Sitting of 26 April 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
Oral Answers to Questions
  SOCIAL SECURITY

    Family Credit
    Mr. John Marshall: To ask the Secretary of State for Social Security how many people are now receiving family credit.
    The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): At the end of October 1992, 450,000 families were receiving family credit.
    Mr. Marshall: I thank my hon. Friend for that answer. Does he accept that it is probably now time for another publicity campaign on the merits of family credit? Does he agree that it is much better to help the low paid through family credit than to legislate for their unemployment through a national minimum wage, as the Labour party wishes to do?
    Mr. Burt: Yes, I think that my hon. Friend is right on both counts. We take quite a lot of notice of the effect of advertising campaigns and some of those that we have run have been very successful. That is one of the reasons why the numbers have been boosted to their present level of 450,000.
    On my hon. Friend's second point, I believe that family credit is a better scheme than the minimum wage. It is better targeted on those who need it most and there is no evidence to suggest that it costs jobs. Indeed, even under the Labour party's scheme as announced before the general election, family credit would still have been necessary with the minimum wage.
    Mr. Olner: Does the Minister not realise that people want not low wages but proper wages for proper jobs? Does he not realise that family credit will have to be considerably extended when the Government bring into law the abolition of wages councils, which is a great time bomb ticking away for the low paid?
    Mr. Burt: No, I do not accept that at all. There is no evidence to suggest that low wages are connected with family credit, which is available to workers who have a family and is, therefore, better directed. It is not aimed at all wage earners. Nor do I accept the hon. Gentleman's point about wages councils. The amount of money needed for family credit depends on the number of people in the family rather more than it depends on wages.
    Mr. Spring: Will my hon. Friend confirm that in order to qualify for family credit the number of hours worked
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    per week was recently reduced from 24 to 16? Does he agree that that will have the beneficial effect of spreading the benefit more widely to many more families?
    Mr. Burt: Yes, I thank my hon. Friend for that intervention. The hours were reduced from 24 to 16, which has enabled a large number of extra people to obtain family credit. We estimate that some 60,000 people have now obtained family credit for that reason in the past year or so. That further emphasises our determination to help the low waged with an in-work benefit, because it is far better for people to be in work than not.

    Pensions
    Mr. John D. Taylor: To ask the Secretary of State for Social Security at what age retirement pensions are paid to men and women in each of the 12 Community countries.
    The Parliamentary Under-Secretary of State for Social Security (Miss Ann Widdecombe): State retirement pension ages are as follows: in Denmark, from age 67 for men and women; in Spain, the Netherlands, Ireland and Luxembourg, from 65 for men and women, as it is also to be in Germany; in Portugal, from age 65 for men and 62 for women; and in Greece, from age 65 for men and 60 for women. In France and Belgium, the retirement pension may be paid from age 60 for men and women. In Italy, the ages are to be increased by five years to 65 for men and 60 for women. In the United Kingdom, the state retirement pension is paid from age 65 for men and 60 for women.
    Mr. Taylor: Since the doctrine of infallibility has recently been accepted by some, will the Minister assure the House that it does not extend to her Department and that there is an open mind on the issue of pensions? Following the high-level review that took place at the weekend, and in view of her reply confirming that eight of the 12 Community countries now provide pensions at the same age for men and women, when will that be the basis on which pensions are paid to men and women in the United Kingdom?
    Mr. Skinner: Where's your hat?
    Miss Widdecombe: The hon. Gentleman, from the penitential and sedentary position of his fourth term in opposition, calls out a rather irrelevant remark.
    Decisions in respect of state pension age will be announced in due course. No decision has so far been reached, and we have at present no plans whatever to change the basis on which the pension is paid?
    Mrs. Angela Knight: But does my hon. Friend agree that as the number of people drawing pensions is likely to increase substantially very soon, while the number of those of working age who support them is likely to decrease, it makes sense to look at the possibility of equalising the pension age at 65? Does she further agree that many women would prefer to work until age 65, as I propose to do, rather than putting increasing financial burdens on their children, as would happen if we kept the retirement age for women at 60?
    Miss Widdecombe: My hon. Friend is right about demographic trends. At the moment, there are some 3.4 people of working age for every one pensioner in Britain. Assuming that no changes were made, that ratio would

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    have decreased to 2·4 per pensioner by the year 2030. We shall obviously take that into account, as we shall take into account trends elsewhere in Europe and the world and potential costs or savings. Of course, women have different preferences and different plans for their retirement, and some would be happy to work for longer. All that I can say is that, as yet, no decision has been taken on the subject.
    Mr. Winnick: Is the Minister aware of the growing concern—which has been increased by what happened at the weekend seminar—that the state retirement pension is no longer safe with the Government? Is it not the case that, to a large extent, what was decided at the seminar was war on the existing welfare state?
    Miss Widdecombe: If there is one thing that I find disturbing about the Labour party, it is its willingness to play with the minds and the fears of the vulnerable and elderly. We made a clear statement in our manifesto, and we have made clear statements at the Dispatch Box time after time, that we have no plans—absolutely no plans —to abolish, to freeze or to means-test the pension. We have stood by that. The only plans to means-test the pension are those coming from the Opposition Benches. Not only do Opposition Members want to means-test the pension: they want to do it at the same time as discouraging the only alternative, which is private provision. The hon. Gentleman also has a considerable amount of penance to do for scaring the elderly totally unnecessarily.
    Sir Donald Thompson: Will my hon. Friend consider reducing the pension age for men by one year every two or three years over the next 10 or 15 years and at the same time give men a chance to bolster the private part of their pension?
    Miss Widdecombe: All options will be taken into account in considering what to do with state pensions. The Government have continually encouraged the provision of pension other than the state pension. As a result of that, 70 per cent. of people now retiring have an addition to their state pension—either from an occupational pension or from savings. That is a proud record to which the Opposition could never aspire and on which, what is more, they pour scorn: they want to keep people dependent on the state and do not want to encourage them to try for security in their retirement.
    Mr. Corbyn: To ask the Secretary of State for Social Security what plans he has to link the state retirement pension to average earnings; and if he will make a statement.
    The Secretary of State for Social Security (Mr. Peter Lilley): We have no plans to link the basic pension to average earnings.
    Mr. Corbyn: Is the Secretary of State aware that in 1980 the Government broke the link between average earnings and the state old-age pension and established instead a link with a rejigged retail prices index, and that that has cost every pensioner more than £17 a week and has taken from pensioners more than £25 billion in the past 13 years? Will the right hon. Gentleman now come clean and stop ripping off pensioners? Can we now return to the system whereby the link was either with the RPI or with average earnings—whichever represented the larger increase—and will the right hon. Gentleman ensure that pensioners in our
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    society, who pay for their old-age pension through taxation and national insurance, can be assured of a decent income in retirement and not have to depend on income support or be forced to take out private pension schemes, some of which are very unreliable indeed?
    Mr. Lilley: The hon. Gentleman should address his questions to the Opposition Front Bench and not to me. In the first place, the Labour Government broke the link with earnings when they were in power. More recently, the Opposition Front-Bench spokesman on the subject said that even to hold the link between pensions and earnings at its present level would be very costly and would do nothing to tackle the problem of poverty among the elderly. For once, he is quite right: it would cost £81½ billion to do what the hon. Member for Islington, North (Mr. Corbyn) suggests and that would cost every working person in this country nearly £6 per week in increased contributions.
    Mr. Congdon: Does my right hon. Friend agree that since many pensioners now retire with generous occupational pensions, it is better to target resources on those in greatest need than to spread them across the board?
    Mr. Lilley: That is absolutely right and is, indeed, what we have been doing. My hon. Friend will know that over the past year we have been able to confirm an extra £500 million to poorer pensioners, largely through the increase in the pensioners' premium last October by £2 per week for a single person and £3 for a couple, over and above the increase in inflation. On top of that, pensioners have seen their purchasing power increase this month by an equivalent of a further £2·90 a week on top of inflation because of the extra £750 million that we have pumped into income-related benefits by not requiring anyone on those benefits to make the 20 per cent. contribution to local government taxation.
    Dr. Reid: Will the Minister confirm that the figure of £8½ billion that he mentioned as the figure necessary to restore the link between pensions and earnings or prices —whichever is the higher—for every pensioner, for 365 days a year, is slightly less than what the Government spent on one day, on black Wednesday, as a result of their own economic folly? Is the Minister not ashamed of the fact that the most vulnerable section of the community —the people who created the wealth that he and his colleagues on the Conservative Benches are now ripping off—have been deprived of £17 a week by the Government? Will he now answer the question put to him by my hon. Friend the Member for Islington, North (Mr. Corbyn)?
    Mr. Lilley: The figure that I quoted related directly to the point made by the hon. Member for Islington, North (Mr. Corbyn) and would be the cost of the proposal that he was advocating. It has nothing to do with the cost in relation to 16 September which, of course, would have been infinitely greater had we followed the advice of the Labour party and remained in the exchange rate mechanism.

    Benefits
    Mr. Pickles: To ask the Secretary of State for Social Security what plans he has to carry out a review of the scope for the replacement of all universal benefits by selective benefits.
    Mr. Lilley: We are reviewing all aspects of social security expenditure.
    Mr. Pickles: Will my right hon. Friend confirm that it is appropriate for some benefits, such as pensions, to remain universal? Will he confirm that since 1979, spending on pensions now totals about £35 billion? Does he recognise that if we change the way in which pensions are funded, as Opposition Members are advocating, the cost would be so prohibitive as to hasten the day when means tests are placed on pensioners, as the Opposition have also advocated? Will my right hon. Friend confirm that we have no intention of means testing the basic state pension?
    Mr. Lilley: I can reassure my hon. Friend that we made a clear pledge at the election that we intend to keep the basic pension as the keystone of our policy for retired people and we have no intention of deviating from that pledge. However, my hon. Friend is quite right. Any Government committed—as were the previous Labour Government and as is the hon. Member for Islington, North (Mr. Corbyn)—to uprating pensions in line with earnings would very soon find that they had no money to pump into increased benefits for the least well-off pensioners, as we have done, and they would be forced to means-test pensions as Labour implicitly recognised when it set up the Social Justice Com Miss ion and said that it was to examine means-testing all universal benefits.
    Mr. Kirkwood: Does the Secretary of State agree that it is inadvisable to hold weekend ministerial reviews entirely in secret as they lead to comment, some of which is wrong and some of which is speculative? Would he be prepared to place in the Library of the House the working documents used at the weekend, if not the ministerial advice? Would he also help to ease some of the confusion and concern that have surrounded the weekend meeting by saying clearly that the purpose of any ministerial review would be to make savings—not savings that would be taken out of the social security budget and returned to the Treasury, but savings that could be redeployed and used within the social security system in other ways?
    Mr. Lilley: The Liberal party may try to formulate its policies by inviting the press to sit in on the discussions, but I do not think that that would be a sensible way to proceed. More publicity should be given to some of the Liberal party's policies, not least its clear policy to impose value added tax on heating—either on top of a carbon tax or unilaterally if it cannot get a carbon tax. The Liberal policy document, which is interestingly called, "Costing the Earth"—a fairly apt description of Liberal policy—makes it equally clear that the additional costs of heating for elderly people
    "must not be achieved through granting exemptions to particular target groups; everyone must face the same incentives to use less and cleaner energy."
    Mr. Nicholas Winterton: Does my right hon. Friend accept that child benefit is a universal benefit, and perhaps the most popular universal benefit in this country? While
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    it may well go to a number of people who are very comfortably off, does he accept that overall it goes to the mother who benefits immensely, as does her child? Even if we were prepared to tax that benefit, therefore, its universality should not be ended.
    Mr. Lilley: Again, my hon. Friend will know that there is a pledge in our manifesto—I am glad to know that it is one that he supports—that we would maintain the payment of child benefit normally to the mother and uprate it in line with inflation. Again, we have no intention of reneging on our pledges and I am sure that he will welcome that.
    Mr. Dewar: Does the Secretary of State accept that there has been a lot of press briefing about what happened at Chevening at the weekend and that it would be helpful if he said a little about that? Is it true, for example, that a decision has been taken in principle that people on middle incomes and above are to be asked to opt out of the basic retirement pension and, ultimately, from sickness and unemployment benefit? As the Government are committed to increasing national insurance contributions by 1 per cent. next year, is it not true that if the Treasury loses the contributions of people who opt out of the basic state retirement pension but still has the responsibility of paying pensions to those in retirement, that is a recipe for further increased taxation? If those policies are in contemplation —never mind the working papers—will the Secretary of State at least guarantee that he will make an early statement and produce a consultation document so that people know what is in store for them?
    Mr. Lilley: We have given no press briefing, as the hon. Member suggests, on what was discussed at Chevening. He underestimates the media's imaginative capacities, as they are able to comment without such briefing, using their imagination. Such comments largely tell us what the people who make them are thinking. If the hon. Member is thinking such thoughts, I congratulate him on his courage and suggest that he should feed them to his Social Justice Com Miss ion. In the course of our long-term review, we shall consider all the options that will meet the objectives that I spelt out to the Select Committee on Social Security, one of which is to focus benefits increasingly on those in need. However, we also want to ensure that people have greater control over their resources and greater ability to tailor their provision to their needs, and that is alien to the whole Labour party tradition.

    Pensions
    Mr. Brandreth: To ask the Secretary of State for Social Security what is the current state pension age in (a) Sweden and (b) the United Kingdom.
    Miss. Widdecombe: A rise in state pension age in Sweden, to 66 from the current 65 for both men and women, will be phased in rapidly by 1998. State pension age in the United Kingdom is currently 65 for men and 60 for women.
    Mr. Brandreth: I thank my hon. Friend for that reply. Will she confirm that the position in Sweden is typical of that in most European countries? Does she agree that for

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    the United Kingdom to fall into line we would be well advised to equalise pension ages in this country over a period of time?
    Miss Widdecombe: As I said in reply to an earlier question, many countries in Europe are now following the path of either raising the state pension age or examining their pension system. I cannot say what our final decision will be on this score, but I will, as my hon. Friend suggests, take into account both European and world trends in reaching it.
    Mr. Skinner: Will the Minister confirm that about two months ago I sent her a couple of letters from constituents of mine? Both letters were from women who were in work. To the one who had a year left to work, the reply was, "Don't worry—we will not introduce a 65 or 67 retiring age for women". To the one who had four years left to work, the answer was a little more ambiguous. It is fairly clear that it is part of the Government's agenda to raise the retirement age for women to either 65 or 67. That is a scandal at a time when the Government are spending £27 billion to keep 3 million people out of work, and they have just handed back more than £20 billion to the richest I per cent. of tax payers. Instead of attacking pensioners, they should be attacking the wealthy in Britain. What does the Minister have against women?
    Miss Widdecombe: Unfortunately for the hon. Gentleman, my memory of the two letters in question is good. To the first lady, I said that she could be completely reassured; to the second lady, I also said that she could be reassured. Therefore, I did not make any difference between the two ladies.
    As for what I have against women, the answer is nothing at all: I want to see them well protected and well looked after, which is why I am so happy that more women than ever before are taking advantage of occupational pensions and thus advancing their situation in retirement. If the hon. Member for Bolsover (Mr. Skinner) wants to quote letters to his constituents from me, I suggest that he reads them first.
    Mr. Ian Taylor: To ask the Secretary of State for Social Security what comparative study has been made of the principal factors underlying the setting of the level of pensions in EC countries.
    Miss. Widdecombe: A number of studies comparing levels of pensions in EC countries have been carried out. One recent comparative exercise based on data provided by Watsons independent actuaries looked at the incomes of pensioners in six EC countries. It is available in the Library.
    Mr. Taylor: Is my hon. Friend aware that the United Kingdom spends 8.4 per cent. of gross domestic product on pensions, which is third in the European Community, beaten only by Denmark and France? Given that the cost of living in the United Kingdom compares favourably with those countries, pensioners here do very well. Will my hon. Friend go further and examine closely the trends in the Community? Earnings-related pensions paid by the state do not make sense, given that they penalise those on the lowest earnings. What we need in the Community are portable pensions, occupational pensions and more encouragement to the private sector to help individuals to
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    protect themselves, given the burden that will depend heavily on those of working age with the demographic trend and the increase in the number of people over 80.
    Miss. Widdecombe: My hon. Friend is absolutely right. I am becoming tired of wholly fallacious comparisons between pensions in the United Kingdom and the rest of Europe which take no account of the fact that in some countries the pensions are earnings related and not basic pensions at all and that many citizens in those countries are drawing a pension below the figures quoted.
    I am also always amazed that the figures quoted are at exchange rates, rather than taking into account the cost of living. For example, I often hear about the wonderful pensions in Denmark and Sweden, completely ignoring the fact that people have to be 67 and 66 to get them and that the basket of goods costs 40 per cent. more and 55 per cent. more respectively.
    Mr. Redmond: Will the Minister have urgent discussions with the President of the Board of Trade in view of the underlying threat to pensions if she allows him to get away with putting his sticky fingers on the pension funds, which would have grave implications for her Department?
    Miss Widdecombe: The President of the Board of Trade has his sticky fingers on nothing whatever. There is no proposal that would mean that pensioners in pension funds transferring from the public to the private sector would not have their interests fully taken care of. That has been made clear by a number of Departments involved. Once again, I must say with regret—as I said earlier to the hon. Member for Walsall, North (Mr. Winnick)—that the hon. Member for Don Valley (Mr. Redmond) is scaremongering and the people whom he is frightening are vulnerable.

    Fraud
    Mr. Trend: To ask the Secretary of State for Social Security what further action his Department is taking to reduce fraud.
    Mr. Lilley: In this financial year, I am introducing financial incentives to encourage local authorities to fight housing benefit and council tax benefit fraud. I am also allocating additional resources to allow the Benefits Agency to deploy more specially trained investigators and to make greater use of new information technology to identify false claims.
    Mr. Trend: Does my right hon. Friend agree that every pound lost to fraud means less for those in real need? Does he agree that the Government have a moral commitment to pursue vigorously fraud and abuse, which hurts the very people whom the social security system is designed to help?
    Mr. Lilley: I agree entirely with my hon. Friend. It is important that we strive as much as possible to prevent fraud. That is why I set a target last year for the Benefits Agency to identify and stop some £500 million of fraud. I am glad to say that provisional figures suggest that we shall have exceeded that target. In the current year, for both the Benefits Agency and local councils handling housing and council tax benefit, we are setting a combined target of identifying and stopping almost £1 billion of fraud. It is no surprise that, as a result, I was able to

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    confirm an extra £1 billion for those on the lowest incomes through the income-related benefits. If we do not take tough action on fraud, we cannot ensure that the money is channelled back to the people to whom Parliament intended it to go.
    Mr. Frank Field: As one of the Members who have pressurised this lethargic Government to take action against fraud, may I ask the Secretary of State to accept that there are two abuses of the social security system? There are those who claim benefits to which they are not entitled and there is the even greater number of people who do not claim benefits to which they are entitled. Does the Secretary of State give equal time to those who are eligible but do not claim? Will he outline to the House which major new initiatives he has taken to ensure that some of the poorest in our society claim the benefits that are due to them?
    Mr. Lilley: I have to acknowledge that the hon. Gentleman takes an even-handed view and recognises the importance of tackling fraud and I pay tribute to him for that. But I agree that we must also ensure that those who are entitled to benefits and are ignorant of their entitlement get to know about them. In the next few days I shall make a further announcement about measures that we are taking, especially on family credit, which is one of the most important benefits in helping people off permanent reliance on benefit and into work. We shall encourage people to claim family credit and improve the advertising so that they do so.
    Mr. Streeter: Does my right hon. Friend agree that far too much taxpayers' money is spent not only on those who claim fraudulently, but on supporting people who lead grossly irresponsible lives and do not deserve to be supported by the rest of us? Is his Department also examining that aspect?
    Mr. Lilley: I recognise that people feel that benefit has a moral dimension and are reluctant to see some of the payments that we make. But, above all, we have to give priority to children. That sometimes means helping children in family circumstances of which hon. Members may not approve. The rights of the child have to come first, even though we naturally want to ensure that we do nothing to undermine the strength of the family, the right to which is, of course, the greatest right that a child has.

    Students
    Mr. Hain: To ask the Secretary of State for Social Security if he has any plans to alter the regulations covering entitlement to benefits of students and their parents.
    Mr. Burt: No. We believe that students should look to the education system, not the social security system, for their maintenance.
    Mr. Hain: May I remind the Minister of the case of Miss Kerry Rees of Neath, whose parents are on invalidity benefit and lost more than £33 in child benefit and income support when she turned 19 a few weeks ago? Is the Minister proud of the fact that Kerry has had to abandon her two-year course at Neath college, just three months before she was due to complete it, and sign on the dole because her parents could not afford to maintain her? It is
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    disgraceful. It is no good passing the buck to the education authority and saying that it should pay a discretionary award, because the Government have cut West Glamorgan education authority's budget by more than £6 million. Surely the Government should abandon such oppressive regulations and allow many thousands of lower-income students like Kerry to claim benefit and continue in higher and further education.
    Mr. Burt: I am grateful to the hon. Gentleman for giving me notice of this particular case, on which we have corresponded. When I wrote to him I mentioned that two possible sources of funds might have helped his constituent, one being the local authority, which has no limit placed on the discretionary amount that it can spend on a particular award and which could have covered this case from the resources it might have. Secondly, the hon. Gentleman's constituent could have had access to further education access fund, which are specifically available to help those who might in other circumstances have their access to education removed.

    Value Added Tax (Fuel)
    Mr. Welsh: To ask the Secretary of State for Social Security what representations he has received on the impact on benefit claimants arising from the imposition of VAT on domestic fuel and power; and if he will make a statement.
    Mr. O'Hara: To ask the Secretary of State for Social Security how much he estimates it will cost his Department in the relevant upratings of benefits to take account of the incremental imposition of VAT on domestic fuel.
    The Minister for Social Security and Disabled People (Mr. Nicholas Scott): We have received a number of representations from a range of organisations and individuals, including hon. Members. My right hon. Friend the Chancellor of the Exchequer announced in his speech that extra help will be given to poorer pensioners and others on low incomes. We will be announcing the precise details and costs of this help in the autumn.
    Mr. Welsh: Does the Minister understand the anger felt at the imposition of VAT on domestic fuel bills and on the standing charges for gas and electricity, especially by people in Scotland, where, by definition, the colder climate means higher fuel bills? It has been estimated that the VAT will place an extra financial burden of £133 on families in Scotland. Does the right hon. Gentleman accept that such taxation on domestic fuel will hit the poorest in our society, especially pensioners and those receiving social security benefits? Has he demanded that the Chancellor should abolish this measure? If not, why not?
    Mr. Scott: My right hon. Friend the Chancellor has explained why he felt it necessary to introduce this measure. It is now common internationally for indirect taxes to be levied on the cost of fuel. The most important thing for the House to bear in mind is that both my right hon. Friend the Prime Minister and my right hon. Friend the Chancellor have undertaken that the poorer people in our society will be protected from the impact of the increases.
    Mr. O'Hara: Is the Minister aware that many pensioners, including those who frequently come to my advice surgeries in despair, receive electricity bills in which the standing charge is the most significant item on the bill? A bill of £24 may be made up, half and half, of the standing charge and the units consumed and it is very common to receive a bill of £36, of which £24 is for the fuel consumed. Does the right hon. Gentleman agree that the imposition of 17·5 per cent. VAT on such bills represents an increase of between 25 and 35 per cent. in the cost of actual fuel consumed? Those pensioners are frightened to consume that fuel. Can the right hon. Gentleman assure those pensioners that they will be adequately protected by the uprating of benefits that he will announce shortly?
    Mr. Scott: The price of fuel has been falling in recent years. The Government have already given substantial amounts of extra help to poorer pensioners and others on low income. As I have already said, the Government have a clear commitment to ensure that those on lower incomes will be protected from the introduction of VAT on fuel.
    Mr. Sims: But is my right hon. Friend aware that there is concern about this tax among some of my constituents, who find that income from the modest savings that they have made during their working lives, when added to their pension, brings them just above the income support level? They still find it difficult to make ends meet and their sense of grievance is added to when others in similar circumstances, but who made no such special provision, are entitled to income support and a number of other benefits which flow from that. Is my right hon. Friend really satisfied with the present level at which one becomes eligible for income support and the structure of benefits associated with it?
    Mr. Scott: This is not the first time that we have heard about the problem faced by the group that my hon. Friend has identified. One reason why we will consider carefully between now and the autumn the precise form of protection to be introduced is to determine which groups, either on income support or any income-related benefit, should be protected as a result of the introduction of VAT on fuel.
    Mr. Bradley: May I press the Minister a little further on the extra compensation that the Government are considering? Will he guarantee today that the extra compensation will not be limited to those on means-tested benefits? He will be aware that many of those on means-tested benefits will not claim such compensation and so will get no extra help with the VAT imposition. Many people on non-means-tested benefits, such as elderly people on retirement pensions, disabled people, people with carers, the unemployed and those on low incomes, will get no extra help with the imposition of VAT unless the compensation scheme extends to non-means-tested benefits. Will the Minister give that guarantee today or, better still, will he urge the Chancellor of the Exchequer to scrap the plans altogether?
    Mr. Scott: I say no to both points made by the hon. Gentleman at the end of his remarks. Full details of the extra help to be made available will be given in the autumn, based on the latest information then available to the Government and to the House. We shall announce then a coherent and integrated set of measures rather than a one-off, isolated measure. I reiterate the commitment
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    made by my right hon. Friend the Chancellor and by my right hon. Friend the Secretary of State that the extra help will be given to those who need it most.

  ATTORNEY-GENERAL

    Obscene Publications
    Mr. Nicholas Winterton: To ask the Attorney-General what recent discussions the Crown prosecution service has had with the obscene publications squad of the Metropolitan police on its prosecutions policy in relation to the Obscene Publications Act 1959 and related legislation.
    The Attorney-General (Sir Nicholas Lyell): The obscene publications squad of the Metropolitan police works closely with the Crown prosecution service. They have discussed many specific cases in recent months.
    Mr. Winterton: I am grateful to my right hon. and learned Friend for that response. He was one of the 300 Members of Parliament who attended the recent exhibition in the Palace at which the vile and offensive material was displayed for all to see. My right hon. and learned Friend has implied that the Crown prosecution service is unlikely to be successful in prosecuting those who make that material available. Will he agree with me and, I think, with the House that at present our law is wholly inadequate? It is a charter for such offensive material. Will he take steps to amend the law as soon as possible to prevent this vile, offensive and disgraceful material from being made available?
    The Attorney-General: I recognise my hon. Friend's frustration in respect of one or two categories of this material, especially computer-created child pornography. However, he will not overlook the fact that, for example, in 1991, the latest year for which I have figures, the Metropolitan police seized no fewer than 19,000 items and brought cases on 363 occasions under the Obscene Publications Act 1959, 40 occasions under the Protection of Children Act 1978 and 53 occasions under the Criminal Justice Act 1988.
    Mr. Fraser: The Attorney-General may know that I also went to the exhibition organised by the hon. Member for Congleton (Mrs. Winterton). Although I take a fairly relaxed view about many of these matters, I was shocked by the use of new technology, of satellite broadcasting and of computer design to create a new, high-tech and obnoxious market in exploitation, especially of children and women. Much of that material is in the public domain; it is not for private consumption. I know that this is not the direct responsibility of the Attorney-General, but I wonder whether his advice to the Home Secretary will be that the law on these matters needs to be brought up to date in accordance with technology. There is clearly a deficiency in the powers to arrest people found in possession of doc-rnents and pictures in relation to the distribution of child pornography.
    The Attorney-General: I well understand the hon. Gentleman's points and I will refer them to the Home Secretary. The computerised matters with which he dealt are under close scrutiny.

    Information Technology
    Mr. Congdon: To ask the Attorney-General what contribution has been made by the Crown prosecution service and the Serious Fraud Office through the use of information technology for the better presentation of cases to juries.
    The Solicitor-General (Sir Derek Spencer): Information technology has been used in a number of factually complex fraud cases to speed up the presentation of evidence and to illustrate it in a clearer and more understandable form.
    Mr. Congdon: I thank my hon. and learned Friend for that helpful reply. Do the initial findings show that juries have found this information technology useful?
    The Solicitor-General: Independent consultants who have been spoken to by the Crown prosecution service confirm that juries have found information technology of great assistance in following the details of cases. It has been used with success in the Barlow Clowes and Eagle Trust cases and it is currently being used in the Nissan prosecution. Its graphics are very good and it is good for showing invoice and payment trails and information of that sort.
    Mr. Miller: I am sure that the whole House will welcome any improvements in the Crown prosecution service, given the difficulties that it faces. Can the Minister confirm whether information technology is being used by the CPS more locally to investigate whether there are connections between complaints raised with the service, even though those complaints may seem small—because collectively they may amount to a large complaint about a person or organisation? I am being careful in my choice of words because I am referring to a particular case, but is the Minister aware of such use of information technology; if not, will he encourage the service to use it?
    The Solicitor-General: Yes, information technology is used in out-of-court inquiries as well as in the presentation of evidence in court. When pursuing inquiries it is useful to bring together a wide range of information to see what factors there are in common.

    Right to Silence
    Mr. Bennett: To ask the Attorney-General if he will make a further statement about the right to silence.
    The Attorney-General: The report of the royal com Miss ion is expected within a few months. The ability of the court to draw inferences from silence will no doubt form part of its careful scrutiny.
    Mr. Bennett: Does the Attorney-General accept that this is extremely dangerous? The royal com Miss ion was set up because of the misuse of confessions and how they are extracted and to increase the pressure on defendants to say something could be extremely dangerous. Would not it be far better to take up the evidence in today's report that the police should be much better trained in the questions that they ask, so as to ensure that we get justice, than to remove the right to silence?
    The Attorney-General: I do not think that the one is exclusive of the other. Today's report, which is a matter for
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    my right hon. and learned Friend the Home Secretary, has its merits. Many of us have heard senior policemen say much the same.
    In respect of the right to silence, I would just add that there is a widespread feeling that it is right not only that the prosecution should clarify the issues at the outset of the case, but that the defence should do so, too. If that is what is required and the defence fails to do so, there has to be some comment. The fair and balanced way in which this was achieved in the recent case of Murray, showing how any inroads into the so-called rights of silence should be treated, may provide a useful model.
    Dame Elaine Kellett-Bowman: Does my right hon. and learned Friend accept that it is quite intolerable, when children have been abused or even murdered, that both persons responsible should get off scot free by remaining silent?
    The Attorney-General: I certainly accept, understand and share my hon. Friend's frustration when a lack of evidence causes that to happen. It is partly a question of investigation, but it is essential in the most horrible and serious cases not merely that people be brought to justice, but that, if they are, we can be satisfied that we really have the guilty person.
    Mr. Maclennan: Does the Attorney-General accept that the lack of a right of silence would contradict the presumption of innocence that is the bedrock of our criminal justice system? Although I do not expect him to comment in full on the research report No. 16 published by the royal com Miss ion today, will he at least draw attention to the quite unexpected finding in it—that the right to silence needs to be strengthened to protect those who are charged?
    The Attorney-General: With respect to the hon. Gentleman, I think that there is some confusion in his question. When we talk about the so-called right to silence, we are really discussing whether there should be a right to comment in the event that someone, after due warning, has chosen not to speak. That is entirely different from reversing the burden of proof.
    Sir Thomas Arnold: Does my right hon. and learned Friend agree that there is a particular problem in respect of fraud cases with section 2 of the Criminal Justice Act 1987?
    The Attorney-General: Society has decided through Parliament that in relation to very serious frauds people should be asked questions and should be criminally liable if they refuse to answer them. From the experience of recent years, I am quite satisfied that that is an important right which society should give to the investigator, and it has played an important part in ensuring that guilty fraudsters are brought to justice.

  OVERSEAS DEVELOPMENT

    Non-governmental Organisations
    Mr. Thurnham: To ask the Secretary of State for Foreign and Commonwealth Affairs what co-operation is undertaken between the ODA and British nongovernmental organisations operating in developing countries.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Mark Lennox-Boyd): The main forms of co-operation undertaken between the ODA and British non-governmental organisations are in long-term development, disaster and refugee relief, food aid, and the volunteer programme. In 1991–92, the ODA spent over £123 million in support of these activities.
    Mr. Thurnham: Will my hon. Friend join me in congratulating Oxfam and many other British charities on their excellent work overseas? Will he confirm that the Government will continue to work with those charities in supporting their emergency and long-term development work?
    Mr. Lennox-Boyd: Yes. I recognise that the NGOs play a critical role in emergency relief and in the development process. The ODA's confidence in that role is reflected by the fact that in about two years provision has doubled from £65 million to the £123 million that I mentioned.
    Dr. Kim Howells: Will the Minister ensure that money given by the Government to workers in the field gets directly to them and does not disappear into the various sinks of corruption which all too often constitute central government in some of the countries that receive the aid?
    Mr. Lennox-Boyd: One of the advantages of disbursement through NGOs is that they can monitor the situation. We find that that is an immensely successful way of disbursing aid effectively.

    British Goods
    Mr. Nicholas Winterton: To ask the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to ensure that where British aid is used by a foreign country for the purchase of imported goods, those contracts are placed with British companies.
    Mr. Lennox-Boyd: Goods imported under British bilateral aid are for the most part supplied from Britain.
    Mr. Winterton: Does my hon. Friend accept that many companies that support the objectives of the Manufacturing and Construction Industries Alliance, which has been formed by hon. Members from all parties, industrialists and trade unionists, have greatly benefited from what I would describe as aid-linked export projects? Does he also accept that the more that British industry, whether consultants, manufacturing or construction, benefits from the money that the United Kingdom gives to overseas aid, the more overseas aid will be supported because people will realise that there is a continuing benefit to the United Kingdom from the aid that my hon. Friend's Department gives to needy countries?
    Mr. Lennox-Boyd: I agree with my hon. Friend. The more that British people appreciate the benefits that accrue to British industry, the more generous they will be with aid. In multilateral aid terms, the latest estimate is that for every £1 in United Kingdom contributions we gain £1·20 in orders. We do extremely well because of the reasons that my hon. Friend has given. About 70 per cent. of our bilateral aid is tied.

    European Commission
    Mr. Enright: To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions are currently in progress between the Council of Ministers and the European Commission on the reorganisation of the Commission's services for dealing with aid matters; and if he will make a statement.
    Mr. Lennox-Boyd: The reorganisation of the Commission's services dealing with aid matters is an internal matter for the European Commission.
    Mr. Enright: The Minister will, nevertheless, be aware that the renovation of buildings and the integration of services have had an effect on the morale of some staff working for the Commission. It is crucial that the Council of Ministers, as well as Parliament, monitors what is happening to make sure that it is effective and, above all, integrated properly. Will he give us an assurance that that will happen?
    Mr. Lennox-Boyd: I am aware of what the hon. Gentleman is speaking about and I know that he speaks with expertise, having worked for the European Community in those sectors. I appreciate that directorates general I and VIII are under the same Commissioner's responsibility and I agree that it is appropriate that the Council of Ministers, Members of this Parliament and other national Parliaments and Members of the European Parliament should monitor the acts of the European Commission in its expenditure.
    Mr. Robert Hughes: Is the Minister aware that the Commission's aid policy must be governed by foreign policy? Is he also aware of the desperate need for humanitarian aid in Angola and that the delivery of such aid has been frustrated by the incapacity and unwillingness of Mr. Savimbi of UNITA to accept the Bicesse accords and the writ of the United Nations?
    Mr. Lennox-Boyd: I appreciate the hon. Gentleman's point. Sometimes it is impossible to deliver aid to areas in great humanitarian need, because of the political problems and the failure of political leaders, who could influence the situation, to take appropriate action.
    Mr. Lidington: Will my hon. Friend assure the House that Her Majesty's Government will continue to criticise constructively the Commission's aid programme, to make sure that both donor and recipient countries get the best possible value for every pound or ecu that is spent?
    Mr. Lennox-Boyd: Yes. During the British presidency, important work was undertaken on development co-operation in the European Community. In particular, the Development Council adopted a declaration on aspects of development co-operation policy to the year 2000 and established work programmes to examine our existing policy and to improve the effectiveness of European Community expenditure money through better co-ordination between nation states and the Commission.
    Mr. Worthington: The Minister should be more forthright. Is not he aware that there is widespread criticism of the policy of the existing Development Commissioner, who is losing the confidence of Europe over the distribution of aid? Should not the Minister be making it clear, as more and more of our aid is being

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    distributed through Europe, that we expect the same quality of distribution of aid by the EC as we would expect from our own Departments?
    Mr. Lennox-Boyd: It would not be right for me to endorse the hon. Gentleman's remarks in public, but we take every opportunity to press the European Community on where we feel that improvements in policy could be made. For example, we have expressed our concern about the European Community humanitarian office and we have debated the matter. We are concerned that it has a narrow definition of emergency relief and we are concerned about several aspects of its implementation.

    Western Sahara
    Mr. Corbyn: To ask the Secretary of State for Foreign and Commonwealth Affairs what aid has been given to refugees from the western Sahara; and if he will make a statement.
    Mr. Lennox-Boyd: The United Nations High Commissioner for Refugees has a $3·5 million programme for Saharawi refugees in Algeria; food aid is provided additionally by the World Food Programme at a cost of $2·5 million.
    Mr. Corbyn: Is not it a tragedy that the Saharawi people have had to spend nearly 20 years living in refugee camps in exile in Algeria? Is not it high time that a referendum was held so that the people of western Sahara
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    can decide their own future? Will the Minister undertake to put pressure on the Government of Morocco to persuade them to cease their silly games over the make-up of the electoral roll under which the referendum can be held, so that the United Nations can supervise a referendum that can decide on the peaceful future of western Sahara and allow those poor unfortunate people stuck in refugee camps to return to their homes?
    Mr. Lennox-Boyd: As the hon. Gentleman is aware, the Government have adopted a policy of strict neutrality between all the parties. However, I very much agree that the referendum is the way forward and, therefore, essential. As the hon. Gentleman will also be aware, Security Council resolution 809, which was adopted unanimously on 2 March, invited the Secretary-General to intensify efforts to resolve the problems of, in particular, voter eligibility, so that the referendum could take place. It must take place.
    Sir David Steel: Can the Minister give the House an undertaking that British personnel who are assisting United Nations operations in the western Sahara will not be withdrawn pending the forthcoming visit of the United Nations special representative?
    Mr. Lennox-Boyd: The position with MINURSO—the United Nations Miss ion for the referendum—to which we have attached 15 military observers at a cost of £4.75 million annually, is that we have agreed to extend current deployment until September.

Points of Order
3.30 pm
Rev. Martin Smyth: On a point of order, Madam Speaker. Have you had a request to allow a Government statement to the House on the apparent change of Government policy as enunciated by the Prime Minister—that this House has sovereignty over the four areas of the United Kingdom—to that which appears in a German magazine and attributed to the Secretary of State for Northern Ireland, which suggests there will be a change of sovereignty in Northern Ireland? What message does that contain for the murderers of David Martin and the bombers of Bishopsgate?
Madam Speaker: I have not had a request from a Minister to make a statement today.
Mr. Derek Enright: On a point of order, Madam Speaker. Is it not an insult to this House that, in debating overseas development and asking questions of Ministers, we have but 10 minutes occasionally and then get only an understudy, not the real thing? Have the Government proposed to do something about that?
Madam Speaker: Any Minister from the Foreign and Commonwealth Office is welcome here to answer questions on overseas development. If the hon. Gentleman wants further time for questions, he must pursue that with his own party through the usual channels and the Leader of the House.

Statutory Instruments, &c
Madam Speaker: With permission, I shall put together the motions relating to statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.).

JUDGES
That the draft Maximum Number of Judges (No. 2) Order 1993 be referred to a Standing Committee on Statutory Instruments, &c.

MARINE POLLUTION
That the draft Merchant Shipping (Prevention of Pollution by Garbage) (Amendment) Order 1993 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1993 be referred to a Standing Committee on Statutory Instruments, &c.

FOREIGN SATELLITE BROADCASTING
That the Foreign Satellite Service Proscription Order 1993 (S.I., 1993, No. 1024) be referred to a Standing Committee on Statutory Instruments, &c.

FURNITURE AND FURNISHINGS (FIRE SAFETY)
That the Furniture and Furnishings (Fire) (Safety) (Amendment) Regulations 1993 (S.I., 1993, No. 207) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Arbuthnot.]
Question agreed to.

Orders of the Day

  Finance (No. 2) Bill
  Order for Second Reading read.
  Madam Speaker: Before I call the Minister, I ask right hon. and hon. Members for short speeches. There is a great deal of interest in the debate, but I simply appeal for voluntary restraint on the length of speeches.
  3.32 pm
  The Chief Secretary to the Treasury (Mr. Michael Portillo): I beg to move, That the Bill be now read a Second time.
  I welcome this opportunity to commend the Finance Bill to the House. My right hon. Friend the Chancellor's Budget judgment this year was exceptionally difficult. He had to avoid putting the recovery in jeopardy; he needed to tackle the level of Government borrowing; and, above all, he had to frame a Budget that would promote confidence. He made exactly the right judgment, and the measures in the Bill achieve those aims.
  Business optimism since the Budget has been demonstrated to be at the highest level since April 1988 —so says the Confederation of British Industry, and so says 3i in a survey published today. Activity is rising in all sectors, according to Dun and Bradstreet and also the Association of British Chambers of Commerce.
  Retail sales in the first three months of this year were up 3.3 per cent. on a year earlier; they are now at record levels. Car production is up 8 per cent. in a year and car registrations up 12·75 per cent. Production in our factories is rising, while industrial production in Japan, Germany and France is falling. Output across the whole economy in Britain is up 0·6 per cent. on last year, and in the non-oil economy up 0·6 per cent. in the first quarter. The economy has now been growing for three successive quarters.
  Business surveys now show better export prospects and improved competitiveness in the home market. Exports to non-EC countries are up 12 per cent. on last year. The level of the pound may be part of that, but the real key to competitiveness lies elsewhere. During the recession, companies have improved their productivity through better management and by getting to grips with quality control.
  The Labour party would have us believe that British manufacturing industry is dead. Far from it. Last year, it exported £87 billion-worth of goods—more than £1,500 for every man, woman and child in this country, which is higher than the figure for Japan.
  Manufacturing exports are at record levels, and manufactured export volumes are forecast to grow 7½ per cent. in the year ahead, in 1993. That will give Britain a rising share of world trade in manufactures, after years in which that level fell.
  Unit wage costs recently rose sharply in Germany and Japan, by about 9 per cent. in each case—but in the United Kingdom they are down 2 per cent. on a year ago, which is the biggest fall since records began. This country now has that genuine competitive edge. It has nothing to do with the currency, but is an underlying improvement in our competitiveness vis-a-vis the performance of other countries.
  Mr. Nicholas Winterton: Like my right hon. Friend, I warmly welcome the improvement in the economic indicators, but will he direct his attention to the huge and growing deficit in United Kingdom manufactures? What do the Government intend to do about that, because manufacturing industry produces the only form of non-inflationary growth in this country? Will my right hon. Friend also confirm that the Government have no intention of returning to the exchange rate mechanism in the foreseeable future?
  Mr. Portillo: My hon. Friend intervenes at the very point in my speech that will deal with his question. British industry's competitiveness is most important—for example, in the energy supplies that it buys. I hope that we will have my hon. Friend's support when we do things that may be difficult and unpopular, but which are absolutely essential in maintaining competitive energy supplies to our manufacturing industry. That point is not one on which we have always had my hon. Friend's support.
  Mr. Dennis Skinner: If everything in the garden is rosy, as the Minister says, will he give an assurance that unemployment will fall below 3 million at the end of this calendar year?
  Mr. Portillo: Only Labour's spokesman is foolish enough to try to make predictions about unemployment. The hon. Member for Dunfermline, East (Mr. Brown) makes such predictions and falls flat on his face. I shall point out how he has done so recently. The Government do not make forecasts of unemployment, but we are very pleased at the recent figures recorded. I shall come to a possible explanation.
  Manufacturing output is at its highest level for more than two years, and manufacturing productivity is at its highest level ever, and is growing faster than at any time in six years. Manufacturing is not only alive and well but performing vigorously.
  Sustaining our competitive advantage will depend on controlling costs, and on controlling wage costs in particular. It is good news that earnings growth is at its lowest level for a quarter of a century. Wage restraint will help our businesses to compete. It will assist the creation of new jobs too, and it may be no coincidence—here I take up the question asked by the hon. Member for Bolsover (Mr. Skinner)—that lower earnings growth has been followed by two months of falling unemployment.
  The hon. Member for Peckham (Ms Harman) is always calling on the Government for a jobs package. She ought to call on her trade union friends to work towards achieving higher employment and not just higher wages, as they so often do. I give the hon. Lady marks over and above the hon. Member for Dunfermline, East, because, in the light of increasingly good economic news, that hon. Gentleman has been swerving like a weathercock in a stiff breeze—from lugubrious and grudging through to churlish, and finally coming to rest at despondent. The hon. Gentleman cannot see a good economic indicator without wishing to talk it down. Perhaps he has a good future in air traffic control—"Labour control to the British economy: change your indicators, you are coming in too high." That is the attitude of the hon. Member for Dunfermline, East.
  We know that some economic indicators tend to lag behind the economy; we know that housing and unemployment are the last indicators that tend to turn
  730
  —they are known in the jargon as "lagging indicators" —but the last thing of all that turns is the despondency of the hon. Member for Dunfermline, East. He is the economy's most lagging indicator of all. His motto is "A sound bite a day keeps confidence at hay."
  The hon. Gentleman's last effort was a real gem. Last week, he could not wait for the unemployment figures to be announced. He put out a press release in advance, crossed his fingers and hoped for the worst. He said that the news would herald a summer jobs crisis. The good news on unemployment, when it came through, must have been a crushing disappointment for him.
  My right hon. Friend the Chancellor of the Exchequer recently said that his song was Edith Piaf's "I have no regrets." I think the hon. Member for Dunfermline, East's song should be Ricky Nelson's "Fools rush in, where wise men fear to tread."
  The hon. Member for Dunfermline, East is going to face a summer jobs crisis, because he is under threat from the hon. Member for Sedgefield (Mr. Blair)—the man with the golden smile. It is not the golden smile that the hon. Member for Dunfermline, East has to watch out for; it is the golden elbow—and I think that that is coming very soon.
  I want to be fair to the hon. Member for Dunfermline, East, because he is not the only one in the Labour party who is a member of the posse of gloom merchants.
  Mr. John Townend: There is more than one?
  Mr. Portillo: There is more than one. There are also the hon. Member for Livingston (Mr. Cook), the hon. Member for Glasgow, Garscadden (Mr. Dewar) with his long, lugubrious face, and the right hon. and learned Member for Monklands, East (Mr. Smith). They are the four horsemen of the apocalypse: death, disease, disaster and Dunfermline.
  Dame Elaine Kellett-Bowman: This is a repetition of exactly what happened last month, when the whole centre page of one of our local papers, the Lancashire Evening Post contained a statement from local trade unionists heralding disastrous job figures when they had improved vastly. The article was published before the figures.
  Mr. Portillo: My hon. Friend is absolutely right. Mr. Bill Jordan, the leader of the Amalgamated Engineering and Electrical Union, has now put matters right. He said that a poll of his members had shown that eight out of 10 firms have full order books and that only one in five companies are still making redundancies. So the trade unions have spoken, even if the Labour party finds it difficult to admit what conditions we are now operating in.
  The Labour party insists on talking Britain down, but I am pleased to report that no one out there is listening to the Labour party. Britain remains a very attractive location for inward investment. The United Kingdom attracts one third of all the investment that comes into the European Community; that is twice the amount that goes to France, and France is our nearest rival.
  The Budget and the Finance Bill are designed to protect incentives. We retain the lowest corporation tax of any developed country and a top rate of income tax of 40 per

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  cent., which is much lower than in Italy, Germany, France and even the United States. That is one of the things that make us such an attractive place for investment.
  Mr. Peter Hain: Will the right hon. Gentleman give way?
  Mr. Barry Jones: Will the Chief Secretary give way?
  Mr. Portillo: No, I want to finish.
  The Bill removes obstacles to inward investment by tackling some of the problems that foreign companies have faced with advance corporation tax, by reforming the taxation of foreign exchange gains and losses, and by putting in place the biggest ever deregulatory package for small businesses. Remember that the social chapter will apply to others, but not to us. My right hon. Friend the Prime Minister has said that they can have the social chapter; we will have the jobs.
  Mr. A. J. Beith: Given all these things, what is it that has happened since the Red Book, which was published before the general election, that explains the Government's growth forecast being so much lower for the next four years than it was when forecasts were made before the general election? Before the general election, we had forecasts of 3·25 and 3·75 per cent. growth over the next couple of years. All the forecasts are now below 2 per cent. What has happened to make the situation so much worse?
  Mr. Portillo: The right hon. Gentleman knows that, across the world, the recession has gone on for longer than people hoped. The right hon. Gentleman also knows that, every time we have a meeting of the Organisation for Economic Co-operation and Development or G7 Ministers, we are all in the business of revising down the forecasts that had been made collectively across the world of the rate at which recovery would occur, so there is no mystery about this, particularly for the right hon. Gentleman, who follows these matters closely.
  Mr. Hain: We have had a list of sound bites from the Chief Secretary and a Pinocchio impression, but could we have some serious economics? I put it to him that, if any of the factors that he has quoted approvingly are valid, they are due to the 18 per cent. devaluation since last September. Why, therefore, are the Government deliberately encouraging an appreciation of the pound by about 5 per cent.? Surely the policy and the priority should be low interest rates, but interest rates are still very high in real terms, and are crippling prospects of long-term sustainable industrial recovery.
  Mr. Portillo: Pinocchio's nose grew with telling untruths. We have had a lot of untruths from the Labour party and the Liberal Democrats. I shall be coming to them shortly. In framing his joke, the hon. Gentleman has not been listening carefully to my speech. All right, we have a lower exchange rate, which is helpful to competitiveness in the short run, but I have been pointing to an underlying change in the competitiveness of this country. I have been talking about a change in our unit wages costs vis-a-vis other countries. Perhaps the hon. Gentleman needs a moment longer to reflect upon what I
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  know is an unfamiliar concept, but one which, when he has absorbed it, he will realise is extremely important in explaining our recovery.
  Two of the foundations for recovery have been in place for some time. They are low inflation and low interest rates, but after this recession what Britain needs is rising confidence, and rising confidence has been enhanced by the Chancellor's clear medium-term economic policies. He has set all his policies in a medium-term framework.
  First, the Chancellor set out a clear monetary policy—a target for underlying inflation of 1 to 4 per cent., and a set of indicators that he will consider when deciding on interest rate policy. Secondly, in the autumn statement, he established a public spending policy for the medium term. Over time, the Government's spending will grow less than the trend growth in the economy. We have published fixed spending ceilings, above which we will not go. Thirdly, the Budget set out a strategy for tackling the deficit in the coming years.
  The form that this Finance Bill takes underlines the Government's medium-term strategy for the economy, because, unusually, this Bill sets out tax rates not just for this year but for the years ahead. Contrast these clear statements with what we have heard from the Opposition. Before the election, they had a policy for everything, and usually two policies for everything. Since the election, they have entered a policy void. The hon. Member for Dagenham (Mr. Gould)—remember him? I might say, my hon. Friend the Member for Dagenham—puts it very well. Of the Labour party, he says:
  "We appear not to have an independent view on the level of public spending or borrowing, or where interest rates should be, or the importance or otherwise of monetary policy, or how the exchange rate should be managed."
  What a condemnation of the Labour party. I want to make it clear that this is not something I picked up from the hon. Member for Dagenham over lunch in the Churchill Room. This is something that he has stated publicly—writing in The Mail on Sunday, no less.
  The hon. Member for Peckham is shadow Chief Secretary. She has held her job almost as long as I have held mine. I have to badger Ministers all the time about controlling spending. That does not make me a very popular chap. It is probably for that reason that I have to look to people on the other side of the House to have lunch with. But what about the hon. Member for Peckham, who is in the equivalent position?
  I cannot remember a single subject upon which the hon. Lady has called for restraint. All her comments have been to the effect that more money is needed for health, education, overseas aid and everything under the sun. Like the other megastar whom she most closely resembles—I am of course referring to Miss Joan Collins—she likes to have the most expensive of everything and, like so many of Joan Collins' screen roles, she just cannot say no. On the subject of what our tunes are today, I suggest that her tune is "I'm Just a Girl Who Can't Say No", from the musical "Oklahoma".
  If public spending is too high, it weighs on the country's wealth-creating sector. We lose sight of that fact at our peril. This year, general Government expenditure is planned to be more than 45 per cent. of GDP. Government spending is likely to rise by 19·5 per cent. in real terms between 1988–89 and 1993–94. Central Government debt interest payments are projected to rise by nearly 9 per cent.

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  a year in real terms between now and 1996–97. On their own, they will add nearly I per cent. to the proportion of national income which is taken by public spending.
  On 8 February, I announced to the House a programme of fundamental public expenditure reviews. During this Parliament, that process will consider every Government programme, reassessing spending commitments against the needs of the 1990s and the century ahead. I have agreed demanding agendas with the Secretaries of State for Social Security, for Health and for Education, and with the Home Secretary, and work is now under way on that. We have chosen those programmes because they are among the biggest. What is loose change in those programmes is, or can be, more than the entire budget for some other programmes.
  Social security is a prime example. It accounts for £80 billion a year, one third of all public spending. Every working person in this country contributes £10 daily to cover the costs of social security. Every year, the amount we spend on social security increases. Since 1978–79, leaving aside unemployment, the programme has grown by more than 3 per cent. a year in real terms. In last year's public spending round, we added £3·9 billion to the DSS programme—that is what we added for one year—and it is a striking thought that that increase in social security spending is nearly twice the total annual investment in national roads, even though investment in national roads is at a record level.
  Looking to the future, the prospects are also very difficult. Demographic pressures are against us, and they will add £250 million a year on their own. Items which a few years ago were insignificant have swollen to massive proportions. Back in 1978–79, help with mortgage interest rates through income support was £10 million. Today it is more than £1 billion. The number of people claiming invalidity benefit has doubled over the last year, while the nation has become healthier over the past 10 years. The number of single parents has also doubled. There are now 1,300,000 single parents bringing up more than 2 million children. All too many of those families depend on income support, and the numbers seem set to keep rising.
  Mr. Malcolm Wicks rose—
  Mr. Portillo: Let me say a little more.
  The Opposition recognise the problems, and the fact that great difficulties are posed by some of the trends. The Opposition have set up a social justice commission to put some of the issues in the spotlight while apparently leaving the shadow Chief Secretary in the dark.
  "We must be prepared to examine in an open-minded way some of the fundamental features of our approach. What is the right balance between universal and selective benefits?"
  That question, those words and those sentiments are not mine; they are the words and the question of the right hon. and learned Member for Monklands, East.
  Mr. Wicks: The Minister said that 70 per cent. of one-parent families in Britain depended on state social security. Does he recognise that, in Sweden, for example, 70 or 80 per cent. of single parents are in employment and standing on their own two feet? Does that not imply that what is needed is a package consisting of jobs, training, education and child care to enable one-parent families to be independent, which is good for the economy and good for those families? Will the right hon. Gentleman draw on those lessons for the United Kingdom?
  Mr. Portillo: I note that the Swedish economy had been in tremendous difficulty recently, and that Swedish interest rates have made ours look like a Sunday picnic. Our own rate of employment is second in the EC after Denmark. The participation of our labour force in employment is very high. I recognise the hon. Gentleman's argument, but there are clearly counter-arguments to be advanced.
  Public expenditure control is necessary and is in place but, in present circumstances, our commitment to sound public finances requires us to raise revenue, too. We shall do so in the way that least affects the recovery or incentives, in a way that spreads the burden fairly and in ways that accord with our long-established principles. Over time, we have shifted the tax burden away from direct taxes, which blunt incentives, to indirect taxes, which do not. We also prefer to broaden the tax base rather than increase rates of tax.
  The Prime Minister signed the Rio convention on climate change last June. We are determined to meet our environmental commitments, along with others, and return carbon dioxide emissions to 1990 levels by the year 2000. If we sign up to commitments, we mean it and we meet them. VAT on domestic fuel and power will contribute significantly to the achievement of our Rio target. The Opposition parties argued last year that the Rio convention did not go far enough, yet now they are unwilling to face up to the consequences of curbing pollution. Their reaction has been as predictable as it is depressing.
  It is quite clear that the Labour party was itself planning such a change. It has issued statements about green taxes and has written policy documents about taxing fuel. It has omitted any reference to fuel and power when talking about our zero rates, and has quite explicitly said that VAT should be increased on things that damage the environment. One does not need to be Inspector Morse to work out that that means VAT on domestic fuel and power.
  Today, however, I want to take issue with the Liberal Democrats in particular. In the Newbury by-election campaign, they have pledged themselves to scrapping the extension of VAT, and have sought to make that the centrepiece of their campaign. The right hon. Member for Yeovil (Mr. Ashdown) tells us that he believes in a new kind of politics. In what he has called the "Newbury declaration"—if anyone can imagine anything so pompous—he explained that politicians should look to "long-term gain" not "short-term calculation", and that politics
  "ought to be about telling people the truth".
  So have the Liberal Democrats been telling people the truth? Listen to what they said in "Costing the Earth", a federal green paper issued in 1991:
  "Liberal Democrats advocate as a first priority the imposition of a tax on energy … the UK is unusual amongst EC Members in not applying even standard rates of VAT onto domestic fuels … if it proved completely impossible to persuade our international partners to adopt energy taxes … we would nevertheless press forward … for example, by ending the anomalous zero rate of VAT on fuel."
  Mr. Beith: Will the Chief Secretary give way?
  Mr. Portillo: I will give the right hon. Gentleman his moment.
  The "Newbury declaration" of the right hon. Member for Yeovil is not only pompous: it is sanctimonious humbug. Liberal Democrats are wedded to short-term

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  calculation and do not give a damn about "long-term gains". So far from believing that politics ought to be about telling people the truth, for a few extra by-election votes the Liberal Democrats would sell their grannies.
  Mr. Beith: The Minister will acknowledge that that green paper did not become party policy. Instead, we took up the suggestion, which the Minister is resisting, that energy taxes should be related to pollution and resource depletion effects like a European carbon tax. That is the sensible way to proceed: not to visit a tax at the same level on wind power as is visited on nuclear power.
  Mr. Portillo: The right hon. Gentleman's integrity and that of his party are not improved by wriggling. It is perfectly clear what the Liberal Democrats were saying then and it is perfectly clear what they are saying now, and it is perfectly clear that there is a huge gap between the two.
  Mr. Robert Hughes: Now that Inspector Clouseau has had his fun with the Liberal party, perhaps the Minister can tell us why, if the VAT on domestic fuel was related to Rio and global warming, the total sum generated is not going into energy conservation in the home?
  Mr. Portillo: The hon. Gentleman emissions the point. Putting VAT on domestic fuel and power will reduce our carbon dioxide emissions by 3·5 per cent. and, with our other measures, that takes us two thirds of the way towards fulfilling our Rio convention commitment. That is how it operates, and it achieves exactly that effect. The hon. Member for Aberdeen, North (Mr. Hughes) knows perfectly well that we are talking about a Budget in which revenue has to be generated. We have the honesty to talk about generating revenue, while the Labour party does not.
  In contrast to what we have heard from the Liberal Democrats, the truth is that independent experts, such as the Institute for Fiscal Studies, have confirmed that this Budget will impose a roughly equivalent extra financial burden on those in all income brackets in our society.
  The action that we propose on the married couple's allowance, on dividends and on car taxation ensure that the better-off pay their fair share. The truth is that any increase in domestic energy prices feeds through automatically in the normal uprating of all benefits, including retirement pensions, and we have promised to provide extra help on top of that for people who will face the most difficulty in meeting their higher fuel bills. That special assistance to those on income support and other income-related benefits will be available before the new bills come in.
  The truth is that the Government can be proud of their record of help for the neediest people. Last October, we boosted the weekly income support rates for pensioners by £2 for a single pensioner and by £3 for a pensioner couple. This month, everyone on income support has benefited by between £1·40 and £2·80 per week because they no longer have to make any contribution to local taxation. What is more, this month all major benefits—not just income-related benefits—have risen by 3·6 per cent., which is nearly twice the current rate of inflation?
  Mrs. Barbara Roche: Will the Minister give way?
  Mr. Portillo: No, I will not.
  Following privatisation, everyone has benefited from falling fuel prices. Domestic gas prices have dropped by 9 per cent. in real terms over the past five years, and domestic electricity prices are actually being cut in price terms this year.
  Under the previous Labour Government, electricity prices rose by 30 per cent. in real terms. No special help was given to people on low incomes then. What is more, Conservative Members remember that the right hon. and learned Member for Monklands, East (Mr. Smith) was an Energy Minister in that Labour Government.
  Mr. David Shaw: With regard to pensioners, does my right hon. Friend recall the position in 1976, when the International Monetary Fund had to be called in, the Christmas bonus could not be paid and Barbara Castle had to change the pension payment date—from April to April, to November to November—in order to lose 10 months of inflation and rob the pensioners? Is it not the Labour party which always has its stiletto knife in pensioners' backs?
  Mr. Portillo: My hon. Friend is right in his recollection of history. In every election since 1979, the Labour party has made grandiose promises to pensioners, but pensioners have not believed them, because they remember that the Labour party tricked them when Labour was last in office, and they know that, when the Labour party offers them policies, they do not add up, and they have no expectation of those promises being fulfilled in future.
  In recent weeks we have seen a string of very good economic figures. They have forced the hon. Member for Peckham to change her tune and to recognise that recovery may be under way. However, not being able to bear such good news, like all great stars she has taken out her handkerchief and spoken in tragic tones. Her performance has been very moving. She now directs our attention to the need for sustained recovery and for tackling the underlying weaknesses of the economy.
  On the Government side of the House, Members have always been interested in sustained recovery and in building up the underlying strengths of our economy. My right hon. Friend the Chancellor of the Exchequer strengthened the car industry by abolishing car tax; it has responded with the best monthly production figures for 19 years.
  The Chancellor gave unparalleled help to exporters in the Budget; exports to non-European Community 24countries are up 12 per cent. on last year. He took steps to help the housing market; prices are beginning to stabilise and even to rise a little.
  The Opposition are not really interested in building up the underlying strengths of this economy. They oppose every policy that offers Britain a stronger future; they opposed every privatisation that turned loss-making corporations into profit-making businesses; they have fought every trade union law reform which has given us the best industrial relations record for 100 years; and they have let their union friends boycott every major training initiative. Now they refuse to condemn the teachers' boycott of testing in our schools, even though it is damaging our education and our economic prospects.

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  The British people will contrast that record of the Labour party with the courage shown by my right hon. Friend the Chancellor of the Exchequer. His tenacity has brought down inflation to its lowest level for a generation.
  The evidence of economic recovery is growing, confidence is returning, Britain is on track. This Finance Bill will keep Britain on track, and I commend it to the House.
  4.6 pm
  Ms Harriet Harman: The Bill arises from a Budget which breaks promises, hits hardest at the people who can least afford it and fails to do what is necessary to deal with the fundamental weakness of the economy and to set the country on course for sustainable economic growth.
  At the heart of the Bill lies a fraud on the electorate. The Tory election campaign was centred on the pledge to cut taxes. The Prime Minister promised specifically and repeatedly that the Government would not put value added tax on gas and electricity—they would not and they had no need to—yet they are putting before the House a Finance Bill which means that for every £1 paid on heating bills they will take another 17.5p in tax, which will affect everyone. It will hit hardest at the poorest, as they spend a larger share of their incomes on heating bills, and the Government know it. It will hit hardest at the elderly, who spend more time at home and need to use more gas and electricity to stay warm, and the Government know that, too.
  Not only have the Government broken their election promises, not only are they hitting the poor and the elderly hardest, but they add insult to injury by trying to justify the measure by claiming that it is environmental. When the Chief Secretary spoke in the Budget debate, he was slightly more honest, saying:
  "Before the election we said that we had no plans to raise VAT, and that was the plain truth [Interruption.] Yes, it was. Last year, we were looking at a level of Government borrowing far lower than that we are facing today. We must take action to deal with the changed position."—[Official Report, 17 March 1993; Vol. 221, c. 300.]
  So which is it? Is it what the Chief Secretary said on 17 March—that the Government have gone into the red—or is it a green measure, as he is trying to pretend today? We know that this is not a measure for the environment; it is intended to raise money. It is a measure not from a Government who have gone green but from a Government who have gone into the red.
  Mr. John Butterfill: Can the hon. Lady tell us what the Labour party did to help the elderly? When Labour was last in power, electricity prices rose by 30 per cent., and I do not recollect her protecting them at that time.
  Ms Harman: Since the Conservative Government have been in power, our pensioners have fallen behind those in the rest of Europe. They have found that residential care services, domiciliary care services, home help and meals on wheels have been cut. They have found that the public transport services that they need to get round have been cut. I should like to know whether the hon. Member for Bournemouth, West (Mr. Butterfill) told those people whom he asked to vote for him at the general election that
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  he would vote to increase VAT on their gas and electricity. I will give way for him to say what he put in his election address.
  Mr. Butterfill: Will the hon. Lady answer my question?
  Ms Harman: I have answered the hon. Gentleman's question. Not only will VAT be put on the cost of the fuel that is used; it will also be put on the standing charge. How on earth can it be an environmental measure to put VAT on a standing charge that, by definition, does not vary with the amount of fuel used? The Government came up with the answer that to have VAT on gas and electricity but not on the standing charge would lead to tax avoidance. Do Conservative Members really believe that, or is it simply another thing that they have taken to saying without even caring or knowing whether anyone believes them any more?
  Mr. Stephen Milligan: Can the hon. Lady tell us clearly what a Labour Government would do, in the remote possibility that they came to power? Would they repeal the tax? If so, how would they find the additional revenue?
  Ms Harman: We will vote against the measure tonight. We will vote against putting VAT on gas and electricity. I challenge the hon. Gentleman: when he asked his constituents to vote for him, did he say that he would put 17·5 per cent. on their gas and electricity bills? Our principles are to be fair to pensioners and ensure that a Labour Government do not clobber them with the same economic mistakes as this Government have.
  In the last general election, the candidate for Enfield, Southgate, Michael Portillo, said:
  "Conservatives want to cut your taxes."
  Can that be the same Michael Portillo who now, as the Chief Secretary to the Treasury, asks for £17 billion extra in taxes? Curiously, the Cabinet that has decided to put taxes up is full of right hon. Members who told their voters that they would put taxes down.
  The Tory candidate for Rushcliffe, Kenneth Clarke, said in his election address:
  "Only the Conservatives believe in keeping taxes down."
  Did he mention that when the Cabinet considered the Budget? The Tory candidate for Edinburgh, Pentlands said:
  "six reasons for voting conservative this time … (3) to stop your taxes going up".
  Did he mention that in the Cabinet? The Tory candidate for Wirral, West, David Hunt, said:
  "Ten reasons to vote Conservative … (1) keep taxes low".
  Did he mention that when the Budget was considered by the Cabinet? The pledge was echoed by Tory candidates throughout the country.
  Perhaps I can remind some of the hon. Members who will be voting tonight of what they said to their voters. The Conservative candidate for Richmond, Yorks said:
  "Only the Conservatives can keep taxes down … A Conservative Government means lower taxation."
  A Conservative Government has not meant lower taxation. The Tory candidate for Chichester, Anthony Nelson, said:
  "A Conservative Government means lower taxation. I want to see taxation reduced further."
  Those Tory Members and all the others who made the same promises now face a choice. They can either keep the clear promises they made to their voters or follow the discredited Ministers through the Lobby to put up taxes as

  739
  the Government's panic response to the damage that they have done to the economy. If they vote with the Government, their constituents will know that they can never be trusted again. [Interruption.] Perhaps the hon. Member for Rutland and Melton (Mr. Duncan) can tell us what he said about keeping taxes down.
  Mr. Alan Duncan: The Labour junior Treasury spokesman in the other place said that VAT should be extended to all zero-rated goods. Does the hon. Lady agree with her Front-Bench spokesman in the other place?
  Ms Harman: We are opposed to putting VAT on gas and electricity. The Government promised that they would not put VAT on gas and electricity—but they are doing exactly that.
  The Finance Bill not only breaks election promises but fails to set the economy on course for sustained economic recovery. The Chief Secretary joked about that, but many people in Britain believe that the situation remains serious. Of course everyone hopes that there will be a recovery. Every sign of improvement is welcome, because the price that the country has paid for the Government's economic incompetence is high. During this recession, 1,347,000 more people lost their jobs. During this recession, 420,000 more young people joined the dole queue. Some 149,000 more businesses have failed and 188,000 more families have lost their homes through mortgage default.
  Having failed to accept responsibility for the recession, the Government now try to take credit for the recovery. Every increase in unemployment is due, of course, to factors outside the Government's control. Every drop in unemployment is due to the Government's economic policies. Every business failure is due to factors outside the Government's control. But any increase in business confidence is due to the Government's economic policies.
  The fall in retail sales was due to factors outside the Government's control. The increase in retail sales is now directly due to the Government's economic policy. No one who lost his job can blame the Government, but everyone who finds a job has the Government to thank. This is a Government who take credit for anything, but accept responsibility for nothing.
  Mr. David Willetts: The hon. Lady referred a moment ago to the recovery. Does she accept that a recovery is under way?
  Ms Harman: I very much hope that a recovery is under way. I very much hope that this unnecessarily long recession, caused by the Government's economic failures, is ending. But I want to be sure, and people in the country want to be sure, that never again do so many lose their jobs and so many businesses fail because the Government think that the economy is nothing to do with them.
  The economy remains scarred by recession. Still 2,940,000 people have no job. Still more than 1·5 million people live in homes worth less than their mortgage?
  Mrs. Ann Winterton: If the hon. Lady agrees that, indeed, the recession appears to be ending and recovery is under way, how much of the start of that recovery does she put down to our coming out of the exchange rate mechanism? Is it her party's policy to return to the ERM in due course?
  Ms Harman: We want to see stability for business in Britain as part of economic recovery. One of the things that business has lacked on exchange rates, interest rates or any other issue is certainty for the future. We believe that management and co-operation on exchange rates are part of that. But one of the problems with the ERM that the Government have failed to address is why our economy was so fundamentally weak that we had no chance of surviving at the rate at which we entered.
  The economy has become seriously weakened. We have fallen behind the countries with which we have to compete. There was no recognition of that in the Chief Secretary's speech. British investment per manufacturing worker is half that of Germany and America and only one third that of Japan.
  We have fallen behind on skills. Skill levels are 40 per cent. below those of our leading rivals. The skills gap is particularly serious in engineering, in which Germany and France continue to produce twice as many qualified people as we do. Our failure to invest in skills and industry shows in our failure to match our competitors on productivity. British productivity is now 30 per cent. below the Organisation for Economic Co-operation and Development average.
  The Government's lack of attention to those economic fundamentals is reflected in a growing balance of payments problem. Despite the recession, we continue to import more than we export. The manufacturing deficit is set to rise. The balance of payments deficit will worsen in the next two years. The volume of imports is set to rise faster than exports. Government forecasts show that they expect consumer spending to lead the economy out of recession. But that will make the already serious balance of payments problems worse unless it is matched by investment in industry and skills.
  Only the Government fail to recognise the deep problems that remain, problems which are evident to those who look at Britain from home and abroad, even if they are apparently undetectable to those who survey the scene from either No. 10 or No. 11 Downing street.
  The Government must address the skills gap and the investment gap which are at the heart of our growing trade gap. Before the Government sound the trumpet to celebrate the end of the recession they should notice that the trumpet, too, is now made in Japan by Yamaha. That is why it remains vital that the Government should adopt the measures that the Labour party is proposing not only for an urgent employment programme, but for a boost to investment, starting with the phased release of the accumulated receipts from the sale of council houses.
  The Government have been borrowing, and the cost of the recession and the weakening of our industries is revealed by public finances. They have borrowed not to train people or to equip them with new skills, but to keep them idle. For the first time since the systematic collection of statistics began, more public money is being borrowed than invested. The Government's approach to public spending is like running the bath taps with the plug out.
  When the Prime Minister was Chief Secretary, he said that we would have a zero PSBR; he then said that he would not accept a PSBR of £25 billion, but now the Government forecast, and they hope to be able to keep to, a PSBR of double that at £50 billion.
  Despite the £115 billion in oil revenues and the £62 billion in privatisation receipts, the Tories are set to push public borrowing to a record high. The quest to press on

  741
  with privatisation has now become a sick joke. Group 4 may need to change its name to Group 8 in recognition of the number of prisoners who have escaped. The Chief Secretary will remember that Margaret Thatcher promised that her plans for privatisation would set the people free. Group 4 has given a new and fresh meaning to that election slogan.
  The privatisation receipts, in common with the oil receipts have not gone on investing in skills, industry and our social and economic fabric, but on financing the growing dole queue. The country has enormous strengths, but the Government's economic policy is eroding them systematically. It is not that the Government have an economic problem, but that the economy has a Government problem. It is not the Labour party which is talking Britain down, but the Conservatives who are holding it back.
  At a time when unemployment remains at around 3 million, it is extraordinary that the Finance Bill contains a measure for the taxation of oil which, on the Chancellor's own assessment, will result in at least 10,000 job losses. The oil industry and independent forecasters estimate that the proposal will cause nearer 30,000 job losses. The change in the tax regime for North sea oil will result in a fall in exploration, and will therefore affect the future of the oil industry. The Government have introduced this change at a time when many other areas of the world have substantial oil reserves, sometimes greater than those in the North sea. The loss of incentives to continued exploration in United Kingdom waters may be highly damaging.
  The measure in the Bill will benefit some operators in the oil industry, especially if they cut the amount of exploration they undertake, which many, faced with the proposed change, now plan to do. Operators in the mature fields will benefit from the reduction in, and eventual abolition of, the petroleum revenue tax. There is a real risk, however, that those operators, instead of investing their new profits in the North sea, will invest that money in other parts of the world. This may be an issue for Scotland and the oil industry, but it is also an important issue for the country. It poses a significant risk to the United Kingdom, not just in terms of immediate jobs losses, but in terms of the future of our energy resources.
  As the economy struggles out of one of the deepest and longest recessions for 50 years, confidence may return to the high street, but public confidence will not return to the Chancellor and his Ministers. The Tories will not address the question of how to build a strong economy because, quite simply, they do not believe that that is an issue for government. They think that it can all be left to the market and that the economy has an inherent capacity to grow.
  It is simply no longer possible to place any trust in what the Tories say either about the economy or about their plans for the economy. The Conservatives failed to forecast the recession and they denied its existence when it started. They underestimated its severity and length, and they overestimated how soon a recovery would begin. Every official forecast made by the Prime Minister and by the Chancellor has had to be revised downwards—except for the forecast for the PSBR, which has had to be doubled. The Chief Secretary has just said—
  Several hon. Members rose—
  Ms Harman: I have given way half a dozen times. I am not prepared to give way now, because many hon. Members want to speak in the debate.
  The Chief Secretary said in a moment of seriousness that, when the Government signed up for commitments, they kept them. I thought that he must be about to make a joke, but I realised that he was trying to be serious. The Government said that they would maintain the value of the pound, but they devalued it. They said that the recession was ending in April 1992; it had another year to go. They said that they would not put VAT on gas and electricity. It is set to go up by 17·5 per cent. They said that they would not have a PSBR of more than £25 billion. It is to be double that. They said that they would cut taxes, but they are to raise them by £17 billion.
  The Chief Secretary said that there would be £1·75 billion in extra investment for councils from the release of receipts from the sale of council houses and from other capital receipts. In the autumn statement debate, I challenged that figure, because councils told me that they expected not an increase but a drop in receipts, because they could no longer sell council houses. Yet the Chief Secretary and the Chancellor, when they clearly knew that councils would not have £1·75 billion to invest and to spend, kept giving that figure.
  The Institute of Housing has carried out a survey which supports my findings. It concludes:
  "Local authority building will be zero and only 400 additional homes will be built through housing associations. A modest increase in investment in 1993 will be paid for by cuts in 1994 and 1995."
  Will the Chief Secretary now admit to the House that there was no £1·75 billion-worth of capital receipts available for council investment and that that figure was and is bogus? I shall give way to the Chief Secretary if he wants to admit that that figure is bogus. I see that he is staying in his seat.
  The Government are now set to chop the welfare state. The increase in unemployment and the fall in receipts are used as the excuse not only to increase taxes, but to cut services. The election promises to protect services and benefits have also been forgotten. No Tory candidates and no Tory Members warned constituents that to vote Tory would mean chopping benefits and services. Of course, cutting the welfare state is not just an expedient caused by the Government's economic incompetence, but is the hidden agenda of the Tory right wing. It sees the increase in borrowing as a chance to take the axe to services in which it has never believed and to benefits on which it has never had to rely.
  The Institute of Managers reports that, even at the bottom of the recession, directors have managed to award themselves a pay increase of 5·5 per cent., yet the Chief Secretary tells us—he told us this again today—that the key to a successful economy is low wages, not for directors, of course, but starting with a cut in the living standards of people working in the public sector?
  Mrs. Angela Browning: Will the hon. Lady give way?
  Ms Harman: I have given way about six times and I intend to press on.
  As the Government cut the welfare state and push up fuel costs for the elderly, more people will turn to charities for help.
  Mrs. Browning: Will the hon. Lady give way?
  Ms Harman: I give way on condition that the hon. Lady tells the Chief Secretary to clean up his jokes about me?
  Mrs. Browning: I thank the hon. Lady for giving way, and if I can help her in the matter of the Joan Collins jokes I will be pleased to discuss that in private with her after the debate.
  I should like to take up the hon. Lady's point about pay increases. We are all aware of the need for pay restraint right across the public and private sectors, but the hon. Lady will recall that the House voted on Members' pay and that many hon. Members, particularly Conservative Members, voted for a zero increase. The same cannot be said for all her Back-Bench colleagues.
  Ms Harman: The trouble is that the Conservative Members who voted for no pay increase for Members of Parliament did not vote for their pay as directors or as consultants to be frozen. The difference between us and the Conservatives is that we believe in a highly skilled, high technology, high investment economy—and high wages will be part of that. We do not think that we should have a low skill, low technology, low wage economy and then try to compete with the third world.
  As the Government cut the welfare state and push up fuel costs for the elderly, more people will turn to charities for help. Last year the Cancer Relief Macmillan Fund gave out more than £3 million in patient grants, of which by far the largest category were grants for heating costs. But the charities to which the elderly and the ill turn will in future be less able to respond because the Government plan to take money off them by making them pay VAT on gas and electricity for the first time.
  The Imperial Cancer Research Fund calculates that VAT on gas and electricity will mean that it has to pay extra tax of £170,000 a year; and the Charities Reform Group calculates that 11 national charities will have to give the Government more than £1 million more.
  The measures in the Finance Bill to encourage more payroll giving and gift aid will go nowhere towards making up for the millions of pounds that the Government will take off the charities through VAT on fuel or to make up for the fall in private charitable giving that has been caused by the recession.
  The Government cannot even get their alibi right. The Chancellor claims that the rosy 1992 Budget forecast for growth was blown off course because of problems in the world economy. The Red Book, however, shows that the one figure that the Government got right in 1992 was that for growth in the world economy, as Dr. John Wells of Cambridge university has pointed out. The problem had everything to do with misleading the electorate about the country's immediate economic prospects and the possibility that taxes would be raised.
  The Government did not tell voters at the last election that they planned to put up taxes and put VAT on gas and electricity, because they knew that, if they told them, they would not be re-elected. Although most Tories are happy to cheat the people who elected them, some, at least, have a conscience. I was glad to see that the Conservative group on Dundee council was prepared to second a motion from the Labour leadership of that council. Although he had a heavy heart in doing so, the Tory leader of Dundee council said that he had come to the conclusion that to oppose the
  744
  motion condemning the Government for putting VAT on gas and electricity would be to try to "defend the indefensible"; and that
  "to impose it for environmental reasons, for controlling pollution, was to stand logic on its head."
  Conservative candidates are asking for votes in the May council elections throughout England and Wales, but, before voting, people are entitled to know where those candidates stand. Do the Tory candidates, for instance, support the proposal to put VAT on gas and electricity? Perhaps the Chief Secretary can tell us, to help the voters of Newbury, whether, if the Tory candidate there were elected, he would vote for VAT on gas and electricity. Will Julian Davidson vote for that if he is elected? Can the Chief Secretary tell us? It would be very odd if he did not know whether a by-election candidate for his own party would vote with him on this matter if he were elected.
  The Chief Secretary is not prepared to tell us whether his candidate in that by-election supports that key measure in the Budget. It is clear why he will not. If the candidate pledges to vote for the VAT extension, he has no chance of being elected, so he will refuse to say. The people of Newbury will know two things about him—that he plans to vote for VAT on gas and electricity and to conceal that fact from those he is asking to vote for him. In that respect, he is like other Tory Members. If any Tory Members have any integrity left, they will join us in the Lobby to vote against the Finance Bill and to keep their promises.
  Mr. John Maxton: On a point of order, Mr. Deputy Speaker. What is the position about Second Reading of the Bill? Am I right in thinking that it is exempted business? Many hon. Members are rising to speak, and if it is exempted, the vote does not need to be at 10 o'clock but can be at whatever hour the House decides.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): The hon. Gentleman is quite right on both points.
  Mr. Nigel Forman: On a point of order, Mr. Deputy Speaker. Do the rules of the House contain any guidance about how we are expected to deal with a shadow Chief Secretary to the Treasury who apparently aspires to the job, yet suggests that public expenditure is to be increased and taxation is to be resisted?
  Mr. Deputy Speaker: That is not a matter for the Chair, as the hon. Gentleman well knows. His point is a sheer waste of the House's time.
  4.36 pm
  Mr. John Watts: The hon. Member for Peckham (Ms Harman) attacked the level of the borrowing requirement and some of the Budget measures that are designed to reduce it. In particular, she attacked VAT on domestic energy but did not mention her party's proposal to impose a levy on the profits of energy utilities and how that would assist consumers. She did not say whether, despite that levy, energy utilities would continue to pass to consumers the benefits from the lower costs that they have enjoyed in recent years.
  The hon. Lady gave a grudging welcome to the encouraging signs of economic growth that have emerged in recent weeks, but criticised the Government for, she claimed, acknowledging the recovery too soon. She said that the Government had claimed that it had started last

  745
  summer, and that we had had to wait a year for it. My right hon. Friend the Chief Secretary explained that the GDP had grown in three quarters. I am a simple accountant and my mathematical ability may not be equal to that of the hon. Lady. However, it is clear that three quarters before the end of the last quarter would take us back to the beginning of the summer of last year. If recovery started last June, it is churlish of the hon. Lady to criticise the Government for a claim which, on her calculation, was perhaps three months premature.
  Mr. Geoffrey Hoon: The hon. Gentleman is the Chairman of the Select Committee on the Treasury and Civil Service. Why did that Committee roundly condemn the Budget?
  Mr. Watts: It would take me a long time to deal in detail with every part of the report that was publi;hed today. The hon. Gentleman is referring to the fourth-form abuse in the earlier paragraphs of the report. I understand the irresistible temptation that faced the Liberal and Labour members of the Committee to insert a few abusive and rude comments about the Chancellor, but they did little to enhance the work of the Committee, and they were not an intelligent commentary on the development of the economy. When I have dealt with another matter that has arisen in the debate, I shall deal with the central feature of that report and the matters that the Government will have to deal with in the years ahead.
  Mr. Giles Radice: It would have helped the Select Committee even more if the Conservative Members who should have been there were actually there.
  Mr. Watts: I plead not guilty, as I was there. As I have said on a number of occasions, I do not consider myself to be either a wet nurse or a Whip for one part of the Committee. My role as Chairman is to serve the whole Committee.
  My right hon. Friend the Chief Secretary referred to a number of measures taken to assist the further development of industry and to a Liberal declaration in Newbury about VAT. In both references, he Missed out one important measure in the Budget. He made no reference to the improvement in the VAT treatment of the racing industry, which is a feature of the Budget for an industry that is of importance to many parts of the country. I link it to the Liberal declaration in Newbury, because I have seen reported a scurrilous allegation from the Liberal candidate that the measure was designed for the by-election and for no other purpose.
  It is important that the record is set straight. The last time that I saw our late colleague, Judith Chaplin, was when she and I went to see my right hon. Friend the Chancellor in the course of pre-Budget consultations. The matter that she discussed with the Chancellor, as she had done often before, was the need for some reform of VAT on the racing industry. Therefore, it cannot be true, and is not true, that the measure is included in the Budget as a by-election bribe. It is there, if anything, as a tribute to the assiduous way in which our late hon. Friend served the interests of her constituency with such vigour.
  Mr. Portillo: My hon. Friend is right. Does he agree that, if it had been a by-election ploy, during the course of my speech I would have made quite a lot of that historically helpful measure?
  Mr. Watts: My right hon. Friend makes his own point in a most powerful way. I thought it appropriate to mention the matter in order to put the record straight and, in particular to draw attention to the role of our late, lamented friend.
  The Bill implements the revenue-raising side of the Chancellor's fiscal judgment. It is clear that the difficult judgment, as my right hon. Friend described it, that the Chancellor took was the right one. He was right to avoid premature increases in the burden of taxation, which might have jeopardised the recovery that we are all so glad to see is shown by recent evidence, even though the consequence is a £50 billion public sector borrowing requirement for the coming year. He was equally right, sensible and wise to recognise that the deficit is not a problem that can be ignored and neglected throughout the economic cycle. It poses a potential problem in the development of the economy in the years ahead.
  Table 2B.5 of the Red Book shows that, in 1997–98, the PSBR is projected at £30 billion or 3·75 per cent. of GDP, based on the central growth assumption in the forecast. On a low growth assumption, that deficit could be as high as 5·25 per cent. of GDP and, even on the assumption of a high assumed level of growth in the forecast, it would still be 2·5 per cent. The Bill contains revenue-raising measures to take effect next year. Had they not been in place, all those forecast levels of deficit would have been another 1·5 per cent. worse. That underlines the importance of those measures in the Bill.
  I am reminded of the comments of my right hon. Friend the Chancellor that the Budget cannot be an a la carte menu. We must look to the revenues that are needed to balance our national accounts. Even on the most favourable assumption that can be contained in the official forecasts, the deficit does not end at the end of the present economic cycle. It is clear that, unless recovery is both substantially stronger than expected, and sustained, further reductions in public expenditure or increases in taxes will be necessary.
  Naturally, my clear preference is for reductions in spending so that we can have the opportunity of further reductions in the level of taxation. The Conservative party is the only party, in the House or outside it, committed to lower taxation as a policy objective. The records of the Labour party in office and, if one looks back far enough, of the Liberal party in office and in support of a minority Labour Government prove that to be the case. Therefore, I urge my right hon. Friend the Chief Secretary to proceed with vigour with the fundamental review of public expenditure that he has been charged to undertake. No part of public expenditure can be considered to be out of bounds.
  We have to address a medium to long-term problem. Therefore, we should not be seeking short-term cuts of the sort that Labour Governments took in the mid to late–1970s, involving slashing the Government's capital programme and imposing cuts in pensioners' incomes—a fact to which my hon. Friend the Member for Dover (Mr. Shaw) referred earlier—and imposing on workers in the public service not merely pay restraints but reductions in real pay. We must not look for such a menu to meet our requirements. We must look at rather more fundamental changes, both in the scope of expenditure and in the structure of the public sector.
  Ms Diane Abbott: Is the hon. Gentleman aware that, when he calls for cuts in public expenditure, he is calling for a continuing downward spiral of low or slashed levels of public investment, leading to nothing happening about the unemployed and to continuing high levels of public expenditure on unemployment? Would it not be far better to invest in the economy, do something about the unemployed and help to cut the PSBR so that we would not have to continue to spend millions on maintaining a standing army of the unemployed?
  Mr. Watts: I am grateful for the hon. Lady's support. I am sure that, had she been a Labour Member of Parliament in the 1970s, she would have opposed the slashing of the capital programme for roads, hospitals and schools which the Labour Government of the day undertook. That is what I had in mind when I referred to short-term measures almost always being the wrong decisions.
  It would be surprising if my right hon. Friend the Chancellor, having taken such pains in his autumn statment to protect the major parts of the Government's capital expenditure programme, were to reverse that decision and make such short-term and ill-considered reductions in beneficial expenditure, rather than having the fundamental review of the role of the public sector that my right hon. Friend the Chief Secretary is undertaking.
  It will build on the initiative announced by my right hon. Friend the Chancellor and my right hon. Friend the Chief Secretary, which is aimed at a substantial transfer of both responsibilities and risks from the public sector to the private sector. That will have beneficial effects on public finances. We are not looking for cosmetic changes, but if there is a permanent shrinkage in the public sector and if risks that are borne in the public sector are taken on in the private sector, that is not cosmetic but a fundamental change in the role and the scope of the public sector.
  Higher taxation is never my preferred option. I am sure that my right hon. Friend the Chancellor will review the progress of the economy in the run-up to his next Budget in November. While the recent growth in consumer expenditure is welcome to get the economy on the move, if that consumer spending growth is excessive and appears detrimental to the current account and the balance of payments because of a high propensity to buy imports, there may be a need to consider some increases in indirect taxation in that Budget. That would ameliorate the growth of consumer spending, if such a growth is becoming a problem, and would contribute usefully, in the short and medium term, to a reduction in the size of the deficit.
  My preference is not for an increased burden of taxation as an objective of policy, but for a combination of lower spending and more rapid growth in the economy. That would be preferable and may well happen, especially if our major trading partners—in particular on the continent of Europe—get their economic acts together. Such a combination could present my right hon. Friend the Chancellor with real options in the later years of the medium-term financial strategy, one of which might be more rapid progress in implementing the Government's policy objective of a lower rate of direct taxation—a 20p basic rate of income tax. That objective is not shared by the other political parties.
  No doubt many aspects of individual taxes will come under close scrutiny in Committee, both on the Floor of
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  the House and upstairs, but there is only one specific tax measure to which I wish to refer today, and it is the petroleum revenue tax. In view of my right hon. Friend the Chancellor's need to raise revenue to reduce the deficit, it is not surprising that he should consider a tax that had begun to appear almost optional and no longer yielded the revenue that he could once have expected. Perhaps the previous tax regime was over-generous in its relief for exploration and appraisal expenditure. However, I hope that my right hon. Friend will think again about the proposed transitional relief.
  As I understand it, many oil companies are committed through their licensing obligations to incurring expenditure. They entered into those commitments when the goalposts were such that they could expect E and A expenditure to be set against their PRT tax liabilities. However, such expenditure will no longer qualify for that relief and nor is it covered by transitional relief. Where expenditure is unavoidable and decisions have been made in the expectation of relief, transitional relief should provide for that.
  The second matter—
  Mr. Robert Hughes: Before the hon. Gentleman leaves the question of petroleum revenue tax, does he agree that it is ominous and sinister that the Chief Secretary, during his opening speech, said not a single word about PRT?
  Mr. Watts: I find that neither ominous nor sinister. There are many matters to which my right hon. Friend could refer, but he cannot refer to them all.
  In fact, my second point was not moving away from PRT. I wonder whether there are other ways in which the yield from PRT could be increased without entirely removing relief for E and A expenditure. One possibility would be to retain a higher rate of PRT and restrict the amount of expenditure that qualifies for relief in any one year. I understand from some oil companies that have been in touch with me that, typically, their E and A expenditure might be about 80 per cent. of their PRT liability. My right hon. Friend's understandable desire to increase the flow of revenue could be achieved by setting a cap of 50 or 60 per cent. on the amount of PRT that can be offset by E and A expenditure. That would increase the flow of revenue to the Exchequer, but would not entirely remove the fiscal incentive to continue exploration for valuable hidden natural resources.
  I fear that, in swinging the pendulum from one extreme to the other, the Budget's proposals may have gone too far. I hope that my right hon. Friend will look again at the matter and with an open mind. It may not be until the November Budget that consideration can be given a different long-term regime for oil taxation, but transitional relief—
  Mr. Alex Salmond: The hon. Gentleman was recruiting some support on these Benches until his final point, when he suggested that any change could wait until November. Does not the hon. Gentleman understand that, by November, thousands of people—some estimate tens of thousands—in the oil industry will be out of work? Would it not be better to make the appropriate change during the Committee stage of this Bill? Will the hon. Gentleman revise his thoughts about the timetable for sensibly adjusting PRT?
  Mr. Watts: The hon. Gentleman intervened a little too early. I said that it might take time for a different long-term tax regime to be devised to meet the objective of a strong flow of revenue, while leaving some incentive for exploration to ensure that important national assets are fully exploited. As the hon. Gentleman intervened, I was saying that the issue of transitional relief was more urgent and needed to be dealt with in this Bill. If it is dealt with satisfactorily, those tens of thousands of people to whom he referred will still be in work, because the licensing obligations for companies relate to work that is to be carried out over a significant number of years. Therefore, there is time for the fundamentals of the long-term regime to be dealt with later in the year if it proves impossible to deal with them satisfactorily in this Bill.
  I am conscious of Madam Speaker's request that all hon. Members be economical in their use of time. I intend to follow her stricture and conclude simply by saying that, overall, it is a good Budget based on sound judgment, and that it includes sensible measures to underpin sustained recovery.
  4.56 pm
  Mr. Denzil Davies: The hon. Member for Slough (Mr. Watts), who is Chairman of the Treasury Select Committee, is, with the greatest respect, deluding himself if he thinks that in public accounts a clear line can be drawn between capital spending and revenue spending. I am sure that the Chief Secretary would confirm that. If a hospital cannot afford to pay its nurses, there is not much point in having capital, and vice versa. It is not such an easy solution as the hon. Gentleman, perhaps inadvertently, suggested.
  The Chief Secretary made a Cambridge Union-style knockabout speech. I do not blame him for that, because he is a man with a problem, and the Red Book shows where it lies. There is a public sector borrowing requirement of £50 billion—8 per cent. of gross domestic product. As the hon. Member for Slough said, even on the best estimates that figure is not likely to come down by much over the next few years. The Government have signed up to the figures in the Maastricht treaty—apparently, we must get the PSBR down to 3 per cent. of GDP. Therefore, the Chief Secretary has a problem. It is in the lap of the gods whether he is still Chief Secretary if and when that 3 per cent. is achieved.
  There is also a balance of payments deficit. Based on the Treasury's estimates, the Red Book says that this coming year the deficit will be £17·5 billion. Within that, the figures are even more horrendous. As my hon. Friend the Member for Peckham (Ms Harman) said, the manufacturing deficit is estimated at £13 billion. In addition, under the column headed "Other", there is another figure of, believe it or not, £9·5 billion.
  I do not understand why the Treasury does not break down that "Other" figure. It is fairly large, at £9·5 billion. Most of it is probably accounted for by food imports. It is estimated that this country will be in deficit to the extent of £13 billion in the manufacturing sector and close to £8 billion or £9 billion in food. We are importing far more manufactures than we are making, and that is true of food as well. We can no longer pay for our food imports by exporting manufactured goods. We are in the appalling position of suffering major deficits in respect of manufacturing and food consumption.
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  Elsewhere in the table, a figure of £2 billion is shown in respect of oil, although no figure is given for energy. I am not an expert on oil taxation, but if half of what I hear is correct, that £2 billion deficit will probably disappear before long if no changes are made to the Bill. What about all the pit closures? I do not know where all the gas will come from—perhaps Norway or somewhere else. It will not be long before this country has an oil deficit also.
  Invisibles account for £3 billion or £4 billion, but that figure fluctuates. This country has massive deficits in production and food that we cannot cover with anything else. The Chief Secretary is right to make a knockabout speech, because he is an intelligent man and I am sure that he is extremely worried about the situation.
  It is said that we are now at the heart of Europe. Our gross domestic product per head is 90 per cent. of the rest of Europe. I do not care to talk about first and second divisions, but in terms of the economy—I mean no disrespect to these countries—we are down with Spain, Portugal, Ireland and Greece. Perhaps the figure will increase 1 per cent. in the coming year with the recession in Germany, but it will take a long time for our GDP to come even close to the EC average. Far from being at the heart of Europe, geographically we shall always be on its periphery, and it seems that we shall be so economically as well. There may be some correlation between the two.
  Despite all that, the Prime Minister is a happy man. He does not worry about those things. He watches cricket, drinks warm beer, fills in his pools coupon, and gently strokes his favourite pit bull terrier. That is the Prime Minister for you. He is quite happy and thinks no more about it—the Committee stage of the European Communities (Amendment) Bill is over.
  Mr. Hain: The Prime Minister can watch Neath beat Llanelli.
  Mr. Davies: I do not think that is any more likely to happen than the Government coming near to meeting their Maastricht PSBR targets.
  Progressive taxation went out of fashion in the 1980s. Adam Smith believed in it, thinking that progressive taxation was a good thing. Karl Marx probably thought the same thing, because he spoke of each according to his needs. With the Reagan and Thatcher revolution of the 1980s, progressive taxation ceased to be fashionable. I am not sure that it is fashionable now among my right hon. and hon. Friends on the Front Bench.
  Our income tax and value added tax systems are extremely unprogressive, if that is a good and right word to describe them. I approve of the lower rate of income tax of 20 per cent. I am old enough to remember one and sixpence and six shillings and thruppence, and whatever else Roy Jenkins abolished in 1969—which may have lost us an election. I would argue for a rate even lower than 20 per cent.
  The current banding is 20 per cent., 25 per cent. and 40 per cent.—but it stops there, with a jump from 25 per cent. to 40 per cent. when the individual's income reaches £23,000. If one considers allowances and the way the system is constructed, the individual must earn slightly more than a Member of Parliament to come within the 40 per cent. bracket—a salary of £31,000 or £32,000. Every pound after that is taxed at 40 per cent.
  I believe that 40 per cent. is too high in some cases. In the late 1970s, there was talk of the middle manager. He is

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  still there. The middle manager in the engineering industry does not earn that much. He may earn £40,000, or £50,000 in a medium-sized firm—although probably not during a recession. To tax that individual at 40 per cent. on everything he earns above £30,000 is wrong, unjust, and counter-productive. The Chief Secretary is gesticulating. I will give way if he wants to intervene.
  Mr. Portillo: I was just thinking that the right hon. Gentleman's tax policies sound so similar to Conservative policies that he ought to come and sit on this side of the House.
  Mr. Davies: The right hon. Gentleman has not heard it all yet, so he had better wait.
  I mentioned Adam Smith and progressive taxation because I believe that there should be percentages. In Britain, the highest earnings are enjoyed not by those who work in manufacturing but by those in the financial sector, and by partners in firms of solicitors and accountants. I mean no disrespect, because they perform a useful function in society. High salaries are paid also to property developers in times of growth, and to people working in the media. Those are where the rewards are greatest.
  Unfortunately, in the kind of society and economic system that we have in Britain, manufacturing comes lower down. The jump in taxation from 25 per cent. to 40 per cent. at an income of £31,000 or £32,000 militates against manufacturing. Young people consider such factors more than our generation did, and they note the kinds of employment which offer high earnings and lower tax rates. Partners in City accountants and solicitors firms think nothing of earning £250,000 a year and more. They pay 40 per cent. tax, as does a man making machine tools who is paid £45,000 or £50,000.
  My scheme of progressive taxation is where I part company with the Chief Secretary. I would begin with tax at 10 per cent.—the right hon. Gentleman might agree —increasing in bands of 10 per cent. to perhaps 60 per cent. or 70 per cent. for the highest earners. That would be a much fairer system, which would lighten the burden on those in middle management who are working in the productive part of the economy, and it would tax more heavily those earning the highest incomes.
  That view may be an unfashionable, and I can understand people arguing, "That would be terrible; there would be no investment," but it would be a more sensible system.
  No one has jumped up and asked, "What will you do about capital gains tax?" It is most curious that capital gains tax under a Conservative Government is 40 per cent., which is the same as the maximum income tax rate for individuals. I accept that there is indexation, but in reality the figure is unlikely to be 25 per cent., even if the capital gain is not very large.
  As to individual taxation, Conservatives do not recognise any difference between capital gains tax and income tax. That is most strange. When I first entered the House, splendid speeches were made by Conservative Members about acorns, oak trees, seeds, and the tree and the fruit. Nobody cared very much about all that in the 1980s. Investment did not mean anything. A buck was a
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  buck was a buck, as a Canadian royal commission said years ago, when it recommended abolishing different forms of taxation or capital and income.
  The Government tax capital gains at 40 per cent., which is too high. I do not believe that capital gains should be taxed at 40 per cent. I believe that the corporation tax is 33 per cent., capital and income. Obviously if one is going to change the system and have a progressive system of income taxation, one must consider capital taxation. I think that 30 per cent. is about right. I believe in the distinction between capital and income in a society that needs and wants to invest, and believes that investment and long-term growth are good things for the benefit of that society.
  Value added tax is a terrible tax. Only someone from the common market would invent something called VAT. It is a dreadful bureaucratic tax, with thousands of civil servants sitting in their tower in Southend, churning out circulars. The tax is not to be found in the statute book; it changes every day as the commissioners of Inland Revenue put out press releases and circulars. One cannot find out or read about it. It is a terrible tax.
  The Japanese and Americans at one time thought of introducing VAT. The Japanese are clever people and they decided they did not want to go down that road. When I was at the Treasury there was a proposal to send the permanent secretary to Japan and persuade them to have the tax and stop the Japanese economic miracle in its tracks. But the Japanese are very clever and decided not to have anything to do with this silly tax. However, we have got it, it is there, and we cannot change it.
  Mr. Butterfill: The hon. Gentleman mentioned America. Perhaps he is not aware that America has a sales tax in almost every state, which funds most of the state expenditure.
  Mr. Davies: I am aware of that. Years ago, in the state of Illinois, I can remember people going down to Indiana and coming back with the boots of their cars filled with television sets because Indiana had a lower sales tax. I do not understand the point that the hon. Gentleman is trying to make.
  Mr. Butterfill: The hon. Gentleman was saying that this form of taxation was not popular anywhere else in the world. I was pointing out that in the largest single market in the world a sales tax, of one form or another, is very popular. The fact that people can move down the road to another state is fine. That tends to create a free market and make people average their taxes.
  Mr. Davies: It is quite easy to pay it at the cash till. There is no bureaucracy; it is just added to the bill. It is very simple, very easy, and does not need 10,000 civil servants, circulars from the board of Customs and Excise, huge law reports and accountants making vast sums of money.
  I seem to be arguing the case for the Conservatives. I think small business men especially would be delighted to get rid of VAT and have a simple sales tax as they have in Indiana, Illinois and other states in the United States; but we have got VAT. The Tories cannot cope with VAT: when Baroness Thatcher formed her first Administration, the first thing that happened was that they abolished the 8 per cent. rate and put VAT up to 15 per cent. To some extent that contributed to the surge in inflation which took

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  place in 1979 and 1980 after the Conservatives got in. They did away with the 8 per cent. rate and imposed a 15 per cent. rate.
  The 15 per cent. rate adversely affected many people. The Chief Secretary mentioned a VAT rate of 17·5 per cent. eventually on domestic heating and fuel; the relevant clause also mentions charities in that class. The same applies to construction, chapels and churches. I remember, as a Treasury Minister, receiving letters from ministers of chapels and churches which had to have their roofs repaired and had to pay 8 per cent. even then. Now 17·5 per cent. will be charged for construction and also for heating bills.
  It does not make sense to have such a high, single positive rate when there is no lower rate at all. If it were 10 or 12 per cent., it would be just about defensible; I do not believe it is defensible to have a rate of 17·5 per cent. without a lower rate which can take into account cases such as churches, chapels and the disabled. I remember VAT being imposed on sanitary products for women, and women's groups quite rightly complained. Now it is 17·5 per cent.
  My proposal—which again is entirely unfashionable; it is progressive, but unfashionable—is for a 5 or 6 per cent. VAT rate on fuel. This rate would also be imposed on—horror of horrors—manufactured food, if I may call it that. Much of our import bill for food is for manufactured food, and the profits made by the leading supermarkets come from manufactured food. I am sure it would be possible to devise a 5 or 6 per cent. tax on fuel and no tax on the other items.
  That is my attempt at rewriting the whole of the tax system. I am sure that it falls on stony ground so far as the Chief Secretary is concerned, and I do not really know about my hon. Friends. It is not fashionable these days to attack or say anything about the mammon of finance and taxation. It is something that politicians on the Front Benches are not allowed to touch, but we on the Back Benches are responsible fellows and allowed to be radical—and that is how I would like to see our taxation system.
  5.15 pm
  Mr. Andrew Bowden: During the past 15 years, we have seen the general trend of taxation move from direct to indirect taxation. I would not argue with that principle or trend—because it increases personal choice and is no disincentive to earners—but, if they pursue that path, the Government have a responsibility to certain sections of our community. If the Government impose that amount of VAT upon domestic fuel, some sections of our community will be hit particularly hard. Therefore, in furthering this trend of indirect taxation—with my support—the Government should look carefully at one or two groups who are on the lowest incomes.
  No one likes paying taxes; no one supports any increases because it is going to make them popular—it is going to do the opposite—but it is hypocritical for any politician or political party to continually demand more and more expenditure without saying where the Government of the day are to find the money to meet those bills.
  A group whom I feel the Government must consider very carefully in relation to VAT on domestic fuel are the retired people of this nation, some 10 million to 11 million
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  pensioners. Within that group there are two sections of special concern. There are some 700,000 pensioners who could be drawing income support but, for one reason or another, are not. They really are living—indeed existing—on the very lowest of low incomes. There are also about 2·5 million people who have very small incomes, only slightly over and above the income support rate. They are not eligible for income support and they too will face significant hardship as a result of VAT on domestic fuel.
  I know that my right hon. Friend the Chancellor of the Exchequer and his colleagues are still considering the best way in which to help pensioners. I would like to make one or two practical suggestions to them—but first, perhaps, I should give a little more background.
  Single pensioners spend between £8 and £9 per week on fuel and heating. Married couples spend between £10 and £11 a week on fuel. In the context of VAT at 8 per cent., that represents approximately 70p a week for a single pensioner and 85p a week for a married pensioner.
  Those figures will seem very small to a very large number of people throughout the country. To many people, less than £1 a week is neither here nor there, but it is very much an item for the 700,000 pensioners who do not draw income support but who could do so and for the 2 million to 3 million pensioners who have a very small income over and above support rates.
  We should also consider this section of the community from a different angle. We are talking about first world war and second world war pensioners, men and women, who were unable to earn large salaries or wages and who found it very difficult to save any money, but often did so. We are talking about a generation of people who are self reliant and responsible and who think in terms of service to others, not just of themselves all the time. Most of them adhere to standards and principles—loyalty, integrity and duty—which to some may seem a bit out of fashion. We owe a very great debt to that group of people, who saw this country through those two enormous conflicts.
  My right hon. Friend may say that he understands the points that I am making but that there are a considerable number of pensioners who can pay VAT on fuel without any great hardship. I accept that. There are pensioners —an increasing number—who pay 40 per cent. tax and a significant number who pay 25 or 20 per cent. tax, but we have to balance that number against the two groups I mentioned earlier—the 700,000 who could claim income support but who do not and the 2 million to 3 million who have only a few pounds a week over and above income support level.
  Therefore, I ask my right hon. Friend and his colleagues to think hard, when they review pensions expenditure and look at the figures for uprating the basic pension, to be announced in October or November, about increasing the basic pension uprating to meet entirely the cost of VAT on fuel. There would be a considerable clawback through the tax system. It would be efficient and effective to operate, and the administrative cost would be limited; the uprating would be part of the overall increase in pensions which will come about anyhow because of the increase in the retail prices index.
  I have done some research into this, and I know that the difference in cost between compensating pensioners through income-related benefits—which the Government have already clearly said that they are thinking about and that they will do, although they have not yet announced the exact details—or through the state pension would be

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  only about £150 million. I can almost hear some of my colleagues say, "Only £150 million!" I remind the House that this is a section of the community to whom the nation owes a great debt. Therefore, I ask my right hon. and hon. Friends on the Treasury Bench to think long and hard about the pensioners of our country?
  Mrs. Roche: I sympathise with many of the points made by the hon. Gentleman. Does he agree that one of the other difficulties that face those pensioners is that many of them may, through no fault of their own, have inefficient methods of heating their homes, and that many studies also show that the homes of many pensioner households are not well insulated? I should be grateful for the hon. Gentleman's comments.
  Mr. Bowden: During the past 10 years there has been a considerable number of schemes—certainly in my Brighton constituency, where there are about 20,000 retired people, many of them on low incomes—to help people to insulate roofs and double-glaze windows. One wants money to be found for that work to carry on. Although a great deal has been done, I agree that much more needs to be done in the years ahead.
  To return to the debt that we owe this group of people, as the vast majority have only limited savings and were often unable to buy their own homes, they face the worst of all worlds. There can be no doubt that a significant section of retired people have not shared in the increase, proportionately, in the standard of living that the vast majority of us have enjoyed during the past 10 to 15 years. All of them moved forward, to a point, but it was this section of our community that benefited the least. I ask my right hon. Friend to consider that point.
  I am conscious that many hon. Members in all parts of the House wish to speak, but before I sit down I shall say a word about petroleum revenue tax, an issue that has already been referred to by my hon. Friend the Member for Slough (Mr. Watts). When making these changes, we have to be careful not to build in a disincentive to explore even further the potential health of the North sea. There is strong evidence that it is only the very large oil companies that will gain from and welcome the changes and that the amount of revenue that they will produce for my right hon. Friend and his Treasury colleagues will be limited.
  My worry is that the proposals will kill the incentive for medium-sized and small companies to follow a programme of aggressive, continuing exploration. We know that there is still a considerable amount of oil to be obtained from the North sea, not least on the basis of existing estimates. I do not claim to be an oil industry expert, but it is amazing that we have found over the years that, as fast as the world uses up oil, estimated oil reserves continue to increase rather than decrease, so it must be to our advantage, as a nation, to obtain every barrel of oil that we can from the North sea.
  There is a serious danger that investment in the United Kingdom oil industry will be reduced by the proposed changes and that there will be loss of jobs and damage to the economy. Reduced investment could even bring about the premature demise of activities in the North sea.
  I hope that my right hon. Friend does not think that I have been too negative. In conclusion, therefore, I shall say that, on the whole, I believe that the Budget is
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  fundamentally sound. It will have my support. It is stimulating the recovery, and it will increase confidence. The nation will see the benefits of this Budget in the years to come.
  5.29 pm
  Mr. A. J. Beith: I hope that the Chief Secretary and his colleagues have listened to and will heed what the hon. Member for Brighton, Kemptown (Mr. Bowden) said about the impact of value added tax on pensioners, and his practical suggestions about an alternative way of solving the difficulty that the Government have created. I will deal with those suggestions later.
  The debate has at least broken new ground. It is the first occasion that I can recall of a Minister addressing the House while holding his nose. It is usually a signal used when the person speaking wishes to express his distaste for what he has to say. It is the sort of thing that our former colleague Mr. Alan Clark used to manage to convey without actually holding his nose when reading out passages of Government policy that were distasteful to him. I think that there were parts of the Chief Secretary's speech that he could have read out while holding his nose for the same reason, rather than that which led him to do so on this occasion.
  I do not suppose that I could persuade the Chief Secretary to feel real distaste for some of the policy decisions in the Budget and the Finance Bill, which I shall criticise later, but he might at least have held his nose when he said that the Government had a clear monetary policy and a clear medium-term financial strategy. Those two statements cannot conceivably stand up, and I am sure that the right hon. Gentleman must recognise that in his more serious moments.
  We have had some welcome signs of recovery today, and one or two others in recent weeks. That has led Ministers into the sort of enthusiasm that might usually have been reserved for their own birthdays when they were much younger. There are signs that we are clambering out of the hole into which the Government pushed us, only to be greeted as we clamber out by the Prime Minister and the Chancellor standing with folded arms, saying, "Well, haven't we done well to get you out of that hole?" It is not very encouraging.
  The signs mean that we should now apply ourselves to ensuring that we have a sustainable recovery—there is as yet no evidence that we have a sustainable recovery on hand—and that we do not return to some of the problems which got us so deep into recession in the first place. An appropriate corrective to an excess of enthusiasm is to be found in what I refer to as the "agreed parts" of the Treasury Select Committee's report published today.
  There are some good parts at the beginning and the end of the report, which benefited from being especially heavily influenced by the Labour and Liberal Democrat members of the Committee, but which, unfortunately, did not command the support of the Conservatives. They are part of the report, they won the vote and they are a sound critique of the dishonest character of the Conservative's strategy at the election. In the agreed parts—those supported by all members or, in one case, by all but one —there are several issues of which the Government should take particular note.

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  The Select Committee warns of the continuing problem of high unemployment, which is likely to remain high, and of our very serious balance of payments position, which is almost inexplicably high for a country which has been in recession for such a long time. It also warns of the dangers of the public sector borrowing requirement which will still be £30 billion in four years' time, even if we have 2 per cent. growth, which not everybody believes. When Ministers rush to claim that 0.6 per cent. growth is wonderful news, they should bear in mind the fact that we have to achieve 2 per cent. growth to keep the PSBR at £30 billion. That is frightening.
  The same report warns of the problem of not having a clear and satisfactory long-term policy to control inflation. It also points out that, if we are to have a genuine option to join European monetary union, we must prepare for it in advance. With the exception of one member of the Select Committee who was clearly not in favour of EMU, the Committee argued that we need to make progress on that and to have a regular review of progress if Britain is to have the genuine option of taking part in EMU. If it happens and we are out of it, that will be to our detriment.
  It is also worth noting that the Finance Bill is an enormous document, certainly one of the largest that I have seen in many years of dealing with Finance Bills. It conjures up horrific prospects for our new procedure when we shall be considering the Finance Bill and Government expenditure in the autumn and shall probably have only the Christmas period for the country and the affected parts of the community to digest another probably quite large Bill. It should cause us to consider more carefully how we handle finance legislation, especially because some parts of it are wholly unexpected and cover aspects about which it would have been possible to consult widely before they appeared in the Bill. Again, I shall deal with some of them in a moment.
  The Bill has 211 clauses and 23 schedules, which implement the largest every peacetime tax increase, proposed by a Government elected on a boast of record tax cuts and a promise of low taxes. I am entitled to say that, because I am speaking on behalf of a party which said that it might, in some circumstances, increase taxes. Indeed, we said that, given the opportunity, we would increase the tax on petrol, but we set out precisely how we would do it and what needed to be done with the money.
  We said that if there were to be significant increases in the tax on petrol—and our proposals were lower than those which the Government are now introducing—there would have to be expenditure on public transport and compensation mechanisms for people in rural areas who are more dependent on motor cars. The party that said that our proposals were outrageous and that no one should vote for a candidate who would contemplate increasing the petrol tax has now suggested larger increases, without the compensation that we believe would be necessary. The tax will bear heavily on people in rural areas who are more dependent on the car, but they will receive no compensatory benefit.
  Nor has there been any progress on one idea with which the Government were toying—road pricing in urban areas —which might have allowed a more effective transfer of costs and use of the fiscal system to discourage the use of the motor car where it can he avoided and where it is most environmentally damaging.
  Domestic fuel is another instance of an issue on which the Conservatives purported to be against any increases.
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  They ridiculed our proposals for an energy tax, which were directed at distinguishing between that which pollutes and that which does not. One of my criticisms of the use of VAT as an allegedly environmental measure is that it draws no distinction between the generation of electricity by oil, coal and nuclear power on the one hand and generation by wind or tidal power on the other. The same rate of tax is to be applied on all methods of generation.
  The measure takes no account of the fact that poorer households spend a large portion of their income on fuel. The 1991 family expenditure survey showed that the poorest 20 per cent. spent 11 per cent. of their total income on fuel, whereas the average figure was only 5 per cent., and that the richest portion of the population spent only 3 per cent. of their income on fuel. The measure bears most heavily on the poorest, on pensioners, on tenants whose housing energy efficiency is not under their control, on families with children, on people with chronic sickness and disability, and on those in the colder parts of the country, such as Scotland and the north. It will also affect charities especially badly.
  The proposal is not a sensible way of meeting the Government's alleged objective of using the tax system for environmental purposes. In practice, that is not what the Government were about. As the Treasury Select Committee concluded in its report, it was primarily a revenue-raising measure, and that is what the Chancellor said when he explained it to the Committee. He said that he first had to bear in mind the need to raise revenue. Indeed, if it were a more effective energy efficiency measure, and if it bore on the more elastic section of energy demand, it would not have the revenue-producing value which the Government derive from the measure.
  It is because the measure is targeted at people who have the least choice about energy use that the Government hope it will produce large amounts of revenue, as it appears likely to do. It is not a genuine environmental tax and is not accompanied by adequate compensation or other measures to help those most affected. The hon. Member for Kemptown spoke of the particular problems of the large group of people just above the benefit level. Very often, they have saved a little, but certainly not enough to enable them to compensate for the effects of the new tax.
  Income tax is another case of the Government raising taxation having said that they would not do so. One will look through the Bill in vain for a direct mention of an income tax increase. It is hidden away in a national insurance increase which is the worst, sneakiest and least fair way of increasing income tax. It hits directly those on the lowest incomes, but does not affect higher levels of income, perks or investment income. It has no effect at all on a whole range of income.
  Mr. Butterfill: I am sure that the right hon. Gentleman will not have overlooked the fact that the freezing of thresholds and the disallowance of certain reliefs, as well as the reduction of relief to a 20 per cent. rate, will bear disproportionately heavily on those paying higher rate tax.
  Mr. Beith: Yes, but although I am in favour of some of the adjustments of relief, they offer no compensation to people on lower incomes who bear the burden of disproportionately high rates of tax. That applies particularly to those who are being targeted because the increase is a national insurance increase. The increase has

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  taken the form of a national insurance increase not primarily because it will have that bad effect—that is a consequence of it, rather than the reason for it—but because that will enable the Government to obtain the revenue that they would obtain from an increase in income tax without breaking the pledge, which they made in terms, that they would not increase income tax.
  The Government now say, "We are simply adjusting the contributions to the national insurance fund to take account of a deficit in that fund." That is nonsense, and everyone knows that it is nonsense. The fund simply does not work that way. Moreover, a moment after he had used the alibi of a deficit in the fund to explain what is in fact a 1p tax increase, the Chancellor admitted that he would in any case be leaving the fund £2·8 billion in the red. In no sense are we talking about a careful actuarial balancing of the national insurance fund. We are talking about a disguised income tax increase, of the kind we shall probably see more of in future, as the Government find it necessary to increase taxes because of the public spending gap, but do not want to do so by formally increasing income tax.
  The provisions affecting petroleum revenue tax have also caused considerable controversy. The Liberal Democrats felt so unhappy about that aspect of the Bill that, with the Scottish and Welsh nationalists, we voted against the relevant Budget resolution. On that occasion, we were not accompanied by the Labour party, but concern has now spread more widely among Labour and Conservative Members alike that what the Government are doing on PRT seems likely to tilt the balance away from exploration and against the smaller companies in the oil sector and in favour of the more rapid depletion of existing oil wells—the part of the oil sector that has already been explored. Clearly, unless some changes are made, that will have a severe impact on jobs. We have requested, and are to have, a debate on the Floor of the House on the main principles of the changes in PRT, and I expect that there will be a considerable amount of more detailed debate in Committee, too.
  The Government seem also to have acted strangely—unless one assesses the provisions merely in terms of how much revenue they will raise—in introducing the provisions for advance corporation tax. I feel particularly aggrieved about that, as I was one of those who complained to the Government about surplus advance corporation tax—the amount that companies with substantial overseas activities pay in advance, to the detriment of their profitability, their shareholders and, ultimately, their employees.
  What the Government have done has not solved that problem, although it has eased it slightly. The Government have gone out to consultation on surplus corporation tax. Meanwhile, they have simply taken the opportunity to rake in a great deal of revenue at the expense of pension funds, charities and all sorts of other bodies which were not consulted at all. The principle of consultation is being applied to the measure for which there was the most urgent demand, yet the Government have brought out of a hat a whole range of measures affecting a large proportion of the population through their pension funds and their investments, on which there has been no consultation at all.
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  It is a bit like taking one's car into the garage to get a particular repair effected and coming back at the end of the day to be given a bill for the addition to the car of innumerable extras—and probably various other bills for work elsewhere—and told that the original repair has not been done. I am sure that hon. Members have had that experience. Those at the garage say, "All the other things that we have done may help a little with your steering problem, but we haven't actually been able to repair it." That is what the Government have done in respect of advance corporation tax, and we shall need to consider the matter carefully in Committee.
  Overall, charities will feel very aggrieved, because although there are improvements in respect of, for example, gift aid for which we asked, and a little on payroll giving, no attention has been paid to the anomaly of the charities' liability for VAT, to their problems with that or to the considerable addition to those problems that will be made by heating VAT, which will cost charities enormous amounts. Barnardo's estimates that £122,000 will be added to its heating bill, while Methodist Homes for the Aged expects its figure to be £143,000. Those are frightening figures for charities struggling in difficult circumstances to help people. Again, the Government's proposals will need to be examined carefully in Committee.
  This is a Finance Bill to raise the taxes that the Conservatives said they would not need and would not raise. It clearly and directly breaks election promises by the Prime Minister. It is a Finance Bill to pay for the continuation of the recession, which the Conservatives said would end as soon as the polls were closed and they were elected. Moreover, It hands the bill for the Government's failure to those sections of the community least able to afford it.
  5.44 pm
  Mr. Michael Stern: I shall try to be brief, in view of the number of hon. Members who wish to speak. I agree with the right hon. Member for Berwick-upon-Tweed (Mr. Beith) that this is a long Bill, consisting, as it does, of 211 clauses and 23 schedules. Further to the comments that I made on Report last year, I hope that the Financial Secretary will tell us when he replies to the debate that the Bill will be no longer than that at the end of its passage through Parliament.
  I shall concentrate on an important feature of the Bill —its relationship to what used to be known as the tax avoidance industry. It was in the 1960s and, in particular in the 1970s, under the last Labour Government, that that industry flourished to such an extent that, arguably, we became the tax avoidance capital of the world. People came from all over the place to go to the plush surgeries in the Harley street area or just off Oxford street to see their tax doctors. While they waited, they would pick up not a decaying copy of Punch but that day's copy of the Financial Times or The Wall Street Journal. They would buy at vast prices a scheme to avoid income tax, corporation tax, capital gains tax, estate duty, inheritance tax or even—jokingly—the dog licence.
  This Government, with the assistance of some major court decisions, succeeded in killing off that industry. One of the major advances in tax legislation in recent years has been the extent to which a trend which, during the 1970s, appeared irreversible— that every time the Government

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  announced a tax change, the highly paid brains in the industry would immediately find ways of getting round it —has been stopped. That is to the Government's credit.
  Many people argued that the principal reason why that trend was stopped was that the tax avoidance industry had been bred of high rates of taxation and that, once the Government had brought down rates of taxation, the need for the industry disappeared. Until recently, that could have been argued. In the past couple of years, however, there have been worrying signs that tax avoidance has started again. It is to the credit of my right hon. Friend the Chancellor that, in the Budget and the Bill, he has taken early and severe steps to knock the re-emergent industry on the head.
  I do not think that the re-emergence of the tax avoidance practices that were prevalent under the last Labour Government and before that would be to anyone's benefit. The fact that the present Bill contains so many measures designed to combat—in some cases, effectively, although I shall draw attention to one or two provisions which I feel could be strengthened—the latest outbreak of the industry is wholly to the credit of the Government, the Chancellor and the Treasury team.
  Large parts of the Bill are devoted to combating tax avoidance: clauses 61 to 66, 81, 84, 88, 111, 112, 116, 117 and 188 all deal with individual aspects of tax avoidance. But those clauses are not the only way in which the Government are bringing steady pressure to bear. As was announced at the time of the Budget, there are other measures which are not in the Bill that are designed to deal with tax avoidance. For example, provisions in Customs and Excise press release No. 28 of 1993 deal with the growing practice of claiming VAT input tax relief on non-business supplies.
  As a member of the Public Accounts Committee, I was delighted to learn in a recent evidence session with Customs and Excise that it is considering setting up a specialised unit to deal with the avoidance of VAT and other customs duties just as, to combat the excesses of the tax avoidance industry in the early 1980s, the Inland Revenue had to set up a special anti-avoidance unit which, in the end, was very successful.
  While I welcome the Government's work to combat tax avoidance, I hope that they will not rest on their laurels. There is already evidence since the Budget that the Government may not have gone far enough. One of the Government's disadvantages in combating major and organised tax avoidance is that the organisation extends to ensuring that the Government do not find out about the tax avoidance until the last minute. I remember that, during the 1970s, many tax avoidance schemes were sold on the basis that timing the submission of the accounts or returns concerned was left in the hands of the organisers of the tax avoidance so that as little information as possible reached the Government as late as possible.
  Clause 111 relates to a particular area of tax avoidance bashing. The clause deals with business expansion scheme relief and its abuse. As the clause is drafted, there is at least a risk that the Government have allowed through a considerable measure of tax avoidance which has not yet taken place.
  Clause 111 deals, as I have said, with the abuse of business expansion scheme relief occurring through what is known as the non-recourse loan, under which someone makes a business expansion scheme investment, which is
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  perfectly laudable, and then effectively sells that investment six months later in such a way that it is not caught by the legislation.
  A great deal of that kind of investment occurred right up to Budget day. A recent article in The Times suggested that, in the tax year just ended, about £800 million was invested in business expansion schemes with the intention of taking advantage of what was then a loophole. The tax at risk was therefore a maximum of £320 million.
  As clause 111 is drafted, most of that tax relief will still be available by actions that might be taken by the taxpayers concerned until September this year. In Committee or on Report, I will try to assist the Government to claw back even more of that tax relief, which was never intended by the legislation and which is still available to the Government to claw back.
  That particular abuse, the non-recourse loan which is effectively a sale by another name, does not just extend to business expansion relief. It can also be applied to capital gains tax to enable a capital gain to be taken now, but declared when the gain is exempt from tax. In Committee or on Report, we may have to consider the extent to which that tax loophole needs to be closed in relation to business expansion scheme relief and capital gains tax.
  Those abuses are examples of areas where it is the duty of hon. Members to assist the Government to achieve their objectives. No one in the country can benefit if we once again become the proprietors of a tax system under which the principal beneficiaries are lawyers and accountants rather than the Government. I hope that we will be able to ensure on a non-party basis that the measures that the Government have taken laudably in the Bill can be extended and made even more effective.
  5.54 pm
  Mr. Giles Radice: It is a good custom, and helpful to the House, that we discuss the Treasury and Civil Service Select Committee report with the Second Reading of the Finance Bill. I will refer to the Select Committee report, because I believe that that would be useful to the House.
  In response to the comments of other hon. Members, I want to make two brief points. I agree that the VAT extension to domestic fuel will have a severe impact on many communities, particularly in Scotland and the north, where the weather is most difficult. We made that point in the Select Committee report. In addition, that tax was introduced primarily for fiscal rather than environmental reasons. That point was supported by all hon. Members in the Select Committee report.
  Rev. Martin Smyth: The hon. Member for Durham, North (Mr. Radice) could have included Northern Ireland in his comments. Does he accept that the average weekly income in Northern Ireland is 76 per cent. of that in the rest of the United Kingdom, but fuel bills there are currently £3·50 more than in the rest of the United Kingdom? Under the new VAT changes, they will be £4 more.
  Mr. Radice: The hon. Gentleman is right, and we could have mentioned Northern Ireland. His point bears out what we said in the Select Committee report. The Government should bear that point in mind.
  As part of the background to the debate, the Government have made much of the signs of recovery in

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  the economy. Certainly, output is at last showing some signs of growth. There have been improvements in high street sales, and there has been some slight stirring in the housing market. All that is welcome, and a mild recovery may be in progress. However, if the American experience is anything to go by, it cannot be taken for granted yet.
  Before the recovery is heralded as a great British triumph, however—I fear that the Prime Minister and the Chancellor of the Exchequer have not avoided that temptation, and the Chief Secretary to the Treasury went down that path earlier today—it is important to put this into context. After all, the signs of growth follow 10 quarters of falling or stagnant output, which is the longest recession of this century.
  There has been a loss of £21 billion of output and there has been a sharp rise in unemployment as 1·3 million jobs have been lost. In addition, our public sector borrowing requirement has gone sharply into deficit, and will be £50 billion in the coming year, as a consequence of the increase in unemployment and falling tax revenues. We should bear that in mind.
  We must also bear in mind the fact that it is a very British recession. The recession was caused by the mistakes of the Conservative Government. We must not forget the Lawson boom of 1977–78 and the over-expansion. Let us not forget the one-club policy that followed. Let us not forget that the economy was clobbered with high interest rates at the end of 1988. We suffered a long period of historically high interest rates.
  I must point out that the exchange rate mechanism is not the main reason for our recession. We should remember that we had two years of high interest rates before we entered the ERM. We should also remember that we joined at too high a level in October 1990—as some of us said at the time. In addition, we were able to bring interest rates down until October 1991.
  The unification of Germany made interest rates too high throughout the whole of Europe. Of course, that put strain on the ERM, and eventually we were forced out of it. I agree with the hon. Member for Milton Keynes, South-West (Mr. Legg) that our withdrawal from the ERM enabled us to reduce interest rates and devalue the pound. That has provided a sizeable stimulus to the economy. If there had not been some recovery after all that, I do not know what could have been done to improve the prospects of the British economy.
  The problem is—this is the background to the Finance Bill—that any recovery will meet considerable difficulties. We underlined some of those difficulties in the Select Committee report, including the huge public sector borrowing requirement that we inherited. It is extremely difficult to bring down that requirement in any satisfactory way without aborting recovery at the same time. That is what the Government have tried to do in their sleight of hand when they promised tax increases, but not yet. That is a great difficulty, and we do not know whether the strategy will succeed.
  We have a tremendous problem with the balance of payments deficit. Even in recession, we have a large balance of payments deficit. We should remind ourselves that we have a current account deficit of 2 per cent. of gross national product in the trough of a large and deep recession, compared with a 2·6 per cent. surplus in the
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  trough of the 1981 recession. That is a worrying comparison. If I were responsible for running the British economy, it certainly would worry me.
  It is all very well to say that we can continue to finance our balance of payments deficit—we have said that for a long time. The question that must be asked is whether we can continue to finance the balance of payments deficit at this level indefinitely. That is what has been put before the House in the Finance Bill.
  We must then ask ourselves how much damage the recession has done to the economy. We have a high level of unemployment, which will be difficult to bring down. As we have discovered, it can choke the recovery by affecting confidence. We know that many business men have put off investment decisions during this period. It may well be that that has reduced the productive potential of the economy: we do not know yet. Certainly, that must concern Ministers as they try to bring about recovery.
  Another problem is the fact that there is a recession in Europe. Those of us who thought that, with one bound, Jack was free, do not understand what has happened to our economy and how closely it is tied to what happens in the European Community. Sixty per cent. of our trade is with Europe. If there is a recession in Europe, or if there are high interest rates in Europe, they affect us. We should not believe that we can escape from what happens in Europe: we cannot.
  We cannot have a short-lived consumer boom because we would immediately run into considerable difficulties and recovery would be choked. Recovery must be export-led and investment-led. It must be accompanied by measures to tackle the long-term weakness of the British economy which are well known to all hon. Members. We all know about the problems with education and training and investment in manufacturing industry, but we have not yet done enough about them. There is little in the Finance Bill to tackle those problems.
  I must mention the position of the Chancellor—this matter is referred to in the Select Committee report. The Finance Bill contains a long-term taxation policy. We need a long-term policy to tackle the structural problems of the economy. Apparently, the policy will be sustained by a Chancellor who has used up his political credit. He has given us a false prospectus on the public sector borrowing requirement. Before the election, he told us that the public sector borrowing requirement in the coming year would be £32 billion. In fact, it will be £50 billion, as we pointed out in our report. That is the biggest single most glaring prediction made by the Government.
  The Chancellor said that we would never devalue, yet we were forced to do so. We have devalued by well over 10 per cent.—it is nearer 15 per cent. During the general election, the Chancellor said that the Government would never increase taxes, yet the Finance Bill proposes an extension of VAT and increases in national insurance.
  It is not surprising that the right hon. Gentleman, according to Gallup, is the most unpopular Chancellor this century. City experts have no confidence in him. Last week, the leader in the Financial Times said that he should be replaced. Those hon. Members on the Select Committee who said that the Prime Minister should replace the Chancellor were not being irresponsible—it is simply plain common sense, and we are absolutely right.
  I do not lightly say that Chancellors should resign. Indeed, in 20 years in Parliament, I have called on only one Chancellor to resign—the present one. I genuinely believe

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  that the best contribution that this Chancellor can make to recovery would be to make way for another Chancellor who would inspire more confidence.
  6.5 pm
  Mr. John Townend: I am a little surprised by the remarks of the hon. Member for Durham, North (Mr. Radice). Clearly, when one is debating economics, one turns to attacking personalities when one cannot win the argument with economic arguments—that does not do any good in the House. The hon. Gentleman has a nerve to blame this Government for the length of the recession, the drop in output and the loss in employment when he and his party, last summer, advocated a policy of staying in the exchange rate mechanism without any change in parity. Undoubtedly, such a policy would continue to force the United Kingdom into deeper recession. If we had left the ERM a year earlier, much of the loss in output, many of the lost jobs and many of the businesses that went bankrupt would not have suffered that fate.
  The hon. Gentleman mentioned that Europe is in recession. Is not Europe in recession because of the ERM? Why is France, with a low inflation rate and a balance of payments that is fairly satisfactory, forced to have very high real interest rates that are driving the country deeper into recession? It is because of its membership of the ERM.
  Mr. Radice: The hon. Gentleman knows that, at the time we joined the ERM, I said that we went in at the wrong time for the wrong reasons and at the wrong rate. He has heard me say that in the House, so he cannot include me in any strictures. It is no good attacking me or my party; we were not in government. The Conservative party was in government and sustained that specific policy. The Conservative Government did not seek to devalue the pound within the ERM, as they were perfectly entitled so to do.
  Mr. Townend: Yet the Labour party demanded that we go back into the ERM within seven days of withdrawing from it. The hon. Gentleman's arguments would be much more convincing if he had agreed with us when we pointed out the damage that membership of the ERM was doing to our economy. Of course, he did not agree.
  As I said in the Budget debate, there is much in the Finance Bill to be welcomed. I shall make a relatively short speech and restrict my remarks to one subject—the time bomb that is ticking away under the Government's financial policy. If that time bomb is not defused, it could not only destroy the Government's electoral prospects but do long-term damage to the British economy.
  I speak, of course, of the twin deficits: the budget deficit and the complementary balance of payments deficit. I appreciate that there is no automatic correlation between the two deficits, but undoubtedly Government spending on the European Community, overseas aid and defence contribute to both deficits. It is generally true that, when a country has a large budget deficit, it usually has a large trade deficit.
  In the Budget, my right hon. Friend the Chancellor started to defuse that time bomb by announcing tax increases which will increase to £10 billion a year by 1995–96. I strongly support the overall strategy in the Budget. It would have been a mistake to increase taxes this year because that could have snuffed out the recovery for which we have waited so long.
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  However, even taking the tax increases into account, the deficit in 1995–96 will still be no less than £39 billion, or 5·5 per cent. of gross domestic product. According to the Red Book, the deficit will still be £30 billion by 1997–98. That is without allowing for any slippage in expenditure. If one looks back at the track record of the Government and, indeed, every Government, one finds that in most years spending plans are exceeded.
  The danger of slippage is borne out by the recent announcement of the March figures for the public sector borrowing requirement, which were no less than £9·5 billion. That was the highest deficit recorded in one month, and it emphasises the seriousness of the situation. The PSBR was £1·5 billion more than was estimated only a few weeks ago in the Budget, as the hon. Member for Durham, North said. So the Red Book figure of £35 billion for the current year has been increased to no less than £36·5 billion.
  That rise in such a short period is disappointing, especially when one considers that the unemployment figures fell in February and March. That should have reduced the upward pressure on the social security budget. It is particularly worrying because expenditure in March was £23·3 billion-–30 per cent. more than the expenditure in the same month last year.
  In looking for the reason for the increase in spending, one significant factor is that spending Departments are completely ignoring the horrendous budget deficit we face. As usual, and as those of us who have served in local government or the health service know, towards the end of the year there is a bonanza of spending so that the Department can spend every penny of its budget and nothing goes back to the Treasury to reduce the deficit.
  The Prime Minister needs to read the Riot Act to the Departments that have acted in that way. The size of the deficit, which is based on the plans in this year's Red Book, is unsustainable if we want a healthy economy. We are piling up debt which will have to be paid by our children and grandchildren. The cost of rising debt interest is cumulative. It builds up at a frightening rate.
  The increase in the PSBR is set out in the Red Book for the six years to 1997–98. As has been said, it includes the benefits of increased growth of GDP. That increase is no less than £233 billion. With long-term interest rates at about 8.5 per cent., that builds up to an extra interest cost of no less than £20 billion a year. Do hon. Members realise the significance of extra spending on debt interest of £20 billion a year? It is equivalent to about 14p on the standard rate of income tax, or getting on for 8·5 per cent. on the rate of VAT.
  The size of the borrowing that the Government will have to undertake and finance is so great that it is extremely unlikely that, over a period, they will be able to keep long-term interest rates down to 8·5 per cent. If that occurred, the cost would be even greater. If the Government are successful—I am sure they will be—in keeping inflation down, the real cost of interest on that debt will become unbearable. The speed of the deterioration can be illustrated by the ratio of net public sector debt to GDP, which in the Red Book will increase from 27·25 per cent. in 1991 to almost 50 per cent. of GDP by 1998.
  I say to the House and to my right hon. Friends on the Front Bench that, having started to deal with the time bomb by announcing tax increases, it is vital that the Chancellor completes the job this year by tackling

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  spending. He will be unable to achieve the necessary results without the unstinting and overwhelming support of my right hon. Friend the Prime Minister, who should spell out to the Cabinet that he will not preside over a Government who put Britain deeper and deeper into debt and that he will not put taxes up and up to pay for extra spending and debt reduction. He should tell the Cabinet that the problem will have to be dealt with by spending cuts large enough at least to match the tax increases already announced.
  I hope that the latest disappointing figure for the PSBR in March will convince our spending Ministers how serious the position is. I strongly support my right hon. Friend the Chief Secretary to the Treasury in his important task. Indeed, the future of the Government and the economy of Britain depend on his success. What he will have to recommend will be painful, but it will be even more painful if we shirk taking tough decisions necessary for both the country and the long-term survival of our party in government.
  Cuts will have to be made across the board. There must be no sacred cows. May I make a few suggestions? We were successful in reducing manpower in the public sector, but it is beginning to rise again. I suggest that the Government should look at the example of the privatised industries, in which efficiency has risen, overmanning has been eliminated, and the work force has been significantly reduced. If the public sector—the Government, the civil service and local government—could achieve only half the reduction in manpower that companies such as British Telecommunications, PowerGen, National Power and British Gas have achieved, the number of those employed would fall significantly and billions of pounds would be saved.
  We can no longer continue to make so many of our benefits universal regardless of income. We must consider whether we can afford to keep troops in Germany and spend £2 billion a year in overseas aid. Should we not reduce public spending in Scotland, Ireland and Wales to the level of spending per head in England? Are we dealing with young offenders cost-effectively when it costs £100,000 each? Are we dealing with the mentally handicapped and disabled who have been decanted from our long-stay hospitals into the community, when costs can reach £80,000 per year per patient?
  Can we continue to achieve savings and economies through computerisation and modern management methods but spend those savings in expanding the services of our Departments? Should not a significant proportion be clawed back to help to pay for the large budget deficit?
  I worry whether the Goverment have the backbone to tackle the problems of expenditure. Their record over the past four years does not give one confidence, especially after the most recent spending round. If they funk or fudge the issue, however, we shall see upward pressure on interest rates as the funding of billions of pounds of debt becomes more difficult, and we will face further tax increases in the run-up to the general election.
  What worries me even more is that political pressures may prevent us from reducing expenditure or putting up taxation, so creating a great incentive to reduce the excessive burden and cost of debt by letting inflation rise. Given what we have suffered and what we have achieved
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  under the Government, that would be an absolute tragedy. Compared with the long-term disastrous effects of that, the option of short-term pain caused by cutting expenditure must be preferred.
  The Chancellor is right to be pleased with the economic recovery and, at a time when we are seeing the results of his economic policy, it was churlish of Opposition Members to make personal attacks against him and to demand his resignation. The Chancellor must reaffirm this success, however, with a commitment to cut spending and reduce the deficit by at least £10 billion by 1996. He should be assured, however, of my full support and, I am sure, that of my hon. Friends.
  6.20 pm
  Mr. Robert Hughes: I shall not follow the speech of the hon. Member for Bridlington (Mr. Townend) in detail, except to say that I thought that some of his proposed remedies for dealing with the Government's problems with their spending targets beggared belief. Perhaps he should reflect on what he said when he reads his speech in the cold light of day. In effect, he said that the mentally and physically handicapped should remain in institutions rather than lead a decent life outside in the community, because it was cheaper to keep them in those institutions.
  Mr. John Townend: I asked whether a charge of £80,000 per person was cost-effective. I suggested that we should consider a more cost-effective means of treating such people.
  Mr. Hughes: The hon. Gentleman has confirmed what I said—what matters to him is cost-effectiveness, not the dignity and life style of people who happen to be born mentally or physically handicapped.
  The Chief Secretary, in between doing a bad impersonation of Pinocchio and Inspector Clouseau, had one odd moment of candour. He admitted that the Government's approach to the Budget and the Finance Bill were dictated by their difficulties with their spending plans and borrowing requirements. They, above all else, are the engine behind the Bill and the Budget—they are designed to deal with the Government's budgetary problems.
  What the Chief Secretary did not admit—I rather suspected that he would not—was that many of the Government's problems are of their own making. They have failed to do anything to reverse the decline in our manufacturing sector, the economic base on which we depend. They let manufacturing go for years and years, and now they are reaping the whirlwind.
  The Government have always said that they would never take the easy way out and would never borrow simply to meet their costs. The Government have done just that, however, because they have raised taxation in such a way as to make it appear that taxes have not been increased. VAT on domestic fuel will be phased in over two years, in the hope that people will forget all about it.
  The Government's idea has always been that one should reduce direct taxation and increase indirect taxation, based on the dubious theory that, by reducing the former, people have more money in their pockets and can choose what to spend it on. In other words, less direct taxation means that people have more disposable income which they can spend on items of their choice.

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  By that test, however, the imposition of VAT on domestic fuel bills is an abject failure. People cannot choose whether to use electric lights, whether to eat hot or cold food or whether to heat their homes. I am not sure whether my next statement should be prefaced by an apology to the President of the Board of Trade or an acknowledgement to him, but VAT on domestic fuel means taxation before, during and after breakfast; taxation before, during and after lunch; taxation before, during and after dinner—in fact taxation for every hour, every minute and every second of the day, whether one is awake or asleep.
  The decision to put VAT on fuel bills is a national disgrace. It is regressive taxation of the worst kind because it will bear most heavily on the lower income groups in our society. The VAT is also applied to the standing charges, which are themselves an imposition on the lower-paid.
  It has already been acknowledged that the poor in our society spend a much higher proportion of their income on heating costs and domestic fuel bills. What is worse, the colder the part of the country, the greater the fuel bill and the greater the tax that one must pay. That is disgraceful. A great deal has been said about the possibility of a recompense for those on state benefits to help them meet the additional costs. It is clear, however, that the Government have not committed themselves to full compensation.
  Even if that were done, there are many thousands, if not millions, of people, just beyond state benefits, who are on low incomes and will receive no help from the state. That is compounded by the fact that, this year, the Government have set a rigid maximum pay increase for public sector workers of 1·5 per cent. Without any changes caused by VAT on fuel hills or increases in national insurance contributions, that 1·5 per cent. increase is a pay cut and a cut in living standards.
  The Government have tried to put up a smoke screen over the imposition of VAT with the paper-thin pretence that it has something to do with the Rio summit and global warming. That shows that, the Government hold public opinion in contempt. They believe that, if they say something to people often enough and long enough, the people will accept it as the gospel truth.
  If there were a connection between the Rio summit, global warming and VAT on domestic fuel, a large proportion, if not all, of the revenue that the Government will raise would be spent on methods of energy saving. The Government could do something to protect houses from heat loss and on the more effective use of fuel in the homes. But we have not heard a word about that from the Chancellor, the Chief Secretary or any other Minister. No mention has been made of using that revenue to offset global warming and to save energy.
  When the VAT change was announced in the Budget, I wrote to the Secretary of State for Scotland. I acknowledged that the change could not make any difference to the public expenditure programmes for this year, but I asked him what plans he had for an emergency campaign to promote energy saving in the home. I got a nice one-and-a-half page letter in response telling me everything that the Government had done in 14 years, but, in essence, his response was that there would be no expansion in such energy-saving programmes. Let there be no mistake: the Government's decision is based purely on revenue generation. They should be honest enough to admit that and should strip away all the excuses.
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  The other major item in the Bill is the change to petroleum revenue tax and its effect on North sea operations. What was so sinister and ominous about the Chief Secretary's speech was the fact that he said nothing about PRT. When the idea was first mooted, however, much concern was expressed and all sorts of grandiose promises were made by Government Back Benchers about their intention to speak about it to the Chancellor, the Chief Secretary, other Ministers at the Treasury and those at the Department of Trade and Industry. Yet not a single word comes from the Chief Secretary.
  There is an old saying, which I am sure you know, Mr. Deputy Speaker: "Act in haste, repent at leisure." That is exactly what the Government have done. They have acted in haste, but, unfortunately, they show no signs of repenting at leisure. I am glad that at least the hon. Member for Slough (Mr. Watts), the Chairman of the Select Committee on the Treasury and Civil Service, said that something would have to be done soon, and that we could not wait until the November statement if there were to be any changes.
  The Government, desperately casting around for increased revenue, decided to alter the tax regime without thinking it through. We know that there was no consultation with the industry. We know that there was no consultation with the Department of Trade and Industry, which has privately told journalists that it was horrified and that it knew nothing about the changes until they were sprung on it. It is more than that. The changes in the tax regime clearly show the folly of subsuming the Department of Energy in the Department of Trade and Industry, of losing the Department of Energy as a separate Department and of losing the Department's place at the Cabinet table. That was no accident.
  The Government decided, with the privatisation of the electricity industry and of gas, to abandon all thought of an energy policy. They believed that the market could simply take care of itself and of our energy needs. The error of that belief is shown clearly in the still unresolved debacle of the coal industry. All that shows that the decision to downgrade the importance of the Department of Energy was short-sightedness of monumental proportions. It is yet another example of the short-termism which has been the hallmark of this Administration throughout their existence.
  They are a Government whose rule is based on sloganistic rhetoric and whose actions are often in direct contrast to their spoken word. I am tired, for example, of hearing every Minister say—we heard some of this today from the Chief Secretary—that the Government want small industry to flourish and smaller companies to grow. The Government say that they are not simply looking after big business, but that they need smaller companies as well.
  In the various licensing rounds in the North sea, much has been said about the need to involve smaller oil companies. One of the conditions of the licensing rounds is how many small companies are involved. Licence conditions are also attached to exploration. I concede that there is merit in diversification—in not having all one's eggs in one basket—yet the Government, in their frantic search for revenue, have ignored the effects of the petroleum revenue tax changes on smaller companies, and especially on exploration and development.
  It is probably inevitable that there are winners and losers in any tax change and that is certainly true in this case. The larger companies with proven, established

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  production wells will benefit greatly. The big companies will get windfall profits, which will be very beneficial to them. The Government's defence, which I have heard repeated elsewhere, is that the extra windfall profits going to the large companies will release money which they can then spend on exploration. It is the age-old trickle-down theory. The trouble is that there is no guarantee that the substantial extra funds will be spent in the North sea. There are other parts of the world where exploration and development will be far cheaper and those are often areas where there is a more benevolent tax regime. That is where the money is likely to go.
  It is right that we should encourage companies to do more to extract every bit of oil from existing fields. We should all applaud that. However, if we do not have a repletion policy or a renewal policy as the reserves are depleted, we shall lose in the long run in terms of energy production and future Government revenue, which will fall.
  The Government's defence so far—I am surprised that they have been so silent about the whole thing—is that the transitional effects will take care of the immediate future. That is not what the oil companies tell me. One company told me that it is capitalised at £75 million. It will not gain from the changes in the PRT. As a result of the removal of relief, it will have to pay an extra £2 million to £4 million a year in taxes over the next few years. That is money which has been earmarked for exploration in the North sea in fulfilment of the company's drilling obligations to the Government. The companies believe that they cannot simply walk away from those obligations. They are not simply a moral responsibility. The companies argue that the obligations are legally binding and that they cannot get out of them.
  The companies accept that some changes are necessary. They accept that there might have to be a maximum allowance to be offset, which would benefit the small companies more than it would the large companies. There is great concern about the job losses that will follow if the Government do not change their mind. Estimates vary. In one of the mysterious, off-the-record briefings which are not supposed to happen, the Department of Trade and Industry has conceded that the Treasury is willing to accept 10,000 job losses. That is no small number. Others say that that figure is too low.
  I believe that the estimates of 40,000 to 50,000 are probably too high. However, we cannot afford any more job losses in the industry. Already there is job-shedding in Aberdeen. I know that it is difficult for hon. Members to become excited about job losses in Aberdeen and I concede that Aberdeen has done well out of the oil industry, as has the surrounding area. However, Aberdeen is not immune from recession, and we are already feeling the draught.
  The PRT changes have caused confusion among Government Back Benchers, to the extent that they are spreading disinformation in Aberdeen. I am told by prominent members of the oil industry in Aberdeen that unnamed Government Back Benchers—I might be able to name them if pressed—[HON. MEMBERS: "Name them."] They are all sitting quietly looking glum, so we can draw our own conclusions.
  Mr. George Kynoch: As a Government Back Bencher who represents a constituency
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  which is heavily involved in North sea oil, I ask the hon. Gentleman to accept that there is a major problem in the oil industry. He has quoted one individual company which is worse off as a result of the PRT changes. However, the oil industry has pressed for a long time for a reduction in PRT. The problem is that the companies reacted quickly immediately after the Budget. They have now reviewed their position, and they see that, in the long term, the PRT changes are clearly in their best interests. I might have some sympathy for the hon. Gentleman if he addressed his comments to a smooth transition to the new lower tax regime with lower tax allowances.
  Mr. Hughes: It is a great pity that the hon. Gentleman has just come in, and has not heard the rest of the debate. If he had heard it, he would have heard the point made not only by Opposition Members, but by Conservative Back-Bench Members, including the hon. Member for Slough, the Chairman of the Select Committee on the Treasury and Civil Service. He said simply that the transitional relief was not good enough and that in the long run, the industry would be worse off.
  Mr. Kynoch rose—
  Mr. Hughes: The hon. Gentleman will have to learn to take it as well as dish it out. I can understand his embarrassment. Within a few days of the changes, he issued an optimistic press statement to The Press and Journal in Aberdeen. He said that he had been to see the Chancellor who had said, "It is all right, old boy. We shall have a look at this and review it." In an optimistic frame of mind, the hon. Gentleman, during Prime Minister's Question Time, said that he was concerned about the changes. He seems to be all over the place.
  The hon. Gentleman seems to be beginning to defend the Government; previously, he suggested that the Government had it wrong. I expected the Prime Minister to tell one of his own Back Benchers something along the lines, "I know that my hon. Friend the Minister has been engaged in discussions on this. We will take another look at it." Instead, the Prime Minister slapped him down.
  I was talking about Conservative Back Benchers spreading disinformation around Aberdeen. I could offer many more examples of companies that will be on the wrong side of the tax change. A prominent member of the oil industry in Aberdeen phoned me in a panic to say that Conservative Back Benchers had told him that the prospects of achieving changes in the tax regime had been badly affected because of the activities of Labour Members. He told me that he had been told that, if Labour Members table amendments, the Government will dig in their heels and refuse to budge—so it will be our fault if the Government make no changes.
  That is unadulterated twaddle. We shall certainly table amendments; if the Government want to table their own, they can do so. They can pass their own amendments if they want to. So let us hear no more of this nonsense: our tabling of amendments will not prevent the Government from tabling theirs. If we do not table any, the Government will be delighted. There will then be no debate on the details; they will rush the measure through, saying that everything in the garden is rosy.
  Mr. Salmond: I wonder whether the hon. Gentleman has heard a slightly different version of a similar story? An oil company told me that Conservative Back Benchers had

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  suggested that I should stop pushing for a debate on the Floor of the House on this matter, because that would act as a disincentive for the Government to make concessions of the sort for which the hon. Member for Kincardine and Deeside (Mr. Kynoch) has been pushing for so long.
  Mr. Hughes: I know that Conservative Back Benchers are running like mad for cover, but I understand that the Opposition decided to take these matters on the Floor of the House for debate. Indeed, we will be happy to debate them there.
  I fear that the Government have decided to ride out the storm, to steamroller through their proposals and to hope that their Scottish Back Benchers, and others, will fall into line. I should remind the House that not only Aberdeen and its surrounding areas will be hit by the job losses. Many people from all over the United Kingdom work in the oil industry, so almost every constituency, not just mine, will be hit. The effects will be all the greater in my area, however.
  I doubt whether the Government will see sense. They will not be moved in the least by unemployment. Certainly, Ministers go north and make platitudinous, banal statements about how awful unemployment is, but they take no action.
  Nothing in the Budget furthers our manufacturing industry or tackles the problems of unemployment. The Government have failed yet again, and I do not believe that they will be forgiven this time.
  6.43 pm
  Mr. John Butterfill: It is a sad reflection on the priorities of certain people in this place that no representative of the Liberal party is present. Perhaps Liberal Members are all too busy trying to persuade the electors of Newbury that they would be good at managing the economy. In any event, they are obviously too busy to participate in what is possibly the most important debate in the House at this time of year.
  The one representative of the Liberal party who did grace us with his presence seemed to suffer an uncharacteristic attack of hyperbole when he referred to the black hole of depression into which the Government had got the country. I assume that he is unaware that the recession in the United States was a good deal deeper than ours. He may also be aware that most other western economies are still going into recession while we are coming out of it. In Germany and France it is deepening every day.
  The right hon. Member for Berwick-upon-Tweed (Mr. Beith) overlooked the fact that we have been coming out of the recession, it now appears, since last June, whereas other countries have been moving into more severe recession. That is a result of the policies that this Government have been pursuing for some time—long-term policies to improve the productivity and competitiveness of British industry. Those policies are reinforced by the measures in the Bill.
  I welcome the freezing in real terms of business rates. That is important to many of my constituents and to many small businesses throughout the country. I am also gratified that the Chancellor has doubled the threshold for stamp duty on house sales. That has contributed in no small measure to the recovery in the housing market.
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  For some time we have pursued policies to assist those involved in exports. The Bill increases the Exports Credits Guarantee Department cover, which is another contribution to the fact that our exports are at record levels.
  I take a keen interest in the insurance industry, so I was particularly pleased to see the measures that my right hon. Friend proposed for improving the reserves of British insurance companies—for allowing them to retain more in those reserves. One of the elements that has held back British insurance companies from competing with their overseas, particularly their EC, counterparts, has been their inability to put into reserve as great a proportion of their gross premium income as their competitors have done, so they have not been able to build up to the financial strength of their competitors, particularly those in Germany.
  I join many other speakers who have expressed their regret about the way in which the Government have arranged PRT affairs. Small companies face a particular difficulty here. I have been approached by a large number of them, explaining the difficulties that the Government's proposals will create for them. The whole industry, however, thinks that the change away from PRT is the right way to go. The difficulty comes with the transitional arrangements, as proposed. They pose a problem for small companies, especially those that have not placed the contracts with their contractors for work that they are obliged to carry out.
  We must press the Government on the question of the licence obligation expenditure. There is no doubt that those who bid for licences did so on the assumption that they would be able to offset that expenditure against tax. I believe that Treasury officials have suggested that these are not contractual obligations—a view not taken by Department of Trade and Industry officials. I and other members of the Trade and Industry Select Committee will press the President of the Board of Trade on that subject when he comes before us tomorrow.
  I hope that the Government will think about the possibility of phasing in the transitional arrangements in a fiscally neutral way by phasing the PRT changes at the same time. In that way we could achieve the objective in a short space of time and be fair to the companies that have undertaken these obligations. If we leave things as they are, those companies will be retrospectively disadvantaged. If the Bill is given a Second Reading, I propose to table a probing amendment that would have this effect and would maintain fiscal neutrality. The PSBR is at an all-time high and must be addressed by increasing taxation and, I hope, by reducing expenditure.
  The Government could have increased income tax or alternatively corporation tax or they could have extended VAT and they chose the right option. An increase in personal taxation would have been a major disincentive at a time when we want the economy to continue to recover.
  We must remember that much of the recovery has come from the unincorporated sector which undertakes considerable capital investment. If it was subjected to high marginal rates of taxation it would have to look at the risk-reward ratio and would be likely to take the view that the risk was not worth the net reward. Similarly, an increase in corporation tax would have given the wrong signal to the business community and would have been a disincentive to those who have been responsible for so

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  much beneficial inward investment. An extension of VAT was the right approach, and it will not be anything like as harmful as some Opposition Members suggest.
  There has been much discussion about the predicament of the elderly. As hon. Members know, my constituency probably has as many elderly people as almost any other, if not more. The damage that an extension of VAT might do to such people has been greatly exaggerated. Benefits will be uprated fully to compensate for the additional costs.
  I share the concern of my hon. Friend the Member for Brighton, Kemptown (Mr. Bowden), who is not in his place. He made a powerful speech about those whose income from other sources takes them just above the benefit threshold and who feel that they may be uniquely disadvantaged by the proposal. They should consider the Budget package as a whole and look at the impact of the reduction in the lower rates of taxation from 25 to 20 per cent.
  Over the two years in which VAT on electricity will be phased in, the rate reduction will also be introduced. It will mean that someone who pays just £1,000 a year in tax will save about £1 a week by the end of the second year. It is estimated that that is about half what the average elderly person will pay as a result of VAT on electricity.
  Mr. Quentin Davies: Does my hon. Friend agree that people should reasonably and rightly take into account not only his point but the fact that utility prices generally have been falling? For example, since the privatisation of British Gas, domestic gas prices have fallen by 20 per cent. in real terms. People should set that against the potential imposition of VAT to reach a balance and see exactly how their finances will be affected.
  Mr. Butterfill: With his usual sagacity, my hon. Friend has anticipated me. In my constituency alone, Southern Electricity is reducing its prices in money terms by 2·5 per cent. in the coming year. That is in addition to the reductions about which my hon. Friend speaks. The matter must be viewed in the context of falling electricity prices as a result of privatisation.
  Although elderly people have greater need of heat, they tend to live in much smaller homes—certainly in my constituency—than the average family. Pensions will be uprated by the average of the retail prices index, which will tend to be somewhat higher than the increased cost of heating their homes. As a result of the tax changes and the RPI indexation of pensions, some of my pensioner constituents may be better off as a result of the Chancellor's changes?
  Mrs. Anne Campbell: The hon. Gentleman speaks about older people living in smaller houses. Does he agree that many elderly people live in badly insulated houses and that one of the best ways to help them reduce heating bills and save energy is to invest in home insulation?
  Mr. Butterfill: I agree that some elderly people live in badly insulated houses. However, in recent years the Government have funded substantial programmes for insulation. Many elderly people in my constituency live in modern or warden-assisted flats which are exceptionally
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  well insulated. People in such small units of accommodation will probably be better off as a result of the changes. I accept that it may be a minority, but it is a growing minority.
  The Government are right to raise revenue at present. I agree with my hon. Friend the Member for Bridlington (Mr. Townend) that the corollary is the worrying level of the PSBR and the need to reduce Government expenditure. I hope that the Chief Secretary will conduct his review robustly and vigorously. It is easy to say that there must be more public expenditure. We are used to such calls from the Opposition, but they are not prepared to take the painful decisions that arise from funding such expenditure. Usually, they fudge the issue when they are in power and create enormous taxation. The Government have not been prepared to fudge it and I hope that they never will be.
  If there is a need for increased taxation, we should face it, however unpopular it may be, because at the end of the day we have some political integrity. [Interruption.] Opposition Members laugh, but when they were in power they did not display that same degree of integrity. Perhaps that is why they lost the last three general elections. The public have rumbled them.
  Mr. Nicholas Brown: How much of what the hon. Gentleman says was in his address at the general election?
  Mr. Butterfill: I have consistently advocated the need to maintain a curb on public expenditure and to increase taxes when it has been necessary to do so. I do not believe in borrowing and I have said publicly time after time that it is immoral to mortgage the future of our young people and future generations. Today we must earn what we spend. What distinguishes us from the Opposition is that they are never prepared to do that.
  Mr. Brown: Will the hon. Gentleman give way?
  Mr. Butterfill: No. I must conclude my speech.
  The Budget is admirable and well suited to the prevailing economic conditions. It shows that our measures over the past two years are beginning to bear fruit because our economy is coming out of recession faster than most other western countries. If we maintain a curb on public spending we shall continue to prosper at a greater rate than those economies.
  6.58 pm
  Mr. Jim Cunningham: The hon. Member for Bournemouth, West (Mr. Butterfill) spoke about cuts in public expenditure and accused us of wanting to increase it. Over the past 14 years, and even in those years which, according to the Government's definition, were good years, there were major cuts in public expenditure. Therefore, the argument is not about vast increases in public expenditure but, as it has been over the past 14 years, about maintaining certain levels of public expenditure. Nobody is advocating hefty increases in public expenditure but, even in the good years when there has been no necessity to make cuts in public expenditure, the Government have seen fit to impose vast cuts. I have said before, but it is worth saying again, that Coventry city council has lost £200 million over the past 10 years, and that included the good years of the Tory Government.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Cunningham: No, not at this stage.
  Mr. Butterfill: Will the hon. Gentleman give way on this point?
  Madam Deputy Speaker (Dame Janet Fookes): Order. The hon. Member for Coventry, South-East (Mr. Cunningham) has made it clear that he will not give way.
  Mr. Cunningham: Tory Members have used the events of 1976, when we had a Labour Government, in support of their arguments. However, they omit the facts. 'What happened in 1976 was the aftermath of the three-day week imposed by a Tory Government, and inflation in the United States was running, between 26 and 28 per cent. Those factors worked their way into the British economy but are ignored by Tory Members now.
  The nearest parallel to the events of 1976 were the events of September last year. In a roundabout way, the bankers, the money lenders or the Government creditors —whatever language one wants to use—were telling the Government that they wanted them to put their house in order, put the economy in order and start paying off some of the debts incurred before September. We must look at the Budget against that economic background.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Cunningham: No.
  Another major factor that must be taken into consideration when we look at the future and at the Budget is the balance of payments problem. In a recent interview the Prime Minister, when asked what he was going to do about that problem, said that he would think about it. That is no substitute for an economic strategy. My fear about the Budget is that, although we have seen one or two green shoots, 18 months down the road we may find ourselves in another economic crisis because the Government have failed to take measures to deal with the balance of payments problem. That problem will not go away, and it will come back to haunt the Government.
  The Government's strategy on VAT has been disguised. Because they have set their face against massive direct tax increases, they will use increases in VAT to fund their borrowing and debt requirements, and they will extend it to other goods and services beyond fuel.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Cunningham: I have said that I will not give way. I want to limit my speech as much as possible so as to allow others to speak.
  Mr. Butterfill: On a point of order, Madam Deputy Speaker.
  Madam Deputy Speaker: Is the hon. Gentleman sure that it is a point of order?
  Mr. Butterfill: Yes, Madam Deputy Speaker. I know that you are anxious to protect the reputation of hon. Members. In my speech, I referred to the increase in public expenditure. As the hon. Member for Coventry, South-East (Mr. Cunningham) said that there had been no such increase, he was implicitly saying that what I said was untrue. He knows that there have been substantial increases in public expenditure under the Government. Therefore, I hope that you will defend the integrity of hon. Members and allow them to redress comments made by Opposition Members.
  Madam Deputy Speaker: That is very ingenious, but it is a point of substance, not a point of order.
  Mr. Cunningham: I can answer that last point. I said that the real argument was about maintaining levels of public expenditure against a background of cuts.
  To return to the subject of VAT, one could live with the Budget—
  Mr. Butterfill: I was right. Public expenditure has increased in real terms every year.
  Madam Deputy Speaker: Order. I recall that the hon. Member for Bournemouth, West (Mr. Butterfill) is keen on points of order. Let me tell him that it is not in order to make seated interventions.
  Mr. Cunningham: The fundamental question about VAT that the Government have not answered, although it has been repeatedly put to them, is whether the people affected by increases in VAT—pensioners, single-parent families, needy families and those on low incomes—will receive full recompense for those increases. All that the Government have given us on that is nods and winks.
  There is nothing in the Budget about the provision of crèche facilities to allow one-parent families to retain a bit of dignity and get employment or training where necessary. There is nothing for women. In particular, nothing addresses the social problem of battered wives. The Budget could have introduced measures to encourage better voluntary services to deal with such issues. Many voluntary organisations do valuable social work among the ethnic communities, unemployed young people and others, but the imposition of VAT on such charities would impose a tremendous burden on them.
  We should welcome any measures in the Budget aimed at reducing unemployment and helping small businesses. However, there is no recognition of the heavy costs for industry of research and development. The directors of large firms all say that they badly need Government assistance in that sector.
  When trying to judge the Budget in social terms, we must look at the other side of the coin. A cost will have to be paid for the lack of measures to ensure safer inner cities. Safer city projects and urban aid grants are being phased out in Coventry, even though they play a tremendous part in dealing with some of the inner-city problems of cities such as mine. There has been no attempt to deal with education, with proper training for young people or with providing a proper education service. Outside the Budget, but in a way still part of it, is the confrontation between the Government and the teachers. The Government should be conciliatory and sit down with the teaching profession, parents' organisations and all other interested parties to try to resolve the frictions in education.
  The Budget was a golden opportunity to help industry. If Britain is to retain a role in Europe as a major industrial power, it has to restore its manufacturing base, but that can be done only with co-operation between the interested parties and organisations which play a part in the maintenance of the manufacturing base. I am disappointed with the Budget. For the sake of the unemployed, I hope that it will succeed, but I am worried that 18 months down the road the erosion of our manufacturing base will continue and we shall still have a major balance of payments problem, when all those problems should be addressed now.
  7.8 pm
  Mr. Matthew Carrington: The real test of the Bill is the effect that it will have on, and the help that it will give to, the recovery of our economy. The purpose of the Finance Bill is to ensure that the groundwork is laid to encourage the recovery that is now so apparent in our economy.
  We heard from my right hon. Friend the Chief Secretary to the Treasury that the last three quarters have shown growth in our economy. That is greatly to be welcomed because it supports, in a concrete form, with statistics from the Central Statistical Office, the anecdotal evidence, which has been clear all around us for some time, of how economic activity is picking up.
  Let me give one example of that from my constituency. House prices have started to go up, houses are starting to sell and activity among estate agents and surveyors is starting to pick up.
  My constituency, which is in inner London, has been badly affected by the recession. Some of the measures in the Bill designed to help house purchase, such as the raising of the stamp duty threshold, will have relatively little effect on the average house purchase in inner London. Therefore, it is good that anecdotal signs of recovery are beginning to become apparent in statistics. The economy is now poised for a period of fairly rapid economic growth.
  Of course, it is not enough simply to help economic growth through the Finance Bill; external factors are also necessary. The USA economy needs to recover from recession, and there are now unmistakable signs that its growth rate is recovering and that the USA will come out of its recession strongly. That will help our exports. Indeed, our exports to non-EC countries have risen by 12 per cent. over the past year, which shows the effect that the USA economy has on our economy and exports.
  Most important of all is what happens in Germany and other EC countries, whose economies are already in recession and heading into even deeper recession. We need to encourage our European partners to take the measures necessary to come out of recession. One of those measures is a reduction in German interest rates, which are now being cut month by month. Those cuts affect the strength of the deutschmark, which has been far too strong, to the disadvantage of other EC countries. As the deutschmark weakens, that will do nothing but good to all our economies.
  Britain already has a great deal in place to facilitate our recovery, such as lower interest rates—
  Mr. Salmond: At what stage of the recovery would Britain have been in if the Prime Minister and the Chancellor had had their wish and kept Britain within the exchange rate mechanism at the rates previously set? What is the hon. Gentleman's estimate of how that would have impacted on economic recovery?
  Mr. Carrington: The hon. Gentleman has asked me to support something that I have never supported—our position inside the ERM. I always felt that the mechanism was not sustainable and would break apart, for the very reasons that eventually caused that to happen. I was pleased when Britain left the ERM, although I am sure that we would all have wished that to happen under different circumstances.
  Mr. Ken Purchase: The hon. Gentleman is singing in his bath.
  Mr. Carrington: If the hon. Gentleman had ever heard me sing, he would welcome the fact that I do not sing in the bath.
  Britain's low interest rates are now having the desired effect on our economy, and our competitive exchange rate is beneficial to business recovery. However, we need to be concerned about the level of interest rates. Given the nature of the housing market and of housing finance, if interest rates are too low, the market will take off again, just as it did in the 1980s. None of us wants that.
  I hope that the Government will bear in mind the need to keep relatively high interest rates. I was glad to note that Ministers have said that they believe that the current level of interest rates is about right for the economy. I strongly support that view.
  The problem in our economy is one of timing. Most of the elements necessary for recovery are now in place, but we must wait patiently for the reduction in interest rates and the competitive exchange rate to work through. That will result in a stronger economic, industrial and commercial base.
  The other problem is the public sector borrowing requirement, with all the inflationary pressures that that causes, and the great danger it poses to the health of the economy in the short and medium terms. I am glad that the Government have taken steps to ensure that, first, there is nothing in the Budget to damage the recovery; and secondly, that the right signals are given to ensure that people understand that the Government take seriously the need to reduce the PSBR. That is in everybody's interest.
  There are three ways to reduce the PSBR. One is economic growth, and I hope that growth will be even faster than projected in the Red Book, so that the PSBR will be reduced even faster. The second way is to keep public sector spending under tight control. It must be more efficient and targeted more effectively, so that the taxes raised are used to produce the greatest benefits for those in need.
  The third way, which is regrettable but necessary, is to raise taxation. The measures to do so contained in the Bill are, sadly, inevitable but correct. It is also right that, by and large, they will not impact this year—the big increases in taxation have been deferred until the recovery has gained a proper foothold. Industry needs to build up its strength before the imposition of the increased taxation necessary to reduce the PSBR. The measures will start to bite next year and the year after.
  No tax increase is ever popular. The Government had a choice, and they correctly chose to increase two taxes. First, there is to be an increase in the national insurance contribution, which is another form of direct taxation. The extra revenue from that will impact directly on the increasing burden of the social security budget. It is right to increase that form of taxation—
  Mr. Ronnie Campbell: The hon. Gentleman did not say that during the election.
  Mr. Carrington: During the election, the economic problems in the world generally were not envisaged to be as great as they have proved to be subsequently. It was always implied that Britain had to come out of recession, and that if it continued for longer than expected, the

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  Government—indeed, any Government—would have to take whatever measures were necessary to correct the imbalances in the economy.
  The other tax to be increased is VAT, through its extension to domestic fuel. When coming out of a recession, it is right to increase indirect rather than direct taxes, because an increase in direct taxes has a direct effect on people's incentive to work. In general, people see what they get in their pay packet as the reason for working, so it would be wrong to affect that position through an increase in direct taxation.
  The imposition of VAT on domestic fuel has another benefit. As my right hon. Friend the Chief Secretary said, as well as reducing the PSBR, it will help to meet Britain's commitments under the Rio convention. The extension of VAT will assist the environment and is to be greatly welcomed. To some extent, it reverses the reduction in the real costs of domestic fuel under privatisation during the past few years. I believe that most people will be able to tolerate that increased tax, even if they do not welcome it.
  Many people will find, however, that change painful and hard to afford. I look forward to measures in the autumn to make certain that those hardest hit by the imposition of VAT on domestic fuel will receive assistance with paying their bills. The most vulnerable will be those whose incomes are just above income support level, whom the present scheme does not assist. They must be given help in overcoming the substantial burden that they will be asked to bear.
  The Bill's provisions a re needed in our present economy. It does relatively little in the current year, which is right at this stage in our economic recovery, but sends all the right signals, to the markets in particular, that the Government are determined to reduce the massive public sector borrowing requirement, and take that task seriously.
  This year, we have the advantage of another Budget in November. Having seen how the recovery shapes up over the next few months, I hope that, in November, the Government will reconsider some of their Budget decisions, will think hard on whether they are the right measures at that time, and will take whatever further steps are necessary in November—possibly even increasing taxation more—to ensure that the PSBR comes down and that the recession continues apace—I mean, that recovery from the recession continues apace.
  7.21 pm
  Mr. Alex Salmond: The hon. Member for Fulham (Mr. Carrington) made a slip at the end of his speech, but at least he did not make the same mistake as the hon. Member for Bournemouth, West (Mr. Butterfill), who described borrowing as immoral. If the hon. Gentleman holds to that view, he must fear for the future of the Treasury team in the after-life, because its members are some of the biggest borrowers of all time.
  Mr. Butterfill: The hon. Gentleman completely misinterprets my remarks. I said that it was immoral to build up borrowing that has to be paid off by future generations. It is moral only if we pay it off ourselves.
  Mr. Salmond: By either test, the Treasury team would stand condemned. The hon. Gentleman may not have studied the alarming PSBR statistics in the current Budget. I do not know what tax changes the hon. Gentleman
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  would propose to get rid of that borrowing quickly. Also, if he studies the Good Book, he will find arguments that the lenders of money are also immoral—so perhaps there is no hope for any of us.
  I will concentrate my remarks on petroleum revenue tax. Right hon. and hon. Members who attended the Budget debate will know that on that occasion I commented on the general shape of the Budget. No doubt the Treasury team has been poring over my remarks in the past few weeks. Tonight, I shall comment only on PRT changes.
  For the Treasury team, there is a big difference between tonight's debate and that on the Budget. Those changes were not considered the most controversial in the Budget, and when it came to the vote—as the deputy leader of the Liberal Democrats pointed out earlier—only Scottish National, Liberal Democrat and Plaid Cymru Members moved against the PRT changes. There was no recognition at that stage of the general concern that is evident now in contributions from hon. Members on both sides of the House.
  All but three of the right hon. and hon. Members who have spoken so far made reference to PRT changes. I hope that the Treasury team is fully aware that if the issue were put to the test again—one hopes that it will be in Committee—the Government will not have anything close to the 264 majority that they managed to clock up when that measure was tested at the end of the Budget debate. There is general recognition now of the implications of the PRT changes.
  I will examine the Government's three arguments for those changes, to test whether there is anything to be said for them. The Government argue, "We can't continue PRT as it now is because it has become a negative tax." In 1991–92, it actually cost the Exchequer £200 million. The Government say that it is ridiculous to retain the present form of PRT.
  There are three contrary points to that argument. In 1991–92, the picture was much affected by what was, one hopes, the one-off Piper Alpha disaster and the tax treatment of the insurance claims that followed—so it seems unfair to pick that year as representative. In that year also, oil taxation as a whole was not negative, but raised more than £1,000 million for the Treasury.
  Because PRT is a profit-related tax, it is sensitive to oil prices. When oil prices are high—they have been for long periods of Conservative Government—one would expect the Treasury to draw in vast sums from a profit-related tax such as PRT. Conversely, when oil prices are relatively weak, one would expect the PRT return to be relatively modest. A wise Government and Treasury would take the rough with the smooth. I did not hear any member of the Treasury Bench complaining, when oil prices were high and the Treasury was raking in up to L14 billion—as much as £20 billion per year at current prices—about the nature of the PRT system. At a time when oil prices remain relatively modest, the Treasury should accept a low tax take as an investment in the North sea's future profitability.
  Petroleum revenue tax is sensitive also to development and exploration levels. It is mistakenly thought by many people, particularly in the Treasury, that the North sea is a declining oil province, but that is not the case. By no measure could the North sea be fairly described as an oil

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  province in decline. On the contrary, oil and gas production levels are increasing and are expected to peak in 1996 or 1997.
  The Minister for Energy himself stated in a Department of Trade and Industry press release dated 27 January:
  "While the overall level of exploration and appraisal drilling fell last year—not surprising in difficult times of low oil prices and record levels of expenditure on field developments—such activity continued to bring home results. Better than one well in four proved to be a discovery. Historically, since drilling began in the North Sea, the ratio has been roughly one in five."
  In other words, the current strike rate is better than the historical average. One well in four is successful in terms of a hydrocarbon accumulation being found. Although it is true that accumulations found today are smaller than before, by no standard for qualifying or judging an oil province can it be said that the North sea is a province in decline.
  Therefore, it is an act of ultimate folly to devise a tax system that benefits continued production from existing accumulations at the expense of discouraging the exploration of future accumulations, when the statistics give every indication that such explorations would be very beneficial and productive. The Government's argument that the PRT was not doing its job is far from proven.
  The second argument deployed by Treasury Ministers since the Budget is, "What's the point of giving money to international oil companies? Why should anyone support that prospectus?" But one consequence of the Government's tax changes is that certain, highly selective oil companies will be given lots of money.
  There is something highly incestuous about the way in which some companies have commented on the changes. British Petroleum representatives said that they are wonderful, but given that BP is one of the companies, because of its production profile, that stands to benefit by tens or even hundreds of millions of pounds, it is hardly surprising that it is enthusiastic about them. Very few companies, if offered tens or hundreds of millions of pounds by the Treasury, would not say, "Yes, these are tremendously good tax changes."
  For the Government then to cite BP's reaction as proof that the industry supports the Government's approach is at best disingenuous and, at worst, incestuous. The Government should be able to quote some independent advice to support the position that they have taken. Of course, that independent support would be very difficult to obtain at the present time.
  The idea of winners and losers is very misleading. I hope that Treasury Ministers have studied the excellent letter in the Financial Times on 2 April from 10 managing directors of the smaller and highly active exploring companies in the North sea at the moment. A great deal of wisdom is found in that letter. The phrase that impressed me most was:
  "Finally, the polarisation of companies into winners and losers is not really accurate. Almost any company can become a 'winner' by cutting UK exploration"
  That is the fact of the matter in these oil tax changes. To be a winner under the fiscal regime proposed by the Treasury team, it is necessary only to stop exploring; it is easy to become a winner in terms of the tax changes.
  Wood Mackenzie, the respected oil analysts, suspect that taxation windfall and gain that the Treasury
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  anticipated from these changes will not come about because it has failed to understand the impact of these changes on behaviour. This is not just a matter of the petroleum revenue tax giving dollops of cash to international oil companies. It is a misunderstanding of who is going to feel the consequences of the oil tax changes. It will not be the international oil companies. If exploration in the North sea province becomes unattractive, they will move their exploration budget elsewhere in the world. It is an international industry and they can move their exploration activity to other oil provinces.
  The people who will lose from the oil tax changes are not the international oil companies but the service companies and the workers in the North sea. Thousands of jobs are on the line as a result of these apparently ill-thought-out proposals in the Budget.
  The third and final argument of the Treasury team is that the long-term tax regime being put forward for the North sea is very attractive and that international investment will be sucked in to take advantage of that tax regime. That is a fundamental misunderstanding. A tax regime that applies only a 33 per cent. corporation tax rate on an oil province is attractive in international terms—and would be looked upon as such—but very few people in the oil industry actually believe that, if there was a hike in oil prices, that tax regime would stay in place. What the Treasury is sowing in the current tax regime are the seeds of its own destruction; there will inevitably have to be further changes in the future.
  We do not need a crystal ball to prove that point. All we need to do is look at the track record in the United Kingdom. One of the first acts of the present Conservative Government, when they came to office in 1979—facing a sharply increasing profile of oil prices—was to increase taxation in the North sea, as, indeed, any sensible Administration would have done at that time. They sharply increased the taxation regime that had been formulated by the right hon. Member for Chesterfield (Mr. Benn). So a Conservative Government were increasing taxes set by one of the demons of the Labour Government.
  No one in the oil industry believes that if we have a sharp increase in prices, as is quite likely towards the end of this decade, any Government would leave in place a 33 per cent. corporation tax rate pick-up from the North sea. Therefore, not even the incentive of a low tax regime is going to be effective in the impact of these overall tax changes. All three arguments put forward by the Government fall down very badly.
  There are specific questions that I wish to ask because the Government, in written answers, have been carefully avoiding giving the information that many hon. Members require. We want to know if there was any consultation between the Treasury and the two Departments immediately concerned—the Department of Trade and Industry, responsible for energy policy, and the Scottish Office, which presently has some responsibility for the impact on employment north of the border.
  As the hon. Member for Aberdeen, North (Mr. Hughes) said, the indication that has been creeping out from these closed briefings is that the DTI and the Scottish Office were not consulted; that this was a big shock and surprise to them. The best way to describe their reaction to these briefings is, "It wisnae me; somebody else is to blame. It was all the idea of the Treasury team."

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  It is an extraordinary prospect. Here is a tax change which is going to affect a minimum of perhaps 10,000 jobs north of the border and the Secretary of State for Scotland is allowing it to be known that he was not even consulted before the tax change was put in place.
  One of my predecessors for the old East Aberdeenshire seat—Bob Boothby—perfectly described the position of the Secretary of State for Scotland as the "scullery maid" of the Cabinet. Here is a fine example of that reduced position if it is true that the Secretary of State for Scotland had no knowledge before the Budget of a tax change that put in jeopardy 10,000 jobs or more north of the border.
  Mr. Robert Hughes: And all over the country.
  Mr. Salmond: Of course, it is all over the country; I have developed that point.
  The point that I am particularly making—I am sure the hon. Member for Aberdeen, North understands it—is that a Secretary of State who has a particular responsibility for Scottish industry and employment, according to the briefings that he is allowing people in his Department to give out, is indicating that he had no knowledge of this taxation change, which will have an enormous impact on Scotland.
  These briefings are very curious. The Press and Journal is the local paper of many hon. Members in the north-east of Scotland and I think that everyone would accept that its coverage of this matter since the Budget has been first class in terms of the detailed examination it has given to the impact of the taxation changes. It reported—appropriately, on April fool's day, 1 April—the briefing given by a senior Treasury official. The direct quote from that briefing reads:
  "For 10,000 (job losses) we are securing £400-£500 million a year in taxation."
  When we heard the President of the Board of Trade and the Prime Minister last autumn—in a callous, indifferent, almost casual way—announce the impact of the coal closures in terms of the overall job losses and the impact that that would have on communities, and the furore, uproar and political controversy that followed, many of us thought then that the Government might have learnt their lesson. However, we see from the briefing by senior Treasury officials that 10,000 job losses are a price well worth paying so that the Treasury can achieve its objectives in terms of the overall shape of the oil industry taxation proposals.
  I will conclude my remarks by focusing on the economy of the north-east of Scotland. The hon. Member for Aberdeen, North noted that many parts of our area have enjoyed a comparatively good time throughout the recession—although it has to be said that there are pockets in my constituency, in Moray and elsewhere, which have very high levels of unemployment—but it seems that the Government are determined to level out economic development throughout the country by making sure, just as the rest of the country is emerging from recession, that the north-east of Scotland is plunging into recession.
  The key industries in our area—farming and fishing —are already experiencing difficulties. If oil, the third key pillar of the economy of the area, is plunged into major job catastrophe, as is threatened by these Budget proposals, we have a triple whammy being visited on the north-east of Scotland by the Conservative Government.
  The big increases in taxation on petrol, the taxation increase which is threatened on domestic fuel, the prospect
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  of people in the most energy-rich area in the whole of the European Community being unable to afford to turn on their electric fires, and these taxation increases on the oil industry, will have a very severe impact on the energy-producing areas of the country.
  There are ways out of the mess that the Government have landed us all in. Suggestions have been put forward by, among others, Professor Alexander Kemp, the adviser to the former Select Committee on Energy. I hope that the Government have taken on board the measures suggested by Professor Kemp in his North sea study occasional paper No. 41. He suggests that we extend the transitional arrangements for relief in such a way as to avoid the effects on exploration.
  Let me end on a cautionary note. I do not think that any Opposition Member will embark upon the fool's errand upon which the hon. Member for Kincardine and Deeside (Mr. Kynoch) has apparently embarked. He has been told by the Treasury team that if only he, in Kincardine and Deeside, can think of some means of achieving the same results, in terms of Treasury revenue, by applying a different shape of taxation change, the Treasury team will be only too anxious to look at it. I am certain that it would. The Treasury's objectives have nothing to do with employment in the north-east of Scotland and elsewhere, but everything to do with the amount of money that it can grab from the North sea oil industry. I am certain that the Treasury would be glad to look at another way of getting an extra £700 million out of the North sea.
  That, however, is not the issue that we wish to debate. We wish to debate whether the proposed taxation changes are sensible and whether they will have the impact that even the Treasury itself admits is possible in terms of the number of jobs lost. We do not want to embark upon finding another way for the Government to get an extra £700 million, thus damaging the North sea oil industry at a time when prices are not strong and when the industry needs investment for the future. I am confident that the Government will be forced to respond to the concern expressed by hon. Members on both sides of the Chamber as people come to understand the potential damage that will be done to the industry, in terms of the loss of tens of thousands of jobs. In Committee, we shall expect a climbdown by the Chancellor on this taxation proposal.
  7.41 pm
  Mrs. Angela Browning: The 1993 Budget is different from Budgets of previous years, not least because of the economic background against which the Chancellor had to work—in particular, his need to address the public spending borrowing requirement problem. It has also set a new precedent, in that measures have been announced in this Budget not just for the forthcoming year but for future years. That is important. It is helpful when planning economic policy to be able to look further ahead than 12 months. The Chancellor has taken a bold initiative.
  Many constraints were placed upon the Chancellor when he outlined his Budget. It was apparent that it would not be a giveaway Budget. I was pleased to be able to make representations to the Chancellor before he made his Budget statement and tell him that it was particularly important that the axe should not fall on the small business community. Many small business organisations—for example, the Forum for Private Business—have paid

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  tribute to the way in which the Chancellor managed his Budget and allowed the small business sector the opportunity to grow and to increase the economic prosperity of this country, which we are now beginning to see.
  I intend to draw attention to other matters, particularly those that affect people in my rural constituency of Tiverton in Devon. My hon. Friend the Member for Brighton, Kemptown (Mr. Bowden) made a compelling case for the grievous impact that VAT on domestic fuel will have upon certain groups in the community. I know that my right hon. Friend the Secretary of State for Social Security has promised that those who are on means-tested benefits will be properly cared for in the autumn statement and that their benefits will be uplifted. There has also been a promise to take into account the impact of VAT on fuel in the retail prices index increase, which will also have an impact on other benefits, such as the state retirement pension.
  My hon. Friend the Member for Kemptown referred to the fact that certain groups spend much more on domestic fuel than other groups. It is important that that should be recognised when benefits are uplifted. It would be impracticable to promise that everybody who is affected in this way will find that there is a mechanism for dealing with the increase, to the nearest penny, in fuel bills. Whatever averaging formula is used to measure the effect on fuel bills of VAT, account must be taken of the greater amount of fuel that is used by the elderly and the housebound.
  My hon. Friend the Member for Kemptown made a strong case for the elderly. I agree with him. I attended a meeting of Tiverton Age Concern on Saturday last. When I entered the hall where the meeting took place, I was hit in the face by the heat. However, the temperature needed to be high because the elderly, the frail, those who are confined to wheelchairs or who are otherwise immobile feel the cold far more than those who are mobile?
  Mrs. Roche: I have followed the hon. Lady's argument with great interest. The Institute for Fiscal Studies estimates that the poorest 10 per cent. spend 13·25 per cent. of their budget on fuel, compared with the richest decile, who spend only 3·46 per cent. of their budget on fuel. Does that not lead her to believe that this provision in the Finance Bill is completely wrong and will have a tremendously damaging impact upon those groups about whom she spoke so eloquently?
  Mrs. Browning: I am grateful to the hon. Lady. She endorses my plea that due account should be taken of the fact that there are certain groups in society who necessarily have to use a lot of fuel because of their state of health or mobility.
  I want also to draw my right hon. Friend's attention to those people who do not claim benefit. Reference has already been made to them. Some of them are on low wages. A high proportion of my Tiverton constituents earn less than the national average wage. Reference has also been made to pensioners who have only a little money in savings. Many of those people exercised thrift during their working lives in order to provide for a small private pension, or they have some savings. When the state
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  retirement pension is uplifted in line with the retail prices index, there should be recognition of the true effect of VAT on fuel prices.
  May I also ask my right hon. Friend to discuss with the Secretary of State for Social Security some of the non-means-tested allowances, for that will almost certainly bring into this category people who face high fuel costs? I refer, for example, to those in receipt of invalidity care allowance and disability living allowance. One ought to investigate how those people will be affected by this proposal.
  It is important also to put on record my views on petroleum revenue tax. I fully understand why my right hon. Friend the Prime Minister committed this country at the Rio conference to reducing CO2 emissions between now and the year 2005.
  However, in my constituency—650 square miles of rural Devon—ownership of a car is vital. That is reflected in the latest census figures, which show that 81 per cent. of my constituents are car owners. In rural Devon, we do not use a car only for driving around to look at the beautiful scenery. It is essential that people have a car to get to work and for access to employment and training. It is also important for people who have to take children to school, to go shopping or to gain access to primary care facilities. They are all essential uses.
  I can also think of many examples of elderly people who live independently in a rural community, and who find that their legs can no longer carry them to the village shop or the local doctor but are quite capable of driving a car. In those cases, the ownership or use of a car gives them continued independence and helps them to live in their own home for longer. The impact of such a tax on people in rural areas must be appreciated, especially as we are now implementing care in the community. If one considers the census figures, one sees immediately the difference between car ownership in rural constituencies and constituencies that are primarily urban.
  I know that there is a strong argument for the tax in terms of the environmental impact of CO2 emissions, but I draw to the House's attention information given to me by the Library. It shows that emissions in this country between 1990 and 2005 are forecast to rise by 19 per cent. That is the lowest forecast in the European Community, and compares with the forecast for Portugal of a rise of 63 per cent. and the average EC figure of 31 per cent.
  I hope that such a pattern of taxation on environmental grounds will not continue in Budget after Budget, because it has a different effect on people in rural and urban areas. I suggest that we consider instead tax incentives involving cleaning up fuel and the motor car.
  I realised that the Budget was not going to be a giveaway Budget. It would have been condemned as irresponsible and profligate by the Opposition, who criticise it now, had my right hon. Friend the Chancellor made it a giveaway Budget. The small business sector has welcomed the Budget, and I wish to draw attention to two aspects that are important to business and especially to manufacturing.
  The first is capital taxation. The Chancellor has allowed those with more than a 5 per cent. interest in unquoted companies to roll over the gain if they purchase and move more than 5 per cent. into another company. I hope that that is the first of many measures to allow the transfer of interests between companies.

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  At the moment, there is no movement of capital, especially in the corporate sector affecting the smaller unlisted company. As the recession lifts, it is important that expanding companies can attract new investment, and I hope that the measure will be built on, as it is greatly needed in the small business sector.
  Many hon. Members have mentioned the importance of manufacturing. In the autumn statement last year, the Chancellor allowed, for one year, 40 per cent. first-year capital allowances on an unrestricted sum. That year will be up by the time of the Budget in November, so, before my right hon. Friend makes a further announcement next autumn, I urge him not only to abolish the one-year break, which has been extremely helpful in lifting the economy and in bringing about the movement that we now see in business and manufacturing, but to take account of the fact that very small businesses find it extremely difficult to carry forward profit and capital to allow for periodic capital expenditures such as the purchase of a new vehicle, which they may make regularly every two or three years.
  I do not ask my right hon. Friend to consider making it an unlimited tax benefit, but to consider putting a ceiling on it. Ideally, I should like a ceiling of £100,000 in any tax year, but I suppose that I could settle for £50,000 if he would consider that. In any event, it should be a 100 per cent. allowance, because the continuation of that allowance will be instrumental in helping small companies which now have increased orders on their books and which are looking forward to further growth.
  7.54 pm
  Mr. Robert Sheldon: I apologise for not being here for much of the debate, Madam Deputy Speaker, but there was a meeting of the Public Accounts Committee which was considering the expenses of the Gulf war. However, I heard the Chief Secretary's opening remarks. I should have been especially interested to hear what he was going to devise as an economic reassessment following black Wednesday.
  You may remember, Madam Deputy Speaker, that we were promised a reassessment shortly after black Wednesday, but that was seven months ago. The Budget was certainly not the reassessment of economic policy that we might have expected, so I thought that, even at this very late stage, we might have heard something from the Chief Secretary about it today, but we did not.
  That day in September was very important. It was the day that Thatcherism came to an end; it was the day that the Government had to face the reality that an economic policy which had lasted for 11 or 12 years had finally run into the sand. It was when the Government realised that something had gone wrong, and their hopes, dreams and expectations that they had fundamentally changed this country's economic position were seen as the nonsense that they always were.
  We all know that Governments make mistakes, but the striking feature of the 1980s was the combination of the scale of the mistake and the long period for which it persisted. The Government were incapable of learning from their errors. Part of the reason for the errors were the wonderful days of North sea oil, which replaced imported fuel. However, the revenue was dissipated in the consumer-led boom which eventually led to the problems and troubles of last year.
  790
  The folly was compounded by the belief that the myth of prosperity was the result of clever Conservative economics. That has all been washed away, along with the money that could have been used in the seven fat years to prepare for the seven years of famine, which have some way to run. Unfortunately, the Government believed that the windfall was proof of an economic miracle, but now we have to live with the reality for which we were unprepared. How are we responding?
  I regret to say that the Government's economic policy does not make sense. The Government now regard success as getting people into shops to spend money, most of which will go on imported products. Our balance of payments deficit is bad enough, but such a move will increase it. The Red Book shows a 1·25 per cent. increase in gross domestic product for this year, together with the same increase in consumer expenditure. At the same time, the Government are levying value added tax on fuel.
  I have a personal interest in VAT on fuel because, while I was Financial Secretary to the Treasury, we held the presidency and it was my lot to negotiate the sixth VAT directive. I argued that VAT was a progressive—or reasonably progressive—tax, but that it would be a regressive tax without zero rating. At a stroke, the removal of zero rating makes it a regressive tax. It is a tax on the poorest people, and the argument that we have been able to use in the Councils of Europe will not be available to us any more because we have conceded the principle that there is a need to retain it as a non-regressive tax. The Government are giving an open door to shoppers to spend their money before the tax comes into effect. That is not a sensible way to proceed.
  The Government must produce a policy for the whole decade. There are long-term dangers because we have frittered away the benefits of previous years and must now be called to account. The £50 billion budget deficit and the £17·5 billion balance of payments deficit will take all those years to recover.
  There are two ways in which the Government can proceed with an economic policy that makes some sort of sense. First, they can reduce the value of the pound and go for exports and the growth that comes from them, while increasing investment incentives. My proposals for the latter would be somewhat different from those of the hon. Member for Tiverton (Mrs. Browning). I do not think that they would apply to motor cars and I do not agree with the limit that the hon. Lady suggests. Nevertheless, the idea of substantial investment initiatives is a correct one.
  We must give manufacturing industry something: we must reverse what happened to it throughout the 1980s. Even 100 per cent. allowances would not be as disastrous as our doing nothing. The 40 per cent. figure will have to be renegotiated this autumn and I expect that to continue, but the figure should really increase to 60, 70 or 80 per cent.—even 100 per cent. would not be impossible, as I said. That would rapidly have an effect. Education and training will take some time to get right; that will need to be done on a rather longer-term basis, but we must begin the long haul to economic viability. The need for that must be impressed upon the Government.
  I have outlined the sensible approach first. The other approach—the approach that I fear will be adopted by the Government—might accept a stronger pound. We have seen the pound rising in the past few weeks. That will please the Bank of England, which loves a dear pound, and will reduce the living standards of our people. That is

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  fundamentally the Conservatives approach; there is no question about that. The Conservatives accept implicitly that the living standards of the British people throughout the 1980s were built on sand. The Government feel that they must reduce them to make sense of their economic policy. Whatever happens, the Government will reduce living standards. They hope that, as a result, imports will fall relative to exports.
  That will still leave the problem of the budget deficit, and that is where the Chief Secretary and his Thatcherite partner, the Secretary of State for Social Security, will start their emasculation of the welfare state—and "emasculation" is the word. I am thinking not just of the common retirement age of 65 for men and women; with a Conservative Government in power, I regard that as inevitable. I am sure that that is what they will do—at the very least. The amount of the retirement pension and the qualifications for it will fall under the axe. Disability payments and a whole range of state benefits are all now under threat, and in addition to those cuts will be the cuts in the national health service.
  The history of the welfare state under this Government and under all Conservative Governments has followed a depressing pattern. General nods in the direction of the post-war consensus which began under the first post-war Conservative Government gave way later to cuts disguised as changes, then to cuts accepted as necessary, now to the real 1990s version of the Geddes axe. The public expenditure cuts of the 1930s created a bitterness whose effects we can still feel, 60 years later. They led to a torrent of dissent that changed the political landscape of our country. The great pity is that that approach is not merely divisive; it is cruel and unnecessary.
  The only claim that the Government can make is that they have kept inflation under control. That claim is not true, but they make it anyway. The price of that claim has been an overvalued exchange rate. The reason why inflation has not been as high as it would otherwise have been has been the very high—the absurdly high, the ruinously high—level of the pound, and the levels of interest rates that have accompanied it. It is the greatest condemnation of our economic inadequacy that the Government entered the ERM at a disastrous level. The Government watched our balance of payments react calamitously and used billions of pounds worth of taxpayers' money in a fruitless attempt to defend the rate. It was the greatest economic incompetence of our age to throw away those valuable moneys on a worthless venture. Never had we seen our resources used so profligately.
  Finally, when the money—our money—ran out, the rate was allowed to fall and business sighed with relief. It should have happened long before, yet the Government claimed credit for it—for the fact that now we have a realistic exchange rate. Now that all that money has been squandered, the exchange rate is realistic and the Government appear to be proud of the part they played in the process.
  Complaints about a cheap pound come from down the road in the City. The City has advocated a dear pound and high interest rates, both of which affect our vital companies in Manchester, Birmingham, Glasgow and our industrial centres on which we depend. If we cannot have financial devolution, we should at least listen with greater
  792
  care to what industry really needs, and we should meet those needs, one of which is large investment incentives for plant and machinery. Such incentives will not only help industry to modernise itself. The hon. Member for Macclesfield (Mr. Winterton) is absolutely right and I am sorry he is so readily brushed aside by those on the Treasury Bench.
  The advantage of investment in new plant and machinery is that it modernises the workers as well as the plant itself. New equipment leads to new methods of manufacture and new forms of operations in which many can play their part.
  Mrs. Browning: The right hon. Gentleman referred to my comment about capital allowances. I hope that he would agree that, in the case of large conglomerates, which have an open-ended opportunity to invest—they can invest and benefit from tax breaks on millions and millions of pounds—there comes a point at which such a provision could be abused. That is why I propose a ceiling, rather than the open-ended offer that he appears to favour.
  Mr. Sheldon: I would accept that if it applied to the present definitions that qualify for investment incentives. I am thinking purely of plant and machinery, and investment in plant and machinery leads to modern methods and practices and modernises workers as well as equipment.
  Our industrial strength used to lie in the manufacturing skills of our people and in their inventiveness. Our manufacturing skills have been overtaken by those of scores of other countries in the developing as well as the developed world. Our inventiveness at least remains, and, although it is not enough to ensure the predominance of our manufacturing industry today, it is nevertheless a talent of great value. But it, too, is under threat because Germany, Japan and now France now produce more patents than we do. Our one residual advantage is now disappearing. What is more, those countries actually use their patents to produce articles.
  Although the Government are beginning to talk as though manufacturing is important, precious little is emerging from their talk. The Prime Minister appears to have a new-found love of manufacturing industry. It is a great pity that he did not discover his affection for it years ago when there was more time to make use of it.
  What the Government are doing for manufacturing industry is wholly inadequate. They need to reassess training and education and to run the economy in the interests of manufacturing industry, and therefore in the interests of prosperity and of our people. The tragedy is that the Government will be trying to retain a high pound when we have a real opportunity to obtain the benefits from a truly competitive pound. In my view, the pound should be considerably lower than it is at present. It is with great sadness that I view the attempts to jack it up.
  Because of our high unemployment levels, we have an excellent opportunity to meet the inflationary pressures that arise from a low pound. That high unemployment will be the greatest assistance to us in producing expansion without inflation. There are not the constraints that we have had in the past and, although the deskilling of our people is serious, I believe that training can be expedited, as it was in the early days of the war when training centres played such an important part in producing for wartime conditions.

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  People want to work. A lower pound can reduce imports and promote exports and that should receive the support of the country. It is a terrible indictment of the Thatcher and post-Thatcher years that such a policy is not proposed. I have always been impressed by the French experience of 1958 to which I keep returning. Under President de Gaulle, the French combined devaluation with deflation and that provided a limitation to import and an incentive to export. Deflation provided the room to achieve those obectives.
  We have no need for further deflation in Britain today. We already have an excessive degree of inflation and such a high level of unemployment. The way is now clear to achieve what France achieved more than 30 years ago. Now that the myths of monetarism and the constrictions of the ERM have been banished, we might have expected a fresh analysis of our economic situation. Indeed, that is what we were promised following black Wednesday. What has happened? We are planning—at least for the time being—a life outside the exchange rate mechanism. In addition, the Government are certainly not going to give the Bank of England the independence that it dearly wants.
  The Government are right in that respect. The Bank of England is like the other nationalised industries. It wants to be privatised because a privatised monopoly is a comfortable institution in which to reside. The first thing that happens is that salaries are jacked up; then share options are introduced; and, finally, both are justified on the basis that the new monopoly profits are a sign of good management.
  So, we have no ERM and no privatised Bank of England. There is a reduction in living standards and exhortation after exhortation to export. That is the revised agenda of the 1990s. The great strength of our democracy has been that Governments have eventually learnt from their mistakes. The learning process certainly needs to begin soon.
  8.11 pm
  Mr. Barry Legg: In some ways, we have had a curious debate so far. We started with some shadow boxing from the Opposition Front Bench. We then heard a few ideas and some glimmerings of a strategy from the Opposition Back Benches. The right hon. Member for Llanelli (Mr. Davies) put forward some kind of strategy and we have just heard a strategy from the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). However, there was a dearth of strategy from the Opposition Front Bench.
  In debate after debate, no matter how carefully we listen to hon. Members such as the hon. Member for Peckham (Ms Harman), we come away with no idea of what those on the Opposition Front Bench would like to see in respect of the total level of public spending, the total level of taxation, the borrowing requirement, the level of interest rates or the level of the currency.
  Mr. Quentin Davies: They do not know themselves.
  Mr. Legg: As my hon. Friend makes clear in that valuable intervention, they do not seem to know. So long as those on the Opposition Front Bench lack a strategy, they will continue to be a most ineffective Opposition. The
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  British people will regard them as an ineffective Opposition who are incapable of being an alternative Government.
  My right hon. Friend the Chief Secretary to the Treasury identified some very encouraging indicators in respect of the British economy that have appeared in the past few weeks. Those encouraging signs include the reduction in unit wage costs of 2 per cent., the latest increase in manufacturing output per head of 7·8 per cent., the improvement in the non-EEC trade balance and the 2·5 per cent. rise in manufacturing output in January and February. There are many other examples which show that recovery is finally getting under way.
  I hope that the Government will continue to watch our economic indicators carefully, because I do not believe that it will be plain sailing from now on. Many hon. Members have identified problems in the economy. I urge my right hon. and hon. Friends on the Government Front Bench to watch the indicators and to take the appropriate action to ensure that we get the sustained and lasting recovery which is so much needed in this country.
  As my right hon. Friend the Chief Secretary rightly said, we are leading Europe out of recession. Although the projections of our growth for this year are meagre, they are much better than those of our European partners. In its most recent projection in respect of Germany, the Deutsche Bank projects a 2 per cent. decline in gross domestic product. Britain is leading Europe out of recession and it is good that the Government have taken advantage of the freedom and flexibility that the markets provided last September.
  The Government have taken advantage of that freedom and flexibility to let the pound float and to reduce interest rates. The British economy is now moving back to a better balance. Many hon. Members wanted to know what the Government are doing for industry. By leaving the exchange rate mechanism and reducing interest rates by 4 per cent., the Government have reduced the interest charges of British industry by £4 billion. That is more than has been contributed by the Budget and more than any of the suggestions, however vague, from Opposition Members.
  It also behoves British politicians to encourage British industry and commerce to look widely for markets and to raise their eyes across the world. The economic pattern across the world is changing. Unfortunately, Europe is currently stagnating. I fear any moves to create a fortress Europe in respect of trading arrangments. I am sure that my colleagues on the Government Front Bench will be ever vigilant in that respect.
  At the present time, the developing economies in the Far East are doing better; they are growing and becoming stronger. The Asian Development bank has projected growth in GDP in the developing economies of the Far East for the coming year of 7 per cent. at a time when growth in Europe is flat. Several of the economies in the Far East are growing at higher rates than that. In addition, the Chinese economy is growing at a rate of 10 per cent. per annum according to the Asian Development bank.
  Business men in this country must see that as an opportunity. The growth in the Chinese economy means that the Chinese are exporting more and also importing much more. It is projected that imports into China in the next 12 months will increase by 20 per cent. or 25 per cent. There are certainly markets out there which British

  795
  industry should take advantage of and there are opportunities which can help Britain to have a prosperous and successful future.
  Several hon. Members have referred to the Treasury and Civil Service Select Committee report on the economy. We produced a report on the Budget statement, and last week we produced a report on monetary union. Quite a lot of work went into the former report and it was unfortunate that some of its impact was diverted by one or two Labour members of the Committee who sought to take cheap political advantage of it. However, overall a lot of worthy evidence was taken and sound conclusions were drawn.
  One of the more important questions about which many hon. Members are interested is when Britain is likely to return to the ERM. I must admit that I am not altogether encouraged by the evidence that we received from my right hon. Friend the Chancellor of the Exchequer when he appeared before the Select Committee.
  My right hon. Friend saw the criteria for our returning to the ERM as follows: first, that we are clearly out of recession in the United Kingdom—that moment is rapidly approaching—and, secondly, that the economies of Germany and the United Kingdom are more closely synchronised. I am not quite sure what he meant by that, but if he means interest rates coming closer together, that is also happening. However, I do not believe that that should be a reason for returning to the ERM.
  Mr. Iain Duncan-Smith: What about the fault lines?
  Mr. Legg: I was coming to the fault lines.
  The Chancellor of the Exchequer and my right hon. Friend the Prime Minister rightly identified fault lines when we left the ERM in September. Since then, we have had a report from the governors of the European central bank which says that they cannot find the fault lines. It is not surprising that governors of the central bank cannot find the fault lines in the European exchange rate mechanism system. If they admitted that there were fault lines, they would have to throw even more money at defending the artificial exchange rates that they have set across Europe.
  The real fault line in the exchange rate mechanism is that the former anchor currency and anchor economy in Germany are no longer financially stable. Fixed exchange rates can run successfully for various periods. For example, under the Bretton Woods system, we ran a successful fixed exchange rate system across the western world for a number of years. One of the reasons that we were able to maintain the system was that the United States was the major economy in the western economies. It is worth remembering that the United States economy is five times larger than the Germany economy.
  The fixed exchange rate system ran successfully because currencies were linked to the major economy and the major economy had sound and stable financial policies. The major economy did not run big budget deficits and it did not have high inflation. When it started to run big budget deficits with the coming of the Vietnam war in the 1960s, that destroyed the Bretton Woods system of fixed exchange rates.
  We have seen the same thing happening in Europe in the past few years. Germany has ceased to be an effective
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  anchor because it no longer possesses the financial stability that it had in the 1960s and 1970s. Germany faces a prolonged period of large budget deficits and reconstruction with the unification that is taking place there, so it no longer possesses the stability that it had previously.
  Germany has massive problems on the competitiveness front. It is no longer the competitive country that it was in the 1960s and 1970s. German wage costs per hour are substantially greater than in the United Kingdom. To imagine that Germany will once again become the anchor and that Britain should, in the near future or the medium term, fix sterling against the deutschmark will simply lead to a repeat of the problems that the United Kingdom has faced over the past five years with inappropriately valued exchange rates and interest rates being set at the wrong level for domestic conditions. If that happens, we shall not see success in our affairs. There is a great danger economically for the United Kingdom in returning to the exchange rate mechanism.
  Hon. Members would do well to draw on recent experience and say that, broadly speaking, floating exchange rates provide the best means of establishing the level at which currencies should operate. If central bankers and politicians think that they know better than markets and that they can overrule markets and set exchange rates, that is a grave mistake and the people and taxpayers in many countries suffer as a result. There should be no return to the exchange rate mechanism in the lifetime of this Parliament.
  We have heard comments from several hon. Members, including my hon. Friends the Members for Bournemouth, West (Mr. Butterfill) and for Bridlington (Mr. Townend), about the high level of public spending and the high level of the public sector borrowing requirement in the United Kingdom. Certainly, for a Conservative Government to be running a deficit of some £50 billion, which equates to some 8 per cent. of gross domestic product, requires vigorous action in the coming months and years to achieve a proper financial balance and bring our public finances into better order.
  My hon. Friend the Member for Bridlington highlighted the level of public expenditure of some £23·3 billion in the past month. He rightly said that that was some 30 per cent. greater than in the same month the previous year. Certainly, Treasury Ministers have a great deal to do in maintaining firm control of public expenditure and substantially reducing the deficit.
  Several hon. Members have noted that the Finance (No. 2) Bill is a substantial document. It has more than 200 clauses and 19 schedules. It may be in danger of running against that well-known cannon of taxation—that taxation should endeavour to be as simple as possible. Conservative Members have often advocated that taxation should be simplified.
  The Bill is weighty. It contains measures which all of us support, such as the raising of the threshold for stamp duty. It also contains extensive measures which will puzzle hon. Members, such as those relating to the taxation of vans. There is a schedule of some 10 pages concerning the tax on vans used by directors and other persons. The Inland Revenue goes into tremendous detail about these vans—the requirements and the definition of a van. In fact, the definition of "van" is any vehicle which conveys goods, provided that it is not a motor cycle as defined in the Road Traffic Act 1988 and it is less than 3,500 kg. If one is an

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  employee or director who is in the habit of driving a three-tonne lorry, the schedule will bring the lorry within the taxation provisions as a benefit in kind.
  I strongly support the Government's strategy for reducing regulation on business, but the Government, the Inland Revenue and Customs and Excise should be mindful that Bills and Acts of Parliament are also regulation. I wish the Committee well in its work on the Bill. I hope that it will be able to reduce some of the volume and help to achieve some simplification.
  In conclusion, I hope that my right hon. Friends on the Front Bench give as much time, energy and ability as they can to tackling the main matters within the Government's control. They should get public expenditure under control so that overall tax levels can be reasonable. They should not spend too much time delving into economic forecasts, second-guessing the markets and working out the correct exchange rate between the deutschmark and sterling or other currencies but should address the fundamental matters which come within their responsibility or control. If the Government do that, we shall have a strategy which will be good for the country, the Government, and our party.
  8.27 pm.
  Mrs. Anne Campbell: I do not think that there is an hon. Member on either side of the House who does not sincerely hope that we are seeing the end of the recession. It is the longest recession since the war. We have been told that manufacturing output has started to rise, that consumer confidence is rising and that the gross domestic product will grow by about 1·3 per cent. this year and 2·5 per cent. in 1994.That should make us all feel better.
  When the economy was falling like a stone, I remember an economist saying that even a stone bounces. Unfortunately, stones do not bounce far, but tend to settle down to the lowest level. For two consecutive months, we have seen slight falls in unemployment. Yesterday in The Observer, William Keegan described it as a "Group 4 recovery". He said:
  "They seem to be losing the unemployed".
  Even the tabloids do not seem to believe what is happening. Last week, the Evening Standard had the headline, "Shock fall in unemployment", as though that somehow was bad news. But so long as it is real, it is welcome.
  I believe that employers over-reacted to the gloom and uncertainty in the autumn and are now beginning to recruit again. Instability is bad for industry because, when employers make people redundant, we lose vital skills which are not replaced. The skilled people we lose are often in their late 40s and 50s, and they find it extremely difficult to get work again when the economy begins to turn up.
  The problem is that, on the basis of the Government's previous record, it is difficult for people to have confidence in what the Conservative Government are doing. Last autumn, the Government seemed intent on doing their utmost to destroy British manufacturing industry. We had record interest rates and an unsustainable exchange rate. The housing market was described as flat, but, in reality, house prices were plummeting.
  Despite their best efforts, the Government were ejected from the exchange rate mechanism and forced to devalue the pound. That led to an 18 per cent. devaluation and
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  lower interest rates. That is what has led to recovery. It is not something which the Government intended to happen, although they now pretend that it is what they intended all along and that they are responsible for the welcome signs of upturn that we are now seeing.
  However, as many hon. Members, but especially Opposition Members, have said, there are dangers in the upturn. That is well illustrated by the circumstances that arose in the early 1980s. When we came out of recession then, the balance of trade was positive. It led to several years in which consumer demand exceeded the growth in exports before the trade deficit grew to unacceptable limits. However, that is not a luxury that we can allow ourselves on this occasion. It is not sustainable. The balance of trade is already in deficit to the tune of £12 billion, and is projected to grow to £18 billion as we come out of recession.
  So we must either restrain consumer demand or encourage exports—preferably both—to bring the deficit back into balance. In the current circumstances, any Government would find it extremely difficult to do so. Manufacturing is only 21 per cent. of GDP. When we compare that with levels in our competitor countries—31 per cent. in Japan and 35 per cent. in Germany—we begin to realise what a weak state British manufacturing is in. Britain, where the industrial revolution began, is in the appalling position of deriving only a small proportion of its GDP from manufacturing industry.
  More help is needed for manufacturing. Opposition Members have said that on numerous occasions. It has only recently been recognised as important by the Government. We need to provide more help in investment. I agree with the hon. Member for Tiverton (Mrs. Browning), who is no longer in her seat, that we must give more help to people who are prepared to invest in resources for research and development.
  We certainly need more investment in our education and training. We should also seriously consider an attempt to cure the short-termism which cripples British industry. High-tech firms, which are the backbone of recovery in a modern technology-based industrial environment, also need their own special encouragement, but the Government are not interested in increasing skills or encouraging research and development; nor do they seem particularly interested in raising levels of investment.
  The Conservative philosophy is simplistic: keep down inflation and wages and in the free market everything will beautifully come all right. We will automatically improve our skills, raise our investment and increase our research and development and that will help us to become an innovative and competitive country. Well, I am sorry to say that that has not happened in the past 14 years, and the electorate are beginning to realise that the Government are pulling a great con trick in pretending that they know how to manage the economy.
  I have more than 1,000 high-tech firms in my constituency. I spoke to one of them this morning. It is a highly innovative firm employing a great many people with valuable skills. It is losing work as a result of declining defence contracts. It has skills which could well be used in civil engineering and consultancy work. It asked me for my help with a specific problem.
  After an exchange of correspondence with Ministers I eventually directed the firm to the regional office of the Department of Trade and Industry for the help that it needed. It reported to me this morning that the DTI was

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  not interested in addressing its problems seriously. It simply tried to push the DTI schemes at it. The schemes were not suitable, but the DTI showed a lack of regard for what the customer wanted. That is one of the basic problems that we have not addressed.
  Mr. Robert Ainsworth: Does not the response that we get from the DTI show that there is a lack of strategy on how we should diversify out of the defence industry into other industries? The answer that we are always given in this place is that there is a straight choice. If we are not prepared to accept the forces of the market, we support the propping up of lame ducks. But we have always advocated the adoption of a strategy. If there is not a strategy, what on earth is the role of the Government? But Conservative Members never appear to agree with that.
  Mrs. Campbell: I am grateful to my hon. Friend. He has reminded me that another difficulty of which the firm in my constituency complained was that there was a lack of strategy in the Ministry of Defence. There is no way in which a firm can know in advance whether its project or proposal will have a good chance of success. Encouraging noises from MOD officials are not usually sufficient. A company may put a great deal of work into a proposal and find that it is turned down at the end of the day. Small firms cannot afford that luxury. They need to be reasonably sure that, if they put a great deal of time, energy and effort into a project proposal, it will have a reasonable chance of being accepted.
  The other major problem that growing firms in my constituency face is finance. Many small firms—I am talking about very small firms consisting of perhaps only half a dozen people—have great difficulty in expanding. Sometimes they obtain the initial finance successfully, but have tremendous difficulty in moving on to the next stage.
  I welcomed the increase in the percentage that the DTI guarantees under the small firms loan guarantee scheme. That could be useful in some circumstances. However, the problem with that scheme is that often the banks refuse to operate it or make it difficult for firms to get hold of the money. The British banking system does not understand high-tech firms. It has no basic understanding of scientific innovation and ideas. That is the problem.
  I suggest that the Chancellor should make the scheme available through science parks. Science parks are usually run by people who understand small high-tech businesses and are prepared to come to grips with the scientific issues at stake. If the Chancellor took up that suggestion, I should like to put forward the St. John's Innovation Centre of Cambridge, which would be delighted to run a pilot project.
  There are two ways in which the country can go. We can either strengthen the supply side, exploit British skills and expertise, invest in people and regain our competitiveness, or we can follow the route for which the Government seem to want us to opt. Under that option, we would lower wages, reduce skills and offer no help with investment and research and development. No attempt would be made to overcome short-termism. That second option will inevitably lead to third-world wages and skills. We would become the world's cheapest conveyor belt,
  800
  making cheap goods at low prices, which would generate low consumer demand. We would have an even larger proportion of Europe's poor than we have now.
  That is the future for Britain under the Conservatives, but there is an alternative. The people have the ability, the skills and the enthusiasm to make Britain great again. I hope that we can do that.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I understand that the winding-up speeches will commence at 9.20 pm. Four hon. Members, who have been in the Chamber for most of the day, are seeking to catch my eye, and with a bit of co-operation from everyone, I may be able to call them.
  Mr. Maxton: On a point of order, Mr. Deputy Speaker. I thought I had clarified with you on an earlier point of order that there is no reason why any hon. Member should not speak, because the vote does not have to take place at 10 o'clock, but at any time thereafter.
  Mr. Deputy Speaker: We shall have to wait to see what happens at 10 o'clock. At present four hon. Members wish to catch my eye.
  8.41 pm
  Sir Michael Grylls: The hon. Member for Cambridge (Mrs. Campbell) made some interesting and constructive points about some of the smaller high-tech firms in her constituency, with which I agree. It was good to hear what she had to say. The Finance Bill is good news for small and medium-sized firms, and I agree with the hon. Lady that the amended loan guarantee scheme will help those firms as they come out of recession and start to take advantage of the expanding economy.
  I want to speak about an issue which has been before the House for a long time: unitary tax. Eight years ago, the House included a retaliatory clause in the then Finance Act to put pressure on the United States Government. I have been concerned about this issue for some time. I have an interest to declare. I feel passionately that we must resolve this issue before too long. On 18 February 1980, Peter Rees, now Lord Rees, said about the United Kingdom/United States double taxation treaty:
  "To those concerned about the unitary question, I say that there is no disposition on the part of the Government to let the issue die … the United States were left in no doubt by what I told them"
  Thirteen years later, we are still no further forward. The blame must be put, fairly and squarely, at the door of successive United States Administrations, who have not addressed the issue effectively. I shall not go into detail about what unitary tax is; suffice it to say that it means taxing companies on a worldwide basis rather than on the basis of the state or the country in which they operate. It is used by some American states—in particular, California —and it has been internationally condemned by the United Nations, the OECD, the 12 members of the European Community, Japan, Switzerland, Finland, Australia, Canada and many other countries.
  Today marks the deadline for the United States Administration to submit an amicus curiae brief in support of Barclays bank, which is leading the way in trying to get a judicial decision on this issue against the California Franchise Tax Board. According to the press

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  —I believe this to be true—the United States Administration have now decided that they will not support Barclays bank in its litigation. I know that the House will be disappointed by that news, and I am aware of the feelings of the 213 hon. Members, many of whom are present now, who have signed early-day motion 1489.I believe that we are justified in being outraged al: the American Administration's decision not to support Barclays' case.
  It would appear that that American Administration have gone back on their promise to the House that they would use their best endeavours to resolve the issue. The chairman of the California Board of Equalisation has stated publicly that the decision not to file a brief is a
  "clear signal to the Supreme Court that the Administration does not want the case heard."
  My hon. Friend the Member for Faversham (Sir R. Moate) and the hon. Member for Newcastle upon Tyne, East (Mr. Brown) who is sitting on the Opposition Front Bench this evening, recently visited Washington as part of a delegation. They were informed by the acting Secretary for tax policy at the United States Treasury:
  "Failure to file the brief"—
  in support of Barclays—
  "will be considered a decision not an oversight".
  Although it is still feasible that the United States Supreme Court will take the case, the failure of the United States Government to support it significantly jeopardises the chances of a court hearing. By failing to support Barclays, the Administration have destroyed the foundation on which their international tax treaties are based. The House should note that, for the first time in their history, the American Administration are admitting that a tax system radically different from the international standard of arm's-length reporting has a place internationally.
  There is a real danger that the use of worldwide unitary tax will break out, like measles, all over the United States. That could send a damaging signal to other countries, which might be encouraged to adopt that as a standard form of taxation because the American Administration no longer seem to regard the OECD model as the accepted standard.
  Other American states are looking to adopt worldwide unitary tax, as demonstrated by the letter sent by the American Governors Association to President Clinton on 15 April stating that the worldwide unitary system offered advantages from which the federal system could benefit. In a far-sighted letter of 24 March to Treasury Secretary Bentsen, the president of the United Kingdom section of the American Chamber of Commerce stated:
  "I regard this matter as potentially the most important to arise in transatlantic commercial relations in a very long time. This is an issue that should be allowed to exhaust the US legal process in the hope that it can avoid becoming a major political dispute."
  Today it has become such a dispute. It has been suggested that the Clinton Administration's reason for not backing Barclays is that they regard the issue as solved, since California enacted legislation giving companies the option of being taxed either on a worldwide basis or on what is known as the "water's edge". The companies are only given that so-called solution on payment of a fee—often a substantial one. It is worth reminding ourselves that neither our Government, the Unitary Tax Campaign nor the Confederation of British Industry supported that legislation.
  802
  It is morally outrageous that a company should be punished for the right to be taxed on an equitable basis. It is quite clear that that so-called solution is not a solution in practice. According to the California Franchise Tax Board, an estimated 2,500 foreign and domestic companies were eligible to elect for the water's edge option in 1990 and that just over half did so. Of that number, only 8 per cent. of British companies—68—elected to do so. That represents less than a quarter of British companies operating in California.
  The fee for the water's-edge election is not insubstantial, and California estimates that it will collect between $40 million and $60 million from that election fee. To charge a fee for the right to file under accepted international practice is surely akin to the highwayman's charge to his victims for the use of the road. The staff of the California Franchise Tax Board have consistently attempted to undercut the legislation.
  The House must be under no illusion that while the 1986 legislation in California was a small step in the right direction, it does not provide a solution to this issue. Given the fee and the throw-back provisions that British companies must face, without a right of appeal, that legislation is morally indefensible.
  I now look quickly to the future. The House passed retaliatory action in 1985, now in the form of section 812 of the Income and Corporation Tax Act 1988.The time has come—I believe that the Opposition agree—for decisive action against the United States to show that we are serious and that we are angry. We have waited too long for the Americans to solve the problem. The House took the words of the United States on trust and, frankly, the United States has let us down.
  Our credibility in negotiations with the United States on all future economic issues will be undermined if we do not follow through and retaliate as we have always said we would. How wide or how narrow the retaliation is is a matter for debate. To deny payment to United States companies of British tax credits could give the Inland Revenue an extra £200 million. In view of the way in which the Americans have behaved, that is a very attractive proposal.
  Many people say that the treaty may be torn up by the United States. The House should remember that the treaty is outdated. It benefits United States companies substantially. The United States would not abandon a treaty which benefits it, especially if retaliation was targeted finely against United States companies which have a presence only in a unitary state—California. The Clinton Administration have made a political decision to protect themselves domestically. The British Government must now protect their own national interest and our own British companies operating in America. The British Government should no longer tolerate the antics of California.
  Although the opportunity for the successful conclusion of legislation has been in the Californian courts since 1984, the United States once again backs away from a meaningful solution. It is British companies and British businesses that are directly affected by the United States Administration's sudden decision to turn turtle. We cannot allow that to happen. The only thing that a United States President can do unilaterally is file an amicus brief, which he has apparently not done to date.
  The United States system differs from the United Kingdom parliamentary form of government. The

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  President cannot guarantee legislation or, as we know from bitter experience, even a treaty. There is no sign that the United States Administration would support any effort to limit the states. Any attempt to ignore the litigation in favour of some new solution would jettison Barclays and all the other companies which have borne and fought the tax.
  There is no doubt that the Government must now retaliate. Our Government must show the Clinton Administration that we will not tolerate their showing disregard for their international obligations and for their promises to the House. I hope that my hon. Friend the Financial Secretary will take this message back to the Treasury and that, as soon as possible, the Government will commence implementation of the retaliatory clause.
  8.52 pm
  Mr. Gordon Prentice: I shall be brief, because I am conscious that many hon. Members wish to take part in the debate.
  This week marks a milestone because it was this week a year ago that the Prime Minister's predecessor said that there was no such thing as Majorism. She also threw in for good measure the fact that the Prime Minister was not his own man. At the time, I thought that those were curious statements, but in the year that has passed, I have realised that Majorism has been given a definition.
  To many of my constituents, Majorism means soaring unemployment. Unemployment in Pendle has risen by 80 per cent. since November 1990.To many of my constituents, Majorism means slump, broken election pledges and the collapse in manufacturing. We know that Majorism means massive borrowing of £50 billion, way above anything ever mentioned by the Conservatives at the time of the general election. It means an enormous trade deficit in manufacturing, running this year at £13 billion. Under a Conservative Government, this country in 1983, for the first time since the industrial revolution, had a deficit in manufacturing.
  The Budget is not only the Chancellor's Budget, but the Prime Minister's Budget. It will be remembered not only as the last Budget before the Government introduce the unified Budget in November, but as the Budget that comprehensively and cynically ditched a raft of election pledges which were made solemnly to the British people on 9 April. It will be remembered—a point picked up by the hon. Member for Tiverton (Mrs. Browning)—as a Budget with a delayed-action fuse. It is a ticking time bomb. The hon. Member for Tiverton said that it was an innovative Budget because it proposed tax increases in later years. Those words will come back to haunt the Government in later years because the tax increases are built into the Budget. Conservatives will never be able to say again with a straight face that they are the party of low taxes and that Labour always wants to put taxes up.
  It is one of the great ironies that the Government seem to have built up a reputation for economic competence. The hon. Member for Milton Keynes, South-West (Mr. Legg) referred to that belief when he tried to mock the Labour party for lacking a strategy. The Government's whole strategy was turned on its head on 16 September 1992 when we pulled out of the exchange rate mechanism and lost £5 billion in the process.
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  There was also some reference to the British national interest. Again, it strikes me as strange that Conservatives are constantly seen as the party that defends the British national interest, whereas the Labour party is seen as incapable of doing so. That attitude was taken furthest by the right hon. Member for Henley (Mr. Heseltine), the President of the Board of Trade. He told The Guardian on 27 November 1991:
  "Some of us would rather see the Budget handed over to the Common Market than to the Labour party."
  Yet the Conservatives wasted £14 billion on the poll tax fiasco and hiked up VAT by 2·5 per cent. to pay for that.
  The Budget runs counter to a series of specific pledges. We may be tired of hearing about them in the House, but they bear repetition so that people outside can hear them. There was a specific pledge on national insurance contributions, and that was broken. The Prime Minister said during the election campaign:
  "I have no plans to raise the top rate of tax or the level of national insurance contributions."
  There was a specific pledge not to increase taxes and that was broken.
  During the election campaign, the Chancellor of the Exchequer said on 31 March 1992:
  "We will not have to increase taxes. I cannot see any circumstances in which that will be necessary."
  The pledge on VAT was broken and that is perhaps the most cynical action of the lot. It is mean, and it will have an adverse impact on the poorest in our community. We still do not have an assurance from Ministers that the poorest members of our community will be adequately compensated.
  I am not talking only about pensioners and those on income support. I am talking about the many millions of poor families whose incomes take them just above the income support level. Some Conservative Members posed questions about that, and I hope that the Financial Secretary will tell the House what special provision will be made to ensure that those just above income support level will not be affected adversely by the hike in VAT.
  We know why VAT on fuel was increased. My regional daily, the Lancashire Evening Telegraph, told its readers a few days after the Budget on 18 March that VAT on fuel was
  "a desperate pledge-ditching step to service the huge deficit that the Government has run up, many would say by its own economic incompetence … it would only need the dissent of just 11 Tory MPs for the measure to be undermined. Such action in our opinion would have the force of probity behind it, in contrast to the attempt by the Government to portray this new VAT imposition as a green anti-global warming tax, fulfilling Britain's international environmental obligations."
  The Chief Secretary tried to sell this line again today. We were told that the Government were committed to the development agenda at the Rio earth summit, which was why it was right for Britain to try to curb pollution by the year 2000.That was the justification offered for hiking up fuel taxes.
  Why then was it not equally right for Britain to join France in moves to agreeing a timetable to reach the United Nations target of 0·7 per cent. of GDP to be spent on overseas aid by the year 2000? France has committed herself to that target. The Lancashire Evening Telegraph was spot on when it said that VAT on fuel was forced on the Government by an exploding deficit which had to be paid for.
  The Chief Secretary displayed tremendous optimism about the state of the British economy, but his optimism

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  is not shared by many people in this country. I was amused to hear the hon. Member for Fulham (Mr. Carrington), whose constituency I know well, detecting signs of recovery from the increased house prices in Fulham. I am not worried about house prices in Fulham; I am worried about what is happening to the real economy—and that means manufacturing and those who work in it making things.
  The Chief Secretary said that the Labour party would have us believe that manufacturing is dead. It is not dead: it is on a life support system. There have been huge losses of manufacturing jobs this year in my constituency. Rolls-Royce has shed 5,000 jobs nationwide and 175 in Pendle. Smith and Nephew has laid off 574 people this year. Wadkins of Colne is closing. Progress Engineering is closing and the latest victim, only a couple of weeks ago, was Baxter Healthcare, which makes medical products, such as intravenous drips. It is closing its plant in my constituency and transferring production to Malta. The NHS trust in my constituency spent £128,000 on Baxter products last year. Ludicrously, highly skilled jobs are being exported to Malta and the Burnley health care trust is expected to import those products in future, now that 200 skilled and loyal workers are to be laid off by this American multinational.
  Beyond the boundaries of my constituency, things are terribly bleak. The last colliery in Lancashire, Parkside, is closing down. Leyland DA F is fighting for its existence, while the Government stand idly by, expecting Lancashire county council to do what is necessary to save it.
  The Governor of the Bank of England has told people what they already know. Speaking to the Treasury and Civil Service Select Committee last month, he said that Britain faced a fundamental weakness, in the form of its large trade deficit, which will take many years to correct. The fact is that we are rapidly losing our manufacturing base. We are importing more and more of the goods that we used to make here. The Governor confessed himself a little worried by the Treasury prediction that our trade deficit would reach £13 billion this year, but went on to say that the trade gap reflected a lack of competitiveness and that there were problems with productivity, training, education and innovation.
  The weakness in our manufacturing is a systemic weakness in the British economy that has not been properly dealt with for the past 14 years. Manufacturing is in decline and the evidence of that decline is plain in the constituencies of hon. Members who represent industrial areas. I can only urge Conservative Members to open their eyes and see the extent of the chaos and the devastation that Government policies have wrought in this country. This Budget does nothing to deal with the real problems facing the nation; tragically, it is not a Budget for jobs.
  9.4 pm
  Mr. Quentin Davies: I shall begin by declaring my interests. I am an adviser to NatWest Securities, which is the investment banking arm of the NatWest group, a director of Dewe Rogerson Consultants, and parliamentary consultant to the Institute of Taxation.
  The hon. Member for Peckham (Ms Harman), the Opposition Front-Bench spokesman, made an appalling speech. She called for reductions in taxation or the abolition of some taxes and then complained about the
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  size of the PSBR. She completely failed to recognise the obvious contradictions between those two, which is an insult not just to the intelligence of the House but to the intelligence of those outside. Such speeches do not deserve to be taken seriously, nor will they be.
  I should like to pay a sincere tribute to the Chancellor. Few politicians in my time in the House, perhaps none, have been subjected to such a sustained and often malicious campaign of abuse. The Chancellor took up office in difficult circumstances two and a half years ago and set himself two tasks—to reduce inflation and to restore growth in the economy. He has been triumphant in the first—there is general recognition of that—and it is becoming increasingly clear that he is succeeding in the second.
  It would be futile to expect Opposition Members to pay tribute to a Conservative Chancellor. They will go on mindlessly calling for his resignation whatever happens to the economy. I am not so naive as to suppose that the animal will change its spots, but I hope that fair-minded and perhaps better informed people in the country who had lost patience during the recession and criticised the Chancellor, will be magnanimous enough to recognise their errors.
  The Chancellor's Budget is courageous. He decided that it was necessary to increase taxes, and I am sure that he is right. He was also right to avoid raising direct taxes such as income tax and capital gains and corporation tax, which are the most economically damaging taxes of all. Having decided to focus on indirect taxes, he was also right to widen the tax base rather than to increase the rates. I hope that he will be emboldened to go further and spread the VAT net even wider in the next Budget. Perhaps he might like to start by extending it to books, magazines and newspapers.
  Many hon. Members have rightly recognised that the economy is now reviving, and have asked whether the new growth will be sustainable. It is essential not to return to the cycle of inflation followed by retrenchment and recession, which is often exacerbated by counterproductive if well-intentioned attempts by Governments to fine-tune the economy. Such attempts have characterised much of our history since the second world war.
  The Chancellor is concerned about the danger of inflation—he said so recently to the Select Committee on the Treasury and Civil Service—and about the need to address it and see it off. Fortunately, there is a weapon to hand which is very appropriate in present circumstances. Interest rates on the continent are falling, but we must resist the always present temptation further to reduce our interest rates, and instead allow sterling to appreciate. I hope that the Government will take the opportunities that are presented in the next few months to do this.
  One cannot have it both ways about devaluation. If it is conceived as an attempt to gain a permanent competitive advantage, it must be accompanied by measures that will retrench demand and release resources for export. That is the only way to ensure that the increase in import prices is not accommodated by demand, which must lead to a general increase in prices. That has not been the position over the past six months, because devaluation has been accompanied by a reduction in interest rates and a relaxation of fiscal policy until this Budget.
  Devaluation has thus been conceived not as an attempt to gain a competitive advantage in export markets, or in domestic markets in internationally traded goods and

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  services, but rather as a necessary concomitant of the reductions in interest rates over the past few months—the price we have had to pay for those reductions. That being so, it is right that, when the international situation permits it, we should allow that devaluation to be reduced, and thereby minimise or lessen the potential impact on price inflation of the rise in import prices. I hope that that will be done.
  There are many good things in the Budget and I approve of the content of the Bill, but I fear that I cannot say the same thing about its drafting. It is almost an object lesson in how a Bill should not be drafted. It is far too long. I know that there is a great tradition in Finance Bills of low standards of bureaucratic obfuscation and prolixity, but the position is getting a great deal worse. My hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) —I endorse his excellent remarks on the subject—drew attention to the absurdity of the passage about vans. I notice that the sensible and welcome changes in the rules for roll-over relief for business assets are spun out into 26 pages, with a text longer than that in which the original relief was cast some years ago.
  Parts of the Bill are simply incomprehensible. Let me give the House one small nugget. Clause 138(1) says:
  "An amount is available for relief under section 136 above for an accounting period if amount A is exceeded by amount B or (if amount C is lower than amount B) amount A is exceeded by amount C; and the amount available for relief for the period is the amount of the difference between amount A and amount B or (as the case may be) between amount A and amount C."
  That is disgraceful. Violence is done to justice because, if a citizen cannot understand the law—the central assumption of the law is that the citizen understands and knows it—then the citizen will be disadvantaged. In this case, people will not be able to claim the reliefs to which they would be entitled, or they will be penalised for making mistakes in their filing because they cannot understand the law. Economic damage will be done because the cost of compliance with such nonsense will increase. There will no doubt be an enormous improvement in the revenues of tax accountants and lawyers, but the burden will be borne by businesses and individuals.
  I hope that the Chancellor will enjoy a well-deserved and general congratulation on having stuck to his policies, which are now coming right, through thick and thin. However, I hope that he instructs the Inland Revenue to hire a new parliamentary draftsman.
  9.13 pm
  Ms Tessa Jewell: The concern of the House about the effect of the imposition of VAT on domestic and charities' fuel and power has rightly focused on the plight of elderly and poor people who live at home and who will now face increased bills. However, I should also like to draw attention to the problem that the measure will cause to charities, and particularly those serving the needs of the many people who can no longer live on their own but require the care of a residential nursing home or hospice.
  The recession has had a serious impact on the ability of charities to respond to real needs through reductions in donations—a 67 per cent. fall according to a survey by the Charities Aid Foundation—and a significant increase in the demand for help from charities. The increase in the level of irrecoverable VAT that is paid by charities makes
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  their vital job even harder. The Government have argued that charities should bear VAT on fuel and power for their non-business use, along with the rest of society. They also contribute to global warming, and therefore should be encouraged to save energy.
  Such an argument reflects a blatant lack of understanding of the reality of such care provision. It is an inescapable medical fact that elderly, ill and disabled people need higher temperatures if they are to be cared for properly. Indeed, one of the ways in which cancer manifests itself is through the need for extra warmth, even in the height of summer. Thus, because of the direct needs of people in their care, the charities that provide the care are high energy users. They have a duty of care to their residents. We cannot, as a simple economic choice, ask them to reduce their energy consumption.
  Of course, residential care providers are not the only charities that will suffer under the Government's measures —grant-making charities will also be affected. They too have had a significant increase in demand on their resources during the recession. Ill, elderly and disabled people on low incomes increasingly turn to charities for help. Their numbers are growing, and no doubt will grow even further with rising fuel prices. The Cancer Relief Macmillan Fund disbursed more than £3 million in patient grants in 1992, of which about £850,000—by far the largest category—was for grants for fuel.
  It is also important not to ignore the effect of the measures on other charities that provide vital services. Equally hard hit will be organisations such as the Imperial Cancer Research Fund, which will lose £170,000 a year; Barnado's, which estimates a loss of £122,000 a year; and the Royal National Lifeboat Institution, which will lose about £80,000 a year.
  The overall figure for the 300 members of the Charity Tax Reform Group is estimated to be about £27 million. Do not the Government realise that charities will have to spend vast amounts of money on VAT on fuel, instead of spending it on their primary purpose of provision of services? It is also fair to say that those who volunteer their help to charities do so to support those services; they do not stand on windy street corners rattling their collection boxes to raise money for VAT.
  The problem should not be viewed in isolation from the wider context of the tax burden of charities. Whereas local authorities and commercial organisations can recover VAT, the services provided by charities are either exempt from or outside the scope of VAT. Charities are in a uniquely disadvantaged position, which will be made worse by the Government's proposal to levy VAT on fuel and power.
  The Government's policy—which they claim encourages charitable giving—rather than offering what they call indiscriminate tax relief from the VAT that charities pay, is just a feeble attempt to face reality. While the measures on gift aid and payroll giving are welcome, what is really needed is a solution to the problem of irrecoverable VAT, which currently amounts to about £300 million a year.
  The obvious solution would be the introduction of a VAT rebate scheme, under which charities could recover an agreed percentage of the presently irrecoverable VAT. That system already exists in Canada, where it works well. The Government have produced excuses for rejecting that proposal, which is popular with charities, including the excuse that it would be unacceptable to the European

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  Community. When the Minister replies, perhaps he will confirm that that is the advice that the Government have received, which is in direct contradiction to the independent advice given to the Charity Tax Reform Group.
  The Budget undermines the position of charities and their long-standing traditional reliefs. We cannot afford to lose the invaluable contributions they make to the well-being of those who are most disadvantaged in society, and to the community life of our nation. We want the Government to listen, to withdraw their proposal to charge VAT on fuel to charities, to undertake a long-term review of charity taxation, and to give renewed consideration to the introduction of a VAT rebate scheme for charities—which must no longer be penalised by the tax system. They deserve even this Government's help.
  9.19 pm
  Mr. Nicholas Brown: They key issues that the Chancellor had to address in this year's Budget were problems caused by previous policy errors—negative economic growth, lack of performance in the British economy, and a substantial public sector borrowing requirement.
  The Chancellor's policy for growth—showing him to be the Keynesian child of the 1960s that we all know him to be—is to cross his fingers and hope that devaluation and a high Budget deficit will provide sufficient stimulus for recovery. Since neither were his pre-election policies, there are those who allege that the Chancellor has stumbled into his present policy by accident. I do not take that cynical view. I can see a future for the Chancellor on his eventual retirement—lecturing at the London School of Economics and writing Tribune group pamphlets on demand management.
  I am pleased that the Chancellor is now back on the radio, replacing the Home Secretary as the Government's principal spokesman on economic affairs. The Home Secretary was probably warned off by a passage in the Budget speech in which the Chancellor made special mention, in a sinister way, of his regret at sticking four and a half pence on a packet of live of the small cigars that the Home Secretary smokes.
  Although the Chancellor's policy for economic growth cannot truly be called Conservative in the sense that the previous Prime Minister would have understood it. the right hon. Gentleman's policy for deficit reduction can truly be called Norman, in the sense that his 11th century namesakes would have understood it. The Chancellor is raising money by taking it from the poor. Of all the revenue-raising options open to him, he chose the most regressive.
  This would not be an economic debate without Conservative Members seeing signs of economic recovery. In fact, The Economist provided some of the latest evidence of that. I noticed the Chief Secretary leaning on it a little. A recent article in The Economist reported that manufacturing output in February increased 2·5 per cent. on a year ago; business men are more optimistic about sales than at any time since 1989; new car sales were up 13 per cent. in the year to March; domestic air travel also increased 5·5 per cent. in the year to March—and even The Economist did not attribute that to rail strikes.
  One must, however, be cautious about forecasting economic recovery on the basis of evidence provided by
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  The Economist. Business men may be more optimistic about sales than at any time since 1989, but in 1989 similar wild optimism was followed by the economy shrinking 1·5 per cent. in the following 12 months. The Chief Secretary spoke about new car sales, but failed to make the point that, as the economy dipped into recession, those sales fell 45 per cent. before registering the more modest 13 per cent. increase that he did tell us about.
  More significantly, today's GDP figures offer harder evidence of the recession coming to an end. I am surprised that the Chief Secretary did not make more use of them. Instead, breaking the habit of a lifetime, he even quoted with approval a survey by the AEEU.
  In common with my hon. Friend the Member for Cambridge (Mrs. Campbell) and all my right hon. and hon. Friends, I hope that recovery is under way. The real issue is that 10 successive quarters of a shrinking economy have left a devastating and enduring legacy. It is no use Conservative Members talking about manufacturing output resuming growth when they are unwilling to acknowledge the 8 per cent. fall in output before growth resumed.
  The recession has had a deep and lasting effect on the British economy. Any recovery will be from a lower base. Something like 3 per cent. of GDP has been permanently lost—a point well made by my hon. Friend the Member for Durham, North (Mr. Radice). Of course recessionary forces are at work in the international economy, but there are peculiarly British dimensions to our own recession—exacerbated by Government economic policy. The recession started earlier and has lasted longer, ran deeper and caused more lasting damage than recessions elsewhere in Europe or in the United States.
  Between 1989 and 1994, according to the OECD forecast, growth in the G7 economies will average 9 per cent. The figure for the British economy over the same period is 1 per cent. That is an indication of the peculiarly British dimension to the problem. Even the Government admit to having presided over five years of stagnation in the British economy—although, in fairness, they tend not to express it in quite that way.
  If the Government's growth forecasts are to be believed—like their pledge to stay in the exchange rate mechanism, and their promises to preserve the value of the currency, not to put up taxes and not to increase the rate or broaden the base of VAT—output in the British economy will not return to the level that it reached in the second quarter of 1990 until some time in 1995.Surprisingly enough, the Government's forecasts were much more optimistic before the general election, when a much stronger recovery was foretold. Before the election, the Chancellor told the House and the British electorate that output would grow by 2 per cent. in 1992–93, by 3 per cent. in 1993–94 and by 3 per cent. in 1994–95, and that there would be stronger growth than the Government now anticipate in the following years. That promise has turned out to be as well founded as all the others.
  I know that, in politics, it is normal to look for points on which our opponents may not have been totally honest with the electorate, but—when we examine the Government's pre-election statements on economic policy—it is difficult to find a single significant issue about which they have told the truth. This lack of candour is designed to conceal the devastating effects of the last five years of economic stagnation. The delay in economic recovery has meant that capital has been strapped, and growth has been

  811
  constrained by capacity at much lower levels without hitting the constraints of inflation or the balance of payments.
  Before the general election, the Government were telling the British people that, in 1996–97, the economy would be 16 per cent. larger than in 1992.This year, that forecast has been revised downwards to 10 per cent. That revision downwards suggests that the Government concede that they were over-optimistic before the general election; no doubt, they hope that no one will attribute unworthy motives to them. They claim that an economic recovery is under way, and they reduce their growth forecast rather than increasing it. The truth is that, on the Government's own figures, by the end of this Parliament—should it run its course—output will be some 6 per cent. lower, and the country will be some £40 billion poorer —that is, £700 per year for every man, woman and child.
  Mr. Butterfill: Will the hon. Gentleman give way?
  Mr. Brown: I cheerfully give way to the hon. Gentleman.
  Mr. Butterfill: Can the hon. Gentleman name another OECD country whose forecasting has been any more accurate? Does he think that Chancellor Kohl in Germany was any more accurate—particularly when he told the German people that unification would not cost them any more?
  Mr. Brown: This is not an error of forecasting, but something a little more substantial. It is not a forecast which worries me so much—although, of course, it is possible in every speech to make fun of forecasts. I am worried about the outcome. Why are the other G7 countries able to do so much better in regard to growth rates up to 1994 than we are? Why is their figure 9 per cent., while ours is 1 per cent.? That is not a forecast; it is now almost a foreseeable outcome. The problem has a peculiarly British dimension. I do not think that the hon. Gentleman addressed it in his speech, but I shall be happy to give way to him again, although it is almost madness to do so.
  Mr. Butterfill: The hon. Gentleman is traditionally over-generous. Perhaps he should look at the possible outturn for the other G7 countries in the next couple of years. I suspect that they are on a delayed path towards what has happened here.
  Mr. Brown: I prefer to take a reasonable look at the cycle, rather than picking and choosing as the hon. Gentleman clearly does. I look forward to debating these matters with him in Committee: I can see that he is fighting hard to get on to the Committee, but he will be aware that, since the general election, the ratio between Government and Opposition is slightly smaller. As the hon. Gentleman has not always been a reliable vote for the Government in the past, I think that some pretty firm pledges will have to be given to those who organise these matters in the Conservative party before we can enjoy exchanges such as this late into the night and, indeed, into the early morning.
  The Government's fibs about growth are as nothing compared with what they said about tax, in particular what they said about value added tax. I should like, however, to deal with two other matters.
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  The hon. Member for Surrey, North-West (Sir M. Grylls) mentioned unitary tax. There have been press reports today of the American Administration's decision. Although there is no difference in principle on this issue between the Opposition and the Government, we take it very seriously indeed and will seek to explore the Government's position in Committee. Amendments will probably be tabled to the clauses dealing with advance corporation tax. They will be designed to probe the Government's commitment to the retaliatory clauses.
  Mr. Hugh Bayley: I know that my hon. Friend is aware that the ACT proposals will have a bad effect on charities which enjoy income from investment in equities, but is he aware that the Joseph Rowntree charitable trust, based in my constituency, found that, if those provisions had applied last year, its income would have been cut by £110,000? Many of the projects which it co-funds with the Government would have gone by default. If the Government tax charities in that way, they will lose money for public welfare schemes. Will my hon. Friend give an undertaking that he and other Labour Members will press this point in Committee?
  Mr. Brown: I can most certainly give my hon. Friend the assurance that he seeks. It would be peculiar to structure the changes that the Government intend to make in such a way as specifically to disadvantage charitable institutions. We intend to explore that issue in detail in Committee. My hon. Friend was right to raise it.
  A number of hon. Members, most notably my hon. Friend the Member for Aberdeen, North (Mr. Hughes), referred to the petroleum revenue tax provisions. Again, we shall explore those provisions in detail in Committee. It will set the tone for those debates if I say now that we oppose the Chancellor's proposals for two reasons. First, we do not believe it right to rely solely on corporation tax as the mechanism for raising taxation from the North sea. If profits have fallen since 1986, that does not necessarily mean that they will not rise again. Relying on corporation tax may mean that the Exchequer is deprived of future revenue. Secondly, we should not like provisions to be enacted which could lead to a drop in North sea exploration, particularly when one appreciates that the North sea is in competition with other parts of the world for the interest of oil companies.
  I turn now to a matter that every hon. Member, without exception, has mentioned either directly or indirectly—clause 42. If clause 42 were a poster, it would be used by Benetton to advertise its products. Clause 42 is a betrayal of a specific commitment, given by the Government before the election, so it may help Conservative Members, particularly those who have expressed reservations about it, to explore how it came about by following the progress of pledges given by those on the Treasury Bench in the run-up to and after the general election.
  As early as 17 October 1991, the Financial Secretary's predecessor, Francis Maude, said in response to my hon. Friend the Member for Derby, South (Mrs. Beckett):
  "I will give the hon. Lady a straight answer."
  That set the tone for what came afterwards. He continued:
  "In the middle and late 1980s, we managed at the same time to increase spending … to run a substantial budget surplus and to reduce tax, and we shall be able to do so again."—[Official Report, 17 October 1991; Vol. 196, c. 426.]

  813
  One out of three is not bad, but I am not sure that increased spending was the one out of the three that the hon. Gentleman would have chosen.
  History continues. On 13 February 1992, John Maples, another member of the Treasury team who failed to get re-elected at the general election, told the House:
  "We have no problem in this regard; we do not need to raise taxes"—
  apparently, hon. Members then shouted, "You have," and he continued:
  "We have set out our tax and spending plans for the next three years."
  That was in February 1992, so it should have taken us through 1993, 1994 and 1995.He said that the Government did not need to raise taxes, but that turned out not to be true.
  During the same extravagant Treasury Question Time Mr. Maples said:
  "My right hon. Friend the Prime Minister has made it clear that we have no intention of raising the rate of VAT either before or after the election."
  That did not turn out to be true either. He later said:
  "My right hon. Friend … has made it perfectly clear we have no intention of increasing VAT. We have made our plans on spending and tax perfectly clear. We do not need to raise VAT".—[Official Report, 13 February 1993; Vol. 203, c. 1106–08.]
  He said it often enough but, as we know, it was not true.
  The present Secretary, of State for Employment was also at it. On 12 March, she said:
  "I am happy to repeat the categoric pledges given by my right hon. Friends the Prime Minister and the Chancellor"—
  rope them all in—
  "that there will be no increase in the standard rate of VAT either before or after the election. We have no need and have no plans to extend the standard rate or to put up other taxes." —[Official Report, 12 March 1992; Vol. 205, c. 961.]
  The latter part of that statement did not turn out to be true either, did it?
  On 11 June 1992, after the general election, the present Paymaster General told the House:
  "We have no plans and no need to raise or extend VAT, as my right hon. Friends have said on numerous occasions." —[Official Report, 11 June 1992; Vol. 209, c. 440.]
  On 10 December 1992, the Paymaster General was again asked whether the Government intended to increase or extend the standard rate of VAT or to increase other taxes. Referring to the general election, he told the House:
  "Those categorical pledges stand as they did at that time." —[Official Report, 10 December 1992; Vol. 215, c. 986.]
  By 4 February 1993, however, the Government were getting coy. At Question Time, the Paymaster General tried to finesse a question by pretending that he thought that we were asking about the previous rather than the next Budget. In response to a question on 4 March 1993 —let us remember that the Budget was on 16 March—the Economic Secretary to the Treasury said that he could give the assurance
  "that all these matters are carefully taken into account in assessing the Budget strategy."—[Official Report, 4 March 1993; Vol. 220, c. 446.]
  The Government resiled pretty late from a range of promises.
  Lest anyone think that the Liberals have anything to be proud of, during the long exchanges about the rate and breadth of VAT, the Liberal spokesman asked about VAT, racehorses and the bloodstock industry, so he may be happy with the outcome and regard it as helpful in that
  814
  narrow respect. In the more significant matter of VAT on fuel, charities and domestic consumers, however, they have rather missed the boat.
  My hon. Friends the Members for Dulwich (Ms Jowell) and for Coventry, South-East (Mr. Cunningham) said that extending the VAT base was a highly regressive measure. If all zero-rated categories were included, it would raise about £10·7 billion for the Exchequer, but the poorest 10 per cent. of households would be £7 a week worse off. The richest 10 per cent. would be £11 a week worse off but, as proportions of household incomes, those figures represent 7 per cent. and 2 per cent. respectively.
  Clause 42 is structured in such a way that it would be possible for it to be followed—next year, for example—by further extensions of the VAT base. Sewerage and newspapers, for example, might appeal to the Chancellor. When considering such matters, it is important that the House should realise that increases in the VAT rate and the shift from direct to indirect taxation have already had a regressive effect. The poorest 10 per cent. of households are 4·4 per cent. worse off than they would be if VAT were at its 1979 level—that is the case now, without taking these changes into account—while the richest 10 per cent. of households are just 2·9 per cent. worse off as a result of increased VAT.
  It is true that the recession has taken its toll on the public as well as the private purse. On the question whether the tax increases will solve the problem, my hon. Friend the Member for Pendle (Mr. Prentice) rightly pointed out some flaws in the Conservative party's case. Public borrowing last year was more than £8 billion higher than the Chancellor expected at the time of the last Budget, and even turned out £1·5 billion higher than announced in this Budget in figures released just one month later.
  Given the short-term problem of lack of demand in the economy, I can see why the Chancellor delayed some of his increases in taxation. But even when the sizeable increases announced in the Budget for future years have fully come into effect in 1995–96, they will reduce public borrowing by only one fifth. Even with five years of growth and three years of above-trend growth, on the Government's forecast public borrowing will still be 3·75 per cent. of GDP by 1997–98.Public sector debt will have increased from £150 billion to nearly £400 billion and will continue to increase. I think that we can therefore probably expect further regressive tax increases, perhaps even later this year.
  In an excellent speech, my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said that we needed a policy for the long term—something more than is implied in an answer that the Chancellor gave my hon. Friend the Member for Wrexham (Dr. Marek) on 28 November 1991:
  "He asked how we are going to pay for the borrowing. We shall pay for the borrowing by borrowing—that is the normal way in which one pays for it."—[Official Report, 28 November 1991; Vol. 199, c. 1062.]
  Clearly, the former Prime Minister was no longer in office, as she would not have let the right hon. Gentleman get away with that.
  Every Opposition Member who has spoken has referred to the Conservative party's election pledges—that there would be no tax increases, no national insurance increases, no cuts in mortgage tax relief, no increase in value added tax, no broadening of the value added tax

  815
  base, no devaluation; that there would be continued membership of the ERM; that the recession would come to an end a year ago—and to the phoney pre-election growth forecasts.
  At the election, the Conservative party lied about our tax policies; now the electorate can see the extent to which it lied about its own tax policies. When the Conservatives said, "Labour will cost you an extra £20 a week," they did not go on to say, "whereas the Conservative party will only cost you £8·50" The Bill is constructed on dishonesty, and I urge the House to reject it.
  9.43 pm
  The Financial Secretary to the Treasury (Mr. Stephen Dorrell): There is a relatively narrow strip of common land in the Budget and I want to begin on it following the speech made earlier by my hon. Friend the Member for Surrey, North-West (Sir M. Grylls) on the subject of unitary tax. My hon. Friend has played a distinguished part in leading the expression of the long-standing concern that exists on both sides of the House about that subject. I take this opportunity to state clearly that the Government continue to share my hon. Friend's view that the unitary tax concept legislated for in California is not one that we can recognise within a recognisable system of double taxation treaties.
  The House should be in no doubt about the basis of the case that Barclays is bringing within the American courts. It is arguing, with our support, that any state tax system in the United States that collects an arbitrary share of the worldwide profits of a company is contrary to the existing double taxation treaty between Britain and the United States. We had understood that that view was shared by the American Federal Government. It appears that that is not the case, and the Government must therefore now review their position. I do not believe that a double taxation treaty can continue to exist indefinitely between two Governments who believe that it means different things. My right hon. Friend the Chancellor will be seeking clarification of the American Government's views when he is in Washington later this week.
  On another matter on which there is a widely held view, let me comment on the opinion expressed by my hon. Friend the Member for Bristol, North-West (Mr. Stern) and several other of my hon. Friends who drew attention to the length of this year's Bill. My hon. Friends will be aware that the ambition of short, brief and clear legislation has been shared by Governments of all political complexions dating back to Oliver Cromwell, a distinguished predecessor of my right hon. Friend the Prime Minister as the Member for Huntingdon.
  Oliver Cromwell once expressed an ambition to reduce the laws of England to the size of a pocket book. He did not make much progress in that direction and I suppose that we are some way behind. However, I give my hon. Friend the Member for Bristol, North-West the assurance that he sought: we shall resist, where humanly possible, the temptation to add further to the length of what we recognise is already a long Bill.
  I want now to consider petroleum revenue tax, an issue in respect of which there is rather less agreement between the two sides of the House. We shall, of course, return to that subject in detail in Committee. However, it is essential
  816
  to restate the elements behind the Government's proposed changes. Those elements have now gained a significant level of support in all parts of the oil industry.
  Our approach is to cut by one third the marginal rate of petroleum revenue tax on existing fields, because we recognise that that will encourage development and therefore bring forward jobs in the development sector on existing and proven reserves and also because we recognise that the lower rate of PRT on existing fields will prolong the life of those fields.
  It can therefore be said to be a measure designed to ensure that we recover the maximum economic reserves out of the North sea. We are also proposing to abolish PRT on future fields. As we are abolishing the tax on future fields, we are also abolishing tax allowances on future fields. The House should pause for a moment and recognise that it is rather strange to argue that we should keep a tax in place in order to operate a system of allowances. That is exactly the kind of system that we have now in many respects, and it has two characteristics which should not command support in the House.
  The system has led me into the rather remarkable position—I suspect almost uniquely among tax Ministers —of being responsible for a tax system which, instead of raising money for the Government, actually costs the Government money. On figures published by the oil industry itself, in respect of a typical new field, the system has led to a subsidy from the taxpayer for oil production running at a rate of about £1·60 a barrel.
  There is widespread recognition within the industry that that system cannot endure. Of course, the Government recognise that we must avoid unnecessary dislocation, and we shall seek to do that. However, the Government believe that it is equally obvious that the existing system cannot endure and must be changed.
  Mr. Salmond: The Financial Secretary is quite wrong: the proposal in the Budget is losing support all the time, as is clear from the oil industry press. However, will he answer the question about consultation? Was there consultation with the Department of Trade and Industry and the Scottish Office before the proposal was announced in the Budget? Is it a piece of collective irresponsibility, or is the Treasury alone responsible for this shambles?
  Mr. Dorrell: I certainly will not refer to the discussions that go on within Government. However, I will comment on the proposition that there should be consultation with the industry. It seems to be a rather odd proposition that, before a Government consider raising tax, they must engage in consultations to give notice of their intentions so that the industry can bring forward its activity to take advantage of the tax system that we are seeking to remove.
  Mr. Robert Hughes: Will the Minister give way?
  Mr. Dorrell: No, I want to move on to another issue that was raised by several hon. Members—the Government's proposals on VAT.
  The Opposition's reaction to the VAT proposals has been interesting. In the months or six weeks since the Budget, they have launched a number of arguments against the proposals. They have been extremely fleet of foot moving from one argument to another as they discover that the arguments that they first mounted do not work.

  817
  The Opposition began by claiming that the distributional effect of t he Budget was unfair. That argument was shot down by the Institute of Fiscal Studies, which made it clear that the Budget raised roughly the same share of income across the income scale. Therefore, they cannot use that argument.
  Labour Members then said that the Government would not make good the effect of the VAT changes on the poorest sections of the community. That was a clear scare, which was shot down by the words of my right hon. Friend the Chancellor in the Budget, when he made clear our commitment to provide extra help for those on means-tested benefits. The next argument was—
  Mr. Nicholas Brown: Can the Minister tell the House whether the Government will compensate in full those people on state benefits for the cost?
  Mr. Dorrell: Since Budget day, we have said clearly that we shall take account of the VAT changes in the benefit upratings which will be announced next autumn.
  Labour Members then argued that the Government were not interested in fuel prices. Understandably, they moved off that quickly when they were reminded that, in the past 10 years, electricity prices have fallen by 8·5 per cent. and gas prices by 15 per cent., both of them in real terms. That is in sharp contrast to the 30 per cent. increase in real terms in electricity prices which was introduced by the Labour Government between 1974 and 1979—the period when the Leader of the Opposition was an Energy Minister. Labour Members had to move off that argument quickly as well.
  Mr. Brown: Will the hon. Gentleman give way?
  Mr. Dorrell: No.
  Today, Labour Members argued that, because the VAT changes are revenue raising, they cannot also be motivated by the environmental considerations. That is a completely absurd argument. It calls to mind the words of former President Johnson when he was describing someone who he alleged could not do two things at once. He said that that politician was so dumb that he could not walk and chew gum at the same time. That may be true of some Labour Members: it is not true of Conservative Members. The VAT changes are part of a revenue-raising plan. We are not raising £3 billion by accident. The changes are part of our commitment to deliver the Rio objective, which is strongly endorsed, at least in theory, by the Labour party.
  Mr. Brown: I am pleased that the Financial Secretary can make a speech and give way at the same time. I ask him again to give the House an assurance that people on state benefits will be compensated in full for the cost of the Chancellor's VAT exactions.
  Mr. Dorrell: I have already responded to that point My right hon. Friend's Budget addressed the need to do two things. He clearly said that he needed, first, to sustain the recovery that was under way and, secondly, to take action to reduce the Budget deficit. The signs of recovery are clear. Even the hon. Member for Peckham (Ms Harman) brought herself to say through clenched teeth that every sign of recovery is welcomed. She carried conviction. The words passed her lips, but she moved on to the next business as quickly as she reasonably could.
  Last week was a black week for the Labour party, because we announced that industrial production is
  818
  growing here when it is falling elsewhere in Europe. We announced that retail sales are up by 3 per cent., car registrations are up by 12 per cent. and house sales are up by 15 per cent. on the same period last year. When surveys are taken of business opinion, they do not share the views of Labour Members. As though to underline the gloom of the Labour Front Bench, on Thursday we announced a drop in the level of unemployment for the second consecutive month. Clearly, it is too soon to say that it is the beginning of a trend. However, we know that it is not, in the words of the Opposition employment spokesman, a freak or a fiddle.
  Mr. Brown: Every Opposition Member hopes that the recession is coming to an end. Will the Financial Secretary explain why the Chancellor found it necessary to revise his growth forecasts down and not up?
  Mr. Dorrell: We shall be able to consider such issues in the Committee.
  Against that background, my right hon. Friend concluded that it would be wrong to impose a tax increase this year. I welcome the endorsement of my hon. Friends the Members for Bridlington (Mr. Townend), for Slough (Mr. Watts), for Bournemouth, West (Mr. Butterfill) and for Milton Keynes, South-West (Mr. Legg) of that strategy. However, my hon. Friends rightly made their endorsement subject to two conditions, both of which the Government accept.
  The first condition is that, while there will be no tax increase this year, there must be action to bring down the deficit in the medium term. That is why the Bill provides for what my right hon. Friend the Chancellor described as a tax wedge to address the budget deficit.
  Mr. Jeff Rooker: Will the Minister give way?
  Mr. Dorrell: No. I am dealing with some remarks made by my hon. Friends.
  The second condition that my hon. Friends made clear was that action must not be confined to the revenue side of the balance. They said that public expenditure restraint was essential. The Government agree with that and wholeheartedly endorse it. The Government share with my hon. Friends a commitment to control inflation. We shall not inflate our way out of debt. They also share with my hon. Friends a commitment to control the burden of taxation. We shall not tax our way out of debt.
  Given those two commitments, the iron laws of arithmetic determine that we shall have to deliver—and deliver we shall—our commitment to restrain public expenditure within what can be afforded in the medium term. All that is in sharp contrast to the Labour party. Like my hon. Friend the Member for Milton Keynes, South-West, I came to the debate keen to know what was the economic policy of the Labour party.
  On monetary policy, is the Labour party in favour of going back into the ERM or not, and under what terms? Is it still in favour of economic and monetary union? Does it believe that monetary policy is too tight or too loose? Its monetary policy used to be to fix interest rates at 2 per cent. below the level fixed by the Government. What is its monetary policy now?
  Not only on monetary policy are the questions unanswered. What is the Labour party's fiscal policy? Is the level of borrowing too high or too low? [Interruption.]

  819
  The shadow Chief Secretary, the hon. Member for Peckham (Ms Harman) says that it is too high. That is an interesting proposition. How will she deliver her commitment to reduce the spending plans of the Labour party to bring the Budget deficit down? How will she do that against the background of the commitment given by the hon. Member for Dunfermline, East (Mr. Brown) on "The World this Weekend" in January, when he said:
  "I'm not talking about raising income tax or national insurance or VAT".
  He seems to have cast a large share of the burden for dealing with the deficit on the shadow Chief Secretary.
  Either way, it is bad news for the hon. Member for Peckham. She cuts a rather sorry figure. There she sits —the political heir to Joel Barnett. Her job is to say no. Her job is to address the language of priorities and choices. Yet she prefers to live in a soft-focus world where to want is to have, where there are no choices, no difficult decisions, no priorities and no disappointments.
  I remember well the days when the hon. Member for Peckham was a health spokesman. She would speculate about Labour's plans for spending on the NHS. Those speculations were expensive enough. Now she speculates not only about health but about education, training, employment measures and overseas aid. All that is against the background of the commitment made by the shadow Chancellor that there would be neither tax increases nor borrowing increases. The House and the country want to know who speaks with authority on behalf of the Labour party.
  Labour's economic policy is like a much-loved ancient monument. It is a familiar part of the landscape. It undergoes the occasional face-lift, but its essential elements are passed lovingly from generation to generation. Like all such creations, it was never designed. Its distinctive shape, its higgledy-piggledy charm, are testament to the creative genius of the composite resolution. But the essential elements of the confection are clear. It was designed for a bygone era. The planners insist that successive generations maintain a range of adornments, the purpose of which is lost in the mists of time. Its maintenance would cost very large sums of public money. It has no relevance to today's economic needs. It is in sharp contrast to the Bill, which addresses today's needs and which I commend to the House.
  9.59 pm
  Mr. Jeff Rooker rose—
  Madam Speaker: Is this a point of order?
  Mr. Rooker: It is not a point of order, Madam Speaker. I stood up to be called.
  The Financial Secretary did not have an opportunity to give way to me, and I should like to spend a couple of minutes to make the point that I would have made had he done so.[Interruption.] If Conservative Members do not realise by now that the Second Reading of the Finance Bill is not subject to the 10 o'clock rule, they have now found that out. Incidentally, the Financial Secretary is no Robert Sheldon either.
  I should like to take up what the Minister said about no tax increases this year. I was late arriving at the House today, because I took a few hours off to visit one of the shire counties in middle England. The local people, on the
  820
  margin of the low-paid, asked me why I had not operated my tax law and why they will pay more taxes. I said that I would take the first opportunity to correct the record.
  The Chancellor of the Exchequer is deliberately increasing taxes for 500 people in every constituency—that is the effect on the low-paid of freezing the tax allowances. It is no good the Financial Secretary saying that the Government are not raising taxes. How can it be justified for 500 of the lowest-paid people in every constituency, who would not normally pay tax, to be called upon to pay tax in order to pay for the tax reliefs to business? How can that not be called an increase in taxation? It is dishonest of the Government to claim that there has not been a tax increase when 300,000 people will pay tax in this tax year. They are some of the lowest-paid people, and the Government should be damn well ashamed of themselves.
  The Government have said that the recovery is here, and they have quoted a catalogue of good news. How can we justify, therefore, the lowest-paid people being expected to face an increase in their tax burden from zero to 20p in the pound? That imposition is in addition to the added burden of VAT on domestic fuel.
  We will debate this issue at some length in Committee. That is all that I wanted to put to the Financial Secretary. How can he justify the immorality of taxing 500 of the lowest-paid people in every constituency when the good times are now here?
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 310, Noes 266.

  Division No. 249]

  [10.3 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Burt, Alistair

  Aitken, Jonathan

  Butler, Peter

  Alexander, Richard

  Butterfill, John

  Alison, Rt Hon Michael (Selby)

  Carlisle, John (Luton North)

  Allason, Rupert (Torbay)

  Carlisle, Kenneth (Lincoln)

  Amess, David

  Carrington, Matthew

  Ancram, Michael

  Carttiss, Michael

  Arbuthnot, James

  Cash, William

  Arnold, Jacques (Gravesham)

  Channon, Rt Hon Paul

  Arnold, Sir Thomas (Hazel Grv)

  Chapman, Sydney

  Ashby, David

  Churchill, Mr

  Aspinwall, Jack

  Clappison, James

  Atkinson, David (Bour'mouth E)

  Clark, Dr Michael (Rochford)

  Atkinson, Peter (Hexham)

  Clarke, Rt Hon Kenneth (Ruclif)

  Baker, Rt Hon K. (Mole Valley)

  Clifton-Brown, Geoffrey

  Baker, Nicholas (Dorset North)

  Coe, Sebastian

  Baldry, Tony

  Colvin, Michael

  Banks, Matthew (Southport)

  Congdon, David

  Banks, Robert (Harrogate)

  Conway, Derek

  Bates, Michael

  Coombs, Anthony (Wyre For'st)

  Batiste, Spencer

  Coombs, Simon (Swindon)

  Bellingham, Henry

  Cope, Rt Hon Sir John

  Bendall, Vivian

  Cormack, Patrick

  Berestord, Sir Paul

  Couchman, James

  Biffen, Rt Hon John

  Cran, James

  Blackburn, Dr John G.

  Currie, Mrs Edwina (S D'by'ire)

  Bonsor, Sir Nicholas

  Curry, David (Skipton & Ripon)

  Booth, Hartley

  Davies, Quentin (Stamford)

  Boswell, Tim

  Davis, David (Boothferry)

  Bottomley, Peter (Eltham)

  Day, Stephen

  Bottomley, Rt Hon Virginia

  Deva, Nirj Joseph

  Boyson, Rt Hon Sir Rhodes

  Devlin, Tim

  Brandreth, Gyles

  Dickens, Geoffrey

  Brazier, Julian

  Dcrrell, Stephen

  Brooke, Rt Hon Peter

  Douglas-Hamilton, Lord James

  Brown, M. (Brigg & Cl'thorpes)

  Dover, Den

  Browning, Mrs. Angela

  Duncan, Alan

  Bruce, Ian (S Dorset)

  Duncan-Smith, Iain

  Budgen, Nicholas

  Dunn, Bob

  Burns, Simon

  Durant, Sir Anthony

  821

  Dykes, Hugh

  Knight, Mrs Angela (Erewash)

  Eggar, Tim

  Knight, Greg (Derby N)

  Elletson, Harold

  Knight, Dame Jill (Bir'm E'st'n)

  Emery, Rt Hon Sir Peter

  Knox, David

  Evans, David (Welwyn Hatfield)

  Kynoch, George (Kincardine)

  Evans, Jonathan (Brecon)

  Lait, Mrs Jacqui

  Evans, Nigel (Ribble Valley)

  Lamont, Rt Hon Norman

  Evans, Roger (Monmouth)

  Lang, Rt Hon Ian

  Evennett, David

  Lawrence, Sir Ivan

  Faber, David

  Legg, Barry

  Fabricant, Michael

  Leigh, Edward

  Fairbairn, Sir Nicholas

  Lennox-Boyd, Mark

  Fenner, Dame Peggy

  Lester, Jim (Broxtowe)

  Field, Barry (Isle of Wight)

  Lidington, David

  Fishburn, Dudley

  Lightbown, David

  Forman, Nigel

  Lilley, Rt Hon Peter

  Forsyth, Michael (Stirling)

  Lloyd, Peter (Fareham)

  Forth, Eric

  Lord, Michael

  Fox, Dr Liam (Woodspring)

  Luff, Peter

  Freeman, Roger

  Lyell, Rt Hon Sir Nicholas

  French, Douglas

  MacGregor, Rt Hon John

  Fry, Peter

  Maclean, David

  Gale, Roger

  McLoughlin, Patrick

  Gallie, Phil

  McNair-Wilson, Sir Patrick

  Gardiner, Sir George

  Madel, David

  Garel-Jones, Rt Hon Tristan

  Maitland, Lady Olga

  Garnier, Edward

  Malone, Gerald

  Gill, Christopher

  Mans, Keith

  Gillan, Cheryl

  Marland, Paul

  Goodlad, Rt Hon Alastair

  Marlow, Tony

  Goodson-Wickes, Dr Charles

  Marshall, John (Hendon S)

  Gorman, Mrs Teresa

  Marshall, Sir Michael (Arundel)

  Gorst, John

  Martin, David (Portsmouth S)

  Grant, Sir Anthony (Cambs SW)

  Mawhinney, Dr Brian

  Greenway, Harry (Ealing N)

  Mellor, Rt Hon David

  Greenway, John (Ryedale)

  Merchant, Piers

  Griffiths, Peter (Portsmouth, N)

  Milligan, Stephen

  Grylls, Sir Michael

  Mills, Iain

  Hague, William

  Mitchell, Andrew (Gedling)

  Hamilton, Rt Hon Archie (Epsom)

  Mitchell, Sir David (Hants NW)

  Hamilton, Neil (Tatton)

  Moate, Sir Roger

  Hampson, Dr Keith

  Monro, Sir Hector

  Hannam, Sir John

  Montgomery, Sir Fergus

  Hargreaves, Andrew

  Moss, Malcolm

  Harris, David

  Nelson, Anthony

  Haselhurst, Alan

  Neubert, Sir Michael

  Hawkins, Nick

  Newton, Rt Hon Tony

  Hawksley, Warren

  Nicholls, Patrick

  Hayes, Jerry

  Nicholson, David (Taunton)

  Heald, Oliver

  Nicholson, Emma (Devon West)

  Heath, Rt Hon Sir Edward

  Norris, Steve

  Heathcoat-Amory, David

  Onslow, Rt Hon Sir Cranley

  Hendry, Charles

  Oppenheim, Phillip

  Heseltine, Rt Hon Michael

  Ottaway, Richard

  Hicks, Robert

  Paice, James

  Higgins, Rt Hon Sir Terence L.

  Patnick, Irvine

  Hill, James (Southampton Test)

  Patten, Rt Hon John

  Hogg, Rt Hon Douglas (G'tham)

  Pattie, Rt Hon Sir Geoffrey

  Horam, John

  Pawsey, James

  Hordern, Rt Hon Sir Peter

  Peacock, Mrs Elizabeth

  Howard, Rt Hon Michael

  Pickles, Eric

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

  Porter, Barry (Wirral S)

  Howell, Rt Hon David (G'dford)

  Porter, David (Waveney)

  Howell, Ralph (North Norfolk)

  Portillo, Rt Hon Michael

  Hughes Robert G. (Harrow W)

  Powell, William (Corby)

  Hunt, Sir John (Ravensbourne)

  Rathbone, Tim

  Hunter, Andrew

  Redwood, John

  Jack, Michael

  Renton, Rt Hon Tim

  Jackson, Robert (Wantage)

  Richards, Rod

  Jenkin, Bernard

  Riddick, Graham

  Jessel, Toby

  Rifkind, Rt Hon. Malcolm

  Johnson Smith, Sir Geoffrey

  Robathan, Andrew

  Jones, Gwilym (Cardiff N)

  Roberts, Rt Hon Sir Wyn

  Jones, Robert B. (W Hertldshr)

  Robertson, Raymond (Ab'd'n S)

  Jopling, Rt Hon Michael

  Robinson, Mark (Somerton)

  Kellett-Bowman, Dame Elaine

  Roe, Mrs Marion (Broxbourne)

  Key, Robert

  Rowe, Andrew (Mid Kent)

  Kilfedder, Sir James

  Rumbold, Rt Hon Dame Angela

  Kirkhope, Timothy

  Ryder, Rt Hon Richard

  Knapman, Roger

  Sackville, Tom

  822

  Sainsbury, Rt Hon Tim

  Thornton, Sir Malcolm

  Scott, Rt Hon Nicholas

  Thurnham, Peter

  Shaw, David (Dover)

  Townend, John (Bridlington)

  Shaw, Sir Giles (Pudsey)

  Townsend, Cyril D. (Bexl'yh'th)

  Shephard, Rt Hon Gillian

  Tracey, Richard

  Shepherd, Colin (Hereford)

  Tredinnick, David

  Shersby, Michael

  Trend, Michael

  Sims, Roger

  Trotter, Neville

  Skeet, Sir Trevor

  Twinn, Dr Ian

  Smith, Sir Dudley (Warwick)

  Vaughan, Sir Gerard

  Smith, Tim (Beaconsfield)

  Viggers, Peter

  Soames, Nicholas

  Waldegrave, Rt Hon William

  Speed, Sir Keith

  Walden, George

  Spencer, Sir Derek

  Walker, Bill (N Tayside)

  Spicer, Sir James (W Dorset)

  Waller, Gary

  Spicer, Michael (S Worcs)

  Ward, John

  Spink, Dr Robert

  Wardle, Charles (Bexhill)

  Spring, Richard

  Waterson, Nigel

  Sproat, Iain

  Watts, John

  Squire, Robin (Hornchurch)

  Wells, Bowen

  Stanley, Rt Hon Sir John

  Wheeler, Rt Hon Sir John

  Steen, Anthony

  Whitney, Ray

  Stephen, Michael

  Whittingdale, John

  Stern, Michael

  Widdecombe, Ann

  Stewart, Allan

  Wiggin, Sir Jerry

  Streeter, Gary

  Wilkinson, John

  Sumberg, David

  Willetts, David

  Sweeney, Walter

  Wilshire, David

  Sykes, John

  Winterton, Mrs Ann (Congleton)

  Tapsell, Sir Peter

  Winterton, Nicholas (Macc'f'ld)

  Taylor, Ian (Esher)

  Wolfson, Mark

  Taylor, John M. (Solihull)

  Yeo, Tim

  Taylor, Sir Teddy (Southend, E)

  Young, Sir George (Acton)

  Temple-Morris, Peter

  Thomason, Roy

  Tellers for the Ayes:

  Thompson, Sir Donald (C'er V)

  Mr. Timothy Wood and Mr. Andrew Mackay.

  Thompson, Patrick (Norwich N)

  NOES

  Abbott, Ms Diane

  Cann, Jamie

  Adams, Mrs Irene

  Chisholm, Malcolm

  Ainger, Nick

  Clapham, Michael

  Ainsworth, Robert (Cov'try NE)

  Clark, Dr David (South Shields)

  Allen, Graham

  Clarke, Eric (Midlothian)

  Alton, David

  Clarke, Tom (Monklands W)

  Anderson, Donald (Swansea E)

  Clelland, David

  Anderson, Ms Janet (Ros'dale)

  Clwyd, Mrs Ann

  Armstrong, Hilary

  Coffey, Ann

  Ashton, Joe

  Cohen, Harry

  Austin-Walker, John

  Connarty, Michael

  Banks, Tony (Newham NW)

  Cook, Frank (Stockton N)

  Barnes, Harry

  Cook, Robin (Livingston)

  Barron, Kevin

  Corbett. Robin

  Bayley, Hugh

  Corbyn, Jeremy

  Beckett, Rt Hon Margaret

  Corston, Ms Jean

  Beith, Rt Hon A. J.

  Cousins, Jim

  Bell, Stuart

  Cryer, Bob

  Benn, Rt Hon Tony

  Cummings, John

  Bennett, Andrew F.

  Cunliffe, Lawrence

  Benton, Joe

  Cunningham, Jim (Covy SE)

  Bermingham, Gerald

  Cunningham, Rt Hon Dr John

  Berry, Dr. Roger

  Dalyell, Tam

  Betts, Clive

  Darling, Alistair

  Blair, Tony

  Davidson, Ian

  Boateng, Paul

  Davies, Bryan (Oldham C'tral)

  Boyce, Jimmy

  Davies, Rt Hon Denzil (Llanelli)

  Boyes, Roland

  Davies, Ron (Caerphilly)

  Bradley, Keith

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

  Brown, Gordon (Dunfermline E)

  Denham, John

  Brown, N. (N'c'tle upon Tyne E)

  Dewar, Donald

  Bruce, Malcolm (Gordon)

  Dixon, Don

  Burden, Richard

  Dobson, Frank

  Byers, Stephen

  Donohoe, Brian H.

  Caborn, Richard

  Dowd, Jim

  Callaghan, Jim

  Dunnachie, Jimmy

  Campbell, Mrs Anne (C'bridge)

  Dunwoody, Mrs Gwyneth

  Campbell, Menzies (Fife NE)

  Eagle, Ms Angela

  Campbell, Ronnie (Blyth V)

  Eastham, Ken

  Campbell-Savours, D. N.

  Enright, Derek

  Canavan, Dennis

  Etherington, Bill

  823

  Evans, John (St Helens N)

  Jones, Martyn (Clwyd, SW)

  Ewing, Mrs Margaret

  Jowell, Tessa

  Fatchett, Derek

  Kaufman, Rt Hon Gerald

  Field, Frank (Birkenhead)

  Keen, Alan

  Fisher, Mark

  Kennedy, Charles (Ross, C&S)

  Flynn, Paul

  Kennedy, Jane (Lpool Brdgn)

  Foster, Rt Hon Derek

  Khabra, Piara S.

  Foulkes, George

  Kilfoyle, Peter

  Fraser, John

  Kinnock, Rt Hon Neil (Islwyn)

  Fyfe, Maria

  Kirkwood, Archy

  Galbraith, Sam

  Leighton, Ron

  Galloway, George

  Lestor, Joan (Eccles)

  Gapes, Mike

  Lewis, Terry

  Garrett, John

  Litherland, Robert

  George, Bruce

  Livingstone, Ken

  Gerrard, Neil

  Lloyd, Tony (Stretford)

  Godman, Dr Norman A.

  Llwyd, Elfyn

  Godsiff, Roger

  Loyden, Eddie

  Gould, Bryan

  Lynne, Ms Liz

  Griffiths, Win (Bridgend)

  McAllion, John

  Grocott, Bruce

  McAvoy, Thomas

  Gunnell, John

  McCartney, Ian

  Hain, Peter

  Macdonald, Calum

  Hall, Mike

  McFall, John

  Hanson, David

  McKelvey, William

  Hardy, Peter

  McLeish, Henry

  Harman, Ms Harriet

  Maclennan, Robert

  Hattersley, Rt Hon Roy

  McMaster, Gordon

  Henderson, Doug

  McNamara, Kevin

  Heppell, John

  McWilliam, John

  Hill, Keith (Streatham)

  Madden, Max

  Hinchliffe, David

  Mahon, Alice

  Hoey, Kate

  Marek, Dr John

  Hogg, Norman (Cumbernauld)

  Marshall, David (Shettleston)

  Home Robertson, John

  Marshall, Jim (Leicester, S)

  Hood, Jimmy

  Martin, Michael J. (Springburn)

  Hoon, Geoffrey

  Martlew, Eric

  Howarth, George (Knowsley N)

  Maxton, John

  Howells, Dr. Kim (Pontypridd)

  Meacher, Michael

  Hoyle, Doug

  Michael, Alun

  Hughes, Kevin (Doncaster N)

  Michie, Bill (Sheffield Heeley)

  Hughes, Robert (Aberdeen N)

  Milburn, Alan

  Hughes, Roy (Newport E)

  Miller, Andrew

  Hughes, Simon (Southwark)

  Mitchell, Austin (Gt Grimsby)

  Hutton, John

  Moonie, Dr Lewis

  Illsley, Eric

  Morgan, Rhodri

  Ingram, Adam

  Morley, Elliot

  Jackson, Glenda (H'stead)

  Morris, Rt Hon A. (Wy'nshawe)

  Jackson, Helen (Shef'ld, H)

  Morris, Estelle (B'ham Yardley)

  Jamieson, David

  Morris, Rt Hon J. (Aberavon)

  Janner, Greville

  Mowlam, Marjorie

  Johnston, Sir Russell

  Mudie, George

  Jones, Barry (Alyn and D'side)

  Mullin, Chris

  Jones, Lynne (B'ham S O)

  Murphy, Paul

  824

  Oakes, Rt Hon Gordon

  Smith, Andrew (Oxford E)

  O'Brien, Michael (N W'kshire)

  Smith, C. (Isl'ton S & F'sbury)

  O'Brien, William (Normanton)

  Smith, Rt Hon John (M'kl'ds E)

  O'Hara, Edward

  Smith, Llew (Blaenau Gwent)

  Olner, William

  Snape, Peter

  O'Neill, Martin

  Soley, Clive

  Orme, Rt Hon Stanley

  Spearing, Nigel

  Parry, Robert

  Spellar, John

  Pendry, Tom

  Steel, Rt Hon Sir David

  Pickthall, Colin

  Steinberg, Gerry

  Pike, Peter L.

  Stevenson, George

  Pope, Greg

  Stott, Roger

  Powell, Ray (Ogmore)

  Strang, Dr. Gavin

  Prentice, Ms Bridget (Lew'm E)

  Taylor, Mrs Ann (Dewsbury)

  Prentice, Gordon (Pendle)

  Taylor, Rt Hon John D. (Strgfd)

  Prescott, John

  Taylor, Matthew (Truro)

  Primarolo, Dawn

  Thompson, Jack (Wansbeck)

  Purchase, Ken

  Tipping, Paddy

  Quin, Ms Joyce

  Turner, Dennis

  Radice, Giles

  Tyler, Paul

  Randall, Stuart

  Vaz, Keith

  Rathbone, Tim

  Walker, Rt Hon Sir Harold

  Raynsford, Nick

  Walley, Joan

  Redmond, Martin

  Warden, Gareth (Gower)

  Reid, Dr John

  Wareing, Robert N

  Robertson, George (Hamilton)

  Watson, Mike

  Robinson, Geoffrey (Co'try NW)

  Welsh, Andrew

  Roche, Mrs. Barbara

  Wicks, Malcolm

  Rogers, Allan

  Wigley, Dafydd

  Rooker, Jeff

  Williams, Rt Hon Alan (Sw'n W)

  Rooney, Terry

  Williams, Alan W (Carmarthen)

  Ross, Ernie (Dundee W)

  Winnick, David

  Rowlands, Ted

  Worthington, Tony

  Ruddock, Joan

  Wray, Jimmy

  Salmond, Alex

  Wright, Dr Tony

  Sedgemore, Brian

  Young, David (Bolton SE)

  Sheerman, Barry

  Sheldon, Rt Hon Robert

  Tellers for the Noes:

  Short, Clare

  Mr. Jon Owen Jones and Mr. Alan Meale.

  Simpson, Alan

  Skinner, Dennis

  Question accordingly agreed to.
  Bill read a Second time.
  Ordered,
  That Clauses 42, 48, 52, 67, 115 and 183 be committed to a Committee of the whole House;
  That the remainder of the Bill be committed to a Standing Committee;
  That, when the provisions of the Bill considered, respectively, by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee.—[Mr. Dorrell.]

  Affordable Housing
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chapman.]
  10.20 pm
  Sir Fergus Montgomery: I am grateful for the opportunity to have an Adjournment debate. Usually when I have such debates, they come in the early hours of the morning, so I am pleased to have one at a civilised hour.
  I hope that my hon. Friend the Under-Secretary will take note of the points that I shall make. In a perfect world, we would not have a problem about affordable housing. If the housing stock of the country were shared out carefully—[Interruption.]
  Madam Speaker: Order. Could the door be closed? It is far too noisy and I cannot hear the hon. Gentleman.
  Sir Fergus Montgomery: Thank you, Madam Speaker.
  In a perfect world, we would not have a problem about affordable housing. However, problems such as the terrible increase in divorce, with the result that where one home sufficed now we need two, and the increase in the number of young people leaving home and gravitating to big cities have all led to an increase in housing problems.
  Housing associations are now the main providers of new homes for people with low incomes. I have to declare an interest, as my wife is chairman of a housing association and a member of the Housing Corporation. It might be better if she were making the speech tonight instead of me, because she knows a great deal more about housing than I do. Some would say that she knows a great deal more about everything than I do, but naturally I would not accept that.
  The purpose of the Adjournment debate is to highlight the concerns of housing associations over the proposed cuts in grant rates. As my hon. Friend the Minister knows, the Government provide an average of 72 per cent. of the capital cost of new housing association homes. That is due to drop to 67 per cent. in 1993–94, and the Government have announced the objective of reducing the levels of subsidy to an average—I underline "average"—60 per cent. in 1994–95 and down to an average of 55 per cent. in 1995–96.I emphasise the word "average" because it is an average for the country as a whole. In the north-west, where my constituency is, the figures would be 45 and 37 per cent. respectively.
  If those figures materialised, rents on new homes built with a 55 per cent. subsidy would, on average, be 7:5 per cent. higher than they were last year. To put that into simple language that people understand, it would mean that a rent of £48 now would rocket to £84 a week. If that happened, it would adversely affect tenants who were working but who would find it difficult to pay such an increase in rent.
  It is accepted that housing associations should be concentrating on housing for those in greatest need, which usually means the poorest families. Consequently, the high percentage of new tenants who are eligible for housing benefit is proof that housing associations are being successful in their target. However, there is concern about the cost to the Exchequer of housing benefit, and it is felt that maintaining housing association grants would reduce future housing association benefits.
  826
  My hon. Friend the Minister for Housing, who I acknowledge got an enormous amount for housing, and who is regarded as knowing more about housing than just about any other hon. Member, gave a lecture on 4 March in which he emphasised benefit tapers and work incentives. The combination of withdrawal rates for housing benefit, family credit and community charge benefits means that households in benefit need to earn about £25 a week more just to have £1 a week in disposable income. That is a horrifying figure.
  The rent levels that housing associations are increasingly having to charge their tenants, especially those with children, require a higher income than the majority could ever earn to escape the severe effect of the tapers. I am told that, at current rent levels, 46 per cent. of working tenant couples with three children would need to earn £100 a week more in order to escape. At the same time, the poorest people are being put in the newest social housing at rents that make it even more difficult for them to get out of the poverty trap and to better themselves.
  If the proposed cuts in housing association grants are implemented, working households would face massive rent increases. On average, in the year 1996, that group will spend 39 per cent. of their income on rent, compared with 29 per cent. last year. The percentage of new working tenants spending more than one third of their income on rent would rise from 27 per cent. last year to a massive 76 per cent. in 1996.If that happens, could the new rents to be charged be considered to be even remotely affordable?
  There is also the question of housing benefit. I am glad to see my hon. Friend the Member for Bury, North (Mr. Burt)—the Under-Secretary of State for Social Security—in the Chamber, as I am glad that he is taking an interest in this matter. The National Federation of Housing Associations estimates that, if the average grant rate goes down to 55 per cent. in 1995–96, 89 per cent. of all new housing association tenants moving into new homes will be on housing benefit.
  The federation makes three valid points. The first is that the percentage of all working households dependent on housing benefits would rise from 47 per cent. last year to 66 per cent. in 1996.Secondly, on average that group would qualify for just over £30 in weekly housing benefit in 1996, compared with just over £13 last year. Thirdly, the weekly income that that group would need to earn to escape any dependency on housing benefit would rise from £160 in 1992 to £224 in 1996.We come to the crunch question—in those circumstances, would it be worth new tenants having a job? I would have thought that the Government would want to encourage people to work, rather than have them stay in the benefits system.
  Housing benefit is a complicated business. An article in the Financial Times on 21 April suggested that there were rumours that housing benefit may be the focus of attempts to make savings in the social security budget. One estimate was given of savings resulting from a steepening of the taper in the rate at which housing benefit is withdrawn as income increases, from the present 65 per cent. to 80 per cent. That would increase the maximum marginal deduction rate to 100 per cent. As a consequence, thousands more people would find themselves in a crippling poverty trap.
  I shall give an example. If that happened, a single person who had a £1 increase in gross income would find that, with income tax of 25p, national insurance of 9p,

  827
  housing benefit on an 80 per cent. taper of 53p, and council tax on a 20 per cent. taper of 13p, the total withdrawn from each additional £1 would be £1.That is a 100 per cent. marginal deduction rate. The person would lose all his pay increase through taxes and loss of benefit. The same would be true for families. That would severely affect work incentives.
  There are other examples. A single person earning £120 a week would find that he had a weekly disposable income of less than £50. A single person earning £180 a week, with a net income of £139·28, paying £40 a week rent, council tax of £280 a year—about £5 a week—and travel expenses of £5 a week, would be left with a weekly disposable income of £89·28.
  Compare that with the single person receiving £44 income support, £40 housing benefit, and £5 council tax benefit, totalling £89 per week. A single person would have to find a job paying at least £180 before he or she was even a few pennies better off in work than out of it. I cannot believe that we should be encouraging that sort of thing.
  Under the capital rule, anyone with capital of £16,000 is disqualified from housing benefit. Capital below £3,000 is disregarded. With capital between £3,000 and £16,000, a notional amount of interest is assumed at the rate of £1 per week for every £250 of capital. I only wish that I could find some way of enjoying that sort of return from my savings. In fairness, that rate of tariff income is too high and is a disincentive to saving. I hope that also will be examined. It would be fairer to assume a tariff income of 50p per week for every £250 of capital.
  I hope that the Minister can give some assurance to housing associations throughout the country, because they are extremely worried about the proposed reductions in grant aid. Affordable housing must be provided for the poorest people in this country, and we must ensure that the housing benefit system does not militate against those who want to work and to help themselves, and that we do not penalise the elderly who have been thrifty during their working lives.
  The reduced grant rate objectives will have four main effects. They will worsen affordability problems; increase housing benefit dependency and reinforce the poverty trap; make housing association revenue streams increasingly dependent on housing benefit—making them, in the view of private investors, a political risk and diminish their quality; and create difficulty in raising private finance because of the adverse impact on loan security for private investors.
  I therefore hope that the Minister will heed the warnings from housing associations throughout the country.
  10.32 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): I am grateful to my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) for raising the important subject of affordable housing, which is one that we take seriously—as evidenced by the presence on the Government Front Bench of my hon. Friends the Minister for Housing and Planning and the Under-Secretary of State for Social Security, who has responsibility for housing benefit.
  828
  My hon. Friend the Member for Altrincham and Sale has always taken a close interest in housing policy and as he pointed out, his wife, Lady Montgomery, is chairman of the Manchester and district housing association and a distinguished member of the Housing Corporation. Her work is much appreciated.
  Our aim is that a decent home should be within reach of every family. That commitment means using public money to best effect, which in turns means extracting the best value from every pound spent and making maximum use of private finance levered in to support public spending.
  Most people prefer to own their own homes. We have expanded home ownership from 56 per cent. in 1979 to 69 per cent. today—from half to well over two thirds during the lifetime of this Government. The right to buy for council tenants, our rents to mortgages proposals, cash incentive schemes to enable council tenants to move out into owner-occupation and shared ownership schemes are all important parts of our commitment to empower those who want to own their own homes to become home owners.
  With mortgage rates at their lowest for 25 years, some impressive fixed-rate mortgage deals on offer and better and better economic news, now is an excellent time for those thinking about buying their own home to do so. The evidence of increased mortgage lending suggests that people are doing exactly that.
  Of course, not every household will want or be able to afford owner-occupation. We must therefore ensure that sufficient good-quality rented accommodation is available. In the private sector, we have ended 75 years of restrictive legislation that had almost killed the private rented sector, to which most people used to look first for housing. There is now evidence of an increase in the number of private lettings. We are determined to continue to reinforce a well run, well managed private rented sector to help meet the need for housing.
  Many people will rightly continue to be housed by local authorities. Here we are making a gradual shift from across-the-board rent subsidies—which went indiscriminately to all tenants, whether they needed help or not—towards targeted, income-related assistance to those who genuinely need the most financial help. This means that, when tenants can afford to pay more towards their housing costs, they do so. Tenants who cannot meet the full cost of the rents will receive means-related help through housing benefit. It must be right to move subsidy away from buildings—away from bricks and mortar—towards the people who live in those buildings, and who really need the subsidy.
  As enablers, local authorities are responsible for developing the housing strategies for their areas, in partnerships with a wide range of groups—in particular, housing associations. Local authorities are responsible for the efficient management of their own housing stock, and for ensuring the provision of accommodation for the statutory homeless. However—as my hon. Friend made clear—local authorities are no longer the main suppliers of new social housing for rent; that role has been taken on by housing associations.
  Housing associations can attract private investment to supplement public spending, and are thus able to build more houses for rent. Over the past five years, public spending on housing association grant has been supplemented by more than £2 billion of private-sector

  829
  finance—a substantial gain to housing output at a time of public spending restraint. That private finance has made possible a great deal of additional investment in social housing.
  Housing association properties have always been intended for those on limited incomes who cannot afford owner-occupation or the alternatives offered in the private rented sector. It is therefore not surprising that many housing association tenants receive housing benefit. We must remember that housing benefit goes a considerable way up the income scale. The fact that a substantial number of new tenants receive benefit demonstrates that new social housing is going to those in greatest need; but diversity in lettings has always been important, and our latest figures show that more than a quarter of new housing association lettings were made to tenants who are not on housing benefit.
  My hon. Friend posed the important question, "Is it worth while for people on housing benefit to have jobs? Should we not encourage people to work rather than to depend on benefits?" I think I quote my hon. Friend reasonably accurately. I entirely agree that getting people off benefit and into employment is vital for the economy and vital for individual prosperity. Our housing benefit taper policy helps to ensure that anyone with income above income support levels will be better off in work. With the taper set at 65 per cent., no tenant, having paid his rent, will be left with an amount to live on that is lower than the appropriate income support level.
  The steep taper is essential to ensure that maximum help is directed at those who most need it. At the same time, it keeps the overall cost and scope of the scheme under control. To reduce the taper to 50 per cent. would have a very substantial annual cost of no less than £340 million. I believe that our view of this issue is understandably coloured at present by the impact of the recession. We need to look beyond that to the future. As the economic cycle turns, more jobs will be created and more people will be able to get jobs to enable them to come right out of the housing benefit system, and keep a dramatically higher percentage of their income.
  But people on low incomes need to know that provision is being made for them in the housing market. Our manifesto promised 153,000 new homes to rent over a period of three years. We will do much better than that. The Housing Corporation estimates that around 80,000 new homes have been provided by Housing Associations, backed by corporation and local authority housing association grant, in 1992–93 alone—nearly three times the output of the previous year.
  As I have already made clear, private sector finance is important to ensure that public spending provides as many decent new homes for families as possible. Private finance enables a third more homes to be built with the available public money than would otherwise be the case. Therefore, we have to strike a balance between rent levels and the number of homes provided. If we provide Housing Association subsidy at a higher level, we must forgo extra output, and that means leaving families in bed and breakfast, or other unsatisfactory accommodation.
  The key point—it is a straightforward one—in the debate is that housing associations this year, despite
  830
  reductions in housing association grants, have bid by a factor of more than four and a half times for the number of schemes that can be supported by the resources available. In other words, housing associations, knowing what the grant level for this year is, have notwithstanding bid by a factor of more than a four and a half times for the number of schemes that can be supported. That clearly suggests that, whatever concerns housing associations may express in public, they have considerable confidence in their ability to make use of their resources available at lower grant rates and to achieve higher outputs.
  We have made it clear that our objective is to increase the proportion of private finance input to new schemes in the future by reducing grant rates to 60 per cent. in 1994–95, but we have also always made it clear that final decisions will be taken only when we have assessed the likely impact on the ability of housing associations to raise the private finance necessary. The advice of the Housing Corporation on this matter will obviously be listened to with very great care.
  But whatever the level of capital spending, we shall inevitably have to choose between the number of houses that we can build and the level of rents that are to be charged. Public investment in housing must be concerned with tackling housing need, and that means seeking as far as possible to help those in greatest need.
  Last year saw the first year-on-year reduction in families being accepted as homeless by local authorities. As new homes are made available through the housing market package, the figures should continue to improve. The housing market package—announced in my right hon. Friend the Chancellor of the Exchequer's autumn statement—has meant that around 18,000 homes for rent will be made available in England. The 80 housing associations involved deserve great credit for their achievement. Purchases have been made right across the country, in almost all local authority areas, making a vital contribution to meeting local housing needs.
  However, the families who may still be in unsatisfactory temporary accommodation and who need a home of their own will not thank us if we allow concern for existing tenants who are already well housed and who can afford to pay a little more towards the cost of their housing to be put ahead of the needs of those needing new homes.
  I hope that I can reassure my hon. Friend that, although our objective is to increase the proportion of private finance input into new schemes because we want every pound of public money to go as far as possible in ensuring the highest possible output of new homes, I continue to make it clear that final decisions housing association grant rates will be taken only when we have assessed the likely impact on housing associations' ability to raise the necessary private finance. We are determined that housing associations shall play their full part in ensuring the greatest possible number of new homes to let, because we are committed to ensuring that a decent home is within the reach of every family.
  Question put and agreed to.
  Adjourned accordingly at fifteen minutes to Eleven o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Mental Incapacity
  Mr. Alex Carlile
  To ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has to review legislation concerning the withdrawal of money from a bank account by a relative or carer on behalf of a mentally incapacitated adult; and if he will make a statement.

  Mr. John M. Taylor
  The Law Commission is reviewing the law and procedures relating to decision making on behalf of mentally incapacitated adults. The commission's initial consultation in 1991 produced a large number of responses in the light of which the commission decided to embark on a second round of separate consultations on particular topics before publishing final proposals. The commission has now published the first of three further consultation papers, "Mentally Incapacitated Adults and Decision-Making: A New Jurisdiction" (L.C.C.P. No. 128) which canvasses proposals for reform of the private law aspects, including financial decision making.

  Police Stations, Northern Ireland
  Mr. McNamara
  To ask the Parliamentary Secretary, Lord Chancellor's Department, pursuant to his answer of 19 April,Official Report, column 28, if he will place in the Library the results of the survey carried out by the Northern Ireland court service into advice at police stations.

  Mr. John M. Taylor
  The survey referred to is not in a form which could readily be placed in the Library. However, I will write to the hon. Member enclosing a summary of the results of the survey for his information. The hon. Member will already have received some of this information in the answer provided to his earlier question on 21 April 1993,Official Report, column 93.

  Boundary Commission for Wales
  Dr. Kim Howells
  To ask the Parliamentary Secretary, Lord Chancellor's Department when he intends to appoint a deputy chairman for the Parliamentary Boundary Commission for Wales.

  Mr. John M. Taylor
  I refer the hon. Gentleman to the answer I gave to the hon. Member for Neath (Mr. Hain) on 20 April,Official Report, column 45.

  Lease Law
  Dr. Spink
  To ask the Parliamentary Secretary, Lord Chancellor's Department what progress has been made on reform of lease law; and if he will make a statement.

  Mr. John M. Taylor
  I refer the hon. Member to the answer given on 31 March by myself to my hon. Friend the 260
  Member for High Peak (Mr. Hendry), Official Report, column 197, and to the answer given on the same date by my hon. Friend the Minister for Housing and Planning to my hon. Friend the Member for Bromsgrove (Mr. Thomason), Official Report, columns 293–94.

PRIME MINISTER

  Energy Bills (Pensioners)
  Mr. McNamara
  To ask the Prime Minister if he will publish the reply he has sent to the letter of Mr. E. B. Glover QC, on the subject of the effect of VAT on energy bills for pensioners.

  The Prime Minister
  [holding answer 14 April 1993]:A reply has been sent on my behalf by the Department of Social Security. It is not my normal practice to publish correspondence, but it explains that the annual uprating of benefits will in due course reflect the increases in fuel bills; that we will be making available extra help to people on income support and income-related benefits which we will announce in the autumn and which will be paid from April 1994 before the bills have to be paid; and that the Government are not taking back the extra help they gave to pensioners on income support to assist them in paying the community charge, even though the community charge has now been abolished.

ATTORNEY-GENERAL

  Scott Inquiry
  Mr. Winnick
  To ask the Attorney-General what evidence the Law Officers have submitted to the Scott inquiry on exports to Iraq.

  The Attorney-General
  My Department has provided Lord Justice Scott with copies of all documents relevant to the range of issues which he has identified.

  Phoenix Companies
  Mrs. Gorman
  To ask the Attorney-General how many prosecutions in 1992–93 the Serious Fraud Office has launched in relation to possible offences involving the use of phoenix companies.

  The Solicitor-General
  None. Such cases are more likely to be handled by other prosecuting authorities.

  Crown Prosecution Service (Recruitment)
  Mr. Whittingdale
  To ask the Attorney-General if he will make a statement about the recruiting policy of the Crown Prosecution Service.

  The Solicitor-General
  The Crown Prosecution Service continues to recruit on merit in open competition high-quality applicants for a comparatively small number of vacancies for lawyers.

  Serious Fraud (Prosecutions)
  Mr. Flynn
  To ask the Attorney-General what was the success rate in prosecutions by the Serious Fraud Office which were concluded within the last six months.

  The Attorney-General
  Eleven Crown court trials involving 22 defendants have been concluded since 1
  261
  October 1992. Seventeen defendants have been convicted and two acquitted and three were discharged without the jury having to return a verdict. In one further trial in the magistrates court the defendant was acquitted. This decision is the subject of appeal to the divisional court.

HOME DEPARTMENT

  Escaped Prisoners
  Mr. Tipping
  To ask the Secretary of State for the Home Department if he will detail, by category of prisoner, the number of prisoners who escaped while under prison escort for the last five years for which figures are available.

  1988

  1989

  1990

  1991

  1992

  Category 'A' Adult Male

  —

  —

  —

  1

  —

  Category 'B' Adult Male

  13

  13

  33

  19

  28

  Category 'C Adult Male

  5

  18

  25

  31

  38

  Unsentenced Adult Male

  29

  39

  26

  54

  43

  Sentenced Young Offender Male

  4

  8

  14

  9

  9

  Unsentenced Young Offender Male

  8

  35

  16

  25

  25

  Sentenced Female

  2

  1

  1

  5

  4

  Unsentenced Female

  —

  4

  4

  —

  —

  Total

  61

  118

  119

  144

  147

  The information relates to those prisoners who escaped whilst under prison escort between 20 June 1988 and 31 December 1992. Information was not collated centrally prior to June 1988. The information is derived from incidents reported to the Incident Management Support Unit, a part of the Directorate of Custody.

  Mr. Tipping
  To ask the Secretary of State for the Home Department if he will detail, by category of prisoner, the number of prisoners who escaped while under prison escort during the months of April 1990, April 1991 and April 1992.

  Mr. Peter Lloyd
  Responsibility for this matter has been delegated to the director general, who has been asked to arrange a reply.

  Letter from Derek Lewis to Mr. Paddy Tipping, dated 26 April 1993:
  The Home Secretary has asked me to write to you in response to your Parliamentary Question asking, by category of prisoner, the number of prisoners who escaped whilst under prison escort during the months of April 1990, April 1991 and April 1992.

  The information is as follows:—

  April 1990

  April 1991

  April 1992

  Category "B" adult male

  5

  3

  1

  Category "C" adult male

  1

  4

  2

  Unsentenced adult male

  2

  4

  1

  Sentenced young offender

  3

  —

  —

  Unsentenced young offender

  2

  6

  2

  Sentenced female

  —

  —

  2

  Unsentenced female

  —

  1

  1

  Total

  13

  18

  9

  The above information is derived from incidents reported to the Incident Management Support Unit, a part of the Directorate of Custody.
  262
  Mr. Peter Lloyd
  Responsibility for this matter has been delegated to the director general of the Prison Service who has been asked to arrange a reply.

  Letter from Derek Lewis to Mr. Paddy Tipping, dated 26 April 1993:
  The Home Secretary has asked me to reply to your Parliamentary Question asking, by category of prisoner, the number of prisoners who escaped whilst under prison escort for the past five years for which figures are available.

  The information you requested is as follows:

  Prisons
  Mr. Mackinlay
  To ask the Secretary of State for the Home Department (1) to what extent prisons provide non-smoking recreation and eating areas; and if he will make a statement;

  (2) whether prisoners who do not smoke are required to share cells with those who do;

  (3) what action his Department has taken to reduce the amount of tobacco smoking by prisoners in Her Majesty's prisons.

  Mr. Peter Lloyd
  Responsibility for this matter has been delegated to the director general of the Prison Service, who has been asked to arrange for a reply.

  Letter from Derek Lewis to Mr. Mackinlay dated 22 April 1993:
  The Home Secretary has asked me to reply to the three Parliamentary Questions on this subject which you tabled for written answer on Wednesday 21 April.
  Prison Standing Orders require governors to arrange as far as is practicable for non-smokers not to be compelled to share living accommodation with smokers, and for non-smoking areas to be available in visiting accommodation and association rooms as long as this does not reduce access to these areas. Smoking is prohibited in areas where food is being prepared or served. Practice in dining areas is a matter for individual governors.
  We acknowledge the importance of measures to encourage prisoners who smoke to break the habit and this is reflected in our corporate plan. Medical advice is available in all prisons and structured health education and counselling facilities are increasingly being provided. A new health care standard for clinical and related health promotion services will be introduced later this year which will provide a further stimulus to the promotion of healthier lifestyles. We are also planning a number of pilot projects to develop models for co-ordinated health promotion programmes. I would expect measures to reduce smoking to feature in these.

  Angling
  Mr. John Greenway
  To ask the Secretary of State for the Home Department what studies his Department has made or plans to undertake about the policing difficulties arising in connection with the protection of anglers taking part in official and legitimate angling competitions from disruption from anti-angling demonstrations; and if he will make a statement.

  Mr. Charles Wardle
  The policing of any event is an operational matter for chief officers.

  Wheel Clamping
  Mr. Callaghan
  To ask the Secretary of State for the Home Department how many representations he has received about wheel clamping from persons in the Rochdale metropolitan borough and in the Greater Manchester area.

  Mr. Jack
  Since 1 April 1992, the Home Office has received 10 letters from hon. Members representing constituencies in the Greater Manchester area concerning the use of wheel clamps on private land. In the same period, five members of the public living in that area have written direct to this office on the same issue. Since the publication of the Home Office consultation paper on 23 February this year, we have received three requests for that document from individuals living in the Greater Manchester area.

  Wheel clamping on the public highway currently takes place only in London, and we are not aware of any representations from people in Greater Manchester on that issue.

  Mr. Parry
  To ask the Secretary of State for the Home Department what recent representations he has received from hon. Members regarding wheel clamping on cars; and if he will make a statement.

  Mr. Jack
  In the 12 months up to 31 March this year, I received 117 letters from hon. Members in relation to

  Reported racial incidents

  Forces

  1988

  1989

  1990

  1991

  1992

  Avon and Somerset

  57

  71

  83

  148

  98

  Bedfordshire

  21

  25

  33

  n/a

  57

  Cambridge

  52

  60

  71

  107

  110

  Cheshire

  0

  0

  0

  3

  29

  City of London

  4

  0

  0

  0

  0

  Cleveland

  29

  55

  57

  68

  73

  Cumbria

  0

  4

  1

  9

  13

  Derbyshire

  17

  20

  53

  143

  60

  Devon and Cornwall

  2

  3

  6

  9

  7

  Dorset

  6

  12

  3

  9

  10

  Durham

  43

  23

  41

  70

  40

  Dyfed Powys

  0

  0

  0

  0

  0

  Essex

  2

  26

  43

  59

  80

  Gloucestershire

  17

  20

  51

  25

  33

  Greater Manchester

  28

  40

  123

  204

  401

  Gwent

  1

  4

  5

  12

  31

  Hampshire

  45

  n/a

  42

  141

  139

  Hertfordshire

  49

  49

  51

  n/a

  106

  Humberside

  49

  52

  67

  81

  68

  Kent

  88

  81

  88

  120

  115

  Lancashire

  75

  93

  201

  119

  231

  Leicestershire

  84

  190

  287

  369

  338

  Lincolnshire

  1

  2

  2

  4

  5

  Merseyside

  136

  123

  144

  162

  134

  Norfolk

  8

  22

  23

  45

  30

  North Wales

  3

  1

  0

  3

  4

  North Yorkshire

  5

  6

  12

  20

  22

  264
  wheel clamping. One hundred and twelve of these concerned clamping on private land, the others related to clamping on public roads.

  A Home Office consultation paper concerning wheel clamping on private land was published on 23 February this year and sent to all hon. Members. The closing date for comments is 31 May.

  Cults
  Mr. Dickens
  To ask the Secretary of State for the Home Department if he will consider setting up a working party to conduct a study of the recruitment methods used by secret cults in the United Kingdom and to advise if legislation would be appropriate.

  Mr. Jack
  The Government do not plan to set up such a working party. Nor do the Government consider it appropriate to legislate specifically in this area. The existing criminal law is adequate to deal with any offences committed by members of a new religious movement or sect.

  Racial Assaults
  Mr. Gerrard
  To ask the Secretary of State for the Home Department (1) in how many cases brought to court during the last year of assault involving racial motivation the defendants were juveniles;

  (2) what information his Department has as to the numbers of reported or recorded racial attacks for the latest three years (a) in the United Kingdom and (b) in London; and in how many of these cases a conviction was obtained;

  (3) in how many cases brought to court during the last year involving racial motivation the defendants were granted bail; and how many of these were cases of murder.

  Mr. Jack
  The only information held centrally relates to the number of reported racial incidents in England and Wales and is given in the table.
  265

  Forces

  1988

  1989

  1990

  1991

  1992

  Northamptonshire

  n/a

  72

  66

  60

  120

  Northumbria

  242

  217

  289

  376

  349

  Nottinghamshire

  4

  27

  135

  221

  222

  South Wales

  86

  94

  308

  385

  311

  South Yorkshire

  n/a

  52

  117

  124

  151

  Staffordshire

  15

  44

  101

  158

  95

  Suffolk

  46

  62

  74

  75

  55

  Surrey

  13

  7

  7

  50

  61

  Sussex

  15

  141

  92

  98

  98

  Thames Valley

  94

  128

  171

  201

  195

  Warwickshire

  27

  21

  44

  32

  35

  West Mercia

  0

  6

  13

  3

  19

  West Midlands

  382

  169

  268

  445

  379

  West Yorkshire

  386

  306

  254

  322

  218

  Wiltshire

  37

  19

  25

  29

  24

  Provincial total

  2,169

  2,347

  3,451

  4,509

  4,566

  Metropolitan police

  2,214

  2,697

  2,908

  3,373

  3,227

  England and Wales total

  4,383

  5,044

  6,359

  7,882

  7,793

OVERSEAS DEVELOPMENT

  Soviet Union
  Mr. Clifton-Brown
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will increase the proportion of the Overseas Development Administration's budget devoted to the problems currently being experienced in the former Soviet Union; what criteria he uses to allocate priorities between different parts of the world; and if the will make a statement.

  Mr. Lennox-Boyd
  We provide substantial assistance to the former Soviet Union and recently announced the doubling of our bilateral aid for Russia.

  Baltic States
  Mr. Flynn
  To ask the Secretary of State for Foreign and Commonwealth Affairs what new proposals he has to extend the scope of the know-how fund in the Baltic states.

  Mr. Lennox-Boyd
  The know-how fund is considering new proposals which will benefit the agriculture, finance and small business and energy sectors and promote good government.

  Nagorno-Karabakh
  Mr. Pickthall
  To ask the Secretary of State for Foreign and Commonwealth Affairs what role his Department is playing in helping the Azeris of Nagorno-Karabakh.

  Mr. Lennox-Boyd
  It is not possible to identify assistance specifically provided to the Azeris of Nagorno-Karabakh. However, since December 1992 the ODA has provided £750,000 in response to appeals by the International Committee of the Red Cross and the UN High Commissioner for Refugees. Through these organisations we have provided relief assistance to both Azeris and Armenians displaced by the conflict whether they be in Azerbaijan, Armenia or Norgorno-Karabakh itself.

  Food Aid
  Mr. Harry Greenway
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many people are estimated now to be receiving British food relief on a regular basis; and if he will make a statement.

  Mr. Lennox-Boyd
  Most United Kingdom food aid is for relief purposes and is not targeted to any group of people on a regular basis. In 1992–93 the United Kingdom supplied over 244,000 tonnes of food aid to developing countries, in addition to paying for our share of European Community food aid. This would in theory be enough to provide around 1·4 million people with their basic needs for a year. But in practice no single group is wholly dependent on food aid from the United Kingdom.

  Yugoslavia
  Lady Olga Maitland
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans there are to send humanitarian convoys to Goradze and Zepa in Bosnia.

  Mr. Lennox-Boyd
  The United Nations High Commissioner for Refugees (UNHCR), which co-ordinates the international relief effort to the former Yugoslavia, is making every effort to deliver relief supplies to Gorazde and Zepa. But over the last few months it has only been possible to reach these towns sporadically by road convoy because of the continuing hostilities. The United Kingdom has contributed 58 vehicles plus support staff to UNHCR's road convoys.

  However, supplies are presently being airdropped to Gorazde, Srebrenica and Zepa. The United Kingdom has provided almost £600,000 of food for the air drops.

EDUCATION

  Environmental Studies
  Mr. Hinchliffe
  To ask the Secretary of State for Education (1) what plans he has to introduce environmental studies into the national curriculum;

  (2) what initiatives promoting environmental awareness in schools his Department supports; and what funding is available for these initiatives.
  267
  Mr. Forth
  All pupils receive education about the environment through the national curriculum core and foundation subjects, the terms of which are set out in the statutory orders and associated documents issued by the Department. The Government will support £85 million of local education authority expenditure on the basic curriculum and assessment in 1993–94 which will be mainly devolved to schools to spend either on training or on books and equipment; and a further £25 million on training to enhance primary teachers' knowledge in specific subjects, including geography which has particular relevance to environmental education.

  Tests
  Mr. David Porter
  To ask the Secretary of State for Education what rights under statute and remedy against failure parents of children at each of the key stages have to see that their children are tested this term; and if he will make a statement.

  Mr. Forth
  Section 10 of the Education Reform Act 1988 imposes a duty on head teachers of maintained schools to secure the implementation of the national curriculum, including the assessment arrangements at the end of the key stages. Local education authorities and governing bodies are under a corresponding duty to exercise their functions so as to secure its implementation.

  Teachers' conditions of employment require them to assess, record and report on the development, progress and attainment of pupils, under the reasonable direction of the head teacher, and having regard to the curriculum for the school.

  Parents who believe that LEAs or governing bodies are failing to discharge a statutory duty associated with the national curriculum should in the first instance complain through the local complaints machinery, provided for in section 23 of the Education Reform Act. If their complaint is not satisfactorily dealt with, they may then complain to the Secretary of State who may give directions to the LEA or governing body concerned, under section 99 of the Education Act 1944, if he considers this is appropriate.

  Special Educational Needs
  Mr. Keith Hill
  To ask the Secretary of State for Education (1) what action he is taking to ensure that children's special educational needs are being identified and met at the earliest possible stage;

  (2) what action he is taking to improve the information and support available to parents during the full assessment and drawing up of statements on children with special educational needs.

  Mr. Forth
  The Education Bill, currently before Parliament, provides for the Secretary of State to issue a code of practice which will give practical guidance to which LEAs must have regard when fulfilling their duties towards children with SEN. The Government have tabled amendments in another place, which, if accepted, would ensure that the code applied to all LEA maintained and self-governing (GM) schools and offered those schools guidance on early action to identify, assess and monitor pupils with special educational needs. The Government envisage one of the guiding principles of the code will be that it should promote partnership between LEAs and parents, not least by ensuring that parents are kept fully informed of the authority's thinking and the reasons 268
  behind an authority's decisions at all stages of the process of making assessments and statements. The guidance will be tightly defined to ensure that all children who need an assessment and subsequently a statement are properly safeguarded and will ensure that full parental involvement is encouraged at all stages.

NORTHERN IRELAND

  Road Schemes
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what assessment has been made of the costs and benefits of(a) the Comber bypass, (b) the Balloo road stage 3 Bangor, (c) the A5 Burndenneth, (d) the Ann street/Thomas street, Dungannon, (e) the A5 Magheramason, (f) the A5 Leckpatrick, (g) the Antrim-Ballymena stage 2, (h) the Greenmount link, Coleraine, (i) the Omagh throughpass stage 2, (j) the Belfast urban area plan roads (95/96) and (k) the Belfast urban area plan roads (96/97) road schemes.

  Mr. Atkins
  Economic and environmental assessments of these road improvement schemes have been undertaken. The assessments showed that each scheme was good value for money.

  House Conversion, Donaghadee
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland on what date Donaghadee urban district council, as planning authority, gave planning permission for the conversion of Warren house, Warren avenue, Donaghadee, into two flats.

  Mr. Atkins
  The Department does not have records of the planning decisions made by Donaghadee urban district council.

  Rates
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland what is the outstanding demand for rates unpaid in due time; and what steps are being taken for this collection.

  Mr. Atkins
  Responsibility for rate collection has been delegated to the Rate Collection Agency under its chief executive, Mr. D. Gallagher. I have asked him to arrange for a reply to be given.

  Letter from D. W. Gallagher to Mr. Peter Robinson dated 26 April 1993:
  You recently asked a Parliamentary Question about overdue outstanding rates and the steps that are taken to collect them. As I am responsible for the Rate Collection Agency the Secretary of State has asked me to reply.
  Overdue outstanding rates in Northern Ireland at 31 March 1993 amounted to £6·71 million or 1·84 per cent. of a total collectable rate of £364·97 million. At 31 March 1992 overdue outstanding rates were £7·24 million or 1·99 per cent. of a total collectable rate of £364·8 million.
  If rates are not paid on time by one of the prescribed payment methods a ratepayer will be sent a Final Demand following which he/she will be issued with a summons (Process in Debt Proceedings) for the Magistrates Court where the Agency will seek a Decree for the amount outstanding. Ratepayers who remain unwilling or unable to discharge their debts then become liable to enforcement action by the Enforcement of Judgments Office or to further legal action under Insolvency Legislation.

  269
  Copies of the Rate Collection Agency's 1991/92 Annual Report have been placed in the House of Common's Library. This report contains statistical information about rate collection and recovery activity.
  Should you require further information please let me know.

  Terrorism
  Mr. McNamara
  To ask the Secretary of State for Northern Ireland whether he has sent copies of the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland" to the Northern Ireland Law Society and the Northern Ireland Bar Council.

  Mr. Mates
  I am not prepared to disclose to whom copies of this confidential consultative paper have been sent.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland whether the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland" has been discussed by the Anglo-Irish secretariat.

  Mr. Mates
  I am not prepared to disclose with whom the Government have had discussions about this confidential consultative paper.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if he will list those organisations which received copies of the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland", indicating the date which they were dispatched and the date and from whom responses were received.

  Mr. Mates
  No.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if he will now forward to the Standing Advisory Commission on Human Rights, NIACRA, the constitutional political parties in Northern Ireland and parties represented in this House, copies of the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland".

  Mr. Mates
  I will consider requests for copies from individuals and organisations as they arise.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland why the Standing Advisory Commission on Human Rights was not sent a copy of the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland".

  Mr. Mates
  I am not prepared to disclose whether or not a particular individual or organisation received a copy of the confidential consultative paper.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if he will place copies of the consultation paper "Terrorist Exploitation of the Construction Industry in Northern Ireland" in all the public libraries in Northern Ireland.

  Mr. Mates
  No.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland if he will extend the period for responses to the consultation paper "Terrorist Exploitation of the 270
  Construction Industry in Northern Ireland" until 30 June to enable those bodies and persons previously unaware of the paper to make responses.

  Mr. Mates
  I will be grateful to receive responses at any time.

  Mr. McNamara
  To ask the Secretary of State for Northern Ireland when he expects to introduce legislation based on his proposals contained in the consultative paper "Terrorist Exploitation of the Construction Industry in Northern Ireland" and the responses to it.

  Mr. Mates
  Our ideas are at a formative stage, and it would be premature to announce our intention to legislate or to establish a timetable for possible legislation.

  Cormorants
  Mr. A. Cecil Walker
  To ask the Secretary of State for Northern Ireland how many cormorants were killed under licence to prevent serious damage to fisheries in Northern Ireland in each year since 1985 and 1993 to date.

  Mr. Atkins
  The information is as follows:

  Cormorants recorded as being killed under licence

  Year

  Number

  1985

  5

  1986

  24

  1987

  99

  1988

  41

  1989

  36

  1990

  35

  1991

  87

  1992

  82

  1993

  1—

  1 Not yet available.

  Mr. A. Cecil Walker
  To ask the Secretary of State for Northern Ireland how many licences were(a) applied for and (b) issued, under section 18 of the Wildlife (Northern Ireland) Order 1985 to permit the killing of cormorants to prevent serious damage to fisheries in Northern Ireland for each year since 1985 and 1993.

  Mr. Atkins
  The information is as follows:

  Year

  Licences applied for

  Licences issued

  1985

  1

  1

  1986

  6

  6

  1987

  14

  14

  1988

  18

  15

  1989

  18

  18

  1990

  24

  20

  1991

  17

  17

  1992

  18

  18

  11993

  12

  11

  1 To 22 April.

  Rates
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland if he will publish a table to show the rateable value of(a) each parliamentary constituency in Northern Ireland, (b) each council area in Northern Ireland, (c) each district electoral area in each council area

  271
  and (d) each ward; and if he will indicate the rates due from each of the areas and the average sum due per elector in each such area or as much of such information as is conveniently available to him.

  Mr. Atkins
  Responsibility for the subject in question has been delegated to the Rates Collection Agency under its chief executive, Mr. David Gallagher.

  Letter from D. W. Gallagher to Mr. William Ross, dated 26 April 1993:
  As I am responsible for the Rate Collection Agency, the Secretary of State has asked me to reply to a Parliamentary

  District council

  Rateable value

  Gross collectable rate

  Number of electors1

  Average sum due per elector £

  Antrim

  13,086,494

  10,905,708

  30,958

  352

  Ards

  15,968,462

  12,620,098

  49,716

  254

  Armagh

  9,827,200

  7,901,448

  36,703

  215

  Ballymena

  14,165,158

  11,592,839

  42,640

  272

  Ballymoney

  4,777,996

  3,761,182

  17,865

  211

  Banbridge

  7,477,586

  5,946,285

  27,052

  220

  Belfast

  121,120,370

  108,778,912

  208,590

  521

  Carrickfergus

  9,510,523

  8,005,775

  25,124

  319

  Castlereagh

  14,062,542

  10,944,271

  47,998

  228

  Coleraine

  14,517,282

  11,619,154

  37,328

  311

  Cookstown

  5,393,031

  4,276,577

  21,813

  196

  Craigavon

  19,153,959

  16,036,148

  54,814

  293

  Downpatrick

  12,448,020

  10,053,421

  41,228

  244

  Dungannon

  7,930,857

  6,238,648

  32,669

  191

  Fermanagh

  10,293,054

  8,410,694

  39,608

  212

  Larne

  8,327,225

  7,152,082

  22,601

  316

  Limavady

  5,523,861

  4,442,493

  19,683

  226

  Lisburn

  23,603,567

  18,922,139

  70,664

  268

  Derry

  26,976,839

  22,307,967

  64,136

  348

  Magherafelt

  6,154,202

  4,833,848

  25,856

  187

  Moyle

  3,234,579

  2,483,773

  10,710

  232

  Newry

  16,080,018

  12,843,613

  57,339

  224

  Newtownabbey

  21,181,377

  17,892,255

  56,106

  319

  North Down

  19,738,968

  15,649,106

  55,057

  284

  Omagh

  9,299,768

  7,777,179

  31,404

  248

  Strabane

  6,060,584

  4,942,891

  25,542

  194

  Total

  425,913,522

  356,338,506

  1,153,204

  309

  1 Information provided by Electoral Office.

HEALTH

  Medicines (Licences)
  Ms Lynne
  To ask the Secretary of State for Health how many licences the Medicines Control Agency has(a) issued and (b) refused each year since April 1989; and how many licences have been issued each year since 1989' in response to applications from other EC countries.

  Dr. Mawhinney
  The figures shown in the table relate to product licences only for the three years up until March 1992. Figures from April 1992 to March 1993 are not yet available. Manufacturers' licences, wholesale dealer and parallel import product licences have been excluded. The numbers of refusals relate to formal refusals; in many cases, applicants chose to withdraw their applications rather than pursue them to a formal refusal. No separate records are maintained which would enable the Medicines Control Agency readily to identify product licence applications arising from other EC countries.272
  Question recently put down by you. This related to rateable value, rates due and the average sum due per elector in each parliamentary constituency, district council area, each district electoral area and each ward in Northern Ireland.
  Unfortunately all of the information you seek is not available. However I am able to provide statistics on a district council basis, and these are set out on the attached schedule.
  Rateable values and the number of electors, but not rates data can be provided on a ward basis. However rating due is at present being revised to reflect the outcome of the recent Local Government Boundaries Commission Review and this information will become available during July.
  I will write to you again at that time.

  Product licences issued

  Applications refused

  April 1989 to March 1990

  663

  3

  April 1990 to March 1991

  728

  0

  April 1991 to March 1992

  883

  5

  Mental Health
  Mr. David Atkinson
  To ask the Secretary of State for Health if she will make a statement on her Department's forthcoming survey on mental health.

  Mr. Yeo
  The Office of Population Censuses and Surveys is carrying out the first national survey to assess the extent of psychiatric morbidity in Great Britain. The survey, due to be completed in 1995, will provide information on the nature and extent of psychiatric illnesses among adults and will enquire into any associated social disabilities; the variation in the use of health, social and voluntary care services; and the risk factors associated with mental illness. The survey information will form a baseline against which changes in the health and social functioning of people with a mental illness can be
  273
  measured, thus providing a means of assessing progress towards achieving the targets set out in our White Paper, "The Health of the Nation" (Cm 1986).

  Dr. Lynne Jones
  To ask the Secretary of State for Health, pursuant to her answer of 5 February,Official Report, column 377–78, if she will give details of the ethnic origin of those detained under section 136 of the Mental Health Act 1983 during each year from 1984 to 1986 in the North West Thames, North East Thames, South East Thames and South West Thames areas; what assessment she has made of the extent of and the reasons for the discrepancy between such detentions in those areas compared with other regions; and if she will make a statement.

  Mr. Yeo
  This information is not available centrally.

  Hypnotherapists and Psychotherapists
  Dr. Lynne Jones
  To ask the Secretary of State for Health whether she will introduce regulations for the registration of hypnotherapists and psychotherapists.

  Mr. Sackville
  We have no such plans.

  Community Care
  Ms Lynne
  To ask the Secretary of State for Health what action she is taking to improve access to community care services for elderly people of Asian origin and other ethnic minorities.

  Mr. Yeo
  Responsibility for ensuring proper access to community care services for all groups rests with local authorities. To help local authorities do this the Department:

  (a) issued policy guidance about ensuring that assessment of community care needs is accessible to people from ethnic minority backgrounds and that services are appropriate (copies are available in the Library);

  (b) issued practice guidance on care management and assessment which draws specific attention to the needs of ethnic minority communities and is developing further practice guidance on ethnic minority issues (copies are available in the Library);

  (c) produced audio cassettes about community care in seven minority languages;

  (d) grant aids the race equality unit, which advises local authorities on good practice in the delivery of personal social services to people from minority groups.

  Psychologists
  Mr. Vaz
  To ask the Secretary of State for Health what representations she has received concerning the statutory registration of psychologists; and if she will make a statement.

  Dr. Hampson
  To ask the Secretary of State for Health what representations she has received concerning the statutory registration of psychologists; and if she will make a statement.

  Mr. Yeo
  We have received representations from the British Psychological Society and are considering whether psychologists employed by the national health service should be required to be chartered.

  Orthopaedics Units
  Mrs. Helen Jackson
  To ask the Secretary of State for Health how many small orthopaedic specialised hospital units have been closed in the past two years.
  274
  Mr. Sackville
  This information is not available centrally.

  Mrs. Helen Jackson
  To ask the Secretary of State for Health what research she has commissioned on the effect of the closure of small hospital units that specialise in orthopaedics on waiting times for hip or knee replacements.

  Mr. Sackville
  None. The patients charter guarantees that all patients waiting for hip or knee replacement operations will be treated within a maximum of 18 months. Latest waiting time figures show that the number of orthopaedic patients waiting more than a year fell by over 45 per cent. in the year to September 1992.

  Pharmacists
  Ms Janet Anderson
  To ask the Secretary of State for Health if she will review the working practices of the Prescription Pricing Authority in respect of the remuneration of pharmacists; and if she will make a statement.

  Dr. Mawhinney
  No.

  Ms Lynne
  To ask the Secretary of State for Health what representations she has received about the proposed changes to community pharmacists' pay.

  Dr. Mawhinney
  We have received a number of representations about our proposals for restructuring pharmacists' remuneration. We shall take these into account in the further discussions we shall be having with the pharmacists' representatives.

  General Practitioners
  Mr. Alex Carlile
  To ask the Secretary of State for Health what proposals she has to restrict the ability of general practitioners to work in single-handed practices; and if she will make a statement.

  Dr. Mawhinney
  None.

  Dentistry
  Ms Lynne
  To ask the Secretary of State for Health how many salaried dentists are currently employed within each health district in England.

  Dr. Mawhinney
  The information provided by the Dental Practice Board by family health services authority area at 31 December 1992 is shown in the table. The information relating to the first quarter of 1993 is not yet available.

  Salaried dentists for each family health services authority 31 December 1992

  Family Health Services Authority

  Number of salaried dentists employed

  Buckinghamshire

  1

  Cambridgeshire

  2

  City and East London

  8

  Cornwall and Isles of Scilly

  2

  Derbyshire

  1

  Essex

  2

  Greenwich and Bexley

  8

  Kensington, Westminster and Chelsea

  8

  Kent

  3

  275

  Family Health Services Authority

  Number of salaried dentists employed

  Lambeth, Southwark and Lewisham

  27

  Liverpool

  2

  Merton, Sutton and Wandsworth

  1

  Salford

  1

  Somerset

  4

  West Sussex

  1

  Total

  71

  Mrs. Ray Michie
  To ask the Secretary of State for Health where the pilot scheme is operating which has been agreed between her Department and the British Dental Association for financial assistance towards the setting up or expansion of dental practices within family health services authorities; what is the cost to date of the scheme; how many practices have been awarded assistance; what plans there are to extend the scheme; and if she will make a statement.

  Dr. Mawhinney
  The 68 family health services authorities taking part in the pilot scheme, aimed at encouraging dentists to set up or expand their practices in areas which need more dentists, are:

  Avon

  Barking/Havering

  Barnet

  Barnsley

  Bedfordshire

  Berkshire

  Birmingham

  Buckinghamshire

  Calderdale

  Cambridgeshire

  Camden/Islington

  City/East London

  Cornwall/Isles of Scilly

  Coventry

  Cumbria

  Derbyshire

  Devon

  Doncaster

  Dorset

  Durham

  Ealing/Hammersmith/Hounslow

  East Sussex

  Enfield/Haringey

  Essex

  Gateshead

  Greenwich/Bexley

  Hampshire

  Hillingdon

  Humberside

  Isle of Wight

  Kensington/Chelsea/Westminster

  Kent

  Kingston/Richmond

  Kirklees

  Lambeth/Southwark/Lewisham

  Lancashire

  Leeds

  Leicestershire

  Lincolnshire

  Liverpool

  Manchester

  Merton/Sutton/Wandsworth

  Norfolk

  Northamptonshire

  North Yorkshire

  Nottingham

  Oxfordshire

  Redbridge/Waltham Forest

  Rotherham

  276

  St. Helens/Knowsley

  Salford

  Sandwell

  Sefton

  Sheffield

  Shropshire

  Solihull

  South Tyneside

  Staffordshire

  Stockport

  Surrey

  Suffolk

  Sunderland

  Trafford

  Wakefield

  Walsall

  West Sussex

  Wiltshire

  Wolverhampton

  Since 1989 when the scheme started, the Department has spent over £720,000 and 140 practices have benefited. An assessment of the scheme is being undertaken and any decisions about its future will be made in the light of the outcome of the assessment.

  Ms Lynne
  To ask the Secretary of State for Health what information she has on the number of dentists who offer NHS patients the option of a Denplan care programme as an alternative.

  Dr. Mawhinney
  None. Private dental treatment is entirely a matter between individual patients and dentists.

  Child Migrants
  Mr. Hinchliffe
  To ask the Secretary of State for Health (1) what is the present level of funding for the Child Migrants Trust; and what future support is envisaged;

  (2) what action she will take to advise relatives of child migrants of the present locations of persons who left the United Kingdom prior to 1967; and if she will make a statement;

  (3) what action she will take to assist child migrants living abroad to receive details of family background and to re-establish United Kingdom family contact.

  Mr. Yeo
  The Department has no information regarding the location of former child migrants. There are no plans to assist directly. The Department has provided funds to the Child Migrant Trust which provides a record tracing and advisory service. The trust has been awarded a grant of £25,000 for this year. Decisions about future funding will be taken at the appropriate time.

  Mr. Hinchliffe
  To ask the Secretary of State for Health (1) what dialogue she has undertaken with health departments in(a) Australia, (b) New Zealand and (c) Canada concerning the welfare of United Kingdom child migrants;

  (2) what dialogue she has undertaken with the (a) Australian, (b) New Zealand and (c) Canadian Governments in order to identify and provide support services and advice to United Kingdom child migrants.

  Mr. Yeo
  None.

  Mr. Hinchliffe
  To ask the Secretary of State for Health what information she has available identifying the number of child migrants who have located and rejoined their families in the United Kingdom.

  Mr. Yeo
  None.

  Ambulance Service
  Mr. Hinchliffe
  To ask the Secretary of State for Health what changes are planned in the pay of the ambulance service in the 1993–94 financial year.

  Mr. Sackville
  My right hon. Friend the Secretary of State set out in her letter of 12 November 1992 to national health service employing bodies, including NHS trusts, the limits she expected to be applied to pay settlements throughout the NHS in the year from that date, a copy of which was deposited in the Library. In that context, offers of an increase of 1·5 per cent. in pay and allowances for the 1993–94 year have been made for those ambulance personnel whose pay is negotiated centrally. Information is not available about pay settlements for staff on NHS trust-specific terms and conditions.

  Drug Prescribing
  Mr. Couchman
  To ask the Secretary of State for Health what sources, independent of her Department and of the pharmaceutical industry, have been used by the Advisory Committee on National Health Service Drugs since 1985 to obtain advice on the costs of the products considered for inclusion on the selected list or on the impact of their actions on other national health service costs.

  Dr. Mawhinney
  The Advisory Committee on National Health Service Drugs is an independent body of experts whose members use whatever sources they consider necessary to obtain advice and information for their deliberations.

  Mr. Couchman
  To ask the Secretary of State for Health (1) what are the elements of the costs of administering the selected list scheme;

  (2) what has been the cost of the administration of the selected list in each year of its operation; and what is the estimated cost for 1993–94 and 1994–95.

  Dr. Mawhinney
  The cost elements of administering the selected list scheme are those incurred in running the Advisory Committee on National Health Service Drugs and of providing departmental administrative support for the Committee. This amounted to £55,000 in 1991–92. Figures for earlier years are not available but the costs have remained constant in real terms since the inception of the scheme in 1985. An increase of around 50 per cent. is forecast for 1993–94 to deal with the extra work of reviewing the 10 new categories of drugs. Costs thereafter are expected to reduce to the earlier levels.

  Hepatitis and Dysentry
  Mr. Hain
  To ask the Secretary of State for Health how many cases of hepatitis and dysentery there have been in England for each year since 1987.

  Mr. Sackville
  The information is shown in the tables.

  Number of cases notified for Viral Hepatitis in England, 1987–1991

  Hepatitis A

  Hepatitis B

  Non A-Non B

  Other/Not Known

  Total

  1987

  1,797

  420

  241

  823

  3,281

  1988

  3,093

  374

  334

  1,067

  4,868

  1989

  5,210

  409

  249

  1,074

  6,942

  1990

  7,165

  419

  162

  1,002

  8,748

  1991

  7,186

  471

  149

  693

  8,499

  278

  Number of cases notified for dysentery in England, 1987–91

  Number

  1987

  3,333

  1988

  3,601

  1989

  3,162

  1990

  2,521

  1991

  8,963

  Health Authorities
  Mr. Milburn
  To ask the Secretary of State for Health if she will list for each family health services authority the remuneration paid to chief executives and non-executive directors.

  Dr. Mawhinney
  Chief executives of family health services authorities (FHSAs) are remunerated in range of £33,160 to £60,650 per year according to the size of the FHSA. All non-executive directors are remunerated at the rate of £5,000 per year.

  Mr. Milburn
  To ask the Secretary of State for Health if she will give details of the remuneration paid to chief executives and non-executive directors of district health authorities.

  Dr. Mawhinney
  Chief executives of district health authorities (DHAs) are remunerated in the range of £41,830 to £69,990 per year according to the size of the DHA. All non-executive directors are remunerated at the rate of £5,000 per year.

  Mr. Milburn
  To ask the Secretary of State for Health (1) if she will list for each family health services authority the names of the chief executives and all non-executive directors;

  (2) if she will list for each district health authority the names of the chief executive and all non-executive directors.

  Dr. Mawhinney
  This information is not available centrally. The appointment of chief executives to family health services authorities (FHSAs) and district health authorities (DHAs) is not carried out by Ministers, but is a matter for the FHSAs and DHAs themselves. Non-executive directors of FHSAs and DHAs are appointed by the appropriate regional health authority.

  AIDS
  Mr. Butcher
  To ask the Secretary of State for Health how many people in the United Kingdom have developed AIDS.

  Mr. Sackville
  Up to 31 March 1993, 7,341 AIDS cases had been reported.

  Mr. Butcher
  To ask the Secretary of State for Health what has been the total Government expenditure on HIV/AIDS medical research; and if she will provide an estimate of total expenditure from all sources on HIV/AIDS medical research.

  Mr. Sackville
  The cumulative total of Government funding for AIDS research for the financial years 1986–87 to 1992–93 is £105,239,000. Information about expenditure from non-governmental sources is not available centrally.
  279
  Mr. Butcher
  To ask the Secretary of State for Health what has been the total expenditure from her Department in support of HIV and AIDS counselling, awareness and education programmes.

  Mr. Sackville
  Between 1985–86 and 1993–94 the Government have allocated £85 million to the development of the national AIDS public education campaign, including the running costs of the national AIDS helpline and related telephone services. The sum of 11·5 million is being made available in 1993–94.

  The table shows the Department of Health and health education authority spend for the development of the national HIV and AIDS public education work including the running costs of the national AIDS helpline and related telephone information services. Not shown in the table are the sums spent by other Government Departments on HIV prevention work within their own spheres of interest.

  HIV and AIDS public education

  Department of Health (£ million)

  HEA (£ million)

  1984–85

  Nil

  —

  1985–86

  0·52

  —

  1986–87

  7·60

  —

  1987–88

  6·74

  4–47

  1988–89

  —

  10·00

  1989–90

  —

  12·00

  1990–91

  —

  10·00

  1991–92

  —

  11·00

  1992–93

  —

  11·225

  Since 1989–90 contributions have also been made towards the costs incurred by regional and district health authorities in the development of local HIV prevention activities. Regional AIDS (Control) Act 1987 reports since 1989–90 record expenditure on local HIV prevention initiatives as follows:

  £ million

  1989–90

  13·4

  1990–91

  23·4

  1991–92

  27·95

  Figures for 1992–93 are not yet available though they are expected to reflect a steady increase in the development of district based HIV prevention work.

  Figures recording the total spent on all aspects of health promotion are not collected centrally. However, the Government continue to spend more on HIV and AIDS education than on any other single health promotion programme.

  Mr. Butcher
  To ask the Secretary of State for Health how many United Kingdom citizens are HIV positive.

  Mr. Sackville
  Up to 31 March 1993, 19,524 reports of persons testing positive for HIV had been received. The true number of infected people will undoubtedly be higher as some will not have been tested.

  Immunisation
  Ms Primarolo
  To ask the Secretary of State for Health what was the percentage uptake of immunisations in each year since 1980 by district health authorities and FHSAs 280
  for (a) MMR, (b) rubella, (c) under-two diphtheria, tetanus, pertussis, polio and (d) pre-school diphtheria, tetanus and polio and BCG, together with the source of this information.

  Mr. Sackville
  Information on vaccination and immunisation by family health services authority is not available centrally.

  Figures for the two-year uptake of diphtheria, tetanus, pertussis and polio by district health authority have been published in the Department of Health publication "Vaccination and Immunisation" since 1987–88, copies of which are available in the Library.

  Further information could be provided only at disproportionate cost.

  Ms Primarolo
  To ask the Secretary of State for Health if she will place in the Library the latest edition of "Vaccination and Immunisation" based on forms KC50, KC50A and KC51.

  Mr. Sackville
  The latest edition available is for the period 1990–91, a copy of which is in the Library.

  Comfrey
  Ms Corston
  To ask the Secretary of State for Health if she will make a statement indicating the total number of cases in(a) the United Kingdom and (b) the world of human veno-occlusive liver disease attributable directly to comfrey consumption; and what percentage of the total incidence of this condition these figures represented in the years in which they arose.

  Mr. Sackville
  This information is not available centrally. However, table 15, pages 184–191, of the World Health Organisation's "Environmental Health Criteria 80", 1988, lists cases of pyrrolizidine alkaloid poisoning and human reports of veno-occlusive disease from the United Kingdom and many other countries. All these cases are linked to the consumption of plants, including comfrey, which contain the toxic pyrrolizidine alkaloids. The Committee on the Toxicity of Chemicals in Food, Consumer Products and the Environment, in its recent statement on the safety-in-use of comfrey, refers to an additional two cases of veno-occlusive disease reported since 1988, one in the USA and one in New Zealand.

  Copies of the World Health Organisation publication, the Ministry of Agriculture, Fisheries and Food's analysis of comfrey products, the advice of the Committee on the Toxicity of Chemicals in Food, Consumer Products and the Environment and the Food Advisory Committee together with a draft information note are available in the Library.

WALES

  Forestry Commission
  Mr. Alex Carlile
  To ask the Secretary of State for Wales what plans he has to change the existing status for the Forestry Commission in Wales; and if he will make a statement.

  Sir Wyn Roberts
  I refer the hon. and learned Member to the answer given by my right hon. Friend the Secretary of State for Scotland to my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) on 30 March 1993,Official Report, column 150.

  Unadopted Sewers
  Mr. Alex Carlile
  To ask the Secretary of State for Wales if he will make funding available to enable water public limited companies and local authorities to upgrade existing unadoptable sewers to adoptable standards; and if he will make a statement.

  Mr. Gwilym Jones
  Responsibility for uprating unadopted sewers to adoptable standards rests with the owners. Sections 104 and 105 of the Water Industry Act 1991 (as amended) provide an adequate mechanism to allow unadopted sewers to be adopted by the relevant authority and include provision for appeals to the Director General of Water Services in the event that adoption is refused.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what plans he has to set up and fund a programme of survey work designed to measure the extent of unadopted sewers; and if he will make a statement.

  Mr. Gwilym Jones
  None.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what information he has as to how many households in Wales have unadopted sewers; and if he will make a statement.

  Mr. Gwilym Jones
  This information is not available centrally.

  Water Disconnections
  Mr. Hain
  To ask the Secretary of State for Wales if he will give figures for the number of disconnections of domestic water supply for each year since 1987.

  Mr. Gwilym Jones
  The information the hon. Member requested is set out in the following table. Separate data for domestic disconnections are not available for 1987–88 and 1988–89. Information on statutory water company disconnections was not collected prior to 1988–89.

  Disconnections by water companies in Wales1

  Number

  Domestic and non-domestic disconnections

  21987–88

  2,067

  1988–89

  1,249

  Domestic disconnections

  1989–90

  1,356

  1990–91

  1,305

  1991–92

  2,951

  31992–93

  1,072

  1 Dwr Cymru Cyf, Chester Waterworks Company and Wrexham and East Denbighshire Water Company.

  2 Excluding Chester Waterworks Company and Wrexham and East Denbighshire Water Company.

  3 Half year ended 30 September 1992.

  Hepatitis and Dysentery
  Mr. Hain
  To ask the Secretary of State for Wales how many cases of hepatitis and dysentery there have been in each year since 1987.

  Mr. Gwilym Jones
  The numbers of notifications of viral hepatitis and dysentery in Wales in each year since 1987 are shown in the table:282

  Viral hepatitis

  Dysentery

  1987

  98

  283

  1988

  194

  91

  1989

  129

  115

  1990

  257

  235

  1991

  360

  972

  19921

  481

  676

  1 1992 data are provisional.

  Notes:

  Viral hepatitis, which includes all forms of hepatitis, was notifiable as infective jaundice prior to 1989.

  Dysentery includes amoebic and bacillary dysentery.

  Source: Office of Population Censuses and Surveys Communicable Disease Statistics (MB2 series).

  Careers Services
  Mr. Morgan
  To ask the Secretary of State for Wales how many careers services organisations of the eight county councils have opted to become(a) part of the nearest training and enterprise council, (b) free-standing organisations, (c) partnership organisations and (d) other; and if he will make a statement.

  Sir Wyn Roberts
  Voluntary partnerships between training and enterprise councils and the careers services of local education authorities have been established in all Welsh counties. We shall be looking closely at the progress of these partnerships before deciding on what arrangements might apply in the future, as a result of legislation proposed in the Trade Union Reform and Employment Rights Bill.

  Local Government Finance
  Mr. Roger Evans
  To ask the Secretary of State for Wales whether he intends to cap any Welsh authorities for 1993–94; and if he will make a statement.

  Mr. David Hunt
  Local authorities in Wales have now set their budgets and council tax for 1993–94. Almost all have budgeted within or very close to the limits implied by the provisional capping criteria I announced last December.

  The provisions of the Local Government Finance Act 1992 require me to determine capping principles for a class of authority prior to announcing a decision to cap any authority of that class.

  In the light of careful consideration of their budgets and all other relevant considerations I have now decided my capping principles for district councils.

  The principles I have adopted broadly give effect to the provisional criteria I announced to the House last December with one modification. I have included a de minimis proviso to avoid designation in cases where the reduction which could be secured by capping would be less than £1·50 per band D household. Full details of my principles have, this afternoon, been placed in the Library of the House.

  On the basis of these principles I have designated Aberconwy borough council for capping. Its 1993–94 budget is £8,734,695 and I have proposed a cap of £8,566,950. The original council tax for a two adult band D dwelling was £69. The reduction implied by the proposed cap is £8.
  283
  On the basis of all the information currently available to me, I am satisfied that my proposed cap is reasonable and appropriate in all the circumstances of the authority and that the reduction I propose is achievable this year.

  If Aberconwy wishes to accept the amount proposed, it now has 28 days in which to do so. It can also challenge my proposal within 28 days, suggesting an alternative figure together with reasons for it, and in those circumstances it is open to me to set the final cap at a different level from the one I originally proposed. If Aberconwy does not accept my proposed cap, I will seek the approval of the House for a draft order confirming the cap.

  Within 21 days of the final cap having been set, Aberconwy must set a new budget requirement reflecting the cap; and this will feed through to the council tax. I expect that by the end of June Aberconwy will have calculated a new budget requirement leading to a reduced level of council tax.

  I propose shortly to apply to the High Court for leave to seek a judicial review of the council tax calculations made by Gwent county council for 1993–94. If leave is granted by the court, the judicial review could result in the authority making new budget requirement and council tax calculations. For this reason, I do not consider it appropriate to make a decision on my capping principles for county councils until such time as this matter is resolved. However, on the basis of the budgetary information available to me, I see no reason to pursue the matter of designation in respect of the other county councils in Wales.

AGRICULTURE, FISHERIES AND FOOD

  Grey Herons
  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food how many grey herons were killed under licence in England and Wales in each year since 1988, to prevent serious damage to fisheries.

  Mr. Soames
  The information requested is as follows:

  Number

  1988

  0

  1989

  0

  1990

  0

  1991

  5

  1992

  11

  1993

  11

  1 Returns of action taken under licence still awaited, so figures may not be final totals.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what advice on non-lethal preventive measures is given to those applying for licences to kill grey herons under section 16 of the Wildlife and Countryside Act 1981, to prevent serious damage to fisheries.

  Mr. Soames
  All applicants receive a site visit carried out by the Agricultural Development Advisory Service which advises on the appropriate use of methods to prevent or deter herons from feeding at the site. These can include the use of physical proofing, such as netting over of small ponds, and the use of audible and visual bird scarers, including pyrotechnic devices.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food how many licences were(a) applied
  284
  for and (b) issued under section 16 of the Wildlife and Countryside Act 1981 to permit the killing of grey herons in England and Wales for each year since 1988, to prevent serious damage to fisheries.

  Mr. Soames
  The information requested is as follows:

  Year

  Applications received

  Licences issued

  1988

  3

  1

  1989

  3

  1

  1990

  2

  0

  1991

  1

  1

  1992

  6

  14

  Totals

  15

  7

  1 In two of these cases the applications were received in 1992 but the licences were not issued until January 1993.

  Mr. Hinchliffe
  To ask the Minister of Agriculture, Fisheries and Food what evidence of serious damage to fisheries is required before a licence under section 16 of the Wildlife and Countryside Act 1981 to permit killing of grey herons is issued.

  Mr. Soames
  Applicants are required to demonstrate that herons are causing serious economic damage to their fishery enterprise and that other methods of preventing or reducing that damage have been tried or are impractical.

  Fishery Inspectors
  Mr. Steen
  To ask the Minister of Agriculture, Fisheries and Food how many fishery inspectors have been employed in total in the United Kingdom in each of the last three years; and how many fishery inspectors or their equivalent have been employed in each of the other EC countries in each of the last three years.

  Mr. Curry
  The number of British sea fisheries officers employed by the fisheries Departments in the United Kingdom in each of the last three years is as follows:

  Number

  1990

  181

  1991

  182

  1992

  205

  Comparable information is not readily available for other EC countries.

  Comfrey
  Ms Corston
  To ask the Minister of Agriculture, Fisheries and Food what plans he has to meet in the near future representatives of the Action Group for the Relief of Pain and Distress or the Society for the Promotion of Nutritional Therapy to discuss the ban on the sale of comfrey products.

  Mr. Soames
  I met last month with representatives of a number of organisations, including the Society for the Promotion of Nutritional Therapy, in relation to the withdrawal of certain comfrey products. I have no plans for further meetings in the near future.

  EC Agriculture Spending
  Mr. Marlow
  To ask the Minister of Agriculture, Fisheries and Food if he will set out the amounts of the five main EC agricultural spending programmes for the last
  285
  year in which figures are available for each EC country, with the best available estimate in each case of the amount that has been fraudulently misapplied.

  Mr. Curry
  It is not possible to estimate the extent of fraud in the common agricultural policy since, by definition, undetected fraud cannot be measured. However, all member states report cases of EAGGF guarantee-funded irregularity—the definition of which goes wider than fraud). Details of the number and value of cases reported in 1991 are given in annex 20 of the 21st financial report on the European agricultural guidance and guarantee Fund—1991—guarantee section and food aid accounts clearance, a copy of which was placed in the Library. Annex 2 of this report also contains details of expenditure charged by sector and by member state against the 1991 EC Budget.

  Agricultural Land (Maps)
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to the Prime Minister's answer to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) of 20 April,Official REeport, column 181 on the integrated administration control system, what mapping documentation can be used as alternatives by farmers if they have difficulty obtaining maps of the right scale; and what further advice on this he has issued to his Ministry's offices and farmers' organisations.

  Mr. Curry
  We made clear in the IACS explanatory booklet sent to all farmers the procedure to be followed if they could not obtain the required maps or field reference numbers by the 15 May deadline for submission of the IACS application form. The advice to such farmers was to make sure they submitted the application before the deadline, together with an explanation of why any supporting detail could not be supplied, and give details of each field area and its location. Full details would be required later. My right hon. Friend the Minister has since announced that where existing maps of forage areas do not give field sizes, we will accept estimates. The location could be identified through a 1:25,000 map which is readily obtainable. The advice we have given to the Department's offices and farming organisations is that we should be as reasonable as we possibly can, within the rules of the scheme, over the submission of mapping documentation.

  Green Belt Farms
  Mr. Mackinlay
  To ask the Minister of Agriculture, Fisheries and Food what guidelines and advice his Department has published to encourage farms situated in the green belt to sell their own produce and that of their neighbours.

  Mr. Baldry
  I have been asked to reply.

  I refer the hon. Member to the answer I have given him today.

SCOTLAND

  Prison Stores
  Mr. Dalyell
  To ask the Secretary of State for Scotland(a) if he will make a statement on the costs so far of market testing in relation to the central prison stores at Fauldhouse, West Lothian and what is his policy in relation to the future operation of prison stores.

  Lord James Douglas-Hamilton
  The best estimate of cost to date, including staff time and consultancy fees, in connection with the market testing of the central prison stores is approximately £92,000. The future operation of the stores will be determined by the outcome of the market test.

  Hepatitis and Dysentery
  Mr. Hain
  To ask the Secretary of State for Scotland how many cases of hepatitis and dysentery there have been in each year since 1987.

  Mr. Stewart
  The number of cases of viral hepatitis and bacillary dysentery notified in Scotland since 1987 are as follows:

  Year

  Viral hepatitis

  Bacillary dysentery

  1987

  511

  344

  1988

  848

  196

  1989

  831

  154

  1990

  546

  235

  1991

  556

  1,526

  1992

  316

  3,506

  Infertility Treatment
  Mr. Dunnachie
  To ask the Secretary of State for Scotland what are the implications for the funding secured for in vitro fertilisation treatment centres of his decision to cancel the funding of such centres; and if he will make a statement.

  Mr. Stewart
  [holding answer 23 April 1993]:No decision was ever taken to provide central funding for in vitro fertilisation services in Scotland. There are therefore no funding implications.

FOREIGN AND COMMONWEALTH AFFAIRS

  Deaths, Waco
  Mr. Alfred Morris
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the deaths of 24 British citizens in the inferno at Waco, Texas, on 19 April.

  Mr. Lennox-Boyd
  The 51-day siege by the FBI of the Branch Davidian compound headquarters in Waco, Texas, ended tragically on 19 April with the reported deaths of more than 80 men, women and children, 24 of them British citizens, including a six-year-old girl. Two British men and one British women survived. Throughout the siege we maintained close contact with the United States authorities, including the FBI. The President of the United States has ordered an inquiry into these events.

  International Criminal Court
  Sir David Steel
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is his policy toward the establishment of an international criminal court.

  Mr. Douglas Hogg
  It is clear that there are substantial legal, political and practical obstacles to establishing an international criminal court. The International Law Commission has for the last three years been actively addressing many of them. At the General Assembly last year, we supported the commission's request to be granted a mandate to draft a statute of an international criminal court as a matter of priority. We now await that draft and will give it careful consideration.

  Sellafield
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have received from(a) foreign Governments, (b) foreign parliamentarians and (c) foreign non-governmental organisations in regard to the proliferation and nuclear materials safeguards problems posed by the planned opening of the thermal oxide reprocessing plant at Sellafield.

  Mr. Douglas Hogg
  Since the THORP project was approved by Parliament in 1978 we have received a number of such representations from abroad, especially in categories B and C of the question. We recognise their non-proliferation responsibilities and would not permit any plutonium to be exported from THORP unless they were satisfied that the material would not be misused.

  Nuclear Non-proliferation
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representation his Department had at the non-proliferation seminar at Rhodes house. Oxford on 21 April.

  Mr. Douglas Hogg
  Foreign and Commonwealth Office officials attended the seminar.

  Iraq
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will reconsider Her Majesty's Government's policy towards the imposition of restrictions on the supply of medicines to Iraq.

  Mr. Douglas Hogg
  There are no restrictions on the supply of medicines to Iraq and they have never been prohibited under the terms of the United Nations sanctions regime against Iraq.

  China
  Mr. Alton
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement regarding Lord Howe's visit to China to discuss human rights; and if Lord Howe raised the matter of population control with the Chinese authorities.

  Mr. Goodlad
  I refer the hon. Member to the reply given by my right hon. Friend the Prime Minister to the hon. Member for Bournemouth, East (Mr. Atkinson) on 15 288
  March, Official Report, column 33. During his visit to China in December last year my right hon. and learned Friend Lord Howe raised a wide number of issues including questions relating to reducing China's population growth.

  EC Treaties
  Mr. David Porter
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the titles, dates signed and scope of each treaty unaffected by the Maastricht treaty in force between the United Kingdom and(a) France, (b) Germany, (c) Italy, (d) Spain, (e) Greece, (f) the Netherlands and (g) Portugal.

  Mr. Garel-Jones
  The information requested by the hon. Gentleman is not readily available and could only be provided at disproportionate cost.

  Yugoslavia
  Mr. David Porter
  To ask the Secretary of State for Foreign and Commonwealth Affairs of he will make a statement on his assessment of the British interest in the former Yugoslavia.

  Mr. Douglas Hogg
  We have an important interest in peace and stability in the Balkans. As my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs made clear in his statement to the House on 19 April, our objectives are to make the Bosnian Serbs and the Serb Government abandon the pursuit of their aims by the use of force; to prevent the fighting from spreading to Croatia, Kosovo, Macedonia or elsewhere; to provide the wherewithal, through the Vance-Owen process, for a just political solution; and to relieve the needs of the hungry and sick.

  Lady Olga Maitland
  To ask the Secretary of State for Commonwealth Affairs what representations he has received regarding protection of those Bosnian Muslims in Sebrenica who have surrendered their weapons to the United Nations from subsequent attack by the Serbs.

  Mr. Douglas Hogg
  None. UN Security Council resolution 819 demands the immediate cessation of attacks against Srebrenica and that all parties treat the town and its surroundings as a safe area. We have called on all parties to comply fully with this resolution and to co-operate with UNPROFOR in its efforts to monitor the humanitarian situation.

  EC Fraud
  Mr. Marlow
  To ask the Secretary of State for Foreign and Commonwealth Affairs which bodies and institutions can bring about investigations as to fraud in the European Commission; and which institutions can initiate publicity on fraudulent activities within the European Commission.

  Mr. Garel-Jones
  It is open to any individual, company or other body to bring to the Commission's attention any perceived irregularities, and to publicise such changes as they wish. The Commission itself, like member states, has the main responsibility to ensure adequate controls are in place to prevent fraud and to bring to light any fraud that occurs. In addition to the Commission's internal controls, the Court of Auditors has a responsibility to examine all Community expenditure, including the Commission's
  289
  administrative budget, and report to the Council of Ministers and European Parliament. Largely as the result of United Kingdom proposals, the Maastricht treaty would introduce measures aimed at improving the protection of the Community's financial interests. These include:

  (i) enhanced status for the Court of Auditors as a Community institution, emphasising the importance of the court's role (Art 4);

  (ii) an explicit reference to the Commission's responsibility to implement the Budget with regard to the principles of sound financial management (Art 205);

  (iii) a requirement for the court to provide the Council and European Parliament with a statement of assurance on the reliability of the Community's accounts and on the legality and regularity of underlying transactions (Art 206s);

  (iv) appointment of an ombudsman, able to receive complaints from citizens of the union and others concerning instances of maladministration in the activities of the Community institutions (Art 138e);

  (v) enhanced powers for the European Parliament in scrutinising the implementation of the EC Budget and the discharge procedure (Art 206b), and in setting up temporary committees of inquiry (Art 138c);

  (vi) an explicit reference to the obligation on member states to counter EC fraud (Art 209a).

  Nepal
  Mr. Parry
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest situation concerning human rights in Nepal.

  Mr. Lennox-Boyd
  We welcome the considerable improvement in Nepal's human rights record since the restoration of democracy in 1990.

NATIONAL FINANCE

  Public Sector Pensions
  Mr. David Shaw
  To ask the Chancellor of the Exchequer if he will estimate the total unfunded liability of civil service and other public sector pensions and the amount by which that liability has increased or decreased in each of the last three years.

  Mr. Portillo
  The latest figures available for the liabilities of the main unfunded public service pension schemes in the United Kingdom relate to 31 March 1991. The estimated total liabilities of the present and former members accrued to that date are around £170 billion. The comparative figures requested could be provided only at disproportionate cost.

  Department

  1 April 1979 Staff

  1979–80 Pay £ million

  1991–92 Staff

  1991–92. Pay £ million

  Defence (including Armed Forces)

  577,000

  3,917

  445,000

  8,921

  Foreign and Commonwealth Office (including ODA)

  12,000

  135

  10,000

  362

  Agriculture

  15,000

  93

  11,000

  236

  Trade and Industry

  19,000

  145

  12,000

  271

  Employment

  54,000

  300

  53,000

  778

  Transport

  14,000

  80

  11,000

  205

  Environment

  53,000

  450

  24,000

  673

  Home Office

  34,000

  225

  48,000

  938

  Legal Departments

  18,000

  100

  29,000

  504

  Education

  21,000

  143

  3,000

  67

  Heritage

  1,000

  62

  1,000

  192

  Health (including NHS)

  929,000

  5,023

  879,000

  11,880

  Social Security

  94,000

  443

  78,000

  1,199

  Scotland

  13,000

  600

  13,000

  1,872

  Wales

  3,000

  400

  2,000

  826

  Northern Ireland

  29,000

  175

  29,000

  524

  290

  Valuation Office
  Mr. Burns
  To ask the Chancellor of the Exchequer what targets will be set for the Valuation Office executive agency for the year 1993–94.

  Mr. Nelson
  I have set the following key targets for the agency in 1993–94.

  OPERATIONAL TARGETS
  Council tax
  To clear 280,000 appeals against the new council tax lists.
  Non-domestic rates
  To clear 295,000 appeals against the 1990 rating valuation lists.
  Direct taxes
  To undertake 112,000 valuation cases for the Inland Revenue concerning inheritance and capital gains taxes.
  Other
  To undertake 130,000 valuations for other government departments, public bodies and local authorities.
  Financial performance and cost efficiency
  To ensure that the agency's net operating costs are at least fully covered by receipts and to achieve efficiency savings of approximately 2·5 per cent. on its gross expenditure.
  Citizen's charter
  To reply to 90 per cent. of all correspondence within 28 days of receipt; and to achieve continuing improvements in timeliness and valuation standards in connection with casework of 1 per cent. per annum.
  Further details of the performance measures and targets are set out in the agency's business plan for 1993–94 and in its corporate plan, copies of which will be placed in the Library of the House on publication.

  Public Servants
  Mr. David Shaw
  To ask the Chancellor of the Exchequer if he will list the numbers and costs of public servants paid out of the Consolidated Fund and local authorities revenues by (i) each Government Department and agency, (ii) all local authorities and (iii) other public bodies in 1979 and at the latest available date.

  Mr. Portillo
  The information is set out in the table. Executive agencies did not exist in 1979; agency figures for 1991–92 are included within the relevant departmental total.
  291

  Department

  1 April 1979 Staff

  1979–80 Pay £ million

  1991–92 Staff

  1991–92 Pay £ million

  Chancellor's Departments

  128,000

  600

  105,000

  1,738

  Cabinet Office and Other Central Government

  56,000

  138

  50,000

  381

  Total Central Government

  2,070,000

  13,029

  1,803,000

  31,568

  Local Authorities

  2,368,000

  12,843

  2,267,000

  34,311

  Debtor Countries
  Mr. Kirkwood
  To ask the Chancellor of the Exchequer what further plans he has to alleviate the burden of debt owed by developing countries; and if he will make a statement.

  Mr. Nelson
  The United Kingdom has an excellent record of helping those developing countries with debt problems. It was a direct result of my right hon. Friend the Prime Minister's initiative for the poorest and most indebted countries following International Monetary Fund sponsored programmes of reform, that the Paris Club of major creditor Governments began implementing the Trinidad terms in December 1992. These provide for the equivalent of the cancellation of up to 50 per cent. of eligible bilateral official debt and a commitment on the part of creditors to examine the whole stock of such debt after a period of proven economic and financial responsibility. So far, 15 of the very poorest and most indebted countries have benefited, resulting in the equivalent debt cancellation of almost $1¾ billion. More will follow.

  The Government are, however, aware that for some of the most desperate cases the terms as currently applied will not be enough. For this reason, we are pursuing with our creditor country colleagues improvements in the terms. Specifically, we would like to see the degree of concessionality increased for those countries that need it and quicker action on the stock of debt for those countries that already have a proven track record of reform.

  The rationale for the policy is threefold: first, to protect as best we can the interests of taxpayers because their money is at risk when countries cannot repay their debts; secondly, to reduce debt to realistically manageable levels and thereby increase the recoveries received; thirdly, to promote development—for which simply writing off debt is not sufficient. Countries must practise sound social and economic policies to benefit from debt reduction as a catalyst for development.

  Insider Dealing
  Mr. Cousins
  To ask the Chancellor of the Exchequer what was the number of(a) prosecutions and (b) successful prosecutions under insider dealing control legislation in the last 12 months.

  Mr. Nelson
  In the last 12 months the prosecution of nine individuals, under the Companies Securities (Insider Dealing) Act 1985, has been concluded. Five prosecutions led to conviction.
  292

  Tax Refunds
  Mr. Madel
  To ask the Chancellor of the Exchequer what is the annual interest paid by the Exchequer caused by delay in making refunds on excessive assessments made by the Inland Revenue; and if he will make a statement.

  Mr. Dorrell
  The Inland Revenue aims to make repayments promptly as it recognises that hardship can occur if repayment is delayed whatever the reason. Interest on delayed repayments of overpaid tax—called repayment supplement—is added automatically where appropriate.

  The total amount of repayment supplement paid for 1991–92 was £76,116,026·51.

  Maastricht Treaty
  Mr. Marlow
  To ask the Chancellor of the Exchequer whether moneys paid through the EC cohesion fund in advance of ratification of the Maastricht treaty are repayable if the treaty is not ratified; and if he will set out the relevant text.

  Sir John Cope
  The EC cohesion fund envisaged by the Maastricht treaty cannot be established before the treaty has been ratified. Accordingly, the Edinburgh European Council invited the Council to adopt, before 1 April 1993, a regulation to establish an interim cohesion financial instrument, based on article 235 of the present treaty. Since the regulation is based on the present treaty, the question of repayment of expenditure incurred under the interim instrument, if the Maastricht treaty were not to be ratified, does not arise.

  Fuel Bills (VAT)
  Ms Harman
  To ask the Chancellor of the Exchequer what proportion of the revenue raised from his proposal to charge value added tax on supplies of fuel and power for domestic, residential and charity non-business use will be attributable to the standing charges paid by customers in their gas and electricity bills.

  Sir John Cope
  Standing charges account for around 12 per cent. of total expenditure on domestic fuel and power.

  Ms Harman
  To ask the Chancellor of the Exchequer what proportion of the revenues raised from his proposal to charge value added tax on supplies of fuel and power for domestic, residential and charity non-business use he expects to be paid(a) by charities and (b) by private households.

  Sir John Cope
  It is estimated that around 1 per cent. of the additional yield from extending VAT to all fuel and power is likely to be paid by charities. We expect almost all of the remaining additional yield will be in respect of private housholds, although there is no reliable information on the expenditure by non-private households on fuel and power.
  293
  Ms Harman
  To ask the Chancellor of the Exchequer what discussions he has had with the Director General of Gas Supply or the Director General of Electricity Regulation on his proposal to charge value added tax on supplies of fuel and power for domestic, residential and charity non-business use.

  Sir John Cope
  My right hon. Friend has had no such discussions.

  Ms Harman
  To ask the Chancellor of the Exchequer whether he has met representatives of organisations for elderly people to discuss his proposal to charge value added tax on supplies of fuel and power for domestic, residential and charity non-business use.

  Sir John Cope
  No such meetings have been held.

  Football Pool Betting Duty
  Mr. Pendry
  To ask the Chancellor of the Exchequer if he will publish the precise text of the terms of the agreement entered into by his Department with the Foundation for Sport and the Arts regarding the distribution of funds made available through the reduction in the football pool betting duty in 1991.

  Sir John Cope
  The conditions for the distribution of funds by the foundation are set out in its trust deed. My right hon. Friend's implementation of the reduction in pool betting duty from 40 per cent. to 37·5 per cent. indicated that he was content with these arrangements.

  Income Tax
  Ms Harman
  To ask the Chancellor of the Exchequer how many individuals he expects to become liable for income tax as a result of his proposal to freeze allowances in 1993–94; how many individuals he expects to cease to be liable for income tax at the standard rate as a result of his proposal to widen the lower rate band of income tax by £500 in 1993–94; and how many individuals he expects to become liable for the higher rate of income tax as a result of his proposal to freeze the basic rate limit in 1993–94.

  Mr. Dorrell
  About 300,000 more people will pay tax in 1993–94 under Budget proposals compared with statutory indexation of personal allowances. Increasing the lower rate band by £500 brings about 700,000 more taxpayers into the lower rate than if the lower rate limit had been indexed. Not changing the basic rate limit increases the number of higher rate taxpayers by 100,000 compared with indexation.

  Public Sector Finance
  Ms Harman
  To ask the Chancellor of the Exchequer whether he will publish a table setting out the value of the public sector borrowing requirement in 1991–92 and 1992–93 together with the forecasts of each of these made in the budgets of 1988, 1989, 1990, 1991, 1992 and 1993.

  Mr. Portillo
  The figures are set out in the table. The "Financial Statement and Budget Report" contains forecasts of the PSBR for only the current year and for the year ahead. PSBR estimates for 1991–92 and 1992–93 given in successive FSBRs prior to 1991 were projections, rather than forecasts, based on illustrative assumptions about the medium-term path of the economy.
  294

  £ billion

  1991–92

  1992–93

  Forecast made in:

  1991 FSBR

  7·9

  n.a.

  1992 FSBR

  13·8

  28·1

  1993 FSBR

  n.a.

  35·1

  Outturn

  13·8

  36·5

  Ms Harman
  To ask the Chancellor of the Exchequer whether he will publish a table setting out the value of the public sector borrowing requirement as a proportion of gross domestic product at market prices for each financial year from 1963–64 onwards together with the value of public sector capital expenditure, including capital grants to the private sector, as a proportion of GDP at market prices over the same period.

  Mr. Portillo
  The figures requested are set out in the table. The size of the public sector has been reduced significantly over the past decade as a result of the privatisation programme.

  Public sector capital expenditure1 2

  PSBR2

  1963–64

  7·9

  3·4

  1964–65

  8·4

  2·7

  1965–66

  8·4

  2·6

  1966–67

  9·4

  3·0

  1967–68

  10·7

  5·0

  1968–69

  10·0

  0·8

  1969–70

  9·7

  -1·3

  1970–71

  10·0

  1·5

  1971–72

  9·2

  1·7

  1972–73

  8·7

  3·7

  1973–74

  9·6

  5·9

  1974–75

  10·4

  9·1

  1975–76

  10·3

  9·4

  1976–77

  9·2

  6·5

  1977–78

  7·5

  3·6

  1978–79

  7·0

  5·4

  1979–80

  6·8

  4·8

  1980–81

  6·3

  5·4

  1981–82

  5·4

  3·4

  1982–83

  5·7

  3·2

  1983–84

  5·8

  3·2

  1984–85

  5·3

  3·1

  1985–86

  4·5

  1–6

  1986–87

  3·9

  0·9

  1987–88

  3·4

  -0·8

  1988–89

  3·1

  -3·1

  1989–90

  3·9

  -1·5

  1990–91

  3–7

  -0·1

  1991–92

  3·7

  2·4

  1 On a national accounts basis. Comprises gross domestic fixed capital formation—net of receipts from asset sales—increase in stocks, and capital grants to the private sector.

  2 As percentage of GDP at market prices adjusted for the abolition of domestic rates.

NATIONAL HERITAGE

  Departmental Contracts
  Mr. Cousins
  To ask the Secretary of State for National Heritage if he will list the duration, value and nature of contracts awarded by his Department to Arthur Andersen, Kleinwort Benson, Denton, Hall, Begrie and Warren.
  295
  Mr. Key
  My Department has not awarded any contracts to these firms.

  Foundation for Sport and the Arts
  Mr. Pendry
  To ask the Secretary of State for National Heritage if he will set out the precise criteria governing organisations' eligibility for receiving grant from the Foundation for Sport and the Arts.

  Mr. Brooke
  The Foundation for Sport and the Arts trust deed states that the main and primary purpose for which the foundation can give grant aid is for"the promotion, support, encouragement or assistance in such manner of such athletic sports or athletic games in the United Kingdom as the Trustees may from time to time in their absolute discretion think fit".

  The secondary purpose for which the trustees are able to give grants with absolute discretion is for the promotion, encouragement or assistance of the arts in the United Kingdom.

  Mr. Pendry
  To ask the Secretary of State for National Heritage if he will make a statement on the eligibility of angling to receive grant from the Foundation for Sport and the Arts.

  Mr. Brooke
  It is for the trustees to decide whether or not an activity is eligible for support under the terms of the trust deed.

TRANSPORT

  Chlorine
  Mr. Alex Carlile
  To ask the Secretary of State for Transport what safety regulations govern the transportation of chlorine by road tanker; and if he will make a statement.

  Mr. Kenneth Carlisle
  The regulations for the transport of dangerous goods by road are made under the Health and Safety at Work, etc. Act 1974. They include the Dangerous Substances (Carriage of Dangerous Substances in Road Tankers and Tank Containers) Regulations 1992 and the Road Traffic (Training of Drivers of Vehicles Carrying Dangerous Goods) Regulations 1992.

  Among other things, these regulations require that road tankers carrying dangerous goods such as chlorine meet the appropriate construction standards and are regularly inspected, and that the dangerous goods carried are accompanied by information in writing to indicate the nature of the danger to which they could give rise. Vehicles must display a hazard warning panel and drivers must be properly trained and hold a valid vocational training certificate.

  Rail Freight
  Mr. Alex Carlile
  To ask the Secretary of State for Transport what was the tonnage of goods and materials transported by rail in each year since 1979; and if he will make a statement.

  Mr. Freeman
  This information is contained in "Transport Statistics", Great Britain, 1992, tables 9.3 and 1.9 and in British Rail's annual reports and accounts for the years in question, copies of which are in the Library.
  296
  Mr. Alex Carlile
  To ask the Secretary of State for Transport if he will bring forward legislation to enable him to control British Rail charges to freight customers.

  Mr. Freeman
  No. Charges are set by negotiation with customers in the light of market pressures.

  Power Station, Humberside
  Mr. Tipping
  To ask the Secretary of State for Transport what representations he has received about traffic problems arising from the construction of a gas-fired power station at Keadby, Humberside; and if he will make a statement.

  Mr. Kenneth Carlisle
  A petition to the Prime Minister with over 150 signatures was received by my Department on 20 April. The petition calls for action mainly by the construction contractors and also the local highway authority.

  Railways Bill
  Mr. Adley
  To ask the Secretary of State for Transport if he will publish notes on each of the amendments made and the new clauses added to the Railways Bill by Standing Committee B in the same form as the notes printed on clauses relating to the Bill as committed.

  Mr. Freeman
  Revised notes on clauses for the Railways Bill will be prepared for the introduction of the Bill in the House of Lords in the normal way. The record of proceedings in Committee record the reasons I gave in Committee for Government amendments.

  Jubilee Line
  Mr. Beith
  To ask the Secretary of State for Transport further to the answer to the hon. Member for Cardiff, West (Mr. Morgan) of 20 April,Official Report, column 70, what guarantee or underwriting has been undertaken by the Government in respect of the loan from the European investment bank to Canary wharf in connection with the Jublilee line project; and whether he will make a statement.

  Ms Harman
  To ask the Secretary of State for Transport whether the Government or any other public body has incurred a contingent liability as a result of the agreement by the European investment bank to provide £98 million to finance the extension of the Jubilee line.

  Mr. Norris
  Detailed arrangements for funding the Jubilee line extension are for agreement between London Transport/London Underground Ltd. and the parties involved in the financing of Canary wharf. These arrangements are currently under discussion and are subject to the normal rules of commercial confidentiality.

  Dounreay
  Mr. Llew Smith
  To ask the Secretary of State for Transport what notification his Department receives of(a) dates, (b) route and port or airport of arrival and (c) transport mode of nuclear fuel rods imported from continental Europe for treatment or storage at the nuclear power establishment at Dounreay.

  Mr. Norris
  Notification is given to the Department under the requirements of the International Atomic Energy Agency regulations—paragraph 456—for the safe transport of radioactive material.

  Plutonium Flights
  Mr. Salmond
  To ask the Secretary of State for Transport what statutory or voluntary arrangements are made for the operators responsible for the plutonium flights from Carlisle to inform his Department of the timing and routing of the flights; what is the date and route of the next plutonium flight from Carlisle; and if he will make a statement.

  Mr. Norris
  Notification is made to the Department under the requirements of the International Atomic Energy Agency regulations—paragraph 456—for the safe transport of radioactive material.

  The date and route of the next plutonium flight are matters for the operators.

  Family Railcard
  Mrs. Mahon
  To ask the Secretary of State for Transport if he will ensure that the family railcard will be available throughout the rail network after privatisation.

  Mr. Freeman
  BR's current range of railcards have proved successful in attracting more passengers to off-peak services. Private sector operators will clearly wish to achieve the same result and there is every reason to believe that they will introduce new initiatives in order to increase this market still further. The Government, therefore, see no need to impose specific requirements on operators to offer particular types of discount facility, with the exception of the disabled persons railcard which is provided voluntarily by British Rail and does not make a profit.

HOUSE OF COMMONS

  Cutlery
  Mr. Cryer
  To ask the Chairman of the Catering Committee when was the last occasion that House of Commons cutlery was sold off by auction; what was the revenue gained; what was the reason for the sale; and if he will make a statement.

  Mr. Colin Shepherd
  This is a matter for the Director of Catering Services and I shall ask her to write to the hon. Member.

DUCHY OF LANCASTER

  Natural Environment Research Council
  Mr. Dalyell
  To ask the Chancellor of the Duchy of Lancaster which component body of the Natural Environment Research Council carries out its geological activities; and which other bodies carry on geological activities of a substantially similar kind to those carried on by the Natural Environment Research Council.

  Mr. Robert Jackson
  The British Geological Survey, within the Natural Environment Research Council,298
  undertakes geological activities. There is no other comparable organisation in the United Kingdom, although there are equivalent bodies in various other countries.

DEFENCE

  M3 BR90 Bridging Equipment
  Mr. Frank Cook
  To ask the Secretary of State for Defence what progress has been made with procurement of M3 BR90 bridging equipment; which companies are the principal contractors and subcontractors; what is the timetable for development and production; and if he will make a statement.

  Mr. Aitken
  The Anglo-German development programme of the M3 amphibious bridge has now been completed. An invitation to tender was issued in February 1993 for the production of bridges to meet United Kingdom and German requirements. Following completion of the tender exercise we plan to take a decision on production in mid-1994. A number of European companies have been invited to tender, including ALVIS and GKN from the United Kingdom and EWK, the German contractor which carried out the development. Interested subcontractors have been advised to approach the potential prime contractors.

  The BR90 development contract with Thompson Defence Projects (TDP), part of the Rolls-Royce Industrial Power Group, is approximately 75 per cent. complete. Negotiations are now taking place with the company for the production phase of this family of bridges. If these are successful, production is planned to commence in 1993. The principal subcontractor is Unipower, which supplies the common bridge carrying vehicles for the project.

  Mr. John Anderson
  Mr. Rogers
  To ask the Secretary of State for Defence what steps he has taken to investigate the arrest of Mr. John Anderson by MOD police in February 1992.

  Mr. Aitken
  Mr. Anderson was arrested by the Ministry of Defence police not in February 1992 but in April 1990. He was detained in connection with a possible case of corruption, interviewed and released without charge. Subsequently, he made a number of complaints concerning the circumstances of his arrest. These have been investigated in accordance with the Police and Criminal Evidence Act 1984 and the report currently rests with the Police Complaints Authority whose decision is awaited.

  Al Yamamah Contract

  Mr. Rogers
  To ask the Secretary of State for Defence if he will list the countries, other than Saudi Arabia, which received materials under the terms of the Al Yamamah 1 contract.

  Mr. Aitken
  There are none.
  299

  Atomic Weapons Establishment
  Dr. Lynne Jones
  To ask the Secretary of State for Defence if he will now order an independent safety investigation into the AWE.

  Mr. Aitken
  I refer the hon. Member to the answer I gave on 3 February 1993,Official Report, column 182.

  RAF Wittering
  Mr. Livingstone
  To ask the Secretary of State for Defence if he will make a statement on the incident on Thursday 15 April at RAF Wittering involving threatening action by a soldier towards women protesters; what was the position of the women relative to the barbed wire perimeter fence at the time; and what instructions are given to soldiers in such circumstances.

  Mr. Archie Hamilton
  The women protesters were about 60 yd inside the station perimeter fence when they were challenged. I am satisfied that the action taken by the RAF and MOD police in removing them from the station was in accordance with MOD regulations.

  Unoccupied Dwellings
  Mr. Jamieson
  To ask the Secretary of State for Defence how many dwellings owned by his Ministry in Plymouth are currently unoccupied.

  Mr. Archie Hamilton
  As at 31 March 1993 the Ministry of Defence owned 250 vacant houses and flats in Plymouth, of which 243 were service married quarters and seven were Ministry of Defence civilian houses. Of these properties, 116 were either undergoing or awaiting major maintenance work or modernisation and 63 were already allocated to service families who were due to move in shortly. In addition, some 277 vacant service married quarters were in the process of being sold.

  Yugoslavia
  Mr. Home Robertson
  To ask the Secretary of State for Defence what instructions have been given to British participants in the European Community monitoring mission to Yugoslavia on the receipt and wearing of medals presented by the European Community; what rules apply to the receipt and wearing of medals awarded by the United Nations for peacekeeping duties; whether British participants in current operations in Croatia, Bosnia, the Adriatic and in enforcing the no-fly zone qualify for British campaign or gallantry medals; and if he will make a statement.

  Mr. Archie Hamilton
  British participants in the European Community monitoring mission in the former Yugoslavia have been advised that they should not accept the medal awarded by the European Community. Decisions on the acceptance and wearing of medals instituted by other countries are a matter for the sovereign, who is advised by the Foreign and Commonwealth Office. Permission is not normally granted if the award is offered more than five years after the event it commemorates, or if an official British award has been instituted for the same period of service. The question of British awards for service in the former Yugoslavia, the Adriatic and in enforcing the no-fly zone is currently under consideration.300
  The approval of the sovereign is required for British personnel to accept and wear medals awarded by the United Nations for peacekeeping duties. Her Majesty the Queen has recently agreed that British personnel who meet the qualifying criteria may receive the United Nations medal for service in the former Yugoslavia.

  Queen Victoria School, Dunblane
  Mr. Wallace
  To ask the Secretary of State for Defence what investigation was made by service personnel or persons employed by his Department into allegations of bullying at the Queen Victoria school, Dunblane, made by Mr. G. Harrison in December 1991; and if he will make a statement.

  Mr. Archie Hamilton
  This is a matter for the chief executive of Queen Victoria school, and I have asked him to reply.

  Letter from Julian Hankinson to Mr. James Wallace, dated April 1993:
  I have been asked to answer to you directly the following Parliamentary Question regarding Queen Victoria School. Date of Order Paper: 21 April 1993

  "6. Mr. James Wallace (Orkney and Shetland): To ask the Secretary of State for Defence, what investigation was made by service personnel or persons employed by his Department into allegations of bullying at the Queen Victoria School, Dunblane, made by Mr. G. Harrison in December 1991; and if he will make a statement."

  Answer:

  As a result of the allegations of bullying at Queen Victoria School made by Mr. G. Harrison in December 1991, Central Region Police carried out an immediate investigation and concluded that there was no cause for further action on their part. At the same time, the Chairman of Her Majesty's Commissioners called for an independent enquiry which took the form of a full pastoral inspection carried out by the Scottish Schools Inspectorate. No investigation was made by Service personnel or persons employed by the Department for the very reason that all enquiries were to be completely independent and impartial.

  I trust this answer is satisfactory. I would be happy to supply any further information if you require it.

TRADE AND INDUSTRY

  Pit Closures
  Mr. Nicholas Winterton
  To ask the President of the Board of Trade what is the total projected cost of the package of aid which is to be made available to the coal communities affected by his pit closure programme.

  Mr. Eggar
  As indicated in "Prospects for Coal", £200 million of additional measures has been available to English areas affected by major job losses in mining. There is a separate package of £43 million available to corresponding areas in Wales.

  Mr. Clapham
  To ask the President of the Board of Trade if he will guarantee that coal miners working at a mine scheduled for closure, mothballing or development under the Government's review who elect to put the colliery into the modified review procedure do not suffer any financial loss over the period whilst awaiting the decision of the review.
  301
  Mr. Eggar
  Decisions on the future of individual collieries, including consultation arrangements, and the remuneration and redundancy terms for its work force, are a matter for British Coal.

  British Coal Pension Scheme
  Mr. Nicholas Winterton
  To ask the President of the Board of Trade when he last met representatives of(a) British Coal and (b) the General, Municipal, Boilermakers and Allied Trades Union to discuss the future of the British Coal staff superannuation scheme; and if he will make a statement.

  Mr. Eggar
  There have been no such discussions.

  Mr. Nicholas Winterton
  To ask the President of the Board of Trade (1) what representations he has recently received concerning the proposal by British Coal to withhold from the British Coal staff superannuation scheme the payment of the £500 million which had been previously agreed for the funding of enhanced redundancy pensions;

  (2) what recent representations he has received concerning the British Coal staff superannuation scheme; and if he will make a statement.

  Mr. Eggar
  I have received a number of letters from the public and Members of Parliament about British Coal's staff superannuation scheme.

  Mr. Nicholas Winterton
  To ask the President of the Board of Trade what is his policy on the decision of British Coal to withhold from the British Coal staff superannuation scheme the payment of the £500 million which had been previously agreed; when that policy was communicated to British Coal; and what assurances he has given to British Coal relating to legal or other costs which might be incurred in resisting moves to force the release of the funds to the superannuation scheme.

  Mr. Eggar
  The management of British Coal's staff superannuation scheme is a matter for the corporation and the scheme's trustees. British Coal is seeking a court direction on the application of its share of the surplus in the scheme before it proceeds. No indemnity has been given or offered to the corporation in respect of its legal other costs. The Department will make grant payments for additional contributions that are made by British Coal.

  Methane
  Dr. Kim Howells
  To ask the President of the Board of Trade if he will make a statement on the ownership of methane within coal seams in the United Kingdom.

  Mr. Eggar
  The Petroleum (Production) Act 1934 vests all petroleum in the Crown. For the purposes of this Act the definition of petroleum includes any natural gas—such as methane—existing in its natural condition in strata.

  Dr. Kim Howells
  To ask the President of the Board of Trade what plans he has to clarify the rights of British Coal in relation to the coal bed methane industry.

  Mr. Eggar
  The Government announced in their White Paper "The Prospects for Coal" (Cm 2235) that when the coal industry is privatised, it is intended that there will be a new coal authority. The authority's powers and duties 302
  would be set out in the relevant legislation. Meanwhile, as the owner of the coal, British Coal's consent is required before any coal bed methane operations can take place.

  Dr. Kim Howells
  To ask the President of the Board of Trade whether methane extracted under a methane drainage licence under schedule 8 of the Petroleum (Production) Regulations 1982 may be commercially exploited by the holder of that licence.

  Mr. Eggar
  Methane drainage licences are granted incorporating the model clauses in schedule 8 of the Petroleum (Production) Regulations 1982 for the purposes of making and keeping mines safe. The terms of the licence do not prohibit the commercial exploitation of the methane obtained in this way.

  Dr. Kim Howells
  To ask the President of the Board of Trade on what basis British Coal assesses the value of coal that has been damaged by methane extraction.

  Mr. Eggar
  This is a matter for British Coal.

  Offshore Oil Industry
  Mr. Ainger
  To ask the President of the Board of Trade what conditions have been attached to oil exploration licences granted to the oil company for blocks 102/10, 103/1, 103/6, 106/27, 106/18, 106/19 and 106/23.

  Mr. Eggar
  The conditions attached to the oil and gas production licences granted to a consortium led by Marathon Oil for blocks 102/10, 103/1, 103/6, 106/27, 106/18, 106/19 and 106/23 are not significantly different from those shown in the indicative conditions circulated in October 1992. A copy of this document was placed in the Library of the House.

  Mr. Ainger
  To ask the President of the Board of Trade what is the shortest distance in nautical miles between(a) RAF Chivenor and (b) RAF Valley and blocks 102/10, 103/1, 103/6, 106/27, 106/18, 106/19 and 106/23.

  Mr. Eggar
  The shortest distances are approximately 70 nautical miles from RAF Chivenor to block 103/6 and 53 nautical miles from RAF Valley to block 106/19.

  Sir Michael Grylls
  To ask the President of the Board of Trade if he treats licences granted by his Department to oil companies under previous United Kingdom continental shelf licensing rounds as contractually binding agreements.

  Mr. Eggar
  Yes. Licences granted to oil companies offer specified rights, subject to conditions where appropriate, over the areas comprised by the licence, for a period stipulated in the licence. In return, companies undertake to obeserve the terms of the licence and to perform any programme of work agreed with my Department.

  Credit
  Mr. Alex Carlile
  To ask the President of the Board of Trade if he will bring forward proposals for legislation to prevent companies sending credit offers to minors; and if he will make a statement.

  Mr. Leigh
  My noble Friend the Parliamentary Under-Secretary of State for Consumer Affairs and Small Firms has asked the Director General of Fair Trading to
  303
  review consumer credit legislation and the proposals for amending it. The need to tighten up the existing provisions which prohibit the sending of credit circulars to minors will be reassessed in the light of the Director General's advice.

  Mr. Alex Carlile
  To ask the President of the Board of Trade what plans he has to review the current laws relating to credit; and if he will make a statement.

  Mr. Leigh
  I refer the hon. and learned Gentleman to the answer I gave to my hon. Friend the Member for Ashford (Sir K. Speed) on 12 March 1993,Official Report, columns 777–78.

  Packaging
  Mr. Alex Carlile
  To ask the President of the Board of Trade if he has any plans to introduce legislation designed to reduce the amount of materials and energy used, and the by-products generated in the manufacture of packaging for goods; and if he will make a statement.

  Mr. Eggar
  I have no plans to introduce legislation along the lines described. There has been a move towards lightweighting of packaging in recent years for both environmental and commercial reasons. This has been achieved without compromising the essential functions of packaging including protecting and preserving food, which itself reduces waste.

  Market Overt
  Mr. Alex Carlile
  To ask the President of the Board of Trade what plans he has to review the law of market overt; and if he will make a statement.

  Mr. Leigh
  I hope shortly to issue a consultation paper on the law relating to transfer of title. This will invite opinions on whether reform is needed to the rule of sales in market overt.

  Post Offices
  Mr. Barry Jones
  To ask the President of the Board of Trade which Post Office Counters offices he has visited in Wales.

  Mr. Heseltine
  I have made no recent visits to any Post Office Counters offices in Wales.

  Mr. Barry Jones
  To ask the President of the Board of Trade which Post Office sorting offices he has visited in(a) Scotland, (b) England and (c) Wales.

  Mr. Heseltine
  I have made no recent visits to any Post Office sorting offices in Scotland, England or Wales.

  Coal Subsidies
  Mr. Cummings
  To ask the President of the Board of Trade when he expects the subsidy to the British Coal Corporation described in the White Paper "The Prospects for Coal" to become payable.

  Mr. Eggar
  The subsidy to the British Coal Corporation will become payable during the current financial year.

  Mr. Cummings
  To ask the President of the Board of Trade how his Department intends to finance the proposed subsidies to be made available to the British Coal Corporation as detailed in his recent White Paper.
  304
  Mr. Eggar
  I shall be seeking finance for the proposed subsidy through the usual Supply estimates procedure.

  Chemical Weapons Convention
  Sir David Steel
  To ask the President of the Board of Trade when the United Kingdom will ratify the chemical weapons convention signed in Paris in January.

  Mr. Sainsbury
  Primary legislation is necessary to enable the United Kingdom to fulfil its obligations under the convention. We intend to ratify the convention when this legislation has been adopted.

  Energy Tax
  Mr. Shersby
  To ask the President of the Board of Trade what proposal has been made by the European Community for a tax on energy designed to reduce the threat of global warming; what consideration the Government have given to this; and if he will make a statement.

  Mr. Eggar
  Although the Department of Trade and Industry has an interest in the proposed directive for a carbon/energy tax, my right hon. Friend the Chancellor of the Exchequer is responsible for taxation matters.

  I refer my hon. Friend to the reply given by my right hon. Friend the Paymaster General on 15 January, Official Report, columns 835–36; and to the Chancellor of the Exchequer's Budget Statement on 16 March, Official Report, columns 182–83.

  Waste Disposal Contracts
  Mr. O'Neill
  To ask the President of the Board of Trade whether a municipal waste-to-energy scheme which had been granted a waste disposal contract before a third tranche of the non-fossil fuel obligation is announced would be eligible to bid into the new order when it is announced.

  Mr. Eggar
  [holding answer 23 April 1993] My Department is considering the arrangements for a third renewables order under the non-fossil fuel obligation, including the technologies to be included. However, other things being equal, a scheme that was able to demonstrate a secure supply of the renewable energy resource needed to drive the generation facility would be eligible to bid, and would be better placed to meet the requirements of the legislation, than one that was not.

EMPLOYMENT

  Underpayment
  Mr. Hinchliffe
  To ask the Secretary of State for Employment, pursuant to her answer of 15 March,Official Report, column 65, if she will name the eight companies prosecuted for illegal underpayment in 1992 and give the penalties incurred and the company names and business locations of all 5,165 establishments in England who paid less than statutory minimum remuneration for their workers in 1992; and if she will show how many employees were underpaid at each establishment.

  Mr. Michael Forsyth
  The names of the employers in England prosecuted in 1992 by the wages inspectorate for
  305
  underpayment of wages, together with particulars of penalties imposed by the courts, are set out in the table.

  Prosecutions by the Wages Inspectorate in England in 1992 under section 16 of the Wages Act 1986: Failure to pay Statutory Minimum Remuneration (SMR)

  Employer

  Number and type of offences

  Number of workers

  Penalties imposed

  American Fried Chicken, Barnsley

  1. Failure to pay SMR.

  20

  Fined £600; costs £75

  M. T. Fisher, Jump, Barnsley

  1. Failure to pay SMR.

  4

  Fined £100; costs £117·50

  Fosters Yard Hotel, Polesworth, Staffordshire

  1. Failure to pay SMR.

  2

  Fined £400; costs £750

  Fountain Stores, South Shields

  2. Failure to pay SMR; keeping false records

  2

  Fined £300; costs £300

  Haircut 100, Blaydon, Tyne and Wear

  2. Failure to pay SMR; keeping false records

  2

  Fined £600; costs £250

  Mark's Bakery, Mexborough

  1. Failure to pay SMR.

  8

  Bound over for 12 months

  Mark's Bakery, Mexborough

  1. Failure to pay SMR.

  2

  Fined £50; costs £50

  G. Pickersgill, Peckfield, Leeds

  1. Failure to pay SMR.

  1

  Fined £100; costs £175

  Training Programme
  Mr. Milburn
  To ask the Secretary of State for Employment, pursuant to her answer of 23 June 1992,Official Report, columns 169–78, if she will provide an updated table of her Department's training programmes for 1992–93.

  Mr. McLoughlin
  This information is not yet available. I shall write to the hon. Member giving the figures requested when the information for 1992–93 is complete.

  Social Affairs Council
  Mr. Barnes
  To ask the Secretary of State for Employment, pursuant to her answer to the hon. Member for Carshalton and Wallington (Mr. Forman) of 16 April,Official Report, columns 739–40, what were the voting figures for each member state recorded in the meeting of the European Community's Social Affairs Council on 6 April.

  Mr. Michael Forsyth
  None of the items on the agenda for discussion at the 6 April Social Affairs Council was brought to a conclusion, and consequently no votes were taken on them.

  Unemployment Benefit
  Mr. Dobson
  To ask the Secretary of State for Employment how many claimants for unemployment benefit were advised to seek sickness or invalidity benefit instead in each month since January 1992.

  Mr. McLoughlin
  Responsibility for the subject of the question has been delegated to the Employment Service agency under its chief executive. I have asked him to arrange for a reply to be given.

  Letter from Mr. M. Fogden to Mr. Frank Dobson, dated 26 April 1993:
  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question to her about the
  306
  The detailed results of inspections carried out by the wages inspectorate and which do not reach court, are disclosed only to the employers and workers concerned.

  number of clients on Unemployment Benefit (UB) who were advised to seek sickness or invalidity benefit instead in each month since January 1992. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.
  The statistics in the attached table show the number of people claiming UB who left the register to start another, more appropriate, benefit in each month since April 1992. This information was only collected quarterly prior to that date. Figures are not held centrally on the numbers moving into each of the alternative benefits. As you will appreciate, Sickness and Invalidity Benefit are only two in a wide range of benefits to which former UB claimants can transfer.
  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Other benefit starts

  Q/E

  Number

  March 1992

  24,432

  April 1992

  8,029

  May 1992

  9,581

  June 1992

  8,641

  July 1992

  10,142

  August 1992

  8,174

  September 1992

  7,808

  October 1992

  10,231

  November 1992

  8,855

  December 1992

  6,055

  January 1993

  8,824

  February 1993

  8,902

  March 1993

  8,405

  Workstart
  Mr. Beith
  To ask the Secretary of State for Employment what area will be included in the Tyneside workstart pilot scheme.

  Mr. McLoughlin
  This is a matter for Tyneside training and enterprise council to determine. Officials from the Employment Department are currently negotiating with the training and enterprise council to develop a proposal.

  The conditions of the workstart scheme, however, mean that the pilot scheme cannot extend to residents outside the Tyneside training and enterprise council area.
  307
  Ms Jane Kennedy
  To ask the Secretary of State for Employment what plans she has to locate a workstart pilot scheme in Liverpool.

  Mr. McLoughlin
  I refer the hon. Member to the reply given on 23 March to the hon. Member for Lewisham, Deptford (Ms Ruddock),Official Report, column 567.

SOCIAL SECURITY

  European Court of Justice
  Mr. Hague
  To ask the Secretary of State for Social Security how many cases in the European Court of Justice have been won by his Department.

  Mr. Lilley
  Since the beginning of 1992 the European Court of Justice has decided in favour of my Department in two cases in which I was a party.

  During this time there was a total of nine ECJ cases involving the United Kingdom social security system.

  Mr. Harry Greenway
  To ask the Secretary of State for Social Security what has been the outcome of recent European Court of Justice cases affecting his Department's policies.

  Mr. Burt
  Since the beginning of last year, nine cases involving the United Kingdom's interpretation of EC law as it affects social security have been referred to the European Court of Justice. The European Court confirmed the United Kingdom's policy interpretation of EC legislation in six of these cases. Two cases involved the clarification of issues as they affected the individual concerned and did not require changes in United Kingdom policy. One case has required a change in the United Kingdom rules governing whether family credit may be given to workers whose families are not resident in the United Kingdom. The remaining case has been referred back to the House of Lords for final determination.

  The Department can also be affected by cases involving other member states, although there have been no such recent judgments.

  Fraud
  Mr. Knapman
  To ask the Secretary of State for Social Security what proposals his Department has to reduce fraudulent claims for social security benefits.

  Mr. Lilley
  For 1993–94 I have set a target for fraud identified and stopped by the Benefits Agency and by local authorities administering housing benefit and council tax benefit of nearly £1 billion.

  Mr. David Evans
  To ask the Secretary of State for Social Security how many prosecutions have been brought for social security fraud in the last five years.

  Mr. Burt
  In the five years ended March 1993 more than 34,000 people were prosecuted for social security fraud.

  Mr. Clifton-Brown
  To ask the Secretary of State for Social Security what measures his Department is taking to tackle fraud and the abuse of benefits.

  Mr. Burt
  The Benefits Agency will be building upon the excellent base established in 1992–93, when over £500 million of fraud savings were achieved. Among the 308
  initiatives planned for this year are the deployment of more investigators and greater use of new technology. In addition, new financial incentives for local authorities are expected to result in a clamp down on housing benefit and council tax benefit fraud.

  Unemployment Benefits
  Mr. Janner
  To ask the Secretary of State for Social Security how much in total has been paid in unemployment benefits and to how many claimants in 1982, 1987 and 1992; and how many claimants he expects to receive what total in 1993.

  Mr. Burt
  In 1982–83 just under 2·5 million claimants received £5 billion in unemployment benefits. For 1987–88 there were 2·6 million recipients and a total of £6·6 billion was paid in benefits. For 1992–93 it is estimated that 2·5 million claimants received £9·3 billion. The forecast for 1993–94, in the Department's third annual report, is for 2·8 million unemployed people to receive just under £10·4 billion.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security how many persons over the age of 55 years received reduced unemployment benefit as a result of occupational pension payments of £35, in the last financial year.

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

  At November 1992, the number of people whose unemployment benefit was reduced or extinguished due to their receipt of an occupational and/or personal pension was:

  Number

  Unemployment Benefit reduced

  18,200

  Unemployment Benefit extinguished

  11,800

  Source: Half yearly analysis of unemployed claimants: November 1992

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security if he will take steps to ensure that all employees made compulsorily redundant receive full unemployment benefit.

  Mr. Burt
  We have no plans to change the rules governing entitlement to unemployment benefit of employees made compulsorily redundant.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what plans he has to raise or abolish the £35 per week threshold for over-55s' pension income when claiming unemployment benefit.

  Mr. Burt
  We have no plans to do so.

  Availability for Work
  Mr. Martyn Jones
  To ask the Secretary of State for Social Security what are the minimum hours under the availability for work requirement necessary for entitlement to income support.

  Mr. Burt
  I refer the hon. Member to my reply to his question on 8 March, column 460.
  309

  Benefits
  Mr. Thomason
  To ask the Secretary of State for Social Security what plans he has to promote a debate on the balance between selective and universal benefits.

  Mr. Lilley
  I am always keen to encourage public debate on social security issues. I would particularly welcome any interesting ideas which could inform the ongoing review of the social security system.

  Mr. Enright
  To ask the Secretary of State for Social Security what benefits are currently under review; and if he will make a statement.

  Mr. Scott
  In the course of the long-term expenditure review, we shall be examining all aspects of the social security programme. No decisions have been taken yet; there would be no point in conducting a long-term review if we already knew the outcome. It is our policy, at this stage of the review, to keep all options open.

  Child Support Agency
  Mr. Milligan
  To ask the Secretary of State for Social Security what progress he has made in setting up the Child Support Agency.

  Mr. Burt
  The Child Support Agency began operations on 5 April as planned. Operating within the framework of the Child Support Act 1991, the agency will provide a clear focus for the assessment, collection and enforcement of maintenance payments, and ensure that many more parents meet their responsibility to maintain their children.

  Housing Benefit
  Mr. Raynsford
  To ask the Secretary of State for Social Security if he will make a statement on the proposals for the Audit Commission for improving the administration of housing benefit in so far as they apply to his Department.

  Mr. Burt
  We welcome the Audit Commission's view that authorities can do much to improve the delivery of housing benefit.

  Departmental Budget
  Mr. Whittingdale
  To ask the Secretary of State for Social Security what proportion of total Government expenditure is currently taken by his departmental budget; and what the proportion was in 1979.

  Mr. Scott
  Total social security expenditure as a proportion of general Government expenditure:

  Percentage

  1978–79

  25·42

  1992–93

  32·20

  Invalidity Benefit
  Dr. Godman
  To ask the Secretary of State for Social Security if he will make a statement on the practical and financial implications of the implementation of the 310
  judgment of the European Court of Justice, case C-328/91 (30 March 1993), in respect of the resumption of the payment of invalidity benefit to women aged 60 to 65 years; and if he will make a statement.

  Mr. Scott
  The European Court's ruling specifically concerned the age conditions for entitlement to two non-contributory benefits—severe disablement allowance and invalid care allowance—and the Court expressly referred to this fact. Contributory invalidity benefit for women aged 60 to 65 was not at issue in the case before the European Court. That is the subject of a joint appeal by the Chief Adjudication Officer and the Secretary of State for Social Security in a separate case; the appeal follows the decision by a social security commissioner to allow payment of standard rate invalidity benefit to women aged 60 to 65.

  Adjudication officers are currently following the commissioner's interpretation of the law in deciding invalidity benefit cases, but payment of any additional benefit awarded as a result of the commissioner's decision is being suspended by the Secretary of State until this appeal has been resolved.

  Elderly People
  Mr. Spring
  To ask the Secretary of State for Social Security what measures his Department has taken to maintain support for the elderly.

  Miss Widdecombe
  Since 1979 the Department has maintained the real value of the basic retirement pension; improved choice and flexibility in pension provision so that now 67 per cent. of recently retired pensioners have income from occupational pensions; and targeted additional resources to poorer pensioners—now totalling some £1 billion extra each year. Spending on benefits for the elderly has increased in real terms by 40 per cent. since 1979, to nearly £34·5 billion in 1992–93.

  Income Support (Pensioners)
  Mr. Duncan
  To ask the Secretary of State for Social Security how many low-income pensioners his Department estimates have gained from the extra increases in income support that have taken effect since the start of 1991.

  Miss Widdecombe
  Around 3 million pensioners on low incomes have gained from these increases.

  Social Fund (Temporary Accommodation)
  Mr. Simon Hughes
  To ask the Secretary of State for Social Security what plans he has to review Government and local office DSS policy on the allocation of the social fund to people resident in, or leaving, temporary accommodation.

  Mr. Scott
  We are currently carefully considering the operation of the social fund in response to a number of authoritative reports and our own close monitoring of the fund.

  Value Added Tax (Fuel)
  Mr. Salmond
  To ask the Secretary of State for Social Security what representations he has received on the impact on benefit claimants arising from the imposition of VAT on domestic fuel and power; and if he will make a statement.
  311
  Mr. Burt
  I refer the hon. Member to the reply earlier today to the hon. Member for Angus, East (Mr. Welsh).

  Disability Claims
  Mr. Skinner
  To ask the Secretary of State for Social Security whether he is now able to announce the removal of the backlog of backdated disability claims; and if he will make a statement.

  Mr. Scott
  The situation on outstanding claims has improved significantly. Of new claims received prior to 1 December 1992, 99·99 per cent. have now been cleared.

  Pensioners
  Mrs. Roe
  To ask the Secretary of State for Social Security what is the total value of extra help which has been directed to pensioners on low incomes since 1989.

  Miss Widdecombe
  The total value of such extra help is now worth around £1 billion a year.

  Benefits (Automated Credit Transfer)
  Ms Janet Anderson
  To ask the Secretary of State for Social Security (1) what has been the cost, for each year since 1987, of seeking to persuade recipients of benefits, pensions and other allowances to switch to payment by automated credit transfer;

  (2) what would be the saving to his Department for each category of benefit, pension or other allowance if all recipients in each category were to switch to payment by automated credit transfer;

  (3) how many people draw benefits, pensions or other allowances in cash weekly at (a) main post offices and (b) sub-post offices;

  (4) if he will list, for each category of benefit, pension or other allowance, the percentage, and actual number of

  Estimate of number of recipients by method of payment (at December 1992) Number (millions) and percentage of beneficiaries paid by:

  Benefit

  Four weekly orderbook

  Fortnightly girocheque

  Weekly orderbook

  millions

  per cent.

  millions

  per cent.

  millions

  per cent.

  Retirement pension

  n/a

  n/a

  6·5

  70

  Child benefit

  2·25

  33

  n/a

  3·0

  45

  Income support

  n/a

  n/a

  3·5

  100

  Unemployment benefit (including income support cases paid by Employment Services)

  n/a

  2·8

  100

  n/a

  Invalidity benefit

  n/a

  n/a

  1·8

  100

  Note: There are some circumstances when payment may be made by weekly girocheque for limited periods—these have been excluded from the table.

  Mr. Spellar
  To ask the Secretary of State for Social Security at what intervals benefits on credit transfer are paid; and whether these are in advance or arrears.

  Miss Widdecombe
  People who choose to have their retirement pension, widowed mother's allowance, widows benefit or widows pension paid by automated credit transfer also have a choice of receiving their benefit every four or 13 weeks, paid in arrears. War pensions are also payable either 13 or four-weekly, and if the latter three weeks are in arrears and one in advance. Child benefit, family credit, disability living allowance, disability working allowance and attendance allowance paid by automated credit transfer are paid four-weekly in arrears.
  312
  recipients who are paid by automated credit transfer, the percentage and actual number of recipients who are paid by Giro, and the percentage and actual number of recipients who are paid in cash weekly at post offices;

  (5) what proposals he has to seek to persuade recipients of benefits, pensions or other allowances to switch to payment by automated credit transfer; and if he will make a statement.

  Miss Widdecombe
  Details of the precise number of beneficiaries paid by particular methods of payment are not available. However, the estimated totals for the number of recipients for the main benefits receiving payment other than by automated credit transfer are shown in the table. The number of recipients who are paid at the post office includes all those beneficiaries paid by order book, but Girocheques may of course be cashed either at the post office or through a bank or building society account.

  It is estimated that 20 million social security beneficiaries use sub-post offices and 4 million use main post offices.

  Information is not available which allows a costing on a benefit basis of the savings that would be made if all beneficiaries were paid by ACT, but the total estimated administration savings from converting all payments of social security benefits to ACT is about £475 million a year.

  The estimated costs of the actions taken to encourage beneficiaries to switch to payment by ACT were £535,000 in 1987–1988; £1,500,000 in 1988–1989; and £4,000 in 1990–91. No costs were incurred in the years 1989–1990, 1991–1992 and 1992–1993. During the next year, we will be making changes to form design and to leaflets, and to other information available from the Benefits Agency. These will be introduced gradually and after the appropriate research and piloting.

  British Coal
  Mr. Nicholas Winterton
  To ask the Secretary of State for Social Security what plans he has to refer to the Pensions Law Review Committee matters relating to the British Coal staff superannuation scheme.

  Miss Widdecombe
  None. Matters relating to the British Coal staff superannuation scheme are for my right hon. Friend the President of the Board of Trade.

  Emphysema and Bronchitis
  Mr. Eric Clarke
  To ask the Secretary of State for Social Security if he will launch a campaign to publicise the new rights for people affected by emphysema and bronchitis.
  313
  Mr. Scott
  The addition of chronic bronchitis and emphysema to the list of prescribed diseases, for which industrial injuries disablement benefit is payable, will be well publicised. Details of how people can claim will be announced well before the implementation date of 13 September 1993.

  Mr. Eric Clarke
  To ask the Secretary of State for Social Security if he will have consultations with the mining trade unions and other interested parties prior to starting up the processing of claims for bronchitis and emphysema.

  Mr. Scott
  Discussions are already under way with British Coal and officials will shortly be writing to the mining trade unions about the arrangements for handling claims. Discussions will be held with other interested parties as necessary.

  Mr. Clapham
  To ask the Secretary of State for Social Security (1) if the procedures for diagnosing coal miners suffering from emphysema and bronchitis will be carried out by the Pneumoconiosis Medical Board;

  (2) if the appeals procedure for coal miners suffering from emphysema and bronchitis will be carried out by the Pneumoconiosis Medical Appeals Tribunal.

  Mr. Scott
  Diagnosis will be carried out by specially qualified adjudicating medical practitioners or special medical boards at the Department's medical boarding centres. Appeals will be dealt with by the independent tribunal service; those against the decision of a SQAMP or SMB will be dealt with by medical appeal tribunals; those against the decisions of the Department's adjudication officers will be dealt with by social security appeal tribunals.

  Mr. Eric Clarke
  To ask the Secretary of State for Social Security if he will make it his policy to provide a pension for widows and dependents and for posthumous claims to be processed by the Pneumoconiosis Medical Appeal Tribunal.

  Mr. Scott
  There is provision in the industrial injuries disablement benefit scheme for widows to make posthumous claims for benefit. Widows may also qualify for widows benefit where the death of their husband was caused by occupational injury or prescribed disease.

  Mr. Clapham
  To ask the Secretary of State for Social Security from what date the procedures for diagnosing coal miners suffering from emphysema and bronchitis will come into force.

  Mr. Scott
  I refer the hon. Member to the reply given by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) on 29 March 1993 at column 77.

  Sickness and Invalidity Benefits
  Mr. Dobson
  To ask the Secretary of State for Social Security how many people received(a) sickness benefit and (b) invalidity benefit in each month since January 1992.

  Mr. Scott
  Information is not available in the form requested. Such information as is available is in the table, and is obtained from a 100 per cent. count of cases by benefit offices at the end of each month, rounded to the 314
  nearest thousand. In particular, the sickness benefit figures include cases registered sick that are not receiving benefit but are receiving national insurance credits.

  Date

  Sickness benefit

  Invalidity benefit

  January 1992

  461,000

  1,393,000

  February 1992

  474,000

  1,404,000

  March 1992

  479,000

  1,413,000

  April 1992

  465,000

  1,437,000

  May 1992

  472,000

  1,443,000

  June 1992

  472,000

  1,456,000

  July 1992

  487,000

  1,466,000

  August 1992

  489,000

  1,487,000

  September 1992

  496,000

  1,503,000

  October 1992

  505,000

  1,513,000

  November 1992

  513,000

  1,523,000

  December 1992

  521,000

  1,536,000

  January 1993

  525,000

  1,550,000

  February 1993

  535,000

  1,565,000

  March 1993

  538,000

  1,576,000

  Benefits Agency (Inquiry Number)
  Mr. David Atkinson
  To ask the Secretary of State for Social Security what recent representations he has received regarding the frequency of engagement of the Benefits Agency free telephone inquiry number 0800 666 555; and if he will make a statement.

  Mr. Burt
  The administration of the Benefits Agency inquiry line is a matter for Mr. Michael Bichard, the chief executive. He will write to my hon. Friend and a copy will be placed in the Library.

  Letter from Michael Bichard to Mr. David Atkinson, dated 23 April 1993;
  As Chief Executive of the Benefits Agency it is my responsibility to answer questions about relevant matters. I am therefore replying to your recent Parliamentary Question to the Secretary of State for Social Security asking what recent representations he has received regarding the frequency of engagement of the Benefits Agency free telephone number 0800 666 555.
  The Benefits Agency Freeline was set up to offer comprehensive advice and information on the whole range of Social Security benefits. However, whilst customer surveys have found a high degree of satisfaction with the quality of the service, it is clear from our ongoing monitoring of this exercise that over the last few months a significant proportion of calls have been unsuccessful because demand for the service has increased. Representations have been received regarding the Freeline service but the numbers about particular subjects are not routinely recorded.
  I am determined to bring about an improvement in the service. The telephone is increasingly the preferred means of contact for the Agency's customers and I am able to tell you that in the last week for which figures are available 18,185 calls were answered successfully by the Freeline. Last year the Agency began a thorough review of the Freeline service, and customers are being consulted on their requirements. The results of this review will inform our thinking about how the service should evolve in the future. However, to ensure that the service is improved in the short term, five Freeline centres have installed Automatic Call Distribution, which allocates calls to lines on a strictly first come first served basis. The early indications are that the Automatic Call Distribution has been effective in reducing call waiting times.
  The Freeline Service is also available in Punjabi, Urdu, Cantonese, and Welsh, as well as a free telephone service giving advice and information to people with disabilities and to those caring for them.
  I hope you find this reply helpful. A copy of the reply will appear in the Official Report and a copy will also be placed in the Library.

ENVIRONMENT

  Enterprise Zones
  Mr. Frank Field
  To ask the Secretary of State for the Environment what is the planned expenditure in respect of all current or planned enterprise zones in(a) 1993–94, (b) 1994–95 and (c) 1995–96.

  Mr. Robin Squire
  . The principal costs of enterprise zones are rate relief and capital allowances. Neither can be accurately calculated in advance as they are dependent upon the rate of development on the individual zones. Current forecasts are as follows:

  1993–94 £ million

  1994–95 £ million

  1995–96 £ million

  Rate relief

  21·2

  8·7

  7·9

  Capital allowances

  30·8

  7·9

  8·0

  Plans for enterprise zones for colliery closure areas are still being formulated and are not therefore included in the above figures.

  Homelessness
  Mr. Battle
  To ask the Secretary of State for the Environment how many applications or inquiries under part III of the Housing Act 1985 were first recorded by local authorities for England as a whole during each quarter of 1991 and 1992; and whether he will arrange for this category of information to be published as a national statistic in his Department's homelessness statistics.

  Sir George Young
  Local authorities report the number of applications or inquiries under the homelessness provisions of the Housing Act 1985 in their quarterly P1(E) return.

  In the second quarter of 1991, the return was revised to collect information on the total number of applications or inquiries made; previously information had been collected on inquiries completed.

  The coverage of the data now collected depends on the administrative practices of individual local authorities. These vary widely between districts and over different periods of time, making it impossible to provide reliable national and regional estimates.

  Mr. Battle
  To ask the Secretary of State for the Environment (1) how many decisions were issued by local housing authorities in England under section 64 of the Housing Act 1985 during each of the four quarters of 1991 and each of the first three quarters of 1992 in relation to households of specific ethnic origin who were(a) found not to be homeless or threatened with homelessness within 28 days, (b) found to be homeless or threatened with homelessness within 28 days, but not in priority need, when advice and assistance only were given, (c) found to be intentionally homeless and not accepted for permanent rehousing and (d) accepted for rehousing on a permanent basis; and whether he will arrange for these categories of information to be published as part of his Department's homelessness statistics;

  (2) how many applications or inquiries were first recorded in England during each of the four quarters of 1991 and each of the first three quarters of 1992 concerning applications for accommodation under part III of the
  316
  Housing Act 1985 in relation to households of specific ethnic origin; and whether he will arrange for these categories of information to be published as part of his Department's homelessness statistics.

  Sir George Young
  Local authorities provide information on their activities under the homelessness provisions of the Housing Act 1985 in their quarterly P1 (E) return.

  Since the second quarter of 1991, local authorities have been asked to report the ethnic origin of all those households who applied to them as being homeless and about whom they made a decision under section 64 of the 1985 Housing Act.

  Many local authorities have yet to provide information on ethnic origin and my Department is currently assessing whether the available data are sufficiently reliable for publication.

  Mr. William Powell
  To ask the Secretary of State for the Environment if he will publish the total number of households accepted, by each local authority in Northamptonshire for each year since 1979, for securing permanent accommodation under the homeless provisions of the Housing (Homeless Provisions) Act 1977 and the Housing Act 1985.

  Mr. Baldry
  Local authorities report the number of households for whom they accept responsibility to secure permanent accommodation under the homelessness provisions of the Housing Acts in their quarterly P1 (E) returns.

  For the information for the years 1979 to 1991 inclusive, I refer my hon. Friend to the answer I gave to the hon. Member for Angus, East (Mr. Welsh) on 17 June 1992, Official Report, columns 569–70.

  The information for 1992 is in the table:

  Households accepted as homeless in 19921

  Number

  Corby

  72

  Daventry

  88

  East Northamptonshire

  107

  Kettering

  78

  Northampton

  519

  South Northamptonshire

  133

  Wellingborough

  131

  1 Excluding intentionally homeless households.

  Construction Industry
  Mr. Nicholas Winterton
  To ask the Secretary of State for the Environment what steps he is currently taking to ensure that his Department is fully aware of the needs, problems and potential of the construction industry.

  Mr. Baldry
  We maintain close links with the industry through a wide range of formal and informal contacts. Last year I established fortnightly meetings at which industry representatives can discuss with me any matters of concern to them. The Department's construction policy directorate holds regular meetings with industry organisations to consider European issues, and has recently set up a similar forum to discuss domestic issues. The Department is represented on many industry bodies. We are increasing secondments between the civil service and the industry to help improve mutual understanding.

  The Department is currently undertaking a review, in close consultation with the industry, to examine how the

  317
  construction policy directorate can develop its established sponsorship activities to meet the present and future needs of the industry and its constituent interests.

  Further and Higher Education
  Mr. Wigley
  To ask the Secretary of State for the Environment what guidance he issues on the position of those employed in institutions of further and higher education and the remit of section 80(1)(a) of the Local Government Act 1992 as a result of the Further and Higher Education Act 1992.

  Mr. Robin Squire
  We have issued no such guidance. Staff employed in institutions of further and higher education are no longer covered by the disqualification from standing for election to local authorities imposed by section 80(1)(a) of the Local Government Act 1972.

  Tyne and Wear Development Corporation
  Mr. Nicholas Brown
  To ask the Secretary of State for the Environment if he will list, by site and workplace, the new jobs that have been created by the Tyne and Wear urban development corporation.

  Mr. Robin Squire
  The new jobs that have been created by Tyne and Wear development corporation since its inception are as follows:

  Development sites

  Jobs

  Royal Quays

  270

  St. Peter's Riverside

  55

  Sunderland Enterprise Park

  200

  Newcastle Central Business and Technology Park

  150

  Newcastle Business Park

  3,738

  Closegate

  100

  Dolphin Quay

  35

  Viking Industrial Park

  192

  Walker Technology Park

  482

  Sunrise Enterprise Park

  375

  5,597

  Companies' own sites1

  4,213

  TOTAL

  9,810

  1 These are sites within the urban development area which are not part of the corporation's main development projects but which have otherwise been supported by the corporation (e.g. by business development grant).

  More detailed information relating to "workplace" cannot be obtained without disproportionate cost.

  Heating Efficiency
  Dr. Spink
  To ask the Secretary of State for the Environment what steps he is taking to promote the improvement of the insulation of existing stock of pre-1981 dwellings and to improve the efficiency of their boilers or other heating sources; and if he will make a statement.

  Mr. Maclean
  My Department sponsors various programmes which promote improvements in domestic heating and insulation.

  Insulation grants for households on low incomes are available under the Energy Efficiency Office's home energy efficiency scheme. Under the green house demonstration programme, the Government have made special funding
  318
  available to local authorities to show the scope for securing energy efficiency improvements in council housing. Grants for heating and insulation may be available to private householders under the renovation grant system administered by local authorities.

  In addition, householders are being encouraged to take energy efficiency measures through the Energy Efficiency Office's national television and press advertising campaign, "Helping the Earth Begins at Home". A free booklet, "Heating Your Home", offers advice on the replacement of old boilers nearing the end of their life with one of three types of more efficient boiler, including the condensing boiler.

  Farm Shops
  Mr. Mackinlay
  To ask the Secretary of State for the Environment (1) what guidelines and advice exist for local authorities when determining planning applications for farm shops situated within the green belt;

  (2) what guidelines and advice exist for local authorities when determining planning applications to permit retailing in farm shops situated in the green belt; and what proportion of goods sold can be the produce of neighbouring farms.

  Mr. Baldry
  Advice on development control matters within the green belt is given in planning policy guidance note 2. Paragraph 13 of that document states that approval should not be given, except in very special circumstances, for the construction of new buildings or for the change of use of existing buildings for purposes other than uses appropriate to a rural area.

  It is normally assumed that the use of a farm shop only for the sale of goods produced on that farm is a use which is ancillary to the use as a farm not requiring planning permission, whereas use as a farm shop selling a significant amount of "imported" produce amounts to a use in its own account and is therefore subject to planning control. This advice is contained in paragraph B2 of annex B to planning policy guidance note 7.

  It will be for that local planning authority to take this advice into account, together with all other material planning considerations, in making planning decisions concerning farm shops in green belts.

  Opencast Mining
  Mr. Stevenson
  To ask the Secretary of State for the Environment what is the current status of outstanding appeals against refusal to grant permission to extract coal by opencast mining in Stoke-on-Trent.

  Mr. Baldry
  There is one such appeal outstanding which is by British Coal Opencast in relation to the Berryhill site. A decision on this case will be issued as soon as possible.

  Radioactive Waste
  Mr. Alan W. Williams
  To ask the Secretary of State for the Environment if he will make a statement on his Department's plans for the long-term storage of high-level radioactive waste.

  Mr. Maclean
  Government policy is that high-level radioactive waste is treated and stored at the surface for a period of at least 50 years, which will allow heat generated by the decay of radioactivity to reduce.
  319

  Green Belt
  Mr. Mackinlay
  To ask the Secretary of State for the Environment what advice or guidance his Department has published to local authorities and other agencies with a view to promoting and maintaining employment in farms and related areas of agriculture, situated in the green belt.

  Mr. Baldry
  It is our policy to encourage the rural economy to prosper and expand. This policy is set out in full in planning policy guidance note 7. While green belts have a special status where there is a presumption against "inappropriate" development, agriculture would not come into that category—see paragraph 13 of planning policy guidance note 2.

  Radiation Units Committee
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what recent meetings he has had with the British committee on radiation units and measurements; and what plans he has to meet the committee.

  Mr. Maclean
  My right hon. and learned Friend has not recently met and has no plans to meet the British Committee on Radiation Units and Measurements.

  National Association for Urban Studies
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what financial support he will provide to the National Association for Urban Studies in the year 1993–94; and if he will make a statement.

  Mr. Robin Squire
  My Department has provided funding for the National Association for Urban Studies for the past four years from the special grants programme. A new three-year grant, awarded in 1990–91, was tapered to encourage the association to broaden its trading base and reduce the reliance on the Department's grant. In that time, the association failed to demonstrate adequate progress towards self-sufficiency. As a result, and because the programme is heavily oversubscribed, I have decided that the scarce resources available would be better spent on other projects.

  ReChem International
  Mr. Alex Carlile
  To ask the Secretary of State for the Environment what plans he has to enforce the 1982 EC Seveso directive on the company ReChem International Ltd.; and if he will make a statement.

  Mr. Maclean
  Directive 82/501/EEC, the so-called Seveso directive, is implemented in Britain by the Control of Industrial Major Accident Hazards Regulations 1984. These currently exclude installations for the disposal of toxic and dangerous waste that are in possession of a licence under the relevant provisions of the Control of

  Total ozone (Dobson units)

  Camborne

  Lerwick

  Year

  5 March

  6 March

  7 March

  5 March

  6 March

  7 March

  1993

  262

  240

  261

  267

  250

  291

  1992

  351

  327

  345

  341

  320

  323

  1991

  384

  429

  1990

  358

  308

  314

  1989

  333

  382

  384

  354

  499

  1988

  411

  420

  352

  375

  436

  340

  320
  Pollution Act 1974. The Health and Safety Executive will shortly be going out to consultation with proposals to remove this exclusion. ReChem International operates plants falling within the current exclusions.

  Waste Exports
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment (1) what position he took regarding the possible amendment of the Basel convention to ban waste exports to non-OECD countries, discussed at the EC Council of Ministers on 23 and 24 March;

  (2) what investigations his Department has undertaken to ascertain what environmental damage will occur as a result of the export of toxic waste from Humberside;

  (3) what action he will take to ensure the toxic waste currently stored at the Capper Pass site in Humberside will not be exported to Mexico or Bolivia;

  (4) what investigations his Department has undertaken to ascertain the toxicity of the toxic waste due to be exported from Capper Pass, Humberside;

  (5) what steps he will take to ensure that companies exporting waste complete the required documentation for the export of non-ferrous materials under the EC directive on the transfrontier shipment of hazardous wastes.

  Mr. Maclean
  I refer the hon. Member to the answer I gave to the hon. Member for Islington, South and Finsbury (Mr. Smith) on 25 March,Official Report, column 710.

  Under existing regulations the United Kingdom has no powers to ban exports of non-ferrous metal waste. However, consignments must meet certain conditions; for example, the holder must have entered into a contract with the consignee for the recovery of the non-ferrous metal content and made a declaration to this effect on the uniform document which is copied to the Waste Regulation Authority. Compliance with these conditions is a matter for the Waste Regulation Authority. We have ensured that Mexico is aware of its obligations under the Basel convention.

  Ozone
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment (1) what were the degrees of deviation from the normal recorded figures of total column ozone over Lerwick and Camborne for 5, 6 and 7 March;

  (2) what were the levels of total column ozone over Lerwick and Camborne on 5, 6 and 7 March; and what they were for the same dates in each of the last 10 years;

  (3) what was the average March level of total column ozone for 1993; and what degree of variation there was from the normal recorded levels for this period.

  Mr. Maclean
  Results of ozone column measurements made at Camborne and Lerwick on 5, 6 and 7 March for 1993 and for the same dates over the past 10 years are:
  321

  Total ozone (Dobson units)

  Camborne

  Lerwick

  Year

  5 March

  6 March

  7 March

  5 March

  6 March

  7 March

  1987

  354

  389

  1986

  301

  373

  383

  389

  400

  1985

  392

  351

  320

  345

  1984

  287

  301

  293

  328

  1983

  359

  279

  1982

  392

  362

  416

  393

  427

  1981

  361

  399

  441

  444

  1980

  378

  436

  Blanks indicate days when measurements could not be made due to weather conditions. Recent data are subject to final calibration corrections. The measurements for 5, 6 and 7 March this year include the four lowest for March in the record, the previous lowest levels being 267 and 270 Dobson Units measured on 1 March 1983. The average ozone measurements for March this year are 335 Dobson Units at Camborne and 347 Dobson Units at Lerwick. These values are respectively 12·6 per cent. and 10·4 per cent. below the average for the last 10 years.

  Flats Over Shops Initiative
  Mr. Streeter
  To ask the Secretary of State for the Environment how much of his Department's £5 million allocation for Living Over the Shop in 1992–93 was spent; what was the average allocation per flat; and how many new homes were produced.

  Mr. Baldry
  The outturn for the first year of the Department's flats over shops initiative will not be known until all final claims have been returned by local authorities. Provisional information from local authority fourth quarterly monitoring returns indicates that some £4,093,000 has been spent in 1992–93 producing some 292 new homes at an average grant cost per unit of £14,000.

  Waste Incinerator, Ealand
  Mr. Tipping
  To ask the Secretary of State for the Environment what costs were incurred by his Department in preparing for the public inquiry scheduled for 30 March into a planning application for a waste incinerator plant by S. and J. Engineering at Ealand; and when he was notified the appeal had been withdrawn.

  Mr. Maclean
  The staff and other internal costs of arranging, and preparing for, individual planning inquiries are not separately identified within the overall cost of the administration of the appeals system. The Department incurred no external costs in this case. The appeal was withdrawn on 24 March.

  Devon County Structure Plan
  Mr. Steen
  To ask the Secretary of State for the Environment what is the reason for the lapse of time since the examination in public of selected matters arising on the third alteration to the Devon county structure plan; why it has been necessary to delay publication of his proposed modifications; and when he intends to publish the proposed modifications to the structure plan.

  Mr. Baldry
  I expect to publish proposed modifications to the Devon structure plan third alterations very shortly.

  The preparation of the modifications has taken longer than I hoped, but this is an important matter which requires proper consideration.

  Mr. Steen
  To ask the Secretary of State for the Environment when the panel conducting the public examination of selected matters arising on the third alteration of the Devon county structure plan in March/April 1992 submitted its report and recommendations.
  322
  Mr. Baldry
  The panel submitted its report and recommendations on 26 May 1992.

  Council Tax
  Mr. Milburn
  To ask the Secretary of State for the Environment what representations he has received about landlords passing on council tax charges to their tenants.

  Mr. Robin Squire
  We have received 83 representations about landlords passing on council tax charges to their tenants. Thirty three of these were in direct response to a consultation letter issued on 5 January 1993 on proposals to amend the landlord and tenant legislation to cater for the situation where the landlord, rather than the tenant, is liable for the tax.

  Mr. Milburn
  To ask the Secretary of State for the Environment what advice he has given to the rent officer service about determining rents in cases where landlords have been found to be passing council tax costs on to their tenants.

  Mr. Robin Squire
  Rent officers are independent of Government and neither Ministers nor officials are able to advise them about determining rents. In making their assessments of fair rents rent officers follow the requirements of the Rent Act 1977. These provisions have been amended to allow for the liability for council tax to be taken into account where appropriate. Rent officers also assess market rents for housing benefit subsidy purposes under the Rent Officer (Additional Functions) Order 1990. Again, these assessments will now take account of council tax where appropriate. The Department has issued procedural guidance notes to rent officers to alert them to these changes, copies of which have been placed in the Library today. In addition, the Institute of Rent Officers has issued a practice note to its members, copies of which are also available in the Library.

  Mr. Milburn
  To ask the Secretary of State for the Environment what is(a) the average rent level determined by the rent officer service in each region and (b) the average council tax bill in each region.

  Mr. Robin Squire
  The regional figures on rent levels determined by the rent officer service in the fourth quarter of 1992, the latest period for which figures are available, are given in table 1.3 of the "Rent Officer Statistics—Fourth Quarter" publication, copies of which are available in the Library.

  The average council tax by region is as follows:

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  Average Council Tax per dwelling

  £

  Northern

  445

  North West

  464

  Yorkshire and Humberside

  423

  East Midlands

  416

  West Midlands

  439

  East Anglia

  397

  South East

  477

  London

  494

  South West

  458

  England

  456

  Authority

  1988–89

  1989–90

  1990–91

  1991–92

  (a)

  (b)

  (a)

  (b)

  (a)

  (b)

  (a)

  (b)

  Corby

  4,714

  89

  10,652

  95

  13,293

  89

  9,445

  95

  Daventry

  2,607

  94

  3,639

  97

  8,246

  89

  5,194

  94

  East Northamptonshire

  7,882

  94

  11,138

  94

  7,309

  87

  4,652

  91

  Kettering

  10,131

  93

  9,722

  90

  8,509

  90

  7,809

  95

  Northampton

  5,558

  89

  n/a

  —

  10,208

  94

  20,144

  89

  South Northamptonshire

  n/a

  —

  n/a

  —

  2,793

  83

  3,540

  92

  Wellingborough

  n/a

  —

  n/a

  —

  10,725

  91

  9,198

  96

  Notes:

  (a)= total claims received

  (b)= Percentage of claims allowed

  n/a = Not available

  Information for 1987–88 is not available

  Source: Housing Benefit Management Information System

  Police Houses
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment how many police houses have been bought or leased over the past three years in the London borough of Ealing by housing associations; if he will state the associations concerned and the cost to the public funds in each case; and if he will make a statement.

  Mr. Charles Wardle
  [holding answer 30 March 1993]: I have been asked to reply.

  The receiver for the Metropolitan police district is to transfer three blocks of flats in Ealing to Housing 21, the housing association arm of the Royal British Legion. Housing 21 will manage the flats for a fee and rents will be paid on to the receiver.

  Number of council house sales and value by region (£000)1

  April to June 1992 (provisional)

  July to September 1992 (provisional)

  October to December 1992 (provisional)

  Number of sales

  Undiscounted value of sales

  Value (1981 prices)

  Number of sales

  Undiscounted value of sales

  Value (1981 prices)

  Number of sales

  Undiscounted value of sales

  Value (1981 prices)

  DOE Regions

  North (excluding Cumbria)

  1,080

  30,538

  16,280

  1,249

  33,753

  17,929

  1,038

  28,249

  15,108

  Yorkshire and Humberside

  974

  32,635

  17,398

  1,074

  36,639

  19,462

  789

  26,950

  14,414

  East Midlands

  690

  24,554

  13,090

  821

  28,661

  15,224

  723

  26,280

  14,055

  Eastern

  1,179

  56,981

  30,377

  1,556

  76,565

  40,670

  1,203

  54,758

  29,286

  London Boroughs

  2,177

  128,753

  68,640

  2,751

  173,054

  91,923

  1,964

  105,301

  56,318

  South East

  1,040

  52,747

  28,120

  1,408

  71,583

  38,023

  1,035

  55,282

  29,566

  South West

  715

  30,442

  16,229

  933

  39,961

  21,226

  788

  33,996

  18,182

  West Midlands

  1,064

  40,196

  21,429

  1,109

  41,593

  22,093

  973

  36,984

  19,780

  North West (including Cumbria)

  1,263

  39,488

  21,051

  1,303

  38,501

  20,451

  1,143

  37,251

  19,923

  England

  10,182

  436,334

  232,614

  12,204

  540,310

  287,002

  9,656

  405,051

  216,633

  1 The figures exclude some 12,300 dwellings, valued at about £120 million, transferred from Bromley Borough Council to Broomleigh Housing Association in April 1992.

  324

  Housing Benefit
  Mr. William Powell
  To ask the Secretary of State for the Environment if he will list the number of applications for housing benefit and the proportion allowed for each local authority in Northamptonshire for each year since 1987–88.

  Mr. Burt
  I have been asked to reply.

  The available information is in the table.

  Housing 21 has the option to acquire the freeholds within five years.

  Council House Sales
  Mr. Milburn
  To ask the Secretary of State for the Environment, pursuant to his answer of 8 February,Official Report, columns 519–20, what was the number and value of council house sales by region for the latest available quarters (a) at current prices and (b) at 1981 prices.

  Mr. Baldry
  [holding answer 22 April 1993]:The latest available information, which is for the period October to December 1992, is given in the table. The table also gives updates of the figures for the preceding two quarters given in my reply of 8 February.
  325

  Special Needs Management Allowance
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment if he will make a statement on the future of the special needs management allowance.

  Mr. Baldry
  [holding answer 20 April 1993]: Special needs management allowance is paid to housing associations by the Housing Corporation, through funding provided by my Department, to contribute to the housing management costs of accommodation providing for people with special needs. When the scheme was introduced in April 1991, as a replacement for the existing hostel deficit grant arrangements, housing associations were informed that it would be reviewed as soon as there was sufficient evidence of the operation of the scheme. The Housing Corporation will therefore be reviewing this year the working of the scheme, taking account of the results of a study mounted by my Department which will compare the effects of the special needs management allowance arrangements with those of the old hostel deficit grant scheme.

  Dioxins
  Mr. Barnes
  To ask the Secretary of State for the Environment what are the maximum tolerable concentrations of dioxins and furans which are allowable for differing types of incinerators, power station operations, leachates, sludges and for the aquatic environment; and if he will make a statement.

  Mr. Maclean
  [holding answer 20 April 1993]:Authorisations issued by Her Majesty's inspectorate of
  326
  pollution under integrated pollution control legislation require the operator to use the best available techniques not entailing excessive cost to prevent, or minimise and render harmless the release of prescribed substances, including dioxins, to any environmental medium.

  Power stations, compared with other combustion and incineration processes, produce only very small quantities of dioxins and furans so that concentration limits are neither appropriate or specified.

  Guidance notes published by the chief inspector of Her Majesty's inspectorate of pollution relating to combustion and incineration processes subject to IPC control suggest an initial limit of 1 ng/M3 TEQ dioxins in releases to air while requiring operators to aim ultimately to achieve one tenth of that limit by the use of progressive techniques. The relevant CI guidance notes are numbered IPR 5/1 to 5 inclusive, IPR 5/7 and IPR 5/11, all of which are in the Library of the House.

  As part of the statutory IPC authorisation process the NRA can, in addition to any limits Her Majesty's inspectorate of pollution itself imposes on an operator, require Her Majesty's inspectorate of pollution to impose further limits where the release is directly to controlled waters. Discharges of dioxins and furans to water are typically extremely low and since they are normally bound to particulates, strict control of particulates in the discharge will minimise the release of these pollutants to the environment.

  The best solution must be to avoid the generation of dioxins in the first place by employing appropriate operating conditions within the combustion or incineration process and this is what IPC aims to achieve.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
PrayersߞRead by the Lord Bishop of Worcester.
Lord Rodney Lord Rodney ߞ Sat first in Parliament after the death of his father.
Viscount Massereene and Ferrard Viscount Massereene and Ferrard ߞ 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 am to attend the Commonwealth Law Conference in Nicosia, Cyprus between the dates of Tuesday 4th May and Friday 7th May 1993. Accordingly, I trust that the House will grant me leave of absence from Tuesday 4th May to Thursday 6th May 1993.

Russian Commemorative Medal
Lord Williams of Elvel Lord Williams of Elvel asked Her Majesty's Government:
Whether British servicemen' who received the Russian commemorative medal in recognition of their service to the Russian war effort are allowed to wear it and, if not, why not.
Viscount St. Davids: My Lords, the Russian commemorative medal can be accepted as a souvenir only and is not to be worn. Permission to wear a foreign award is not normally given if it is offered more than five years after the event it commemorates or if an official British award has been instituted for
2
the same period of service. The Russian commemorative medal was not instituted until 1985, and the contribution of British servicemen to the Soviet war effort had already been recognised by the award of the Atlantic Star.
Lord Williams of Elvel: My Lords, I thank the noble Viscount for that Answer, which will come as no surprise and yet will be a deep disappointment to the Royal Naval Patrol Services Association. Is the noble Viscount aware that escorting convoys to Russia during the Second World War required enormous bravery, courage and hardiness and that anything that anybody can do to reward the people who performed that essential service, who for obvious reasons are now coming towards the end of their lives, should now be done? Would the noble Viscount further accept that it was, in fact, the Foreign and Commonwealth Office which imposed restrictions on the wearing of this medal, not the Soviet authorities?
Viscount St. Davids: My Lords, I am sure that your Lordships' House will concur with the noble Lord's assessment of the bravery of those involved in the campaign. However, after World War II more than 50 different nations, including the United Kingdom, instituted awards and medals for campaign service in that war. In 1946, agreement was reached between the allied nations that there would be no interchange of campaign awards between countries as each nation would have instituted its own campaign stars and medals for particular periods of service.
Lord Mason of Barnsley: My Lords, first, is it not a fact that the Russians decided in 1985, the 40th anniversary of the last war, that these men should be recognised and a commemorative medal was struck to which about 12,000 men are entitled? Is it not also a fact that if they receive the medal, they wear it on suits—on mufti—and not on a military uniform? How can the Ministry of Defence object to that? Secondly, what are the views of the Royal British Legion? Do not its members want to see their comrades wear this medal alongside their other campaign medals? Finally, is it

3
not an insult to the nation concerned that, having recognised our men for their gallantry during the last war, its medal cannot be worn publicly?
Viscount St. Davids: My Lords, the Government believe that a multiplicity of medals can only cause confusion and will lower the perceived value of those which are authorised by the sovereign in the eyes of both the recipients and the nation.
Lord Mayhew: My Lords, is the noble Viscount aware that his attitude towards these elderly and brave war veterans must strike many noble Lords as ungenerous? Does he agree that, although perhaps 50 allied governments agreed about not wearing other nations' commemorative medals, this medal has a unique feature—namely, the extremely grudging attitude of Stalin and his government towards the bravery of these people at the time? It may well be most appropriate that the new Russian Government should wipe that out by a commemorative medal such as the one that they are now offering.
Viscount St. Davids: My Lords, I would draw your Lordships' attention to the regulations which govern the wearing of medals. They emanate from the Foreign and Commonwealth Office. Part A of the regulations pertains to those who are in the service of the Crown. Those people are obviously covered by the disciplinary Acts. Part B governs the wearing of medals by those who are not in the service of the Crown. Clause 1 states:
"It is The Queen's wish that Her Majesty's subjects should not accept and wear the insignia or any such Order or decoration without Her Majesty's permission".
We believe that the integrity of campaign medals will be maintained only if their authorisation and subsequent issue remain the prerogative of the sovereign.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that, while I do not dispute his decision on the basis of the present regulations, those regulations appear to be unduly restrictive and in the case of those who faced all the risks and dangers of the Russian convoys and received a very proper reward from the Russian Government an exception should be made? If such an exception is contrary to the regulations, would it not be a good thing to amend them?
Viscount St. Davids: My Lords, it would be proper if I were to bring this matter to the attention of my right honourable friend and to express your Lordships' views to see whether it is possible to bring about some amendment to the restrictions.
Lord Ennals: My Lords, I greatly welcome the Minister's reply. Will he consult some of the organisations, such as the Royal British Legion, of which I am proud to be a member, to see what they feel about this matter? This period after the end of the cold war when we can search for ways of paying credit to one another would surely be a good time to reconsider the issue.
Viscount St. Davids: My Lords, I shall bring the noble Lord's comments to the attention of my right honourable friend.
Lord Mowbray and Stourton: My Lords, is not it true that after the last war the French Government, at various times, awarded medals to British citizens for their great services to the allied cause during the Second World War? Those medals were always accorded acceptance by the Monarch through the Government. That is a point worth thinking about when considering this matter.
Viscount St. Davids: My Lords, we should not confuse medals which are awarded for gallantry and services and campaign medals.
Lord Molloy: My Lords, I am very close to the Royal British Legion as I am president of the metropolitan area. We greatly welcome the Minister's reply. We believe that any British serviceman or woman, wherever they have served in the interests of our country, should be proud to wear whatever medals they have, and, what is more, the Government should congratulate them.
Viscount St. Davids: My Lords, the noble Lord's connection with the Royal British Legion is well known to your Lordships' House. Again, I shall refer his comments to my right honourable friend.
Lord Grimond: My Lords, does not the ruling in this matter go back to a rather casual remark made by Queen Elizabeth, who said:
"My dogs shall wear no other collars but mine own"?
Is not that wholly inappropriate now? Everyone is glad that the noble Viscount will raise this matter, because the restriction is clearly out of date.
Viscount St. Davids: My Lords, I am afraid that the comments of Her Majesty Queen Victoria do not lie within my brief.
Noble Lords: Queen Elizabeth!
Lord Williams of Elvel: My Lords, I thank the noble Viscount for his response. He has summed up the feeling of the House extremely well. I greatly hope that his right honourable friend will pay particular attention to the views that have been expressed on all sides of the House and will make the change in the regulations that the noble Lord, Lord Boyd-Carpenter, suggested.

Prescription Charges
2.47 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What is the annual revenue to the Department of Health from prescription charges for the latest period for which figures are available; and how much of that revenue is spent on the administration of the prescription scheme.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, it is estimated that £338 million will be raised

5
from prescription charges in the current year. It is not possible to identify the exact cost of collection, but we believe it to be minimal.
Lord Molloy: My Lords, I thank the Minister for that Answer. I acknowledge the difficult situation with regard to prescription charges. Will she say, for example, whether general practitioners are meeting their immunisation targets? Are many people going to the chemist to collect various forms of medicament only to find that they cannot afford them when they know the cost? Should not such things be looked at? The pharmaceutical industry earns a great deal of money overseas for Britain, which is good for the NHS and the Treasury. Nevertheless, should not its price regulation scheme be reconsidered to bring it into line with everyone's efforts to help the NHS?
Baroness Cumberlege: My Lords, the Government are well aware of the contribution which the pharmaceutical industry makes to this country's balance of payments. Vaccination and immunisation rates have never been higher. That says a lot for the Government's scheme of incentive payments for GPs to reach their targets. For those people who cannot afford to pay for medicines, there are some very comprehensive exemption schemes available.
Lord Mellish: My Lords, will the Minister be good enough to confirm or deny the reports which have appeared in the local and national press stating that some pharmacists are going out of business because the Government intend to challenge the present rate of charges?
Baroness Cumberlege: My Lords, a fundamental review is going on at the moment concerning pharmacists' remuneration and the way medicines are dispensed. I think that the present fears will prove to be unfounded.
Lord Bruce of Donington: My Lords, despite the many exemptions and allowances being made in respect of these charges, is the Minister aware that the point has been reached where the charges are extortionate and a public scandal?
Baroness Cumberlege: My Lords, 80 per cent. of all items dispensed by pharmacists are free of charge. We have no evidence showing less use of medicines due to the increase in charges.
Lord Ashley of Stoke: My Lords, is the Minister aware that there are always people just above the poverty line and that they are always being hit? The increase in prescription charges is yet a further blow. Those people are not poor enough to qualify for the Government's inadequate exemption scheme but they are too poor to pay for medicines. Therefore, their suffering will be exacerbated. Will the Government please recognise that prescriptions are not a dispensable commodity and that sick people must have medicines, which should be affordable by everyone?
Baroness Cumberlege: My Lords, I cannot accept what the noble Lord says. People who receive either income support or family credit, men aged over 65 and
6
women aged over 60, children under the age of 16, students in full-time education, pregnant women and women who have had a baby during the previous 12 months, war disablement pensioners and people who suffer from certain medical conditions, are granted remission of charges. That is a very comprehensive exemption list.
Lord Ennals: My Lords, will the Minister give two other relevant figures? Will she give the amount of savings expected from the new 10-item limited list announced in November? Secondly, will she say how much is expected to be saved as a result of the instruction by the Secretary of State to the NHS executive to make savings on treatments which in future will not be available on the National Health Service?
Baroness Cumberlege: My Lords, it is impossible to say how much money will be saved by the new selected list since the advisory committee has not yet decided on the medications which will be included. However, I wish to remind your Lordships that the money which accrues from prescription charges alone is enough to buy 88,000 hip replacements or 57,000 coronary artery bypass grafts. Without that money the National Health Service would be much the poorer.
Lord Stallard: My Lords, will the Minister comment on reports that old age pensioners in receipt of free prescriptions will in the near future be charged for their prescriptions based on new means test procedures?
Baroness Cumberlege: My Lords, the Government at this moment have no plans to introduce such a scheme.
The Countess of Mar: My Lords, does the Minister agree that the vast majority of prescriptions are issued to people over the age of 65 and that it has been estimated that approximately 40 per cent. of hospital admissions of the elderly are due to adverse drug reactions? Does she further agree with the large body of opinion which suggests that there is a great deal of overprescrihing for the elderly? Will she say what procedures the Government are taking to ensure that there is no such wastage?
Baroness Cumberlege: My Lords, the Government have invited family health service authorities to introduce a scheme to give advice to GPs on prescribing. That is already having some effect. I agree with the noble Countess that there is not a pill for every ill. I believe that the general practitioners should look more carefully at their prescribing habits.
Lord Desai: My Lords, will the Minister confirm that the rise in prescription charges is 12 times that of the rate of inflation? Will she also confirm that although £339 million is a lot of money it is one-third of what the internal market set-up has cost the National Health Service? Should not the Government be economising where economies are more necessary rather than through prescription charges?
Baroness Cumberlege: My Lords, it is the duty of every Government to try to hold down costs.

7
Although the increase in prescription charges has been higher than the rate of inflation it has not been higher than the rate of increase of the drugs bill. During our recent debate I welcomed very much the support of the Opposition Front Bench for the selected list.
Lord Molloy: My Lords, is the Minister aware that the ABPI says that there is a danger of cheap drugs driving out efficient and expensive drugs, which could threaten research and lead to a deterioration in patient care? Will those issues be taken into consideration?
Baroness Cumberlege: My Lords, that is very much the purpose of the advisory committee which will be considering the issue.

Clean Coal: R&D
2.56 p.m.
Viscount Hanworth Viscount Hanworth asked Her Majesty's Government:
Whether, in view of the importance to some countries of generating electricity from coal, they would support an international approach to research and development of clean coal solutions; and whether they have taken action to this end.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Baroness Denton of Wakefield): My Lords, the development of clean coal technologies is a global issue and my department is already supporting 30 projects involving United Kingdom and overseas companies, the European Community, the International Energy Agency and the United States.
Viscount Hanworth: My Lords, I thank the Minister for that Answer. Does she consider that the coal-topping cycle is the most likely to be successful and that, if so, funds will be required for a demonstration plant? Secondly, will the Minister explain the position on the research which is being carried out in the United States?
Baroness Denton of Wakefield: My Lords, a substantial part of the additional £12 million of new money for coal research announced in the coal White Paper will be spent on the key components of the topping cycle because it is viewed as being of great importance. However, during the review my honourable friends had close discussions with a number of companies about the level of support required for demonstration projects. It was clear from those discussions that in the present market conditions none of the projects was economic. In view of the fact that such a plant would therefore not materially affect the number of coal mines kept in operation in the United Kingdom during this decade, it was considered inappropriate to spend public money in that area. I assure the noble Viscount that we are working extremely closely with the United States, where there is a memorandum of understanding. Its work in this field is advanced and the benefits will come to Britain in due course.
Lord Mason of Barnsley: My Lords, is the Minister aware that, as regards cleaner coal power station technology, we began development on the fluidised bed, especially at Grimesthorpe near Barnsley, in which other nations participated and gave financial help? Do I now take it that Her Majesty's Government have withdrawn their support from the development of fluidised beds and that the research has gone abroad? What is the latest position?
Baroness Denton of Wakefield: My Lords, I am delighted to confirm the noble Lord's remarks. Much work was done in developing technologies to improve the efficiency of coal utilisation. Indeed, during the past 10 years the United Kingdom public sector, with support from the European Community, invested more than £1 billion in that area. Currently the DTI is involved in 60 projects with a contract value of about £120 million. Those are assessed on values coming forward.
The Earl of Halsbury: My Lords, does the Minister agree that the problem is not to find a clean coal solution but to choose between a substantial number of different clean coal solutions in order that, in making haste slowly, we shall not pay too high a premium for prototype development?
Baroness Denton of Wakefield: My Lords, as usual the noble Earl puts the issue in an extremely straightforward way.
Lord Dean of Beswick: My Lords, the Minister will have noticed that the noble Viscount's Question is about the international rather than the domestic clean coal situation. Is the Minister aware that the last time on which there was a full debate on energy in your Lordships' House, the figure quoted for the increase in coal-fired power stations internationally, taking into account China, was enormous? I hope that the Government will continue to press for international agreement for cleaner power stations, otherwise we shall fall behind and not move forward, as we should all like to do.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord Dean, for that question. The size of the issues is such that they must be played on an international platform. I am delighted to confirm that we have 30 joint contracts.
Lord Ezra: My Lords, in the recent coal review the implications were that the Government would not agree to finance any major demonstration plant in clean coal technology in this country. Does the noble Baroness agree that other countries would be left to develop those technologies? As it is a matter of such great importance to the British coal industry and one about which the coal review was concerned, is that not regrettable and should we not make greater efforts in that regard?
Baroness Denton of Wakefield: My Lords, I believe that the noble Lord, Lord Ezra, misunderstands the situation when he says that we are not making efforts.

9
We are indeed making efforts. We are collaborating internationally, which means that we do not waste taxpayers' money.
Lord Peston: My Lords, to pursue the international theme raised by my noble friend Lord Dean, I should like to ask the noble Baroness whether we realise the scale of the problem. If the Chinese communist state becomes remotely economically successful and, for that matter, if the Soviet economy gets going again, both countries will go forward using conventional coal technology. Am I not right to say that the consequences for atmospheric pollution are massive compared with anything which is happening in this country? Is the international collaboration to which the noble Baroness referred on a scale which will save the environment or shall we not be saying simply that it is too late and that the damage has been done?
Baroness Denton of Wakefield: My Lords, the noble Lord, Lord Peston, draws attention to an extremely important point. While looking at the clean coal technology, about which the noble Viscount asks, the Government are looking at options, recognising that environmental issues will move forward extremely quickly. My honourable friend the Minister of State for Energy will visit the United States in the near future to discuss further the size of the issues we face. I assure the noble Lord that we do not underestimate them.
Lord Peston: My Lords, I should like to put on record a further point. The problem is—
A noble Lord: Question!
Lord Peston: My Lords, perhaps the noble Lord will hold his horses and wait to hear what I have to say.
A noble Lord: Thirty minutes!
Lord Peston: My Lords, I am well aware of that but it is not this Question which has taken up the time. The more that the noble Lord interrupts me, the longer it will take for me to ask my question, which I shall ask. Is not the central point that new technology will be more expensive than existing technology? Therefore, there is no reason to believe that the main users will use it.
Baroness Denton of Wakefield: My Lords, the development of new technology obviously concerns itself with costs as well as environmental issues. It is important that we share those with all our partners.

Caledonian Pine Forests
3.4 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether they support the proposal to recreate the Caledonian pine forests of Strathspey and Mar contained in the report Common Sense and Sustainability: A partnership for the Cairngorms by the Cairngorms Working Party appointed by the Government.
The Minister of State, Scottish Office (Lord Fraser of Carmyllie): My Lords, my right honourable friend the Secretary of State for Scotland announced on 26th March that he would be consulting publicly on the recommendations made to him by the Cairngorms Working Party. The consultation period ends on 30th June and no announcements will be made until Ministers have had the opportunity to consider the responses received during the consultation period.
Lord Campbell of Croy: My Lords, I am grateful to my noble and learned friend for that reply. Do the Government agree that the present remaining fragments of the original forests provide important natural habitats and that the proposed regeneration would enhance the attractions and facilities of the Cairngorms area while increasing local employment in forestry?
Lord Fraser of Carmyllie: My Lords, that is indeed so. As a consequence of sharing that view, we already support the regeneration of native pine woods by providing for higher grants under the woodland grant scheme. In that connection, we should clearly wish to pay the closest attention to the recommendations of the working party on the regeneration of the Caledonian pine forests and the creation of new forests in Strathspey and Mar.
Lady Saltoun of Abernethy: My Lords, to what density per hectare is it considered necessary to reduce the red deer population in order to permit natural regeneration of the Caledonian pine forests? Do the Government believe that it would be practicable to reduce the red deer population to that extent?
Lord Fraser of Carmyllie: My Lords, while I cannot give the noble Lady a precise answer in terms of the reduction, as is implicit in her question, it is quite clear that significant efforts must be made to cull, in particular, the hinds. For that reason we support fully not only the efforts of the Red Deer Commission but we support also private estates in their endeavours.
Baroness Nicol: My Lords, will the Government pay particular attention to the recommendation in the report about the possible over-use of access roads, especially on the high ground? Can we be assured that, whenever practically possible, limitations will be placed on the use of tractor vehicles on high ground? Will the Government take on board that the excessive use of four-wheeled vehicles now being made by members of the public is causing a great deal of damage in England and Wales? Will the noble and learned Lord assure us that, if possible, that danger will be diverted from the Cairngorms?
Lord Fraser of Carmyllie: My Lords, the report makes some interesting and important recommendations in that regard. For example, it discusses fully the concept of the long walk in to ensure that there is regulation of access. It makes also a number of observations with regard to that part of the Cairngorms which are accessible both by way of the ski road and the ski lift. All I can say at present is that there are clearly strong views on this matter and there

11
is a conflict of interest. I hope that all those who have views will make their representations during the consultation period.
Lord Campbell of Croy: My Lords, is my noble and learned friend aware that there could be one drawback, to which I must admit; namely, that extending those forests could provide habitat for the unpopular highland midge? In those circumstances the need to encourage its natural enemies will be even more important.
Lord Fraser of Carmyllie: My Lords, I suppose that any plan to revert land to its natural state carries such a risk. However, for all kinds of reasons it is clearly desirable that the original Caledonian forests should be restored in so far as it is possible.
Lord Carmichael of Kelvingrove: My Lords, I am grateful to the noble Lord, Lord Campbell of Croy, for raising this matter. This extremely good and far-reaching report has been well received in Scotland. It makes possible a much more structured management of the Cairngorms. The Minister said that the consultation period would conclude at the end of June. Is he aware of the suggestion in today's Glasgow Herald that an interdepartmental working party of officials only will report soon? Will that impede the possibility of the public report being able to influence the Minister? The suggestion is that the interdepartmental committee may propose privatisation. I hope that the Minister will remember the debate that we had some two weeks ago when about 20 noble Lords who took part were solidly against the idea of privatisation?
Lord Fraser of Carmyllie: My Lords, in considering our response to the Cairngorms Working Party, we must bear in mind what is similarly offered to us by way of that internal review. However, it would be wrong for me to anticipate either at this stage.

Business
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Report stage of the Trade Union Reform and Employment Rights Bill will be adjourned at about 7p.m. for about one hour and that during this adjournment the Second Reading of the Local Government (Overseas Assistance) Bill will be taken.

Trade Union Reform and Employment Rights Bill
3.10 p.m.
Report received.
Clause 1 [Election scrutineer to check register]:
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater) moved Amendment No. 1:
Page 2, line 27, after ("day") insert ("before the day").
The noble Viscount said: My Lords, I must say that it is pleasant to start the proceedings with a
12
government amendment that not only reflects the view that the noble Lord, Lord Wedderburn, expressed in Committee on the subject but, indeed, one that replicates exactly the wording used in the amendment he tabled at that stage.
As noble Lords will be aware, Clause 1 of the Bill provides that the terms of appointment of a scrutineer appointed to oversee the conduct of a union election ballot must enable him to inspect the union membership register either of his own volition or in response to a request made by a union member or candidate during the "appropriate period". The appropriate period is defined in the clause as the period beginning with the first day on which an individual may become a candidate (or on the scrutineer's appointment, if later), and ending with the day on which the scrutineer makes his report to the union. Schedule 1 and Clause 4 make identical provision in respect of political fund and merger ballots respectively.
The noble Lord, Lord Wedderburn, tabled an amendment in Committee to provide instead that the appropriate period would end on the day before the day on which the report is submitted. At the time I accepted his argument, widely supported in this Chamber, that the scrutineer might need a final day in which to complete his report, free of the obligation to consider any requests to inspect the register on which he would then be obliged to report.
We certainly wish to ensure that the scrutineer's report could not be continually delayed by late requests, possibly even mischievous ones, from members. I think that the amendments meet the concerns expressed by noble Lords in Committee. I beg to move.
Lord McCarthy: My Lords, on behalf of those of us on this side of the House I should like to thank the noble Viscount for tabling the amendments. As he said, they are precisely what my noble friend moved in Committee. I do not know whether this is a complete and utter precedent in the 12 years in which we have followed such Bills. However, it comes fairly close to it. Let us hope that it is an encouraging sign for what will follow during the rest of the week because, of course, all our amendments are equally reasonable.
Lord Rochester: My Lords, I too am glad that the noble Viscount has been as good as his word in moving the amendment and in meeting the very valid point made by the noble Lord, Lord Wedderburn. I welcome the amendment.
Lord Wedderburn of Charlton: My Lords, I should like very briefly to thank the Minister. Like my noble friend, I hope that this is how we will proceed for the rest of the afternoon.
Viscount Ullswater: My Lords, I am grateful for the comments of all noble Lords. I commend the amendments to the House.
On Question, amendment agreed to.
Schedule 1 [Political fund ballots]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 2:
Page 67, line 42, after ("day") insert ("before the day").
On Question, amendment agreed to.
Clause 4 [Ballots for union amalgamations and transfers of engagements]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 3:
Page 6, line 34, after ("day") insert ("before the day").
On Question, amendment agreed to.
Clause 5 [Ballots for union amalgamations and transfers of engagements: notice and voting papers not to include influential material]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 4:
Page 11, line 24, at end insert ("but may be accompanied by a statement, not exceeding 200 words, explaining the main provisions of the Instrument of Transfer or Amalgamation."
The noble Baroness said: My Lords, as noble Lords will recall, Clause 5 says that when a union ballots its members on a merger or a transfer of engagements it may not send anything else with the voting paper. We discussed the clause very carefully in Committee and we on this side sought, unsuccessfully, to move an amendment which would at least let the members of a union know what their leadership thought about a proposed merger at the time that the ballot papers were sent out.
As we know, the clause was added to the Bill at a very late stage. It apparently arose because some complaints were made by, I think, only three people in the recent ballot to form Unison, the new public sector union. The individuals do not appear to have utilised the procedures open to them of appealing to the certification officer, but simply complained to their MP. On that very slender basis, the Government proposed to legislate.
On Second Reading, I said that when I first saw the clause I thought that the Government had gone a bit dotty. That is still my view. I cannot see why it should be regarded as some kind of right that information should be withheld from members unless the union agrees to double the expenditure in which it is being involved in carrying out the ballot in the first place. We were told by the Minister in Committee that there was nothing to prevent a union sending out material so long as it does not go with the voting papers themselves. But it is at the point of voting that people actually want information.
Moreover, I can recall the intervention by the noble Earl, Lord Harrowby, at col. 1388 of Hansard in Committee on 16th March, when he pointed out that members of Lloyd's frequently receive
"sheaves of papers and voting papers in the same envelope".
The case is similar with trustees. I am a trustee of a small scheme and recently voted on a change of rules. In the same envelope, and perfectly properly, I received information about the background plus a resolution which had been approved by a meeting of members.
I do not understand why it is necessary to treat unions so differently—although perhaps I do. In the years that I have spent in your Lordships' House, and looking back at previous Bills with which I have been involved, I have come to understand that there is a basic hostility towards anything to do with unions. It seems to me that the Government want to make life as
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difficult for them as possible. Of course, one means of doing so is continually to introduce legislation on the slightest pretext which will make union administration more complex, difficult and also more expensive.
Another way is to prevent unions becoming stronger. One of the ways in which unions have been strengthening their position during the recession has been by amalgamation. At one time, all the pundits, including those on the government side, seemed to think that that was a good idea. But, again, along come the Government equipped with three complaints to an MP attempting once again to change the law. I should have thought that three was not significant, given the thousands of members who participated in the Unison ballot.
We failed in Committee with what I thought was a reasonable amendment. But I still believe that even if members do not go to conferences, attend their branch meetings or read their journals, they are entitled to vote and to do so on the basis of a reasonable amount of information. Even the noble Lord, Lord Boyd-Carpenter, seemed to accept that view in Committee. He said that union members,
"should receive a clear, clean statement of what they are voting on".—[Official Report, 16/3/93; col. 1386.]
He continued to say that the statement should not be able to be construed as advising them to vote one way or the other. So, despite our strong objections to the clause itself, we have come back with what I think is a minimalist approach. The amendment says that voting papers,
"may be accompanied by a statement, not exceeding 200 words, explaining [in simple terms] the main provisions of the Instrument of Transfer or Amalgamation".
Surely the Government would not object to that. In any event, as I understand it, the material has to be approved by the certification officer before it is issued. It would be a very bad thing if, as a result of the clause in the Bill, future mergers were to be voted upon by sections of the membership who had little idea what it was all about. I beg to move.
Lord Rochester: My Lords, for the life of me I cannot see why, in principle, companies and trade unions should be treated in different ways in this respect. When company shareholders are invited to vote on a major matter, the view of their board of directors is sent to them along with any voting paper. Why should unions be treated differently? It seems to me, as it does to the noble Baroness, Lady Turner, that Clause 5 is yet another example of punitive legislation imposed on trade unions which does not apply to other organisations. I say "punitive" because of the very considerable additional expenditure which is involved in having to send out two sets of papers where one would suffice.
When compared with the voluminous material to which company shareholders are subjected in similar circumstances, the amendment asks for very little. By confining any statement that may accompany the voting paper to no more than 200 words, the amendment seeks out a compromise with the Government which I hope the Minister will accept.
Lord Wedderburn of Charlton: My Lords, the noble Lord, Lord Rochester, anticipated my mentioning this

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point. I support the argument that this is yet another case where that which is allowed to companies, however large or small, is not allowed to trade unions for no good reason at all. However, I pass over that point to a further point. The history of trade union law since 1980 does not make it unreasonable occasionally to wonder what will follow a particular Bill which is before your Lordships' House. One wonders whether the Government's argument does not allow for the next Bill to include a provision that there should not be one-sided material presented, at any rate at the time of the vote or somewhat before, in trade union decisions.
On Report in another place the Minister of State said that the principle was,
"that one-sided material should not go to members when the ballot papers are sent out".
That summarises the Government's argument. The Minister of State continued:
"Surely the hon. Gentleman can see that it is difficult to understand why the union's view should be presented again at the final stage, when people are asked to vote in the ballot". —[Official Report, Commons, 16/2/93; col. 161.]
The final stage is not necessarily confined to the day of the ballot. It might be argued that the final stage is the final stage of the argument. Why does that principle not also apply to elections if one is to deal with organisations in this arbitrary manner? It could apply to decisions of all kinds at the final stage. Are the Government giving us a Bill which states that in the period before a trade union ballot on an important matter one sided material is not allowed? I know the Minister will say that that is not what the Government are promoting on this occasion. However, since 1982 every Bill that has been passed on this matter has contained a raised flag on what is to follow. Unless the Minister can give us an assurance that this principle will not be applied elsewhere in trade union law, your Lordships should draw the conclusion that that may well occur. On that basis the modest amendment of my noble friend should surely be supported.
Lord Boyd-Carpenter: My Lords, as has already been pointed out, I expressed some doubts about this matter at a previous stage. This is a difficult issue. On the one hand, it seems not unreasonable that the notice of the decision to be taken should be accompanied by some information about it. On the other hand, as the Bill now stands, that statement could be biased very much in one direction or another. As I understand it, there is no provision in the Bill to prevent a biased or not wholly subjective statement being included. The trouble with this is that in 200 words anyone could state a powerful argument in favour of either one side or the other. Although I sympathise with the desire on the part of the union to avoid having to submit a separate statement, I see real difficulty with this amendment in as much as it would provide an opportunity for a wholly argumentative, non-objective point to be put in favour or against the proposal. In 200 words one can do quite a lot. The provision would not secure that the statement was the objective statement which I believe most of your Lordships would like to see included.
Lord Murray of Epping Forest: My Lords, unless the Government actually regard inconsistency as a possible virtue—I should not have thought they did—surely they will accept this amendment as being not only desirable on merit, as has been said, but also as being totally and absolutely consistent with much of the legislation on trade unions which has preceded this Bill over the past 10 years. We have been told again and again by the Government Front Bench that one of the main purposes in this great sweep or thrust of legislation has been to ensure that trade unionists are properly informed so they can be fully in control of decisions which are made in their name. That has been the doctrine that has been quite properly enunciated from the Government Front Bench. Surely it is only consistent with that that the membership should be informed of what is happening and of the reason that the proposals are being put forward. The argument that the membership should be deliberately kept in the dark sits ill with that idea. The Minister shakes his head. I am glad to have the assurance that it is not the intention to keep the membership in the dark. I believe the Government's intention should be to illuminate the membership on the decisions they have to take. That is the case we seek to make.
A point which the Government have consistently made in discussing legislation of this kind is the need to use the resources and the financial provisions of members of trade unions effectively and efficiently and to prevent waste. Again this amendment would serve that purpose. Further, the Government have said they seek to improve industrial relations. The main purposes of mergers and transfers of the kind we are discussing are to use the resources of members more efficiently and more effectively; to spend their money more carefully and more effectively; and to reduce unnecessary competition at the expense of employers at the workplace. On all these grounds I should have thought the Minister would have been disposed to recognise the value and the virtues of this amendment and to accept it.
Lord Mottistone: My Lords, instead of pursuing this argument, would not a union do better to leak the 200 words to the press? The members would probably be far keener to read the statement if it appeared in the press than if the statement were posted to them in an envelope with the voting papers. I am more inclined to read what is in the press on company issues than a long argument produced by the chairman of some company. I should have thought the position would be much simpler if that were done. The unions would have to leak the information of course; otherwise the press might not pick it up.
Baroness Seear: My Lords, that is a most extraordinary suggestion from the noble Lord, Lord Mottistone. Does he really think that the press, which is largely anti-union, will present a case which will be seen to be fair, even if it is—one must have doubts about that—and one that will be believed by trade union members? I should think the most likely effect of such a process would be to make union members vote the.other way. However, that remains to be seen. Will the noble Viscount explain why the matter we are

17
discussing is not a good step for unions to take when everyone else may take it? That is what strikes so many of us as being vindictive against unions. I believe I have said previously when discussing this Bill that there is a strong feeling among those who have supported previous legislation that this Bill is out to get the unions. If the Minister wishes to disabuse us of that idea, will he explain why a step which every other organisation is allowed to take is not to be permitted to unions? They are to be obliged to do something which will place a heavy burden upon their already restricted resources. If he cannot convince us on this matter, that is yet further evidence that the purpose of the legislation is totally to undermine unions. I fail to see how one can obtain good industrial relations if one does that.
3.30 p.m.
Lord Blease: My Lords, I was interested to hear the remarks of the noble Lord, Lord Boyd-Carpenter. It appeared to me that he was in total agreement with the principles contained in the amendment. However, I believe he suggested that a statement of 200 words was too lengthy. Would 150 or 100 words be more acceptable to the noble Lord?
Viscount Ullswater: My Lords, I am grateful to all noble Lords who have taken part in the debate, and especially to the noble Baroness, Lady Turner, for her explanation of the aims of the amendment. The fact that noble Lords opposite divided the House twice on issues connected with Clause 5 left us in no doubt of their resistance to its provisions.
Union members entitled to vote in a merger ballot will, of course, always receive a notice about the ballot, approved by the independent certification officer, with the voting papers. Provisions in paragraph 55 of Schedule 7 to the Bill will ensure that, in future, such notice must go out with the voting papers for a merger ballot. In deciding on the form of notice on which it will seek the certification officer's approval, the law will continue to give unions a choice.
The union may opt for a notice setting out, in full, the instrument of amalgamation or transfer for which the ballot seeks approval. Alternatively, it may seek the certification officer's approval for a notice giving an account of the instrument, as set out in Section 99(2) (b) of the 1992 Act:
"sufficient to enable those receiving the notice to form a reasonable judgment of the main effects of the proposed amalgamation or transfer".
Therefore, I cannot accept the comments of the noble Lord, Lord Murray of Epping Forest. We are not trying to prevent union members from knowing all that is going on or keeping them in the dark.
Such an account would certainly cover what the amendment describes as "the main provisions" of the instrument. It would probably have to do more, if that was necessary in the view of the certification officer, to give the union's members a sufficient account of the main effects of the amalgamation or transfer. The point is that if a union believes that that is a better way to proceed than by sending out a copy of the full instrument—and my noble friend Lord Mottistone
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will have views on that—it is, and will continue to be, free to seek the certification officer's approval for such an account.
The noble Lord, Lord Wedderburn, mentioned election ballots in his arguments in support of the amendment. Union merger ballots are quite different from union election ballots. Quite obviously, the question at issue is completely different. Merger ballots concern the very future existence of the union. That is the point at issue and that is what I should like to draw to the attention of the noble Baroness, Lady Seear. On the other hand, election ballots, and the different law which relates to them, concern a choice between individuals competing to hold union office. The analogy is not a good one. Just because the law requires candidates' addresses to be sent out with election ballot voting papers, that is no argument for saying that there must be some broadly equivalent arrangements for merger ballots. The law already applies in quite different ways in respect of those ballots.
For example, there is nothing even remotely equivalent in the law on union elections to the arrangements which have always applied for the certification officer to approve the notice about a merger ballot. Indeed, it is difficult to see what the basis of an analogy could be. Perhaps it might involve the certification officer considering whether the candidate in an election really meant what he said in his address. I can assure your Lordships that we have no plans for such requirements.
Lord Wedderburn of Charlton: My Lords, I am grateful to the Minister for giving way. Taking all of the argument which he has put to us, does it not appear odd that at that final stage, when the very existence of the union is at stake, as the noble Viscount put it, the law will permit material to be sent in a different envelope from that in which the Government had refused to allow it to be included?
Viscount Ullswater: My Lords, no. I do not know whether the noble Lord is in order in raising a different point. If the union wishes to persuade its members how to vote I do not believe that that should be within the scope of this law. That is why we suggest that the statement should be sent without such persuasive literature.
I appreciate that the noble Baroness in particular and other noble Lords who have spoken stressed that the amendment aims at only a limited and modest change to the provisions in the proposed new Section 99(3A). I have given careful consideration to the possibility that we should allow some additional explanatory statement relating to the instrument of amalgamation or transfer which is the subject of the ballot to be sent out with voting papers. However, as I have explained, I have concluded that there is no need for that, given the nature of the law relating to the notice which will be allowed to accompany the voting papers. I agree with the noble Lord, Lord Boyd-Carpenter, that we have the right balance in the Bill. Therefore I hope that the noble Baroness will withdraw the amendment.
Baroness Robson of Kiddington: My Lords, I am not a leading participant in this debate but I have been listening to it very carefully. The noble Viscount stated that no persuasive literature must go out on the question of a merger between two trade unions. To take the analogy used by my noble friend Lord Rochester, when I receive a merger proposal from a company in which I happen to be a shareholder I am sent the most persuasive arguments to make me vote one way or the other. I cannot see the difference.
Viscount Ullswater: My Lords, the difference is quite clear. The law relating to trade unions and the law relating to companies is quite different, quite distinct and needs to be treated differently because of the nature of the two different identities.
Lord McCarthy: My Lords, this is precisely what we are always asking the noble Viscount. He says that the law is different. We know that the law is different. We are asking him why the law is different. He never gives us a reason why when, as he says, the future existence of the union is at stake the executive and democratically elected leaders of the union are not allowed to put their point of view whereas the person who is involved in a takeover is allowed to put his point of view. What is the difference which justifies the law?
Viscount Ullswater: My Lords, I believe that I have answered that point succinctly.
Lord Murray of Epping Forest: My Lords, perhaps I may clarify one point.
Lord Mottistone: Order! This is Report stage and one cannot clarify a point. One can ask a question. I believe that if noble Lords look at the rules of the game they will find that that is the case. Therefore, if the noble Lord restricted himself to a question rather than a clarification it would be better.
Lord Murray of Epping Forest: My Lords, I am indebted to the noble Lord for drawing to the attention of your Lordships the fact that a question is pending at any second now. This is my question. Will the Minister clarify the impression that he has given that the Government do not object to a letter containing advice or a view arriving through the same letter box in the same post, in a different envelope, with a different stamp onto the same table of the same member, but he does object to one letter containing all the material arriving through the letter box in one envelope and with one stamp? Does he see a real distinction between those two things?
Viscount Ullswater: My Lords, with the leave of the House, my answer to that question is that the law requires that a notice should accompany the ballot paper. It does not require that such other additional material should be sent. That is entirely for the union to decide.
Lord Murray of Epping Forest: My Lords, but does he object? That is my question.
Baroness Turner of Camden: My Lords, I am rather disappointed with the way in which the Minister
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responded. As I made clear when moving the amendment, this is a minimalist amendment. We have tried to deal with the arguments advanced by the Minister when we put a different amendment at Committee stage. In the drafting of the amendment I tried to address the argument put by the noble Lord, Lord Boyd-Carpenter, to the effect that members should receive a clear statement but should not receive persuasive literature. Indeed the amendment simply says that the ballot paper:
"may be accompanied by a statement, not exceeding 200 words, explaining the main provisions of the Instrument of Transfer or Amalgamation".
The Minister said that together with the voting paper it would be possible to send either a full copy of the instrument, which is usually a legalistic document, or a statement which will cover the main points of the instrument, in consultation with the certification officer. That I understand. On the other hand, surely in the case of a merger one would wish the individual members to receive the actual legal document, even if they do not always read it. In addition, they should receive a summary which would set out simply the main provisions.
I do not believe that the Minister has adequately replied to the points put from this side of the House. I am not satisfied. He has produced no valid arguments for trade unions being governed differently from companies under the law covering mergers or takeovers. Surely the arguments are similar for unions. The identity and existence of the organisation may be at stake. In both instances, the member and the shareholder are entitled to have similar considerations. However, with regard to trade unions we have different and, I believe, much more punitive legislation.
I should have thought that the Government would wish to do everything possible to encourage mergers between unions. It is not so long since the German trade union movement was being held up to us in Britain as an example. We were told that we had far too many unions. Since those days the unions have made a substantial attempt to reduce their number through merger and amalgamation. They have had some success. However, the legislation now being introduced seems to me to run counter to that trend. I believe that it is not to the advantage of either the unions or their members.
Nevertheless, it is not my intention to press the amendment to a vote. When the provision is on the statute book we shall have to consider how best it can be applied in union terms. The unions will have to work out how best they can continue to ensure that their members are kept fully informed of potential mergers and transfers of engagements. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Confidentiality of trade union's register of members' names and addresses]:
Viscount Ullswater Viscount Ullswater moved Amendment No. 5:
Page 12, line 4, at end insert:
("and any reference in this Act to "the duty of confidentiality" is a reference to the duty prescribed in this subsection.").
The noble Viscount said: My Lords, in moving Amendment No. 5, I speak also to Amendments Nos. 103 and 104. These are minor technical amendments which we believe will make the provision to be inserted by the Bill into the 1992 Act more easily understood.
As noble Lords will be aware, Clause 6 requires a trade union to impose a duty of confidentiality on any scrutineer or independent person whom it appoints to oversee certain ballots. Even if the union fails to observe this duty, however, it is automatically incorporated into the terms of the appointment of the scrutineer or independent person by references to be introduced at appropriate points in the 1992 Act by this Bill.
It seems that those references to an incorporation of a duty of confidentiality, as currently set out in the Bill, have caused some puzzlement. The amendments therefore make it clear that any reference to a duty of confidentiality is a reference to the duty defined under Section 24A(3) to be inserted by Clause 6: I trust that your Lordships will agree that it is helpful to clarify matters in this way. I beg to move.
3.45 p.m.
Baroness Turner of Camden: My Lords, I thank the Minister for that explanation. In the circumstances, we do not offer any opposition to the amendment.
On Question, amendment agreed to.
Clause 7 [Ballots: repeal of provisions for financial assistance and use of employers' premises]:
Lord McCarthy Lord McCarthy moved Amendment No. 6:
Page 12, line 34, after ("116") insert ("except in regard to elections carried out in accordance with 115(2) (b))").
The noble Lord said: My Lords, we now turn to Clause 7 which, as the House knows, deals with the repeal of the scheme for financial assistance to unions in relation to ballots. The objective of the clause is to deny unions any form of assistance to pay for what are now legally imposed ballots, all of which have to be postal. The amendment makes one exception to the general repeal in relation to election ballots. We do not suggest that there should be any money in future for strike ballots, although they now have to be postal, or for ballots about rule changes, political funds, amalgamations or, to use that strange phrase in the consolidation Act, "any other purpose". We simply provide that in the case of election ballots the provisions that exist should remain in place.
We put forward the amendment following the arguments advanced by the Government and their supporters both in this House and in another place for what they were doing. For example, the spokesman for the Government stated on 16th February, at col. 162 of the Official Report in another place, that the clause is there because of the widespread and well accepted scheme which does not merit a continued subsidy. In other words, the fact that the scheme is widespread and well accepted means that it does not merit a continued subsidy. We have never been able to understand that argument. Indeed, the Government had difficulty in explaining it and elaborating upon it. They subsequently came forward with another
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explanation. At col. 163, the Minister stated that they were abolishing the scheme because it was not justified to give public money to subsidise strikes. He stated:
"We have to decide between using public funds to subsidise ballots on strike action or … other worthy causes".
In seeking to follow the arguments of the Government, the House will remember that at Committee stage we moved an amendment to take out the word "strikes". At that point the Minister put forward another two reasons. On 16th March, at col. 1404 of the Official Report, he stated that there was no case to continue a scheme because it was created as an incentive to postal balloting when the practice was not statutory. In other words, because it has become statutory —there is no option and no alternative—the unions should be denied the money. He also stated that the Government had already decided to phase out the scheme and to provide no more Treasury money in three years' time. In other words, they were already into that process. They therefore could not take notice of our amendment because it was too late.
I suggest that those arguments do not add up to a consistent case. It is not an argument for abolishing a scheme because it is working well. It is not an argument for abolishing a scheme because one is extending the burden, with full postal voting on amalgamations, strikes, and so on. It is not a case for abolishing a scheme that the Government have decided to phase out the mechanism. What they can phase out they can phase in. Therefore we now seek to persuade the Government to accept that there is a case for continuing the scheme in one particular respect. The election element is the most costly single factor in the process of balloting. The number of elections in unions, for the most part imposed as a result of legislation, has become the single most expensive form of balloting. It is no secret that the bulk of the £4.2 million which the Government gave unions last year was spent on election ballots. Election ballots now cost unions more than £5 million a year. Most of that cost is imposed upon them by the Government. Therefore we say that the least the Government can do in those circumstances is to honour the pledge that they made in 1980 to fund some of the costs of those ballots. Most people would suggest about 50 per cent. of the cost. Therefore, it will still cost unions several million pounds a year to come into line with the Government's own requirements. I beg to move.
Lord Rochester: My Lords, I have put my name to the amendment. When a somewhat similar provision was debated in Committee, I deplored the fact that this clause of the Bill was introduced at Report stage in another place without any prior consultation. In reply the noble Viscount, Lord Ullswater, told me that the decision to phase out financial assistance for union ballots was taken in the wake of the public expenditure settlement last autumn; and that, given the claims on that expenditure, funds for union ballots could no longer be justified. Yet at the same time as funding is to be phased out, under the Bill unions are to be obliged to spend even more on ballots. In future virtually all ballots are to be postal and subject to independent scrutiny. That caused me to say at

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Second Reading that the Government's decision smacked of a certain meanness. I continue to have that feeling.
The amendment does not seek to overturn the clause altogether, but simply to limit continued government funding so that it applies, as the noble Lord, Lord McCarthy, said, only to ballots for the election of union officers or representatives. Those are ballots which trade unions are under a statutory duty to hold at periodic intervals. They account for a large part of the expenditure on the totality of ballots. It seems to me reasonable that, in holding such ballots, unions should continue to receive some financial assistance. I therefore support the amendment.
Lord Boyd-Carpenter: My Lords, I wonder whether my noble friend the Minister can tell noble Lords what amount of public money is involved. If this amendment were to be accepted, what would be the total cost?
Lord Wedderburn of Charlton: My Lords, before the Minister answers that question, I should like to support my noble friend in moving this very important amendment. It is my belief that the historian will find that the Government are in breach of promise and in breach of faith in this matter. I exempt the Minister, who was not around when the turn of policy came. But now he comes, as it were, to finish it off.
In 1980 it was said that there should be more secret postal ballots, financed in great part through public funds. I believe that my noble friend is right in saying that that is now done to the extent of some £4 million to £5 million a year.
Perhaps I may quote the noble Earl, Lord Gowrie, who said on 20th May 1980, which is where the story begins:
"The provision of public funds for secret postal ballots has been widely welcomed as following best existing practice of many trade unions and as part of our overall aim of encouraging greater participation by rank-and-file members of unions". [Official Report, 20/5/80; col. 740.]
That policy was followed in the teeth of divided trade union counsels. There were many who said: "Don't trust it. Don't take the money". But gradually more money came forward, and it is the tendency of mankind, shared perhaps by companies and trade union leaders, to take money when it is offered. The money was taken, and is being taken. At the same time the Government made more ballots compulsory; and then made more compulsory ballots postal. So one reaches the point now where the breach is finalised; namely, the law is pushed forward to include more postal ballots which are obligatory on the trade union, and in the next two years or so the money is to be taken away. Against that picture my noble friend's amendment is modest indeed. I have spared noble Lords the detail of the history, partly because I am sure that all noble Lords know very well that that outline is correct. I support the amendment.
Lord Stoddart of Swindon: My Lords, I too support the amendment on very much the same grounds as those stated by my noble friend Lord Wedderburn of Charlton. There is no doubt at all that the unions have
24
been duped. Indeed, the Government would have had a great deal more trouble in introducing their provisions for compulsory postal ballots had the bitter pill not been sweetened by some financial assistance. The Government did not then say that there was a time limit on that particular form of assistance. They did not make it absolutely clear that there would be a further Bill which would remove the financial assistance. But now we have such a Bill. One cannot help believing very seriously that it is the intention of the Government, in spite of their protestations, to undermine the trade union movement through financial means. This particular provision will cost the trade unions dear—and many of them are in dire financial straits at the present time—for having to do things which are imposed upon them statutorily by Parliament, by the Government. At the behest of the Government, in large measure they will have to use their funds to do things in which they do not believe.
However, there is another catch in the Bill. There is another provision which will hurt the trade unions very much if the Government have their way. That is contained in Clause 14, where in my view the Government deliberately set out to wean people away, perhaps by default, by persuading people that they need not pay the trade union subscription every week. So the Government are getting at the trade unions in two ways. First, they are increasing their expenditure, which they promised not to do; then, at the same time, in the same Bill, they are doing their best to undermine the income of the trade unions. I believe that through this Bill, the Government show their animosity towards the trade union movement, and show perfectly well that, in spite of the fact that they have said they believe in a strong democratic trade union movement, they do not believe in the trade union movement at all. As I have said before, the only reason that they tolerate the trade union movement is that in some instances trade unions are administrative conveniences for the employers.
Baroness Denton of Wakefield: My Lords, I thank the noble Lord, Lord McCarthy, for his explanation of the thinking behind the amendment. But, like the related amendment that was tabled and debated in Committee, I am afraid that it remains unacceptable to the Government.
Perhaps I may start my remarks by answering my noble friend Lord Boyd-Carpenter, who asked for the costs incurred under the scheme. In 1991 the certification officer made payments totalling over £4 million to 77 unions. In 1992 a similar amount was paid to 80 unions. Amounts paid range from as much as over £1 million to the Transport and General Workers' Union to as little as £315 to the National and Provincial Building Society Staff Association. The amount of money that a union receives depends on the extent to which the union holds ballots and incurs expenditure which can be refunded under the terms of the scheme. It also depends on whether the union chooses to apply for refunds. Some unions do not.
Clause 7 repeals Sections 115 and 116 of the Trade Union and Labour Relations (Consolidation) Act 1992. Section 115 empowers the Secretary of State to establish a scheme under which payments may be

25
made to trade unions in respect of certain postal ballots. It will become obsolete once the trade union ballot funding scheme which the certification officer currently administers has been phased out in 1996, and we are therefore using the opportunity afforded by this Bill to repeal it. Section 116 is defined in terms of Section 115. Without either Section 115 or the scheme, it will become meaningless. It therefore makes sense that it too should be repealed.
The noble Lord made it clear that the main intention behind the amendment is that a ballot funding scheme should continue to exist in respect of union elections. As we emphasised in Committee, Clause 7 has no effect on whether or not the existing trade union ballot funding scheme is phased out. That decision was taken quite separately and is being implemented by a statutory instrument which came into effect on 1st April. Clause 7 simply repeals the power to establish such a scheme, a power that is clearly becoming redundant now that the Secretary of State has decided that it is no longer right or an appropriate use of public funds for such a scheme to operate.
It may be helpful if I set out once again the reasons for phasing out the trade union ballot funding scheme. The scheme was introduced in 1980 to encourage the voluntary practice of secret balloting at a time when there were no statutory requirements for unions to ballot their members before calling strikes or when electing leaders. Since 1984 such ballots have been a legal requirement. The original objectives of the scheme are no longer relevant and it now largely operates as a government subsidy for ballots which unions are required to carry out by law.
4 p.m.
Lord Stoddart of Swindon: My Lords, I wonder whether the noble Baroness can answer one question. When the provision for financial assistance for postal ballots was introduced in 1980, was it made clear at that time that the assistance was only temporary and not permanent?
Baroness Denton of Wakefield: My Lords, in 1980 the scheme was to encourage balloting. Indeed, it is surprising that the Trades Union Congress boycotted the scheme until 1985. I understand that it almost expelled two unions for using the scheme. Since 1986, unions have been allowed by the Trades Union Congress to use the scheme. It never welcomed the scheme. The issue is not the cost. That was dealt with by the statutory instrument that phased out the trade union ballot funding scheme. This clause takes out unnecessary legislation.
Lord Stoddart of Swindon: My Lords, I am most obliged to the noble Baroness for trying to answer my question but I fear that she has not done so. Will she please answer it? In 1980 when the scheme was introduced, was it introduced on the basis that it would be or could be phased out at some point in the future? Was it made clear to the trade unions—never mind about the Trades Union Congress, which is not concerned here since this involved financial assistance to individual trade unions and not to the Trades
26
Union Congress—that it could be phased out, or was the impression given that it was introduced on a permanent basis?
Baroness Denton of Wakefield: My Lords, it was never indicated that the funding was permanent. The purpose of the scheme was to encourage balloting. That is now a legal requirement.
Lord Wedderburn of Charlton: My Lords, as the noble Baroness has said that there was no such indication from the Government, can she say why the Secretary of State made the following comment? In a major speech that he made on the issue of postal ballots in December 1979, he told the trade unions:
"if you are thinking of having one, you do not have to worry about the cost, for the taxpayer will reimburse you".—[Official Report, Commons, 17/12/79; col. 165.]
I do not select those words out of context. There is nothing in the context to suggest a limitation as to time.
Baroness Denton of Wakefield: My Lords, the issue then was the availability of the funding to encourage balloting. Balloting is now required by law.
Lord Stoddart of Swindon: My Lords, perhaps I may just try again.
Lord Howie of Troon: My Lords, I wonder whether the noble Baroness would make it clear whether or not it was presented to this House—not to any outside body—that this funding was a temporary measure? In my recollection it was not, but I may be wrong.
Baroness Denton of Wakefield: My Lords, let me once more repeat for the benefit of the noble Lord, that it was not presented as a permanent measure.
Lord Howie of Troon: My Lords, was it presented as a temporary measure?
Lord Harmar-Nicholls: My Lords, perhaps I may ask my noble friend what legislation is permanent, in the sense that this House, if it so wishes cannot vary it at a later stage in the light of new circumstances? The noble Lord's question is irrelevant in the context of the powers of Parliament itself.
Baroness Denton of Wakefield: My Lords, I thank my noble friend for drawing attention to the real position of legislation. I return to the clause to which the amendment of the noble Lord, Lord McCarthy, applies. I stress that the scheme is being abolished because it no longer represents a justified use of public money. That applies to all and any ballot that it funds. Trade union ballots can and should be funded by trade unions, not by the taxpayer.
The Government cannot accept the amendment. I hope that the noble Lord will withdraw it.
Lord McCarthy: My Lords, with respect, the noble Baroness has a genius for non-justification. It is no answer to say that we abolished this because we abolished something else. We have phased out the scheme and you cannot ask us to explain or defend it because we have done it. That is like saying that we have switched off the life support machine and it is done now; you are dead. Do not ask why. We have

27
done it. Of course the Government can switch the machine back on again. They know that. We are asking them why they do not do so. It is not even true to say that they did it before they published the Bill. The Bill was published before they abolished the scheme. The Bill was published in November 1992. In explaining the Bill, the Government said that they were going to abolish the scheme. The trade unions complained and asked for an explanation. They have not been given an explanation today. It is no answer to say, "We did it to encourage balloting and now that balloting has been encouraged, we do not need to do it any more." Balloting is taking place and it still costs money. It was because it cost money that Mr. Prior (who is now the noble Lord, Lord Prior) introduced the scheme in the first place. It is no justification to say that the scheme is being abolished because it was introduced as an encouragement to do something—to encourage us to be good boys and girls—.and then to say, "You are such excellent boys and girls that we shall take away the money." That is no justification.
My noble friend Lord Wedderburn is absolutely right. A promise was made. It was not made in so many words on the Floor of the House but it is well known—I wish that the noble Lord, Lord Prior, was in his place—that the then Minister wanted to encourage trade unions to engage in balloting. In fact he had friends in the trade unions and knew what they wanted and felt about these matters. Those friends said to him, "Yes, we would like to have ballots, Jim, but they are very expensive." He said, "Don't worry. Leave it with me. I'll do something about that." He did something and now, because it has been successful, the Government are taking it away.
It is no excuse to say, "You are all doing it." Every time the Government bring a Bill to this House it adds to the cost. This adds to the cost while taking away the means of paying the cost. I have explained to the House before what additional costs will be incurred by trade unions to deal with the additional functions placed on scrutineers for the surveillance and extension of elections. Even general secretaries and presidents who do not have votes have to be regularly elected. That costs unions more than £100,000 and £150,000 a year—all done by the Government. There is no justification for taking away that support. It constitutes a breach of faith and we intend to divide the House.
4.10 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 87; Not-Contents 131.

Division No. 1

CONTENTS

Addington, L.

Bruce of Donington, L.

Ardwick, L.

Carmichael of Kelvingrove, L

Ashley of Stoke, L.

Carter, L.

Aylestone, L.

Cledwyn of Penrhos, L.

Beaumont of Whitley, L.

Cocks of Hartcliffe, L.

Blease, L.

Dean of Beswick, L.

Bonham-Carter, L.

Desai, L.

Boston of Faversham, L.

Dormand of Easington, L.

Bottomley, L.

Ennals, L.

28

Ezra, L.

Merlyn-Rees, L.

Falkland, V.

Mishcon, L.

Fisher of Rednal, B.

Molloy, L.

Fitt, L.

Morris of Castle Morris, L.

Gallacher, L.

Mulley, L.

Galpern, L.

Murray of Epping Forest, L.

Geraint, L.

Nicol, B.

Gladwyn, L.

Northfield, L.

Graham of Edmonton, L. [Teller.]

Ogmore, L.

Pitt of Hampstead, L.

Greene of Harrow Weald, L.

Plant of Highfield, L.

Gregson, L.

Ponsonby of Shulbrede, L.

Grey, E. [Teller.]

Prys-Davies, L.

Hampton, L.

Richard, L.

Hanworth, V.

Robson of Kiddington, B.

Harris of Greenwich, L.

Rochester, L.

Hilton of Eggardon, B.

Sainsbury, L.

Hirshfield, L.

Seear, B.

Hollis of Heigham, B.

Sefton of Garston, L.

Holme of Cheltenham, L.

Serota, B.

Howie of Troon, L.

Shackleton, L.

Hughes, L.

Stallard, L.

Jay, L.

Stoddart of Swindon, L.

Jay of Paddington, B.

Strabolgi, L.

Jeger, B.

Taylor of Blackburn, L.

Jenkins of Putney, L.

Taylor of Gryfe, L.

John-Mackie, L.

Thomson of Monifieth, L.

Judd, L.

Tordoff, L.

Kilbracken, L.

Turner of Camden, B.

Lockwood, B.

Wallace of Coslany, L.

Longford, E.

Wedderburn of Charlton, L.

McCarthy, L.

White, B.

Mclntosh of Haringey, L.

Williams of Elvel, L.

Mallalieu, B.

Williams of Mostyn, L.

Mason of Barnsley, L.

Winchilsea and Nottingham, E

NOT-CONTENTS

Aberdare, L.

Elton, L.

Acton, L.

Erroll of Hale, L.

Alexander of Tunis, E.

Faithfull, B.

Allenby of Megiddo, V.

Finsberg, L.

Arran, E.

Flather, B.

Ashbourne, L.

Forbes, L.

Astor of Hever, L.

Fraser of Carmyllie, L.

Auckland, L.

Fraser of Kilmorack, L.

Barber of Tewkesbury, L.

Gainford, L.

Belhaven and Stenton, L.

Gardner of Parkes, B.

Bellwin, L.

Geddes, L.

Bessborough, E.

Gibson-Watt, L.

Blatch, B.

Goschen, V.

Boardman, L.

Halsbury, E.

Borthwick, L.

Harding of Petherton, L.

Boyd-Carpenter, L.

Harmar-Nicholls, L.

Brabazon of Tara, L.

Hayhoe, L.

Braine of Wheatley, L.

Hemphill, L.

Butterworth, L.

Henley, L.

Cadman, L.

Hesketh, L. [Teller.]

Caithness, E.

Hives, L.

Campbell of Croy, L.

Holderness, L.

Carnegy of Lour, B.

HolmPatrick, L.

Carnock, L.

Hood, V.

Chalker of Wallasey, B.

Hooper, B.

Charteris of Amisfield, L.

Hothfield, L.

Chelmsford, V.

Howe, E.

Clark of Kempston, L

Hylton-Foster, B.

Cockfield, L.

Johnston of Rockport, L.

Constantine of Stanmore, L.

Lauderdale, E.

Cox, B.

Lindsay, E.

Cranborne, V.

Lindsey and Abingdon, E.

Cullen of Ashbourne, L.

Liverpool, E.

Cumberlege, B.

Lloyd-George of Dwyfor, E.

Davidson, V.

Long, V.

Denham, L.

Lyell, L.

Denton of Wakefield, B.

Mackay of Ardbrecknish, L.

Dundonald, E.

Mackay of Clashfern, L. [Lord Chancellor.]

Eden of Winton, L.

Effingham, E.

Mancroft, L.

Elles, B.

Margadale, L.

Elliott of Morpeth, L.

Marlesford, L.

Elphinstone, L.

Merrivale, L.

29

Mersey, V.

St. Davids, V.

Milverton, L.

Saltoun of Abernethy, Ly.

Monteagle of Brandon, L.

Shannon, E.

Mottistone, L.

Sharples, B.

Mountevans, L.

Skelmersdale, L.

Mowbray and Stourton, L.

Slim, V.

Moyne, L.

Stewartby, L.

Munster, E.

Strathclyde, L.

Murton of Lindisfarne, L.

Strathmore and Kinghorne, E. [Teller.]

Nelson, E.

Newall, L.

Sudeley, L.

Norrie, L.

Swansea, L.

Orkney, E.

Terrington, L.

Oxfuird, V.

Teviot, L.

Park of Monmouth, B.

Torrington, V.

Pender, L.

Trumpington, B.

Peyton of Yeovil, L.

Ullswater, V.

Plummer of St. Marylebone, L.

Vaux of Harrowden, L.

Quinton, L.

Vivian, L.

Rankeillour, L.

Wade of Chorlton, L.

Reay, L.

Whitelaw, V.

Rippon of Hexham, L.

Wynford, L.

Rodger of Earlsferry, L.

Young, B.

Rodney, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.18 p.m.
Clause 13 [Right not to be excluded or expelled]:
Baroness Turner Baroness Turner moved Amendment No. 7:
Page 24, line 45, at end insert:("but does include conduct which is in breach of the rules of the union and which is calculated to impair its position to negotiate with an employer on behalf of its members generally or at the place of work of the individual.").
The noble Baroness said: My Lords, Clause 13 was discussed thoroughly in Committee. It is the clause which removes the right the trade union movement has had for many years to regulate itself under what are called the Bridlington principles. It is one of the most important clauses in the Bill. It is right that we should have spent a lot of time discussing it at Committee stage.
However, we did not succeed in convincing the Committee that the clause as it stands would be damaging to the maintenance or growth of single union deals or that it would be responsible for undermining industrial stability. The clause makes it impossible for a union to refuse admission to an individual whose terms and conditions of employment are governed by a negotiating agreement held with another union, and also makes it impossible to exclude anybody on the same grounds.
As we said in Committee, at the present time the TUC has its own system of regulation. It is a system of self-regulation which, despite the criticisms sometimes made—it would be astonishing if criticisms did not arise from time to time, particularly in those instances where an award has gone against a specific union—has played a significant role in ensuring a degree of industrial stability. Generally speaking, unions have gone along with the decisions made. The fact that TUC membership is still something desired by ordinary members is clear from the recent ballot conducted by the merged engineering union.
Nevertheless, the Government have not been moved by the arguments that we advanced. Moreover, in Committee, your Lordships rejected in a Division the amendment I advanced that would have allowed a union to refuse membership to an applicant where
30
exclusive bargaining rights were held by another union. In Committee the Minister sought to maintain that union membership and union recognition are two quite separate things. I speak from some experience when I say that they are not; they are really very closely connected indeed.
When attempting to organise at a green field site where there is no union membership the very first questions that union organisers are asked by potential members are, "Will the employer recognise the union? What will you do to get recognition?" That is quite natural, for although over the years unions have developed other individual services—legal aid, discount trading, insurance services, holiday and tourist services and so on— the main reason for a union's existence is to negotiate pay and conditions of service. They began as collectives to represent employee interests in situations where the individual had vastly less bargaining power than the employer. That is still the situation and it is why, despite all the efforts of the Government, who, I insist, plainly do not like unions and would make them much more difficult to organise if they could get away with it, unions still continue to exist despite unemployment and despite all the legislation we have had since 1979 and it is why they will continue.
My amendment seeks to salvage at least something from this and to provide some kind of safeguard for industrial stability. It is built on the assumption that a union highly prizes its negotiating rights once it has got them. It seeks to deal with the situation which occasionally arises in which an individual, having fallen out with his colleagues or perhaps finding himself in a minority following a vote on a pay deal or even perhaps as a result of political motivation aided by outside influences which are anti-union, deliberately sets about undermining the union's position. He may seek to organise a breakaway. He may perhaps, deliberately with malicious intent, seek to utilise the provisions of the Bill to undermine the single union agreement which has been established and to which the majority of employees adhere.
Some such situation was envisaged by Nissan when it wrote the letter the text of which I read to your Lordships on the 18th March at col. 1563 of the Official Report in Committee. The letter pointed out, it will be recalled, that the clause if unamended could undermine single union agreements and could put employers in an impossible situation. Surely if an individual, maliciously motivated, sets about trying to undermine the negotiating position of a union it should be possible for the union to deal with him under this clause of the Bill. That is what the amendment is about. It is quite a minor amendment given the size of the clause and the impact that the clause is likely to have when it is in legislation. Nevertheless, it provides some minor safeguard to unions where they have a single union agreement. For that reason it is important. I hope that the Minister will be prepared to give it favourable consideration. I beg to move.
Viscount Ullswater: My Lords, this amendment raises issues which I really thought we had laid to rest, in Committee both in this House and in another place.

31
The Government believe that individuals should not be prevented from joining the trade union of their choice because of a cartel arrangement between trade unions which preserves their spheres of influence while taking no account of the wishes of members and potential members. Central to the Bridlington principles are the "rules" that a union may not recruit members of another union where that union objects to their transfer and that a union may not organise at a place of work where another union has a majority of members. Those are a clear denial of those individuals' freedom to join the union of their choice. If they consider that another union would serve them better, why should they not be able to join it?
We do recognise of course that unions should not be required to accept anyone and everyone into membership. The clause provides sensible exemptions from the general right of individuals to join the union of their choice. One of these exemptions provides that a union may refuse membership on grounds of conduct. However, it is important that a union cannot use this exemption to exclude someone for a reason that has nothing genuinely to do with "conduct". We must ensure that it does not allow unions to re-introduce aspects of the Bridlington principles by the back door, or undermine other essential planks of our trade union legislation.
In so far as the effect of the amendment is to allow a union to exclude an individual on the ground that it is the intention of that individual to cause damage to the legitimate interests of the union, I have to say, as I have said already in the House, that the amendment is entirely unnecessary. The clause already allows such exclusions. Let us be perfectly clear: any conduct other than that specified in subsection (4) of the clause will be a legitimate reason for exclusion or expulsion, so long as it is the sole reason for that exclusion.
The noble Baroness's arguments have again demonstrated the confusion that appears to linger in the minds of some noble Lords in respect of trade union membership and trade union recognition. This clause is about union membership. It has nothing to do with recognition. As we have said on many occasions, it is up to an employer who, if anyone, he chooses to negotiate with. If he wishes to negotiate collectively, he may choose to do so with one union or with several. That is his decision. That decision may of course be influenced by a number of factors. It has nothing to do with the right of individuals to join the union of their choice.
For the purposes of this clause there are two kinds of conduct: conduct for which exclusion from a union is explicitly not permitted, and any other form of conduct for which exclusion is permitted, provided that it is the sole reason. To the extent that the amendment seeks to reinforce the latter point, it is unnecessary. To the extent that it seeks to limit the former category—the conduct for which exclusion or expulsion is not permitted— I cannot accept it. I hope that the noble Baroness will therefore be persuaded to withdraw the amendment.
Baroness Turner of Camden: My Lords, I have to say that I really am rather unpersuaded. Again I
32
emphasise that there is not this distinction between trade union membership and trade union recognition. The two go very much together. That has been seen by numbers of people who were concerned that the clause as it now stands would be a danger to improvement in the spread of single-union agreements.
The intention is to rule out conduct which is in breach of the rules of the union and which is calculated to impair its position to negotiate with an employer on behalf of its members generally or at the place of work of the individual. In other words, it is elaborating precisely what kind of conduct can be dealt with under the terms of the clause. It is intended to deal with the situation where an individual maliciously seeks to undermine the union's negotiating position. As we said when we discussed the single union situation last time round, we are not alone in our concern that the clause, if unamended, will result in a great deal of industrial instability. We think that the Bridlington principles, though they have been decried on numerous occasions by the Minister, have over the years resulted in a much greater degree of industrial stability than could have been expected otherwise. By removing that kind of restraint on unions we are letting ourselves in for a great many problems and for a great deal of general industrial instability.
In view of the importance of the clause and the fact that this was a minimal attempt to minimise its impact I feel that I have no alternative but to test the opinion of the House.
4.29 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 88; Not-Contents, 133.

Division No. 2

CONTENTS

Addington, L.

Grey, E.

Airedale, L.

Hampton, L.

Archer of Sandwell, L.

Hanworth, V.

Ardwick, L.

Harris of Greenwich, L.

Ashley of Stoke, L.

Hilton of Eggardon, B.

Attlee, E.

Hirshfield, L.

Aylestone, L.

Hollis of Heigham, B. [Teller.]

Beaumont of Whitley, L.

Holme of Cheltenham, L.

Blease, L.

Howie of Troon, L.

Bonham-Carter, L.

Hughes, L.

Boston of Faversham, L.

Jay, L.

Bottomley, L.

Jay of Paddington, B.

Bruce of Donington, L.

Jeger, B.

Carmichael of Kelvingrove, L.

Jenkins of Putney, L.

Carter, L.

John-Mackie, L.

Cledwyn of Penrhos, L.

Judd, L.

Cocks of Hartcliffe, L.

Kilbracken, L.

Dean of Beswick, L.

Lockwood, B.

Dormand of Easington, L.

Longford, E.

Ennals, L.

McCarthy, L.

Ezra, L.

Mclntosh of Haringey, L.

Falkland, V.

Mallalieu, B.

Fisher of Rednal, B.

Mason of Barnsley, L.

Fitt, L.

Merlyn-Rees, L.

Gallacher, L.

Mishcon, L.

Galpern, L.

Molloy, L.

Geraint, L.

Morris of Castle Morris, L.

Graham of Edmonton, L.[Teller.]

Mulley, L.

Murray of Epping Forest, L.

Greene of Harrow Weald, L.

Nicol, B.

Gregson, L.

Northfield, L.

33

Ogmore, L.

Stoddart of Swindon, L.

Pitt of Hampstead, L.

Strabolgi, L.

Plant of Highfield, L.

Taylor of Blackburn, L.

Ponsonby of Shulbrede, L.

Taylor of Gryfe, L.

Prys-Davies, L.

Thomson of Monifieth, L.

Richard, L.

Tordoff, L.

Robson of Kiddington, B.

Turner of Camden, B.

Rochester, L.

Wallace of Coslany, L.

Sainsbury, L.

Wedderburn of Charlton, L.

Scanlon, L.

White, B.

Seear, B.

Williams of Elvel, L.

Sefton of Garston, L.

Williams of Mostyn, L.

Serota, B.

Winchilsea and Nottingham, E.

Shackleton, L.

NOT-CONTENTS

Aberdare, L.

Hooper, B.

Acton, L.

Hothfield, L.

Aldington, L.

Howe, E.

Alexander of Tunis, E.

Hylton-Foster, B.

Allenby of Megiddo, V.

Johnston of Rockport, L.

Arran, E.

Lauderdale. E.

Astor of Hever, L.

Lindsay, E.

Auckland, L.

Lindsey and Abingdon, E.

Barber of Tewkesbury, L.

Liverpool, E.

Bellwin, L.

Lloyd-George of Dwyfor, E.

Bessborough, E.

Long, V.

Blatch, B.

Lyell, L.

Boardman, L.

Mackay of Ardbrecknish, L.

Borthwick, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Boyd-Carpenter, L.

Brabazon of Tara, L.

Mancroft, L.

Braine of Wheatley, L.

Margadale, L.

Brougham and Vaux, L.

Marlesford, L.

Butterworth, L.

Merrivale, L.

Cadman, L.

Mersey, V.

Caithness, E.

Milverton, L.

Campbell of Croy, L.

Monteagle of Brandon, L.

Carnegy of Lour, B.

Mottistone, L.

Chalfont, L.

Mountevans, L.

Chalker of Wallasey, B.

Mowbray and Stourton, L.

Chelmsford, V.

Moyne, L.

Clark of Kempston, L

Munster, E.

Constantine of Stanmore, L.

Murton of Lindisfarne, L.

Cox, B.

Nelson, E.

Craigavon, V.

Newall, L.

Cullen of Ashbourne, L.

Norrie, L.

Cumberlege, B.

Orkney, L.

Davidson, V.

Oxfuird, V.

Denham, L.

Park of Monmouth, B.

Denton of Wakefield, B.

Pender, L.

Dundonald, E.

Peyton of Yeovil, L.

Eden of Winton, L.

Plummer of St. Marylebone, L.

Elles, B.

Quinton, L.

Elliott of Morpeth, L.

Rankeillour, L.

Elphinstone, L.

Reay, L.

Elton, L.

Renwick, L.

Faithfull, B.

Ridley, V.

Ferrers, E.

Rippon of Hexham, L.

Finsberg, L.

Rodger of Earlsferry, L.

Flather, B.

Rodney, L.

Forbes, L.

Romney, E.

Fraser of Carmyllie, L.

St. Davids, V.

Fraser of Kilmorack, L.

Saltoun of Abernethy, Ly.

Gainford, L.

Sharpies, B.

Gardner of Parkes, B.

Skelmersdale, L.

Geddes, L.

Slim, V.

Gibson-Watt, L.

Stewartby, L.

Goschen, V.

Strathclyde, L.

Greenway, L.

Strathcona and Mount Royal, L.

Halsbury, E.

Harding of Petherton, L.

Strathmore and Kinghorne, E. [Teller.]

Hardwicke, E.

Harmar-Nicholls, L.

Sudeley, L.

Hemphill, L.

Swansea, L.

Henley, L.

Teviot, L.

Hesketh, L. [Teller.]

Thomas of Gwydir, L.

Hives, L.

Thurlow, L.

Holderness, L.

Torrington, V.

HolmPatrick, L.

Trumpington, B.

34

Ullswater, V.

Whitelaw, V

Vaux of Harrowden, L.

Wynford, L.

Vivian, L.

Young, B.

Wade of Chorlton, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.37 p.m.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 8:
Page 27, line 3, after ("section") insert ("including rights arising from an agreement relating to the application of criteria in subsection (3) of that section").
The noble Lord said: My Lords, the purpose of this amendment to Clause 13 is to ensure that certain fundamental liberty of contract-making is clearly held by trade unions. It is a matter about which there has been widespread concern and ambiguity.
I wish to make five points on the amendment. The first is as to context. This clause prevents workers from establishing and joining organisations of their own choosing without any distinction whatever, subject only to the rules, without need for authorisation. They have the liberty to draw up their constitution and rules and elect their representatives in full freedom. Those words are the nub of the convention on freedom of association of the International Labour Organisation. I think it was established in Committee that, to put it mildly, there is clearly a grave risk of the breach of that convention, which the Government do not answer by simply stating that the clause is not in breach. I hope that at some point in our proceedings the noble Viscount will be able to tell us whether the Government are willing now, having looked at the matter again, to give greater publicity—perhaps by placing documents in the Library—to the transactions at which the various bodies of the ILO have looked regarding this and previous similar legislation, especially in view of the fact that yet again this clause makes use of unjustifiable conduct. That is a category which the ILO has found not to be in accordance with the convention's minimum standards.
Secondly, in that context the clause demands that the trade unions set their admissions and exclusions within the range of what it says are acceptable criteria. For the first time in our law there are limited criteria in this clause as to the right of trade unions to admit and exclude. But they include a number of phrases in the new Section 174, such as invitation by way of a profession, occupation, or trade, or the like. I take those three as characteristics of new Section 174(3).
The question then arises whether, if those criteria are not observed, there is a remedy, and at whose hands. As the clause stands—and I take it that the Government are confident enough by now not to wish to change the basic structure—the new Sections 174(3) and (5) refer on to Section 177. May I read subsections (3) and (5) of Section 177. They give the remedy. Subsection (3) says:
"The remedy of an individual for infringement of the rights conferred"——
that is an individual who has been excluded improperly—

35
"is by way of a complaint to an industrial tribunal in accordance with that section, Sections 175 and 176, and this section, and not otherwise".
The rights being set down are remediable by action for compensation in the industrial tribunal.
Indeed, the clauses are framed in a traditional way, repeating what has occurred in previous Bills. Subsection (5) of the new Section 177 states:
"The rights conferred by Section 174 are in addition to, and not in substitution for, any right which exists apart from that section; and, subject to subsection (4) nothing in that section, Section 175 or 176 or this section affects any remedy for infringement of any such right".
In other words, the subsection maintains all the rights which would exist, quite apart from this section, unless, of course, they are in clear breach of the new section. All rights are reserved. Any right which exists apart from the section is maintained.
The question that has arisen comes from the desire of the amendment to add to subsection (5) the words:
"including rights"—
that is to say, maintaining the rights
"arising from an agreement relating to the application of criteria in subsection (3) of that section".
Perhaps, in view of the context, it would have been better to say subsection (3) of Section 174.
Why should we need to do that? It is because terms like "specified trade", "specified profession" or "specified occupation", are notoriously uncertain. I do not go into conduct for the moment. That raises rather different issues. There are great doubts about the meaning. In real life, practices and agreements are likely to grow up around what people understand to be specified professions or occupations. Often they tend to agree—sometimes implicitly—that a certain meaning should be observed, not in contravention of such criteria but to elucidate their application.
For example, if union A and union B—I go straight to the trade unions—agree that as a matter of common sense, since that has always operated in the area of shipyards, or rather shipbuilding as there are scarcely any shipyards, that one of them will take into membership marine engineers while the other will offer itself to all the rest, that would be quite sensible. It does little more than permit trade unions, in agreements even possibly involving employers, through the freedom of contract (which the general law allows the parties) to attach trade meanings and usages as a meaning to any terms other than those prohibited by statute.
Some people have said that it may be the Government's intention to prohibit this kind of agreement. The clause does not do so, in my submission, as it stands. However, it would be of some value to know that the Government really mean to keep to what they have here, possibly even in a later Bill. Obviously, the industrial situation— and the industrial situation not merely for unions but for managers —would be different if the parties were not allowed to agree, not in contravention of the Bill but in application of the Bill. It would be a situation of some gravity for them if they were prevented from doing that which any other citizen could do in that regard.
In my submission the amendment would cure ambiguities. It is not only my submission. There are others who are worried —that the same freedom of contract should be allowed as is allowed to other parties; those, for example, who attach a customary meaning to terms of a contract which is not a breach of a statute. Within the boundaries of the Act I submit that it would be useful for everybody, not simply for trade unions but for industrial relations generally, to make clear at this stage that there is nothing wrong in the kind of conduct that every other citizen in the land can conduct quite properly. I beg to move.
4.45 p.m.
Baroness Turner of Camden: My Lords, I support the amendment moved by my noble friend. I do not want to go over the same arguments. My noble friend has explained clearly what the amendment is about. Speaking with some experience of trade union work over a long period, I stress that it would be a great pity if the kind of inter-union arrangements to which he referred were not permitted. A union can decide to recruit marine engineers and another union will have an agreement with that union under which it recruits the rest. That kind of agreement or arrangement is common in industry and works extremely well. It leads to the degree of industrial stability that I hope we all aim for. With that in view, I hope that the Government feel able to accept the arguments of my noble friend and the amendment that he has moved.
Viscount Ullswater: My Lords, I have to confess that I found it difficult to understand the purpose of the amendment. Therefore, I am grateful to the noble Lord for setting out his reasons for tabling it. I am sorry if my response does not fully deal with his arguments.
Perhaps it would be helpful if I outline the rationale behind the structure of Clause 13 and the purpose of subsection (3) in particular. As noble Lords are aware, the purpose of Clause 13 is to give individuals greater freedom to join the union of their choice. The approach taken in the clause concentrates on the individual right, subject to certain exceptions, rather than defining in the first instance the circumstances in which a union may exclude or expel individuals from membership. Subsection (2) details the reasons which are permissible as grounds for exclusion or expulsion by a trade union. The first of these is that an individual does not qualify, or no longer qualifies, for membership by reason of an enforceable membership requirement in the union's rules. What constitutes an enforceable membership requirement is defined further in subsection (3).
An enforceable requirement is one which restricts membership solely by reference to employment in a specified trade, industry or profession; occupational description (including grade, level, or category of appointment); or possession of specified trade, industrial, or professional qualifications or work experience. Such restrictions are commonly used by trade unions to ensure a commonality of interest among their membership and to make the tasks of

37
representation and negotiation realistic and meaningful. It has never been our intention to force unions to accept into membership individuals who have nothing in common with their existing membership. Such restrictions are therefore acceptable as reasons for exclusion.
The requirement that these exclusions must be specified in the union's rule book, unlike the other acceptable reasons for exclusion in subsection (2), is included to ensure that it is a genuine, generally-applied, rule of the union that membership be restricted in this way. It might otherwise be possible for a union to use these exemptions as a route to exclude specific members in particular circumstances. This would clearly be unacceptable.
The clause therefore provides adequate protection for trades unions against being required to accept inappropriate individuals into membership, while providing the widest appropriate right for individuals to join the trades union of their choice.
I cannot see how the amendment contributes anything worthwhile to the clause. If it simply ensures that rights based on the criteria in subsection (3) and contained in the union's rules are additional remedies to those provided for in the clause, then I believe it to be unnecessary. The clause already makes it quite clear—in the very subsection to which the amendment refers—that the rights conferred by the section are in addition to any other rights. There is no need to specify any of those rights.
I can confirm that the clause does not outlaw agreements between unions as to the matter referred to in subsection (3) of Section 174. However, subsection (5) is not ambiguous. The amendment is superfluous and in no way clarifies subsection (3).
When moving the amendment, the noble Lord, Lord Wedderburn, referred to reports from the ILO and the Council of Europe and asked whether they would be made available. I believe that he asked—if not on this occasion, then on a previous occasion—whether they could be placed in the Library. I have to say that they are made available. I believe that I said in Committee that they are made available to the Trades Union Congress and to the Confederation of British Industry and that they are not confidential. I have no objection to placing the relevant documents in the Library. Having said that, I hope that the noble Lord will accept the explanation that I have given and that he will feel able to withdraw his amendment.
Lord Wedderburn of Charlton: My Lords, I thank the Minister for his reply and especially for what he said about ensuring that ILO documents and the like are readily available. However, having based his reply upon the foundation, as I understood it, that this amendment was difficult to understand, the Minister then readily found that it was unnecessary and superfluous. I find that a somewhat awkward conjunction of argument.
If I may put it this way, I gave the Government reading time on this question because I raised it in Committee on another amendment. Perhaps the Minister will remember that I used the example of a gumboot worker and referred to a real example from years gone by of one trade union which organised
38
workers in the rubber industry and another trade union which organised workers in the shoe industry. The question that arose was: who should organise the workers in the gumboot factory? It seems wrong to say that those two unions cannot possibly reach an agreement on what is meant by the relevant occupation. I was not at all sure at the end of the day whether the Minister said that they could or could not reach such an agreement.
The amendment does not create exemptions. It has nothing to do with exemptions from the section. It has to do with parties who make agreements within the terms of the new law. The amendment does not, by any means, ban freedom of choice. It relates to the freedom of choice of all the people concerned—the members of the various unions and the members who want to join this or that union. As I understand it, the Government accept the fact that if someone comes along and says to a union, "I am a marine engineer and want to join you", and the union says, "No, sorry, we don't cater for marine engineers", that is all right because it is in their rules. That seems okay. All that I am saying is that that is "freedom of contract" within the clause and within the new law. Plainly, the same argument applies to all sorts of other contracts, as those who have more knowledge of industrial relations than I have will be able to explain.
I must advise Ministers generally that, as they know, the courts have now decided, by a decision of your Lordships' Appellate Committee, that they are allowed to look at Hansard. I must say that the answers to some of these amendments are likely to convince them that they had better reverse that decision, because it will not help them to look at this particular debate, which is on a matter that I should have thought rather important. It is about freedom of contract, which is something that I thought that the Government believed in. It is about an amendment which is not a breach of the new law; it is about its application. It is about industrial relations and about doing things sensibly by agreement, yet all we get is a negation of the amendment with the words, "It is too difficult to understand". With great respect to the Minister, that is not good enough.
However, perhaps I can do little more than let the amendment lie upon the table. Without pursuing the matter, I suggest to my noble friends that that is the right and proper course because, if the Government are now understanding the point, perhaps they will look at the matter again on Third Reading. Indeed, I say to them, "Please look at this again on Third Reading because there is an area of ambiguity which could easily be cleared up". If it is acceptable to the House, I shall let the amendment lie.
The Deputy Speaker (Lord Hayter): My Lords, I did not understand. Is the noble Lord withdrawing the amendment?
Lord Wedderburn of Charlton: My Lords, I understand that it is perfectly permissible to let the amendment lie and not to press the matter to a Division.
The Deputy Speaker: My Lords, is it your Lordships' pleasure that the amendment be withdrawn?
Amendment, by leave, withdrawn.
Clause 14 [Right not to suffer deductions of unauthorised or excessive subscriptions]:
Lord McCarthy Lord McCarthy moved Amendment No. 9:
Page 27, line 11, at beginning insert ("(1) Subject to subsection (10A) below").
The noble Lord said: My Lords, I sincerely hope that this will be a little simpler—at least for the Minister. In moving Amendment No. 9, I am speaking also to Amendment No. 13, which deals with the check-off system, which, in itself, is simple enough. The Minister said that he did not understand the amendment just moved by my noble friend Lord Wedderburn, but that he was against it. I hope that he will understand this amendment and be in favour of it.
This is the last attempt to deal with the realities of the check-off system. We are concerned solely with how the worker gets to know, first, that he is still paying to his union and, secondly, how much he is paying to his union. It seems to us that that is the essence of what we should be concerned with. In the amendment we seek to provide alternative means for establishing those two things. The amendment provides an alternative to the elaborate procedure in the new Section 68 of the 1992 consolidation Act, as amended by Clause 14 which, as we have seen, takes us into a whole maze of notifications, appropriate sums, calculations, authorisations and so on and so on.
In the amendment we suggest as an alternative a situation in which one would not have to apply that complicated and, it seems to us, fairly unpopular way of dealing with a problem which we know the CBI and the TUC do not like. We are not saying that the Government's procedure should be ruled out, but we suggest a parallel procedure. An alternative way of operating a lawful check-off would be based, in effect, on the situation which exists in most industries, firms and areas in which the check-off now exists.
First, the worker must personally authorise the payment by direct debit of a particular sum relating to his or her union subscription (just as happens now from banks accounts for payments such as mortgages, subscriptions to clubs and all kinds of things until we stop those direct debits). Secondly, the employer involved must agree to act as, in effect, the collector, agent or banker. As I have said, the employer agrees to act as agent and the worker authorises a direct debit. As long as the third condition applies—the worker is told regularly that such a deduction is being made and is told whenever it increases (which is precisely the system of rules operating for direct debits)—that system can continue until it is changed either by the worker saying that he does not want to pay any more or by the employer saying that he no longer wants to act as agent.
That is a precise parallel—or as precise as we can get it—to the procedure which exists in other circumstances. That is what we have tried to provide. However, it is also something that, as we pointed out in Committee, regularly happens in industry today
40
because workers obtain, with their pay slips, a notification from the employer of all deductions. As what we are suggesting happens now, in that employees are told regularly what deductions are being made for their union subscriptions, the amendment would not involve employers in any vast new bureaucracy. For that reason, we hope that it will be supported by the friends of the CBI and employers generally.
Of course—and I stress this or it might be misunderstood—the employee can stop payment if he does not like it, just as he can stop it with a direct debit at any time that he does not like it. Of course, the provisions of Section 63A still apply. If there is a complaint that, in one way or another, the provisions of the Bill are not being carried through, that complaint can be dealt with as specified in the Bill. What we suggest squares with all other kinds of deductions: for clubs, political parties, charge accounts at Austin Reeds and Harrods; membership of the National Trust, dependants' allowances; ex-wives and so forth. Those who say that this simple system cannot be done for trade unions have, once again, to say what is so different about trade unions that we cannot accept the provision. I beg to move.
5 p.m.
Lord Rochester: My Lords, in my view Clause 14 is another example of burdens being placed upon trade unions which do not apply to other organisations. I cannot see why individuals, in their capacity as union members, are to be obliged to re-authorise the deduction of union subscriptions from their wages every three years when the same individuals, as subscribers to clubs, charities or other organisations, can enter into a direct debit arrangement with their bank which continues until such a time as they choose to cancel it.
I do not see why employees should be treated as morons in one capacity and as intelligent citizens in another. As I see it, the amendment seeks to correct that anomaly by ensuring that union subscription deductions may be authorised by a direct debit arrangement; and, as a consequence of that arrangement, the obligation to re-authorise payment every three years should not apply. That proposal seems to me to be a reasonable one, and therefore I support the amendment.
Lord Mottistone: My Lords, the noble Lord, Lord McCarthy, said in passing that the amendment would appeal to the CBI among other bodies. Unfortunately since knowing about the amendment I have not had time to discuss it with the CBI so I cannot speak for it. There seems to be a certain amount of logic in the amendment, and I shall be interested to hear what my noble friend has to say.
Lord Howie of Troon: My Lords, in my position as a civil engineering journalist, I am a member of two well-known organisations, one of which is the National Union of Journalists, with which I agree from time to time, and the other is the Institution of Civil Engineers with which I agree more or less all the time. Under these proposals my debit arrangements

41
for subscriptions will be different for the Institutions of Civil Engineers from those of the NUJ. They are equally important to me in my profession, calling or trade—whatever one chooses to call it—and it is absurd that the subscription arrangements should be different. I am sure that the amendment—when the Government think about it—should be supported.
Lord Stoddart of Swindon: My Lords, I too support the amendment. I spoke about this clause earlier this afternoon and in Committee. I must confess that, having heard the replies of the Government Front Bench, I am still not convinced of the necessity for this clause, nor can I understand why it has been brought forward, unless it is to attack further the financial base of the trade union movement. As I understand it, there has been no call for such a provision from the employers. Again, as I understand it—I may be wrong —the employees have been happy to go along with the situation as it presently appertains. There has been no great call from the employers that the arrangements should be altered. Indeed, I further understand that if there is to be any authorisation at all, the employers would prefer that the authorisation period should be longer than three years and at least five years. Why are the Government coming forward with this restrictive provision?
The Government Front Bench is well aware that I am a fair and reasonable person, but on this occasion one is forced to the conclusion that the Government have a firm agenda, and it is an agenda which envisages a much smaller trade union movement than we have at present. I do not know their target; I have heard the figure of 25 per cent. and 20 per cent. of all employees. My guess is that it is the lower. So far, the Government have failed to convince me, and I feel sure that they have failed to convince this side of the House, that that is not one of the prime reasons for this clause.
One is bound to be suspicious, is one not? As has been pointed out by the noble Lord, Lord Rochester, and my noble friend Lord McCarthy, if employees once authorise a charitable donation, that will continue for so long as the employee does not cancel it. So why on earth should a trade union subscription be any different? That, too, is a voluntary subscription and, in many cases, it is also a charitable subscription because the articles of some trade unions are of a charitable nature. Why should trade unionists who are making a voluntary—not forced—contribution to a trade union be required to make an authorisation every three years, whereas if they want to make a regular contribution to the Red Cross or some local charity, they have to make the authorisation once only? This requirement does not just place a burden upon the employee and the trade union involved, it places a great burden on the employers themselves. And it puts the employer at risk, because if an employer deducts an amount from his employee's wages which has not been authorised, perhaps because of an oversight, the employer could be legally liable, taken to court and fined.
Lord McCarthy: My Lords, yes.
Lord Stoddart of Swindon: My Lords, I am grateful to my noble friend Lord McCarthy for confirming that that is right. Under those circumstances, I cannot understand why the Government are so resistant to every amendment put forward regarding this clause. I sincerely hope that they will find themselves less resistant this afternoon.
Baroness Denton of Wakefield: My Lords, I have listened with interest to the several points made by my noble friend Lord Mottistone and noble Lords opposite. However, noble Lords will not be surprised that they have failed to convince me. The noble Lord, Lord McCarthy, said earlier that I was defending in an indefensible way. I felt that our defence was straightforward: we believe that trade unions should fund their own ballots. I cannot be clearer than that, and I hope that I am also clear on this occasion.
Perhaps I may draw attention to the issue which is at point in Clause 14 in relation to the major differences, ideas and suggestions to which the noble Lord has referred. It was interesting to note that the examples quoted varied among noble Lords. The noble Lord, Lord Howie, referred to professional subscriptions; the noble Lord, Lord Stoddart, referred to charitable subscriptions; and the noble Lord, Lord McCarthy, referred to the use of charge cards at stores. In all those instances the funds being donated or assigned are already in the bank. In this instance we are talking about the money which is the wage packet of the employee and not already with him. We are talking about informing the employee of deductions to be taken from his salary and not the expenditure of funds already paid—
Lord McCarthy: My Lords, does the noble Baroness agree that in the average deduction slip which the average worker receives at the end of the average week or the average month the average employer is making many deductions from funds which are not in the bank? We want to square with that situation.
Baroness Denton of Wakefield: My Lords, they are legal, authorised deductions. We are not talking about choosing what to take. Clause 14 offers trade union members who pay their subscriptions through check-off significant new legal protections. With respect to the noble Lord, Lord Stoddart, the reform is rooted in improving the rights of individual trade union members and not the rights of employers. Many employers and employers' associations have supported the principle of the reform. The purpose of the amendment appears to be that when employers operate direct debit arrangements—and quite what is meant by the use of the term here is not clear—none of those protections applies. There is what appears to be the right to be informed when a deduction has been made but nothing more—not even a requirement that written consent should be obtained.
It seemed that as the Bill progressed through your Lordships' House and through another place, we had established that there was general agreement about some of the features of Clause 14. The principle of written consent seemed to be accepted, as did the right

43
to information in advance of increases and the right to withdraw from the arrangements at any time. But apparently that consensus has vanished. Under the terms of the amendments, employers are to operate something called "direct debit" arrangements—though it is certainly not what is normally understood by the term "direct debit"—and protection for the individual has disappeared.
Employers cannot operate direct debit. The direct debit system was established and is administered by banks and building societies. No one but banks or building societies may make direct debit deductions. The deductions are made from bank accounts, not from salaries. It is simply nonsensical to suggest that any arrangement which employers might operate in respect of trade union deductions can come under the heading of "direct debit".
Baroness Seear: My Lords, will the Minister inform the House how that lines up with the give-as-you-earn scheme, which is deducted? That similarly is deducted from salaries and not from money already in the bank. I ask for information.
Baroness Denton of Wakefield: My Lords, those are deductions approved by the individual. In this case we are trying to protect the individual's rights—
Lord Stoddart of Swindon: My Lords, I am sorry to interrupt but we on this side of the House are very puzzled about what the noble Baroness is trying to tell us. On the one hand, she says that she wishes to protect workers' rights in relation to trade union subscriptions but, on the other hand, she says that she does not wish to protect the rights of people under the give-as-you-earn schemes. They are exactly the same in law and they are the same in operation; they are authorisations made by the employee to the employer to deduct funds from his wages for a specific purpose. One purpose is to contribute to the trade union and the other is to contribute to a particular charity. What on earth is the difference? The Minister has not explained that and she certainly has not convinced us.
5.15 p.m.
Baroness Denton of Wakefield: My Lords, perhaps I may make it clear that we are not trying to stop check-off. Check-off is separate and special. Only check-off gives rise to the thoroughly unsatisfactory legal position under which the only legal right to stop making payment in this way is to leave the union. Additionally, there is the legal possibility that check-off arrangements which are a part of a collective agreement can be implied into an individual's contract of employment without his express consent—
Lord Wedderburn of Charlton: My Lords, I apologise for interrupting the Minister but she has made a pronouncement of extraordinary importance in regard to the present law. Will she confirm that she is of the opinion that the only way to end a check-off arrangement is for a worker to leave the union? If the Minister confirms that, will she tell us the precedent in case law or in statute on which that proposition is founded?
Baroness Denton of Wakefield: My Lords, the matter arose in Committee and there was a disagreement of view. There are many ways, but the only legal way—and that is what we are trying to correct—is to leave the union.
Lord Pitt of Hampstead: My Lords, I belong to the British Medical Association, which is a trade union. My subscriptions are deducted from my bank account every year. I do not have to leave the BMA to stop that. That is nonsense.
Baroness Denton of Wakefield: My Lords, I believe that the noble Lord is somewhat confused; that is not check-off, to which we are applying this clause. Additionally, there is the legal possibility that check-off arrangements which are part of a collective agreement can be implied into an individual's contract of employment without his or her express consent. The proposals in Clause 14 rectify the current and unsatisfactory legal status of check-off. If noble Lords are anxious to ensure that trade unions can collect their members' subscriptions by direct debit, there is nothing in this Bill or in any law to prevent them from doing so. The provisions in the Bill, which intentionally apply only to check-off arrangements, would not impact on an arrangement between a union and its members for subscriptions to be paid by direct debit from the members' bank or building society.
I suggest that the amendments do not have a real meaning. Employers cannot operate direct debit arrangements on behalf of their workers and there is no valid comparison between check-off arrangements and direct debit. Therefore, I hope that the noble Lord will not press the amendment.
Lord Stoddart of Swindon: My Lords, before the noble Baroness sits down, and I am sorry to trouble her—
Lord Mottistone: My Lords, on a point of order—
Lord Stoddart of Swindon: My Lords, there is no point of order.
Lord Mottistone: My Lords, this is Report stage.
Noble Lords: Stoddart!
Lord Stoddart of Swindon: My Lords, the noble Baroness has worried many of us. She appeared to be saying—and I wish that she would confirm it—that there are trade unions in this country which will allow their members to have their subscriptions paid to the trade union only through a deduction from wages and that they will not accept subscriptions in any other way; that is, not at a branch, by direct debit, by cash, by post and so on. I have never heard of that. If the noble Baroness has a precedent, she owes it to the House to give it.
Baroness Denton of Wakefield: My Lords, the trade union rules are such that the legal position as regards check-off is that the individual member cannot move from those rules.
Lord McCarthy: He can resign.
Baroness Denton of Wakefield: My Lords, that is what we are saying. The aim of our clause is to avoid that being the only way out.
Lord McCarthy: My Lords, the noble Baroness would not deny that an individual trade unionist who does not wish to pay by check-off can write to the secretary of the branch and say, "In future, issue me with a card. I am stopping check-off." There is nothing impossible about that and he would not have to leave the union.
Lord Greene of Harrow Weald: My Lords, may I ask the Minister a question?
Noble Lords: Order, order!
Baroness Denton of Wakefield: My Lords, I should point out that the clause is not based on what unions do or do not do. It is based on the unsatisfactory legal position which currently pertains. I do not disagree with the remark made by the noble Lord. that that is a possibility, but here we are dealing with the legal position.
Lord McCarthy: My Lords, we are extremely disappointed in the way in which the amendment has been received. It is notable that the Government have not been defended. They are not alone but they have not been defended. The only person who has intervened in the debate on the Government's side is the noble Lord, Lord Mottistone. He rather smiled upon the amendment and said that he thought that the CBI might also have smiled upon it. Therefore, all noble Lords have supported the amendment and none of the Government's doughty supporters felt that they wished to attack this significant amendment.
The noble Baroness gave us a series of interesting and novel arguments against it. First, she says that this cannot be done because the other examples which I gave all come from bank accounts—sums in the bank. That is not true, as my noble friends have said. An employer makes all kinds of deductions from people who do not have bank accounts; for example, you can give to Oxfam, you can pay into an insurance scheme and you can pay into a pension fund through the employer. Indeed, he makes superannuation deductions. Those people do not necessarily have bank accounts. That is the end of that argument.
Secondly, what has a bank account to do with this anyway? We are talking about deductions. Whether or not people have bank accounts and whether they have surpluses or deficits is not an argument for doing or not doing anything. In fact, it is not even a difference because in many cases people do not have bank accounts.
The noble Baroness said that a kind of consensus had been achieved in the other place which we are trying to get rid of by virtue of this amendment. I thought that I had made it clear—and I apologise if I did not—that this is an alternative to the existing provisions in a Bill. We are not saying, "Take all that nonsense away". We are saying that that nonsense will continue to apply, which will antagonise the employers and muck up the unions, unless our common-sense alternative is accepted. We are not
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getting rid of the consensus in any way. The consensus agreed that there should be regular notification from the unions and the situation should not exist, which the Government always say does exist, where this can be achieved through collective agreements, although I know of no examples of that. In future, agreement will have to be given by the individual worker for the check-off to continue. That is the unsatisfactory aspect of the present legal position, according to the Government. We are quite prepared to get rid of that and that is not affected by our amendment because our amendment provides for individual agreement.
The noble Baroness says that the phrase "direct debit" cannot be used because it is sacred—it applies only narrowly. It is a term of art in law. If that is the only objection, we will call it direct deduction. If that phrase cannot be used, then we shall find another phrase which can be used. The phrase itself does not matter. We all know what we are suggesting; namely, an effective alternative which most people seem to think will work reasonably.
The final defence—and I have tried to think about this, as have other noble Lords on this side of the House—is the perpetual argument from the Government that they cannot accept the amendment because under the present situation, if a member leaves check-off, he leaves the union. The Government are saying that that is the only way that you can leave check-off. Suddenly and strangely, the Government do not like people leaving unions. They will not do what the TUC wants because they believe that the TUC wants to engage a situation in which people inadvertently leave unions. As great supporters of the trade union movement, they will not allow that. We must not allow workers to leave trade unions.
I have tried to think what that means. If you stop the check-off arrangement and at that point you do absolutely nothing else, of course you leave the union because you run out. That is what the Government wish to prevent people doing—running out. The Government should not worry about that because people will not run out of the unions: they will join them. If that is the only defence that the Government have, they do not have a defence and I must test the will of the House.
5.27 p.m.
On Question, Whether the said amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 80; Not-Contents, 137.

Division No. 3

CONTENTS

Addington, L.

Cledwyn of Penrhos, L.

Archer of Sandwell, L.

Dean of Beswick, L.

Ardwick, L.

Diamond, L.

Ashley of Stoke, L.

Dormand of Easington, L.

Attlee, E.

Falkland, V.

Aylestone, L.

Fisher of Rednal, B.

Beaumont of Whitley, L.

Fitt, L.

Blease, L.

Gallacher, L.

Bonham-Carter, L.

Galpern, L.

Boston of Faversham, L.

Geraint, L.

Bottomley, L.

Graham of Edmonton, L.[Teller.]

Brooks of Tremorfa, L.

Bruce of Donington, L.

Greene of Harrow Weald, L.

Carmichael of Kelvingrove, L.

Grey, E.

47

Hampton, L.

Mottistone, L.

Hanworth, V.

Mulley, L.

Hayter, L.

Nicol, B.

Hilton of Eggardon, B.

Peston, L.

Hollick, L.

Pitt of Hampstead, L.

Hollis of Heigham, B.

Plant of Highfield, L.

Holme of Cheltenham, L.

Prys-Davies, L.

Hooson, L.

Redesdale, L.

Houghton of Sowerby, L.

Robson of Kiddington, B.

Howie of Troon, L.

Rochester, L. [Teller.]

Hughes, L.

Scanlon, L.

Irvine of Lairg, L.

Seear, B.

Jay, L.

Sefton of Garston, L.

Jay of Paddington, B.

Serota, B.

Jeger, B.

Shackleton, L.

Jenkins of Putney, L.

Stoddart of Swindon, L.

Kennet, L.

Strabolgi, L.

Kilbracken, L.

Taylor of Blackburn, L.

Lockwood, B.

Thomson of Monifieth, L.

Longford, E.

Tordoff, L.

McCarthy, L.

Turner of Camden, B.

Mclntosh of Haringey, L.

Wedderburn of Charlton, L.

Mallalieu, B.

White, B.

Mason of Barnsley, L.

Williams of Elvel, L.

Merlyn-Rees, L.

Williams of Mostyn, L.

Molloy, L.

Winchilsea and Nottingham, E

Morris of Castle Morris, L.

NOT-CONTENTS

Acton, L.

Fraser of Kilmorack, L.

Aldington, L.

Gardner of Parkes, B.

Alexander of Tunis, E.

Geddes, L.

Allenby of Megiddo, V.

Gibson-Watt, L.

Arran, E.

Goschen, V.

Astor, V.

Greenway, L.

Auckland, L.

Halsbury, E.

Banbury of Southam, L.

Hardwicke, E.

Belhaven and Stenton, L.

Harmar-Nicholls, L.

Bessborough, E.

Harmsworth, L.

Birdwood, L.

Hemphill, L.

Blatch, B.

Henley, L.

Boardman, L.

Hesketh, L. [Teller.]

Borthwick, L.

Hives, L.

Boyd-Carpenter, L.

HolmPatrick, L.

Brabazon of Tara, L.

Hooper, B.

Braine of Wheatley, L.

Hothfield, L.

Brougham and Vaux, L.

Howe, E.

Butterworth, L.

Hylton-Foster, B.

Cadman, L.

Jellicoe, E.

Caithness, E.

Jenkin of Roding, L.

Campbell of Croy, L.

Johnston of Rockport, L.

Carnegy of Lour, B.

Killearn, L.

Carnock, L.

Kinnoull, E.

Chalker of Wallasey, B.

Lauderdale, E.

Chelmsford, V.

Layton, L.

Clark of Kempston, L

Leigh, L.

Colnbrook, L.

Lindsay, E.

Colville of Culross, V.

Lindsey and Abingdon, E.

Colwyn, L.

Liverpool, Bp.

Constantine of Stanmore, L.

Long, V.

Cox, B.

McColl of Dulwich, L.

Craigavon, V.

Mackay of Ardbrecknish, L.

Cranborne, V.

Mackay of Clashfern, L.

Cullen of Ashbourne, L.[Lord Chancellor.]

Cumberlege, B.

Manton, L.

Davidson, V.

Margadale, L.

Denham, L.

Marlesford, L.

Denton of Wakefield, B.

Marsh, L.

Derwent, L.

Merrivale, L.

Dundonald, E.

Mersey, V.

Elles, B.

Milverton, L.

Elliott of Morpeth, L.

Mountevans, L.

Elphinstone, L.

Moyne, L.

Elton, L.

Munster, E.

Faithfull, B.

Murton of Lindisfarne, L.

Ferrers, E.

Nelson, E.

Finsberg, L.

Norrie, L.

Flather, B.

Orkney, E.

Forbes, L.

Orr-Ewing, L.

Fraser of Carmyllie, L.

Oxfuird, V.

48

Park of Monmouth, B.

Strathmore and Kinghorne, E[Teller.]

Pender, L.

Peyton of Yeovil, L.

Sudeley, L.

Plummer of St. Marylebone, L.

Swansea, L.

Rankeillour, L.

Swinfen, L.

Reading, M.

Teviot, L.

Reay, L.

Thomas of Gwydir, L.

Rennell, L.

Trefgarne, L.

Renton, L.

Trumpington, B.

Ridley, V.

Ullswater, V.

Rippon of Hexham, L.

Vaux of Harrowden, L.

Rodger of Earlsferry, L.

Vivian, L.

Romney, E.

Wakeham, L.[Lord Privy Seal]

St. Davids, V.

Saltoun of Abernethy, Ly.

Waterford, M.

Sharpies, B.

Whitelaw, V.

Skelmersdale, L.

Wynford, L.

Stewartby, L.

Young, B.

Strathclyde, L.

Strathcona and Mount Royal, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.35 p.m.
Baroness Denton of Wakefield Baroness Denton of Wakefield moved Amendment No. 10:
Page 27, line 36, leave out ("date of') and insert ("day on which the worker signs and dates").
The noble Baroness said: My Lords, this is a technical amendment to remove a minor uncertainty in the drafting of Clause 14. Under the terms of the clause, check-off deductions may lawfully be made from an individual's wages if he has signed and dated an authorisation document. Once he has done so, and unless he chooses to withdraw his consent, deductions may continue to be made for up to three years. The amendment puts beyond doubt that the authorisation document should be dated with the actual date upon which it is signed and that it remains valid for three years from the day on which the worker signs and dates it. I hope that your Lordships will be able to accept the amendment. I beg to move.
Lord McCarthy: My Lords, I have no objection at all to the amendment.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 11:
Page 28, line 6, at end insert:
("( ) Where the worker has received appropriate notice as defined in subsection (7) from the trade union or some other source, nothing in subsection (5) (b) above shall prevent a deduction of the increased amount of subscription from being a deduction of a permitted amount. For the avoidance of doubt, nothing in this subsection shall affect the right of complaint contained in section 68A.").
The noble Lord said: My Lords, in moving Amendment No. 11, I should like to speak also to Amendments Nos. 14, 15, and 16. The amendments deal with the question of just exactly how to identify the employers who, as I see it in the check-off, are acting as agents between the union and its members. Parts of the new Section 68 imply that employers are responsible for the moneys and that they are not just agents.
In relation to the last amendment, my noble friend Lady Denton said that because no one objected to Clause 14 in the other place she understood that all employers thought that it was all right. It is

49
unfortunate that, in going through another place, the CBI took a view that it was better to put the employer's viewpoint to officials and not to bring it to the Floor of the House. Whether or not that was a good plan is another matter. But it certainly was not the case that the employers thought that Clause 14 was good. In fact, they foresee considerable problems with particular provisions in the clause.
Employers are particularly keen that the clause should show that they are merely acting in the role of a collection agency. They are not in any way concerned with the benefit which the individual may or may not derive through membership of a trade union or what that individual is prepared to pay for that privilege. It is their firm belief that any responsibility for notifying union members of increases in subscriptions, and indeed for reminding individuals of their right to pay their subscriptions by alternative means, should rest with the union and the union alone. They recognise—and here we return to the last amendment—that there are other ways of paying.
In the course of our debate in Committee my noble friend Lady Denton made the point that, as the employer is the person who collects the subscriptions, the employer must be held responsible for the deductions from wages and that, therefore, this justified placing the burden of notifying increases in subscriptions on employers. I still believe that that is a matter for the trade unions. However, although I would have preferred to table again the amendments that I tabled in Committee which were much more straightforward on this point, I have altered them—No. 11 is the key amendment that I have altered—to try to take account of what my noble friend Lady Denton said in Committee.
This amendment does not seek to remove the employer's accountability for unlawful deductions from pay, nor, as redrafted, does it remove the primary obligation on the employer to ensure that any subscription deductions do not exceed the permitted amount. However, the amendment ensures that in any case where the employee has received the prescribed form of notice from the union, there is no need for the employer then to duplicate the very same procedure. I believe that is a mild way of dealing with this situation. I hope therefore that my noble friend the Minister will give it great regard in deciding whether he can perhaps go some way to meeting me.
An additional benefit of Amendment No. 11 is that it would permit employers and trade unions to agree between themselves which of them would be responsible for providing the necessary notice. I am sure that where the check-off system operates, the unions would be happy to follow that kind of practice.
My Amendments Nos. 14, 15 and 16 are consequential to the main amendment and provide the necessary protection for the employer who has relied in good faith on the trade union having agreed to notify increases in subscriptions and subsequently finds himself being held liable for the union's own default, where this exists. I suggest to your Lordships that in this instance there must be some mechanism through which the employer can seek redress. It seems
50
to me wrong in principle in Clause 14 that the only law insists on the employer finding the cash and has no particular call on the union to find the cash where there has been an error and the matter has been brought to a court or to a tribunal as the case may be in relation to the relevant subsections of this clause.
I believe that my amendments as redrafted go some considerable way towards meeting the Government's position. By ensuring that the individual receives a notice, by leaving the responsibility for the deduction with an employer, but at least providing some facility for alleviating the employer's burden if the employer incurs a burden before a court or a tribunal, I believe that my amendment satisfies all the objectives as put to me by my noble friend the Minister.
These amendments will not only avoid confusing the relationship between trade union members, their union and the employer but will relieve substantially the extra administration which employers currently face as a consequence of this part of the Bill. My noble friend the Minister made the point in Committee that as there is no legal duty to undertake the check-off system, this is a burden which is voluntarily assumed by employers. I have to say that there are significant advantages both for employers and for employees in carrying out the check-off. However, my amendments merely seek to permit that process to be made more manageable and not to create wrong impressions about who is responsible for what in this general picture. I hope that my noble friend will on this occasion be able to go some way towards meeting me. I beg to move.
Lord Rochester: My Lords, in Committee I agreed with the noble Lord, Lord Mottistone, and indeed with the TUC that it should be for the union rather than an employer to give notice to the employee of any increase in the amount of union subscription to be deducted from wages. We are now in the position that we have to accept the Government's view that this responsibility should lie with the employer. However, I support the noble Lord, Lord Mottistone, in his contention that in cases where the employee receives the prescribed notice from the union, the employer should not then be required to duplicate exactly the same procedure.
It must follow that where the employer has thus relied on the union to notify the increase in subscription, and the employer is subsequently held liable for the union's default, if that should happen, the employer should be entitled to redress in the form that is set out in Amendments Nos. 14 to 16. I hope that I have already made it plain enough that I would much rather see this clause excised from the Bill altogether, but if we must have it I feel that I should support the amendments.
5.45 p.m.
Lord Wedderburn of Charlton: My Lords, I hope that I may briefly register a mild word of agreement with the noble Lord, Lord Mottistone. I hope that does not cause him too much astonishment. I submit that the importance of this approach is that it is based upon the notion, as the noble Lord put it, that it is best

51
if the employer and the trade union agree which of them is to send a notice or take whatever other step is necessary. The best way to operate a check-off is of course by a negotiated agreement. That can often solve problems of this kind. That does not rest on whether or not there is a duty in the law to operate a check-off. In a jurisdiction not many hundreds of miles away on the Continent that duty exists but, of course, it is operated through joint agreements. The trouble with the Government's clause, particularly as regards the approach the noble Lord, Lord Mottistone, has adopted, is that it does not give much scope for negotiated methods of operating the check-off. It seems to me that the employer must remain responsible in the last resort for his deductions, but that is a minor point compared with the measure of consensus that we have achieved that this matter should be operated by agreement between employers and unions. It is the failure of the Government to include that element that is causing them so much trouble.
Lord Boyd-Carpenter: My Lords, I hope that my noble friend Lord Mottistone can clear up one point in his amendment which puzzles me. The amendment states:
"Where the worker has received appropriate notice as defined in subsection (7) from the trade union or some other source".
What other source is that?
Lord Mottistone: My Lords, the notification may come from the trade union directly or it may come from an official within the company or from the trade union outside the company. There are various ways in which people can be informed of changes. The shop steward might inform workers of changes as I understand the position. Or it may be the case that a worker receives a letter from his general secretary. I do not know all the details of this matter but that measure was included as a necessary supplement.
Lord Stoddart of Swindon: My Lords, I do not wish to comment except to say that, bearing in mind the previous interventions of the noble Lord, Lord Mottistone, on points of order, the final exchange between the noble Lord and his noble friend although useful was completely out of order.
Viscount Ullswater: My Lords, I trust that I shall be in order. I am grateful to my noble friend Lord Mottistone for his remarks explaining his amendments. I know that in tabling these amendments he has endeavoured to take account of some of the objections we had to the similar amendments that he put forward when your Lordships considered this Bill in Committee. I am grateful to him for that. However, I have to say that I remain unable to accept his amendments.
The effect of the amendments would be to bring about a major change in the provisions contained in Clause 14 of this Bill. They would remove the requirement that advance notice of an increase in the deductions to be made from an individual's wages by his employer in respect of union subscriptions must be issued by that employer. As a consequence of that
52
shift in responsibility, the remedy for a wrongful deduction would also be altered, to enable trade unions to be joined in tribunal proceedings. The substantive amendment in this group goes quite contrary to government policy on the issue of check-off deductions, and we therefore cannot accept it.
In explaining the Government's response to this amendment, I should like to return to the first principles of Clause 14. The provisions it contains are being introduced to protect the interests of individual trade union members who pay their trade union subscriptions through the check-off. The principles it contains were, of course, the subject of wide consultation and were welcomed by many.
Clause 14 offers trade union members new protection in two respects: it gives all trade union members the right to have their consent sought before these deductions are made and at intervals thereafter, and it gives them the right to receive information about increases in the amounts of money being deducted from their wages at source.
I believe that my noble friend, Lord Mottistone, and, I dare say, other noble Lords around the House, object to none of this. They may have comments to make about whether it is the right thing to do. We disagree only in respect of who should issue the advance information about increases required by the clause. I contend that in assigning that responsibility to the employer the Government have chosen the only logical answer to this Question, as well as one that is consistent with the policy underpinning the clause.
The subject of the clause is the check-off, which in this context is an administrative arrangement between employer and employee. It is quite separate and distinct from the direct relationship between the union and its members. It is a financial transaction. Just as the amount that an employer pays his employee is a matter between them, so any amounts of money that the employer deducts from that employee's pay in respect of trade union subscriptions are a matter between them both. The act of deduction is and must be the responsibility of the employer who effects the transaction.
We are resisting the amendment, therefore, because it is inappropriate to the purpose and effect of Clause 14. Of course we agree that trade unions should inform their members when they increase their subscriptions. They should so inform all their members—not just those who pay through the check-off. But that is not our concern here. We are concerned only with deductions made by employers via the check-off arrangement. It is only right that employers should remain responsible for ensuring that they are acting lawfully at all times.
It is entirely up to the employer to decide the terms in which he notifies the increases. He can certainly say in the notice that he issues that "The union has informed me … " and so on, but there is no need to spell that out on the face of the Bill.
It may be, however, that there are those who fear that the requirement to issue advance notice of increases places too heavy a cost burden on employers. Let me reassure your Lordships that any

53
such fears are groundless. Employers are currently and will remain quite at liberty to pass on to the relevant union any costs associated with the collection of check-off payments. After all, in operating the check-off they are providing a service for the union.
It may also be that the consequential amendments of my noble friend Lord Mottistone concerning tribunal proceedings reflect a fear among employers that any eventual proceedings may also place a cost burden on them. Again, I can allay any such fears. Employers will be quite at liberty to require those unions on whose behalf they operate the check-off to indemnify them financially against any legal proceedings or wrongful deductions. Therefore, no employer need suffer any financial penalty for operating the check-off.
I understand that my noble friend has changed the wording of his amendments to take account of our discussions at Committee stage. I have considered them carefully, but I believe that they go against the principle of Clause 14. I hope that what I have said will persuade my noble friend that he should withdraw his amendment.
Lord McCarthy: My Lords, I wonder whether the Government realise how alone they are on this issue.
Noble Lords: Order!
Lord McCarthy: My Lords, I did not think that we had made a contribution from this side of the House. The Government will never know how alone they are!
Lord Mottistone: My Lords, I believe that it is perfectly proper for the noble Lord, Lord McCarthy, to speak because he has not yet intervened in the debate.
Viscount Goschen: My Lords, at Report stage it would not be in order because the noble Lord would be speaking after the Minister.
Lord Mottistone: My Lords, that is right. I had forgotten that.
I find it difficult to be convinced by my noble friend's initial statement that my amendments would totally upset what the Government believe to be the purpose of Clause 14. I cannot see that that is so. Nor did my noble friend provide a good explanation as to why, even if that is so, it is necessary for Clause 14 to be in such a form that the amendments would spoil it. I see the reason for Clause 14 —although I suspect that some noble Lords do not see it—but I do not understand why it is said bluntly that my amendments, including those moved at Committee stage, are unacceptable because they go against the principle of Clause 14. Nothing that my noble friend said, or that my noble friend Lady Denton said at Committee stage, has persuaded me otherwise.
Amendments Nos. 14 to 16 seek to write into the Bill protection for the employer in the event that he deducts an amount from somebody's wages about which the union has not told the employee and the employee takes the employer to the tribunal. My noble friend said that once the employer has paid whatever the tribunal or the court tells him to pay, he can get the money back from the union. If it is
54
necessary for the employee to be given the powers which are contained in the latter part of the clause to enable him to take the employer to the tribunal in order for the employee to get his money back, it is not unreasonable for the Bill to state that, furthermore, the employer can then be reimbursed by the union.
My noble friend said grandly that the employer can, I suppose, sue the union. That will cost him money whereas if the matter is written into the Bill the process would be automatic. I do not consider it unreasonable to include those protective amendments, even if we agree that Amendment No. 11 destroys the purpose of Clause 14, which I do not understand. In a sense the issues are separate.
I am totally dissatisfied. However, I do not believe that there is any point in taking the matter to a Division because I do not believe that I stand a chance, in view of the result of earlier Divisions. Furthermore, to do so would remove the option, which I intend to work towards, to return to the argument at Third Reading. I have to he persuaded why the amendments are unacceptable. They provide a reasonable protection for the employer in his role as agent between unions and employees. My noble friend said that employers were just that. I was delighted to hear him say that because if they are agents, it should be clear beyond all peradventure in the clause that that is what they are. That would clarify the issue for everybody.
At this stage I shall reserve the right to return to the matter at Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 11A:
Page 28, line 9, at end insert ("or to an increase in a wage rate by reference to which the worker's subscription deductions are calculated and which has been notified to all members concerned by the Union.").
The noble Lord said: My Lords, I have been asked to put down the amendment by the Society of Telecom Executives, which is a moderate union to which I give extremely moderate advice from time to time when the need arises.
The amendment is a technical rather than a philosophical matter about which the union is worried. As I understand it, the Government's intention in Clause 14 is to deal with unions which seek to make subscription increases greater than those to which a union member might have agreed had that member been given a specific choice. The purpose of Amendment No. 11A is to cover those cases where unions and their members have agreed, usually through the rules, that the union contribution should be tied to a particular wage rate. I am told that that arrangement has two advantages. First, it can be represented as performance pay for the union. As a union achieves an increase in members' rates, so the union's income rises. Secondly, it is simply and readily understood. The number of minutes' work per week needed to pay for the union's subscriptions every year remains unchanged.
Where such arrangements exist, they are accepted by employees as a sensible way of regulating the

55
contribution to the unions and are not a source of extra work to the employer. However, under circumstances in which union members have agreed to contributions on that basis, it is unreasonable for the Government to insist that each employer must remind each worker on every occasion that the application of the formula leads to such an increase—that is, every time the employer negotiates an increase in the wage rate—of an individual's right to cease paying union contributions.
Given that the law requires a three-yearly authorisation of check-off, those actions would add considerably to the administrative effort required by the employer in providing check-off arrangements. They must therefore provide an incentive to the employer not to provide such arrangements.
Noble Lords will be aware that trade unions are voluntary organisations. Their members belong to them because they have chosen to do so. The right of the union to seek an agreement with an employer so that the trade union members —the employees of the firm—may enjoy the benefit of that convenient way of paying subscriptions should be a matter for agreement between the union and the employer. I believe that it is perverse for the Government deliberately to make more difficult an arrangement which is simple, well understood and flows from a clear understanding of how contributions are to be determined.
The amendment seeks to put that right. It provides that, first, where the subscription increase flows directly from an increase in a wage rate on a published formula, and, secondly, where that increase has been notified to all the members concerned by the union, there should then be no requirement for the employer to have to take those excessive and potentially expensive actions. I believe that the main inconvenience of the provision falls initially upon the employer and runs against the Government's general approach to regulation. I beg to move.
Lord McCarthy: My Lords, I hope that the Minister will correct us if we are wrong because we are in great sympathy with what the noble Lord wishes to do. However, so far as we understand, the matter is dealt with on the face of the Bill. New Section 68(6) refers to that amount of increase which is disallowed because, in a sense, it has not been authorised. It states:
"So much of the increase referred to in subsection 5(b) is relevant as is not attributable solely to an increase in the wages payable on the relevant day".
That seems to us to cover the point that the noble Lord makes. However, he wishes to add,
"or to an increase"…
that is another qualification…
"in a wage rate by reference to which the worker's subscription deductions are calculated and which have been notified to all members concerned by the Union".
That last part of the amendment does not seem to be required by new Section 68(6) of the Bill. On that basis we do not favour the amendment. However, if matters are otherwise, I look forward to hearing from the Minister.
Viscount Ullswater: My Lords, I am grateful to the noble Lord, Lord Howie of Troon, for his words of explanation on the amendment. I am afraid that, reasonable as he suggests they are, I am unable to accept it.
One of the important features of Clause 14 is the new right that it gives to trade union members who pay their subscriptions by deduction from their wages at source to be notified in advance of any increase.
We have discussed separately the issue of who should be responsible for sending out that notification, and we have made it clear that it is our belief that the employer should, because it is his proper responsibility.
However, it is most certainly not our intention that employers should be unreasonably burdened by the new provisions. Therefore, we accepted in another place arguments put to us that where a union's subscription rate is calculated by reference to an individual's own earnings, for example as a percentage of his pay, as highlighted by the noble Lord, Lord McCarthy, then it would be unreasonable to expect employers to issue advance notice every time.
After all, if we take the case of a worker who pays a percentage of his pay as his union subscription, every time his pay alters his subscription will alter. He might earn overtime periodically, and each time his subscription might alter. Every time that subscription increased, his employer would have to notify him a month in advance. In many cases, such a requirement would simply not be practicable.
We therefore agreed that in these cases, advance notice of increases which result solely from an increase in the individual's wages need not be issued.
However, the amendment before us is very different. Its effect would be that advance notice of increases need not be issued when subscriptions are calculated by reference to a particular point on a pay scale rather than to an individual's pay.
The situations are quite distinct. Pay scales do not fluctuate as individual earnings may. They probably alter no more often than once a year. The likelihood of the employer being burdened by a requirement to issue frequent notices of increase simply does not arise.
In effect, a union which sets its subscription rate by reference to a particular point on a pay scale is setting a flat rate subscription in a different guise. They are quite entitled to do so. But it does not follow that a union member who pays his subscription in this way should be denied the protection offered to his workmate whose union sets what clearly is a flat rate subscription.
Moreover, whereas a worker will generally be well informed about any increases in his own pay packet and their implications, where appropriate, for his union subscriptions, he may not always be so well informed about increases in the central pay scale. Where an increase results from a change in the pay scale, he therefore should be personally informed by his employer.
As I have said, we can see no case for the amendment. I hope therefore that the noble Lord will see fit to withdraw it.
Lord Howie of Troon: My Lords, I am grateful to the Minister for his reply, and to my noble friend Lord McCarthy for his comments. I shall read them in Hansard tomorrow to see whether I understand them.
I have only one comment to make on the Minister's reply. The amendment was prompted by the Society of Telecom Executives, a body of people who are very well aware of wage scales and matters of that kind. There is no mystery there. They are kept fully informed by the union of the movements in wage scales and would not face the problems which the Minister seems to think other people would face. The Minister may well be right that my amendment is unnecessary. It was intended to remove burdens from employers—an unusual thing for unions to want—as well as to clarify the general issue.
I am a little dismayed that the Minister has turned me down so clearly, but I am not surprised. I have been involved in a small way, as today, in trade union legislation matters over the past 10 or so years as they have been discussed in this House. Over that 10-year period I have noticed one very significant change. Noble lords who are older will remember that when we debated these matters in the early 1980s, the Government would sometimes accept amendments. The noble Lord, Lord Mottistone, will certainly remember having amendments accepted in the past, or at least smiled upon. Sometimes the Government would say that they could not accept an amendment but that they would take it away and look at it. But there has been a change. In recent years it has seemed to me that the Government's only reply to a debate on an amendment is "No". That has the advantage of clarity—"no" being the shortest word which conveys the Government's intentions to us. With those remarks, and a sense of dismay, I shall certainly withdraw my amendment. I shall take further advice upon the reply that has been given to it and the comments that have been made in relation to it, and see what can be done later on. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McCarthy Lord McCarthy moved Amendment No. 12:
Page 28, line 14, after ("withdraw") insert ("or not withdraw").
The noble Lord said: The amendment is minimal. Its object is to continue the line of argument which we opened up in Committee when we debated Amendment No. 55. At this point the Bill deals with what happens when subscriptions rise. It says that the worker must get advance notice and be told how much he must now pay. Secondly, he or she must be told that they can at any time withdraw the authorisation by giving notice in writing. That in effect is what is on the face of the Bill. We argued that that was an unbalanced way of putting the position; that at that point the worker should be told of both options; namely, that he could "withdraw or renew" the authorisation and it was up to him to decide which option to choose. The noble Baroness said that that was unacceptable. At col. 1625 on 18th March, she said that it was unnecessary because it was obvious; the worker would know that anyway. She said it was impossible; the worker had no right to demand to
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renew the check-off, which was entirely a matter for the employer. And, as the Government have done so far when in doubt, she produced the point about the law saying that one cannot challenge the check-off without leaving the union. We shall leave that one aside.
We did not claim to understand those objections and we do not claim to understand them now. But we pushed a number of alternatives. As noble Lords will remember, we said, if the Government would not accept our alternative, would they accept "withdraw or continue"? That was said to be unacceptable because it could place an obligation on the employer. We suggested "renew or not renew". We were told that that was unacceptable. We suggested "withdraw or not withdraw". There I thought we might have made an inch of ground because we were told that the noble Baroness and the Government would not think that that bore any relation to the clause. At least it is not impossible. It is not misleading. It is not contrary to the statute. It does not bring up the one about resigning from the union. So we come back with the phrase which is, I believe, based on that. It is very similar. We are saying "withdraw or not withdraw". That seems simple enough. If your Lordships do not like that, we can have "cancel or continue", or "renew or fail to renew". What we are trying to do is quite simple. We think that this is an unfair way of putting the position. Nothing that could be put in the Bill would be an option, an involvement or a liability on the employer to continue the check-off if he did not want to do so. Of course it would not. But it would be accepted by the trade union movement as something which looked roughly fair. On that basis I move the amendment.
Lord Boyd-Carpenter: My Lords, surely this is a wholly unnecessary amendment. If the Bill provides, as it does, that one "may" withdraw—not that one "shall" withdraw, but one "may" withdraw—surely it is perfectly clear that the use of the word "may" means that one need not do so, otherwise there is no point in using the word "may". Therefore to put in "or not withdraw" is simply to add words to the Bill and is, I think, very bad drafting.
6.15 p.m.
Lord Wedderburn of Charlton: My Lords, the amendment moved by my noble friend is surely an example of something that the Government said they did not want to have in regard to mergers; namely, one-sided notices. He suggests that the notice should be even-handed and, if it must be there, it should make clear what the options are. It is difficult to see why that should not be so, and why it should be one-sided. The noble Lord, Lord Boyd-Carpenter, reminds us that the Bill says "may". That is quite true. But the employment relationship, like some other relationships on occasion, is not one in which words used are necessarily neutral. The foreman may tell you that your best interests might be served if you did a bit more overtime. That is perfectly neutral. But if one writes it down and looks at it in this House, that is not necessarily so. What is asked for here is that if the

59
employer has to do this unilaterally—I must say that I hope the noble Lord, Lord Mottistone, will pursue the question of just how this ought to operate by agreement—the notice to be given should be even-handed.
Baroness Denton of Wakefield: My Lords, in replying to the noble Lord, Lord McCarthy, on this amendment, perhaps I may say that we made it clear in Committee that this type of amendment was unacceptable and —I was about to say—"unnecessary". My noble friend Lord Boyd-Carpenter has made that point for us. We believe that the word "may" implies total even-handedness. It is a very straightforward matter. There is no statutory right for a worker to pay union subscription by check-off. The check-off is a voluntary arrangement, although it may also become part of a contract between the employer and the worker. The proposals in this Bill are concerned to ensure that there are proper safeguards to protect individual trade union members who opt to pay their union subscriptions in that way. A worker will be required to give his or her written authorisation to check-off deductions. Once given, that authorisation can remain in force for up to three years. But the worker has a right under the law to withdraw from the arrangement at any time. The Bill simply requires the employer to remind the worker of that right when giving a notice of increase in the subscription deduction. The worker does not have to reaffirm his or her consent in writing on receiving that notification. The clause operates on the presumption that deductions will continue to be made, in accordance with the worker's original written authorisation, throughout the three-year period unless either the employer or the worker actively takes steps to alter the position.
The precise wording of the notice of increase will be a matter for the employer. The only statutory requirements are that it should be made at least one month in advance; should specify the amount of the increase and the increased subscription deduction; and should remind the worker of his or her right to withdraw from the arrangement at any time. That is entirely consistent with the Government's policy. To specify that the notice must include a reminder also of the right not to withdraw is, as I said, unnecessary.
Indeed it is possibly arguable that the amendment would cause confusion and increase the administrative burden which noble Lords opposite have been anxious to minimise. The notification of some kind of notional or implicit "right not to withdraw" might give the impression to those receiving it that some action is indeed required if they wish to continue the arrangements. We could have required written consent to be given whenever the amount of check-off were increased, in which case there might have been some force in the arguments that have been put. But we have not done so and I do not believe that noble Lords opposite are pressing us to do so. In the circumstances as I have described them, there is no case for an amendment along the lines of the one we are considering.
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Though some noble Lords opposite seem wary of this part of Clause 14, it is very simple. Individuals should have the right to withdraw from check-off arrangements whenever they wish. They should also be informed and reminded of that right. This provision will ensure that they are. I am sure that if the union is meeting their needs and providing the service and benefits for which they look, this provision is not something the unions need fear. I hope that the noble Lord is reassured about our position and will withdraw the amendment.
Lord McCarthy: My Lords, I am not reassured. The noble Baroness always has on me the same effect. She drives me back to Shakespeare. Lear said to Regan: "O, reason not the need". We know that it is not necessary. We say that it should be equitable and reassuring. Trade unions tell us that people will take it well and the absence of it is taken ill. But the Government do not care how people take things. Therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Lord McCarthy Lord McCarthy moved Amendment No. 13A:
Page 29, line 6, at beginning insert ("subject to subsection (2) below,").
The noble Lord said: My Lords, this is a rather more substantial amendment., which is grouped with Amendments Nos. 17 and 105. This amendment is a rewriting of one that we tabled in Committee on Schedule 8. However, it was late at night and the amendment came so far on in Schedule 8 that we took pity on the Committee and did not move the amendment. Therefore we have, as it were, brought it forward through this paving amendment in Clause 14.
We are trying to extend the period through which the new system for operating the check-off will come in from one year to two years. On the face of the Bill, in Schedule 8, it says that, from the moment the Government invoke the order that brings into effect that particular part of the Bill, the trade unions have one year to create the new system. The amendment seeks to give them two years.
The argument is mounted on several grounds. The fact is that the Government have never argued for one year. The question of whether the period should be one, two or three years has not been debated. At least I cannot find any record of it in the proceedings of the other place. Our information is that it is the opinion of the trade unions that a period of one year from the notification of the new system places them in a difficult position.
In the first place the unions must seek facilities to find out exactly where the check-off exists and which employers and to what extent employers are prepared to co-operate to continue to carry out the check-off. The unions have to do that for every place of work and every employer where they have members. Where problems arise, as we think they may—this has been part of our argument, though I readily agree that the Government do not accept it—in that employers may say that the system is difficult to operate or time consuming with its periodic reauthorisations, unions have to try to persuade employers of the benefits of

61
continuing with the check-off. Where they fail to get employers to agree to continue with it, they have to make alternative arrangements.
As we have said over and over again in this Chamber, people talk about resigning from unions when check-offs are cancelled. Of course, in the real world there are many alternative ways to do things. It would be possible for the large number of union members with bank accounts to subscribe by direct debit. That is happening in a considerable number of unions which are organising workers who have bank accounts—for example the First Division Civil Servants. I understand that all or very large numbers of them pay by direct debit. But, where direct debit is not possible, alternative arrangements will have to be found.
Many noble Lords will know that in the 1960s, before the spread of check-off, there was a system—a race—of trade union collectors. Most of them required some form of commission and, in order to carry out their work, had to make arrangements and get facilities to move about the factory, shop or office during the employer's time to collect subscriptions. All those arrangements would have had to be negotiated. Individual unions might find that they had to have a mix of different systems, including maybe some new systems as well.
If the Government want to indicate that this measure is not what it says and is not intended to undermine and reduce the influence and standing of trade unions; and if they want to assure us that it is designed to look after the individual members whom they want to see get fair play, they ought to be prepared to accept this very modest amendment, which is aimed at giving the unions a little more time. I beg to move.
Lord Rochester: My Lords, in the light of what the noble Lord, Lord McCarthy, said, it seems to me that one year is a short time for a union to be given to do all the work involved in obtaining the initial authorisation for the check-off arrangement. Therefore, I hope that the Government will view the amendment sympathetically. If they cannot accept it, I hope that at any rate they will offer an explanation which will satisfy noble Lords as to why the period is as short as that included in the relevant schedule.
Viscount Ullswater; My Lords, I am grateful to the noble Lord, Lord McCarthy, for his explanation of these amendments. He will not be surprised if I say that the amendments are not such as I feel able to accept.
The arguments about Clause 14, with its new provisions on the check-off, have been well rehearsed. There is no need to go over that particular ground again. However, perhaps it is worth setting on the record—this perhaps is what the noble Lord, Lord McCarthy, wished from me—that the Government attach great importance to the new protection that will be offered by this clause to individual trade union members who pay their subscriptions through the check-off. It is therefore fundamental to the clause that all those who pay their subscriptions in this way
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—and not just those new to the arrangement after the clause comes into effect—should benefit from the new protections at an early stage.
At the same time, we recognise that employers who already operate the check-off will inevitably need some time to adjust to the new requirements for those who are already covered by check-off arrangements. That is why we decided that it would be appropriate to allow the period of a full year for those already paying union subscriptions in that way to be given the opportunity to give their written consent. This is the provision that has been made in Schedule 8 to the Bill. The one-year period will also give the employer plenty of time to establish systems for giving advance notice of any increase to those from whom he makes deductions. Of course, everyone will have the right to withdraw from the check-off at any time as soon as the clause comes into effect: that is entirely consistent with the new protections we are introducing.
Whatever the good practice of certain employers, the fact is that in certain cases individual written consent is not a necessary legal prerequisite of the making of check-off deductions. The clause puts right that unsatisfactory position. It is only right, therefore, that we should extend it as a legal right to all those already covered by the check-off at a relatively early date. Moreover, many people covered by the check-off when the clause comes into effect, even if they did give written consent in advance, may have done so many years ago. There is therefore no logic or justification in the argument that people already covered by check-off should have to wait a further two years before they are given the opportunity to reconsider and, if they wish, reaffirm their consent to the arrangement.
I certainly do not accept the argument that one year places too heavy a burden on employers and that they will not have time to make the necessary adjustments. A year is a more than adequate period, and the clock only starts ticking after the clause comes into effect, itself after this Bill's well publicised passage through the House and attainment of Royal Assent. Employers will have had plenty of notice of what is required of them. Effectively, they will be given the opportunity to plan for something that will probably not need to be completed until the autumn of 1994.
I am therefore unable to accept the amendment. It would introduce an unacceptable delay into the implementation of the important provisions in the clause. I hope that my words reassure the noble Lord, Lord McCarthy, that employers will have sufficient time to make the arrangements, and that he will be persuaded to withdraw the amendment.
6.30 p.m.
Lord Wedderburn of Charlton: My Lords. before the noble Viscount sits down, I should like to ask a question. I may have misunderstood him and perhaps he will correct me if I am wrong. His argument seems to rest upon the notion that we need the new clause in order to give employees the opportunity to reaffirm or withdraw. That is a central element of government argument and one must ask again—believing that the notion is wrong and that there is no need for a new clause to allow people to withdraw from check-off,

63
which can be done immediately—whether the noble Viscount has any legal basis for that proposition. It has been repeated both by him and his noble friend. On these Benches we have said continuously that in terms of the law it is wrong.
Viscount Ullswater: My Lords, I believe that we have covered this area on a number of occasions. My noble friend and I have sought to say that there are occasions when a collective agreement is in force when, first, an employee may not have given his personal written consent to that and, secondly, if the rules of the union are such that that is also part of the collective agreement, then the employee would not have the opportunity of withdrawing from check-off.
I appreciate all the arguments put forward from the Front Bench opposite and other parts of the House. In many instances, perhaps 99 out of 100, the unions will make accommodation for the member if they so wish. We have said that. We have said that the legal position is such that there may be some instances where the only remedy an employee can take, as the noble Lord from the Front Bench opposite said, is to resign from the union. That is a position we wanted to obviate.
Baroness Seear: My Lords, can the noble Viscount quote any collective agreement where that is in fact the case?
Viscount Ullswater: My Lords, I do not have a case with me. There are many instances where collective agreements are changing from day to day. It would not be right to burden the House with such detail.
Lord McCarthy: My Lords, can the noble Viscount tell us what such a collective agreement would say? It would regulate that most unregulated thing in collective agreements—the relationship between a union and its members. It would ask the employer to agree that, if the individual withdrew from check-off, then the union should not volunteer an alternative way to belong. It is a world of madness. Why should any union sign such an agreement or an employer want it? It is nothing to do with employers.
Viscount Ullswater: My Lords, with the leave of the House, our replies have not stressed whether we can quote instances, but what is the legal position. In this House we are dealing with what the law states. I have said what the law states. That is how I identify to noble Lords the current position of the law and the situation that we intend to change by the Bill.
Lord McCarthy: My Lords, I suppose I am not surprised. I would be more pleased if the Minister was less grateful and more agreeable.
It is true that we have not rehearsed the one-year rule. That is a defect on our part. Both in this House and in another place we allowed the whole question of a period of grace—if I may call it that—that the Government have given the trade union movement, to go by default. On the other hand, the Minister knows that it has not gone by default in negotiations with the Trades Union Congress and the Government. He knows that the Trades Union Congress and the
64
individual unions have made it clear that they believe that it will be extremely difficult to implement this within 12 months.
The Minister says that employers will know how long they have to move. My information, which seems to be reasonable, is that employers will not move until they have to. If the Minister went to an employer today and said, "You know there is a Bill; you know it is coming and that you have a year", that employer would not want to know. Employers are dealing with the difficult problem of making their businesses survive. They will get round to it in the end. but how long they will give the union and what can be done in the time at their disposal is of concern. However, the Government are not concerned about the matter.
When the Government make so much, as they do continually, about all the people who have never agreed to be on the check-off, and say that they want to give them rights, it suggests that we are back to our old friend from Bartholomew Fair and his enormities. It suggests that enormities exist. In the Government's mind there must be thousands of trade unionists who want to leave unions but who cannot do so for some reason that is not explained, or who cannot leave the check-off without leaving unions which they do not want to do for some reason that is not explained. It is only when the Government on their white horse come galloping in with this provision that all those people will be able to leave their unions. That is nonsense.
The Government are not giving rights to anybody. Anybody who wants to can leave the union tomorrow. The Government arranged that and from their point of view it was right. But they cannot quote it at us. That was done when the Government abolished the closed shop. That made it possible for anybody to leave a union at any time and the Government are proud of that. But they cannot come trotting along here saying, "We need another piece of legislation to free people so that they can leave unions". That is not the present circumstance. This is a situation where unions are asking for a reasonable time to introduce a new system. We calculate that 6.25 million trade unionists are on check-off. I believe that they deserve a little time and that I should test the mood of the House on the issue.
6.38 p.m.
On Question, Whether the said amendment (No. 13A) shall be agreed to?
Their Lordships divided: Contents, 58; Not-Contents, 117.

Division No. 4

CONTENTS

Airedale, L.

Galpern, L.

Blease, L.

Graham of Edmonton, L.[Teller.]

Boston of Faversham, L.

Carmichael of Kelvingrove, L.

Gregson, L.

Cledwyn of Penrhos, L.

Grey, E.

Clinton-Davis. L.

Hampton. L.

Dean of Beswick. L. [Teller.]

Hollick, L.

Diamond, L.

Holme of Cheltenham, L.

Donoughue, L.

Houghton of Sowerby, L.

Dortnand of Easington, L.

Hughes, L.

Eatwell, L.

Jay of Paddington, B.

Falkland, V.

Jeger, B.

Fitt, L.

Judd. L.

Gallacher, L.

Kilbracken, L.

65

Lockwood, B.

Scanlon, L.

McCarthy, L.

Seear, B.

McGregor of Durris, L.

Sefton of Garston, L.

Mclntosh of Haringey, L.

Serota, B.

Mallalieu, B.

Shackleton, L.

Mason of Barnsley, L.

Stoddart of Swindon, L.

Merlyn-Recs, L.

Strabolgi, L.

Molloy, L.

Taylor of Gryfe, L.

Nicol, B.

Tordoff, L.

Peston. L.

Turner of Camden, B.

Pitt of Hampstead, L.

Wedderburn of Charlton, L.

Prys-Davies, L.

Whaddon, L.

Rea, L.

White, B.

Redesdale, L.

Winchilsea and Nottingham, E

Richard, L.

Young of Dartington, L.

Rochester, L.

NOT-CONTENTS

Acton, L.

Kenilworth, L.

Ailesbury, M.

Kimball, L.

Aldington, L.

Kinnoull, E.

Alexander of Tunis, E.

Lane of Horsell, L.

Annaly, L.

Lauderdale, E.

Arran, E.

Leigh, L.

Astor, V.

Lindsay, E.

Auckland, L.

Lindsey and Abingdon, E.

Banbury of Southam, L.

Long, V. [Teller.]

Belstead, L.

Lucas of Chilworth, L.

Biatch. B.

McColl of Dulwich, L.

Boardman, L.

Mackay of Ardbrecknish, L.

Borthwick, L

Mackay of Clashfern, L.[Lord Chancellor.]

Boyd-Carpenter, L.

Brabazon of Tara, L.

Manton, L.

Brentford, V.

Margadale, L.

Brougham and Vaux, L.

Marlesford, L.

Buckinghamshire, E.

Merrivale, L.

Cadman, L.

Mersey, V.

Carnegy of Lour, B.

Milverton, L.

Carnock, L.

Mottistone, L.

Chalker of Wallasey, B.

Mountgarret, V.

Chelmsford, V.

Moyne, L.

Clark of Kempston, L

Munster, E.

Colnbrook, L.

Murton of Lindisfarne, L.

Colville of Culross, V.

Napier and Ettrick, L.

Cranborne, V.

Norrie, L.

Cumberlege, B.

Orkney, E.

Darcy (de Knayth), B.

Orr-Ewing, L.

Davidson, V.

Oxfuird, V.

Demon of Wakefield, B.

Pender, L.

Derwent, L.

Rankeillour, L.

Dundonald, E.

Rennell, L.

Eccles of Moulton, B.

Renwick, L.

Elles, B.

Rodger of Earlsferry, L.

Elphinstone, L.

Romney, E.

Faithfull, B.

Saint Albans, D.

Ferrers, E.

St. Davids, V.

Finsberg, L.

St. John of Bletso, L.

Flather, B.

Saltoun of Abernethy, Ly.

Fraser of Carmyllie, L.

Skelmersdale, L.

Fraser of Kilmorack, L.

Stewartby, L.

Gardner of Parkes, B.

Strathclyde, L.

Geddes, L.

Strathcona and Mount Royal, L.

Gibson-Watt, L.

Glenarthur, L.

Strathmore and Kinghorne, E.[Teller.]

Goschen, V.

Gray of Contin, L.

Sudeley, L.

Hacking, L.

Swansea, L.

Harmar-Nicholls, L.

Thomas of Gwydir, L.

Harmsworth, L.

Trefgarne, L.

Hemphill, L.

Trumpington, B.

Henley, L.

Ullswater, V.

Hives, L.

Vinson, L.

Holderness, L.

Vivian, L.

HolmPatrick, L.

Wakeham, L.[Lord Privy Seal.]

Hooper, B.

Hothfield, L.

Whitelaw, V.

Howe, E.

Wynford, L.

Hylton-Foster, B.

Young, B.

Jeffreys, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.45 p.m.
[Amendments Nos. 14 to 17 not moved.]
Clause 16 [Requirement of postal ballot]:
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 18:
Page 30, line 32, at end insert:
("( ) In cases where less than 50 members are to be balloted, each person entitled to vote must be given either—

(i) a convenient opportunity to vote by post, or

(ii) an opportunity to vote immediately before, immediately after, or during his working hours at his place of work or at a place which is more convenient for him.").

The noble Baroness said: My Lords, in Committee we sought to retain the right of union members to have a workplace ballot on strike action. The Government's position in this Bill is that henceforth all strike ballots must be conducted by postal means. The reasons given by the Government for the change are not exactly compelling. The Government were themselves responsible for introducing legislation giving the option of either workplace or postal ballots in the case of industrial disputes. That was as recently as 1988. No evidence that I am aware of—it was certainly not advanced by the Government in Committee—has arisen since 1988 to warrant such a change of view in such a very short timescale.
As recently as the 1987 Green Paper the Government were saying that they accepted that postal ballots were less suitable than workplace ballots in the case of potential strike action. Nothing surely has changed since that time. Everyone agrees that workplace ballots have significantly higher turnouts. For some reason or other, that does not commend itself to the Government as an argument, although if the Government are concerned with ensuring that decisions are based on as wide a mandate as possible it is surprising that they do not consider that that has any importance. Indeed, the Government's own code of practice on industrial action ballots makes it clear that secret workplace ballots are particularly suitable where speed of obtaining the voters' response is of the essence.
Industrial action ballots are different from other kinds of ballots or elections where the time factor may not be quite as important. In his response in Committee the Minister appeared to be arguing that, since 1988 election ballots had to be fully postal, now was the time to bring industrial action ballots into line. But everyone with experience of industrial relations knows that ballots about strikes are about workplace issues of some immediacy. It is necessary not only for union members but also for employers to know the results as quickly as possible.
It is accepted on all sides—or at least it was—that workplace ballots, held under proper, secret conditions, are much more likely to achieve a quick result. We have not been prepared to let the arguments go entirely, even though we made no progress in Committee. We have come back with another

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amendment which would allow workplace balloting in cases where the numbers to be balloted are small. We have set the figure at 50.
Why small numbers? The Minister may well say that there is no logic in making this distinction. However, I believe that the Government themselves were at one time considering a threshold figure—a figure of 50, I believe, although 30 was mentioned on one occasion—and I do not understand why they have decided to depart from that conception. If there is to be postal balloting for large industrial disputes, which could have a major effect on public or private services, surely the same conditions should not apply in the case of much smaller groupings of members, often employed in small undertakings. For such undertakings the arguments are surely strong; that everyone, the employers and the employees, need to know the result as quickly as possible. The employers themselves may not have the resources to cope with a continuing situation of instability. They, even more than the large organisation, need to know as soon as they possibly can what the result of a test of employee opinion is.
Moreover, with relatively small numbers of people, it is much easier to organise secret and safe ballots on site. I hope therefore that the Minister will be able to tell us that he is able to accept at least some of the arguments we have advanced. I was involved, during the time I was a union official, with workplace balloting held on site. My experience was that ballots were always conducted in a rigorously safe, secret and acceptable way. The employers provided facilities. Very often, the numbers to be balloted were relatively small. On the other hand, very tight security was possible with a small number of people involved. If the Government are concerned about security, as appeared to be the position when we discussed the matter in Committee, surely it is understandable that where there are smaller numbers it is much easier to evolve a safe and secure system.
For those reasons, I hope that we shall have a favourable response from the Minister. We have tried, as we have with all our amendments this evening, to cope with some of the arguments advanced by the Government in Committee. We have not come back with exactly the same arguments and exactly the same types of amendments. We have looked carefully at what was said by the Minister in Committee and have tailored the amendments we have put forward to your Lordships today directly to meet some of the arguments advanced by the Minister.
This amendment comes within that category. We have set the number at 50. We believe that that is a reasonable number and that if the Minister were to look favourably upon it at least a message would he sent to the trade union movement outside, which feels very strongly that it has been "sorted out" by the Government and that it has been the recipient of extremely hostile, indeed punitive, legislation. It would send out a signal to unions and their members that the Government are prepared to be reasonable
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and to listen to some of the arguments advanced on behalf of unions and their members. With those comments, I beg leave to move the amendment.
Lord Boyd-Carpenter: My Lords, I cannot see the logic of having a differential when the ballot is over or under 50. I feel that this is an unnecessary addition to the Bill. In addition, I am intrigued by the words of the postal alternative:
"a convenient opportunity to vote by post."
It seems to me a formula that could give rise to infinite dispute as to whether a convenient opportunity was, or was not, given. I take it that "a convenient opportunity" does not mean a stamped addressed envelope.
Baroness Turner of Camden: My Lords, will the noble Lord give way?
Lord Boyd-Carpenter: My Lords, of course.
Baroness Turner of Camden: My Lords, is the noble Lord aware that,
"a convenient opportunity to vote by post",
is the wording used in previous legislation?
Lord Boyd-Carpenter: My Lords, yes, indeed. It seems to me, and I abide by it, that it is a phrase which can give rise, or could give rise, to quite an amount of argument. It is quite unnecessary. However, what is really unnecessary is to make an arbitrary distinction between cases in which the ballot may be over or under 50.
Lord Finsberg: My Lords, the noble Baroness, in introducing the amendment, said that everyone who was engaged in industrial relations would agree that it is a good thing to have workplace ballots. I have had 30 years' experience of industrial relations in the workplace, having to deal with trade unions of all kinds. I do not agree with her. All too often one has had the spectacle I go back to my early days when I was working down the coal mines and had nothing to do with industrial relations—of so-called "free" workplace ballots where there was intimidation and things of that sort. People who saw what happened then know how true that is.
The noble Baroness says that most trade unions act correctly. I agree with her. Unfortunately, when one is legislating one has to be certain that one does not leave loopholes for unions like the NUM or the old electrical trades union, which in those days employed every possible means of perverting decent industrial relations. I believe therefore that it is not necessarily right to rely upon workplace ballots. A workplace ballot can be coloured by the swift emotion of something that has gone wrong. In my judgment, it is better to have a postal ballot, which gives people the opportunity of considering what the issue really is.
Then, of course. there is the idea of 50. Why not 48, or 52? The number has been drawn out of a hat merely to make it different from the argument which was lost in Committee. I hope very much that the Government will not accede to the ingenious attempt to re-insert the "Trojan horse" that many of us were glad to see disappear.
Lord Wedderburn of Charlton: My Lords, however experienced or inexperienced in industrial relations law one may be, the Government are the origin, as Ministers know, of the proposal that a different rule should apply to workplaces where there are less than 50 union members being balloted. The 1991 White Paper, in paragraph 3.21, says that the Government,
"propose that an industrial action ballot should have to be conducted by fully-postal voting in every case where more than 50 union members are entitled to vote."
There was discussion of the possibility of semi-postal balloting in smaller workplaces and what would be be appropriate. The suggestion of my noble friend is that the Government's belief, based upon the existing state of knowledge and research in the area, was that workplace ballots, no doubt with considerable requirements in regard to secrecy and so on, on the whole produced a higher turn-out. That was the suggestion in the research carried out in the early 1980s by Undy and Martin. I remember asking the Minister at some point in Committee whether there was further research that went the other way.
If you really want to have a high turn-out and a ballot conducted in such a way that it is likely to reflect the opinions of the members, then the Government's conclusion in 1991 was that, at any rate in the smaller areas, you could do that satisfactorily by a workplace or semi-postal workplace ballot. What the Government have never explained is, first, whether they have any further research the other way and, secondly, why they have changed their mind about smaller workplace ballots.
Baroness Seear: My Lords, I support the amendment. In small concerns, if a row blows up, it needs to be dealt with quickly. It is much better dealt with through a workplace ballot. Of course there may be abuses, but there can be abuses in any system that you adopt. That is not an argument that really holds very much water.
We know that things have gone wrong. They have gone wrong on postal ballots as well as on workplace ballots. This is a sensible amendment. As the noble Lord, Lord Wedderburn, has said, the Government favoured something of the sort not so long ago. If they would change their minds on things that are worth changing their minds on instead of things that are not, we may well have got on a great deal better.
7 p.m.
Lord Stoddart of Swindon: My Lords, I too should like to support the amendment. I would not have spoken except that the noble Lord, Lord Finsberg, got to his feet and gave us the benefit of his personal experience in industry, which of course we value. Perhaps I could give him the benefit of my experience in industry. When I worked at the power station we often had workplace ballots, which in fact I ran, and ran successfully. There was no question of the secrecy of the ballot being breached, nor was there any intimidation. They worked successfully.
If we can run them at workplaces where there are 250 people, and run them successfully, I am sure that we can run them, and that it is desirable to run them, at workplaces where there are only 50 people. Because
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the ballot would not usually take place about wages—they were probably fixed by the wages council, which we still have but not for much longer, or perhaps by wider collective bargaining—we would be talking about disputes that were local, and very local, and which probably by the time the postal ballot had taken place would have been settled. Therefore, everybody would have embarked on a great deal of time and money wasting. There are good reasons why we should accept this amendment for small concerns.
I believe that employers would be satisfied with that as well. Imagine the entrenched positions that could occur if there was a postal ballot and a majority had voted for industrial action when in fact the need for industrial action had passed. The men may well feel, "Well, we voted for this, we must now do it". It is ridiculous to have postal voting in circumstances such as this. The Government ought to see the benefit of what, as we have heard, they themselves were putting forward at earlier stages of their industrial attack on trade unions and they should agree to this amendment.
Baroness Denton of Wakefield: My Lords, first, let me say that I was intrigued to hear earlier this afternoon that I drove the noble Lord, Lord McCarthy, to Shakespeare. I am sorry that on this occasion I shall not have the benefit of learning to what I drove him.
I have listened carefully to the noble Baroness's arguments. I would be the first to acknowledge her direct experience with unions. But I make no apology for the fact that my reasons for resisting this amendment are essentially the same as those already expressed.
Perhaps I should begin by explaining why we consider it important to ensure that union members have the protection of fully postal voting in an industrial action ballot. First, we believe that only fully postal voting can guarantee members that the ballot will be conducted in a proper manner. It is important that those entitled to vote in an industrial action ballot should be free to do so away from the pressures which might otherwise be brought to bear if that ballot was conducted in the workplace.
Today, as on many previous occasions when we have discussed the Bill, noble Lords and noble Baronesses have indicated that that is not their experience, but my noble friend Lord Finsberg indicates today that it is his, and as the noble Baroness said there will always be instances of abuse to any system. We believe that postal voting has a minimising effect. The temperature of the argument is not related to the size of the vote.
Secondly, only fully postal voting gives union members greater assurance that the ballot is free from the kind of impropriety which might occur—I stress "might"—if ballot papers were collected from the workplace, or returned for counting, otherwise than by post. There is no overriding reason to suppose that the pressures which might be brought to bear during workplace voting will be any less where only a small number of members are involved—indeed, they may well be greater.

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The noble Baroness, Lady Turner, suggested that it may be that in this area the employers did not have the experience or the capacity to deal with these issues. I would point out that instances where the union membership of a particular union voting on this issue was 50 or under would not only apply to smaller employers. But, as my noble friend pointed out, there are no sound reasons for the setting of a threshold, which, at whatever level, would be arbitrary and could give rise to anomalies.
We remain convinced that only fully postal voting for an industrial action ballot can give members sufficient assurance that they have cast their vote in a properly conducted ballot. We do not believe that it is unreasonable to require fully postal voting for all industrial action ballots, and I hope that the noble Baroness will withdraw her amendment.
Baroness Turner of Camden: My Lords, I do not at all accept what the noble Minister has said in response to the debate on this amendment. First, she talks about rights. In my amendment there is an alternative. It says:
"(i) a convenient opportunity to vote by post, or
(ii) an opportunity to vote immediately before, immediately after, or during his working hours at his place of work or at a place which is more convenient for him".
I should have thought that that gave individuals a right. It does not take away a right; it gives a right. It is a right to have the opportunity to vote at work when it may be very much more convenient than to have it sent to your postal address. That may well be the case —and I did not make this point earlier—where the workforce may be a travelling or itinerant one. That is not an unusual situation nowadays.
I do not accept the arguments about intimidation. That experience probably arises from a good many years ago. The Government themselves were responsible for introducing the concept of workplace balloting. The trade union movement at the time, certainly the TUC, was quite willing to accept this and developed its policies around workplace ballots on the basis that this was likely to involve a much higher turnout than postal balloting, and that has certainly proved to be the case.
Moreover, as my noble friends have said, the disputes that we are talking about are often small and local ones, obviously involving, from the amendment, relatively small numbers of people, and obviously small companies. This is a sensible amendment. I regret that the Government have seen fit to trot out arguments in opposition to it that certainly do not seem to me to hold water, and I am sure that numbers of your Lordships will join with me in that sentiment. I do not intend to press this at this point in the Bill. I simply express my concern and regret that, although this reasonable amendment has been advanced by us at this point in the discussion of the Bill, the Government have nevertheless seen fit to adhere to their—
Lord Stoddart of Swindon: —reactionary stance, my Lords.
Baroness Turner of Camden: My Lords, my noble friend is absolutely right— the reactionary stance that they have shown throughout the discussions on this Bill. I shall not advance, as would my noble friend Lord McCarthy, some quotation from Shakespeare on this occasion, but I shall say that it sometimes seems that the Government make a lot of fuss—much ado about nothing—when they talk about intimidation. I have not heard from the other side any examples of intimidation to justify coming forward with such an enormous, wide-ranging and sweeping piece of legislation as we have been discussing this evening. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount St. Davids: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, I suggest that the Report stage begin again at 8.10 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Merchant Shipping (Registration etc.) Bill
Brought from the Commons; read a first time, and to be printed.
Road Traffic (Driving Instruction by Disabled Persons) Bill
Brought from the Commons; read a first time, and to be printed.

Local Government (Overseas Assistance) Bill
7.11 p.m.
Baroness Flather: My Lords, I beg to move that this Bill be now read a second time.
This is a wholly admirable Bill, which was chosen by Mr. Jim Lester in another place on being successful in a ballot after no fewer than 18 years of trying. It combines Jim Lester's local authority background with his abiding interest in creating ever-stronger links with the newly democratic countries of Eastern Europe, as well as with less developed countries overseas. He has worked unstintingly towards this end throughout his parliamentary career. It was therefore quite natural for him to hasten to remove the doubt which had suddenly appeared as to the ability of local authorities to provide any assistance at all to equivalent bodies abroad.
The position on "technical twinning"—that is, on technical assistance to twinned overseas authorities —had always been uncertain. However, with lawyers working for individual authorities and the Local Government International Bureau concluding that, on balance, sufficient powers could be inferred to allow authorities to undertake such work, it was certainly understood that there would be no legal problem if the cost of such assistance were to be paid from central government grant.

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What brought the issue to the fore was, of course, the sudden increase in demand from Central and Eastern Europe. Following the collapse of communism in Central and Eastern Europe in 1989, there was keen interest on the part of Ministers at the Department of the Environment, and in the local government communities, in assisting the setting up of stable and efficient systems of local government in these newly democratic countries. This was seen as having the potential to make a major contribution to the achievement of political stability and economic recovery there.
The result was, first, a series of Foreign Office-sponsored programmes of assistance to local government in Poland, Hungary, Czechoslovakia and Bulgaria and, secondly, the technical links scheme. The technical links scheme was set up by the Foreign Office and the Local Government International Bureau in June 1991. It was a joint central-local government initiative, financed by a £700,000 per annum allocation from the Know-How Fund. Its purpose is to contribute to the growth and management of local democracy. Projects aim to deal with urgent technical difficulties, such as environmental, public health, infrastructure or service delivery problems.
Secondly, a programme was set up by the EC, called the Ouverture programme, on the initiative of Strathclyde Regional Council. In addition to Strathclyde Regional Council, selected Spanish, German and Italian local authorities were involved. The programme is funded by the European Community.
Local authorities showed a strong initial interest in both schemes and nine projects were approved in November 1991. However, by December 1991 doubts had begun to arise over local authorities' powers to do such work. For technical twinning, local authorities have relied on the discretionary power in Section 137 of the 1972 Act, on the economic development power in Section 33 of the 1989 Act, and on the power to carry out work conducive or incidental to their functions under Section 111 of the 1972 Act.
A court case on another matter dealt with the scope of Section 111 of the Local Government Act 1972, on which some local authorities had relied. It became clear that Section 111 could not be used because the provision of assistance overseas could not be regarded as conducive or incidental to the discharge of an existing function.
At the same time, lawyers advising the Audit Commission argued that the use of Section 137 and Section 33 was inappropriate because both required expenditure carried out under them to bring direct and commensurate benefits to the authority's area or inhabitants. It was difficult to see how overseas technical assistance could be said to provide such direct benefits. The Audit Commission's lawyers concluded that they were unaware of any powers under which local authorities in England and Wales could carry out such work.
It was clear that, unless action could be taken to remedy these legal doubts, there was a risk of losing an extremely effective scheme for getting assistance to
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Eastern Europe. Jim Lester, by choosing this Bill, has made it possible to save this initiative and British local government's capacity to use its expertise in this manner.
The Bill is a simple two-clause Bill. Its purpose, set out in the Long Title and in Clause 1(1), is to provide local authorities with a power to provide advice and assistance on any matter in which they have skill and experience to overseas bodies engaged in any of the activities of local government. The Bill originally provided for that assistance to be given to overseas bodies engaged in local government. Under the present drafting of the Bill, a British local authority can provide advice and assistance on any matter in which it has skill and experience. This is not restricted to its own functions or to the activities which it and the overseas body have in common. It can provide assistance to any overseas body that has some function or activity in common with or comparable to British local government.
Clause 1(3) makes this power subject to a requirement for the Secretary of State's consent. This is the part of the Bill which has been least welcomed by the local authority associations and they have pressed for its removal. However, it is felt that this is a necessary safeguard to ensure that no significant costs of overseas assistance will fall on the council taxpayer. The consent requirement is not meant to be a heavy-handed control. It is there as an ultimate safeguard. The Secretary of State proposes to give a general authorisation for the provision of technical advice and assistance within the scope of the Bill. That will cover work which is carried out under projects such as the technical links scheme and Ouverture; work where the costs of the work fall below specified de minimis levels; assistance where work up to a specified cost arises out of town-twinning links (that is, up to twice the expenditure which was incurred on these links during the previous year or, where there was no such expenditure, up to twice the town-twinning links planned for the current year); and, finally, assistance where the cost is equal to the income which the local authority receives for providing it.
Clause 1(5) prohibits financial assistance. Originally, the clause simply prohibited all financial assistance. However, the associations pointed out that that would prevent them from donating equipment, such as fire engines, for which they no longer had any use, but which retained a notional capital value. That was accepted, and the current wording is designed to allow such assistance while maintaining the prohibition on financial assistance.
Clause 1(6) is a standard clause, the purpose of which is merely to authorise any expenditure necessary by the Department of Employment, the Scottish Office and the Welsh Office in administering the power provided by the Bill. Clause 1(7) lists the local authority bodies which are to be given the new power. The only significant omissions are parish, town and community councils. The reason for that is merely that Jim Lester and Ministers concluded that since those councils do not employ technical officers it is unlikely that they would have much to contribute to the provision of technical assistance abroad.

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Once the Bill is on the statute book, local authorities will at last have a clear power to provide technical advice and assistance overseas. Despite their understandable reservations about the consent requirement, I believe that the associations see the Bill as a significant step forward which will enable authorities to proceed confidently with the projects under the Technical Links Scheme, Ouverture and other schemes. I beg to move.
Moved, That the Bill be now read a second time —(Baroness Flather.)
7.21 p.m.
Lord Graham of Edmonton: My Lords, perhaps I may first apologise for my husky voice. I have a cold, but I realise that the Bill is not to be sniffed at. I shall keep as far away from the Dispatch Box as I can. I shall begin by congratulating the noble Baroness not just on her good fortune in being a friend of my friend Jim Lester, but on the excellent way she has served the House by explaining so clearly the problems and the solutions that the Bill encompasses. I, like the noble Baroness, and no doubt others who are interested, read carefully the proceedings on Second Reading, in Committee, and on Third Reading in another place. It is clear that, although one or two reservations were put forward in another place on behalf of the local authority associations, there is a depth of goodwill which transcends any party difficulties.
I am happy to begin and end what I have to say by telling the House that we on the Labour Benches recognise the necessity for and value of the Bill. I was interested to read what Mr. Jim Lester said in another place, especially when he described how his interest in the subject was first aroused. He attended a meeting of the International Union of Local Authorities in Toronto in 1970. One's interest in a subject can be stimulated and maintained for a long time as a result of personal experiences. I went to a similar conference a year or two earlier when I was the council leader of the London Borough of Enfield. In the 1960s I had the good fortune to go to the conference before the one in Toronto.
The conference I attended was held in Belgrade, Yugoslavia. I have vivid memories not just of the conference but of the subjects discussed. The differences between Delhi and Pittsburg were debated. The problems resulting from the environment in which people lived in those cities was one of the major subjects. Since then, as a result of the friendships I made and the interest that was aroused, I have always had a high regard for the contacts made at local government level. The noble Baroness has a long experience of serving in high office in local government. I am sure that she will share my feelings.
I was taken by a phrase used by Mr. Lester (col. 106 of Hansard) who produced the slogan, "Think globally, act locally". That is a fair summary of the feeling behind the Bill. From what the noble Baroness said, it is plain that no one will be under any illusion that this will be a free lunch for those involved or a free ride on a vehicle that will do great things; it is not.
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I like the concept that we in Britain have a local government structure from which it is possible for other parts of the world to benefit. Those of us who have been involved in local government have a great deal for which to be thankful. I hope that we do not go too far down the road of saying that what we in this country do, and what the Government have done to local government, provides a model that we should export to other parts of the world. For instance, my good friend Mr. Tony Banks, in his speech in another place, reminded us that there have been 144 Local Government Acts since 1979, 51 of which have been major measures. They did things such as removing control of the budget from local authorities; reducing the rate support grant, which has been cut drastically under this Government; abolishing key local authorities such as the GLC and the other metropolitan counties; transferring key services such as education from local government; taking control nationally of teachers' pay from the local authority body. They have done a great deal of harm with regard to capital receipts. It is a bit rich if people believe that we are the acme of perfection when giving advice on accountability to other nations.
Having said that, we can all be grateful that the authorities interested in this matter recognise that the Bill is too good an opportunity to be missed. I am sure that in Committee I shall be tabling one or two amendments which have already had a canter over the course in the other place. The noble Baroness rightly said that the associations (the Association of County Councils, the Association of District Councils, the Association of Metropolitan Authorities, CoSLA and the Local Government International Bureau) all expressed reservations about the requirement for consent. The noble Baroness was quick to say that too much should not be made of that point and that consent would not be withheld for reasonable projects. However, the associations tell me that they see no need in principle to import a requirement that the Secretary of State give his consent to individual schemes.
Local authorities are responsible bodies, acting within the law and accountable to their electors. They are subject to increasingly tight ministerial control of their overall expenditure. We understand that there is no likelihood that the provision will be dropped; nevertheless, we shall raise the matter. Then there is the "without prejudice" clause. It would have been preferable had the Bill included a clause making it clear that the new power would have no effect upon any existing power to provide technical assistance to bodies outside the United Kingdom. We believe that the clause could be re-drafted to meet the legitimate concerns of the authorities while keeping to the mainstream of what is wanted.
General powers are intended to be used only where no more specific powers exist. I shall wish to raise in Committee the subject of powers for parish, town and community councils. There was previously some doubt as to whether those lower-tier authorities were to be included in the Bill. It is now clear that in England and Wales, at least, a number of such councils are in the process of developing technical

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twinning or partnership links with local communities in Eastern and Central Europe and Africa. That is something which should be encouraged. An amendment at a later stage might serve a useful purpose. Mr. Lester told us what was going on at the moment. He told us that under the existing scheme Bradford is represented in Czechoslovakia; Doncaster, Hull, Dorset, Berkshire, Scunthorpe and Southampton, are all working in Poland; and Hungary has schemes from Croydon, Chorley and Kent. Therefore, we can see that a great deal is being done by authorities in all parts of the country, whether the councils are controlled by Conservative, Labour or any combination of the parties.
We have a useful additional shot in the armoury of local authorities which, despite the enormous burdens under which they labour, believe they have a contribution to make. They want to use their resources and expertise not least among their officers and in the initiatives which they have started. I congratulate the noble Baroness, Lady Flather. She can be assured of the support of Members on these Benches. We look forward to improving the Bill a little further in Committee.
7.30 p.m.
Viscount Goschen: My Lords, perhaps I may first say how pleased I am that my noble friend Lady Flather, who has such a distinguished record in local government, is taking the Bill through the House. As my noble friend explained, the purpose of the Bill is to empower local authorities in Great Britain to provide advice and assistance in matters in which they have skill and experience to bodies outside the UK which have equivalent or comparable functions.
There is nothing new about local authorities providing such assistance. It has often arisen out of the educational and cultural links between British and foreign communities which are commonly known as "town twinning", though it has in the past been on a small scale and incidental to the main twinning activity. Lawyers working for many local authorities, and indeed for the Local Government International Bureau, have in the past concluded that powers permitting such activity could he implied or inferred.
Certainly, as my noble friend explained, it was always understood that if the cost of technical assistance overseas —so-called "technical twinning" —were borne by central government there could be no difficulty in terms of legality. So that when, following the events of summer 1989 in Eastern Europe a strong wish arose in British local government to provide advice and assistance to local authorities in those countries the Government were only too keen to support that. It led to the creation by the Foreign and Commonwealth Office and local authority associations of the Technical Links Scheme. There were initially a substantial number of applications from local authorities for funds to carry out work under it. But by December 1991 doubts had arisen about authorities' powers to undertake such work. Unless we could take action to remedy those legal doubts it was clear that we would lose an extremely effective scheme for getting vital practical assistance to Eastern
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Europe. The situation could be remedied only by primary legislation but there were and are no appropriate government Bills available to allow us to clarify the legal situation here.
We are, therefore, delighted that my noble friend is taking this Private Member's Bill through your Lordships' House. The Bill has the Government's strong support. It offers an excellent example of co-operation between central and local government. Starting from just after First Reading in another place there has been a series of very constructive meetings and detailed correspondence between the Bill's sponsor, the Government and the local authority associations. Throughout we have aimed to accommodate the concerns of local government. As a result the associations have given the Bill their full support.
The associations' principal concern about the Bill has been the fact that the power to provide technical assistance is subject to the Secretary of State's consent. We are afraid that there have to be safeguards against the hopefully remote possibility of an irresponsible authority wasting council tax payers' money. But that is not meant as a heavy-handed control. To meet the associations' concern, the Bill has been amended to provide for the Secretary of State to give a general authorisation. The result will he that applications for the Secretary of State's consent will be very much the exception and that most technical assistance will be covered by the general authorisation.
Other anxieties have related to the need for a "without prejudice" clause, a relaxation of the prohibition on financial assistance and whether the Bill should empower parish and town councils to provide technical assistance overseas. The Bill has already been amended in order partially to meet some of those anxieties so far as that is possible. But the associations have been asked to provide further information on them so that they can be considered again in time for Committee stage.
My noble friend's Bill is a small measure but one of considerable potential value. It would enable British local authorities to provide vitally needed technical advice and assistance to local government in Central and Eastern Europe and also in the wider world. In doing so it will in a small but important way be helping to build democratic and economic stability in those countries. I commend the Bill to the House.
7.35 p.m.
Baroness Flather: My Lords, perhaps I may comment on what was said by the noble Lord, Lord Graham. I was delighted to hear that he counts Jim Lester as a friend, as do I; indeed, he is not only a friend but a mentor. Since I have been a Member of your Lordships' House I have received a great deal of help, advice and encouragement from Jim Lester.
I was sorry to hear a note of politics creep into the discussion; I had hoped that we could keep that out. At least we may be sure that we shall not export what central government may or may not have done to local government in this country but only what local government is able to provide by way of expertise to those who will benefit from that.

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The noble Lord, Lord Graham, spoke of local authorities being responsible bodies in relation to the consent of the Secretary of State. Perhaps because I spent 15 years in local government I can say that some authorities are responsible but some are not. The vast majority are responsible but we know only too well that some are not and, therefore, some safeguard may be necessary.
As regard town and community councils, we are still waiting for evidence from the local authority associations. It is not ruled out that they will be included but as yet the associations have not provided the required amount of evidence. The associations' case for providing a "without prejudice" clause is that it has been found by the lawyers of the Audit Commission that there is no specific power to provide such assistance to authorities overseas. The local authorities associations are asking that that particular power, which does not exist, should be preserved. It is somewhat convoluted that we are here trying to introduce a new Bill specifically to provide that power while saying at the same time that the power which existed should be preserved. The fact is that no such power exists.
I commend the Bill to your Lordships.
On Question, Bill read a second time, and committed to an Unopposed Bill Committee.
The Earl of Strathmore and Kinghorne: My Lords, I beg to move that the House do adjourn during pleasure until 8.10 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.38 to 8.10 p.m.]

Trade Union Reform and Employment Rights Bill
Consideration of amendments on Report resumed.
Clause 17 [Notice of ballot and sample voting paper for employers]:
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 19:
Page 31, line 9, at end insert:
("( ) For paragraph (a) of subsection (2) of section 226 there shall be substituted the following—
"(a) the union has held a ballot in respect of the action—

(i) in relation to which the requirements of section 226B so far as it is applicable before and during the holding of the ballot were satisfied,

(ii) in relation to which the requirements of sections 227 to 231 were satisfied, and

(iii) in which the majority voting in the ballot answered "Yes" to the question applicable in accordance with section 229 (2) to industrial action of the kind to which the act of inducement relates"

and paragraphs (h) and (c) shall take effect in accordance with Schedule 7 to this Act.").
The noble Lord said: My Lords, Amendment No. 19 is a somewhat complex matter. Therefore, I must spend a little time on it in an excited and somewhat crowded House.
The Minister has kindly corresponded with me on this matter. Unless he indicates that he has changed
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his mind already, I shall have to take on the task of trying to change it. At first sight it appears to be a somewhat technical point but on inspection I have found that it is a central matter of the law relating to trade union liberties.
It concerns the question of when industrial action, even if in contemplation or furtherance of a trade dispute, will retain protection or immunity because it has the support of a ballot. The question is what hoops must be negotiated for there to be the support of the ballot.
The problem arises in that Part II of the Trade Union Act 1984 set down the basic procedures of ballots for trade union industrial action: they must be in secret; they must be only by those members entitled to vote and so on. Those basic ground rules have remained roughly the same. However, in 1988 a further requirement was imposed in respect of industrial action whereby it had to have the support of a ballot if it were not to be the subject of an application to the court by a member of the union. That was not within the vision of the 1984 Act. Therefore, the question arose as to whether the procedures introduced by industrial action generally in 1984 and those introduced in 1988 in respect of a member's application to the court were to be the same or different. I remember that there was some debate on the matter and the government of the day took an extremely sensible view; namely, that it would be absurd to have two ballots or two different sets of procedures. Indeed, the 1988 Act provided, as Section 62(a) of the consolidation Act now provides that:
"Nothing in this section shall be construed as requiring a union to hold separate ballots for the purposes of this section and sections 226 to 234".
In other words, the Government established a sensible procedure—the only workable procedure—that procedures in the various types of situation requiring ballots would be the same. That was recognised in the 1988 debates and I shall not weary your Lordships with them, but it was an extremely important acceptance by the government of the day that that was the only workable system.
That unity of procedure or, perhaps I should say, that unity of sets of requirements as to what is involved in the support of a ballot has now been broken in this Bill for the first time. I make no complaint but it is only to be found in paragraphs 46 and 73 of Schedule 7. My amendment seeks to rescue the issue from the schedule and bring it out into the light of day of the Bill itself. That seems a more sensible way to debate the matter on Report.
As the Bill stands, where a ballot on industrial action is relied upon by a union and legal action is brought by a member of the union, it must satisfy Sections 227 to 231 of the Consolidation Act. Those are mainly the rules about voting, conduct in the ballot, procedure and so on. However, as regards support for the ballot in a case where an employer pops up as a plaintiff in an action in tort, but nevertheless looking at the same ballot, there is an addition to the same paragraph. Here we have Sections 227 to 231 plus Section 231A. That section contains the requirement that the union must notify

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an employer of the result of the ballot. My amendment would change that in order to try to reunify the procedures.
I am well aware that my amendment would not fully achieve that objective because in the course of its procedures the union must, if it is to succeed against the employer, satisfy three other hurdles: give notice to the employer of those who are to ballot; provide a specimen of the ballot paper and a seven-day notice of those who are about to take action.
The Minister was good enough to write to me on this matter but he only confirmed that that is the Government's intention. Indeed, he expanded on the point and told me that under Section 62, a trade union member will not be able to apply to the court simply because the union has failed to provide details of the ballot result to an employer or—and he added this to be wholly accurate, as I was not in Committee—to notify the employer of its intent to conduct the ballot.
The noble Viscount told me that it would be possible to unite the two sets of procedures but the Government do not believe that that is appropriate or necessary. One can see the force in that. When a member of a union is bringing an action without anything more, one may well ask how it is possible to tell the union that it must notify the employer, although the threat is of industrial action and there would not necessarily be a difficulty in finding to whom one should give notice.
However, the whole description looks at the problem through the wrong end of the telescope. When the union discusses industrial action, the officers and national executive will not know whether the ultimate challenge to the union is to come from an employer, from a member or indeed—and there are three hoops—from a third party. If we look at the schedule, we end up with three possibilities: requirements that the union must satisfy if it is a union member who pops up as applicant to the court; a further requirement—Section 213A, which is another reason for deleting it— if a third party, perhaps a supplier or a customer, brings an action in tort; and three extra hoops if it is the employer who is party to the dispute.
I must admit that the force of that has struck me only since I began to look at the matter in Committee. That situation cannot be right. Let us suppose that one is advising the union, what should one say? One must advise the union that it should go through all the hoops in case it is the employer who launches an interlocutory injunction action in the High Court. One must give that advice. One cannot depend upon it being a member's action where the requirements would be lower, or action by a third party where they would be in the middle.
My amendment would get rid of only one of the oddities. But it is an essential one so far as concerns the third party; namely, Section 231A whereby notice to the employer is a required hurdle when the third party brings an action in the High Court. However, in a sense, it is also to put the Government on notice that, if the Bill is passed in its present form, they should come clean and say that in every case the union
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will have to do what in practice it will have to do—that is, give all the notices to the employer in issue when it is contemplating industrial action.
The Minister must try to put himself in the position of advisers and union officials trying to comply with the law. If you are trying to comply with the law, you will have to tell people to go through the largest number of hoops. Therefore, although the matter is rather technical to begin with—I fully appreciate and acknowledge that further amendment would be needed—if the amendment were accepted, in spirit at any rate, the Government would be able to come back perfectly properly on Third Reading and discover something. That is what Third Reading is for. They could return and say, "Well, we do intend that everyone must go through all the hoops and so we will put it clearly". Alternatively, they could say that that is not their intention and make it clear why there is some division or unify the matter downwards, which would be the preferable arrangement. I apologise for sometimes putting the matter in a technical way. The simple question is: will the Government try to make this last-ditch attempt to recapture the unity of procedure in all types of ballot for industrial action no matter who is the applicant or plaintiff? I beg to move.
Baroness Turner of Camden: My Lords, I support the remarks made by my noble friend on this extremely complicated and difficult matter. I believe that he has flagged up the difficulties of those advising unions about these legislative quagmires who, if the Government do not do something about amending this part of the Bill, will have to say to people, "You have to go through all the hoops and take all the hurdles if you are to remain safe and preserve immunity". That was probably not what was intended in the first place. I should be most grateful if the Government would agree to look further at the matter, as suggested by my noble friend. I hope that they will perhaps return with something a little different on Third Reading. I await with interest to hear what the Minister has to say.
Viscount Ullswater: My Lords, the substantive effect of the amendment, in combination with Amendments Nos. 101 and 102, would be to remove the sanction for a union's failure to take the steps required to notify details of an industrial action ballot result to employers. I am sure that the noble Lord, Lord Wedderburn, will recognise, therefore, that it is perhaps unacceptable to government.
I am grateful to the noble Lord for the words he used as regards the points he raised in Committee which it would appear I did not answer at that stage. I sought to address them by way of letter to the noble Lord. I am glad that he found the letter helpful. I believe that it sets out the Government's position. I recognise that the amendment that the noble Lord moved would produce a certain symmetry of requirements, if I may put it that way. It would be equally possible to do that by giving union members the right to restrain unballoted calls for industrial action by their union where the union had failed to

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take the steps required under the new Section 231A of the 1992 Act, which would be inserted into that Act by Clause 18.
As I mentioned, I wrote to the noble Lord, Lord Wedderburn, to explain that, in our view, it is neither appropriate nor necessary to allow union members to bring proceedings under the statutory right set out in Section 62 of the 1992 Act on the grounds that their union has failed to provide details of a ballot result to an employer.
The requirement to provide ballot result details to employers is a new one. The noble Lord is right to draw our attention to that fact. The law on industrial action balloting has not hitherto required a union to do anything by way of providing information to employers. If there are to be such requirements, there must be a sanction for non-compliance. The appropriate sanction in this case is to remove the statutory immunity that a union would otherwise have to protect it against proceedings in tort. However, the 1991 Green Paper proposal to introduce the requirements did not suggest that they should also apply so as to enable a union member to bring proceedings under the provisions of Section 62. We see no need to give union members a sanction to operate in respect of those particular requirements.
The noble Lord also asked why we are proposing the different arrangements in respect of which employers could bring proceedings in tort because of denial of the new notice requirements, and those who could do so because of failure by a union to supply ballot result details to a particular employer. Again, it is true that we have adopted a different approach in respect of a failure to satisfy the requirements for provision of notice of intent to ballot and intent to organise industrial action. However, those are entirely new requirements which do not have any relationship to existing law such as exists with respect to the provisions of the new Section 213A and the present Section 231. Moreover, the notice requirements have been constructed with the purpose of providing information to employers about likely events affecting their own employees. The ballot result requirements do not necessarily work in the same way. A single ballot can cover more than one employer's workers if that is the choice of the union and the union itself would have to accept the consequences of its decision as to the scope of the ballot.
The noble Lord and the noble Baroness, Lady Turner, asked what advice should be given to unions and stated that it should be the duty of government to provide advice in those circumstances. We say that the unions would be well advised to abide by all aspects of the requirements on industrial action. There is no harm in reiterating that fact. We believe that the requirements are there for a proper purpose. We intend that they should apply. Indeed, we have put in the statute what we consider to be the proper—and only the proper—sanctions for non-compliance.
I hope that the explanation I have given as to why the presently proposed provisions should remain as they are will satisfy the noble Lord. I can see from the
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way that he is shaking his head that I have probably not persuaded him. Nevertheless, I hope that he will feel able to withdraw the amendment.
Lord Wedderburn of Charlton: My Lords, the Minister has tried to convince me. Of course, I accept what he says and that the best thing to do is to abide by the law. But what I am trying to tell him, the Government, my noble friends and the rest of your Lordships is that it is very hard to know what you have to do to abide by the law as it stands. It is just not fair to put this to people pretending that there are three options when in fact there is only one. The law should not do that; good law never does. Good law is open and straightforward.
I beg the Minister to try and find his way through the schedule and tell us what he would advise people to do. In his reply, he dealt with two possibilities; namely, that the procedure is different where a union member complains than it is where the employer is the plaintiff or complains. However, I shall put that argument to one side. Let us suppose that I accept that it will be a different series of hoops for union members. I do not really believe in that; but, all right. There are not just two possibilities; there are three. The Minister speaks of multi-employer disputes in relation to new Sections 226, 226A and 234A where notices have to be given. But if you have a multi-employer situation, there may be some disagreement about who is a party to the dispute and who is not. That is regular run-of-the-mill stuff. Therefore, some of the companies—perhaps even some of the subsidiary companies—may turn out to be suppliers and customers, as happened in Wapping where all sorts of companies had inter-linked functions.
Some companies will be party to the dispute as employers. They would fall under the area of the most hoops. I am sure that the Minister will understand—I think that he agrees because he is nodding his head—that there are people in the middle who may or may not be associated companies. They may have an action in tort if, for example, their supplies are cut off and the union has done something tortious. The union will then try to say, "Oh well this is supported by immunity". But it is supported by immunity only if it has the support of the ballot. That is why the support of the ballot is absolutely crucial.
I really am trying to persuade the Minister to look at this again before Third Reading, or at least tell us what he really means on Third Reading. It is the third party in the middle who is in many ways crucial to my argument now, having put aside the union member. If you are trying to advise a union and you say, "You have come to me because you want to abide by the law", what you will have to say to a union in that situation now on the basis of the Bill can only be, "You had better satisfy the most cumbersome and difficult conditions that can possibly be thought of under the schedule and go through all of that because otherwise you are not safe".
I am grateful to the Minister for having written to me to confirm that there are different layers in this matter. The matter we are discussing constitutes a major change in the procedure of trade disputes. My radical friends would point out to me that this is the

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one area where unions have negotiated the matter successfully. Most unions have learnt how to satisfy the requirements of the procedures of the ballot largely because the procedures required are not unreasonable. I do not believe I have attacked any of them. However, now new procedures are being introduced. The Minister rightly says that the procedures will be introduced under a new set of requirements which will create enormous difficulties for unions in multi-employer disputes.
It is rather unsatisfactory that this matter should have to be dug out of the schedule. I say that advisedly. This is a matter of sufficient seriousness to justify its inclusion in the clauses of the Bill. Now that the matter has been dug out, the Minister has not addressed himself to the three types of situation I have mentioned. I have addressed the "Yes or No" issue as regards an injunction being issued against the union in a perfectly normal situation. If the union loses the support of the ballot it will have lost its trade dispute, its immunity, its protection and everything, whoever the plaintiff may be. Nothing could be more central to the law than this point. I hope that the Government will at least tell us a little more about their intentions on Third Reading.
8.30 p.m.
Viscount Ullswater: My Lords, with the leave of the House—
Baroness Seear: My Lords, I do not pretend that I fully understand everything the noble Lord, Lord Wedderburn, has said. However, I am absolutely persuaded that there is an important issue here and that it is not clear.
Viscount Ullswater: My Lords, I believe it is Report stage and I have spoken. It is up to the mover to speak. I wished to say before the noble Lord sat down—I am turning the tables here—that I might like to clarify a point but—
Lord Wedderburn of Charlton: My Lords, perhaps the noble Viscount might like to ask me a question before I sit down.
Baroness Seear: My Lords, I am persuaded that this is important, complicated and not well understood. No one can wish to have legislation in this field that is complicated and not well understood. I strongly support the noble Lord, Lord Wedderburn, when he begs the Minister to return at the next stage of the Bill with a clarification of this matter.
Viscount Ullswater: My Lords, I feel like Magnus Magnusson in that I have started so I shall go on, with the leave of the House. I hope I can clarify something the noble Lord, Lord Wedderburn, said because he rather took me to task for dealing only with two of the three pillars to which he referred. I hope I may put this matter in another context of the citizen's right that we shall address in another instance. It is quite correct that a union's failure to take the steps to provide ballot result details to an employer could provide the grounds for proceedings under the new citizen's right. The noble Lord shakes his head because I believe he
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feels that that was not a matter addressed in the three pillars he discussed. However, I believe my point is quite justifiable. It appears that I have not elucidated anything for the noble Lord and I shall leave him to decide what to do with his amendment.
Lord Wedderburn of Charlton: My Lords, I have no option but to withdraw the amendment in the hope that the noble Viscount will wake up tomorrow in a much more positive mood as regards his intentions on this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 20:
Page 31, line 29, leave out from ("describing") to first ("the") in line 30 and insert ("(so that he can ascertain their category or categories and approximate number)").
The noble Lord said: I shall have to do this unseen as it were. This amendment is less complex, less difficult and concerns territory that is better known than the previous amendment. I can therefore deal with it briefly. We on this side of the House have always been slightly shocked by the way in which the notice that the union is required to give, first, of who is to vote and, secondly, of who is to take part in industrial action, has been expressed. It has been expressed in a way which could be said to cause the union to finger its members—as I put it in Committee —and hold them out to the employer in such a manner that various forms of victimisation might well be practised. I believe that this feeling extends beyond noble Lords on these Benches. It has never been denied that, although there is some protection against some forms of victimisation in the workplace, there will never be a system of law that can rule that out completely.
In another place the Government said that the employer must know who is taking part in the proceedings and know their identities. The Government later withdrew the word "identities" and since then there has been a common semantic form relating to the two types of notice to be given. The Bill states that the union must describe the members who are about to take part in the proceedings so that the employer can readily ascertain who they are.
In Committee we tried to soften that provision. I tried to persuade the Government to accept an estimate of the numbers who are to take part in any proceedings. I would not accept this provision in any form, but we have to accept the Government's logic and see what we can do with it. The Government's logic has always been that the employer needs to know this information, although they have always been somewhat coy about why he needs to know.
I thought that it would be acceptable to the Government if the employer were given an estimate of the numbers of people who are to take part in any proceedings. However, that was not acceptable to the Government in Committee. I speak also to Amendment No. 22 which concerns this issue. I have tried to persuade the Government that a union should only have to describe the members so that the employer can ascertain their category or categories

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and also their approximate number. I believe that my amendments go a long way towards meeting the Government's position but they stop short of naming people.
The Government have always said that they are against names and addresses being given in the ordinary way, although they have not been wholly firm on that position. I believe it is now time for the Government to adopt a firm position on the giving of names and addresses. That matter is also addressed in Amendment No. 21. I hope the Government will take a softer line on this issue and will not oblige unions to point out the members who are to take action. Most systems of industrial relations law, certainly on the Continent, would regard that as a violation of civil liberties, and in most cases a violation of constitutional rights. I know of no system of democratic industrial relations law where the union is required to name or indeed to point to the members who are to take action.
I hope that the Government will reconsider this matter if they wish to achieve reasonable industrial relations. The Government do not appear to want trade unions, but they will have them in any case. If the Government wish to achieve reasonable industrial relations, they should not put the officials of unions in a position where they will be regarded by their members as playing the employers' part in a dispute and, worse than that, of being some form of quisling offering them as hostages to the employer if he happens to be a person who is prone to victimisation. I thank heaven that not all employers are prone to victimisation. This amendment concerns the matter of names. I am asking the Government whether they will consider softening their stance as regards the harsh drafting of the Bill at present. I beg to move.
Baroness Turner of Camden: My Lords, I rise to support the amendment moved by my noble friend. It will be recalled that in Committee we on this side of the House expressed our concern about the wording in the Bill because it could be held to mean that the union would have to provide names and addresses of members to employers in the event of a ballot on strike action. Indeed, in Committee the Minister did not deny that that could sometimes be the situation.
Similar wording occurs later in the Bill where a similar duty is laid upon the union in regard to members who, following a ballot in favour of action, are to be called out on strike. As my noble friend said, the matter has been the subject of discussion not only in your Lordships' House in Committee but also in the other place. We accepted that the Government intended in the Bill that the employer should know the size and part of the workforce likely to be involved in industrial action and about to be balloted. In the other place there was a clear indication that the Government did not expect the wording of this part of the Bill to force unions into the position of having to give the names of their members.
My noble friend's amendment makes that quite clear. Under the terms of his amendment enough information is to be supplied to the employer to enable him to know the category or categories of employee involved and their approximate number. Surely that is
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all he needs to know. I question why he needs to know that. If he needs to know anything he surely cannot need to know more than that. If he needs to know more than that, for what purpose? Unions are very concerned lest it opens the door to intimidation. As we know, that can be exercised in very subtle and not always obvious ways.
It seems to me that the wording of my noble friend's amendment would meet the concerns which we expressed previously, and which I gained the impression were shared widely among your Lordships, about possible breaches of confidentiality in regard to the names and addresses of members held by unions. I therefore hope that the Minister will feel disposed to accept this alternative wording.
Lord Rochester: My Lords, in Committee I said that the requirement in both Clauses 17 and 20 that a trade union should so describe employees to an employer that their identities could readily be ascertained amounted to an unreasonable breach of confidentiality. In reply, the noble Viscount, Lord Ullswater, reminded me that I had often spoken of my regard for the Institute of Personnel Management and that in its comments on the Bill the IPM had said:
"In so far as a ballot is used to ascertain an individual's opinion with regard to possible industrial action — the Institute supports the proposal that employers:- should be informed of the intention to hold a ballot, the workers involved, the questions put, and the voting procedure".—[Official Report, 18/3/93; Col. 1666].
I have not since checked that particular point with the institute, but those words do not seem to me to imply that information concerning the employees involved should extend to naming them individually.
However that may be, I continue to be troubled about the matter. As the noble Lord, Lord Wedderburn, has already said, in Committee various attempts were made to find a formula to meet the situation that was acceptable to the noble Lord and me and other noble Lords on this side of the House and also to the Government. The Minister will recall that in response he said that he would consider carefully what should be done. In the amendment yet another attempt has been made to find a satisfactory solution to the problem. I hope, therefore, that the noble Viscount will treat it positively and either accept it, or, if he cannot do that, at least agree to come forward at Third Reading with a government amendment that will relieve us of our anxieties on this matter.
8.45 p.m.
Baroness Seear: My Lords, I hope that the noble Viscount will accept the amendment, but, if he does not, will he tell us why he thinks the employer needs names and what he thinks the employer will do with the names? We need an answer to those two questions.
Viscount Ullswater: My Lords, as I said during the Committee stage debate—for example, in response to Amendment No. 87—we believe that employers should be entitled to notice telling them which of their workers are likely to be involved either in a ballot on industrial action or in official industrial action.

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I note that Amendments Nos. 20 and 22 refer to a description being provided of the "category or categories" of employee. In the Committee stage discussion of Amendment No. 87 I, too, referred to categories. On that occasion I said:
"If giving the categories is sufficient to enable the employer readily to ascertain the employees, then it will be enough to give categories. The vital point is whether the description is sufficient to enable the employer readily to ascertain the employees".—[Official Report, 25/3/93; col. 471.]
In the same debate, I also explained why we believe it is right, in a situation of prospective industrial action being organised against him, for an employer to have a right to information that can help him to protect his business. I have to accept that noble Lords opposite may not share our views about the propriety of the steps which an employer could take with that aim in mind.
To answer the noble Baroness, Lady Seear, as I said then, and repeat now, the Government believe that prospective industrial action creates special circumstances in the employment relationship. When threatened with either an industrial action ballot, or industrial action itself, an employer should be able to respond as he judges appropriate.
If he wishes to put his side of the case against approving the industrial action in a ballot, for example, an employer may need to know which of his workers will be involved in that ballot. Similarly, if he knows that certain workers will be called on to take official industrial action, the employer may want to put to them his arguments against doing so.
Even if he does not wish to do that, the employer will certainly want to take steps to minimise the disruption which the prospective industrial action could cause. He will, therefore, need to know which of his employees are likely to be involved. That is why employers need the right to the kind of notice details provided for in new Sections 226A and 234A.
I listened very closely to the noble Lord, Lord Rochester, as I did previously in Committee, and considered his words very carefully. However, if the description the union has given is sufficient to satisfy the notice details required it would be under no obligation to provide anything more detailed.
To summarise, therefore, there is no reason to suggest that employers would have a right other than in the most exceptional circumstances, to insist on the provision of names as part of a notice. I daresay we shall be dealing further with that matter in the next series of amendments.
I appreciate the strength of feeling which has prompted so many amendments relating to this particular issue. I can assure your Lordships that we have given full consideration to all the arguments put to us during Committee stage and also in another place. We remain convinced, however, that the provisions in the Bill deliver the right result. They fulfil the proposals which the Government set out in the 1991 Green Paper Industrial Relations in the 1990s. For the reasons I have explained, none of the proposed modifications considered by your Lordships would satisfy that test. Accordingly the Government
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cannot accept the amendment and I hope that I shall have persuaded the noble Lord, Lord Wedderburn, to withdraw it.
Lord McCarthy: My Lords, before the noble Viscount sits down could he say whether it would be accurate to say that the employer only has a right to the names if he cannot find them out for himself? So all this is just a smoke screen. To say that only in one case in 10 or 100 would the names be needed is not to give anything, because, if the employer cannot find out the names in any other way, he can demand the names.
Viscount Ullswater: My Lords, no. I believe that in order to gain the protection afforded by the statutory immunities—that is what we are talking about—the union must comply with certain requirements in law prior to organising industrial action. It is entirely proper that an employer who believes that a union has failed to comply with one or more of those requirements can bring proceedings in court to halt the organisation of industrial action. However, it is also ultimately for the courts to decide whether or not the union has complied with those statutory requirements.
If the union has given sufficient information for the employer to ascertain which workers will be involved in the ballot or the industrial action, the employer has complied with the law. Of course, the test of that compliance has to be eventually in the court. But that does not give the employer the right to demand on each and every occasion the names of those people.
Lord McCarthy: My Lords, is it not the case that the employer will be the man or woman who makes the decision? The union complies with the law if the employer can find out the names. If the employer subsequently comes to court and says, "On this information I could not find out the names", the union will discover that it has broken the law.
Lord Wedderburn of Charlton: My Lords, the Minister is right to believe that the provision gives rise to some feeling. However the amendment is prompted not merely by strength of feeling but by shock that even after dozens of employment Bills we now have a generation of lawmakers with such a poverty of understanding of fundamental individual human rights that they do not see what is wrong with the provisions. That is the fact of the matter. The Government seek a phrase to suit them but one which creates the least possible shock.
The Green Paper to which the Minister made reference referred to the union having to identify which workers or class of workers were to be called upon. That is a fuzzy formula. Surely my noble friend Lord McCarthy is right. The Minister must not take up this formula that "the courts will decide". Of course the courts will decide. But the courts will decide according to what we and another place pass into law. The courts will decide on a formula, unless it is changed from the provision as it now stands, which means that the union can say, "It's the van drivers, or those in this, that or another grade". That formula was often used in another place. It is a convenient description.

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However, the Minister states that if that formula does not work then the union will have to give more personal identification—names, national insurance numbers, or whatever. That is a flagrant breach of personal rights in almost every advanced system of law. Most of those systems recognise that there is a right to strike. The Government do not recognise any such right. To use the phrase of Ministers, which I suspect will be much quoted, "Strike ballots give rise to special circumstances and the employer must be allowed to respond".
I shall not trespass further on the amendment to be moved by my noble friend. I have gone further than I wished in seeking to provide a reasonable formula. Workers and others will have to make their own conclusion from the Government's provisions in the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Turner of Camden Baroness Turner of Camden moved Amendment No. 21:
Page 31, line 33, at end insert:
("( ) Nothing in this section shall be taken to impose a statutory duty upon the union to provide names and addresses (held in confidence) to the employer or agent of the employer.").
The noble Baroness said: My Lords, when the issue was discussed in Committee, I stressed, as has the noble Lord, Lord Wedderburn, the total unacceptability of a provision in a Bill by which a trade union would be compelled to "finger" —in other words, to name—its members to an employer. When the matter was debated in Committee in another place, there seemed to be an understanding of that viewpoint by the Government at that stage. However, despite what the Minister said today, there is nothing on the face of the Bill that I can see to prevent a union being forced into the position of having to provide names both in regard to those about to be balloted, as in this clause, and those who will receive a strike call. That is referred to in Amendment No. 23. In moving Amendment No. 21, I speak also to Amendment No. 23. I believe that that is entirely unsatisfactory.
I am anxious, too, for another reason. Every union has members on its register who do not wish their employers to know that they are union members. They may have been long-time members who have been promoted into a supervisory or lower level managerial appointment. They still retain their loyalty to the union. They may not attend meetings but they follow what happens within the union.
Those members may come off the check-off arrangements. Despite what the noble Baroness said earlier, they still remain members although they have come off the check-off arrangement. They pay their union subscriptions direct by annual cheque or banker's order. That is a common situation. Those members have as much right as other members to be involved in any ballot that may be held. Ironically they are the union members most likely to oppose strike action. But they are entitled to keep their union membership private.
Unless the Bill is amended it will be open to an employer to insist that names be provided. The
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Minister may claim, as he did earlier, that the situation would be most unusual: that it would arise in only the most exceptional circumstances. Nevertheless, it has to be admitted that unless there is an amendment to the Bill that possibility exists. That being the case, I hope that the Minister will agree that there are real worries and that he will be prepared to accept my amendments.
Amendment No. 23 covers the same ground, perhaps even more importantly. It deals with the situation at the point at which people are being called upon to participate in strike action following a ballot in which the majority voted in favour of action. I believe that there is scope for intimidation. As we indicated earlier, that can be in the most subtle forms. It is not necessarily the action by an employer against which an employee would have any immediate redress. It would be a total disincentive to those people —they wish to retain their membership but nevertheless do not wish their employers to know about it—to maintain their connection with their union. They may very much wish to retain their membership. Unless the amendment is accepted by the Minister, or a similar provision put into the Bill, people who have accepted promotion but who nevertheless wish to retain their union membership will feel dubious about continuing to do so and unhappy on that account. I beg to move.
Lord Rochester: My Lords, the noble Baroness has spoken to the amendment from a background of knowledge and experience which must be unrivalled in this House. I suggest that it is for the House to respect that expertise. She has explained, certainly to my satisfaction, how circumstances can and do arise in which a union member who may have been promoted to management or supervisory status decides to continue in membership of a union but does not wish that fact to be known to the employer. He therefore asks that his name and address be held in confidence.
In such circumstances, I hope that the noble Viscount, Lord Ullswater, will accept that the union should not be obliged to betray that confidence. Unless the clause is altered in a way such as the noble Baroness suggests, that is exactly what could happen.
Lord Wedderburn of Charlton: My Lords, should the Minister be minded to resist the highly reasonable amendment of my noble friend on the Front Bench, I ask him how the Bill would work without it in this respect. A union has used all the necessary procedures internally to consider a ballot on industrial action. Let us refer to a strike. The union gives notice to the employer and gives a specimen ballot paper. Let us take the example that the Government have taken throughout the debates in another place. The notice to the employer states that it will involve all the van drivers. The ballot is held and there is an enormous majority. The union is about to give notice to the employer that it is going to call on all the van drivers to come out on strike according to the ballot. It says, to use the words of the clause, that these are the persons which it,
"intends to induce or has induced".

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to come out. Tom, who is a long-term member of the union and a van driver says, "I'm not going on strike. Don't you dare give my name". What does the union do?
9 p.m.
Viscount Ullswater: My Lords, as I have already said we believe that employers should be entitled to notice telling them which of their workers are likely to be involved either in a ballot on industrial action or in official industrial action.
At Committee stage during discussions on Amendment No. 74, with which an amendment similar to this one was grouped, I also accepted that present provisions do not remove the possibility, however remote, that a union might have to supply names— and only the names—to an employer if that were the only means of satisfying the notice requirements.
So far as the industrial action balloting requirements are concerned, the Government recognise that the nature of the process means that a union's membership register may not have the significance which applies in respect of other kinds of union ballot. So, for example, the scrutineer for an industrial action ballot will not have the same rights of access to a union's membership register as is to be available to scrutineers of other ballots. That difference reflects reality. Industrial action balloting is different from other kinds of union balloting. And it is because of those differences that we believe the concerns underlying the amendments are misplaced.
In a situation where industrial action is in prospect, a union will be contemplating calling upon workers to take industrial action against their employer. If an employee takes industrial action, it is a fair assumption that the employer will be aware of that. It follows that, at that stage, the employer would know whether an individual was responding to the union's call for action, and that the individual was prepared to be identified as doing so.
In contrast to other ballots, where those entitled to vote will be either the whole of the union's membership, or that part which is electing a particular national official, it is the union's choice whether to call on any members to take industrial action, or to enter into the balloting process that can afford it the protection of the law for organising action by them. The union makes its choice about who is to be involved when determining who is to be given entitlement to vote in the industrial action ballot. That ballot has a special effect. It can afford the union special protection against proceedings which could otherwise be brought against it for calling on workers to take industrial action against their employer.
We believe that where a union decides to seek that protection and to organise such action, it must be prepared to provide the employer with sufficient details of those it intends to call on to take action, so that the employer can readily ascertain those who might be involved. Without this, the employer may not be able to respond, as he ought to be able to do, to protect the interests of his business.
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The noble Lord, Lord Wedderburn, asked me about a specific point; namely, a situation where all the van drivers had been called upon through a ballot to take industrial action and that that notice of industrial action was to be given to the employer. He said (in his own words) that it would be quite reasonable for the employer to understand who was to take part in the ballot and who was to take part in the action. He specified all the van drivers. I believe he quoted that Tom did not want his name to be given. Of course, there would not be any requirement to give names because he specified all the van drivers.
Let us however take another hypothesis, say, that of the weekend relief drivers. They may be on a rota system. Therefore it would be impossible and it may be difficult for the union to give any names of those sorts of people. Therefore it would be quite proper for it to give the class or the group so that the employer should readily ascertain who it is that he will call on during strike action.
I believe that—
Lord Wedderburn of Charlton: My Lords, I am grateful to the noble Viscount for giving way. He gives a rather important example, I suspect. Will he clarify his answer to that question? Here we have an employer who is told that some of the relief drivers will come out. How does the union do that? If they are all part-time relief drivers, must he be given enough information about the more radical relief drivers to hire only the part-time non-radical relief drivers? Is that how it will work—as a matter of strike breaking?
Viscount Ullswater: No, my Lords. I was pointing to an example in which I believe the circumstances of being able to provide names would not be helpful to the employer. So far as the notice to the employer is concerned, I am sure that a court would rule that if those drivers were in this instance to be called upon to take strike action, it would be quite proper for it to be given in that way. But the trouble about any hypothesis is that the circumstances have to he rather detailed. I was trying to be helpful to the House rather than perhaps to be very specific.
Baroness Seear: My Lords, does the noble Viscount recognise that in what he says, and in the kind of legislation he now wishes to get through, he is biasing the strike action in favour of the employer in every way that he possibly can, and that that is tantamount to denying an effective right to strike? If the employer is to be aided to do everything he can to bring in what in old-fashioned language used to be called "scabs" —that may not be a very appropriate name, but that is what they would have been called—he makes it as difficult as he can for the union to win in a dispute with the employers. We had better get it on the record that the Government are determined to bias an industrial dispute in favour of the employer.
Viscount Ullswater: My Lords, I listened very carefully to the words of the noble Baroness. But I feel that from the Government's side I should say this. We consider industrial action to be very serious indeed. Therefore it is very important for the economy of the country for the employer's company or firm to be able

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to take action to prevent consequences which he may not be able to predict if some of his workforce are induced to take action. We must remember that that inducement will then be covered by the protection of law, if it is done in a correct manner. We are talking about breaking contracts and in particular employment contracts. These are very serious matters. I do not feel that the noble Baroness takes on board the seriousness to a company of the effects of industrial action or of breaking an employment contract, as is shown by our intentions in the Bill.
Baroness Seear: My Lords, I accept that this is a Report stage, but the noble Viscount did not put the point directly to me. I am very well aware that strike action can be very disruptive. However, the Government fail to understand that the right to withdraw one's labour in certain circumstances is a fundamental right. The development of the economy is of very great importance, but there are other rights which are also of very great importance. We come back to what we have said during debates on this Bill. The Government are determined to destroy collective bargaining. They will not achieve a successful industrial system unless they have a good system of industrial relations. That is what they are destroying. This will not help the economy. It will do the greatest damage to it.
Lord McCarthy: My Lords, would it be fair to say that the Minister is saying that industrial action is so serious and so vital that, so far as the Government can ensure it, it must be done away with?
Viscount Ullswater: No, my Lords. Those words rather sting me. I do not believe that that is what the Government have been trying to do in this or any other Bill. I believe that the present peacefulness of industrial relations indicates the success of some of our legislation. However, we need to create a balance. I believe that the balance we have created is right. I have to admit that obviously that balance is not the balance that the noble Baroness and the noble Lords opposite consider to be right. I think that we have to leave the matter there. I hope that the noble Baroness will withdraw her amendment.
Baroness Turner of Camden: My Lords, I am disappointed at the Minister's response to what I thought were very reasonable amendments. In this Bill the unions have to give notification or information twice to the employer: at the point of carrying out the ballot and at the point of calling out people on strike. All members in that situation, perhaps in a particular company, may be entitled to be included in both those ballots, irrespective of their position on the staff of the company. There are many companies, particularly those with single union agreements, where the entire workforce, from people in very modest positions right up to middle levels of management, are members of the union. Under the union's rules all might be entitled to vote. But that does not mean that all those individuals should be in a position where their names could be given to the employer if the employer insisted that he did not have enough information to satisfy his
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rights under the legislation and he needed to know everybody's names. So far as I can see, from what the Minister said, that would mean that the names would have to be given. I think that that is a fundamental breach of privacy and of human rights. I agree with the noble Baroness, Lady Seear. The Bill weighs the odds against the union very heavily indeed.
The Minister spoke about striking a balance. I do not know whether that means that the balance has now been struck, so that we will not have any more legislation. One would hope that perhaps that might be the case. Or perhaps they will do away with some of the legislation that we already have. Certainly it does not seem to us on this side of the House to be very balanced legislation. It seems that every piece of legislation that we have had from the Government, including this one, introduces fresh hurdles that the union has to surmount in order to retain immunity.
In this instance, the hurdle that the unions have been given to overcome is that they are being put in the position of having to give the names of people who have asked that their names be treated in confidence. That is entirely unacceptable. It is so unacceptable that, although we have only one more chance on this Bill at Third Reading—
Lord Tordoff: My Lords, perhaps the noble Baroness will give way. I wonder whether it is possible that she anticipates the Government changing the electoral law so that people will have to give their names and show which way they have voted on matters. We are moving in that direction, are we not?
Baroness Turner of Camden: That is always a possibility, my Lords. One never knows what the Government will do next.
Lord Wedderburn of Charlton: My Lords, will my noble friend also bear in mind that precedents have established that the union does not have the authority to advance personal notices in relation to individual employees, even if they are members, without express authority. Presumably, by implication, this wretched clause tries to overcome that barrier as well.
Baroness Turner of Camden: My Lords, my noble friend makes an important point. In other words, the union is placed in difficulties with its members—difficulties in which it does not want to be placed. For example, the members would quite rightly maintain that their names and addresses were held in confidence by the union; that they had said to the union that they did not want to be part of check-off but wanted to pay subscriptions direct and their names and addresses were to be retained in confidence in the union's records.
The Government's attitude to the extremely modest suggestions contained in Amendments Nos. 20 and 21, is disturbing in that they have not seen what we are trying to do. We are trying to protect individual rights. The Government talk of individual rights of union members and on this side of the House we are trying to protect the individual's right to privacy. It is highly unacceptable. Although I shall not press the matter to a vote this evening, I feel so strongly about it that I shall have to consider whether there is anything

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further that I can do when the Bill comes before your Lordships at Third Reading. In the meantime, I regret to say that I have no alternative but to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20 [Notice of industrial action for employers]:
[Amendments Nos. 22 and 23 not moved.]
9.15 p.m.
Clause 21 [Industrial action affecting supply of goods or services to an individual]:
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 24:
Page 36, line 29, after ("individual") insert ("who falls within the scope of subsection (IA)").
The noble Lord said: My Lords, Amendment No. 24 opens the unhappy world of Clause 21. It has already been criticised as a clause because the liabilities it creates are too wide. As we saw in Committee they apply to a situation where the applicant has no entitlement to any goods or services; where he has suffered no damage; where the deprivation he suffered is so difficult to describe that Ministers in Committee found it impossible to give us a clear example of the limits of the liability.
It is a wide liability, but we have not looked at the question of the plaintiff. Perhaps that is the fault of some of us who have described the applicant or plaintiff as "Disgusted of Tunbridge Wells", because that conjures up a picture. But perhaps we have not done justice to it because that is the way the Government, in their rhetoric, invited us to look at the clause. The amendment seeks to redress the situation by saying that the individual to which the clause applies should be understood in the context that government spokesmen have so far described.
That is to say, in another place the Government's description of the clause with the new wide liability and the order of the court being anything in its discretion it can apply, was for an individual, especially for individuals who were to be the recipients of the Citizen's Charter where unlawful action had not been restrained by proceedings brought by an employer or by a union member.
That description illustrates the way in which the Government presented it to us as an alternative remedy. At col. 270 on 15th December last the Minister of State in another place said,
"We are giving the citizen who suffers a loss as a result of unlawful action the right to go to court to seek an order to bring it to an end. If an employer had already taken that step, that right would clearly be redundant. There may be occasions, however, when an employer does not act and citizens suffer inconvenience. In that event, the provisions in [what was then] Clause 19 would come into effect, and quite right, too. Why should citizens be inconvenienced because a gutless and spineless employer fails to see a remedy for unlawful action which results in loss?"
I do not know what the CBI would think of that description of employers. What it makes clear is that it is an alternative remedy where the employer does not act and the customer does not act.
The Minister also said at col. 271,
"We must think. however, about what is likely to happen in the circumstances most likely to arise. It would be
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comparatively unusual for the company concerned not to take action … it would be unusual for the employer not to take action".
The noble Baroness, Lady Denton, in Committee in your Lordships' House at col. 488, also spoke of the clause as being one which would,
"afford protection to all individuals affected by any unlawfully organised industrial action".
She went on to say,
"We believe that it is right in principle that individual citizens should be able to bring proceedings to halt the organisation of unlawful industrial action where that results in their being deprived of any goods or services … Nor do the new provisions replace existing rights provided to employers and trade union members, who are already able to bring proceedings to halt unlawfully organised industrial action".
From that and a fuller examination of the debates one gets a very clear picture that the Government are saying that there are remedies for the union member —we looked at those during the consideration of a previous amendment—to go to court where there is not a proper ballot and there are remedies for the employer. Under the Bill there will be remedies for the employer in a large number of situations unless the union gets through all the necessary hoops correctly. Furthermore, the employer is only one example of companies which have rights of action in tort. They may be customers or suppliers. There are plenty of examples in the Law Reports of companies which are not the employer in dispute, but perhaps associated or other companies, enforcing rights of action for breach of or interference with contract where there is no protection in regard to the immunities in a trade dispute.
The clause as proposed is one that deals with individuals, not those cases. However, when one looks at the clause, it is not drafted in the clearest possible manner to make that interpretation necessarily the only possible construction. Therefore, this amendment says that we must be clear about who this individual is. Certainly the clause as it stands does not tell us exactly the width of "individual". The normal understanding of "individual" would exclude corporate persons. I take it from the speeches that the Government have already made that they would have no objection to paragraph (a) of my modest interpretative amendment which provides that "individual" does not include "a corporate person". The two terms are normally thought of as being disjunctive.
Secondly, under paragraph (b), the individual does not include,
"an employer party to a trade dispute",
whether or not the employer is a corporate person,
"in contemplation or furtherance of which the act has been done or is likely to be done".
That is consequential upon the presentation of the alternative remedy. I did not add some of the other possibilities—for example, a union member—but it may be that the Government will criticise me for not having my drafting perfect. One could add,
"or a union member who has a right of action under Section 62".
In other words, the amendment attempts merely to make clear —heaven knows, those who will have to deal with industrial relations will need to have it made clear—the width of "individual".
I can well understand that some people—it may be that the noble Lord, Lord Mottistone, is among them—will take the view that this is going in exactly the wrong direction; in other words, that it is slimming down the clause to include only "Disgusted of Tunbridge Wells" or some mad-cap plaintiff whom he especially wants to exclude. I can see that, but as the clause stands that is the direction. I am taking the clause as it stands and taking Ministers' speeches as they stand and saying that paragraphs (a) and (b) are necessary as interpretative clarification in the light of those speeches.
Paragraph (c) raises a serious point. I have excluded,
"a person not resident within the European Community".
The traditional way of dealing with this would have been,
"a person not resident in the United Kingdom".
But I was not sure that that was acceptable in terms of Community law these days. It may be that I am wrong but I use this formulation rather than "United Kingdom".
The reason that I raise this point is that the clause is so wide—the plaintiff does not have to show entitlement, damage or practically anything else—that there might well be an applicant who flies across from New York, China or from some other part of the globe—with information technology such an applicant would not have to move his or her person—and makes an application to the court. That may sound fanciful to noble Lords opposite but the law of labour relations is already very international. Therefore, I am asking the Government in paragraph (c) whether they really mean that the individual can be someone anywhere in the world who complains, on a faint basis of deprivation, of some act which turns out to be unlawful in terms of the clause. If one excluded those three areas one would be clearer about what the noble Baroness, Lady Denton, meant on 25th March when she said that the clause should,
"afford protection to all individuals affected by any unlawfully organised industrial action".—[Official Report, 25/3/93; col. 488.]
As an alternative remedy one could understand that. But it is incumbent on the Government, in the face of the amendment, to tell us just how wide they intend to go. If in fact the Government are opposed to paragraph (b) and they intend an employer who is a party to a trade dispute to be able to use Clause 21, then much that we have been discussing is neither here nor there. He will not bother about notices, naming and so on. He will simply go straight to the court under Clause 21 and get an order there. So paragraph (b) is, for the immediate purpose of industrial relations, the most important section of all in the amendment. I hope that the Government will take this seriously and accept that it is in their own interest to get it right. We have passed the stage where we can get rid of Clause 21, which most of us on these Benches would very much like to do. I hope that the Government will have some meaningful discussion as to which individuals and which persons can bring an action under this clause. I beg to move the amendment.
Lord McCarthy: My Lords, I want to support my noble friend on this amendment. It is a classic probing amendment. When I first came to this House I asked the late Lord Ponsonby of Shulbrede if we were allowed to talk during debates and he said, "only if someone is moving a probing amendment". I asked him what that was and he said "one on which we have no intention of dividing".
The fact is that this probing amendment is a highly critical probe. We have talked up to now too much about the coverage of Clause 21, about what it means in terms of no entitlement, no damage, no measurable loss of any kind and so on. We have not talked about the people who are allowed to invoke it. That is what my noble friend is talking about and that is what he is inviting the Government to talk about. What is the extent of the liabilities? Does the ability to invoke this very wide clause, which takes you straight into an injunctive remedy where you have only the lower levels of argument to establish your case at that stage, apply not just to third parties but to everybody else as well, and in particular to employers?
If it does, and if the noble Viscount or the noble Baroness is going to tell us that it does, then I understand why they might tell us they think they have got the right balance. I understand why they might say that they do not need to come back next year to adjust the balance, because this Clause 21 will indeed be a very wide extension of liability, and therefore I hope that this probe goes home.
Baroness Denton of Wakefield: My Lords, I assure the noble Lord, Lord Wedderburn, that I have listened seriously to the arguments he has put forward, supported by the noble Lord, Lord McCarthy. However, I have to say to him, for the reasons which I will now outline, that I cannot accept them. The statements that I made at Committee stage are still totally appropriate.
When taken together, the amendments would have the effect of excluding certain categories of person from the scope of the important new right provided by Clause 21. This would mean in practice that certain persons would be precluded from applying to the court for an order to halt the unlawful organisation of industrial action which deprives them of goods or services. We believe that to preclude such persons in that way would be quite unnecessary.
The key amendment is Amendment No. 25, since this specifies the categories of person who would be excluded from applying to the court for an order under the provisions of Section 235A(1). It may be helpful if I explain why, in each of the cases specified in that amendment, it would be undesirable or unnecessary to deny those groups of persons the chance to put their case to the courts.
Amending the provisions specifically to exclude a "corporate person" is unnecessary. The term "individual", as specified in subsection (1) of Section 235A, is clear. It means exactly what it says—that the person bringing the proceedings must be an individual and must be acting in their capacity as an individual. The courts would not hold a "body corporate" to be an "individual" for the purposes of an application

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under the new right. As the noble Lord indicated, and I have learned, the word "person" includes a corporate body, but the word "individual" does not.
It is of course already the case that employers party to a trade dispute would be able to bring proceedings to halt the unlawful organisation of industrial action under other provisions in law. However, if they do so, they will be bringing those proceedings as an employer and not as an individual. If, however, an employer who is party to a particular dispute is deprived of goods or services as an individual, it is right that he should be able to bring proceedings to halt the unlawful act which so deprived him. In each case, there would be an entirely different basis for an application to the court and it is neither necessary nor desirable to make the kind of distinction which the noble Lord, Lord Wedderburn, attempts in his amendments.
I appreciate the noble Lord's attempts to apply the principles of commonality of rights among EC residents to these provisions by recognising that nationals of our EC partners should be able to bring proceedings under the new right and should not therefore be excluded from the ambit of the new right. I am, however, still unclear why he feels that those outside the EC should not be able to do so, even when unlawfully organised industrial action in the UK deprives them of goods or services.
Today, the world operates on a global stage, and it is possible that those individuals who would suffer from unlawful—and I stress "unlawful"—industrial action were not at the time resident in the Community. Indeed, it could well be that people suffering from the withdrawal of airline services could be stranded outside the Community. We firmly believe that there is no need for any special restriction on the ambit of the right. It is highly unlikely that overseas residents will be deprived of goods or services as a result of unlawful industrial action or, if they are, that they would use the right. But there is no logical reason for preventing them from using it.
The provisions as drafted place the onus firmly on the individual to satisfy the court that he or she has been deprived of goods or services as a result of unlawfully organised industrial action. If an individual is deprived of goods or services as set out in the provisions he should be able to use the new right regardless of his status, interest in the dispute, or geographical location. The courts can be expected to act fairly and properly when considering a case before them. The noble Lord, Lord McCarthy, said that this was in the nature of a probing amendment. I hope that the noble Lord, Lord Wedderburn, will feel able to withdraw it.
Lord Wedderburn of Charlton: My Lords, the noble Baroness's answer discloses some important new matter. Of the three categories that my amendment puts forward the new matter is not so much concerning the third category; namely, persons not resident within the European Community. But since she expressed puzzlement as to why I should limit it, I shall tell her that workers can rely on a trade dispute, following amendment of Section 29 of the Trade Union and Labour Relations Act 1974 by this
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Government in 1982, only when the trade dispute matter abroad has an effect within the United Kingdom. There is therefore a perfectly good case for saying that they should not be liable to those outside the United Kingdom, by reason of their being unable to rely upon trade dispute matters that arise only abroad.
I explained to the Minister that I said "European Community" rather than "United Kingdom" because I did not want even the possibility of a clash with European Community law. That is the reason for paragraph (c). I do not believe that she has answered the point in relation to it.
In relation to paragraph (a) and "a corporate person" and paragraph (b) and
"an employer party to a trade dispute",
I accept—and I was very glad to hear that the Minister accepts—that "an individual" does not include in this clause "a corporate person". Therefore, employers who are companies cannot come along with a case for any kind of personal deprivation.
However, the Minister then told us something enormously important—namely, that a non-incorporated employer can come to court as an employer under the provisions relating, for example, to the need for a union to ballot, to give notice and so on, claiming an action in tort. An action alleging that the act done by the defendant is tortious must be one on which he can sue. Let us take an example. If I know that the noble Lord, Lord Rochester—I know that he would not do this—has interfered with and broken a contract with someone else, how and when I could sue on that matter would be questionable since I was not involved in those contracts. Let us suppose that there has been picketing, as in the case involving the South Wales pits in 1985. Mr. Justice Scott, as he then was, held that the plaintiffs who could sue in relation to such picketing were those who were working or were employers or managers in those particular pits—and not everybody else in the country. If the plaintiff comes as an "employer", he is bound by those normal rules of the common law of tort.
However, this particular plaintiff can do something else. As the noble Baroness explained, there is a metamorphosis of this employer into an individual with individual loss and individual deprivation. I had not understood it before, but I do now. It will be very difficult to divide the plaintiff's "employer loss" from his "individual loss" because he is not incorporated but, as an individual, he will now be able to take advantage of Clause 21. The importance of that is that under Clause 21 he does not have to prove that the action done or threatened by the union is tortious as against him. He has to show only that it is liable to give rise to an actionability in tort by any person.
So a small employer who does not incorporate is given a massive addition to his causes of action. We have only just extracted this information after between six and nine months of discussions in Parliament. If that is what the Government intend, surely they must include some clarifying provisions. Indeed, I advise the Minister that she has an obligation to go back to her right honourable and honourable friends and say that this problem has

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arisen. I stress that it has never been mentioned in any speech previously and that it has never before appeared in a brief. The point is that an individual employer is able to sue either as an employer, as the noble Baroness put it, under normal actions in tort and ballots or as an individual in respect of his individual loss under Clause 21—but not if he forms a company. It is a wonderful example of some of the disadvantages of the corporate veil in registering a business as a company.
Although one could easily argue with the government brief in places, that is not the point of this intervention. In withdrawing the amendment, I ask the Government to add a subsection to Clause 21 to stop unnecessary litigation about exactly who can sue, and, with particular relevance to the individual employer, to clarify just when he can and cannot make use of the clause. Surely the trade unions and workers involved deserve at least that, even if some of the lawyers might be sad about such clarification other than in court. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton had given notice of his intention to move Amendment No. 25:
Page 36, line 42, at end insert:
("(1A) For the purposes of this section an "individual" means any person other than—

(a) a corporate person;

(b) an employer party to a trade dispute in contemplation or furtherance of which the act has been done or is likely to be done; and

(c) a person not resident within the European Community.").

The noble Lord said: My Lords, I apologise for not having said when discussing the last amendment that I was taking Amendments Nos. 24 and 25 together. I hope that Amendment No. 25 can be printed, because it is an important amendment, as we shall see.
[Amendment No. 25 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 26:
Page 36, line 46, after ("persons") insert ("by reason of the failure by the union to hold a ballot as required by section 226 of this Act;").
The noble Lord said: My Lords, Amendment No. 26 goes to a much narrower point. It goes to the type of liability, and to one of the two ways in which an applicant under Clause 21 may be able to substantiate his case. It is usually illustrated on both limbs of the liability by the union's failure to hold a proper ballot. We have seen how difficult that may be under some of the preceding amendments. The two limbs—if I may put them in reverse order to the way that the clause puts them—relate, first, to the case where a member of the union might have obtained an order against the union under Section 62 of the consolidation Act, which means by reason of a failure to hold a proper ballot; and, secondly, to the case where the act which is done or threatened is one which is actionable in tort against any person.
The amendment would tie the second of those limbs in with the first by confining it to cases where there was not a proper ballot, as required by Section 226. Section 226 leads on to the division—I am not trying
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to backtrack into the previous argument—so I apprehend that the Government's balloting structure would be secure. But torts outside that would not give rise to liability.
Perhaps I may return to an example that I gave on the last amendment: if there is picketing in a dispute which involves a large number of sites, and on one of the sites in the North-East picketing goes beyond that acceptable under the law, then a range of persons may have a cause of action in the High Court. It is not of course a case where one necessarily discusses trade disputes. I appreciate that under the consolidation Act, as before, if one is picketing at one's own place of work in contemplation or furtherance of a trade dispute, there may be some defence; but, putting that aside, there may well be liability in nuisance or in a number of other types of action in tort. As to nuisance, if one runs up and down the highway to the annoyance and the interference of the person occupying the house, one may be liable for the tort of nuisance.
However, if the pickets have delayed a lorry, and the lorry was late in getting its cargo to a train, and the train was a little late in getting the packages to London, and Mr. and Mrs. Dot in Tunbridge Wells then found that the package that might have come to them was delayed, only it was not coming to them anyway because it was going to their daughter, and so they had no entitlement, that does not matter under Clause 21. All they have to show is that at that one place in the North-East the pickets went off into conduct that was actionable in tort. It was not actionable by them of course. They could not possibly sue for nuisance: they are not frontagers or occupiers of the land nearby, or, indeed, using that highway. But the act itself is in its nature actionable and so all they have to show is that six pickets—or one picket come to that—make for liability in nuisance in the North-East. Then some kind of minimal deprivation, a definition of which we have never managed to obtain from the Government, takes place, and so they can go to the court as applicants. That is sheer Alice in Wonderland. I hope that the Government will not try to show that it is, in substance, incorrect. The details may be wrong: perhaps it should be the South-West rather than the North-East.
It is clear that if there is an act that is tortious against a person—I was going to say anywhere in the United Kingdom, but after the Minister's last reply I am not sure where it might be actionable—one is home. The amendment says that one should not be home if the liability is other than the failure to hold a proper ballot under Section 226. It is that range of liability which has usually been discussed by the Government. To give them their due, they have lined up the two types of liability in discussions; that is to say, the liability where a member of the union can sue because there has not been a ballot, and the liability where an employer can sue because there is a tort which is not protected by a proper strike ballot. All the amendment does is to bring those two into line.
I hope that the Government will take the amendment seriously, even at this late stage. It is a modest amendment. It only asks the Government to

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give up the more outlandish illustrations of what the clause would do, and still leaves them with the substance of the average industrial dispute. I beg to move.
9.45 p.m.
Viscount Ullswater: My Lords, the noble Lord, Lord Wedderburn, has sought to limit the application of the new citizen's right by tabling the amendment. I am sure that he will not be at all surprised to hear me say that we find his amendment totally unacceptable. As currently drafted, the provisions make it clear that an act of inducement will be considered unlawful for the purposes of the exercise of the new right if it is actionable in tort on any grounds. The amendment will provide that such an inducement will be actionable only by reasonable failure to hold a proper ballot, thus limiting the exercise of the new right only to certain kinds of unlawfully organised industrial action. That is a wholly inappropriate distinction to draw.
Indeed, perhaps the noble Lord is trying to suggest in his amendment that certain types of unlawful acts are more serious or more acceptable than others. Is the noble Lord seeking to argue in the example that he gave that unlawful picketing is not serious enough to be unlawful at all?
In introducing the clause we have sought to provide individuals with a new right which affords them additional protection against unlawfully organised industrial action. We believe that it would be quite wrong to amend the provisions in a way which would apply that principle selectively. An individual deprived of goods or services as a result of an unlawful act should have the right of redress regardless of the basis upon which the action is unlawful.
An amendment of the kind suggested by the noble Lord, Lord Wedderburn, would make the provisions extremely difficult to defend to an individual who has been deprived of goods or services as a result of an unlawful act. Could we seriously be expected to tell people who have been deprived of goods or services as a result of an unlawful strike that they had no right to prevent that strike because the only fault was that the union had failed to give seven days' notice to the employer? The point is that, whether the strike call is unlawful or not, the individual will expect to be able to exercise the new right in all cases where industrial action is unlawful and deprives him of goods or services—
Lord Wedderburn of Charlton: My Lords, I am sorry to interrupt, but the issue is important. I am sure that in fairness the Minister will give my proposed amendment the due that it deserves. My amendment suggested that the rights should be limited by a failure to observe Section 226. As amended by the Government in the Bill, Section 226 includes the requirement that an employer be given all the notices under Section 226A. Therefore, the example which the Minister gave of the notice to the employer not being important is a bad example and he was badly advised. The notices will still have to be given because they fall within Section 226, which leads to Section 226A.
Viscount Ullswater: My Lords, I sought to tell the noble Lord that that provision would be effective. I tried to indicate that the noble Lord's amendment would restrict the provision to only one effect, while we are saying that that should not be the case. We say that it should be open to the individual to take the action as I have described.
I have come to the end of the point that I was trying to make. I hope that I have been able to persuade the noble Lord that we seek to give the right to the individual in this way and that we should not seek to use that selectively as he has suggested in the amendment.
Lord Dean of Beswick: My Lords, as a longstanding member of a trade union—
Noble Lords: Order!
Lord Dean of Beswick: My Lords, I wish to ask the Minister a question, if that is in order. I listened to the comments made by my noble friend Lord Wedderburn in moving the amendment and I listened to the Minister's reply. As a former factory trade unionist, not an officer in a trade union, I find the complexities of the Bill and the way in which the provisions affect people on the factory floor somewhat amazing. One could draw a multitude of conclusions. For example, my noble friend Lord Wedderburn referred specifically to the fact that a number of factories may be involved. Some large employers have factories all over the place. If a misdemeanour were committed by one group of people at one factory in a general dispute surrounding those factories—
Lord Mottistone: My Lords, after the Minister has spoken I do not believe that it is appropriate for the noble Lord to start a speech. He said that he was going to ask a question. It is appropriate to ask a question only before the Minister sits down. To go on with what is turning into a long speech is outwith the rules of the House. After the Minister has spoken, only the mover of the amendment should speak.
Lord Dean of Beswick: My Lords, where one factory in a group of factories commits a misdemeanour, are the other factories in that group affected? That question needs to be answered.
Viscount Ullswater: My Lords, with the leave of the House, we are talking about unlawfully organised industrial action. It does not matter where that action takes place, if it is unlawfully organised the citizen has a right under the Bill.
Lord Dean of Beswick: My Lords, that does not answer my question. I spent the latter years of my engineering life working at GEC. There were factories with thousands of employees in different areas. Let us suppose that the workforce in the GEC empire decided to strike. If 14 sites behaved according to the legislation and one did not, would the 14 sites be held responsible for the one which did not comply? If that is so, it flies in the face of traditional trade union law and what the Government are supposed to be trying to achieve.
Viscount Ullswater: My Lords, I should have to be clear about all the circumstances surrounding the scenario which the noble Lord paints. For example, if one ballot was taken at all the sites and the unions failed to tell one of the employers of the intended action, that would be considered to be unlawfully organised industrial action and the citizen's right would prevail.
Lord Wedderburn of Charlton: My Lords, it may be the function of Report stage finally to tease out the extraordinary nature of things. The Minister said that he would not be surprised if I found this to be unacceptable. My noble friends and I have been saying that we are always told at the start of the answer, rather than at the end of the argument, that things are unacceptable.
The Minister is saying that an action which is unlawful, which is organised unlawfully but which is actionable by anybody can form the basis of a successful application to the court by anybody else. I do not believe that the Minister realises what an enormous extension of legal liability that is. It is not matched in any previous legislation. It will be the basis of a number of PhD theses on the rule of law because it clearly flies in the face of an extremely solid and sensible—I almost said liberal—rule; that is, that each rule of law has a clear definition of liability and a clear definition of those who may use it.
Once one reaches the point where, if someone breaks an obligation in law, everyone else in the country has the right to go to court in an advantageous way, one steps across the normal confines of the rule of law and invents a situation. That is well known in the American labour law literature of the 1930s where the labour injunction was used in exactly that way. It was shown that it had become a remedy of public and penal law rather than based upon normal civil relations of parties in a liberal state. It is a very serious thing that the Government are doing here. I hope that it does not keep the Minister awake—or rather, perhaps, I do hope that it keeps him awake. He should think about the matter before Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McCarthy Lord McCarthy moved Amendment No. 27
Page 37, leave out lines 1 to 4.
The noble Lord said: My Lords, I think that at this time of night we may as well presume that we are in fact probing, or teasing out, as my noble friend Lord Wedderburn would say. If one takes account of what the Minister said in response to the very modest attempts to limit the scope of Clause 21, one wonders whether one has any hope of persuading him in the case of a rather more significant attempt to limit the scope of the clause which we have before us in the present amendment. Therefore, perhaps one should begin by asking the Minister to tease out the reasons for the words on the face of the Bill that we are seeking to remove.
The amendment aims to leave out lines 1 to 4 on page 37 of the Bill. It is that part of the clause which says:
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"In determining whether an individual may make an application under this section it is immaterial whether or not the individual is entitled to be supplied with the goods or services in question".
I do not think that the Government have really explained to us—and that is what I am trying to tease out of them—why we have to have those four lines in the Bill. Why are they necessary? It is very unusual in general terms of civil liability to grant redress, compensation or, in this case, an injunction or restrain movement where there is no contract, basis or right on the part of the individual and to go further and say that it is in fact,
"immaterial whether or not the individual is entitled to he supplied with the goods or services in question".
My first question to the Minister is: why precisely do the Government think that they need that unusual provision in the clause? I have always felt that they had British Rail in mind. For example, there I stand on Didcot station. There is no sign of the 9.35, the 10.35 or the 11.35. Because I do not have a contract, I know very well that, when I reach the other end, it does not matter what the ticket says in the small print: you cannot get British Rail for anything. Therefore, the Government say, "Never mind, get the union". That is the idea. It is a kind of vicious man's charter: If you cannot get British Rail, you can get the union.
But there must be something more to it. Why is it necessary to say that it is not material,
"whether or not the individual is entitled to be supplied with the goods or services in question"?
Let us be clear about the issue. Even if we removed the words, there would still be a great deal which is peculiar about Clause 21. We still would not have to have proof of measurable, identifiable or admitted damage. We would still have a situation in which there was a very wide form of liability and where there could be an inducement which was ineffective. We would still have a whole range of peculiarities in the Bill. We are merely asking why the Government require those four lines. I beg to move.
10 p.m.
Lord Rochester: My Lords, I want to support this amendment but before doing so I feel that I should also support what the noble Lord, Lord Mottistone, said earlier and express the hope from these Benches that, in order that we can make progress on the Bill within the normal procedures of the House, noble Lords on all sides of the House will respect the conventions and speak only once on Report. In particular noble Lords should not speak after the Minister has replied to the debate.
The amendment challenges the basic aim of Clause 21 to extend to actual or potential customers the right to take proceedings to restrain unlawful action even though they are not entitled to be supplied with the goods or services in question. It is really difficult for me to add anything of substance to what the noble Lord, Lord McCarthy, has already said in relation to this amendment. I shall therefore simply remind the Government that major employer organisations, including the CBI, are opposed to the clause in its present form, basically because of the damage that maverick individuals can do in thwarting the efforts of

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both management and unions to deal with the sensitive situations that arise in seeking to settle industrial disputes.
Moreover, as I said in Committee, to judge from the comments of the Law Society, lawyers themselves are doubtful about the desirability of introducing the provision, given that remedies already exist for parties to a contract and others suffering actual loss as a result of unlawful industrial action. All I can do is to urge the Government to heed this advice before the clause is implemented by giving further consideration to amendments such as this one, which is aimed at limiting the harm that vexatious litigants can otherwise do to industrial relations and therefore to industrial performance.
Lord Dean of Beswick: My Lords, I find it strange that the noble Lord, Lord Rochester, should express surprise that the Government are completely ignoring the views of the CBI and other people on this particular subject. The Government's main purpose in introducing this Bill has been to ignore the wishes of other people on both sides of the employment and economic fence. The Government ignore anyone who does not hold their political point of view.
Perhaps the noble Lord, Lord Rochester, had the privilege, or perhaps I should say the disprivilege, of watching the interview that took place on television yesterday between the Secretary of State for Education and Mr. Walden. The Secretary of State tried to rubbish a legal verdict that had been reached by three Lords of Appeal in the Court of Appeal. If the noble Lord, Lord Rochester, had watched that interview, he would not be surprised at the Government's behaviour. The Government want to become their own court of law with regard to some of their actions. That position was well illustrated yesterday.
A few years ago the Clay Cross local authority decided to argue with the decision of the courts of the land. The members of that local authority were threatened with imprisonment and some of them were disqualified from standing for public office. Now we have a situation where a Secretary of State can quite outrageously rubbish on television a legal verdict that has been reached by one of the highest courts in the land because the verdict did not suit the Government. Therefore I do not think the noble Lord, Lord Rochester, should be surprised that the Government ignore the CBI or anyone else who is affected by this legislation.
Baroness Denton of Wakefield: My Lords, I start by thanking the noble Lord, Lord Rochester, for drawing our attention to the customs of the House at Report stage. I am sure that everyone will take note of his comments.
I turn my attention to the amendment in front of us. The noble Lord, Lord McCarthy, said he was trying to tease out some matters. My answer will be little different from answers that have already been given during the consideration of the Bill both here and in another place.
In Committee in this House there was considerable discussion on this matter. From the time when this
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new right was first proposed as part of the Government's Citizen's Charter, we have made it clear that its main purpose is to protect those who are affected by unlawfully organised industrial action who are currently unable to protect their interests.
Deprivation can result from unlawfully organised action whether or not there is any legal entitlement to the goods or services in question. That deprivation is just as real even if there is no entitlement, whether under a contract or anything else. That is why it would undermine the right if Section 235A(3) was removed as proposed by the amendment.
I stress again that there is no risk of frivolous or vexations proceedings succeeding under the new right. As the noble Lord, Lord Rochester, will see from the terms of Section 235A(4), a court is to be required to satisfy itself that any claim made under the new right is "well-founded". We believe that that will have the effect of disposing of frivolous applications.
So an individual who claims that an act will or is likely to deprive him or her of goods or services will have to be able to satisfy the court about the matter. We have confidence that the courts will apply that test properly and effectively. Why should anyone want to bring proceedings unless they are, indeed, deprived or at risk of deprivation? After all, the remedy they could obtain is no more than an order halting the unlawful act. To quote the noble Lord, Lord McCarthy, the aim is not to "get" anybody. The individual cannot obtain any financial gain through an award of damages as such a remedy is not available under the right. I suspect that the noble Lord will not be surprised by my answer. I hope that he will draw some reassurance from what I have said.
Lord McCarthy: My Lords, at least we have reached a point of agreement. The noble Baroness said that she would not tell me much, and she did not tell me anything. It is perfectly true that we have been round this course before. I hoped for something better. We were told previously that the right was part of the Citizen's Charter. We must be thankful that we were not told that it was part of the Green Paper. We have heard two arguments: it is part of the Green Paper or it is part of the Citizen's Charter. This time it is part of the Citizen's Charter, and therefore it is justified. The fact that something is in the Citizen's Charter is not a justification, it is a statement that it has been put in the Citizen's Charter. Nothing follows from that.
To say that there can be deprivation without legal entitlement means nothing. I am deprived of going to the Ritz for a free dinner. Unfortunately, I have no entitlement to go to the Ritz for a free dinner. Therefore, normally, outside Clause 21, I have no right to go to the Ritz for a free dinner, but Clause 21 is different because it is part of the Citizen's Charter.
The noble Baroness says that that is all right because it is well-founded. What well-founded means on the face of the Bill is that it is well-founded in terms of the Bill itself. There is no definition of what well-founded means. Well-founded means in effect that even though one does not have a legal entitlement one can allege that one suffers some immaterial,

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immeasurable and unidentifiable deprivation. We do not know what deprivation means in this context. No explanation is offered to us.
Finally, the noble Baroness said that people will not make frivolous complaints because they cannot obtain any compensation. Outside the context of Clause 21 one would think that somebody who took up a case and could obtain no compensation whatever would do so for malicious purposes. That, I suspect, will very often be the case. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 28:
Page 37, line 4, at end insert:
("( ) In determining whether to entertain an application under this section the court shall have regard to whether any other application has been made under this section.").
The noble Lord said: My Lords, I thank the noble Lord, Lord Rochester, and my noble friend Lady Denton for supporting me in my earlier remarks. As a Back-Bencher of some experience, I was sorry to have to bring to the attention of the noble Lord, Lord Dean of Beswick, that he was exceeding the rules of Report stage. As the noble Lord will find from my amendment, I sympathise with what he said. However, he said it at the wrong time; and we have to stick to the rules.
At Committee stage, the amendment was moved in the same form as a probing amendment. I move it again because I was concerned to ensure that an application made under the terms of the clause does not come before several courts in the land at the same time. My noble friend Lady Denton said:
"The courts have existed for years on the basis that they are fully aware of what is going on with regard to proceedings brought before them, particularly duplicate proceedings". [Official Report, 25/3/93; col. 511.]
Noble Lords will know that the CBI advises me. The experience of the CBI is totally at odds with my noble friend's remarks. Following up those remarks, we have checked with the Lord Chancellor's Department. It has confirmed that if applications are lodged in any of the Divisional Courts of the Queen's Bench Division up and down the country, as they will be under citizen's rights, those must of course be accepted. There is no way of checking whether another application has already been made with regard to the same matter. It is clear therefore that without some means of funnelling the applications which seek the one injunction, there will be an unacceptable wastage of public funds and time, not to mention companies' funds and time. There may be many ways of achieving that aim. I know that a number of options have been put to the Government by the legal advisers to the CBI. My amendment is one such option.
My noble friend Lady Denton raised another. point in Committee. She was not aware of any other legislation which expressly required the courts to have regard to whether an application had already been made to it in respect of the same matter. Other Members of the House may wish to comment on other legislation. My point is that no other legislation is
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quite like that which the Government propose in Clause 21. I believe that that statement is in tune with what noble Lords opposite have said.
In most applications before the courts few people will come to the court and say, "I wish to have an injunction with regard to such and such a matter". In most cases perhaps only one or two persons will have the right to seek court action. That is what I believe lawyers call locus standi. In such cases therefore it is obviously of less import for the law expressly to state that the court shall have regard to whether other applications have been made.
With Clause 21 the situation is quite the contrary. Hundreds or thousands of persons might be affected by unlawful industrial action. The noble Lord, Lord McCarthy, referred to British Rail. One can understand that there might be circumstances in that particular affair in which hundreds or thousands of persons might be affected by an unlawful industrial action. Each of those as individuals would have a locus standi to bring individual proceedings for an injunction. As drafted at present, nothing in Clause 21 prevents such an inundation of the courts occurring. That is the point I seek to make with my amendment. That is why this draft legislation is different from other legislation. That is why express wording limiting the duplicating of proceedings is necessary.
I well understand that there may be other and better ways of making such provision. The CBI has suggested one or two to my noble friend's advisers. However, as noble Lords opposite stated at different times and in different ways, nothing in Clause 21 as drafted at present limits the number of actions that could be brought, at great cost to the Crown let alone to companies. Trade unions are only one of the parties involved. Perhaps my noble friend will give special thought to this matter. I believe it is probably for the Government to produce the appropriate amendment to encompass this point.
I shall attack the subject in a slightly different way in my next few amendments. It is all part of the same subject. There is a genuine need for Clause 21 to contain some limitation as to how it can be applied so that we do not get overwhelmed by people taking advantage of what it seeks to do. Though I am fully in support of the principle of giving individuals a chance to have a bash, we do not want all the individuals to have a chance to have a bash. I beg to move.
10.15 p.m.
Lord Rochester: My Lords, I should like very briefly to support the amendment. The noble Lord, Lord Mottistone, has said practically all that can be said in introducing it. For my part, I believe that in this instance the factor that should override all others is the disproportionate industrial disruption that could be brought about by individuals who are not party to the particular trade dispute when negotiations leading towards a settlement may be in an extremely delicate state. If in those circumstances it were known that the courts were under an explicit statutory duty to have regard to whether a duplicate application had been made, I suggest that that might make all the difference in deterring would-be

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trouble-makers from seeking access to the law. I hope that, on reflection, the Government will see fit to accept the amendment.
Lord Wedderburn of Charlton: My Lords, I wonder whether the noble Lord, Lord Mottistone, when he sums up on the amendment, will take that point a little further. If one of the objectives of the amendment —I can see that it may be—is for the court to have some power in relation to large numbers of individuals whom the noble Lord does not want to see in court because they would overwhelm everybody and be a nuisance, does he envisage that the court would have a capacity to deal with the matter by way of costs against the unwelcome individuals whether or not they were supported by the new commissioner?
Baroness Turner of Camden: My Lords, from these Benches I should like to support the amendment moved by the noble Lord, Lord Mottistone, and supported by the noble Lord, Lord Rochester, and, I believe, by my noble friend. Extending the right to sue in the event of unlawful action in the way that this particular part of the Bill does would, in my view, be an open invitation to individuals with a grudge—hence our reference in Committee to "DOT" (Disgusted of Tonbridge). It is, I believe, an invitation to people with a malicious purpose, perhaps egged on—who knows?—by the tabloid press or some sort of political organisation to enter into action under this clause. The amendment by the noble Lord seems designed to deal with some of the dangers that have been posed. Quite clearly it is meant to deal with multiple applications. It seems clear to me that that is a very sensible thing to try to do. To have masses of cases all being dealt with in different courts at the same time would be absolutely chaotic. The courts could be deluged with claims, all of them similar. I wish that we were not going to have this clause. But it seems to me that, if we are to have it, we must have some method by which the courts "shall have regard", as the amendment says, to other applications that have been made under this part. For those reasons I support the amendment.
Viscount Ullswater: My Lords, I have listened carefully to the points which my noble friend Lord Mottistone and the noble Lord, Lord Rochester, put forward in support of this amendment. I am grateful also to my noble friend for giving me advance notice of the specific advice he received from the CBI on this matter. We considered this issue briefly during the Bill's Committee stage. As my noble friend Lady Denton said at the time, the Government believe the amendment to be unnecessary.
My noble friend told your Lordships that it was the established practice for the courts to proceed on the basis that they were fully aware of all proceedings brought before them, particularly with regard to duplicate proceedings. As she also made clear, we are not aware of any other legislation which expressly states that the courts should have regard to whether or not an application has been made in respect of the same matter. It would be a matter for concern if, by including provisions along the lines suggested by this
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amendment, that were taken to imply that in other areas the courts did not have to take account of other relevant court cases.
I understand very well the point that underlies my noble friend's amendment. It would be wasteful, both for the courts and the parties concerned, if duplicated proceedings were to proceed and lead to duplicated orders.
However I do not believe that will happen in practice. I accept that a particular court may not be aware, when it receives an application, that an identical application has already been made in respect of the same dispute. But if that were the case, then the party against whom the proceedings were brought—that is, the union or other person organising the action—would presumably be well aware, and would no doubt inform the court accordingly. If it wished, the court could also ask if the respondent (or plaintiff) was aware of any other similar current proceedings. The court would then decide, in the light of that information, how to proceed with the application.
That, I believe, is what my noble friend wishes to happen. It is, I believe, what would happen in practice. His amendment is not necessary to achieve that result.
I cannot accept that it would be right to impose a specific duty on the courts which would require them to make inquiries as to whether similar proceedings had been brought before hearing an application. That would be an unnecessary burden on the courts themselves. Responsibility for the issue of proceedings is a purely administrative process. The introduction of a duty to consider possible duplication would in effect therefore necessitate the introduction of a further judicial stage prior to any hearing. This would risk delaying and frustrating the hearing of an application under the new right. As I have made clear, it will be a simple matter for the party against whom proceedings have been brought to draw any apparent duplicated proceedings to the court's attention where it was appropriate to do so, or for the court (if it wished) to ask the parties for such information.
It would also be unfortunate if court judgments were to be opened up to challenge on the grounds that a court had not carried out a full check to see whether there were any identical proceedings, before reaching its judgment.
My noble friend Lady Denton did not suggest that the courts would make a specific point of always applying rigorous tests to discover whether there were duplicated proceedings when applications of this type were made. Indeed it would, I believe, be unrealistic and unnecessary to expect them to do so. The point is that the courts proceed—and indeed have to proceed—on the basis that they can be made properly aware of these matters, as necessary, when relevant proceedings are brought before them.
The Lord Chancellor's Department has advised that, whilst the issue of an application would not be refused, once they are issued all these applications will be entered in a central list. This will ensure that the court is made aware of any similar proceedings, pending or concluded, against the same defendant.
Also, there may be room for argument as to whether applications brought in respect of the same

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unlawful act in fact duplicate each other. For example, different applications might cite different reasons as to why the act is allegedly unlawful; or they may involve quite different circumstances of alleged deprivation; or they might seek to halt action in different parts of the country. The essential point is that the individual should be allowed to pursue a genuine application.
I recognise that my noble friend feels strongly about these matters, and is genuinely concerned about the dangers of duplicated proceedings.
However, I hope that the points that I have made have shown that these proposed limitations on the powers of the courts would risk either adding to their difficulties or frustrating the operation of the important new right that we are introducing for individual citizens. With those words, I hope that my noble friend will consider withdrawing the amendment.
Lord Mottistone: My Lords, I understand a lot of what my noble friend said. I have the slight feeling that he is understandably responding to amendments tabled, both earlier amendments and ones to follow, on the assumption that there is nothing new here.
In the course of the Committee stage, let alone now, the possibility has come to light of lots of individual cases being brought to the courts. That has not happened in the past. For example, when there have been instances of secondary action in which people
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were able to sue in the courts or seek an injunction, relatively few people were eligible to take that kind of action. We are now in a situation where all travellers on the railways, the buses, or whatever—and they run into thousands—are theoretically able to do that.
I understand that my noble friend may not want to discriminate against one person or another. But the position requires a little thought, if nothing more. Too many people will be taking the same kind of action. There needs to be a representative. But that is not the point of the Citizen's Charter. We are all citizens and do not want to be represented. We are like Cross-Bench Peers and firmly resist teaming up together.
The provision therefore could lead to a lot of trouble. No doubt the government at the time can step in and stop it. But they will look awfully silly if they have to do that because individuals will say that the government are taking away their rights. It will be better discreetly to limit the rights at this stage, before the legislation starts to bite, than to allow something to happen in the future.
I will not say anything further at this stage. Of course I shall withdraw the amendment. But I hope that my noble friend will think about the potential problems and awful difficulties that governments and others will have if there is not some kind of curb on what Clause 21 is trying to do. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 29:
Page 37, line 5, at beginning insert ("Subject to subsection (4A) below").
The noble Lord said: My Lords, in moving Amendment No. 29 I shall speak also to Amendment No. 31. It will not take long because it is on the same theme. Amendment No. 29 is aimed at ensuring that the court grants an injunction only where the application is meritorious. I put that forward as one idea, although it will not get over what I have been talking about.
Many industrial disputes involve action which has a widespread effect on the subject. There are some situations in which the intervention of the law may prove unhelpful to the parties, particularly if they are on the verge of settling a matter. It is not difficult to imagine somebody coming to court who is motivated not so much by having his supply of goods or services restored, but who is more concerned with using the law to further some other cause. I am afraid that happens. All kinds of pressure groups pester your Lordships and, indeed, some of us are pressure groups ourselves.
We must therefore be careful that the real intention of the measure is not subverted by some other machinations. It may well be that at a sensitive stage the obtaining of an injunction will temporarily halt the disruption, but may result in hardening of attitudes and so forth. In that situation it may not be in the public interest to grant an injunction and that is what the amendment seeks to address. By requiring the court to have regard to the wider public interest before making such an order, a check will be imposed on those who seek to use the law for their own purposes regardless of the longer-term effect that that might have on the economy and the public at large. I beg to move.
10.30 p.m.
Lord Wedderburn of Charlton: My Lords, the noble Lord has raised an important point which leads to a further question. I shall put it briefly in this form. He has raised the question of applicants under Clause 21 pursuing an ulterior motive. The noble Lord put it in that way. It makes me ask the Minister whether the court's functions under this clause would be regarded as within the range of its discretionary equitable remedies. If it is within the range of the normal discretionary equitable remedies, would the normal equitable limitations apply to the use of its discretion? The one which the noble Lord brings to mind is that well known and important maxim that he who comes to equity must come with clean hands. Will the court reject an applicant if his or her hands are not clean? The noble Lord has raised a rather important question.
Lord Rochester: My Lords, I am glad to support the amendment which seeks to limit the damage that Clause 21 could so easily inflict on attempts by both management and trade unions to settle disputes, particularly in forcing trade unions to spend time and resources not in dealing with the dispute itself but in defending their case at law. The amendment aims to
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bring a little more industrial realism into the clause. I hope therefore that, with or without very much conviction, the noble Viscount will accept it.
Baroness Turner of Camden: My Lords, I too support the amendment. As I am sure the Minister is aware, Clause 21 has occasioned a fair amount of hostile comment, and not only from trade unions. Having said that, the trade union movement does not defend unlawful action. It would like to see disputes resolved through established procedures. However, whether or not a dispute is lawful, it is essential that nothing should stand in the way of early resolution. It is surely understandable even by the Government that people do not willingly withdraw labour, with all that that means in forgone wages and losses generally, without some cause at the back of it. Therefore, employers and unions have a common interest in opposing any legislation which would make a settlement more difficult to achieve.
The amendments in the name of the noble Lord, Lord Mottistone, compel the court to have regard to all the circumstances in the case. They deal with the fears expressed by employers as well as unions that a settlement could be delayed with all that that could mean in terms of extra costs and further destabilisation. That will happen unless the courts are allowed to take the possibility of a settlement into account.
Amendment No. 32, to which I think the noble Lord spoke—
Lord Mottistone: My Lords, at this stage I am speaking only to Amendments Nos. 29 and 31.
Baroness Turner of Camden: My Lords, Amendment No. 31 refers to the possibility of settlement of the dispute. Is that not right?
Lord Mottistone: My Lords, Amendment No. 31 refers to the public interest.
Baroness Turner of Camden: My Lords, Amendment No. 31 states:
"In determining whether to make an order under this section the court shall have regard to all the surrounding circumstances of the case and, where the court is satisfied that there is a reasonable prospect of a settlement of the dispute, no such order shall be made".
That is Amendment No. 31 on my Marshalled List. Is that right? Have I got it wrong?
Lord Mottistone: My Lords, I have got it wrong. I apologise for the fact that my amendments have become muddled. I thought that I was speaking to an amendment which has come out as Amendment No. 33. I apologise for that. I do not know how we can get this sorted out.
Baroness Turner of Camden: My Lords, when we come to discuss Amendment No. 33, which deals with the public interest, I shall support that as well. In the meantime, I should like to support Amendment No. 31, which states that the court has to take account of whether there is a reasonable prospect of a settlement. I think that is very sensible and I hope that the noble Viscount will be prepared to accept, if not the wording, at least the sentiments that lie behind the wording put before your Lordships.
Viscount Ullswater: My Lords, before we go any further, I think we have got ourselves into a muddle. If my noble friend thinks that he was speaking to Amendment No. 33, the noble Lord, Lord Wedderburn, has an amendment to move to that amendment. I feel the house would perhaps want to hear his amendment. It may be out of order, but I am sure that your Lordships would take a relaxed attitude on this occasion.
Lord Wedderburn of Charlton: My Lords, I appreciate the offer made by the noble Viscount but, as I understand it, Amendment No. 29 has been called, and the noble Lord, Lord Mottistone, spoke at the same time to Amendment No 32. Amendment No. 30 has not yet been called and when it is, it will be discussed with Amendment No. 33, to which my amendment is relevant. Most of the discussion so far has not been relevant to public interest. Public interest is to come.
Lord Mottistone: My Lords, if I might intervene, with your Lordships' leave, I have to apologise deeply. I realise now that my brief for Amendment No. 31 was the one which was meant to go with No. 33. As Amendments Nos. 29 and 30 are paving amendments, perhaps it would be simpler, if your Lordships agree, to approach the matter as though I had moved Amendments Nos. 30 and 33. Is that all right?
Lord Tordoff: My Lords, with respect, Amendment No. 29 was called and that is the amendment before the House at the moment. Therefore, we must either dispose of that amendment or couple with it whatever we wish. Amendment No. 29 is, however, the one before the House at the moment.
Viscount Ullswater: My Lords, I am sorry to prolong this difficulty, but Amendment No. 29 is a paving amendment, and I am extremely unclear as to what it paves.
Lord Wedderburn of Charlton: My Lords, very clearly, Amendment No. 29 goes with Amendments Nos. 32 and 31. Amendments Nos. 30, 33 and 34 are to come. The apprehension of your Lordships no doubt mounts in relation to those amendments, but they come later.
Viscount Ullswater: My Lords, it was because my noble friend had actually changed the grouping that we have perhaps fallen into this difficulty. That is why he said that he was addressing Amendments Nos. 29 and 31 quite specifically; and that is the information he gave to me. However, I shall attempt to address the problems that he has outlined.
I think I should start my response by indicating just what we see as the paramount purpose of the new citizen's right to restrain unlawful organisation of industrial action. That purpose is simply this. We wish to give individuals deprived of goods or services because of unlawful inducement of industrial action an effective legal remedy through which they can protect their interests as they—the individuals —perceive those interests.
As far as customers and potential customers are concerned, it would be the best outcome if they were
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never deprived of goods or services because of any industrial action whether lawfully organised or not. It follows—and here I agree completely with the noble Lord—that such individuals are more than likely to be satisfied where disputes which have deprived them of goods or services are resolved and are very unlikely to bring proceedings under the new right where they believe that a settlement is imminent.
However, I fear that from that point onwards our views may diverge. We maintain that it is up to individuals to form their own view of how best to protect their interests. If an individual believes that he is deprived of goods or services because of unlawfully organised industrial action and that his most effective means of ensuring that this deprivation ceases, would it really be right for the law to be such that be cannot obtain the remedy that he seeks? The Government would say that arrangements which could have that result would be inconsistent with the purposes of the new citizen's right—and, indeed, with those of our Citizen's Charter itself.
I would not claim that individuals will always correctly decide on the best means of protecting their interests. Nor, however, would I claim - and I doubt that my noble friend would do so either - that they would always get it wrong. But we believe that they should decide for themselves. May I turn now to Amendment 33?
Lord Rochester: My Lords, Amendment No. 33 comes later.
Viscount Ullswater: My Lords, I turn now to Amendment No. 31, which was grouped with this amendment. We must therefore ask just what could happen if provisions as proposed by these amendments became part of the law. And in reviewing this, we should consider the matter from the point of view of the individual deprived of goods or services because —he or she believes—of unlawfully organised industrial action. Amendment No. 31 would mean that when he brought his case to court, instead of considering whether the act concerned was unlawful, and had the relevant effects on the individual, the court would have to reach its own view on the question of the prospect of a settlement. If it concluded that there would be a settlement—or even that there was a "reasonable prospect" of a settlement —the court could make no order to protect the individual. Frankly, I would regard that as a situation in which the new right had been rendered nugatory. The situation created would be one where an individual who was deprived of goods or services because of an unlawful act would have lost his case, even though that deprivation was accepted by the court, and the act was also accepted to be an unlawful one.
I should add that there are other practical problems. If Amendment No. 31 were accepted, a court could find that its judgment could be challenged on the basis that it had failed to have proper "regard to the surrounding circumstances" and prospects of a settlement. It is wholly undesirable to put the courts at risk of that kind of challenge.

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Finally, we must also bear in mind that, sooner or later, pretty well all industrial disputes are "settled". In view of that, is it really conceivable that amendments of this kind could amount to anything more than a means of ensuring that the new right could never be exercised so as to obtain a court order against unlawful industrial action?
I hope that my noble friend will reflect on what I have said, as I shall reflect on his case for the amendments. In the meantime I hope that he will withdraw his amendment. Before I ask him do do so, the noble Lord, Lord Wedderburn, asked me whether the court would have regard to equitable remedies. The answer to the question that he posed is "No". If the applicant satisfies the requirements of the clause he is entitled to the remedy it provides, and we believe that that is how it should be.
Lord Mottistone: My Lords, I am sorry for having made such a muddle and for having wasted time, which is the one thing that I do not like to do. I am grateful to my noble friend the Minister for what he had to say. I shall read with great care what he said, and perhaps when we have moved the next amendment and have the whole lot together he will see that it comes back to what I said on the earlier amendment, Amendment No. 28.
There is room for tightening up this clause, and we have not got much time left. It is in the interests of the Government more than anybody else that it should be tidied up to take care of the kinds of things that we have all been saying from both sides of the House. I refer both to those provisions which employers have spotted as being difficult and to those that have been spotted by other sources. It is extremely important that the Bill does not leave this House without Clause 21 being tightened up, but at this stage, I beg leave to withdraw Amendment No. 29.
Amendment, by leave, withdrawn.
10.45 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 30:
Page 37, line 5, at beginning insert ("Subject to subsection (4B) below.").
The noble Lord said: My Lords, in speaking to Amendment No. 30, I was proposing to speak also to Amendments Nos. 32, 33 and 38. I see that Amendment No. 33, to which I have already spoken, is one that the noble Lord, Lord Wedderburn, seeks to amend. I shall not speak at length on the earlier amendments—Amendment No. 30 is a paving amendment and Amendments Nos. 32 and 33 have been "sort of" covered. We await what the noble Lord, Lord Wedderburn, has to say on that.
I should, however, like to speak to Amendment No. 38, which focuses not on the court, but on the all-important commissioner who has the power to grant assistance from the public purse. The amendment is a modification of one which I moved in Committee when my noble friend Lady Denton was concerned that seeking the views of the employer and the union, whom she felt were third parties, would delay the granting of the remedy. The amendment is redrafted so that the delay would not now occur.
My noble friend rightly said that the commissioner should not be seen as a representative of any particular party but rather as an independent person. I do not believe that my amendment in Committee would have tampered with that independence but, in any event, I hope she will agree that this redrafted amendment makes the presence of independence even clearer than perhaps she might have considered.
In short, this amendment is in keeping with the other paragraph of subsection (3) of Section 235—that is, the initiative rests with the commissioner and it is the commissioner who decides whether to grant assistance to an individual in obtaining an injunction. However, the amendment ensures that, in addition, there is not the comical situation whereby the commissioner should ignore the knowledge that he or she may have concerning the near-resolution of the dispute. I hope that my noble friend will find that this amendment can be tackled more readily.
I turn briefly to Amendment No. 33. Although, as I have already said, it makes the point that it may not be in the public interest to grant an injunction and seeks to address that, by requiring the court to have regard to the wider public interest before making an order, checks will be imposed on those who seek to use the law for their own purposes regardless of the longer term effect that that might have on the economy and the public at large. I beg to move.
Lord Rochester: My Lords, I should like to speak in support of Amendment No. 33 because, with respect to the noble Lord, Lord Mottistone, I do not think that we have really debated that as yet. That is the amendment relating to the public interest. It will have the further advantage, as I see it, that it will enable the noble Lord, Lord Wedderburn, to move his amendment to Amendment No. 33.
Although the noble Lord, Lord Stoddart of Swindon, is not in his place, I am sure that he will not mind me reminding the House that it was he who in turn reminded us of the celebrated occasion when the Official Solicitor had to be roped in to rescue the Government from an earlier embroilment.
As I see it, Amendment No. 33 would ensure that, if the fears that some of us on both sides of the House have expressed as to the possibly disastrous effects of Clause 21 on industrial relations were to be fulfilled, there would be a let-out for the Government. No possible harm could come from including such a provision as Amendment No. 33 on the face of the Bill and if the Government accept it now—as I hope that they will—they may one day be very glad that they did so.
Perhaps I may speak to Amendment No. 34, in the name of the noble Lord, Lord Wedderburn, although I appreciate that he has not yet moved it. It is grouped with Amendment No. 30, and therefore, as I understand it—
Lord Wedderburn of Charlton: My Lords, I understood that the procedure would be that an amendment would he moved and then the Chair would say that it was moved. I was not called to move my amendment, so I dutifully sat in my place. If the

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noble Lord, Lord Rochester, were to have a little patience he might see the reasoning behind the amendment better after I have moved it.
Lord Tordoff: My Lords, with respect to noble Lords, the amendments, as I understand it, are grouped, and therefore the amendment to which the noble Lord, Lord Mottistone, put his name and the amendment to that amendment, to which the noble Lord, Lord Wedderburn, has put his name, are capable of being discussed at the moment, although they have not yet been moved.
Lord Wedderburn of Charlton: My Lords, my amendment comes after the amendment—
Lord Tordoff: My Lords, as I understand it, an amendment can be discussed if it is an amendment to an amendment which is grouped with an earlier amendment.
Lord Wedderburn of Charlton: My Lords, I do not know the precedent for that, but I doubt it.
Lord Dean of Beswick: My Lords, I believe that the noble Lord, Lord Tordoff, is right. It seems in some respects to be out of order, but it is not unknown for groupings to take place, and for the individual amendments to be moved, provided that the mover of the amendments speaks to them. It is not that much out of order anyway.
Lord Rochester: My Lords, it might help the House if I were to make a suggestion; that is, that the noble Lord, Lord Wedderburn, should be enabled to move his amendment at this stage.
Lord Tordoff: My Lords, speak to his amendment.
Lord Rochester: My Lords, I suggest that the noble Lord should speak to his amendment, provided that I in turn am then able to comment upon that amendment.
Lord Mottistone: My Lords, should not the Chair have moved Amendment No. 34 as soon as I had finished speaking? That would then have sorted out the matter. The amendment is grouped with my amendments.
Viscount Ullswater: My Lords, a way of resolving this matter might be if noble Lords would like to address all the amendments that are grouped, and then when my noble friend withdraws Amendments Nos. 30, 31 and 32, perhaps he could notionally move Amendment No. 33, which would allow the noble Lord, Lord Wedderburn, to speak to Amendment No. 34, and then other noble Lords 'could address the point without being out of order.
Lord Wedderburn of Charlton: My Lords, if the House wants me to do that now, I shall readily agree with it. The point in my amendment addresses the central feature of Amendment No. 33, which is, of course, the desire that the court should have the obligation to consider the public interest. We all of us like to think that the public interest is on our side, but the public interest is not a given category. In so far as
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it is within the juridical reasoning of the courts, it is already the obligation of the courts, in remedies of this kind, to consider the public interest.
What I am saying to the noble Lord, Lord Mottistone, is that part of his puzzlement as to why the Government will not accept the amendments is due to the fact that the Government are more interested in enforcing the new rights of every individual, whether his hands are clean or not, as we saw, against trade unions, than in the settlement of trade disputes. It is a clear ideological position.
The Government may, or may not, accept the public interest point, but my warning in this amendment to the amendment tabled by the noble Lord, Lord Mottistone, is that, if they accept it, it will not change anything. It will not achieve any one of his objectives; first, because the courts will say, as they have said about other legislation in this area, that they are already under a duty to do that. Unless one defines the public interest in the way that redirects their eyes in the direction that we want, one will not change anything.
I have tabled my amendment, which has many defects, in order to raise the point that not only are the courts already obliged to consider what they apply as the public interest in discretionary remedies, but also that the common law courts carry over from the past a concept of the public interest which is dominated by concepts of property, leading inevitably to that concept being applied in a way which is contrary to the position in court of a defendant trade union.
Your Lordships may believe that that is a strong statement. I am not attacking the courts at all. I am saying that if one looks at the litigation one finds that a specific notion of public interest is naturally and properly applied by the judges in a way that can never be of assistance to a trade union defendant. I shall give two illustrations, as I am bound to do after making those propositions.
The first is the judgment of the Court of Appeal in the case which arose out of the dock strike case in 1989. That strike will be within the memory of most Members of your Lordships' House. The Court of Appeal reversed the learned judge in the exercise of discretion; first, because he took account of the status quo as involving the future prospects of the workforce and the union and, secondly, because he did not expressly put into account the public interest, namely, the damage done by the strike. Lord Justice Stuart-Smith said:
"There can be no doubt that a complete stoppage in all the Scheme ports will have a major impact on innocent third parties and the economic wellbeing of the nation".
That was his conclusion on the issue of public interest. It may be that many noble Lords believe that that is a proper way to deal with the issue. However, it also shows clearly that a successful strike, on the logic of judgments such as that, will always be held to be contrary to the public interest.
Secondly, in cases of 1979 and 1980 a number of noble and learned Lords in the judicial committee made it clear that there is an overriding discretion based upon public interest, as they put it, which allows them to grant injunctions. It is no good the Minister saying that under this clause equitable maxims would

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not apply to the remedy because it is a discretionary clause. Perhaps he is right in saying that equitable maxims will not be applied in the ordinary way but a discretion is involved in the clause. In those cases Lord Diplock and the noble and learned Lord, Lord Scarman, agreed on the following proposition, which came at the end of their description of when injunctions could be refused. They refused on various grounds and stated,
"but this does not mean that there may not be cases where the consequences to the employer or to third parties or the public or perhaps the nation itself may be so disastrous that the injunction ought to be refused, unless there is a high degree of probability that the defence will succeed".
The loss, not merely to the public at large but also to third parties, or even the employer, is counted by the courts. I am not attacking them in that respect. These are the principles which are applied. However, if one does not amend those principles they will be applied in the ordinary way and even the noble Lord, Lord Mottistone, will find that no difference is made in respect of the application of the clause in court.
I am not asking that trade unions should be let off. One may want to make the courts use their discretion, as French courts do. In regard to discretionary remedies they are apt to give short orders of a few days on condition that the parties negotiate or take certain conciliation steps. If one or other does not, it is worse for them in the next order.
Our courts are not within sight of such use of discretion and public interest. If you said to the courts, "Look at this code of practice as your primary guide", I am certain that the High Court would look at it. I might not like particular decisions but that is neither here nor there. One would get out of the two centuries-old notion of public interest tied to old property notions, which many lawyers who are not at all radical in other ways see as being outmoded.
The reason for tabling the amendment is to warn the noble Lord, Lord Mottistone, to sign no public interest signs. Unless one does something about the meaning and application of public interest it will make no difference to Clause 21.
11 p.m.
Baroness Turner of Camden: My Lords, I support the amendment moved by the noble Lord, Lord Mottistone, but I should be much happier if my noble friend's amendment were accepted. As he has indicated, "public interest" is an extremely wide term and no doubt judges would say that they take account of the public interest in any event, perhaps in the terms in which my noble friend has explained.
However, my noble friend's amendment seeks to define more closely what that should mean in industrial relations' terms. It still leaves the court free to consult with whichever bodies it deems appropriate, but it lays upon it a duty to have regard to ACAS codes of practice and ILO conventions. We are talking about an industrial relations situation here. Therefore, I hope that the Minister will support my noble friend's amendment and that the noble Lord, Lord Mottistone, might be prepared to accept it.
Lord Rochester: My Lords, in the difficult procedural position in which we find ourselves, I hope that I may have the leave of the House to comment on the speech of the noble Lord, Lord Wedderburn, on his amendment, having already spoken to Amendment No. 33.
I rather hope that the noble Lord, Lord Wedderburn, will not press his amendment if only because I suspect that its contents will be opposed by the Government as savouring too much of corporatism. Therefore, on those grounds alone, it might be more politic to support the amendment of the noble Lord, Lord Mottistone, as it stands. I recognise that there may be difficulties, to which the noble Lord, Lord Wedderburn, referred, in adopting that course on the grounds that a bird in the hand is worth two in the bush—leaving the courts to have regard to what they conceive to be in the public interest.
If that presents difficulties, as the noble Lord, Lord Wedderburn, believes, I suggest that it would be more appropriate, having accepted the principle underlying the amendment in the name of the noble Lord, Lord Mottistone, to find some means, other than the code of practice with its corporatist attitude, to examine what is the public interest. I come back to where I started. I support in principle the amendment moved by the noble Lord, Lord Mottistone.
Viscount Ullswater: My Lords, at the outset I am speaking to Amendment No. 30 which is the paving amendment, but we seem to have tagged on a number of other amendments and perhaps I should address them all.
I am grateful to my noble friend for the explanation of his amendment and the various other amendments which I understand we are considering. I shall try not to number them in case I get them wrong.
As regards Amendment No. 32, many of the points I made in our previous debate on Amendment No. 29 remain relevant. To recap, the proposed new right will protect individuals who, at present, are powerless to use the law to help protect their interests when deprived of goods or services because of unlawfully organised industrial action.
Turning first to Amendment No. 32, we should not expect an individual contemplating proceedings under the new right to "second guess" what representations might be made to a court by:
"the employer or employers against whom the industrial action has been directed".
Even more importantly, we should not ask a court to refuse an order which it would otherwise grant on the basis that it considers that there is a "reasonable prospect of a settlement" for the reasons I pointed out during your Lordships' debate on Amendment No. 29.
Similarly, as regards Amendment No. 33, why should an individual have to second guess the court's decision about whether an order which the court would otherwise grant would, or would not, be held by the court to be in the "public interest"? If an individual deprived of goods or services because of unlawfully organised industrial action would be entitled to an order from the court under the right as presently proposed, how could we justify making it

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impossible for him to do so because of something he could not anticipate; that is, how the court would view "public interest"? Nor, indeed, should we put the courts themselves at the risk of seeing judgments challenged on the basis that they had somehow failed to take "public interest" properly into account.
By way of an amendment to Amendment No. 33, the noble Lord, Lord Wedderburn, takes the point a little further. It is one thing to require the courts to have regard to the public interest, but quite another to require them to take account of what another body considers to be in the public interest. As they have shown in the past, the courts are well able to determine what is in the public interest when it is appropriate for them to do so.
As it is, the terms of Amendment No. 34 indicate only too clearly the difficulty, perhaps even the folly, of attempting a rigid definition of "public interest" for the purposes of directing the courts. Why should the process proposed by the amendment produce the right kind of result? Indeed, is it likely to prove possible even for ACAS to come up with a viable definition of public, interest out of the proposed process of consultation? Even if I thought that Amendments Nos. 30 and 33 were desirable—which I have to say that I do not—I am of the view, along with the noble Lord, Lord Rochester, that Amendment No. 34 is neither constructive nor useful as an addition.
Amendment No. 38, which is also included in this group of amendments, addresses a rather different issue. Its provisions would not modify the powers of the courts, but those of the new Commissioner for Protection Against Unlawful Industrial Action.
As pointed out in Committee, it is helpful to both the new commissioner, and to those who might bring proceedings under the new right, to have certain indications of the kind of issues which the commissioner might consider when deciding whether or not to grant assistance. I have to say, however, that the amendment could send the wrong signals in that respect.
I am sure that my noble friend would accept that virtually all disputes are eventually settled. However, we are dealing in practice with cases where a settlement has not been reached, and the individual is suffering (or may suffer) deprivation caused by unlawful industrial action.
If it is clear that a settlement is imminent—and that is a matter which the commissioner will be able to take into account in deciding whether to grant assistance —but it is unnecessary to include a specific provision to that effect, Section 235B(3) does not prevent the commissioner taking account of such factors. However, I can assure my noble friend that the commissioner, like any other publicly-funded body, will have a responsibility for the proper use of taxpayers' money.
I appreciate that my noble friend Lord Mottistone is concerned about the hypothetical possibility that the exercise of the new right might cause damage to good industrial relations. However, we do not agree that the risk of that happening is significant enough to warrant undermining the effectiveness of the right in
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the way which could happen if the amendment was accepted. I hope, therefore, that my noble friend will feel able to withdraw his amendment.
Lord Mottistone: My Lords, I thank my noble friend and, indeed, other noble Lords who have spoken for helping me to salve the mess into which I put your Lordships and for which I again apologise. I think that we got over the message, albeit in different ways. I note what my noble friend said. Tackling each amendment in turn, I must say that, of course, they are all imperfect in their own way. That is understandable. It is difficult to see how we can have a comprehensive something. I was seeking a comprehensive something from the CBI, which led to what turned out to be Amendment No. 33. I thought that the individual amendments would be shot down. I said, "Please get me one which is all-encompassing". That is the one that the confederation provided me with and the one that the noble Lord, Lord Wedderburn, sought to amend. I believe it is the one agreed to by the noble Lord, Lord Rochester, but by practically no one else.
However, having said that, although the Minister tells me that I am more worried about what might happen in hypothetical cases than I should be, I should like to leave him with the thought that Clause 21 brings new law into existence because of its potential use by so many thousands of people. It will have a locus standi, as I was saying earlier, which in other legislation has tended to be limited to relatively few bodies and therefore the lawsuits are of manageable numbers. I leave that thought with my noble friend the Minister. I shall not bother him further except to say that I may be difficult on Third Reading. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 and 32 not moved.]
The Deputy Speaker (Baroness Cox): My Lords, I should point out that if Amendment No. 33 is not moved, I cannot call Amendment No.34. I call Amendment No. 33.
Noble Lords: Not moved!
[Amendment No. 33 not moved.]
[Amendment No. 34 not moved.]
Viscount Ullswater Viscount Ullswater moved Amendment No. 35:
Page 37, leave out lines 32 to 35.
The noble Viscount said: I should say at the outset that the origin of this amendment lies in one moved by the noble Lord, Lord Wedderburn, in Committee. I am rather sad that the noble Lord, Lord Howie of Troon, is not in his place so that he could hear my words as he accused the Government of saying "No" to everything and never listening. I say that fairly lightheartedly.
I now turn to the amendment. An individual will be able to seek a court order under the new citizen's right to prevent the organisation of industrial action which is either actionable in tort or could be the basis of an application by a union member, under Section 62 of the Act, on the grounds of failure of his union to ballot before calling for industrial action. The individual

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must, of course, be able to satisfy the court that he will be deprived of goods or services because of the act concerned.
It is also a principle of the new right that it should not have the result of turning any act which is not actionable in tort or under Section 62 into one against which a court order could be made as a result of proceedings under the right. As the noble Lord pointed out in the debate on Amendment No. 124, Section 62 itself includes provisions which mean that, for the purposes of that section, it does not matter whether a call for industrial action is (or would be) effective or ineffective; and to be "actionable in tort", it must be an element of the tort that the inducement is (or would be) effective.
The amendment that the noble Lord tabled in Committee did not directly propose to remove the new Section 235A(7)(a). However, we naturally gave careful consideration to the arguments he then made, even though we resisted that particular amendment. It was that consideration that has led us to propose the amendment now before your Lordships. While it is a government amendment, I am happy to acknowledge the part played by the noble Lord in bringing this matter to our attention. I beg to move.
Lord Wedderburn of Charlton: My Lords, I thank the Minister for his comments. If my noble friend Lord Howie were here, he would realise that although the Government frequently do not listen, they do read. This amendment is welcome and it removes what we considered to be an unnecessary objection to the clause.
Viscount Ullswater: My Lords, I am, of course, grateful for those comments.
On Question, amendment agreed to.
[Amendment No. 36 not moved.]
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 36A:
Page 37, line 38, at end insert:
("( ) Where an individual could apply to the court in respect of an act under this section, whether such an application is made or not, subsection (6) of section 62 shall not apply to an application made in respect of the same Act under that section.").
The noble Lord said: My Lords, this amendment is in a sense consequent upon the amendment which the Minister has just made. I am not trying as it were to push my luck by trying to get something in addition to that which we have already got, but I would like to ask the Minister through this amendment whether or not the following consequence really arises.
One might say that there are four major situations where an inducement is very important in relation to the liability of a trade union especially —sometimes of other persons as well—in the 1992 Act and in the Bill. Depending upon the interpretation of the meaning of the word "inducement", the liability may or may not fall. Section 219 concerns the general protection for inducing a person to break a contract in a trade dispute. Section 226 concerns the position where a trade union's act to induce a person to take industrial action is the basis of liability if it does not go through all the hoops. Finally, under Section 62 a
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union may suffer an order from the court if it induces members to take part in industrial action. Here, under the Bill, Clause 21 bites upon an act which induces a person to take part in industrial action. There are other illustrations, but I suggest that those four situations are the building blocks of the Government's trade union law.
In three out of four of those situations now, following the amendment moved by the Minister, inducement has to be effective in some respect. That leaves one area where inducement need not be effective but still counts. There is notional inducement, which is not really inducement but counts against the union in court. It is still not clear exactly what it is, but it is different from the normal case. That area is Section 62, where a member takes action in court against the union.
The argument of the amendment is parallel to that which I advanced previously about the dangers of having different procedures according to who is the plaintiff. Here we have another case where, depending on who turns out to be the plaintiff, the union may or may not be liable. The amendment suggests that we should at least make clear the principles of liability by taking the one remaining non-inducement which counts as an inducement, in Section 62(6), and say that that, too, must be a real inducement. It is not a great defence for a union. If there is some evidence of inducement that will normally be enough, but there will be the occasional case in which this particular subsection—which now sticks out like a sore thumb —could make a difference and produce liability almost by chance and not on any principle in the Government's legislation.
I do not expect the Government to accept the amendment immediately, but I hope that the logic of the position will be clear when after our debates they come to read in Hansard what I have said. I beg to move.
Lord McCarthy: My Lords, I hope that the Minister who replies to the debate will take the point on board. In a sense my noble friend Lord Wedderburn is pushing his luck, but the logic of the argument has been considerably reinforced by the attitude which the Government have taken in respect of the previous amendment. It would be unfortunate if the Government were to tell us, much as the noble Baroness did on the previous occasion, why they could not accept a move away from ineffective inducement only to find at Third Reading that they could do so. Perhaps they could tell us tonight that they can accept the amendment.
Viscount Ullswater: My Lords, I am most grateful to the noble Lord, Lord Wedderburn, for his explanation of the amendment. I hope that my response will persuade him that it is neither appropriate nor necessary.
Perhaps I should indicate that we read very carefully in Hansard what the noble Lord says. We consider very carefully what he says. It is not always easy to respond to some of the problems that he poses

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when he moves his amendments because he speaks rather more around the subject of the amendment than to the words on the printed page.
As the noble Lord, Lord Wedderburn, is aware, the Government moved Amendment No. 35 to deal with a similar anxiety which he raised at Committee stage in relation to provisions which were proposed as new Section 235A(7) (a). We accept that the effect of Section 235A should not be to turn any act which is at present lawful and, where appropriate, protected by the statutory immunities or protected against proceedings by a member under Section 62 into one against which proceedings could be brought under the new right.
If the noble Lord's current concern is that the definitions of "inducement" or "industrial action" in Section 62 might somehow come to be applied to determine whether an act was tortious, I can assure him that there is no risk of that happening. "Actionable in tort" means no more, and no less, than that an act would fall to be treated as such under the law as it stands. There is no question of a call for industrial action being treated as tortious simply because of definitions in Section 62(6). Those definitions relate to a particular statutory right and not to any tort.
Of course I shall read carefully what the noble Lord said. However, I return to my original remarks. I believe the amendment to be unnecessary and perhaps inappropriate. I hope that the noble Lord will withdraw the amendment.
Lord Wedderburn of Charlton: My Lords, the noble Viscount is very kind when he states that I speak around the subject; I know that he means I go too wide. However, perhaps I may develop one point further. Perhaps I may put it in a sentence. Inducements under Clause 21 must be real inducements. We therefore have a problem in relation to Clause 21(2) (b). I apologise to the noble Viscount that I did not spell this out. When he considers the debate will he look at new Section 235A(2) (b)? Where an act can form the basis of an application by a member under Section 62, it counts as unlawful action in new Section 235A.
We have now knocked out the unreal inducement from Clause 21. We therefore have a clause which states that there must be an inducement and it must be real. We have knocked out the fact that it need not be real. But the new Section 235A(2) (b) reference to Section 62 is to an inducement which need not be real.
Those circles of inducements which are real and unreal—another circle has been set up by the way that the debate has progressed—are unnecessary. They will lead to total confusion in litigation. Surely it is sensible to say that an inducement is an inducement. If one wishes to define that, one can do so. But do not have different definitions in clauses which interrelate.
That is the point which I failed to make. I apologise again. The clauses interrelate. New Section 235A is dependent on Section 62. But new Section 235A has a different definition of inducement from Section 62. Rather than my attempting to move matters too fast, perhaps the Minister will consider the provision. In
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the grave hope that he will consider the interrelationship between Section 62 and new Section 235A, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 37 to 39 not moved.]
Lord McCarthy Lord McCarthy moved Amendment No. 40:
Page 39, line 26, at end insert:
("( ) In providing such advice and assistance, the Commissioner shall apply similar criteria and conditions as are currently applicable in the case of individuals seeking assistance under the Legal Aid Scheme.").
The noble Lord said: My Lords, we take Amendment No. 40 seriously. It deals with the proposed system of advice and assistance which will be given to people by the new commissioner. Amendment No. 40 states:
"In providing such advice and assistance, the Commissioner shall apply similar criteria and conditions as are currently applicable in the case of individuals seeking assistance under the Legal Aid Scheme".
We believe that that would be equitable.
The House will know, because there has been considerable controversy in this House and elsewhere, what has happened recently to the legal aid scheme. Noble Lords will know about the Lord Chancellor's proposals of last November in the context of the Autumn Statement. They will know about the way in which the free disposable limit was reduced by about 27.5 per cent., from about £3,000 a year to about £2,000, so that all applicants for legal aid with pay above an income support level of £44 a week would find that they would have to bear some of the cost of litigation themselves. Noble Lords will know too that at the same time as the Lord Chancellor proposed those changes in the legal aid scheme, there were corresponding reductions in the dependants' allowances. They will know that at the same time there was an increase in the fraction of income to be counted above the free limit from one quarter to one third.
Finally, they will know that at the same time the Lord Chancellor announced the abolition of the free legal advice scheme. They will know, as has been said by many interested parties, by Members of this House, and by noble and learned Lords who took part in debates, that it has been calculated that the effect of the changes will be to reduce the value of the present legal aid scheme to between about 12 million and 14 million people (or 37 per cent. of households). They will know that the Law Society has calculated that there will be a very significant increase in the present proportion of those who consider that the existing legal aid level is insufficient to enable them to continue with the possibility of litigation.
We want the Government to contrast that reduction with what is suggested not simply for the CROTUM but also for the new commissioner. There is to be, as we see it, no upper limit to eligibility and no system of income fractions. A totally free legal advice service is being given to those who want to go against trade unions in the same way as it was given under the provisions of the CROTUM—this time in the case of unquantifiable, non-contractual, immeasurable quasi-deprivation.
We do not see how the Government can conceivably justify such a measure. Justification was

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advanced by the noble and learned Lord the Lord Chancellor in reducing the value of the legal aid scheme—the scheme which would apply to innocent people charged with murder and to people seeking redress from serious deprivations—measurable deprivations —of all sorts. The argument which was advanced for reducing the scope of the legal aid scheme was that of the public sector borrowing requirement. It was said that the present legal aid scheme could not be afforded, and that there were escalating costs. We know now that there are no escalating costs so far as the CROTUM is concerned —except in so far as the CROTUM herself costs a lot of money and goes around the country drumming up business.
It may very well be that the new commissioner will also have no cases; we do not know. Nor do we know what the Government are putting into the kitty to finance the new commissioner. But we do know the distinction between what is being done to the legal aid scheme for all other forms of legal redress and what is being done in the case of these two instances of special commissioners giving special aid to people who want to put arguments and cases against trade unions. We know that this cannot conceivably be justified. The only way that the Government or anyone could say that it was even remotely explicable is if there were concrete evidence of such infringements of the Government's anti-union laws that they had become a public scandal and that therefore everything had to be done, at whatever cost, to provide people with cost-free ways of proceeding against trade unions. The Government do not say that. On the contrary, they say that their system of legislation against trade unions—the new rights that they have created and the rights that they will create—will give us the best industrial relations in the world. How can they justify it on those grounds?
Secondly, the Government may say that there is so little ground for litigation that if one expected anybody to pay anything, to contribute in any way, towards prosecuting these cases, nobody would come forward at all. In other words, if the CROTUM could not give a blank cheque, nobody would go to the CROTUM. I suggest that even that would not apply to the new commissioner, who will give all kinds of rights to quite a different race of people. Therefore we say that such a measure is totally unjustified. We say that there is something mildly indecent about the distinction between the two levels of compensation, and we ask the Minister to justify it. I beg to move.
11.30 p.m.
Viscount Ullswater: My Lords, I understand that noble Lords opposite are not convinced of the need for special assistance which the new commissioner will be able to provide for proceedings under the new citizen's right. I listened very carefully to the words of the noble Lord, Lord McCarthy. He seemed to spend a long time complaining about the limit put on the increase in the legal aid budget without recognising that it was a considerable increase on last year. Year
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on year it shows an increase. I do not believe that there should be a valid analogy with proceedings assisted by legal aid.
I shall return to what was said at Committee stage. In response to an amendment—I believe it was Amendment No. 131—my noble friend Lady Denton explained the special features which, we believe, justify the special assistance which the new commissioner will be able to offer and which also explain why we cannot accept that the conditions applicable to an award of civil legal aid should apply.
My noble friend made these points in particular: first, that the remedy available under the new right will be a restraining order and not damages; secondly, that the individual will always be seeking assistance for proceedings against trade unions, which have considerable financial and legal resources; and, thirdly, that an individual exercising the new right will almost certainly be acting in what might loosely be described as a "representative capacity", since the award of a restraining order is likely to benefit a good many other people besides the particular plaintiff.
In responding, the noble Lord, Lord McCarthy, commented on each of those points. However, he failed to recognise the importance of taking all those factors together. The point is that all the proceedings which can be granted assistance from the commissioner will share those characteristics. It is not the case that all applications for civil legal aid would do so. Indeed, I suspect that the particular combination would apply to very few.
Of course we are concerned about the limit on public expenditure. I am sure that noble Lords will welcome the announcement made last December that we intend to offer the appointment as new commissioner to the present Commissioner for the Rights of Trade Union Members, Mrs Gill Rowlands. Locating the new commissioner's offices with those of the present commissioner will achieve savings as against the resources that would be involved in establishing a completely new office. We are mindful of the need to get the best value from taxpayers' money in this regard as in all other areas of public expenditure.
I suspect that I have not been able to convince the noble Lord with my arguments. But I also suspect that there may well be no arguments that I could present that would do so, so long as we propose that the new commisioner's assistance should be available without the kind of conditions that currently apply to awards of legal aid. Nonetheless, I hope that the noble Lord will withdraw his amendment.
Lord McCarthy: My Lords, the noble Viscount will not be surprised at what I say as regards his remarks. I do not know whether he has heard that in the Department of Employment they say that the reason why Mrs. Rowlands is getting this job as well as the other job is to show that she can work one day a week.
I am not surprised at what the Minister said. I did not say and perhaps I should have said that the legal aid budget was increased. Yes, it was increased, but not by the amount of the increase in the cost of litigation. That is the problem. It was not increased enough to take into account the increase in demand on

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the legal aid budget. But it was increased; that is quite right. The question is why a similar kind of procedure and a similar level of benefit should not apply to those other cases.
The noble Viscount has not put forward any further arguments. He has not even put forward any arguments at all. He reminded me of the arguments that we had in Committee when the noble Baroness was answering a similar range of points. She raised the point about restraint; she said, in answer to my points that in the case of the commissioners it would take the form of a restraining order. She said that the trade unions have legal resources and she said that there was a representative capacity. The only point that has been made by the noble Viscount is that he thinks I should add those arguments together.
My students sometimes say that. They say, "You gave me a gamma last week and the week before and again the week before that. Can't we add them all together?" I reply, "That is three gammas and three gammas make a gamma". It is no good. If there is no case on one, two and three, there is no case at all. There is no case at all. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Wedderburn of Charlton Lord Wedderburn of Charlton moved Amendment No. 41:
After Clause 21, insert the following new clause:
("Industrial action abroad
. The following subsection shall be added to section 244 of the 1992 Act—
"(6) An act done in contemplation or furtherance of a trade dispute shall not be actionable if

(a) it is done outside the United Kingdom, and

(b) it is lawful in accordance with the law of the country in which the act is committed."").

The noble Lord said: My Lords, we touched earlier on the problem of industrial action which takes place abroad; that is, outside the United Kingdom for the purposes of this part of the law. Should action which is lawful outside the United Kingdom, under any circumstances, be actionable in English courts? Most people assumed that the answer to that question was no. Indeed, when the present law on trade disputes was restricted by Section 18 of the Employment Act 1982, there was discussion about a specific restriction which was placed upon a trade dispute which related to matters abroad.
I do not wish to raise the pluses or minuses in that debate, where the Government added the formula that the trade dispute could relate to matters abroad so long as its effective work was in Great Britain. However, no one suggested in those debates—no one for a moment would have thought to do so—that United Kingdom courts would take jurisdiction over industrial action which had been undertaken completely lawfully abroad because it would have been unlawful in Britain. It is a curious notion but I am afraid that it has now occurred.
In the case of Dimskal Shipping in 1992 your Lordships' judicial committee decided by a majority that that could be done. Since we are now concerned with the general law on trade disputes and liabilities of trade unions, that happens to be a rather important
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expansion of liability in regard to what the courts now call "economic duress"—a doctrine which I say in passing the Canadian courts have refused even to discuss in the area of labour relations because it obviously throws a further balance out in favour of employers. But the judicial committee accepted that it gave rise to liability here.
It was a case where a flag-of-convenience ship, with a Panamanian flag and an exploited Filipino crew, (which is so common from a third world country in these flag-of-convenience ships) was boycotted by Swedish unions and by the International Transport Federation which has offices in London. The Swedish courts would not consider any action because what was being done was completely lawful in Sweden. The consequence was that the owners had to pay proper wages, back-dated, to the crew, and certain other payments. It was argued that in the English courts they could recover that money which was paid by reason of the agreement, and that the English courts should require restitution by the International Transport Federation resident within the jurisdiction here.
The noble and learned Lord, Lord Goff of Chievely, said, and it had been argued,
"that a man ought to be able safely to regulate his conduct by complying with the laws of the country in which he finds himself. This may be true so far as the criminal law is concerned; but I cannot see that it applies in the case of matters which may affect the validity of a contract governed by some other system of law".
He led the four noble and learned Law Lords to the conclusion that restitution should take place. A severe dissent was pronounced by the noble and learned Lord, Lord Templeman, who said,
"the courts of this country should not concern themselves with industrial action lawfully carried out in the place where that action occurred … Moneys paid as a result of conduct lawful where committed and irrecoverable in this country under the law of tort [which is this case] should not be recoverable in this country under the law of restitution. The contents of a bottle cannot be changed by altering the label".
The amendment says to the Government that there is a need, in this extremely delicate area of industrial relations, for the Government to keep an eye on the way in which precedents in the courts are going. If this House and the other place reach the conclusion that it was a wrong direction, that the doctrine of economic duress has now been introduced not merely in regard to economic duress so-called in Britain, for which there is no immunity in the statutes, but also in regard to actions which are completely lawful abroad but which can be called economic duress as though it happened here, then perhaps the courts have gone a little too far. With a dissenting opinion by an authority such as the noble and learned Lord, Lord Templeman, there is a case for Parliament to say, "Wait a minute, you have gone a little far. Acts which are lawful in the country where they are committed so far as concerns trade dispute law should not be actionable on some pretext of their being transposed into another course of action in the British courts". I beg to move.
Viscount Ullswater: My Lords, in spite of what the noble Lord said in moving the new clause, I do not agree that such provisions are necessary or desirable.

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The clause would effectively limit the right to bring proceedings to halt an act which, if done in this country, would render a person liable to proceedings. That limitation would apply without regard to the effects of the act—which could be effects occurring in this country.
The noble Lord also said that the Dimskal Shipping company case demonstrates the need for provisions as proposed by the amendment. I am aware of the case and have considered whether its outcome requires any amendment to UK legislation. However, the fact is that the statutory immunities to which this amendment relates are relevant to the protection of acts against proceedings in court. I believe that the noble Lord will find that in the Dimskal case the judge at first instance held that the ITF was not liable in tort and that the shipowners did not pursue their claim in tort thereafter.
As the noble Lord well knows, the statutory immunities have never operated to protect an act against proceedings other than proceedings in tort. The Government have no plans to extend the immunities so that they prevent other kinds of proceedings, as we see no need whatever to do so. We find the new clause unacceptable. I hope therefore that the noble Lord will withdraw it.
Lord Wedderburn of Charlton: My Lords, I have three points for the noble Viscount and for his reading. First, it is not the case that immunities have operated only in regard to a liability in tort. The most important liability, excluded by an immunity since 1871, is that which would make a union liable for the
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doctrine of in restraint of trade, which is much more important in many ways than the liabilities in tort. If that is the basis of the noble Viscount's argument, it needs perhaps to be reconsidered.
It is not of course necessary to move this amendment into the law but it is desirable if one sees a doctrine being introduced which not only is an expansion of liability—that is before us as a side wind —but which also expands liability for acts done abroad. We are rapidly entering an area where transnational obligations and problems are first on the agenda. It is extraordinary that, whereas other courts are making great efforts not to expand liabilities and to hold the position stable, the Government should at this moment take this extraordinary attitude to a judgment which exposes new liabilities which can rest only on trade unions. However, that is perhaps, as it has been throughout the day, their judgment. It is desirable because it puts another liability on trade unions. This Bill will mark them out as an Administration for which we have no precedent in regard to industrial relations and civil liberties. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Citibank Europe Bill [H.L.]
Committed to an Unopposed Bill Committee.

Unibank Bill [H.L.]
Committed to an Unopposed Bill Committee.
House adjourned at sixteen minutes before midnight.

  SERBIA AND MONTENEGRO: SANCTIONS ENFORCEMENT
  SERBIA AND MONTENEGRO: SANCTIONS ENFORCEMENT
  EC ASSOCIATION AGREEMENTS: RATIFICATION
  EC ASSOCIATION AGREEMENTS: RATIFICATION
  SUNDAN: PEACE TALKS
  SUNDAN: PEACE TALKS
  HOUSE OF LORDS COLLECTION TRUST
  HOUSE OF LORDS COLLECTION TRUST
  ADAS: PROMOTIONAL MAILING
  ADAS: PROMOTIONAL MAILING
  FARMERS' RIGHTS UNDER DATA PROTECTION ACT 1984
  FARMERS' RIGHTS UNDER DATA PROTECTION ACT 1984
  FARMERS: MAPPING ASSISTANCE
  FARMERS: MAPPING ASSISTANCE
  ORDNANCE SURVEY MAPS: COPYING FEE
  ORDNANCE SURVEY MAPS: COPYING FEE
  SIZEWELL B PWR: PRESSURE VESSEL PROBLEMS
  SIZEWELL B PWR: PRESSURE VESSEL PROBLEMS
  BCG IMMUNISATION FOR SCHOOLCHILDREN
  BCG IMMUNISATION FOR SCHOOLCHILDREN
  HEARING AIDS: NHS PURCHASING ARRANGEMENTS
  HEARING AIDS: NHS PURCHASING ARRANGEMENTS
  ROAD PRICING
  ROAD PRICING
  BREWING INDUSTRY AND LICENSED TRADE: EMPLOYMENT FIGURES
  BREWING INDUSTRY AND LICENSED TRADE: EMPLOYMENT FIGURES
  SCHOOL EXCLUSIONS
  SCHOOL EXCLUSIONS
  FLOATING HELIPORTS
  FLOATING HELIPORTS