my feet at an early stage during the opening remarks of the hon. Member for Normanton to say that I agreed with the proposal.
        Whatever the hon. Gentleman's precise intention in tabling the amendment, this is clearly another example of the way in which the Opposition have no compunction about exposing charge payers to the effects of overspending by local authorities. There will always be a temptation to spend upwards. Even small authorities with small budgets will be tempted to spend upwards, especially in view of the settlement announced by my right hon. Friend the Chancellor in his Budget last March. It is precisely the authorities that set their budgets over SSA that indulge in the kind of overspending that we seek powers to restrain. The vast majority of the small authorities are not included. Capping has worked to the extent that such authorities have trimmed their budgets accordingly. Only 86 of the 267 local authorities with budgets of under £15 million were spending over their SSAs. I believe that those authorities would not have sought to budget over their SSAs—and over £15 million—if they thought that capping was in prospect.
        Come what may, authorities budgeting at or below SSA have nothing to fear from the provisions of the Bill. They are budgeting prudently and sensibly and their charge payers receive a fair deal. It is the other authorities—the authorities spending well above SSA—from which the charge payer needs protection. We are not talking about small sums. About 40 authorities set budgets which added £26 or more to the bills met by their charge payers. In some cases, the effect was very much more significant. My right hon. Friend the Secretary of State mentioned a few examples on Second Reading, pointing out that Derwentside had cost its charge payers an additional £95, Harlow £83, Elmbridge £73 and Watford £56.
        The hon. Member for Derbyshire, North-East spoke of the criteria for standard spending assessments. The

        823
        average increase in standard spending assessments for shire districts in 1991–92 is 28·3 per cent. The increase in total SSAs is 19·4 per cent. North-East Derbyshire's SSA increased 26·2 per cent., in line roughly with the SSAs for other Derbyshire districts.
        Each year, we consult the local authority associations about standard spending assessments. My hon. Friend the Minister for Local Government and Inner Cities believes that there is nothing new to be said or heard. When, just before Christmas, we announce our intended SSAs for the following year, we listen to delegations and to the views of Members of Parliament and councillors. It is interesting to note how many district councils are spending money on functions for which the counties are financed under the SSAs—and then districts wonder why we are slightly doubtful about their spending policies.
        Mr. Bellotti: Will the Minister bear in mind the Audit Commission's family of local authorities, which takes into account 49 different factors? There is a vast difference in the SSAs of local authorities in the same families.
        Mr. Key: That does not surprise me. The hon. Member for Eastbourne (Mr. Bellotti) can be reassured that we constantly consider the families of local authorities. It does not surprise me that there are great differences within the families on the indicators for SSAs. The hon. Member for Derbyshire, North-East laughs, but statistically the methodology of SSAs is sophisticated. However, it is much simpler than the old grant-related expenditure assessment system. Sitting in the centre of the bicycle wheel, about which the hon. Member for Derbyshire, North-East told us, it is interesting that local authorities queue up to tell us that their figures are unfair and that all the authorities around them are overpaid. That is the nature of the beast, I fear.
        Mr. Hardy: I shall not labour the point, but an element in the determination of standard spending assessments is the 1981 census. The Minister referred to his visit to my constituency—I am delighted that he enjoyed that and we should be pleased to see him again—but the devastation that he saw has occurred since the 1981 census. The economic condition of my area is based on that assessment rather than on the current position. That makes the SSA for the area quite absurd.
        Mr. Key: I well recall that memorable day when I was able to announce Government support of more than £20 million for local authorities in the hon. Gentleman's constituency. How I should like to be able to repeat that on my visits to his constituency.
        I am sure the hon. Member for Wentworth (Mr. Hardy) is aware that another census has just been taken. Once the figures have been analysed and are available to us, it will make a substantial difference.
        It is important to recognise that the Labour party has never suggested that it will replace the system of SSAs. Will it replace that system?
        Mr. O'Brien: Yes.
        Mr. Key: If the Labour party is committed to replacing SSAs with a grant mechanism, it should tell us and, more important, local authorities exactly what it has in mind, because there has been a deafening silence so far.
        Mr. O'Brien: If the Minister reads Hansard, he will find that on Second Reading my hon. Friend the Member for Dagenham (Mr. Gould) explained our policy no fewer than three times. I am surprised that the hon. Gentleman has not read Hansard, which clearly shows all the options.
        6.15 pm
        Mr. Key: Our SSA reports are copious—I recall that there are almost 100 pages—but I do not think the detail given in the speech of the hon. Member for Dagenham was quite as clear as that.
        My hon. Friend the Member for Rutland and Melton (Mr. Latham) mentioned Rutland authority. I acknowledge the contribution that it, Beverley and several other small authorities have made in their serious critique of the methodology of SSAs as they affect small rural authorities. I enjoyed my discussion with officers and councillors from those authorities and I assure my hon. Friend that we are carefully considering the substantial work that was done. I look forward to the results of that work, to which I shall respond in due course. I have much enthusiasm for the methodology of SSAs; I am never sure why, but I find it compelling. I should be sorry if a Labour Government did away with them.
        The hon. Member for Barnsley, West and Penistone mentioned the Sheffield supertram. As he knows, we are holding discussions on that and more meetings are planned. I look forward to resolution of the problems. As discussions are being held, it would be unwise for me to say more tonight.
        There is no question of the destruction of democracy. I am not scared about that, but if I am scared about anything it is about parts of our country where local democracy is not thriving. I sometimes worry about the future of local democracy.
        Mr. Blunkett: I worry all the time.
        Mr. Key: The hon. Member for Brightside worries all the time. I hope that he does not, because he is a cheerful fellow; I hate to think of him worrying all the time.
        There is a problem in some of our great cities, but it should not be addressed on a party political basis, because it is a problem of democracy. Opposition Members may agree that when one visits a city area one increasingly meets people who say that they are the real representatives of the community. They say, "Don't listen to him; I really know what the people think." There is much diversity among the people who queue up to say that they represent communities, but what they have in common is that most of them are not elected councillors. That is a real problem for democracy.
        The amendment would not only reduce but, in practice, eliminate the purpose of the provisions of clause 1. Once again, that shows that the Opposition are more interested in pandering to the interests of their friends in local government than in protecting charge payers, and I call on the Committee to reject the amendment.
        Mr. O'Brien: The purpose of the amendment is to prevent authorities that spend less than £15 million and below their SSAs from being capped. The Minister assured us that the Government do not intend to cap such authorities, but we have often heard that from Ministers in Committee. Local authorities, especially Rutland, that spend 10p, 15p or 20p per week too much per charge payer

        825
        may be capped. It is now getting so ridiculous that there must be some protection for local authorities, which is why we have tabled the amendment.
        The Minister said that there would be a precept on the collection fund with regard to parish and town councils. I remind Conservative Members that the same was said about the police, about the fire service and about public transport, but they are all subject to capping. If we are to have assurances that there will be no further approach to capping for parish and town councils, it is imperative that the amendment is accepted to protect authorities such as Rutland. A very small increase in expenditure could put such authorities into the capping criteria. That is very dangerous for local authorities and for democracy within those authorities.
        Mr. Latham: I am sorry to interrupt the hon. Gentleman, but he must not take that line. He has tabled an amendment and asked for an assurance, which he has been given. He should withdraw the amendment.
        Mr. O'Brien: We have had so many assurances. We referred to those given during the debate on the Local Government Finance Act 1988, which are being overturned tonight. Therefore, the assurance that the Minister is now giving us does not impress us one bit. If Conservative Members are interested in their local authorities and want to protect them, they must support the amendment. Because we are concerned about the future and the protection of local authorities, we will press the amendment to a Division.
        Question put, That the amendment be made:—
        The Committee divided: Ayes 209, Noes 286.

        Division No. 163]

        [6.20 pm

        AYES

        Abbott, Ms Diane

        Cartwright, John

        Adams, Mrs Irene (Paisley, N.)

        Clark, Dr David (S Shields)

        Allen, Graham

        Clarke, Tom (Monklands W)

        Alton, David

        Clelland, David

        Anderson, Donald

        Clwyd, Mrs Ann

        Archer, Rt Hon Peter

        Cohen, Harry

        Armstrong, Hilary

        Cook, Robin (Livingston)

        Ashdown, Rt Hon Paddy

        Corbett, Robin

        Ashley, Rt Hon Jack

        Cryer, Bob

        Ashton, Joe

        Cummings, John

        Banks, Tony (Newham NW)

        Cunliffe, Lawrence

        Barnes, Harry (Derbyshire NE)

        Cunningham, Dr John

        Barnes, Mrs Rosie (Greenwich)

        Davies, Rt Hon Denzil (Llanelli)

        Barron, Kevin

        Davies, Ron (Caerphilly)

        Battle, John

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

        Beckett, Margaret

        Dewar, Donald

        Beith, A. J.

        Dixon, Don

        Bell, Stuart

        Doran, Frank

        Bellotti, David

        Douglas, Dick

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

        Duffy, A. E. P.

        Benton, Joseph

        Dunnachie, Jimmy

        Bermingham, Gerald

        Dunwoody, Hon Mrs Gwyneth

        Blair, Tony

        Edwards, Huw

        Blunkett, David

        Evans, John (St Helens N)

        Boateng, Paul

        Ewing, Mrs Margaret (Moray)

        Bradley, Keith

        Fatchett, Derek

        Bray, Dr Jeremy

        Faulds, Andrew

        Brown, Gordon (D'mline E)

        Field, Frank (Birkenhead)

        Brown, Nicholas (Newcastle E)

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

        Bruce, Malcolm (Gordon)

        Flynn, Paul

        Buckley, George J.

        Foot, Rt Hon Michael

        Caborn, Richard

        Foster, Derek

        Callaghan, Jim

        Foulkes, George

        Campbell, Menzies (Fife NE)

        Fraser, John

        Campbell, Ron (Blyth Valley)

        Fyfe, Maria

        Canavan, Dennis

        Garrett, John (Norwich South)

        Carlile, Alex (Mont'g)

        Garrett, Ted (Wallsend)

        Carr, Michael

        Godman, Dr Norman A.

        826

        Golding, Mrs Llin

        Mowlam, Marjorie

        Gordon, Mildred

        Mullin, Chris

        Gould, Bryan

        Murphy, Paul

        Graham, Thomas

        Nellist, Dave

        Grant, Bernie (Tottenham)

        Oakes, Rt Hon Gordon

        Griffiths, Win (Bridgend)

        O'Brien, William

        Grocott, Bruce

        O'Hara, Edward

        Hain, Peter

        O'Neill, Martin

        Hardy, Peter

        Orme, Rt Hon Stanley

        Harman, Ms Harriet

        Owen, Rt Hon Dr David

        Hattersley, Rt Hon Roy

        Parry, Robert

        Haynes, Frank

        Patchett, Terry

        Heal, Mrs Sylvia

        Pendry, Tom

        Henderson, Doug

        Pike, Peter L.

        Hoey, Ms Kate (Vauxhall)

        Powell, Ray (Ogmore)

        Hogg, N. (C'nauld & Kilsyth)

        Prescott, John

        Home Robertson, John

        Primarolo, Dawn

        Howarth, George (Knowsley N)

        Quin, Ms Joyce

        Howells, Dr. Kim (Pontypridd)

        Radice, Giles

        Hughes, John (Coventry NE)

        Randall, Stuart

        Hughes, Robert (Aberdeen N)

        Redmond, Martin

        Hughes, Roy (Newport E)

        Rees, Rt Hon Merlyn

        Hughes, Simon (Southwark)

        Reid, Dr John

        Illsley, Eric

        Richardson, Jo

        Janner, Greville

        Rooker, Jeff

        Johnston, Sir Russell

        Rooney, Terence

        Jones, Barry (Alyn & Deeside)

        Ross, Ernie (Dundee W)

        Jones, Ieuan (Ynys Môn)

        Rowlands, Ted

        Jones, Martyn (Clwyd S W)

        Ruddock, Joan

        Kaufman, Rt Hon Gerald

        Salmond, Alex

        Kennedy, Charles

        Sedgemore, Brian

        Kirkwood, Archy

        Sheerman, Barry

        Lambie, David

        Sheldon, Rt Hon Robert

        Lamond, James

        Shore, Rt Hon Peter

        Leadbitter, Ted

        Skinner, Dennis

        Leighton, Ron

        Smith, Andrew (Oxford E)

        Lestor, Joan (Eccles)

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

        Lewis, Terry

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

        Litherland, Robert

        Smith, J. P. (Vale of Glam)

        Livingstone, Ken

        Soley, Clive

        Lloyd, Tony (Stretford)

        Spearing, Nigel

        Loyden, Eddie

        Steel, Rt Hon Sir David

        McAllion, John

        Steinberg, Gerry

        McAvoy, Thomas

        Stott, Roger

        McCartney, Ian

        Straw, Jack

        Macdonald, Calum A.

        Taylor, Mrs Ann (Dewsbury)

        McFall, John

        Taylor, Matthew (Truro)

        McKelvey, William

        Thomas, Dr Dafydd Elis

        McLeish, Henry

        Thompson, Jack (Wansbeck)

        McMaster, Gordon

        Turner, Dennis

        McWilliam, John

        Wallace, James

        Madden, Max

        Walley, Joan

        Mahon, Mrs Alice

        Warden, Gareth (Gower)

        Marek, Dr John

        Wareing, Robert N.

        Marshall, David (Shettleston)

        Watson, Mike (Glasgow, C)

        Marshall, Jim (Leicester S)

        Welsh, Andrew (Angus E)

        Martin, Michael J. (Springburn)

        Welsh, Michael (Doncaster N)

        Martlew, Eric

        Wigley, Dafydd

        Maxton, John

        Williams, Rt Hon Alan

        Meacher, Michael

        Williams, Alan W. (Carm'then)

        Meale, Alan

        Wilson, Brian

        Michael, Alun

        Winnick, David

        Michie, Bill (Sheffield Heeley)

        Worthington, Tony

        Michie, Mrs Ray (Arg'l & Bute)

        Young, David (Bolton SE)

        Mitchell, Austin (G't Grimsby)

        Moonie, Dr Lewis

        Tellers for the Ayes:

        Morgan, Rhodri

        Mr. Allen McKay and

        Morley, Elliot

        Mr. Ken Eastham

        Morris, Rt Hon J. (Aberavon)

        NOES

        Adley, Robert

        Arnold, Sir Thomas

        Aitken, Jonathan

        Ashby, David

        Alexander, Richard

        Aspinwall, Jack

        Alison, Rt Hon Michael

        Atkins, Robert

        Allason, Rupert

        Atkinson, David

        Amess, David

        Baker, Nicholas (Dorset N)

        Amos, Alan

        Baldry, Tony

        Arbuthnot, James

        Batiste, Spencer

        Arnold, Jacques (Gravesham)

        Bellingham, Henry

        827

        Bendall, Vivian

        Gorst, John

        Bennett, Nicholas (Pembroke)

        Grant, Sir Anthony (CambsSW)

        Benyon, W.

        Greenway, Harry (Ealing N)

        Bevan, David Gilroy

        Greenway, John (Ryedale)

        Biffen, Rt Hon John

        Gregory, Conal

        Blackburn, Dr John G.

        Griffiths, Peter (Portsmouth N)

        Blaker, Rt Hon Sir Peter

        Grist, Ian

        Body, Sir Richard

        Ground, Patrick

        Bonsor, Sir Nicholas

        Grylls, Michael

        Boscawen, Hon Robert

        Gummer, Rt Hon John Selwyn

        Boswell, Tim

        Hague, William

        Bowden, A. (Brighton K'pto'n)

        Hamilton, Hon Archie (Epsom)

        Bowden, Gerald (Dulwich)

        Hamilton, Neil (Tatton)

        Bowis, John

        Hannam, John

        Boyson, Rt Hon Dr Sir Rhodes

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

        Brandon-Bravo, Martin

        Hargreaves, Ken (Hyndburn)

        Brazier, Julian

        Harris, David

        Bright, Graham

        Haselhurst, Alan

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

        Hawkins, Christopher

        Bruce, Ian (Dorset South)

        Hayes, Jerry

        Buchanan-Smith, Rt Hon Alick

        Hayward, Robert

        Buck, Sir Antony

        Heseltine, Rt Hon Michael

        Burns, Simon

        Hicks, Mrs Maureen (Wolv' NE)

        Burt, Alistair

        Hicks, Robert (Cornwall SE)

        Butler, Chris

        Higgins, Rt Hon Terence L.

        Butterfill, John

        Hill, James

        Carlisle, John, (Luton N)

        Hind, Kenneth

        Carlisle, Kenneth (Lincoln)

        Holt, Richard

        Carrington, Matthew

        Hordern, Sir Peter

        Cash, William

        Howard, Rt Hon Michael

        Chalker, Rt Hon Mrs Lynda

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

        Channon, Rt Hon Paul

        Howarth, G. (Cannock & B'wd)

        Chapman, Sydney

        Howell, Rt Hon David (G'dford)

        Chope, Christopher

        Hughes, Robert G. (Harrow W)

        Churchill, Mr

        Hunt, Sir John (Ravensbourne)

        Clark, Rt Hon Alan (Plymouth)

        Hunter, Andrew

        Clark, Dr Michael (Rochford)

        Hurd, Rt Hon Douglas

        Clark, Rt Hon Sir William

        Irvine, Michael

        Clarke, Rt Hon K. (Rushcliffe)

        Irving, Sir Charles

        Colvin, Michael

        Jack, Michael

        Coombs, Anthony (Wyre F'rest)

        Jackson, Robert

        Coombs, Simon (Swindon)

        Janman, Tim

        Cope, Rt Hon John

        Johnson Smith, Sir Geoffrey

        Couchman, James

        Jones, Gwilym (Cardiff N)

        Cran, James

        Jones, Robert B (Herts W)

        Currie, Mrs Edwina

        Jopling, Rt Hon Michael

        Curry, David

        Kellett-Bowman, Dame Elaine

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

        Key, Robert

        Davis, David (Boothferry)

        Kilfedder, James

        Day, Stephen

        King, Roger (B'ham N'thfield)

        Devlin, Tim

        King, Rt Hon Tom (Bridgwater)

        Dickens, Geoffrey

        Kirkhope, Timothy

        Dicks, Terry

        Knapman, Roger

        Dorrell, Stephen

        Knight, Greg (Derby North)

        Douglas-Hamilton, Lord James

        Knight, Dame Jill (Edgbaston)

        Dunn, Bob

        Knowles, Michael

        Durant, Sir Anthony

        Knox, David

        Eggar, Tim

        Lang, Rt Hon Ian

        Evans, David (Welwyn Hatf'd)

        Latham, Michael

        Evennett, David

        Lawrence, Ivan

        Fairbairn, Sir Nicholas

        Lee, John (Pendle)

        Fallon, Michael

        Leigh, Edward (Gainsbor'gh)

        Favell, Tony

        Lennox-Boyd, Hon Mark

        Fenner, Dame Peggy

        Lightbown, David

        Field, Barry (Isle of Wight)

        Lilley, Rt Hon Peter

        Finsberg, Sir Geoffrey

        Lloyd, Sir Ian (Havant)

        Fishburn, John Dudley

        Lloyd, Peter (Fareham)

        Fookes, Dame Janet

        Lord, Michael

        Forman, Nigel

        Lyell, Rt Hon Sir Nicholas

        Forsyth, Michael (Stirling)

        McCrindle, Sir Robert

        Franks, Cecil

        Macfarlane, Sir Neil

        Freeman, Roger

        MacGregor, Rt Hon John

        French, Douglas

        MacKay, Andrew (E Berkshire)

        Fry, Peter

        Maclean, David

        Gale, Roger

        McNair-Wilson, Sir Michael

        Gardiner, Sir George

        McNair-Wilson, Sir Patrick

        Gill, Christopher

        Madel, David

        Goodlad, Alastair

        Malins, Humfrey

        Goodson-Wickes, Dr Charles

        Mans, Keith

        Gorman, Mrs Teresa

        Maples, John

        828

        Marland, Paul

        Shepherd, Richard (Aldridge)

        Marlow, Tony

        Shersby, Michael

        Marshall, John (Hendon S)

        Sims, Roger

        Marshall, Sir Michael (Arundel)

        Skeet, Sir Trevor

        Martin, David (Portsmouth S)

        Smith, Tim (Beaconsfield)

        Maude, Hon Francis

        Soames, Hon Nicholas

        Mayhew, Rt Hon Sir Patrick

        Spicer, Sir Jim (Dorset W)

        Mellor, Rt Hon David

        Spicer, Michael (S Worcs)

        Meyer, Sir Anthony

        Squire, Robin

        Mills, Iain

        Stanbrook, Ivor

        Miscampbell, Norman

        Stanley, Rt Hon Sir John

        Mitchell, Andrew (Gedling)

        Steen, Anthony

        Moate, Roger

        Stern, Michael

        Monro, Sir Hector

        Stevens, Lewis

        Montgomery, Sir Fergus

        Stewart, Allan (Eastwood)

        Moore, Rt Hon John

        Stewart, Andy (Sherwood)

        Morrison, Sir Charles

        Stewart, Rt Hon Ian (Herts N)

        Morrison, Rt Hon Sir Peter

        Sumberg, David

        Moss, Malcolm

        Summerson, Hugo

        Moynihan, Hon Colin

        Taylor, Ian (Esher)

        Neale, Sir Gerrard

        Tebbit, Rt Hon Norman

        Nelson, Anthony

        Temple-Morris, Peter

        Newton, Rt Hon Tony

        Thompson, D. (Calder Valley)

        Nicholls, Patrick

        Thompson, Patrick (Norwich N)

        Nicholson, Emma (Devon West)

        Thorne, Neil

        Oppenheim, Phillip

        Thornton, Malcolm

        Page, Richard

        Thurnham, Peter

        Paice, James

        Townend, John (Bridlington)

        Parkinson, Rt Hon Cecil

        Townsend, Cyril D. (B'heath)

        Patnick, Irvine

        Tracey, Richard

        Patten, Rt Hon John

        Tredinnick, David

        Pattie, Rt Hon Sir Geoffrey

        Trotter, Neville

        Peacock, Mrs Elizabeth

        Twinn, Dr Ian

        Porter, David (Waveney)

        Vaughan, Sir Gerard

        Portillo, Michael

        Viggers, Peter

        Powell, William (Corby)

        Wakeham, Rt Hon John

        Raison, Rt Hon Sir Timothy

        Waldegrave. Rt Hon William

        Rathbone, Tim

        Walden, George

        Redwood, John

        Walker, Bill (T'side North)

        Rhodes James, Robert

        Walters, Sir Dennis

        Riddick, Graham

        Ward, John

        Rifkind, Rt Hon Malcolm

        Wardle, Charles (Bexhill)

        Roberts, Sir Wyn (Conwy)

        Watts, John

        Roe, Mrs Marion

        Wells, Bowen

        Rossi, Sir Hugh

        Wheeler, Sir John

        Rost, Peter

        Whitney, Ray

        Rowe, Andrew

        Widdecombe, Ann

        Rumbold, Rt Hon Mrs Angela

        Wiggin, Jerry

        Sackville, Hon Tom

        Wilshire, David

        Sainsbury, Hon Tim

        Winterton, Mrs Ann

        Sayeed, Jonathan

        Wolfson, Mark

        Scott, Rt Hon Nicholas

        Woodcock, Dr. Mike

        Shaw, David (Dover)

        Shaw, Sir Michael (Scarb')

        Tellers for the Noes:

        Shelton, Sir William

        Mr. John M Taylor and

        Shepherd, Colin (Hereford)

        Mr. Timothy Wood.

        Amendment accordingly negatived.
        Mr. Blunkett: I beg to move amendment No. 17, in page 1, line 9, at end insert
        'after the making of an Order under subsection (4) below'.
        The First Deputy Chairman of Ways and Means (Sir Paul Dean): With this, it will be convenient to consider the following amendments: No. 18, in page 1, line 10, after 'above', insert
        'and after the making of an Order under subsection (4) below'.
        No. 21, in page 1, line 19, at end insert
        `(4) the Secretary of State may make an Order to give effect to the provisions of subsections (1) and (2) above after he has laid before Parliament a statement specifying that the calculation of the amount of £15 million referred to in section 101(1) of the 1988 Act does not in respect of any authority include any revenue expenditure arising in connection with a project all or part of whose capital cost is funded by the European Community.'.
        Mr. Blunkett: I want to take up the issues that we left at the end of our debate on the previous group of amendments which relate to the effect that expenditure has on the capping criteria, its relationship to the SSA and the question of money that is returned to us from the European Community in the form of grants and allocations for specific projects.
        At the end of our previous debate, there were some interesting exchanges between the Minister and my hon. Friend the Member for Normanton (Mr. O'Brien) about the way in which the collection fund, the draw-down and precepting related to capping. We look forward to the Minister's reply with some interest because the Opposition and local authority treasurers believe strongly that precepting on the collection fund has an effect on the amount that the major collecting authority can draw down without itself being subject to capping.
        That also relates to the level of expenditure that is counted by the main spending authority before it runs into difficulties with the Government's criteria. There is no better example of that than the farce that relates to the expenditure of moneys that have been returned to us from the Commission in Brussels. I use the words "returned to us", because, as hon. Members know, the amount that we contribute varies from time to time. It will vary in the coming year by doubling to more than £2 billion.
        Some of that money is due back to local authorities in a variety of schemes, such as RECHAR. As hon. Members know, authorities spending that money immediately find themselves disqualified by the Government from taking up other forms of national aid or capital expenditure permissions to enable them to continue their normal programmes on capital. The system works in a ridiculous way. Money from Europe, whether RECHAR or a range of other schemes—RECHAR is a particular example because it was never intended to be counted as part of the capital programme—results in authorities having to cut their capital programme to be able to accept resources that have been allocated from Europe. Their basic credit approvals are not increased—in other words, they are not shown to be additional in terms of the extra help—so local authorities have to make cuts. That has always applied under the present Government. The additionality rules have been ridiculed because of their impact and because this country has a lower level of expenditure on capital than our European Community partners have. They do not apply the same additionality rules.
        However, as a result of capping, revenue expenditure is treated in the same way, so that when capital allocations are made by the European Community the revenue that backs it up to provide for the debt charges and, in some cases, the running costs of projects approved for EC aid is counted for capping purposes. The authority is forced to cut its normal mainstream budget in order to accept our money back from our European partners. A dafter position one could never expect to come across. Without capping, the position would not arise. [Interruption]
        I hear that the Whip is doing his bit again going round the houses drawing up his little lists. Perhaps he would draw up the list of authorities that have been denied help by the rules that currently apply. Perhaps he would whip in some of his colleagues so that they can hear about the way in which their people—not their local authorities—are affected. [Interruption.] I welcome the Secretary of State to the Chamber to hear about the absurdity of inner-city
        830
        areas—which he offers to help through the city challenge scheme—being unable to take up European help as a result of his capping proposals.
        The urban programme included a disregard in respect of capping. Our amendment seeks to extend a disregard for capping purposes to all similar resources from Europe. The disregard should apply equally to all other sources, including central Government. In the debate on the previous group of amendments we were discussing precepts, outside draw-downs on collection funds and amounts paid to an authority from elsewhere but which nevertheless count for year-on-year increases in expenditure. Those amounts should be set aside for capping purposes. If not, every amount that is allocated, for example for critical training programmes, from European moneys will be counted for year-on-year expenditure by local authorities.
        My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay) described the position on the scheme for the South Yorkshire supertram rapid transit system. Even though central Government have agreed to aid the scheme through the Department of Transport, the scheme falls foul of the rules. The local authorities, which are part of the passenger transport authority, are subject to the capping criteria in respect of the activities of the passenger transport authority. I underline that fact for the sake of the Minister who will reply to the debate. The local authorities find themselves cutting their mainstream essential services in order to take up the allocation of funds from a Government Department. Exactly the same thing happens when funds are allocated from Europe.
        The additionality rules should be changed for capital expenditure and the impact of the revenue consequences should be disregarded for capping purposes. It is simple. If someone offers one some money, should one be penalised for spending it? Let us use the analogy of the family budget, which in the early days the former Prime Minister used to use. Someone comes along and offers the family some extra cash from outside, money which the family gave to the person to help him along in the past. That is what we do by contributing to the European Community.
        The person says, "You are on hard times. You have been recognised as a deserving case." Of course, under the Government's criteria, only deserving cases can receive EC help. The person says, "I want to give you back some of the money that you gave me last year." The family has to say, "We are terribly sorry. We would love to take it and we realise that it would help us to pay for the extension that we managed to build with the capital that you gave us last year. We would love to be able to heat and light it and let our son and daughter sleep in it, but unfortunately there is a rule which says that if we accept your money, the Government will take away some of the supplementary benefit." That is the absolutely silly position. One cannot accept back the help that one originally gave.
        6.45 pm
        We want the Government to clarify the position once and for all. If they mean anything that they say about urban regeneration, improving training and alleviating unemployment, they must accept the amendment. Unemployment is not taken into account in standard spending assessments, so it cannot be taken into account when resources are allocated to combat unemployment and provide more training programmes.

        831
        The silly attack made on Derwentside council on 3 June during the Second Reading debate was referred to again today. Derwentside took action to combat the results of the closure of the Consett steelworks. It took sensible, entrepreneurial and enterprising action. It got off its backside and took action. It did exactly what the Secretary of State asks authorities to do in his city challenge scheme. He encourages local authorities to come up with a comprehensive scheme to tackle the unemployment, economic decline, degeneration and environmental despoliation which has taken place as a result of economic collapse. He encourages them to show initiative and come up with something that competes with any decent scheme anywhere else in Europe. He asks them to provide the wherewithal to make the scheme work and give people the backing that they need to show their own enterprise in creating jobs. Derwentside did it.
        Now what do the Government say? They say, "You can have economic regeneration, you can have leisure facilities or you can have a decent environment, but you cannot have all three. You have to choose between investment in training and enterprise, such as programmes to set up workshops and technology parks,"—those schemes did everything that all hon. Members would want to do for their area—"associated leisure provision and economic regeneration." It is too daft for words.
        The £6 million spent in Derwentside—according to the Government it is such an evil amount of money to spend —has ensured that many people in the area have jobs who would not have had them otherwise. It has reduced the call on supplementary benefit. It has reduced the amount that has had to be drawn in redundancy pay. It has reduced the demand on the family credit budget and the amount that would otherwise have to be paid out in housing benefit and free school meals. However, instead of applauding the authority for saving the Government probably substantially more than £6 million in benefit payments, the Government ridicule Derwentside local authority.
        Derwentside is one of the authorities that benefit and should benefit from European Community aid. It is one authority, like many others in former steel and coal-mining areas, which the EC funds are intended to assist. The Government should help such authorities by lifting the ridiculous rules on additionality and capital. For goodness sake, they should accept the amendment and help local authorities to do a job of work in preventing unemployment, restoring jobs, providing training schemes, working in partnership with the private sector and making the money work. The Government should stop capping authorities and disregard the revenue consequence of capital expenditure.
        In simple terms, the Government should allow local authorities to spend European Community money which does not damage our economy but helps it and which is not a drain on the local taxpayers but assist them. They should not penalise local authorities for spending that money. It is simple. There cannot be a more straightforward case and I shall be fascinated to hear the Government wriggle about why they are not willing to accept the amendment.
        Mr. Portillo: The hon. Member for Sheffield, Brightside (Mr. Blunkett) asks for clarification. I am happy to supply it because, unusually for him, parts of his speech betrayed a misunderstanding. I shall cover matters that are familiar
        832
        to him and which he understands perfectly well, before dealing with the issues on which the misunderstanding arises.
        Our view of money from the European funds is that they should not merely fund domestic expenditure but should be additional to the amount that the Government would otherwise have to spend. That is the concept of additionality, and it means that our global total for public expenditure is increased by the amount that we expect to receive from European funds. In that way we ensure true national additionality.
        We make capital allocations to local authorities, and they may spend money that they hold or credit approvals or supplementary credit approvals. The Government's aim is to control total public expenditure. The amount spent by local authorities is an important part of that, and allocations to local authorities are made in the light of totals set at national level that take account of European funds.
        Whether the amount that a local authority spends is financed by receipts or money provided by the Government in credit approval, supplementary credit approval, or by grants received from Community funds makes no difference. It all comes within the capital allocation, which is not necessarily increased because part of it is financed by a Community grant.
        A local authority in receipt of a European fund grant has an important advantage in that it no longer has to seek credit approval for that part of the money, and it does not have to draw on its receipts or borrow. Obviously, it is the cheapest possible way in which a portion of an authority's capital spending can be funded.
        I think that the hon. Gentleman understands those concepts. Of course I am concerned that some local authorities have found it difficult to spend enough within their capital allocations in respect of money made available from European funds. That is why, last year, we top-sliced £25 million from credit approvals and why this year we shall top-slice £45 million. I have tried to ensure that part of that top slicing is made available to cover the gap for local authorities that receive money from European funds but which lack the capital cover to spend in line with what they will receive.
        That deals with capital allocations and the way in which we are trying to address the matter through flexibility on credit approvals to help some local authorities to spend money that has been allocated to them by the Community.
        I was asked how European fund grants are treated in the context of capping. It must be left to local authorities to decide which projects are worth pursuing and which should be included in their budgets. That applies whether or not they have assistance from the Community. Leaving local authorities to decide on their priorities fits in well with the city challenge initiative of my right hon. Friend the Secretary of State. That challenge is largely about asking local authorities to organise their priorities and to put together packages of money for them.
        Projects that receive a grant from the Community funds but which require the local authority to make some contribution so that the Community grant is not 100 per cent. of expenditure are no exception to this general rule. If the matter is important enough for the local authority to include in its budget, it will do so irrespective of whether that part of it is financed by the Community. The project should stand on all fours with others.

        833
        If the local authority receives money from the Community fund grant, it will need to raise that much less itself. The budget on which capping bites is that which the local authority funds from the community charge, the uniform business rate, the rate support grant and other specific grants. It does not include Community grant, because that is not part of the authority's budget. That money is outside the demand that the local authority makes on the collection fund. Therefore, it is outside our consideration for capping. I think that the hon. Gentleman misunderstands that point. We would not cap a local authority in respect of Community grant on part of a project.
        Mr. Blunkett: The Minister's answer sounds extremely plausible until we think about what happens to European social fund allocations for, for example, training schemes. In such cases the local authority spends the money and a claim on EC resources is submitted afterwards. EC money is retrospective and the local authority draws on the collection fund to pay, for example, the wages of staff working in a training workshop which is 50 per cent. funded from the social fund. Would the authority be affected in the year in which it draws on the collection fund by capping for that expenditure, even though in future the authority would be reimbursed? If the Minister can answer that question, I shall be happy to concede that he has scored a goal against me.
        Mr. Portillo: Before I answer that question, I should say that I got carried away in thinking that specific grants were within the budget of a local authority. I should have said that they are not, which means that the budget is even more restricted than I suggested.
        The demand made by a local authority upon the collection fund will potentially be within the criteria for capping. I was not trying to score a goal against the hon. Gentleman but to offer clarification. If, in a subsequent year, a local authority is reimbursed by the European Community, the amount is not within the budget. Presumably that means that, in the subsequent year, the local authority has some other amount freed up, so that, taking money one year with another, the amount that it has had to spend has not brought it within the criteria for capping.
        I am sure that the hon. Gentleman did not intend this, but the amendment literally means that, if any part of an item of local authority expenditure is funded by the European Community, all the expenditure, not just that part of it, should be exempt from capping. That would not be appropriate, as even the hon. Gentleman may think. Perhaps he will not think that way because he is against capping altogether, so I shall not try to pin that one on him. I think that he was intending to exempt that part of expenditure which comes in grant from European Community funds.
        I hope that I can reassure the hon. Gentleman by saying that that is outside the budget and therefore not susceptible to capping. I have to recognise that, if the local authority spends the money in advance, then in the year in which it makes the demand on the collection fund, that demand, for whatever purpose, can bring it closer to the criteria for capping, but it will reap the advantage in the following year, when the grant is received and the grant will not bring it any nearer to the criteria for capping.
        7 pm
        Mr. Blunkett: I am grateful for the Minister's explanation. He will realise that my hon. Friends and I are in favour of not counting expenditure, whether from the EC or the local taxpayer, on projects that had been agreed as part of an EC programme, whether under the regional or social funds or under RECHAR. RECHAR is additional to the amount that the Government have already taken into account in terms of top slicing. It has to be like that, because RECHAR allocations are made after predicted capital allocations are announced by the Government.
        However, we have had a prolonged and difficult debate about whether RECHAR will be accepted and whether authorities will have the necessary specific supplementary credit approvals. It is not a national issue. The debate is about the local authorities taking up schemes that they have drawn up and then had approved through RECHAR, and whether they will be able to go ahead with those projects when they receive the allocation.
        It is fine if the authority gets a boost the year after, when the grant comes in, but in the year in which it spends the money, if it has to draw down on the collection fund, that authority can be pushed into fulfilling the criteria for capping, particularly that on year-on-year expenditure increases. That is important for authorities that may be capped in one year even though they will be helped the year after, and so have to make cuts in services that were supposed to be enhanced by the allocation of European moneys, rather than cancelled out.
        The crucial point is that, the more complicated and centralised are the regulations that restrict the freedom of local authorities to act, the more that, in applying general rules, local authorities are restricted so that they cannot do their jobs properly. An authority may be capped one year simply because it has drawn down on the collection fund, but it will not be capped the next year because it has received resources that have lessened the demand on the collection fund. That makes no sense to us and no sense to those outside.
        Furthermore, it makes no sense to count for capping purposes the money for a project that is supposed to be an additional benefit to the mainstream programmes of a local authority—that applies to inner-cities activities as well—rather than a substitute for what is already going on. The 50 per cent., or whatever the sum might be, that the authority has to find should not be included in the capping criteria—just as, retrospectively, the EC contribution is not.
        The Minister's explanation has been helpful. I used the "goal against me" example with a smile, because I sometimes do not mind having a goal scored against me. It is winning the game that counts. It is important that we all have the same understanding when it comes to sorting out the Yorkshire rapid transport system, because otherwise education and home help services will be cut to pay for a project that does not involve additional local fund raising or poll tax increases, and has been agreed by local and central Government to make sense. On that basis, I am happy to beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.
        Question proposed, That the clause stand part of the Bill.
        The Second Deputy Chairman: Before I call the hon. Member for Normanton (Mr. O'Brien) to open the debate, I remind him and the Committee that we have had a fairly good run on amendments to clause 1, so it would not be appropriate to go over the ground that we covered in those debates.
        Mr. O'Brien: I appreciate that, Sir Paul, and I shall not go over the debates on the amendments. According to the explanatory memorandum:
        "Clause 1 provides that section 101 of the 1988 Act, which exempts from charge capping English and Welsh authorities whose budgets are less than £15 million, is to cease to have effect."
        Therefore, the clause is important and significant.
        It is sad to realise that the Government intend to press the capping of these authorities whose budgets are influenced by small amounts of expenditure. Examples have been given of how district authorities with budgets of £5 million, £6 million or £9 million can easily come into the capping range as a result of small increases in expenditure. As I said in a previous debate, this could represent as little as 20p or 30p per poll tax payer. Through our amendments to the clause, we tried to protect those local authorities that will be brought into the capping range, as that can only have a severe effect on their services.
        Another disappointment is that, where local authorities, through their own efforts, have acquired additional financial support from either the EC or some other source, the Government have decided that that will be included in the limits set by the clause.
        We also debated the precepting of parish, town and county councils in Wales on the collection fund. This is an important matter and we shall read carefully in Hansard tomorrow the answers to the questions on it. I hope that what the Minister said is correct, and it will not be part of the overall expenditure for district councils.
        There is a gleam of hope for local authorities, because the clause will not apply before 1 April 1992, and we all hope that before then there will be a general election. I am sure that those serving in local government will welcome a general election because the Labour party has said that capping, as applied by the Government in the past two or three years, will be abolished, as will the poll tax system. People are hoping for an early general election, so that a Labour Government, who believe in and support local government, can introduce the policies that are needed to help local authorities to meet their responsibilities.
        Mr. Harry Barnes: The clause is incredible, considering that the Government are supposed to be following a new policy and replacing the poll tax. It is especially incredible when later clauses are supposed to pave the way for the introduction of the new so-called council tax.
        While all that is going on, we are back with the old form of poll tax legislation. The flavour of the debate smacks of what has been going on for a long time on the poll tax scene. All this is happening following the district council elections in which the Conservatives were devastated. Despite those results, and despite the verdict of the electorate—the people were obviously opposed to Conservative policies and especially the poll tax—at the first opportunity, the Government are back down the old poll tax route. Indeed, they are acting contrary to everything contained in their election manifesto, in which
        836
        they were committed to the principle of accountability, with the link between local electorates and their councillors being of supreme importance.
        All the injustices of the standard spending assessment, linked to the Government support grant, are bad enough in that many district councils have been forced to charge higher amounts than they would have charged had there been a fair system of grant in operation. Now, such charges must stop and services will be destroyed. Apart from services that must be provided in accordance with statutory duties, important local authority ancillary services will come to an end.
        The area of Derwentside has come in for strong criticism from the Government. Not only did it have special needs because of the high rate of unemployment there, but the Government's funding arrangements for the area meant that Derwentside had to find ever more funds from its own resources. I referred earlier to a written answer that I received on 5 December. That was accompanied by information that was placed in the Library showing money coming from revenue support grant, from the business rate and from the poll tax.
        7.15 pm
        In the Committee debates on the introduction of the poll tax for England and Wales, we were told that, in rough and ready terms, 50 per cent. of the total would come from central Government funding, 25 per cent. from poll tax monies and 25 per cent. from the national business rate.
        By 5 December last, of Derwentside's total standard spending assessment—which it obviously had to go beyond—only 18·3 per cent. came from revenue support grant. That contrasted with authorities better able to handle financial matters, such as Westminster, which got 57·8 per cent., and Wandsworth, with 49·6 per cent. Other authorities appeared at the high end of the figures, but many were at the low end, and Derwentside, on 18·3 per cent., was only 162 from the bottom of a list of 336. My area of North-East Derbyshire received 11·3 per cent. in revenue support grant.
        How could such figures be called reasonable and just in view of the great disparities between areas? Reference has been made to Audit Commission reports giving figures of comparable areas. They show wide deviations between SSAs per charge payer. Are the Government's SSAs and calculations wrong, or is it suggested that the Audit Commission's judgment about authorities being comparable is wrong? I have shown how the figures deviate widely —by as much as 100 per cent. in some cases—and I am sure that other Audit Commission reports reveal additional fantastic disparities.
        Nothing in the Bill begins to eliminate the injustices of the poll tax legislation. Those injustices must be corrected if the Government are to be seen to be introducing a paving measure for a new policy. Later we shall discuss the problems of valuation. The Government's so-called new schemes are full of nonsenses and our fear is that although we may do away with the most unjust form of taxation ever invented in any western democratic system and we shall put in its place the second most unjust system.
        We should be doing something to help local authorities get by until fresh legislation is introduced. Instead of provisions designed to cap authorities, we should have provisions remedying the problems that have been created by the Government's poll tax legislation. In the past, I

        837
        have spoken at length about the massive attack involved in electoral legislation caused by the poll tax. While this is not the time to develop that point, sooner or later we shall need a full debate on that and similar issues.
        In the meantime, there is no justification for the Bill. The Government are trying to gallop it through so that legislation of a sort is enacted before the next parliamentary recess.
        Many authorities will be hit by the Government's criteria. An article in the Municipal Journal of 31 May entitled "Beyond Belief" lists the authorities that are likely to be included in the Government's criteria. The authorities mentioned are not only Labour-controlled but include authorities controlled by the Liberal Democrats and the Conservative party. As the majority are Labour-controlled, the Government claim that the measure is essential and necessary because they are dealing with profligate bodies. They are not.
        Some of those authorities may have policies that could be considered problematic, but that is a matter between them and their electorate and not a matter for the House. Many are simply engaged in ordinary local government activities with the support of, and a stream of recommendations from, the Audit Commission and others to show that their activities are perfectly reasonable. I described the case of North-East Derbyshire, but many other authorities, such as Hartlepool and Easington in the north-east, are in a similar position. Those fall into the category of authorities that are likely to be capped or be threatened with capping, and will therefore have to cut their own throats in terms of expenditure. We must stop further development in that direction.
        The districts of Conservative Members such as the hon. Member for Welwyn Hatfield (Mr. Evans) will be hit by those measures. The hon. Gentleman should understand what is happening, as he served on the Committee that introduced the iniquitious poll tax legislation. I hope that he will not support the measure in the Lobby tonight, because this is an opportunity for Conservative Members to decide whether they have finally jettisoned the poll tax and are looking for an alternative, however inadequate, or whether they should go down the same road and vote at the Whips' behest. We must ensure that we inform their constituents that they have not departed from the principles upon which they initially built their case.
        Mr. David Evans: The hon. Gentleman might like to know that Welwyn Hatfield is a Labour-controlled authority. It has the 18th highest community charge simply because the Labour authority has overspent, year in, year out, on services that its neighbours have provided at a much lower cost.
        Mr. Barnes: If time allowed me to go through the 366 authorities, I would give the details of the amount of grant that Welwyn council receives from the Government. They are available in the Library and need to be carefully examined to see whether there is any credence in the hon. Gentleman's argument. Welwyn Hatfield probably operates exactly according to the general principles. A set of criteria has been devised which hits at certain authorities and not others.
        Despite considerable efforts by Opposition Members, we never discuss the make-up and structure of the standard spending assessment and the grants that are linked to it. We have simply been told that there is a
        838
        magical formula that allows the system to function fully and well, but that is not the case. The Government have deliberately manipulated and fiddled the arrangements. If a genuine principle is involved, they should be willing to talk to those authorities that feel that they are being badly treated because they fall foul of many of the conditions that have been laid down. North-East Derbyshire is one such authority. We are not allowed to meet the Minister to discuss those matters so we cannot have an impact on changing the way in which the formula will operate under the clause.
        Mr. Bellotti: I begin by referring to the standard spending assessments and drawing attention to the serious problems in different parts of the country, especially Sussex. If all the Minister's faith will be put on SSAs and subsequent figures will be based on them, how can he justify the fact that the SSA for Wealden is £100 of relevant population in 1991–92; for nearby Lewes it is £94; for Adur it is £88, but for Hove it is £173? That is why, some two years ago, the Hove borough council did not need to levy a rate for its then ratepayers. There can be no justification for those disparities of SSAs in the same area. It is not surprising that some district councils in Sussex look to Hove and ask, "Why?" If the Government are to base their future spending plans on SSAs they must deal with that issue in East Sussex and say why Hove has double the SSA of authorities in the same area.
        The same problem applies in other parts of the country, and hon. Members have referred to that matter throughout the debate. If the clause is to be approved, neighbouring authorities will suffer when they try to deliver a level service.
        Some local authorities have special conditions in their make-up. It is essential for the local economy of Eastbourne that tourism, in all its manifestations, is backed. If the clause goes through, Eastbourne will have to make almost £1 million worth of cuts next year. Like most tourist resorts in this country, it will have to cut its tourism budget. As 9 per cent. of Eastbourne's population is employed in tourism, unemployment will increase if we withdraw the ability of the local authority to encourage economic generation. There will be more empty hotels and less money coming into the country from abroad.
        Is the Minister saying that local authorities that depend on tourism should not spend money on, for example, cleaner beaches which is a Government policy? Eastbourne and 34 other resorts have just been awarded blue flags for the state of their beaches. Is the Minister saying that those local authorities should not spend money on encouraging people to spend time and money in their areas? Like other resorts, Eastbourne also spends money on providing plants and flowers. The Carpet gardens in Eastbourne are known internationally. Will budgetary cuts mean that those local authorities can no longer spend money on such things? It could be argued that they are luxuries beyond what local authorities must provide for people's needs. However, they provide economic generation and growth.
        The Minister has not dealt with any of those issues tonight. His arguments have all been based on finance. Indeed, every decision that the Government make with regard to local authorities is finance-led.
        We were given to understand that the clause would provide the assurances that we sought about the position of parish and town councils at the lower tier of principal

        839
        authorities. On examination, however, those assurances prove nothing of the sort. It is not true that the Government do not take into account the expenditure of those parish and town councils in reaching their decision to cap. I should be interested to receive a further response from the Minister about the position of parish councils. Is it true that the Government will not take account of any level of spending by parish councils so that whatever the level of that spending, it will not count in any way towards a decision to cap? If the Minister can confirm that he will not take that spending into account we shall be rather more assured. We have listened carefully to the Minister, however, and we are not convinced.
        7.30 pm
        Mr. O'Brien: Does the hon. Gentleman agree that the Minister has not properly clarified the influence that parish and town council precepts will have on the SSAs of district councils? The problem applies not to the non-metropolitan districts alone, but to the metropolitan ones. The hon. Gentleman has raised a pertinent point, as it appears that there is no cut-off point at which capping will apply to authorities lower down the scale.
        Mr. Bellotti: I am grateful to the hon. Gentleman because we both failed to understand fully the Minister's response. I hope that we shall receive further clarification from the Minister so that we are clear as to the exact state of affairs before we vote.
        During the speech of the hon. Member for Pendle (Mr. Lee) there was an interchange that might have led hon. Members to believe that Pendle will not be affected by the proposals. That is not so. Pendle local authority will need to consider cutting its services by more than £500,000. It is not alone in that because another 88 local authorities will have to consider what cuts to introduce next year.
        Should the clause be accepted the Minister must spell out the effect of those cuts on local services. The clause does nothing to meet the needs of local communities. It attacks local democracy and it will not lead to accountability. It is not worth supporting.
        Mr. Portillo: I believe that we have made some progress in clarifying some of the issues, sometimes to the surprise of the Opposition.
        I shall repeat what I said about parish councils. Parishes do not precept on districts, they precept on the collection fund. Potentially we may cap what a district demands from the collection fund. What the parish demands from the collection fund—what it precepts on the collection fund—is an entirely separate matter. When we draw up an SSA—a level of spending that is appropriate —we lump the district and the parish together on the ground that what parishes do is in substitution of what districts might otherwise do. The SSA takes account of district and parish spending together. When it comes to capping, however, what the parish precepts is outside the conditions for the capping of the district because the parish precepts on the collection fund, not the district.
        Mr. O'Brien: The Minister has now introduced a different dimension. He is now referring to the concurrent functions of parish and district councils. Is he saying that there must be clear demarcations between the functions of the district and parish councils? If one particular function
        840
        is the responsibility of the district council, does that mean that the parish council should not precept for that particular service?
        Mr. Portillo: No. The hon. Gentleman seems intent on trying to smell a rat that is not there. The justification for setting the SSA for a district and parish together is that parishes do in certain places what districts do in other places. Therefore, the only fair way in which to set the SSA is to set it according to what the parish and district spend together. Since the parish precepts on the collection fund directly, not on the district, and since we are concerned only with capping what a district demands on the collection fund, what the parish precepts has nothing to do with drawing the district nearer to being capped.
        Mr. Gould: The capping criteria are defined in terms of the SSA. Does that mean that it is possible that a district could find itself exceeding its SSA because of a precept made by the parish which, as the Minister said, would be included in the district's SSA?
        Mr. Portillo: No, that is not possible. The SSA for a district is set without reference to whether parishes exist. Where parishes exist we assume that they are simply doing things that districts would otherwise do. In those circumstances the parish precepts on the collection fund, not the district. We are concerned only with what the district precepts on the collection fund. That is the only thing that we are seeking to cap. Perhaps the hon. Gentleman has identified that there is asymmetry between the way in which the SSA is determined and the way in which the capping operates—that I do not deny.
        Mr. Gould: I am sure that we are both aiming to clarify this rather tricky matter, but surely the asymmetry is the important point. That may lead to a situation in which the district is capped independently, but it may be capped on the basis of a criterion—the SSA—that depends to some degree on the expenditure by the parish council. That is what I understood the Minister to say when he said that the parish's expenditure counts towards the district's SSA, but, because it precepts separately, does not impinge upon the cap, at least not directly. I suggest that it may impinge indirectly because of its influence on the SSA.
        Mr. Portillo: If the hon. Gentleman is looking for a problem, I accept that there is one, but he has got the wrong one. The problem is the opposite. Where a parish exists the district may be unfairly advantaged, not disadvantaged, because what the parish is spending is precepted directly on the collection fund and does not figure as part of district spending. I have given the game away. There is a slight problem, but it is precisely the opposite of that suggested by the hon. Member for Dagenham (Mr. Gould). In view of that I had better move on to other matters raised in the debate.
        I wish to be a little more helpful to the hon. Member for Sheffield, Brightside (Mr. Blunkett) about the European Community. Where a local authority spends some money and subsequently gets a grant from the EC, in the year that it spends the money it must find it from the collection fund. In the year after, it will get the money from the EC. However, if, in year one, when the local authority spends that money, it already knows that it is going to get a grant from the EC, it can take that into account in the year that it spends the money because the budget is assessed on an accrual basis. If an authority is already certain that it will

        841
        receive EC money, albeit that that money will not pitch up until year two, it may take it into account in year one. I believe that that is a more helpful answer to the hon. Member for Brightside.
        I have not said that I will not meet the authority that the hon. Member for Derbyshire, North-East (Mr. Barnes) represents. I have said that, at the moment, there is nothing new to hear from him and nothing new for me to say to him. However, when we propose SSAs, certain local authorities and certain hon. Members will want to have meetings and my hon. Friends and I shall be as open as we have always been to agree to such meetings.
        I was amazed by the speech of the hon. Member for Eastbourne (Mr. Bellotti). It is not for me to do his work for him and to tell him why the SSA is higher in Hove. However, it is higher because the social conditions are different and he should know that better than anyone else. The method by which the SSA is calculated is available for him in the numerous statistical reports which show how the SSA is calculated.
        I was especially surprised that the hon. Member should talk about tourism. Last year I increased the weighting given for tourism from 25 per cent. of a resident night per tourist to 50 per cent. of a resident night per tourist. No local authority in the country benefited more from that change than did Eastbourne. So when the hon. Gentleman failed to mention that fact, it struck me to the core as an example of remarkable ingratitude and insensitivity.
        I feel that the House wants to bring this matter to a resolution. I reiterate that the Government are determined to deliver the council tax at reasonable levels. We have set out figures for what the council tax would have been this year. We are determined that we shall not have a repetition of what happened with the community charge when local authorities allowed their spending to go through the roof and arrived at community charges well in excess of what the Government had estimated.
        We have given our reasonable estimates for the council tax. We intend to deliver the council tax close to those figures, and the only way in which that can be achieved is by restraint on local authority spending. We are in favour of that: the Labour party is dead against it. That is why our figures for the council tax are credible and why the Labour party's figures for a return to the rates—
        Mr. O'Brien rose—
        Mr. Portillo: —are wholly incredible. That is why this clause should stand part of the Bill.
        Mr. O'Brien: I tried to intervene on the Minister because he referred to the introduction of the council tax. Some of the problems alluded to in this debate have been caused because the Government want to ensure that the council tax is put in place without a great deal of upset and rancour on the part of local authorities.
        The Minister omitted to mention one element about which I wished to ask him a question. If the Government want a smooth transition to a council tax, will they announce the provisional capping criteria before local authorities' budgets are set? That will include district councils. When we considered the budget proposals of local government for 1991–92 we referred only to the metropolitan districts, the London boroughs and the shires, but now 333 authorities are under the threat of capping. So do the Government intend to announce the
        842
        capping criteria for all local authorities, including the districts, before the budget process commences? If so, when can we expect the announcement?
        Mr. Portillo: I intend, as last year, to set out the provisional criteria for capping for all local authorities well in advance, but I cannot yet say on what date I shall do so.
        7.45 pm
        Mr. O'Brien: I am sorry to come back on this issue, but given that local authorities will have to work within the Government's guidelines on their expenditure it is disappointing that the Minister has no knowledge of when the statement on budget-capping criteria will be made. If the Minister cannot tell us that tonight, will he consult the Secretary of State and let us have the information tomorrow, when we continue this debate? It is important that local government be given the information as quickly as possible so that representations can be made. One problem this year was the shortage of time For representations to be made by local authorities that were to be capped.
        Question put, That the clause stand part of the Bill:—
        The Committee divided: Ayes 273, Noes 211.

        Division No. 164]

        [7.45 pm

        AYES

        Adley, Robert

        Chalker, Rt Hon Mrs Lynda

        Aitken, Jonathan

        Channon, Rt Hon Paul

        Alexander, Richard

        Chapman, Sydney

        Alison, Rt Hon Michael

        Chope, Christopher

        Allason, Rupert

        Churchill, Mr

        Amess, David

        Clark, Dr Michael (Rochford)

        Amos, Alan

        Clark, Rt Hon Sir William

        Arbuthnot, James

        Colvin, Michael

        Arnold, Jacques (Gravesham)

        Coombs, Anthony (Wyre F'rest)

        Arnold, Sir Thomas

        Coombs, Simon (Swindon)

        Ashby, David

        Cope, Rt Hon John

        Aspinwall, Jack

        Couchman, James

        Atkins, Robert

        Cran, James

        Atkinson, David

        Currie, Mrs Edwina

        Baker, Nicholas (Dorset N)

        Curry, David

        Baldry, Tony

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

        Batiste, Spencer

        Davis, David (Boothferry)

        Bellingham, Henry

        Day, Stephen

        Bendall, Vivian

        Devlin, Tim

        Bennett, Nicholas (Pembroke)

        Dickens, Geoffrey

        Bevan, David Gilroy

        Dicks, Terry

        Blackburn, Dr John G.

        Dorrell, Stephen

        Blaker, Rt Hon Sir Peter

        Douglas-Hamilton, Lord James

        Body, Sir Richard

        Dover, Den

        Bonsor, Sir Nicholas

        Dunn, Bob

        Boscawen, Hon Robert

        Eggar, Tim

        Boswell, Tim

        Evans, David (Welwyn Hatf'd)

        Bottomley, Mrs Virginia

        Evennett, David

        Bowden, A. (Brighton K'pto'n)

        Fairbairn, Sir Nicholas

        Bowis, John

        Fallon, Michael

        Boyson, Rt Hon Dr Sir Rhodes

        Favell, Tony

        Brandon-Bravo, Martin

        Fenner, Dame Peggy

        Brazier, Julian

        Field, Barry (Isle of Wight)

        Bright, Graham

        Finsberg, Sir Geoffrey

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

        Fookes, Dame Janet

        Bruce, Ian (Dorset South)

        Forman, Nigel

        Buchanan-Smith, Rt Hon Alick

        Forsyth, Michael (Stirling)

        Buck, Sir Antony

        Forth, Eric

        Burns, Simon

        Franks, Cecil

        Burt, Alistair

        Freeman, Roger

        Butler, Chris

        French, Douglas

        Butterfill, John

        Fry, Peter

        Carlisle, John, (Luton N)

        Gale, Roger

        Carlisle, Kenneth (Lincoln)

        Gardiner, Sir George

        Carrington, Matthew

        Gill, Christopher

        Carttiss, Michael

        Glyn, Dr Sir Alan

        Cash, William

        Goodlad, Alastair

        843

        Goodson-Wickes, Dr Charles

        Mates, Michael

        Gorst, John

        Maude, Hon Francis

        Grant, Sir Anthony (CambsSW)

        Mayhew, Rt Hon Sir Patrick

        Greenway, John (Ryedale)

        Meyer, Sir Anthony

        Gregory, Conal

        Mills, Iain

        Griffiths, Peter (Portsmouth N)

        Miscampbell, Norman

        Grist, Ian

        Mitchell, Andrew (Gedling)

        Ground, Patrick

        Mitchell, Sir David

        Grylls, Michael

        Moate, Roger

        Hague, William

        Monro, Sir Hector

        Hamilton, Hon Archie (Epsom)

        Moore, Rt Hon John

        Hamilton, Neil (Tatton)

        Morrison, Sir Charles

        Hannam, John

        Morrison, Rt Hon Sir Peter

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

        Moynihan, Hon Colin

        Hargreaves, Ken (Hyndburn)

        Neale, Sir Gerrard

        Harris, David

        Nelson, Anthony

        Haselhurst, Alan

        Newton, Rt Hon Tony

        Hawkins, Christopher

        Nicholls, Patrick

        Hayes, Jerry

        Nicholson, David (Taunton)

        Hayward, Robert

        Nicholson, Emma (Devon West)

        Heathcoat-Amory, David

        Onslow, Rt Hon Cranley

        Hicks, Mrs Maureen (Wolv' NE)

        Oppenheim, Phillip

        Hicks, Robert (Cornwall SE)

        Page, Richard

        Higgins, Rt Hon Terence L.

        Paice, James

        Hill, James

        Patnick, Irvine

        Hind, Kenneth

        Patten, Rt Hon John

        Holt, Richard

        Peacock, Mrs Elizabeth

        Howard, Rt Hon Michael

        Porter, David (Waveney)

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

        Portillo, Michael

        Howarth, G. (Cannock & B'wd)

        Powell, William (Corby)

        Howe, Rt Hon Sir Geoffrey

        Rathbone, Tim

        Hunt, Sir John (Ravensbourne)

        Redwood, John

        Hunter, Andrew

        Riddick, Graham

        Hurd, Rt Hon Douglas

        Roberts, Sir Wyn (Conwy)

        Irvine, Michael

        Roe, Mrs Marion

        Irving, Sir Charles

        Rossi, Sir Hugh

        Jack, Michael

        Rost, Peter

        Jackson, Robert

        Rowe, Andrew

        Janman, Tim

        Rumbold, Rt Hon Mrs Angela

        Johnson Smith, Sir Geoffrey

        Ryder, Rt Hon Richard

        Jones, Gwilym (Cardiff N)

        Sainsbury, Hon Tim

        Jones, Robert B (Herts W)

        Sayeed, Jonathan

        Jopling, Rt Hon Michael

        Scott, Rt Hon Nicholas

        Kellett-Bowman, Dame Elaine

        Shaw, David (Dover)

        Key, Robert

        Shaw, Sir Michael (Scarb')

        Kilfedder, James

        Shelton, Sir William

        King, Roger (B'ham N'thfield)

        Shepherd, Colin (Hereford)

        Kirkhope, Timothy

        Shepherd, Richard (Aldridge)

        Knapman, Roger

        Shersby, Michael

        Knight, Greg (Derby North)

        Sims, Roger

        Knight, Dame Jill (Edgbaston)

        Skeet, Sir Trevor

        Knowles, Michael

        Smith, Tim (Beaconsfield)

        Knox, David

        Soames, Hon Nicholas

        Lang, Rt Hon Ian

        Spicer, Sir Jim (Dorset W)

        Latham, Michael

        Spicer, Michael CS Worcs)

        Lawrence, Ivan

        Squire, Robin

        Lee, John (Pendle)

        Stanbrook, Ivor

        Leigh, Edward (Gainsbor'gh)

        Stanley, Rt Hon Sir John

        Lennox-Boyd, Hon Mark

        Steen, Anthony

        Lester, Jim (Broxtowe)

        Stern, Michael

        Lightbown, David

        Stevens, Lewis

        Lilley, Rt Hon Peter

        Stewart, Allan (Eastwood)

        Lloyd, Sir lan (Havant)

        Stewart, Andy (Sherwood)

        Lloyd, Peter (Fareham)

        Stewart, Rt Hon lan (Herts N)

        Lord, Michael

        Summerson, Hugo

        Lyell, Rt Hon Sir Nicholas

        Taylor, Ian (Esher)

        Macfarlane, Sir Neil

        Taylor, Teddy (S'end E)

        MacGregor, Rt Hon John

        Temple-Morris, Peter

        MacKay, Andrew (E Berkshire)

        Thompson, D. (Calder Valley)

        Maclean, David

        Thompson, Patrick (Norwich N)

        McNair-Wilson, Sir Michael

        Thorne, Neil

        McNair-Wilson, Sir Patrick

        Thornton, Malcolm

        Madel, David

        Thurnham, Peter

        Malins, Humfrey

        Townend, John (Bridlington)

        Mans, Keith

        Tracey, Richard

        Maples, John

        Tredinnick, David

        Marland, Paul

        Trippier, David

        Marlow, Tony

        Trotter, Neville

        Marshall, Sir Michael (Arundel)

        Twinn, Dr Ian

        Martin, David (Portsmouth S)

        Vaughan, Sir Gerard

        844

        Viggers, Peter

        Wiggin, Jerry

        Wakeham, Rt Hon John

        Wilkinson, John

        Walden, George

        Wilshire, David

        Walker, Bill (T'side North)

        Winterton, Mrs Ann

        Walters, Sir Dennis

        Wolfson, Mark

        Ward, John

        Wood, Timothy

        Wardle, Charles (Bexhill)

        Woodcock, Dr. Mike

        Watts, John

        Wells, Bowen

        Tellers for the Ayes:

        Wheeler, Sir John

        Mr. John M. Taylor and

        Whitney, Ray

        Mr. Tom Sackville.

        Widdecombe, Ann

        NOES

        Abbott, Ms Diane

        Fatchett, Derek

        Adams, Mrs Irene (Paisley, N.)

        Faulds, Andrew

        Allen, Graham

        Fearn, Ronald

        Alton, David

        Field, Frank (Birkenhead)

        Anderson, Donald

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

        Archer, Rt Hon Peter

        Flynn, Paul

        Armstrong, Hilary

        Foot, Rt Hon Michael

        Ashdown, Rt Hon Paddy

        Foster, Derek

        Ashley, Rt Hon Jack

        Foulkes, George

        Ashton, Joe

        Fraser, John

        Banks, Tony (Newham NW)

        Fyfe, Maria

        Barnes, Harry (Derbyshire NE)

        Garrett, Ted (Wallsend)

        Barnes, Mrs Rosie (Greenwich)

        Godman, Dr Norman A.

        Barron, Kevin

        Golding, Mrs Llin

        Battle, John

        Gordon, Mildred

        Beckett, Margaret

        Gould, Bryan

        Beith, A. J.

        Graham, Thomas

        Bell, Stuart

        Grant, Bernie (Tottenham)

        Bellotti, David

        Griffiths, Win (Bridgend)

        Benn, Rt Hon Tony

        Grocott, Bruce

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

        Hain, Peter

        Benton, Joseph

        Hardy, Peter

        Bermingham, Gerald

        Harman, Ms Harriet

        Blair, Tony

        Haynes, Frank

        Blunkett, David

        Heal, Mrs Sylvia

        Boateng, Paul

        Healey, Rt Hon Denis

        Boyes, Roland

        Henderson, Doug

        Bradley, Keith

        Hoey, Ms Kate (Vauxhall)

        Bray, Dr Jeremy

        Hogg, N. (C'nauld & Kilsyth)

        Brown, Gordon (D'mline E)

        Home Robertson, John

        Brown, Nicholas (Newcastle E)

        Howarth, George (Knowsley N)

        Brown, Ron (Edinburgh Leith)

        Howells, Dr. Kim (Pontypridd)

        Bruce, Malcolm (Gordon)

        Hughes, John (Coventry NE)

        Buckley, George J.

        Hughes, Robert (Aberdeen N)

        Caborn, Richard

        Hughes, Roy (Newport E)

        Callaghan, Jim

        Illsley, Eric

        Campbell, Menzies (Fife NE)

        Janner, Greville

        Campbell, Ron (Blyth Valley)

        Johnston, Sir Russell

        Canavan, Dennis

        Jones, Barry (Alyn & Deeside)

        Carlile, Alex (Mont'g)

        Jones, Ieuan (Ynys Môn)

        Carr, Michael

        Jones, Martyn (Clwyd S W)

        Cartwright, John

        Kaufman, Rt Hon Gerald

        Clark, Dr David (S Shields)

        Kennedy, Charles

        Clarke, Tom (Monklands W)

        Kirkwood, Archy

        Clelland, David

        Lambie, David

        Clwyd, Mrs Ann

        Lamond, James

        Cohen, Harry

        Leadbitter, Ted

        Cook, Robin (Livingston)

        Leighton, Ron

        Corbett, Robin

        Lestor, Joan (Eccles)

        Cryer, Bob

        Lewis, Terry

        Cummings, John

        Litherland, Robert

        Cunliffe, Lawrence

        Livingstone, Ken

        Cunningham, Dr John

        Lloyd, Tony (Stretford)

        Davies, Rt Hon Denzil (Llanelli)

        Loyden, Eddie

        Davies, Ron (Caerphilly)

        McAllion, John

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

        McAvoy, Thomas

        Dewar, Donald

        McCartney, Ian

        Dixon, Don

        Macdonald, Calum A.

        Doran, Frank

        McFall, John

        Douglas, Dick

        McKay, Allen (Barnsley West)

        Duffy, A. E. P.

        McKelvey, William

        Dunnachie, Jimmy

        McLeish, Henry

        Dunwoody, Hon Mrs Gwyneth

        Maclennan, Robert

        Edwards, Huw

        McMaster, Gordon

        Evans, John (St Helens N)

        McWilliam, John

        Ewing, Mrs Margaret (Moray)

        Madden, Max

        845

        Mahon, Mrs Alice

        Ross, Ernie (Dundee W)

        Marek, Dr John

        Rowlands, Ted

        Marshall, David (Shettleston)

        Ruddock, Joan

        Marshall, Jim (Leicester S)

        Salmond, Alex

        Martin, Michael J. (Springburn)

        Sedgemore, Brian

        Martlew, Eric

        Sheerman, Barry

        Maxton, John

        Sheldon, Rt Hon Robert

        Meacher, Michael

        Shore, Rt Hon Peter

        Meale, Alan

        Short, Clare

        Michael, Alun

        Skinner, Dennis

        Michie, Bill (Sheffield Heeley)

        Smith, Andrew (Oxford E)

        Michie, Mrs Ray (Arg'l & Bute)

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

        Mitchell, Austin (G't Grimsby)

        Smith, J. P. (Vale of Glam)

        Moonie, Dr Lewis

        Soley, Clive

        Morgan, Rhodri

        Spearing, Nigel

        Morley, Elliot

        Steel, Rt Hon Sir David

        Morris, Rt Hon J. (Aberavon)

        Steinberg, Gerry

        Mowlam, Marjorie

        Stott, Roger

        Mullin, Chris

        Straw, Jack

        Murphy, Paul

        Taylor, Mrs Ann (Dewsbury)

        Nellist, Dave

        Taylor, Matthew (Truro)

        Oakes, Rt Hon Gordon

        Thomas, Dr Dafydd Elis

        O'Brien, William

        Thompson, Jack (Wansbeck)

        O'Hara, Edward

        Turner, Dennis

        O'Neill, Martin

        Wallace, James

        Orme, Rt Hon Stanley

        Walley, Joan

        Owen, Rt Hon Dr David

        Warden, Gareth (Gower)

        Parry, Robert

        Watson, Mike (Glasgow, C)

        Patchett, Terry

        Welsh, Andrew (Angus E)

        Pendry, Tom

        Welsh, Michael (Doncaster N)

        Pike, Peter L.

        Wigley, Dafydd

        Powell, Ray (Ogmore)

        Williams, Rt Hon Alan

        Primarolo, Dawn

        Williams, Alan W. (Carm'then)

        Quin, Ms Joyce

        Wilson, Brian

        Radice, Giles

        Winnick, David

        Randall, Stuart

        Worthington, Tony

        Redmond, Martin

        Young, David (Bolton SE)

        Rees, Rt Hon Merlyn

        Reid, Dr John

        Tellers for the Noes:

        Richardson, Jo

        Mr. Robert N. Wareing and

        Rooker, Jeff

        Mr. Ken Eastham.

        Rooney, Terence

        Question accordingly agreed to.
        Clause 1 ordered to stand part of the Bill.

      Clause 2

        AMENDMENT OF GROUNDS FOR CHARGE CAPPING IN SCOTLAND
        Mr. John Maxton: I beg to move amendment No. 41, in page 2, line 4, at end insert:
        'The Secretary of State shall not treat the total estimated expenses of an authority as excessive when the budget set by the authority results in an increase in expenditure less than the rate of inflation prevailing at the time budget is set.'.
        The Temporary Chairman (Mr. Geoffrey Lofthouse): With this it will be convenient to take the following Amendments: No. 3, in page 2, leave out lines 7 to 26 and insert—for paragraph 1 of Schedule 3 to the 1987 Act there shall be substituted—

        "(1) In determining whether an increase in expenses by a local authority is excessive, the Secretary of State shall have regard to:

        (a) the level of unemployment in the area in the preceding three years;

        (b) the age structure of the population and the reports on the general levels of health as measured by heart disease;

        (c) the condition of the housing stock and the numbers on the housing waiting lists;

        (d) the numbers in receipt of income support;

        (e) the number of one-parent families; and

        (f) the number of disabled.".'.

        No. 42, in page 2, leave out lines 7 to 11.
        No. 43, in page 2, leave out lines 12 to 19.
        No. 44, in page 2, line 13, leave out 'the end' and insert "'enactment'".
        No. 45, in page 2, line 18, leave out from 'to' to end of line 19 and insert
        'new burdens placed on local authorities as a result. of legislation from central government'.
        No. 46, in page 2, line 19, at end insert 'and
        (c) shall have regard for the impact on the services available to, and the welfare of, the relevant population resulting from any action under this Act.'.
        No. 47, in page 2, line 19, at end insert—
        'The Secretary of State shall not have regard to grant aided expenditure assessments when deciding if an authority's planned expenses are excessive as indicated in paragraph 4 of Finance Circular 16/1990 issued by the Scottish Office.'.
        Mr. Maxton: Clause 2 has been designed to bring Scotland into line with England and Wales in terms of capping powers. It extends dramatically the powers that the Secretary of State for Scotland will have to decide levels of spending in local authorities.
        Amendment No. 41 and those linked with it, including those tabled by the Scottish nationalists and the Liberal Democrats, are designed to limit that power, so that it will not be quite as sweeping as it otherwise would have been.
        All of us on the Opposition Benches—there are riot many on the Conservative Benches—would have wished to see clause 2 deleted completely, but as the clause was passed on Second Reading, we have no option but to keep it as it is.
        However, the powers that the Secretary of State is taking under the clause will, if enacted and used, so limit local democracy in Scotland that it will become almost meaningless. Under the clause, he will have almost complete power to decide what he believes is an excessive increase in expenses of a local authority.
        When the Secretary of State looks at the planned expenditure of any local authority, he will be able to say that the increase that it is proposing is excessive, even though it may be below the rate of inflation. It may be, as has often been the case in the past few years, that the increase in local government costs is higher than the increase in the retail prices index.
        The Secretary of State may still deem that the increase—which may be designed to do no more than to maintain services at existing levels—is excessive, and force the authority to reduce its poll tax—or, if by some freak, the Government win the next general election, its council tax—and bring cuts in its services.
        The people whose services are cut at the whim of the Secretary of State are the same people who elected the local authority on the basis that it would provide certain services—[HON. MEMBERS: "Where is the quorum?"] My hon. Friends rightly ask about a quorum. If this were a Standing Committee, the Government would not have a quorum and would be unable to continue with their business. Perhaps the rules of this Chamber should be brought into line with those that apply upstairs.
        8 pm
        The Government may, in certain circumstances, impose new duties on local authorities that lead to increased expenditure. Even then, the Secretary of State may decide that such expenditure is excessive. For example, in the past few years, school boards, primary school tests, and community care have meant increased expenditure for

        847
        local authorities on behalf of central Government, often against their better judgment—but they have not necessarily been exempted by the Secretary of State's capping powers.
        The Secretary of State already controls the level of central Government grant to each local authority, and the level of non-domestic rates. Under the new powers in clause 2, he will have almost complete control over local authority expenditure and income.
        The likely future for local authorities has been clearly illustrated by the Government's treatment of Lothian region this financial year. I am sure that some of my hon. Friends from Lothian will want to add to my comments. Under the threat of capping, Lothian regional authority reluctantly agreed to reduce its poll tax rather than be subjected to capping. The Secretary of State deemed that Lothian's increased expenditure was excessive and unreasonable. I emphasise the word "unreasonable" because, under the proposed new clause, that criterion will disappear.
        Lothian's increase was 11·2 per cent.—a higher percentage increase than Strathclyde, Grampian or Highland. However, it was the same percentage increase as Tayside, and lower than that of the Borders, Central, Dumfries, Galloway and Fife.
        Lothian's revenue support grant per poll tax payer is the lowest in Scotland. At £453 per head, it is well below that for the Borders, at £798, and for Dumfries and Galloway, at £781. Lothian's expenditure per poll tax payer is, at £1,222, well below the Scottish average, and the third lowest in Scotland.
        If Lothian had received the average Scottish revenue support grant, its poll tax would have been only £133 per person after the Government's £144 reduction. Why did the Secretary of State decide that Lothian's expenditure increase was excessive and unreasonable? I will be happy to give way to the Minister if he will tell the House why Lothian's figures warranted the description of an excessive and unreasonable increase. As the Minister is nodding, I can only assume that it was because Lothian's expenditure was set to increase grant-aided expenditure by 12·18 per cent.
        Last October, the Scottish Office issued finance circular 16/1990, which stated, in paragraph 4:
        "It is important to emphasise that the authorities grant-aided expenditure has been arrived at principally for the purpose of determining and distributing grant. It is for each local authority to decide the level of services reasonably required in its area, having regard to the interests of the local community both as users of those services and as poll tax payers. The grant-aided expenditure is not an expenditure guideline and should not be regarded as such."
        Why is it right for the Government to decide that grant-aided expenditure shall not be an expenditure guideline, but then to use it in deciding that a local authority's expenditure is excessive?
        Under the present regulations and law, the Secretary of State's only threat has nothing to do with fact or logic, or with levels of expenditure, and everything to do with levels of poll tax and political prejudice. There was a blatant attempt to discredit the Lothian region Labour administration for political ends, in the slim hope that Labour in both Lothian and Scotland would suffer and that the Tories might win back some of the seats that they lost in 1987—or, more likely, might manage to hang on to some of the seats that they still hold in Scotland. That is very unlikely, but that is why the Secretary of State used
        848
        the powers that he did. His use of them had nothing to do with local government expenditure or protecting poll tax levels. It had to do with trying to protect the Tory party's last slender hopes of keeping any seats in Scotland.
        If, under the existing law, the Secretary of State can use his powers in such an arbitrary and biased manner, how much more frightening are the powers that he is now attempting to take? The Convention of Scottish Local Authorities estimates that, if one applied the same accounting criteria in England and Wales, 31 district councils and five regional councils would have faced capping this year. The Minister may disagree, but that is a good, sound estimate, made by people who are very experienced in local government finance.
        We have tabled the amendments to put some blocks on the Secretary of State's excessive powers. It will be for the other parties to explain their amendments, but ours are designed to restore the status quo and to retain the criterion of unreasonableness. That is a weak criterion—as the Secretary of State proved this year, it does not stand up—but at least he is obliged to make some effort to explain his actions, whereas under the new powers he seeks, he would not have to do so.
        Our amendments also try to ensure that, if a local authority keeps its expenditure below the rate of inflation, it will not be capped. At present, there is no guarantee of that. An authority could increase its expenditure by less than the rate of inflation and still be capped, because the Secretary of State deems its increased expenditure excessive.
        Our amendments also require the Secretary of State to take account of new burdens placed on local authorities by central Government legislation. Finally, they say that the Secretary of State cannot use grant-aided expenditure as his guide.
        The truth is that the Government dislike the very concept of local democracy. They have been in power for so long that they are now abusing power.
        Mr. John Home Robertson: It is corrupt.
        Mr. Maxton: I would not necessarily have used that particular word, but I accept the implication. As Lord Acton says, power corrupts; absolute power corrupts absolutely.
        Nowadays, if any authority wants to do things differently from the Government and has different ideas —even if it has been elected by the people—the Government wish to curtail its power, thus reducing its ability to perform its proper functions. The Government's arrogance is breathtaking: they believe that they are better able to decide what the people of Scotland want, although the people of Scotland have rejected them time and again. They cannot accept that local authorities elected by local people know what is best for those people, and should be free to make decisions without excessive interference on the part of central Government.
        Neither clause 2—even if it is amended—nor the Bill in its entirety can end the desperate crisis that faces local government and many poll tax payers. The Government frantically abandoned the poll tax as they realised what a disaster it had become—a disaster which, incidentally, Opposition Members had predicted from the outset. Having abandoned it, however, they were not prepared to face the consequences of their own crass stupidity.

        849
        I now hear that the Secretary of State never supported the poll tax. I have heard through various grapevines that he does not believe in it. Perhaps, after the next general election, he will be free to write his memoirs and tell us whether that is true.
        Instead of introducing clause 2 and the dictatorial powers contained in the Bill as a whole, the Government should have abolished the 20 per cent. minimum payment, backdated rebates for those who did not claim in time and restored local authorities' discretion to waive payment in cases where collection would cause hardship. If the 20 per cent. payment is wrong in 1993, it is wrong now, and should go now.
        Above all, the Government should get rid of the poll tax as soon as possible. If they swallowed their pigheaded pride and recognised publicly that their so-called council tax was an inferior version of the old rating system, they could, even now, withdraw the Bill and present another to reintroduce the rating system on 1 April 1992.
        We have said repeatedly that if the Government did that we would give their Bill every assistance. If they wanted to reform it later—as they suggest in the council tax legislation—there would be nothing to stop them doing so, in the unlikely event of their winning the next general election. Clause 2 of this Bill, however, does nothing to solve the problems that they have created for local authorities.
        The amendment may improve the situation only partially, but any measure to reduce the extraordinary powers that the Secretary of State is trying to take must surely be tried. I ask my hon. Friends to support it in the Lobby.
        Mr. Home Robertson: I am grateful to my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) for his extensive references to Lothian region. I hope that people throughout Scotland will have the opportunity to see a still from a television shot of the Chamber, revealing that, during the first part of his speech, the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Eastwood (Mr. Stewart), sat on the Front Bench in almost solitary splendour—accompanied by the Whip, his hon. Friend the Member for Leeds, North-East (Mr. Kirkhope). Leeds, North-East is, of course, a well-known Scottish constituency.
        The Secretary of State for Scotland—the leader of the minority administration at the Scottish Office—has now arrived to double the Scottish Tory representation. Yet again, the Secretary of State—in this case, the right hon. Member for Galloway and Upper Nithsdale (Mr. Lang) —has taken it on himself to set the budget for Lothian regional council.
        I have probably been involved in setting local taxes in Scotland, nominally at least, more often as a Member of Parliament than as a Scottish district councillor, which I was for five years. That says a good deal about the march of centralisation under the present Government. Nowadays, instead of taxes and budgets being set by people who are accountable to the local electorate, they are set by people from Cornwall to Muckle Flugga—including people from England, Wales and Northern Ireland. They are answerable not to the Scottish electorate but to the whim of Government Whips such as the hon. Member for Leeds, North-East. So much for local accountability and local democracy.
        850
        8.15 pm
        This is not an obscure debate about local government finance; nor, indeed, is the Bill an honest measure to protect local taxpayers. That is the fig leaf behind which the Government try to hide in their attempt to justify poll tax capping—or rate capping, as it used to be called. We hear from Ministers, again and again, that the aim is to protect local taxpayers from profligate local authorities. The Bill, however, represents yet another part of the Government's discriminatory and vindictive campaign against local services in selected parts of Scotland.
        My constituency suffered more than most from central interference in local affairs during the Thatcher years. Here we are again, under the new, supposedly squeaky clean Prime Minister, suffering exactly the same treatment. The image makers are working overtime nowadays. It seems to me that the only difference between this crocodile and the last is the fact that this one seems to smile a little more often.
        Ministers have taken powers to intervene in local government budgeting where they see fit to judge, purely subjectively, that the plans of elected local representatives are excessive and unreasonable. It beats me how on earth the perpetrators of the poll tax can be deemed fit judges of what is excessive or unreasonable. My hon. Friend the Member for Cathcart said that the Secretary of State for Scotland had tried to distance himself from the poll tax; I find that amazing.
        The Secretary of State for Scotland (Mr. Ian Lang): No.
        Mr. Home Robertson: I am glad to hear it, because remember vividly—as will my hon. Friend the Member for Cathcart—the long, weary hours in the Standing Committee on the so-called Abolition of Domestic Rates Etc. (Scotland) Act 1987, when the right hon. Gentleman was one of the Members who supported the legislation through thick and thin. We tried to warn them then: we told them it would be a disaster, that it would be unfair and that it would lose the party elections. Virtually all the Tory Members on the Committee lost their seats, but still they would not learn. Now, finally, the penny seems to have dropped; but we cannot trust such people to be objective judges of what is unreasonable in local government budgeting.
        The Secretary of State considers it excessive and unreasonable for pensioners in Lothian region—including the far-flung parts of my constituency—to have the free bus passes for which people in Lothian voted, as they have done repeatedly in local elections. He also thinks that a range of other local services are unreasonable and excessive—for instance, the Abbey residential home for old people in North Berwick, which is to be closed because of the package of cuts he has imposed on the region. The right hon. Gentleman wants to take credit for taking £18·5 million out of Lothian's budget and cutting the poll tax, but he must also face the consequences of the painful cuts that our constituents are having to suffer.
        The services to which I refer are not luxuries; they are vital to the well being of the elderly, the disabled and others who rely on them. The minority regime at St. Andrew's house, however, considers them excessive and unreasonable.
        The Secretary of State for Scotland has given himself the power—and now he seeks more power—to set the budgets of Scottish local authorities. But he has left the

        851
        responsibility for providing local services and responsibility to the local electorate with local councillors. It was Rudyard Kipling, was it not, who referred to
        "power without responsibility—the prerogative of the harlot throughout the ages"?
        Kipling knew a thing or two about the law of the jungle, and one wonders with what reptiles he would have compared Scottish Ministers, given their conduct over the years. Their judgment has been shown once again to be excessively and unreasonably harsh and arbitrary.
        Let us look in detail at the situation in Lothian region, to which my hon. Friend the Member for Cathcart has already referred. Lothian has been capped again by the Government. As my hon. Friend said, for a start, Lothian regional council gets less Government subsidy per head than any other region in Scotland. It receives £88 per head less in subsidy than the Scottish average, and £117 a head less than the constituents of the Secretary of State, in Dumfries and Galloway region.
        Grant discrimination makes it inevitable that Lothian has to set a higher local tax than anywhere else in Scotland. The inefficiency and cost of the poll tax system makes the position even worse. My hon. Friend said that the Government were abolishing the poll tax system. Would to God they were. If their plans are carried through, that system will last not only throughout the current year but for another two or three years, under the programme that they have in mind, complete with the surcharge which people on very low incomes still have to pay. The poll tax is still very much with the people of Scotland. The inefficient and costly system dreamed up by the Government is still hurting people in our country.
        The Secretary of State has seen to it that Lothian starts with a built-in disadvantage because of the discriminatory distribution of central Government grant. Lothian regional council has tried to make the best of a difficult job by setting a modest budget—£10 per head lower than the average for Scottish regions, and £19 a head less than Dumfries and Galloway regional council, which covers the area represented by the Secretary of State for Scotland —[Interruption.] I do not know why the Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart) is pulling such faces at me; I am only citing figures that were provided in reply to parliamentary questions. I can refer to them more closely if he likes.
        Despite Lothian's prudent budgeting, Government manipulation has left us with the highest poll tax in Britain outside Lambeth. That would be bad enough, but to add insult to injury, the Secretary of State now seeks to cut £18·5 million out of the Budget. He tries to take the credit for cutting the poll tax, while leaving councillors to face the music for the loss of pensioners' bus passes, and the other cuts for which the Secretary of State is personally responsible. He will not get away with it—at least, the Secretary of State himself may survive because he has given an extra subsidy to people in his part of the world, but the previous Secretary of State, now Secretary of State for Transport, and the Under-Secretary, the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) will have a job explaining to their constituents why they have to put up with worse services and such a high poll tax because of the financial gerrymandering of the Scottish Office. They cannot be allowed to get away with it, and they will not.
        Mr. Dick Douglas: After a fairly long Committee sitting we have come to the clause which applies to Scotland. Although we are discussing amendment No. 41, moved by the hon. Member for Glasgow, Cathcart (Mr. Maxton) I should like to allude to amendment No. 3, tabled by my hon. Friends and myself, which has not been given pride of place. It has the same thrust as the other amendments in the group, and would have the same impact on a situation that causes great concern.
        With great respect, I have to say that the hon. Member for East Lothian (Mr. Home Robertson) has been looking backwards and considering the Secretary of State's current powers, but we are concerned about the powers that the right hon. Gentleman intends to take, the thrust of which would be to relate the Scottish position to that in England and Wales. That should cause us all great concern, because the basis of local authority finance in Scotland, as we all know, is significantly different.
        The main burden of my remarks may not seem to relate strictly to our amendment, because that would affect schedule 3 to the Abolition of Domestic Rates Etc. (Scotland) Act 1987, but I want to relate it to the Scottish experience. I want to ask the Secretary of State about grant-aided expenditure, to which the hon. Member for Cathcart alluded. Will the Minister tell me whether we are to move away from the criteria in the substantial document, "Grant-Aided Expenditure"? That document bears some examination, because its case rests not on prejudice but on some degree of objectivity—although not perfect objectivity, of course.
        If the Committee will forgive me, I shall quote the introductory paragraph of that document for 1991–92:
        "The tables presented in the main part of this report show the calculation of Grant Aided Expenditure…for 1991–92 for regional, district and island authority services. These calculations are prepared using the client group approach which is a systematic means of allocating a predetermined level of expenditure equitably among local authorities. It should he noted that the client group approach does not determine the level of provision in absolute terms nor its distribution between services. The total relative GAE for a local authority is the sum of the separate assessments for individual services. The total estimates of GAE for each authority are used by the Scottish Office as the basis for the distribution of the Revenue Support Grant."
        That is the basis for the distribution of a grant. It is not to be used to determine whether expenditure is excessive. I ask the Minister whether it will be used as such. I shall happily give way if I am wrong, and we can save a lot of time, but, if I am correct in my assumption, in order to allocate the distribution of the rate support grant we shall use a device which sub-groups of local authorities have worked out with the Scottish Office over a period of years. I do not say that it is perfect; we may have disagreements about it—I am sure that Lothian would, and other authorities might, disagree with it—but there is a certain sense in which it can be regarded as a touchstone. We are moving away from that.
        The Convention of Scottish Local Authorities has sent me an appendix which says:
        "In England the capping criteria has been in place for some time and is normally centred around both the movement on a year to year basis in an authority's budget and what excess, if any, that budget generates in respect of that authority's standard spending assessment as set by the Government. The likelihood is that in Scotland instead of measuring excesses against SSA, the equivalent will be an authority's grant-aided expenditure assessment."

        853
        COSLA, the local authorities in Scotland and the Committee deserve an answer, not in the sweet by and by, but now. COSLA's appendix continues:
        "This is a matter of particular concern as it has never been accepted either by the Convention or its member councils that GAE assessments are in any way a true and accurate assessment of what each authority should be spending."
        That is the gravamen of my criticism of what the Government are trying to do. On later clauses we shall discuss the intentions on valuation.
        The hon. Member for East Lothian spoke about the effect of previous legislation on Lothian and other regions. As the hon. Member for Cathcart said, by giving the Government the powers that they seek in the clause, we would bring many local authorities that are excluded from capping powers within the ambit of those powers. Restrictions imposed by the words "excessive" and "unreasonable" will be removed.
        Those are enormous powers to give any Secretary of State, but they are enormous powers to give a Secretary of State in a Government who have rested their case for the reform of local authority finance on the basis of local autonomy and accountability.
        8.30 pm
        We are giving the Government enormous powers to interfere with local autonomy and accountability because they have moved into the local authority sphere. The Minister, no doubt, will tell us what percentage of local authority revenue will come from the so-called council tax, but it must be about £1 in £10. The Government say that Scottish local authorities will collect council tax revenue of about £800 million, but that if they try to raise extra revenue to meet need caused, for example, by higher unemployment, the United Kingdom's macro-economic structure will disintegrate. I do not believe that. It may happen if local authorities that are responsible for 50 million people decided to do it, but not when authorities are responsible for 5 million people.
        The hon. Member for Cathcart rightly said that we are concerned about having the poll tax for longer than is desirable. Anyone who is aware of the exigencies of the poll tax would not want it to continue longer. The Scottish National party and the Liberal Democrats have devised systems of local income tax. I have alluded to that before, so will not go into it.
        Mr. Maxton: I accept what the hon. Gentleman says, but at a conference that I attended recently, the hon. Member for Banff and Buchan (Mr. Salmond) suggested the replacement of the poll tax not by a local income tax but by 100 per cent. Government grant to local government. I should be grateful if the hon. Gentleman would clarify that.
        Mr. Douglas: I am not avoiding the question, but things have moved on. The Government raised VAT to 17·5 per cent. and are now responsible for 90 per cent. of local authority revenue. But should they so desire, they could become responsible for 100 per cent. Collection of the poll tax is down to 50 per cent. As a short-term expedient to save local government the embarrassment of trying to collect an uncollectable tax, the Government should have offered 100 per cent. support and the poll tax would have been abolished at a stroke.
        A Labour Government would have to consider that, because they would be unable expeditiously to introduce the so-called fair rates. Capital value assessments and
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        valuations will not be introduced until 1993 at the earliest, and that will impose enormous burdens on Scottish local authorities. We agree with the hon. Member for Cathcart and were ahead of the Labour party in suggesting that the 20 per cent. rule should be abolished.
        Mr. Maxton indicated dissent.
        Mr. Douglas: We may cavil about that, so let me put it gently: there is no disagreement that the 20 per cent. rule should be abolished and that students and others should be exempt from the poll tax.
        The Government have a responsibility to bridge the gap in revenue. Perhaps VAT should be increased further, but the most efficient measure is the standard rate of tax. In the long term, we propose a local income tax, which could be introduced by 1 April 1992 if we began now.
        The powers that are being sought by the Government cannot be justified. They cannot speak of the autonomy or accountability of local authorities when they determine what an authority will do, when they are responsible for 90 per cent. of its revenue and when they are saying, "No matter what the electors of the area want, we will determine what is excessive."
        Earlier, the Under-Secretary of State for the Environment said that he was horrified when he spoke to unelected people who said that they were speaking for areas. If we diminish the role of local authorities, non-elected people will speak for areas, because it will be difficult to attract councillors of a sufficient calibre and local authorities will not be accountable to their electorates.
        The Government must make up their mind about whether they want to give local authorities real power, and that means accountability for revenue. They cannot drive a wedge between authorities' accountability for the services that they offer yet at the same time determine what revenue they can raise.
        The Government are moving not only from the criteria that have been established to determine what is excessive but from grant-aided expenditure. They are trying to make Scotland follow the English model of the standard spending assessment by using a device that was not designed for that purpose. The tenuous trust that has been established between Scottish local authorities and the Scottish Office will be eroded and the Government will pay a heavy price.
        Mr. Malcolm Bruce: The Liberal Democrats' amendment No. 46 has the same general thrust as that moved by the hon. Member for Glasgow, Cathcart (Mr. Maxton). He sought to ensure that capping powers should not be imposed if local authority spending was contained within the rate of inflation. We seek to ensure that the Government would not impose capping without taking account of the impact on the local community and on the welfare provisions. In all honesty, the amendments are merely devices within the framework of the Bill to try to constrain the application of capping powers. As all the speeches have shown, it is the principle that we fundamentally oppose.
        It will be interesting to hear the Minister defend and justify the Government's position, but no doubt he has a brief that will eat all the words ever delivered and spouted by his predecessors when they gave us what it would be fair to call lectures on the need to introduce a system of local financing which would ensure accountability to the

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        electorate. That is now a dead duck. Accountability to the local electorate is no longer one of the Government's objectives.
        However, there is a more worrying issue. I am not sure whether it would be appropriate, so I shall not identify the person involved, but I spoke to a member of the Government when the Government announced the abolition of the poll tax. He passionately supported the poll tax, but said that, once people realised that the Government were setting up a separate system of tax collection to produce precisely 14 per cent. of local government expenditure, they would start to wonder, "What kind of crazy system is that?" The Government are trying to impose capping powers on local authorities which, in any case, will have the right to raise only about 14 per cent. of their total expenditure from that source. How can that be?
        The argument that used to be deployed was the minginess of the Government's support grant. That was the weapon that the Government used before, and it was pretty effective. When local authority ability to raise revenue is squeezed to such an extent, it is extraordinary that the Government should now introduce comprehensive capping powers.
        I remember the number of occasions when the Secretary of State for Scotland boasted to the House about how he was able to administer local government in Scotland without recourse to capping. Throughout the period of the crisis with the rates, throughout the revaluation, throughout the introduction of the poll tax and its entire administration, the Scottish Office stood alone, proud that it did not have to introduce capping. Now that the poll tax has been swept away, to the Government's eternal humiliation, capping is suddenly not only necessary, but necessary as a permanent and absolute power to be available for use against all authorities on every occasion. That seems an extraordinary development.
        There are several questions that we must ask the Minister. How does he believe that it is appropriate to have a system of local government finance which requires a separate tax collection system that yields only 14 per cent. of local authority expenditure? How can we trust him and his colleagues in the Scottish Office to determine what is excessive and extravagant and to determine what criteria to use to judge authorities' performance?
        I echo the words of the hon. Member for Dunfermline, West (Mr. Douglas) about the breakdown of trust that will follow between the Scottish Office and local authorities. There has been a basic understanding that the Government have a certain degree of right, and that there was a client relationship. Reference has been made to the confusion about how the rate support grant was calculated. In spite of the client group approach, there was some mystery about how each local authority's revenue and support grant was determined. However, it was accepted that there was a rough and ready justice and that the approach was broadly fair.
        However, when the only determinant is the arbitrary judgment of Ministers who are beleaguered, whose backs are against the wall and who are facing political annihilation, one cannot believe that there is an objective analysis. There will be a simple, blatant political fix
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        designed to try to secure the preservation of the species. The record and the experience of the past few years should tell the Government that it will not work, but that does not stop them trying.
        8.45 pm
        The people of Scotland are pretty fed up with the Government and with the contempt with which local government has been treated. They are also pretty fed up with the way in which they are encouraged to vote for local councillors whom they duly elect, but are then treated with contempt on the ground that the councillors whom they have elected cannot be trusted to fulfil their obligations. The Government cannot say that not enough people vote. People have the right to vote; if they do not turn out to vote, it is not the Government's job to determine at what level to intervene and decide whether a vote is invalid. There are parliamentary constituencies in which the turnout to vote is not what it should be, but I accept that this is not the appropriate moment to discuss exactly how the House is elected and the relationship between the votes cast and the seats won.
        I say merely that either elected democratic local government has a place in the future or it does not. The clause appears to mark the end of real democratic, accountable local government. The Minister and his party will be held accountable for that. He is making it extremely difficult to ensure that in future we have local authorities that can be trusted not only by the people but in their working relationship with central Government. If he destroys that trust and the working relationship between the Government and local authorities, which works pretty well in Scotland, despite the conflicts that have emerged, he will have destroyed a vital mechanism for delivering local services tailored to local needs and priorities. That is what the Government are abolishing and they will be held to account for it.
        Mrs. Maria Fyfe: So far, this has been a rather odd debate because it has taken place entirely between members of the Opposition. No Scottish Tory Back-Bencher is present to listen to this debate which affects Scotland and no Conservative Members are even rising to speak.
        I take issue with my hon. Friend the Member for East Lothian (Mr. Home Robertson), who earlier repeated the famous quotation about the prerogative of the harlot being power without responsibility. At least it can be said of the harlot that she is prepared to play an active role.
        During last week's debate, I interrupted the Secretary of State to ask him to name the Scottish councils that he thought were extravagant and wasteful. He said that he could happily leave that to the Under-Secretary of State, the hon. Member for Eastwood (Mr. Stewart), and that he would do so eloquently. The hon. Member for Eastwood did not name one such council, because he could not. All he did was to reply in a nit-picking way to some points that had been made in the debate and merely mentioned various resources that had been allocated. Once again, he made a speech of the type that leads people to be deceived because they believe that the resources are hard cash instead of merely the ability to borrow money or to raise money through the sale of assets. Once again, an attempt was made to mislead.
        Strathclyde especially is facing massive cuts on top of its previous round of cuts. That leaves it with extremely

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        serious decisions to make. The earlier round of cuts has caused the axing of many worth while voluntary bodies which were doing a great job in their communities but which have been forced to either give up their work entirely or to curtail it considerably.
        I mention specifically one function of Strathclyde region, which is not a statutory duty but is nevertheless a welcome and respected function—the provision of nurseries for the under-fives. In my constituency, the local regional councillor, Neelam Bakshi, myself and local parents had to put up quite a struggle to preserve a nursery. The region accepted our views, but it has to be said that the need for a nursery in that one small part of one constituency in Glasgow is at least double the places provided in the area. Only yesterday, the Government said that they would provide 160 creche places for customers of Glasgow development agency, which would be funded partly by the private sector and partly by the public sector. They have at least recognised that the need is there. If they recognise that, why cannot they ensure that the resources are there when local authorities are providing that service instead of forcing the authority to consider cuts?
        It is obvious that the Government are simply using their powers, which stem from their majority in the House, to force cuts that they cannot justify. It is interesting that they want to remove the word "unreasonable" from local government legislation, which says that if spending is "excessive and unreasonable", the Government will take powers to cut it. They have never been able to show that Scottish local authorities acted unreasonably. They simply change the goalposts and remove that word. If they were able to provide evidence, they would have done so and they have had ample opportunity to do so over the past 12 years. They have never been able to talk about any Scottish local authority in those terms.
        We have made the point before and we will make it over and over again until this lot are shifted out of power. When the Division Bell rings tonight, the majority will come trooping through the Lobbies with no idea what they are voting on and what the effect will be on Scotland. They know nothing and they could not care less. They will then wonder why they are so unpopular in Scotland. I do not know what it takes to tell them—except the next general election.
        Mr. Geoffrey Dickens: I had not intended to make a contribution to the debate, but the hon. Member for Glasgow, Maryhill (Mrs. Fyfe) has goaded me into making a contribution from the Conservative Benches. I promise that it will not be a lengthy contribution and I do not usually disappoint the Opposition when I make such a pledge.
        In my early days in public life, I served as a member and chairman of a parish council, as a member, chairman and leader of a district council, as a member of a county council and as a committee chairman of a county council committee. In those days, as today, parish councils had to precept the big brother council—the district, city or borough council—for the money that they had to spend. They do not collect their own money; they precept the district councils for the money. However, parish councillors still work out their spending plans and their priorities. It does not make any difference who collects the tax.
        What really matters to the councillors who are elected is to ensure that the money is spent wisely for the sake of
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        the people who have elected them on to the parish council. The system works well and I do not see why the Opposition should make such a fuss about who collects the tax as long as the elected councillors have the opportunity to fix their own priorities and their own spending plans.
        Mr. John McAllion rose—
        The Temporary Chairman: I call Mr. Thomas Graham.
        Mr. McAllion: This must be the first occasion on which I have been mistaken for my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham). I am sure that any comparison would withstand an objective analysis.
        The group of amendments relates to the Government's attempts to strengthen the capping powers available to the Secretary of State for Scotland. To understand fully the significance of the amendments with which we are trying to change clause 2, it will be helpful to look back at some of the recent history of capping.
        I remember well the 1986 Green Paper review of local government finance. At that time, we were assured that capping would be a transitional measure which would be phased out as the poll tax was phased in and that the poll tax would ultimately prove to be the system of accountability in local government which would render unnecessary capping powers for the Secretaries of State for Scotland, for Wales and for the Environment. We were told that everyone would pay the poll tax, that everyone would have a stake and that everyone would therefore hold to account the local authorities whose spending was deemed to be excessive and unreasonable. We were told that with the advent of the poll tax, capping would be rendered completely redundant.
        Looking back to 1986, I am struck by the fact that the review paper was quite touchingly innocent in its belief about what would come to pass. Things did not quite work out as the authors of the Green Paper intended. The poll tax ran into inevitable political trouble and as the poll tax receded, so did the early confidence that the Government had shown in it.
        Capping began to make a comeback. We were first told that the poll tax would take a number of years to work and that we had to have capping powers as a weapon of last resort. We were then told that capping powers were not a weapon of last resort, but a reserve power that might have to be used from time to time. From a reserve power, capping became a selective action power. In clause 2, we are told that capping is a necessary power without which the Secretary of State cannot perform his function as the head of the Scottish arm of the Government.
        Ministers will seek to assure us that clause 2 simply brings Scottish capping powers into line with those available to the Secretaries of State for Wales and for the Environment. They will also tell us that we need stronger capping powers in Scotland because the current powers available to the Secretary of State are limited and prevent him from fulfilling the role that the Government intend for him. However, that means that the Secretary of State for Scotland will now be able to determine not only the level of local tax in a local authority area, but the level of local services in the area.
        I come from Dundee. The only time the citizens of Dundee see the Secretary of State for Scotland is when he sweeps into the city in a big car cavalcade and poses briefly in front of the television cameras for an opening or a

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        launch. He then sweeps out of the city before most people in Dundee are aware that he has been there. Usually the first inkling that the people in Dundee have that he has been in the city is when they turn on their televisions at night and realise that he was there earlier in the day.
        I understand why the Secretary of State may prefer that. He knows that he is neither popular nor charismatic, especially with Dundonians. It is always better to be safe than sorry, so why tell people in Dundee that he is coming to the city? It is best for him to get in and out of the city before people realise that he has been there. That is the safest way in which the Secretary of State can visit Dundee.
        The man who is almost frightened to show his face in the city is the same person who will ultimately decide the level of local taxes in Dundee. He is the same person who will ultimately decide the level of local services in Dundee. He is the same person who has never stood for election at any level in Dundee and never will. The hon. Member for Eastwood (Mr. Stewart) stood for election in Dundee a long time ago. He registered a respectable 19,000 votes in the constituency of Dundee, East. May I remind him that the Tory candidate at the last election in Dundee registered an unhealthy 5,000 votes? That is not to say that the hon. Member for Eastwood was a much better candidate than those who have stood in the years since. It simply reflects the fact that the Tory party is that much more unpopular than in the 1970s when he stood in the city.
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        Mr. William McKelvey: On my hon. Friend's point about the Secretary of State sweeping into Dundee and sweeping out, perhaps the Secretary of State can do that with such alacrity because there are roads in and out of Dundee. The Secretary of State never comes to Kilmarnock because if he ever gets there, he will not get back up the A77 safely.
        Mr. McAllion: My hon. Friend makes a fair point. I remind him that we have roads in and out of Dundee because we have a Labour administration in Tayside regional council which has made sure that we have roads.
        We are expected to approve the powers given to the Secretary of State for Scotland in clause 2, knowing that that would give him the authority to cap local expenditure, not in accordance with criteria generally agreed in the House, agreed between the Convention of Scottish Local Authorities and Scottish Office Ministers or agreed in any other way, but in accordance with criteria on which the Secretary of State for Scotland alone decides and on the basis of judgments which he alone makes.
        Whatever happened to democracy, accountability and direct elections in Scotland? In this alleged Mother of Parliaments we are expected to pass a clause which effectively will be a licence to the Secretary of State for Scotland to exercise what my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) described on Second Reading as arbitrary authority. Unless we approve the limitations which the amendments propose on the powers available to the Secretary of State for Scotland, we shall give him unparalleled power at local government level and make a reality of what was once merely a political slogan —that the Secretary of State for Scotland was merely a
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        colonial governor. If the Secretary of State is given the powers in the clause, he will be a colonial governor in Scotland.
        The limitations in the amendments are moderate—perhaps in keeping with my party these days. The amendments deal with moderate issues such as expenditure. If local government expenditure rises at less than the rate of inflation there should be no capping. I cannot understand why the Secretary of State for Scotland assumes that he would need to cap local government expenditure if it was rising at less than the rate of inflation.
        The amendments also say that capping should be applied only where it is reasonable to do so. If the Secretary of State cannot accept that, he is telling the Committee that capping should be applied where it is unreasonable to do so and that he wishes to retain the power for the Secretary of State for Scotland unreasonably to cap local authorities throughout the length and breadth of Scotland. If that is what he is saying, I am sure that he will not say it very loudly when the general election comes.
        Our limitations would also require that decisions on capping should not be made solely on the basis of the Secretary of State's judgment but that others should be involved in deciding what criteria should be applied where capping is thought to be the obvious route to take. The amendments also suggest that account should be taken of the new burdens placed on local authorities by central Government legislation. Surely that is a reasonable thing to ask.
        The demands in the amendments are not excessive. By any standard they are sweet reason itself. If the Minister and the Government find it impossible to accept them, we must conclude that they are the people who are excessive, extreme and not fit to be in government. In the Government's arguments about the clause, especially on Second Reading, we heard a strange and novel doctrine being spun. It is the idea that local voters cannot be trusted to think for themselves and that they are not fit to decide who should be elected to their councils and who should make decisions about raising local revenue to pay for local services. We have been told that the Secretary of State for Scotland must decide for them, although he would describe it otherwise.
        The Secretary of State once said—I think that it was in a statement to the House—that we were dealing with greater accountability to the national taxpayer rather than to the local taxpayer. But the problem with that argument is that the national taxpayers did not vote for the Secretary for Scotland either. So he does not have that democratic figleaf. Ministers are exercising power and making decisions at national and local level without ever having been elected either at local or national level in Scotland. That is the system which was described by Tory Members as unacceptable when it operated in eastern Europe, but which they use to mask their electoral weakness in Scotland and excuse their right to run Scotland without any democratic mandate.
        Some Conservative Members referred to what they described as a breakdown of trust. The way in which the Government have operated in the past 11 to 12 years in Scotland is leading to a breakdown in trust in not only this Government but the entire system of government in Scotland. That is why the Tories are the only party in Scotland opposed to constitutional change and reform. For many reasons there must be constitutional reform in Scotland and a Scottish Parliament. One of the main

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        reasons for the establishment of such a Scottish Parliament is the behaviour of the Government over the past 12 years and the way in which they have treated local government.
        Mr. Thomas Graham: I support amendment No. 41. I spent a great deal of time in local government and I clearly remember meeting local people who put into the system their thoughts about the types of buildings and services that they wanted. We based our programmes and policies on such an input, and when we fought elections the people voted for us. Throughout Scotland, local people argued their case and supported the political party of their choice.
        Since 1979, the Government have committed the serial murder of local government. They have undermined the role not just of local government but of councillors. In the eyes of the public, they have made "councillor" a dirty word. The Government have accused them of not trying to deliver services and have used Parliament to mount a constant political attack on democratically elected councillors. That has caused a great loss of confidence in local government. The Government are beginning to rue the day that they started such an attack; that is evident from the way in which they were decimated at the last local government elections in England.
        I am extremely worried about the proposal to cap local government expenditure. In my constituency surgery at the weekend, I spoke to people from Houston who wish to see the construction of a local library. People in Kilbarchan would like to see the opening of a community centre, and people in Lochwinnoch would like a play area for their children. In almost every village in my constituency, people want amenities that will improve their quality of life. That is admirable. Hon. Members like to see local people taking an active interest in their surroundings and speaking to the appropriate people, such as local councillors and Members of Parliament.
        The Minister knows that I am disturbed that services in my area are being hammered, not because of capping, but because of the Government's systematic underfunding of local government. That has meant that there are not enough places for the elderly in day care centres, and not enough home helps. The savage increase in concessionary fares is the result of the Government's deliberate underfunding of local government.
        The Government have now produced a capping plan which, they say, will protect people and prevent them from paying too much. No one has ever come to my surgery complaining that he is paying too much for local services, but many people complain about the Government and about the savage attacks on local government funding. The Government seem to have a tremendous hatred for local government, which provides many essential services to our elderly, our disabled, our mentally handicapped and children living in bad conditions created by the Government's mad economic policies.
        People face high interest charges, and mortgage rates are going through the roof; families are made homeless and have to go to local authorities begging them to provide homes; yet the Government are denuding local authorities of the finance to build houses for rent, and to provide the services that help children who come from families that are broken up because of high mortgage rates and unemployment. These factors put stresses and strains on
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        family life as they do on local government. People want local government to act as Santa Claus, because the Government have failed them.
        Capping is an import from the far east—as far east as Russia. The Russians have been asking the Government to help in their economic policies, but it looks as though, instead, the Government are importing a totalitarian system and imposing controls on local government. Local government has become as misnomer. The struggle to keep local government is nearly over. The central control that George Orwell portrayed in "Nineteen-Eighty Four" is here, and has been approaching for a long time. Capping is just another step along that line.
        The day of reckoning is around the corner. People want decent local government, with involvement by the local people. In my constituency, people are crying out for services to be provided. That will come about only if central Government allocate more funds to local government and allow local government to get its act together and to have the power to borrow and to build. If local government cannot do that, how will we have local government services? Such services need money. Instead of capping, the Government should be supporting those services.
        This week, I saw one of the most successful films ever made, "The Silence of the Lambs". It has some analogies with what is going on. We have a cannibal Government who want to gobble up more and more power for themselves. However, we know that power corrupts. The Government's attitude towards local government is corrupt. It threatens the democratic process because it permeates to those who vote for local government. The Government want to impose the totalitarian system that is so beloved by all of them.
        I am disgusted that we are capping rather than increasing local government expenditure. Increases would ensure that the services for the elderly and handicapped that local government has provided for many years would continue. The Minister has an opportunity, by supporting the amendment, to support common sense and decency, and to ensure that local government continues in its rightful place.
        Dr. John Reid: Tonight, those who have spoken have thrown what, if we were not in Parliament, would be called abuse at the Minister. Instead, we should perhaps compliment him on his forbearance and fortitude. I have never before known a human being who has managed to go through such a difficult time over local government finance, with so many twists and turns and U-turns, and remain smiling. There have been no tears of regret, and the Minister is smiling again. He reminds me of the words of an old song made famous by a constituent of mine, Sydney Devine, from Cleland, just down the road from Mr. MacGregor of Shotts. The words could be applied to the Minister:
        "If they gave gold statuettes
        For smiles of regret
        He'd be a legend in his time."
        The Minister has gone through the whole of this sorry story about local government finance smiling. The horror of the poll tax stands in contrast to that, and I need not enumerate it because all of us—presumably even the people of Eastwood—well know the problems caused by the poll tax. We meet those people in our surgeries. At times, we see grown men reduced to tears by frustration and despair.

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        9.15 pm
        I will not go over those issues, because I wish to concentrate on one fundamental question as we consider the mechanics of poll tax capping. In the last year, we have seen not simply a change of tactics in capping, not an instrumental change in local government finance or even a change in the manner in which we deal with local government finance. The issue of capping gives rise to a fundamental change of principle by the Government.
        A good start would be for the Minister to say whether he agrees with the former Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher), who said in recent days that she believed that the poll tax was correct in principle. If he agrees with that, we are in a peculiar position, for the fundamental principle of the poll tax was accountability. It was sold—or, rather, was not sold—by means of that propaganda or marketing too. All the suffering, impoverishment, indignity and frustration has been due to that one principle of accountability, to which, at least in her honesty, the right hon. Member for Finchley still sticks.
        We were told that, for too long, local authorities had spent too much money, and that accountability was the only democratic way—through the ballot box—to stop it. For three years, the point was hammered home. A relationship was to be built in between electors, local councillors and local authorities and local spending. If, at the end of the day, a local authority spent too much of the money for which it was accountable to its electors, the electorate would exercise their judgment through the ballot box.
        That fundamental principle was supported by the Minister, and for that principle the right hon. Member for Finchley was prepared to give her political life. I suspect that, although they now wish to renege on it, it is the principle on which the Government will founder, because of the way in which they implemented it.
        Mr. Maxton: My hon. Friend rightly says that the right hon. Member for Finchley (Mrs. Thatcher) was prepared to see her political career founder on the principle of the poll tax. But the author of the poll tax, the man who devised it and based his whole political career on it—the hon. Member for Stirling (Mr. Forsyth), the Minister of State—has not been prepared to sacrifice his political life for it.
        Dr. Reid: The Minister of State has not graced us with his presence, despite his early role in developing the poll tax. No doubt he has other business elsewhere. I shall not make the same mistake as the Prime Minister and attack him when I do not know where he is. For all I know, he is dining with Her Majesty. Whatever his excuse for being absent tonight, we must ask the hon. Gentleman that fundamental question on this issue.
        If the Government were committed to the principle—to which the right hon. Member for Finchley and apparently, because I think I see him nodding in assent, the Parliamentary Under-Secretary are still committed—how does that equate with the capping of local taxation? The matter is fundamentally incompatible. It is not possible to hold to the principle of the local accountability of the electorate on the one hand while saying, on the other, that central Government will dictate the level of local expenditure.
        Mr. Dickens: Does the hon. Gentleman recall the hon. Member for Renfrew, West and Inverclyde (Mr. Graham) saying that his council needed community centres, recreation grounds and libraries? Opposition Members blame the Government but why did not Labour councillors provide those facilities when there was a Labour Government? Why have they sat back for so many years and not provided those facilities? Why do Opposition Members suddenly decide that they want them and that the fact that they have not been provided is the Government's fault because we introduced legislation?
        Dr. Reid: I was trying to deal with the strategic principles involved, but it is sometimes good to be dragged down to the local town halls to consider the important details. I shall discuss that principle in a moment. I do not suggest that local authorities should have carte blanche to spend Government money. The hon. Gentleman should question my remarks rather than those of other hon. Members. As always, I listened to my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) —indeed, I hang on his words. He brought great intelligence and detail to our debate, and none of his comments was incompatible with my arguments.
        For the past five years, the Government have been saying that local accountability is the way to solve the problem. Either they believe that that is true, or they believe that the problem will be solved by central Government diktat. There is a fundamental contradiction. It is not a matter of balance or compromise, or of the Government saying that they recognise the dual negotiating roles of local and central Government. If so, although we might not agree entirely with their policy, we might approach it within the same philosophical and practical framework.
        No Opposition Member would suggest that an individual, far less whole groups of individuals who constitute local authorities, could possibly be islands unto themselves. That is the difference between Conservative and Opposition Members. We are collectivists and understand that we live in society. We must sometimes cope with an ex-Prime Minister who, 6,000 years after the first settlements in the Mesopotamian valley, still believes that there is no such thing as society. Perhaps that is the view of Conservative Members. We do not believe that individuals are free to have absolute rights, irrespective of the consequences.
        We have been asked to accept not a balance between local and central Government but a diktat. It is not in opposition to local government spending willy-nilly: rather, the Government assert that the legislation should pass dictatorial fiscal powers, so that the Secretary of State can decide local authority spending without paying attention to local needs, opinion or democracy. That is not only unjust but also inefficient, because such decisions cannot be made sensibly and efficiently by people with no experience of areas such as mine and those of my hon. Friends the Members for Renfrew, West and Inverclyde and for Glasgow, Springburn (Mr. Martin).
        I mean no personal criticism of the Minister. Let us suppose that the Ministers at the Scottish Office were not malevolent, that they were kind and just men. Even ascribing to them the most gentle, considerate and humane of approaches—if I can hold them in that fantasy world for a second—I do not believe that they could understand

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        the needs of Springburn, Bellshill or Linwood as they ponder them while walking through the leafy groves of Edinburgh, West or Eastwood.
        Perhaps Ministers are flanked by permanent secretaries and civil servants who spend all their time running in and out of Bellshill, Dundee, Springburn or Clelland in the hope of seeing Sydney Devine. I doubt it. I suspect that, cocooned in the Scottish Office, we have Ministers from some of the most affluent areas of Scotland, surrounded by their social superiors, the civil servants, from even more affluent areas of Scotland. They make dictatorial decisions on matters that are vital to some of the most deprived and impoverished areas of Scotland. With the best will in the world, I do not believe that those Ministers, advised by those civil servants, can make decisions that are efficient or fair for local communities such as my own.
        Even if a Labour Government were in power, and given our programmes and intentions, which are far better placed to assist constituents in areas such as mine, in all sincerity, we would be handicapped with the same civil servants. We can all learn lessons with the passage of time, and perhaps we could learn from some of the things that the right hon. Member for Finchley did. I am sure that we would not undertake a round of sackings and that we would not be dictatorial, but, in common with any other Government, we would expect to be surrounded by people who are committed to the general framework of our programme.
        Even a Labour Government, with a committed programme that would be of far greater assistance to local authorities than that of the Government, would be handicapped if we took to ourselves the type of dictatorial power that the Minister is trying to take tonight. I hope that the Minister will reflect on that, even at this 59th minute of the 11th hour. I hope that, despite the U-turns he has already committed—no doubt it would embarrass him to do any more—he will think about withdrawing the Bill.
        Mr. Michael J. Martin: In common with my hon. Friends, I feel that a disservice has been done to local government in recent years by the type of debate that the Government have initiated. We have had much talk about rate capping and local authority overspending, but such talk tends to highlight those authorities with a bad reputation. The Government have tried to give the impression that every authority is like that.
        The hon. Member for Littleborough and Saddleworth (Mr. Dickens) asked where Labour local authorities were when the Labour Government were in power. It is a matter of public record that when Labour authorities were in power councillors were never out of St. Andrew's house and Whitehall arguing the corner for their cities.
        Every stranger who comes to my native city of Glasgow, including hon. Members, says that a fantastic transformation has taken place.
        Mr. McKelvey: Not in Easterhouse.
        Mr. Martin: A lot of positive things are happening in Easterhouse—tenant co-operatives have been established and it has a swimming pool, which the people of Springburn have wanted for years. Hon. Members who do not come from Glasgow have commented on how fantastic its transformation has been, due to the sandblasting, the garden festival, the waterfront development and the co-operation of the private sector. I hope that
        866
        Conservative Members will give credit to local authorities that act positively. If they are prepared to hand out criticism, they should be prepared to give credit where it is due.
        9.30 pm
        Like my hon. Friends, I am worried that if we keep turning the screw on local authorities we will not get in the House the talented men and women from local government that we have had in previous years. If they cannot serve their apprenticeship in local authorities, where will they come from? Many of those who have served the House well have had a good training in local government. I think that I am right in saying that our Prime Minister had experience as a councillor.
        Mr. Home Robertson: Not a very good example.
        Mr. Martin: Perhaps not, but the point was worth making.
        I served as a councillor in the constituency that I represent. Because of the nature of our activities here I cannot point to anything tangible that I have achieved as a Member of Parliament, but in the old ward that. I represented I can point to a housing association which is thriving and with whose fights to obtain grants I was involved as a founder member. I can point to play areas and even to simple things such as fences or walls to give elderly people with disabilities more privacy. Over the years almost all councillors were able to point to such achievements—that is, until the Government began their attack on local authorities. The Government are undoing the good work that dedicated men and women did many years ago.
        I want to highlight the cases of three councillors who did an excellent job in the city of Glasgow. The first was John Main, who became provost of Glasgow in the late 1960s but who unfortunately died in office. He left school at 14 because his parents could not afford to keep him at school and as a result he was obsessed with seeing that every child in the local authority area had a good education. He worked night and day to see that excellent schools were built in Glasgow.
        Councillor Gibb, my second example, was so appalled by the housing in Glasgow that he insisted that we build houses on every gap site. It is said that on a visit to a Glasgow art gallery when he was asked his opinion of a landscape painting he said, "That landscape is fantastic; just think how many houses we could put on it." That shows how obsessed he was with seeing that people were given a decent chance in life.
        A colleague of mine named Patrick Trainer, a senior councillor in Strathclyde who recently retired, had the foresight to recognise that since we were becoming more closely involved with the EEC the abattoirs in the city of Glasgow would have to be brought up to a certain standard. He fought tooth and nail to see that that was done and because of his work we have a good market that will be able to cope with 1992.
        I mention these people because they and others will not have a chance to leave their mark on local authorities because the Government are stifling them. It is unfair for the Government to put such a restriction on local authorities when the Minister knows that they have statutory obligations and cannot just not spend money.
        My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) has referred time and again in the

        867
        House to the care of children. Local authorities have a statutory obligation to look after children. Regardless of councils' budgets, if children are in need they must find a home for them and give them food and shelter.
        The Government have turned their back on the homeless in our society and that has put more and more pressure on Strathclyde regional social work department and Glasgow district housing department. The Minister also knows that police officers' wages are not negotiated by councillors; they are subject to national negotiation. The city treasurer must keep his or her fingers crossed on the outcome of negotiations in London with the Police Federation.
        The matter does not end there, because every local authority worker has a basic wage which has to be negotiated nationally. I know that the Government want to destroy national negotiations, but if they do so the people who will suffer will be the workers in the constituency of the hon. Member for Argyll and Bute (Mrs. Michie) where there will be high unemployment. Local negotiations will mean a cut in the wages and conditions of hard-working men and women who do not have a good wage to begin with.
        I have heard members of the Scottish National party talking about the difficulties of local authorities. They say that the Government should give local autonomy a chance. I do not dispute the view that those who are elected by the community should have a say, but the weakness of the SNP case is demonstrated by the fact that men and women outside Strathclyde came into Strathclyde and told the electorate not to pay the poll tax when the elected councillors were saying, "We do not agree with the poll tax, but if you do not pay it where will the money for the services come from?" That weakens the case of people such as the hon. Member for Dunfermline, West (Mr. Douglas) who was elected by the people of Dunfermline as a Labour Member of Parliament and has not gone before them to say that, whereas he was elected as a Labour Member, he is no longer a member of that party.
        Two things are worrying local councillors, as anyone who speaks to them will know. The first is what the Government are doing at the moment, and the second is that because the poll tax is not coming in they are having to consider shedding labour. Those who knew the consequences of not paying the poll tax, despite their dislike of it—we all disliked it—and call themselves trade unionists should hang their heads in shame. The consequences of their actions will be that men and women in my constituency where unemployment is rife will be forced out of a job.
        At one time we had a railway industry which was a big employer, but, because of Government policy which led to the closure of that industry, the only thing the workers had to turn to was local government. Those who were lucky enough to find a job in India street or down in the city chambers were grateful for it. Those who supported the anti-poll tax campaign have not assisted those workers who are out of a job.
        The Minister must obviously consider his Department's overall expenditure, because, whatever may be his view of the way in which local authorities handle their affairs, if the councillors give up and—God forbid that this should ever happen—tell the Minister, "Take your services and
        868
        run them from St. Andrew's house," he will be confronted with even more problems than local authorities have now. He would not do a better job, and the bottom line would be a greater cost to the taxpayer and ratepayer.
        Dr. Norman A. Godman: We have just listened to a characteristically powerful speech by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin). I thank him for his kind reference to some of the work that I have been doing.
        I support amendments Nos. 41, 3, and 46. Unlike other hon. Members who spoke about diminishing local autonomy and democracy, I want to explain why I believe that the amendments will improve clause 2, to the benefit of the more vulnerable people in my constituency.
        Amendments Nos. 3 and 46 emphasise the need to protect vulnerable citizens in our communities. The hon. Member for Gordon (Mr. Bruce) spoke of the importance of ensuring the welfare of local communities. Amendment No. 3, moved by the hon. Member for Dunfermline, West (Mr. Douglas), emphasises the importance of providing protection for certain groups. Paragraph (1) states:
        "In determining whether an increase in expenses by a local authority is excessive, the Secretary of State shall have regard to:

        (a) The level of unemployment in the area in the preceding three years".

        According to Government statistics, unemployment in my constituency is running at 13 per cent., and I see no sign that that dreadful statistic will be alleviated in the near future.
        Amendment No. 3 refers also to
        "the condition of the housing stock and the numbers on the housing waiting lists".
        The condition of many houses on the lower Clyde is nothing short of disgraceful in terms of damp—let alone the poor quality of materials that were used in the construction of those properties 40, 50 or even 60 years ago. However, Inverclyde district council has been denied assistance by the odd job lot at the Scottish Office and their officials. People come to my surgery to complain about the dampness, which, among other things, presents a very real health hazard—especially to young children and elderly.
        Amendment No. 3 refers also to the need to protect those in receipt of income support, one-parent families, and the disabled and handicapped. Strathclyde's social work department seeks to protect the vulnerable in our communities, but its fine, decent work has been severely constrained by Government cuts in the past, and it will be even more damaged in the future. Section 12 of the Social Work (Scotland) Act 1968 allows social workers to provide financial assistance for families in need. Area teams are involved and the district manager of the social work department is given a budget each year to tide people over for a few days.
        Recently, a young woman came to see me with her two young children. She had suffered appalling domestic violence, and was anxious to escape from a psychopathic husband. She needed money to get out of the area and go to close relatives who would protect her. The social work manager, or one of his team, was able to help, and she and her children escaped.
        The present Government have cut that budget and will cut it again. Children will be affected. It is important to draw attention to the diminution of local autonomy and democracy that Scottish Office Ministers have inflicted on our communities. We must remember, however, that the

        869
        serious damage that they have done to the more vulnerable members of society will go against them come the election: they will be driven out of office, which is what they deserve.
        9.45 pm
        The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): We shall, of course, follow up the specific points raised by the hon. Member for Greenock and Port Glasgow (Dr. Godman) and others. First, however, let me address some remarks to the hon. Members for Glasgow, Springburn (Mr. Martin) and for Renfrew, West and Inverclyde (Mr. Graham). I pay genuine tribute to many Scottish councils and councillors, whose work for the community is often not appreciated sufficiently. The hon. Member for Renfrew, West and Inverclyde, who is not in the Chamber now, will know—as will the hon. Members for Paisley, North (Mrs. Adams) and for Paisley, South (Mr. McMaster)—that I have never personally attacked councillors of any political persuasion in either Eastwood district or Renfrew district; and the two districts differ politically.
        The question of resources is not the key issue in today's debate; I must point out, however, that aggregate external finance has risen this year by 10·4 per cent.
        I confirm that clause 2 would strengthen and widen the Secretary of State's capping powers in Scotland. I believe that that is essential to protect local taxpayers from the excessive spending of local authorities which—or so experience suggests—occurs during a changeover from one local authority finance system to another. This year, many Scottish authorities have set community charges in flagrant disregard of the true interests of their charge payers. That is not true of all local authorities, but it is true of a number.
        It must be Government's duty to ensure that the fundamental shift in the balance of taxation brought about by the Community Charges (General Reduction) Act 1991 has the intended effect of keeping local taxes down to a reasonable level, and is not used to fund higher spending. The new local level of charges made possible by this measure must be passed on to local people. That is why, in the last year of the community charge system, we are moving to increase central Government's powers to control total expenditure. That is entirely reasonable, although, as the hon. Member for Gordon (Mr. Bruce) pointed out, the new system will involve less accountability.
        The hon. Members for Gordon, for Motherwell, North (Dr. Reid) and for Dundee, East (Mr. McAllion)—I gather that I am always welcome in Dundee—mentioned trust. Let me confirm that the Secretary of State will make a declaratory statement in the autumn about capping criteria, well ahead of local authorities' setting their budgets. One criticism has been made—[Interruption.] I can give hon. Members an absolute assurance that the criteria will be published by the end of November at the latest, and our intention—
        Mr. Maxton: Too late.
        Mr. Stewart: The authorities do not set their budgets until next January. We will give the information by the end of November, and we hope to do so by the end of October or the middle of November. That is a perfectly reasonable timetable.
        Mr. Douglas: We are in a transitional period. A timetable that may have been appopriate in relation to setting budgets in the past is not appropriate given the dislocation that local authorities are suffering. Cannot the Minister reconsider his dates and give the information—in consultation with COSLA, of course—well before the time that he mentioned?
        Mr. Stewart: Of course we shall consult COSLA, but we are talking about budgets for 1992–93. We aim to announce and publicise the criteria by the end of October or early November, long before the budgetary process of authorities really gets under way.
        Dr. Reid: Will the Minister give way?
        Mr. Stewart: I shall give way, but the House will appreciate that we are pushed for time.
        Dr. Reid: The Minister must know that when he talks about October and November, there is a suspicion that he may be putting the decision off further and further because the Government are 6 per cent. behind in the opinion polls. [HON. MEMBERS: "Ten per cent."] Will the hon. Gentleman assure us that, when he reads tomorrow morning in The Guardian that they are 10 per cent. behind, we shall not find that his timetable has been postponed until March or even June? Will he confirm that the timetable is final?
        Mr. Stewart: That was a risible intervention. I thought that I was being helpful to the House in setting out a reasonable timetable.
        I recognise the point that amendment No. 41, the lead Opposition amendment, was intended to draw to the attention of the House, but the yardstick suggested—apart from the fact that it would not take account of any authority already budgeting well in excess of the grant-aided expenditure figure—would not cover the possibility that, as in the current year, inflation could sharply between the time that the budgets were set and the start of the year in question. I—and all other local taxpayers—have the right to expect authorities setting their budgets to take into account forecasts of a fall in inflation for the year ahead.
        Mr. Maxton: One of the factors built in to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 from the word go was the use of the retail prices index when setting the business rate—the non-domestic rate—in Scotland. What the Minister describes could have happened then. If the principle of using the retail prices index as a guide was right then, why is it wrong now?
        Mr. Stewart: The reason for the inflation limit on increases in the business rate was to protect the business community. The limit was, of course, determined by the retail prices index for the year to the previous September. The hon. Gentleman is suggesting a limit based on the current RPI figure in March or April. That figure could move sharply one way of the other in the subsequent year.
        The hon. Member for Dunfermline, West (Mr. Douglas) made an extremely well-informed speech. Most of what he said about the client group approach as a basis for determining grant-aided expenditure was right.
        Mr. Maxton: An unholy alliance.
        Mr. Stewart: There is no unholy alliance. The hon. Member for Dunfermline, West was the only person here who took the relevant documents out of the Library for

        871
        the debate. I can assure him that in taking into account the client group mechanism as the basis for determining GAE, we arrrive at the figures using—as he knows—a large number of indicators. Indeed, all the indicators outlined in the amendment, except those on housing, are taken into account. The hon. Member for Greenock and Port Glasgow also mentioned housing, but housing expenditure is not strictly relevant because it is determined separately. That applies to amendment No. 46, which is similar but more general. GAE is used as a basis for grant distribution.
        I was astonished by some of the attacks that the hon. Member for East Lothian (Mr. Home Robertson) made on the grant distribution system. It is agreed through the distribution committee of the local government finance working party—
        Mr. O'Brien: What about the level?
        Mr. Stewart: The hon. Member for East Lothian criticised the distribution, not the level. Distribution is agreed by the distribution committee. That technical matter is agreed between COSLA and Scottish Office officials in the light of advice, and the criteria and formulae are constantly re-evaluated. The hon. Member for East Lothian attacked COSLA as much as he attacked the Government.
        Lothian's grant-aided expenditure is lower per head than that of regions such as Strathclyde, but it has a lower proportion of school pupils in education authority schools. Compared to Strathclyde, Lothian is relatively prosperous; it is a relatively small, compact region. It does not have sparsely populated areas such as those in Dumfries and Galloway.
        The formulae that have been criticised by Opposition Members are agreed by COSLA. They are not imposed and there are clear social differences between Lothian and Strathclyde, which suggest that it is sensible to have higher grant per head for regions such as Strathclyde. Opposition Members have not advanced a formula that could be used by COSLA and Scottish Office officials to change the distribution formulae.
        Opposition Members discussed the general policy issues raised by clause 2 but did not offer any clear policy. On Second Reading, the hon. Member for Glasgow, Garscadden (Mr. Dewar) said that the previous Labour Government passed section 5 of the Local Government (Scotland) Act 1966 to introduce a form of rate capping for excessive and unreasonable expenditure. That is being changed in the Bill, but does the hon. Member for Cathcart support what the previous Labour Government did in Scotland or what the hon. Member for Dagenham (Mr. Gould), whom I am glad to see present, said—that there should not be any such powers?
        The Opposition are unclear on that central point. In contrast, the Government's position is absolutely clear. Experience shows that local authorities can use the transitional year sharply to increase spending. That must not happen in 1992–93, and under clause 2 it will not happen. The criteria will be clear and will be published well in advance so that local authorities can take them fully into account when setting budgets. The purpose of clause 2 is to give community charge payers in Scotland the same safeguards against excessive spending as people in
        872
        England and Wales. Those safeguards are necessary. On that basis, I ask hon. Members to resist the amendments and to support clause 2.
        Mr. Maxton: We might have expected such a speech from the Minister. Throughout the poll tax fiasco, the cry of the Minister, of the Secretary of State and of Michael Ancram when he was a Minister was that accountability was the purpose of the poll tax. They said that it would make local authorities accountable. I remember raising in debates on schedule 3 to the Abolition of Domestic Rates Etc. (Scotland) Act 1987 exactly the issue that we are debating tonight: why, if the aim of the poll tax was accountability, does the Secretary of State require this power? We were told that it was a reserve power which would never be used. Tonight, the Minister is turning the whole issue on its head and is twisting and turning all his principles to try to get out of a very difficult situation.
        It has been an interesting debate. Until the Minister made his contribution, almost the whole debate took place among members of the Opposition parties. Until the hon. Member for Dumfries (Sir H. Monro) came to the Chamber, not one—
        It being Ten o'clock, THE CHAIRMAN left the Chair to report Progress and ask leave to sit again.
        Committee reported Progress.
        Ordered,
        That, at this day's sitting, the Local Government Finance and Valuation Bill may be proceeded with, though opposed, until any hour.—[Mr. Boswell.]
        Again considered in Commitee.
        Question again proposed, That the amendment be made.
        Mr. Maxton: As I was saying before I was so rudely interrupted—[HON. MEMBERS: "Withdraw."] As I was saying before I was interrupted, until the hon. Member for Dumfries walked in at about 9·50 pm not one Scottish Back-Bench Tory debated the issues involved—[Interruption.] If the Under-Secretary of State for the Environment, the hon. Member for Salisbury (Mr. Key) had been here instead of going to have his dinner, he would have realised how many members of the Opposition had spoken. It is clear that the Scottish Tory party is not interested in local democracy or in what happens in the local councils. It is concerned only about its own power and its position in Scotland. I should have thought that some Scottish Tories might have been prepared to make a speech in defence of local government in Scotland, because it might be one way to save their seats.
        Mr. Home Robertson: Geoffrey Dickens did.
        Mr. Maxton: My hon. Friend the Member for East Lothian (Mr. Home Robertson) is quite right. The one Back-Bench Tory who spoke during the whole debate was the hon. Member for Littleborough and Saddleworth (Mr. Dickens). He was not aware that we do not have parish councils in Scotland, but it was interesting that the one short speech made by a Tory Back Bencher was in favour of the amendments. He rightly said that local authorities should decide what they spend, and what services they provide. Why did not other Scottish Tory Members of Parliament also say that?
        I am delighted to hear that the Secretary of State will make a declaratory statement—although I have never heard that phrase—about the criteria that are to be used. I assume that such a statement is a statement to the House—or is it something about which I know nothing?
        Mr. Allan Stewart: Wait and see.
        Mr. Maxton: I am being told to wait and see. The Minister used the term "declaratory statement" in his speech. Will he tell me what it meant? Will it be a statement to the House? It is most interesting that the Secretary of State can make whatever statements he likes to the House about the criteria, but he is under no statutory obligation to stick to them. The distrust in local Government in Scotland of the Secretary of State and of the Minister is such that, whatever they say in the House, those in local government are unlikely to believe them. They know that, when the time comes and when the chips are down, the Ministers will, if necessary change the criteria. We do not want declaratory statements: we want a schedule to the Bill specifying the criteria in statute, so that we can debate them and vote on them, and so that, if necessary, they can be changed. If the criteria were passed in legislation, the Minister would have to stick to them. That will not be the case.
        Yet again, the Secretary of State is setting the criteria and saying what is to be considered excessive. The Secretary of State has the power. Nobody else is to be involved in the whole decision-making process. The Secretary of State is now taking power into his own hands, which makes a mockery of local democracy, and of the rights of people in Scotland to decide what they want and how they take decisions. The debate is about local democracy and about accountability. That is why l want to force the amendment to a vote, and I ask my hon. Friends to join me in doing so.
        Mr. Douglas rose—
        Hon. Members: No.
        Mr. Douglas: Many hon. Members have not come in to listen to the debate and they have not heard the inadequate reply by the Minister. I asked a specific question about grant-aided expenditure, and about the criteria. It is evident from the Minister's inadequate reply that the Secretary of State intends to use a device that is for the purposes of capping. The Minister's reply suggests that the Convention of Scottish Local Authorities is right and that we are moving in the direction that it has described. That move should be deplored.
        Question put, That the amendment be made:—
        The House divided: Ayes 213, Noes 286.

        Division No. 165]

        [10.7 am

        AYES

        Abbott, Ms Diane

        Benton, Joseph

        Adams, Mrs Irene (Paisley, N.)

        Bermingham, Gerald

        Allen, Graham

        Blair, Tony

        Alton, David

        Blunkett, David

        Anderson, Donald

        Boateng, Paul

        Archer, Rt Hon Peter

        Boyes, Roland

        Armstrong, Hilary

        Bradley, Keith

        Ashley, Rt Hon Jack

        Bray, Dr Jeremy

        Ashton, Joe

        Brown, Gordon (D'mline E)

        Banks, Tony (Newham NW)

        Brown, Nicholas (Newcastle E)

        Barnes, Harry (Derbyshire NE)

        Brown, Ron (Edinburgh Leith)

        Barnes, Mrs Rosie (Greenwich)

        Bruce, Malcolm (Gordon)

        Barron, Kevin

        Buckley, George J.

        Battle, John

        Caborn, Richard

        Beckett, Margaret

        Callaghan, Jim

        Beith, A. J.

        Campbell, Menzies (Fife NE)

        Bell, Stuart

        Campbell, Ron (Blyth Valley)

        Bellotti, David

        Canavan, Dennis

        Benn, Rt Hon Tony

        Carlile, Alex (Mont'g)

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

        Carr, Michael

        874

        Clark, Dr David (S Shields)

        McAvoy, Thomas

        Clarke, Tom (Monklands W)

        McCartney, Ian

        Clelland, David

        Macdonald, Calum A.

        Clwyd, Mrs Ann

        McFall, John

        Cohen, Harry

        McKelvey, William

        Cryer, Bob

        McLeish, Henry

        Cummings, John

        Maclennan, Robert

        Cunliffe, Lawrence

        McMaster, Gordon

        Cunningham, Dr John

        McWilliam, John

        Davies, Rt Hon Denzil (Llanelli)

        Madden, Max

        Davies, Ron (Caerphilly)

        Mahon, Mrs Alice

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

        Marek, Dr John

        Dewar, Donald

        Marshall, David (Shettleston)

        Dixon, Don

        Marshall, Jim (Leicester S)

        Doran, Frank

        Martin, Michael J. (Springburn)

        Douglas, Dick

        Martlew, Eric

        Duffy, A. E. P.

        Maxton, John

        Dunnachie, Jimmy

        Meacher, Michael

        Dunwoody, Hon Mrs Gwyneth

        Meale, Alan

        Eastham, Ken

        Michael, Alun

        Edwards, Huw

        Michie, Bill (Sheffield Heeley)

        Evans, John (St Helens N)

        Michie, Mrs Ray (Arg'l & Bute)

        Ewing, Mrs Margaret (Moray)

        Mitchell, Austin (G't Grimsby)

        Fatchett, Derek

        Moonie, Dr Lewis

        Faulds, Andrew

        Morgan, Rhodri

        Fearn, Ronald

        Morley, Elliot

        Field, Frank (Birkenhead)

        Morris, Rt Hon J. (Aberavon)

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

        Mowlam, Marjorie

        Flynn, Paul

        Mullin, Chris

        Foot, Rt Hon Michael

        Murphy, Paul

        Foster, Derek

        Nellist, Dave

        Foulkes, George

        Oakes, Rt Hon Gordon

        Fraser, John

        O'Brien, William

        Fyfe, Maria

        O'Hara, Edward

        Garrett, John (Norwich South)

        O'Neill, Martin

        Garrett, Ted (Wallsend)

        Orme, Rt Hon Stanley

        Godman, Dr Norman A.

        Owen, Rt Hon Dr David

        Golding, Mrs Llin

        Parry, Robert

        Gordon, Mildred

        Patchett, Terry

        Gould, Bryan

        Pendry, Tom

        Graham, Thomas

        Pike, Peter L.

        Grant, Bernie (Tottenham)

        Powell, Ray (Ogmore)

        Griffiths, Win (Bridgend)

        Prescott, John

        Grocott, Bruce

        Primarolo, Dawn

        Hain, Peter

        Quin, Ms Joyce

        Hardy, Peter

        Radice, Giles

        Harman, Ms Harriet

        Randall, Stuart

        Haynes, Frank

        Redmond, Martin

        Heal, Mrs Sylvia

        Rees, Rt Hon Merlyn

        Healey, Rt Hon Denis

        Reid, Dr John

        Hinchliffe, David

        Richardson, Jo

        Hoey, Ms Kate (Vauxhall)

        Rooker, Jeff

        Hogg, N. (C'nauld & Kilsyth)

        Rooney, Terence

        Home Robertson, John

        Ross, Ernie (Dundee W)

        Howarth, George (Knowsley N)

        Rowlands, Ted

        Howells, Dr. Kim (Pontypridd)

        Ruddock, Joan

        Hughes, John (Coventry NE)

        Salmond, Alex

        Hughes, Robert (Aberdeen N)

        Sedgemore, Brian

        Hughes, Roy (Newport E)

        Sheerman, Barry

        Hughes, Simon (Southwark)

        Sheldon, Rt Hon Robert

        Illsley, Eric

        Shore, Rt Hon Peter

        Ingram, Adam

        Short, Clare

        Janner, Greville

        Skinner, Dennis

        Jones, Barry (Alyn & Deeside)

        Smith, Andrew (Oxford E)

        Jones, leuan (Ynys Môn)

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

        Kaufman, Rt Hon Gerald

        Smith, J. P. (Vale of Glam)

        Kennedy, Charles

        Soley, Clive

        Kirkwood, Archy

        Spearing, Nigel

        Lambie, David

        Steel, Rt Hon Sir David

        Lamond, James

        Steinberg, Gerry

        Leadbitter, Ted

        Stott, Roger

        Leighton, Ron

        Straw, Jack

        Lestor, Joan (Eccles)

        Taylor, Mrs Ann (Dewsbury)

        Lewis, Terry

        Taylor, Matthew (Truro)

        Litherland, Robert

        Thomas, Dr Dafydd Elis

        Livingstone, Ken

        Thompson, Jack (Wansbeck)

        Livsey, Richard

        Turner, Dennis

        Lloyd, Tony (Stretford)

        Vaz, Keith

        Loyden, Eddie

        Wallace, James

        McAllion, John

        Walley, Joan

        875

        Wardell, Gareth (Gower)

        Winnick, David

        Wareing, Robert N.

        Wise, Mrs Audrey

        Watson, Mike (Glasgow, C)

        Worthington, Tony

        Welsh, Andrew (Angus E)

        Young, David (Bolton SE)

        Welsh, Michael (Doncaster N)

        Wigley, Dafydd

        Tellers for the Ayes:

        Williams, Rt Hon Alan

        Mr. Martyn Jones, and

        Williams, Alan W. (Carm'then)

        Mr. Allen McKay.

        Wilson, Brian

        NOES

        Adley, Robert

        Douglas-Hamilton, Lord James

        Alexander, Richard

        Dover, Den

        Alison, Rt Hon Michael

        Dunn, Bob

        Allason, Rupert

        Durant, Sir Anthony

        Amess, David

        Dykes, Hugh

        Amos, Alan

        Eggar, Tim

        Arbuthnot, James

        Evans, David (Welwyn Hatf'd)

        Arnold, Sir Thomas

        Evennett, David

        Ashby, David

        Fairbairn, Sir Nicholas

        Aspinwall, Jack

        Fallon, Michael

        Atkins, Robert

        Fenner, Dame Peggy

        Atkinson, David

        Field, Barry (Isle of Wight)

        Baker, Nicholas (Dorset N)

        Finsberg, Sir Geoffrey

        Baldry, Tony

        Fishburn, John Dudley

        Batiste, Spencer

        Fookes, Dame Janet

        Bellingham, Henry

        Forman, Nigel

        Bendall, Vivian

        Forsyth, Michael (Stirling)

        Bennett, Nicholas (Pembroke)

        Forth, Eric

        Benyon, W.

        Fowler, Rt Hon Sir Norman

        Biffen, Rt Hon John

        Franks, Cecil

        Blackburn, Dr John G.

        Freeman, Roger

        Blaker, Rt Hon Sir Peter

        French, Douglas

        Body, Sir Richard

        Fry, Peter

        Bonsor, Sir Nicholas

        Gale, Roger

        Boscawen, Hon Robert

        Gardiner, Sir George

        Boswell, Tim

        Gill, Christopher

        Bottomley, Peter

        Glyn, Dr Sir Alan

        Bottomley, Mrs Virginia

        Goodlad, Alastair

        Bowden, A. (Brighton K'pto'n)

        Goodson-Wickes, Dr Charles

        Bowden, Gerald (Dulwich)

        Gorman, Mrs Teresa

        Bowis, John

        Gorst, John

        Boyson, Rt Hon Dr Sir Rhodes

        Grant, Sir Anthony (CambsSW)

        Brandon-Bravo, Martin

        Greenway, Harry (Ealing N)

        Brazier, Julian

        Greenway, John (Ryedale)

        Bright, Graham

        Gregory, Conal

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

        Griffiths, Peter (Portsmouth N)

        Bruce, Ian (Dorset South)

        Grist, Ian

        Buchanan-Smith, Rt Hon Alick

        Ground, Patrick

        Buck, Sir Antony

        Grylls, Michael

        Burns, Simon

        Hague, William

        Burt, Alistair

        Hamilton, Hon Archie (Epsom)

        Butler, Chris

        Hamilton, Neil (Tatton)

        Butterfill, John

        Hannam, John

        Carlisle, John, (Luton N)

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

        Carlisle, Kenneth (Lincoln)

        Hargreaves, Ken (Hyndburn)

        Carrington, Matthew

        Harris, David

        Carttiss, Michael

        Haselhurst, Alan

        Cash, William

        Hawkins, Christopher

        Chalker, Rt Hon Mrs Lynda

        Hayes, Jerry

        Chapman, Sydney

        Hayward, Robert

        Chope, Christopher

        Heathcoat-Amory, David

        Churchill, Mr

        Hicks, Mrs Maureen (Wolv' NE)

        Clark, Dr Michael (Rochford)

        Hicks, Robert (Cornwall SE)

        Clark, Rt Hon Sir William

        Higgins, Rt Hon Terence L.

        Colvin, Michael

        Hill, James

        Coombs, Anthony (Wyre F'rest)

        Hind, Kenneth

        Coombs, Simon (Swindon)

        Holt, Richard

        Cope, Rt Hon John

        Hordern, Sir Peter

        Couchman, James

        Howard, Rt Hon Michael

        Cran, James

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

        Currie, Mrs Edwina

        Howarth, G. (Cannock & B'wd)

        Curry, David

        Howe, Rt Hon Sir Geoffrey

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

        Howell, Rt Hon David (G'dford)

        Davis, David (Boothferry)

        Hughes, Robert G. (Harrow W)

        Day, Stephen

        Hunt, Sir John (Ravensbourne)

        Devlin, Tim

        Hunter, Andrew

        Dickens, Geoffrey

        Hurd, Rt Hon Douglas

        Dicks, Terry

        Irvine, Michael

        Dorrell, Stephen

        Irving, Sir Charles

        876

        Jack, Michael

        Raison, Rt Hon Sir Timothy

        Jackson, Robert

        Rathbone, Tim

        Janman, Tim

        Redwood, John

        Johnson Smith, Sir Geoffrey

        Rhodes James, Robert

        Jones, Gwilym (Cardiff N)

        Riddick, Graham

        Jones, Robert B (Herts W)

        Ridley, Rt Hon Nicholas

        Jopling, Rt Hon Michael

        Roberts, Sir Wyn (Conwy)

        Kellett-Bowman, Dame Elaine

        Roe, Mrs Marion

        Key, Robert

        Rossi, Sir Hugh

        Kilfedder, James

        Rost, Peter

        King, Roger (B'ham N'thfield)

        Rowe, Andrew

        King, Rt Hon Tom (Bridgwater)

        Ryder, Rt Hon Richard

        Kirkhope, Timothy

        Sackville, Hon Tom

        Knapman, Roger

        Sayeed, Jonathan

        Knight, Greg (Derby North)

        Shaw, David (Dover)

        Knight, Dame Jill (Edgbaston)

        Shaw, Sir Michael (Scarb')

        Knowles, Michael

        Shelton, Sir William

        Knox, David

        Shepherd, Colin (Hereford)

        Lang, Rt Hon Ian

        Shepherd, Richard (Aldridge)

        Latham, Michael

        Shersby, Michael

        Lawrence, Ivan

        Sims, Roger

        Lee, John (Pendle)

        Skeet, Sir Trevor

        Leigh, Edward (Gainsbor'gh)

        Smith, Tim (Beaconsfield)

        Lester, Jim (Broxtowe)

        Soames, Hon Nicholas

        Lilley, Rt Hon Peter

        Spicer, Sir Jim (Dorset W)

        Lloyd, Sir Ian (Havant)

        Spicer, Michael (S Worcs)

        Lloyd, Peter (Fareham)

        Squire, Robin

        Lord, Michael

        Stanbrook, Ivor

        Lyell, Rt Hon Sir Nicholas

        Stanley, Rt Hon Sir John

        McCrindle, Sir Robert

        Steen, Anthony

        Macfarlane, Sir Neil

        Stern, Michael

        MacGregor, Rt Hon John

        Stevens, Lewis

        MacKay, Andrew (E Berkshire)

        Stewart, Allan (Eastwood)

        Maclean, David

        Stewart, Andy (Sherwood)

        McNair-Wilson, Sir Michael

        Stewart, Rt Hon Ian (Herts N)

        McNair-Wilson, Sir Patrick

        Sumberg, David

        Madel, David

        Summerson, Hugo

        Malins, Humfrey

        Taylor, Ian (Esher)

        Mans, Keith

        Taylor, Teddy (S'end E)

        Maples, John

        Tebbit, Rt Hon Norman

        Marland, Paul

        Temple-Morris, Peter

        Marlow, Tony

        Thompson, D. (Calder Valley)

        Marshall, John (Hendon S)

        Thompson, Patrick (Norwich N)

        Marshall, Sir Michael (Arundel)

        Thorne, Neil

        Martin, David (Portsmouth S)

        Thornton, Malcolm

        Mates, Michael

        Thurnham, Peter

        Maude, Hon Francis

        Townend, John (Bridlington)

        Mayhew, Rt Hon Sir Patrick

        Tracey, Richard

        Meyer, Sir Anthony

        Tredinnick, David

        Mills, Iain

        Trippier, David

        Miscampbell, Norman

        Trotter, Neville

        Mitchell, Andrew (Gedling)

        Twinn, Dr Ian

        Mitchell, Sir David

        Vaughan, Sir Gerard

        Moate, Roger

        Viggers, Peter

        Monro, Sir Hector

        Waldegrave, Rt Hon William

        Moore, Rt Hon John

        Walden, George

        Morrison, Sir Charles

        Walker, Bill (T'side North)

        Morrison, Rt Hon Sir Peter

        Ward, John

        Moss, Malcolm

        Wardle, Charles (Bexhill)

        Moynihan, Hon Colin

        Watts, John

        Neale, Sir Gerrard

        Wells, Bowen

        Nelson, Anthony

        Wheeler, Sir John

        Nicholson, David (Taunton)

        Whitney, Ray

        Nicholson, Emma (Devon West)

        Widdecombe, Ann

        Onslow, Rt Hon Cranley

        Wilkinson, John

        Oppenheim, Phillip

        Wilshire, David

        Page, Richard

        Winterton, Mrs Ann

        Paice, James

        Wolfson, Mark

        Parkinson, Rt Hon Cecil

        Wood, Timothy

        Patnick, Irvine

        Woodcock, Dr. Mike

        Patten, Rt Hon John

        Yeo, Tim

        Pattie, Rt Hon Sir Geoffrey

        Young, Sir George (Acton)

        Peacock, Mrs Elizabeth

        Porter, David (Waveney)

        Tellers for the Noes:

        Portillo, Michael

        Mr. David Lightbown and

        Powell, William (Corby)

        Mr. John M. Taylor.

        Price, Sir David

        Question accordingly negatived.
        Motion made, and Question put, That the clause stand part of the Bill.
        The Committee divided: Ayes 284, Noes 212.

        Division No. 166]

        [10.19 pm

        AYES

        Adley, Robert

        Durant, Sir Anthony

        Alexander, Richard

        Dykes, Hugh

        Alison, Rt Hon Michael

        Eggar, Tim

        Allason, Rupert

        Evans, David (Welwyn Hatf'd)

        Amess, David

        Evennett, David

        Amos, Alan

        Fairbairn, Sir Nicholas

        Arbuthnot, James

        Fallon, Michael

        Arnold, Sir Thomas

        Fenner, Dame Peggy

        Ashby, David

        Field, Barry (Isle of Wight)

        Aspinwall, Jack

        Finsberg, Sir Geoffrey

        Atkins, Robert

        Fishburn, John Dudley

        Atkinson, David

        Fookes, Dame Janet

        Baker, Nicholas (Dorset N)

        Forman, Nigel

        Baldry, Tony

        Forsyth, Michael (Stirling)

        Batiste, Spencer

        Forth, Eric

        Bellingham, Henry

        Fowler, Rt Hon Sir Norman

        Bendall, Vivian

        Franks, Cecil

        Bennett, Nicholas (Pembroke)

        Freeman, Roger

        Benyon, W.

        French, Douglas

        Biffen, Rt Hon John

        Fry, Peter

        Blackburn, Dr John G.

        Gale, Roger

        Blaker, Rt Hon Sir Peter

        Gardiner, Sir George

        Body, Sir Richard

        Gill, Christopher

        Bonsor, Sir Nicholas

        Glyn, Dr Sir Alan

        Boscawen, Hon Robert

        Goodlad, Alastair

        Boswell, Tim

        Goodson-Wickes, Dr Charles

        Bottomley, Peter

        Gorman, Mrs Teresa

        Bottomley, Mrs Virginia

        Gorst, John

        Bowden, A. (Brighton K'pto'n)

        Grant, Sir Anthony (CambsSW)

        Bowden, Gerald (Dulwich)

        Greenway, Harry (Ealing N)

        Bowis, John

        Greenway, John (Ryedale)

        Boyson, Rt Hon Dr Sir Rhodes

        Gregory, Conal

        Brandon-Bravo, Martin

        Griffiths, Peter (Portsmouth N)

        Brazier, Julian

        Grist, Ian

        Bright, Graham

        Ground, Patrick

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

        Grylls, Michael

        Bruce, Ian (Dorset South)

        Hague, William

        Buchanan-Smith, Rt Hon Alick

        Hamilton, Hon Archie (Epsom)

        Buck, Sir Antony

        Hamilton, Neil (Tatton)

        Burns, Simon

        Hannam, John

        Burt, Alistair

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

        Butler, Chris

        Hargreaves, Ken (Hyndburn)

        Butterfill, John

        Harris, David

        Carlisle, John, (Luton N)

        Haselhurst, Alan

        Carlisle, Kenneth (Lincoln)

        Hawkins, Christopher

        Carrington, Matthew

        Hayes, Jerry

        Carttiss, Michael

        Hayward, Robert

        Cash, William

        Heathcoat-Amory, David

        Chalker, Rt Hon Mrs Lynda

        Hicks, Mrs Maureen (Wolv' NE)

        Chapman, Sydney

        Hicks, Robert (Cornwall SE)

        Chope, Christopher

        Higgins, Rt Hon Terence L.

        Churchill, Mr

        Hill, James

        Clark, Dr Michael (Rochford)

        Hind, Kenneth

        Clark, Rt Hon Sir William

        Holt, Richard

        Colvin, Michael

        Hordern, Sir Peter

        Coombs, Anthony (Wyre F'rest)

        Howard, Rt Hon Michael

        Coombs, Simon (Swindon)

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

        Cope, Rt Hon John

        Howarth, G. (Cannock & B'wd)

        Couchman, James

        Howe, Rt Hon Sir Geoffrey

        Cran, James

        Howell, Rt Hon David (G'dford)

        Currie, Mrs Edwina

        Hughes, Robert G. (Harrow W)

        Curry, David

        Hunt, Sir John (Ravensbourne)

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

        Hunter, Andrew

        Davis, David (Boothferry)

        Irvine, Michael

        Day, Stephen

        Irving, Sir Charles

        Devlin, Tim

        Jack, Michael

        Dickens, Geoffrey

        Jackson, Robert

        Dicks, Terry

        Janman, Tim

        Dorrell, Stephen

        Johnson Smith, Sir Geoffrey

        Douglas-Hamilton, Lord James

        Jones, Gwilym (Cardiff N)

        Dover, Den

        Jones, Robert B (Herts W)

        Dunn, Bob

        Jopling, Rt Hon Michael

        878

        Kellett-Bowman, Dame Elaine

        Rhodes James, Robert

        Key, Robert

        Riddick, Graham

        Kilfedder, James

        Ridley, Rt Hon Nicholas

        King, Roger (B'ham N'thfield)

        Roberts, Sir Wyn (Conwy)

        King, Rt Hon Tom (Bridgwater)

        Roe, Mrs Marion

        Kirkhope, Timothy

        Rossi, Sir Hugh

        Knapman, Roger

        Rost, Peter

        Knight, Greg (Derby North)

        Rowe, Andrew

        Knight, Dame Jill (Edgbaston)

        Ryder, Rt Hon Richard

        Knowles, Michael

        Sackville, Hon Tom

        Knox, David

        Sayeed, Jonathan

        Lang, Rt Hon Ian

        Shaw, David (Dover)

        Latham, Michael

        Shaw, Sir Michael (Scarb')

        Lawrence, Ivan

        Shelton, Sir William

        Lee, John (Pendle)

        Shepherd, Colin (Hereford)

        Leigh, Edward (Gainsbor'gh)

        Shepherd, Richard (Aldridge)

        Lester, Jim (Broxtowe)

        Shersby, Michael

        Lightbown, David

        Sims, Roger

        Lilley, Rt Hon Peter

        Skeet, Sir Trevor

        Lloyd, Sir Ian (Havant)

        Smith, Tim (Beaconsfield)

        Lloyd, Peter (Fareham)

        Soames, Hon Nicholas

        Lord, Michael

        Spicer, Sir Jim (Dorset W)

        Lyell, Rt Hon Sir Nicholas

        Spicer, Michael (S Worcs)

        Macfarlane, Sir Neil

        Squire, Robin

        MacGregor, Rt Hon John

        Stanbrook, Ivor

        MacKay, Andrew (E Berkshire)

        Stanley, Rt Hon Sir John

        Maclean, David

        Steen, Anthony

        McNair-Wilson, Sir Michael

        Stern, Michael

        McNair-Wilson, Sir Patrick

        Stevens, Lewis

        Malins, Humfrey

        Stewart, Allan (Eastwood)

        Mans, Keith

        Stewart, Andy (Sherwood)

        Maples, John

        Stewart, Rt Hon Ian (Herts N)

        Marland, Paul

        Sumberg, David

        Marlow, Tony

        Summerson, Hugo

        Marshall, John (Hendon S)

        Taylor, Ian (Esher)

        Marshall, Sir Michael (Arundel)

        Taylor, Teddy (S'end E)

        Martin, David (Portsmouth S)

        Tebbit, Rt Hon Norman

        Mates, Michael

        Temple-Morris, Peter

        Maude, Hon Francis

        Thompson, D. (Calder Valley)

        Mayhew, Rt Hon Sir Patrick

        Thompson, Patrick (Norwich N)

        Meyer, Sir Anthony

        Thorne, Neil

        Mills, Iain

        Thornton, Malcolm

        Miscampbell, Norman

        Thurnham, Peter

        Mitchell, Andrew (Gedling)

        Townend, John (Bridlington)

        Mitchell, Sir David

        Tracey, Richard

        Moate, Roger

        Tredinnick, David

        Monro, Sir Hector

        Trippier, David

        Moore, Rt Hon John

        Trotter, Neville

        Morrison, Sir Charles

        Twinn, Dr Ian

        Morrison, Rt Hon Sir Peter

        Vaughan, Sir Gerard

        Moss, Malcolm

        Viggers, Peter

        Moynihan, Hon Colin

        Waldegrave, Rt Hon William

        Neale, Sir Gerrard

        Walden, George

        Nelson, Anthony

        Walker, Bill (T'side North)

        Nicholson, David (Taunton)

        Ward, John

        Nicholson, Emma (Devon West)

        Wardle, Charles (Bexhill)

        Onslow, Rt Hon Cranley

        Watts, John

        Oppenheim, Phillip

        Wells, Bowen

        Page, Richard

        Wheeler, Sir John

        Paice, James

        Whitney, Ray

        Parkinson, Rt Hon Cecil

        Widdecombe, Ann

        Patnick, Irvine

        Wilkinson, John

        Patten, Rt Hon John

        Wilshire, David

        Pattie, Rt Hon Sir Geoffrey

        Winterton, Mrs Ann

        Peacock, Mrs Elizabeth

        Wolfson, Mark

        Porter, David (Waveney)

        Woodcock, Dr. Mike

        Portillo, Michael

        Yeo, Tim

        Powell, William (Corby)

        Young, Sir George (Acton)

        Price, Sir David

        Raison, Rt Hon Sir Timothy

        Tellers for the Ayes:

        Rathbone, Tim

        Mr. John M. Taylor and

        Redwood, John

        Mr. Timothy Wood.

        NOES

        Abbott, Ms Diane

        Armstrong, Hilary

        Adams, Mrs Irene (Paisley, N.)

        Ashley, Rt Hon Jack

        Allen, Graham

        Ashton, Joe

        Alton, David

        Banks, Tony (Newham NW)

        Anderson, Donald

        Barnes, Harry (Derbyshire NE)

        Archer, Rt Hon Peter

        Barnes, Mrs Rosie (Greenwich)

        879

        Barron, Kevin

        Field, Frank (Birkenhead)

        Battle, John

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

        Beckett, Margaret

        Flynn, Paul

        Beith, A. J.

        Foot, Rt Hon Michael

        Bell, Stuart

        Foster, Derek

        Bellotti, David

        Foulkes, George

        Benn, Rt Hon Tony

        Fraser, John

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

        Fyfe, Maria

        Benton, Joseph

        Garrett, John (Norwich South)

        Bermingham, Gerald

        Garrett, Ted (Wallsend)

        Blair, Tony

        Godman, Dr Norman A.

        Blunkett, David

        Golding, Mrs Llin

        Boateng, Paul

        Gordon, Mildred

        Boyes, Roland

        Gould, Bryan

        Bradley, Keith

        Graham, Thomas

        Bray, Dr Jeremy

        Grant, Bernie (Tottenham)

        Brown, Gordon (D'mline E)

        Griffiths, Win (Bridgend)

        Brown, Nicholas (Newcastle E)

        Grocott, Bruce

        Brown, Ron (Edinburgh Leith)

        Hain, Peter

        Bruce, Malcolm (Gordon)

        Hardy, Peter

        Buckley, George J.

        Harman, Ms Harriet

        Caborn, Richard

        Haynes, Frank

        Callaghan, Jim

        Heal, Mrs Sylvia

        Campbell, Menzies (Fife NE)

        Healey, Rt Hon Denis

        Campbell, Ron (Blyth Valley)

        Hinchliffe, David

        Canavan, Dennis

        Hoey, Ms Kate (Vauxhall)

        Carlile, Alex (Mont'g)

        Hogg, N. (C'nauld & Kilsyth)

        Carr, Michael

        Home Robertson, John

        Clark, Dr David (S Shields)

        Howarth, George (Knowsley N)

        Clarke, Tom (Monklands W)

        Howells, Dr. Kim (Pontypridd)

        Clelland, David

        Hughes, John (Coventry NE)

        Clwyd, Mrs Ann

        Hughes, Robert (Aberdeen N)

        Cohen, Harry

        Hughes, Roy (Newport E)

        Cryer, Bob

        Hughes, Simon (Southwark)

        Cummings, John

        Illsley, Eric

        Cunliffe, Lawrence

        Ingram, Adam

        Cunningham, Dr John

        Janner, Greville

        Davies, Rt Hon Denzil (Llanelli)

        Jones, Barry (Alyn & Deeside)

        Davies, Ron (Caerphilly)

        Jones, leuan (Ynys Môn)

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

        Jones, Martyn (Clwyd S W)

        Dewar, Donald

        Kaufman, Rt Hon Gerald

        Dixon, Don

        Kennedy, Charles

        Doran, Frank

        Kirkwood, Archy

        Douglas, Dick

        Lambie, David

        Duffy, A. E. P.

        Lamond, James

        Dunnachie, Jimmy

        Leadbitter, Ted

        Dunwoody, Hon Mrs Gwyneth

        Leighton, Ron

        Edwards, Huw

        Lestor, Joan (Eccles)

        Evans, John (St Helens N)

        Lewis, Terry

        Ewing, Mrs Margaret (Moray)

        Litherland, Robert

        Fatchett, Derek

        Livingstone, Ken

        Faulds, Andrew

        Livsey, Richard

        Fearn, Ronald

        Lloyd, Tony (Stretford)

        880

        Loyden, Eddie

        Redmond, Martin

        McAllion, John

        Rees, Rt Hon Merlyn

        McAvoy, Thomas

        Reid, Dr John

        McCartney, Ian

        Richardson, Jo

        Macdonald, Calum A.

        Rooker, Jeff

        McFall, John

        Rooney, Terence

        McKay, Allen (Barnsley West)

        Ross, Ernie (Dundee W)

        McKelvey, William

        Rowlands, Ted

        McLeish, Henry

        Ruddock, Joan

        Maclennan, Robert

        Salmond, Alex

        McMaster, Gordon

        Sedgemore, Brian

        McWilliam, John

        Sheerman, Barry

        Madden, Max

        Sheldon, Rt Hon Robert

        Mahon, Mrs Alice

        Shore, Rt Hon Peter

        Marek, Dr John

        Short, Clare

        Marshall, David (Shettleston)

        Skinner, Dennis

        Marshall, Jim (Leicester S)

        Smith, Andrew (Oxford E)

        Martin, Michael J. (Springburn)

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

        Martlew, Eric

        Smith, J. P. (Vale of Glam)

        Maxton, John

        Soley, Clive

        Meacher, Michael

        Spearing, Nigel

        Meale, Alan

        Steel, Rt Hon Sir David

        Michael, Alun

        Steinberg, Gerry

        Michie, Bill (Sheffield Heeley)

        Stott, Roger

        Michie, Mrs Ray (Arg'l & Bute)

        Straw, Jack

        Mitchell, Austin (G't Grimsby)

        Taylor, Mrs Ann (Dewsbury)

        Moonie, Dr Lewis

        Taylor, Matthew (Truro)

        Morley, Elliot

        Thomas, Dr Dafydd Elis

        Morris, Rt Hon J. (Aberavon)

        Turner, Dennis

        Mowlam, Marjorie

        Vaz, Keith

        Mullin, Chris

        Wallace, James

        Murphy, Paul

        Walley, Joan

        Nellist, Dave

        Warden, Gareth (Gower)

        Oakes, Rt Hon Gordon

        Wareing, Robert N.

        O'Brien, William

        Watson, Mike (Glasgow, C)

        O'Hara, Edward

        Welsh, Andrew (Angus E)

        O'Neill, Martin

        Welsh, Michael (Doncaster N)

        Orme, Rt Hon Stanley

        Wigley, Dafydd

        Owen, Rt Hon Dr David

        Williams, Rt Hon Alan

        Parry, Robert

        Williams, Alan W. (Carm'then)

        Patchett, Terry

        Wilson, Brian

        Pendry, Tom

        Winnick, David

        Pike, Peter L.

        Wise, Mrs Audrey

        Powell, Ray (Ogmore)

        Worthington, Tony

        Prescott, John

        Young, David (Bolton SE)

        Primarolo, Dawn

        Quin, Ms Joyce

        Tellers for the Noes:

        Radice, Giles

        Mr. Jack Thompson and

        Randall, Stuart

        Mr. Ken Eastham.

        Question accordingly agreed to.
        Clause 2 ordered to stand part of the Bill.
        Committee report progress; to sit again tomorrow.

Trunk Roads (Leicestershire)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boswell.]
10.33 pm
Mr. Keith Vaz: I welcome the opportunity to raise the concern, anxiety and anger of my constituents about the road system in Leicester and its effect on my fellow citizens' quality of life. I have arrived in great haste from a packed public meeting at the Judgemeadow community college, Marydene drive, in Leicester. The meeting was called by the county council to consider the public response to the proposals for the eastern district distributor road that will pass through the Colemand and Evington wards of my constituency. Together with the A46-A47 link road, they will directly affect the lives of 16,000 people in Leicester, East.
I am grateful to the local residents of Leicester who have, in the past few years, fashioned impeccable arguments against that road and in favour of a trunk road round Leicester—people such as Arthur Padmore who, two decades ago, as a local councillor, chaired meetings against it. Thanks is also due to Frank Kerr, Sue Chapman, Walter Lindsay, Val Jones, John Thomas and others who have either initiated petitions or convened meetings. Special thanks goes to Councillors Mike Preston, Mary Draycott and Stewart Foster. Tenants, residents, parents, school children, vicars, head teachers and pensioners have all joined in our protest.
Today is the fourth anniversary of my election to the House. I first raised this issue in my maiden speech. Since then, petitions to Parliament, lobbies and other activities have been undertaken. The Minister will recall that I met him about this matter and I met his predecessor. They courteously told me that, in the first instance, the scheme was a matter for the local authority. However, after hearing the arguments, I hope that the Minister will realise that the only way in which to alleviate the hardship and anxiety of the people of Leicester, East is the creation of a trunk road around, but not inside, Leicester. Additional Government funding must be made to help the local authority achieve that.
Leicester has the privilege of holding the title of "Environment City", yet its road system, the traffic congestion and the noise and pollution from that traffic threatens to destroy the environmental nirvana that good people and an energetic city council have sought to create.
I am sorry to say that some county council members and the officers they instruct are crazy about roads. If they see a trafic problem they create a new road. The people who want to put the new road through do not live in the area. They do not shop there, they do not send their children to the local schools and they do not worship there. They are oblivious to the catastrophe that they are going to create.
From its inception the entire route has been opposed. It has been made clear time and time again that the road system will not cope with the proposed traffic flow, that the structure of houses will have to be strengthened and made safe and that the route roads and the roads off them already deserve a reduction in traffic flows, not an increase.
What are the consequences of the scheme? There is no need for the local people to be handed a crystal ball as they know what the future will be like. Their lives will simply not be the same again. By the time the route reaches the
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junction of Colchester road and Uppingham road, 22,000 vehicles a day will be travelling along it. From the stretch from St. Joseph's church to the junction of Wicklow drive and Westmeath road, the number of vehicles increases from the present level of 12,000 to 22,000 a day. From the junction of Wicklow drive to Colman road the current level of 9,000 vehicles a day increases to 18,000. From Colman road to the junction of Ethel road and Main street the current level of 9,000 vehicles a day rises to an estimated 23,000. From Main street down to Biggin Hill road the number goes up from 3,000 to 18,000. The number of vehicles that will join the A6 from Biggin Hill road will increase to 25,000.
The local authority has failed miserably to get its act together. It has constructed stage 1 of the A46-A47 link road at a cost of £2·1 million. It is now embarrassed because people are pulling their trotters and saying that it is a road that goes nowhere. If the residents of Hungerton boulevard had their way, it would point straight at Glenfield and right into the plush office of the dapper Mr. Tommy Thompson, the director of planning and transportation.
Last Sunday, the residents of Hungerton boulevard and Hotoff road joined me and the residents of Abbotts road and Scruptoff lane in a march along the route which was organised by Mr. Trevor Merby. That quiet and unassuming stretch of road is to become the Brands Hatch of the midlands. The residents of Hungerton boulevard have a loaded gun pointed at them, yet they have not been told dates, places or times of events or even how much of their gardens they will have to give up.
The situation for the residents of Abbotts road is much more dramatic. After being told for years that the route would go behind their gardens and through the land owned by the Leicester clinic, the residents discovered that the county council had decided to put it through their road. In the history of local democracy in Leicester, this will be remembered as a famous breach of faith. The residents and I will not permit a unilateral change to satisfy the egos of those who work in county hall. Abbotts road and the dogleg into Scruptoff lane is already a busy road and it will not be able to handle 20,000 vehicles a day. The residents' response will be an emphatic no. Nor are the Colchester road residents the least bit impressed by the council's assurances that the road will be improved to cope with the traffic. How is one supposed to cope with a permanent headache?
It is said that Colchester road looks like a road purpose-built for an orbital road round Leicester. The residents of Colchester road think differently. They think that it is fine as it is. The Goodwood road versus Spencifield lane debate is a disgraceful attempt to divide my constituency and drive a wedge between residents who have already campaigned on the same side. It is grossly incompetent of the council to wait until now to ask people their views; and the council now proposes—the Minister knows this because I raised it with him at a meeting—either a dual carriageway down Goodwood road, which will mean the demolition of 127 houses, or a single carriageway down that road with the heavy goods vehicles going down Spencifield lane.
I shall deal first with Goodwood road. It is already busy and dangerous. It cannot cope with a doubling of the traffic on it. The noise is so appalling that people cannot sleep at night. For the 127 people whose houses are at risk of demolition, the anxiety must be overwhelming. Theirs is

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a priority view, no matter what the residents feel elsewhere, since it is they who will have to go through the harrowing experience of losing their homes. Some of them have already stated that they would rather go elsewhere than stay there because the road has become so busy. They should be listened to and their views should be acted upon.
We shall not tolerate any increased traffic along Spencifield lane. I and local people, including local councillors have discussed the large volume of traffic already on Spencifield lane. There are two schools in this very residential area, and we have already brought to the council's attention the traffic difficulties associated with feeder roads such as Downing drive. If either of these routes is chosen the other will suffer because smaller connecting roads will be used as rat runs and residents will be continually harassed.
Finally, Biggin Hill road is also on the route. The residents of this tiny cul-de-sac face the awesome prospect of a road running through their road which will carry 25,000 vehicles. They must wonder what on earth they have done to deserve that.
The cost of the scheme has reached staggering proportions. The cost of the A46-A47 link road is now £4·6 million, excluding any compensation that will have to be paid to residents. The cost of the eastern district distributor road is put at between £12 million and £14 million, depending on which option is chosen.
Alternatives have already been advanced. They would take the traffic and the misery outside the city. The proposals accept the need to ease the worries of people who live on Humberstone drive without the need to allow this traffic to be imposed on other local people. The road would go out of the city boundary at Thurky Grange and over the land at the back of Delaware road and Newhaven road. That route would keep the heavy goods vehicles and ordinary traffic well away from built-up areas, and it would not rejoin the main route until it reached Stoughton road.
This is just one of the proposals. In my view, the highly paid officers at county hall are paid their high salaries to propose alternatives, not to choose the most convenient way out. The Minister can help us out of this problem. He can authorise and support the idea of a trunk road round Leicester. The Government's White Paper suggested the idea of an eastern bypass. He has told me in the past that he has not been approached by the local community for support for the scheme. I have a mandate from tonight's meeting and from the people of Leicester, East to ask him to reconsider the position.
Mr. Ken Arkley, the county engineer, prompted by tonight's public meeting, has informed us that the Department of Transport has not yet commissioned a study. Will the Minister please commission a study into the proposals for an eastern bypass? Any alternative would cost more money. The Minister knows that from the meetings that we have had. Will he please meet a delegation, led by myself, of local councillors and county officers who will make the case for additional funding for an alternative route round Leicester? An extra £3 million or so will provide a long-term solution. Will he confirm that money would be forthcoming if the county made out a strong case?
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The route has been dubbed the road to nowhere. In fact, it is the road to ruin. It will ruin the lives of 16,000 people in my constituency. It is high time that the county council stopped treating the eastern part of Leicester and its road transport system as though it were an expensive Lego set to be created and dismantled at will. It is time that they stopped playing politics with people's lives. It is time that they gave local people a firm timetable with firm proposals which will take the traffic out of the city of Leicester and out of residential areas.
Delay and uncertainty are the enemy of progress. If the county council does not put these people first, we shall be in a bare-knuckle fight to make them listen and act on the views of local people, because these are the people whose views should count. We look to the Minister for support in this endeavour.
10.46 pm
The Minister for Roads and Traffic (Mr. Christopher Chope): This has been an interesting, albeit short, debate, because we have heard the hon. Member for Leicester, East (Mr. Vaz) arguing for even more investment in the trunk road system. I see him nodding in agreement with that. I am sure that that point will not be lost on the hon. Member for Kingston upon Hull, East (Mr. Prescott), who has announced that there would be a moratorium on the Government's trunk road building programe should there ever be a Labour Government. I am sure that the hon. Gentleman will wish to report tonight's proceedings to his constituents and to tell them that there is but one political party that is unequivocally committed to continuing to investment in the capital infrastructure of our road system—the Conservative party, which I am proud to represent.
The Government have had a good record on providing resources for trunk roads in and around Leciester, not within the city itself, because within the city the roads are not trunked. In the last financial year, some £62 million was spent by the Department of Transport on constructing trunk road improvement schemes in Leicestershire. That represents almost 50 per cent. of all such expenditure in the east midlands in the same period, and is a measure of the importance that the Department and the Government attach to the road infrastructure in Leicestershire.
Since the subject of the Adjournment debate is trunk roads in Leicester, I do not intend to respond in detail to the points about the local roads in Leicester, for which the Government are not responsible. On the trunk roads in Leicestershire and the programme for the future, the 1989 White Paper "Roads for Prosperity" announced that we would spend some £3·5 billion on improving the capacity of the motorway network, and one of the most important parts of that network is the M1 where it runs through Leicestershire. That is now the subject of a consultants' study to see what is the best system of widening between junctions 19 and 23A.
That scheme will be expensive, but when it is completed, it will play an important part in the regeneration of employment opportunities in Leicestershire. The area east of junction 21 has been identified by Leicestershire county council's structure plan as the motorway's employment area. That emphasises the point often made by the Government—that the provision of a good roads infrastructure is often an essential part of providing employment opportunities.

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As the hon. Gentleman knows, there are many other schemes in the Department's programmes. I will not describe them all, but the Market Harborough bypass is under construction and is going well, and we are working on the £31 million dual-carriageway Quorn-Mountsorrel bypass.
We have already announced that we will include in the trunk road programme a study of the eastern bypass. That will go out to consultants shortly. When the design commission is awarded later this month or next month, it will be possible for the consultants to investigate the points that the hon. Gentleman raised tonight.
The eastern bypass scheme is well down the list in the programme. It is one of the last for which we shall be appointing consultants, and it takes a lower place in the order of priorities than many other schemes. Its estimated cost is about £45 million, so it is very dependent on a continuing commitment to the "Roads for Prosperity" programme that this Government support, but which could be jeopardised were another party to take office.
Mr. Vaz: I am glad to hear that the study has gone out to consultants. Can the Minister give a rough timetable for when he envisages that the consultants will begin reporting? Does he accept that one of the problems about spending a lot of money on the link road and distributor road is that it will be wasted if the bypass is subsequently constructed? Will the Minister meet a delegation from Leicestershire county council to hear the arguments for the case that the scheme in question should have a higher place on the Government's agenda? We appreciate that there are many schemes before the Minister, but will he listen to the views of local people, through their elected officials? Will he listen to the argument that, if the scheme had greater priority, that could save money on the link road that is currently being created?
Mr. Chope: If the hon. Gentleman wants to arrange a delegation to discuss a new road scheme, I shall be happy to meet it. I will not prejudge the case, and I will listen to the arguments. However, I understand that the eastern bypass, which would link the A46 and the A6, is not an alternative to doing something about the amount of traffic in the urban area of eastern Leicester. I am informed that anything from 15,000 vehicles a day upwards are using the route of the proposed eastern distributor road and the link road to which the hon. Gentleman referred earlier.
Of that traffic, Leicestershire county council, which is the highways authority, estimates that 85 vehicles in every 100 are locally generated traffic. If that is so—I have no reason to doubt that statistic—the eastern bypass will not resolve that problem. Any urban community must face up to the fact that, if an enormous amount of traffic is generated within that community and wants to move around within the city, it is useful to have proper channels for it. That has been the county council's strategy, although it is a matter for local people to resolve among themselves; it is not for me to intervene.
Mr. Vaz: That was the point of tonight's local meeting. It was clear that people believed that, if a survey and study commissioned by the Department of Transport were carried out, the figures could be changed. They were not satisfied that the council's figures—which are several years old—were still accurate.
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Will the Minister confirm that it is Government policy to move roads outside cities, rather than causing more congestion by adopting a broad policy of putting more roads inside city areas?
Mr. Chope: Certainly it is the Government's policy to invest in the inter-urban network, which primarily means motorways and trunk roads. That policy has been very successful: it has taken a good deal of traffic off less suitable roads. Within a conurbation, however, traffic often needs to get from one side of the city to another. That is why, under the system whereby we provide a 50 per cent. transport supplementary grant, many local authorities present bids for urban schemes dealing with traffic that has been generated within that urban locality and wishes either to leave the city centre for the motorway network, or to come back in, or to travel from one point to another within the city.
It is in that context that the link road, and, within Leicester, the distributor road that was to go right around the inner ring of Leicester, were conceived many years ago. The road has largely been built, although there are two missing parts. It is not for me to assess whether the strategy was right; but, if we were to build an eastern bypass for Leicester, it would certainly be much further out than the existing line of the distributor road.
I do not think that the amount of traffic that such a bypass would take that would otherwise use a distributor road is significant enough to suggest that this is a viable alternative. The eastern road is needed in its own right, as part of the inter-urban network. I leave it to the people of Leicester, and Leicestershire, to decide among themselves whether they want to proceed with any traffic relief within the Leicester conurbation.
It is always easy for those living in a city to say, "All our problems can be resolved if the road building is carried out outside the city"—or, in the case of the hon. Member for Leicester, East, outside his constituency. That is always an attractive argument, but I do not think that it is necessarily always practical: much of the traffic is generated within a city. That is why, to remove congestion and pollution and improve the quality of life of those who choose to live in cities, we must continue to invest in road infrastructure in the city centres.
Mr. Vaz: Does the Minister consider an increase in traffic from 9,000 to 20,000 vehicles a day an improvement in people's quality of life?
Mr. Chope: It depends on which people the hon. Gentleman means. People do not normally travel in motorised transport unless they have chosen freely to do so. Fewer people still own cars in this country than in most other European countries, and I detect no suggestion that the people of Leicester, or anywhere else, have said that they do not want to buy motor vehicles in the future, or to invest in their own personal transport.
I understand that, this very evening, the hon. Gentleman chose to travel by car from his constituency to the House to be in time for the debate. He used the motorway network, although there is a very good train service between Leicester and London. I would guess that he did that to gain the extra flexibility of being able to travel directly by car from the place where his meeting took place on to the M1, proceed to London, and then come straight into the House of Commons car park. I am

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sure that many people in Leicester, as elsewhere, will be pleased to know that the hon. Gentleman uses road transport and is not in any way prejudiced against the car.
Mr. Vaz: I can confirm that I am not prejudiced against the car. I got here by car, as the Minister said. But for local residents who live near roads—whether they be trunk roads or roads inside cities—such an increase in the volume of traffic must be bound to affect the quality of life. Does not the Minister agree with that proposition?
Mr. Chope: If one lives by the side of a road, an enormous increase in the volume of traffic on that road will obviously affect one's quality of life. That is why many people in Leicester have argued in favour of the road
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scheme to which the hon. Gentleman has referred. Others have argued against it. People's reaction depends on whether they think that there will be benefits or disbenefits affecting them directly. Those are matters for local political resolution, and I should not wish to try to deal with local road controversies, because the Department of Transport has enough difficulty already in trying to deal with the national road schemes.
I can tell the hon. Gentleman, however, that the eastern bypass of Leicester is in the national scheme and we are in the process of appointing consultants on it. I look forward to meeting the hon. Gentleman and others from Leicester to discuss and hear about the suggestions that it might be a solution to all the traffic problems in Leicester.
Question put and agreed to.
Adjourned accordingly at one minute past Eleven o'clock.

TRANSPORT

  Carbon Dioxide Emissions
  Ms. Valley
  To ask the Secretary of State for Transport what percentage reductions of carbon dioxide emissions are planned for each year between the present time and 2005.

  Mr. Chope
  We have not set year-by-year targets.

  Airline Deregulation
  Mr. Shersby
  To ask the Secretary of State for Transport if he will make it his policy to initiate a pan-European airline deregulation campaign as a prerequisite to an open skies environment between Europe and the United States of America; and if he will make a statement.

  Mr. McLoughlin
  The United Kingdom Government have been and continue to be in the forefront of the pursuit of aviation liberalisation in Europe, both multilaterally in the EC and bilaterally. Wherever possible, we have been taking steps to pursue similar liberalisation elsewhere in the world. Discussions on liberalisation with the United States are at an early stage. Our aim will be to remove obstacles to fair competition, which hinder our airlines at present, and to remove unnecessary regulation.

  Driving Licence Records
  Mr. Cohen
  To ask the Secretary of State for Transport whether his Department is examining the possibility of disclosing copies of photographs obtained on driver licences to the police; whether powers in section 15(1) of the Road Vehicle (Registration and Licensing) Regulations 1971 would allow for this; and if he will make a statement.

  Mr. Chope
  The Driver and Vehicle Licensing Agency —DVLA—is currently collating and analysing responses to the consultation document on the proposal to include photographs on driving licences. The police are allowed access to the driver licensing records for law enforcement purposes under the terms of the Data Protection Act 1984. The DVLA would, as necessary, seek advice on disclosure of photographs from the Data Protection Registrar. Regulation 15 of the Road Vehicles (Registration and Licensing) Regulations 1971 specifically covers release of information from the vehicle register. I will make a further statement shortly.

  Taxi Licences
  Mr. Cohen
  To ask the Secretary of State for Transport, pursuant to his answer to the hon. Member for Don Valley (Mr. Redmond) of 2 May,Official Report, column 306, whether he has issued advice to local authorities on how to
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  determine what offences make a person not a fit and proper person to hold a taxi licence; and if he will make a statement.

  Mr. McLoughlin
  Local authorities have broad discretion over all the main areas of taxi licensing and they decide, based on the information at their disposal, whether to issue a taxi licence. No guidance has been issued.

  A33
  Sir David Price
  To ask the Secretary of State for Transport when he expects the upgrading of the Chilworth to Otterbourne section of the A33 to motorway standard to be completed and opened to the public; and how he intends to control the consequential traffic congestion on the unreconstructed section of the A33 between Bar End, Winchester and Otterbourne.

  Mr. Chope
  Upgrading of the Compton (Otterbourne) to Bassett (Chilworth) section of the A33 to motorway standard is currently due to be completed and open to the public later this year. We have no plans to carry out any major works on the existing A33 between Winchester and Compton (Otterbourne) which will be superseded by the planned Bar End—Compton section of the M3. Advance works for this scheme are already under way. The main construction is due to start next year.

  Rail Services
  Mr. Wigley
  To ask the Secretary of State for Transport (1) if he will issue a general directive to the British Railways Board, under section 27 of the Transport Act 1962, to require it to take into account the national interest of Wales in exercising its functions relating to passenger transport, relating to the need for adequate and convenient InterCity services between Cardiff and Holyhead;

  (2) if he will now use powers under section 3 of the Railways Act 1974 to give directions to the board of British Rail to continue to provide InterCity railway service through trains six times a day each way between Holyhead and London; and if he will make a statement.

  Mr. McLoughlin
  No. The Government's policy is that InterCity should take its decisions on a normal commercial basis. Government grants are available for services provided by Regional Railways.

  A1-A1068 (Junction)
  Mr. Beith
  To ask the Secretary of State for Transport what studies he has undertaken of the costs and benefits of a junction providing direct access from the Al to the A1068.

  Mr. Chope
  No economic appraisal has been undertaken of a direct access from trunk road A1 Alnwick bypass to the A1068.

  Roads (Safety Fencing)
  Mr. Fearn
  To ask the Secretary of State for Transport how many dual carriageways and motorways have Bridon wire fencing installed along the central section.

  Mr. Chope
  In England, wire rope safety fencing has been provided on dual carriageway central reserves at three locations. A further five such installations are in progress.
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  My right hon. Friends the Secretaries of State for Scotland and for Wales are responsible for highway matters in Scotland and Wales.

  Red Routes
  Mr. Pawsey
  To ask the Secretary of State for Transport what plans exist to extend red routes to other urban areas.

  Mr. Chope
  It will be for local authorities outside London to decide whether to introduce priority red routes in their areas using their existing powers, in co-operation with the police and seeking the authorisations of the priority red route signs and markings from the Secretary of State.

  Road Tankers (Safety)
  Mr. Pawsey
  To ask the Secretary of State for Transport what plans he has to strengthen road tankers to reduce risk of spillage and fire in case of accident.

  Mr. Chope
  The Dangerous Substances (Conveyance by Road in Road Tankers and Tank Containers) Regulations 1981 are the subject of current review and consultation by the Health and Safety Executive. Updated regulations covering improved requirements for petrol tankers and tankers carrying other flammable liquids are expected to be published at the end of this year, supported by approved codes of practice.

  A1 (Resurfacing)
  Mr. Beith
  To ask the Secretary of State for Transport how many times the A1 south of Scremerston has been resurfaced in the course of the road works carried out there over the last year; and whether he will make a statement.

  Mr. Chope
  The road improvement south of Scremerston widened the existing carriageway by 2m to bring the section of the Al up to current design standards for a single carriageway road. Work commenced in September last year and was substantially completed in December. The contractor returned to the site in May to replace an area of surfacing that did not comply with the specification.

  West Midlands (Rail Services)
  Mr. Snape
  To ask the Secretary of State for Transport if, when he next meets the chairman of British Rail, he will discuss the quality of rail services between London Euston and the west midlands.

  Mr. Freeman
  Quality of inter-city services is a commercial matter for British Rail. I am sure that it will want to improve performance on this route in order to compete successfully with other forms of transport.

  A38
  Mr. Robert Hicks
  To ask the Secretary of State for Transport if he will state the total number of representations his Department have received in response to the A38 trunk road improvement between Liskeard and Bodmin, indicating(a) the numbers favouring the options to the north and south of Dobwalls, respectively, (b) the numbers favouring the options to the north and south of the A390, respectively and (c) the number who would have preferred a Glynn valley option.
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  Mr. Chope
  More than 500 completed questionnaires were received in response to the recent public consultation on the proposed improvement of the A38, Liskeard to Bodmin. The questionnaires are still being evaluated. We will make a full statement on the results of the public consultation when the preferred route is announced towards the end of the year.

  Mr. Robert Hicks
  To ask the Secretary of State for Transport when and for what reasons the decision was taken not to include an upgrading of the A38 on a new line of route through the Glynn valley as an option as part of the A38 trunk road improvement between Bodmin and Liskeard; and if he will make a statement.

  Mr. Chope
  The decision not to include a new route through the Glynn valley as one of the options for the improvement of the A38, Liskeard to Bodmin, was taken at an early stage in the development of the scheme.

  Forecasts of future traffic indicate that a dual carriageway road will be necessary. The poor vertical and horizontal alignment of the existing road through the valley precludes its use as half of a dual carriageway system. It would be necessary to build a completely new road.

  The topography of the valley is such that building a new dual carriageway through it would be extremely difficult. Major engineering works, including substantial earthworks and structures, would have a very damaging impact on the environment of the valley, which is the central feature of the Mid-Fowey special area of great landscape value and a Cornwall nature conservation site.

  Railway Construction
  Mr. Adley
  To ask the Secretary of State for Transport if he will list for all OECD countries, the number of miles of new publicly funded, main line railway track constructed, for each of the last 10 years, and the number of miles of such track(a) actually under construction and (b) planned.

  Mr. Freeman
  This information is available only at disproportionate cost.

  Vehicle Licensing
  Mr. Madden
  To ask the Secretary of State for Transport when the application for a heavy goods vehicle licence from Mr. George West, ref. VDL/H/CC, was received by the DVLA at Swansea; when the licence is going to be issued; and if he will make a statement explaining the reasons for the delay in issuing this licence.

  Mr. Chope
  I regret that, without Mr. West's date of birth, Driver and Vehicle Licensing Agency—DVLA— officials are unable to investigate Mr. West's case. The agency has more than 40 million driver records, and these are held under unique numbers made up from the driver's name and date of birth. The agency deals with up to 40,000 driving licence applications each day.

  I have written to the hon. Member requesting the information which DVLA will need to identify Mr. West's application; and I will write to him again when my inquiries are complete.

  Seamen
  Sir Geoffrey Johnson Smith
  To ask the Secretary of State for Transport when he will announce the results of the studies into the future supply and demand for United Kingdom seamen and into the supply and demand for United Kingdom merchant ships in time of war.

  Mr. McLoughlin
  Summaries of both reports have today been placed in the Libraries of both Houses of Parliament.

  Trinity House Transmitter, Amble
  Mr. Beith
  To ask the Secretary of State for Transport if he will arrange for a non-statutory public inquiry into the proposal of Trinity House to erect a Loran C transmitter at Amble, Northumberland.

  Mr. McLoughlin
  The arrangement of a non-statutory public inquiry into this proposal would be a matter for my right hon. Friend the Secretary of State for the Environment. Since no Crown development is involved in the proposal, the question of such an inquiry under Department of Environment circular 18/22 does not arise.

  Mr. Beith
  To ask the Secretary of State for Transport whether his Department has been notified as the developing department of the strong objections of the local planning authority to the proposal by Trinity House to erect a 700ft mast at Amble, Northumberland; and whether he will apply the procedures set out in circular 18/84 in response to these objections so as to enable a public local inquiry to take place.

  Mr. McLoughlin
  [holding answer 10 June 1991]: The Department of Transport is aware of the objections of the local planning authority to the proposal by Trinity House to erect a mast near Amble in Northumberland. The Department is not however the developing Department; indeed no Crown development is involved in the proposal. Accordingly the question of using procedures under Department of the Environment circular 18/84 does not arise.

PRIME MINISTER

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Tuesday 11 June.

  The Prime Minister: This morning I has meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further meetings later today.

  Tanks
  Mr. Bill Michie
  To ask the Prime Minister what response he has made to the letter of 4 June from Sanderson Kayser Ltd. on the implications of the Chieftain main battle tank replacement contract.

  The Prime Minister
  A reply will be sent to the company shortly.

EDUCATION AND SCIENCE

  Nuclear Structure Facility, Daresbury
  Mr. Butler
  To ask the Secretary of State for Education and Science how many Nobel prize winners wrote to him to ask for the retention of the nuclear structure facility at Daresbury; and what was the nature of his response.

  Mr. Alan Howarth
  My right hon. and learned Friend has received one letter from a Nobel prize winner who expressed the hope that the Science and Engineering Research Council's nuclear structure facility at Daresbu.ry could be kept open. The reply was to the effect such decisions were for the SERC to make, based on its judgments of scientific priority.

  Mr. Butler
  To ask the Secretary of State for Education and Science if he will publish his Department's evaluation of the quality of the work done at the nuclear structure facility at Daresbury.

  Mr. Alan Howarth
  Evaluation of the scientific quality of research carried out under the aegis of the research councils is a matter for them and the scientific community to assess. The Department does not seek to make its own judgments in these matters.

  Mr. Butler
  To ask the Secretary of State for Education and Science what representations were made to the Parliamentary Under-Secretary of State, the hon. Member for Stratford-on-Avon, in the course of his recent visit to Daresbury laboratory about the desirability of a peer review of the quality of work undertaken at the nuclear structure facility; and what was his response.

  Mr. Alan Howarth
  During my visit to Daresbury laboratory with my hon. Friend on 22 February I met a number of the staff and their representatives who put to me their concern about SERC's planned closure of the nuclear structure facility. Several expressed the view that such a decision should be subject to further peer review. I responded by emphasising that decisions on the management of SERC's programme must be for the council to judge, and by referring to the further study to assess the importance of the area of nuclear structure science announced by SERC on 7 February.

  National Curriculum
  Mr. Andrew Smith
  To ask the Secretary of State For Education and Science if he will list the expenditure to date incurred on the production and administration of the national curriculum, broken down between that incurred on (i) working groups, (ii) publication, (iii) publicity, (iv) School Examinations and Assessment Council meetings, (v) in-service training, (vi) monitoring and (vii) other.

  Mr. Eggar
  Government expenditure on the national curriculum in the 1989–90 financial year was some £20·6 million; and in 1990–91 it was £24·8 million (provisional). These figures include grant-in-aid to the National Curriculum Council and the School Examinations and Assessment Council. Planned expenditure for 1991–92 is some £34·9 million.

  The implementation of the national curriculum has also been supported by the Government via specific grants to

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  local education authorities. Eligible expenditure includes in-service training, the employment of advisory teachers, support for non-teaching support staff, and the provision of extra books, materials and equipment. In 1989–90 these grants totalled some £100 million; in 1990–91, they were some £120 million; and in 1991–92 they will support LEA expenditure of around £170 million.

  It is not possible to break down this expenditure in the way requested by the hon. Member. The table shows direct expenditure by the Department:

  (i) Working Groups

  In the financial years 1987–88 to 1990–91—£7l0,000.

  Planned expenditure in 1991–92—£127,000.

  (ii) Publication

  National curriculum subject orders—£5,500,000.

  NC assessment statutory documents and speeches—£148,000.

  (iii)Publicity

  Leaflets for parents and teachers—£665,000.

  (vi)Monitoring

  Monitoring is being carried out by Her Majesty's Inspectorate as part of their normal duties.

  Local Authority Service Provision
  Mr. Rowe
  To ask the Secretary of State for Education and Science for which areas of local authority service provision for which he is responsible payments are required to be made to individuals who are not employees(a) in the form of a grant or one-off payment and (b) on receipt of paid invoices.

  Mr. Eggar
  [holding answer 6 June 1991]: Local education authorities may make payments to a variety of individuals who are not their employees. Examples may include mandatory and discretionary awards to students; assistance to school children and students for clothing, footwear, school journeys or towards tuition fees; allowances to councillors or governors; and payments to suppliers of goods and services. Information on the full range of such payments, or on whether they take the form of grants or of reimbursement of paid invoices, is not collected centrally.

ENERGY

  British Coal
  Mr. Patchett
  To ask the Secretary of State for Energy if he will list the number and type of job creation opportunities set up by British Coal Enterprise Ltd. in South Yorkshire since 1984.

  Mr. Heathcoat-Amory
  Since 1984, in the Yorkshire region as a whole British Coal Enterprise Ltd.—BCE—has helped to create 5,711 new job opportunities by funding the start-up or expansion of new businesses, and a further 1,298 new job opportunities through the funding of managed workspace. BCE has also helped 4,695 ex-British Coal employees to find alternative employment, through the job and career change scheme. The total to 31 March 1991 is therefore 11,704. Separate figures for South Yorkshire are not published.

  Electricity Privatisation
  Mr. Morgan
  To ask the Secretary of State for Energy how many of the stockbrokers eligible for selling commissions in respect of electricity privatisation in England and Wales he proposes(a) to pay and (b) not to pay, before the end of June, all or most of the fees due.

  Mr. Heathcoat-Amory
  The relevant payments in respect of the regional electricity companies share offers are under way: I would expect the remainder to be substantially completed during the month. Those in respect of the generating companies share offers should be in train shortly thereafter.

  Mr. Morgan
  To ask the Secretary of State for Energy when he expects Touche Ross to complete its audit in relation to the sale of shares in the privatisation of the electricity supply industry of England and Wales.

  Mr. Heathcoat-Amory
  I have recently received Touche Ross's audit report in relation to the selling commissions due to brokers in respect of the regional electricity companies share offers, on the basis of which the relevant payments are now being made to brokers; that in relation to the generating companies share offers is expected shortly. As regard the firm's work on fraud audit, I would refer the hon. Member to the answer which I gave him on 10 June at columns 408–9.

  Fossil-Fuel Power Stations
  Mr. Flynn
  To ask the Secretary of State for Energy what uses are made of the ash created in the burning of coal in fossil-fuel power stations.

  Mr. Heathcoat-Amory
  Up to 50 per cent.—around 7 million tonnes—of the ash from coal-fired power stations is used for commercial purposes in a number of constructional applications and building products, for example, as structural fill material in road construction projects, in the manufacture of aerated building blocks and lightweight aggregates, and concrete applications.

  Fuel Rationing Coupons
  Mr. Mans
  To ask the Secretary of State for Energy what is the current cost of storing motor fuel rationing coupons.

  Mr. Moynihan
  Due to an advance in printing techniques, such storage is no longer necessary. We have now moved to a print on demand scheme, which will involve no expenditure after this financial year, thus saving at least £200,000 per annum.

NATIONAL FINANCE

  Child Tax Allowance
  Sir Ian Gilmour
  To ask the Chancellor of the Exchequer what would be the additional revenue in a full year that would result from abolishing the £3,295 annual tax allowance for children; and by how much child benefit could be raised if the additional revenue were wholly used for that purpose.

  Mr. Norman Lamont
  The additional revenue produced by abolishing the personal tax allowance for all children
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  would be about £60 million in a full year for the United Kingdom. This sum would allow child benefit to go up by about 10p a week for each eligible child.

  Interest Rates
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer what representations he has received on margins charged by banks over minimum lending rate; and what proposals he has for regulating these margins.

  Mr. Norman Lamont
  I have received a number of representations on this issue. My officials, together with the Bank of England, are looking at the concerns that have been raised. We will consider what—if any—action is necessary when we have established the facts.

  Mortgages
  Mr. Beith
  To ask the Chancellor of the Exchequer what information he has on(a) the total number of mortgages for which monthly repayments are reviewed annually and (b) the proportion of mortgages subject to annual review which are reviewed in each month.

  Mr. Maples
  Only partial information is available. We do not hold information on the total number of mortgages for which payments are adjusted annually, but it is estimated that over 40 per cent. of building society mortgages fall into this category. No information is available on the proportion of annual review mortgages that are reviewed in each month.

  Income Tax Assessments
  Mr. Beith
  To ask the Chancellor of the Exchequer how many assessments for personal income tax made by the Inland Revenue were appealed against in each year since 1987.

  Mr. Maude
  The number of appeals against schedule D. capital gains and taxed income assessments since 1987 are as follows. In many cases, the appeal was against an estimated assessment raised in the absence of the taxpayer's return.

  Million

  1987–88

  2·1

  1988–89

  2·9

  1989–90

  3·1

  1990–91

  3·2

  The relevant statistics for schedule E assessments are not available on the computerised PAYE system.

  Mr. Beith
  To ask the Chancellor of the Exchequer how many assessments for personal income-tax made by the Inland Revenue in each year since 1988 were appealed against(a) on the initial assessment, (b) on the second assessment, (c) on the third assessment and (d) on further assessments.

  Mr. Maude
  Figures for appeals are not recorded in this form.

  Inland Revenue (Efficiency)
  Mr. Beith
  To ask the Chancellor of the Exchequer what performance indicators are used by the Inland Revenue to monitor the service's efficiency and effectiveness(a) in terms of assessment of tax revenue due and (b) in terms of collection.
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  Mr. Maude
  A wide range of indicators is used to plan, manage and report the Inland Revenue's work. Key figures are published each year in the Board of Inland Revenue's plans and annual report, copies of which are in the House of Commons Library. For example, the report for the year ending 31 March 1990—Cm. 1321—showed that 98·8 per cent. of the main assessments for schedule D income tax were issued on time in 1989–90, and that the proportion of assessment taxes which had been collected was the highest for five years.

  Pensioners (Tax)
  Mr. Allen
  To ask the Chancellor of the Exchequer if he will publish figures showing for 1991–92 the numbers of pensioners who(a) pay no income tax, (b) pay income tax at the basic rate only and (c) pay income tax at the highest rate.

  Mr. Maude
  The latest estimates are that about 7·3 million individuals aged over 65 will pay no income tax, 2·6 million will pay income tax at the basic rate only and 150,000 will pay at the higher rate.

ENVIRONMENT

  Local Government Expenditure
  Mr. Higgins
  To ask the Secretary of State for the Environment what percentage of local government expenditure in Worthing is likely to be financed from community charge, uniform business rate and central government, respectively in 1991–92; and what were the figures in 1990–91.

  Mr. Portillo
  Worthing borough council are expecting to raise £22·55 million in community charges in respect of 1990–91. Together with income of £23·6 million from the non-domestic rates pool, and £7·4 million revenue support grant, after safety net adjustment, this money will help finance £322·1 million net revenue expenditure by West Sussex county council, and £9 million net revenue expenditure by Worthing borough council.

  For 1991–92 Worthing borough council are expecting to raise £25·8 million in community charges in respect of that year. Together with £26·3 million from the non-domestic rates pool, and £8·4 million revenue support grant, this will help finance £354·8 million budgeted net revenue expenditure by West Sussex county council in 1991–92, and £10 million budgeted net revenue expenditure by Worthing borough council in 1991–92.

  It is not possible to say what proportion of local government expenditure in Worthing is financed by any one of these sources.

  Household Incomes
  Mr. Mullin
  To ask the Secretary of State for the Environment if he will update his answer to the hon. Member for Sunderland, North (Mr. Clay),Official Report, 27 June 1990, column 259, to 1991–92 showing, in addition, the total gainers and losers and a more detailed breakdown of net household income, equivalised and unequivalised, at the top end of the income range.

  Mr. Key
  Information placed in the Library on 15 February and 27 June 1990 showed the distributional impact of the community charge on a basis directly
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  comparable with domestic rates. Subsequent changes in local government spending and the level of central support mean that an equivalent basis of comparison is not available for 1991–92. Because of the small sample size, a more detailed breakdown of net household income is not possible.

  Buildings Regulations
  Mr. Wigley
  To ask the Secretary of State for the Environment when he expects his Department's proposals for the revision of part M of the Building Regulations 1985 to be introduced.

  Mr. Yeo
  I expect to lay before Parliament in the autumn of this year revised Building Regulations, incorporating changes to the requirements of part M. The revised approved document which gives practical guidance on how the requirements of the regulations can be met will be published at the same time. They will come into force subject to parliamentary approval in the summer of 1992.

  Wild Birds
  Mr. Meale
  To ask the Secretary of State for the Environment whether the caging of wild birds for use as decoys is permitted under the European Birds directives 1979.

  Mr. Baldry
  The directive prohibits the hunting, capturing or killing of wild birds where the methods used would result in the large-scale or non-selective capture or killing of birds, or would cause the local disappearance of a species. The directive prohibits live birds which are blind or mutilated from being used as decoys.

  Convention Centres
  Mr. David Atkinson
  To ask the Secretary of State for the Environment what is the amount of grants and other assistance given to(a) the Birmingham international conference and exhibition centre and (b) the Bournemouth international centre from public funds in the United Kingdom and from the European Community; and if he will make a statement.

  Mr. Key
  The Birmingham international convention centre has received £49·75 million grant from the European regional development fund.

  The national exhibition centre received a central Government grant of £1·5 million at the outset and a further £12·3 million ERDF grant in 1988 to fund the newest halls.

  The Bournemouth international centre has received no specific grant from central Government or the ERDF.

  My Department does not collect information on local authority support for such projects.

  Listed Buildings
  Mrs. Irene Adams
  To ask the Secretary of State for the Environment what criteria are used to designate a listed building in each category.

  Sir George Young
  There are three categories of listed building in England and they are classified in three grades to show their relative importance as follows:

  Grade I —Buildings of exceptional interest.

  Grade II*—Particularly important buildings of more than special interest.

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  Grade II —Buildings of special interest, which warrant every effort being made to preserve them.

  Principles of selection and grading are more fully explained in appendix 1 to my Department's circular 8/87 "Historic Buildings and Conservation Areas—Policy and Procedures".

  Local Government Structure
  Mrs. Irene Adams
  To ask the Secretary of State for the Environment if he has any plans to introduce full-time councillors in his proposals for the structure of local government; and if he will make a statement.

  Mr. Key
  The Government will be publishing shortly a separate conslutation document on the internal management arrangements of local authorities; I cannot pre-empt its contents.

  Enterprise Zones
  Mr. Meacher
  To ask the Secretary of State for the Environment what is his estimate of(a) the lost revenue, (b) the cost of capital allowances, and (c) (a) and (b) within enterprise zones for the latest workable year.

  Mr. Portillo
  The latest available figures are:rate revenue forgone in enterprise zones in the United Kingdom—£92 million in 1989–90.
  capital allowances in enterprise zones in Great Britain—no figures are available for Northern Ireland—£150 million in 1988–89.

  Environmental Protection Act
  Ms. Walley
  To ask the Secretary of State for the Environment since what date the guidance notes to the implementation of the Environmental Protection Act have been out of print; and when he expects new ones to be printed.

  Mr. Baldry
  A total of 6,000 copies of the "Practical Guide to Integrated Pollution Control" were issued on 28 February 1991. These were sent free of charge to operators of processers controlled under part I of the Environmental Protection Act 1990, and to all other interested bodies on request. However, demand for the guide so far exceeded our expectations that this initial supply was exhausted by mid-April. A reprint of a further 6,000 was ordered immediately and copies may now be obtained from the Department on request. The guide was out of print for less than three weeks.

  Tradeable Permits
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment when he expects to receive the results of research by London Economics Ltd. into the utility of tradeable permits; and if he will place a copy of the research in the Library.

  Mr. Baldry
  I expect to receive a final report from London Economics Ltd. before the end of the year, and will then place a copy in the Library.

  Compulsory Tendering
  Mr. O'Brien
  To ask the Secretary of State for the Environment what action he has taken on representations he has received concerning differential treatment between
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  outside and in-house contractors under the local government compulsory competitive tendering schemes; and if he will make a statement.

  Mr. Key
  My right hon. Friend considers all representations about the operation of compulsory competitive tendering. Where they relate the conduct of individual competitive tendering exercises by local authorities, he considers whether there are grounds for the use of his sanction powers under sections 19A and 19B of the Local Government, Planning and Land Act 1980 and sections 13 and 14 of the Local Government Act 1988, and uses them where appropriate.

  Mr. O'Brien
  To ask the Secretary of State for the Environment what information he has as to the guidelines followed by the Audit Commission in settling the question of local authorities being allowed to undertake work for each other under the compulsory competitive tendering procedure; and if he will make a statement.

  Mr. Key
  Any such guidelines are a matter for the Audit Commission.

  Mr. O'Brien
  To ask the Secretary of State for the Environment what information he has as to how many contracts have been put out to tender by local authorities under the provisions of the Local Government Act 1988; and how many contracts were awarded to outside contractors and how many were won in-house under the compulsory competitive tendering schemes.

  Mr. Key
  My Department does not collect this information, but indications are that the proportion of contracts awarded to external tenderers varies between services, and is highest for building cleaning work, at some 30 per cent.

  Mr. O'Brien
  To ask the Secretary of State for the Environment if he will undertake a review of the retendering procedure for the carrying out of additional work to any main contracts under the compulsory competitive tendering scheme for local government; and if he will make a statement.

  Mr. Key
  We have no plans to make changes to the regulations made on 19 March 1991 which provided, among other things, that where "other cleaning" work had been assigned to direct service organisations and the cost of additional work to meet the litter duties proposed by the Environmental Protection Act 1990 exceeded 20 per cent. of the cost of the work already being done, the work had to be put out to tender again.

  Mr. O'Brien
  To ask the Secretary of State for the Environment what amendments have been made to the threshold included in the Local Government Act 1988, for the smaller levels of work carried out in local government under compulsory competitive tendering schemes; and if he will make a statement.

  Mr. Key
  No amendments have been made to the de minimis threshold of £100,000, set out in the order made on 29 July 1988—SI No. 1988/1372.

  Councillors
  Mr. O'Brien
  To ask the Secretary of State for the Environment when he intends to include in the consultative document on the internal management of local government the role of the elected member; and if he will make a statement.
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  Mr. Key
  The Government intend to publish this document shortly; I cannot pre-empt its contents.

  Nuclear Plants (Carbon Dioxide)
  Mr. Flynn
  To ask the Secretary of State for the Environment if he will make it his policy to commission a study of the effects of carbon dioxide releases to the atmosphere from sea water boiled off in the cooling of nuclear plants; and what information he presently possesses on the levels of carbon dioxide released to the atmosphere as a result of the nuclear fuel cycle from uranium mining to waste disposal.

  Mr. Baldry
  No. The amount of carbon dioxide released from sea water used for cooling power stations is negligible in global terms.

  I understand that the nuclear industry and environmental analysts are in agreement that the nuclear power fuel cycle is responsible for about 4 per cent. of the carbon dioxide released from conventional coal-fired plant for an equivalent amount of delivered energy.

  "Environment: Ideas for the 21st Century"
  Mr. Flynn
  To ask the Secretary of State for the Environment if he will obtain for his departmental library a copy of the report published in December 1990, "Environment: Ideas for the 21st Century", prepared by the Dutch committee for long-term environmental policy.

  Mr. Baldry
  Yes.

  Planning Controls
  Mr. Lawrence
  To ask the Secretary of State for the Environment when he will announce the outcome of the consultation about planning controls over agriculture and forestry buildings conducted by his Department and the Welsh Office.

  Sir George Young
  On 5 October 1990 my right hon. Friends the Secretaries of State for the Environment and for Wales issued a consultation paper inviting views on two significant changes to the present permitted development rights enjoyed by agriculture and forestry. We are grateful to the large number of bodies and individuals responding to this exercise. A list of their submissions is being placed in the Library of the House, where copies will be available on request. We have also published a research report on the subject—"Permitted Development Rights for Agriculture and Forestry"—which is available through HMSO.

  The consultation paper proposed: (i) the extension to all areas of England and Wales of arrangements similar to those which already apply in the national parks, giving local planning authorities discretion to require details of new agricultural and forestry buildings to be submitted for approval; (ii) an increase, in all areas of England and Wales, in the minimum area of agricultural land attracting permitted development rights under class A of part 6 of schedule 2 to the General Development Order.

  The Government have decided to implement both these changes by amendment to the General Development Order and to extend controls further in certain respects.

  The current scheme in the national parks requires anyone who wishes to erect a farm or forestry building that falls within the definition of permitted development not

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  requiring a specific planning permission to first send basic information about the proposed development to the local planning authority. The authority then has 28 days to decide whether the proposed development is likely to have significant effects on its surroundings. If so, it may require the submission of details for formal approval. Consultation on submitted details would be a matter for the authority's discretion.

  If the authority does not ask for details, the development can proceed after the expiry of the 28-day period. If details are sought, the authority's consent will be needed before the development can proceed, but it may concern itself only with the siting, design, and external appearance of the building. It may not challenge the need for the development. If the authority does not approve the proposed details, the applicant has the right of appeal to the Secretary of State.

  In the light of the consultation responses, and the research carried out, we have decided to build on the experience of the national park arrangements by making them apply to all parts of England and Wales. In addition to the consultation proposals, we intend in the light of the views expressed: (i) to make the arrangements cover not only new buildings, but also significant extensions and alterations, and farm and forestry roads. Extensions and alterations and farm and forestry roads are already covered in the national parks; and (ii) both in national parks and elsewhere, to expand the considerations to be taken into account by local planning authorities to cover not only visual aspects, but also the desirability of preserving ancient monuments and their settings, known archaeological sites, the settings of listed buildings, and sites of recognised nature conservation value including SSSIs.

  Some consultees argued that agricultural buildings should be subject to full development control. They claimed that the initial notification and any subsequent consideration of details would together take longer than the normal planning process. On the basis of experience in the national parks, the Government consider that in most cases the local authority will not need to request full details of the proposed development; the farmer will therefore usually be free to proceed after 28 days—much quicker than most planning consents.

  As recommended in the research findings, the new arrangements will be accompanied by guidance to local planning authorities stressing the importance of reconciling environmental considerations with the operational requirements of farm and forestry business. We hope to incorporate that guidance in a revised version of planning policy guidance note 7, also reflecting the outcome of consultation on a draft version of that document.

  We have considered whether local authorities should be required to charge fees in conjunction with these arrangements. The Government's policy is that local authorities' development control activities should be wholly funded by application fees. Accordingly, we have decided that a fee should be payable, in national parks and elsewhere at the initial notification stage; no further fee would be payable where the local authority decided to request details. The fee will be £20 initially. We will monitor the costs of the operation of the new system over the first three years, and thereafter aim to relate the fee to actual costs, as with other planning fees.

  The second main proposal in the consultation paper for new planning controls over agriculture was the extension
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  of full development control to all farm holdings of less than five hectares. We have considered carefully the case put by many consultees and in the research findings for a 10 hectare eligibility limit, but that would double the number of farm units coming within control—so that about one quarter of all holdings would come within control. We do not accept that the case has been made to bring in that degree of control.

  We have, however, decided: (i) not to proceed with the idea of an exemption for genuine commercial holdings when extending planning control to holdings of less than five hectares; we have concluded that the proposed genuineness test would be unworkable; (ii) to extend control to separate areas of agricultural land of less than one hectare. Land below one hectare which forms part of a unit of five hectares or more but is separated from it, for example by a public road or by land in different ownership, will thus be subject to full development control.

  Below these thresholds, all agricultural permitted development rights under class A of part 6 of schedule 2 to the General Development Order will be withdrawn. These new measures will provide more effective control over development associated with the fragmentation of holdings. They will discourage the erection under permitted development rights of buildings ultimately intended either for non-agricultural uses, or to support an application to erect an agricultural dwelling where in farming terms there may be no prospect of creating a viable holding.

  In addition, we propose to improve controls over excavations and engineering operations and over livestock units. Excavations and engineering operations which individually or collectively exceed 0·5 hectares on one site will be brought within the discretionary control system for buildings, in the national parks and elsewhere.

  We also intend to rectify an anomaly in the treatment of livestock units. Since 1988 specific planning permission has been required to erect livestock buildings within 400 m of residential or similar property. It has however been possible to use new agricultural buildings within the 400 m cordon for keeping livestock once five years have elapsed from erection. We will amend the General Development Order so that in future new buildings erected within the cordon will not be able to be used for livestock without specific planning permission, except in emergencies. And we will issue further guidance to local planning authorities on development near existing livestock farms.

  Taken together, these changes will produce substantial environmental benefits in controlling the effects of agricultural and forestry development, while ensuring that the rural economy can continue to prosper and make its own contribution to the quality of the environment. They represent a significant extension of the rights of local authorities to take an interest in the activities of our agricultural and forestry industries. We therefore intend to monitor the operation of the new system, and to review the position in three years' time with a view to making any further modifications shown to be necessary, either by increasing or reducing control.

  Nothing in this statement applies to planning controls over fish farms. We announced last December that we would be withdrawing permitted development rights for fish farm excavations and engineering operations in the national parks. In addition, during Parliament's consideration of the Planning and Compensation Bill, the Government introduced provisions to control floating

  485
  freshwater fish tanks and cages. I hope to announce shortly a consultation paper on the detailed implementation of these measures, and on the planning treatment of buildings and other developments on fish farms.

  Minerals Survey
  Mr. Ken Hargreaves
  To ask the Secretary of State for the Environment when he proposes to publish the results of the 1988 minerals survey.

  Mr. Yeo
  I am pleased to announce that the results of the survey are published today, 11 June 1991. A copy is available in the House of Commons Library. These findings show that the majority of the minerals industry acts responsibly and effectively where our planning system requires them to restore their land when extraction or tipping ceases. But I would like to see the whole of the industry operating to the highest standards and actively ensuring that all their sites will be adequately restored and will not create future dereliction for public funds to reclaim.

  I am very concerned that a third of the workings still in operation, and almost 60 per cent. of the areas for mineral waste tipping, either have no planning conditions requiring final reclamation or that the conditions which do exist are not thought satisfactory.

  That is why the Government are taking a number of steps. The Planning and Compensation Bill now contains provisions to bring old interim development order mineral sites into the planning system and their operations up to modern standards.

  We have instituted a review of the operation of the Minerals Act 1981, which will include how best to improve the activities on the many mineral permissions granted in the 1950s and 1960s. We are to fund a pilot study by Groundwork to encourage the improvement of the environmental performance of the minerals industry, and we are funding a number of important research projects concerned with improving reclamation practices within the industry.

  All this should result in the minerals industry becoming "better neighbours" while still supplying the minerals which are needed by the country.

  Plant and Machinery
  Mr. Burns
  To ask the Secretary of State for the Environment if he will undertake a review of the rating of plant and machinery.

  Mr. Portillo
  We have decided to establish a small expert committee to review the rating of plant and machinery. Much of the existing law has remained substantially unchanged for almost 30 years and has become outdated as a result of technological change. The committee will have the following terms of reference:To consider the present law and practice in regard to the rating of plant and machinery in the United Kingdom; to make recommendations as to the principles that should be prescribed to comprise the extent of rateable property, having regard to the financial and other considerations involved, and with a view to removing inconsistencies and harmonising the law and practice in all parts of the United Kingdom; and to make proposals for giving effect to the recommendations.

  It will be asked to report by 31 December 1992, so that any recommendations can be implemented for the 1995 revaluation of non-domestic property.
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  The chairman of the committee will be Mr. Derek Wood, QC. The other members will be decided after consultation with interested bodies.

  Waltham Forest HAT
  Mr. Summerson
  To ask the Secretary of State for the Environment when the tenants of the Cathall road, Boundary road, Oliver close and Chingford hall estates in Waltham Forest will have the opportunity to vote for the establishment of a housing action trust.

  Sir George Young
  At a recent meeting, the joint steering group of tenant representatives proposed that a ballot of tenants on the proposal for a trust to redevelop the estates should begin on 13 July. The London borough of Waltham Forest has already confirmed that, if a trust is established after tenants vote in favour, they will fully support its implementation.

  In view of the very high level of agreement that has been reached among the parties on how the HAT proposal can best serve the interests of the tenants of the estates, I am happy to confirm that the ballot will begin on the date proposed by tenant representatives.

  I hope the tenants of the estates will seize the unique opportunity this proposal offers to transform housing and living conditions on the estates, and bring investment and jobs, in the interests of themselves, their families and the wider community in Waltham Forest.

  Waste Incineration
  Mr. Kirkwood
  To ask the Secretary of State for the Environment if he will list any EC regulations or directives currently in force or pending which restrict or control the erection of high-volume waste incinerators in the vicinity of food storage and processing premises.

  Mr. Baldry
  [holding answer 10 June 1991]: There are no EC directives or regulations which specifically impose restrictions or controls of this kind.

  The EC has adopted three directives on incineration: directive 84/360 on the combating of air pollution from industrial plants and directive 89/369—new plant—and directive 89/429—existing plant—on municipal waste incineration. These set emission limits and combustion conditions which apply to new plant now, and will apply to existing plant over 6 tonnes/hour capacity from 1996, and from 2000, with interim conditions from 1995, to smaller plant.

  In addition, directive 85/337 requires the environmental effects of major projects to be taken into consideration before development consent is given. These effects might include effects on food storage and processing premises in a project's vicinity.

FOREIGN AND COMMONWEALTH AFFAIRS

  Northern Iraq
  Mr. Mullin
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps his Department is taking to protect Iraqi and Kurdish civilians who have assisted allied forces during the occupation in Northern Iraq, once allied forces have been withdrawn.

  Mr. Lennox-Boyd
  Our aim has always been that those refugees and other civilians who fled their homes in March
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  should be able to return in conditions of safety and security. We are working to establish the conditions which would allow for their continuing safety after the withdrawal of allied forces from Iraq.

  Israel
  Mr. Sillars
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on the numbers of Palestinian dead and wounded, respectively, and of Israeli dead and wounded, respectively, since the start of the Intifada; and what representations he has made to Israel.

  Mr. Lennox-Boyd
  According to our information, since the start of the Intifada 906 Palestinians have been killed by the Israeli security forces and many thousands injured. There has recently been a disturbing increase in the number of Palestinians killed by other Palestinians: the total now stands at approximately 400. We regularly take up with the Israelis incidents where we believe their security forces have acted in breach of the fourth Geneva convention. According to our sources, at least 61 Israelis have been killed by Palestinians, but we have no reliable figures for numbers of Israelis injured. We continue to condemn violence on both sides.

  Mr. Sillars
  To ask the Secretary of State for Foreign and Commonwealth Affairs what action he has taken at United Nations Security Council level in respect of Israeli attacks on Lebanon on 4 June.

  Mr. Lennox-Boyd
  We have made clear to the Israelis in London and Jerusalem our concern about the recent raids. We believe that the key to peace on Israel's northern border is the effective deployment of the Lebanese army, a strong Government in Beirut and the withdrawal of Israeli forces from southern Lebanon in accordance with United Nations Security Council resolution 425.

  Tibet
  Mr. Dunnachie
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his policy on Tibet.

  Mr. Lennox-Boyd
  I refer the hon. Member to the reply I gave on 18 October 1990, column 905, to the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas).

  Addis Ababa (British Subjects)
  Mr. Geraint Howells
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many British subjects are at present trapped in Addis Ababa; how many have been invited to shelter in the British embassy during the current crisis; and what steps have been taken to ensure the safety of those not resident in the embassy.

  Mr. Lennox-Boyd
  The British community were advised to leave Ethiopia by the embassy on 23 May 1991. About 150 chose to remain. All were invited to shelter on the embassy compound. Over 60 accepted. All have now returned to their homes. The embassy remains in close touch with the community. Addis Ababa international airport reopened on 7 June 1991 and all British nationals are free to leave.

  Iraq
  Mr. Dalyell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of current persecution of Iraqis by the Government of Saddam Hussein.

  Mr. Lennox-Boyd
  We continue to monitor the situation in Iraq closely and receive information from a number of sources. We have made clear to the Iraqis that we would take the severest view of any evidence of persecution, which would contravene the terms of Security Council resolution 688.

  Sri Lanka
  Mr. Michael Morris
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the expulsion by the Sri Lankan Government of Mr. David Gladstone, British high commissioner in Colombo.

  Mr. Lennox-Boyd
  We believe that Sri Lankan action to be wholly unjustified. During four years in Colombo Mr. Galdstone has assiduously carried out Her Majesty's Government's policies, including effectively representing our concerns over Sri Lanka's unsatisfactory human rights record. It appears that his expulsion was motivated by a desire to stifle these criticisms.

  Our immediate response has been to cancel high-level visits, including one I had planned for this month. We are also reviewing other aspects of our relationship.

  We intend to move quickly to nominate a successor to Mr. Gladstone as high commissioner in Colombo.

  Sierra Leone
  Mr. Anderson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response he proposes, either bilaterally or as part of a Commonwealth initiative to protect the security of small states, to the invasion of Sierra Leone by troops from Liberia loyal to Charles Taylor.

  Mrs. Chalker
  Following discussions with the Government of Sierra Leone we are supplying a quantity of non-lethal defence equipment to the Sierra Leone army.

TRADE AND INDUSTRY

  Import Restrictions
  Mr. Mullin
  To ask the Secretary of State for Trade and Industry what consideration has been given to revising or removing the restrictions on imports from Vietnam following the introduction of the market system in that country.

  Mr. Sainsbury
  Restrictions on imports from Vietnam are subject to regular review in the light of foreign and trade policy considerations.

  Mr. Mullin
  To ask the Secretary of State for Trade and Industry if he will impose restrictions upon imports of textiles from Thailand in the light of revelations about the use of child and forced labour in that country.

  Mr. Sainsbury
  The EC, acting under the aegis of the multi-fibre arrangement, already restricts imports of a
  489
  wide range of textiles products from Thailand. Child labour and forced labour are extremely complex issues often born out of poverty and social deprivation. The most effective way to eradicate these problems is, I believe, to improve the underlying economic and social conditions. Open trade, rather than further trade restrictions, is more likely to contribute to this process.

  Israel
  Mr. Latham
  To ask the Secretary of State for Trade and Industry whether he will make a statement on trade links between the United Kingdom and Israel; and what action he is taking to encourge them.

  Mr. Sainsbury
  Trade links between the United Kingdom and Israel are good. Trade between the UK and Israel exceeded £1 billion for the first time in 1990—UK exports £558 million, UK imports £502 million. Israel is a priority market for export promotion under the British Overseas Trade Board's forward plan. My Department supports the activities of the British overseas trade group for Israel. I intend to visit Israel later this year to encourage trade and investment links.

  Mr. Latham
  To ask the Secretary of State for Trade and Industry whether he will make a statement on his Department's note of guidance to British exporters regarding the Arab trade boycott of Israel; and when it was last revised.

  Mr. Sainsbury
  My Department's guidance note on the Arab boycott seeks to inform British firms on Government policy towards the boycott, to help remove misunderstandings about the operation of the boycott as it affects them and to provide them with information to assist their decisions about trading with the Arab world and Israel.

  The note, copies of which are in the Library, was last revised in January 1991.

  Mr. Latham
  To ask the Secretary of State for Trade and Industry whether he will make a statement on all recent and proposed trade missions to Israel supported financially or administratively by his Department.

  Mr. Sainsbury
  During the financial year 1990–91, my Department provided financial support for three trade missions to Israel organised by the British overseas trade group for Israel. In the current financial year a further four such missions are due to receive support.

HEALTH

  NHS Trusts
  Mr. Allen
  To ask the Secretary of State for Health what is his current policy towards the collection of information by his Department on the number of jobs lost and beds closed as a result of units becoming NHS trusts; and if he will make a statement on his future policy on this matter.

  Mr. Waldegrave
  I do not anticipate bed closures and job losses"as a result of units becoming NHS trusts".

  Both trusts and directly managed units need to fit their staff numbers to the efficient fulfilment of the health care
  490
  contracts placed on them by health authorities. As in the past, some will doubtless expand in numbers and other contract. We do not routinely collect this kind of data from either NHS trusts or directly managed units. It is the responsibility of NHS trusts to determine the number of staff needed to provide the level of patient care contracted for.

  Mr. Robin Cook
  To ask the Secretary of State for Health what is the timetable for the second wave of NHS trusts.

  Mrs. Virginia Bottomley
  Each trust application is the subject of public consultation lasting three months. My right hon. Friend the Secretary of State expects to be able to announce his decisions on the second wave applications in the autumn. The second wave of trusts will become fully operational in April 1992.

  Mr. Robin Cook
  To ask the Secretary of State for Health what types of information NHS trusts are expected to include in their business plans to be submitted to the national health service management executive.

  Mrs. Virginia Bottomley
  Business plans are expected to set out in financial terms how a trust will deliver the services that the purchasers have commissioned from it. The plans contain financial projections covering income and expenditure, assets, source and application of funds, contract and activity analysis, cash flow and capital projects. They also include information on services provided, quality, training and teaching, research and personnel.

  Mr. Robin Cook
  To ask the Secretary of State for Health by what date NHS trusts were required to submit their business plans to the NHS management executive; and how many trusts submitted their plans by the date.

  Mr. Waldegrave
  NHS trusts were originally asked to submit their business plans to the NHS management executive—NHSME—by 8 March 1991. Although none of the trusts met this deadline they discussed their reasons individually with the NHSME and of the 57 NHS trusts, 53 have now submitted complete business plans and another three partially completed plans.

  Mr. Robin Cook
  To ask the Secretary of State for Health what is the current value of the net assets of each NHS trust used to calculate the capital element of their contract prices.

  Mr. Dorrell
  I refer the hon. Member to the reply I gave him on 5 February at columns 96–97.

  Mr. Hardy
  To ask the Secretary of State for Health what range of salaries or other remuneration is paid to chief executives, managing directors and directors of those NHS trusts which operate ambulance services.

  Mrs. Virginia Bottomley
  The salaries of chief executives and other directors are a matter for the trust board.

  Mr. Hardy
  To ask the Secretary of State for Health what commercial operations are now offered or are being proposed by those NHS trusts providing ambulance services other than the conveyance of patients or responding to emergencies.
  491
  Mrs. Virginia Bottomley
  These NHS trusts offer a range of services. They are free to supplement their NHS income through additional services as long as they are not to the detriment of their patients and do not interfere with their ability to meet their NHS obligations.

  Occupational Therapy
  Ms. Walley
  To ask the Secretary of State for Health (1) if he will give details of the national shortfall in occupational therapists region by region;

  (2) if he will give details of the number of trained occupational therapists who will complete training in each of the next five years.

  Mrs. Virginia Bottomley
  Table 1 shows the percentage of occupational therapists posts in each region which had been vacant for three months or more at 31 March 1990. Steps are being taken to balance supply and demand. These include increasing the number of training places and encouraging and supporting retention and return initiatives undertaken by health authorities and the College of Occupational Therapists. These measures have contributed to the 28·7 per cent. increase in the number of occupational therapists between 1985 and 1989.

  Table 2 shows the intakes to training in England and Wales for the last three years, and gives an indication of the potential output of qualified occupational therapists over the next three years.

  Table 1

  Vacancy levels for Occupational Therapists1

  Regional Health Authority

  Vacancies as a percentage of Funded Establishment

  Northern

  20·5

  Yorkshire

  14·3

  Trent

  14·5

  East Anglian

  12·0

  North West Thames

  16·6

  North East Thames

  22·0

  South East Thames

  23·7

  South West Thames

  16·7

  Wessex

  11·4

  Oxford

  10·1

  South Western

  7·1

  West Midlands

  13·6

  Mersey

  10·6

  North Western

  11·4

  Source: Joint National Professional Manpower Initiative

  1 Vacancies of 3 months or more on 31 March 1990 as a percentage of funded establishment.

  Table 2

  Intakes to Occupational Therapist training1 England and Wales

  1988

  1989

  1990

  827

  836

  872

  1 Excludes "In-Service" training courses.

  Fertility
  Ms. Richardson
  To ask the Secretary of State for Health (1) what information he has on how many men and women have received medical help for infertility in the last year for which figures are available;

  (2) if he will indicate which district health authorities provide (a) ovarian scanning, (b) radio-immune assay service, (c) artificial insemination, (d) IVF and (e) GIFT.
  492
  Mrs. Virginia Bottomley
  This information is not held centrally. The provision of infertility services is a matter for individual health authorities to decide in the light of local needs and priorities.

  Ms. Richardson
  To ask the Secretary of State for Health how many district health authorities no longer provide sterilisation operations on social grounds; and if he will name these authorities.

  Mrs. Virginia Bottomley
  Information about the provision of sterilisation operations is not routinely collected. Regional and district general managers were recently reminded of existing guidance which makes it clear that male and female sterilisation operations should be available under the NHS on both family planning and medical grounds.

  Pain Relief
  Mr. Wigley
  To ask the Secretary of State for Health if he will now take steps to ensure that adequate data are collected within the NHS concerning pain relief; and what approaches he has had from the Pain Society on this matter.

  Mr. Dorrell
  Information on pain relief is not collected centrally because it is not a recognised medical specialty.

  Pregnancy Testing
  Ms. Richardson
  To ask the Secretary of State for Health which district health authorities do not provide routine pregnancy testing.

  Mrs. Virginia Bottomley
  This information is not collected centrally.

  Housing and Health
  Mr. Battle
  To ask the Secretary of State for Health if he will make a statement on his Department's assessment of the relationship between standards of housing and health.

  Mr. Waldegrave
  A range of environmental factors, including poor housing conditions, can have an adverse effect on health. "Health of the Nation", published on 4 June, a copy of which is available in the Library, sets out proposals for improving standards of health and includes details of action the Government have already taken to improve housing conditions.

  Miscarriage Association
  Dr. Twinn
  To ask the Secretary of State for Health what plans he has to support the Miscarriage Association; and whether he will make a statement.

  Mrs. Virginia Bottomley
  The Miscarriage Association provides valuable support to many women who have had the misfortune to suffer a miscarriage. In recognition of its work we have recently awarded the association an increased core grant of £10,000 per annum and a project grant of £5,000 per annum. Both grants are for three years. The project grant is intended to help the Miscarriage Association improve the service it provides to ethnic minority communities.

  Breast Screening
  Dr. Twinn
  To ask the Secretary of State for Health if he will make a statement on the relevance to the United Kingdom breast screening programme of the results of the Canadian trial of breast screening.

  Mrs. Virginia Bottomley
  The adverse results of the reported Canadian trial have no direct relevance to the NHS breast screening programme. These research results relate to women under 50 while the United Kingdom programme covers women aged 50 and over. There is considerable international research evidence that in older, post-menopausal, women mammographic screening, followed by appropriate treatment where necessary, can reduce mortality from breast cancer by about a quarter in the age group screened. Women who are invited to attend for screening should do so.

  Death Rates
  Mr. Cousins
  To ask the Secretary of State for Health (1) if he will publish tables showing the death rate trends for coronary heart disease, stroke and cancer in each social class on the same basis of sex and age-group as that provided in annexes A, B and C of the document entitled, "The Health of the Nation";

  (2) if he will publish tables showing the death rate trends for coronary heart disease, stroke and cancer of each national health service region in England, showing males and females separately and distinguishing age groups in the same manner as annexes A, B and C of the document entitled, "The Health of the Nation"; and if he will give the average trends on the same basis for England as a whole over the same period.

  Mr. Dorrell
  The information requested could be provided only at disproportionate cost.

  Child Employment Legislation
  Mrs. Margaret Ewing
  To ask the Secretary of State for Health (1) what is his estimate of the number of schoolchildren working part-time who are in breach of child employment legislation regulations; and if he will make a statement;

  (2) what is his estimate of the number of schoolchildren working part-time who are in breach of child employment legislation/regulations; and if he will make a statement.

  Mrs. Virginia Bottomley
  The available information relating to prosecutions and convictions for the illegal employment of children in different areas of employment is shown in the tables.

  (a) Non-industrial undertakings
  Figures notified to the Home Office for prosecutions and convictions in England and Wales under sections 18, 19 and 20 of the Children and Young Persons Act 1933:

  Year

  Prosecutions

  Convictions

  1979

  23

  18

  1980

  26

  25

  1981

  24

  22

  1982

  17

  16

  1983

  12

  12

  1984

  12

  9

  1985

  11

  9

  1986

  2

  2

  1987

  8

  8

  494

  Year

  Prosecutions

  Convictions

  1988

  28

  22

  1989

  23

  19

  Information relating to the employment of children in Scotland is a matter for my right hon. Friend the Secretary of State for Scotland.

  (b) Industrial undertakings
  Informations laid by HSE's Factory and Agricultural Inspectorates for breaches of section 1 of the Employment of Women, Young Persons and Children's Act 1920 and concerning the illegal employment of children.

  Year1

  Informations laid

  Convictions

  1981

  4

  4

  1982

  4

  4

  1983

  3

  3

  1984

  6

  6

  1985

  8

  6

  21986

  4

  4

  1986–87

  11

  9

  1987–88

  2

  2

  1988–89

  7

  7

  1989–90

  8

  6

  1 1981–85, calendar years.

  2 1986, January to March 1986.

  1986–87 onwards, years commencing 1 April.

  (c) Agricultural Undertakings
  Information laid by HM Agricultural Inspectorate against persons at work who put at risk children under the age of 16 by the contravention of agricultural legislation:

  Year

  Informations laid

  Convictions

  1981

  40

  37

  1982

  31

  24

  1983

  18

  16

  1984

  16

  15

  1985

  30

  27

  1986

  27

  22

  1987

  21

  15

  21988

  3

  3

  31988–89

  18

  17

  1 1981–1987—Calendar years.

  2 1988—1 January to 31 March.

  3 1988–89—Year commencing 1 April (provisional).

  Figures for industrial and agricultural undertakings apply to Great Britain

  GP Fundholders (Contracts)
  Mr. Blunkett
  To ask the Secretary of State for Health what restrictions exist on the freedom of general practitioner fundholders and national health service consultants to consider contracts along the lines of those contracted by Trafalgar Medical Services in Sheffield; and what monitoring his Department proposes to undertake of such arrangements.

  Mr. Dorrell
  General practice fundholders are free to place contracts for the limited range of hospital services covered by the fundholding scheme with providers who they consider will give the best care to their patients.

  Where general practice fundholders wish to contract with a non-NHS provider with which any member of the practice is connected, the National Health Service

  495
  (Fund-holding Practices) (General) Regulations 1991 require the practice to obtain the written consent of the regional health authority. Regional health authorities are expected to consider whether such proposals will provide a proper quality of care for patients and value for money compared with the alternatives available.

  HIV (Anonymised Screening)
  Mr. Strang
  To ask the Secretary of State for Health what is his latest estimate of the number of people tested for HIV in the programme of anonymised screening at drug dependency units, for each of the health authorities participating in the programme; and what was the date on which the programme began in each authority.

  Mrs. Virginia Bottomley
  Voluntary unlinked anonymous HIV antibody surveillance of saliva specimens from injecting drug users at a range of centres including drug dependency units began in December 1989 in London and in January 1990 outside London. The results will be published shortly.

  Mr. Strang
  To ask the Secretary of State for Health if he will give his latest estimate of the number of pregnant women who have been tested for HIV in the programme of unlinked anonymised screening of(a) rubella blood samples, (b) Guthrie cards and (c) in total, for each of the health authorities participating in the programme; and if he will give the dates of commencement of the programmes in each authority.

  Mrs. Virginia Bottomley
  Unlinked anonymous surveillance of leftover blood samples from women attending antenatal clinics began in early 1990 in centres in inner London and in other districts in the Thames regions. In districts outside the Thames regions the programme began in mid to late 1990. At 22 May 1991, a total of 32,979 samples from women in inner London, 20,133 samples from women in other districts in the Thames regions and 21,144 samples from women in districts outside the Thames regions had been tested. Information about the number of Guthrie cards tested is not available centrally. The Guthrie card survey is not part of the Government's programme of suveys but is funded by the Medical Research Council and co-ordinated by the Institute of Child Health.

  Mr. Strang
  To ask the Secretary of State for Health if he will give his latest estimate of the number of hospital in-patients who have been tested for HIV in the programme of unlinked anonymised screening, for each of the health authorities participating in the programme; and if he will give the dates of commencement of the programme in each authority.

  Mrs. Virginia Bottomley
  A feasibility study of unlinked anonymised HIV surveillance of hospital patients began in two centres in February 1991. Sera are stored and will be tested in batches. No blood has yet been tested.

  Mr. Strang
  To ask the Secretary of State for Health what is his latest estimate of the total number of people screened for HIV in the programme of unlinked anonymised screening(a) by each of the health authorities participating in the programme and (b) in total.

  Mrs. Virginia Bottomley
  The number of people screened for HIV in the programme of anonymised HIV surveys is given in the following table.
  496

  Number

  Ante natal clinics to 22 May 1991

  South-West Thames RHA

  9,732

  South-East Thames RHA

  15,121

  North-East Thames RHA

  20,113

  North-West Thames RHA

  8,146

  Yorkshire RHA

  15,979

  North Western RHA

  5,165

  Genito urinary medicine clinics to 24 May 1991

  2 London clinics

  5,085

  4 clinics outside London

  6,610

  Saliva swabs from injecting drug users

  The results of this survey are not yet available but will be published soon.

  Mr. Strang
  To ask the Secretary of State for Health what is his latest estimate of the number of people tested for HIV in the programme of anonymised screening at genito-urinary medicine clinics, for each of the health authorities participating in the programme; and what was the date on which the programme began in each authority.

  Mrs. Virginia Bottomley
  The studies in genito-urinary medicine clinics began in spring of 1990 in two clinics in London and later that year in four clinics outside London. At 24 May 1991, a total of 5,085 samples for people attending clinics in London, and 6,610 samples from people attending clinics outside London had been tested.

  Kidney Dialysis
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health if he will give the numbers of people receiving kidney dialysis treatment in the age brackets(a) 0 to 20 years, (b) 21 to 40 years, (c) 41 to 60 years and (d) 61 to 80 years, or comparable age divisions.

  Mr. Dorrell
  The table gives estimates of the numbers of people receiving dialysis treatment according to 20-year age bands as at 31 December 1990.

  Age

  Number

  Under 20

  349

  21 to 40

  2,163

  41 to 60

  3,233

  61 to 80

  1,907

  Over 80

  101

  The figures are based on returns from renal units in 1990 adjusted to take account of the response rate and apportioned according to the age distribution of services in 1989.

  Blood Transfusion Service
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health what is the relationship between the blood transfusion service and the national health service hospital trusts; whether it is intended to give the service its own trust status; and if he will make a statement.

  Mr. Dorrell
  The establishment of NHS trusts has had no effect on the relationship between hospitals and the regional transfusion centres—RTCs—which continue to supply blood to all hospitals on a basis of clinical need. There are no current applications from RTCs for trust status.

  Kidney Transplant Operations
  Sir Michael McNair-Wilson
  To ask the Secretary of State for Health what is the average cost of a kidney transplant operation; who bears the cost; and what part of it is made up of booking the operating theatre.

  Mr. Dorrell
  The average annual cost of a kidney transplantation in the year of operation is around £10,000. For NHS patients the cost is borne by the health authority responsible for the care of the patient. The cost of booking the operating theatre is not separately identifiable.

  Prescription Charges
  Mrs. Mahon
  To ask the Secretary of State for Health (1) how much it would cost to make the long-term sick in receipt of invalidity benefit automatically exempt from prescription charges;

  (2) how many invalidity benefit recipients are not entitled to free prescriptions.

  Mrs. Virginia Bottomley
  This information is not available centrally.

  East Birmingham Hospital
  Mr. Terry Davis
  To ask the Secretary of State for Health (1) how many people had been waiting for more than a year for an operation in East Birmingham hospital on(a) 31 December 1989 and (b) 31 March 1991;

  (2) what percentage of the total on in-patient waiting lists at East Birmingham hospital on 31 March 1990 had been waiting for (a) more than one year and (b) more than two years.

  Mrs. Virginia Bottomley
  Waiting time information by individual hospital is not available centrally. The hon. Member might like to contact Mr. Nigel Thompson, the chairman of East Birmingham health authority, for details.

  Smoking
  Mr. Dalyell
  To ask the Secretary of State for Health what is his Department's assessment of the medical effects of smoking 20 cigarettes a day.

  Mr. Dorrell
  Cigarette consumption at this level results in a serious risk of developing a whole range of life-threatening diseases. The smoker's chances of contracting lung cancer, chronic obstructive airways disease and coronary heart disease are much enhanced. In addition there is an increased risk of contracting the following diseases:

  Cerebrovascular disease

  Cancer of the lip, oral cavity and pharynx

  Cancer of the oesophagus

  Cancer of the larynx

  Cancer of the pancreas

  Peripheral vascular disease.

  There is also evidence that other conditions are associated with smoking, including:

  Low birthweight babies (where the mother smokes during pregnancy)

  Aortic aneurysm

  Cancer of the bladder

  Cancer of the cervix

  Cancer of the stomach

  Cancer of the kidney

  Peptic ulcer.

  National Association of Young People in Care
  Mr. Hinchliffe
  To ask the Secretary of State for Health (1) what is his policy with regard to the recognition of the National Association of Young People in Care as a representative body;

  (2) what steps he is taking to offer financial support to the National Association of Young People in Care.

  Mrs. Virginia Bottomley
  The association is one of a range of voluntary organisations which is routinely consulted on policy and practice developments. The association has submitted an application for funding in the current financial year. A meeting to discuss this was held with representatives of National Association of Young People in Care on 9 May when further information was sought about their proposed new structure. A final decision about funding will be made shortly.

  Chernobyl Nuclear Accident
  Mr. Flynn
  To ask the Secretary of State for Health what representation Her Majesty's Government had at the conference hosted by the International Atomic Energy Agency between 21 to 24 May in Vienna, on the IAEA international advisory committee report on the consequences of the 1986 Chernobyl nuclear accident; whether any United Kingdom Government scientists were involved in the study; and what study has been made of the report in regard to the applicability of its conclusions and recommendations to the United Kingdom.

  Mr. Dorrell
  Participants at the conference comprised a number of people from the United Kingdom, including a doctor from the Department of Health and a scientist from the National Radiological Protection Board. Both attended in their capacity as members of the International Advisory Committee—IAC—whose membership was drawn from independent scientists and organisations with an interest in radiological protection and epidemiology. Also in attendance was an observer from the nuclear installations inspectorate.

  The Government are currently considering the report from the IAC and will take account of any factors which may be relevant to the position in the United Kingdom.

  NHS Complaints Procedure
  Mr. Blunkett
  To ask the Secretary of State for Health whether patients attending private consultants' clinics at general pracitioner fundholders' premises will be entitled to use national health service complaints procedures; and if he will make a statement.

  Mr. Dorrell
  [holding answer 23 May 1991]: Where the services of a consultant are purchased for the patient of a fundholding practice out of the practice fund and the consultant is acting in a private capacity, a complaint against the referring doctor may be pursued under the Naitonal Health Service (Service Committees and Tribunal) Regulations 1974. If in these circumstances the patient wishes to pursue a complaint against the consultant, he would need to do so, if there was no possibility of conciliation directly with the consultant, either through the General Medical Council or the legal process depending on the nature of the complaint. Private care can of course be purchased for NHS patients by any commissioner of care, whether a district health authority or a GP fundholder.

  HIV Tests
  Mr. Strang
  To ask the Secretary of State for Health what were the cumulative totals of positive HIV antibody test results reported by each health authority on(a) 31 March 1989, (b) 30 September 1989, (c) 31 March 1990, (d) 30 September 1990 and (e) 31 March 1991.

  Mrs. Virginia Bottomley
  The information available to the Department on the cumulative totals of positive HIV antibody test results reported by each health authority is given in the tables.

  United Kingdom HIV antibody positive persons reported by region for England, Wales, Northern Ireland and Scotland Cumulative totals up to end of March 1989

  Total reports

  England

  Northern

  286

  Yorkshire

  1311

  Trent

  248

  East Anglia

  1160

  North West Thames

  2,827

  North East Thames

  1,764

  South East Thames

  917

  South West Thames

  268

  Wessex

  234

  Oxford

  1332

  South Western

  237

  West Midlands

  353

  Mersey

  154

  North Western

  348

  Channel Isles

  20

  Wales

  124

  Northern Ireland

  55

  Scotland

  1,621

  United Kingdom HIV antibody positive persons reported by region Cumulative totals up to end of September 1989

  Total reports

  England

  Northern

  305

  Yorkshire

  323

  Trent

  283

  East Anglia

  171

  North West Thames

  3,089

  North East Thames

  2,048

  South East Thames

  979

  South West Thames

  303

  Wessex

  251

  Oxford

  349

  South Western

  259

  West Midlands

  375

  Mersey

  162

  North Western

  388

  Channel Isles

  20

  Wales

  144

  Northern Ireland

  62

  Scotland

  1,707

  United Kingdom antibody positive persons reported by region Cumulative totals up to end of March 1990

  Total reports

  England

  Northern

  333

  Yorkshire

  356

  Trent

  359

  500

  Total reports

  East Anglia

  188

  North West Thames

  4,073

  North East Thames

  2,263

  South East Thames

  1,434

  South West Thames

  337

  Wessex

  291

  Oxford

  365

  South Western

  278

  West Midlands

  414

  Mersey

  177

  North Western

  747

  Channel Islands

  23

  Wales

  157

  Northern Ireland

  68

  Scotland

  1,768

  United Kingdom HIV antibody positive persons reported by region Cumulative totals up to end of September 1990

  Total reports

  England

  Northern

  348

  Yorkshire

  384

  Trent

  378

  East Anglia

  197

  North West Thames

  4,497

  North East Thames

  2,505

  South East Thames

  1,592

  South West Thames

  385

  Wessex

  307

  Oxford

  384

  South Western

  298

  West Midlands

  479

  Mersey

  182

  North Western

  670

  Channel Islands

  24

  Wales

  176

  Northern Ireland

  77

  Scotland

  1,840

  Country and region of 1st report

  Cumulative total Cases

  England

  Northern

  354

  Yorkshire

  397

  Trent

  396

  East Anglia

  204

  North West Thames

  4,621

  North East Thames

  2,569

  South East Thames

  1,681

  South West Thames

  434

  Wessex

  328

  Oxford

  403

  South Western

  329

  West Midlands

  510

  Mersey

  185

  North Western

  696

  Wales

  229

  Northern Ireland

  82

  Scotland

  1,919

  United Kingdom total

  15,337

  Channel Isles

  Isle of Man

  29

WALES

  Extra-contractual Referrals
  Mr. Morgan
  To ask the Secretary of State for Wales (1) what percentage of Welsh health authorities' current budgets are allocated for extra-contractual referrals.

  (2) what is the estimated expenditure by the Welsh health authorities on extra-contractual referrals in April and May; and how it relates to the budget set aside by those authorities for such referrals.

  Mr. Nicholas Bennett
  Health authorities have made provision in their budgets for the cost of anticipated extra-contractual referrals—ECRs. The amounts in each case depend on the expected pattern of referrals and the extent to which these have been covered by contracts. Not all authorities have reached final agreements on contracts and which services will be provided "off contract". It is therefore not possible to provide the information in the form requested at present. Authorities have been asked to give details of ECRs for the first two months of this year and to indicate whether or not their provision is adequate to meet the actual demand assessed on this basis. I shall write to the hon. Gentleman when this information is available.

  A465
  Mr. Roy Hughes
  To ask the Secretary of State for Wales when he expects all outstanding statutory procedures on the planned A465 Glynneath-Aberdulais improvement to be completed.

  Sir Wyn Roberts
  Provided the outstanding issues in the inspector's report of the public inquiry can be satisfactorily resolved, statutory procedures could be completed later this year.

  Mr. Roy Hughes
  To ask the Secretary of State for Wales what was the nature of the problem which has caused extended statutory procedures on the planned A465 Glynneath-Aberdulais improvement.

  Sir Wyn Roberts
  The inspector who held the public inquiry into the scheme recommended significant alterations which have required further investigation and consultation with a number of interests.

  Ophthalmology
  Mr. Morgan
  To ask the Secretary of State for Wales what policy considerations led to his decision to set up a second ophthalmology treatment centre in Wales.

  Mr. Nicholas Bennett
  The additional treatment centre intended for Bridgend is proposed as a result of the large ophthalmology waiting lists. The centre will provide an accessible and cost effective means of reducing the lists in south and west Wales.

  Mr. Morgan
  To ask the Secretary of State for Wales what discussions he has had(a) with the Royal College of Ophthalmologists and (b) with local consultant ophthalmologists in Wales concerning medical follow-up responsibilities for patients on the ophthalmology waiting lists receiving eye surgery at the existing Bangor and proposed Bridgend treatment centres.

  Mr. Nicholas Bennett
  Our officials discussed follow-up and other procedures with the Royal College of 502
  Ophthalmologists prior to establishing the Bangor centre. Patients attend two follow-up consultations arranged with the centre in line with the guidelines of the royal college.

  Mr. Morgan
  To ask the Secretary of State for Wales what account he took of the recommendations of the Royal College of Ophthalmology on staffing requirements per 100,000 people, prior to his decision on a second ophthalmology treatment centre in Wales.

  Mr. Nicholas Bennett
  The decision to establish a second ophthalmic treatment centre was taken following consideration of the particular waiting times in this speciality and local circumstances and opportunities. Detailed staffing requirements will be settled in discussion with the host authority.

  Mr. Morgan
  To ask the Secretary of State for Wales what length of contract will be offered to consultants to be employed in the ophthalmology treatment centre to be opened in Bridgend; and how many consultants will be employed.

  Mr. Nicholas Bennett
  Staffing levels for the new ophthalmology treatment centre, Bridgend are currently under discussion with the host district health authority. Individual contracts for staff at the centre will be the responsibility of Mid Glamorgan health authority.

  Mr. Morgan
  To ask the Secretary of State for Wales what proposals he now has to reduce waiting lists in ophthalmology and general surgery in the catchment area of South Glamorgan health authority.

  Mr. Nicholas Bennett
  Bids for funds under the waiting times initiative for 1991–92 have been invited from all health authorities in Wales. South Glamorgan DHA is able to refer general surgery patients to the treatment centre at Bridgend and ophthalmology patients to the Bangor treatment centre and will also be able to refer patients to the new cataract centre when it becomes operational.

  Mr. Morgan
  To ask the Secretary of State for Wales what consultations with ophthalmologists he undertook prior to making his decision on the setting up of a second ophthalmology treatment centre for Wales at Bridgend general hospital.

  Mr. Nicholas Bennett
  The decision to establish a second ophthalmology treatment centre at Bridgend was taken after consideration of the waiting list position in ophthalmology in south Wales and local circumstances and opportunities.

  Forestry Commission
  Mr. Ron Davies
  To ask the Secretary of State for Wales if he will make a statement on the reorganisation of the Forestry Commission in Wales.

  Mr. David Hunt
  The Government have endorsed the proposal by the forestry commissioners that they should carry out an internal reorganisation of the commission in order to achieve a clearer distinction between those staff concerned with its regulatory and advisory duties as a Government Department and those engaged in the management of its forests. The commissioners plan to implement this reorganisation by 1 April 1992.
  503
  The forestry commissioners have decided that the headquarters' offices of the Forestry Authority and the Forestry Enterprise in Wales will remain in Aberystwyth. They are also proposing that the commission's forests in Wales should continue to be managed by the existing eight forest district offices, but that there should be three new local offices to administer the authority's functions. The details of the reorganisation are currently being discussed with staff representatives.

  Local Plans
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales what action he intends to take to ensure that local plans are prepared for(a) Alyn and Deeside district council, (b) Carmarthen district council, (c) Ceredigion district council, (d) Glyndwr district council, (e) Montgomeryshire district council, (f) Neath borough council, (g) Preach district council and (h) South Pembrokeshire district council.

  Mr. Nicholas Bennett
  The preparation and adoption of local plans by planning authorities is not a statutory requirement. It is for each authority to decide which parts of their area should be covered by local plans. Planning policy guidance (PPG) note 12 of November 1988 and PPG15 (Wales) of October 1990 urged district planning authorities to extend and complete their local plan coverage. The Planning and Compensation Bill, which is currently before Parliament, includes a provision which will place a mandatory duty on each district council and each national park authority to prepare and adopt a single local plan covering the whole of its area.

  British Rail (Meetings)
  Mr. Wigley
  To ask the Secretary of State for Wales if he will list the dates on which Ministers at the Welsh Office have met the chairman and other senior executives of British Rail during the past 18 months, noting the main issues raised at each such meeting.

  Sir Wyn Roberts
  My right hon. Friend or I met the chairman or other directors of British Rail on 10 May, 13 June and 28 November 1990 and on 8 February, 12 February and 13 May 1991. We discussed a wide range of issues concerning rail services for Wales.

  Dentists (Patient Care)
  Mr. Livsey
  To ask the Secretary of State for Wales how many representations he has received from dentists in Wales since the implementation of the new contract on patient care; and what were the main concerns expressed.

  Mr. Nicholas Bennett
  The Department has received two representations from individual dentists about the new contract. The representations concerned the treatment of child patients in relation to the community dental service and alleged decline in gross income.

  Old Schools
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many schools built wholly or mainly before 1903 there are in each of the local education authorities of Wales; and what plans he has to rebuild them.
  504
  Sir Wyn Roberts
  Details of the ages of school buildings are not held centrally. Reponsibility for the provision, repair and maintenance of school buildings rests with local education authorities.

  Education and Training
  Mr. Barry Jones
  To ask the Secretary of State for Wales what was the proportion of persons aged 16 years leaving full-time education or training in(a) 1989–90 and (b) 1990–91.

  Sir Wyn Roberts
  No information is collected centrally from the further education sector about 16-year-old leavers. The school leavers survey collects information about leavers from the school sector; however 1989–90 information is not yet available and the survey for 1990–91 has yet to commence.

  Alzheimer's Disease
  Mr. Barry Jones
  To ask the Secretary of State for Wales what plans he has to meet leaders in Wales of the Alzheimer's Disease Society.

  Mr. Nicholas Bennett
  The Department is in regular and close contact with the Wales development officer of the Alzheimer's Disease Society.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what financial aid he gives to the Alzheimer's Disease Society.

  Mr. Nicholas Bennett
  A total of £70,000 in 1991–92, including funding under the elderly initiative and the mental illness strategy and to support the work of the society's development officer in Wales.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what research moneys he gives to the Alzheimer's Disease Society in Wales.

  Mr. Nicholas Bennett
  No money is specifically earmarked to the Alzheimer's Disease Society for research. However, the Government are contributing towards a collaborative study led by the Institute of Human Ageing, Liverpool into the incidence of dementia. As part of this, some £30,000 each year is being provided for that part of the research being undertaken at University college of North Wales, Bangor.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what help he proposes to give to carers concerning Alzheimer's disease in Wales.

  Mr. Nicholas Bennett
  The Welsh Office-led all-Wales mental illness strategy and our comprehensive programme of action to develop social care more generally are intended to promote the development of services which provide care for those suffering from Alzheimer's disease, including appropriate support for families and friends who contribute to care. These initiatives are supported by record levels of resources, including £4·6 million in 1991–92 for the mental illness strategy—more than double last year's allocation; and over £4 million under the elderly initiative, the new scheme to promote more flexible forms of community care for elderly people and those with sensory or physical disabilities, and in funding for voluntary organisations, including the Alzheimer's Disease Society.
  505
  Mr. Barry Jones
  To ask the Secretary of State for Wales what is his estimate of the number of sufferers from Alzheimer's disease in Wales.

  Mr. Nicholas Bennett
  Based on an estimate derived from the NHS Health Advisory Service's publication "The Rising Tide—Developing Services for Mental Illness in Old Age" published in November 1982, a copy of which is in the Library of the House, there are approximately 28,000–9,500 males and 18,500 females—suffering from Alzheimer's disease in Wales.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many carers of Alzheimer's disease sufferers there are in Wales.

  Mr. Nicholas Bennett
  The precise number of carers is not known, but we recognise that many people contribute in different ways to the support of this group of vulnerable people.

  Alder Hey Royal Children's Hospital
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will meet parents of children of Deeside, Clwyd, who are awaiting heart surgery or who are deemed likely to need surgery at Alder Hey royal children's hospital.

  Mr. Nicholas Bennett
  I have no plans to intervene in contractual arrangements between health authorities in Wales and their chosen provider units.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many children from(a) Clwyd, (b) Gwynedd and (c) Powys have had heart surgery performed at the Alder Hey royal children's hospital.

  Mr. Nicholas Bennett
  Data provided by Mersey regional health authority show that no children from Clwyd, Gwynedd or Powys had surgical operations on the heart at Alder Hey royal children's hospital in 1989–90, the only year for which data are available. This information is based only on those cases where the hospital episode has finished, and complete clinical details are available.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how much money, as a down payment, health authorities in Wales are required to pay to the appropriate health authority, to which Alder Hey hospital answers, before operations are performed or before youngsters are placed on the waiting list.

  Mr. Nicholas Bennett
  None. District health authorities strike contractual agreements, including with Alder Hey hospital, under which they agree to make regular payments for the care provided or make individual extra-contractual arrangements, mainly for emergency cases, which incur payment after treatment has been provided.

  Dogs
  Mr. Geraint Howells
  To ask the Secretary of State for Wales what is his estimate of the number of all breeds of dogs in Wales; and if he will make a statement.

  Mr. Nicholas Bennett
  This information is not held centrally.

  Consultants
  Mr. Morgan
  To ask the Secretary of State for Wales how many new consultants were appointed in 1989 to work at the treatment centres at(a) Ysbyty Gwynedd, Bangor, (b) general surgery at Bridgend and (c) elective orthopaedics at Rhydlafar.

  Mr. Nicholas Bennett
  The orthopaedic treatment centre, Rhydlafar, was the only centre to become operational during 1989. One additional consultant was appointed.

  Mr. Morgan
  To ask the Secretary of State for Wales what lengths of contracts were given to the consultant surgeons employed in the treatment centres in(a) ophthalmology at Ysbyty Gwynedd, Bangor, (b) general surgery at Bridgend and (c) elective orthopaedics at Rhydlafar.

  Mr. Nicholas Bennett
  The Department has contracts with the host district health authorities for the provision of treatment at the treatment centres. Contracts for individual members of staff are the management responsibility of those host health authorities.

  Employment Training
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will publish the number of employment training places for each of the counties of Wales in 1990–91 and 1991–92, indicating the difference over the years by number and by percentage.

  Mr. David Hunt
  Information on the number of ET places provided for each of the Welsh counties in 1990–91 and 1991–92 is not available. The Government now fund each training and enterprise council for employment training according to the number of training weeks delivered, and the outputs achieved. It is for TECs to determine, in the light of local circumstances, how many places to purchase.

  Residential Homes
  Mr. Barry Jones
  To ask the Secretary of State for Wales how many residential homes for the elderly mentally infirm or very dependent he has visited in Wales.

  Mr. Nicholas Bennett
  [holding answer 4 June 1991]: None, but I have recently visited a number of hospitals which have facilities for elderly mentally infirm patients, including Bronllys hospital, Brecon and Valley hospital, Anglesey.

NORTHERN IRELAND

  Eye Surgery
  Mr. McGrady
  To ask the Secretary of Stale for Northern Ireland what is the current waiting time before a patient receives an operation for cataracts at the Royal Victoria hospital, Belfast.

  Mr. Hanley
  Waiting times vary from two to three weeks for urgent cases to over two years for a few non-urgent cases.
  507
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland how many people are currently on the waiting list for cataract operations at the Royal Victoria hospital, Belfast.

  Mr. Hanley
  The estimated number of patients is 2,900.

  Fair Employment Commission
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many new members of staff have been appointed to the Fair Employment Commission since 1 January 1991; and how many of them were(a) Protestants, (b) Roman Catholics and (c) other religions.

  Mr. Needham
  The commission has declared its intention to make monitoring information available on a yearly basis. To make such information available more frequently and covering shorter periods could infringe the confidentiality requirements of the Fair Employment Acts by disclosing the religious beliefs of identifiable individuals.

  Cost Limits
  Mr. John Marshall
  To ask the Secretary of State for Northern Ireland if he will make a statement about the 1991–92 running cost limit for the Northern Ireland Office and the Northern Ireland Departments.

  Mr. Brooke
  The running cost limit for 1991–92 for the Northern Ireland Office and the Northern Ireland Departments is £652·6 million. Details of the provision for individual Northern Ireland Departments are set out in the Northern Ireland estimates which were laid before the House today.

  Strangford Lough
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what proposals he has for the participation in the management of Strangford lough of persons owning land along the lough shore.

  Mr. Needham
  [holding answer 10 June 1991]: On 6 June 1991, the Department of the Environment for Northern Ireland issued a consultation paper on the future management structure for Strangford lough and on a marine nature reserve. It is being circulated widely. Officials will arrange meetings to explain the proposals further. The proposed management structure would comprise an executive committee of representatives of bodies with statutory powers in the area and of an advisory committee representing local interests. These will include lough shore land owners and other local residents, lough-users and conservationists. The closing date for comments on the consultation paper is 18 October 1991. The Department will then produce a policy document.

HOME DEPARTMENT

  Drugs Offences
  Ms. Richardson
  To ask the Secretary of State for the Home Department how many women are serving sentences in British prisons under section 3 of the Misuse of Drugs Act 1971; and how many of these are deportees.

  Mrs. Rumbold
  On 30 June 1990, a provisional figure of about 320 females were serving sentences for all types of 508
  drugs offences in prison service establishments. The only readily available information on the types of drug offences does not separately identify males and females. It is published annually in Prison Statistics England and Wales (table 1(a) of the latest volume, for 1989, Cm. 1221), copies of which are in the Library. Information on whether they were liable for deportation on completion of sentence is not available centrally.

  Electoral Arrangements
  Mr. Rooker
  To ask the Secretary of State for the Home Department, pursuant to the answer to the hon. Member for Paisley, South (Mr. McMaster) of 14 May,Official Report, columns 71–72, if he will set out the minimum notice which the proposed advertising campaign for information regarding absent voting will give to electors; and if he will make a statement on discussions he has held with electoral registration officers on this matter.

  Mrs. Rumbold
  In the unlikely event that Parliament was dissolved on the same day as that on which a general election was announced, the proposed advertisements would appear in newspapers on a Wednesday, and applications for an absent vote would have to be returned by the following Monday. On past experience, however, electors will probably have about 12 days' notice in which to apply for an absent vote.

  The proposed campaign will be similar to one which ran before the 1987 general election and will take account of comments received from electoral registration officers following that campaign.

  Mr. Rooker
  To ask the Secretary of State for the Home Department if he will set out in summary the information he has on procedures for absent voting at general elections in member states of the European Community outlining criteria used for registration of absent voting for various grounds such as(a) ill health, (b) employment, (c) absence from home and (d) overseas residence.

  Mrs. Rumbold
  I shall write to the hon. Member.

  Age of Consent
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will list the ages of consent for heterosexual men and women and homosexual men and women in Britain and in each of the European countries, East and West.

  Mr. John Patten
  We do not have the full information requested, but I refer the hon. Member to my letter of 4 June to my hon. Friend the Member for Battersea (Mr. Bowis), a copy of which has been placed in the Library. This gives details of the ages of consent in European Community states.

  Domestic Violence
  Ms. Richardson
  To ask the Secretary of State for the Home Department (1) how many men received a custodial sentence for domestic violence in the latest year for which figures are available; and what was the average length of sentence;

  (2) how many incidents of domestic violence were reported in the last year for which figures are available; and how many resulted in (a) a charge, (b) a prosecution and (c) a conviction.
  509
  Mr. John Patten
  Information collected centrally on court proceedings is not in sufficient detail to distinguish offences of domestic violence from other violent offences. Some information on domestic violence as a component of offences of violence against the person is given in the Home Office Research Bulletin 27, a copy of which is in the Library.

  Asylum Seekers
  Sir Russell Johnston
  To ask the Secretary of State for the Home Department when he intends to consult non-governmental organisations about the reform of arrangements for asylum seekers.

  Mr. Peter Lloyd
  We are in regular contact with organisations active in the asylum field and their views will be taken into account in the Government's continuing review of their arrangements. If decisions are taken with direct implications for outside organisations they will, of course, be discussed with them.

  Obscene Telephone Calls
  Ms. Richardson
  To ask the Secretary of State for the Home Department how many obscene telephone calls were reported in the last year for which figures are available; how many gave rise to(a) a charge, (b) a prosecution and (c) a conviction; what plans he has to review the present maximum penalty for this offence; and if he will make a statement.

  Mr. John Patten
  The figures requested are not readily available and could be obtained only at disproportionate cost. Information collected centrally does not distinguish making an obscene telephone call from other offences under the Telecommunications Act 1984. The maximum penalty for this offence will be increased from a fine of £400 to a fine of £1,000 by fine upratings in the Criminal Justice Bill.

  Homosexual Offences
  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will estimate the cost to the prison service of gaoling the men who are sentenced each year for the consenting homosexual offences of soliciting, buggery, procuring and indecency, including the cost of keeping these men in custody for the full terms of their sentences.

  Mrs. Rumbold
  In 1989—the latest information available—178 men were received into prison service establishments following conviction for buggery and indecency between males. At 30 June 1989 the population held for such offences was 375.

  The population breakdown between prison types and the relevant cost per week (1989–90) was as follows:

  Type of establishment

  Number

  Cost per week £

  Local/remand

  156

  309

  Training prison: open

  11

  218

  Closed

  198

  257

  Young Offender Institution

  10

  346

  375

  280

  510
  Information is not readily available for the length of sentence given or served for such offences. It is therefore not possible to estimate the cost of keeping these men in prison for the full terms of their sentence.

  Mr. Cohen
  To ask the Secretary of State for the Home Department if he will estimate the annual police and court costs involved in prosecuting gay and bisexual men for consenting homosexual soliciting, buggery, procuring and indecency, including men prosecuted for homosexual indecency under byelaws, public order legislation and common law.

  Mr. John Patten
  Prosecution costs are not available in the form requested.

  Women Prisoners
  Ms. Richardson
  To ask the Secretary of State for the Home Department if he will provide the latest figures on numbers of suicides, attempted suicides and self-mutilation inflicted by prisoners at each of the women's prisons.

  Mrs. Rumbold
  Since 1980, seven women have died at their own hand while in prison service custody. The establishments involved were Holloway, in 1981 and 1985, Risley, in 1986, 1987 and twice in 1989, and Durham in 1990. Accurate information on the incidence of attempted suicide and deliberate self-injury by prisoners is not available. It is planned to introduce new arrangements for reporting all such incidents, in line with a recommendation made by Her Majesty's Chief Inspector of Prisons in his report on suicide and self-harm in prison.

  Ms. Richardson
  To ask the Secretary of State for the Home Department if he will list for the latest year for which there are figures(a) how many women were sent to prison for violent offences, (b) what percentage this RS of the total female prison population, (c) what percentage this is of the total prison population and (d) what percentage this is of the population of the United Kingdom.

  Mrs. Rumbold
  Excluding those committed in default of payment of a fine, 380 females were received into prison service establishments in England and Wales in 1989 under sentence for offences of violence against the person, sexual offences and robbery. On 30 June 1989 the population of females serving sentences for these offences was 323 and formed 18 per cent. of the female prison population and 0·7 per cent. of the male and female prison population. They also represented six per million of the estimated resident male and female population of England and Wales.

  Pornography
  Mr. Cohen
  To ask the Secretary of State for the Home Department what effects the proposed implementation of the single European market in 1992 will have on the importation of sexually explicit material classified as pornography; and whether the Government will seek special powers to maintain the status quo whereby sexually explicit material which is freely available in other EC member states will continue to be excluded from the United Kingdom.

  Mr. John Patten
  The introduction of the single market will entail changes in the nature of our customs controls
  511
  with a greater emphasis on selective checks and intelligence. However, it will not require us to relax our prohibitions on the supply of obscene material or our internal controls on display and supply.

  Deportation
  Ms. Richardson
  To ask the Secretary of State for the Home Department how many women, by nationality, are currently awaiting deportation.

  Mr. Peter Lloyd
  The figures in the following table relate to those currently awaiting deportation as the subject of a deportation order made under section 3(6) of the Immigration Act 1971, where a recommendation for deportation made by a court was part of a custodial sentence; under section 3(5)(b) of that Act where deportation on conducive grounds will follow a custodial sentence; or under section 3(5)(a) of that Act where a woman has remained beyond her permitted stay or has breached conditions attached to her stay. The information on deportation orders made under section 3(6) and 3(5)(b) relates to the period since 1 January 1988, while the third category relates to the period since 1 June 1990.

  Women subject to a deportation order

  Nationals of

  Section 3(6)

  Section 3(5)(b)

  Section 3(5)(a)

  Bangladesh

  —

  —

  1

  Belize

  —

  1

  —

  Brazil

  3

  —

  —

  Cameron

  —

  —

  1

  Chile

  1

  —

  —

  Colombia

  19

  —

  2

  France

  1

  —

  —

  Germany

  1

  —

  —

  Ghana

  9

  —

  16

  Grenada

  1

  —

  —

  Guyana

  2

  —

  —

  Holland

  2

  2

  —

  Hong Kong

  —

  —

  1

  India

  3

  —

  2

  Iran

  —

  —

  2

  Jamaica

  22

  1

  2

  Malaysia

  —

  —

  1

  Mauritius

  —

  —

  1

  Nigeria

  63

  1

  20

  Pakistan

  —

  —

  2

  Philippines

  —

  1

  2

  Poland

  —

  —

  1

  Sierra Leone

  —

  —

  2

  Spain

  2

  —

  —

  Trinidad and Tobago

  2

  —

  —

  Turkey

  —

  —

  1

  United States of America

  7

  —

  —

  Uruguay

  1

  —

  —

  Yugoslavia

  1

  —

  —

  Zambia

  1

  —

  —

  Zimbabwe

  —

  —

  1

  Ms. Richardson
  To ask the Secretary of State for the Home Department how many women have been returned to Nigeria; and how many are awaiting deportation to Nigeria since the introduction of decree 33.

  Mr. Peter Lloyd
  Since 10 October 1990, when the Nigerian Government promulgated decree 33, 82 women have been returned to Nigeria under deportation powers, including 59 who chose to make supervised departures; and 27 Nigerian women are currently the subject of deportation orders. None of those who have left was affected by decree 33. Two of those awaiting deportation 512
  committed drug offences in this country on or after 10 October 1990 and may therefore be liable to prosecution on their return to Nigeria.

  Prisoners
  Mr. Mullin
  To ask the Secretary of State for the Home Department what is his estimate of the cost of detaining(a) a category A prisoner and (b) a category B prisoner.

  Mrs. Rumbold
  During 1989–90—the latest figures available—the average cost per week of detaining an inmate in a typical dispersal prison, the type of prison in which category A inmates are normally held, was £575. The cost per week in category B training prisons was £318.

  Mr. Terry Davis
  To ask the Secretary of State for the Home Department whether it is a requirement for prisoners to be notified of decisions by the parole board in writing.

  Mrs. Rumbold
  There is no such requirement.

  Mr. Terry Davies
  To ask the Secretary of State for the Home Department who is responsible for communicating the decisions of the parole board to prisoners at Sudbury prison.

  Mrs. Rumbold
  All parole decisions are notified by the parole unit to the governors of the establishments; they are then responsible for informing prisoners.

  Immigration
  Mr. Wells
  To ask the Secretary of State for the Home Department how many immigrants there have been from the Indian sub-continent since the passage of the Immigration Act 1981 each year since 1982.

  Mr. Peter Lloyd
  The number of persons from the Indian sub-continent accepted for settlement in the United Kingdom in the years 1982–90 is published in table 15 of the Home Office Command Paper "Control of Immigration: Statistics United Kingdom 1989" (Cm. 1124), and in table 1 of the Home Office Statistical Bulletin 3/91 "Control of Immigration: Statistics—Third and Fourth Quarters and Year 1990". A copy of both publications is in the Library.

  Gambling
  Mr. Dunnachie
  To ask the Secretary of State for the Home Department what research has been considered by his Department on fruit machine gambling by young people; and if he will make a statement.

  Mr. Peter Lloyd
  The results of the Home Office research study "Amusement Machines: Dependency and Delinquency", published in July 1988, showed that very few young people are at risk of becoming dependent on amusement machines and that there is no clear evidence of any association between the playing of machines and delinquency. We have received no reliable new evidence to contradict these results and remain of the view that further legislative controls are not justified at present.

  Jury Vetting
  Mrs. Mahon
  To ask the Secretary of State for the Home Department if he will indicate for the years 1988, 1989 and 1990 the number of occasions in which the police national computer has been accessed for the purposes of jury vetting; and if he will make a statement.
  513
  Mr. Peter Lloyd
  The purposes for accessing the police national computer are not recorded centrally. However, statistical returns from chief officers of police show that under arrangement described in Home Office circular 43/1988, criminal record checks were made of the following number of people summoned for jury service:

  Number

  1988

  1,152

  1989

  5,602

  1990

  4,146

  Prison Sentences
  Mr. Bermingham
  To ask the Secretary of State for the Home Department if he will list how many men and women received life sentences in England and Wales for each year since 1979; and if he will make a statement.

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

  Number of males and females who received 'Life' sentences 1979 to 1989 England and Wales

  Year

  Males

  Females

  1979

  149

  8

  1980

  181

  2

  1981

  153

  7

  1982

  206

  9

  1983

  136

  4

  1984

  138

  6

  1985

  164

  6

  1986

  183

  9

  1987

  169

  5

  1988

  206

  12

  1989

  176

  11

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  Males

  7

  8

  6

  19

  26

  20

  18

  11

  9

  16

  Females

  —

  1

  —

  1

  2

  3

  4

  4

  5

  2

  Total

  7

  9

  6

  20

  28

  23

  22

  15

  14

  18

  Dog Attacks
  Mr. David Young
  To ask the Secretary of State for the Home Department how many reported attacks have taken place on people by dogs in each of the last five years for which figures are available; how many of these resulted in hospital treatment; and how many resulted in death.

  Mr. Ron Davies
  To ask the Secretary of State for the Home Department what information he has concerning the incidence of injury to humans caused by attacks by dogs during each of the last five years; and what information he can provide on the breeds of dogs involved.

  Mrs. Angela Rumbold
  [holding answer 20 May 1991]: As there is no requirement to report a dog attack, or injuries caused by dog attacks, statistics on them are not collected centrally. In the last year to May 1991, the number of incidents recorded in London by the Metropolitan police were as follows:
  514
  Mr. Bermingham
  To ask the Secretary of State for the Home Department what was the average length of sentence served by men and women in England and Wales for each year since 1979; and if he will make a statement.

  Mrs. Rumbold
  The readily available information is published annually in Prison Statistics England and Wales (tables 3.15, 3.16, 4.15, 4.16, 5.15 and 5.16 of the latest volume, for 1989, Cm. 1221), a copy of which is in the Library.

  Mr. Bermingham
  To ask the Secretary of State for the Home Department how many men and women were released on licence from a life sentence in England and Wales for each year from 1979; and if he will make a statement.

  Mrs. Rumbold
  The readily available information relates to prisoners released from prison service establishments and is published annually in Prison Statistics England and Wales (table 8.5 of the latest volume, for 1989, Cm. 1221), a copy of which is in the Library.

  Mental Health Act
  Mr. Bermingham
  To ask the Secretary of State for the Home Department how many men and women in England and Wales were given an absolute discharge under the Mental Health Act for each year; and if he will make a statement.

  Mr. John Patten
  The number of males and females in England and Wales who were given an absolute discharge, by tribunal under part V of the Mental Health Act 1983 or by the Secretary of State under sections 41 to 49 of the 1983 Act and 65 to 74 of the 1959 Acts, between 1980 and 1989—the last year for which information is available—is given in the table.

  Number

  German Shepherds (Alsatians)

  200

  Pit bull terriers

  126

  Rottweilers

  109

  Staffordshire bull terriers

  43

  Undefined cross-breeds

  38

  Dobermann pinschers

  33

  English bull terriers

  27

  Labradors

  23

  Collies

  13

  Jack Russell terriers

  6

  Greyhounds

  6

  Yorkshire terriers

  3

  Great Dane

  1

  Husky

  1

  Irish wolf hound

  1

  Rhodesian Ridgeback

  1

  Total

  631

SCOTLAND

  Ambulances (Accident/Emergency Journeys)
  Mr. Home Robertson
  To ask the Secretary of State for Scotland what is the average time taken for an accident/emergency patient to be taken by ambulance from East Lothian to Edinburgh royal infirmary; what is the average daily number of such journeys; and whether any patients have died doing such journeys since the closure of the Roodlands casualty unit.

  Mr. Michael Forsyth
  On average, 45 minutes and nine journeys each day. Roodlands casualty unit did not treat patients suffering major trauma or life-threatening conditions and such patients were always conveyed to Edinburgh. There has been no change therefore in the journey time for such patients. The Scottish ambulance service has no evidence that any patient has died because of the journey time to hospital.

  Local Government
  Mrs. Irene Adams
  To ask the Secretary of State for Scotland (1) what representations he has received about the proposals for change in local government;

  (2) if he will make a further statement on his proposals for a new structure for local government.

  Mr. Allan Stewart
  I refer to the reply given by my right hon. Friend on 15 May. A consultation paper setting out the case for change and the principles to be applied in moving towards a single-tier system of local government throughout Scotland will be issued shortly.

  Mrs. Irene Adams
  To ask the Secretary of State for Scotland what future role he proposes for Strathclyde regional council; and if he will make a statement.

  Mr. Allan Stewart
  As the hon. Member knows, the existing system of local government in Scotland is under review. My right hon. Friend will be issuing a consultation paper on the structure of local government in Scotland shortly. Strathclyde regional council, together with other councils and interested organisations, will be invited to comment.

  Green Belt
  Mrs. Irene Adams
  To ask the Secretary of State for Scotland if he will publish a table showing the percentage of land designated as green-belt areas in(a) Scotland, (b) Strathclyde and (c) Renfrew district.

  Lord James Douglas-Hamilton
  The percentages of land designated as green belt in the areas mentioned are:

  per cent.

  Scotland

  1·7

  Strathclyde

  7·5

  Renfrew

  78·3

  Mrs. Irene Adams
  To ask the Secretary of State for Scotland what are the criteria used to designate green belt land in Scotland.

  Lord James Douglas-Hamilton
  The criteria for the designation of green belt land are set out in SDD circular 24/1985. It is for local plans to establish the exact boundaries of green belts within the strategic framework set by the circular and structure plan policies.

  Drinking Water
  Mr. Maxton
  To ask the Secretary of State for Scotland what was the level of nitrates recorded in Scottish drinking water in each of the last 20 years.

  Lord James Douglas-Hamilton
  Information is not available in the form requested. Nitrate levels in drinking water differ from one supply to another and may vary seasonally. Surveys carried out in 1975 and 1985 showed that only a very small percentage of the total number of Scottish supply sources contained more than 25 mg of nitrate per litre. Eight of the 12 Scottish water authorities reported that no sources exceeded that figure. All water put into supply was within the EC limit of 50 mg per litre. In 1990 a few small rural supplies were recorded as occasionally exceeding this limit. In these cases nitrate levels are being reduced by blending with other water until the sources can be replaced. Information on nitrate levels in individual supply zones is included in the public records of water quality which water authorities have been required to maintain since 1 July 1990.

  Operations
  Mr. Maxton
  To ask the Secretary of State for Scotland how many operations were cancelled or postponed by Scottish health boards in each month from January 1990 to March 1991.

  Mr. Michael Forsyth
  The information requested is not held centrally.

  Disability
  Mrs. Irene Adams
  To ask the Secretary of State for Scotland how many people are registered(a) blind, (b) deaf or (c) disabled in (i)Scotland, (ii)Strathclyde and (iii)Renfrew district.

  Mr. Michael Forsyth
  Local authorities in Scotland are required to inform themselves of the number of chronically sick and disabled people in their areas but are not required to, and in practice do not, keep registers for this purpose. They do, however, receive information on the number of blind persons voluntarily registered either with local societies for blind people or with the local authorities themselves. The number of blind persons so recorded at 31 March 1990 was 6,709 in Strathclyde, and 14,120 in Scotland. I have no information in respect of Renfrew district.

  Mr. Fearn
  To ask the Secretary of State for Scotland what information he has on the mean salary of disabled adults in Scotland.

  Mr. Allan Stewart
  [holding answer 6 June 1991]: There is no information available on the mean salary of disabled adults in Scotland. The survey "Disabled people in the labour market" conducted on behalf of the Employment Service by Social and Community Planning Research Ltd. and published in report "Employment and Handicap" in June 1990 showed that in Great Britain as a whole in 1989 the median earnings of people with disabilities was in the range £150 to £199 per week. The survey cannot provide a reliable estimate for Scotland.

  Paisley, North
  Mrs. Irene Adams
  To ask the Secretary of State for Scotland how many people are over the age of 18 years in the constituency of Paisley, North.

  Mr. Michael Forsyth
  I regret that the information requested is not available.

  Whisky
  Mrs. Irene Adams
  To ask the Secretary of State for Scotland what was the number of people employed in the manufacture and distribution of Scotch whisky in each of the last three years.

  Mr. Allan Stewart
  Employment figures are available for plants manufacturing Scotch whisky as their principal product. No separate figures are available for transport services relating to just the whisky industry.

  The table shows manufacturing employment in the whisky and other related industries in Scotland in plants employing 11 or more employees in 1987, 1988 and 1989, the latest year for which figures are available.

  Manufacturing employment in the whisky and other related industries

  1987

  1988

  1989

  Scotland

  11,000

  10,600

  10,200

  Source: The Scottish Office Industry Department. Regional Data System.

  Labour Statistics
  Mr. McAllion
  To ask the Secretary of State for Scotland when he next intends to meet the Scottish Trades Union Congress to discuss employment levels in Scotland.

  Mr. Allan Stewart
  My right hon. Friend has arranged to meet the Scottish Trades Union Congress General Council on 26 July to discuss economic and other issues.

  Education (Early Leavers)
  Mr. Wray
  To ask the Secretary of State for Scotland what is for each year since 1974 the number of students in(a) primary, (b) secondary and (c) higher education in Scotland who left their respective courses before completion; and if he will give in each case the respective percentages for males and females.

  Mr. Michael Forsyth
  [holding answer 10 June 1991]: This information is not held centrally.

  Child Immunisation
  Mr. Kirkwood
  To ask the Secretary of State for Scotland (1) if he will set up a joint working party with the British Medical Association in Scotland to review the impact of the new child immunisation targets in GP contracts on small rural practices; and if he will make a statement;

  (2) if he will now consider allowing an element of discretion in the setting of immunisation targets for children in small practices which find it impossible to meet the current target levels in the new GP contract;

  (3) how many representations he has received from small GP practices which are unable to reach
  518
  immunisation targets for children because of the small number of children suitable for vaccination in their patient lists.

  Mr. Michael Forsyth
  [holding answer 10 June 1991]: These matters are governed by the statement of fees and allowances, the terms of which are negotiated with the profession on a Great Britain basis. The health departments are at present reviewing a number of detailed aspects of the GP contract, in consultation with the profession, with the aim of improving still further the quality of general medical services. Against this background, I see no need for a joint working party on this specific issue.

  My Department can trace only one such representation, made before the implementation of the new contract.

  Nuclear Waste
  Mr. Redmond
  To ask the Secretary of State for Scotland if he will list, by location, the proposed 6,000 drill holes he has authorised the nuclear industry to make in Caithness, in respect of ascertaining a suitable site for a nuclear waste dump; when he expects them to report their findings; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 23 May 1991]: The exact location of any shot holes, up to the maximum of 6,000 granted planning permission by my right hon. Friend, is an operational matter for the chairman of UK Nirex Ltd. He wrote to the hon. Member for Moray (Mrs. Ewing) on 13 May on this subject and I have placed a copy of his letter in the Library of the House. UK Nirex expects to identify its preferred site for a repository later this year.

  Planning
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland when he expects the planning powers of new town development corporations to be transferred to district councils; and if he will make a statement.

  Mr. Allan Stewart
  [holding answer 6 June 1991]: The Scottish new town development corporations, apart from Glenrothes, exercise certain planning powers under special development orders. It is the Government's intention, as stated in the White Paper "The Scottish New Towns—The Way Ahead" that these orders will be revoked at the time of dissolution of each development corporation. Each new town will then become integrated into the normal planning system.

  Education
  Mrs. Margaret Ewing
  To ask the Secretary of State for Scotland if he will list in the Official Report for each regional council area (a) the total money allocated for the implementation of the five to 14 years curriculum and testing in (i) training of staff and (ii) introductory and closure day courses for staff and what were the full costs of full implementation, (b) the total money allocated to appoint development officers for five to 14 years development and for development planning and information technology officers and what were the estimated costs for full implementation, (c) how many and what percentage of head teachers will be granted additional

  519
  relief to cope with developments of the five to 14 years curriculum and testing and (d) what increase in per capita allowances for 1991–92 have been allocated per pupil.

  Mr. Michael Forsyth
  [holding answer 6 June 1991]: The cost of the five to 14 development programme has been met almost entirely by central Government, either directly or through support for work carried out by the primary assessment unit in the Scottish Examination Board, and by the Scottish Consultative Council on the Curriculum and the colleges of education; expenditure on the programme in 1990–91 was over £2 million, and will be at the same level in the current year.

  In addition specific grant is paid at a level of 75 per cent. against expenditure by authorities on in-service teacher training for the five to 14 programme.

  Per capita allowances and other forms of support for individual schools are a matter for education authorities themselves; information on these is not held centrally.

  General Government support to local authorities in the form of aggregate Exchequer finance was increased for 1991–92 by 10·5 per cent. over the level in the previous year.

SOCIAL SECURITY

  Paisley, North
  Mrs. Irene Adams
  To ask the Secretary of State for Social Security how many single parents receive income support in the constituency of Paisley, North.

  Miss Widdecombe
  The administration of income support is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member with such information as is available and copies will be placed in the Library and the Public Information Office.

  Mrs. Irene Adams
  To ask the Secretary of State for Social Security how many single parents in receipt of child benefit there are in the constituency of Paisley North.

  Mr. Jack
  The information requested is not available.

  Benefits (Guidelines)
  Mr. Wigley
  To ask the Secretary of State for Social Security what guidelines he has issued to the benefits agency on the balance between maintaining the level of service to the public and cost-cutting exercises.

  Miss Widdecombe
  The balance between service delivery and cost is achieved through the process of agreeing aims, objectives and targets. My right hon. Friend the Secretary of State has agreed the aims, objectives and targets for 1991–92 with the chief executive of the Benefits Agency. These are set out in the agency's business plan which is published and available in the Library. The targets cover service delivery, efficiency, budgetary performance and customer satisfaction.

  Family Credit
  Mrs. Mahon
  To ask the Secretary of State for Social Security what is the average delay that a claimant for family credit experiences between applying for the benefit and receiving an award; how many claimants there are for family credit; and what measures are proposed to improve service to the low paid and people in need.
  520
  Mr. Jack
  The administration of family credit is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member and copies will be placed in the Library and the Public Information Office.

  Community Care Grant
  Mrs. Mahon
  To ask the Secretary of State for Social Security what guidelines exist for the degree of priority to be given to young people leaving homeless hostels, for social fund community care grant purposes; and what study he has made of the practice of his Department's Keighley, Halifax and Skipton offices in this regard.

  Mr. Scott
  The guidance issued by the Secretary of State referring to social fund payments is set out in the "Social Fund Manual", a copy of which is in the Library. The Department's district office managers also have responsibility to issue guidance that reflects local needs. A social fund officer is not bound by the guidance issued by the Secretary of State or the district manager. He may exercise his own judgment in the priority of a particular application if the circumstances dictate.

  The Department's former offices at Keighley, Halifax and Skipton now form the Benefit Agency's Halifax district. No formal local study of social fund operations has taken place since the new Halifax district was formed in April 1991, but production and monitoring of local guidance is a continuous process for which the district office manager is responsible.

DEFENCE

  Hunting
  Mr. Meale
  To ask the Secretary of State for Defence if he will provide details and dates in each year since 1989 when the Household Cavalry participated in foxhunting or deer hunting and with which hunts.

  Mr. Archie Hamilton
  Details and dates in each year since 1989 when members of the Household Cavalry Mounted Regiment took part in fox hunting are set out in the table. No additional costs to public funds were incurred as a result of this activity.

  The Household Cavalry Mounted Regiment has not participated in any deer hunt since 1989.

  Date

  Quorn Hunt

  Belroir Hunt

  Cottesmore Hunt

  October 1989

  4

  2

  1

  November 1989

  8

  9

  2

  December 1989

  9

  8

  —

  January 1990

  8

  8

  5

  February 1990

  7

  8

  3

  March 1990

  1

  1

  —

  September 1990

  —

  2

  —

  October 1990

  9

  9

  2

  November 1990

  6

  6

  3

  December 1990

  4

  5

  2

  January 1991

  6

  5

  —

  February 1991

  6

  5

  —

  March 1991

  —

  1

  —

  Mr. Meale
  To ask the Secretary of State for Defence what provision is made for members of the armed forces, in non-mounted units, to hunt in duty hours.
  521
  Mr. Archie Hamilton
  Personnel in non-mounted units are not normally permitted to hunt in duty hours. However, in exceptional circumstances and at the commanding officer's discretion it may be permitted provided there is no detriment to military tasks.

  Mr. Meale
  To ask the Secretary of State for defence what provision is made for members of the armed forces to hunt in duty hours.

  Mr. Archie Hamilton
  Members of mounted regiments and other military personnel who have an official requirement to ride are authorised to ride during duty hours as a means of acquiring or perfecting equestrian skills. They may participate in a range of equestrian activities including hunting.

  Mr. Meale
  To ask the Secretary of State for Defence whether army personnel are permitted to use Ministry of Defence equipment in off-duty hours.

  Mr. Archie Hamilton
  Army personnel are permitted to use MOD equipment in off-duty hours normally on payment of hire charges.

  Mr. Meale
  To ask the Secretary of State for Defence what was the cost of transporting horses and riders to hunting meets in each year since 1989.

  Mr. Archie Hamilton
  The costs of transporting horses and riders to hunting meets cannot be readily identified. Where horses are used by Army personnel for hunting outside normal duty, the transport costs fall to the individual.

  Tanks
  Miss Emma Nicholson
  To ask the Secretary of State for Defence (1) when his Department will announce a decision on the replacement for the Chieftain as the main battle tank for the British Army.

  (2) what has caused the delay by his Department in reaching a decision on selecting a replacement for the Chieftain as the main battle tank for the British Army.

  Mr. Alan Clark
  As I told the hon. Member for Leeds, West (Mr. Battle) on 4 June 1991,Official Report, Volume 192, columns 142–43, a wide range of factors has to he taken into account in reaching a decision as important as that on the equipment for our future main battle tank fleet. It is our intention to make a further announcement before the end of this month.

  Miss Emma Nicholson
  To ask the Secretary of St ate for Defence (1) what account he will take of the likely employment consequences in the British defence industry in making his decision on the replacement main battle tank for the British Army;

  (2) what account he will take of the potential value to the British defence industry of export orders for the Vickers Challenger 2 in making his decision on the replacement main battle tank for the British Army.

  Mr. Alan Clark
  All relevant factors will be taken into account.

  Radio Mast, Coney Weston
  Sir Eldon Griffiths
  To ask the Secretary of State for Defence for what purpose he is to erect at Coney Weston, Suffolk, a 100 ft tall radio mast and related buildings; what 522
  consultations he has had with local authorities and environmental bodies about the siting of the tower; when he intends to construct it; and how much it will cost.

  Mr. Archie Hamilton
  The 30 m high tower we propose to construct at Coney Weston, Suffolk, is part of the Royal Air Force's advanced communications system known as the Boxer network. There has been full consultation with the local planning authority and a notice of proposed development submitted for consideration. We propose to commence construction of the tower later this year. It is not our practice to disclose details of individual costs which are commercial-in-confidence.

  Strategic Defence Initiative
  Mr. Flynn
  To ask the Secretary of State for Defence (1) whether the United Kingdom is involved in the high-altitude endoatmospheric defence interceptor programme;

  (2) whether the United Kingdom is involved in the development of the theatre high altitude defence system;

  (3) whether the United Kingdom is involved in the extended range interceptor system for short-range defence;

  (4) whether the United Kingdom is involved in the ground-based surveillance and tracking system;

  (5) whether the United Kingdom is involved in the ground-based free electron laser programme in collaboration with the United States of America.

  Mr. Alan Clark
  All the systems referred to are elements of the United States strategic defence initiative programme. British firms and other institutions are given opportunities in all areas of the SDI programme.

  Nuclear Materials
  Mr. Flynn
  To ask the Secretary of State for Defence what information he has concerning the capability of the Soviet Union to dismantle withdrawn warheads and to manage and recycle the nuclear materials arising.

  Mr. Archie Hamilton
  The Soviet Union does not reveal what it does with the nuclear materials arising from withdrawn nuclear warheads. However, it would almost certainly have the capability to dismantle warheads and recycle the nuclear materials arising for either civil or military purposes.

  BNFL (Security Vetting)
  Mr. Flynn
  To ask the Secretary of State for Defence whether his Department plays any role in the security vetting of applicants for work with British Nuclear Fuels plc in respect of his Department.

  Mr. Kenneth Carlisle
  No.

  Kuwait Oil Fires
  Mr. Dalyell
  To ask the Secretary of State for Defence, further to his oral answer of 4 June,Official Report, column 137, what advice he has received on the lung function of service personnel in the area of the oil fires in Kuwait and from which experts.

  Mr. Archie Hamilton
  The monitoring of the lung function of our personnel is undertaken by our medical team in Kuwait, together with a military public health physician.
  523
  Mr. Dalyell
  To ask the Secretary of State for Defence if he will now seek information about the lung conditions of dissected sheep in Kuwait.

  Mr. Archie Hamilton
  No. The presence of atmospheric pollutants in Kuwait is well known and effective measures are therefore in place to monitor the health of our personnel.

  Service Personnel and Ministry Staff
  Mr. Trotter
  To ask the Secretary of State for Defence whether he will list the number of(a) service men and (b) departmental civilians in each of the regions of the United Kingdom.

  Mr. Archie Hamilton
  The latest available figures are given in the table on page 32 of the Statement on the Defence Estimates 1990, volume 2.

  Infantry Training
  Mr. Brazier
  To ask the Secretary of State for Defence how many man training days infantry battalions are allocated on average for(a) 1990–91 and (b) 1991–92.

  Mr. Archie Hamilton
  [holding answer 3 June 1991]: I am unable to provide the information requested without incurring disproportionate costs, but my hon. Friend may find it helpful to know that average man training day allocations for TA independent units were 40 for 1990–91 and 36 for 1991–92.

EMPLOYMENT

  Vocational Qualifications
  Mr. Favell
  To ask the Secretary of State for Employment what progress is being made towards the introduction of comprehensive national vocational qualifications.

  Mr. Jackson
  Progress in developing a national framework of standards-based vocational qualifications relevant to the needs of the modern workplace has been good. This far-reaching reform is being led by the National Council for Vocational Qualifications, which has been set the target of completing the framework of reformed qualifications to cover 80 per cent. of the work force by the end of 1992. At present almost 300 NVQs are available to around one third of the work force in over 40 major industries.

  Comparable progress has been made in producing equivalent Scottish vocational qualifications.

  Mr. Matthew Taylor
  To ask the Secretary of State for Employment (1) what has been the annual budget of the standards branch of the training, enterprises and education department since the establishment of the National Council for Vocational Qualifications; and if he will make a statement;

  (2) what are the annual grand totals of budgets for the industry lead bodies currently engaged in drafting competences, from the date of their establishment, the standards branch of the training, enterprise and education department since the establishment of the National Council for Vocational Qualifications, and the National Council for Vocational Qualifications, since its establishment, as an annual percentage of the work-related further
  524
  education budget administered by the training, enterprise and education department in each relevant year; and if he will make a statement;

  (3) if he will list the industry lead bodies currently engaged in drafting competences and their associated criteria as the basis for national vocational qualifications; what was the date of the establishment of each industry lead body; and what have been their individual budgets from the date of their establishment;

  (4) if he will publish the annual budget of the National Council for Vocational Qualifications since its establishment; and if he will make a statement;

  (5) if he will place in the Library a copy of the report entitled "Knowledge and Competence", commissioned by the standards branch of the training, enterprise and education department; and if he will make a statement.

  Mr. Jackson
  The National Council for Vocational Qualifications (NCVQ) was established in 1986 to reform the national framework of vocational qualifications in England, Wales and Northern Ireland. Its key target is to produce national vocational qualifications (NVQs) to cover 80 per cent. of the work force by the end of 1992. The grant-in-aid budgets which have been made available to NCVQ by the Employment Department since 1986–87 to undertake this work are as follows:

  £

  1986–87

  520,000

  1987–88

  3,708,698

  1988–89

  3,750,000

  1989–90

  3,000,000

  1990–91

  2,621,000

  1991–92

  3,700,000

  The Employment Department's standards programme has provided pump-priming funding since 1987–88 to assist in the development of standards that form the basis of NVQs, and comparable Scottish vocational qualifications (SVQs) in Scotland. These standards are developed through 160 employer-led lead bodies. The annual budgets of the standards programme since 1987–88 are as follows:

  £

  1987–88

  2,086,000

  1988–89

  3,000,000

  1989–90

  6,700,000

  1990–91

  8,911,000

  1991–92

  9,077,000

  The standards programme is administered separately from and is not part of the Employment Department's work-related further education budget, which is £6,633,000 for 1991–92. Figures are not kept centrally for the budgets of lead bodies, which are employer-led and funded. The Employment Department generally funds up to 50 per cent. of the costs of developing standards in particular industries. Total budgets of lead bodies are therefore well in excess of the standards programme budgets. A list of the industry lead bodies which are currently engaged in drafting competences and their associated criteria as the basis for national vocational qualifications is given in section 2 of the Employment Department's publication "The Standards Digest", a copy of which has been placed in the House of Commons Library. Lead bodies progressively came into existence. Section 3 of "The Standards Digest" details when lead bodies started work on developing standards.
  525
  The Employment Department's report "Knowledge and Competence: Current Issues in Training and Education" forms part of the technical guidance made available to those who are concerned with developing standards for competence-based vocational qualifications. I am arranging for a copy of this report to be placed in the House of Commons Library.

  Labour Statistics
  Mr. Andrew Smith
  To ask the Secretary of State for Employment if he will make a statement on unemployment in southern England.

  Mr. Jackson
  The seasonally adjusted unemployment rates in April 1991 for the south-east, south-west and East Anglia regions were 6·3 per cent., 6·8 per cent. and 5·5 per cent. of the work force respectively. This compares with 7·6 per cent. for the United Kingdom.

  Mr. Beith
  To ask the Secretary of State for Employment what is the current average unemployment level in the Northern region.

  Mr. Jackson
  In April 1991, the seasonally adjusted unemployment rate in the Northern region was 10.0 per cent.

  Channel Tunnel
  Mr. Ronnie Campbell
  To ask the Secretary of State for Employment if he will make a statement on the employment implications for the north-east of the completion of the channel tunnel.

  Mr. Forth
  The channel tunnel should benefit the economy and employment prospects of the United Kingdom generally. I am sure that companies and individuals in the north-east will take full advantage of the opportunities presented by the tunnel.

  Manual Handling
  Mr Cryer
  To ask the Secretary of State for Employment when he last met the Health and Safety Commission when the subject of manual handling was discussed; and if he will make a statement.

  Mr. Forth
  No discussions have been held with the Health and Safety Commission on this subject in recent years. However, I am aware that the Commission is developing proposals for regulations to implement a European directive on the minimum health and safety requirements for the manual handling of loads where there is a risk, particularly of back injury to workers. The directive must be implemented by 31 December 1992 and I understand that the Commission is planning to issue a consultative document containing its proposals for regulations and associated guidance later this year.

  Training and Enterprise Councils
  Mr. Wallace
  To ask the Secretary of State for Employment what information he has about the involvement in training and enterprise councils of those engaged in running small businesses.

  Mr. Forth
  When TECs become operational my right hon. and learned Friend the Secretary of State ensures that each TEC board has at least one director with experience of running a small business.
  526
  Over 100 TEC directors are from companies which have 30 or fewer employees. TECs have drawn up imaginative plans for helping small businesses to prosper and grow.

  Mr. Wilshire
  To ask the Secretary of State for Employment if he will make a statement on the progress in setting up TECs.

  Mr. Howard
  Excellent progress is being made in setting up training and enterprise councils. All 82 TECs in England and Wales are now in place, with 75 fully operational. The whole network will be operational later this year, nearly two years ahead of schedule.

  Young Employees (Training)
  Mr. Matthew Taylor
  To ask the Secretary of State for Employment what measures he is undertaking to encourage businesses to provide training opportunities for employees aged 16 to 19 years.

  Mr. Howard
  The Government have introduced a wide range of measures to businesses to train their 16 to 19-year-old employees. In particular, YT encourages employers to offer high-quality training. The comprehensive proposals in the recent White Paper "Education and Training for the 21st Century" are designed further to increase training opportunities for young people, particularly through the nationwide extension of training credits, the expansion of the compacts approach and improvements to the qualifications system. We are also setting a new standard—"Investors in People"—for the development of all workers, including young employees.

  Disabled People
  Mr. McMaster
  To ask the Secretary of State for Employment if he has any plans to develop new initiatives to assist people with disabilities into jobs.

  Mr. Jackson
  Last year's consultative document contained proposals for such initiatives. We have received many comments about ways in which we could improve the effectiveness of the help that we give to people with disabilities who want jobs. We have announced some of our decisions already and others will follow.

  Compacts
  Mr. Brandon-Bravo
  To ask the Secretary of State for Employment if he will make a statement on the future of the compacts initiative.

  Mr. Howard
  The compacts initiative has been a success in urban programme areas and I have recently announced that the compact approach should now be extended across the whole country.

  It will be for the local partners, including training and enterprise councils, employers and schools to decide how best to take forward compacts in their own areas.

  Manufacturing Industry (Job Losses)
  Mr. Nicholas Winterton
  To ask the Secretary of State for Employment what have been the job losses in manufacturing industry during the last three months, six months, 12 months and 18 months; and if he will make a statement.
  527
  Mr. Forth
  The number of employees in employment in manufacturing industries in Great Britain at March 1991 has fallen by:

  Number

  last 3 months

  97,000

  last 6 months

  169,000

  last 12 months

  209,000

  last 18 months

  237,000

  Loan Guarantee Scheme
  Mr. Cousins
  To ask the Secretary of State for Employment if he will give the number of loans, the total sums outstanding and the average size of loan outstanding in each year since 1981 under the loan guarantee scheme.

  Mr. Forth
  The number of loans currently outstanding is 11,310, but this cannot be broken down by year. Information on sums outstanding and average size of loan outstanding are commercial details between lenders and borrowers and not available to the Department.

  Mr. Cousins
  To ask the Secretary of State for Employment if he will give the premiums for the guarantees issued under the loan guarantee scheme in each year since 1981, the income derived from the payment of such premiums and such income net of defaults in each year since 1981.

  Mr. Forth
  The premium rates for guarantees issued under the loan guarantee scheme are:

  Per cent.

  1981 to May 1984

  3·0

  June 1984 to March 1986

  5·0

  April 1986 to date

  2·5

  Table A

  Year

  Area

  1986

  1987

  1988

  1989

  1990

  1991

  01 South West

  45·0

  45·0

  42·5

  43·0

  45·0

  46·0

  02 South

  37·5

  37·5

  34·5

  32·0

  34·0

  37·5

  03 South East

  45·5

  47·0

  47·0

  45·5

  47·0

  46·0

  05 London North

  35·5

  34·0

  33·0

  32·5

  30·5

  32·5

  06 London South

  35·0

  34·0

  37·0

  39·0

  38·5

  38·5

  07 East Anglia

  41·0

  31·5

  28·5

  31·5

  32·0

  35·5

  08 North Home Counties

  49·0

  47·5

  44·5

  42·5

  44·5

  44·5

  09 East Midlands

  34·0

  34·0

  33·5

  35·0

  37·0

  41·5

  10 West Midlands

  51·0

  47·0

  44·0

  42·0

  44·5

  50·5

  11 Wales

  52·0

  50·0

  46·5

  46·0

  50·0

  53·0

  12 Marches

  36·5

  35·5

  35·0

  36·5

  43·5

  39·5

  13 North Midlands

  36·0

  34·0

  32·0

  35·0

  38·0

  42·0

  14 South Yorkshire and Humberside

  32·5

  31·0

  28·0

  33·0

  34·0

  36·5

  15 West and North Yorkshire

  59·0

  52·5

  52·0

  50·0

  56·0

  59·0

  16 Greater Manchester

  39·0

  42·5

  40·0

  37·5

  42·0

  47·0

  17 Merseyside

  35·0

  31·0

  29·5

  28·0

  33·0

  37·0

  18 North West

  34·0

  30·0

  27·0

  34·5

  35·5

  33·5

  19 North East

  36·0

  35·0

  28·5

  28·5

  34·5

  38·0

  20 Scotland East

  42·0

  46·0

  45·5

  46·5

  53·5

  55·0

  21 Scotland West

  31·0

  32·0

  33·0

  28·5

  27·5

  35·0

  Total

  806·5

  777·0

  741·5

  747·0

  800·5

  848·0

  528
  For loans within inner city task force areas, introduced in June 1988, the premium rate is 2·0 per cent. (2·5 per cent. to March 1990).

  Information on income prior to the Department of Employment becoming responsible for the scheme is not available. For subsequent years income derived from premia payments was:

  £ million

  1985–86

  5·4

  1986–87

  3·8

  1987–88

  2·9

  1988–89

  2·6

  1989–90

  2·8

  1990–91

  3·3

  The net cost of the scheme has been:

  £ million

  1985–86

  27·1

  1986–87

  11·2

  1987–88

  3·6

  1988–89

  3·8

  1989–90

  5·6

  1990–91

  16·5

  Health and Safety Executive
  Mr. Simon Hughes
  To ask the Secretary of State for Employment if will list by district the total number of inspectors employed by the Health and Safety Excutive in each year since 1986–87.

  Mr. Forth
  Health and Safety Executive's field inspectors are based in network of area offices, with the exception of mines inspectors who are organised by districts. The available information for the 1 April each year is given in

  Table A—Inspectors based in Areas;

  Table B—Inspectors based in Districts;

  Table C—Inspectors HQ-based.

  529
  Notes:

  1. Figures include factory, agriculture and specialist inspectors based at field consultant groups for all years.

  2. 1986 figures also include field-based industrial air pollution inspectors.

  3. 1990 and 1991 figures include field-based quarries inspectors who transferred to the factory and agricultural division in October 1989.

  4. 1991 figures include field-based railway inspectors following the transfer of the Railway Inspectorate from the Department of Transport in December 1990.

  Table B

  District

  Year

  1986

  1987

  1988

  1989

  1990

  1991

  Scottish and

  7

  7

  10

  10

  2

  2

  North Eastern

  5

  6

  North Yorkshire

  9

  7

  7

  9

  6

  6

  South Yorkshire

  8

  8

  6

  6

  6

  6

  North Midlands

  8

  10

  7

  9

  6

  6

  Western and

  8

  9

  9

  9

  7

  7

  South Eastern

  9

  10

  8

  Southern Western

  10

  11

  11

  10

  7

  6

  Total

  64

  68

  58

  53

  34

  33

  Notes:

  1. Pre 1990 figures are for field-based Mines and Quarries Inspectors.

  2. Figures for 1990 and 1991 are for Mines Inspectors only, following the transfer of the Quarries Inspectorate to the Factory and Agricultural Division in October 1989.

  3. The table shows that the Scottish and North Eastern and Western and South Eastern District offices amalgamated. District boundaries were also changed.

  Table C

  1986

  1987

  1988

  1989

  1990

  1991

  HQ-based inspectors

  361·0

  359·5

  365·5

  382·5

  404·5

  460·0

  Total HSE inspectors

  1,231·5

  1,204·5

  1,165·0

  1,182·5

  1,239·0

  1,341·0

  Notes:

  1. HQ-based inspectors include those on non-inspection duties eg. management, policy or technical standards work etc.

  2. Nuclear Installations Inspectors are HQ-based. Their site inspections and visits are organised and carried out from HQ.

  3. Offshore Safety inspectors are based at HQ buildings and at Aberdeen and Great Yarmouth.

  National Record of Achievement
  Mr. Harry Greenway
  To ask the Secretary of State for Employment if he will make a statement about the introduction of the national record of achievement.

  Mr. Jackson
  The national record of achievement (NRA) was launched on 27 February. It presents a simple 530
  record in summary form of an individual's achievement throughout education, training and working life. The NRA is an important step in motivating individuals to continue with their learning throughout life. To date, more than 1·3 million copies of the NRA have been ordered by schools, colleges and employers.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Guildford.

Lord Marlesford
Mark Shuldham Schreiber, Esquire, having been created Baron Marlesford, of Marlesford in the County of Suffolk, for life —Was, in his robes, introduced between the Lord Norrie and the Baroness Carnegy of Lour.

Baroness Denton of Wakefield
Jean Denton, CBE, (formerly Mrs. A. Denton), having been created Baroness Denton of Wakefield, of Wakefield in the County of West Yorkshire, for life -—Was, in her robes, introduced between the Lord Hesketh and the Baroness Blatch.
The Marquess of Linlithgow The Marquess of Linlithgow —Sat first in Parliament after the death of his father.

The Lord Chancellor: Leave of Absence
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before the commencement of business I take the opportunity to inform the House that, with the approval of Her Majesty the Queen, I have accepted an invitation to attend an informal meeting of European Ministers of Justice in Ottawa, Canada, between 15th and 19th June. Accordingly, I trust that the House will agree to grant me leave of absence from Monday. 17th June, to Wednesday, 19th June.

Belgian Courts: Sentencing Policy
3 p.m.
Lord Monson Lord Monson asked Her Majesty's Government:
What conclusions they draw from the length of sentences passed on three Irish IRA supporters convicted in Belgium on 29th April of conspiracy and possession of weapons in connection with planned attacks on British army personnel on the Continent.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, the sentences passed must be a matter for the Belgian court.
Lord Monson: My Lords, I thank the Minister for that understandably diplomatic reply. The Belgian courts, like our own, are fully independent of political control; arid rightly so. Nevertheless, he will doubtless be aware that the court in this case imposed lenient sentences upon the convicted men on the curious grounds that their motives were idealistic rather than mercenary. Does he agree that Lenin, Hitler and Pol Pot were all idealists in their way, as have been the
998
perpetrators of every religious massacre throughout history? While fully continuing to support the principle of judicial independence, will Her Majesty's Government do everything in their power to convince educated opinion on the Continent of Europe that idealism can never be even a partial excuse for acts of terrorism?
The Earl of Caithness: My Lords, I totally agree with the noble Lord that the courts must remain independent and so must their sentences.
Lord Cledwyn of Penrhos: My Lords, is the Minister able to inform the House of the extent to which Scotland Yard's anti-terrorist squad was involved in this case? Are the Government satisfied with the co-operation that we receive from our West European allies in matters of this kind?
The Earl of Caithness: My Lords, co-operation between the United Kingdom security authorities and their counterparts, including Belgium, is already good. No doubt it could be further improved and we continue to search together for ways to do that.

Nuclear Weapons: US Report
3.2 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney asked Her Majesty's Government:
Whether they have studied the report from the United States Congress which concluded that "unintended nuclear detonations present a greater risk than previously estimated"; and, if so, with what result.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, I can confirm that the report to which the noble Lord refers has been studied carefully by our officials and independent advisers and we regard it as a useful contribution to the consideration of nuclear weapon safety issues. I can also confirm that the Government remain satisfied with the safety of both our own nuclear weapons and US nuclear weapons that may he present in this country.
Lord Jenkins of Putney: My Lords, one is grateful for the Minister's rather reassuring answer. However, is it not a fact that in the case of the United States nuclear weapons, some replacement has taken place because of anxiety about the reliability of older ones? Have Her Majesty's Government considered similar action so far as this country is concerned?
The Earl of Arran: My Lords, the safety record at Aldermaston has always been extremely good and even after vesting day—indeed, as well as after vesting day—we consider that it will be just as successful, with the most stringent precautions taken into account.
Lord Skelmersdale: My Lords, does my noble friend agree that the report bears out the total idiocy of Labour councils declaring nuclear free zones?
The Earl of Arran: My Lords, I could say that my noble friend makes a very good point.
Lord Mackie of Benshie: My Lords, will the noble Earl tell the House whether there have been unintended nuclear detonations?
The Earl of Arran: My Lords, to the very best of my knowledge, no.
Lord Williams of Elvel: My Lords, will the noble Earl confirm that the Trident warheads which we are about to make operational suffer from the defects that were noted in the Drell Report? Will the Government pay serious attention to the conclusions of that report as regards warheads manufactured in this country?
The Earl of Arran: My Lords, as to lessons to be learned from the Drell Report, we always take into account any suggestions that we believe could improve our safety record. I remind noble Lords that we have an extremely good track record. We are completely satisfied with the safety of the Trident nuclear missile system. The missile and its United Kingdom warhead will undergo a comprehensive series of trial assessments and formal safety approval procedures before entering service with the Royal Navy.
Lord Williams of Elvel: My Lords, is it not the case that the US is considering a redesign of the Trident warhead because of the comments of the Drell Report? Are not the UK Government considering the same redesign?
The Earl of Arran: My Lords, the United Kingdom Government are not considering a new design. They consider the design as it always has been and, one hopes, will prove to be, completely safety proof.
Lord Jenkins of Putney: My Lords, will the Government keep the matter under very close review having regard to the completely disastrous consequences which could follow an unintended explosion?
The Earl of Arran: My Lords, the Government are never complacent about the extremely important matter of safety precautions.
Lord Trefgarne: My Lords, is it not the case that Trident warheads to be deployed on Royal Navy missiles are designed and manufactured in this country and that therefore the questio~ put by the noble Lord, Lord Williams, does not arise?
The Earl of Arran: My Lords, my noble friend is quite right.
Lord Williams of Elvel: My Lords, does the noble Earl agree that the Trident warheads come from US nuclear technology? We can specify the US Congress and Drell Report numbers for those warheads. It is not simply a question of UK design. Is it not the case that they are basically of US design?
The Earl of Arran: My Lords, yes, that is true to some extent. However the point is that the Drell Report did not conclude that US nuclear weapons were unsafe. On the contrary, all three members of the Drell panel testified that in their opinion the US nuclear stockpile is safe.
Lord Trefgarne: My Lords, does my noble friend recall that these warheads are wholly United Kingdom
1000
designed and United Kingdom built? There is no question of any United States input into British nuclear warheads.
The Earl of Arran: My Lords, I shall have to make quite certain about that point. I shall write to my noble friend and to the noble Lord, Lord Williams.
Lord Jenkins of Putney: My Lords, the noble Earl is to be congratulated upon his caution.

Overseas Aid: GNP Percentages
3.7 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What were the percentages of GNP allocated to overseas aid in 1979 and 1990.
The Earl of Caithness: My Lords, official development assistance as a percentage of GNP was 0.51 per cent. in 1979 and 0.31 per cent. in 1989. The figure for 1990 is not yet available.
Lord Hatch of Lusby: My Lords, does the noble Earl agree that those figures represent a substantial reduction in the overseas aid contributed by this Government at a time when it may never have been more necessary?
Is he aware that the following countries provide a greater proportion of their GNP in overseas aid than the United Kingdom? I refer to Norway, Sweden, the Netherlands, Denmark, France, Finland, Belgium, Canada, Italy, Germany, Australia and Japan. If they can attain a higher percentage of GNP why cannot we?
The Earl of Caithness: My Lords, as the noble Lord well knows, the Government accept the target in principle but, in common with previous administrations and many other major donors, they are not able to set a date for achieving it.
Lord Taylor of Gryfe: My Lords, is the Minister aware that our aid budget has important implications for our export trade? Because of the limited amount of aid, our aid-trade provisions were exhausted in April and there is no more money for export subvention until next April. Does that not have serious consequences for the manufacturing industry?
The Earl of Caithness: My Lords, the noble Lord asks an important question which I believe is slightly more specific and therefore wide of the Question on the Order Paper.
Baroness Gardner of Parkes: My Lords, will the Minister inform us whether the assistance given by the ODA through voluntary agencies such as Plan International—of which I am the UK chairman: it is a child sponsorship body—is in addition to the amount that he quoted or is part of it? Will he also inform the House about the difficulties of helping countries such as the Sudan where that Government are unwilling to co-operate in receiving help?
The Earl of Caithness: My Lords, the answer to the first part of my noble friend's question is, yes, it is

1001
included in the figures that I mentioned. What is not included is the type of aid to which I referred in the debate held in the name of my noble friend Lord Aiding ton; namely, economic assistance to Eastern Europe and the USSR. That is a separate item.
My noble friend also touches on an important point. Though we might be willing to give aid to certain countries, the conditions in those countries are such that it is impossible for us to give that aid.
Bareness Ewart-Biggs: My Lords, is the Minister aware that the aid budget, which is now stagnant, has fallen by 12 per cent. in real terms since 1979? Is he also aware that people will be disappointed that he did not take the opportunity today to announce a rise in the aid percentage of GNP? Is he further aware that Britain is one of only three countries in the OECD which has not yet set a timetable for reaching the UN official target of 0.7 per cent. of GNP? When will the Government set a timetable to increase our aid towards reaching that target?
The Earl of Caithness: My Lords, the noble Baroness is incorrect in saying that our aid provision has been static. It has increased in real terms during the past, few years and the projected planning totals show a further increase. I am sure that the House will welcome the initiative taken by my right honourable friend when he was Chancellor of the Exchequer which became known as the Trinidad Terms. The initiative was designed to relieve the debt of third world and developing countries—the most important issue that they face—by approximately 18 billion dollars. The UK share will be 900 million dollars. We hope that the terms will soon be agreed because this country will be proud to have been involved.
Baroness Ewart-Biggs: My Lords, does the Minister agree that in real terms aid has decreased by 12 per cent. since 1979?
The Earl of Caithness: My Lords, yes, it has decreased in real terms by 12 per cent. since 1979. However, it had decreased by more than that in previous years.
Baroness Robson of Kiddington: My Lords, is the Minister aware of the reply to a Written Question on 15th May by the Minister for Overseas Development in another place? The reply stated:
"In 1990 ODA spent over £21 million on activities directly related to population concerns".—[Official Report, Commons, 15/5/91; col. 192.]
Does the Minister agree that aid in that form is the best way to help the under-developed world? What percentage is that £21 million of the 0.31 per cent. of GNP that we presently spend on overseas aid?
The Earl of Caithness: My Lords, I am unable to give the noble Baroness the percentage of GNP. As regards her first question, I said in a recent debate in this House that the aid that we give towards population and family planning is important and for that reason it is an increasing percentage of the ODA budget.
Perhaps the noble Baroness, Lady Ewart-Biggs, would care to confirm that the Labour Party intends
1002
to increase the share of government expenditure on ODA to 0.7 per cent. What will the terms be and what will that mean in increased taxation?
Lord Annan: My Lords, does the Minister agree that one of the reasons why we lag behind other countries in this respect is the inordinate demands made daily, even in this House, for an increase in public expenditure? Is it a fact that we cannot do that until our economy improves and inflation falls?
The Earl of Caithness: My Lords, the noble Lord makes salient points. I am sure that when dividing on a matter concerning public expenditure your Lordships will take careful note.
Lord Peston: My Lords, is the Minister saying that this paltry sum is the most that we can afford because of the economic difficulties that the country is now facing? That is what he appears to be saying by agreeing with the noble Lord's question.
The Earl of Caithness: My Lords, it is of serious concern to this country if the noble Lord believes that our annual aid programme of more than £1 billion is a paltry sum.
Lord Peston: My Lords, the key point to bear in mind is that 0.31 per cent. is three-tenths of one penny in every pound of our earnings. We are led to believe that ours is one of the more affluent countries of the world. Does not the Minister agree that that is not a large sum of money compared with that given by other countries?
The Earl of Caithness: My Lords, I do not agree. It is a large sum of money but the question is not only that of money. If I were to go to King Charles's Street, obtain from the Treasury an increase to 0.7 per cent. and burn that sum of money in King Charles's Street on my way back to the Foreign Office, I am sure that the noble Lord would be thrilled because we had obtained the right percentage. The important point is the way in which one utilises the aid. The House will be well aware that in a recent report the United Kingdom was commended for the way in which it provides its aid.
Lord Stoddart of Swindon: My Lords, is the Minister aware that some noble Lords are puzzled by the answers that he has given? He says that the Government accept the United Nations target of 0.7 per cent. of GNP and therefore one would believe that we should be aiming towards that. However, we appear to be aiming away from it because the percentage of GNP has reduced since 1979. Does that not show absolute complacency towards the problem?
The Earl of Caithness: My Lords, the answer to the noble Lord's first question is, no, because the amount is increasing in real terms.
Lord Hailsham of Saint Marylebone: My Lords, are not the Opposition muddling themselves by the false statistical use of the word "percentage" instead of concentrating on real figures?
The Earl of Caithness: My Lords, I agree with my noble and learned friend that the Opposition appear to be totally confused.
Lord Harris of Greenwich: My Lords, which recent report congratulated the Government on their record?
The Earl of Caithness: My Lords, it was the OECD report.
The Earl of Onslow: My Lords, is my noble friend aware that a large amount of foreign aid is totally wasted? Is he further aware that we give £85 million per year to India, which manages to run an army four times the size of our army in India in 1936, and which also has an ocean-going navy and a nuclear defence weapon? I see no reason why the English taxpayer should subsidise that form of expenditure. India can well afford its own development aid and there is no need for this country to waste taxpayers' money in that fashion.
The Earl of Caithness: My Lords, I have carefully noted my noble friend's comments and I shall pass them on to my right honourable friend.
Lord Hatch of Lusby: My Lords, perhaps the noble Earl would like an answer to his question. Is he aware that the Labour Party is committed to attaining the target of 0.7 per cent. of GNP within the lifetime of a parliament? It is publicly committed to that figure. The Minister talked about moving towards that target, but surely we are moving away from it. Is it not the case that during the first part of the 1980s overseas aid was drastically cut and we were told that it would be restored when the economy recovered? We have been told about an economic miracle so where is the increase in overseas aid? Will the Minister now answer my question: how is it that the countries on the list that I gave to him are able to provide a higher percentage of GNP? Why can we not attain the same level'?
The Earl of Caithness: My Lords, it is our aim to reach the target of 0.7 per cent. It is also important that we utilise the aid in the best way; and that is why the OECD has recommended that other countries should follow our lead.
Lord Hatch of Lusby: My Lords, will the Minister answer my question? Why is it that those countries can attain a higher percentage of GNP than we can?
The Earl of Caithness: My Lords, if the noble Lord is talking about the expenditure of other countries he is well advised to address his remarks to the countries concerned.

Prison Education
3.18 p.m.
Baroness David Baroness David asked Her Majesty's Government:
Why there is no reference to prison education in the White Paper on education and training published on 20th May 1991, and what implications the White Paper will have for prison education.
The Minister of State, Home Office (Earl Ferrers): My Lords, reference to prisons was not made in the White Paper because the changes proposed will not make a significant impact on prison education.
Baroness David: My Lords, is it not the case that many further education colleges and LEAs provide a great deal of prison education and that that will be an important consideration when the legislation is drafted? Does the Minister agree with the report of the Select Committee on Education, Science and Arts of another place which was published in March? It stated that many prisoners become more violent and dangerous while in prison but that others who are helped by NACRO and similar associations which offer educational provisions abandon their criminal practices and settle down as useful citizens. Are the Government committed to putting more money into prison education as was proposed by Lord Justice Woolf in his recent inquiry?
Earl Ferrers: My Lords, I agree that the colleges of further education provide a great deal of the education in prisons. The proposal is that colleges of further education will be removed from local authority control and will become corporate bodies funded by central funding councils. Therefore, the relationship between the colleges of further education should be at no greater distance from the prisons than it is at present.
The amount of prison education has increased from 5.5 million hours to 7.5 million hours between 1987-88 and 1989-90. I give the noble Baroness an assurance that my right honourable friend the Home Secretary wishes to see more prisoners taking educational courses and training in skills in order to ensure that they have a better chance of leading a life free of crime.
Baroness Sharpies: My Lords, can my noble friend say how many writers in residence there are in different prisons?
Earl Ferrers: My Lords, not without notice.
Lord Richard: My Lords, will the noble Earl tell us whether he accepts the statement in Lord Justice Woolf s report on this aspect of his inquiry that:
"We met many prisoners … who told us that … educational provision was woefully inadequate. There were long waiting lists to join classes. Even those who succeeded in being accepted for a class could not be sure whether they would be able to attend it—classes were frequently cancelled because, prisoners were told, there was no prison officer to escort them to the education rooms … Prisoners were particularly resentful that, in their view, education was not given a high enough priority".
Will the Minister accept that that is a very damning criticism of the present situation? While we on this side of the House do not expect miracles, economic or otherwise, will he tell us what the Government are doing to move in the right direction?
Earl Ferrers: My Lords, Lord Justice Woolf made a number of proposals about prisons. The Government are studying those proposals and will give their reply to them in a White Paper in due course.
Lord Hailsham of Saint Marylebone: My Lords, have the Government considered the availability of

1005
correspondence courses in this connection, which may be particularly suitable for prison inmates? If so, will he give the House some information on the subject?
Earl Ferrers: My Lords, I do not have any information as to the number of correspondence courses which are at present undertaken in prisons. However, I shall find out and write to my noble and learned friend about it.
Lord Harris of Greenwich: My Lords, will the Government's response to Lord Justice Woolf's report be published before the Summer Recess?
Earl Ferrers: My Lords, it will be published either before the Summer Recess or after it.
Lord Richard: My Lords, I congratulate the Minister on his perception and accuracy. Will it be possible to have a debate on the Woolf Report before the Recess? The Leader of the House told us some time ago that the Government are anxious that there should be a debate on the subject. Will the noble Earl give us an assurance that, when the White Paper is published, it will deal with the provision of education in prisons?
Earl Ferrers: My Lords, whether we have a debate on the Woolf Report is a matter for the usual channels, to which I have no doubt the noble Lord, Lord Richard, will direct his attention. I advise the noble Lord to wait and see what the content of the White Piper will be.
Baroness Masham of Ilton: My Lords, does the Minister know that many prisoners can neither read nor write? Therefore, remedial teaching is very important and, as a member of a board of visitors, I congratulate the teachers who carry out that very important work with prisoners.
Earl Ferrers: My Lords, I am aware of the very important point which the noble Baroness makes about some prisoners not being able to read and write. That is why it is very important that special educational needs should be protected, and it is our intention that they will be. I agree also with the noble Baroness that the work which the teachers do is quite remarkable.
Baroness Carnegy of Lour: My Lords, will my noble friend to it the House who decides on the level of education provision in individual prisons and, therefore, who it is whom the Government and noble Lords must influence in order to achieve an increase?
Earl Ferrers: My Lords, it is the responsibility of the governor of each prison. He is advised by the head of inmate activities and the education officer. Of course the majority of education is provided by the local education authority, usually through colleges of further education.
Baroness David: My Lords, is the Minister aware that the chief education officer of the prison service praised a report last November on the work of the local education authorities? Will that be remembered
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when the legislation is finally drawn up so that there continues to be local education authority involvement?
Earl Ferrers: My Lords, the work of the local education authorities in providing education in prisons has been substantial. The proposal is that, from 1st April 1993, the colleges of further education will be removed from local authority control and will become bodies funded by the central funding council.
Lord Peston: My Lords, will the noble Earl clarify what I thought was a very helpful opening Answer? He said that the reason that prisons were not included in the White Paper is that it is the Government's view that FE colleges, whoever controls them, will have as large a role to play as they had in the past. Do I understand him to say that that role will not be diminished, whatever new arrangements are made?
Earl Ferrers: My Lords, I did not say that, but that was the basic drift of what I intended to imply. Although there is a change in the funding of colleges of further education, involvement with prisons is not expected to change.
Lord Winstanley: My Lords, in response to an earlier question the noble Earl told us that the Woolf Report would be published either before or after the Summer Recess. Therefore, are we entitled to assume that under no circumstances will the report be published during the Summer Recess?
Earl Ferrers: My Lords, the Woolf Report has been published. It was the Government's response to it to which I was referring. The likelihood is that that will be published either before or after the Recess. It is unlikely that it will be during it. However, I should not care to give a totally cast-iron guarantee.

Police custody (Time Limits) Bill [H.L.]
3.26 p.m.
Lord Harris of Greenwich: My Lords, I beg to introduce a Bill to place limits on the length of time for which prisoners may lawfully be held in a police station or on court premises. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Harris of Greenwich.)
On Question, Bill read a first time, and to be printed.

Water Industry Bill [H.L.]
3.27 p.m.
The Lord Chancellor: My Lords, I beg to move that this Bill be now read a third time. This is the first of five Bills in my name on the Order Paper. I shall speak briefly to all five Bills together. As I explained to your Lordships on Second Reading, this consolidation results from the Water Act 1989 which substantially restructured the law of England and Wales relating to water. The consolidation is substantial and I am sure that I have the support of the House in expressing

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appreciation for the work of the Law Commission, of parliamentary counsel who made the consolidation possible, and of the Joint Committee which has carefully considered these Bills.
I hope that I also have the support of the House, or at least its forbearance, as I move the remaining stages of each of the five Bills. Since separate Motions are necessary for the Third Reading and passage of each Bill, your Lordships will observe an element of ebbing and flowing on each occasion.
Moved, That the Bill be now read a third time.—(The Lord Chancellor.)
On Question, Bill read a third time, and passed, and sent the Commons.

Water Resources Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Statutory Water Companies Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Land Drainage Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Water Consolidation (Consequential Provisions) Bill [H.L.]
Read a third time.
The Lord Chancellor: My Lords, I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(The Lord Chancellor.)
Lord Williams of Elvel: My Lords, perhaps this would be an appropriate moment to congratulate the noble and learned Lord on the elegance of his footwork.
The Lord Chancellor: My Lords, I am grateful to the noble Lord.
On Question, Bill passed, and sent to the Commons.

Crofter Forestry (Scotland) Bill
3.30 p.m.
Read a third time, and passed.

Welfare of Animals at Slaughter Bill
Lord Soulsby of Swaffham Prior: 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.
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Moved, That the order of commitment be discharged.—(Lord Soulsby of Swaffham Prior.)
On Question, Motion agreed to.

Export and Investment Guarantees Bill
3.32 p.m.
The Lord Advocate (Lord Fraser of Carmyllie): My Lords, I beg to move that this Bill be now read a second time.
The Bill has two main objectives. The first is effectively to rewrite the powers contained in the relevant existing legislation (the Export Guarantees and Overseas Investment Act 1978) in a way which will clarify and update these powers to the benefit of UK exporters and the taxpayer. The existing Act will as a result be repealed. The second is to provide the legal framework to transfer the insurance services business of the Export Credits Guarantee Department to the private sector.
Before I describe the Bill in more detail I hope your Lordships will find it helpful if I describe the role of ECGD, which under slightly differing names has been the vehicle through which the Secretary of State has exercised the trade encouragement powers enshrined in this Bill and in preceding legislation. ECGD has been protecting UK exporters against the financial risks of selling abroad for over 70 years and in the process has encouraged over £250 billion of UK exports. ECGD's operations fall into two distinct parts. That is reflected in its organisation and management. The project group, based in London, handles major project and capital goods exports sold on medium and long-term credit. In 1990-91 the project group issued guarantees valued at over £2.3 billion. The insurance services business, based in Cardiff, insures business sold on short-term credit. Those exports comprise the whole range of consumer goods but also extend to machinery and equipment. In 1990-91 it insured exports in excess of £13 billion.
Despite some fundamental differences in the nature of ECGD's London and Cardiff operations, both have been run as businesses subject to the same overall financial objective; that is, that they should operate over time and taking one year with another at no net cost to the Exchequer. That objective has been confirmed to Parliament by successive administrations. It is also a requirement of the GATT that official export credit schemes are not subsidised by governments. That means that for all its trading operations ECGD seeks to charge premium rates and adopt underwriting policies which will secure the desired financial outturn.
The need for the legislation derives from a review of ECGD's status and structure commissioned in August 1988 by my noble friend Lord Young, the then Secretary of State for Trade and Industry, to identify whether any changes needed to be made to enable ECGD better to meet the needs of UK exporters after 1992 and the completion of the single market. This report, known as the Kemp Review, recommended, after extensive consultations with ECGD's customers, bankers, brokers and trade associations, that ECGD's

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insurance services business should be separated from ECGD and converted into a government-owned company before being transferred later to the private sector. It also concluded that support for project business should continue to be provided by government through the residual ECGD. That recognised that the nature of project exports—high value contracts, usually in developing countries and presenting a financial exposure often spreading over decades meant that credit insurance risks were inherently uncommercial and required continuing government involvement through ECGD. The report was ma de public.
At the same time, the House of Commons Select Committee on Trade and Industry carried out a short inquiry on the future of ECGD and the vast majority of the evidence submitted to it from interested parties supported the recommendations in the report. On 18th December 1989 the then Secretary of State for Trade and Industry, the right honourable Member for Cirencester and Tewkesbury, announced that the Government had broadly accepted the Kemp Review recommendations.
The review had concluded that the status of insurance services needed to be changed quickly for a number of reasons. By far the most important of those is the need to enable insurance services better to meet the increasing competition which it faces from private sector insurers for its better quality business. That competition is provided by insurers based in the UK and else where within the European Community. This process can only intensify as the single market become; an even greater reality and as the distinction between export credit and domestic credit risks become; more and more blurred.
The Second Non-Life Insurance Directive which came into force in July of last year has freed credit insurers in the private sector to offer their services throughout the Community. Some EC insurers are already successfully marketing their facilities in the UK. At the same time there is the move to insurance policies which bring together cover for domestic and export credit risks in the one document. Through restrictions in ECGD's existing governing legislation and by virtue of the exclusion of official export credit schemes from the scope of the EC insurance directives, the insurance services group is unable to respond effectively to any of these opportunities or challenges. The risk is that this process will result in the loss of its better quality business leaving it with an unviable portfolio of only those risks which are unattractive to its competitors.
Privatisation represents the most practicable and sensible means of allowing insurance services to meet those challenges and opportunities. It will enable insurance services to compete freely with other insurers in Europe and to meet the needs of UK companies by allowing them access to packages of credit insurance covering both their domestic and export business.
A secondary, but nonetheless important, factor leading to the Government's decision was the threat of a legal challenge to the continued operation of official export credit schemes on the basis that in certain
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respects they could he regarded as constituting unfair competition to the private sector insurers incompatible with the Treaty of Rome. Clearly the greatest risk of such a legal challenge is in respect of business where there is an overlap between the activities of the private and public sectors. In practice this is the lower risk business connected with exports to the EC and OECD markets representing about 75 per cent. of insurance services' total business and much of its best business. Any legal ruling which prevented insurance services undertaking this activity would leave it with a totally unviable portfolio.
It is not only this Government who are taking this threat seriously. With a few minor exceptions every other EC government are taking steps of one kind or another to lessen the degree of state involvement in export credit insurance operations in this area.
I am well aware that, while the proposal to privatise insurance services continues to be welcomed in principle by those most closely concerned, anxiety has been expressed as to whether the overall arrangements post-privatisation will ensure that our exporters continue to have access to facilities which are equivalent to those available to their competitors in other major exporting countries. While I can state quite unequivocally that there are no grounds perceived for such anxiety, it would obviously be helpful if I were to describe in some detail the steps which the Government propose to take to deal with the one issue on which most attention has focused. That is the question of continuing Government support for business which is unlikely to be immediately acceptable to the private insurance and reinsurance markets.
Although the Government's aim is that as much as possible of insurance services business should in future be handled in the private sector, it has all along recognised that some of insurance services' business could not immediately he so accommodated and that there would therefore be a need for some ECGD reinsurance facilities to supplement the capacity available in the private market. That would avoid any reduction in facilities following privatisation. This was indeed foreshadowed in the announcement of 18th December 1989.
The need for ECGD to provide such reinsurance facilities to the privatised insurance services has been anticipated in the drafting of Clause 1 of the Bill. This clause enables the Secretary of State to give guarantees which indirectly encourage exports. That would obviously be the case where ECGD reinsured a primary insurance policy issued by the privatised insurance services. So the general enabling powers will be in place.
The question is: to what extent will they need to be exercised? Placing ISG's portfolio of risks in the private reinsurance market is an event probably unique in the market's experience. We are talking of the commercial and political risks attaching to some £13 billion of UK exports annually. This is an enormous amount by any measure and it is a credit to the skill and the flexibility of the market and to ECGD and its advisers that the capacity has in fact been found to meet virtually the whole of this requirement.

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However, there could be a small shortfall and the Government intend to fill this through ECGD becoming, in effect, a member of the reinsurance syndicate providing support to the new company.
This "top-up" support, if I may so describe it, will be transitional and will be made available to the company for a period of up to three years after privatisation. Given the successful placing of so much of the company's requirements in the market even before it starts its operations, the Government are confident that, once the market has familiarised itself with the new company and its management, it will be able to meet the company's full reinsurance needs within this three-year period.
I emphasise that quite separate from that the Government will provide a facility to ensure that cover will continue to be available on business with a few countries in respect of which the management of insurance services considered that to have offered the risks to the reinsurance market could have prejudiced the market's response to the total book of business put to it. This cover will be delivered through ECGD giving 100 per cent. reinsurance to the privatised company. By definition, the countries coming within this facility are those where the company and private market reinsurers are not at present happy with what they see as the political and commercial risks. Over time this will no doubt be a changing picture.
However, based on the private market's current view of the insurance services portfolio, that is likely to be a relatively minor facility and is likely to be needed for only a handful of importing countries involving, it is calculated, about 2 per cent. only of the current total turnover of insurance services. It could well be that most of these markets will become reinsurable in the private market so that the need for this facility will fall away. The likelihood of that however, is rather less clear than it is for the top-up arrangements which I have just described. For that reason, it was not considered appropriate to apply to it the same time formula as that attaching to the top-up arrangements.
In order to meet concerns that this so-called national interest reinsurance facility might be withdrawn prematurely, my honourable friend the Minister of State gave the assurance during the Report stage of this Bill in another place that this facility would not be time limited; that the requirement for the facility would be kept under review and that the Government's intention was that, subject to its performing satisfactorily as an ECGD trading facility, it would continue for as long as the Government considered it essential to meet the reasonable needs of exporters.
I am aware that, despite the strength of these assurances, there have been calls for them to be given statutory force and to be included in the Bill itself. I should therefore explain that the Government's preference for dealing with this issue on a non-statutory basis does not proceed from any wish in any sense to weaken its undertaking but rather reflects the legal and technical difficulties of reproducing those assurances in a statutory form. This in turn reflects the
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fact that, despite their extreme firmness, the assurances have had necessarily to contain an element of conditionality to enable the Government quite properly to retain the right—which it does of course have in relation to the generality of ECGD's facilities —to make decisions about maintaining the facility in the light of experience.
The Government must also remain free to exercise their judgment as to the acceptability for cover of any individual contract in the same way as any other insurer or reinsurer. I therefore believe that what are shared objectives between the Government and exporters in this area are effectively served by the assurances which Ministers have so far given to Parliament and which are now firmly on the public record. My honourable friend the Minister for Trade has given them in writing to many members and representatives of the exporting community. I take this opportunity to add one further reassurance. I undertake that, when assessing exporters' needs as part of any future reviews of the facility, the Government will consult exporters and their representative associations in order to take their views on this important point. Through your Lordships I wish to assure them that these views will be fully taken into account before any final decisions are reached.
These new arrangements will usefully bring together the private and public sectors in a constructive partnership: a privatised insurance services, supported by the reinsurance market, capable of providing an even more efficient and comprehensive service to the customer, with ECGD bringing its expertise to bear on the national interest facility.
I have naturally concentrated so far on the arrangements for the change of status of insurance services. I would now like to turn to the provision of ECGD support for project exports. Although, under the post-privatisation reinsurance arrangements which I have just described, there will be some continuing ECGD involvement in short term export credit, ECGD will obviously primarily be concerned in future with support for project exports. It is to enable this support to be provided in a more effective and up-to-date manner that we are proposing to change ECGD's current governing legislation in the way proposed in Parts I and III of the Bill.
The original decision, emerging from the Kemp Review, to continue to provide Government support, through ECGD, for project exports and our subsequent recognition of the need to provide ECGD with more new powers to do that job more effectively are all, of course, clear evidence of the Government's commitment to this sector of industry. However, it can hardly be surprising that, when announcing their decision to continue with this support, the Government also signalled their intention of taking steps to reduce the costs associated with it. This reflects in particular the huge strain the international debt crisis has imposed on ECGD's financial position with the near certainty that this will result in the taxpayer having to meet substantial net losses. ECGD's last published trading accounts—for 1989–90 —reveal a £3.9 billion cumulative deficit and an

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expectation that its cash borrowing from the Consolidated Fund would rise to £3.4 billion by the end of the 1990–91 financial year.
ECGD has obviously been far from alone among the international financing institutions—including other official export credit agencies in its experience. It may be—and we obviously all hope that this will be the case—that a debt crisis of the severity of that experienced in the early 1980s will not be repeated. Nevertheless, it would have been quite irresponsible and a denial of our obligations to the taxpayer not to have learnt the lessons of this experience and sought to avoid it being repeated in the future, however remote the possibility. That is exactly what has been done. The result has been the introduction by ECGD of the so-called portfolio management system, announced by my right honourable friend the Secretary of State for Trade and Industry in January this year. Through a more prudent and disciplined approach to the underwriting of sovereign risk and by better matching ECGD's premium to risk, this system will provide greater confidence that we will not suffer similar losses in future and will thus ensure that a better balance is drawn between the national interest case for supporing project exports and the risk of loss to the taxpayer.
The Government are well aware that some aspects of this system have not been welcomed by exporters, especially the increases in premium rates which we have had to introduce for exports to the higher risk markets. We recognise, too, that many of these rates are no by higher than those charged by ECGD's equivalent in some other countries. However, not to have taken these steps would have been to deny the hard lessons of the past and to renege on long-standing ministerial assurances to Parliament that ECGD's activities should not become a charge upon the taxpayer. However, we are working vigorously in the appropriate EC and OECD fora and in our bilateral negotiations with other governments to ensure that other countries take similar steps to ensure that their official support schemes do not operate as surrogate subsidies. I am pleased to report that this initiative is making good progress. Indeed, directly arising from this United Kingdom pressure, the communique issued following last week's OECD ministerial meeting contained a specific reference to this issue, indicating a general recognition among OECD ministers of its significance.
I now turn to the details of the Bill. ECGD's current Act of 1978 is beginning to show its age. There are often occasions when there is doubt about whether ECGD has the actual or implied powers to pursue a particular course of action. This has become noticeable in relation to ECGD's need to manage more effectively its existing portfolio of assets and liabilities. This Bill has therefore been drafted in a way which clearly sets out ECGD's primary powers for the encouragement of exports and overseas investment but adds explicit new powers to enable it to control or reduce costs associated with its business. The existing Act is therefore to be repealed. Parts I and II of the new Bill will be a complete replacement of the old powers.
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Part I is a restatement of the existing powers to enable guarantees to be issued in order to encourage British exports and overseas investment. I wish to emphasise that no fundamental change of any kind in ECGD's role is intended. In that respect the word "facilitate" has been used in relation to the export of goods and services from the UK since the word "encourage" in the old Act was found to be restrictive on occasions. In less legal and more understandable terms the Government's objective through these powers will continue to be to encourage exports. The new description of this power will, however, allow a wider range of export business to be encouraged.
Clause I provides the powers to enable ECGD to facilitate the export of goods and services. It has been drafted in the widest possible terms. Clause 2 continues the powers that enable ECGD to give guarantees on investments made in overseas enterprises. An extra provision has been included to extend cover in relation to associated companies which should make the scheme more attractive to UK companies.
Clause 3 provides the explicit statutory authority to make arrangements which are in the interests of the proper financial management of the portfolio; that is, all the assets and liabilities built up in the normal course of business. This will allow ECGD to take full advantage of appropriate financial market techniques to manage its portfolio more cost-effectively. ECGD has already achieved some useful public expenditure savings by these means, but the scope of its operations has been limited by the terms of the existing Act.
Clause 3 will enable the entire ECGD portfolio to be managed more effectively and significant public expenditure savings should flow from this in time. I should emphasise that these powers will confer upon ECGD the capability of mounting a fully fledged internal treasury management operation. They will therefore neither impinge upon nor be to the detriment of exporters. Indeed, to the extent that they succeed in reducing overall costs, they should be to the advantage of the community as a whole, including exporters.
ECGD has acquired much useful general market information and expertise in its credit insurance activities. Clause 5 gives ECGD the opportunity to market some of this information and skills and to charge for so doing. In making that point I wish to emphasise that it is not the intention to start charging customers for the information it provides in respect of particular transactions where it is asked to provide a guarantee.
Clause 6 places limits on the level of commitments that may be assumed in respect of the operations covered by Clauses 1 to 3. At present the sterling statutory limit is set at £35 billion and no change is proposed. The foreign currency limit currently stands at SDR 25 billion and it is proposed to reduce this limit to 15 billion so that it corresponds more closely to the department's current foreign currency commitments. As noble Lords will no doubt have observed, the Government have also thought it appropriate, given the need for parliamentary

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accountability, to introduce separate statutory limits for financial management arrangements under Clause 3.
Clause 7 provides for a return to be laid before Parliament giving details of the department's sterling and foreign currency commitments as soon as practicable after 31st March each year. It is also appropriate to mention here that the Government have agreed that there should be a statutory obligation to produce and lay before Parliament an annual report. Provision for this has been made in Clause 4.
Part II of the Bill provides the legal framework for the transfer of the insurance services business to the private sector. The text here follows a pattern established by earlier privatisations whereby the Secretary of State is given authority under Clause 8 to set up a scheme for the transfer of the assets and liabilities of the relevant business into a so-called vehicle company.
Clause 9 provides for the Transfer of Undertakings (Protection of Employment) Regulations 1981, known as TUPE, to be applicable to the transfer. Clause 10 is the essential mechanism to enable the sale process to proceed and allows the Secretary of State to acquire or be issued with shares in a vehicle company.
Clause 11 allows the Secretary of State to transfer to the new company that part of the existing insurance services business which the new company will be able to operate in the private sector. The major advantage is that under the proposed reinsurance method existing policyholders will retain all their rights against ECGD. There will thus be no immediate change for customers. Their policies will remain with the Secretary of State until they expire. Clause 12 provides the Secretary of State with the authority to delegate certain of his functions.
Part III deals with financial and administrative matters. At this point, it might be helpful if I were to report on the progress that has been made for the sale of insurance services. This has been proceeding in parallel with consideration of the Bill in Parliament. In all these negotiations it has been made absolutely clear that completion of the sale will be dependent upon the successful passage of the Bill through Parliament to Royal Assent.
Following a good response to a pre-qualification questionnaire, the Government announced on 5th March a shortlist of six potential bidders for the business who met the Government's key criteria of commitment to, and understanding of, the business, financial robustness and willingness to take over the business broadly on the terms proposed by the Government.
My right honourable friend the Secretary of State for Trade and Industry announced on 1st May that responses to the invitation to tender had been received from AG, NCM and Trade Indemnity. These are serious and positive responses from respected private sector insurance companies. The Government are currently evaluating those proposals and it would of course be inappropriate for me to comment on them before that evaluation is complete.
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Through this legislation, and other non-statutory initiatives, the Government are engaged in the most radical restructuring of ECGD in its over 70 years' history. We recognise that because the services of ECGD have come to be so highly regarded by exporters such changes are bound, quite rightly, to be closely scrutinised and to give rise to some concerns. I seek to assure your Lordships that the Government's primary motivation throughout has been how best to ensure that the benefit of these services can be safeguarded for the future against the challenges which currently confront them. It is from this perspective that we have concluded that the only truly effective way forward is to privatise insurance services so as to provide a comprehensive, flexible and even better service to our exporters.
As for project exports, our proposals will mean that, almost uniquely within the EC, our exporters will continue to have the benefit of a government department dedicated to the provision of support for such exports. I believe that this combination—the maximum privatisation of short-term support coupled with the retention wholly within the public sector of support for project exports—represents a solution to the problems of 1992 which will be unique to the United Kingdom but which, by making the best use of the experience and skills in both the private and public sectors, will represent the best possible deal for exporters. I commend the Bill to the House.
Moved, That the Bill be now read a second time. —(Lord Fraser of Carmyllie.)
4 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the noble and learned Lord the Lord Advocate for introducing the Bill. I have a certain sympathy for him, first, because the Bill is extremely complex and, secondly, because it deals with matters which are difficult for those who are not in the business fully to understand. Nevertheless, there is a clear test for the Bill which I must state at the outset. Does the Bill help United Kingdom exporters or does it hinder them? The answer, I am afraid, has come back loud and clear from every organisation involved in exporting. It hinders them. I shall give various reasons why I believe that to be so.
I have one point of agreement with the noble and learned Lord. I believe that the Export Guarantees and Overseas Investment Act 1978 needs to be amended and updated. But it needs to be amended in a manner wholly different from the way the Government propose. What do they propose? First, as the noble and learned Lord told us, they propose in Part I to institutionalise the portfolio management system. I notice that the noble and learned Lord insisted that the Government are trying to encourage exports, but the Bill, as he rightly pointed out, refers only to facilitating exports. We shall want to come back to that point at a later stage.
Exports must be encouraged. Will the portfolio management system encourage exports? If the Government wish to answer yes to my question, they must demonstrate that the portfolio management system will not penalise existing United Kingdom

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success We shall in my view be penalised in those countries where our exporters have done well because of traditional trading patterns. I refer in particular to Commonwealth countries. Those trading patterns are now being constricted under the portfolio management system as ECGD believes that it is overloaded on those risks. The Government will have to demonstrate that I am wrong. Will the portfolio management system give rise to a further increase in export credit premia? I think I shall be able to show in Committee that we are not only unfavourably compared with other European export credit agencies in the premia that ECGD charges at the moment but that PMS will lead to further increases where we least need them.
Furthermore, the Government will have to show that tae better risk business, because of the Government's preference for bank guarantees, will not go to the forfeiting market and be outside the whole Insurance Services Group even when it is privatised. The Government will have to show that the aid and trade provision will not suffer as a result of the portfolio management system. As the noble and learned Lord is aware, the aid and trade provision operated by the Overseas Development Agency requires ECGD cover. The provision is for less developed countries. If, as appears to be the case at the moment, the portfolio management system reduces overall ECGD exposure to less developed countries, the aid and trade provision will correspondingly suffer. We shall want a good many reassurances from the Government on that matter.
Finally, we have to ask ourselves a question; I put it frankly to the noble and learned Lord. Is not the portfolio management system a herald for what is known as the zero option, whereby the Treasury would like to be out of the business of supporting exports altogether? I want a complete and categoric denial of that from the noble and learned Lord when he comes to reply to the debate. There is a good deal of suspicion that that is the basic government attitude.
Part II of the Bill relates to the privatisation of the Insurance Services Group, which, as the noble and learned Lord quite rightly said, is based in Cardiff. He pointed out that the Kemp Report of June 1989, entitled Review of Status Options for ECGD, came to certain conclusions. The main conclusion was that the Insurance Services Group, which I shall call ISG for short, should become a 100 per cent. government owned company, with the intention that private capital is introduced within three to five years, depending on the progress of possible European Community legislation. In other words, Kemp concluded that there may in the future be a case for introducing private capital into ISG but there was no case at that moment. Kemp also concluded that there was no pressure from the United Kingdom exporting community for a change in the status of any part of ECGD. He further concluded that the private sector does not and cannot provide services equivalent to those currently provided by ECGD. That was particularly true, he said, of the small and medium-sized enterprises which look to our counselling on their exports through the ECGD regional organisation.
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It could well be that Mr. Kemp was right. There may well be a directive on this matter within the next three to five years. All we know is that there is none at present and there is none in contemplation. There may well be a legal challenge, a point to which the noble and learned Lord referred. All those are hypothetical matters. They do not lead to immediate privatisation. Why are the Government ignoring the main recommendations of the Kemp Report? What is wrong with the report? Would it not be much better to increase competition—I believe that there should he increased competition—but to allow ISG to insure exports from other European Community countries and indeed to allow ISG, if it is appropriate, to insure domestic credit? Should there not be a much closer relationship between the short-term insurance and the longer-term project insurance handled out of London?
Perhaps I may explain why I think that that should be the case. Let us suppose that one of your Lordships runs a company which manufactures radar installations. Let us suppose that he sells a radar installation to, for the purposes of the argument, Zimbabwe. The main installation, the main project, will be insured by ECGD London. But that is not the end of the matter. There is then a succession of maintenance contracts and spare parts contracts. These require short-term insurance that needs to be arranged through Cardiff rather than London. To separate them means two entirely different contracts between the seller of the radar station to Zimbabwe and London and between the seller of the radar station to Zimbabwe and a privatised ISG. Would it not be much better to make the two much closer even than they are at the moment? They are under one hat at the moment but they should be made much closer.
The noble and learned Lord went on to talk about the method of privatisation. How will this be done? It is to be done by a trade sale. Of course there was a long list of potential purchasers for this business, but that list has now been whittled down to just two companies. One is NCM, which I remind your Lordships is a Dutch company, and the other is Assicurazioni Generali, which is an Italian company. So far as concerns trade indemnity, they have not offered to buy the business for the very simple reason that they cannot afford to do so. Last year their losses were considerable. They have offered some sort of arrangement whereby they might take over the management and in the end come round to doing some sort of deal where they will take it over.
Therefore, realistically there are two candidates for the purchase of this business: one is Dutch and the other is Italian. Is the noble and learned Lord really trying to persuade the House that a Dutch or Italian owner of the Insurances Services Group will go out of his way to encourage British rather than Dutch or Italian exports? If I may say so, I find that a curious argument.
However, it is by no means certain that even the Dutch or the Italians will stay in the race. There are three problems to which the noble and learned Lord referred indirectly which may well cause them to drop out in the way that the major British purchasers have

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dropped off the shortlist. First, they may not know it yet—although they will find out soon enough—but the United Kingdom Inland Revenue requires the equalisation reserve of the privatised ISG to be constituted out of post-tax profits rather than, as is the case in the Netherlands, out of pre-tax profits. Therefore, the price-earnings ratio which they will have to pay may be much higher than they initially thought. Secondly, there is no guarantee that the skilled staff who work in ISG in Cardiff will stay with a privatised ISG unless they are compelled to do so. I shall return to that point later. Thirdly, there is the Government's treatment of the whole problem of political risk.
As regards political risk, there was, as the noble and learned Lord pointed out, considerable debate in the other place about what all that meant. The Minister in that place assumed that no one understood—that is, apart from himself—what the issues were. He was fairly cavalier in his treatment of another place. He said that it was all insignificant, and anyway the reinsurance slip had been wrapped up and there was no real problem. Further, he stated:
"The countries that are regarded as requiring political risk reinsurance are few. Press speculation about the identity of those markets has been wide of the mark. The proportion of ISG business at present involving exports to those markets —not the proportion of total business in British exports—is still less than 2 per cent. of the total business insured in 1990-91. That is still a worthwhile amount of exports—about £300 million worth—but it is a small proportion of the total insurance book of ECGD and a fractional proportion of the total non-oil visible exports from Britain".—[Official Report, Commons, 15/4/91; col. 54.]
It seems that £300 million is apparently subject to political risk reinsurance. Let us contrast that figure with the one stated in the final draft of the interdepartmental report on the Kemp Review:
"Government withdrawal from political risk associated with short-term trade credit is likely to have an adverse effect on UK exports generally because shortage of capacity of political risk reinsurance would leave a gap in the market. At present, the ISG provides political risk cover of around £1.7 bn per year".
So what is the figure we are talking about? Is it £300 million or £1.7 billion? I suspect that it is £1.7 billion.
I understand that the noble and learned Lord is saying that a large proportion of that sum of £1.7 billion will be wrapped up in this great reinsurance treaty which is being negotiated, apparently at this moment, with the company and Lloyd's market. ECGD will supply a top-up facility for a maximum of three years. But anyone who understands how the reinsurance market works in London—and, indeed, the Swiss Re, the Munich Re or any other major reinsurance company—knows that reinsurance treaties are completed for one year. Political risk reinsurance acts rather like a concertina, if I may use that expression, in that in some years insurance companies and underwriters are interested in political risk reinsurance and in others they are not. That reinsurance treaty has to be renegotiated from year to year. That is why the Government cannot come to any Dispatch Box in either House and say, "We have got it all wrapped up for all time". That simply is not consistent with the nature of the reinsurance market.
1020
Then the noble and learned Lord went on to say that ECGD would provide national interest political risk reinsurance for those companies which the market will not accept. Apparently the main objection to what I would call the "Hampson" amendment in another place was that it was quite unreal for the Government to be committed for all time to supply political risk reinsurance and that projects might be too risky. If ministerial assurances are to be believed, the Government are about to commit themselves for all time to provide national interest reinsurance. So what is wrong with the Hampson amendment?
There is no doubting the fact that this is a major impediment to the privatisation of ISG. Moreover, when they look closely at what the Government are proposing, I am not sure whether even the Dutch or the Italians will remain in the race. It will certainly be of no benefit to United Kingdom exporters. The solution is that ECGD must stand as a political risk reinsurer of last resort without time limit. Whether it is through the reinsurance treaty or on its own, it makes not a whit of difference; the Government must stand behind it. That is the only way to ensure that this is viable.
I said that the third reason why the Dutch and the Italians may drop out of the race is that they might find that the staff are unwilling to go along with privatisation. If privatisation is implemented, it will directly affect about 600 civil servants based in Cardiff and the regional network. While at this stage the proposal is to transfer to the government company —that is, the vehicle company—on a voluntary basis, in my view and in that of the trade unions involved, the most likely outcome is that insufficient staff will volunteer and coercion will prove necessary. Both the volunteers and those forced to transfer will lose their Civil Service status and be subject to the terms and conditions of employment offered by the purchaser of the company.
We understand that the TUPE regulations to which the noble and learned Lord referred will apply. But they exclude pensions and, as the Civil Service Pension Scheme is generally considered to be better than those available in the private sector, it seems inevitable—it certainly seems so to the trade unions—that the staff transferring to the privatised company will have to accept an inferior scheme.
I very much hope that the noble and learned Lord will reflect seriously on the Bill which he has put before the House. The recommendations of Mr. Kemp have been ignored. The only takers for the business are either Dutch or Italian and they may in any event have gone by the board. The national interest appears to be of no account. There are grave suspicions in all exporting industries throughout the length and breadth of the country about the Government's attitude towards exports. There are grave suspicions that the Treasury is running the whole thing and wants to get out of it; there are grave suspicions too that Ministers are trying to wrap up what they have to say in weasel words and are not coming out with the truth about the problem.
So my advice to the noble and learned Lord is that he should think carefully before he pursues the Bill

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and before he becomes mixed up in the difficult problems which will come before your Lordships if the Bill goes forward into Committee. If he feels, as I believe that he should, that this is not a proper Bill to bring forward now, in view of all the objections that have been made, he should do the proper thing, withdraw it and put it in the waste paper basket where it properly belongs.
4.21 p.m.
Lord Ezra: My Lords, due to a prior engagement which made at a time when I believed that this debate would take place on another day, I may not be able to be here for the final stages of the debate, and that I regret. I speak as someone who over the years has played quite a part in export promotion. For the first 10 years of its existence, I was a member of the British Overseas Trade Board, a large part of that time under the able chairmanship of the noble Lord, Lord Thorneycroft I was also chairman of the European Trade Committee.
Like the noble Lord, Lord Williams, I approach this issue on the simple basis of whether the proposal will aid exports. To understand the motivation behind the submission of the Bill for our consideration, I did a little research. In particular, I hit upon the report of the Trade and Industry Select Committee of another place, dated 6th December 1989, in which it commented upon a memorandum prepared by the Treasury on the ECGD. It says:
"The content of this memorandum is alarming and gives the impression that the Government is moving towards withdrawing Government support not only from the short-term export insurance business but also from long-term and project business".
We know that the Government have said that the latter is not their intention. The committee also says that a logical extension of the argument used by the Treasury for what appeared to be short-term savings,
"would be that a total collapse of the UK's export trade would relieve the economy of the burden of paying for Commercial Councillors in British embassies throughout the world".
That is what the report from another place had to say. It bearing such motivation in mind, I regret to say, that one has to approach the Bill. Is it intended merely to institute short-term savings at the expense of long-term export prospects?
With respect to the projects group, there must be grave suspicion about the introduction of the so-called portfolio management system. That has already been accompanied by a substantial increase in premia. The premia quoted by major British exporters have been shown in many cases to be twice the level as those of our major competitor countries and there is every prosper: that they may increase further. That does not seem to be following the level playing field philosophy. It is putting our exporters with major projects in those markets at a grave disadvantage.
The question also arises as to what will happen to our capital goods exports. Although the amount of project finance is relatively limited in terms of our total exports, nevertheless it represents some 15 per cent. of our capital goods exports. The capital goods
1022
industry in this country is already in sufficient difficulty not to have thrown at it this major disadvantage when it is promoting its exports.
When one turns to the Insurance Services Group there are even more questions to be asked. Here we are talking about a much larger proportion of exports. It is some El 3 billion, as the noble and learned Lord pointed out, which is just over 10 per cent. of our total exports. What I find as puzzling as the noble Lord, Lord Williams, is that the Government, although saying that they accept the Kemp Report, have nonetheless departed from one of the major recommendations contained in that report.
In talking about the separation of the Insurance Services Group, paragraph 15 of the Kemp Report states:
"Such a radical change would need to be thoroughly prepared and carefully carried through: four to five years would probably be needed before the introduction of private capital. This would allow time for the alternative ways of doing this to be explored and evaluated, and for the course and case of market developments to become clearer".
I cannot for the life of me understand why the Government have ignored what appears to be one of the most important conclusions of the Kemp Report. Kemp is saying that there may well be a case for separating off the Insurance Services Group but that it should be done by stages. Let us first separate it off under government control; let us see how it establishes itself; let us see how we need to modify its operation while it is under government control; and, then, if all goes well, in a period of four or five years, let us see whether it is desirable to introduce private capital.
Such a proposition may have received some support from the House. We may not have agreed that ultimately we wished to see private capital introduced. But a period of four or five years allowed before that were done would not seem unreasonable. Instead, the Government are bent upon telescoping the whole operation, and immediately the separate company is formed, they wish to privatise it.
The noble Lord, Lord Williams, spoke about the two overseas firms which are now the remaining effective bidders. I am not opposed to the involvement of other Community countries in our affairs—we are moving into the single market—but what disturbs me, especially in the case of the Dutch company, is that, as I understand it, it is the recipient of special financial benefits from the Dutch Government designed to facilitate and encourage (if I dare use that word) Dutch exports. I do not see how a Dutch company, which has a special relationship with the Dutch Government, the object of which is to stimulate Dutch exports, can at the same time take over a major insurance operation in the UK with the apparent object of facilitating exports from here. That seems to present a problem.
I agree entirely with the noble Lord, Lord Williams, about the confusion that has been created by the question of political risk reinsurance. I too read carefully the debates that took place in another place and the exposition of the whole subject by Mr. Sainsbury, the Minister for Trade. I found it difficult to follow the gist of his reasoning. At one stage I thought that he was saying that the Government were

1023
effectively providing political risk reinsurance, but when I read on I formed the impression that the Government are opposed to it. All I can say is that that point was mentioned in the Trade and Industry report of another place to which I have referred. The report said that HMG should continue,
"to provide a political risk reinsurance facility".
That is clear. What is unclear is what the Government are putting in its place and what its duration should be. As the noble Lord, Lord Williams, rightly stated, it requires substantial changes in the reinsurance market before what the Government say they are doing can be brought about.
I have considered the matter carefully. I have read all the attendant documents I can lay my hands on. I fear that the answer to the crucial question of whether the Bill will help stimulate exports must be that it is most unlikely to do so. It could indeed harm our export prospects.
4.30 p.m.
Lord Kissin: My Lords, when I came to the House 17 years ago, I thought of a non-controversial subject for my maiden speech. I chose ECGD because I thought that nobody would have a second opinion on the subject. I was heartily commended on what I said, but the Government took no notice and I do not think that they will take any more notice of what has been said today.
Throughout both the developed and developing world, there is widespread recognition of the value of government supported export credit schemes to insure credit risks that would otherwise not be covered. For many years, governments in this country have in my view quite rightly adopted a responsible and realistic policy; namely, to maintain and support a system of government-backed export credit and insurance to ensure that at any time British exporters are competitive with the rest of the world.
Our scheme was forward looking and well administered. Other governments wanted to copy it. Members of the ECGD were invited, when the noble Lord, Lord Bottomley, was Secretary for Overseas Trade, to help Coface in France and Hermes in Germany in developing their schemes. At the same time, governments were seeking through multilateral negotiations to reduce or eliminate the use of subsidies which can distort the operation of market forces and lead to wasteful and costly beggar-my-neighbour policies. They were perhaps not perfect, but systems of official export credit and insurance have survived and have been accepted. However, since the announcement of the privatisation of ISG in December 1989, the Government have overturned that policy. Fired by what would appear to be a narrow and obsessive view of market economics, the Government seem hell bent on a unilateral dismantling of our system of export support.
The trend suggested that this should be done gradually. As the noble Lords, Lord Williams and Lord Ezra, pointed out, no one has taken any notice because it is being done today. I shall not call them subsidies because they were, and are, additional
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facilities offered by governments to underwrite risks for exporters to help them to build up valuable business in difficult markets.
I am pleased to see that the process of privatisation in this country has not gone as smoothly as hoped. In my view, the justifiable criticism from British exporters has helped to influence political opinion in both Houses. Already damage has been done by the uncertainty created by the Government's action. Before our competitors have the pleasure of seeing United Kingdom plc shoot itself in the foot, I believe that the Government should withdraw the privatisation Bill and continue to develop our previous policies.
Since the decision to privatise the insurance services division of ECGD was announced in 1989, a number of contradictory, misleading and damaging statements have been made. At the time, it was meant to continue for five years. Now, however, that has been scrapped and replaced with a bland reassurance that the need for a national interest facility would be kept under review. Even the most ardent supporters of the Bill believe that some government reinsurance facility is essential. It is therefore not surprising that most of the bidders for ISG decided not to pursue the matter once the Government's continued involvement was in doubt.
Earlier this year, there were six interested bidders, we were told, including Trade Indemnity. I believe that Trade Indemnity has excluded itself as a bidder and as a negotiator for a joint enterprise. Those that remain, as the noble Lord, Lord Williams, rightly pointed out, are the Dutch NCM and the Italian export earnings department. A week ago the Minister said that the Government were evaluating the offers before them. What is being evaluated —the purchase price or how two foreign, partly government-subsidised companies will support British exports? In short, we now have a situation where no right-minded UK company wishes to buy ISG.
Last year, the Government also announced a new system and powers for managing the exposure of the projects division of the ECGD, which is not being privatised. The scope of these new powers is wide and there are justifiable fears that the abolition of the projects division is an ultimate policy objective. In February, the ECGD announced that its provision for bad and doubtful debts primarily related to the projects division had risen from £3.5 billion to £7.2 billion. However, provisions are not actual losses and the ECGD is almost alone among the export credit agencies in the world in making and announcing such provisions. Our exporters fear, quite rightly, that the provisions may encourage debtors to default and reinforce the Government's desire to make cuts in ECGD services which are not being privatised. While appreciating the likely net cost to the taxpayer, we must bear in mind what it would mean if we did not export and if we did not pursue our export schemes. That is apparently not part of the consideration for our policy.
Finally, at the end of April, UK capital goods exporters were quite rightly alarmed when it was announced that the £97 million ODA budget for aid and trade provisions, used successively to help UK

1025
exporters to secure valuable contracts in countries such as China and India, had been fully committed and that no new money would be available until April 1992.
I consider that the Government's policy on the export credit support is in disarray. Their persistent negative attitude in supporting exports further will only serve the interests of our overseas competitors.
At the outset, it is vitally important to remember that ECGD has an excellent track record. In the 45 years of its life the agency has traded at virtually no cost to the taxpayer, and during that period some £250 billion of exports have been achieved. All our major competitors provide significant levels of export credit and insurance, and not one has shown itself prepared to dismantle its system of export support.
The insurance service, the ISG of the ECGD based in Cardiff, is primarily concerned with providing short term cover. The noble Lord, Lord Williams, pointed out clearly what short term cover really means; what is short term; and when it becomes long term.
Apparently the main argument put forward for privatisation is that ISG's services overlap with what is provided by private insurers such as Trade Indemnity and that the Government have no right to run a commercially competitive insurance company. Secondly, ISG could be free to develop new business in the area of domestic credit facilities and expand into Europe to take advantage of the single market after 1992. Ii is my view that those arguments ignore the realities of the export credit insurance market in the United Kingdom and in Europe. In particular, ISG cannot be a commercial underwriter. It must also provide a range of cover for political and economic risks and quality of cover, advice and support which, because of government backing, cannot be matched by private underwriters.
Further, without availability of government backed insurance or reinsurance, many exporters would be unable to secure the bank finance they require to fund credit facilities. Premium rates would rise sharply, and there would be a substantial reduction in cover of political risks in a number of important export markets.
We are trying to predict how 1992 would affect the export credit insurance market, but that is an extremely difficult prediction to make. With each country having its well established private or official export insurance underwriter, the prospect of a privatised ISO being able to build a significantly broad client basis across Europe is more than questionable.
Further, given the high level of government involvement in export credit insurance, that is, Coface in France and Hermes in Germany, the organisation of the ECGD as a whole to support exports to third world countries can only be thrashed out on a political level. Unilateral action by the United Kingdom must hurt British exporters and our economy.
The arguments for privatisation of ISG at present are very weak. However, the risks to UK exporters are very significant. Continued government support is essential, and until a formula can be thoroughly worked Out over a period of at least three to five years
1026
all thoughts of privatisation should be postponed. Private capital can be introduced only if it is clear that UK exporters will not suffer from a reduction in both the range and quality of insurance cover provided.
No one argues that the work of the ECGD projects division in providing longer term credit and insurance could be carried out by a private sector underwriter. However, the projects division has come under attack for the following reasons: first, that the support it provides makes an insignificant contribution to the UK balance of payments; secondly, that it represents a growing burden on the taxpayer; and thirdly, that we should not mindlessly follow the practice of other countries and support the sale of capital goods to countries which are unlikely to pay for them. Once again those criticisms have no basis of reality. Having spent all my working life in international trade, I can say with a certain amount of authority that what might be nice in theory—that is, a world without subsidies—cannot work and never has worked in practice.
In particular, as regards ECGD's projects division, it is argued that ECGD's credit insurance policy covers only about 2 per cent. of the UK's non-oil export business, and that it makes no important contribution to the balance of payments. But 2 per cent. represents between £2 billion and £2.5 billion of exports of our strategically important capital goods and defence industry. About 20 per cent. of exports in this sector are probably supported by ECGD. Such sectors depend on exports to sustain capacity and to compete economically for domestic business. If the Government's export credit support fails to match that of our competitors, then multinationals operating in the UK will move their procurement and business abroad, which will adversely affect both domestic employment and imports.
It is true that 40 per cent. of ECGD's project business is concentrated in only six markets—China, South Africa, Indonesia, Hong Kong, the Soviet Union and India. But those developing markets represent a large proportion of the world's population, with significant economic potential. In view of the substantial export credit support which is provided by Japan, the USA, France and Germany, we cannot afford to place our exporters at a disadvantage vis-à-vis our competitors.
It has been claimed that the activities of ECGD's projects division is costing the taxpayer £1 billion a year, made up of some £400 million in subsidised interest rates and £600 million in net claims, and that the recent increase in debt provisions automatically means that the net cost to the taxpayer will rise. Therefore it is argued that the ECGD activities should be severely curtailed and premiums raised. But debt provisions are not trading losses and those figures need to be put in perspective. What happens if we do not have such exports, if the factories and workers who are employed directly and indirectly are out of work? Can anybody prophesy how many of our factories and export businesses at home would close, and how many unemployed people the taxpayer would have to pay for?

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Throughout its life, ECGD has traded at very little net cost to the taxpayer, and there is nothing in ECGD's trading history to suggest £600 million of net claims on a continuing basis. Secondly, the losses of the 1970s and 1980s, associated with a sharp rise in market interest rates and sovereign debt rescheduling, could surely not have been foreseen. Thirdly, the so-called losses are likely to fall as interest rates fall and because the relatively lax lending policies of the past have been tightened. No exporter expects government support for exports that are not going to be paid for.
As regards the premiums, ECGD's rates are already significantly higher than those in Europe—that is, Coface 3 per cent., UK 8 per cent.—while ECGD's actual losses are lower than any of its competitors, who, unlike ECGD, are not compelled to make massive public provisions.
What I have said should demonstrate that if the Government continue to pursue their present policy they will do untold and permanent damage to the UK economy which is dependent on its ability to export to the rest of the world.
Export credit insurance and export credit is a complex business. Both the UK and overseas governments have traditionally been very pro-active in supporting their exports and ensuring that their exporters are no worse off than their competitors. The current Government's radical and unilateral approach is both inappropriate and dangerous. If pursued it will damage our industry and employment merely for the realisation of some abstract economic principle. We can never calculate the cost of losing our export industry.
As a way forward I strongly recommend that the privatisation of ISG is postponed, or preferably thrown out of the window, until a more workable alternative combining private capital with continuing government insurance or re-insurance is found, possibly through the creation of a separate entity owned by the Government initially and administered by the ECGD for a period of time in a way that could attract private capital and be expanded into Europe.
Secondly, the Government should actively explore the possibility of ECGD creating a central reinsurance agency as part of the Department of Trade and Industry which could help to harmonise rates and services within the EC and shift some of the burden from national governments.
Thirdly, the Government should continue to give ECGD every possible support for its projects division and ensure that the range and quality of its services are no worse than those offered by other agencies. The Government should focus their attention on supporting multinational initiatives by the EC to achieve over time a reduction in support for exports.
Governments have two main tasks; first, as an "enabler", to create an environment which allows for the free movement of people, capital and the operation of market forces, and, secondly, as a "protector", to maintain and promote the national interest. In the case of export support the latter option is the only sensible way forward.
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Let me make it clear that at the moment I see no other solution but for the ECGD to be embodied within or linked to the Department of Trade and Industry, whose prime concern should be the promotion of UK plc in world markets. We can learn a little from the Japanese and what they have done via MITI to create a body that plans, organises and implements export support schemes. Are the UK Government determined, naively, on such feeble arguments, to make decisions which will prejudice our export business for years to come?
4.53 p.m.
Lord King of Wartnaby: My Lords, since I speak from this side of the House your Lordships will know that I am a supporter of this Government. However, perhaps I may begin by declaring an interest. British Airways, of which I am chairman, is involved in negotiations in the USSR in which the availability of ECGD cover may be material. I am also chairman of Babcock International, whose business in several overseas markets is materially affected by the availability of ECGD cover and ATP financial support.
I am less concerned with what the Bill says than with what the Government are doing and are failing to do to provide support for the export industries of this country. Your Lordships would not expect me of all people to quarrel with proposals to bring government-controlled businesses into the private sector. I have frequently urged the Government to privatise all those industries which were nationalised by the first post-war Labour Government. Those nationalised industries have cost the British taxpayer scores of billions of pounds. It is to the credit of this Government that they have restored most of those industries to the more efficient organisation of private ownership.
I welcome the proposal to separate from other functions ECGD's function in providing insurance cover for short-term credit and to make the insurance services a stand-alone business in the private sector. I have no doubt that that reorganisation will make possible greater operational efficiency in the provision of cover for short-term credit.
At the same time it is disappointing that only one British company apparently remains on the shortlist of bidders and that insurance services may be sold to non-UK owners. I sound this note of caution: although privatisation is one of the central policies of this Government, that policy and philosophy are not shared by all the governments of the European Community. France, for example, has made clear its intention to continue with both public and private ownership in its industrial organisation. A privatised UK company may find itself competing against organisations in Europe which are owned or part owned by governments.
As we move towards the promised land of the single market one is forced to ask how competition can be perfectly free and perfectly fair between such differently owned entities. What happens if ownership of a privatised UK company passes into the hands of another EC but non-UK company or group of

1029
companies? What is to stop that second company at some future time being purchased by a company which is owned in part or wholly by a government of one of the twelve member states?
The Secretary of State has tried to guard against the risk of back-door nationalisation by referrals to the Monopolies and Mergers Commission. He has pursued that policy with singular lack of success. The clearance of Elf Aquitaine's bid for Amoco was the fourth such clearance in less than a year. In the circumstances it may be wise for the Government to be granted the power to establish the Cardiff-based insurance services as a separate company to be sold to private shareholders but to defer the exercise of that power until they can satisfy Parliament that British companies which rely on short-term credit insurance services in competitive situations will not be disadvantaged.
This country has to earn its living in the world at large. It can do so only if the Government allow and enable the export industry of the country to compete on reasonably equal terms with its overseas rivals. Credit and credit insurance are important factors, sometimes critical factors, in that competition. This Government are committed, very properly, to bringing inflation down to or below the level in other EC and OECD countries. The same must apply to the price of credit insurance. Yet ECGD premium rates in many instances are already higher than those of our competitors and the Secretary of State is threatening to increase them further.
The higher price which this Government are charging for export credit insurance compared with competitor countries is costing this country business and employment at the very time when we are experiencing a deeper business recession than most of our European neighbours.
The construction and capital goods industries are major contributors to the national economy. They have proved by their performance over many decades that in design, quality and delivery they are equal to the best in the world. It should not be necessary to remind the Government that capital goods are not produced or marketed in the same way as fast-moving consumer goods. Ten years may elapse without a single order being placed in this country for electric power generating plant. The industry has been sustained and the technological capability preserved by the orders won overseas against foreign competitors.
There is no longer a narrowly-defined UK domestic market for our manufacturers of capital goods, as the award of the Humberside power station last year to a German company demonstrated. Our companies must compete with their European competitors on equal terms in this country. The Government must ensure that they are able to do so on similar terms in more distant markets.
The Government must stand behind the breadwinners of our major industries. There is worrying evidence that they have failed to do so and that exporters in commercially competitive countries, including Italy. Germany, France and Japan, receive
1030
from their Governments more widely available financial medium-term support and at lower prices than their British counterparts.
We are not asking for subsidies. We are not asking the Government to buy contracts for us. We ask and insist that the Government should deal as effectively with other governments as we are required to deal with other companies. It is the responsibility of the Government to establish for the exporting companies of the United Kingdom an environment in which they can compete on terms which are fair and reasonable.
Export orders, which are vitally important to our manufacturers of capital goods and to the thousands of people who are employed by them, are being lost because the Government refuse to extend insurance cover in some of our successful and promising markets. It is tragic that British construction groups, having invested great effort and expense to qualify for airport development and other projects in the USSR, are now being forced to surrender opportunities to other European competitors because the Government refuse to extend ECGD cover. In Malaysia British firms are bidding for important capital goods projects. To succeed, they must be given a level of Government support which approaches that enjoyed by their competitors.
In the background of this debate, but no doubt in the forefront of ministerial minds, is the international debt crisis. The ECGD accounts laid before Parliament earlier this year revealed that total sovereign provisions had risen to £7,248 million. The Minister has repeatedly stressed the importance of underwriting risk on more prudent terms and of reducing the cost of export insurance.
It is of the greatest importance that the Government should not confuse remedies which are available only through international agreement with those within their own gift. The international debt crisis, which plunged so many third world economies into despair, was the result of a lamentable lack of co-ordination amongst the governments of the world's creditor nations. There is no substitute for such co-ordination.
The Government are pressing for international agreements to eliminate export credit aid and subsidies. That is fine, but in advance of securing such agreement there is no merit in penalising British industry by placing our exporters at a disadvantage with their competitors.
When the Privy Council Committee for Trade was reorganised in 1696, it was charged to work for the removal of obstacles to trade and for the employment of the poor. The committee and its successor, the Board of Trade, have pursued those policies with some success for 300 years. Our present-day Department for Enterprise has not been relieved of those duties.
The Government have a choice. They can meet the cost of providing ECGD insurance and ATP finance at levels adequate to support the efforts of exporters in bidding situations which are often determined on something approaching a government-to-government level. Alternatively—they have a choice—the Government can leave the exporters to fend for

1031
themselves and find the cost of additional employment benefit and assistance for factory closures which lost market opportunities will bring as surely as night follows day.
In an address to the Institute of Directors in April the Secretary of State said that one of the two great national weaknesses was a tendency to take a short-term view. That is precisely what we are asking him to avoid as Minister responsible for the provision of support for our export industries. I commend to the Secretary of State St. Luke, Chapter 4, verse 23—Physician, Heal thyself!
5.7 p.m.
Lord Taylor of Gryfe: My Lords, like the noble Lord, Lord Ezra, I have an engagement tonight which may not permit me to remain throughout the debate. Having made that apology, I want to thank the noble and learned Lord, Lord Fraser of Carmyllie, and congratulate him on dealing with the Bill, which is somewhat outside his normal province. I understand that the Minister concerned, being a Name at Lloyd's, has excluded himself from the debate. It must be one of the few compensations these days for being a Name at Lloyd's that one does not have to feel responsible for this piece of legislation.
I should like to say first how pleased I am to follow the noble Lord, Lord King of Wartnaby. I wish to relate to the House an experience that I had when visiting his factory at Renfrew. That factory belongs to Babcock International. I had some responsibility for a number of years for dealing with export project finance with a large British merchant bank. One of our clients, with whom we worked successfully, was Babcock's, so I decided that I would go down to Babcock's and not simply sit in the City office. I walked through the factory and the manager who accompanied me said, "Lord Taylor, the workers in the factory have observed your interest today and the shop stewards would very much like to have a word with you". I said, "I am not sure that I want to be involved in the internal industrial relations problems of Babcock International, but how do you feel about it?", to which he replied, "Meet them by all means".
The shop stewards, who were assembled around the table in the board room, simply said, "Lord Taylor, we understand that you are responsible for putting together the financial packages on some of our export bids. We should like to ask you why we are losing some of those contracts. Is it because we are not equalling our competitors in productivity or is it because of the export finance that supports our bids?". One of the shop stewards, who was a shop-floor man, said, "Explain for us the comparison between Coface, Exim Bank and the export support agencies in different parts of the world". Those people were concerned about competitiveness and about jobs. They realised that if British export industry was carrying unnecessary burdens that put it out of line with its competitors, it could cost them their jobs.
I congratulate the noble Lord, Lord King of Wartnaby, who, when his company was bidding for export orders overseas, took with him not only his
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sales manager, finance director or technical engineer but frequently a shop steward. So the shop steward realised just what international competition meant. That had impressed itself on the shop stewards to the extent that they were critically examining the facilities for export finance. I am delighted to see the noble Viscount, Lord Weir, sitting opposite. I look forward to his contribution to the debate because the same kind of discussions arose in visits to Weir's of Cathcart.
The point is that if our export industries requiring project finance have not secured the level playing field about which the noble Lord, Lord Young, used to tell the House when he was in office, I am afraid that it will be extremely difficult to achieve success in manufacturing industries. The Treasury may calculate that it is saving some pounds here and there. But in terms of the national interest and their contribution to maintaining a manufacturing industry, the Government must exercise their responsibility for ensuring that we have a level playing field.
In this debate a great deal has been said about the Kemp Report. I suppose that it was the Kemp Report that encouraged the present Bill. I have a copy of that report, although there are not many of them around. On page 9 it states that:
"the national export credit scheme may be seen as a business unity but one that is too important as an instrument of national economic policy not to be kept under Government control".
It goes on:
"For reasons already indicated, industry is insistent that any change in the existing system should not result in any diminution in the level and scope of the service they are used to from ECGD".
It adds that there is no pressure from British business or British industry to make such changes no pressure at all. Sedgwick, the large insurance brokers, conducted a survey in this connection and 90 per cent. of the firms questioned in the manufacturing industries indicated that they saw no good reason to make the kind of changes that are indicated in the Bill.
In its recommendations the Kemp Committee, to which reference has already been made, states that:
"The minimum time needed to legislate for and run in an Insurance Services Group reconstituted as a joint-stock company is four years; this might prove insufficient".
I do not understand why the Government quote the Kemp Committee in support of their case and at the same time reject what in my view is a basic recommendation.
Sometimes I like to hope—I do so particularly today when there are so many representatives of British industry in the House—that we judge these matters not on a party or doctrinaire basis. I never believed in the arid argument of privatisation versus nationalisation. That is in the past. We must answer the question and the challenge that the noble Lord, Lord Williams, presented. Is this good in the national interest? Is it good for British industry? If noble Lords were sitting in their boardrooms rather than in a political forum, I am quite sure that they would come to the conclusion which the noble Lord, Lord King, had the courage to express this afternoon.
Is it good for industry? The first thing to do when selling off the assets in any business is to assess the

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market. If six feelers are put out to leading companies which it is thought might be interested in buying those assets and only two positive replies are received, both of them foreign, one would say: "The market has collapsed. Why should we sell assets, for doctrinaire reasons, when it is quite obvious that the market has very little interest in acquiring those assets and at the same time by selling these assets we are jeopardising an important element of export and financial support?" So I plead with a number of the speakers who are to follow me, who have a long and distinguished record in industry in Britain, to make the kind of judgment that they would make if they were sitting in their own boardrooms and discussing the disposal of an important asset.
How much will we get out of this? Originally it was thought that we might realise £100 million in the disposal of this particular branch of ECGD. The City seems to believe that about £25 million might be the appropriate figure. Considering that in the transition period to the privatisation the Government will need to liquidate certain responsibilities and that there will be transitional payments to the new companies—what are now called sweeteners—it is unlikely that at the end of .he day the nation will finish up with anything realised from the disposal of this branch of ECGD.
For all those reasons this course is not worth pursuing. ECGD has a statutory obligation in the Act,
"to encourage UK trade and provide insurance and related export support facilities for UK exporters".
The new privatised organisation will not accept that specific obligation. It is an obligation of a UK government-owned institution. The new organisation, quite sensibly acting in the interests of the shareholders, will calculate the return to its investors. It will not be moved by national considerations or by a consideration to keep British manufacturing industry in business. It will calculate its premiums in a way to give a reasonable return. That is the risk that we run with this legislation and I think that we should avoid it.
It has already been said in this debate that one of the problems of the present Government is that the hand of the Treasury is obvious in this legislation and in the general conduct of ECGD. At the moment our premiums are the highest in Europe. No other country in Europe with which we compete —neither the Germans nor the French—carries the burden that we have to meet on ECGD financing. In addition, there are the aid provisions, which are very important on export deals. They are a kind of sweetener. If one can provide an element of aid in the bid and so reduce the total price on a particular project, that can be helpful. The French are experts at improving what is called the credit mixte.
Under the present arrangements of this Government we exhausted this year's aid trade provisions in April. They will not be reviewed for another year—until next April. That means that no British exporter bidding for an overseas contract can include any element of credit mixte or aid provision, whereas our competitors still have in their pockets a large amount of aid-trade provisions.
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I know that the tradition of this House is that we do not move for a rejection of legislation at Second Reading. However, I hope that heed will be taken of the critical comments made by the noble Lord, Lord King, and other important leaders of industry who are present today so that at Committee stage we may avoid some of the worst excesses of this rather poor piece of legislation.
5.21 p.m.
Lord Prior: My Lords, I declare an interest. I am very proud to be chairman of GEC, one of Britain's largest exporters and, I am informed, the largest single user of the ECGD. I begin by paying a tribute to the ECGD. We find it an organisation which has worked manifestly well in the interests of the nation through its exporters. It does not blindly follow our wishes but provides objective, pragmatic assessments of what is possible.
I turn to the Bill. My noble and learned friend on the Front Bench does not seem to have many friends. In fact, looking through the list of speakers I do not believe that many of his friends will speak. I hope that he takes that seriously. I know that my noble and learned friend is not an exporter. I do not blame him for what he said today. It is probably a good thing that he does not know much about exporting because if he did the words would not have come out of his mouth in the way that they did. It would not have been possible to have made such a speech if one had to deal with the problems of the ECGD day after day, as some people do.
It is sad that from the assurances underlying the Bill, the general view is that the Treasury does not regard British exports or ECGD as being of great significance or importance. That was pointed out by the noble Lord, Lord Taylor of Gryfe. That is the crux of the matter. That is why the assurances are given. That is why the views that have been expressed were so strong and were stated with so much feeling. It is sad that at this time, in the depths of recession with an adverse trade balance of over £1 billion a month, we should consider any action which might cut back exports, or the possibility of exports. I do not refer only to exports. Unless one has a strong capital investment business in capital goods, the investment is not available to provide the goods at home and imports flood in.
Considerable problems face the Government if they proceed with the Bill as drafted. Your Lordships are sometimes critical of British industry. I wonder whether noble Lords realise that even the Government acknowledge that ECGD's charges are the highest of any export credit agency in the world by a considerable margin. The level of premium which exporters were called upon to pay, even before recent increases, were sometimes up to two or three times higher than those asked of our competitors. It is to our certain knowledge that in the case of South Africa the premiums charged by the German and French credit agencies were a third of those offered by ECGD. We are referring to a very considerable difference in premium costs and, on a large project, a substantial sum of money which may run into tens of millions of

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pounds. That sum has to be included in the tender price; it cannot be separated. It can mean the winning or losing of a contract.
The noble Lords, Lord Ezra and Lord Taylor, spoke about a level playing field. Yes, of course we want a level playing field, but sometimes we do not even get out of the pavilion. The level playing field is a long way off.
The level of short-term premium is also rising. In some cases it is rising to more than 10 per cent. of the total cost of a project. That makes no sense. Sometimes one feels that it is part of a deliberate attempt by the Treasury to get out of the business of ECGD altogether. We are told that the Government are doing their best to get other countries to follow suit and put up their premium rates. I do not understand why the Minister for Trade proposes unilateral disarmament for our exporting forces. Surely the policy of this Government has always been one of multilateral disarmament. Currently there is absolutely no evidence that other countries are following us in putting up their premiums.
Before I leave the subject of long-term credit, perhaps I may say that it is not only the bigger companies which are worried by these problems. The big companies employ a myriad of sub-contractors. They need cover too. They are the people who perhaps employ the bulk of labour. As has already been said, perhaps we see the hand of the Treasury in the Bill. During the review of ECGD operations carried out in 1989 the Treasury pushed for the so-called "zero option" which was in effect the complete abolition of ECGD cover. Fortunately, it did not succeed in persuading the Cabinet of the wisdom of such a move. Instead of a single blow by the executioner's axe, as the Treasury originally wanted, it is administering death by a thousand cuts by increasing premiums and restricting the availability of credit. It is because those assurances which we have been given before have not been kept that we have such difficulty in accepting similar assurances now on the future of ECGD at Cardiff.
I turn to the short-term credit, which is the main subject of the present Bill. My noble and learned friend states that the private sector is better able to meet the needs of exporters than the ECGD. I simply do not recognise that argument. I believe that I have his words down reasonably correctly, but I do not understand them. Nor do I understand the second reason given: that the position is unfair to private sector insurers. It is not as though they are jumping over each other to get into the market. The only two bodies which have shown any interest are an Italian firm and a Dutch firm. It is hard to understand why it is unfair to private sector insurers.
I do not mind the privatisation that this measure provides if I felt that it took the Treasury out of the argument. That is what most of the former nationalised industry chairmen used to say to me: "We want to be privatised. We do not wish the Treasury to have anything to do with us any longer". I follow that argument. But the problem with regard to this measure is that the Treasury cannot get out
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altogether. The political risk argument has to be met, as has the top-up facility for credit which lasts for more than a short period of time.
As drafted, the Bill does not deal with points about political risk and top-up facilities. The Minister has told me that re-insurance can be obtained internationally. He must be aware that that is already taken into account by underwriters. The insurance sector in the United Kingdom, considered by many as one of the strongest in the world, has taken a terrible bashing in recent years. Hurricanes, Piper Alpha and asbestosis have all taken their toll. Lloyds is not in robust health, as many noble Lords may know from bitter personal experience. Indeed, one of the previous bidders for the ISG—namely, Trade Indemnity—made an operating loss last year of £28 million. It is not surprising that insurance companies are now taking a prudent view of risk.
None of us can say what will be the case three years from now as regards top-up assurance. However, it seems clear that a commitment of cover for up to three years will not suffice. The Minister has no crystal ball so why endanger the future of many companies in this manner?
I turn to the political risk and to deal with the extraordinary business of what NCM, a Dutch company, is able to do. It was privatised in 1932 but it receives an enormous amount of government backing. In a press handout from NCM dated 24th April the company made clear that it still receives from the Dutch Government a degree of cover for political risk. At the end of 1989 the commitment of the Dutch Government under those policies of political risk amounted to 40 billion guilders (£12.3 billion). On account of political risks that year the Dutch Government paid out no less than £229 million.
My noble friend said that the agency was only a minor facility that was needed on a handful of occasions. That is not the way in which the Dutch have used it throughout the years. If we had used the facility in the same way we might now be in a stronger trade position. It is evident that the term "political risk" is one of elasticity. Many people who deal in the export market have come to recognise that fact only too well; in particular the French, Italians, Japanese, Germans and many others.
It is quite clear that many noble Lords are puzzled about the Bill. In the middle of a bleak recession and with a massive deficit in our balance of payments the Government have introduced a Bill which has produced a strong reaction from Members of this House and from industry. Like my noble friend Lord King, I wish to be a strong supporter of the Government; I believe in them and wish to see them succeed. However, I beg the Government to listen more carefully to industry, on whom the future welfare of this country depends. We are talking not about small matters but about immensely important consequences for the future of our country. There is an understanding on both sides of the House—and perhaps the same exists in another place—that unless we can improve our industrial performance we shall

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never be able to reduce the unemployment figures and give the people of this country the prosperity that we all wish to see.
I hope that the Government will take seriously what has been said. This is not just a bleat; it is not just industrialists using the same old words to try to cover up some of our inefficiencies. We recognise the fact that we have our part to play; but please listen to us because a great deal is at stake. We wish to help and we can do so only if we in turn feel that our views are receiving a reasonable and correct response from the Government. That is what matters and that is what we shall look for in tabling a few amendments in Committee. I hope that the Government will not try to stand behind the view that nothing can be done. Something must be done otherwise confidence will not exist and that could be disastrous for us all.
5.35 p.m.
Lord Selsdon: My Lords, it was only to be expected that the debate would broaden out to be one on the future support for ECGD rather than on the Bill. But that is symptomatic of the times in which we live because we all fear the dead hand of the Treasury. It appears that somebody has forgotten that ECGD was established in 1919 by Sir Winston Churchill to encourage and promote exports after a difficult time. It was a time when the Board of Trade, like the Archbishop of Canterbury and others, had power and teeth and before the role of the Department of Trade was set aside and became one to restrict and control.
During the past 10 years we have seen a shift from ECGD year on year costing taxpayers nothing to the heavy burdens imposed as changes have taken place. Those changes, or third world debt, were not of the making, of the. countries concerned but were due to a number of factors that we failed to recognise. In part they were due to the rising cost of energy, to the floating, of exchange rates for a longer period than was necessary and to rising interest rates.
In the debate today on the Second Reading of a Bill to privatise a small part of ECGD one detects an underlying fear that it is the thin edge of the wedge and that someone has said, "Get rid of this at any price, even to foreigners". Those of us who believe in British trade find it difficult to understand why on the one hand the Government oppose having EC legislation thrust upon them while on the other hand they hide behind it when they find it convenient, and we wonder more about the second aspect.
I declare no financial interest but I have chaired a number of export bodies and have had the privilege of serving on some with the noble Lord, Lord Ezra, my noble friend Lord Limerick and others. Over time one has detected the commercial sector pushing government to support trade. My noble friend Lord King referred to the original Privy Council Committee for Trade. Its Charter of Trade still hangs in Hogarth frames n a number of offices of senior officials. They look at it with longing for the days when trade was declared to be an activity in which Her Majesty's Government should be actively involved; there was protection of our trade upon the high seas.
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The protecting of trade today revolves to an extent around GATT; but it also revolves around protecting ourselves against the advantage taken of us by a number of our competitors. If the Treasury had time to think long term it would realise that this must be one of the worst possible times to begin such a movement in legislation because it has not yet got its act together. If our interest rates were down to the level of those of our industrial competitors, if our inflation was also down at their levels and if we still had the attitude that trade, whether at home or overseas, was good and beneficial, we should have no problem. There might then be only a minor need for an Export Credits Guarantee Department.
But today we have the Government attacking the major banks in the City for the outrageous charges that they place upon small businesses, while the premiums charged by ECGD are even more outrageous in reality. It is the pot calling the kettle black. But the change that must come is difficult to forecast. If, as we hope and anticipate, the Government can reduce inflation to 5 per cent. by the end of the year, and if they no longer have interest rates at more than double the rate of inflation, the need for such historic support for trade will begin to fall away. There is no doubt that in order to retain any semblance of a manufacturing industry we need the support that was historically available.
Of the 7,500 exporters who hold ECGD policies, some 6,500 are in the manufacturing sector. I served with pleasure on a committee chaired by my noble friend Lord Aldington. I remember that the Government reacted strongly when the committee asked what would happen if we had no manufacturing base in the future. That question is still asked. However, without that form of historic support we cannot go very much further in terms of capital goods exports.
If we examine where those capital goods or manufactures go, we see that this country more than any other of our industrial competitors is dependent upon the third world or former parts of the British Empire. We have major deficits in manufactures with many of our industrial competitors and surpluses, understandably, with those countries which need manufactured products or plant and machinery to develop their own interests. We must be careful not to throw away much of what has been done in the past.
If our enemy is the Treasury, let us have it out. Numerous reports have been written; for example, by Bob Kemp. He was a very good man, as were almost all the people I met in ECGD. They have had their resources and support taken away from them. The Treasury too produced its reports. It produced the Byatt Report, which many of us felt was almost the death knell of any form of involvement by government in trade or major projects abroad. Those were worries of the past.
Today the Government have a chance. This Bill is not of great significance. It does not relate to a large amount of manufactured business; it is only a small section. However, it is a start. If the Government are to continue with this—and they may have difficulty because there will be a number of amendments tabled

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in Committee on political risk cover and other matters—they should give the assurances that all the bodies with which I have been associated have asked for. They want a firm assurance from government that we shall be at least as well protected as any of our industrial competitors and have an ECGD capable of matching rate for rate, pound for pound and premium for premium what is offered by our competitors on the Continent and elsewhere.
If the Government would make such a firm statement, they would find support more forthcoming in the future. There is this fear and I believe that noble Lords who speak after me will voice it. If such an assurance were forthcoming from my noble and learned friend, I believe he would find more support from these Benches than has been the case so far.
5.42 p.m.
Lord Tombs: My Lords, I begin by declaring an interest. I am chairman of Rolls-Royce, a company which last year—1990—exported capital goods to the value of £2.5 billion, some of it with the support of ECGD.
In my view the privatisation at Cardiff is not necessarily bad although the Government are doing their best to make it so. We gave evidence to the Select Committee on Trade and Industry in another place two years ago supporting proposals for the privatisation of ISG at Cardiff. At the time we hoped for greater availability of finance outside the public sector, more flexible and imaginative insurance policies and, perhaps, more efficient administration. We certainly did not support the privatisation proposals in order to reduce the scope of the cover on offer or to increase the cost of the facilities. I am sorry to say that both of those unhappy results seem likely to emerge from the proposals presently before your Lordships' House.
The reason stems from the grudging and inadequate assurances which the Government have been prepared to give in response to requests for such assurances in another place—assurances relating particularly to the insurance of political risk and top-up facilities. Indeed, it may well be that those grudging assurances have something to do with the fall-off of companies expressing interest and the fact that we are left with only two foreign state-supported insurance companies in serious play.
Very sensible amendments were tabled in Committee in another place but they received short shrift from the Government. If the Bill proceeds, I hope that that unhappy history will not prevent attempts to improve the measure in Committee more or less in the way that was proposed there.
The Bill as drafted is only part of a wider scene. It should be seen in the context of government policy on exports in general and on medium to long term insurance and project finance in particular. Both of those will continue to be the responsibility of government. It may not be known, although some noble Lords have mentioned the fact, that premiums which we pay for medium to long term insurance are often much higher than the premiums on offer to our
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keenest European competitors. The difference in the premium rates can greatly exceed the total margin available on a large project. That is the measure of the absurdity of the competitive situation in which we are currently placed by government policy.
Earlier this year, premiums across the board for medium term insurance rose by 10 per cent. That was said to be only an interim measure until portfolio management—PMS—entered the ring in a more serious way. However, we were advised to expect further premium rises when that happened and to expect cover in those areas where the UK is traditionally strong to be restricted.
There has been over 18 months of uncertainty as regards the application of PMS and the privatisation of ECGD. The only positive decision in that period has been that since the aid and trade provision is now exhausted, there is an embargo on new applications for aid and trade provisions. Therefore, projects which could and should come to Britain will not come to Britain. Loyal customers, who expect from us the same support as our competitors' governments offer, will be disappointed and they are as puzzled about that as we are.
Over a considerable number of years the Government's attitude towards exports, unlike that of our competitors, seems to have been half hearted. I do not believe that that stems from any Machiavellian plot on the part of government or—and I say this with reluctance—the Treasury. It stems from a lack of understanding of fundamentals. It seems obvious to me and, I am sure, to many of your Lordships that exports equal jobs and foreign exchange. One might believe that those are both desirable ends. Apparently they are appreciated more by the governments of our competitors than by the Government in the United Kingdom.
There is a need for an unequivocal commitment by the Government to support exports on terms not less favourable than those demonstrably available to our competitors. As the noble Lord, Lord King, said, we are not looking for handouts or differential subsidies. But we are looking for a level playing field and for terms which our competitors have access to and which they use.
Availability of those terms and a positive statement from government of their commitment to the importance of exports would restore confidence in companies and among our customers. There is an urgent need for a deep re-think of the Government's attitude to exports as an important part of their approach to industrial policy in general. If that leads to delay or to the withdrawal of the present Bill, that would be no great disadvantage.
5.48 p.m.
Lord Trefgarne: My Lords, along with more than one noble Lord who has spoken, 1 begin by declaring an interest. I was a Minister in the Department of Trade and Industry when this Bill first saw the light of day. I am now involved in industry in at least two companies which are regular users of ECGD facilities.
I support the principle of moving the insurance services division of ECGD into the private sector, not

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because of any basic political beliefs but because I see no reason why government should be involved in quasi-commercial business. The fact is that Ministers are nol very good at running businesses.
I see my noble friend Lord Prior and the noble Lord, Lord Weinstock, in their places. What would be the result if every time my noble friend wanted to raise the price of his product, he had to ask the Minister; if every time he wanted to operate in a particular country, he had to ask the Minister; if every time he wanted to extend the range of his products, he had to ask the Minister; if every time he wanted to alter the pay of his employees, he had to ask the Minister? Of course, their great company would not be the proud success it is today.
It is to the considerable credit of the officials of ECGD that they have done so well as they have, despite the fact that Ministers do indeed meddle in the day-to-day running of that enterprise in the way I described. The fact is that Ministers are too fond of digging up the plant to see how the roots are getting on. That never did any plant any good.
We are told that the European Community has designs upon the state-backed credit insurance carried on by member states, at least in so far as it affects the trade between member states. I believe that there has been or e case before the European Court of Justice on the matter. It may be that there are draft directives somewhere in the corridors of the European Commission waiting to be presented to the Council of Ministers. I recall that during my time in the DTI I asked specifically whether there were any draft directives. At that time there were none; maybe there are now. My noble and learned friend can perhaps reply to that point when he speaks later in the debate. Is it truly the case that the European Commission has its sights set upon this activity? If so, we should have better chapter and verse than we have had thus far.
I do not doubt that my former right honourable friend, now the commissioner for competition matters in the European Commission, has been thinking about the competitive aspects of this business also. He is zealous in seeking out what he sees to be distortions of trade brought about by absence of fair competition. If that is the case, I suggest to my former right honourable friend that there are other member states within the Community whose export promotion arrangements are a good deal less fair than those we practise in this country.
I emphasise that I support the basic principle of the Bill. I believe, however, that the proposals suffer from a number of shortcomings. I start from the position which many other noble Lords share. Whatever new arrangements are to be made, the end result must be that British exporters are not placed at any disadvantage compared with their competitors. Perhaps I should say that they must not be placed at any greater disadvantage than they are at present because it is the case, as my noble friend Lord Prior reminded us, that in recent months a number of Treasury-inspired rate increases and restrictions of cover have caused some difficulty for our exporters. We shall see whether there is anything my noble friend can say about that.
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I see a number of difficulties arising from what is proposed. I do not intend to trouble your Lordships with all of them at this stage. Two issues, however. stand out —the political risk and the related but different point of national interest cover. There is cover which, for all practical purposes, is uniquely provided by ECGD against such things as political unrest or political decisions leading to delay or suspension of payment. National interest cover is slightly different. It is cover which ECGD is pressed or on occasions even directed to provide, sometimes by formal ministerial directive, not because of overseas considerations but because of domestic United Kingdom considerations.
No duty is placed upon the new owners to continue that cover, which in many markets is absolutely crucial. The matter was raised in the other place and indeed amendments were proposed in Committee to secure the continued provision of the cover. However, following certain undertakings from my honourable friend Mr. Sainsbury the amendments were removed. I must state plainly that while my honourable friend's words were welcome, they did not go far enough. We should give the other place a chance to consider the matter again. I shall certainly be willing to support an amendment to achieve that at a later stage.
I accept that the Bill appears to provide the necessary power—indeed, my noble and learned friend referred to that in his opening speech—for the Government to continue to underwrite both political risk and national interest cover. However there is a risk that with the Bill as drafted fiscal restraints are likely to dominate ministerial thinking to the disadvantage of our exporters. Indeed, according to my noble friend Lord Prior—and I have some sympathy with the view he expresses--there has perhaps been too much fiscal thinking in ministerial minds in regard to the matter in recent times.
I turn to the second point to which I attach some importance. Others have referred to it. It concerns the nationality of the potential owners. I hope that I am not the last of the little Englanders seeking only to maintain ECGD in UK ownership for old times' sake. I believe that Ministers and Parliament must satisfy themselves that a non-UK owner or a new UK owner will support British exporters no less vigorously than hitherto. It is not self-evident, as more than one noble Lord has said, that an Italian or a Dutch company already involved in this business with its own nationals will continue to ensure that cover is always available on this side of the Channel as it has been hitherto.
I emphasise again that I seek only to ensure that British exporters are not placed at a disadvantage. It may be possible to achieve that by placing duties on the new owners or the Government, or both. It is surely an issue which your Lordships will wish to explore at a later stage. The truth is that the present list of bidders is rather thin. There is only one British company, apparently, that is even remotely interested, a firm called Trade Indemnity Co. Ltd. It is a fine firm with a long record. However, as the noble Lord, Lord Williams, pointed out, the last year or so for that company has not been particularly successful, nor has

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it indeed for the British insurance industry generally. Therefore it is perhaps not surprising that there are no British companies racing to be the first to acquire this part of ECGD. However, in the light of that situation, perhaps the Government should consider whether or not it would be right to re-open the lists in regard to the bidding for ECGD and perhaps extend the competition to later in the year to see whether new and more powerful offers come forward.
There are other subsidiary points about which I do not need to trouble your Lordships in detail at this time. For example, I am worried about the lack of provision for the employees of ECGD to acquire a share of the business. I remember that during my time in the department I sought to see whether that was possible. Under the arrangements then proposed it did not seem to be. I regret that. I hope that the Government will keep an open mind on the matter to see whether some provision can be made.
I am troubled also by the Government's reluctance to publish the prospectus, even in summary form. The document almost certainly, I presume I have not seen it—contains information of a sensitive, commercial nature. Perhaps it would be possible to publish it without that sensitive commercial information if that helps my noble friends.
Another point I shall want to explore in Committee is the current arrangement whereby Treasury consent is required for almost everything that ECGD does. I do not argue against that in principle, but there are times when it is right to ask—the time when some of the recent decisions were made would be such occasions—whether Treasury consent has been unreasonably withheld for some of the things that ECGD should have done.
Those are all detailed points which we can explore in Committee. For the moment I support the Second Reading of the Bill; I hope your Lordships take the same view.
6 p.m.
Viscount Weir: My Lords, before speaking I would like to declare my interest as chairman of an engineering company which is a substantial exporter and which, without its exports, would be much less than half the size that it is. As to project and long-term finance, recent government policy, as we know, has been simply a matter of increasing premiums and of limiting the amount of support. I hope that no Ministers today will waste your Lordships' time by denying that. The Government have given as the reason the poor financial outcome of past commitments to exports.
Like most of your Lordships, I imagine, I sympathise with those losses and I deprecate them. Indeed in a perfect world there would be no reason for any government artificially to support its own exporters against their foreign rivals. But the world of international trade is a far from perfect one. Unhappily it still remains the fact that competition is often as much between countries as it is between companies. Surely therefore it is only realistic for the Government, in setting the terms and extent of export
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support, to look not only at the financial outcome of the UK experience in isolation but also at the overall UK position relative to competing countries.
That is a matter which is not often mentioned. However the analysis carried out by the major British exporters shows that among the export credit authorities of the main exporting countries, ECGD has significantly the highest proportion of its portfolio in good markets and simultaneously one of the lowest exposures to the 10 largest debtor countries. In fact, at a figure of 14 billion dollars, British exposure to the less creditworthy countries is less than half the average of France, Japan or Germany. That suggests to me that by international standards the ECGD is relatively pretty well placed.
Given that situation, and taking again the perhaps over-used metaphor of the level playing field, it seems that our Government, in competing with other governments, believe that they are entitled to play downhill and with the wind behind while they expect our exporting companies to play under precisely the opposite conditions. I applaud the efforts of Government to negotiate for disarmament with competing countries in this export finance contest. What is not reasonable however, is to proceed forward—as my noble friend Lord Prior put it so well—by way of unilateral disarmament and to do so before substantive progress has been made in negotiation. Yet that is just the way in which we are proceeding. It is simply an aid and comfort to our competitors and incidentally a source of puzzled amusement to some of them.
Those of us who are at the sharp end of exports are disadvantaged on premium rates and coverage. We know that because we see the differentials for ourselves. We either lose orders or our profit margins are put under severe pressure if we have to try to swallow those differentials. Therefore we must look for detailed explanations and reassurances as to effective action which the Government intend to take.
As regards the proposed privatisation of the short-term export credit insurance business, I am certainly not opposed to privatisation in principle. I merely remark that the experience of my own business and that of many other exporters whom I know suggests that at the very least the insurance service does a pretty good job. Most certainly there is no evidence of so defective a performance as to justify privatisation for any obvious reasons of efficiency.
At the same time we are all aware of the ghastly position today of our balance of payments. At a time of such difficulty is it surely not imprudent and ill-considered to make so radical a change in export insurance arrangements? Of course the Government believe that what they are proposing will work better, but they do not know that that will happen. It seems to me to be irresponsible and ill-judged to take any unnecessary risk at this difficult time.
If privatisation is to proceed, however, as no doubt it will, as noble Lords have already heard today, there are two very simple matters that need attention. First, there need to be proper, firm statutory arrangements for covering those risks which are largely political and which lie outside the scope of the normal commercial

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insurance market. Such arrangements must be put in place for a sufficiently long time. Vague phrases which we have heard like "up to three years" or "will be kept under review" are insufficient. Secondly, we need a firm and effective mechanism for reviewing the outcome of privatisation once it has been in place for a period.
As I remarked earlier, the Government do not know how well privatisation will work. In case they fall down on the job and in doing so seriously disadvantage our exporters, there must be a system established in the Bill to review the position and to make such changes as circumstances show to be necessary. I am not alone among your Lordships in feeling severe unease at the very few commercial insurance companies which have come forward to bid for the business. That would seem to indicate some lack of confidence or certainly a lack of enthusiasm on their part, as to just how successful the whole exercise will be. Those doubts are surely sufficient reason on their own for requiring more effective review procedures than anything in the Bill as it now stands.
In conclusion, I look today, as British industry does, for proper reassurances of effective support for long-term export finance. On the privatisation of short-term activities, I look for no more than those concessions which simple common sense would suggest.
6.8 p.m.
Lord Jay: My Lords, the longer I listen to the debate this afternoon the more I become convinced that the motive of the Government in introducing a Bill involving a measure of privatisation of the ECGD is not so much any desire to help industry or exports but, partly, a narrow desire held by the Treasury to save money at all costs. The motive is also partly a doctrinaire belief in privatisation for privatisation's sake regardless of the facts and the merits.
The Government having already laid a heavy burden on exports by fixing our exchange rate at a considerably overvalued level—which of itself is a tax on exports—is now hitting exporters again by watering, or withdrawing altogether, the longstanding and valuable support for exports. I do not think anyone who has listened to the debate this afternoon will disagree if I say that industry and the exporters in this country, far from supporting the Bill, are almost unanimously opposed to it.
Harm is bound to be done. As we know, premiums will rise. They are rising already. To handicap exporters in that way is surely exactly the opposite of what a modern government should be doing. After all, for the United Kingdom exports are the support of all our other economic aims. The only surprising fact is that one has to say so at this stage. Nowadays, other governments—notably, those of France, Japan, and others—assist their exporters directly with an array of devices. 'They do not rely on a hidden hand to support their export trade. In my view, these days export promotion ought to be the chief activity of the DTI, as it has been in the past. Indeed, the 1964 Government expanded a whole range of export services, mainly through the ECGD and based on low interest rates,
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low premiums and an assurance that the department, by and large, would match any advice which other competitor governments were offering. That was of very great assistance to exporters and to their confidence. Incidentally, the volume of UK exports rose by more than 25 per cent. in the four years after 1964 when that policy was in force.
The ECGD was, after all, founded 70 years ago by a Conservative Government in the days when conservatism was much less doctrinaire than it is now. Since then it has not only been supported on an all-party basis by every government in this country, but it has been copied by virtually every major industrial country in the world, including the United States. As the Kemp Report states, the ECGD has been a highly valuable instrument of government economic policy. When all is said and done, what reasons do Ministers give, including the noble and learned Lord today, for these proposals? Having looked around rather desperately to find an excuse for the proposals, Ministers now say that the Treaty of Rome, by reason of Articles 92 and 93, may detail our possessing a publicly-owned credit authority. Incidentally, as the British public were assured repeatedly 15 or 20 years ago that the Treaty of Rome would not in any way interfere with public ownership of industry, I hope we shall not hear too much of that argument.
The Kemp Report states that,
"there is nothing in the … 1992 legislation nor in any other proposals for legislation … which in any way affects the ability of the state agencies to carry on business".
The Kemp Report did not recommend immediate privatisation even of the short-term group of services. Thirdly, I ask the Minister again, as has already been asked this afternoon: if the Rome treaty is really the obstacle, why are other EC members helping their state credit enterprises and keeping them under public ownership and control?
Next we are told that as a state institution the ECGD has incurred very heavy losses in recent years. As we know, that is perfectly true and is a result of the world debt crisis. However, although that is an argument for privatisation one has to take note of the fact that our great clearing banks have also incurred the most enormous losses in overseas loans during the past few years. I do not blame them for that, but I do not think that that is an argument that can be raised for privatisation, particularly as the ECGD was specifically created to deal in political risks.
To whom are the Government going to sell this business and entrust these valuable national functions? The only domestic candidate, as has been said, is the firm of Trade Indemnity; virtually the ECGD's only competitor in this country. However, I gather from the Minister that it is no longer a competitor. Is it really true that the only choice now is between Dutch and Italian bidders who are, in the Government's mind, possible recipients of these interests and functions? I find it extraordinary that the Government are seriously contemplating handing over a large section of the ECGD to overseas companies.
During Question Time on 4th June, the noble Lord, Lord Reay, said:

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"There is no reason why the nationality of the owner should be seen as a key factor".—[Official Report, 4/6/91; col. 539.]
Can we really expect an Italian-owned company to show great enthusiasm for helping the British motor car industry to export to Italy in competition with Fiat? I find that very difficult to believe. However, if this sale goes to a private company whether British or foreign, how can the Government continue the policy of matching the aid that foreign credit institutions give with similar offers by the British company, or whatever company takes over these functions?
In my eyes the whole proposal bears all the marks of having originated in the unseemly rush of the noble Lord, Lord Young, to privatise everything in sight regardless of the effect that it will have on exporters and our trade deficit. That has done a great deal of damage elsewhere—for instance, in the shipbuilding industry. For those reasons, I hope the Bill will be drastically amended before it leaves this House.
6.16 p.m.
The Earl of Limerick: My Lords, I hesitated before adding my name to an already long list of speakers. However, I did so on account of an even longer involvement with the subject. Like my noble friend Lord Trefgarne, at one time I held ministerial responsibility for export credits; in my case in the mid-1970s. Also, for 25 years, both before and after that time, I was involved as a banker in arranging credit for exporters; precariously also successively as chairman of the British Overseas Trade Board and what is now British Invisibles. I have had a more than casual interest in the success of our export trade. Throughout that period I have had a high regard for the leadership and commitment of ECGD. It has laboured in recent years under certain disadvantages, one of which is addressed by paving provisions in this Bill.
We have come a long way since the debates in 1978 on the Export Guarantees and Overseas Investment Bill. It used to be contended that our exporters, or at least significant classes of them, needed, deserved and/or could not manage without some government subsidy. Today one seldom hears that argued. It would of course run foul of the GATT provisions, the EC competition rules and the Berne Union, if that line were to be pursued.
The fundamental requirement, however, is quite unchanged. I express it in this way: it is to ensure that British exporters, whether selling capital goods, consumer goods or services, whether selling for cash, on short-term or long-term credit, shall not be disadvantaged in terms of insurance cover or financing costs compared with exporters from competitor countries. There will always be an element in that of "by-and-large" or of "swings-and-roundabouts" but if we cannot respond to overseas competition, by and large we shall suffer where it hurts very much—in our balance of trade. That would matter to our inflation rates and thus to our interest rates. Above all, it would matter to employment.
How does the Bill match that fundamental requirement? I leave aside the renewal provisions of
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the Bill and come to the clauses paving the way for the privatisation of the Cardiff-based short-term ISG business. Will this help or hinder? The Kemp Report pointed to no clear conclusion. Since then there have been few voices against the principle of privatisation. The noble Lord, Lord Williams, argued cogently for some competition in this short-term market place and for a government-owned ECGD to offer insurance to exports from third countries. That is beguiling, but it would not work well for the same reason that the ISG business itself is now, in its elements, unsound. I stress that that is no criticism of the dedicated people who manage it to the best of their ability. It is unsound for basic commercial reasons.
First, it has never had an equity capital base as a cushion against a bad underwriting period and thus could not resist the most uncommercial of all controls when its accumulated surpluses were exhausted at the end of the 1970s; that is, control by the Treasury. Secondly, ECGD is not empowered to reinsure in the commercial market when conditions would so admit with advantage. Likewise, ECGD is not empowered to hedge the sterling part of its portfolio that is, much the greatest part—against interest rate fluctuations. The taxpayer would have been saved a few hundred million pounds if that ability had been available. No underwriter can operate efficiently without those fundamental advantages. If the Government are unwilling to afford them to ECGD, then it is right in principle to privatise the ISG. I have no equivocation in saying that.
The timing, however, could be another matter. The likely bid price today is only a fraction of what it was assumed to be when the idea was first mooted. Any of us individually may decide resolutely to sell something, but hold our hands notwithstanding in a bad market. That is not to say that even at a low price it might not be a good decision if it achieved its objectives, took a load off the taxpayer and left the exporter with no worse a service.
I have a slightly mischievous thought. As we know, NCM enjoys reinsurance rights in respect of Dutch export business with the Dutch Government. Should NCM be the successful bidder for ISG, could political risk reinsurance with the Dutch Government be denied to British exporters? It raises a nice question for the experts on EC competition rules.
I believe that there are real issues here for the Government but, except for those who have doctrinaire objections to the ISG privatisation, they are only marginally raised by the Bill itself. The Bill makes many useful or necessary provisions and I give it a general welcome, though I hope it will be strengthened in certain particulars. In the words of the Kemp Report, there should be no diminution in the level of support compared to the facilities available to exporters in other countries. Exporters are realists and are as aware as anyone else of the macro-economic issues. Those engaged both directly or indirectly in our export trades—and more are indirectly engaged, as subcontractors, component manufacturers or suppliers of services than we or they often recognise—have genuine concerns. The Bill offers a test of

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credibility and of genuine government commitment in support as much for what is not in the Bill as for what it contains.
I believe that the questions which need to be addressed in the course of the wider debate about ECGD's future are these. First, where, along the spectrum from zero option to covert subsidy, do the Government stand in their commitment to our export success at anything approaching its present level? Secondly, if ISG is to be privatised and the development of PMS results in premiums at an internationally uncompetitive level, what do the Government remain prepared to do to match the support offered by other governments to their exporters in those circumstances? Thirdly, and more specifically, by what means will the sometimes essential political cover remain available? Cannot a timeless commitment, at least in this regard, be made plain?
Likewise—my fourth question—what commitment will remain to support contracts which can be justified in the national interest? Fifthly, how confident can we be about adequate private reinsurance capacity? Some indication of indigestion is already appearing in the market place, and widespread treaty arrangements should be a cornerstone of the underwriting capability. Sixthly, what will be the reaction if evidence accumulates that long-term premium levels under PMS mean that our exporters regularly come second, third or last in price terms for major contracts? As we all know, there are no prizes except the first prize. How long do we pursue what the noble Lord, Lord Prior, referred to as unilateral disarmament? I.. is a fact that in a major contract the difference between the financial terms may represent a significant part of the total cost to the purchaser of the package that he is buying; a part so significant that it may outweigh even sizeable differences in the cost of the underlying goods and services.
The high moral ground of free trade and market forces is a splendid place to stand, so long as one does not starve in isolation. I am reminded of the sad epitaph on the yachtsman's headstone:
"Here lies the body of Edward Day
Who died defending his right of way
He was right, dead right, as he sped along
But he's just as dead as if he'd been wrong".
My Lords, we have to get it right.
6.27 p.m.
Lord Carr of Hadley: My Lords, I must first apologise for the fact that, owing to a commitment which long pre--dates my knowledge of the date of this debate, I shall have to leave shortly after I have spoken. I shall be brief.
I do not feel any need to add to the many detailed arguments put forward from all sides of the House but I wish briefly to record my immensely strong support for the seriousness of the doubts and worries expressed about the way the Government are heading over export credit guarantees. Those doubts and worries have been expressed from all sides of the House. I do not think I have ever heard in either
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House of Parliament a debate in which there has not been any support from the Back Benches in any part of the House for the Government's proposals.
I am not opposed to privatisation of the short-term credit insurance business; I am strongly in favour of it in principle. But it needs, in substance and in timing, the most careful preparation. I cannot believe that it has had such preparation. I say that because of the position we are in today of there being apparently only two contenders, both foreign owned, for the prospective privatised company. I am not opposed either—far from it—to the Government seeking by their international action to bring about a more sensible pricing policy and a more economic policy in other ways—policies that have been applied by all governments to the provision of export credit guarantees for their industries. But I find it incredible that this Government of all governments should embark on what my noble friend Lord Prior so rightly described as a policy of unilateral disarmament. Do we really believe that other governments will follow in our steps? Will they not merely take advantage of what we do, much to our detriment?
I shall not go into details. I merely want to express my very strong fears and add them to those which have already been expressed. In order to amplify what I say, I should like to press upon the Government what I regard as an economic and moral imperative that flows from their ruling economic and industrial doctrines.
This Government have based their industrial policy on giving the maximum power to market forces as the driving force of our economy. Although I have sometimes thought that they have carried that excellent doctrine to rather an excessive degree in odd corners—indeed, most good doctrines do not usually gain by being pressed too literally and too far—by and large, I strongly support them. But the point I want to make is that it is by way of the opposite side of the coin that they must effectively pursue their regulatory function to ensure that competition is fair. They try hard; never perfectly, but they try hard—indeed, no one can do this perfectly within the domestic field—by their fair trade policies, about which some of us may sometimes have doubts, but they are there and they are strong.
But the Government need to do exactly the same over foreign trade. They have a duty, especially following on from their doctrine of market forces, to provide the same help for our exporters with export credit guarantees as is given to companies in competitor countries. That is a duty which they cannot surrender—although they appear to be doing so. So it is not only what is in the Bill but what they are already doing that matters. We hear many examples where our suppliers and exporters are already in a hopelessly uncompetitive position vis-à-vis their competitors in other countries. It cannot go on; it must stop. We cannot, and I hope that we will not, put up with the situation.
I beg my noble friends in the Government to listen carefully to what has been said today. I ask them not to resile from the principles of privatisation and of trying to get this whole business internationally on a

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sounder economic and cost-effective footing but also not to sell British industry down the river, which is what they are in danger of doing at present.
6.32 p.m.
Lord Donoughue: My Lords, I cannot compete with the great experience in trading and exports of many noble Lords who have spoken today. Therefore, I shall make a few general points in support of what has been an impressively near-universal opposition to this curious Bill.
Perhaps I may begin with a general point on exports, which are the context of this Bill. We know that Britain needs to export a higher percentage of its output than most of its main competitors. Therefore, it obviously requires a favourable export climate. Historically that has been achieved—though not entirely satisfactorily, since our export performance has been patchy and our balance of payments deficits have, in recent years, been intolerably high—mainly through the efforts of our manufacturing industry and our invisible exporters. But it has been greatly assisted by two factors: first, a willingness to adjust our currency to preserve competitiveness (without saying that that is a good thing); and, secondly, by the official assistance provided by the state through a whole range of incentives from, at the most general, investment incentives to, at the most particular, the export support services such as the export credit guarantees which we are discussing today.
Against that background we must accept that the scope for currency adjustments to preserve competitiveness is now, and will be, less available within the European exchange rate mechanism. That is not insignificant. In the post-war period, under governments of all persuasions, sterling has been allowed to depreciate massively against the deutschmark, the dollar and the yen. That has been an export assistance but it will diminish—certainly to the benefit of controlling inflation, but a relatively high currency will make exporting harder.
In that situation, the Government are proposing, effectively, to diminish one of the most important export services. That is a puzzling and a damaging move which, I must confess, I do not fully understand and which I can only believe derives either, as has been suggested, from the Treasury's pursuit of even the smallest savings or from some primaeval ideological opposition to government intervention. We had been led to believe that that kind of ideological luggage went out through the door with Mrs. Thatcher, but obviously that is not so.
The timing of this move is also strange. At present, Britain is in a deep recession which, theoretically and historically, should be the most helpful time for the trade balance, as imports normally fall in a recession. Yet, even now, we have a massive trade deficit. When the domestic economy revives—and I am sure that the Government will try to achieve that before risking an election—the pressure to export will diminish relatively and the pressure to import will increase. The prospects for the balance of trade in the future are, accordingly, not good.
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In that situation, this Bill is a gratuitous blow to our exporters. It can only make the prospects for our trade balance worse. I have used the word "gratuitous" because I believe that it is gratuitous, unnecessary and an unreciprocated surrender of an important instrument of export policy. Our competitors will say "thank you", but they will not imitate this taste for self-inflicted wounds.
As has been recognised, the widespread opposition to the Bill is not party based. Wide sections of industry have joined the opposition. That is not surprising when one considers that almost one quarter of the UK's exports are presently insured by the ECGD. Few people believe that after privatisation the export sector will receive the support that it has at present and which it needs. There are no guarantees in the Bill that reinsurance will be provided against short-term political and economic risks in the future. It is the small firms that are already under the hammer of high interest rates which have the most to fear. I ask the Minister: do we want the small firms sector to withdraw entirely from the export field?
The new private insurers which are envisaged—and I must say that they are a curious cocktail—will have no real commitment to insure British exports. They will simply have the opportunity to do so; but there will be no obligation or commitment. They will have the opportunity to insure where they see a profit—that may not often be the case in the present depressed private insurance market. Why should they insure risks which the state, with a much greater commitment and liability, will not take on? The Government's promise to "top up" insurance during the transition period offers little to industrialists planning to invest in new and often risky export markets over the next 20 years. The Minister's suggestion that there may be "a small shortfall" may prove to be the underestimate of the year.
The Minister may reply that this Bill deals only with short-term insurance. That is little consolation. Short-term insurance by the ECGD is very important. However, the precedent being set for medium and long-term project cover is very worrying. The unavoidable conclusion is that this Government maintain their long-standing prejudices: that industry does not really matter; that exports do not really matter; and that government can certainly do nothing, or should do nothing, to help them.
The whole post-war history of our most successful competitors, especially Germany and Japan, shows that that approach is unfounded. Their governments work to create advantages for their industrialists. Why are our Government creating disadvantages for our exporters? The ECGD at Cardiff has an excellent record of servicing industry, as has been said many times by others with more experience than I have. I believe that it made a profit every year until last year during the most difficult decade afflicting all insurers. It is being sacrificed on the altar of outdated dogma and prejudice. It is not a good Bill. As my noble friend Lord Williams and the noble Lords, Lord King and Lord Prior, said, the only question is whether it will

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help British industry and British exporters. The answer has come from all sides of the House; and the answer is no.
6.40 p.m.
Lord Wade of Chorlton: My Lords, I am taking part in the discussion to draw your Lordships' attention to what I see as the fundamental problem that Western Europe has to face: how we move from what has been a confrontational approach to Eastern Europe to one in which trade and the movement of goods will grow. We have discussed that previously in the House. The Government have moved forward and said that we must develop our trade with Eastern Europe. It is as that trade develops that risks to business will increase. It is from businessmen and entrepreneurs that that trade and business will have to come.
In the past 45 years we have protected our interests in the world with our armed forces. We believed it to be appropriate that the Government should fund the defence of the country and use a large proportion of our GDP on that defence. The Government have a role to play. They must do what individuals cannot do.
In the Bill we remove short-term insurance from government control and transfer to private enterprise those activities which individuals can undertake and which it is not necessary for government to undertake. We look to the Government to look after our defence and run our Army, but, when we look to trade rather than force to bring peace, is it not reasonable to expect government to contribute to that aspect of the nation's interest since it is something that only governments can do and individuals cannot?
As an example, I should like to draw your Lordships' attention to one case. The Carroll group of companies undertakes developments. I have no association with Carroll and speak independently, but I have great admiration for its entrepreneurship and ability to undertake large projects. It had the opportunity to work in Moscow. After a long period of negotiation, it was agreed that Moscow City Council would draw up a 99-year lease with the Carroll group of companies. That lease was signed in your Lordships' Dining Room. It was the first 99-year lease entered into by the Russian Government since 1917. It had a number of beneficial effects. It will result in the construction of a British trade centre in the heart of Moscow. It will be operated by a British company. It has drawn the attention of the Russians to what business leasing and commercial opportunity are all about. Since being involved in such a commercial operation the Russians have changed their law s so as to take advantage of that type of business opportunity.
As a result, we shall see two massive towers on the Moscow skyline. They will compete with the trade centre in New York, and the development will be British. Moscow City Council has been so impressed that it his offered the company a further 14 acres surrounding the Kremlin for further development and for the renovation of existing properties. The towers will cost about £150 million to build. It is a commercially viable operation. There is no question of
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the company looking for government support for that part of the operation. What it faces, as so many noble Lords have already said, is the political risk. Is it worth it for a hank to provide the company with the commercial resources necessary unless the bank knows that the company has the full support of the British Government?
That is what leadership is about. People look to governments to do what individuals cannot do. It is one thing for a small businessman to say, "I am British"; it is another thing for him to say, "I am here with the full support and the enthusiasm of the whole of Britain. I have the leaders of the country behind me. We all want to see it happen, and it will happen, because they are behind it". That is the issue at the heart of the debate, which has been mentioned by so many experienced industrialists. We look to the British Government to give that leadership; to say, "Here is Britain. We believe in this and we as a nation will support it, thrust for it and give the company the support it needs to go forward with confidence".
My involvement in exporting is in a small business only. As my noble and learned friend knows, I started a cheese export business. Ministers, Members of Parliament and government officials do not know what exporting is about. You fill your handbag and off you go. You arrive at some out-of-the-way place where you feel alone. By God, you do feel alone! You knock on a door. You do not know whether you will be let in. You wonder to yourself whether you should be doing this: is it really worth it? You may succeed and see your British sign up in a big store. You see your name on the wall and you think, by God, it was worth it! You see your name there and the British goods with it. One day the ambassador might come along and say, "We are glad you did it". Ambassadors occasionally visit, but not often. You then feel that what you have done has been worthwhile.
It is important to those poor little guys. I was one of them, and I know what it is like to be out there alone and sending your men abroad. That is the aspect of the matter that lies behind the Bill. I understand that the Government want to make things more efficient and take things out of public control. The more things we take out of government control the better! But there are certain responsibilities that governments have which cannot be left to the individual. I hope that after listening to the debate the Government will understand that point and consider it carefully when they go forward with the Bill.
6.48 p.m.
Lord Sefton of Garston: My Lords, I make no apologies for not putting down my name to this debate. When I saw the subject I thought that I should be too terrified to speak. The noble Lord, Lord Wade, spurred me on. He has not claimed, and I do not claim, to be as knowledgeable about the subject as many noble Lords who have already spoken. Everyone has expressed grave anxiety about the Bill and the effect that it may have on our exports. I should have thought that this was one occasion when the House ought to decide to vote against the Second

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Reading. However, I do not press that, because I know that there is not the faintest chance of anyone doing so.
Having listened to expert opinion and seen what has happened to British industry over the past 10 years, perhaps I may express a simple, fervent wish. I saw industry move out of Merseyside long before it suffered its current problems. That was done at the behest of private enterprise. It had nothing to do with the Government. I hope that all the fears expressed about the Bill and for our welfare as a nation economically and industrially will be felt in the future. I hope that when all those who have spoken, especially those who have moved most recently from the nationalised sector into the private sector consider their actions in relation to international trade and commerce, they will not be so keen to sell parts of their industries to foreigners. I am not satisfied that, with the industry which is being privatised, the Government will not be prepared, at the drop of a hat and in pursuit of achieving a cheap book, to sell off our birthright and heritage in industrial matters to people on the Continent.
6.50 p.m.
Lord Holme of Cheltenham: My Lords, this has been an extraordinary and memorable debate, ably introduced by the noble and learned Lord, Lord Fraser of Carmyllie. It will not have escaped his attention that not one voice in the debate has been raised in support of the Government's position, unless it was the highly qualified support of the noble Lord, Lord Trefgarne. The Minister may wonder, with noble friends like that, who needs noble enemies on this issue.
First, I sincerely hope that the Government will stop praying in aid the Kemp Report. Kemp gave three alternatives for the ISG and the noble and learned Lord relied in his remarks on the third alternative. But Kemp did not propose outright privatisation. What he proposed, as my noble friend Lord Ezra pointed out earlier in the debate, was a joint stock company owned and controlled by the Government, operating for at least three years before private capital was brought in. Kemp recommended that time be taken for the government controlled company to find out what it was doing and to understand the market in which it was engaged. He certainly did not recommend a hasty sale. Therefore, the House is entitled to ask, "Why the rush?"
As the noble Earl, Lord Limerick, pointed out, the rush certainly cannot be on grounds of timing. The timing could hardly be worse. As has come out in this debate and as is a matter of common knowledge in the House, British industry is struggling. This is not the time to impose fresh handicaps. The prospect of that hallowed ground of cliché, the level playing field, has been exposed to our view several times during the debate. The high insurance premiums that we oppose mean that we have already tied together the bootlaces of some of our best players; let us not go one stage further and deprive our whole team of boots altogether.
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Nor is it a good time to find serious offers for the new privatised company. The insurance and reinsurance market is hardly in a state of robust confidence. That is why the Government have found only two potential bidders. Like my noble friend, I do not believe that the fact that the bidders are respectively Dutch and Italian is prima facie a reason to oppose their bids, but I wish to ask the Government a specific question about the Dutch company which is bidding. As the noble Lord, Lord Prior, identified, the company, NCM, has substantial government backing. I wish to ask the Minister this: am I correct in thinking that on another matter involving the Department of Trade and Industry, the involvement of the French Government in some would-be bidders for British companies has been prima facie grounds for the Secretary of State to block those acquisitions? Will he take a similar view in this instance and will the involvement of a Dutch company in a potential bidder for the insurance company block them from taking part? If that were to be the case, or if for any other reason only one of the two bidders were left—and it is turning out to be the story of the seven little Indians; there are now only two left will the Minister say specifically whether the sale would go ahead? A competition in which there was only one bidder would be no contest. In those circumstances I urge him to recognise that the sale should not go ahead. I shall be interested to hear the Government's view on this, since it is a possible contingency.
I wish to explore the motives of the Government in bringing forward the legislation. I agree with the noble Lord, Lord Jay, on this, if not on the question of European bidders. He said that the motive was a mixture of ideology and Treasury meanness. Several noble Lords have mentioned the hand of the Treasury in the matter. Regrettably, it often seems that the hidden hand is that of the Treasury around the throat of those in the DTI and BOTB who wish actively to encourage our exporters.
What industry needs, in this as in other matters, is intelligent pragmatism, not ideology; practical encouragement, not Treasury penny pinching, and an attentive ear, not an arrogant persistence in a wrong cause. It may seem harsh to use the word "arrogant" of the Government's course, but how else can we describe their removal in another place of an extremely sensible amendment made in Committee which would have rendered the Bill somewhat more palatable?
The noble Lord, Lord Kissin, said earlier in the debate that the Government would not listen to what we had to say here. I hope he is wrong. Of course, I do not suppose that the Government will listen to these Benches or the Labour Benches, it is not their habit to do so. However, I hope that they will listen to the wealth of good advice based on hands-on experience in the leadership of British industry offered to them from all sides of the House this afternoon. Many years ago, the party opposite used to be scornful of the superior wisdom of the gentlemen in Whitehall. Let us hope that the Government recover their bearings before we reach the later stages of the Bill.

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One final word on political risk. As we approach the end of the century, we live in a world which is in flux. Many of the changes in South Africa, in East and Central Europe and in the Soviet Union are extremely welcome. However, there is risk—great risk. I am one of those who believe that international trade plays a part in building one peaceful and prosperous world. As a Briton, I want Britain to take a leading role in that trade. The future of the British economy and our public services depends on our playing a leading part in that trade. However, the risks involved are so large that only government can stand behind political uncertainties of this kind. I urge the Government to do so at reasonable rates and on a stable, long-term basis.
6.57 p.m.
Lord Clinton-Davis: My Lords, for me this has been an utterly remarkable debate. After a number of years in another place and a relatively short time here, I have never seen a situation where no one on either side of the House has supported the Government on such a measure.
I feel some degree of sympathy with the noble and learned Lord, Lord Fraser. He has taken on this brief. He is a distinguished advocate and probably has had to take on all kinds of briefs, but I do not imagine that he could have expected that his advocacy would fall on the stony ground that it has today. The prosecution has in no way been an ordinary prosecution; nor has the indictment been ordinary. It has come from people who have a lifetime of experience in industry and from distinguished former Ministers on both sides of the House. I know how passionately my noble friend Lord Jay feels about the issue. As a deliberate act, as he explained, he used the ECGD back in the 1960s as an important instrument of trade policy. He is not the only Minister to have done so. Ministers on both sides of the House have quite rightly engaged in that activity.
This huge weight of experience has been in almost total conflict not only with the Bill but with the whole policy o the Government in relation to export trade—perhaps failure of policy would be a fairer way of putting it.
The Treasury has come in for a great deal of condemnation in the debate, and the fingerprints of the Treasury are all over the proposal. The noble Lord, Lord Prior, in a quite remarkable speech in my judgment and I think that of others, referred to it as unilateral export disarmament—for that is what it amounts to. The trouble is that we are dealing not only with the government measure but with something introduced back in January which then caused industry bewilderment, confusion and deep anxiety. That bewilderment, confusion and anxiety have persisted notwithstanding every explanation that has been given in another place and now by the noble and learned Lord. It is against that backcloth, against the deep recession, often denied as even existing by the Government—disastrous, unprecedented trade deficits, the appalling plight of our balance of payments and worsening unemployment—that they have chosen to put forward this misbegotten measure.
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The Government have argued on the one hand that the ECGD has been efficient, forward-looking and entrepreneurial despite the deliberate activities of the Treasury to undermine those purposes; yet on the other hand they seek effectively to dismember it. I thought when I first read the speech of the Minister in another place, which was reflected in what the noble and learned Lord had to say, that when the Government opened the debate they were arguing for the maintenance of the ECGD, but we now know that that is not the case.
I can explore only some of the arguments. What is it that the Government insist makes them move in the direction of change? It is the Treaty of Rome, Articles 92, 93 and 94. I should like to consider the position for a moment. Ministers here and in another place are saying that they are bereft of legal argument, notwithstanding all the legal talent that is available among the Law Officers and here in this House, to resist any charge that might be made by the Commission that we, almost in isolation, were in breach of Articles 92 and 93 of the Treaty of Rome. With respect, that is patent nonsense. It would be the first time in my experience, after four years in the Commission—I suppose I should declare that—that the Government would have behaved in that way vis-à-vis the Commission. My experience is that for the most part they were deliberately obstructive. They have certainly been anxious, and often successful, to resist the activities—sometimes they think predatory —of the Commission in the use of the competition articles. They therefore cannot suggest that they are bereft of legal argument.
If one looks at Article 93, paragraph 2, one finds that:
"On application by a Member State, the Council, may, acting unanimously, decide that aid which that State is granting or intends to grant shall be considered to be compatible with the common market".
So it is perfectly possible to argue under that provision. I shall not weary the House with the entirety of that because noble Lords can look at the paragraph themselves.
If one looks at Article 94 one finds:
"The Council may, acting by a qualified majority on a proposal from the Commission, make any appropriate regulations for the application of Articles 92 and 93 and may in particular determine the conditions in which Article 93(3) shall apply and the categories of aid exempted from this procedure".
That can work both ways, but the fact remains that for the Minister to abdicate total responsibility in terms of legal argument is patent nonsense.
Then the question has been asked, and we have to ask it again of the Minister, what draft directives there are in the alternative to the use of those articles to which I have referred appearing on the legislative timetable of the Commission. The question is relevant because the Government have said that they have to act with great haste to anticipate either of those potential or real situations. I also have to ask the following question of the Minister. Is he seriously saying that the Commission is suddenly going to depart from a policy of recognising the various aids to

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export trade after having accepted the situation over many years? What evidence is there to support that proposition?
The approach to this Bill also reflects the following fact which has not been mentioned today. Either there is a misrepresentation of the position vis-à-vis the Commission or there is a failure totally to understand how the Commission operates. I do not believe that it is inclined to stamp all over the flower beds. When it comes to a situation of this kind it will tread warily because there is a great deal at stake for the whole of the European Community.
Against that background one has to ask why the Government have single-handedly decided to lay all their cards face upwards on the table before the others have even begun to play. I do not think that the House welcomes that form of capitulation, and we do not believe that it is the real scenario at all. But if it were to be true, at the very worst—if the Government were truly incapable of adducing any argument on the legal stage—is it seriously suggested that they would then be told by the Commission that they would have to stop their activities with the ECGD unilaterally and forthwith? That in itself is a question which has only one answer. The Commission does not behave in that way and the facts of life are not like that either.
I therefore charge the Government with producing a hopelessly flawed argument as regards this position. It is hopelessly flawed in another way too, because the Government have said that they are proposing to go on giving some support over the next three years, and perhaps even longer. How is that consistent with their arguments in relation to the Commission's proposed activities or Article 92? I suggest that the Government find themselves in difficulty on that score as well.
What about Kemp? This afternoon and this evening the Government have relied heavily on a selective approach as far as Kemp is concerned. I do not propose to cite all the arguments about that, but if one looks at the introduction to Kemp, page iii, paragraph 9, one sees:
"The regime for export credit facilities to support trade with third countries will have to be thrashed out by agreement amongst member-states at political level. The idea of a single Community scheme seems impracticable".
It goes on:
"There are no proposals for new legislation … although this is being challenged in the European Court by two Belgian private-sector insurers. However, irrespective of the outcome, there are good policy reasons why the Government should support"—
I hesitate to use this term—
"a 'level playing field' for all insurers, private sector or public sector".
Opposition has been reflected by noble Lords on both sides of the House. That opposition has come from industry—from Hawker Siddeley, Vickers, the Credit Insurance Association, the Federation of British Electrotechnical and Allied Manufacturers' Associations, the chambers of commerce, the trade unions and elsewhere. It is difficult to ascertain who is in support of the measure.
A number of your Lordships have referred to the narrow base of bidders—two foreign companies and one British company, which has chosen to tender on
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grounds which do not reflect what the Government requested it to do. A number of important questions have been already posed by your Lordships which I do not need to repeat now.
From these Benches we are asking for assurances that the Government will think again. They ought to think again because a great deal is at stake. I believe that they would be thanked by industry if they were to reflect again. Their prestige is much less important than the potential damage to industry which will flow from the measure. That was well said by the noble Lord, Lord Wade, whose speech reflected his keen interest in relation to the Soviet Union in particular.
What of the political risks, which are so unattractive to the private sector? That was a point made forcefully by Kemp. Where do the Government stand if nobody is prepared to pick up those political risks? More importantly, where do our exporters stand in such circumstances? The crunch was put by my noble friend Lord Williams at the beginning of the debate and has been repeated by other noble Lords. Will this measure help or hinder our exporters? That is the acid test.
Perhaps I may say a word about the workforce. They were not consulted and their views have been ignored. People have major doubts about their future employment and their pension rights. They should not be left in a state of anxiety and doubt in that regard.
I do not propose to repeat all the arguments again. As a result of this debate the Government are left with serious questions to answer, even more so than after the debate which took place in another place. There is another way. It is a way which the Government should choose and one which was put forward by my noble friend Lord Williams at the beginning of the debate. Yes, increased competition for ISG services is a reasonable proposition. But why could that not be achieved by extending the range of ECGD's activities to enable it to insure exports from other European Community countries and United Kingdom domestic trade? Is there anything so radical and remarkable about that proposition? Is it so offensive to suggest that the Government should embrace it?
ECGD is an efficient operation. That is conceded by the Government. It has done well by the exporters of this country in furthering our national interests. It has given its employees reasonable conditions and security. Why undermine it, and particularly at such a difficult and dangerous time in our country's history?
The noble Lord, Lord Prior, begged the Government to,
"listen more carefully to industry".
He was right. The noble Lord, Lord Selsdon, said that British industry should be at least as well protected as others. That is a matter which has given rise to serious anxiety on all sides of the House.
The burden of proof for the need for change rests fairly and squarely on the shoulders of this Government. It is a burden which they have significantly failed to discharge here and elsewhere over many months. Consequently it is our view, as my noble friend Lord Williams said at the beginning, that the Government should take this Bill away. I dissent

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only from his proposition that it should be put in the dustbin because one can take things out of the dustbin. It should be buried, once and for all.
7.15 p.m.
Lord Fraser of Carmyllie: My Lords, as I listened to the debate I am not sure what was more uncomfortable, the rifle fire from in front of me or the heavy artillery which boomed away from behind. If I draw any consolation, it is that one or two pieces of heavy artillery listened assiduously to the debate but, to my relief, did not contribute.
The noble Lord, Lord Ezra, indicated that the matter could be dealt with simply by asking the question: does this help exports? As he knows, it is too simple 3 question to pose. The greater part of the debate has been concerned not with matters contained within the Bill, which we are considering at Second Reading, but with wider concerns, which have been forcefully and eloquently expressed, relating not only to the role of ECGD if the Bill reaches the statute book but, t the approach that is followed at the moment.
What I found disappointing about the response from the Opposition Front Bench was that, while I readily understand why leaders of industry should have those concerns and express them forcefully, one would have anticipated that we ought to be looking at this subject in the calm and dispassionate context of successive governments which have repeatedly given assurances that ECGD should break even and should not become a charge on public funds. We should be considering it in the context that until the recent increase:; ECGD has not increased project and capital premium rates since 1984 and since 1984 has paid out claims equal to about eight times its premium income on projects. As I indicated, ECGD currently has a deficit with the Consolidated Fund of about £3 billion. The premium rates now established are not set to recover chose past losses but are set solely in relation to the perceived risks in the new business. ECGD's claims and losses cannot be pushed around and mislaid. The bill for that enormous cost has to be met by someone. If ECGD is in deficit, is there a question of the bill being passed to the taxpayers?
The noble Lord, Lord Williams, shakes his head but much of the debate covered that area and—I shall not give way—he readily anticipated that that would be the case. He spoke at some length about project management; perhaps he would like to look at his own speech. If he is proposing an uncosted addition and saying that in future premium rates should be restricted and someone else should take them on I am sure that. at Committee stage he will have ample opportunity to tell us exactly what he has in mind.
Lord Williams of Elvel: My Lords, I am most grateful to the noble and learned Lord for obeying the conventions of the House in the end and giving way. Does he understand the difference between provisions and losses? That is important. ECGD or any company may make provisions, but whether those provisions are realised into losses is quite a different question.
Lord Fraser of Carmyllie: My Lords, of course I appreciate that. If the noble Lord likes to read what I
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said in my opening speech he will appreciate that I did not suggest that none of what was built up as a deficit was recovered. However, he knows perfectly well that there was a significant change as the 1980s developed. I may be wrong—the noble Lord will doubtless put me right—but I would have thought that if he were in government, he would be indicating that ECGD should not become a charge on public funds.
Lord Prior: My Lords, I am grateful to my noble and learned friend for giving way. Before he leaves that point, have not some of the losses that the Treasury has suffered through the operation of ECGD on long-term financing occurred simply because it lent long and borrowed short? As a result, has it not found itself with interest rates rising, having lent at much lower rates of interest, and is it not now trying to regain that money? Is not that one of the problems? It falls under Part I of the Bill, so it is relevant.
Lord Fraser of Carmyllie: My Lords, as I said, those premium rates which are set now and to which my noble friend has indicated his disagreement are set not to recover past losses, but are set solely in relation to perceived risks in new business.
I appreciate that when those engaged in the important business of exports are talking to trade Ministers and there are no law officers sucking their teeth indicating their anxiety, it may be suggested that short cuts with regard to the sternest of our international obligations should be taken. However, we are dealing here with primary legislation. As I said, there are serious matters to be considered with regard to our obligations under GATT and, notwithstanding what the noble Lord, Lord Clinton-Davis, said, with regard to our obligations within the European Community. It is extraordinary that, as we deal with this primary legislation, there should be any question of asking why we are approaching it in this way. Why should we not look to matters of illegality which we believe are widely followed by others throughout the world? I say to my noble friend Lord Wade that, if it is a matter of dealing with a need, that is right. If we see that there are imperfections in the international system, it is no discredit to us that we should make every effort to get the system to work efficiently and fairly.
Lord Jay: My Lords, GATT has been in existence for 40 years, as has ECGD. So far as I know, there has never been any clash between them.
Lord Fraser of Carmyllie: My Lords, as I indicated to the noble Lord, we are dealing here with primary legislation. What seemed to me to be suggested about illegality was, to say the least, rather curious.
The noble Lord, Lord Williams, asked me whether PMS was seen as being in some way the first stage in the process towards what has been described in shorthand as the zero option; namely, the withdrawal of ECGD support for capital goods and project exports. Perhaps I may confirm, if it is not already clear to others, that that suggestion is without foundation. I stress the Government's firm commitment to a stable and viable framework of ECGD support for project exports.

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The noble Lord, Lord Kissin, referred to the prudent and substantial provisions made by ECGD in its 1989-90 accounts which were published in February. As I understood him, he suggested that ECGD is the only export credit agency to make such provisions against political losses. As I understand matters, that is not true. Exim Bank now makes such provisions and a number of other major agencies are reviewing their practice in that area.
I have dealt with the matter of portfolio management as it has taken up a major part of the debate. It has been said by some noble Lords that there is no support for the provisions in the Bill. Although I accept—I can hardly do otherwise—that there have been expressions of considerable hostility towards the Government's position on export credits at present, when one analyses—I hope that this will be done with regard to all the speeches—the degree of hostility to the provisions in the Bill, it will on examination be found to be considerably less. If I understood him correctly, my noble friend Lord King was not particularly concerned with what was in the Bill. My noble friend Lord Selsdon said that it was of no great significance. The noble Lord, Lord Tombs, said that the privatisation of the services was not necessarily a bad thing. My noble friend Lord Trefgarne supported the principle of moving the insurance services to the private sector. My noble friend Lord Weir was not opposed in principle to what was being done in the area of privatisation. However, all those who spoke obviously had other criticisms to make.
My noble friend Lord Limerick went further. He said that not only did he support what we were doing but that there were flaws in the existing ECGD arrangements for providing business that was modern and that met the needs of the market. I am grateful for the way in which he so carefully set out that point. Perhaps I may add to the three arguments that he made; indeed, I made the point in my opening speech. Statutorily, the organisation is prohibited from providing in a single document, or at all, both domestic and export credit insurance. Judging from the nods on the Opposition Benches, that is accepted as being my one good point and something that should be encouraged. If it is not encouraged, it will happen whether we like it or not. That is what people appear to wish. I ask my noble friends behind me whether if we were to correct the position to allow Cardiff to offer in a single package export credit insurance, they contemplate any advantage in taking into the public sector an element of domestic insurance.
The question of whether Kemp offers support for the Government's position has been widely debated. All the evidence submitted to Kemp and to the Select Committee on Trade and Industry favoured the Kemp recommendations for the privatisation of insurance services. As was indicated in the debate, most interested observers continue to support that principle of privatisation.
Lord Taylor of Gryfe: My Lords, I apologise for interrupting the noble and learned Lord. What
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justification has he for his comment about universal support for the privatisation of insurance services among the export community or major businesses?
Lord Fraser of Carmyllie: My Lords, when one analyses what has been said in the debate today and what was said in evidence given to Kemp and to the Select Committee in another place, it appeared that there was support. It is plain from the face of the Bill that the Government do not entirely follow the Kemp proposal; namely, that the insurance services should operate as a government company for up to two years. As I understand it, the basis for the Kemp Report proposal was that the private sector reinsurance market would require some time to study the track record of the new company before making available sufficient reinsurance capacity for the insurance services portfolio. I sought to indicate in my opening speech that, whether Kemp was right or we were right, it appears that the reinsurance market has shown itself ready to take on the vast bulk of the portfolio without that transitional, government company stage.
Kemp also believed that a period of operation as a government company would be necessary in order to convert insurance services into a saleable proposition. In the Government's view, that remains an unnecessary step because the Government have received serious bids to purchase the insurance services immediately.
Anxiety has also been expressed in the debate that foreign ownership is dangerous, although those like my noble friend Lord Trefgarne were careful to preface their remarks by saying that they were not to be regarded as the last of the little Englanders. But undoubtedly we have to be careful that behind the concerns, there may be something of that lingering mentality.
I do not wish it to be taken as an indication or reply that the Government's preferred purchaser will be a foreign institution. However, while I understand that fears continue to be expressed that the United Kingdom's national interest might suffer, I believe that the fears are misplaced for two reasons. First, the vast majority of insurance services business represents a fully commercial proposition. It is not national interest business and never has been insured under the national interest powers in Section 2 of the Export Guarantees and Overseas Investment Act. It is good business which the new owner, irrespective of nationality, will be anxious to maintain.
Secondly, in relation to that small element of insurance services business which is uncommercial, but where the Government wish to encourage exports in the national interest, the privatised insurance services will provide cover to exporters under the national interest reinsurance facility which I have described. Although the new owners will be required to provide that facility, the contractual arrangements should mean that it will be to the mutual advantage of the Government and the new owners, irrespective of nationality, for them to do so. The national interest will thus be safeguarded.
Particular concern seemed to focus not so much on the Italian company, which had been indicated as being a prospective company, but on the Dutch

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company. The noble Lord, Lord Ezra, was concerned that N CM could be used by the Dutch Government to help promote Dutch exports. He asked how could they do so and at the same time own a company whose job was to promote United Kingdom exports. All three companies that I mentioned are in the private sector and independent of governmental control. As I indicated, the national interest reinsurance facility will provide the mechanism by which the national interest exports can be encouraged. Whoever are the new owners, they will be required to operate that facility on the Government's behalf.
In winding up for the Opposition, the noble Lord, Lord Clinton-Davis, focused on what was essentially the reason for the privatisation of that part of the ECGD activities at this stage. In large measure he focused on what I had to say about the possibility of some future legal challenge from Brussels to state involvement in credit export insurance matters. I am sure he is aware that a working group of the EC Council of Ministers in Brussels has devoted much of its time to considering the implications for official export credit insurance schemes of the advent of the single market. There is a recognition, shared by all member states, that in the area of activity in which the official and private credit insurers compete for business, it is essential to ensure that fair competition exists between the two.
However, if the noble Lord is not persuaded by, as it were, a legal consideration of these points, let me put to him that France, Belgium, Spain and Italy are all restructuring their operations in anticipation of change. In Germany and the Netherlands, the major export credit agencies are already based in the private sector. Thus, by making the change that we propose in the Bill, far from being out of step with the rest of Europe or being in advance of the field, the United Kingdom is simply part of the mainstream of EC development in this sector.
A large number of detailed points were put to me. I regret that I may have insufficient time to answer them all. Perhaps I may deal with two specific points. My noble friend Lord Prior referred to some very large figures in relation to the political risk reinsurance and claims paid by the Dutch Government to NCM. On re-examining those figures, he will find that they relate not to the short-term business which is to be done by the IS group. The vast bulk of the Dutch Government figures relate to medium and long-term capital goods and project business which, as the noble Lord will appreciate, will remain within the United Kingdom, in accordance with the advice that Kemp gave us, and within the remit of government and will not be privatised.
My noble friend Lord Trefgarne asked why no prospectus for the sale has been issued. There is no prospect us because this is a trade sale by competitive tender and not a public flotation. A short list of companies was provided with a confidential invitation to tender which comprised a large body of documents concerning the business and the proposed sale
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arrangements. Two volumes of extracts and summaries of the ITT were placed in the Libraries of both Houses of Parliament as well as being made available to ECGD staff and representatives.
My noble friend Lord Wade made particular reference to the Carroll British trade centre project. It is true that ECGD medium-term cover for the USSR is under review. That is quite reasonable, given ECGD's existing high exposure and the current economic and political problems there. However, the facts of the Carroll case are not as described in the newspapers. It is not true that the export credit cover offered by the French was better than that which was available at the time from ECGD. I shall write further to the noble Lord about that matter.
In a very careful contribution, my noble friend Lord Selsdon asked for a broad assurance from me on behalf of the Government that the Government would always make available through ECGD facilities and support which match in every respect, including premium rates, facilities which might be available from other countries to competitor exporters. While doubtless his words will be studied with great care by both my right honourable friend the Secretary of State for Trade and Industry and my honourable friend the Minister for Trade, I must point out—as I did earlier in the debate—that to date it is not and never has been the policy of any British Government to match premium rates; nor do I believe that any government could give an open-ended promise to provide support, whatever the cost or whatever the risk, simply because for whatever reason one other country may have done so elsewhere.
This has been a complicated debate and not the easiest discussion in which to have been the centre of attention. Nevertheless, in reply I have sought to focus upon the fact that although there have been deep concerns expressed, I have no doubt whatever that my right honourable friend the Secretary of State for Trade and Industry will pay the closest regard to what was said. However, I come back to the fact that the ambit of this Bill is much narrower than the discussion that we have had today. No doubt there are a number of important points which will be discussed in Committee and I look forward to the opportunity to debate them.
I have already dealt with the matter of the political risk and the national interest assurances which were given. I do not propose to repeat them. I trust that what I said in opening will be carefully studied before we get to Committee stage. With that expression of hope, I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Agriculture and Forestry (Financial Provisions) Bill
7.38 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Trumpington): My Lords, I beg to move that this Bill be now read a second time.

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The main purpose of the Bill is to deregulate the Agricultural Mortgage Corporation and the Scottish Agricultural Securities Corporation. It also contains certain other financial provision. But before I go into those in more detail, I should perhaps add that the Bill is hybrid. That is because the deregulation provisions will make one change to both corporations' memorandum of association. This change is purely consequential to the main deregulation provisions. It has the full support of the corporations and their shareholders and it does not affect any other private interests. In all other respects this is a straightforward public Bill although we have obviously complied with the relevant standing orders for private business. I hope that clarification is helpful.
The Agricultural Mortgage Corporation and the Scottish Agricultural Securities Corporation were set up in the inter-war years to provide farmers with long-term credit. Both corporations have always been registered limited companies; but because they were established with Government support, certain statutory restrictions were imposed on their activities and on the type of loans they could offer. These restrictions are simply not appropriate in the very different farming conditions of the 1990s. When we consulted the industry last year about the future of the AMC, the response was firmly in favour of deregulation. Equally important, both corporations are very successful organisations which no longer need Government help or the controls that inevitably go with it.
That raises the important question of how deregulation will affect their future activities. I repeat what was said about that when the Bill was considered earlier in another place because that statement was discussed very carefully with the corporations' shareholders and it fully reflects their views.
The AMC itself intends to remain firmly in the business of providing long term loans to the agriculture industry. That forms the basis of its current, very successful operations and is where its expertise lies. But deregulation will allow the AMC to be more flexible—for example to lend on security other than land, to help farmers finance diversification projects and to offer loans outside England and Wales. The AMC will also be able to consider joint ventures with organisations providing other financial services if that would offer the farmer a better overall package. So while we believe that deregulation will help the AMC to adapt to the needs and challenges of the coming decade, we are satisfied that in the main the AMC will continue to do what it has always done best —to provide medium and long term loans to the agriculture industry.
I now turn to the AMC's shareholders—the Bank of England and five of the major clearing banks—because they will have an important role in helping to make the transition to deregulation as smooth as possible.
The Bank of England and the AMC's other shareholders do not in any way guarantee the AMC's borrowings, but their involvement has clearly been a major factor in building up the confidence on which
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the AMC has successfully developed its business over the past 60 years. The shareholders are determined to ensure that the move to deregulation goes smoothly and efficiently.
The Bank of England is particularly concerned to see that the changes sought by the commercial bank shareholders and the AMC are made in an orderly manner and readily recognises that it has a special and positive role to play in ensuring an orderly adjustment to the new market situation. The Bank will only dispose of its shareholding when it is satisfied that this adjustment is assured. While we cannot commit the Bank of England, we would expect that to take a number of years.
The position of the clearing banks is a little different. Over the years they have increasingly entered the markets in which the AMC operates and they and the AMC now compete to provide a similar type of service to the agricultural industry. So it makes increasingly less sense for the clearing banks to continue to hold an investment in what is a competing company.
At the same time, the clearing banks are genuinely anxious to ensure that the move to deregulation goes smoothly and efficiently. Apart from any wish to protect their own investment, the AMC's customers are their customers too. So while there is likely to be some disinvestment, the clearing bank shareholders have assured us that it will happen in an orderly way. Precisely how and when will, of course, be a matter for discussion between the AMC and the clearing banks, but we are certain that the AMC will be able to attract new capital. It is a very successful organisation and it can, and should, stand on its own reputation like any other very successful private company.
The SASC is owned by three Scottish clearing banks, which are fully involved in the formulation of its current and future plans. Unlike the AMC, the SASC only lends at a fixed rate of interest and so it is not in direct competition with its shareholders, whose lending is predominantly at a variable rate of interest. For the future the SASC's primary objective will be to provide a first class service to the Scottish farming community through its competitive mortgage facilities. We understand that there are no plans for any of its shareholders to sell their holdings.
Clause 1 of the Bill will repeal the legislation which enables agriculture Ministers to lend money to the two corporations and sets out the conditions which they must satisfy to qualify for financial support. The clause also makes some minor consequential repeals. Existing mortgages and debentures issued by the AMC and the SASC will not be affected by any of these repeals.
The repeals will be brought into force by commencement orders. This will ensure that the repeals affecting the AMC are not implemented until the outstanding government loan has been repaid. In practice it will probably be possible to make the necessary orders later this year.
Clause 2 will allow agriculture Ministers to recover the costs involved in supervising Community carcass grading schemes. A system of pig carcass grading was introduced in all member states on 1st January 1989.

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Beef carcasses will be subject to a mandatory grading scheme from 1st January 1992 and we are currently consulting the industry on the detailed arrangements. The Commission also has plans to introduce a scheme for lamb. Grading can be carried out either by the slaughterers or by the Meat and Livestock Commission on their behalf but in either case it is supervised by our fatstock inspectorates.
Our intention is to recover the total costs of this supervision in Great Britain from 1st January 1992, which i the date on which beef carcass grading will be introduced. We shall of course consult the industry before any charges are introduced and in fact Clause 2 specifically requires us to do that.
Clause 3 provides the statutory authority to make national payments under the Community's suckler cow premium scheme. This scheme was introduced in 1980 tc help maintain the incomes of specialist beef producers at a satisfactory level. Producers who keep suckler cows for rearing calves for beef can qualify for a headage payment from the European Agricultural Guarantee and Guidance Fund. Member states also have the discretion to top up this Community premium with an additional national payment and the United Kingdom has always done so. Because these national payments are discretionary they cannot be authorised by regulations made under the European Communities Act 1972, which would be the normal way to do it. At the moment, the authority for payment therefore rests solely on the annual appropriation Acts. We fully accept that this is not a satisfactory state of affairs and Clause 3 is intended to put that right.
The clause enables agriculture Ministers to make regulations providing for the payment of the national premium under the Community scheme. The regulations may also set out appropriate conditions for such payments. I emphasise that the operation of the scheme will not be affected in any way. The national payments will simply be put on a clear and appropriate statutory footing.
Turning to Clause 4, I have taken a particular interest in the New Forest since taking on Ministerial responsibility for forestry matters in England. Last year, at Lyndhurst, I presided over the launch of the Government's response to a report into the future of the New Forest. I am very much aware, therefore, that the New Forest Verderers form an integral element in the administration of the forest. The Verderers' present-day functions include important responsibilities relating to the conservation and recreational use of the forest, which attracts a positively enormous number of visitors each year.
To help meet the administrative cost of these responsibilities, in 1973 the Treasury agreed to the Forestry Commissioners making an annual grant to the Verderers from the forestry fund. Clause 4 will simply put this grant on a firm statutory footing. We are not talking of huge sums of money. The grant has never exceeded £10,000. But without some support the Verderers cannot respond effectively to the growing pressure on this very lovely and important part of our national heritage.
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Finally, Clause 5 deals with the geographical extent of the Bill. Since carcass grading and the suckler cow premium scheme are devolved matters, the Bill does not extend to Northern Ireland. However, there will be separate parallel legislation on these matters.
Clause 5 also provides for the commencement of Clause 2. As I have already indicated, the Clause 1 repeals will be brought into force by order and Clauses 3 and 4 will come into force immediately the Act receives the Royal Assent. That is normal practice where the payments concerned are already being made under the authority of the appropriation Acts.
This has perforce been a long speech to explain a short but useful Bill. I commend it to the House.
Moved, That the Bill be now read a second time. —(Baroness Trumpington.)
7.52 p.m.
Lord Gallacher: My Lords, I thank the noble Baroness for explaining the Bill clearly and in detail. I also thank her for her kindness in sending notes on the Bill's clauses. Like the dedicated people that we are, we have read them with considerable assiduity. Between the two explanations we are reasonably clear about what the hybrid measure is about. We support the provisions of the Bill in all respects as we did in another place. However, I wish to ask several questions about Clauses 1 and 2, although not necessarily to be answered this evening as some are of a technical nature.
Clause 1 converts the Agricultural Mortgage Corporation in England and Wales and the Scottish Agricultural Securities Organisation into bodies unsupported by Her Majesty's Government. Former support was of a limited kind. Nevertheless, in the mind of certain members of the public both bodies were government backed. In effect that gave added security to lenders. That was never so but it was thought by some to be so.
As the Bill gives both bodies greater freedom, including wider lending powers, can the Minister say whether there exists in either body any scheme for the protection of depositors which is comparable to those in existence for bank and building society depositors? If not, are any such schemes contemplated when changes take place in the Memorandum and Articles of Association of both bodies?
Does the Bill's special proposals to continue present exemptions under Section 16(i) of the Consumer Credit Act 1974—an exemption also enjoyed by banks and building societies—confirm that the AMC and the SASC are regarded by the Treasury as being of equivalent status to banks and building societies? In another place the Minister spoke of powers to offer loans outside England and Wales. In how many other countries does the AMC intend operating once the Bill has been passed?
On the face of it the proposals in Clause 2 to allow Her Majesty's Government to recover costs incurred in supervising the statutory grading of carcasses to European Community standards are innocuous. However, the notes on Clause 2 lead me to think that there are several matters to be discussed with representative organisations to cover pigs, for which a

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charge is already being made, and cattle, for which a charge will be introduced on 1st January 1992, as well as any future scheme for sheep. The variability factors about charges contained in Clause 2, such as throughput exemptions, give cause for interest if not concern. When discussions with the industry are concluded, I hope to the satisfaction of all, will the Minister be prepared to give details about those charges in a press release or in answer to a Written Question?
Clauses 3 and 4 relating to suckler cow premium and grants by the Forestry Commission to Verderers in the New Forest respectively are in the nature of bookkeeping amendments. Bookkeeping was never my strongest subject; in fact after such a distance of time I can remember only that one debits the receiver and credits the giver. Therefore I take the assurances that the Minister has given about Clauses 3 and 4 as being guaranteed and in those circumstances I have nothing further to say about them.
We support the Bill. It is modest but important and I hope that it has a speedy and successful passage through your Lordships' House.
7.56 p.m.
Lord Mackie of Benshie: My Lords, I too thank the Minister for sending us the fascinating notes on clauses. We too support the Bill but I should like the Minister to explain a number of issues. I understand from her full explanation that the AMC and the SASC will be commercial organisations and that government restrictions will to a great extent be removed.
One of the great virtues of the AMC and the SASC has been that they have lent at fixed rates and at fixed profit margins. I hope that their new scope will not mean that they will follow the clearing and commercial banks into a form of usury and encouragement of spending. That has resulted in what were previously respectable banks putting up notices in their offices to encourage people to take out new loans at what appear to be modest rates of interest in order to go on holiday and so forth. However, when one examines the APR the interest rates amount to 29 per cent. or 30 per cent. I hope that their plans do not include such lending in the pursuit of profit following the less respectable and less useful financial organisations which lend money.
The recovery of fees does not appear to promise a great deal of money to the Treasury. Clause 2(4) states:
"Before making any decision as to the total fees to be recovered under this section or the method of apportioning them between the persons liable to pay them the Minister shall consult".
I hope that the Minister will take note of the fact that the farmer's obligations should end at the farm gate. Already there are disputes in Scotland about who should pay certain fees in respect of slaughtering, and that is unfair.
I was amused and delighted to note that the Government have admitted that they have been a little out of place in paying the extra money for the suckler premium and are correcting that in the Bill. It was nice of the Government to have paid the money. I hope
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that they will continue and make the national contribution the maximum that they can under the EC regulations, because the keepers of suckler cows need it in these times.
Lastly, as regards the Verderers, that is an example of Treasury kindness which one does not often see. However, perhaps the noble Baroness will explain to me the procedure as regards the right to turn out pigs in the pannage season. Perhaps she will tell me how much extra food they have, how much they put on per day, how much the pigs like being turned out in the pannage season and what the pannage season is. I should be very grateful for that information, as I am sure would other noble Lords.
8 p.m.
Baroness Trumpington: My Lords, I am grateful to both noble Lords for what they have said and for their general welcome for this short Bill. On Clause 1 the noble Lord, Lord Gallacher, raised the question of whether there is any scheme for the protection of depositors. The answer is, no. The AMC and SASC do not currently take deposits from members of the public. If they decided to do that, they would need to seek the necessary authorisation under the Banking Act 1987.
The noble Lord followed that up by asking in how many other countries the AMC will operate. As far as I know it has no immediate plans to operate in any country outside the UK.
I believe that the final question of the noble Lord, Lord Gallacher, was whether the Government will give the details of the results of consultation on carcass classification. The answer is, yes.
Turning to the noble Lord, Lord Mackie of Benshie, he maintained that a farmer's responsibility should end at the farm gate. Charges will be levied on slaughterhouses and not on farmers as such. Whether slaughterhouses choose to pass on those charges to the farmer is a matter for their commercial judgment. Their ability to do so will depend on the state of the market. Farmers benefit from the information provided, because the classification is an indicator of quality.
As regards whether the suckler cow premium is being paid at the maximum rate, the rate for the 1991–92 scheme has not yet been set. It is currently being considered and an announcement will be made in due course. Under the 1990–91 scheme the maximum rate of premium allowable under Community rules was paid in the less favoured areas but a slightly lower rate was paid elsewhere.
I omitted to mention that the noble Lord, Lord Gallacher, asked me about consumer credit exemption. The Bill will allow the Secretary of State for Trade and Industry to exempt the AMC and SASC if he considers them appropriate organisations after deregulation. That will effectively place them in the same position as banks and building societies.
I shall have to write to the noble Lord, Lord Mackie, about the pigs. When I was in the New Forest, there were sheep everywhere but I did not see any pigs. However, I shall have great pleasure, as I always do, in writing to him.
Lord Mackie of Benshie: My Lords, perhaps the noble Baroness will give us some information about the son of new lending to be undertaken by the AMC and SASC.
Baroness Trumpington: My Lords, it is rather early days for that. As I said in opening, it is a question of the existing shareholders doing their thing and the AMC taking on its own life as an independent body. Therefore, I do not wish to answer that question at this stage. I commend the Bill to the House.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Forestry Bill
8.5 p.m.
The Earl of Lindsay: My Lords, I beg to move that this Bill be now read a second time. I am very pleased to have been given the opportunity to introduce this Bill, which has passed through all its stages in another place. It was a Private Member's Bill there and it obtained support from all parts of the House. Also, it was warmly welcomed by the Government. I offer congratulations, which I am sure your Lordships will wish to endorse, to my honourable friend Sir Hector Monro, the Member for Dumfries, for initiating this Bill and for guiding it successfully up to this point.
Before I go further, I declare an interest. I am both a woodland owner and, by profession, a landscape architect involved in design, land use and other environ mental issues.
This Bill is very short but that does not detract from its importance. Forestry represents a crucial part of our countryside and heritage. Therefore, it is important that all forestry proposals are carefully considered and that decisions reached are seen to be fair and to take full account of environmental and other interests. The Forestry Commission's regional advisory committees—also known by the acronym RAC—have an important role to play in this process, and it may hell) noble Lords in considering this Bill if I set out briefly where the regional advisory committees fit into the scheme of things.
When a planting or felling application comes forward to the Forestry Commission, it first satisfies itself that the application contains all the information required and that it is completed to a satisfactory standard. The commission then sends details to the appropriate statutory bodies which are to be consulted. Agreements have been reached between the commission and the authorities concerned on the circumstances in which such consultation will take place. If, during the course of consultations, objections are raised to any aspects of the application, then the. commission will try to resolve these by discussion with the parties involved. When it is not possible to resolve objections and the applicant wishes to continue with his application, it will be referred to the commission's appropriate regional advisory committee to assist in trying to find a solution acceptable to all the parties concerned.
It is important to stress that the regional advisory committees' role is purely conciliatory and advisory.
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They do not take decisions; nor do they perform any executive functions. If no solution emerges, then the case is referred to the forestry commissioners together with the committee's advice. I should mention that, until recently, the committees' advice in disputed cases was not made public. However, my right honourable friend the Secretary of State for Scotland announced in April that that is to change. In future, an account of the committees' deliberations, together with their advice to the forestry commissioners, will be made public by way of a press release.
After taking account of the RAC discussions with all the parties, if the commissioners decide that an application should be refused, they may refuse it without reference to Ministers. In all other cases, the commissioners are required, before overriding any objections, to seek the endorsement of Ministers. There are thus important safeguards to ensure that the views of other land use interests are taken fully into account before decisions on planting or felling applications are reached.
The system works well in practice. Between 1984 and 1990 only 113 cases out of 40,000 applications for planting or felling licences had to be referred to the regional advisory committees. Nevertheless, some of these disputed cases have tended to hit the headlines and to raise questions on the relationship between forestry and the environment. Inevitably, the RACs have been placed in the front line and that has brought their membership into sharp focus.
The RACs are constituted under the provisions of Sections 37 and 38 of the Forestry Act 1967. Their purpose is to advise the commissioners as to the performance of their functions under the Act, which provides that:
"Each regional advisory committee shall consist of not less than seven nor more than nine members, and of those members (other than the chairman) not less than four shall be persons appointed by the Commissioners after consultation with organisations appearing to them to represent the interests of owners of woodlands and timber merchants respectively and organisations concerned with the study of promotion of forestry".
In 1974 the committees were first given the additional task of seeking to reconcile differences of view over grant and felling licence applications. No change was made to the statutory membership of the committees at that time but, within the framework set by the Act, places were assigned on each committee to cover agriculture, planning and environmental interests. For some years a place had also been allocated to a trade union representative, which it was decided should continue.
With all nine places thus filled, it was clear that the planning and environment members could not possibly cover the wide range of environmental interests, such as landscape, recreation and nature conservation, that were involved. That has long been of concern to the forestry commissioners, as well as to environmental bodies, and has given rise to the perception in some quarters that the committees are biased in favour of forestry.
That takes me on to the Bill. It is a straightforward measure to increase the maximum membership of each regional advisory committee from nine to 12. That will enable the commissioners to appoint

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additional members to strengthen the representation and range of countryside interests. I have been given an assurance that the commissioners will allocate the additional three places to environmental interests. There would thus be four members from forestry backgrounds, four covering the broad spectrum of environmental interests, and one member each for the agricultural, planning and trade union interests, and an independent chairman. I am sure that such representation will satisfy the great majority of people, and, indeed, will be consistent with the forestry commissioners' statutory duty to seek to achieve a reasonable balance between the needs of forestry and the environment. It will help to demonstrate that the committees reach their decisions in a balanced way and to ensure that they carry out their valuable work in an atmosphere of public confidence. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(The Earl of Lindsay.)
8.12 p.m.
Lord John-Mackie: My Lords, as an ex-chairman of the commission I should like to say a few words. I congratulate the noble Earl for the way in which he introduced the Bill and the way he covered the detail. He said much of what I wish to say. There is no doubt about the importance of RACs; they do a good job of work and are necessary in the work of the commission, though they are purely advisory and do not make decisions.
In the original 1967 Act the commission is given instructions as to the quality of the four members; no other instruction is given. In the present important one-sentence Bill there is also no question of whether any particular qualifications are required of the three new members.
The noble Earl said that the commission agrees that it would like some environmental strength in the RACs and that it will ensure that that is done. However, I should like to point out that environmentalists are inclined to think that foresters have no environmental know-how. I emphasise that an enormous number of foresters are better environmentalists than many so-called straightforward environmentalists. I hope that the commission will watch carefully whom it appoints and ensure that they are not only environmentalists but also have some knowledge of policy.
8.13 p.m.
Lord Gallacher: My Lords, perhaps I may add my appreciation to the noble Earl, Lord Lindsay, for the able manner in which he introduced the Bill. Had I known that it was to be done in such a competent way, I could have saved myself much time spent on homework; for example, I read the whole of the proceedings of Standing Committee C in another place on 1st May 1991. Nevertheless, it was useful to have confirmation of those proceedings so eloquently placed before your Lordships' House by the noble Earl.
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I understand that the Bill was recommended by the Select Committee on agriculture in another place and that its purpose is to increase the membership of regional advisory committees from nine to 12 members to give greater representation to environmentalists. Generally, my reaction to proposals of this kind has always been that size does not necessarily reflect quality. As the noble Earl pointed out, the regional advisory committees carry out a conciliation role in settling differences between applicants and conservators. The statistics of their performance as conciliators are mightily impressive in that of 40,000 applications to plant or fell in the United Kingdom only 113 were referred to the RACs.
My noble friend Lord John-Mackie said some wise words about who the environmentalists are in the world in which we live. I assume that if the Bill becomes law persons appointed to the RACs will be chosen in an individual capacity rather than as nominees of specific bodies or organisations. That has hitherto always been what the Government have said when people ask how those appointments are made. If so, I hope that in making the appointments in individual capacities the net will be widely spread. We are all environmentalists in one way or another and many people of all ages have the ability to contribute to the work of RACs and to maintain their record in conciliation.
That said, I support the Bill. I hope that it will pass speedily through your Lordships' House.
8.15 p.m.
Lord Mackie of Benshie: My Lords, as so often happens everything that could be said about the Bill has been said, but that will not stop me saying it again. I congratulate the noble Earl on the clarity with which he put forward the case. Like the noble Lord, Lord Gallacher, I am doubtful that increasing the size of a committee makes it more effective. The evidence appears to be that they have been able to settle matters in most cases without trouble.
Obviously, representation of different bodies is important, and I accept that. Like my noble kinsman, I trust and hope that the environmentalists will have some knowledge of the countryside and will want to protect not only the rare species of plants, of which they seem to be enormously fond, but also the rare species of humans in the countryside who often depend on forestry for their living. That said, I support the Bill and I shall be interested to see what the Government have to say about it.
8.17 p.m.
The Earl of Strathmore and Kinghorne: My Lords, I am glad to have the opportunity to welcome the Bill, which was ably presented by my noble friend Lord Lindsay. I should like also to echo his remarks in drawing attention to the important part played by my honourable friend Sir Hector Monro in introducing the Bill in another place and attracting such widespread support.
As my noble friend mentioned, the Government welcome the measure. We share the Forestry Commission's concern that the present balance of

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membership on the regional advisory committees has led to the view that the committees are less than even-handed and are unduly biased in favour of forestry when considering disputed cases, though we have seen no evidence to justify that view. We are satisfied that the committees act in a fair and impartial way and perform a valuable if at times thankless task.
Taken as a whole, the Forestry Commission's consultation procedures, backed up by the environmental assessment regulations and the high standards of forest design demanded by the commission for its grant schemes, represent an effective system of regulating the environmental impact of forestry operations. However, there is no doubt that obtaining an increase )n the regional advisory committees' membership from nine to 12 as proposed in the Bill will be a major step in meeting the criticisms of the present imbalance of representation on the committees. I am sure that that will lead to a wider understanding and acceptance of their work.
As my noble friend Lord Lindsay made clear, it is the intention to allocate the three additional places to those with an environmental background. That, together with the seat at present allocated to environmental interests, would make a total of four, thus giving parity with those members representing forestry on the committees.
The regional advisory committees are not asked to consider many disputed cases. Indeed, some of them have not had any referred to them for a number of years. But I am sure that their deliberations and advice will be made easier by having more members who can provide experience and expertise on environmental matters. The Government are happy to support the Bill.
8.20 p.m.
The Earl of Lindsay: My Lords, I thank noble Lords who have taken part in this debate especially for their kind and generous remarks and for the support which they have clearly expressed for this measure. Such support from all sides of the House bodes well for the Bill's passage through its later stages. The noble Lord, Lord John-Mackie, made the point that foresters are the best environmentalists. I thoroughly agree with him and I believe that the Forestry Commission does so as well. It is because of that point that it has had so few disputed cases passed back to the RACs over the past six years. Nevertheless, that point has been well realised.
The noble Lord's kinsman, the noble Lord, Lord Mackie of Benshie, mentioned that human beings are just as important as rare species. I have no doubt about that. The Forestry Commission intends that out of every four environmental places on each RAC, one of the places should go to someone with some experience of recreation and public access so that the human dimension will not be lost to, for example, the newts or the lesser spotted toad.
The noble Lord, Lord Gallacher, made the point that appointments should not be made on a nominee basis but to those who are qualified to serve in their own right. I believe that the Forestry Commission intends to get the most out of this extra representation on each committee. It has been anxious that out of nine members on each RAC only one has officially stood for environmental interests. I believe that it is anxious to illustrate the much greater breadth of wisdom that it can introduce to the committees. I thank noble Lords and I hope that they will give the Bill a Second Reading.
On Question, Bill read a second time and committed to a Committee of the Whole House.
House adjourned at twenty-two minutes past eight o'clock.

  CAMBODIA: KHMER ROUGE PURGE
  CAMBODIA: KHMER ROUGE PURGE
  THE BALTIC STATES: APPEAL
  THE BALTIC STATES: APPEAL
  THE BALTIC STATES: CSCE INQUIRY PROPOSAL
  THE BALTIC STATES: CSCE INQUIRY PROPOSAL
  BURMA: WORK OF UN AGENCIES
  BURMA: WORK OF UN AGENCIES
  THE BALTIC STATES AND THE SOVIET UNION
  THE BALTIC STATES AND THE SOVIET UNION
  CHANNEL TUNNEL SERVICES: BR INVESTMENT
  CHANNEL TUNNEL SERVICES: BR INVESTMENT
  EDUCATION AND TRAINING REGIONAL ADVISORY COMMITTEE STAFF
  EDUCATION AND TRAINING REGIONAL ADVISORY COMMITTEE STAFF
  AGRICULTURE AND FORESTRY BUILDINGS PLANNING CONTROL
  AGRICULTURE AND FORESTRY BUILDINGS PLANNING CONTROL