Sitting of 5 July 1993

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

    Invalidity Benefit
    Mrs. Helen Jackson: To ask the Secretary of State for Social Security if he will make a statement on his plans for invalidity benefit.
    Mr. Malcolm Bruce: To ask the Secretary of State for Social Security what representations he has received about the future of invalidity benefit; and if he will make a statement.
    The Secretary of State for Social Security (Mr. Peter Lilley): Invalidity benefit is being reviewed in the context of the fundamental review of social security expenditure. Many representations have been received. No decisions have been made, but when they are I will make a full statement to the House.
    Mrs. Jackson: Is the Secretary of State aware that, in Sheffield, the number of medical assessments for people on invalidity benefit has increased in every month since February, so that it is now 70 per cent. higher than it was in February? Is he also aware that, to use the words of a constituent who went for a medical assessment, it was undertaken in a way that made her feel "a criminal and a
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    scrounger"? Will the Secretary of State, therefore, assure all the many people who are already sick and depressed from being out of work that they will not suffer continual harassment and worry that their income will be removed?
    Mr. Lilley: I am grateful to the hon. Lady for writing to me about that case. I assure her that I have asked a senior medical officer in the area to look into her constituent's interview and report the details to me. Obviously, I would not like anyone to feel harassed in the way that she describes.
    The number of people applying for invalidity benefit has remained pretty constant in recent months throughout the country, whatever may have happened in particular regions, but, over the longer term—since 1979—the number of people receiving invalidity benefit has increased from 600,000 to 1·5 million, at a time when the nation's health has improved. It is only natural, therefore, that we should examine the benefit and see whether the arrangements for it can be improved.
    Mr. Bruce: Will the Secretary of State acknowledge that the sooner he can make a decision on that the better, and that many people who receive invalidity benefit are deeply concerned and angry that the Government may be targeting them—the poorest and most vulnerable members of the community—when wealthy donors to the Conservative party appear to be trying to persuade the Government to ensure that their incomes are protected? Can that be just and fair?
    Mr. Lilley: The second half of the hon. Member's question makes it clear that he is not seriously concerned about those on invalidity benefit. He is just trying to make cheap jibes at their expense. Nothing that has been said by the Government, or in any of the documents allegedly coming from us, would give rise to the fears that he mentions. Only the scaremongering of Opposition Members suggests that there is any targeting of people on invalidity benefit. Our objective is to ensure that those who are genuinely sick and disabled receive help and that it is not diverted to those who would be better off either working or on benefits that would help them back to work.

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    That seems to me a logical and positive approach, which those who have a genuine incapacity to work fully and whole-heartedly support.
    Mrs. Roe: Does my right hon. Friend share my view that his proposals to consult fully on a test of ability to work will be welcomed widely by the medical profession? Is he able to tell the House whether his Department has received any representations from doctors on the tightening up of procedures and current rules?
    Mr. Lilley: I agree with my hon. Friend that most people think that it is sensible to consider an objective medical test. We are considering it and we shall see whether it is possible to develop one. If so, we will consult fully about it. Since we began the tightening up of procedures under the existing legal powers in February this year, we have received about 300 letters from doctors, all but three or four supporting the changes that we are making and saying that it is sensible to tighten up, and that the previous arrangements were unsatisfactory for them as well as for their patients.
    Mr. Ward: Does my right hon. Friend agree that, while we all want applicants for state help to be sympathetically and courteously dealt with, he should not be deterred from carrying out a full review of all aspects of social security spending by all the smears and innuendo put about by the Labour party? Does he further agree that such a review is the only way to make sure that the money goes to those in need and not to those who would just like a little bit extra?
    Mr. Lilley: My hon. Friend is absolutely right. We have to carry out a deep and far-reaching review. The objective of that review is to end up with a better system, in the sense that it guarantees the position of the most vulnerable and needy in society and does not outstrip the nation's ability to pay. If we allowed the system to outstrip that ability, it woud collapse under its own weight and put at risk the very people who depend on it. Opposition Members who believe that nothing need be done are putting at risk those who depend on the system.
    Mr. Bradley: Is not it quite incredible that the Secretary of State accuses the Opposition of scaremongering and fails to deny that he will cut benefits to the sick and disabled who will have to pay the price for your economic impompetence? [HON. MEMBERS: "Order."] Does not he realise that the average invalidity benefit payment is £79 a week, which is well below the national average? Those people will suffer hardship if you tax it, thus reducing the amount of benefit to which they are entitled. If you add to that the heartless decision to stop payments to the independent living fund for the terminally ill because the Government refuse to resource the fund sufficiently—this is not scaremongering—that is a tax on the sick and disabled because the Government are trying to cut public expenditure. Will the right hon. Gentleman today stop the attacks on the sick and disabled and make sure that they have the amounts to which they are entitled, so that they may live and die in dignity and independence?
    Mr. Lilley: I am grateful to you, Madam Speaker, for sharing some of the unwarranted blame that we have to face on this issue. Whenever we have reformed and changed benefits, we have always protected the position of existing claimants. Everybody knows that and people have our track record to go on. Equally, we have made it clear
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    for many years, since the Chancellor of the Exchequer announced that it was our long-term intention to tax all income replacement benefits, that that has been our intention in the case of invalidity benefit, as elsewhere. Because of practical difficulties, we found it impossible to do that. However, most people would agree that it is sensible that a benefit that replaces income should, where possible, be treated like income and taxed for people who have other income to accumulate with it. The hon. Gentleman seems to think that money grows on trees and that it is just a matter of the Government pouring endless, additional sums into the benefit system. We have increased expenditure by two thirds in total, but growth must be contained within the nation's ability to pay.

    Social Security Payments
    Mr. Fishburn: To ask the Secretary of State for Social Security what percentage of central Government spending will go in social security payments this year; and what the figure was in 1979.
    Mr. Lilley: Expenditure on social security accounts for more than 30 per cent. of total Government expenditure. In 1978–79, the proportion was just 24 per cent.
    Mr. Fishburn: Do not these figures show that, unless something is done about it, the growth in social security will overwhelm us all? Is not the main intellectual and political question for the Conservative party to seek to constrain that giant in the years ahead? Does my right hon. Friend agree that there is no better place to start than to set a date for the equalisation of the age at which men and women may retire?
    Mr. Lilley: My hon. Friend is right; we have to start thinking now about these problems if we are to ensure that they are tackled sensibly and that we or a future Government are not forced into arbitrary cuts later. Every Government in the world face such a problem. Some, who perhaps have shown less foresight than us, have been forced into difficult and arbitrary decisions. Last week, the German Government had to announce nearly £10 billion of cuts, including real cuts of 3 per cent. in many benefits.
    We are committed to introducing an equal pension age for men and women and we shall make an announcement on that in due course. It would not be sensible to make an announcement before we have heard the Coloroll decision from the European Court of Justice, which should clarify the position on the equalisation of private pensions. We are proceeding in an orderly and speedy fashion to that end.
    Mr. Frank Field: Does the Secretary of State accept that he is panicking over his review of social security expenditure? Has he taken note of the Prime Minister's statement that 70 per cent. of the public sector borrowing requirement is due to cyclical—that is, unemployment—effects on the Government's budget? If that is so and the Secretary of State takes the Prime Minister's words to heart, should not he relax over the whole process?
    Mr. Lilley: The hon. Gentleman forgets that we have set a new control total for public expenditure that deliberately excludes the cyclical rise in spending on the unemployed because we believed that it was right, morally and economically, to finance that rise as the economy went into recession. As we come out of recession, it is equally

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    right and proper to keep to the same total and ignore, therefore, the cyclical beneficial effects on unemployment. Otherwise, there would be a permanent ratchet effect—every time there was a down turn, the level of expenditure would be raised and it would never be allowed to recover. Even if one excludes unemployment, the underlying rate of growth of spending on social security spending has been 3 per cent. a year in real terms during the 1980s and is set to be 3·3 per cent. up to the end of the century. That is something which must be taken into account in any long-term review.
    Mr. Forman: Is not the most disturbing consequence of the seemingly inexorable increase in social security over this long period the way in which it produces disincentives for people to take low-paid jobs? Is my right hon. Friend aware that one of my constituents, who saw me at my surgery on Friday, said that he has the possibility of taking a new job, largely on commission, selling insurance for £30 a week, plus any commission, whereas his existing income on income support is £300 a week? He complained that, when there is a disparity of that kind, where is the advantage of getting back into regular work?
    Mr. Lilley: My hon. Friend points to a difficult problem that arises especially acutely in the case of those on income support who get help with their mortgage payments. I do not think that it is possible to resolve that problem simply by extending that help to people in work, except at the potential expense of several billion pounds, which clearly is not affordable in any foreseeable circumstances. Therefore, we have to look at other ways in which we can try to improve incentives in the system and, of course, we are doing so.
    Mr. Dewar: Does the Secretary of State accept that many people are worried about the treatment of lone parents in future social security budgets following the speeches made by Ministers this weekend, some of which seemed to give the impression that lone parents were a feckless group of social outcasts? Is not it the case that 70 per cent. of lone parents are divorced, separated or widowed and that teenage unmarried mothers, so often represented as typical, are only a small minority of the total? Ministers preach family values, but does the Minister accept that their policies constantly undermine family stability?
    Did the right hon. Gentleman notice—[Interruption.] Did the Secretary of State notice that statistics produced by his own Department in the past week showed that, in 1979, 19 per cent. of lone parents had a family income of less than half the national average? By 1991–92, that figure had grown to 60 per cent. Rather than simply criticising lone parents publicly, would not it be right for Ministers to concentrate on helping the vast majority who want to earn their keep, by improving affordable child care facilities, training opportunities and job opportunities?
    Mr. Lilley: The hon. Gentleman is wrong on most points. The largest, fastest-growing group of lone parents —they cover a variety of different categories—is the "never married" category. The important thing is that we are not against any category of people and we are certainly not against lone parents. We are in favour of parents—both parents—accepting responsibility for their children and offering them love, affection and support. The state can and must sometimes step in with monetary help if
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    marriages break down and the parents are unable to support their children. However, we can never substitute for that love and commitment.
    Everyone notices that Opposition spokesmen, with one or two notable exceptions, never say anything good about the family and they always seem to support alternatives to it. That is, I imagine, why one anonymous leading Labour figure is quoted in The Independent today as saying that the hon. Member for Glasgow, Garscadden (Mr. Dewar) should stop trying to defend the indefensible. I agree with his colleague the hon. Member for Sheffield, Brightside (Mr. Blunkett) who, in a "carefully worded statement" according to The Independent, made it clear that Ministers were right to tackle the issue of single parents. He said
    "We need … real action to reinforce personal responsibilities. That means acceptance by fathers of their obligation towards their children and … housing policies which do not encourage the belief that the only way to a home is having a baby."
    I agree with the hon. Gentleman.

    Family Support
    Sir Anthony Durant: To ask the Secretary of State for Social Security what is the annual spending on family credit; and what was the spending on family income supplement in 1979.
    Mr. Amess: To ask the Secretary of State for Social Security how many awards of family credit have been made since the introduction of the scheme.
    The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt): Family credit expenditure for 1992–93 was £864 million. This is 13 times more in real terms than the £24 million spent on family income supplement in 1978–79. Since its introduction in April 1988, more than 3,750,000 family credit awards have been made.
    Sir Anthony Durant: In spite of earlier criticisms of the scheme, does my hon. Friend agree that the average payment is now £42 a week and that more than 80 per cent. receive at least £20 a week, which is an incentive to getting back to work? Is it not a better scheme than the earlier one?
    Mr. Burt: My hon. Friend is quite right. The average award now compares favourably with the average award of family income supplement, which, at current prices, would be about £17·40 a week, compared with the present average of £44 a week. The average for the self-employed is £55 a week. The numbers currently in receipt of family credit are at a record of 457,000. The scheme is fulfilling its aim of directing resources to where there is most need.
    Mr. Amess: Will my hon. Friend confirm that a family credit helpline was introduced in March this year, thus fulfilling another election manifesto commitment? Will he also confirm that our right hon. Friend the Secretary of State is conducting an advertising campaign to help unemployed families better to understand the benefits to which they would be entitled when in work?
    Mr. Burt: My hon. Friend speaks for some 1,300 family credit recipients in Basildon. I am pleased to tell him and them that our helpline, which now caters for potential as well as existing claimants, has received 250,000 calls so far. My hon. Friend is also right to say that the latest take-up

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    advertising campaign is aimed at the unemployed and informs them of their potential to receive family credit, which can act as a real incentive to getting back to work.
    Mr. Pike: Is not one of the reasons for the large increase in amounts paid out in family credit the large increase in the number of people on low pay as a result of Government policy? Will the Minister tell us how many people on low pay and living in poverty are entitled to family credit, but, unfortunately, not getting it?
    Mr. Burt: The hon. Gentleman fails to distinguish the fact that the most important determinant in family credit is not the size of the wage, but the number and the age of the children. Part of his anger comes from the fact that family credit is a better system than any supported by the previous Labour Government.
    Mr. Rooney: In view of the Minister's comments about the spectacular increase in the numbers receiving family credit and about the amount of the awards, when can we expect the Government to undertake a responsible review of how the money is distributed? How much impact has there been from the change in working hours from 24 to 16? Why does the Minister not look again at the clawback of 94 per cent. for anyone receiving an increase in wages?
    Mr. Burt: About 60,000 extra families have received family credit as a result of the change of hours from 24 to 16 as the entry to family credit. We keep the scheme constantly under review. I am sure that the hon. Gentleman shares my pleasure in the fact that take-up is increasing both for expenditure and for case load. Take-up by case load is 14 per cent. higher than it was five years ago and expenditure is 6 per cent. higher. I am sure that the hon. Gentleman welcomes those figures.
    Mr. Harry Greenway: Does my hon. Friend agree that family stability comes best from children being born of a loving relationship between a man and a woman? The strong movement towards girls and very young women to have babies to get flats and houses is damaging to them and to the children, because those children do not have the proper background that they should have. Will my hon. Friend consider that point and do all that he can to encourage proper family stability, because it is the bedrock of the nation?
    Mr. Burt: Behind some of the newspaper rhetoric over the weekend have been sensible comments from hon. Members of all parties and from a variety of commentators on the issues raised by single parenthood. Family structure is important. It is the responsibility of social security to protect the most vulnerable and it is too often forgotten that the most vulnerable element in a single-parent family is the child. We ought to hear more about the child's situation than about the rights and responsibilities of everyone else.
    Mrs. Golding: Given the big increase in the need for families to have family credit, does not the Minister think that, instead of proposing the withdrawal of all benefits from mothers with children who have been recently abandoned by their fathers, the Government would do better to concentrate their efforts on eliminating poverty wages and the threat of unemployment, as that would do more to stabilise family life? Or does the Minister agree with his right hon. Friend the Secretary of State for Wales who believes that penalising children is the right answer?
    Mr. Burt: There is no question of withdrawing benefit in the manner suggested by the hon. Lady. It is important that the social security system acts to protect the most vulnerable. The hon. Lady will also understand that the most important thing that any Government can do for the poorest is to improve the jobs situation. The Government are determined to improve that situation by keeping inflation and interests rates low. It should be noted that the prospects for growth in this country are significantly better than in the majority of countries abroad. I would have hoped that the hon. Lady would welcome that development.

    Pensioners (Income)
    Mrs. Lait: To ask the Secretary of State for Social Security what has been the change in pensioners' total incomes since 1979.
    The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague): In the decade following 1979, pensioners' average incomes increased by 30 per cent.
    Mrs. Lait: Will my hon. Friend confirm that the income of pensioner couples, excluding housing costs, has risen by almost a half since 1979, allowing for inflation? Will he further confirm that the proportion of pensioner couples in the lowest income groups has fallen from 19 per cent. in 1979 to 11 per cent. now? Does he agree that those figures show that pensioners are better off under a Conservative Government?
    Mr. Hague: My hon. Friend is absolutely right. She rightly draws attention to the figures published last week showing that the total incomes of pensioner couples have risen by 48 per cent., excluding housing costs, since 1979. That is largely because of the growth in occupational pensions and in income from savings. But the Government have always recognised that not all pensioners have shared in that increased prosperity. That is why extra resources have been concentrated on helping the oldest and poorest pensioners.
    Mr. Winnick: Is the Minister aware that, last week, a strong deputation of pensioners from all over the country came to the House and that they were deeply anxious that their standard of living will be further eroded as a result of the introduction of VAT on domestic fuel? Does the Minister recognise that, in this country, there remain literally millions of pensioners who are living on the very smallest of incomes? That have not benefited in any way from occupational pensions and now find themselves living day by day, virtually on the breadline. Are not the Government largely responsible because they have refused to increase the pension in line with earnings? Should not they be thoroughly ashamed of themselves?
    Mr. Hague: My right hon. Friend the Secretary of State and other members of the Government have always made it clear that extra help will be given before the increase in VAT takes effect next year. That help will be additional to the automatic increase in pensions and other beneftis that will reflect the impact of any increase in fuel bills. But the hon. Gentleman should remember that, in the past 14 years, total expenditure on benefits for the elderly has

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    increased by 40 per cent. in real terms, to a level never dreamt of by any previous Labour Government. The Opposition should remember that on all occasions.

    State Pension Age
    Mr. Jacques Arnold: To ask the Secretary of State for Social Security what is his current estimate of the additional cost of equalising the state pension age at 60 years.
    Mr. Hague: The cost would be around £4 billion a year more than the current scheme at 1992–93 prices.
    Mr. Arnold: Would not the reverse be true if equalisation were to take place at a higher level? Would not there be considerable savings—amounting to billions of pounds—in the social security budget, which could be redirected to those most in need? Is not that why Germany and the United States are well on the way to equalising at a higher level and why Denmark has already done so?
    Mr. Hague: My hon. Friend is right to point to the action taken by other countries in equalising, and in some cases increasing, their state pension age. Obviously, large savings stand to be made in those countries' expenditure. The Government are still considering all the options. No decision has yet been taken, but one will be announced in due course.
    Mr. Bennett: Is the Minister aware that the Government's continual dithering over this matter is causing a lot of hardship to people who have to make logical decisions about their retirement? Does he accept that what would help most people would be to offer a flexible retirement age between 60 and 65 to suit individuals and their savings?
    Mr. Hague: Accusations of indecision or dithering come strangely from a party whose policy on this matter is shrouded in the deepest mystery and is likely to remain so for some time. The Government have received 4,000 responses to their consultation document about the state pension age. It is fair and proper to give full consideration to all those responses and to await the European Court judgment, which was mentioned by my right hon. Friend the Secretary of State, before reaching a decision on any of the options, including a flexible retirement age.

    Social Fund
    Lady Olga Maitland: To ask the Secretary of State for Social Security how many payments have been made since the introduction of the discretionary social fund.
    The Minister for Social Security and Disabled People (Mr. Nicholas Scott): Since the discretionary social fund was introduced in 1988, more than 7·2 million grants and loans, worth more than £1·2 billion, have been awarded.
    Lady Olga Maitland: I thank my right hon. Friend for that most encouraging news. Will he confirm that, since the introduction of the social fund, more than £300 million has been given to community care projects and more than £800 million in interest-free loans? Is not that another good example of the Government targeting those most in need?
    Mr. Scott: I have no doubt at all that, in the five years of its life, the social fund has demonstrated its ability to
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    respond flexibly to need at the margins of the overall social security system and to control expenditure—something which its predecessor manifestly failed to do.
    Mr. Skinner: Why do not the Government admit the facts—that during their period in office, they have allocated £26·2 billion in tax cuts to the richest I per cent. of people in Britain, yet they have the cheek to tell people who are living below the poverty line that they cannot get money from the social fund? This Government stink to high heaven.
    Mr. Scott: I am tempted to respond to the gross discourtesy shown by the hon. Gentleman earlier in our proceedings by ignoring his question. Instead of doing that, I shall say that the social fund has responded to need and that Governments of all political colours have always found that, at the margins of any social security system, there is a need for a flexible response to special need. The social fund has provided such a response. The single payments scheme was doubling in cost every two years and had simply become unaffordable. I believe that we were right to bring that expenditure under control while meeting special needs.

    Benefits Uprating
    Mr. Simon Coombs: To ask the Secretary of State for Social Security how much was spent on uprating benefits in April.
    Mr. Lilley: The uprating of all the main benefits by 3·6 per cent. in April this year cost an additional £2·5 billion.
    Mr. Coombs: Does my right hon. Friend agree that it is essential that the Government, like other Governments, should live within their means when it comes to the social security budget? Is not it significant that the French Government have just announced that there will be no pension uprating in July this year and that they propose to claw back £3·8 million in health charges? Has my right hon. Friend also noted that the German Government propose a 3 per cent. cut in benefit across the board? Is there an example to be followed in all that, and will he follow it?
    Mr. Lilley: My hon. Friend puts his point extremely clearly. He will recall that, before the announcement of last year's public expenditure round, we heard scaremongering throughout the summer to the effect that we would have to make such a draconian cut. None of the scares that were run by the hon. Member for Glasgow, Garscadden (Mr. Dewar) turned out to be true. We fulfilled the uprating that was then necessary. We believe that it is sensible to carry out sensible structural reforms. We have begun that process with the long-term review. We have commitments and we have kept to them, unlike the Labour party, which singularly failed to do so when it was in power.
    Dr. Godman: In the light of the decision of the Secretary of State to accept the judgment of the European Court of Justice—case number C328/CF91—will he ensure that all the women concerned, who will benefit directly from that judgment and his belated acceptance of it, will not only receive the benefits to which they are entitled under European Community law but will be paid all arrears dating back to this April? Will he give an assurance that he

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    will not now proceed with his appeal at the Court of Appeal against Commissioner Skinner's decision, CS27/91?
    Mr. Lilley: He is no relation, I trust, of the hon. Member for Bolsover (Mr. Skinner).
    As I do not keep in mind a catalogue of all European Court cases by number, I shall write to the hon. Gentleman when I have traced that case number. We have no option but to accept the rulings of the European Court of Justice since it overrides the authority of the House.

    Single Mothers
    Mr. Riddick: To ask the Secretary of State for Social Security how much was provided by his Department in benefits to single mothers in 1975, 1980 and the last year for which figures are available.
    Mr. Burt: Although changes in the benefits system mean that figures for 1975 and 1980 are not available, expenditure on benefits for all lone parents has increased from £2·4 billion in 1981–82 to £6 billion in 1991–92 at constant prices.
    Mr. Riddick: Those are pretty incredible figures. Does my hon. Friend agree that, when the welfare system encourages young women to have babies out of wedlock so that they can qualify for council houses and benefits, perhaps the system has gone too far? Will he confirm that the Government will take action to extend and encourage parental responsibility, particularly paternal responsibility?
    Mr. Burt: There are many reasons why there has been a greater number of single parents in the past 20 years or so, including a greater tendency to divorce and separate, as well as a rising number of single, never-married young mothers. The responsibility of social security is that, whatever the relationship between parents may have become, a child has a right to be financially protected: in the first instance, by its natural parents, and the Child Support Agency will reinforce that; secondly, by providing what incentives we can for mothers to go back to work, where appropriate, because all the evidence that we have shows that the majority of single mothers want to get back to work; and, thirdly, where children are left vulnerable, they must be protected by the rest of society.
    Ms Glenda Jackson: Will the Minister take this opportunity to condemn unreservedly not only the question put by the hon. Member for Colne Valley (Mr. Riddick) but the speech made by the Secretary of State for Wales over the weekend, which quite outrageously alleged that young women deliberately make themselves pregnant to benefit from housing and social security benefits, when the Minister knows, as do Conservative Members, that there is absolutely no evidence whatever to support those scurrilous allegations? Will he further assure the House and the country that no woman and her children will be denied benefit because she will not name, or the Government cannot find, the father?
    Mr. Burt: It was clear this weekend that the issue of single parenthood has now been raised, and a variety of sensible comments have been made by hon. Members on
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    both sides of the House. My right hon. Friend the Secretary of State mentioned the quote from the hon. Member for Sheffield, Brightside (Mr. Blunkett).
    In addition, my right hon. Friend the Secretary of State for the Environment said that Britain had moved on, quite rightly, from the unacceptable situation where single mothers were ostracised but
    "as a society we have to think seriously about how we try to help single mothers and I am not at all sure that putting them on their own with their children is the best way."
    The hon. Member for Croydon North-West (Mr. Wicks) wrote an interesting article on single-parent policy, which appeared in The Guardian today. The issues have now been raised and, provided they are discussed sensibly and in a straightforward way, some of the problems that affect single parents, and therefore society, can now be sensibly considered.

    Child Benefit
    Mr. Congdon: To ask the Secretary of State for Social Security how many increases in child benefit have been announced in the past two years.
    Mr. Burt: Since April 1991, there have been four increases in child benefit rates—in April and October 1991 and April 1992 and April 1993. These have increased the pre–1991 rate of £7·25 a week for each child to the current rate of £10 a week for the eldest eligible child and £8·10 a week for all other children.
    Mr. Congdon: Will my hon. Friend confirm that the Government have pledged to retain child benefit as the cornerstone of their policy for helping all families with children? Will he further confirm that the annual uprating of child benefit, in line with the increase in prices, fulfils that pledge? Does he agree that the greatest threat to universal benefits is the threat to means-test them, which emanated from members of the Labour party?
    Mr. Burt: Yes, what we know from the Commission of Social Justice, which is not very much, shows that my hon. Friend is right to have such suspicions. Child benefit remains the cornerstone of our policy; but since 1988 the Government have been able to find additional resources worth £1 billion, which have been made available to the least well-off families with children. That is a record of which to be proud.

  CHURCH COMMISSIONERS

    Church Congregations
    Sir Michael Neubert: To ask the right hon. Member for Selby, as representing the Church Commissioners what account is taken of the size of congregations in setting the contribution required from each parish to diocesan funds.
    Mr. Michael Alison (Second Church Estates Commissioner, representing the Church Commissioners): It is not for the commissioners to set parish share or quota levels. Each individual diocese has its own method of calculating that and most take account, among other things, of the usual Sunday attendance figures, which are based on congregation size at times other than festivals or peak holidays.
    Sir Michael Neubert: Is not it a matter of regret that church finances, which are already reeling from a fall in property values, will now have to cope with compensation running into millions of pounds to clergy who are leaving the Church in opposition to the ordination of women priests—an avoidable and infinitely divisive issue which, unlike the Bishop of Durham, who is taking retirement, and despite what he says, will not go away? Would not it reduce the number leaving and ease the financial burden on congregations if the safeguards proposed in the Act of Synod were incorporated in a supplementary Measure and given the force of law, rather than expecting traditionalist clergy to run the risk of another fit of political correctness and militant feminism at some point in the future?
    Mr. Alison: I take note of what my hon. Friend has said. We very much hope that the alarmist figures of likely resignations will prove, in practice, to be gross overestimates and that the pastoral provisions announced already by the bishops of the Church of England will go a long way towards reassuring those who are in danger of resigning. I should point out to my hon. Friend that the net cost arising from resignations will depend on the extent to which resigning clergy are immediately replaced.
    Mr. Frank Field: The hon. Member for Romford (Sir M. Neubert) asked whether the right hon. Gentleman would be in favour of the safeguard being enshrined in a supplementary Measure. If that Measure came before the House after women's ordination had taken effect, would he be in favour of that?
    Mr. Alison: I would certainly be in favour of that, particularly if the hon. Gentleman felt happy with it. But we would have to look at it on its merits, and it would be difficult to provide the safeguards for which he and I are looking. Much would depend on appointment factors, which are often subject to secret voting, and one could never be certain that the aims that we seek were achievable in a statutory form.

    Property Assets
    Mr. John Marshall: To ask the right hon. Member for Selby, as representing the Church Commissioners what is the latest estimate of the property assets of the Church Commissioners.
    Mr. Alison: The commissioners' property investments were valued at £901·2 million net at 31 December 1992.
    Mr. Marshall: My right hon. Friend is possibly as surprised as I am that we have reached this question this afternoon. Has he considered the question of clergy housing? Is it desirable for clergy to live in a tied cottage for 40 years and then have to buy a home when they retire? Would not more women priests be attracted to the Church —many of us look forward to that—if they did not have to live in tied houses?
    Mr. Alison: It would be very difficult to enable a clergyman to stay in the house from which he had been ministering to his parish, after he had resigned the incumbency of the parish. His successor would have to find somewhere to live, and there would be an increasing roll-on effect with the need to buy more and more property over the years. My hon. Friend will be aware that the Church has a very active and helpful rehousing provision
    14
    to enable clergy, on leaving a tied cottage, to find property for their retirement which is well subsidised by the Church Commissioners.

  LORD CHANCELLOR'S DEPARTMENT

    Commonhold
    Mr. Fishburn: To ask the Parliamentary Secretary, Lord Chancellor's Department what plans he has for introducing commonhold.
    The Parliamentary Secretary, Lord Chancellor's Department (Mr. John M. Taylor): The Government intend to introduce legislation when parliamentary time allows.
    Mr. Fishburn: Is not it absurd that condominiums and co-operatives, which are the standard way in which flat owners own their property throughout the English-speaking world and the Common Market, are not available in England? Would not commonhold put that right? Would not it be beneficial for this measure—which is supported by everyone who is interested in the proper forms of tenure for our great cities, from. the Duke of Westminster to the Labour Front Bench—to be introduced as soon as possible?
    Mr. Taylor: No one has done more than my hon. Friend to advance that proposal and see it thus far, with the enfranchisement legislation shortly to receive Royal Assent. I share his sense of urgency about getting the condominium rules, or commonhold, on to the statute book, although he may feel that those of his constituents who have lived, in their view, under difficult reversion regimes have achieved a vital breakthrough in being able to acquire the freehold reversion. I agree, however, that the picture will not be complete until we get the commonhold legislation on to the statute book as well. There is great pressure on parliamentary time, and the commonhold legislation will have to compete with other legislation that the Government are minded to introduce.
    Mr. Raynsford: Does not the Minister accept that, following the Government's shameful climbdown in the face of the interests of the landed estates and the Duke of Westminster, the leasehold enfranchisement measures in part I of the Leasehold Reform, Housing and Urban Development Bill will prove to be a sham to the large number of leaseholders who will not be able to take advantage of them? When will the Government show a sense of urgency about the need to reform leasehold and introduce the commonhold measures that have been promised for far too long?
    Mr. Taylor: I have just answered the second part of the question. As for a climbdown, as the hon. Gentleman calls it, I am not aware of one. The measures introduced by the Department of the Environment, which are shortly to receive Royal Assent, have received a broad and proper welcome.

    Legal Aid
    Mr. Ian Bruce: To ask the Parliamentary Secretary, Lord Chancellor's Department what is his latest estimate of the amount that will be spent on legal aid in the current year; and what the figures were for (a) 1978–79, (b) 1990–91, (c) 1991–92 and (d) 1992–93.
    Mr. John M. Taylor: It is estimated that net expenditure on legal aid will amount to £1·284 billion in the current financial year. Net expenditure on legal aid in 1978–79 and in the previous three years was as follows: for 1978–79, £86 million; for 1990–91, £682 million; for 1991–92, £906 million; and for 1992–93, £1·093 billion.
    Mr. Bruce: The figures are clearly frightening because they reveal the speed at which the cost of legal aid is increasing. Has my hon. Friend thought to tackle the problem from the other direction, by reforming court procedures to cut the delays and waste caused by having many lawyers sitting around in court waiting for cases to be called and by frequent adjournments, thus also creating various costs?
    Mr. Taylor: As I have been one of those lawyers who used to sit around, I have every sympathy with my hon. Friend's question. He may like to know that improvements to and the simplification of court procedures are a constant and urgent preoccupation of the Lord Chancellor's Department. Meanwhile, the royal commission will report tomorrow, and my hon. Friend will no doubt want to see the extent to which its proposals meet his anxieties.
    Ms Eagle: What is the Minister's opinion of the fact that when Mr. Asil Nadir fled bail, he left behind a legal aid bill of £1 million which has to be footed by the British taxpayer, although Mr. Nadir is clearly not short of money? Will the Government consider examining the loopholes in the legal aid system to prevent such outrages happening again?
    Mr. Taylor: It is extremely unusual to hear the Labour party worrying about the taxpayer—refreshing perhaps, but just a touch unusual. The Labour party's usual cry is for more and more legal aid.
    Mr. David Shaw: What are the Department's views on the projections for growth in legal aid costs over the next few years? Is the Department worried about the fact that it is projected that the legal aid bill will exceed the Government support given to manufacturing industry?
    Mr. Taylor: I do not have a brief to speak on industrial matters, but I can answer my hon. Friend's question about the amount by which legal aid is set to increase over the next three years. Very approximately, the figures are 10 per cent., 10 per cent. and 10 per cent. in each of the next three years, and the anticipated usage of legal aid is expected to rise from the participation of 3 million persons per annum to 4 million persons per annum during the review period.
    Mrs. Roche: To ask the Parliamentary Secretary, Lord Chancellor's Department what assessment his Department has made of the effect of the recent restriction in eligibility to legal aid; how many representations he has received on this issue; and what proportion of them have indicated that this restriction is causing hardship.
    Mr. John M. Taylor: We estimate that about 48 per cent. of households are now eligible for civil legal aid and about 21 per cent. for advice and assistance under the green form scheme. The Lord Chancellor and I have received a number of representations about various aspects of the changes to legal aid eligibility, a small proportion of which give examples of the effect of the changes.
    Mrs. Roche: What would the Minister say to the seriously ill leukaemia patient who is not able to sue for medical negligence because of cuts in legal aid and who said that he could not gamble with the money that is meant for his children's food? What consideration has the Minister given to the Home Affairs Select Committee's recommendation that the cuts in eligibility should be restored?
    Mr. Taylor: I remember that the hon. Lady raised the issue of the Home Affairs Select Committee's report with me during the debate on legal aid eligibility. I am at pains to tell her that the Lord Chancellor will shortly report, on the Government's behalf, on the Committee's report. I think that that will happen soon, and I do not want to anticipate it.
    Sir Ivan Lawrence: Is my hon. Friend aware that two hours' consultation under the green form scheme for someone with an income of up to £60 a week will be free and that two hours' consultation for someone with an income of £62 a week will cost £100? In view of the all-party Home Affairs Select Committee's recommendation that the suspension of the green form scheme should be dispensed with, especially as it is to continue in Scotland —the Lord Chancellor told the Select Committee that people north of the border would be better off than people in the south—will my hon. Friend undertake to look again at the decision to do away with the green form scheme other than for those on income support?
    Mr. Taylor: My hon. and learned Friend will be aware that the proposals were approved not long ago by a majority of 49 in this honourable House. They were subsequently referred to the High Court on judicial review, whereupon the Lord Chancellor's position was sustained in its entirety. However, it is not for me to anticipate future positions with regard to public resources and the many claims on them. We will continually and very closely monitor the effects in practice of the changes that we have made.

    Judges
    Mr. Cohen: To ask the Parliamentary Secretary, Lord Chancellor's Department what study has been made of the parental background, gender and race of judges; and what proposals he has for change.
    Mr. John M. Taylor: The Lord Chancellor's policy is to appoint to judicial office, entirely on merit, those best qualified, regardless of gender, ethnic origin, political affiliation, religion or parental background. The Lord Chancellor has repeatedly made it clear that he particularly encourages applications for judicial appointment from women and ethnic minority practitioners.
    Mr. Cohen: Are not working-class, black, Asian and women judges scarcer than praise for Arthur Scargill from

    17
    a Tory Government? Does not the hidebound and classbound composition of the judiciary contribute to its many mistakes? Are not many students—intelligent young men and women—saying that they now find it harder to obtain grants for courses in law studies? Is not it about time that the Government fast-streamed working and middle-class young men and women into the upper reaches of the legal profession?
    Mr. Taylor: The only figures available on the socio-economic background of lawyers are contained in the results of a survey of student solicitors at the College of Law. In that survey, just over half the students responding described themselves as being from socioeconomic groups A and 13, 28 per cent. described themselves as C1, C2 or C3 and 20 per cent. failed to respond. That is encouraging evidence of a growing social spread among new entrants to the profession, but it is by no means a cause for complacency.
    Mr. Hawkins: Does my hon. Friend agree that the significant increase in judicial appointments in recent years from ladies and members of ethnic minority communities is greatly to be welcomed? However, does he agree also that it is ludicrous for the Labour party to call for some kind of positive discrimination when what the British people need are the best judges? Is not it absolutely right for the Lord Chancellor to continue to insist that judges will be appointed only on merit and does not the positive discrimination suggested by the Labour party lead Labour into the ridicule and contempt of the British people?
    Mr. Taylor: Yes, indeed. My hon. Friend may wish to know that the number of women in the judiciary is showing a steady increase. The trends at the lower levels are most important and they are the most particularly encouraging. There are now 50 female assistant recorders, compared with 35 some 15 months ago.
    Mr. Boateng: Does the Minister recognise that, the merits of the current judiciary apart, there is a need for special training for judges hearing, trying and sentencing in cases involving sex offences? Does he recognise the extent to which the judiciary is brought into disrepute by the silly and inane remarks of some judges? What attempts will he make to ensure that the training for the judiciary in that important area is enhanced?
    Mr. Taylor: There is no more urgent area of anxiety and progress in the Judicial Studies Board programme and curriculum than that identified by the hon. Gentleman. It has the highest priority of all.
    Mr. Lidington: Would it not add to the diversity of the background of members of the bench if the Government were to ensure that rights of audience in the higher courts and eligibility to sit on the bench were opened up to all solicitors—not just solicitors in partnership but employed solicitors? Will my hon. Friend therefore override the objections of the barristers's trade union and introduce that necessary reform?
    Mr. Taylor: The Lord Chancellor's advisory committee on legal education and conduct published its advice on this important matter on Friday. The committee's advice gives the green light to solicitors in private practice appearing as advocates in the higher courts. I think that the lights are at amber for employed solicitors. The Lord Chancellor will be considering those matters with the appointed judges.

    Lawyers
    Mr. Barry Jones: To ask the Parliamentary Secretary, Lord Chancellor's Department what information he has on the number of persons qualifying as (a) solicitors and (b) barristers in each of the last three years.
    Mr. John M. Taylor: The information that the hon. Gentleman requires is collected by the independent professional bodies themselves. I understand from the Law Society that, in 1990, 3,389 solicitors were admitted to the roll, 4,614 were admitted in 1991 and 4,775 in 1992. I understand that, in 1989–90, 1,200 barristers were called, in 1990–91, 1,157; and in 1991–92, 1,340.
    Mr. Jones: I thank the hon. Gentleman for the detail of his reply. Does he agree far more women barristers and solicitors are needed so that, before too long, we have a sufficient number of judges who are of the female sex? Does he accept that far too many of our judges are way off beam and far too insensitive when dealing with cases that relate to sex crimes? Will he admit that his Department —indeed, the Government—must do more so that we might have a better show? There is a need for him and his Department to do better.
    Mr. Taylor: If the hon. Gentleman would re-read his question, he would see that there was no other way that I could answer it. He might take comfort from the fact that the most recent figures show that, in 1992, 49 per cent. of all those admitted to the roll as solicitors were women and that 13 per cent. were from ethnic minorities. Out of a total of 1,340 barristers called in 1991–92, 41 per cent. were women. The hon. Gentleman must regard that as encouraging.

Defence Estimates, 1993
3.31 pm
The Secretary of State for Defence (Mr. Malcolm Rifkind): The House will be aware that every year the Government publish a Defence White Paper, which sets out their policy and plans for the future and describes the activities of the armed forces in the Minister of Defence. This year's White Paper, called "Defending our Future", is published today. We are also publishing the United Kingdom defence statistics for 1993, and a separate defence statistics bulletin showing expenditure on research and development.
I have taken the unusual step of announcing publication through a statement in the House because, although the White Paper includes the traditional information, I believe that the approach that we have taken in "Defending our Future" is a new departure, and that much of the material in it is particularly significant.
That applies in two respects. First, "Defending our Future" reports on the adjustments to the "Options for Change" force structure, taking into account recent changes in the international situation, and presents that force structure as an integrated whole.
Secondly, it then shows, in a way which has never been attempted before, how each of the elements of our armed forces can be matched to the various tasks which we require the armed forces to carry out. That matching of forces to tasks is crucial. The two must be in balance if we are to avoid wastefulness on the one hand and overstretch on the other. I believe that the analysis which we set out, which is an entirely new and ground-breaking approach, shows that that balance is being achieved.
The force levels of the armed forces are kept under constant review. We are regularly analysing the international situation, evaluating the threats which we face, and making sure that we have the right mix of forces to meet that threat. It is a continuous process. It is not something that we do every year, stopping our planning while we do it. Since last year's defence White Paper, we have continued that process of adjustment. Our conclusions are set out in detail in "Defending our Future". This afternoon I will describe the most important elements of what we are proposing.
The international situation continues to change, and in a number of very important respects the security of the United Kingdom has been enhanced in the past two years. In certain other areas there have been new demands on our armed forces. "Defending our Future" addresses both considerations.
I refer first to the improvements in our security and the implications for our force structure. Russia remains the largest European military power and it retains significant forces for its own defence; but it is also well disposed to the United Kingdom, its offensive capability has dramatically reduced, its equipment serviceability has deteriorated, and its defence industry is in decline. Since 1991, the Soviet Union has ceased to exist and Russian forces have now largely withdrawn from Ukraine, Belarus and the Baltic states as well as from eastern Europe. At the same time, we have made great progress in establishing mutual trust with our former enemies.
That means that a major external threat is even more unli8kely to re-emerge in the foreseeable future than seemed likely in 1991, and this makes it sensible for us to
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make some reductions in the levels of relevant forces that were particularly aimed at countering the Soviet threat. Equally, the changed strategic situation has demanded that we confirm a series of enhancements to our capability in other areas. Let me begin with the reductions.
For the Royal Navy, the rapid decline in the size and operational activity of the former Soviet submarine fleet means that there is no longer the same need to sustain the current level of anti-submarine operations in the north Atlantic; nor is there the same need to patrol the Greenland-Iceland-United Kingdom gap.
We therefore plan to reduce the submarine fleet to 12 SSNs and to withdraw the Upholder class of four conventional submarines from service by 1995. We are examining the relative merits of their sale, lease, or storage. The reduced risk in the north Atlantic also means that the surface fleet can meet its tasks in peace and war, including our contribution to NATO, with a force of about 35 destroyers and frigates.
For the Army, we have decided that our requirement for indirect fire anti-armoured weapon can best be met through procurement of an air-launched weapon. Already, the United States and Germany have withdrawn from the MLRS 3 collaborative programme, and we will follow them at the end of the current phase.
For the Royal Air Force, the reduced threat of air attack to the United Kingdom means that a force of 100 Tornado F3 fighters will be fully capable of defending the United Kingdom and meeting our commitments to NATO's reaction forces. This is a reduction of 13 aircraft, and the force will be reorganised into six squadrons rather than seven. There will be no change in the number of Tornado GR1 aircraft.
We have also decided that, for similar reasons, there is no short-term requirement for a medium surface-to-air missile, but there is likely to be a longer term need and we are continuing our studies into those options. There is a clear operational justification for each of those reductions, which otherwise would not have been agreed.
I turn now to the other side of the picture—the enhancements to our current force structure that are appropriate to respond to new challenges and potential threats. The past 12 months have shown an increase in the number of operations, both in Europe and the wider world, in which our armed forces might be involved in conflict.
There is a need to ensure maximum flexibility and mobility for our armed forces in the modern world. In the White Paper we present measures that will improve our overall capability to respond to the changing situation, some of which have recently been announced to the House.
For the Royal Navy, we recently announced procurement of a helicopter carrier which will enter service later in the decade and which will significantly enhance our amphibious capability. No such dedicated carrier has been available to the Royal Navy since 1985. We are also proceeding with project definition of the class of ships to replace HMS Fearless and Intrepid.
For the Army, I recently announced an increase in the planned size of the infantry to take account of our new commitments, and our intention to retain two additional battalions and increase front-line strength by 5,000. We are also considering how best to equip the Army's six

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Challenger I regiments, over and above the purchase of 127 Challenger 2 tanks which we have already announced. I will make a further announcement in due course.
I am able to announce today that we are placing an order worth some £75 million for over 400 new medium load carrier vehicles. That will enable us to deliver ammunition quickly to forward locations in support of our new AS90 self-propelled howitzers, and provides a good example of the practical steps we are taking to enhance the mobility and flexibility of our forces. We have also invited tenders for a future attack helicopter, which will substantially enhance the Army's anti-armour capability.
For the Royal Air Force, "Defending our Future" confirms plans to replace or refurbish part of the Hercules transport aircraft fleet. We also intend to procure a substantial number of additional support helicopters to increase the flexibility and mobility of our armed forces. The Eurofighter 2000 is now secure, and will be the cornerstone of the RAF capability in the future, and we have plans to upgrade the Tornado GR1's operational capability.
Those adjustments, taken together, represent a shift in the overall capability of our forces. We are reducing capability where the threat to the United Kingdom has itself been significantly reduced. We are gaining capability in those areas where we believe we will be required to act. Changes to particular capability areas need therefore to be seen in the context of the whole programme, and our security policy objective.
For example, our plans to reduce anti-submarine and air defence capabilities must be viewed alongside improvements in areas such as Army manpower, the new helicopter carrier, armour and anti-armour, and air transport helicopters—all key elements of the mobile, flexible and well equipped forces which we shall need for our future security needs. Choices always have to be made. It is my view, and that of the chiefs of staff, that we have made the right choices to enable us to face up to the challenges which confront us.
I turn now to the major innovation set out in "Defending our Future". I mentioned at the beginning of my statement the new analysis that we have undertaken of the way in which our armed forces carry out their commitments. "Defending our Future" includes unprecedented detail about the rationale for our current and planned force structures and activities.
During the cold war, defence planners dealt with a relatively simple equation, one side of which was the monolithic threat from the east. In the post-cold-war world, that certainty has vanished to be replaced by a broad spectrum of risk and uncertainty. The defence planner needs more sophisticated tools to ensure that the programme really is providing what such a fluid strategic setting demands.
We have therefore identified broad policy areas within each of the defence roles set out in last year's statement, and within each of those the specific military tasks, 50 in number, which the armed forces are required to undertake. We have then identified with some precision the force elements—for example, the number of infantry battalions or frigates or aircraft—required to meet each task.
All that is set out, in full, in the White Paper. It gives Parliament and the public an insight we have not had before into the purposes for which we use all the elements of our armed forces. It highlights the balance which currently exists between commitments and resources. It
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also shows clearly how changes—for example, a decision to take on a new United Nations commitment or the approaching obsolescence of an item of equipment—may affect the detail of the programme. There are many valuable conclusions to be drawn from the analysis. Let me give a few general examples.
First, our analysis has also shown us how our defence needs are influenced by national commitments unique to the United Kingdom. Most of our European partners do not have commitments analogous to our responsibilities in Northern Ireland and to our dependent territories; nor, except for France, do our European allies maintain a national nuclear deterrent. The cost of those activities amounts to more than £3 billion a year. That has to be borne in mind when comparisons are made between levels of defence spending.
Secondly, the analysis also shows the value of NATO, and the benefits of sharing the financial burden of our collective security of the defence of Europe. If NATO disappeared and we had to insure on a purely national basis against major external threat, we would almost certainly have to spend a great deal more money than we currently do.
Thirdly, another valuable insight is the overlap between the types of forces needed for the defence of Europe and the types of forces needed to contribute to our wider security interests—through United Nations operations, for example. The kind of mobile, flexible, well equipped and trained forces, with true war-fighting capabilities, that we provide for our NATO commitments have proved equally suited to operations in the Gulf and in Bosnia—the Tornado and Sentry aircraft and the Warrior armoured personnel carrier, for example.
But the most significant overall conclusion is that the planned force structure is capable of meeting all the tasks we require of it. At the same time, we must, of course, ensure that its high quality of manpower, equipment and support is mantained; and I have touched on a number of the major items in our foward programme that will help us to do so. We must also watch carefully to ensure that we maintain the balance we have achieved between our commitments, our force levels, and the resources devoted to defence. Again the analysis will help us to do so.
I do not expect the House to comment in detail on this material today—but I hope, by publishing this analysis, that our defence debates will be even better informed than in the past.
"Defending Our Future" is a comprehensive account of the Government's defence policy. It rightly describes the tasks of the armed forces and the civil servants in the Ministry of Defence. I pay tribute to the outstanding way in which they carry out their duties. It also breaks major new ground in terms of open government. Never before have commentators on defence issues has such access to the defence planner's perspective. I hope that the House will understand and appreciate the seriousness of this endeavour, and I commend it to the House.
Dr. David Clark: I thank the Secretary of State for his "Statement on the Defence Estimates" and for accepting the argument, which the Labour party has advanced over the years, that more information on planning in the armed forces should be available to us. We do indeed appreciate this—especially the Secretary of State's acknowledgement of the role that our forces will

23
have to play under the aegis of the United Nations. Opposition Members take this matter very seriously. Indeed, it is included in the Labour party's constitution.
However, what the Secretary of State has announced is merely a small step, and is in no way a substitute for a full defence review, which would enable an assessment of the threats and the challenges to Britain's security to be made, so that our armed forces could be reshaped accordingly.
The Government's statement is long on presentation, but short on commitment; long on planning, but short on strategy. We have had fine words, but where's the beef? In reality, there will be increased demands on our armed forces, but they will have fewer tanks, fewer ships and fewer men and women. Nothing has changed: the overstretch will go on.
When will the Secretary of State shake off his indecision and take some decisions? When, for example, will he confirm that he has not yet made up his mind on a new nuclear bomb for the RAF? Does he not realise that he will have to cancel this eventually? Why cannot he do so now and save £3 billion?
Will the right hon. and learned Gentleman confirm also that he cannot make up his mind about the decision concerning Challenger 2 tanks? We need to know whether he intends to upgrade Challenger I or replace it with Challenger 2.
Why cannot the Secretary of State make up his mind about support helicopters? Is he not aware that our armed forces are desperately short of helicopters? Does he not recall that one of his predecessors, as long ago as 1987, announced the Government's intention to place an order for 25 EH101 support helicopters? After six years, is the Secretary of State incapable of making a decision?
What about our conventional submarines? How and why are the four Upholder class submarines to be disposed of, even though they cost us almost £1 billion to complete and are not yet in service?
These are questions to which we need answers. We need decisions. Today was decision day for the Secretary of State, but we have not had decisions.
The Secretary of State referred to the need for a non-proliferation treaty and for a comprehensive test ban. Will he now join Labour in welcoming President Clinton's wise decision, over the weekend, to extend the ban on nuclear testing? Why is the right hon. and learned Gentleman being so churlish? Does he not accept that this is a major step towards renewal of the non-proliferation treaty in 1995? Will not the Government welcome it?
Why does the Secretary of State treat the defence workers of Britain in such a cavalier and callous manner? Does he not appreciate that more than 100,000 of them have lost their jobs? The right hon. and learned Gentleman doe not seem to care about them. Why does he persist in refusing to establish a defence diversification agency, which could help in the transition from military to civilian jobs? These skills are too valuable for the nation to lose.
The Opposition accept that there is a case for reducing the amount that we spend on defence. With the end of the cold war, virtually every country in the world is doing so. But it must be done with management and planning, and the criteria must be those of security and defence, and not
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simply demands from the Treasury, which are what the Government have adopted as their criteria. Strategy and savings can go hand in hand, but they must be balanced.
Today, we have had "Options for Change" mark 2. "Options for Change" mark I cut service manpower and today we have had cuts in equipment. When are we to expect mark 3, which will cut commitments?
The Secretary of State talks of "adjustments", but the adjustments that he has discussed today are no substitute for a full-scale defence review. The Conservatives have got Britain's defence into such a mess because they persist in that folly. It will remain in a mess until we have a full defence review.
Mr. Rifkind: The hon. Member for South Shields (Dr. Clark) asked me about Challenger tanks, support helicopters and submarines. He will appreciate the fact that, if Labour's policy of a £6 billion reduction in defence spending were implemented, there would be none of any of those for the armed forces, now or at any time in the future. The hon. Gentleman should reflect on that fact.
On Challenger tanks, the various rumours and reports about possible reductions in the number of armoured regiments or armoured reconnaissance regiments are incorrect. We have no proposals to make any reductions in the number of armoured regiments or armoured reconnaissance regiments. We are considering the best way to meet the modern requirements, in terms of their tanks, of those regiments.
We have reviewed the question of support helicopters and can confirm that there is an enhanced requirement for them to ensure mobility and flexibility for the Army's needs. I hope to make a fairly early announcement on precisely how we intend to implement that matter. We have said in the White Paper that we are considering options such as the sale, lease or storage of the Upholder submarines, and that will be taken forward.
The hon. Gentleman asked about nuclear tests in the light of President Clinton's announcement. Historically, this country tests less than any other nuclear power. We have carried out an average of one test a year, which is far fewer than France, the United States, Russia or China. Only with testing can one ensure the safety and reliability of nuclear weapons. If testing is not to continue, it will be necessary to develop computer modelling and simulation techniques but we cannot yet be certain that those methods will provide the information available from underground testing. Clearly, that needs further detailed consideration.
Finally, the hon. Gentleman came up with his usual call for a defence review, which masks the bareness, the nudity, of Labour party policy. Whenever the House asks the Labour party how much it thinks should be spent on defence, we are told that that will be considered by a defence review. When we ask the Labour party how many battalions, frigates or aircraft are required by the armed forces, we are told that that will be the subject of a defence review. When we ask what the commitments of the armed forces should be, we are told that that should be the responsibility of a defence review.
The hon. Gentleman's view and that of the Liberal party remind me of a remark that Voltaire once made—that the Opposition are like a eunuch, knowing what they want to do but not know how to do it.
Sir Nicholas Bonsor: I welcome the new format of the "Statement on the Defence Estimates",

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which my right hon. and learned Friend the Secretary of State has produced today. I particularly welcome the new way in which the size and structure of the forces are linked to the Government's commitments, internationally and to defend our own country.
My right hon. and learned Friend will know that the Defence Select Committee feels that, in some aspects, our forces are overstretched at the present level of commitment, and we are looking for improvements to be made in specific areas. However, he is absolutely right to make that specific statement linking the two, and I look forward in future to ensuring that commitments do not outstretch resources.
In that context, I see no prospect of our being able to cut the commitments that the Government face in the short or long term to secure our country's future. That being so, it must follow that the Treasury can make no further cuts in resources to the funds made available to the Ministry of Defence. I hope that my right hon. and learned Friend will convey the feeling of myself, the Defence Select Committee and many of my colleagues to that effect.
Mr. Rifkind: I thank my hon. Friend for the welcome that he gave to the White Paper's general presentation. There has been some incorrect speculation in the press, and I can confirm that the resources available to the Ministry of Defence are, and continue to be, those announced in the public expenditure survey last year. Contrary to some suggestions in the press, no further reduction has been imposed on the Ministry of Defence.
It is right firmly to link resources, commitments and the other ways in which the armed forces carry out their requirements. Our commitments in some sectors have been reducing. Over the past year, there has been a reduction in our military presence in Cyprus, and we are in the process of reducing our military presence in Hong Kong. We have also indicated our intention to withdraw from Belize. There have been a number of such reductions. However, the overall link between resources and commitments must remain the test against which we judge any proposed changes in capabilities or assets for the armed forces.
Mr. Bruce George: I wish that the Chancellor had made this statement, as his fingerprints are all over the document which we have yet to see. The Secretary of State says that the White Paper breaks new ground, but that ground was broken in the 1920s and 1930s, when British forces were run down to a level that ultimately proved to be dangerous.
I hope that the Secretary of State's White Paper reflects the dangerous environment in which we live, and that he has provided adequate forces to meet all contingencies. If the Royal Navy found it difficult to meet its commitments with "about 50", how will it meet its commitments with about 30 frigates and destroyers? The right hon. and learned Gentleman will go down in history as the Secretary of State responsible for reducing the Royal Navy to the lowest number of capital ships—ships of the line—since 1689.
Mr. Rifkind: The hon. Gentleman's final comment is historically inaccurate. If he studies the records, he will discover that, in the 1820s, after the Napoleonic wars, ships of the line were reduced from 98 to, I think, 23—a figure far lower than the Royal Navy's current or expected strength.
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The real test that must be applied involves the tasks expected of the Royal Navy. The hon. Gentleman will know from my earlier remarks that we believe it right to reduce the number of submarines and frigates because of the dramatic reduction in the threat previously posed by the Soviet naval forces. I do not think that the hon. Gentleman, with his knowledge of defence matters, would seriously question that there has been dramatic reduction of potential naval threat from Russia or the former Soviet Union. That is the operational basis on which the changes have been made.
If the hon. Gentleman wishes to know how the Royal Navy is to carry out its current commitments with the frigate/destroyer fleet of about 35, he has merely to read the White Paper, which says exactly how that will be done.
Mr. Archie Hamilton: Does my right hon. and learned Friend accept that the fact that the White Paper shows that our forces are aligned with our commitments is welcome? However, does he also accept that the scales are pretty finely balanced, which should make him reluctant to take on new commitments? My right hon. and learned Friend should constantly review where we might lose commitments, including Northern Ireland.
Mr. Rifkind: My right hon. Friend is right to say that there is not a lot of unused capacity in the armed forces. The White Paper shows that, as has always been the case, our armed forces carry out many tasks on behalf of Her Majesty's Government, and we do not have forces dedicated to unexpected contingencies or crises. All our forces which might be used in a crisis are used for other roles in peacetime. That is right and proper, and is the policy carried out by every other country. It is important that that point should be understood.
Mr. Menzies Campbell: The right hon. and learned Gentleman's literary reference is well taken, as there is more than a hint of Dr. Pangloss about himself.
The White Paper tells us two things. The first is that there is still no clear overall political judgment by the Government of what the United Kingdom's military role should be as a middle-ranking power. Secondly, if we are to have access to capability and to maintain our security, is not that most likely to be done through far greater military and political integration in NATO and the European Community as part of the integrated defence policy that the Maastricht treaty clearly contemplated?
Mr. Rifkind: On the hon. and learned Gentleman's opening comment, it is better to be candid with the House than to seek to avoid the consequences of our policy. That is what the hon. and learned Gentleman does, because he knows that the Liberal party called for a 50 per cent. reduction in our defence forces.
Mr. Menzies Campbell: Rubbish.
Mr. Rifkind: Yes, the hon. and learned Gentleman is right—it was a rubbish policy. That is why he is so embarrassed by it.
He also has the nerve to call for political and military integration within NATO. Where has the hon. and learned Gentleman been for the past 40 years? The United Kingdom defence forces could hardly be more integrated within NATO than they are at present.
Sir Geoffrey Johnson Smith: I congratulate my right hon. and learned Friend on producing a much improved defence White Paper. We all recognise that it is difficult to accept change and to match resources to changing commitments. However, many of us on this side of the House, while understanding the difficulty of accepting change, recognise that we are fully stretched. We do not want my right hon. and learned Friend to return to the House next year to say that, after making agreed changes to meet new commitments, or changes in commitments, he has to announce further cuts.
Mr. Rifkind: I acknowledge my hon. Friend's comments, and he is right to emphasise that commitments and resources must remain closely interlinked. We will continue to seek more value for money through improvements in efficiency and other such changes. However, there is inevitably a limit to that which can be achieved by that means. Where that can be achieved, it is well worth pursuing.
Mr. John McWilliam: The Secretary of State deserves our thanks at least for more information, but he receives some minus points for the way that it has been presented.
For example, the right hon. and learned Gentleman managed to include in the active fleet eight, not six, type 23 frigates, which could not be used on the Armilla patrol anyway. He has managed to include also Fearless as an assault ship, which could not put to sea tomorrow if we had a major war on our hands. From my brief reading of the White Paper, the Secretary of State seems to have included some questionable assets—but I assure him that I shall be studying it in much more detail.
Mr. Rifkind: It would be fairly absurd not to make any reference to ships currently in refit as assets available to the Royal Navy. Of course they are not available when they are in refit, but when one is determining total numbers, one takes into account the fact that refits are required for every ship at some time in its life.
Mr. Peter Viggers: Is my right hon. and learned Friend aware that his statement will come as a bitter disappointment to journalists who wrote about defence cuts before they knew the facts? In fact, there are no cuts in resources in the statement.
Does my right hon. and learned Friend agree that we need no lectures on defence from the Labour and Liberal Democrat parties, both of which are dedicated to dangerously damaging cuts? When allocating resources, will my right hon. and learned Friend remember always that 95 per cent. of our trade goes by sea, and that, however capable the Royal Navy's shipping units may be, we need sufficient units to be credible in defending our trading interests?
Mr. Rifkind: I agree. The Royal Navy will remain, after the United States navy, probably the most effective naval force in the world. It is a powerful force in terms not only of its ships and assets but of the naval skills and experience of those who man those ships. The Royal Navy performs a number of roles in the national interest, and I believe that it will continue to be able to do so with all the professional excellence that the nation has come to expect.
Mr. James Molyneaux: Given United Nations bungling, I compliment the Secretary of State on
28
the choice of title for his White Paper, "Defending our Future"—rather than the future of foreigners. May we assume that priority will be given to defending British interests and British citizens? It is to be welcomed that the Secretary of State has resisted any cuts in infantry strengths, particularly in the light of unwise statements made over the weekend by at least two ex-Ministers.
Mr. Rifkind: The defence of the United Kingdom and of its citizens must always be the first call upon Her Majesty's armed forces. Of course we look forward to the day when it will be possible to reduce the number of battalions in Northern Ireland in a responsible way. In judging when that is appropriate, we shall be guided by the important work that the armed forces are doing in Northern Ireland, and the importance of ensuring that the battle against terrorism is won.
Mr. Robert Hicks: Does my right hon. and learned Friend agree that there is probably greater uncertainty in the world today than at any time since 1945, and that, however good the planning of the link between resources and commitment might be, it might not always work out in practice? Is he aware of the increasing unease, especially in the Royal Navy, that that unfortunate set of circumstances might occur?
Mr. Rifkind: I accept the force of what my hon. Friend says. Considerations of the kind he mentions—the unpredictable nature of the post-cold-war world—require us to consider the need for armed forces that are more flexible and mobile and that can be deployed in circumstances that we cannot predict. Those enhancements have to be funded and, at a time of declining defence resources, it is sensible to identify the capabilities that are less necessary. Clearly, a potential Soviet naval threat in the north Atlantic has receded dramatically during the past few years, which entitles us to change the balance of our capabilities in the way that I have outlined.
Mr. Gerald Kaufman: The right hon. and learned Gentleman dodged the question put to him by my hon. Friend, the Member for South Shields (Dr. Clark) about nuclear testing, which the Government said 15 months ago was indispensable to the nation's security.
Does the right hon. and learned Gentleman agree that, now that President Clinton has banned British nuclear testing in Nevada, the pretence that Britain's nuclear capability is independent is exposed as a total sham? Will he also accept that, now that we have no Soviet enemy to aim nuclear weapons at, now that we have no American friend who will permit us to test those weapons and now that the French President and Prime Minister have called for a comprehensive international nuclear test ban treaty, it is about time that the Government took the initiative in the negotiation of such a treaty?
Mr. Rifkind: The United Kingdom's view on nuclear testing has not changed. We believed a year ago, and we believe today, that there are useful advantages in ensuring the safety and reliability of our nuclear weapons. If that is no longer possible, clearly the emphasis has to be on trying to identify whether simulation, computer modelling and other methods can provide comparable information. Time will tell whether that information can be provided in the same way, and we look forward to co-operating with other countries with that objective in mind.
Mr. John Biffen: I respect and welcome the skill with which my right hon. and learned Friend has undertaken this revision of our military capabilities, not least because it involves contesting with many long-standing interests. When "Defending our Future" and the expenditure that it postulates are fully effective, how will our military spending, as a percentage of our gross domestic product, compare with that of our political allies and economic rivals in the European Community?
Mr. Rifkind: When "Options for Change" is fully implemented. we expect British defence expenditure to be broadly the same as that of France and Germany, as it is today. As a percentage, it will be slighly higher than that of a number of other NATO countries, but much of that is to be explained by our commitment in Northern Ireland, our residual responsibilities for dependent territories and —along with France—our nuclear status. In terms of hard cash spent on defence, British, French and German defence expenditure are almost identical and are likdly to remain broadly the same.
Mr. Tam Dalyell: Footnote 5 on page 28 of "UK Defence Statistics", 1993 edition, states that there are 7,100 people in intelligence and investigation. Do we get value for money from them? How on earth could they have allowed a British Foreign Secretary to tell the House that the operation in relation to Kuwait was justified and proportionate, when we now learn that it would have done discredit to Abbott and Costello? These guys ran out of petrol and did not know where the university was where they were supposed to assassinate the former President of the United States. What has happened to British intelligence, and how could a senior member of the Government be so sure that the Americans were right?
Mr. Rifkind: If there was evidence available to the United States—and there was—that Iraqi intelligence was seeking to assassinate a former President of the United States, the American response, which was deliberately targeted on the headquarters of Iraqi intelligence, was appropriate.
Mr. David Martin: Can my right hon. and learned Friend confirm that the Royal Navy and Royal Marines manpower figures already announced are unchanged by today's statement? Will he continue to treat with contempt Liberal statements on defence matters of this kind, bearing in mind that party's conference policy, which has never been reversed, for a 50 per cent. cut in defence expenditure, with the horrible consequences that that would have for manpower and equipment levels?
Mr. Rifkind: It is correct that the likely redundancies affecting the Royal Navy and the Royal Air Force that were announced some time ago are unchanged by today's announcement, which we took into account when making those figures known. I understand that the Liberal party has never been asked to reverse the commitment to a 50 percent. cent. cut and the massive reduction in the size of the armed forces that would result from that policy.
Mr. Frank Cook: May I help the Secretary of State on matters nuclear? This year, his experts gave evidence to the Select Committee on Defence
30
that testing was unnecessary and that all the safety assessments could be done mathematically by computer modelling.
The Secretary of State makes a plea about the unique nature of our defence requirement, while at the same time saying that our defence provision is structually sound. That might be true coming from the brass hats, but it is not true coming from the people on the ground.
The Secretary of State cannot have it both ways. He cannot say that this nation is an international leader in strategic requirements and allow it to be the leader of the Rapid Reaction Corps and maintain a seat on the Security Council, while still allowing the Treasury to beat him about the head and drive him into the ground in this way. The Government cannot have it both way. When will they stand up for one or the other? They should either relinquish the leadership of the Rapid Reaction Corps and their seat on the Security Council or put the Treasury in its place.
Mr. Rifkind: The time to contemplate such an unpleasant conclusion would be when we were unable to meet our commitments. As "Defending our Future" clearly shows, the Rapid Reaction Corps and the United Kingdom's other commitments can be met. When the present draw-down process is complete in 1995, there will be a significant extra availability of military personnel to deal with any unexpected occurrences. It is at this precise moment, when a number of battalions or regiments are amalgamating, that we have restricted availability of forces for any overseas commitments. That situation will ease over the next 18 months.
Rev. Ian Paisley: Is the right hon. and learned Gentleman aware that a statement by the former Minister of State for the Armed Forces that the cuts could lead to a cut in the commitment to troops in Northern Ireland received wide coverage in the Province?
Will the Minister note that, when the former Minister of State, his right hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), mentioned Northern Ireland, he sidestepped any comment on that matter? Will the Minister rectify that by assuring the people of Northern Ireland that, although, under the policy of his right hon. Friend the Member for Epsom and Ewell, the Ulster Defence Regiment and part-time soldiers met their demise, there will be no cuts in the troop commitment to Northern Ireland?
Mr. Rifkind: The men of the former Ulster Defence Regiment are now carrying out an extremely valuable and welcome role as proud members of the new Royal Irish Regiment. I hope that the hon. Gentleman will welcome the new way in which they have been further integrated with the armed forces of the United Kingdom.
The precise level of our military presence in Northern Ireland cannot be static because, of course, it will change —sometimes it will go up, and sometimes it will go down. I look forward to the day when security will enable it to be substantially reduced, because that would be a clear mark of success in the battle against terrorism. I assure the hon. Gentleman that it would be reduced only if the security circumstances in our view were to justify such a course of action.
Mr. John Hutton: While welcoming the greater transparency and openness in the

31
White Paper, which will benefit the discussion of such issues in the future, I must express reservations about the statement on the Royal Navy and the future of Britain's few remaining warship yards.
Can the Secretary of State confirm that a new class of ships is designed to replace Fearless and Intrepid, and that it is not the Government's intention to replace those ships with one assault ship? Can he confirm that there will be no slippage in orders for the new class of submarines, the batch 2 Trafalgars?
When does he expect the next round of type 23 frigate orders to be placed? Will his right hon. and learned Friend the Chancellor of the Exchequer come to the House in November with yet a further round of defence cuts that he will have to explain?
Mr. Rifkind: Coming as he does from Barrow-in-Furness, I thought that the hon. Gentleman might have at least preceded his comments by welcoming the helicopter carrier, and the benefit to employment that will result in his part of the country. We have concluded that it is right to take forward the project definition for the replacement of Fearless and Intrepid and, at this stage, we envisage two ships to replace them. Announcements about other procurement matters will be made in due course when we have something new to say. There are no changes other than those that I have announced.
Mr. Ian Taylor: My right hon. and learned Friend's contribution to the proper discussion of defence priorities in this document is to be warmly welcomed, certainly on the Conservative Benches, where the only constructive discussion will take place.
Will he look closely at the shifting foreign policy objectives? There are many current concerns about the former Soviet Union, such as the potential destabilisation that may be caused by the movement of Russians outside Russia. There is also the problem of nuclear proliferation, especially in the middle east. We in Britain need to know that we have the resources available to meet those foreign policy commitments as and when they arise.
Mr. Rifkind: I agree with my hon. Friend. The situation in Russia is, at best, uncertain and there could be either beneficial or worrying developments. No one can predict how events may turn out. Russia remains a nuclear super-power and, even after it has fulfilled all its obligations under the START treaty, in 10 years it will still have more than 3,000 strategic nuclear warheads.
For reasons such as those, we have to maintain a strong defence, and NATO must continue to be the fundamental bedrock of our defence policy. That has been the guiding factor that has determined the sort of defence capability that we must continue to have long into the 1990s.
Mrs. Margaret Ewing: In the context of the reduction of RAF Tornado squadrons from seven to six, will the Secretary of State confirm that there will be no implications for the development of RAF Lossiemouth as a key base in the deployment of and training in the use of those aircraft? When will he be able to announce exactly the further plans for the operational capability of the GR1s?
Mr. Rifkind: The particular squadron that will be disbanded as a result of today's announcement will be the
32
No. 23 Squadron at RAF Leeming. Other matters will be reported to the House when we can give specific information.
Sir Nicholas Fairbairn rose—
Hon. Members: Hear, hear.
Sir Nicholas Fairbairn: I am obliged to hon. Members on both sides of the House.
May I congratulate my right hon. and learned Friend on his terse and trenchant statement, and suggest that, for the country's benefit—as the hon. Member for Upminster (Sir N. Bonsor) said—that is as far as we can go? May I suggest that he abandons the "about" theory next year? We are to have "about" 40 destroyers or frigates, which I am told means between 35 and 45—and presumably means 35. Thereafter, the figure will be 35, which I am told means between 30 and 45. If everything can be numbered correctly, why are destroyers and frigates, which will apparently be repaired and refitted at Rosyth, given such a vague assessment?
Mr. Rifkind: I echo the House's welcome to my hon. and learned Friend on his return to the House after his recent illness. We are delighted to see him in the Chamber.
I appreciate my hon. and learned Friend's concern about the number of frigates and destroyers. He will be pleased to know that, contrary to some press speculation, the 18 major warships which I said recently would be refitted at Rosyth are in no way affected by today's statement. We were, of course, aware of the contents of the White Paper when I reported to the House on the allocated programme that would go to Rosyth. In the consultation document, which we hope to publish later this week, the figure of 18 major warships will be confirmed.
Mr. Andrew F. Bennett: In view of the commitment of the Secretary of State and of the Government to a new non-proliferation treaty, how can we continue to try to develop a new free-fall nuclear bomb and the tactical air-to-surface missile system? Would it not be logical to abandon that attempt and to save money, which could then be used necessarily to increase our conventional weapons and conventional defence systems?
Mr. Rifkind: The whole question of the future of our sub-strategic nuclear capability is currently under consideration. I hope to be able to report to the House fairly soon on that matter. I do not want to add anything at present.
Mr. Winston Churchill: However skilfully my right hon. and learned Friend may have dressed up his announcement today, is he aware that he cannot conceal the fact that it constitutes part of the relentless rundown in the capability of our armed forces from an already tiny base? Is he aware that it is especially a matter for regret that he has not been able to reprieve any more of the overstretched infantry battalions which still face cuts?
My right hon. and learned Friend has announced today that there will be further reductions in the front-line strength of the Royal Air Force. As my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn) has just mentioned, the reduction from 50 destroyers and frigates a decade ago to about 35 is a matter for deep concern. Looking to the overall capability of our armed forces, is my right hon. and learned Friend aware

33
that we shall no longer be able to fulfil our capabilities, as we have in the past, if we ever have to fight a significant conventional war?
Mr. Rifkind: I cannot agree with my hon. Friend's conclusion. We believe that we would be able to defend these shores against the threat to which my hon. Friend refers. He must reflect on what changes he believes are justified in the light of the end of the cold war, the collapse of the Soviet Union, the removal of the Soviet naval threat from the Atlantic and the removal of any likelihood in the foreseeable future of a direct attack on the United Kingdom.
One cannot, of course, exclude the possibility that those threats, which have largely disappeared, might re-emerge at some date. However, they could not re-emerge overnight, but only over a considerable period. If there was any evidence that such a new threat was beginning to re-emerge, there would be a bounden duty on this Government, as there would be on all NATO Governments, to revise our defence capabilities.
In all honesty, we cannot argue that it necessary to maintain in the vastly different circumstances of the 1990s a balance of capabilities that was designed for the cold war. There is a need for greater flexibility and mobility, and that is why part of our planned enhancements which have been envisaged in recent years are to continue and are to be made available to our armed forces in the way that I have described.
Mr. Greville Janner: How many people will be made redundant by the armed forces as a result of the previous announcements by the Secretary of State and of his announcement today? As the figure will run into thousands, and as those people will be made redundant when millions of people are already looking for jobs, will the Secretary of State confirm that he has consulted the Secretary of State for Employment about the results of such redundancies? Have his officials talked and listened to Department of Employment officials about the employment results of his policy?
Mr. Rifkind: Redundancies in the Navy and the Air Force were announced in recent months. Today's statement has done nothing to change the figures as, obviously, we took those matters into account. I announced a proposed size for the Army of 119,000 some months ago and a large part of the draw-down has been completed. There will be a need for a third phase of redundancies on the basis of the orginal proposals that were announced some time ago, but that will not be changed by the White Paper.
Mr. Michael Colvin: No one could accuse my right hon. and learned Friend of lacking presentational skills. He made—as any good lawyer would —the best of a brief which, at first sight, seems to be inadequate and driven more by the Treasury than by defence considerations.
Will he address the question of the mobility of our armed forces which has been raised by some hon.
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Members? He has not answered the question about support helicopters, or those about heavy lift air transport of a tactical and strategic nature. Does he agree that it is important that, if we are to fulfil our obligations to the United Nations peacekeeping and peacemaking efforts, we must be able to get men and equipment to the places where they are needed as quickly as possible?
Mr. Rifkind: I agree unreservedly with my hon. Friend. We have carried out a new assessment in recent months as to the likely need for support helicopters. That assessment has suggested that enhanced financial provision—greater than had been anticipated previously—is needed to ensure that support helicopter facilities will be available. That provision is built into our assumptions.
We are working on the precise identification of the type of helicopter that would be required, and we hope to come to an early conclusion. My hon. Friend knows that various options have been discussed recently. The need for a proper enhancement of support helicopters is accepted unreservedly.
Mr. David Young: The Secretary of State has poured scorn on the suggestion of a defence review. May I ask him for a commitment that he will not allow British forces to go into any future situation where those troops would be overstretched, under-resourced and underfunded until there has been a defence review?
In view of the redundancies that are implicit in the statement, what discussions are the Secretary of State and his Department having with the DTI and the Department of Employment to ensure that areas that are dependent on defence contracts have other industries brought in, and ensure that the skill of men and women in the defence industries is not lost when they are thrown on the scrap heap?
Mr. Rifkind: The signs are rather encouraging. Over 70 per cent. of those who were made redundant from the Army during the past year have now found employment. The fact that that has been possible during a severe economic recession is a useful indicator of how valuable their experience has been. The hon. Gentleman should welcome that.
Several hon. Members rose—
Madam Speaker: Order. We must now move on.

STATUTORY INSTRUMENTS, &c
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.).

MERCHANT SHIPPING
That the Merchant Shipping (Local Passenger Vessels) (Masters' Licences and Hours, Manning and Training) Regulations 1993 (S.I., 1993, No. 1213) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Michael Brown.]
Question agreed to.

Orders of the Day
  OPPOSITION DAY
  [16TH ALLOTTED DAY]

  Pit Closures
  [Relevant document: The First Report of the Trade and Industry Committee of Session 1992–93 on British Energy Policy and the Market for Coal (HC 237), together with Memoranda of Evidence (HC 703).]
  Madam Speaker: I have selected the amendment in the name of the Prime Minister. I shall limit speeches to 10 minutes between the hours of 7 pm and 9 pm.
  Mr. Harry Barnes: On a point of order, Madam Speaker. The motion that we are to debate ends with a reference to measures that would ensure
  "a fair opportunity for coal to compete for a wider market."
  No. 36 in the Remaining Orders of the Day and Notices of Motions—last, but not least—is the Energy (Fair Competition) Bill, which would introduce measures such as those referred to in the motion. In those circumstances, is it not right that we should be given an opportunity to consider that measure following today's debate? The Bill could do what the Secretary of State has not done to save the coal industry in this country.
  Madam Speaker: The hon. Gentleman will be aware that that is not a point of order for me. He is a good publicist, though: I note that it was his own Private Member's Bill to which he referred.
  4.29 pm
  Mr. Robin Cook: I beg to move,
  That this House recalls that Her Majesty's Government encouraged the belief that the proposals in the White Paper, `The Prospects for Coal' would reprieve 12 pits and widen the market for their coal by providing a subsidy for their output; notes that within three months of its publication two of those pits have already closed and no extra contracts have been secured for the coal of the other ten pits, which therefore remain at risk; records its concern at the damage from the continuing closure of Britain's coal mines to the coalfield communities, the mining equipment industry, and the long-term security of energy reserves; and demands that Her Majesty's Government now acts to secure the future of the remaining pits and adopts the recommendations of the Trade and Industry Select Committee in its Report, 'British Energy Policy', which would ensure a fair opportunity for coal to compete for a wider market.
  Three months ago, the House debated the White Paper on coal. The press reports on that White Paper were all quite clear about its bottom line—that 12 pits had been saved. Most of them put that bottom line in their headlines. The Daily Telegraph announced:
  "12 pits reprieved by Heseltine".
  The Financial Times carried the headline:
  "Government to save 12 pits".
  The Independent—marginally more optimistic than the rest —said:
  "13 pits have hope of survival".
  In Today, we read:
  "£500 million bill for taxpayers to reprieve a dozen pits".
  The Daily Express—the official organ of the state, which saves us from speculating what Conservative central office is saying by faithfully reprinting every word—announced:
  36
  "12 pits and 7,000 jobs are saved".
  Those half-dozen newspapers did not all reach the same conclusion by accident. They were all heavily briefed, lobbied and guided to the same conclusion—that 12 pits would be saved. But the educational effort that was mounted to get the message across to the press was as nothing compared with the one-to-one tutorials set up to convince Conservative Back Benchers—and many of them believed what they were told.
  I see that the hon. Member for Davyhulme (Mr. Churchill) has temporarily absented himself from the Chamber. He was quoted by the Press Association a fortnight ago as saying that
  "Had he known then what he knew now he would have voted against the White Paper rather than merely abstaining."
  I hope that the Patronage Secretary's representative will convey to the missing Member our hope that we are tonight giving him a second chance to redeem himself. We can assure the hon. Gentleman that there will be more rejoicing tonight in our Division Lobby over the one prodigal who returns to it than over the 295 who got it right last March.
  At least the hon. Member for Davyhulme abstained. The hon. Member for Rochford (Dr. Clark), who I am pleased to see is with us, voted with the Government. During the March debate, the hon. Gentleman said:
  "While we hoped that we might have been able to save more pits than the 12 … which we will save, at least we have 12".—[Official Report, 29 March 1993; Vol. 222, c. 58.]
  I am sorry to say to the hon. Gentleman that we are now 10. Only three months later, we have lost two of those pits. At Rufford, the decision has been taken to close the pit, which will cease production when the current face is exhausted—probably in a couple of months' time.
  The hon. Member for Wells (Mr. Heathcoat-Amory), the Minister of State, Foreign and Commonwealth Office, who was then Minister responsible for coal, visited Rufford in February last year. This is what he said to the local paper:
  "Rufford is a fine example of how a loss-making pit can turn round to become a remarkable success."
  Barely a month before a general election, in a marginal Tory constituency, Rufford was a remarkable success. Now, barely a year into this discredited Tory Government's term of office, Rufford is an expendable failure.
  At Markham, production has already ceased. As it happens, I have been down to Markham. Only six months ago, when I visited Markham, there was machinery still in service. It was new machinery—machinery that they were still stripping down to install underground. It was modern machinery—machinery that had helped to make that pit highly efficient and to double its productivity in eight years. It was expensive machinery—machinery that is now among the millions of pounds' worth of machinery that is being left underground in Britain to buckle under pressure and be buried under roof faults.
  I hope that, in his reply, the Minister will spare the miners at that pit and at Rufford the humbug that it is they who choose to close the pit by accepting redundancy. In those cases, they had no choice. Those at both pits were told that they could stay open until next year, when the coal contract drops by 10 million tonnes, or they could vote to close this year. The difference was that, if they voted to close this year, they would each get an extra £10,000 on top of their redundancy. We have all contested

  37
  elections; that is how we got here. I doubt whether any of us would care to contest an election in which the voters for our opponent qualified for a £10,000 bonus.
  I fully understand why those miners voted for extra redundancy money. The only thing about which they were being consulted was whether their pit would close this year or next. It is a grotesque travesty of the language to say that any of them have taken voluntary redundancy. Let us at least give them the dignity of recognising 'what the Government forced on them—compulsory redundancy in all but name.
  Mr. Peter Thurnham: Will the hon. Gentleman make it clear how he intends to pay to keep pits open? Does he intend to keep all 31 pits open? Does he recollect that previous Labour Governments closed 277 pits without any of the generous redundancy payments that this Government have offered?
  Mr. Cook: That Labour Government did not make one miner compulsorily redundant. That Labour Government saw an increase in the amount of coal going into electricity generation. I do not take any particular kudos for that Labour Government, as it was like every Government since the war except this one. This is the first Government to see a reduction in the amount of coal for electricity generation. That is why we have a crisis in our coal industry. The hon. Gentleman helpfully brings me on to the reason for the closure of those pits, and the reason why the other 10 are still at risk. It has nothing to do with miners wanting to go.
  Neither the White Paper nor the three months since it was published have produced a contract for one extra bag of coal from those pits. That is why they are closing. It will not do for Ministers to say that it is nothing to do with them, that it is not their fault, it is the fault of British Coal for not selling the coal, or the fault of the generators for not buying the coal, or, as the Minister appeared to suggest this morning, the fault of Michael Fish because it has been too warm for the past three months to sell the coal.
  It will not do, because it was their idea. It was they who came up with the lifeline of a subsidy to find a bigger market. It was they who let the press believe that that would save 12 pits. Now that it is not working, it is they who, for just once in their ministerial careers, must accept responsibility for it not working. We warned them that it would not work. It would not work because the problem for coal is not its price. One cannot sell coal at any price in a market that has been specially rigged to keep it out.
  The Minister for Energy (Mr. Tim Eggar)indicated dissent.
  Mr. Cook: The Minister may shake his head, but I address my point to him. If there is one thing for which I am grateful to him and his colleagues in the Cabinet, it is that in the past three months they have proved our case about the rigged market. They set out to test the market. The result of that test is already in: two pits have failed it. The result of that test confirms that we are dealing with a rigged market. Let us review the evidence.
  Since March, British Coal has relied on the subsidy to offer extra coal for sale to generators at a sharply reduced price. The price is supposed to be a commercial secret, but since no one is buying it, let us give it some more advertising space. The price at which it is offering coal is
  38
  93p per gigajoule. That is 40 per cent. below the base price in the contract. At that price, generators could produce electricity at a penny-ha'penny per kilowatt hour. That is cheaper than they can produce electricity from the new gas-fired stations, at tuppence per kilowatt hour.
  It is cheaper than they can buy electricity from France at threepence ha'penny per kilowatt hour. It is cheaper than they can buy electricity from nuclear power stations, at almost 4p per kWh hour. If ever more proof were needed that we are dealing with a market rigged against coal, what better proof could there be than that the generators will not buy it even when it would give them cheaper electricity?
  The largest consumer of electricity in Britain is ICI. It is not a dangerous, leftist front, even if it makes donations to the Tory party. Its power services manager has prepared a comparison which shows how ICI has been disadvantaged by the generators' refusal to buy that cheap, subsidised coal. I shall read it in full, as it is worth sharing with the House:
  "Utilising internationally priced coal … Fiddler's Ferry power-station, 5 miles from ICI in Runcorn,"
  is capable of generating electricity
  "in the range of £10–15/vcMWh.
  For a high proportion of the time, this power station"—
  a coal-fired power station—
  "and others like it are underloaded, yet new gas-fired power-stations which require an income of £25–30/MWh are being built and prosper within the market. Generation costs are therefore higher than necessary."
  He ends by saying:
  "We invite a rationalisation of this economic behaviour."
  The question that the Secretary of State must answer is this: how can he rationalise that perverse outcome? While he is at it, can he explain why the Government are still approving more gas power stations? Last month, his colleagues at the Department of Trade and Industry approved a new gas power station at King's Lynn. It is an interesting case, because the King's Lynn power station will be wholly owned by the local electricity company. All profits from its sales will go to Eastern Electricity.
  I invite the House to speculate on what will happen once that power station, approved by this Government, is up and running. Will Eastern Electricity play the market? Will it whoop with delight when it discovers that a coal-fired power station could give its consumers cheaper electricity than the one that it has just built? If Ministers are so wet behind the ears as to believe that that will happen, they should have taken not the money from Octav Botnar but lessons in how markets work in the real world.
  Eastern Electricity will fix its purchasing so that it will take all the output that can be produced by that station, and to ensure that that is what will happen it will do what every other electricity company has done : it will give the new power station a 15-year contract, which guarantees that it will take all the electricity that the power station can produce.
  Mr. George Stevenson: It is called competition.
  Mr. Cook: My hon. Friend takes my punchline. I have marked him down and will bear it in mind against him.
  The Government tell us that this is widening competition. It is not widening competition but closing down competition. Nobody else can compete, whatever their price, for the share of the market that those contracts

  39
  guarantee the new gas-powered stations. In the next three years, one third of the entire electricity market will be sewn up in these sweetheart deals.
  Mr. Rod Richards: In view of what the hon. Gentleman said about Fiddler's Ferry power station, will he tell the House whether he and his party are for or against the construction of the Connah's Quay power station?
  Mr. Cook: I remind the hon. Gentleman it is fresh in my mind because I re-read my speech last night—that he made the same request in my last speech. I have to give him the same answer, and it is straightforward: Labour sees no objection whatsoever to the Connah's Quay project, because it is proposed to use sour gas, which cannot be used to heat homes direct and cannot be used in ovens. Our objection is to sweet gas—a premium fuel—being turned into baseload electricity with the loss of half its calorific value. That is not only bad for coal mines but is a daft energy strategy. I hope that the hon. Member for Clwyd North, West (Mr. Richards) is capable of remembering that for the time when we debate coal again in the autumn.
  That is why the Select Committee recommended that we should stop handing out licences to every new gas station and that we look at downrating electricity stations to meet peak demand, not running them flat out to meet baseload. The Government totally ignored those recommendations.
  There is one other aspect of the rigged market on which I want to bring the House up to date—the interconnector with France. In the White Paper, Ministers welcome changes in the contract with France, which from April
  "will ensure that exports will occur"—
  that is to say, exports of electricity from Britain to France. It is paragraph 7.106 if the Minister wants to look it up.
  I checked last week with the National Grid Company on what exports have occurred since that statement that the changes will ensure that exports will occur. In April, Britain exported to France zero electricity. In May, Britain exported to France zero electricity. In June, Britain exported to France zero electricity. There was a change —I would not wish to deny to the House that since the White Paper there has been some change in our relationship with the French interconnector. The change was that, in each of those months, imports of French electricity were up on the same month one year ago.
  I remind the House that we are paying more for the electricity from the French interconnector than we would for electricity from coal—from the pits that we are shutting down. I will happily give way to any Conservative Member who is capable of believing for one minute that France would dream of importing electricity from a foreign source at a higher price and at a cost of shutting 31 French pits. I am not surprised that there are no takers, because we all know that there is not the remotest prospect of the French paying over the odds for an import that will damage their domestic industry, which is precisely what we are doing.
  Dr. Keith Hampson: As in so many areas, the hon. Gentleman does not seem to have understood the Select Committee report, if he has read it. The report clearly states that most of our electricity
  40
  companies purchase French electricity because it is cheaper for the company. Although the distortions of the nuclear levy might ultimately make it more expensive, for the companies it is cheaper.
  Is he saying that companies should deliberately buy more expensive electricity rather than take what is cheap and on offer? Does he accept that some electricity companies, such as Yorkshire, are buying less energy from the interconnected? Indeed, Yorkshire is not buying any French electricity this year, compared with last.
  Mr. Cook: The net effect is an increase. In one sense, I welcome the hon. Gentleman's intervention, because it takes me on to my next point. He is absolutely right. The reason why the electricity companies find it profitable to pay more to import French electricity is because—
  Dr. Hampson: They pay less but the nonsense of the levy makes it ultimately more costly.
  Mr. Cook: They claim it back. We are daft enough to pay them the nuclear subsidy on all electricity from France. Since March, the Government have not paid a penny in the subsidy that they promised to British coal mines, but they have paid millions of pounds to subsidise electricity imports from France. I remind the hon. Gentleman, who seems to have forgotten it, that recommendation (7) of his own Select Committee was:
  "Electricity supplied from France should cease to be non-leviable. EdF's ability to negotiate contracts to supply-baseload … should be made conditional on UK generators having non-discriminatory access"
  through the French network. Again, those recommendations were ignored by Ministers.
  Dr. Hampson indicated dissent.
  Mr. Cook: That is what the hon. Member recommended to his Government.
  There is a contradiction here. Ministers have consistently rejected all the recommendations of the Select Committee to challenge the rigged market. Ministers tell us that they accepted the recommendation of the Select Committee. What they mean—I have listened carefully to what they say—is that they accepted the recommendation of a subsidy. But I again have to say that that was not what the Select Committee recommended.
  Before the Secretary of State tries to pull that one on the House, let us be quite clear what the Select Committee recommended. Yes, it recommended a subsidy of 16 million tonnes for electricity generation, but it did so with the parallel recommendation that there should be a requirement on the generators in return to contract for 21 million tonnes of additional coal. What the Government did was to offer generators the subsidy without making them give a commitment to buy any extra coal.
  Instead of buying that extra coal, the generators are running down coal stocks at power stations. I have two observations to make about those coal stocks. First, I would have more sympathy with the generators' claim that they have more coal in stock than they need if they had not been so busy importing coal for the past five years. According to their own calculations and their own logic, those imports must now be a mistake. If they do not need all those coal stocks at the power stations, they did not need all the imports that have added to our balance of trade deficit, thus increasing pressure on manufacturing industry to achieve more exports to pay for the coal that they did not need.

  41
  My second observation is addressed more to the Government than to the generators. In the three months since we last debated the issue, Lord Ridley has passed on, but I debated against him often enough to know that he would not want his role to go without recognition just because he is not here to listen. It was Lord Ridley, after all, who–15 years ago—wrote the strategy that the Government have followed so faithfully. He composed a paper before the Government came to power, explaining how a Conservative Government could run down the coal industry and weaken its power. I looked at it again this morning, and noted that its first recommendation was for the Conservative Government to
  "build up maximum coal stocks, particularly at the power stations".
  That is why, throughout the Government's term of office, we have had large coal stocks. The aim was to prevent miners from stopping work; now there is a danger that those same stocks will be used to put them out of work for good. That is why the Select Committee recommended that the generators should be required to hold not less than 20 million tonnes of coal—double the level at which they are apparently aiming.
  The White Paper, for once, did not ignore that recommendation. In paragraph 13.23, Ministers committed themselves to having talks with the generators, about stocks
  "as a matter of urgency".
  May I ask the Secretary of State what happened to those stocks? What is his definition of urgency? Why are the generators behaving as though the White Paper had said nothing about the level of stocks? When the generators have run down the stocks, there will be no point in turning around and asking Britain's coal mines to increase output; by that time the mines will be closed. They will have been filled in and flooded—and not just the 12 that the White Paper claimed to have saved.
  The House must now face up to the gravity of the crisis in the coal industry. Between them, the pits not included among the 12 are already producing more than 30 million tonnes. That is all that the generators will buy from next year onwards. On present markets, not only will all those 12 pits go by March; so will some of the others that have yet to figure on any closure list. That will be a tragedy for the surrounding communities—communities that were built because a pit was there; communities that will have no work when the pit is gone. It will also be a tragedy for the nation, because with those pits will go our access to our coal reserves.
  Silverdale has figured in the press as one of the pits that may be next for closure. The shaft and tunnels at Silverdale give access to 30 years' supply of coal. No one else in the world would be filling in shafts that give access to such an immense national resource.
  The other week, the Chancellor of the Exchequer shared with us his insight into the economics of the coal industry, observing:
  "Coal is a rather old-fashioned way of generatiing electricity."
  I concede that it is rather old-fashioned in the Chancellor's constituency, where his Government have just closed the last pit; but if it is so old-fashioned, why have the last two dozen power stations ordered in the United States been coal-fired? Why does the United States expect coal consumption to rise by one fifth in the next decade? It should not be difficult for Conservative Members to obtain
  42
  the United States coal figures: they need only ask that notable donor to the Tory party, Lord Hanson, who owns most of the pits. He may not take kindly to the news that the party into which he has poured so much money is describing his operations in America as old-fashioned.
  Not only have we the largest coal reserves in Europe; as Conservative Members want to talk about the cost of production, let me tell them that we have the most efficient coal mines in Europe. We are busy closing them down, while other Governments are working hard to keep open the least efficient pits in Europe. The case for saving Britain's pits is not based on nostalgia for the past; the case for saving our coal industry is based on their success in the present.
  Mr. Graham Riddick: What percentage of the coal that will be burnt in the new coal-fired power stations in America has come from opencast mines?
  Mr. Cook: A number of mines in America are not as deep as ours, but they are not opencast mines by any stretch of the imagination. [Interruption.] Pearson and Hanson, which owns them, runs deep mines, but they are not as deep as ours. Pearson is a wholly owned subsidiary of Hanson. [Interruption.] I hear an hon. Member ask where else in Europe Governments are seeking to keep pits open. Germany is now providing its coal industry with three times the amount that our Government have contributed to the British industry.
  America has opencast and deep mines, as has Britain. It is for that very reason that the majority have been closed. If the hon. Member for Colne Valley wishes to make a case on behalf of opencast, he must consider the point that I have been making throughout my speech about the market for coal. If the current position continues, opencast as well as deep mining in Britain will be in trouble.
  Mr. William Cash: The hon. Gentleman referred to Germany. Does he concede that, according to the most recent figures available to us, in 1991 the German coal industry received £9 billion—pounds, not ecu—of authorised state aid through the European Commission? Does he accept that we should investigate the imbalance vis-a-vis the British coal industry?
  Mr. Cook: I congratulate the hon. Gentleman on getting in a pro-coal and an anti-European point simultaneously. I agree with the thrust of his remarks, which is essentially correct. If we take the European perspective—although I suspect that the hon. Gentleman may not wish to do so—it is insane that in Europe we are closing down the most efficient pits, which produce the cheapest coal, while other Governments are providing substantial subsidies. The German Government, supported by the Common Market, are doing so to keep open pits that produce coal at three times the price at which it is produced in Britain.
  Dr. Hampson: Will the hon. Gentleman give way?
  Mr. Cook: I have already given way to the hon. Gentleman once.
  As I have said, the case for Britain's pits is not based on a nostalgic affection for the past; the case for saving our coal industry is based on their present success. Ironically, only last week British Coal issued a press release showing

  43
  that productivity had risen by a quarter in the past year, and that, in the past eight years output per man had arisen by 300 per cent.
  If any other industry had shown such spectacular advances, Ministers would have showered it with Queen's awards; they would be queuing for photo-opportunities with the success story. The Prime Minister would be memorising statistics in front of a mirror, in order to reel them off at Question Time. Instead, because it is the coal industry, this industry is treated with vindictive vandalism by Ministers who are determined to prove that they were right all along when they told us that 31 pits would have to close.
  The White Paper was not about how to keep miners' jobs; it was about how to keep their own jobs while ending the miners' jobs. The White Paper was always a fraud and, since the two closures, it can be seen to be a fraud. It must be seen to be a fraud even by the Conservative Back Benchers who were taken in by it last March. I forgive them for being taken in at the time; I am prepared to accept that they voted in good faith, thinking that they would save 12 pits, but they now know that they did not. We shall not forgive them—and the miners will not forgive them—if they let themselves be taken in again.
  I give Conservative Members this warning: if the Government get away with it tonight, more of the 12 pits will close before the House returns from the summer recess. If Conservative Members want to save those pits, they must do it tonight. They will not get a £10,000 bonus if they vote with us tonight—that is a cynical ploy used by the Government—but they will stop more pit closures, halt the destruction of more coalfield communities and prevent the loss of more coal reserves. That is what we shall vote for tonight; it is what the nation wants the House to vote for tonight, and it is what Conservative Members should join us in voting for.
  5 pm
  The Secretary of State for Employment (Mr. David Hunt): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
  'welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.'.
  The amendment stands in the name of several of my right hon. Friends, including the President of the Board of Trade. I am sure that I speak for all hon. Members when I say how pleased we are that he has been able to return home and that we wish him a speedy recovery to full health.
  I have participated in many coal debates in the past 10 years, for several years as the Minister with responsibility for coal, then as Secretary of State for Wales and now as Secretary of State for Employment. I hope that the many hon. Members who have participated in the various debates will accept that there is no monopoly of concern for the coal industry from one party rather than another.
  44
  If Labour Members reflect for a moment and read the reports of the many debates in Hansard, they will find that concern for the coal industry and its employees could be found in all parties.
  My hon. Friend the Member for Bolton, North-East (Mr. Thurnham) scored a magnificent try against the hon. Member for Livingston (Mr. Cook) when he pointed out that, under a period of Labour Government, 277 pits had closed. The hon. Gentleman immediately leapt to a conclusion; Hansard will show that he used statistics relating to the last period of the Labour Government, but he made a fatal error. My hon. Friend was, of course, referring to the period of Labour government between 1964 and 1970. During that period, 277 pits closed. In 1967, just about 60 pits closed.
  Mr. Ronnie Campbell rose—
  Mr. Hunt: The hon.Gentleman may not like the facts, but I am going to give them to the House.
  Under that period of Labour government, in one year, 60 pits closed and, in the following year, just under 60 pits closed, so just over 120 pits closed within two years. If my right hon. and hon. Friends refer to Hansard of that time, they will read the barrage of criticism from all parties against the then Labour Government because 185,000 coal industry employees lost their jobs in their local collieries.
  Mr. Campbell rose—
  Mr. Hunt: I shall give way in a moment.
  As I said, 185,000 jobs were lost in the collieries, and there were no generous redundancy schemes then. The amount of money received by someone leaving the coal industry at that time was pretty mean, and Labour Members said so at the time. There was no enterprise company charged with bringing new life to coalfield communities,and there was no opportunity for employees leaving the coal industry to find another job or another chance. When the hon. Member for Livingston seeks to put on one side that period of Labour Government, he does himself and his party an injustice. The concern expressed at that time was expressed by all parties.
  The hon. Member for Livingston is right to recall that there were substantial further pit closures in the 1970s under a Labour Government. I think that by 1979 the number had grown to 353. We have to ask why that happened.
  Mr. Joseph Ashton: Because they were all worn out.
  Mr. Hunt: No, not because they were all worn out. Of course, that was true in some cases, but—
  Mr. Ronnie Campbell/rose—
  Mr. Hunt: I shall not let a rather silly comment pass —I am going to deal with it. I ask you to note, Mr. Deputy Speaker, that the hon. Member for Blyth Valley (Mr. Campbell) is trying to change the subject quickly, but I shall not let the hon. Member for Bassetlaw (Mr. Ashton) get away with it. I shall give way, but I am going to deal with the point raised. [Interruption.] Labour Front-Bench Members should not get excited.
  Mr. Ashton rose—
  Mr. Hunt: I shall deal with the sedentary comment made by the hon. Member for Bassetlaw who can then

  45
  respond. The pits were not closed because they were all worn out. He has only to read the statements made at the time by Labour Ministers: the pits were closed because there was no market for their coal. He has to ask himself why. It was because the domestic market contracted dramatically; people stopped burning coal in their homes and started burning what the hon. Member for Livingston referred to as the sweet premium fuel called gas. He forgot to mention, however, that its calorific value is much higher than that of coal.
  If the hon. Member for Bassetlaw reads Hansard, he will find statements made by Labour Ministers in which they said that, sadly, there was no market for the coal and it would therefore be wrong to keep the pits open, even though there were still a number of substantial recoverable reserves.
  Mr. Ashton: I came to the House a year or two before the Minister. I arrived in 1968 in a by-election, during a pit closure in my constituency. Unemployment was running at 1 per cent. and miners who wanted to move to another pit were found jobs—they were not forced into redundancy. One of the reasons for the closure, which the Secretary of State has not mentioned, was the price of oil. It was at rock bottom until the war between the Arabs and the Israelis in 1973, which caused it to rocket. The price trebled around the world and, incidentally, it also caused inflation to treble, a problem for which he has always blamed the Labour Government. Every miner who wanted a job at another pit was moved. Thousands moved to my constituency where there are still three profitable pits. The Secretary of State offers only half-truths, like all solicitors and cheapjack lawyers who do not have a brief.
  Mr. Hunt: The hon. Gentleman offers a lot of bluster but very few facts, as befits an occasional columnist for a newspaper—I shall not embarrass him by saying which newspaper. He should reflect on what he said. I will not embarrass Opposition Members by asking how many of them burn coal in their own homes—[Interruption.] I suppose that the record will not show that there was a small smattering of individuals.
  Mr. Kevin Barron: Will the Secretary of State give way?
  Mr. Hunt: I will give way in a moment.
  The point that I was making stands. There was a savage contraction in the domestic market for coal.
  Mr. Ronnie Campbell: I am not surprised that the Government want to close the 12 pits. A few years ago, the Secretary of State was the Minister responsible for coal and at that time I worked in Bates colliery. We went through the colliery review procedure, which was fairly new at the time, and Bates colliery won. The right hon. Gentleman was the Minister responsible for coal and that pit still shut. I was a miner at that pit and I know all about it. There were still 29 million tonnes of coal in that pit and it could still be working today.
  Mr. Hunt: The hon. Gentleman will recall that British Coal spent some time considering the report of the independent—
  Mr. Ronnie Campbell rose—
  Mr. Hunt: I hope that the hon. Gentleman will accept that British Coal spent some time considering the report and, in the end, it did not accept the view that the hon. Gentleman has just put forward.
  The hon. Member for Blyth Valley has just made a point that I made earlier. Pits closed when they still contained a substantial amount of coal because the market changed. I examined the case for Bates colliery very carefully at the time. I was convinced that British Coal had made the right decision. However, it was a matter for British Coal to determine.
  Mr. Riddick: Will my right hon. Friend give way?
  Mr. Hunt: Yes, in just a moment.
  The issue raised by my hon. Friend the Member for Bolton, North-East should not be shrugged aside easily. From time to time, coal must face substantial changes in the energy market.
  Mr. Riddick: A few moments ago, my right hon. Friend challenged Opposition Members to say how many of them burnt coal in their own homes. Is he aware that my local Labour-controlled council—Kirklees council—has, over the past year, forced hundreds, if not thousands, of my constituents to stop burning coal by imposing unnecessary smokeless zones on the rural parts of my constituency, despite the fact that emission figures of smoke and sulphur dioxide in those areas fall within the guidelines set by the Department of the Environment and the European Community? Is that not plain Labour hypocrisy?
  Mr. Hunt rose—
  Mr. Martin Redmond: On a point of order, Mr. Deputy Speaker. Will you draw the attention of Conservative Members to Government legislation regarding smoke control zones?
  Mr. Deputy Speaker (Mr. Michael Morris): That is not a point of order for the Chair.
  Mr. Hunt: My hon. Friend the Member for Colne Valley (Mr. Riddick) has raised a very important point. I wonder how many Opposition Members have been councillors in local authorities that have decided not to install coal-fired units in local accommodation. I could quote many examples of that. However, I simply raise that matter to refute the point made by the hon. Member for Livingston.
  I want now to consider what happens today.
  Mr. John Evans rose—
  Mr. Barron rose—
  Mr. Hunt: I should give way to the hon. Member for Rother Valley (Mr. Barron).
  Mr. Barron: I should like to take the Secretary of State back to the point about pit closures. Will he name any Conservative or Labour Government who have ever closed coal mines in this country for foreign coal imports?
  Mr. Hunt: There has always been a level of imports from other countries and that has been the case under all Governments—[Interruption.] I am answering the point raised by the hon. Member for Rother Valley. I have always seen a level of coal imports—
  Mr. Barron: What about power stations?
  Mr. Hunt: I have been present in many coal debates when Opposition Members have urged the Government to put a cap on the level of imports as if protectionism was the answer for the coal industry. I reject that argument. The coal industry now faces a substantial change in the energy market and that must be faced with reality instead of trying to introduce open-ended subsidies, which the Select Committee on Trade and Industry did not suggest but which was implicit in the comments of the hon. Member for Livingston.
  Mr. John Evans: The Secretary of State has referred to the difficult period in the 1960s and 1970s when quite a number of collieries closed. The Secretary of State represents a north-west constituency and he will acknowledge that a substantial number of small collieries in St. Helens and Wigan closed for two major reasons. The first was because they were reaching the point of exhaustion and the second was that many of their reserves could be exploited from a brand new big colliery called Parkside.
  Will the Secretary of State acknowledge that the vast difference between that period and the closure of Parkside is that Parkside has about 30 million tonnes of coal reserves which will now be lost to the nation and will remain in the ground for ever?
  Mr. Hunt: I will deal with that point by referring back to the point made by the hon. Member for Bassetlaw, who said that the pits closed because they were worn out. The answer is not as simple as that. Some pits were exhausted while some were economically exhausted. Some could be accessed from other shafts in other mines. I am aware of all that. Equally, some pits had a substantial amount of coal which could still have been mined. However, the market, in the phrase used by a Labour Minister at the time, had collapsed.
  I am trying to explain how I believe coal has a future. However, it will not have such a future if we go down the route advocated by some Opposition Members of trying to introduce an open-ended subsidy and of trying to keep alive uneconomic pits.
  Mr. Peter Hardy: Will the right hon. Gentleman give way?
  Mr. Hunt: I will give way in a moment, but I want to make this point because it is very important.
  The hon. Member for Livingston said that output per man shift in the past few years has increased substantially. That is true. Since 1979, this Government have invested a substantial amount of money in support of the coal industry. The figure now totals £18,000 million. In the last financial year, that support has enabled British Coal to have a fixed capital programme of more than £180 million. There will be a similar figure in this financial year. It is good that the industry has responded by improving its output per man shift.
  Several hon. Members rose—
  Mr. Hunt: I will indicate when I am ready to accept interventions, which will be in just a moment after I have made my next point.
  The hon. Member for Livingston should consider what happened during the period of the Labour Government between 1974 and 1979 to which he thought my hon. Friend the Member for Bolton, North-East was referring.
  48
  Listening to the Labour party, one would think that Labour has a monopoly of concern for improving output per man shift. However, I will remind the House of the figures.
  In 1974, when the Labour Government took office, output per man shift was 2·94 tonnes. What was the output per man shift by 1979? Having listened to the hon. Member for Livingston, one would have thought that output per man shift had increased substantially by 1979. In fact, it had declined from 2·94 tonnes to 2·89 tonnes.
  In the period that I have referred to, there was half a decade of inaction in respect of the support being given to coal and in respect of the response of those who worked in the industry. Opposition Members should reflect on that for a moment before they quote the nonsensical figures that they have put forward from time to time—[Interruption.] The hon. Member for Livingston cannot dispute the figures for output per man shift. [Interruption.] The hon. Member for Bassetlaw keeps shouting, "Nonsense". He thinks that he has made a point. He has not made a point at all, because output per man shift has been calculated on the same basis over the period that I am talking about, and, of course, it relates production to the number of people in the industry.
  Let me deliver the figures again. In 1974, it was 2·94 tonnes per man shift, and in 1979, it was 2·89 tonnes.
  Mr. Ashton: What was the total tonnage?
  Mr. Hunt: I am responding to the points raised by the hon. Member for Livingston. That is what debating is all about, even if the hon. Member for Bassetlaw does not understand it. Output per man shift was announced by British Coal just a short time ago as having reached 8–5 tonnes per man shift.
  Mr. Ashton: What is the total tonnage?
  Mr. Hunt: That is a creditable achievement.
  Mr. Deputy Speaker: Order. I keep hearing a sedentary intervention from the hon. Member for Bassetlaw (Mr. Ashton), "What is the total tonnage?" If the hon. Gentleman wishes to intervene, he should rise in his place and see whether the Secretary of State will give way; otherwise he should stay quiet.
  Mr. Hunt: I am going to answer the hon. Gentleman. Do not let me miss an opportunity to put the hon. Gentleman right.
  I now quote from the National Coal Board, as it then was, summary of statistics. I can now confirm that all undergound output per man shift in 1974 was 2·94 tonnes and in 1979 it was 2·89 tonnes. What about the output? National Coal Board mines output in 1974 was 116·9 million tonnes, and in 1979 it was 109 million tonnes.
  Mr. Ashton rose—
  Mr. Hunt: The hon. Gentleman should heed your words, Mr. Deputy Speaker. It is about time he stopped his nonsensical sedentary interventions. I have been seeking for the past few minutes to deal with the points that were raised by the hon. Member for Livingston. The speech of the hon. Member for Livingston read rather like the curriculum vitae for George Orwell's Minister of Truth. I have never heard such a rewrite of history.
  Mr. Ashton: On a point of order, Mr. Deputy Speaker. You rose to your feet and criticised me—probably quite

  49
  rightly—for making interventions from a sedentary position. The Minister will not give way, although he keeps challenging me. What is the total tonnage for this year and what is the forecast for next year?
  Mr. Deputy Speaker: The hon. Gentleman is not being fair to anybody—either myself or the Minister. I heard him ask from a sedentary position, "What was the total tonnage output?" I heard an answer given. Whether or not the hon. Gentleman likes the answer is another matter, but the Secretary of State gave way.
  Mr. Hunt: We go from bad to worse with the hon. Gentleman. We are, of course, dealing with tonnages which are well known to the House, and up-to-date figures are set out not only in the energy review but in the Select Committee's report.
  Several hon. Members rose—
  Mr. Hunt: Just one moment. I was dealing properly with the hon. Gentleman's sedentary intervention. I do not want to occupy the House any more with his sedentary interventions, but I was giving the output per man shift figures for 1974 and 1979, and his sedentary intervention was, "What was the total output?" I have now given the total output figures for 1974 and 1979, and he is still not satisfied, but, of course, those figures do not prove his point.
  The point that I was making is that we should concern ourselves in this debate–1 hope that hon. Members will address the real issues, and the real issue which the hon. Member for Livingston did not address—[Interruption.] I would be obliged if Opposition Members did not criticise their hon. Friend so much by saying that he has not dealt with the issues. I am dealing with issues to refute the hon. Gentleman's point.
  Several hon. Members rose—
  Mr. Hunt: Just one moment. As we look forward to the future, let us consider the consequences of the second substantial shift in the marketplace for coal that is now used for electricity generation, just as we considered the first substantial shift in the marketplace away from coal being used in the—
  Mr. William O'Brien: Will the Secretary of State give way?
  Mr. Hardy: Will the Secretary of State give way?
  Mr. Hunt: I shall give way again in a moment.
  The point that I am making is that we have to address the substantial shift in the market for domestic coal, just as we did between 1964 and 1970; now, we look at the shift in the market for coal for electricity generation.
  The Government carefully read the report of the Trade and Industry Select Committee and accepted its main thrust. Specifically, if Opposition Members will recall, we accepted the main recommendation and offered a temporary and declining subsidy for additional sales of British deep-mined coal. We have asked the industry to provide us with firm evidence of the additional sales that it believes that it can secure and the amount of subsidy that it will require.
  If hon. Members look at the Order Paper, they will see that, immediately following this debate, there is a motion on financial assistance to industry, which
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  "authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance … sums exceeding £10 million in total but not exceeding 120 millon in total to support sales of coal produced from underground mines in the United Kingdom."
  Several hon. Members rose—
  Mr. Hunt: I shall give way later.
  That motion, of course, releases the necessary funds to keep the commitment that was made by my right hon. Friend the President of the Board of Trade. I shall put the record straight again and report exactly what my right hon. Friend the President of the Board of Trade said in his statement on the coal industry on 25 March. He said:
  "I cannot guarantee that supplementary sales will be achieved by British Coal."
  Later, he said:
  "Finally, let me remind the House of what I said earlier. There can be no guarantees. The market for coal is complex and unpredictable. Even among the experts, opinions differ. I have done all that I reasonably could, consistent with economic realities and legal constraints, to increase the opportunities for British Coal.
  It is now for British Coal to make the most of these opportunities. The outcome will be settled, as it should be, in the marketplace. Our policies will give the industry every chance of strengthening its position and achieving future success. It is now up to the people who work in the industry to build on this."—[Official Report, 25 March 1993; Vol. 221, c. 1230–31.]
  I had to quote that statement because the hon. Member for Livingston did not quote Hansard. He confined himself to quoting newspapers. When we quote newspapers, we deny the existence of debates and statements in the House. Nothing could have been clearer than my right hon. Friend's point, and I have quoted it in order to put the record straight.
  Mr. Hardy: Is it not incredible that, a few moments ago, the Secretary of State boasted about the vast amount of public money that the Government invested in the coal industry and yet the same Government have been party to rigging the market to prevent the coal industry from taking advantage of the most astonishing increases in productivity to which the right hon. Gentleman might refer?
  Is the Secretary of State aware that, a few weeks ago, before the President of the Board of Trade was taken ill —one hopes that he will be quickly back to the House to maintain the debate—his hon. Friend the Member for Rochford (Dr. Clark) and I were present at a meeting at which the President of the Board of Trade said, "Isn't it a pity that the enormous increase in productivity in the mining industry did not take place earlier?"
  The previous chairman of the board had to get to his feet to contradict the President of the Board's point, because that increase in productivity has been taking place almost consistently for the past four or five years. Having achieved record productivity, unmatched in the rest of British industry, is it wise for the Government to write off their investment in mining communities as they are doing?
  Mr. Hunt: I very much welcome the hon. Gentleman's comments about my right hon. Friend the President of the Board of Trade. I am grateful to him for ensuring that they were made by the Opposition. So far as the allegedly rigged market for energy is concerned—[Interruption.] All right— so far as the rigged market for energy is concerned, it is rigged in favour of coal because—
  Mr. Stevenson rose——
  Mr. Hunt: Let me answer the point.
  As the President of the Board of Trade pointed out, there is a subsidy of about £1 billion a year, which goes directly to ensuring that the market is weighted in favour of coal. We are now dealing with a market that is becoming freer, and decisions are being made by energy generators in the context of that freer market.
  If Labour Members re-examine the report of the Select Committee on Trade and Industry, they will see that several recommendations have been broadly accepted by the Government. The Government have accepted the first recommendation relating to the reform of working practices. They have accepted the broad thrust of recommendations Nos. 14, 15, 16 and 17 relating to the subsidy for additional sales of coal and recommendations Nos. 27, 28 and 29 relating to the establishment of an independent licensing authority. The White Paper in paragraphs 30 and 31 proposes extra funding for the support of clean coal technology. In the White Paper, the Government have broadly accepted paragraph 32 relating to the annual report of the energy commission and the energy advisory panel.
  As I said previously, the future of the coal industry has been debated in a way in which such matters should be debated—with informed reports from Select Committees. However, the Government are not bound to accept all of the recommendations. For example, as my hon. Friend the Member for Leeds, North-West (Dr. Hampson) pointed out earlier, it would be illegal to accept recommendation No. 7.
  Recommendation No. 11 relates to the reduction in output from opencast mining. I simply ask those Labour Members who are sponsored by the Transport and General Workers Union and who have made it clear that they do not want to see any reduction in jobs in the opencast coal industry and the nuclear industry to reflect for a moment. Trade unions throughout the country have made it clear that they do not want to see any reduction in jobs in the oil and gas industry.
  Dr. Hampson: My right hon. Friend will appreciate that the Select Committee tried to strike what we called a "balanced energy policy". In a way, that "balanced energy policy" could be interchanged with what the Leader of the Opposition called an "integrated energy policy" in a debate in December 1975. I remind my right hon. Friend that the Leader of the Opposition said that the Labour Government had
  "an effective policy for the development of oil and gas resources but a policy for our coal industry and also for our nuclear industry."
  His balance was interesting—he did not put the coal industry first. He said:
  "This is a policy of which we should be proud". —[Official Report, 8 December 1975; Vol. 902, c. 164.]
  That sort of balance and integration was at the heart of the Select Committee's proposals.
  Mr. Hunt: I am grateful to my hon. Friend for putting the record straight.
  Mr. Terry Lewis: First, I declare that I am sponsored by the Transport and General Workers Union. I also have a local interest in opencast mining. Many of us are fearful of, and opposed to, the extension of opencast mining on green belt land and land that is contaminated by previous workings. Some of us want to see a more strenuous approach taken by the Secretary of State and his
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  colleagues, especially with regard to mineral planning guidelines, so that local authorities and local communities can make their own decisions—and not be pressed by Whitehall into accepting the national needs as perceived by Ministers—and safeguard the environment at a time when British opencast miners submit their hideous opencast applications.
  Mr. Hunt: The hon. Gentleman criticised me previously for the length of my speech. I simply point out to Labour Members that I am prepared to give way, but they must accept that my speech will be much longer as a result—[Interruption.] I will deal with the point, although the shadow Secretary of State for Employment criticised me for making too long a speech in a previous debate after I had given way to 25 interventions. I believe that Ministers and Opposition spokesmen should give way and I now respond. However, in giving way, I hope that Labour Members will recognise that my speech will be longer as a result.
  Mr. Robin Cook rose—
  Mr. David Hunt: Let me deal with that point. I understand that the hon. Gentleman has already given considerable advocacy to the views of his constituents on environmental issues not only to the Minister for Energy but to the Secretary of State for the Environment. He will know that there are checks and balances in the system to ensure that environmental considerations are taken properly into account.
  Mr. Cook: I think that my hon. Friends are concerned not about the length of the right hon. Gentleman's speech but about the fact that, in the 35 minutes that he has been speaking, he has not once addressed the crisis in the coal industry. If he maintains that the crisis is caused by a free and open market, which I think he referred to earlier, will he now address himself to the central point of our case, which is that British Coal cannot sell coal to the generators at a price that would produce electricity to the consumer at a cheaper price than from any other source?
  Mr. Hunt: I have already said that we must deal with a dramatic contraction in the market for coal for electricity generation. To deal with the hon. Gentleman's specific point, my right hon. Friend the President of the Board of Trade made it clear to the House that he accepted the broad thrust of the Select Committee's recommendation that a subsidy should be provided to ensure that genuinely additional sales of coal for electricity generation could be provided by ensuring that the difference between world energy prices and the cost price was covered by such a subsidy.
  Mr. Stevenson rose
  Mr. Hunt: I shall deal with the point raised by the hon. Member for Livingston and then I shall give way.
  The subsidy is there and available not only to British Coal but to the private sector to ensure that the private sector can take advantage of genuinely additional sales of coal to the electricity generators.
  Mr. Robin Cook: The House is aware that the subsidy has been in place since March. The question I put to the Secretary of State is this: now that the subsidy is in place and the price of coal could provide cheaper electricity than any other source, and if it is a fair market, why will the

  53
  generators not buy it? If the Secretary of State will not answer my question, will he answer the question from ICI? Why is ICI being asked to pay twice the price for electricity that it would pay if the generators bought that coal?
  Mr. Hunt: I remember another recommendation made by the Select Committee [Interruption.] This directly answers the point made by the hon. Gentleman. The Select Committee recommended that electricity generators should keep a minimum of 20 million tonnes at the power stations. At present, the figure is 30 million tonnes. That 30 million tonnes at the power stations obviously has an effect on the market. I have made it clear that the subsidy is there. Provided the House approves the subsequent motion on the Order Paper, the subsidy will be in place and the money will be available. It will then be for British Coal to ensure that it secures those additional contracts.
  Mr. Cook: I am delighted that the Secretary of State referred to the same commitment that I referred to earlier—that is, that the generators should maintain stocks of not less than 20 million tonnes. Currently, the two generators propose to reduce their stocks to 10 million tonnes. May I take it from what he said that the Government will order the generators to maintain a level of 20 million tonnes, which will release additional markets?
  Mr. Hunt: As far as the tonnages kept at the power stations are concerned, I understand from my hon. Friend the Member for Rochford (Dr. Clark) that we are discussing with the electricity generators what the level should be. What I said is true: although the recommendation was 20 million tonnes, the amount at the generators today is 30 million tonnes.
  Dr. Michael Clark: My right hon. Friend has referred to what the Government have offered to do to help British Coal to bring its price down in order to enter markets that would otherwise not be open to it. He has also mentioned that it is up to British Coal to find those markets and, in many ways, I agree with him. Does he accept, however, that it is very difficult for British Coal to find all the markets that it might want for generation if the generators are insistent on building new gas-fired power stations and will not offer coal-fired power stations for sale at a reasonable price?
  Would not it help enormously to overcome the problem of finding markets for British Coal if the generators were reminded of their duopoly position and of the obligations they have? They should be encouraged to sell surplus coal-fired power stations at a realistic asset price rather than try to sell them at a price equivalent to the cost of building new high-technology power stations that those sold-off power stations would then have to compete against?
  Mr. Hunt: My hon. Friend has made an important point that I will bring to the attention of the generators. I will also bring it to the attention of the Director General of Electricity Supply, because, although he is aware of the problem, my hon. Friend's point carries an important message for the industry.
  British Coal has opportunities open to it. In the long term, its success will lie in its productivity being continually improved and its overheads reduced. I strongly believe that privatisation is urgently necessary for that industry not only because it will remove the
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  constraints of public ownership but because privatisation will do even more to secure a proper future for our coal industry.
  If the jobs of miners were preserved artificially, that would be done at the expense, immediately, of employees in other energy industries whether nuclear, gas or opencast.
  Dame Elaine Kellett-Bowman: At the expense of gas.
  Mr. Hunt: As my hon. Friend has said, it is a fact that every new gas-fired station will result in increasing job opportunities in that industry.
  It is most important to offer real hope for the future. That will not be done by seeking to persuade miners that they have long-term employment prospects in an industry faced with a contracting market. They know that themselves. When they go down the pits, they know that most of those pits have a strictly limited life. [HON. MEMBERS: "Come on!"] Oh yes, they do. I have been underground in nearly 30 coal mines and I have seen some wretched conditions caused by narrow seams. I have seen coal produced with high chlorine, sulphur or ash content. I have seen limited seams that offer a limited life.
  Surely it is far better to keep faith with those we care about in the coal industry by ensuring, now, that we provide jobs for the future by putting the necessary investment into those coal communities to provide additional jobs. My experience as Secretary of State for Wales has led me to the conclusion that one does not keep jobs in the Rhondda valley, for example, where once there were 50 coal mines, but now there are none, by artificially prolonging the life of exhausted pits. One provides jobs for the future by bringing in new industries and providing new high-tech opportunities.
  Mr. Winston Churchill: My right hon. Friend is speaking as though we had a free and open market in energy supplies, but he knows very well that that is not the case. He knows that the nuclear industry is guaranteed a market for every kilowatt hour that it produces and that the gas industry and Electricity de France have privileged access to energy markets, which are not available to coal.
  Three months ago, my right hon. Friend the President of the Board of Trade, to whose return to the House and full health we look forward at the earliest opportunity, gave an undertaking that he and the Government would work to widen the market for coal. That action, alone, can secure the future of the 12 so-called reprieved pits.
  Can my right hon. Friend tell the House what specific steps the Government have taken in those intervening three months to underpin the market for coal? Have they reined in the French connector supplies and, given the prospect of the dash for gas, extended the market for our coal?
  Mr. Hunt: A great deal of activity has taken place. It is the party of instant results that has ensured that we debate the subject today. I very much hope that we shall see an opportunity for not only British Coal but the private sector to secure genuine additional sales. We will, of course, continue to strive for that.
  I hope that fair-minded Members will acknowledge that, when I was Minister with responsibility for coal, I did my best to secure additional markets for it. In the present

  55
  market atmosphere, however, it is difficult to secure them, and I hope that my hon. Friend the Member for Davyhulme (Mr. Churchill) recognises that.
  Mr. Allan Rogers: The Secretary of State has referred to my constituency and I should tell him that it had, at one time, 63 coal mines, and not 50 as he said. He has suggested that he is closing coal mines on two grounds—first, because they have a finite life and, secondly, out of kindness, common humanity, because of their poor conditions. I presume that the right hon. Gentleman will extend that practice to the rest of the United Kingdom and give it the benefit of his humanity as well.
  Will the right hon. Gentleman address the issue that is of vital concern to people in the industry, perhaps not those in south Wales, because most of the pits have closed, but certainly in the rest of the United Kingdom? It is no good talking about the finite life of a particular colliery or a particular coalfield when pits with hundreds of years of coal reserves left in them are being closed. If he is hell bent on closing those pits, will he provide some alternative work for the people in that industry, rather than simply deciding to close those pits because of the Government's dogma and their 10-year pursuit of the mining industry?
  Mr. Hunt: I recall standing with the hon. Gentleman at Oakdale business park, where a great deal of money has been spent on restoring a derelict site—the old banana tip in Rhondda. I hope that that business park will result in many new jobs coming to the Rhondda valley.
  The hon. Gentleman should remember, however, that we are dealing with the market for coal, and not any of the other matters that he sought to attribute to me. I hope that he will accept that Wales offers good examples of communities looking to the future. They are entitled to do so because of the substantial amounts of partnership money that is available through the private sector and the public sector working together. The announcement of £243 million for England and Wales represents such partnership money and is available to provide and secure job opportunities.
  Mr. Don Dixon: Get on with it.
  Mr. Hunt: I am still answering the point raised by the hon. Member for Rhondda (Mr. Rogers). I will come to a conclusion in a moment, but it is right to answer the points raised.
  I should like to remind the hon. Member for Rhondda that I am proud of the fact that, together with Lord Walker and the then National Coal Board, I created an organisation called British Coal Enterprise Ltd. That organisation has just published its annual review of activities, the eighth such report, for 1992–93 and I hope that the hon. Gentleman will read it. It lists 87,500 job opportunities that have been created since 1984–85. I believe that that is a good result. [Interruption.] The hon. Gentleman should not allow his hon. Friends on the Opposition Benches to belittle the work of British Coal Enterprise Ltd., which has done an excellent job. It will continue to have the full support of the Government.
  Mr. Cash: I, too, pay tribute to my right hon. Friend for the work that he did in his previous capacity. Indeed, he
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  and I worked very closely together in relation to. the coal strike of 1984. I pay tribute to him also for his work in connection with British Coal Enterprise.
  Does my hon. Friend agree that one of this country's main difficulties is the increasing level of public expenditure? Does he know that, in terms of central Government expenditure alone, the cost of closing the mine at Trentham, let alone the one at Silverdale, will be £85 million to £90 million in the first year and that that will be barely offset by the amount of money coming back?
  Is my right hon. Friend aware of Conservatives' concern about monopolies? The lack of access, under a privatised regime, to the core contracts of mines is itself an offence against the principles that the party stands for. That is compounded by the lack of a level playing field in Europe. My right hon. Friend should understand that some of us who agree with him in respect of many issues take a very strong view about the way in which this whole matter has been dealt with, as it offends Conservative principles above all else.
  Mr. Hunt: I want to see a level playing field in Europe. That is why I am very much in favour of the Maastricht treaty, which goes some way towards restoring that situation. My hon. Friend has done a very good job for his local colliery, but he will accept that it lost a considerable sum of money last year. Ultimately, it is for British Coal to determine the future of each colliery.
  The future for coal depends on the market—in particular. the tonnages that can be sold to the generators. The Government cannot create an artificial market for coal without damaging many other jobs. Coal must compete with other energy sources. We cannot just pretend that nuclear energy, gas and oil do not exist.
  What the Government can do is create the opportunity for additional sales. Following publication of the report of the Select Committee on Trade and Industry, that is exactly what my right hon. Friend did. The subsidy that the Government have made available to British Coal—this is reflected in a later motion on today's Order Paper—will help the company to match world prices for sales over and above their core contracts with the generators. With that subsidy, and with increased productivity, coal has a future. That future will be secured better in the private sector, and the Government will bring forward early legislation on privatisation.
  Dr. Kim Howells: If that is the case, why is the Aberthaw contract of the Tower colliery, in which there has been considerable investment, and which is one of the last 20 supposed to be safe, being cut by 200,000 tonnes a year? Why has the right hon. Gentleman said nothing about the way in which management—Mr. Neil Clarke and the chairman of the coal board—have backed out of efforts to find new markets and have been absolutely silent on the question of the fight for greater markets for coal? Is there any collusion between the Government and the chairman of the coal board to facilitate a management buy-out?
  Mr. Hunt: I gave way to the hon. Gentleman because I have had tremendouse respect for his background in the industry and, indeed, for his valiant fight for the true interests of miners, especially at a very difficult time for the industry. Obviously, decisions about individual collieries must be a matter for British Coal. The hon. Gentleman

  57
  will remember that when he was involved, in a full-time capacity, with the National Union of Mineworkers, that was always the basis of decisions.
  No Government—Labour or Conservative—have ever tried to second-guess British Coal or the former National Coal Board about decisions on individual collieries. That is why I have tried, in this speech, to put forward the view that jobs in coal, as in any other industry, must depend on the industry's success.
  The reality is that the market has changed. Industrial change cannot be avoided. It would be totally wrong to destroy jobs by imposing high electricity prices on industry. This country cannot, in a very competitive world, afford to have an economy preserved in the past. Our industries have to be efficient if they are to compete in the future. [Interruption.] One of my hon. Friends has shouted, "The chemical industry."
  That is a very good example. Our chemical industry is one of the most successful in the world. If we are to ensure that it remains a world leader and that the jobs depending on it are retained, we cannot shackle it with high electricity prices.
  With regard to those who are leaving the industry, the Government have provided opportunities—not only with the £243 million regeneration package or with the support for British Coal Enterprise, but also with the whole regeneration strategy that we have endorsed since 1979. This has been done before. It has been done at Shot ton and Corby and in other communities affected by industrial change. Unemployment in Corby is now below the national average—something that not even the doubting Thomases of the Opposition would have forecast in 1979.
  From this debate, there is a clear message to the coal communities. First, I strongly believe that coal has a future in a highly competitive energy market. The support that the Conservative Government are providing will secure that future. Privatisation will create a profitable industry able to survive on its own. Secondly, where pits close, new businesses and new jobs will be created to replace those that disappear. There is a future—a future for coal, and a future for coal communities. I urge my right hon. and hon. Friends to throw out the motion and support the
  5.56 pm
  Mr. Tony Benn: I have heard many Energy Ministers speak, but I have never heard a more disgraceful speech than the one that has just been delivered by the right hon. Gentleman. Many thousands of people in the mining communities will have expected from the Secretary of State a serious account of the Government's energy policy. I contrast the right hon. Gentleman's speech with that of the Secretary of State for Defence, who, just after Question Time today, announced a defence review. The Secretary of State for Defence tried to measure our resources against our commitments.
  Successive Energy Ministers, of whom I am proud to have been one, have been custodians of 300 years' worth of coal reserves—1,000 years, if the coal under the North sea is included—and of other energy sources, notably nuclear power, as well as gas. If the policy that the Secretary of State mentioned were applied to the farming industry, with its huge subsidies and set-aside grants, there would undoubtedly be an outcry from Conservative Members representing—
  Mr. Eggar rose—
  Mr. Benn: I want to make my point. The hon. Gentleman will have an opportunity to comment in his winding-up speech. This ought not to be treated as a student debate. Those who are listening are entitled to hear the arguments so that they may compare—
  Mr. Eggar rose—
  Mr. Benn: I do not intend to give way at the moment. People listening to the debate ought to be able to compare the arguments.
  There has been reference to the period of the last Labour Government. I am very proud to have been the Minister who expanded the market by authorising the Drax B coal-fired power station; who agreed to and made possible the sinking of the Selby coalfield; who signed the agreement with France and said in the House that its purpose was to export British coal by wire to France—the argument that was put forward in the House when this was done; and who reached an agreement with the National Union of Mineworkers that, where pits were closed because of exhaustion, as sometimes happens, or where pits were closed because of dangerous working, as is sometimes necessary, or where pits were closed because there was access to the coal reserves of other shafts, the union would be offered a veto.
  In truth, the NUM had a powerful argument—that very often there were reserves that the Coal Board did not want to explore. I offered the union an exploration grant of £500,000 for the purpose of establishing whether those reserves existed in every pit. I hope that the Minister will not try to cover up the brutality of his policy by making debating points about the previous Labour Government.
  Mr. Eggar: Will the right hon. Gentleman give way?
  Mr. Benn: I shall give way, but I am making a serious speech and do not want this to become a mere knockabout.
  Mr. Eggar: The right hon. Gentleman said that he was proud to have signed the interconnector agreement with France and that he signed it because he thought that he was exporting coal by wire. Why, therefore, did he agree with the French terms, which meant that the French could export nuclear electricity to this country without giving us the ability to break that agreement legally?
  Mr. Benn: The Minister is totally wrong. The interconnector was a physical connector, and the contract with the French was signed subsequently. The Minister's assertion is like saying that if one orders a ship, one must have ordered it to import goods from Japan. Ships are capable of carrying goods both ways. [HON. MEMBERS: "Oh, no."] It is the truth.
  The Government should also mention the fact that, when the new Labour Government took office in early 1974, we discovered that the previous Prime Minister had told the Central Electricity Generating Board to import Australian coal. By the time the coal was delivered, it was so expensive that the British generating board sold it at a loss to Electricity de France because British coal was cheaper. Also in 1974, the generating board wanted some 22 nuclear power stations, which had all been set in hand by the previous Government. That number was cut back to two.
  So much for the past. It would be a tragedy if anyone from a mining area listening to this debate thought that it

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  was just about what happened 20 years ago. The people listening to this debate want to know why pits are being closed and I submit to the House that it has nothing whatever to do with market forces.
  Anyone who has been reading articles by Brian Crozier in The Times recently may know something about it. When the Government came to power in 1979, they were determined to break the National Union of Mineworkers and were prepared to sacrifice the British coal mining industry in order to do so. The Government precipitated the strike in 1984. I have forgotten which Minister said that, when there was some industrial action earlier, they were not ready for the strike.
  Anyone who thinks that Arthur Scargill started the strike had better read what actually happened. Cortonwood had been given a long life; when the Government decided to close it, the local branch officials told the national officials, "We don't want you here." They wanted to decide it themselves and Arthur Scargill was told by the branch officials at Cortonwood that they had decided to resist that decision and appeal to the NUM for support.
  The articles in The Times were not news to any of us. Brian Crozier, that paranoid nut who ran a private security service, managed to persuade the Prime Minister of the day that a miners' leader who wanted to keep the pit open was engaged in trying to bring about the Russian revolution in Britain. I do not know how that man could have been listened to by anyone. Hon. Members should read the book if they do not believe what he said. We know that David Hart was put in by the then Prime Minister to wreck the agreement between MacGregor and Scargill, which might conceivably have brought that strike to a more reasonable conclusion.
  The then Prime Minister treated the miners as the enemy within. Like many other hon. Members, I spoke to many miners who had served in the second world war. They bitterly resented being described as "the enemy within" by a Prime Minister who had never even served in the armed forces in the second world war. From the beginning—from the "Ridley plan" through the strike—this has been a policy to destroy the National Union of Mineworkers. That is what it is about.
  The Government should not try to tell us about their generous redundancy terms, because they bumped them up to get people to leave the industry. How much of the £18 billion support for the industry has been used to buy out men from the industry? How much of it has gone into redundancy arrangements? Some miners are told that if they do not accept redundancy pay, they will be put in low-paid jobs, and the redundancy pay that they receive six months later is then related to their low pay.
  When they receive their redundancy pay, they want to use it to pay off their mortgages, but the Government will not let them do so. So much for a Government who believe in home ownership. Miners in my constituency who took up the offer to buy their own houses, believing that the industry was safe, thought that when they were made redundant they would at least have a roof over their heads. But when they went to the DSS, they were told that they could not spend their money. It is not real money but a coupon. It is a lump sum of unemployment pay and they
  60
  will get nothing from the DSS until they have spent every penny of it. The Government are fraudulent in their presentation of the case.
  When the pits are closed, what happens? The environment in the areas where the pits have been is stripped and opencast. Local authorities are not allowed to prevent the opencasting of areas because the Government have taken away local authorities' power to determine whether opencasting should take place.
  I have the privilege to represent what was a mining area —the last pit in Chesterfield closed 10 days ago—and I know that what the Minister said was wholly untrue. Last October, when the Government were forced back by a great outcry of public opinion, they pretended that they would do something simply to buy the support of enough Conservative Members of Parliament to get the measures through. When what they saw as the hubbub had subsided, they decided to carry on with closing the pits.
  It is a disgraceful story because this country is richly endowed with energy sources and needs a national energy policy. It is sensible for Governments to say, as they do in other policy areas, that they will conserve gas. The previous Labour Government said that we would not allow the oil companies in the North sea to flare the gas. My right hon. and learned Friend the Leader of the Opposition and I provided for flaring controls to prevent gas being flared until the gas-gathering pipeline was available, so that gas would be available.
  We did not even develop all the fields that we discovered. We had discovered a field in the Irish sea but held back its development. We could do so because it was in public ownership. We did not have to exploit everything that we discovered. We cut the nuclear component from the 22 power stations demanded by the CEGB to two. We developed the mining industry, with elaborate arrangements that involved consultation with all users of coal and electricity.
  I will not say that this Government have betrayed the mining industry, because one must believe in something before being able to betray it. This is a search-and-destroy mission against the National Union of Mineworkers.
  I shall finish with a political point. In 1984–85, the NUM warned people that if it went down, others would follow. Anyone looking back, 10 years later, will see that that is exactly what has happened to the health service and local government. The Government are determined to destroy not only the NUM but the trade union movement. because that is the main obstacle to what they are really about—enriching their friends and impoverishing those who create the nation's wealth. I saw figures the other day showing a 14 per cent. reduction in income among the poorest people and enormous profits made by those who have either acquired privatised assets or plan to do so.
  Let us not forget that Mr. Hanson will be waiting to buy the pits that we are told are uneconomical. Such people pour money into the Tory party. Business Age, which is not a left-wing magazine, has produced a figure of £71 million as the amount donated to the Tory party. In return, donors have a chance to buy in those assets. Some Tory Ministers who were in the Cabinet that privatised particular industries sit on the boards of the companies for which they have legislated. This is a corrupt Government and people understand that they are about corruption. Ministers come along and make a lot of funny speeches without a note on the Dispatch Box. They advance a wicked argument, which does not carry any credibility.

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  The Government can close the pits, but they cannot abolish miners. Thousands and thousands of miners and miners' families in this country were proved right. Arthur Scargill was described as a scaremonger, but he was right. He was re-elected. He is more popular than the Prime Minister—everybody knows that. He is more popular because he told the truth; what he said in 1984–85 was true.
  The Government, facing awful scandal—the profits made from the Bank of Credit and Commerce International, the Maxwell pensioners and Polly Peck—are trying to destroy the lives of highly skilled engineers who work underground with high technology arid who created the wealth on which the first industrial revolution was built. One day, we will need those people again to rebuild the country on the basis of its energy resources.
  6.12 pm
  Dr. Keith Hampson: In one sense, I agree with the right hon. Member for Chesterfield (Mr. Benn). Clearly, we face a serious state of affairs in our mining communities, and it is not confined to the pit areas. The mining equipment industry produces substantial exports of about, I believe, £400 million a year, so subsidiary industries are dependent on what happens in the coal industry.
  We heard enormous passion in the speech of the right hon. Member for Chesterfield, but has he forgotten what has happened in the years since he was the Secretary of State for Energy? Do I have to go back to the White Paper that he produced? Do I have to remind him of the balanced energy sources for which he argued?
  At the heart of the Opposition's case is the argument that, supposedly, the market for coal is rigged. The primary reason, it is said, involved the nuclear industry. Yet, when Secretary of State for Energy, the right hon. Gentleman said that one had to have a nuclear ingredient. Twice he said that Windscale had to be enlarged and that
  "no energy Minister could recommend to the House"— [Official Report, 15 May 1978; Vol. 950, c. 174.]
  other than having the nuclear ingredient. He cited the Royal Commission on Environmental Pollution, because there were problems involving nuclear power. But we now have problems of air pollution and the burning of carbon fuels. The environmental lobby argues about how clean the nuclear industry is compared with the coal industry. Has the right hon. Gentleman forgotten not only history, but what he has said in the House?
  Of course, the Leader of the Opposition was once an oil spokesman. Of course, he defended the oil industry and the jobs in that industry, and he was right to do so. It is a major industry. The Liberal party's spokesman on the Select Committee, the hon. Member for Gordon (Mr. Bruce), rightly defended that industry.
  That is why the Select Committee called for a balanced energy strategy, just as the right hon. Member for Chesterfield had done all those years ago. No modern economy can be totally dependent on coal or have a coal-dominated energy strategy.
  When Labour Members call for an energy strategy, they deceive the nation. They are calling for a strategy fixed for coal. For the past three years, the energy industry in this country has been fixed for coal. How could one say otherwise when, on privatisation of the industry, the electricity companies were required to buy huge tonnages —70 million and 65 million tonnes of coal?
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  That was way above the amounts that they would have bought in an ordinary energy market. In addition, they did so at a price which, at £1·85 a gigajoule, was substantially more than the world price of about £1·30—and below that if one is shipping into a coastal power station.
  Once we removed the rigging of the market in favour of coal, any independent business man had to say that alternative cheaper sources were available. Opposition Members constantly argue on behalf of manufacturing industry. The Select Committee on Trade and Industry is now preparing a report on the competitiveness of British manufacturing industry. Is it, in principle, wrong to seek to give British manufacturing industry the cheapest possible power source?
  Opposition Members are readily saying that we should continue to protect the old position and force the electricity companies to continue to buy British coal, when it is more expensive than foreign coal or when cleaner alternatives are available.
  It is a tragedy for the coal industry that alternatives have become available, but that is due to the march of history. We have developed a new gas turbine technology which was not available when the White Paper of the right hon. Member for Chesterfield was published in the 1970s. That turbine technology is an increasingly more cost-effective and efficient system of burning gas. That has changed the value of gas as a premium fuel. In recent press releases, British Coal has acknowledged that fact.
  In the press release it stated that the threat that it had anticipated had become even worse. It states that gas was
  "reaching full capacity earlier and running at even higher efficiency levels."
  That is one of the industry's key problems. In addition, summer is with us, and the industry is presented with another problem: it has to persuade people to buy coal.
  The huge existing coal stocks present a big problem, but there are other factors in the equation. The Select Committee thought that imports constituted one of the two most important factors—the second was existing surface stock levels. However, that first factor is currently not the real problem. There is a low demand for coal because it is the summer, and gas is coming on to the market quickly and at ever-increasing efficiency.
  Mr. Eric Illsley: The hon. Gentleman has said that manufacturing industry and industry in general will be subject to higher prices if we maintain the coal industry at its current market levels. Why has the Major Energy Users Council been complaining about the high cost of energy now and over the previous few years?
  Dr. Hampson: I do not want to sound patronising, but hon. Members and people outside the House have not bothered to read the Select Committee report. It contains a section on why the heavy users have serious problems, which we have addressed. The report contains recommendations on that, and I have sympathy with those users and their problems. The heavy users such as ICI and the paper industry—not industry as a whole—have a case.
  However, the general argument is different. The Select Committee report acknowledges that there is pressure on the coal market. People should not cite the Select Committee report as though it contains a series of absolutes. We were making generous assumptions, and hoping and praying that we could strike a better deal for the coal industry.

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  We were stretching the figures, in believing that the market could possibly reach 16 million extra tonnes. From all the evidence given at the outset, most of us knew that the market could only be about 12 million tonnes. Due to the conditions that I have just outlined, the market is less than that, and the industry is under even greater pressures.
  The Select Committee added a potential 3 million tonnes to the non-electricity industry in our calculations. I do not want to bore the House with a description of how we reached that figure, but we were speculating and we must now return to reality. We must not cite the Select Committee's report as if it constituted an alternative strategy which is not now being pursued.
  In many respects, the Government are seeking to do what the Select Committee recommended. British Coal has a future; a certain number of pits—we did not say how many—have a future if we can reduce the production costs of deep-mined coal to those of world prices, which are largely determined by the huge opencast pits opening all over the world. That requires the NUM and the mining unions to make great sacrifices. It is no good the unions, and the Opposition Members who represent them, digging in and saying no change.
  The hon. Member for Rother Valley (Mr. Barron) said that great improvements in productivity have been made in the past four years. That is of course true, because, in the past four years, particularly since privatisation, new disciplines have been introduced into, and new competitive pressures have been exerted on, the industry to try to lower its costs and get to grips with inefficient practices. The industry has no future if we cannot reduce further its costs.
  The first key factor of the Select Committee's report which the Government have acknowledged is that we must subsidise our prices in new contracts to match those of world prices. We said that we would try to squeeze the imports as much as possible, and try to squeeze French imports. The Government are desperately trying to do so, and companies such as Yorkshire Electricity are not accepting French imports. However, that alternative supply still exists for others. We have also squeezed orimulsion, but those are all small amounts in the equation.
  Let us not deceive ourselves that there is a real choice. There is an efficient gas industry, and not one Labour or Conservative member of the Committee wanted to pull back from the position that it has reached. We could easily control it, in the way that the right hon. Member for Chesterfield did, because licences and consent must be granted.
  The Government rightly said that, with huge gasfields such as Liverpool bay, with its sour gas, it is pointless not accepting that jobs are at stake, and that that natural resource should go into electrical supply. Unfortunately, if that is done, it squeezes the coal market—but the Select Committee said that that should be done.
  Mr. Martin O'Neill: I wanted to intervene some moments ago, but the hon. Gentleman got carried away. I refer to his earlier point about productivity. The Secretary of State made great play of productivity, but I was not clear about his comparisons.
  If the hon. Gentleman will cast his mind back to the 1970s, productivity included that involved in the drivages of roads, and so on—which at that time were undertaken
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  by employees of British Coal, or the National Coal Board as it then was. Today, drivages are undertaken by private contractors, and do not appear in British Coal's figures. Therefore, the basis of the Government's statistical comparison is totally fallacious. They are comparing unlike with like, so those statistics are invalid and should not be quoted.
  Dr. Hampson: I will not enter into that technical argument, which we dealt with to some extent in the Select Committee—and we have had the Boyd report. It is a technical issue, as to what sort of drivages are best in this country. Other countries use different technological techniques and operate different kinds of pits. The point is that, however they get the coal out of the ground, it is cheaper on the world market than the product that our deep mines can produce. That is the dilemma.
  So, we have to free our operators, including British Coal—the hon. Gentleman knows from the evidence that it submitted to the Select Committee that it is totally in favour of this—from various legislation introduced since the 1940s, to allow more flexibility, so that they can make better use of working time to achieve higher productivity and get costs down.
  I pay full tribute to the developments in productivity of the past few years, but coal is under pressure from the twofold competition of world coal prices and a highly efficient gas industry. A British Coal press release dated 30 June rightly boasts that output per man is 23 per cent. higher than one year ago, yet that is a terrible catch-22.
  Nuclear is, because of past strategies, static at around 20 per cent., but gas is increasing, and in the next two years will reach 25 per cent. That squeezes coal down to about 50 per cent. Of that coal burn, there are cheaper and environmentally cleaner coal imports. At a time when demand for coal is diminishing, productivity is dramatically improving. Fewer pits and fewer men can produce sufficient coal, even in an increased market.
  Opposition Members do not have a solution any different from that of the Government.
  Several hon. Members rose—
  Dr. Hampson: No, I will not give way. I was accused by the Chair in the last coal debate of speaking too long. On that occasion, I allowed six interventions—and today I have allowed three, which is very generous. I must bring my remarks to an close.
  High-technology pits allow a smaller work force to produce sufficient output, even if the market stabilises. The Committee's report has been distorted by misinformation. For example, we were told today that other Governments help their industries. The British Government have a huge record of giving help. The rest of the European Community countries are running down their coal industries to a much greater extent. There is virtually nothing left in Europe, apart from in Germany.
  Mr. Barron rose—
  Dr. Hampson: The hon. Gentleman can make his point in his own speech. I would like him to read the Select Committee report, which gives in table 2 the figures for the rundown from the 1970s to the 1990s. We and the Germans are in almost exactly the same position. Our output fell from 108 million tonnes in 1973 to 75 million tonnes, and that of the Germans from 99 million tonnes to 71 million tonnes.

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  Germans are pouring proportionately the same amount of money into coal as we are into nuclear, but they are doing that to protect the rundown of coal. The Belgians, the French, the Spanish and the OECD in general are running down their coal industries at a faster rate than this country has done over the past 20 years.
  Mr. Barron rose—
  Dr. Hampson: No, I will not give way.
  The coal debate is riddled with myth. Even a distinguished presenter of the "Today" programme this week endorsed, or at least did not challenge, Arthur Scargill's claim about coal reserves. Arthur said yet again that there is "more than a thousand years of coal", and that it was a tragedy that such a great resource was available and untsed. All the various estimates are in the Select Committee's report, if only people will analyse them.
  Mr. Benn: They are wrong.
  Dr. Hampson: No, we are not wrong. The report says that there may be about 300 years of coal left in the United Kingdom, but questions how much of it will be practicable to extract from the 50 existing pits. Practicalities reduce the term to something between 25 and 40 years. The report says—all the Labour members of the Committee signed up to this—that it is closer to 25 than 40 years in respect of existing pits.
  The Select Committee spells out the fact that the real dilemma for British Coal is the investment required for new pits, such as those in Nottinghamshire and Selby. It costs about £400 million to £500 million at present-day prices to sink a new deep mine, apart from obtaining planning permission in places such as East Anglia. Coal that may be available for 200 years is not in the vicinity of existing pits. It is time the existing mining communities woke up to that fact, and stopped being deluded by people such as Arthur Scargill.
  Not one expert—left, right or center—in the world anticipates that, in the next 30 years, given the likely world price of coal, because of huge opencast pits opening in Australia, South Africa, South America and North America, any Government will spend £400 million to £500 million on a deep mine, because the unit cost of coal produced there could not conceivably compete with imports.
  6.28 pm
  Mr. Malcolm Bruce: Although I was a member of the Select Committee, I do not intend to dwell on its report, as did the hon. Member for Leeds, North-West (Dr. Hampson). The Committee had to deal with a situation that should never have been allowed to develop. As Select Committees are of habit all-party and must achieve a consensus, they cannot entertain radical proposals.
  The Government probably hoped that they would get more time out of their announcement of three months ago. The public, understandably, are confused and concerned that, despite assurances and the rescue plan that was eventually forced on the Government, nothing appears to have changed.
  The programme of privatising gas and electricity has meant that, whether wilfully or through lack of foresight, coal is being squeezed out of the marketplace. Unless the
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  Government are prepared to acknowledge that and do something about it, the coal closure programme will accelerate.
  Some hon. Members implied that those of us who make constructive comments against the accelerated closure programme have an old-fashioned idea about the role of coal. The coal industry has been declining, and all sides have recognised the change in the market.
  Two questions must be addressed, the first of which is how to manage that decline sensibly and constructively and take account of the needs of communities. Secondly, what strategic calculation is required to ensure the retention of long-term flexibility and choice?
  People are beginning to realise that the Government have created such a distortion that coal will be squeezed until it is closed off as a significant alternative in a short time. Any Government who allow that to happen will rightly be accused of total irresponsibility and vandalism in respect of a major energy resource. The Government are in danger of being accused of that unless they take some action now.
  British Coal is not our only coal producer, but it is our major one, and it appears to have its mind set on the belief that the only way to get the industry into profit is to contract. But contraction is becoming a spiral towards near-oblivion. It is directed not at a target figure but at a figure that is reducing all the time. There does not seem to be any will to market coal or to enter into the spirit of competition.
  Today's newspapers show that the industrial market for coal is disappearing at an alarming rate. There is a lack of confidence among British Coal customers about a commitment to provide a future source. Customers do not believe that there will be guaranteed security of supply, and any company that gets itself into such a situation is on dangerous ground.
  The industry is contracting. The pertinent points made by the hon. Member for Livingston (Mr. Cook) were extremely well put, but they were not even acknowledged, let alone answered, by the Secretary of State. As a Liberal Democrat, and to some extent a referee in the confrontation between the two major parties, I must say that the hon. Member for Livingston spoke for 29 cogent and effective minutes, while we had 55 minutes of waffle by an unprepared Secretary of State who did not answer any of the points raised.
  One of the pertinent questions asked by the hon. Member for Livingston was, how is it that British Coal can provide a source for energy supply which is cheaper than gas or nuclear fuel, but cannot find a market? That question simply echoed in the air but produced no response whatever from the Government. Every electricity consumer and every major industrial user, not just ICI, wants an answer to that question, but it has not been addressed.
  The hon. Member for Leeds, North-West (Mr. Hampson) is a member of the Select Committee on Trade and Industry, as I am. He acknowledged that, as a Member representing a constituency in the north-east of Scotland, where tens of thousands of people are employed in the oil and gas industry, I would not vote for measures that will put them out of work. However, a Government with any foresight could have created a sensible and managed energy policy under which such a choice would not have to be made. That is the Government's failure.

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  British Gas started with a monopsony in North sea gas, because it was the only customer. When it was privatised, and the technology for gas-fired power stations was developed, it was inevitable that the oil and gas-producing industries would try to find a market. The gas-fired stations provided just such a market, and that got round British Gas.
  It is interesting that British Gas frequently argues that gas is too good a fuel to be burnt in that way. That is a legitimate point, because, after having always taken an interest in energy matters, one of the most startling pieces of evidence that I heard on the Select Committee was that the life of North sea gas is longer than the life of British coal. The presentation of that piece of evidence was historic. That is an extraordinary transition, and part of the reason for it is that there has not been a strategic calculation about what the right level ought to be.
  We cannot retain our flexibility and choice with 10, 12 or 15 pits, because such an industry will be small in world terms, and its ability to compete will be restricted. The question that arises is whether anybody has more management drive and more commitment to technology and marketing than British Coal.
  The other question that the Government have not answered is whether they are determined simply to reduce British Coal to the smallest possible viable and profitable corporation and then sell it to the management or anybody else; or whether they will give the coal reserves to someone who might make more of them. Even Labour Members sponsored by either of the coal unions must recognise that someone other than British Coal running a pit is rather better than having it closed, even if they would not like to face that choice.
  It is deeply depressing that the Government have argued that, as North sea oil and gas have created for themselves a market for electrical generation, they should be allowed to exploit it. However, in the month that they gave clearance for that, they introduced new taxes in the North sea that will discourage the finding of more oil and gas, which is in the national interest.
  Mr. Illsley: I appreciate the difficulty of the argument about whether it is better to retain pits in public ownership or under a different type of management, if that means that they will stay open. We would not agree to just any form of management taking over collieries, because the terms and conditions of employment could be lowered to such an extent that it would not be worth while for union members to work in them. The competence of the management is another factor in a scenario in which the market is contracting. At Monktonhall, mineworkers pumped hard-earned redundancy money into a venture that could fail and lose their investment.
  Mr. Bruce: The hon. Gentleman is correct. As he knows, I have supported the right of the Monktonhall miners to take over their colliery, and I hope that they will succeed. It is frustrating that they have more difficulty getting access to finance than some of their competitors, who would like to profit from their difficulties.
  I understand the hon. Gentleman's point, but the wider issue is that, in the national interest, we must ensure the maximum viable coal industry. The Government's strategy ensures that we will not achieve that. There is a
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  danger that the coal industry will be reduced to such a level that it will be too small to maintain viability and any standing as a world player, as it was in the past. That is worrying.
  The environmental argument is a little spurious, because, while the Government use the contraction of the coal industry and the expansion of other sectors as environmental justification for their policy, they overrule local planning authorities to ensure the dramatic expansion of opencast mining. They do that against the wishes of local communities, in a way that is regarded as extremely damaging to the environment.
  One colliery, Brynhenllys in Wales, was drawn to my attention yesterday. It is an anthracite opencast mine, that will effectively displace the deep-mined anthracite colliery in Betws. In spite of being repeatedly refused by the local planning authority, plans have been approved by the Secretary of State in the past month.
  There are many other examples all over the country of the Secretary of State having given planning permission for the expansion of opencast mining to allow deep-mined collieries to be shut down. I am not convinced that that is an environmentally constructive approach.
  Mr. Alan Beith: Does my hon. Friend recognise that the problem is even worse than that? Under the existing mineral planning guidance, local planning authorities, knowing that they will be overruled by the Secretary of State if they turn down an opencast application, find themselves reduced to placing extra limits, such as increasing the height of the banks, or weakening in some minor way the grounds for the application. Those planning authorities know that, even when they feel strongly that an application should be rejected, they will probably be overruled, so they feel that they might as well make the best of a bad job.
  Mr. Bruce: I understand that, because, ultimately, it only involves more and more planning time. generally, the public do not want to see a dramatic expansion in opencast mining, and the Government appear to be prepared to overrule the balance of pits. That has produced the net effect that my right hon. Friend has described.
  The Government continue to insist that, somehow, what is happening is simply the operation of a free market. What has happened in the past three months has proved that the free market is not working, because coal is cheaper than any other source of fuel, yet the market has not changed. It cannot possibly he a free market, in spite of the argument about stocks. It is all about market positioning —people making calculated strategic decisions to determine their place in the market.
  The market is also distorted by the regime that the Government have created. They have created a privatised electricity industry, where the nuclear industry is guaranteed a market, regardless of the price for everything that they can produce. The Treasury appears to take the simple view that it simply wants the maximum revenue from the nuclear industry. The fact that one other aspect of the Treasury's books will cost millions—if not billions —of pounds, in redundancy, community development and so forth, does not appear to enter into the calculation.
  There is also distortion because nuclear power is expanding its share of the market. It has a privileged position inside the public sector, with its debts being

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  written off. That is not fair, free market competition, regardless of whether one is pro or anti-nuclear. My position is well known.
  At the core of the debate about THORP in the past week was the question of who would underwrite the £13 billion-worth of contracts. The answer is simple: the consumer will underwrite them. That is not a free market, but a guarantee of being able to exploit one's position in the market, where one cannot lose. Coal does not have that opportunity or advantage, but is squeezed out as a direct result.
  It is true that gas-powered stations must be licensed, but the Government deliberately allowed a scramble to take place, because they wanted that distortion to arise. I have made my position clear. I do not support measures to reverse that process, but I believe that the distortion should not have been allowed to happen in that way in the first place. That puts some obligation on the Government to have a rethink.
  The Minister made his point about the French interconnector. I have seen the supposed arguments, and I am not convinced by them. The interconnector was supposed to be a two-way, not a one-way, process, and that suggests that at least half the difference ought to be recoverable. The Government have never satisfactorily explained why not.
  Although I have no expectations, the Minister and the Government ought to acknowledge that they have made a mess, and that they have created distortion in the marketplace, partly driven by malice, partly driven by strategy and partly driven by ideology. The Government have not come clean, and they have not been open or honest. If they had said, "We have made a calculated decision that the coal industry should contract to a certain level because it is too dominant within the electricity supply market, and we are creating a playing field to achieve that," it would have been honest. It might riot have been acceptable, but it would have been honest.
  The Government have acted totally under the counter, and we have had to guess and second-guess their motives. I am sure that, whatever their motives, they are not in the national interest. The Government should think again.
  6.44 pm
  Dr. Michael Clark: I am pleased to follow the hon. Member for Gordon (Mr. Bruce). Like him, I shall do my best to make a constructive speech because I believe that we should attempt to find a solution rather than go back over the past and try to attribute blame. My estimate is that there is as much anguish and disappointment among Conservative Members as there is among Opposition Members about the fact that we are not finding the market for coal that we expected three months ago and about the fact that there is still much to be done if we are to save the majority of the pits that we set out to save in March and April.
  At the time of the White Paper, we were promised that the generators would be encouraged to sign contracts, which they were some distance away from signing then. That has now been done and in notes to hon. Members both National Power and PowerGen have let it be known that they have signed or are on the verge of signing five-year contracts. We have moved forward in that respect.
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  We were promised that there would be a dramatic reduction in imports of coal. With one or two minor exceptions, coal imports are negligible at the moment. So be it; they should have been negligible a long time ago. If they had been, we should not have had the stocks that we are now discussing. We were told that steps would be taken, albeit modest steps, to cut the amount of electricity coming from France through the link. Like the hon. Member for Gordon and others who have spoken this afternoon, I am disappointed that we have not made further progress on that. However, we may hear a little more about that from my hon. Friend the Minister.
  We were also told that in the longer term there would be closer scrutiny of planning consents for opencast coaling and for combined cycle gas turbine stations. That is still long term. One hopes that the matter is being worked on and that the steps that need to be taken now so that long-term action will occur are being taken now, and that thought is being given to tighter controls and less ready planning consents for opencast coal and for gas-fired power stations. We were also told that there would not be retrospective change to planning consents that had been given for gas-fired power stations and that there would not be retrospective action against nuclear power stations or nuclear plans. Many hon. Members on both sides agreed that that was wise and proper.
  Yet the fact remains that we have not sold any coal over and above what we would have sold if the White Paper had not been produced. We have to wonder why. We know that Nuclear Electric is doing better than it has done in the past and that it is taking a few extra per cent. of the market available. We can, if we like, blame the warm weather, but I suspect that the position would have been the same if we had had the coldest spring for 100 years. I believe that the reason for our present difficulties is largely that we have a record level of coal stocks. As the generators are now in the private sector, and as they want to reduce the financial burden of those stocks, they are less inclined to buy the coal that we should like them to purchase. They have obligations to their shareholdres to run the stocks down for financial reasons.
  I intend to evaluate three areas with a view to finding a remedy for the current situation: first, the Government's role; secondly, British Coal's role; thirdly, the role of the generators. We all know that the privatisation of coal is at the end of a long chain of privatisation. As a result, there is little doubt that the coal industry has suffered, as all fair-minded people would accept. It would have been far better for the coal industry to be privatised before the electricity generating industry was privatised. It might have been even better if, when the electricity generating industry was privatised, it had been privatised with the coal contracts already in place. That would at least have been a consolation prize for the coal industry if it was to be privatised at the very end of the chain. That has not happened and there is no point in wishing to change the past. We cannot do that.
  The fact remains that the coal industry was constrained in a number of ways because it was in the public sector. It was constrained in its working practices and in its investment, and it is only through lifting the coal industry out of the public sector and into the private sector that we can largely get rid of those constraints. Therefore, I urge my hon. Friend the Minister to press ahead with the privatisation of the coal industry as quickly as possible, even if that is not entirely acceptable to Opposition

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  Members, who perhaps would prefer the industry to be in the public sector. As the hon. Member for Gordon said, it is surely better that pits stay open and that the industry survives under different ownership than that the industry collapses and dies under public sector ownership, retained only as a matter of political principle and dogma. New ownership and new commitment will lead to new morale and new opportunities for the coal industry.
  When my hon. Friend the Minister studies the privatisation package, he should consider the possibility of regional packages, with coal mines being sold off in regional groupings so that there is a commonality of interest within the area. That should also include selling off, with deep-mined coal, some of the opencast sites or some of the planning consents for opencast sites. That would make the package more attractive to a purchaser as it would give him the cheaper coal that comes from opencast mining in addition to some of the more expensive liabilities of deep-mined coal.
  There are examples of the publicly owned British coal industry not taking the action that would almost certainly have been taken if the industry had been in the private sector. One example was when, a few weeks ago, British Coal announced that it had not been as cost conscious on the surface as it should have been. It decided to cut expenditure—and that, unfortunately, means job losses on the surface. There is considerable doubt as to whether British Coal has ever looked properly at manning levels on the surface. At the same time, it has looked always with a critical eye at manning levels and productivity underground.
  The Government should point out to British Coal that, if it is to become the prime coal mining company of this country, it should not be importing 100,000 tonnes of coal from Poland to sell on the domestic market simply because British coal is not appropriate for the domestic market. Surely any private sector company would make sure that it was producing coal that was appropriate for the domestic market. Why is British Coal bringing 500,000 tonnes of Colombian coal into both the Thames and the Mersey? In total, that is the equivalent of probably one and a half pits' worth of coal. It is complacent of British Coal to continue to import coal for resale when it should be selling its own commodity.
  If British Coal were in the private sector, it would take appropriate steps—as do many private sector companies —to ensure that there was a market for its commodity, even if that meant joint ventures with some of its customers. In the private sector, British Coal would have had joint ventures to ensure that clean coal technology was moved into a demonstration plant and that gasification was also available to make sure that more coal was sold. Those joint ventures would have been a useful way of doing that.
  My second point concerns British Coal's dilemma. It does not know whether it represents British coal as a company or as a national industry. As a nationalised concern, there is no doubt that it takes the view that it is the guardian of both the company and the industry. But as an industry that is about to be privatised, British Coal is now beginning to look for the first time at its organisation. It is not as interested as it should be or as it used to be in the industry in general. That is why it has only belatedly
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  agreed to offer pits for sale. That is why it has allowed faces that are difficult to mine to deteriorate and has occasionally lost machinery at those faces without making adequate efforts to pull that machinery out. I understand that several million pounds' worth of machinery has been lost at both Markham and Rossington.
  British Coal is also removing face machinery, sometimes justifiably to put into other pits and into other faces where it is needed, but sometimes at a face that is working, for scrap. It would be far better if that machinery were left in place and offered for sale with the pit to some future operator. But British Coal is not absolutely certain that it wants those pits to continue, because they will compete against the hard core of pits that the company will be keeping for itself. Asking British Coal to sell off pits in good working order is not like asking turkeys to vote for Christmas—it is like asking them to organise Christmas, and British Coal certainly does not intend to do that.
  My final point concerns generators. Ideally for the British coal industry, there would be private coal mines supplying generators that were not only private but plentiful, as that would do away with the duopoly that exists at present. There is an excess of generating capacity, and it is said that that excess is being offered for sale. But, as I said in an intervention in the speech of my right hon. Friend the Minister, the price that is being asked for the excess capacity in the generating industry is not the written down value of the generator or its true asset value but a price equivalent to the cost of building replacement modern capacity of the same type as Drax. In other words, the generators are prepared to sell off surplus generating capacity only if they can obtain a price equivalent to the price that they have to pay to replace it with modern engineering.
  That is not a real world situation. The generators occupy a privileged position: they know that they now belong to the private sector, but they still enjoy the benefits of the duopoly that resulted from their transition from state ownership to the private sector. They are retaining assets built and transferred to them by the state—assets which should still be used for the general benefit of this country and not as some pawn in a game played by the generators.
  It is true that the closure of power stations must be notified to the regulator and that the reasons for that closure must be stated so that they can be examined, but I believe that, in addition to that, the regulator should be considering carefully the generators' explanations as to why they are not offering the stations for sale at a reasonable price. Third parties seeking to purchase a power station from the generators should also have the opportunity to make representations to the regulator, and the regulator should be obliged to see whether the existing owner is trying to sell at an unreasonably high price.
  I welcome the statement made by Professor Littlechild in March this year, in which he asked for more time between the announcement of the closure of a power station and the closure itself. It is gratifying to know that National Power is now acting on that recommendation by giving adequate notice of closure so that buyers may be able to come on the scene. I hope that others will follow the example set by National Power and take note of Professor Littlechild's request.
  I am not seeking artificial markets or permanent subsidies for coal. I am not advocating the preferential

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  purchasing of coal. Nor am I seeking Government-inspired or Government-enforced contracts. I am seeking equal opportunity for coal as a fuel; a free market for coal and, in the absence of that, more intervention by the regulator until the free market can be truly established; diversity rather than a duopoly of customers; proper acceptance of the importance of coal in this country; full recognition of the contribution that coal miners make to our economy; and an acknowledgement that the coal industry still has an important role to play long into the future.
  Several hon. Members rose—
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I remind the House that between 7 pm and 9 pm there is a 10-minute limit on speeches.
  6.59 pm
  Mr. Martin Redmond: As it is not 7 pm, I think that I shall be in order if take a bit longer.
  If logic and reason were to prevail, the Labour party would have won the argument many years ago. Regrettably, the irrational arguments and the luddite approach of Tory Members have led to the demise of the industry.
  The problems have been with the chairman of British Coal, its industrial relations officer, Mr. Kevin Hunt, the President of the Board of Trade, and the Minister for Energy. I have to say that they must be as thick as two short planks not to accept our reasoned arguments.
  Following the debate on the White Paper, we wrote to the President of the Board of Trade, listing eight points. Rossington pit which is in my constituency, was one of those to be mothballed. We asked him to give an assurance on those eight points. He passed it on to the Minister for Energy, who passed it to the chairman of British Coal, because he said that it was an operational matter.
  Correspondence has passed between the chairman of British Coal and myself, but none of the eight points were answered. If the Minister were to listen instead of prattling on to his Parliamentary Private Secretary it might do the industry some good: he has done nothing so far. The eight points are vital to a mothballed pit. The coal Minister has had them once but I will send them again tomorrow.
  I do not want to take up too much time, but it is vital for Rossington. British Coal is taking steps to remove essential machinery that will make Rossington pit inoperative. The Minister should get off his backside, go to British Coal and do the job for which he is paid, instead of sitting back like Pontius Pilate.
  The national interest is crucial, but one would not think so from the policy decisions made by the Government. The balance of payments will be affected, but that will not be the concern of the Government as they will not be in power after the next election. We cannot have a long-term energy policy if we allow market forces to prevail. We are allowing market forces to prevail and then complaining about this policy or that policy.
  The report of the Trade and Industry Select Committee was a waste of time. The Government had no intention of taking any notice whatever of any of its recommendations. They intended to hold back the tide and groundswell of public opinion until it had abated. They are a bit like King Canute. Unless we can jiggle or marshal market forces, there is no way that we shall have a suitable energy policy.
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  I received a letter from National Power, in which it talks about the amount of coal that it is taking, but that is declining. I take what the generators say with a pinch of salt. They are in it for profit, not the national interest and in days gone by the Queen would have sent her troops to behead people for committing such treasonable acts against the country.
  Opposition is coming not only from the National Union of Mineworkers, the Labour party or the general public but from the Association of British Mining Equipment Companies, which cannot be described as a supporter of the Labour party or the NUM. It says:
  "Should the 12 pits earmarked for rescue in the White Paper not now be saved, we will be back where we started after the initial announcement last October, and the Government's review will have been a waste of time and effort."
  Of course, all the consultation that the Government go through is nothing but a sham—a public exercise to take the sting out of the matter and to pretend that they will take note of the consultation. The Government's arrogance is such that they will take notice of nothing—nothing but their own irrational ideas. That is a tragedy.
  I regret that the Government did not get their troops in this evening because we would have heard the usual loudmouthing, shouting and bawling about an industry that they know nowt about. They have big gobs but no ears. If they opened their ears, they would certainly hear a logical, sound and responsible argument from Labour Members. I do not want anybody to say that Tory Members are interested.
  The so-called rebels have been mentioned. One or two of them joined us in the Lobby last time, and one or two talked about it but jibbed at the last moment. I am very concerned about the rebels because I am sure that they will survive any argument like a snowflake in hell. I listened to the hon. Member for Rochford (Dr. Clark) put his logical argument. When he was Chairman of the Committee that considered the Associated British Ports (No.2) Bill, he vetoed every amendment tabled by members of the Committee. Why? Because of his vested interest with one of the subsidiaries.
  Dr. Michael Clark: On a point of order, Mr. Deputy Speaker. Not only is that dishonourable, but it is absolutely untrue. I had no interest with any subsidiary that made representations before that Committee. If I had, I would have declared it in the Register of Members' Interests and would have declined to sit as Chairman.
  Mr. Deputy Speaker: The hon. Member for Don Valley (Mr. Redmond) will have heard that assurance.
  Mr. Redmond: I understand and I will withdraw the remark if it is untrue, but the hon. Gentleman vetoed every amendment so as to stop the Associated British Ports (No. 2) Bill from being debated on the Floor of the House. I ask myself why. He has declared his interest in British Gas. That may be understandable because British Gas was involved in the arguments at about that time. We need to ensure that hon. Members speak honourably and have the interests not only of the coal industry but of the country at heart. I do not mind people trying to kid people, but at least they should be honest and tell people exactly where they stand.
  I do not think that there will be many Tory rebels this evening. Will it be another case of catch as catch can? I do not think that sufficient Conservative Members will

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  support the Labour motion, but if they are concerned about the national interest and the welfare of this country in the 21st century and do not want us to be held to ransom by the coal barons of the world they will certainly support our motion this evening.
  7.9 pm
  Mr. Richard Alexander: On behalf of my hon. Friend the Member for Rochford (Dr. Clark), I totally disagree with the suggestion of the hon. Member for Don Valley (Mr. Redmond) that he was dishonest or dishonourable in any of his conduct in relation to the Associated British Ports (No. 2) Bill. It was a disgraceful comment, which I feel that the hon. Gentleman should have withdrawn more fully.
  I am one of the Government's most loyal supporters. It gives me no great pleasure to criticise their policies on the coal industry, and to underline the disastrous consequences of what has been done over the past 12 months for north Nottinghamshire in general, and my constituency in particular.
  At the end of January, the Select Committee recommended ways in which to obtain a greater market for coal. The White Paper, unfortunately, rejected many of the Select Committee's recommendations, but the Government reprieved 12 of the 31 pits on the original hit list. Some of my hon. Friends believed that that did not ensure a long-term future for the coal industry, but our advice on what should be done was not accepted.
  Since the White Paper, two pits have closed, another is likely to close and there is a strong likelihood that others will follow. In my county, four pits have closed since March, and Rufford will close before the end of the year. That represents a loss of 4,000 jobs; it is a desperately serious blow for Nottinghamshire—particularly north Nottinghamshire—and the associated businesses and communities that depend on the coal industry.
  The debate is timely. I respect my right hon. Friend the Secretary of State, but I had hoped for a more positive indication about the future than he was able to give us. The Government must not just wring their hands and say that there is no market for coal. The coal industry operates in a market that is rigged against it, and only the Government can unlock the inbuilt disadvantages under which the industry currently operates.
  During the last debate, we aired the issues of the French connection, the levies and the ease with which the gas industry can start up its gas turbine power stations. I will not go into all that again. Meanwhile, however, our indigenous industry, which has reserves for hundreds of years, is slowly bleeding to death. It must be folly to stand by and see the pits that contain those reserves close one by one, despite past investment of hundreds of millions of pounds, the new technology and the pride that miners take today in the achievements of their pits. We have highly skilled and professional mine workers who take a pride in their jobs.
  Even as the debate proceeds, thousands of miners are being put on the dole, with thousands more of their dependants living with little hope for years to come. Miners have worked hard to bring their costs down. Their productivity has never been higher. All they ask now is an opportunity to compete on equal terms with alternative
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  sources of energy, and they are not getting that at the moment. The miners are seeking not higher subsidies or larger redundancy packages, but a signal from the Government that they have an equal place in the energy market with competitor fuels.
  The closures are happening not because coal is uneconomic, but because it does not have that equal opportunity. As the Coalfield Communities Campaign urges all hon. Members in its most recent briefing for this debate, the Government must reappraise the situation in the energy market in the light of what has happened since last March, and I urge that course on the Government.
  Last month, the Department of Trade and Industry set up a Nottinghamshire and Derbyshire coalfield regeneration partnership, whose object is to use European funds to attract inward investment into the coalfield areas. I was astonished to learn that the only local authority to be represented on that body will be the county council. Mansfield district council and Newark and Sherwood district council, which represent the communities most affected by the closures, will have no voice on it. The county council will spend the money, but those at the sharp end are excluded from membership.
  That has created astonishment and resentment in the communities of north Nottinghamshire. The fact that the districts most affected by the closures are not represented on that body is another own goal by the Department of Trade and Industry. It does nothing to assuage the feeling of resentment and uncertainty caused by the pit closures in those communities.
  I ask the Government to look at what has happened at the pits which have closed or are about to be closed—or those which, like Bevercotes in my constituency, are laughingly described as being "mothballed". In October, my right hon. Friend the President of the Board of Trade gave a specific pledge that the pits that British Coal did not want would be made genuinely available to the private sector. I accept the honesty and integrity with which he made that statement, but since then—as hon. Members have said—equipment has been dismantled and removed. Moreover, two months after the White Paper, British Coal had still not advertised the pits for licence to the private sector. Only within the last couple of weeks has it done so.
  British Coal must know, as every hon. Member in the debate knows, that, once coaling ceases, pits deteriorate and become less attractive. Equipment that has been expensively installed in such pits must not be taken out. When I took this matter up with the chairman of British Coal, he informed me:
  "it is not our intention to offer collieries as going concerns."
  There we have it. If British Coal is not going to mine the coal, no one else is going to mine it as a going concern, and pits will be run down to an unacceptable level. Surely that is not what the President of the Board of Trade had in mind when he said that those pits would be genuinely made available to the private sector.
  I fully understand British Coal's wanting to recover and retain its assets, but it must be remembered that these are also public assets, and the Government and Treasury ought to want those assets transferred to the best advantage of the taxpayer. The taxpayer has a right to make sure that otherwise good working pits should not be vandalised to the point of uselessness to any purchaser.
  Private operators have a part to play in the future. They should be encouraged to do so, and the Government and British Coal should be much more closely involved in

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  ensuring that it is done. I seriously urge the Government to do that, in the interests of the much more prosperous coal industry that we all seek for the future.
  7.18 pm
  Mr. Richard Caborn: This afternoon the House has witnessed one of the most complacent speeches from a Minister that I have heard in the past 10 years. The way in which he dealt with an issue that is extremely important for the nation was an abuse of the Dispatch Box. In March, the Government produced a White Paper of 150 pages, which we debated four days later. Equally, it is an abuse of the House that today's debate has to be held on an Opposition day—we have had to use an Opposition day to bring a Select Committee report and recommendations before the House for them to be voted on. The Government requested the report but could not find the time—indeed, denied the House the time —to debate it.
  The Secretary of State's speech was a reflection of the Government's bankrupt policies on the mining and energy industries. When the industrialists who have been watching—let alone the mining communities and the miners themselves—see how we treat an extremely important industry, they will know that they have a great deal to worry about, not just with regard to the mining industry.
  Despite what the Government would like us to believe, we are not deciding the fate of individual pits; we are deciding whether we will have a mining industry at all and what are the long-term implications for the nation's energy supply. As the hon. Member for Rochford (Dr. Clark) said, unless the House accepts a package of treasures similar to that proposed by the Select Committee on Trade and Industry, of the pits that are on the reprieved list, one pit a month will close. In addition, the figures do not stack up—we shall have only 15 pits operating in two or three years' time. The Secretary of State, however, could only put up his hands and say, "We surrender; it is the market, and there is no alternative." He has clearly swallowed the White Paper's argument hook, line and sinker.
  The White Paper states that the need for generating stations, capacity, choice of fuel, type of plant, and so on are commercial matters for the market to decide. I challenge the Government: has not the nation got an interest, a view or a say? We are considering the future of one of the nation's strategic industries, an industry on which all other economic activity is built, but we are allowing the nation little say.
  Energy is an industry that consumes the nation's natural resources and pollutes our environment. That is reason enough for the issue to be a matter for all of us. In the final analysis, it is the taxpayer who picks up the bill for every lost job. How can the Government argue that the industry should have carte blanche when it comes to writing out bills that the nation must pay? How can any Secretary of State, especially any Secretary of State for Employment worthy of the name, defend a decision that will cost the nation 100,000 jobs?
  The Secretary of State told us that the President of the Board of Trade was right to state on 13 October 1992 that 31 pits should close. He said that the Government were right to plough on regardless in March and to substitute
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  —which is all that they have done—the prolonged pain of phased closures for the big bang of one mass redundancy. Twenty-one pits have now closed.
  Setting aside the fact that it cannot be right to abandon 300 years' worth of valuable coal reserves and that it cannot be right to close pits that produce the cheapest deep-mined coal in Europe and spend millions of pounds making people redundant, is it not lunacy to import coal while paying our miners the dole? Is it not lunacy to allow the French to use the interconnector to export their power, as has been amply proved this afternoon? Is it not lunacy to close established deep-mined pits, to open new, environmentally damaging opencast mines and to abandon cheap coal-fired electricity in favour of more expensive gas generation?
  I wonder which report I signed, because the distortions that I have heard this afternoon about the cheapness of gas-fired electricity as opposed to coal-fired electricity are not justified by the report to which I added my signature. The cheapest electricity is produced by coal—that is plainly stated in the report. The second cheapest is gas generated, the third is nuclear-generated, and the fourth comes from the French interconnector.
  Mr. Alan Duncan rose—
  Mr. Caborn: I shall not give way, as I have only 10 minutes in which to speak. The cheapness of coal has been well documented, but more important is the way in which the Government are now allowing 25 to 30 per cent. of the industry to be disrupted in a five-year period; over five years they are allowing us to move from no electricity being gas generated to between 25 and 35 per cent. being gas generated. The energy industry is a long-term industry and such a move is very disruptive. That is at the centre of the Select Committee's argument.
  Central to the Select Committee's inquiry was the very question that the Secretary of State asked: is there a larger market for coal? We considered the issue from a sound economic and commercial perspective and came up with the answer that yes, there is a larger market for coal.
  Mr. Duncan: Where?
  Mr. Caborn: A larger market for coal could be found if the Select Committee's 39 recommendations were followed. The inquiry was conducted in the open, not behind closed doors. All the evidence was made public, on television and on radio. The difference between the Select Committee and the Government was that the Select Committee approached its task with an open mind. We did not try to defend the decision made on 13 October 1992 —which, unfortunately, is what the Government have done. They have tried to defend the indefensible.
  The President of the Board of Trade said, in his opening remarks to the Select Committee, that he was prepared to introduce legislation to widen the market for coal. Instead of doing so, when it came to the final decision, he ducked it. There is only one actor on the energy stage who can take the necessary action; it is not British Coal, PowerGen, National Power or the nuclear industry but the Government. Only they can rectify the discrepancies in the model of privatisation for the electricity industry. That is the only way in which we shall have a sustainable coal and mining industry.
  Mr. Richards: Will the hon. Gentleman give way?
  Mr. Caborn: No. It is unfortunate that the White Paper did not deal with the core issue of the 39 recommendations, which was to widen the market for coal.
  Mr. Duncan: Where?
  Mr. Caborn: If the hon. Gentleman is so illiterate that he cannot read the Select Committee's report, he should not be here. It is all very well for the Minister for Energy to poke fun—we have seen a disgraceful amount of that today from Conservative Members. In March, the Government denied the Select Committee a reasonable answer to the 39 recommendations, and they have done so again, but the judgment will be made not in the House but outside. That judgment is coming.
  Unless there is a response to the key issue in the 39 recommendation's, which is to open the market for coal —which only the Government can do—I predict that, in the coming two to three years, the number of pits will be reduced to 14. That will be a reduction from the 130 pits and 150,000 miners in 1985 to 14 or 15 pits and about 15,000 miners. The Government will have sold out the nation. It is probably not the Government but generations to come who will pay the price.
  7.28 pm
  Mrs. Elizabeth Peacock: The statement that my right hon. Friend the President of the Board of Trade made last October was totally rejected by a huge number of people who had no contact with mining or manufacturing and very little contact with coal itself. They totally rejected what he had to say. However, I am very sad that my right hon. Friend the President is not with us today and I hope that the strong pressure which many of us put on him over the past few months did not contribute to his recent illness. We all wish him well.
  Many people did not accept what the Government said last October. I do not want to return to those arguments, because we have been over them time after time. However, I still do not believe that the Government took adequate steps to ensure a long-term strategy and future for British Coal at that time. We should have taken steps to control the French interconnector. We should have ensured that we could sell British electricity through France to southern Europe where there are purchasers. We could have slowed down the dash for gas. I was not looking for anyone else to be put out of work, but I cannot see why all the jobs must be lost in one industry and connecting industries.
  I am sure that all hon. Members have received letters from the Association of British Mining Equipment Companies. A constituent of mine who is involved in that association wrote to tell me:
  "The implications for our industry will be the loss of the major part of our domestic market".
  We are all aware that any manufacturing industry requires a strong home market on which to export. Members of the association to which I have referred will suffer.
  We did not do those things back in October and we now have a reducing British market for our coal. We have generators with large stocks because we are using more power from gas. Obviously, those generators must decide what to do with those stockpiles. We have overproduction. As we have already heard, mines are more efficient than they have ever been and they produce more coal, more cheaply than ever before. There is no argument about that. However, via British Coal, we are using taxpayers' money
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  to make miners redundant and we are sealing underground millions of pounds' worth of equipment for which the taxpayers have paid.
  We are now in an era of industrial vandalism, the likes of which we have not seen since there were Luddites in Yorkshire. It is true to say that those Luddites did nothing like British Coal is allowed to do now. That vandalism is being perpetrated by British Coal. When business men are willing to consider ways of using the assets for the benefit of United Kingdom plc and all those who want to work in the industry, why cannot the Government and the coal industry help them to go forward and make the best use of those assets to everyone's advantage?
  Of course, there is a strong case for reshaping the coal industry. The sooner it is reshaped, the better. It has to be reshaped now so that it may survive and prosper in the future. If it does not, we will not have a strong mining industry. I am aware that my hon. Friend the Minister for Energy has often said that he sees a future for the coal industry.
  I am not against privatisation, because I believe that privatisation holds the best solution for the future of the industry. However, we cannot and must not expect the present British Coal organisation to be the vehicle for privatisation. Those running the business are too entrenched, and they have undoubtedly already shown that they are afraid of real competition in the industry.
  If the Government want to introduce legislation to privatise the coal industry, I will support my hon. Friend the Minister for Energy, but only on the basis that the present British Coal organisation is broken up into at least three clearly separate, competing coal mining and marketing companies and that other industrial investors are authorised to operate coal mining at other pits on an equitable commercial basis.
  Only through that kind of action will the Government ever see a return on the £7·5 billion which has been invested since 1979 in the coal industry for new coal faces and equipment. There is no argument about that figure. However, two thirds of those mines are now closed or under threat. That is really taxpayers' money down the drain. The value of that investment at 1993 values is £10 billion. That is a huge amount of money. Many other industries would he thriving if they had received that level of investment over many years.
  Some £500 million has been spent in the Yorkshire area of Barnsley in the past 10 years to reconstruct the industry totally. All that has now gone. All the mines are closed, including the £20 million washing plant at South Kirby and the larger washing plant at Woolley. The recent blowing up of the Woolley washing plant was a terrible act of vandalism.
  I have some very pertinent questions for my hon. Friend the Minister for Energy. When he replies to them later, I will decide what action to take in respect of the debate. However, I must tell my hon. Friend that I could not possibly support the Government, and I am sure that he would not expect me to do so given the stance that I have taken over the past few months. It may be helpful if my hon. Friend were to answer my questions.
  Will my hon. Friend tell the House and the country how much we are paying for electricity from the French interconnector? I recall that the Select Committee on Trade and Industry found that we were paying 3·38p per unit on base load. I understand that the regional electricity

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  companies have recently negotiated a reduction from 2·8p to 2·6p on base load. How expensive is our French electricity?
  Can my hon. Friend confirm that we have renegotiated a similar reduction for our French electricity? I trust that we are not paying a 30 per cent. premium to the French and closing our mines, paying redundancy and scrapping machinery which has cost the taxpayers of this country many millions of pounds.
  Perhaps my hon. Friend the Minister will say a word about coal imports. We are now importing 100,000 tonnes of house coal—not cheap power station coal. House coal can be, and was, mined in Yorkshire. It should have continued to be mined there. The 0·5 million tonnes arriving via the Thames could be supplied by British mines. As we already know, 300,000 tonnes are to be imported by British Coal for a processor on Merseyside via PowerGen's Fiddler's Ferry terminal. That could be Yorkshire coal. Fiddler's Ferry was built by PowerGen for power station coal, not for high-grade processor coal at the expense of mines in this country. It is nonsense to allow that to happen.
  What about the mines for licence? I am sure that my right hon. Friend the Secretary of State for Employment was sincere about British Coal making such mines available to potential operators. However, I suggest that British Coal is afraid of competition. It wants to ensure that it has a continuing monopoly. Surely a Conservative Government would not want to see an on-going coal monopoly.
  Is British Coal management simply looking forward to privatisation and the golden spectre of share options in a privatised monopoly? Anyone wanting to consider licensing one of the mines destined for closure would experience great difficulty. Every obstacle is put in the way of people wishing to license such a mine. There is no prospectus and no description and there are no figures. There is nothing but a map reference. I am sure that we would not all go on a treasure hunt with a map reference. Anyone seeking to dispose of assets or any business would provide proper information for those considering licensing or purchasing.
  British Coal also demands that a letter is signed relieving the organisation of any liability if any information provided is inaccurate. I cannot see why British Coal does that because it does not provide any information. It is ensuring that nothing is inaccurate by providing no information. What a way to sell our assets, and particularly our national assets. That is rather like buying a second-hand car from Arthur Daley with the additional disadvantage of being blindfolded so that one really cannot see what one is purchasing. That is no way to progress.
  We want to see a future for our coal mining industry. Many of us want to see a private coal mining industry as opposed to one that is closed down. However, we want it to have the safeguards that any mining industry should have because safety is very important.
  I suggest that some, if not many, of the mines could have a future for the mining of specialist coals for niche markets—direct to processors and the house coal market. We all agree that that is much smaller that it was several years ago; nevertheless, it is still there.
  The Government should ensure that closed mines are removed from British Coal control and placed in a separate organisation so that their potential can be fully
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  and freely investigated by companies that wish to compete with British Coal and with each other. That urgent matter needs urgent attention.
  7.38 pm
  Mr. Eric Clarke: I also regret that the President of the Board of Trade is not present. I wish him well. I should have preferred to make my criticisms to his face rather than from afar. I should like to know where his hon. Friends are. Are they at his bedside? Very few of them are present. Even the Minister is not listening to me. Is this not a serious business? Where are they?
  Throughout my lifetime, headlines have always read "The coal industry is in crisis". If we continue with the Government's policies, there will soon be no coal industry in which to have a crisis. It is a very serious condemnation of the Government's policies that this is happening. I blame the Government for what is happening. I am just as disappointed as the hon. Member for Gordon (Mr. Bruce) in the Minister's antics. I want to treat the matter very seriously. I come from a mining background. The Secretary of State clowned around and used statistics and a host of other items that were totally irrelevant to the crisis that the people in the Public Gallery and elsewhere have to face. [Interruption.] Okay.
  The Government's formula for the closure of economically viable collieries is pure propaganda. Their subsidy and help are to no avail. After the debate—I emphasise that—The People exposed how the miners' staff superannuation fund was dipped into to subsidise redundancies to the tune of more than £400 million. That was never mentioned on the Floor of the House.
  Mr. Eggar indicated dissent.
  Mr. Clarke: The Minister may shake his head if he wishes.
  There was a total lack of effort in encouraging generating companies to buy British and secure a market for coal. That is also a condemnation of the Government. The Pontius Pilate attitude has been mentioned in respect of the energy market, but a subsidy of £1·3 billion a year is built in for nuclear power. There is no relaxing of attitudes in respect of the argument for the extension of the life of Magnox power stations—another recommendation in the document that is being bandied around.
  Will Magnox stations be closed? The $64,000 question is, what are the Government going to do with those stations? How much will it cost to phase them out? We would then see the real cost of nuclear power. Will the people of Britain again foot the bill for those stations, or will we recommission them again and subsidise them until another Government take them over in the near future? There are no market forces for nuclear power, but there are market forces for the coal industry.
  I am sure that all hon. Members have received a letter from the Association of British Mining Equipment Companies. I make a plea on its behalf. It represents the finest mining engineering companies in the world, which sell their products to China, for example, and other countries. The association says that it needs an indigenous industry for research and development—we have used that argument before—and for customers and jobs. The Government do not seem to care a tuppeny hoot about the mining industry, but there is a knock-on effect on skilled labour, jobs and important export potential.

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  Ignoring the Select Committee's reasonable, sensible options was the road to closure. The Government's reply was aimed to con the public or to cool them down. They obviously conned their Back-Bench rebels. That was what really mattered to the Government; that was their motivation. That is the conclusion which any logical person will come to. Who will pay for that? It will be the miners and mining communities. The people of this country will pay the highest price for the closures and the "Heseltine folly".
  Miners do not talk behind people's backs—we do not talk about people who are ill—but the President of the Board of Trade carries joint responsibility with his colleagues and everyone who voted to support this policy. They are guilty.
  There is an opportunity. Conservative Members have said that they cannot change matters. They can change them. The formula that the Government put to the country as a panacea is not working. They can change matters because they can support us in voting to prove that the people of Britain will give their children a better inheritance, that miners will not be denied the right to work, and that common sense, decency and democracy will prevail. Will hon. Members please use their common sense, take off their blinkers and support the Opposition?
  7.44 pm
  Mr. Rod Richards: The history of the industrial revolution is that the organisations and economies that embraced technological change and took advantage of it flourished and went from strength to strength. Those that resisted change and introduced subsidies to prop up obsolete products and practices have declined and, as in the case of eastern Europe, ruined their economies.
  There is no escaping the fact that, over the past 20 years, we have witnessed a fundamental shift from heavy industry towards a manufacturing and technology-based society, partly because we developed the new technologies ourselves and party because of the emergence of developing industrialised countries in south America and the far east, with their low-wage labour inputs. In the light of that new competition, it would be extremely naive of us to think that we can sustain markets when our production costs are up to 10 times more than those of our competitors.
  The steel industry, for example, was the victim of a grossly ambitious plan, encouraged by successive Governments, which resulted in overcapacity, overproduction, big losses and huge subsidies. Billions of pounds of taxpayers' money was spent to produce steel that nobody wanted. Even with the massive amount of money that was poured into our steel industry, we could not compete with world prices, yet, despite that, people still argued for the industry's retention.
  Thankfully, under this Government, the waste of resources was ended. We now have a steel industry which is a leaner operation which has been allowed to build on its strengths. Fifteen years ago, it employed 200,000 people. Now, it has a dedicated work force of about 45,000 and it has reached new levels of productivity and excellence.
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  Nevertheless, it must be recognised that if an industry with improved practices still cannot compete, we must let it go. The Japanese shipbuilding industry used to be one of the greatest in the world, but now barely a ship is built in its waters. The Japanese recognised at an early stage that the costs of that labour-intensive industry were becoming unrealistic and unsustainable as its neighbours such as Korea started to develop their own docks. Japan did not fight that logical progression. Instead, it chose to diversify its industrial and manufacturing base into new and developing sectors where it could once again be a market leader.
  The past few months have seen a debate about the future of the British coal industry rage at all levels. [Interruption.] It has not escaped my notice, Mr. Deputy Speaker, that the hon. Member for Mansfield (Mr. Meale) is trying to interfere with your judgment. However, I shall ignore that for the moment.
  Mr. Deputy Speaker: Order. I assure the hon. Gentleman and the House that no one interferes with my judgment when I am in the Chair.
  Mr. Richards: I apologise, Mr. Deputy Speaker. It was certainly not meant to reflect on your integrity.
  Newspaper headlines have bemoaned the demise of king coal and how it spells doom for the United Kingdom. They talk of the scaling down of the coal industry as a new and vicious phenomenon dreamt up on a whim. Of course, that could not be further from the truth. From a peak of employing 1·25 million miners in 3,300 mines at the end of the first world war, the coal industry has undergone 75 years of continued retraction.
  The decline has occurred under both political parties. Between 1964 and 1970, the then Labour Government, recognising the over-production and over-capacity of the coal mining industry, closed down some 288 pits with a loss of 186,000 jobs. Furthermore, the United Kingdom has not been alone in scaling down its coal industry. The number of miners in Europe has dropped from 1·5 million in the 1950s to a present total of under 200,000. Belgium closed its last pit in 1992 and France envisages the loss of its remaining 20,000 mining jobs by the year 2005.
  It is an inescapable truth that one cannot continue producing something that one cannot sell. The market for coal has been in decline for three generations and we have all had a hand in its demise, including Labour Members. Over the past 50 years, millions of individuals have made the crucial decision not to burn coal in their homes. Since 1947, domestic use in Britain has fallen from 37 million tonnes to just over 5 million tonnes. Of course, the environment is better for it. Having said that, I have no doubt that coal has a part to play in the future generation of electricity in the United Kingdom.
  The Point of Ayr colliery near my constituency is a good example of a mine which is competitive, in which there has been new technology and new investment and, most importantly and crucially, which has a market for its coal. I grew up in the coal mining valleys of south Wales. I am only too aware that mining is a dirty, difficult and dangerous task. I cannot help but think that many of those people who are outraged by the recent and necessary closure of mines have perhaps an over-romantic vision of what coal mining entails.
  I know many miners who have health problems—dust on their lungs, shortness of breath, eyesight permanently

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  damaged by working in low light and hearing impaired by industrial noise. [Laughter.] I am fascinated that Labour Members find that amusing. I do not find it amusing, because I know miners who suffer from those problems. All the miners whom I know can recall a colleague who has either been killed or seriously injured underground.
  What has happened to the 1·25 million miners who have left the coal face in the past 80 years? The answer is that the industrial revolution has provided them with new opportunities to make a living.
  Mr. David Hanson: Will the hon. Gentleman give way?
  Mr. Richards: Labour Members voted against those opportunities and I shall give some examples. The Government intend to spend £160 million to build a barrage in Cardiff to develop that city. It is the greatest development in any city in Europe and will create tens of thousands of jobs. Labour Members, including the hon. Member for Cardiff, West (Mr. Morgan) voted against that development.
  The Labour party also voted against the White Paper on coal. That White Paper will lead to the development of Connah's Quay power station and will create some 3,000 jobs. The Labour party, including the hon. Members for Delyn (Mr. Hanson) and for Alyn and Deeside (Mr. Jones), voted against that White Paper and, therefore, against those jobs. When I asked the hon. Member for Livingston (Mr. Cook) whether he was for or against the development of the Connah's Quay power station, all he could say was that he had nothing against the burning of sour gas. He did not say firmly that he was for that power station.
  The once dirty and smoke-filled mining valleys of south Wales, which relied almost entirely on coal mining to provide employment, are now the silicon valleys of the United Kingdom. The demise of the traditional industry did not spell the end of the communities in that region but marked a new beginning—a new chapter—in the industrial revolution. New investment has been flowing into Wales—
  Mr. Deputy Speaker: Order.
  7.55 pm
  Mr. William O'Brien: I have listened to the debate from the beginning. It has been made plain today that the hon. Members for Clwyd, North-West (Mr. Richards) and for Leeds, North-West (Dr. Hampson), and the Secretary of State, know nothing about mining. The hon. Member for Clwyd, North-West talked about everything, including Japanese shipbuilding, the liquorice works and everything else, but not the mining industry. He demonstrated beyond a shadow of doubt that he knows nothing about mining. The Minister knows little about the mining industry.
  We are in the present position because those who are dealing with the destiny and future of miners and mining communities, and the nation in general, know little about the mining industry. The hon. Member for Leeds, North-West talked about the necessity to import coal, but omitted to explain about the dumping of coal in the United Kingdom at the low prices at which it is produced in the producing countries. One of the problems that miners and
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  mining communities face is that they are being used by this Government and Governments abroad for the dumping of coal in the United Kingdom.
  Recently, the journal published by National Power reported that it had introduced the first load of coal at the Royal Portbury dock in Bristol:
  "The first cargo of coal has arrived at the new bulk handling terminal which has been developed by National Power. The 43,000 tonnes cargo from the United States via Amsterdam arrived on board the MV Ascension. It took three days to unload."
  In addition to the problem of dumping coal in the United Kingdom, we are experiencing a higher deficit in the balance of payments than ever before. The Minister and the Secretary of State are allowing coal to be dumped in the United Kingdom, at the expense of miners and their families.
  The Secretary of State quoted many figures for the output per man per shift. However, his figures related to output per man per shift for men underground: he was talking about face workers, not the total industry for the periods for which he was making comparisons. It was totally unfair of him to mislead the House and the country by quoting figures that are grossly incorrect. Many of the points made by the Secretary of State were totally inadequate, totally irrelevant and against the best interests of the mining industry in general.
  The mining industry is my prime concern, because, like many other Labour Members, I worked in the pits until I came to Parliament. We spent most of our working lives in the pits, and looking after the interests of the miners and the families. We often depended on the mining industry for our living. Because of the attitude and policies of the Government, we are now seeing the demise of the mining industry. They have no regard to what is happening in the industry.
  The Secretary of State spoke about British Coal Enterprise Ltd. Anyone who asks how many jobs that organisation has created in his constituency, however, cannot get a firm answer, because many of those jobs are just myths.
  The remaining colliery in my constituency, Sharlston —in which I, too, worked—closed after the announcement by the President of the Board of Trade in February. In addition to that pit closing, another factory shut within the same period, and a further 1,300 jobs were lost. Within a few weeks, more than 2,000 jobs were lost from my constituency.
  When we ask the Government what action they will take to help those areas to generate jobs, there is little response from anyone—from the Minister responsible for mining or from those in the Departments of Trade and Industry and of the Environment. They have given little support to my constituency and other similar regions in their attempts to generate job opportunities.
  Miners have always played their part in sustaining our economy. Reference has been made to the industrial revolution, but we need not go back that far. When the country was at war, the miners played their part in the war effort by ensuring that energy was provided.
  My hon. Friends on the Labour Benches may recall that, when the five-day week was brought in, the Government requested miners to produce more coal. Those miners gave up their Saturdays to produce that extra coal to meet that Government demand. No one can say that the miners have not produced coal or played their

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  full part in sustaining our economy. The Government's rewards to the miners and their communities for their efforts are extremely poor.
  The Secretary of State referred to a report on output figures of the past eight years. That report revealed that output per man shift for every person working in that industry had increased in eight years from 2·5 tonnes to more than 8 tonnes. I challenge the hon. Member for Clwyd, North-West to name any other industry that can match the results achieved in the past few years by the effort and hard work of the miners.
  Mr. Richards rose—
  Mr. O'Brien: Sit down. The hon. Gentleman would not give way to my colleague, so I will treat him in the same way.
  It is obvious that the miners have given their all in their efforts to meet the requests of Governments. I am proud to belong to the mining fraternity and community. It is an industry worth fighting for, and that is why this debate appears on the Order Paper, at the initiative of the Labour party.
  We should defend the mining industry, and the Government should answer for their actions towards it.
  Mr. Nicholas Winterton: Will the hon. Gentleman give way?
  Mr. O'Brien: I am sorry, but I have little time left, and there is a lot to be said.
  I could say a great deal in support of the mining industry and miners' families, in addition to the points raised by my hon. Friends. Because time is short, and because so many other hon. Members want to speak, I shall dwell on my pit, Sharlston, which closed speedily after the President of the Board of Trade made his announcement in February.
  I said then, and I repeat now, that the men of Sharlston and their families were treated shabbily by the Government and by British Coal. That pit had a proud record of producing coal: it broke its own productivity record year after year. The work force were second to none in terms of output.
  8.4 pm
  Mr. Alan Duncan: I wish to make a few observations, having watched the debate develop in the past months.
  One of the advantages of the parliamentary system in which we play our part is that no one is immune to the letters received directly from his constituents. All of us recall the mountain of letters that we received when the first announcement about pit closures was made last year.
  I hope that the House will accept that I am trying to address the issue honestly when I say that I was well aware at the time that a raw nerve had been struck by the initial announcement. The general feeling was that it had offended a basic sense of decency. That feeling was based on a number of suspicions.
  It was felt that the decision was prompted by short-term considerations; that the price of gas, which appears competitive at the moment, might not be sustained in the long term, and that the decision had not been made in the context of an overall energy policy, as it deserved to be.
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  Above all, it was felt that those working in the mining industry, who had dramatically increased their productivity rate, had been peremptorily treated.
  The mountain of letters followed. Our duty as parliamentarians was surely enhanced when we were forced to consider the issue in detail. That is exactly what I and many of my colleagues have done.
  As the House may be aware, I have experience of the oil industry, a parallel industry in the energy sector. I have seen oil traded across international markets for many years. That experience taught me that the energy sector is bound not just by domestic economics, but by international ones and by international costing. That applies equally to the coal industry.
  Opposition Members may not realise that, although I represent a rural idyll, my constituency also has a deep mine, Asfordby, which has received tens of millions of pounds investment. It is set to be one of the most successful in the coal industry. I welcome its success, which I want to encourage.
  In trying to wrestle with the problems that the original announcement caused, one must accept, as my hon. Friend the Member for Clwyd, North-West (Mr. Richards) graphically explained—I am sorry that his explanation was not welcomed by Opposition Members—that the coal industry is an industry in decline. We must face the realities of that decline.
  It is all too sad that, as the coal industry shrinks, we fail to sing the praises of the oil and gas industries, which have risen to take the place of coal as the major electricity generating sources. The oil and gas sectors have been a tremendous triumph, but we hear far too little about the success that private enterprise has brought them. We hear far too much from the Opposition about what has happened to coal, but they fail to appreciate what is happening elsewhere in the energy sector.
  Mr. Nicholas Winterton: Will my hon. Friend give way?
  Mr. Duncan: I will do so, because I know that my hon. Friend holds strong views.
  Mr. Winterton: Does my hon. Friend accept that using gas for energy generation is extremely wasteful, whereas its use for domestic appliances is extremely efficient? Does he also accept that we have finite reserves of gas, whereas we have almost unlimited coal stocks underground?
  Mr. Duncan: My hon. Friend has beautifully encapsulated all the fallacies of his position. First, gas reserves, like oil reserves, are extensive, but both are finite. Secondly, it is not for Members of Parliament to make commercial judgments in a field in which professionals are better able to judge. The further we remove ourselves from those decisions, the better. It is not for us to judge whether gas or oil will run out. [HON. MEMBERS: "It is."] I think that it is not.
  There has been mention of the French interconnector. The contracts for the purchase of electricity through the interconnector were undertaken by the last Labour Government. There would be severe penalties should we withdraw. Furthermore, withdrawal would be in breach of article 30 of the treaty of Rome.
  I should like to address the charge that the industry is rigged. It is self-evident that National Power and PowerGen are a duopoly for the generation of electricity. More important, they are—to use strict economic

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  language—a duopsony. They are the country's two buyers of coal and, indeed, of other sources of energy. However, although they have market power, they judge that they can generate electricity more cheaply by using gas.
  Let us imagine what the situation would be if there were five, six, seven or even eight purchasers of gas or coal. It is probable that they would all make the same assessment. The actual structure of power generation does not in any way alter the basic fact that coal is too expensive and that the mines cannot find a market. The charge that the industry is rigged simply does not stand up to investigation. It is not right to suggest that developments are having a detrimental effect on what would otherwise be the fair play of the market.
  In my view, the Government are right in trying to alleviate the difficulties created by the transition of an industry that is in decline by reason of other sources of energy generation. They are doing the right thing in trying to pave the way for privatisation of the mines that remain and can produce coal effectively and efficiently.
  However, I seek an assurance that some money will be made available to assist the Union of Democratic Mineworkers in what I hope will be an effective management and employee buy-out, so that the work force, who have been so effective in improving productivity, may have a chance to show what they are capable of. I hope that, in this regard, my hon. Friend will be able to give me some comfort.
  I look in vain for any specific Labour commitment to keeping mines open, to shelling out the enormous amount of money that would be involved. It has been argued today that so much money has been poured into the mines that they must all be kept open for fear of losing the benefits of the subsidies. That is an extraordinary argument. If it is proved that mines can survive only with continued enormous subsidies, it is better to close them now than to pour good money after bad and cause unemployment in the gas and oil industries.
  I hope that, on reflection, people will realise that the Government's decision, though difficult, is the right one, and that no purpose will be served by efforts to hold on to an industry that is in decline and cannot be sustained without the investment of many billions of pounds that could be better spent elsewhere.
  8.14 pm
  Mr. Kevin Barron: I spent a few minutes pondering which part of the speech of the hon. Member for Rutland and Melton (Mr. Duncan) had been passed to him by the Minister's Parliamentary Private Secretary. At first, I thought that it was the reference to a coal industry in decline—something that was mentioned earlier in what resembled a GCSE economic history paper. Conservative Members ought to talk about the British coal industry in decline, for the industry throughout the world is not in decline. Indeed, there is expansion in Asia, Africa and elsewhere. The percentages are in double figures, and that situation has prevailed for many years.
  Let me give the hon. Member for Rutland and Melton some information about the French interconnector. The contract was signed in 1981. I do not know how good the hon. Gentleman is at figures, but he should be able to work out that 1981 was two years after 1979, when the Concservative Government were elected. But there is a point that is often overlooked. The French interconnector
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  contracts were renewed this year, following the debate about what was happening to to the British coal industry. At that time, the Government knew that the equivalent of 6·5 million tonnes of coal, in terms of electricity generation, was being imported. To my knowledge, only one regional electricity company decided not to participate. If there had been some Government action in respect of the French interconnector, the pit closures that have occurred since the end of March might not have been necessary.
  I made a speech in the House last October, following the announcement that the two remaining mines in my constituency would be subjected to changes. Kiveton was to close altogether, and Maltby was to be mothballed. Since then, it has been announced that Maltby is to be put on a development status basis. The Minister, having replied to an Adjournment debate that I initiated on this subject, will know that in the past two months 700 men at Maltby have been made redundant, despite the fact that it is one of the most profitable mines in Britain.
  The Government's amendment to the motion indicates that they will offer to the private sector pits that they do not themselves want to keep in production. The Minister knows that that is not true. The Maltby work force, together with people in the City and others in the private sector, have been trying to make a bid so that the mine might be kept in production, but have come up against a point-blank refusal. In fact, the Minister refuses even to meet the people concerned.
  About 150 people are left, but they are not producing coal any more. The bonus scheme that was related to the level of production has ended. Information that I have received from British Coal contradicts that, but it is a fact that people now working at the mine do not have a chance to earn bonuses. Thus, they have suffered in terms of weekly income, despite assurances that they would be protected.
  My interest in the Kiveton colliery is shared by my hon. Friend the Member for Derbyshire, North-East (Mr. Barnes), as two mines were amalgamated many years ago. Kiveton is one of the 12 market-tested pits. I have spoken to men and management a number of times since the term "market-tested" came into vogue. What has it meant for the workers? The machine shifts have been reduced in number from nine a day to six, as was announced two weeks ago. On that basis, 50 jobs have disappeared.
  The mine's market amounts to only one third of its current production. It is selling into a market that is being supplied by one of the mines that the Government are offering to the private sector. Anyone interested can have a go at the coal mine, but not at the market that used to go with it. It is quite clear that, unless something happens with regard to future contracts with the electricity supply industry, Kiveton, together with the others on the list of 12 market-tested pits, will close.
  What is the reason for this? Currently there is a contract for the supply of 40 million tonnes, including 8 million tonnes from open-cast mines. This time next year, the quantity will be 30 million tonnes, of which 7 million tonnes will be from open-cast mines. The implications for the deep-mine industry will be severe, as must be clear to anyone who takes the trouble to study the situation. Today, the Secretary of State for Employment repeated something that the Minister has said occasionally: that the answer is to contract more coal by the use of subsidy.

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  What is happening about introducing subsidies? At the last Department of Trade and Industry Question Time, on 23 June, in answer to a question about how many requests the Minister had received from British Coal for a portion of the subsidy for expanding the coal market, the Minister said:
  "My right hon. Friend and I have not received any specific requests for subsidy from either British Coal or private sector producers."—[Official Report, 23 June 1993; Vol. 227, c. 295.]
  I received a letter five days later from the chairman of the British Coal Corporation, who said:
  "We made a very competitively priced offer to the generators for additional sales. This has been rejected by National Power who say they will reassess the market for coal in the autumn. And, while we await a formal response from PowerGen, the public statements of both generators have offered little comfort, suggesting that they would be willing to buy more coal, but possibly not a great deal, probably not until some months have elapsed, and then only at very low prices."
  That is another of Mr. Clarke's more morale-raising speeches since he has been appointed chairman of the British Coal Corporation.
  The Minister and the chairman of British Coal Corporation cannot both be right. The chairman cannot have made a competitive offer to the generators while no one has asked for a subsidy from the Minister—or can he? I want the Minister to tell us when he winds up the debate. My information is that the rules with which people must comply before receiving a subsidy mean that they do not know how much subsidy they will have before they make a formal approach to the generators and receive a formal contract in return. They must agree provisional terms before going back to the DTI and asking how much subsidy they can have. It is an absolute sham and the Minister knows it, because he is part of the conspiracy by saying that nobody has asked for a subsidy, while British Coal says that its offers have been rejected.
  The Government have the power to do something about the current crisis in the deep-mined coal industry. They must know that, by this time next year, when nearly 25 per cent. of current contracts will come from opencast coal mining, there will be a massive reduction in deep-mined pits. They tell us that they are holding discussions with the generators about coal stocks. If they wish, they can act now to ensure that that does not happen.
  However, I doubt whether they will do so because, since the introduction of the White Paper in March, their actions have been consistent with the view reported to them in 1991, when they appointed N and M Rothschild, a merchant banker in the City, to look into the privatisation of the British coal industry. That first report, which was leaked to the Opposition and denied by Ministers, said that in some 12 months' time we would be down to 14 deep mines. I predict that that will happen if something is not done to stop it.
  I am fed up with seeing people stand up and wring their hands about the problem. Privatisation does not come into it. In 14 months' time there will be no industry to privatise because the deep-mine industry will have gone, and the Government will have been a major part of the conspiracy to get rid of it.
  8 23 pm
  Mr. Jim Lester: I agree with the hon. Member for Rother Valley (Mr. Barron) about opencast mining. The prospect of new opencasting of green field sites has become unacceptable at any price, whether environmental or in terms of the need for deep-mined coal.
  Although our coal industry has declined, many of us feel that it should not become extinct because it is in the national interest that we should retain a four-fuel potential well into the next century.
  I have made speeches on the White Paper and shall not repeat all that I said then because it is all on the record, but the problem remains the same: how do we retain a short-term market in order to retain a deep-mine potential for the future?
  My right hon. Friend the Secretary of State spoke about a freer market for coal. What he said is true but it should be a freer market in the sense of putting on the market those pits which British Coal does not need. However, if the market is the same in terms of where we sell the coal, I see no point in anyone wanting to buy a pit unless they have a contract to sell the coal. If the amount of coal about to be burnt is exactly the same, it is not a freer market but simply a different market for exactly the same amount.
  We now realise that the generators, not the Government, control our energy policy. That concerns me considerably. In the near future, little more than the core contract will be required, and it will take at least 18 months before we can see what coal stocks are likely to be required. As and when coal is sought, it will be sought not on a contract basis but on the stock price that we want at the time. That is no way to get people to invest in the industry or to look to the future.
  In the short term, the Government must concentrate on the question of stock. I welcome the fact that my hon. Friend the Minister is currently negotiating stocks and discussing import substitution.
  My main concern, which I have discussed in previous debates, is about the relationship between coal-fired power stations and research and development. However much we discuss the short term, unless we have a policy on coal-fired power stations the coal industry has no future.
  The over-capacity of generation, which has come about through the building of new gas-fired power stations and the successful operation of nuclear power stations, has caused that pressure on older coal-fired power stations. Of those, a capacity of 500 MW has already been closed and we hear of more closures to come. Another problem for coal-fired power stations is emission control, which must involve research and development if they are to have a future.
  In the previous debate I spoke about the need to retain intermediate power stations. I have discussed with my hon. Friend the Minister the High Marnham and Cottam power stations in Nottingham. Those intermediate 2,000 MW power stations would he ideal for refitting and for using the new technology, which is not necessarily market oriented because it rarely is. We have offered to fund some new technology through extending research and development for the next three years, but it is not a sensible basis for investing in new technology, research and development, if at the end of that time there is no use for the product. We will be unable to fit the topping cycle—the

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  latest technology—or anything on which Britain has worked for centuries. We have the best coal burn technology in the world.
  I remember going to the United States before 1979, when I was interested in energy and the United States was consulting our technology to see how best it could burn its coal. That technology has now been developed in the United States and if we want it we must buy it back from them. The last thing we want is the same thing to happen to the topping cycle, which is the ultimate in terms of coal burn and using gas for clean emissions.
  I desperately want my hon. Friend the Minister to say whose responsibility it is to declare an overall strategy and policy for coal-fired power stations up to the year 2,000, which is not far away, and beyond. Where do research and development fit into that overall picture? Unless we act, we are simply whistling in the wind when we discuss the coal industry, production, costs and so on, because there will be no market for them. I am convinced that we need to retain the potential for a deep-mine industry in this country. I have no mines in my constituency, but I speak because I have an interest in Nottinghamshire and coal, which has a role to play. We must ensure that it fulfils its role.
  Unless the Government are able to concentrate on the short-term stock levels, the estimated coal burn over and above the core contract of the 16 million tonnes that we are prepared to subsidise, a strategy for coal-fired capacity and the need to refit and modernise before the year 2000, I see a bleak immediate future for miners. The future is bleak at a personal level—of which hon. Members can speak graphically—and, more importantly, in terms of the long-term balance of fuel supplies.
  When my hon. Friend the Minister replies to the debate, I hope that he will respond to those salient points —the short-term prospects in the next 18 months and the energy burn and coal-fired strategy for which the generators are not responsible. The generators have a business to run and they are seeking to do so as best they can, but the four-fuel policy is the Government's policy and the Government must be able to provide an overall strategy for coal-fired generation.
  The youngest station was completed in 1974, which is a long time ago. None of us can envisage a new coal-fired power station being built in our lifetime, but we can envisage utilising the capacity of existing power stations, and refitting and modernising them to take us into the next century and ensure a future for Britain's deep-mined coal industry.
  8.32 pm
  Mr. Paddy Tipping: It is 102 days since the Government published the White Paper on coal, and 98 days since the House had the opportunity to discuss it. In the space of four days, the Government put together a quick fix to persuade people to vote with them. That political fix is rapidly becoming unglued.
  The Government promised a subsidy that would keep 12 collieries open while they were market testing. The Government have been unclear about the length of time that that market testing should take. Since March, four pits have closed in Nottinghamshire. There are grave concerns at Rufford, Bilsthorpe and Calverton about the future of those mines as market-testing pits.
  The House knows that the men at British Coal have decided to close Rufford colliery. Last week the Prime
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  Minister said that that decision was taken for two reasons: first, there were geological problems and, secondly, the men had voted to close the colliery. He was wrong on both counts. If, 12 weeks ago, that pit was fit to be kept open, what has changed geologically since then? The answer is that there has been a recognition within British Coal that its marketplace is so limited that, although it is technically possible to keep the colliery open, there is not the financial strength to do so.
  There are 600 men at Rufford colliery, but only 226 of them voted for the closure. Rufford is closing because of British Coal's vindictive tactics. The men at the colliery were told that, if the pit was not closed before December, they would lose £10,000. I am not criticising people for taking tough decisions. The Minister for Energy should give a clear response tonight and help the industry. His colleague, the Secretary of State, talked about compassion being shown not just on one side. If the Minister has compassion, he should state tonight that, following consultation with the chairman of British Coal, he will extend the period beyond December. That would give people confidence.
  The men of Rufford were also told that, if they did not take the money now and the pit was not closed before the autumn, they would not have the chance of another job. They were told that, if the pit was closed now, they would be transferred. That was held out as their hope for the future.
  That is how miners in Nottinghamshire and across the country have been treated. The miners have done everything asked of them and more. Let us consider the record. They have increased productivity by 150 per cent. over the past five years. They are producing coal at half the cost of Germany. In the past six years, the price in real terms of coal from the pithead has not increased. Is it any wonder that all across Europe people think that we are crazy for closing our collieries?
  The hon. Members for Clwyd, North-West (Mr. Richards) and for Leeds, North-West (Dr. Hampson) talked about their collieries such as Point of Ayr and Selby. They said that those collieries had a secure future. I beg them not to be taken in by guile because the logic of the marketplace speaks for itself. The contract with the generators is for 30 million tonnes next year. If we take off opencast mining—possibly 10 million tonnes—we will be left with a good period of closure over the next six to 18 months. I believe that that closure period will reduce the number of collieries to, at best, 15, and perhaps even to 12—there will be consequences for privatisation.
  We would be left with a rump of collieries. Conservative Members who argue for splitting that group are talking about slitting the throat of the rump of the industry because the energy market is a tough market. We need groups of pits of three, four or 12 to ensure that the industry survives. The call for privatisation sounds the death knell of the industry.
  It may well be right to talk about the strengths of the Selby coalfield, but I make a prediction. Given the rate of extraction at Selby, the fact that there is a danger of flooding in the Vale of York, the pressures in the ground at York, and the fact that the overheads at Selby are split between a group of collieries, it is possible that, instead of being the pit of the 21st century, Selby will be closed by the year 2000 or 2005.
  There has been talk about additional new contracts with the generators, but such events will not happen for a

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  long time. The facts speak for themselves. National Power holds 19 million tonnes of coal and PowerGen holds 14 million tonnes. What is at issue is not the price of coal being offered for the new contracts, but the volume of the contracts.
  People have talked about the recent hot weather. If I had a fridge full of lager cans and someone knocked at my door saying that I could buy cut-price lager, but I had no place to store and cool the lager, I would not buy it whatever the price. That is the position in which the generators currently find themselves. It is clear that no additional contracts will be forthcoming. At best, if the Government use their best endeavours, the additional contracts will be'small.
  The future of the deep-mined coal industry in this country looks extremely bleak. If the Government care about the future and do not want to rat on the commitments that they have given the miners, they must do something about the problem. First, they could move quickly on the nuclear review. Earlier this year, the Minister for Energy promised a nuclear review and said that he would announce its terms before the recess. Will he repeat that statement tonight? Will he confirm that the nuclear review will be announced and will take place quickly? The coal industry will survive only if space is made within the energy market.
  It is clear that gas has many advantages. It is fascinating that gas can be subject to a 15-year contract but coal has one of only five years. It was astonishing to hear Conservative Members argue the case tonight for opencasting, because decisions about that should be made locally. It is obscene to tear up fields, pull down hedgerows and knock down trees, when the need for coal can be supplied from the deep-mining industry.
  What is the Minister doing about creating a European energy market, and discovering the element of subsidy in EDF—the French company? It is clear that we do not have open access to the European market. The Minister must act quickly to save what remains of the British coal industry.
  The Minister probably knows the real hostility that is felt over the Government's backing of British Coal on the pension fund issue. British Coal employees think that it is obscene that, as they see it, they are paying from their pension fund the' cost of their own redundancies. That is not right or proper; it is immoral, and it will be challenged in the courts. I hope that the challenge will be successful.
  We want more than anything else a coal industry that is successful, and in which people are rewarded for their efforts.
  8.40 pm
  Mr. Michael Alison: Although there was a sombre hue to part of the speech of the hon. Member for Sherwood (Mr. Tipping), I am glad to follow him, because he sought to move some of the cloud of doom from Nottinghamshire to Selby, which I have the honour of representing.
  In the light of the hon. Gentleman's remarks, I will place on record comments that I hope will restore the perspective. They were made by my right hon. Friend the President of the Board of Trade in the House on 19 October last year:
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  "After the contraction of the industry that we are contemplating, British Coal will still be the largest contributor to electricity generation in this country. I confirm that the Selby group is a core part of the future of the British coal industry. We have invested £1·3 billion in that group of pits, which has played its part in securing the improved productivity upon which the long-term viability and, therefore, the future of the industry depend."—[Official Report, 19 October 1992; Vol. 212, c. 214.]
  Perhaps I may, without embarrassing him, sound a note of agreement with the hon. Member for Rother Valley (Mr. Barron), while disagreeing with something said by my hon. Friend the Member for Rutland and Melton (Mr. Duncan). I do not believe that coal is in decline; the hon. Member for Rother Valley is right when he says that it is a fuel with a future in the international dimension. I believe that it is a fuel with a future also in Britain, quite apart from having the lion's share of electricity generation that it has traditionally enjoyed.
  Gigantic sums have been invested in pits such as the Selby group. When the hon. Member for Normanton (Mr. O'Brien) made his challenging speech about the British coal industry's future—from the point of view of someone like yourself, Mr. Deputy Speaker, who spent a lifetime in the pits—he was at pains to itemise the enormous increase in productivity that British Coal has achieved over the past decade. He said that the figure had increased from 2·3 million tonnes per man shift 10 years ago to 8 million tonnes per man shift today. I believe that the exact figure is 7·86 million tonnes, which must be a record average.
  When one places that against the figure of more than 30 million tonnes per man shift that is regularly achieved at Selby, one sees the dividend from the unprecedented scale of investment made there by this Government and since the end of the war. One sees also the dividend from manpower productivity that such investment secures.
  One must agree with the hon. Member for Rother Valley that there is a future for the coal industry in Britain, based on pits such as Selby where there has been huge investment and staggering productivity is being achieved, which can challenge and beat any importer and even dumped coal, if we are allowed to have our way.
  The hon. Member for Normanton, who is a near neighbour of mine in Yorkshire terms, made a plea for the coal industry in general and for his constituency pits in particular. That is the dilemma. Given the productivity achieved at Selby as a result of massive investment, it is self-evident that if the entire British coal industry is to have a future, investment and output must be concentrated on the pits where productivity is on the Selby scale. That means facing a continuing contraction of less productive, less effective pits in different parts of the country and concentrating on those such as Selby.
  That is not simply a self-interested, constituency point, because a large proportion of those employed at the Selby group come not from my constituency but are miners who were redeployed from pits in south and west Yorkshire. The logic of concentrating coal mining on high-productivity pits such as Selby is that it offers a genuine prospect of continuing employment in coal mining for those who want it. Even within the Selby complex, a number of miners were attracted by voluntary redundancy terms. In recent years, we lost 3,000 workers voluntarily, which has helped to increase the group's productivity even more dramatically.
  If one combines the scale of support for relocation, retraining and re-employment that the Government

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  manage to provide through British Coal Enterprise Ltd. and by other means with the corresponding huge investment in modern pits such as Selby that has been seen since 1979 and even more dramatically since the 1984 strike, one gets the best of both worlds. One achieves a world-beating British coal industry with prospects for the future, redeployment of manpower, and the sustaining of the old coal mining communities.
  The Government have pursued an acceptable and rational policy. They made effective use of the huge amounts of money that they poured into the industry, and have tempered the winds of redundancy for those who will be displaced from older pits. I urge my hon. Friend the Minister to continue with that double-barrelled approach of rational, if costly, investment resulting in a high-productivity, low-cost industry, and of offering hope to miners of redeployment in other industries or of being drawn to areas such as Selby, where many miners have already been redeployed.
  8.49 pm
  Mr. Eric Illsley: The right hon. Member for Selby (Mr. Alison) spoke about the mining complex in his constituency. I remind him that it was the last Labour Government who provided the investment for that complex under their "Plan for Coal" between 1974 and 1979 when a market of 150 tonnes was planned. The right hon. Gentleman shakes his head, but if he checks he will find that that is the case.
  We are beginning to see the level of the deception perpetrated by the Government on the public and the mining industry since last October when the decision to close 31 pits was followed by a tremendous public outcry. That showed that people were sick to death of what the Government were doing to the industry. In October, dozens of Tory Members ran to the press saying that they would not vote for the measure unless more than 20 pits were saved. With one or two notable exceptions, all those hon. Members backed off and supported the Government's proposals.
  The White Paper was published in March, but it was basically a worthless document, designed simply to placate Conservative Members and decieve the country into believing that some parts of the industry were to be saved and some collieries reprieved. It was a quick fix to get the Government out pf a hole. As my hon. Friend the Member for Sherwood (Mr. Tipping) said, only 12 weeks alter the proposals were published, collieries that were supposed to be reprieved are being closed. Production has already ceased at about 20 pits and the reprieved pits are again in line for closure. In addition to three that have closed already, another three in south Yorkshire seem to be under threat.
  Not a penny of subsidy has been paid by the Government to support the industry. The extra tonnage due to be sold to the generators has not been sold to them. The aid to the industry suggested in the White Paper was a complete sham. Some of the collieries not even mentioned in October or referred to in the White Paper, the safe 19 collieries, are also under threat. Some of the 12 that have been reprieved or put out to market testing might be saved at the expense of some of the collieries which at that time were said to be economic. That shows that there is no economic case for the closure of any of those collieries.
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  Comparison of the performance of one colliery against another, profit comparison, is futile. The Government are trying to reduce the amount of coal being produced because there is no market for it. It was wrong for the President of the Board of Trade to speak on a number of occasions about uneconomic pits, because it is simply a case of taking out lumps of the market.
  The arguments that my colleagues and I have advanced since October, especially in March when the issue was debated, have proved to be correct. There is no economic case for closure; the Government are simply removing tonnages and the White Paper failed to address the problem of the market for coal. We have said that time and again, but that market could be addressed if the Government had the political will to do that. They have not done anything to increase the market for coal.
  The Government have not done much for the coal industry since 1974, the days when the Government of whom Baroness Thatcher was a member were forced out of office because of the coal strike. In October, Lord Parkinson reiterated the philosophy that the Government have attacked the industry since 1974 because they blame it and the National Union of Mineworkers for their loss of office at that time.
  Most of the coal industry's problems arose from the privatisation of the electricity supply industry and the creation of a rigged market. The creation of the duopoly of National Power and PowerGen gave those companies the opportunity to buy coal from any source. That followed lobbying by Lord Marshall of Goring, the then chairman of the Central Electricity Generating Board, who made no secret of the fact that he wanted to buy coal from other than British Coal. He told a Select Committee on Energy that the CEGB took 85 per cent. of its coal from British Coal and that that would have to change. He did not advance any economic or diversity arguments for that but simply said that it had to change.
  The privatisation of the electricity supply industry gave the go-ahead for the dash for gas. There was such a flurry of applications that British Gas had to increase its price by 35 per cent. in respect of stations not already contracted. Killingholme gas station opened on 19 April with a staff of 35. It is completely false for Conservative Members to say that jobs in oil and gas will be lost. Some 19 GW of gas-fired generation are likely to come on stream; that is equivalent to about 30 million tonnes of coal, which—surprise, surprise—is the contract for next year's coal market. Gas-fired generation from stations that have not yet even been built could totally eclipse the contract market for British Coal. No jobs have been lost as the stations have not yet been built and, in any case, 35 people are required to man one such power station.
  For years the Government have refused to implement any sort of sensible energy policy. Their only policy is to leave it to the market. The Government have totally rebuffed all opportunities for coal. The Select Committee on Energy, which is now disbanded, took evidence on clean coal technology, about which some hon. Members have spoken.
  There is no way in which the Government will back such technology. They closed the pressurised fluidised bed combustion plant at Grimethorpe and have no intention of looking at any advanced technology using clean coal. The operations of our competitors, especially Texaco in America, are far in advance of anything that has been done in this country. It is the old argument, which was also

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  advanced in respect of the fast reactor, that we do not want it here and will not spend on it, but we will buy somebody else's technology when it is up and running and everybody else has bought it.
  Hon. Members have spoken about how the market for British coal can be improved. Despite the damage to our balance of payments, we have the capacity to import millions of tonnes of coal which is dumped, sold at less than its cost of production, by other thriving coal industries.
  My hon. Friend the Member for Normanton (Mr. O'Brien) spoke about the new coal terminals. On 23 June, the Financial Times carried a photograph of the Portbury dock at Bristol, which is one of the biggest terminals in the country, with the capacity to handle 7 million tonnes of imported coal a year. On the day that the photograph was taken, a 37,000-tonne ship was unloading coal for National Power. Gladstone dock on Merseyside will open later this year and will have a capacity to handle 5 million tonnes a year.
  That is nothing new: we have been talking about it for years during debates on the Associated British Ports (No. 2) Bill. When the Select Committee on Energy looked at the coal industry, it warned of the effect, and the conclusions of the Select Committee on Trade and Industry are nothing new, although the hon. Member for Leeds, North-West (Dr. Hampson) referred to them as if they were set in concrete. The Energy Select Committee issued those warnings years ago.
  I have already mentioned the threat from gas and the 30 million tonnes that could eclipse the coal industry altogether, but gas-fired generation is not cheaper than the existing coal-fired generation. On the contrary, it is more expensive. The gas-fired generators are also bidding to the pricing pool at a negative price, so they are, in effect, submitting a contract to give their power away. Due to the workings of the pool price mechanism, those gas-fired generators take the marginal cost into the pool and take the highest cost capacity. Bidding with a negative bid and taking out the highest cost capacity, they say, "Thank you very much," and make a profit.
  Last week, it was announced that the subsidy to nuclear power for the year was £1·35 billion. Nuclear power has a guaranteed market, but privatisation exposed the sham of the nuclear power industry—it is far more expensive. Other factors to be considered are that 93 per cent. of opencast sites are on green field sites and that power prices have increased by 32 per cent. in the past year, an increase into which Professor Littlechild requested an investigation. Blue Circle Cement complained that the price—
  Mr. Deputy Speaker: Order.
  9.2 pm
  Mr. Winston Churchill: It is a matter for regret that my right hon. Friend the President of the Board of Trade cannot be with us for the debate. I know that I am not alone in wishing him a full and speedy recovery.
  My right hon. Friend the Secretary of State for Employment made some powerful points about the 353 pits closed by Labour Governments, from 1964 to 1970 and from 1974 to 1979, with the attendant loss of 185,000 coal industry jobs. That is certainly a fair point to make, but tonight we must address the reality of the present
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  situation and the prospects for tomorrow. That is what the men, in what remains of the mining industry, want to hear in the House.
  Those prospects look decidedly bleak. The market for coal has effectively collapsed. The generators are clearly abusing their joint monopoly. Having challenged the Government on several points, the generators have won the day. They seem quite determined not to commit themselves to any new purchases before October or November; even then, they will not sign for long-term contracts, but propose to buy in parcels of 200,000 or 300,000 tonnes under tender. That will surely make the United Kingdom price collapse to below world market levels.
  The generators know how that policy of buying short wrecked the United States coal industry in the 1960s and evidently they are seeking to emulate it over here. In May, British Coal offered the generators coal at 93p per gigajoule delivered to inland power stations. Even at that price, it was unable to find purchasers.
  The generators want to close capacity at their older coal-fired stations. Some of those stations are 30 years old and have no gas cleaning. None the less, the owners are refusing to sell at a true market value; instead, they are demanding the replacement value for those antiquated assets because they do not wish for competition. Although there is a gross surplus of plant and of input fuels, the price of electricity does not go down. Where is the regulator? Where is the Monopolies and Mergers Commission? Where are the Government to hold the ring where patently there is no free market?
  The British mining industry is in better condition today than it has been at any time this century. British coal can be produced at 80p per gigajoule, yet viable pits are being closed. Silverdale pit, into which £90 million was invested five years ago and which has a new drift, with 30 years of life, is to be closed. Both Rossington and Markham Main pits have seen £6 million to £7 million pounds worth of equipment buried. It is difficult to describe that as anything other than institutionalised vandalism.
  Mrs. Llin Golding: In Newcastle, we have no information that Silverdale is to be closed. We ask the question all the time. No one has told us that it is to be closed. I only wish that someone would tell us what is happening in Silverdale.
  Mr. Eggar: It is not closing.
  Mr. Churchill: I heard my hon. Friend say that it is not to be closed. I am delighted to know that and I hope that remains the position. To see such an investment put into jeopardy would be a serious matter.
  Meanwhile, British Coal is importing about 100,000 tonnes of Polish coal, and the figure will rise as more pits close. In addition, about 500,000 tonnes of Colombian coal is being landed at Thames docks and a further one third of a million tonnes at Mersey docks. Meanwhile, the generators are planning a major uplift from their stocks, which stand at 34 million tonnes. If they are allowed to run down their stocks too fast, there will be virtually no market for any coal above the core contracts in the current year, no matter at what price it is offered.
  In the current year, the British Coal core contracts are down by 25 million tonnes to 40 million tonnes. The nuclear industry is increasing its output by 2 million tonnes to 24 million tonnes coal equivalent. Gas is up by

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  7 million tonnes to 11 million tonnes coal equivalent. The others are stable at 18 million tonnes, making a total of 93 million tonnes in the current year. That leaves uncommitted from the estimated fuel burn this year only 16 million tonnes.
  That is sufficient to provide life and justification for the 12 reprieved pits; but if, as seems likely, the genera tors are allowed to uplift 11 million tonnes of their 34 million tonnes of stock, that leaves only 5 million tonnes uncommitted in the current year, of which 2 million tonnes almost certainly will go to imports, leaving just 3 million tonnes available in the current year. On that basis, there is no way in which the 12 so-called "reprieved" pits can have a future.
  The Government should make it clear to the generators that there must be no rapid rundown of stocks. It have said it before, and I make no apology to the House for saying it again: we do not have a free market in energy. We have a heavily rigged market—indeed, a subsidised market in certain quarters. Between last year and 1996–97, the nuclear input will increase by 6 million tonnes coal equivalent and the gas input by 30 million tonnes coal equivalent—each million tonnes, in round figures, displacing a pit.
  Both those energy sources have privileged access to the market. Gas can pass on the capital costs to the consumer of its newly built power stations. They were set up by the regional electricity companies, so they have a cosy relationship with them. Nuclear energy has not only privileged but guaranteed access to the market for every kilowatt hour that it produces. On top of that, nuclear power gets a £1,200 million a year subsidy. So much for the free market—it just does not exist.
  The Government's amendment claims that they have accepted the principal recommendations of the Select Committee report. They have indeed accepted the key recommendation of providing a subsidy to the generators to burn up to 16 million tonnes of coal over the above the 40 million tonnes core contract. That appears to amount to a subsidy of £400 million to £500 million. Despite undertakings given by the Government, and specifically by the President of the Board of Trade, that the Government would use their best endeavours to widen the market for coal, which alone can underpin and give a long life to the reprieved pits, there is no evidence that they have any will or determination to do so. Without a wider market, there will be no additional sales. Without additional sales, no subsidy will be payable; that subsidy will remain entirely theoretical and uncommitted.
  I will put three questions to my hon. Friend the Minister. First, have the Government told the new Government of France, at the highest level, that it is unacceptable to the House and to the country that taxpayers' money should be used to import electricity from France—the most expensive electricity on the United Kingdom market, with a price identified by the Select Committee of 3·4p per kWh—with the effect of putting no fewer than six British pits out of business?
  Secondly, have the Government taken steps, as recommended by the Select Committee, to explore the possibility of gas stations being used for mid-merit or peak generation, instead of for baseload capacity? If that were done, a market could be provided for 10 additional pits.
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  Thirdly, are the Government willing to order the generators to draw down their stocks at no greater a rate than 5 million tonnes a year? That might prove critical in saving some of the 12 reprieved pits.
  I fear that not enough is being done by the Government to underpin the market for coal. It is not enough to tell the mining industry, "Here is a subsidy—go out and find yourself a market." The Government must live up to their responsibilities and play their part in finding that wider market because, as many right hon. and hon. Members on both sides of the House have said, it is a rigged market.
  It is about time that the Government made it clear that they are prepared to re-rig the market in favour of coal instead of against it. That could be done by establishing a neutral flow through the interconnector with France, by reining back gas stations to 70 or 75 per cent. of operations—at which point they would still be profitable, although not as profitable as was originally planned—and by curbing the rundown of stocks. Without those three essential elements, or a combination thereof, the 12 reprieved pits have no future and those pits, and others perhaps on the list of 19, will inevitably close.
  We are presiding over the closure of the most efficient deep-mined coal industry in Europe. We are abandoning Europe's greatest national resource and condemning Britain in the 21st century to becoming dependent on imported energy, with all the implications that that holds for our balance of payments and our security of supply. The Government's short-term attitude to our long-term energy resources and their refusal to exert themselves to give coal a fair opportunity to compete on equal terms with other fuels in the years ahead means that, with a heavy heart, I shall be casting my vote against the Government tonight. The miners of Britain and the coalfield communities that depend on them deserve better from the Government than they have so far been offered.
  9.13 pm
  Mr. Bill Etherington: I am somewhat pressed for time, as I understand that I must finish at about 9.20 pm. I shall be as brief and succinct as possible, as most hon. Members have been tonight.
  First, I declare an interest, as I am sponsored by the National Union of Mineworkers. My sponsorship does not perhaps reach the large amounts that we have read about in connection with Mr. Nadir—that is quite a name to have under the circumstances—but it is something of which I am proud. I was a miner for 21 years.
  I have been waiting since I entered Parliament to put one or two things straight. First, I want to tell the Secretary of State that I do, indeed, burn a coal fire, and have done so for many years. I did not want to intervene from a sedentary position when the challenge was made earlier in our proceedings.
  The second thing that I have wanted to say for a long time concerns the term, "the enemy within", which was applied to me and to many others by the Baroness Thatcher in 1984. Under those circumstances and according to those criteria, I am very proud to be classed as the enemy within.
  I want to regale the House with a story. My grandfather was a member of the Durham Miners Association. In 1940, some miners were working two or three days a week and the Durham Miners Association was having to pay out large sums in unemployment benefit—none the less, it

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  managed to provide two Spitfire fighter planes for the benefit of the nation. Shortly after that, the association was responsible for collecting many thousands of pounds, which was a tremendous amount of money in those days, to try to help the Russian people who were fighting against German oppression.
  When I hear Baroness Thatcher talking about the enemy within and when I think about my perception of the miners, I wonder just how much money went from the Grantham grocers to help the Government out during those troubled times.
  Unfortunately, I was not called in the debates last October or in March, but at least I shall have my six minutes today. It was fairly obvious from the public response to the debate that followed the announcement by the President of the Board of Trade that 31 pits were to close, that the public did not accept that the free market forces system had worked.
  In effect, the public were telling hon. Members on both sides of the House—at the time, there was a response from many Conservative Back Benchers—that they wanted the Government to do what they had elected them to do, which was not to leave matters to market forces but to govern the country. That was what people voted for, even if many of them voted for the wrong party and now realise their mistake. The public wanted the Government to act —to do something about the situation.
  I am as sorry as anyone about what has happened to the President of the Board of Trade in recent weeks; I hope that he is soon back here among us. I should have liked him to be here to hear what I have to say, because I do not like talking behind people's backs—which, in the circumstances, is almost inevitable, as I am sure all hon. Members will understand. I shall refer to the Government instead.
  The Government played for time. It is a sad fact that, if one is cynical, one is often proved right. Last October, I took the view that the Government were shocked by the reaction that they received from the public, and played for time. When I introduced a ten-minute Bill in December, I said as much. I said that we were not being kidded, that we knew what the end result would be. Sadly, we have been proved right.
  It is not correct for the Government to say that they have accepted the main points of the report of the Select Committee on Trade and Industry report. In fact, the reverse is the case. I must say in passing that my union —the NUM—did not think that a very good job had been done, and was highly critical of the Select Committee report. Nevertheless, had the Government accepted the letter and spirit of that report, we should not be in the position that we are in today.
  It is interesting to examine the recommendations that were accepted. The President of the Board of Trade said quite honestly, throughout the investigation, that the problem was the market. My view is that the market has been distorted since the denationalisation of the generating industry. In many ways, the present Government are not to blame—Lords Wakeham and Parkinson were the ones responsible for the destabilisation of our generating industry.
  The only proposals that have been put forward since then have involved a subsidy, which the Government
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  know will never be taken up—just as the colleries will not be bought by a private owner—because there is no market: the coal cannot even be given away. The second suggestion was for longer hours.
  Wearmouth colliery, which is in my constituency, is doing extremely well. It is working better reserves than it has had in its 150-year history: it is working in coal 7 ft 6 in thick, unlike that mentioned by the Secretary of State when he talked about the thin seams full of chlorine and sulphur. Only 25 per cent. of its coal is finding a market. Although £20 million was invested in Wearmouth colliery, unless the Government interfere, it is doomed, as are many others.
  Many of my constituents, not only miners, think that the Government have been responsible for a sophisticated piece of political chicanery, and that is what it is. I hope that one or two Government Back Benchers, some of whom have an honourable record of voting against what they do not believe in, may come to our rescue tonight. If nothing else, it would let the public see what is going on. On that happy note, I will conclude.
  9.20 pm
  Mr. Martin O'Neill: In some respects, the debate has been encapsulated in the last two speeches. We have heard a miner speak with authority, considerable personal knowledge and experience and great affection for his industry. We also heard the hon. Member for Davyhulme (Mr. Churchill) announce his intention to vote with us this evening because of his dissatisfaction with the manner in which the future of the industry has been handled. It is clear that, in the past nine months, this country has, on a number of occasions, been transfixed by the future of the coal industry.
  It is perhaps no accident that the Government managers decided that this Opposition debate should be held at the same time as the announcement on defence cuts. It is certainly true that other issues apart from the coal industry are being given media attention.
  It must be said that if the defence of the country depends on strategic considerations, our supply of energy is of equal strategic significance. It requires equal long-term planning and equal support from the Government at every stage in that process.
  Today's debate has lacked some of the colour that we would have associated with it had the right hon. Member for Henley (Mr. Heseltine) been present. We all wish him well in his recovery. As the speech of the Secretary of State for Employment showed, the debate was Hamlet without the President, although, at one stage, we had the ghost from Leeds trying to make a contribution.
  If there is a tragedy today, it is the way in which the Government have handled the coal industry. The work force in the past two decades did everything asked of them. Those who in the 1960s and 1970s were offered the opportunity to seek other employment did so in the knowledge that there were opportunities for work elsewhere. The closures that the Labour Governments of that time carried out, although on occasions in times of controversy, were carried out in the knowledge that those individuals would be able to obtain secure employment in the future.
  It is also clear that, in the past two decades, the coal industry has been capable of increasing its productivity by quite massive amounts. Now that the Secretary of State is

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  back in his place, I should like him to try for once to treat the debate seriously, as there was great play made of the apparent increase in productivity in the 1980s compared with the 1970s. However, he did not make clear his basis of comparison.
  In the 1970s, the driving of roads into collieries to allow access to coal was carried out by British Coal employees. That meant that they were not producing coal but were going through stone, scrap and the like. That was not reflected in the productivity figures, and it was characteristic of the Secretary of State's disgraceful speech that he did not have the intellectual honesty to compare like with like on this fundamental question. He shakes his head. If he would care to dispute that point, I am happy to give him the opportunity to do so.
  A number of hon. Members referred to the Select Committee's report, which said that no more consents should be granted for combined cycle gas turbines and that, since the publication of the White Paper consents for some 1,500 MW of CCGT power at Staythorpe, King's Lynn and others had been granted—the equivalent of some 10 million tonnes of coal, yet, at the same time coal-fired plants at West Thurrock, Palihan and Thorpe Marsh have been closed.
  Thorpe Marsh, which is in Doncaster, is owned by National Power. In the May edition of Power News, the plant was praised for its thermal efficiency and excellent industrial relations. In March, the plant accepted 120 redundancies on the understanding that that would ensure its future. Since 1990, £40 million has been spent on the plant. The station consumed some 670,000 tonnes per annum—a third of the output of Bentley and Hatfield collieries.
  Only 20 minutes up the road at Keasby a new 750 MW gas power station is being constructed. When the issue was raised on the Adjournment a couple of weeks ago by my hon. Friend the Member for Doncaster, North (Mr. Hughes) and my right hon. Friend the Member for Doncaster, Central (Sir H. Walker), the Minister for Energy said:
  "It would not be appropriate for the Government to intervene on an issue of this kind."—[Official Report, 16 June 1993; Vol. 226, c. 972.]
  I remind the Minister that the Government retain a 40 per cent. share in National Power and that £40 million of shareholders' money—in many respects, our money—has been spent on the station, to say nothing of the prospective redundancy costs. As the two collieries concerned were on the hit list, we can see that the consequences of the package of redundancies and closures will be considerable for that part of the country. I suppose that the cynic would say that it was merely an example of the wish being father to the thought.
  We were told that gas-fired power stations are built on the assumption that coal-fired stations are dearer. The White Paper admits:
  "At the prices in the prospective contract for British Coal suppliers from April 1993 onwards, the avoidable cost of generating electricity from large existing coal fired power stations (using 500 MW turbines) is generally less than the full costs of a new CCGT, assuming both run on baseload."
  On the radio this morning, the Minister for Energy said that if there was a difference between the two it could be attributed to combined heat and power. [Interruption.] Some of us heard the radio programme this morning. Perhaps the Minister did not understand what he was saying. He said that the difference between coal-fired and
  106
  gas-fired power stations was the thermal efficiency represented by combined heat and power. Today, the director general of the Combined Heat and Power Association issued a press statement suggesting that that claim was rather difficult to support because only 1 per cent. of the new power stations have CHP.
  The difference does not come from that at all. The only difference between the two arises from the arrangement of the baseload efficiency of CCGT. Coal-fired power stations will not be able to operate on baseload. There is the rub. It is not simply a matter of markets or a matter of demand; it is a matter of how the markets work. The way in which the markets work is at the core of the problems of the coal-fired power stations, because they are not being given the chance to operate on base load. That opportunity is being afforded to the gas-fired stations, which do not need to operate on base load but are best suited to operate on an on-off basis. Those power stations are being given an unfair advantage. That issue was addressed in the Select Committee report, but not in the White Paper.
  We have heard not only that British coal is less expensive than the CCGT product, but that it has had large amounts of Government assistance. The Secretary of State said today that it had been given some £17·8 billion worth of subsidy since 1982, but, since 1979, operating grants have represented less than 1 per cent. of Government grants to the coal industry. The money has gone on deficit grants to British Coal, but there have been no deficit grants since 1989. The money has been spent on increased pension costs, social costs, concessionary coal and the like. The grants have cushioned the blow of redundancy, but have not enabled coal to compete with other fuels.
  The Government claim to have provided British Coal with an indirect subsidy through price support and the three-year coal contracts agreed after privatisation of the electricity industry; yet, in a formal submission made to the International Atomic Energy Agency, the Government said:
  "these understandings—
  that is, the contracts and the money that was made available to those companies—
  "are commercial arrangements between the companies
  concerned and … contain no element of state aid or price support."
  Moreover, the United Kingdom Government have a duty to inform the European Commission of any indirect state aid to the coal industry. According to the Commission, no such aid has been provided by the United Kingdom since 1986.
  We find that the central points made by the Secretary of State—that coal is dearer than gas, that productivity is somehow higher when the Conservatives are in power, and that the Government have given substantial amounts of money to the coal industry—have been shown to be completely untrue.
  As to the recommendations of the Select Committee report, the Government have said that they support a subsidy, yet not a penny has been given. No figure has been set on the total amount available. Even the so-called subsidy differs from that recommended by the Select Committee, and my hon. Friend the Member for Rother Valley (Mr. Barron) made that point forcefully in his speech.

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  The Select Committee subsidy was to go to the generators to buy additional coal; the White Paper subsidy is to go to British Coal to enable it to sell coal to the generators. The White Paper subsidy is restricted to the energy market; the Select Committee subsidy was also to go to the industrial market. The figures that have emerged from the coal report today suggest that money is required to give support to industrial users, given their current exodus from the coal market.
  To the extent that any figure can be placed on the subsidy, it will certainly not exceed the sum that British Coal, with the encouragement of the Government, is trying to filch from the staff superannuation scheme—a theft which is curently being dealt with by the courts—and we will see what success it has in robbing, Maxwell-style, that pension scheme.
  At the heart of our case against the White Paper is not merely the duplicity surrounding the proposal to subsidise but the Government's failure to deal with the basic reasons for coal's inability to compete with gas in a fair market. The Select Committee made several recommendations. It recommended that Nuclear Electric should cease to receive income from the fossil fuel levy, that combined cycled gas turbines should be used as mid-merit or peak instead of baseload capacity, that French electricity imports should cease to be non-leviable, that the Government should provide a subsidy to the electricity generators which should then be required to purchase additional coal and that a subsidy for additional sales in the industrial market should also be provided.
  The Committee also recommended that the Government should adopt specific measures to support flue gas desulphurisation and clean coal technologies and should require the generators to hold coal stocks of at least 20 million tonnes. That amount is being held at the moment, and we should like to think that it will be held for some time to come although we know that the generators intend to allow the stocks to fall to about 10 million tonnes.
  Such issues are the fault lines of the debate. They are the difference between those who support the Government's position and those who support that of the Select Committee.
  In recent months and years, some people have been quizzical about the Government's support for the industry. This evening, we have seen Government Whips running around with bits of paper, putting pressure on hon. Members to speak. One of the individuals who was going to make a most pertinent speech was almost squeezed out and managed to speak only at the very end. In the previous debate, four Conservative Members voted with the Opposition and another four denied the Government their support. There were many who were, I suppose, giving the Government the benefit of the doubt; but we were pretty certain that the Government would not deliver.
  We believed that the promise of a subsidy would not be enough to encourage the generators to buy more coal. It was clear to us that the Government would not use their powers to require the generators to maintain the levels of stocks. In that respect, we are waiting to see what the summer brings and what they are prepared to utilise during that period. We were certainly under no illusion
  108
  that the Government would do anything to frustrate the attempts of Electricite de France to sell us nuclear power, which has proved to be the case. We were vindicated because we suspected that the Government would do nothing to interfere with the electricity market.
  We were now able to see clearly what the Government's intentions were. As someone said today, they intended to get a quick fix. They got it and survived but they now need the continued support of their Back Benchers. This is an opportunity for those who gave the Government their grudging support last time to say that what they have offered since is not good enough, that they have betrayed the trust placed in them and that they have betrayed the coal industry and those who work in it and depend on it. I ask those hon. Members to join my right hon. and hon. Friends and their own hon. Friends in the Lobby to defend our great industry, the coalfield communities and our great national asset, our coal reserves.
  9.38 pm
  The Minister for Energy (Mr. Tim Eggar): In his opening comments, the hon. Member for Clackmannan (Mr. O'Neill) referred to the statement that was made earlier this afternoon. For a moment, I thought that the hon. Gentleman thought that he was still shadow spokesman for defence. I am not surprised that I thought that. because one of the noticeable things about the past few months has been the way in which the hon. Member for Livingston (Mr. Cook) has consistently hogged the airwaves on all energy matters. He really has been the invisible shadow energy spokesman. Looking at the hon. Member for Bolsover (Mr. Skinner) and the other Opposition Members sponsored by the National Union of Mineworkers, I can understand why the hon. Member for Clackmannan has been kept off the Opposition Front Bench on these matters.
  When the hon. Member for Clackmannan said something positive, what was he urging? He urged intervention and Government decision taking and rejected any market solution. Having listened to the hon. Gentleman tonight, I can understand why the hon. Member for Caerphilly (Mr. Davies) was on the Opposition Front Bench during the last coal debate.
  We have had a good debate and 21 right hon. and hon. Members have spoken—
  Mr. Robin Cook: Will the Minister give way?
  Mr. Eggar: I will give way to the hon. Gentleman shortly.
  The central issue of the debate, to which the hon. Member for Sheffield, Central (Mr. Caborn) referred and which my hon. Friend the Member for Batley and Spen (Mrs. Peacock) mentioned, were the major measures announced by the Government following the report of the Select Committee on Trade and Industry. Following that review and during the period of consultation on the White Paper, many opinions were offered to the Government. However, the one consistent theme was that there was an additional market for coal if only the Government would make available a subsidy to British Coal or to other private sector producers.
  We have made that subsidy available. We have not guaranteed an additional market for coal because that is not within our control or within the control of the Select Committee. Nor is it within the control of the private coal

  109
  producers or British Coal. We have offered no guarantees. However, we have offered opportunities for additional coal sales and we have made available hundreds of millions of pounds of taxpayers' money to support that.
  Mr. Churchill: Will my hon. Friend give way?
  Mr. Robin Cook rose—
  Mr. Eggar: I will willingly give way to my hon. Friend.
  Mr. Churchill: I am grateful to my hon. Friend. Of course everyone understands that the Government were not able to guarantee a market. However, my right hon. Friend the President of the Board of Trade undertook, on behalf of the Government, to use his best endeavours to secure a wider market for coal. That does not simply need a subsidy—it requires a redressing of the imbalance against coal that is exemplified by the fact that the taxpayer is paying 1·2 billion a year in subsidy to Nuclear Electric, which has a guaranteed market for its output.
  Mr. Eggar: I am well aware of my hon. Friend's point. However, the British coal industry receives considerable assistance. This Government have spent £18 billion on the industry since 1979. Every year for the past three years British consumers have paid £1 billion more to pay for electricity by buying British coal than they would have if they had bought electricity generated from imported coal. To say that the market is somehow rigged against coal is simply not accurate.
  Mr. Robin Cook: I am most grateful to the Minister for observing the normal courtesies of the Front Bench. May I gently remind him that my hon. Friend the Member for Caerphilly (Mr. Davies) spoke in the last coal debate because the Government put up the Secretary of State for Wales rather than the Minister for Energy to reply to the debate. As the Minister has just assured the House that there is no rigged market, will he answer the question that has remained unanswered since 4 pm? If it is not a rigged market, why is it that the generators will not buy coal at a price that will enable them to provide electricity cheaper than from gas, cheaper than from nuclear power, and cheaper than they can buy it from France? Why not?
  Mr. Eggar: The hon. Gentleman has never understood how a market works. He knows perfectly well that the generators and the independent power producers could readily have built new coal-fired stations. They were free to do that. They were free to take advantage of the cheap coal to which the hon. Gentleman refers. The generators have not done that, nor have the independent power producers done it. They have chosen to invest in gas stations. They have done that because they know that, in the present market conditions, gas is a cheaper way of producing electricity than coal is. Many independent decisions have been reached and many people have decided to invest in extra power generation. They have all opted for gas and not for coal. That is the true test of whether coal is competitive.
  My hon. Friend the Member for Newark (Mr. Alexander) referred to the redeployment of equipment at Bevercotes. I know of his concern and that of the UDM on this matter. I have been in regular close touch with British Coal on it. I have been assured by the chairman of British Coal that no assets employed at Bevercotes will be redeployed unnecessarily and that the corporation will take each decision to salvage major equipment from those
  110
  pits on the basis of all the economic criteria. Of course, that includes the use of that equipment in other pits. [Interruption.]
  It is all very well Opposition Members jeering, but this has been a useful debate, and I am trying to answer specific points that have been mentioned.
  Mr. Barron: Will the Minister give way?
  Mr. Eggar: I will try to refer to some of the points that were made by the hon. Member for Rother Valley (Mr. Barron) in due course.
  My hon. Friends the Members for Clywd, North-West (Mr. Richards) and for Batley and Spen referred to the importance of safety considerations. We entirely agree with them. The hon. Member for Wentworth (Mr. Hardy) is also concerned about that matter. We are working very closely with the Health and Safety Commission. I am sure that British Coal will ensure that all proper measures are taken.
  The hon. Member for Midlothian (Mr. Clarke) used some extravagant language about the British Coal pension fund. That was rather out of character for the hon. Gentleman. As I have said, there will be no rip-off of the pension funds, either the staff pension fund or the mineworkers' pension fund. The question at issue —
  Mr. Frank Dobson: Doing a Robert Maxwell?
  Mr. Eggar: It is no good the hon. Member for Holborn and St. Pancras (Mr. Dobson) shouting about Robert Maxwell. I know how close Robert Maxwell was to the Labour party, but on this issue there is no similarity whatsoever, because British Coal and the trustees have agreed that the matter in dispute between them will be considered by the High Court. I am sure that British Coal will adhere to the decision of the High Court on the issue.
  The hon. Member for Midlothian and my hon. Friend the Member for Leeds, North-West (Dr. Hampson) referred to help for the British mining equipment industry. I have met representatives of ABMEC, and we are working closely with them on a package of measures that are geared to try to assist their export market and smaller companies.
  My hon. Friends the Members for Broxtowe (Mr. Lester) and for Rochford (Dr. Clark) referred to the closure of power stations. They urged that we should take measures to try to ensure that, if they are closed, those power stations are made available to the private sector. I entirely agree with my hon. Friends' wish for greater competition to be developed in electricity generation. I agree that the sale of power stations could be one way of achieving that competition. In the first instance, of course, it is a commercial matter.
  I heard what my hon. Friends, including my hon. Friend the Member for Davyhulme (Mr. Churchill), said about the price that is allegedly being asked by the generators. I am watching that matter carefully and I know that the Director General for Electricity Supply is considering the matter. I am sure that the generators will pay attention to the considerable interest that has been expressed in the House on this matter. My hon. Friend the Member for Broxtowe is concerned about the modernisation of coal-fired stations, which will provide a number of opportunities.

  111
  My hon. Friend the Member for Rutland and Melton (Mr. Duncan) asked for financial support for management and employee buy-out teams—he especially mentioned the Union of Democratic Mineworkers. We have always made it clear that we want to ensure that any management and employee teams bidding for the industry will have a fair opportunity to bid against other buyers.
  I have written to the President of the UDM informing Neil Greatrex that the Government will give support to management and employee buy-out teams that are bidding for the main privatisation. We are prepared to fund up to 50 per cent. of the eligible costs of employing consultants and advisers up to a maximum of £200,000 per team. I am sure that that will be welcomed by the House.
  Mr. Duncan: What the Minister has said will give—
  Mrs. Peacock rose—
  Mr. Deputy Speaker (Mr. Michael Morris): Order. The hon. Member has been here long enough to know not to intervene when another hon. Member has the floor.
  Mr. Duncan: What the Minister said will give enormous comfort to those who have the vision to make the most of the assets that they see and their hard work. On their behalf, I welcome what the Minister said.
  Mr. Eggar: I thank my hon. Friend. The UDM and the people of Nottinghamshire will recognise the reaction of Labour Members. They are not interested in the miners of Nottinghamshire having a chance to buy or own those pits. The hon. Member for Sherwood (Mr. Tipping) has kept quiet. I am sure that he is distressed by those Labour Members who are sponsored by the National Union of Mineworkers who do not want the UDM to show this sort of initiative.
  Mrs. Peacock: I am listening carefully to what my hon. Friend is saying about help and support for management buy-outs. Can he tell the House what help he will give to private sector investors who want to take over the mines that British Coal wants to close? Those people are not given any help at all except a map reference. That is not good enough.
  Mr. Eggar: Some 14 pits have been advertised for licensing to the private sector. I understand that British Coal has received serious expressions of interest for a considerable number of those pits. If my hon. Friend feels that the private sector is in some way being prevented from proceeding with the purchase or leasing of pits, she need only come to me and I will ensure that that matter is properly investigated. That is how it should be.
  It is clear from the expression of Labour Members that they do not want miners to be offered the opportunity to work in private sector mines. The only sort of mining they want is in the public sector. They are not interested in jobs for miners or their constituents, or in giving opportunities to individuals. They are simply interested in control by the National Union of Mineworkers and the public sector. The Labour party does not change at all.
  Mr. Hardy: Will the Minister give way?
  Mr. Eggar: Normally I would give way to the hon. Gentleman, but he was not here earlier, so I hope that he will forgive me for not giving way.
  My hon. Friend the Member for Davyhulme commented on the whole issue of coal stocks. I understand his concern about that and I understand the point made by the Select Committee.
  We are in discussion with the generators on the appropriate level of stocking. Even the Select Committee's recommended level of 20 million tonnes is nowhere near what is held now. At the moment, 33 million tonnes are held at power stations and an additional 14 million tonnes at the pit heads. Whatever is finally decided about the appropriate stocking level will not have any significant impact on the likely draw down of those stocks, at least in the next few months. One must be realistic about that.
  A number of hon. Members spoke about the electricity trade with France. It is no good the right hon. Member for Chesterfield (Mr. Benn) saying that he thought that he entered into that contract because it was a means of exporting coal by wire. Does he really mean that he committed Her Majesty's Government to massive public expenditure without understanding the terms on which the electricity was to flow?
  The hon. Members for Livingston and for Clackmannan have consistently urged us to breach international undertakings and to go against the treaty of Rome. They want us to go against all the evidence that was produced for the Select Committee about the legal powers.
  The hon. Member for Gordon (Mr. Bruce) gave a typical sitting-on-the-fence Liberal speech, but he did not mention what was said about energy in the Liberal party manifesto. In that manifesto, the hon. Gentleman informed us and the electorate that 45 per cent. of our electricity could be generated by wind power.
  Let me tell the House what that actually means. It means that we would need 100,000 windmills, which would take up 25,000 sq km of our country; 10 per cent. of the country would be peopled with windmills. Would the hon. Gentleman offer all Liberal constituencies as a site for a windmill? What would he do if the wind stopped blowing? Would he be able to guarantee that Liberal constituencies would not be denied electricity if that were to happen? Such is the energy policy of the Liberal party.
  We know that it is the duty of the Opposition to oppose. We also know that the Labour party is the captive of its history. We know of the power that the NUM-sponsored Members still wield within the parliamentary Labour party. Today, however, the Opposition spokesmen, the hon. Members for Livingston and for Clackmannan owed it to the House to do more than repeat their normal brew of smears, innuendo, half-truths and misrepresentations.
  The Labour motion urges that a guaranteed future should be given to the pits, but the Opposition spokesmen said nothing about how that future would be achieved. We heard no word as to which nuclear power stations they wanted to close. We heard nothing about which construction workers for North sea rigs or power stations would lose their jobs. Do the Opposition want Teesside workers or those in north Wales to lose their jobs? Not one jot was said about that.
  The Labour party offered no explanation about how it would advocate breaching the terms of the treaty of Rome governing the French interconnector. The Opposition did

  113
  not tell us which legally binding contracts they would break. If they want more coal produced, however, such contracts must be broken.
  It is worse than that, because the Opposition have not sketched out their long-term vision of Britain's coal industry, except for the hon. Member for Livingston who said that he would oppose its privatisation. He and his hon. Friends have not said whether they would renationalise the industry. The hon. Member for Blyth Valley (Mr. Campbell) is nodding in agreement—[Interruption.]
  Mr. Deputy Speaker: Order.
  Mr. Caborn: On a point of order. Mr. Deputy Speaker.
  Mr. Deputy Speaker: Mr. Caborn—and I hope that it is a genuine point of order.
  Mr. Caborn: The views of the Select Committee are being neglected, and the House is being misled. In no way did the Select Committee ask for any contract to be broken.
  Mr. Deputy Speaker: That is not a matter for the Chair.
  Mr. Derek Foster rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put,put and agreed to.
  Question put accordingly, That the original words stand part of the Question:—
  The House divided: Ayes 286, Noes 308.

  Division No. 315]

  [10.00 pm

  AYES

  Abbott, Ms Diane

  Campbell, Menzies (Fife NE)

  Adams, Mrs Irene

  Campbell, Ronnie (Blyth V)

  Ainger, Nick

  Campbell-Savours, D. N.

  Ainsworth, Robert (Cov'try NE)

  Canavan, Dennis

  Alexander, Richard

  Cann, Jamie

  Allen, Graham

  Carlile, Alexander (Montgomry)

  Alton, David

  Cash, William

  Anderson, Donald (Swansea E)

  Chisholm, Malcolm

  Anderson, Ms Janet (Ros'dale)

  Churchill, Mr

  Armstrong, Hilary

  Clapham, Michael

  Ashton, Joe

  Clark, Dr David (South Shields)

  Banks, Tony (Newham NW)

  Clarke, Eric (Midlothian)

  Barnes, Harry

  Clarke, Tom (Monklands W)

  Barron, Kevin

  Clelland, David

  Battle, John

  Clwyd, Mrs Ann

  Bayley, Hugh

  Coffey, Ann

  Beckett, Rt Hon Margaret

  Cohen, Harry

  Beith, Rt Hon A. J.

  Connarty, Michael

  Bell, Stuart

  Cook, Frank (Stockton N)

  Benn, Rt Hon Tony

  Cook, Robin (Livingston)

  Bennett, Andrew F.

  Corbett, Robin

  Benton, Joe

  Corbyn, Jeremy

  Bermingham, Gerald

  Corston, Ms Jean

  Berry, Dr. Roger

  Cousins, Jim

  Betts, Clive

  Cox, Tom

  Blair, Tony

  Cryer, Bob

  Blunkett, David

  Cummings, John

  Boateng, Paul

  Cunliffe, Lawrence

  Boyce, Jimmy

  Cunningham, Jim (Covy SE)

  Boyes, Roland

  Cunningham, Rt Hon Dr John

  Bradley, Keith

  Dalyell, Tam

  Bray, Dr Jeremy

  Darling, Alistair

  Brown, Gordon (Dunfermline E)

  Davidson, Ian

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

  Davies, Bryan (Oldham C'tral)

  Bruce, Malcolm (Gordon)

  Davies, Rt Hon Denzil (Llanelli)

  Burden, Richard

  Davies, Ron (Caerphilly)

  Byers, Stephen

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

  Caborn, Richard

  Denham, John

  Callaghan, Jim

  Dewar, Donald

  Campbell, Mrs Anne (C'bridge)

  Dixon, Don

  114

  Dobson, Frank

  Kilfoyle, Peter

  Donohoe, Brian H.

  Kinnock, Rt Hon Neil (Islwyn)

  Dowd, Jim

  Kirkwood, Archy

  Dunnachie, Jimmy

  Leighton, Ron

  Dunwoody, Mrs Gwyneth

  Lestor, Joan (Eccles)

  Eagle, Ms Angela

  Lewis, Terry

  Eastham, Ken

  Litherland, Robert

  Enright, Derek

  Lloyd, Tony (Stretford)

  Etherington, Bill

  Llwyd, Elfyn

  Evans, John (St Helens N)

  Loyden, Eddie

  Ewing, Mrs Margaret

  Lynne, Ms Liz

  Fatchett, Derek

  McAllion, John

  Faulds, Andrew

  McAvoy, Thomas

  Field, Frank (Birkenhead)

  McCartney, Ian

  Fisher, Mark

  Macdonald, Calum

  Flynn, Paul

  McFall, John

  Foster, Rt Hon Derek

  McKelvey, William

  Foster, Don (Bath)

  Mackinlay, Andrew

  Foulkes, George

  McLeish, Henry

  Fraser, John

  Maclennan, Robert

  Fyfe, Maria

  McMaster, Gordon

  Galbraith, Sam

  McNamara, Kevin

  Galloway, George

  McWilliam, John

  Gapes, Mike

  Madden, Max

  Garrett, John

  Mahon, Alice

  George, Bruce

  Mandelson, Peter

  Gerrard, Neil

  Marek, Dr John

  Gilbert, Rt Hon Dr John

  Marshall, David (Shettleston)

  Godman, Dr Norman A.

  Marshall, Jim (Leicester, S)

  Godsiff, Roger

  Martin, Michael J. (Springburn)

  Golding, Mrs Llin

  Martlew, Eric

  Gordon, Mildred

  Maxton, John

  Gould, Bryan

  Meacher, Michael

  Graham, Thomas

  Meale, Alan

  Grant, Bernie (Tottenham)

  Michael, Alun

  Griffiths, Nigel (Edinburgh S)

  Michie, Bill (Sheffield Heeley)

  Griffiths, Win (Bridgend)

  Milburn, Alan

  Grocott, Bruce

  Miller, Andrew

  Gunnell, John

  Mitchell, Austin (Gf Grimsby)

  Hain, Peter

  Moonie, Dr Lewis

  Hall, Mike

  Morgan, Rhodri

  Hanson, David

  Morley, Elliot

  Hardy, Peter

  Morris, Rt Hon A. (Wy'nshawe)

  Harman, Ms Harriet

  Morris, Estelle (B'ham Yardley)

  Harvey, Nick

  Mowlam, Marjorie

  Hattersley, Rt Hon Roy

  Mudie, George

  Henderson, Doug

  Mullin, Chris

  Heppell, John

  Murphy, Paul

  Hill, Keith (Streatham)

  Oakes, Rt Hon Gordon

  Hinchliffe, David

  O'Brien, Michael (N W'kshire)

  Hoey, Kate

  O'Brien, William (Normanton)

  Hogg, Norman (Cumbernauld)

  O'Hara, Edward

  Home Robertson, John

  Olner, William

  Hood, Jimmy

  O'Neill, Martin

  Hoon, Geoffrey

  Orme, Rt Hon Stanley

  Howarth, George (Knowsley N)

  Paisley, Rev Ian

  Howells, Dr. Kim (Pontypridd)

  Patchett, Terry

  Hoyle, Doug

  Peacock, Mrs Elizabeth

  Hughes, Kevin (Doncaster N)

  Pendry, Tom

  Hughes, Robert (Aberdeen N)

  Pickthall, Colin

  Hughes, Roy (Newport E)

  Pike, Peter L.

  Hughes, Simon (Southwark)

  Pope, Greg

  Hutton, John

  Powell, Ray (Ogmore)

  Ingram, Adam

  Prentice, Gordon (Pendle)

  Jackson, Glenda (H'stead)

  Prescott, John

  Jackson, Helen (Shef'ld, H)

  Primarolo, Dawn

  Jamieson, David

  Purchase, Ken

  Janner, Greville

  Quin, Ms Joyce

  Jones, Barry (Alyn and D'side)

  Radice, Giles

  Jones, leuan Wyn (Ynys Môn)

  Randall, Stuart

  Jones, Jon Owen (Cardiff C)

  Raynsford, Nick

  Jones, Lynne (B'ham S O)

  Redmond, Martin

  Jones, Martyn (Clwyd, SW)

  Reid, Dr John

  Jones, Nigel (Cheltenham)

  Rendel, David

  Jowell, Tessa

  Richardson, Jo

  Kaufman, Rt Hon Gerald

  Robertson, George (Hamilton)

  Keen, Alan

  Robinson, Geoffrey (Co'try NW)

  Kennedy, Charles (Ross,C&S)

  Roche, Mrs. Barbara

  Kennedy, Jane (Lpool Brdgn)

  Rogers, Allan

  Khabra, Piara S.

  Rooker, Jeff

  115

  Rooney, Terry

  Taylor, Mrs Ann (Dewsbury)

  Ross, Ernie (Dundee W)

  Tipping. Paddy

  Rowlands, Ted

  Turner, Dennis

  Ruddock, Joan

  Tyler, Paul

  Salmond, Alex

  Vaz, Keith

  Sedgemore, Brian

  Walker, Rt Hon Sir Harold

  Sheerman, Barry

  Wallace, James

  Sheldon, Rt Hon Robert

  Walley, Joan

  Shore, Rt Hon Peter

  Wardell, Gareth (Gower)

  Short, Clare

  Wareing, Robert N

  Simpson, Alan

  Wicks, Malcolm

  Skinner, Dennis

  Williams, Rt Hon Alan (Sw'n W)

  Smith, Andrew (Oxford E)

  Williams, Alan W (Carmarthen)

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

  Wilson, Brian

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

  Winnick, David

  Smith, Llew (Blaenau Gwent)

  Winterton, Mrs Ann (Congleton)

  Snape, Peter

  Winterton, Nicholas (Macc'f'ld)

  Soley, Clive

  Wise, Audrey

  Spearing, Nigel

  Worthington, Tony

  Spellar, John

  Wray, Jimmy

  Steel, Rt Hon Sir David

  Young, David (Bolton SE)

  Steinberg, Gerry

  Stevenson, George

  Tellers for the Ayes:

  Stott, Roger

  Mr. Jack Thompson and Mr. Eric Illsley.

  Strang, Dr. Gavin

  Straw, Jack

  NOES

  Ainsworth, Peter (East Surrey)

  Channon, Rt Hon Paul

  Aitken, Jonathan

  Clappison, James

  Alison, Rt Hon Michael (Selby)

  Clark, Dr Michael (Rochford)

  Allason, Rupert (Torbay)

  Clifton-Brown, Geoffrey

  Amess, David

  Coe, Sebastian

  Ancram, Michael

  Colvin, Michael

  Arbuthnot, James

  Congdon, David

  Arnold, Jacques (Gravesham)

  Conway, Derek

  Arnold, Sir Thomas (Hazel Grv)

  Coombs, Anthony (Wyre For'st)

  Ashby, David

  Coombs, Simon (Swindon)

  Aspinwall, Jack

  Cope, Rt Hon Sir John

  Atkins, Robert

  Couchman, James

  Atkinson, David (Bour'mouth E)

  Cran, James

  Atkinson, Peter (Hexham)

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

  Baker, Rt Hon K. (Mole Valley)

  Curry, David (Skipton & Ripon)

  Baker, Nicholas (Dorset North)

  Davies, Quentin (Stamford)

  Baldry, Tony

  Davis, David (Boothferry)

  Banks, Matthew (Southport)

  Deva, Nirj Joseph

  Banks, Robert (Harrogate)

  Devlin, Tim

  Bates, Michael

  Dickens, Geoffrey

  Batiste, Spencer

  Dicks, Terry

  Bellingham, Henry

  Dorrell, Stephen

  Bendall, Vivian

  Douglas-Hamilton, Lord James

  Beresford, Sir Paul

  Dover, Den

  Biffen, Rt Hon John

  Duncan, Alan

  Blackburn, Dr John G.

  Duncan-Smith, Iain

  Body, Sir Richard

  Dunn, Bob

  Bonsor, Sir Nicholas

  Durant, Sir Anthony

  Booth, Hartley

  Dykes, Hugh

  Boswell, Tim

  Eggar, Tim

  Bottomley, Peter (Eltham)

  Elletson, Harold

  Bottomley, Rt Hon Virginia

  Evans, David (Welwyn Hatfield)

  Bowden, Andrew

  Evans, Jonathan (Brecon)

  Bowis, John

  Evans, Nigel (Ribble Valley)

  Boyson, Rt Hon Sir Rhodes

  Evans, Roger (Monmouth)

  Brandreth, Gyles

  Evennett, David

  Brazier, Julian

  Faber, David

  Bright, Graham

  Fabricant, Michael

  Brooke, Rt Hon Peter

  Fairbairn, Sir Nicholas

  Brown, M. (Brigg & Cl'thorpes)

  Fenner, Dame Peggy

  Browning, Mrs. Angela

  Field, Barry (Isle of Wight)

  Bruce, Ian (S Dorset)

  Fishburn, Dudley

  Budgen, Nicholas

  Forman, Nigel

  Burns, Simon

  Forsyth, Michael (Stirling)

  Burt, Alistair

  Forth, Eric

  Butcher, John

  Fowler, Rt Hon Sir Norman

  Butler, Peter

  Fox, Dr Liam (Woodspring)

  Butterfill, John

  Fox, Sir Marcus (Shipley)

  Carlisle, John (Luton North)

  Freeman, Rt Hon Roger

  Carlisle, Kenneth (Lincoln)

  French, Douglas

  Carrington, Matthew

  Fry, Peter

  Carttiss, Michael

  Gale, Roger

  116

  Gallie, Phil

  Maclean, David

  Gardiner, Sir George

  McLoughlin, Patrick

  Garel-Jones, Rt Hon Tristan

  McNair-Wilson, Sir Patrick

  Garnier, Edward

  Madel, David

  Gill, Christopher

  Maitland, Lady Olga

  Gillan, Cheryl

  Malone, Gerald

  Goodlad, Rt Hon Alastair

  Mans, Keith

  Goodson-Wickes, Dr Charles

  Marland, Paul

  Gorman, Mrs Teresa

  Marlow, Tony

  Gorst, John

  Marshall, John (Hendon S)

  Grant, Sir Anthony (Cambs SW)

  Marshall, Sir Michael (Arundel)

  Greenway, Harry (Ealing N)

  Martin, David (Portsmouth S)

  Greenway, John (Ryedale)

  Mates, Michael

  Griffiths, Peter (Portsmouth, N)

  Mawhinney, Dr Brian

  Grylls, Sir Michael

  Mellor, Rt Hon David

  Gummer, Rt Hon John Selwyn

  Merchant, Piers

  Hague, William

  Milligan, Stephen

  Hamilton, Rt Hon Archie (Epsom)

  Mitchell, Andrew (Gedling)

  Hamilton, Neil (Tatton)

  Mitchell, Sir David (Hants NW)

  Hampson, Dr Keith

  Moate, Sir Roger

  Hanley, Jeremy

  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, Emma (Devon West)

  Heald, Oliver

  Norris, Steve

  Heath, Rt Hon Sir Edward

  Onslow, Rt Hon Sir Cranley

  Heathcoat-Amory, David

  Oppenheim, Phillip

  Hendry, Charles

  Ottaway, Richard

  Hicks, Robert

  Page, Richard

  Higgins, Rt Hon Sir Terence L.

  Paice, James

  Hill, James (Southampton Test)

  Patnick, Irvine

  Hogg, Rt Hon Douglas (G'tham)

  Patten, Rt Hon John

  Horam, John

  Pattie, Rt Hon Sir Geoffrey

  Hordern, Rt Hon Sir Peter

  Pickles, Eric

  Howard, Rt Hon Michael

  Porter, Barry (Wirral S)

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

  Porter, David (Waveney)

  Howell, Rt Hon David (G'dford)

  Powell, William (Corby)

  Howell, Sir Ralph (North

  Rathbone, Tim

  Norfolk)

  Redwood, Rt Hon John

  Hughes Robert G. (Harrow W)

  Renton, Rt Hon Tim

  Hunt, Rt Hon David (Wirral W)

  Richards, Rod

  Hunt, Sir John (Ravensbourne)

  Riddick, Graham

  Hunter, Andrew

  Rifkind, Rt Hon. Malcolm

  Jack, Michael

  Robathan, Andrew

  Jackson, Robert (Wantage)

  Roberts, Rt Hon Sir Wyn

  Jenkin, Bernard

  Robertson, Raymond (Ab'd'n S)

  Jessel, Toby

  Robinson, Mark (Somerton)

  Johnson Smith, Sir Geoffrey

  Roe, Mrs Marion (Broxbourne)

  Jones, Gwilym (Cardiff N)

  Rowe, Andrew (Mid Kent)

  Jones, Robert B. (W Hertfdshr)

  Rumbold, Rt Hon Dame Angela

  Jopling, Rt Hon Michael

  Ryder, Rt Hon Richard

  Kellett-Bowman, Dame Elaine

  Sackville, Tom

  Key, Robert

  Sainsbury, Rt Hon Tim

  Kilfedder, Sir James

  Scott, Rt Hon Nicholas

  King, Rt Hon Tom

  Shaw, David (Dover)

  Kirkhope, Timothy

  Shaw, Sir Giles (Pudsey)

  Knapman, Roger

  Shephard, Rt Hon Gillian

  Knight, Mrs Angela (Erewash)

  Shepherd, Colin (Hereford)

  Knight, Greg (Derby N)

  Shepherd, Richard (Aldridge)

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

  Shersby, Michael

  Knox, Sir David

  Sims, Roger

  Kynoch, George (Kincardine)

  Skeet, Sir Trevor

  Lait, Mrs Jacqui

  Smith, Sir Dudley (Warwick)

  Lamont, Rt Hon Norman

  Smith, Tim (Beaconsfield)

  Lang, Rt Hon Ian

  Soames, Nicholas

  Lawrence, Sir Ivan

  Speed, Sir Keith

  Legg, Barry

  Spencer, Sir Derek

  Leigh, Edward

  Spicer, Sir James (W Dorset)

  Lennox-Boyd, Mark

  Spicer, Michael (S Worcs)

  Lidington, David

  Spink, Dr Robert

  Lilley, Rt Hon Peter

  Spring, Richard

  Lloyd, Peter (Fareham)

  Sproat, lain

  Luff, Peter

  Squire, Robin (Hornchurch)

  Lyell, Rt Hon Sir Nicholas

  Stanley, Rt Hon Sir John

  MacGregor, Rt Hon John

  Steen, Anthony

  MacKay, Andrew

  Stephen, Michael

  117

  Stern, Michael

  Waldegrave, Rt Hon William

  Stewart, Allan

  Walden, George

  Streeter, Gary

  Waller, Gary

  Sumberg, David

  Ward, John

  Sweeney, Walter

  Wardle, Charles (Bexhill)

  Sykes, John

  Waterson, Nigel

  Tapsell, Sir Peter

  Watts, John

  Taylor, Ian (Esher)

  Wells, Bowen

  Taylor, John M. (Solihull)

  Wheeler, Rt Hon Sir John

  Taylor, Sir Teddy (Southend, E)

  Whitney, Ray

  Temple-Morris, Peter

  Whittingdale, John

  Thomason, Roy

  Widdecombe, Ann

  Thompson, Sir Donald (C'er V)

  Wiggin, Sir Jerry

  Thompson, Patrick (Norwich N)

  Wilkinson, John

  Thornton, Sir Malcolm

  Willetts, David

  Thurnham, Peter

  Wilshire, David

  Townend, John (Bridlington)

  Wolfson, Mark

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

  Wood, Timothy

  Tracey, Richard

  Yeo, Tim

  Tredinnick, David

  Young, Rt Hon Sir George

  Trend, Michael

  Trotter, Neville

  Tellers for the Noes:

  Twinn, Dr Ian

  Mr. David Lightbown and Mr. Sydney Chapman.

  Vaughan, Sir Gerard

  Viggers, Peter

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to standing order No. 30 (Question on amendments):—
  The House divided: Ayes 307, Noes 285.

  Division No. 316]

  [10 16 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Butcher, John

  Aitken, Jonathan

  Butler, Peter

  Alison, Rt Hon Michael (Selby)

  Butterfill, John

  Allason, Rupert (Torbay)

  Carlisle, John (Luton North)

  Amess, David

  Carlisle, Kenneth (Lincoln)

  Ancram, Michael

  Carrington, Matthew

  Arbuthnot, James

  Carttiss, Michael

  Arnold, Jacques (Gravesham)

  Channon, Rt Hon Paul

  Arnold, Sir Thomas (Hazel Grv)

  Clappison, James

  Ashby, David

  Clark, Dr Michael (Rochford)

  Aspinwall, Jack

  Clifton-Brown, Geoffrey

  Atkins, Robert

  Coe, Sebastian

  Atkinson, David (Bour'mouth E)

  Colvin, Michael

  Atkinson, Peter (Hexham)

  Congdon, David

  Baker, Rt Hon K. (Mole Valley)

  Conway, Derek

  Baker, Nicholas (Dorset North)

  Coombs, Anthony (Wyre For'st)

  Baldry, Tony

  Coombs, Simon (Swindon)

  Banks, Matthew (Southport)

  Cope, Rt Hon Sir John

  Banks, Robert (Harrogate)

  Couchman, James

  Bates, Michael

  Cran, James

  Batiste, Spencer

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

  Bellingham, Henry

  Curry, David (Skipton & Ripon)

  Bendall, Vivian

  Davies, Quentin (Stamford)

  Beresford, Sir Paul

  Davis, David (Boothferry)

  Biffen, Rt Hon John

  Deva, Nirj Joseph

  Blackburn, Dr John G.

  Devlin, Tim

  Body, Sir Richard

  Dickens, Geoffrey

  Bonsor, Sir Nicholas

  Dicks, Terry

  Booth, Hartley

  Dorrell, Stephen

  Boswell, Tim

  Douglas-Hamilton, Lord James

  Bottomley, Peter (Eltham)

  Dover, Den

  Bottomley, Rt Hon Virginia

  Duncan, Alan

  Bowden, Andrew

  Duncan-Smith, lain

  Bowis, John

  Dunn, Bob

  Boyson, Rt Hon Sir Rhodes

  Durant, Sir Anthony

  Brandreth, Gyles

  Dykes, Hugh

  Brazier, Julian

  Eggar, Tim

  Bright, Graham

  Elletson, Harold

  Brooke, Rt Hon Peter

  Evans, David (Welwyn Hatfield)

  Brown, M. (Brigg & Cl'thorpes)

  Evans, Jonathan (Brecon)

  Browning, Mrs. Angela

  Evans, Nigel (Ribble Valley)

  Bruce, Ian (S Dorset)

  Evans, Roger (Monmouth)

  Budgen, Nicholas

  Evennett, David

  Burns, Simon

  Faber, David

  Burt, Alistair

  Fabricant, Michael

  118

  Fairbairn, Sir Nicholas

  Lamont, Rt Hon Norman

  Fenner, Dame Peggy

  Lang, Rt Hon Ian

  Field, Barry (Isle of Wight)

  Lawrence, Sir Ivan

  Fishburn, Dudley

  Legg, Barry

  Forman, Nigel

  Leigh, Edward

  Forsyth, Michael (Stirling)

  Lennox-Boyd, Mark

  Forth, Eric

  Lidington, David

  Fowler, Rt Hon Sir Norman

  Lightbown, David

  Fox, Dr Liam (Woodspring)

  Lilley, Rt Hon Peter

  Fox, Sir Marcus (Shipley)

  Lloyd, Peter (Fareham)

  Freeman, Rt Hon Roger

  Luff, Peter

  French, Douglas

  Lyell, Rt Hon Sir Nicholas

  Fry, Peter

  MacGregor, Rt Hon John

  Gale, Roger

  MacKay, Andrew

  Gallie, Phil

  Maclean, David

  Gardiner, Sir George

  McLoughlin, Patrick

  Garel-Jones, Rt Hon Tristan

  McNair-Wilson, Sir Patrick

  Gamier, Edward

  Madel, David

  Gill, Christopher

  Maitland, Lady Olga

  Gillan, Cheryl

  Malone, Gerald

  Goodlad. Rt Hon Alastair

  Mans, Keith

  Goodson-Wickes, Dr Charles

  Marland. Paul

  Gorman, Mrs Teresa

  Marlow, Tony

  Gorst, John

  Marshall, John (Hendon S)

  Grant, Sir Anthony (Cambs SW)

  Marshall, Sir Michael (Arundel)

  Greenway, Harry (Ealing N)

  Martin, David (Portsmouth S)

  Green way, John (Ryedale)

  Mates, Michael

  Griffiths, Peter (Portsmouth, N)

  Mawhinney, Dr Brian

  Grylls, Sir Michael

  Mellor, Rt Hon David

  Gummer, Rt Hon John Selwyn

  Merchant, Piers

  Hague, William

  Milligan, Stephen

  Hamilton, Rt Hon Archie (Epsom)

  Mitchell, Andrew (Gedling)

  Hamilton, Neil (Tatton)

  Mitchell, Sir David (Hants NW)

  Hampson, Dr Keith

  Moate, Sir Roger

  Hanley, Jeremy

  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, Emma (Devon West)

  Heald, Oliver

  Norris, Steve

  Heath, Rt Hon Sir Edward

  Onslow, Rt Hon Sir Cranley

  Heathcoat-Amory, David

  Oppenheim, Phillip

  Hendry, Charles

  Ottaway, Richard

  Hicks, Robert

  Page, Richard

  Higgins, Rt Hon Sir Terence L.

  Paice, James

  Hill, James (Southampton Test)

  Patnick, Irvine

  Hogg, Rt Hon Douglas (G'tham)

  Patten, Rt Hon John

  Horam, John

  Pattie, Rt Hon Sir Geoffrey

  Hordern, Rt Hon Sir Peter

  Pickles, Eric

  Howard, Rt Hon Michael

  Porter, Barry (Wirral S)

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

  Porter, David (Waveney)

  Howell, Rt Hon David (Gdford)

  Powell, William (Corby)

  Howell, Sir Ralph (North

  Rathbone, Tim

  Norfolk)

  Redwood, Rt Hon John

  Hunt, Rt Hon David (Wirral W)

  Renton, Rt Hon Tim

  Hunt, Sir John (Ravensbourne)

  Richards, Rod

  Hunter, Andrew

  Riddick, Graham

  Jack, Michael

  Rifkind, Rt Hon. Malcolm

  Jackson, Robert (Wantage)

  Robathan, Andrew

  Jenkin, Bernard

  Roberts, Rt Hon Sir Wyn

  Jessel, Toby

  Robertson, Raymond (Ab'd'n S)

  Johnson Smith, Sir Geoffrey

  Robinson, Mark (Somerton)

  Jones, Gwilym (Cardiff N)

  Roe, Mrs Marion (Broxbourne)

  Jones, Robert B. (W Hertfdshr)

  Rowe, Andrew (Mid Kent)

  Jopling, Rt Hon Michael

  Rumbold, Rt Hon Dame Angela

  Kellett-Bowman, Dame Elaine

  Ryder, Rt Hon Richard

  Key, Robert

  Sackville, Tom

  Kilfedder, Sir James

  Sainsbury, Rt Hon Tim

  King, Rt Hon Tom

  Scott, Rt Hon Nicholas

  Kirkhope, Timothy

  Shaw, David (Dover)

  Knapman, Roger

  Shaw, Sir Giles (Pudsey)

  Knight, Mrs Angela (Erewash)

  Shephard, Rt Hon Gillian

  Knight, Greg (Derby N)

  Shepherd, Colin (Hereford)

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

  Shepherd, Richard (Aldridge)

  Knox, Sir David

  Shersby, Michael

  Kynoch, George (Kincardine)

  Sims, Roger

  Lait, Mrs Jacqui

  Skeet, Sir Trevor

  119

  Smith, Sir Dudley (Warwick)

  Tracey, Richard

  Smith, Tim (Beaconsfield)

  Tredinnick, David

  Soames, Nicholas

  Trend, Michael

  Speed, Sir Keith

  Trotter, Neville

  Spencer, Sir Derek

  Twinn, Dr Ian

  Spicer, Sir James (W Dorset)

  Vaughan, Sir Gerard

  Spicer, Michael (S Worcs)

  Viggers, Peter

  Spink, Dr Robert

  Waldegrave, Rt Hon William

  Spring, Richard

  Walden, George

  Sproat, Iain

  Waller, Gary

  Squire, Robin (Hornchurch)

  Ward, John

  Stanley, Rt Hon Sir John

  Wardle, Charles (Bexhill)

  Steen, Anthony

  Waterson, Nigel

  Stern, Michael

  Watts, John

  Stewart, Allan

  Wells, Bowen

  Streeter, Gary

  Wheeler, Rt Hon Sir John

  Sumberg, David

  Whitney, Ray

  Sweeney, Walter

  Whittingdale, John

  Sykes, John

  Widdecombe, Ann

  Tapsell, Sir Peter

  Wiggin, Sir Jerry

  Taylor, Ian (Esher)

  Wilkinson, John

  Taylor, John M. (Solihull)

  Willetts, David

  Taylor, Sir Teddy (Southend, E)

  Wilshire, David

  Temple-Morris, Peter

  Wolfson, Mark

  Thomason, Roy

  Wood, Timothy

  Thompson, Sir Donald (C'er V)

  Yeo, Tim

  Thompson, Patrick (Norwich N)

  Young, Rt Hon Sir George

  Thornton, Sir Malcolm

  Thurnham, Peter

  Tellers for the Ayes:

  Townend, John (Bridlington)

  Mr. Sydney Chapman and Mr. Robert G. Hughes.

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

  NOES

  Abbott, Ms Diane

  Chisholm, Malcolm

  Adams, Mrs Irene

  Churchill, Mr

  Ainger, Nick

  Clapham, Michael

  Ainsworth, Robert (Cov'try NE)

  Clark, Dr David (South Shields)

  Alexander, Richard

  Clarke, Eric (Midlothian)

  Allen, Graham

  Clarke, Tom (Monklands W)

  Alton, David

  Clelland, David

  Anderson, Donald (Swansea E)

  Clwyd, Mrs Ann

  Anderson, Ms Janet (Ros'dale)

  Coffey, Ann

  Armstrong, Hilary

  Cohen, Harry

  Ashton, Joe

  Connarty, Michael

  Banks, Tony (Newham NW)

  Cook, Frank (Stockton N)

  Barnes, Harry

  Cook, Robin (Livingston)

  Barron, Kevin

  Corbett, Robin

  Battle, John

  Corbyn, Jeremy

  Bayley, Hugh

  Corston, Ms Jean

  Beckett, Rt Hon Margaret

  Cousins, Jim

  Beith, Rt Hon A. J.

  Cox, Tom

  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

  Blunkett, David

  Davies, Bryan (Oldham C'tral)

  Boateng, Paul

  Davies, Rt Hon Denzil (Llanelli)

  Boyce, Jimmy

  Davies, Ron (Caerphilly)

  Boyes, Roland

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

  Bradley, Keith

  Denham, John

  Bray, Dr Jeremy

  Dewar, Donald

  Brown, Gordon (Dunfermline E)

  Dixon, Don

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

  Dobson, Frank

  Bruce, Malcolm (Gordon)

  Donohoe, Brian H.

  Burden, Richard

  Dowd, Jim

  Byers, Stephen

  Dunnachie, Jimmy

  Caborn, Richard

  Dunwoody, Mrs Gwyneth

  Callaghan, Jim

  Eagle, Ms Angela

  Campbell, Mrs Anne (C'bridge)

  Eastham, Ken

  Campbell, Menzies (Fife NE)

  Enright, Derek

  Campbell, Ronnie (Blyth V)

  Etherington, Bill

  Campbell-Savours, D. N.

  Evans, John (St Helens N)

  Canavan, Dennis

  Ewing, Mrs Margaret

  Cann, Jamie

  Fatchett, Derek

  Carlile, Alexander (Montgomry)

  Faulds, Andrew

  Cash, William

  Field, Frank (Birkenhead)

  120

  Fisher, Mark

  Macdonald, Calum

  Flynn, Paul

  McFall, John

  Foster, Rt Hon Derek

  McKelvey, William

  Foster, Don (Bath)

  Mackinlay, Andrew

  Foulkes, George

  McLeish, Henry

  Fraser, John

  Maclennan, Robert

  Fyfe, Maria

  McMaster, Gordon

  Galbraith, Sam

  McNamara, Kevin

  Galloway, George

  McWilliam, John

  Gapes, Mike

  Madden, Max

  Garrett, John

  Mahon, Alice

  George, Bruce

  Mandelson, Peter

  Gerrard, Neil

  Marek, Dr John

  Gilbert, Rt Hon Dr John

  Marshall, David (Shettleston)

  Godman, Dr Norman A.

  Marshall, Jim (Leicester, S)

  Godsiff, Roger

  Martin, Michael J. (Springburn)

  Golding, Mrs Llin

  Martlew, Eric

  Gordon, Mildred

  Maxton, John

  Gould, Bryan

  Meacher, Michael

  Graham, Thomas

  Meale, Alan

  Grant, Bernie (Tottenham)

  Michael, Alun

  Griffiths, Nigel (Edinburgh S)

  Michie, Bill (Sheffield Heeley)

  Griffiths, Win (Bridgend)

  Milburn, Alan

  Grocott, Bruce

  Miller, Andrew

  Gunnell, John

  Mitchell, Austin (Gf Grimsby)

  Hain, Peter

  Moonie, Dr Lewis

  Hall, Mike

  Morgan, Rhodri

  Hanson, David

  Morley, Elliot

  Hardy, Peter

  Morris, Rt Hon A. (Wy'nshawe)

  Harman, Ms Harriet

  Morris, Estelle (B'ham Yardley)

  Harvey, Nick

  Mowlam, Marjorie

  Hattersley, Rt Hon Roy

  Mudie, George

  Henderson, Doug

  Mullin, Chris

  Heppell, John

  Murphy, Paul

  Hill, Keith (Streatham)

  Oakes, Rt Hon Gordon

  Hinchliffe, David

  O'Brien, Michael (N W'kshire)

  Hoey, Kate

  O'Brien, William (Normanton)

  Hogg, Norman (Cumbernauld)

  O'Hara, Edward

  Home Robertson, John

  Olner, William

  Hood, Jimmy

  O'Neill, Martin

  Hoon, Geoffrey

  Orme, Rt Hon Stanley

  Howarth, George (Knowsley N)

  Paisley, Rev Ian

  Howells, Dr. Kim (Pontypridd)

  Patchett, Terry

  Hoyle, Doug

  Peacock, Mrs Elizabeth

  Hughes, Kevin (Doncaster N)

  Pendry, Tom

  Hughes, Robert (Aberdeen N)

  Pickthall. Colin

  Hughes, Roy (Newport E)

  Pike, Peter L.

  Hughes, Simon (Southwark)

  Pope, Greg

  Hutton, John

  Powell, Ray (Ogmore)

  Ingram, Adam

  Prentice, Gordon (Pendle)

  Jackson, Glenda (H'stead)

  Prescott, John

  Jackson, Helen (Shef'Id, H)

  Primarolo, Dawn

  Jamieson, David

  Purchase, Ken

  Janner, Greville

  Quin, Ms Joyce

  Jones, Barry (Alyn and D'side)

  Radice, Giles

  Jones, Ieuan Wyn (Ynys Môn)

  Randall, Stuart

  Jones, Jon Owen (Cardiff C)

  Raynsford, Nick

  Jones, Lynne (B'ham S O)

  Redmond, Martin

  Jones, Martyn (Clwyd, SW)

  Reid, Dr John

  Jones, Nigel (Cheltenham)

  Rendel, David

  Jowell, Tessa

  Richardson, Jo

  Kaufman, Rt Hon Gerald

  Robertson, George (Hamilton)

  Keen, Alan

  Robinson, Geoffrey (Co'try NW)

  Kennedy, Charles (Ross.C&S)

  Roche, Mrs. Barbara

  Kennedy, Jane (Lpool Brdgn)

  Rogers, Allan

  Khabra, Piara S.

  Rooker, Jeff

  Kilfoyle, Peter

  Rooney, Terry

  Kinnock, Rt Hon Neil (Islwyn)

  Ross, Ernie (Dundee W)

  Kirkwood, Archy

  Rowlands, Ted

  Leighton, Ron

  Ruddock, Joan

  Lestor, Joan (Eccles)

  Salmond, Alex

  Lewis, Terry

  Sedgemore, Brian

  Litherland, Robert

  Sheerman, Barry

  Lloyd, Tony (Stretford)

  Sheldon, Rt Hon Robert

  Llwyd, Elfyn

  Shore, Rt Hon Peter

  Loyden, Eddie

  Short, Clare

  Lynne, Ms Liz

  Simpson, Alan

  McAllion, John

  Skinner, Dennis

  McAvoy, Thomas

  Smith, Andrew (Oxford E)

  McCartney, Ian

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

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

  Wallace, James

  Smith, Llew (Blaenau Gwent)

  Walley, Joan

  Snape, Peter

  Wardell, Gareth (Gower)

  Soley, Clive

  Wareing, Robert N

  Spearing, Nigel

  Wicks, Malcolm

  Spellar, John

  Williams, Rt Hon Alan (Sw'n W)

  Steel, Rt Hon Sir David

  Williams, Alan W (Carmarthen)

  Steinberg, Gerry

  Wilson, Brian

  Stevenson, George

  Winnick, David

  Stott, Roger

  Wise, Audrey

  Strang, Dr. Gavin

  Worthington, Tony

  Straw, Jack

  Wray, Jimmy

  Taylor, Mrs Ann (Dewsbury)

  Young, David (Bolton SE)

  Tipping, Paddy

  Turner, Dennis

  Tellers for the Noes:

  Tyler, Paul

  Mr. Jack Thompson and Mr. Eric Illsley.

  Vaz, Keith

  Walker, Rt Hon Sir Harold

  Question accordingly agreed to.
  Mr. Deputy Speaker forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the Government's acceptance of the principal recommendations of the Report by the Trade and Industry Committee "British Energy Policy and the Market for Coal" (HC 237), and in particular the offer of a transitional subsidy for additional sales of United Kingdom underground coal for electricity generation, the wide ranging package of measures to assist the regeneration of coal field areas, the commitment by British Coal that they will offer to the private sector pits which they do not themselves wish to keep in production, and the Government's intention to bring forward as rapidly as possible the legislation necessary to privatise British Coal.

  Coal Sales (Financial Assistance)
  10.29 pm
  The Minister for Energy (Mr. Tim Eggar): I beg to move,
  That this House authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £10 million in total but not exceeding £120 million in total to support sales of coal produced from underground mines in the United Kingdom.
  Mr. Kevin Barron: In our earlier debate, I tried to get an answer to a question but no response was forthcoming in the Minister's reply. In a letter to hon. Members dated 28 June, the chairman of the British Coal Corporation said that British Coal had
  "made a very competitively priced offer to the generators for additional sales",
  which had been rejected. The Minister said five days earlier that no one had actually asked for the subsidy to secure additional sales for British Coal. Could he tell us whether, when British Coal asked the generators, it knew how much per gigajoule the subsidy would be, or whether it was trying to negotiate with the generators without knowing how much the subsidy would be?
  Mr. Eggar: Nobody knows what the level of subsidy is. I am sure that the hon. Gentleman will have noted from the parliamentary answer that I gave about two weeks ago that we have asked for a response both from British Coal and from private sector coal producers to assist us in setting the level of subsidy. To paraphrase my answer, we have basically asked for information regarding the world price of coal as they perceive it—as the hon. Gentleman will understand, there is a dispute about the level of the world price of coal.
  We have asked producers for an indication of what their production costs are and, on that basis, we should like to proceed to set the level of subsidy that is available. I apologise for not being able to address the hon. Gentleman's point in my earlier remarks, but I can assure him that it was not a valid one, because there has as yet been no application for subsidy from British Coal.
  Mr. Barron: Is the Minister telling the House that British Coal did not have the subsidy when it tried to negotiate additional sales and made the offer that has fallen through and been rejected by National Power, and probably also by PowerGen?
  Mr. Eggar: I can tell the hon. Gentleman that, by definition, British Coal did not know the level of the subsidy when it entered into whatever commercial negotiations it entered into with National Power. He has only to look at the answer that I gave.
  The House will be aware that the White Paper outlined the Government's intention to offer financial support both to British Coal and to private sector coal producers who could secure a genuinely additional market for United Kingdom underground coal for electricity generation at world-related prices, where that was consistent with the relevant European Community provision. The Government propose to provide that support under section 8 of the Industrial Development Act 1982. At this stage, I propose to set the limit for expenditure on the subsidy at £120 million.
  Mr. Mark Fisher: Will the Minister make sure that he explains to the House how the subsidy works, in terms both of timing and of prior knowledge? He appeared to be saying to my hon. Friend the Member for Rother Valley (Mr. Barron) that, at the time of negotiation with the generators, the scale of the subsidy is not known. That being so, how can anyone wishing to take advantage of the subsidy know what its value is?
  Mr. Eggar: I understand the point that the hon. Gentleman is making. Further exploration is needed. As I am sure the hon. Gentleman understands, there is a genuine difference of view about the world price of coal.
  Mr. Barron indicated dissent.
  Mr. Eggar: It is no good the hon. Gentleman shaking his head. We have received representations from a number of different parties arguing about the world price. There are genuinely conflicting views, and much depends on what one factors in for transport costs and so on. In order to assist us with setting the level of subsidy, we have asked for information not only on what people perceive the world price to be—the House will understand the difference between spot and contact prices and so on—but also on production costs, because, as the Government and the Select Committee have repeatedly said, the subsidy is the difference between the world price and the production cost. At this stage we are waiting for additional information.
  Mr. Dennis Skinner: We know that at least two of the 12 market-tested pits have been closed as a result of all the shenanigans that have gone on. What will happen to the other 10? We cannot afford to wait a long time. There was speculation that, without this debate, British Coal would close one of those pits on each day of the miners' conference. This debate probably helped to prevent that for a while.
  Here we have 10 pits that are still in the market-tested regime—we think. Let us assume that they want to take advantage of what is now a fairly favourable world market for British coal. We can argue about the price per gigajoule and all the rest, but we are close to it and better in many cases. The game will be finished before the end of the year for those 10 pits, so what is the procedure to ensure that miners and management can keep them open? The Minister must tell us exactly what the procedure is for ensuring that subsidy is paid so that they can get some of the extra market.
  Mr. Eggar: The hon. Gentleman's assertion that there is little difference between the production cost of some pits and the world price is probably not correct.
  Mr. Skinner: Some of the pits are excellent.
  Mr. Eggar: I quote from memory, because I do not have the figures exactly to hand, but I think that it is fair to say that the lowest cost deep-mined pit in the United Kingdom is the Selby complex, which is producing coal at slightly above £1 a gigajoule. Depending on the adjustment that one makes for the calorific value of our coal compared with world coal, and for such matters as chlorine and sulphur content, it is generally felt that the world price landed at ports is quite considerably less than
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  £1 a gigajoule, although there is an argument about whether that is spot or contract prices. Transport costs must be considered as well.
  A difficult and complicated assessment must be made to arrive at the world price. [Interruption.] This is a very difficult and important area. The hon. Member for Bolsover (Mr. Skinner) asked a perfectly reasonable question, and I am trying to answer it.
  When private sector producers or British Coal have secured additional contracts or are advanced in their negotiations, they will provide the Government with the information for which we have asked—there is nothing to stop them providing it in advance—and we will consider each case on its merits. We shall bear in mind what the Select Committee said about the appropriate level of subsidy and make a decision in the light of that. We shall want to listen carefully to what British Coal and the private sector producers have to say.
  Mr. Fisher rose—
  Mr. Eggar: I do not know whether the hon. Gentleman wants to make a speech, but it may help if I deal with questions in replying to the debate.
  Mr. Fisher rose—
  Mr. Eggar: If the hon. Gentleman still wants to intervene, I shall, of course, give way.
  Mr. Fisher: The Minister has given us some idea of how the procedure works. Is he telling the House that it is the procedure that operated on the occasion referred to by Mr. Neil Clarke in his letter to hon. Members? He wrote:
  "We made a very competitively priced offer to the generators for additioanl sales".
  That offer was rejected by National Power.
  Is the Minister saying that the generators came to him in the way that he has just described to the House? Has the procedure that he has described every been put into effect, and was it put into effect on that occasion?
  Mr. Eggar: I thought that I had made the position clear; I apologise if I did not. British Coal has not come to us, and I think, although I am not certain—[Interruption.] I am trying to be helpful. I am sure that the hon. Member for Rother Valley (Mr. Barron) will make his own speech if he wishes; I shall try to pick up his points after that.
  British Coal did not come to us. This is a commercial matter between British Coal and the power generators, and I understand that British Coal made an approach to the generators before the Government made clear what system they would adopt—in an answer to a parliamen-tary question from, I believe, my hon. Friend the Member for Norwich, North (Mr. Thompson).
  Before I was interrupted, I was saying that we proposed to set the limit for expenditure on the subsidy at £120 million. Let me add, for the avoidance of doubt, that I intend to return to the House for further authorisation for funding if and when additional finance is required, because of the size of the subsidy.
  As I have said, I shall seek leave of the House to answer any further points. I commend the motion to the House.
  10.41 pm
  Mr. Derek Enright: The constituency that I have the honour to represent is synonymous with the history of coal. Every village in that constituency started, in mediaeval times, as a small farming community,

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  developed a coal industry in the same period but was thoroughly exploited in the last century. Houses, roads and railways were built deliberately to provide for their lordships' coal, as it then was. Now there is only one pit left in an area that used to have more pitheads than any other English constituency, and that pit is under threat.
  I do not want to repeat arguments that have already been adduced, but I feel that neither the Secretary of State nor the Minister has answered some of our questions. We have been talking specifically about the market. The Secretary of State spoke of what had happened under Labour and Conservative Governments, which was not helpful to the future of coal; if we are looking at history, we should try to draw some lessons from it. The lesson that we have drawn from the throwing away of coal is that the market does work; the Arabs cornered oil and made the price shoot up, because they controlled it. That was a world market—a market that we must guard against; but we will guard against it only through the diversity of the supplies that we produce.
  As was said by the right hon. Member for Selby (Mr. Alison)—who is not known for his left-wing views—every reliable international study shows that, at the turn of the current century, the main energy source throughout the world will indeed be coal, and perish those who have not sufficient coal to deal with the markets then. It does not matter whether it has a particular subsidy; the point is, into what sort of market are we selling?
  We are in danger of selling into a market that we cannot control. That is one of the problems with British Coal. We have said often enough, and, to be fair, some Conservative Members have repeated it, that the quality of British Coal's top management is not what it should be, certainly not when it comes to finding the markets they could for exports. The markets are there, but British Coal is not attempting to do anything about them, with or without a subsidy. Neil Clarke's expertise lies in spot selling worldwide. He is used to selling uranium and massive amounts of various ores. That is where his mining interest is to be found, and it is a dangerous example for the market with which we are concerned.
  The motion implies that the provison of a subsidy to coal is a charity handout, but there have already been handouts. People no longer recall the dash for gas. Let us not forget that British Gas was willing to sell to the electricity supply industry at its price, what it called an economic price that was in British Gas's commercial interests. Against its judgment of the marketplace and despite what the market would take, British Gas was compelled to sell gas more cheaply, although it had a perfectly good reason for not doing so. Incidentally, there are many good reasons why it should maintain a monopoly, but that is a subject for a different debate. The argument is that, as the chairman of British Gas clearly said, one should not be compelled to sell at a price that is uncommercial.
  Let us consider the strange way in which the pits were deemed to be economic and how it was decided whether they needed a subsidy. The Minister will no doubt say that Houghton Main has to be taken with Grimethorpe, but let me deal in more detail with the two pits with which I have been closely associated. John T. Boyd, a company not known for its affiliations to left-wing causes, produced a report for the Government. I could read out all the references to Grimethorpe, as they make excellent reading, but I shall mention only the salient points.
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  The first is that Grimethorpe already had
  "a positive cash flow of £1·668 million",
  which is a lot of money. The report also states:
  "On an economic basis Grimethorpe has the potential to operate as a stand-alone colliery".
  That is important, because the Minister has regularly talked about putting it together with Houghton. There are certainly shared facilities, but it is possible for the two collieries to operate without them with some technical alterations.
  I shall wait until the Minister is ready before saying that, in agreeing to knocking out Grimethorpe straight away, the Government and British Coal showed bad faith to British Coal's customers. When one is trying to sell coal, it is bad to say that one does not care about those whom one is supplying. The first that the industrial customers —the majority of Grimethorpe's customers were industrial customers—knew about their coal supply being stopped was on the news. Only if they happened to listen to the news did they hear about it. What sort of commercial sense is that? What sort of management is that? What is more, firms previously supplied by Grimethorpe are now paying more for their fuel. That is a funny sort of marketplace and a funny sort of subsidy.
  Frickley is the last remaining pit in my constituency. The Government brought in Rothschild—eminent bankers, indeed. Rothschild said that Frickley was among the most profitable pits. It recommended, "Sell it off and whizz it out for privatisation." It recommended that Frickley should be on the front shelf for everyone to shop for. However, Frickley mysteriously appears on the Government's list of 21 pits. The only reason for Frickley's inclusion is that Frickley pit was very loyal to the National Union of Mineworkers.
  I have not traditionally been a believer in conspiracy theories. However, my right hon. Friend the Member for Chesterfield (Mr. Benn) has referred to the political dimension. That point is made in The Times so it must be correct. The Times stated:
  "Clarke to undermine the miners."
  Brian Crozier describes what happened. What is particularly sinister is the private army he formed prior to the 1979 election when he met the then shadow Cabinet. That was when the plotting started against the miners. That is indeed sinister. There is no justification in economic or energy terms for getting rid of Frickley.
  I regret to say that, in the earlier debate, no mention was made of the package—as the Government call it—to help areas like mine. I would be only too happy if that help were given. Let us consider the RECHAR money. Contrary to what the Government say, a lot of the money being spent on the coal industry and the regeneration of coal industry areas does not come from the Government; it comes from the European Community.
  Between July 1990 and December 1993, almost £12 million-worth of schemes in the Wakefield metropolitan district area were approved. They are licensed and approved and there is no nonesense about that. However, as a result of the Government's shilly-shallying, so close to December 1993, Wakefield has received only £862,043. That is a disgrace. If the Government intend to bring in emergency action, what kind of resolution does that show and what kind of signal does it send? In addition, we do not have assisted area status, when we have one of the largest concentrations of unemployment in Yorkshire.

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  One hundred years ago, on 7 September, the Featherstone massacre occurred. James Gibbs and James
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  Duggan were shot by an army sent in by a Tory Government. The Tory Government are not going to send in an army now; they are killing us bit by bit, slice by slice. It is the massacre of the innocents.
  10.53 pm
  Mr. A. J. Beith: In the previous debate, my hon. Friend the Member for Gordon (Mr. Bruce) set out his conviction and mine that the Government lack any coherent policy for the coal industry and have failed to set coal in the framework of a sensible energy policy.
  I want to consider the matter from the slightly narrower perspective of my constituency where we have the only remaining pit in the Northumberland coalfield. I have seen three pit closures there in my time as a Member of Parliament and several more before that. So far as I can establish, my constituency produces more opencast coal than any other constituency in the United Kingdom and there are many more opencast coal applications hanging over my constituency.
  The subsidy that we are discussing must be one of the most ingenious ever devised. I am convinced that someone in the Department of Trade and Industry must have sold it to the Treasury on the basis that the Treasury would not have to pay out very much of it and that it could be accepted on the basis that the prospect of having to pay it was pretty limited. It was a device to get the Government off a political hook, and it was based on the fiction that, somehow, the market conditions had been substantially changed by the creation of the subsidy.
  The subsidy alone does not change those market conditions. Indeed, it has about it an air of impermanence which is greater than that which surrounds the other features of the market, even though there might also be some uncertainty about them. Among the other features of the market, I include the substantial investment by the regional electricity companies in gas generation and the peculiar position of the nuclear industry.
  There is a stronger sense of permanence about the consequences of the investment in gas generation. Clearly, a generator which sees a profit stream coming from the generation is much less concerned about the price that it will have to pay for electricity. That situation already exists, and it will continue throughout the working life of the generating unit in which the regional electricity companies have invested. We have something which, from their point of view, looks a rather better long-term bet than the possibility that they might buy some coal at a price which was brought to the world price by a Government subsidy. Indeed, all the incentives are for them to use the generating capacity in which they have invested, even if the purchase price is higher.
  The subsidy does not change that market position. It does not alter that advantage, which is protected by the monopoly power of the regional electricity companies as distributors of electricity to the households of their region. That power has been unabated by the regulator, who, in a very cavalier way, has accepted that the decisions made by the regional electricity companies to invest in that gas capacity were reasonable at the time that they were made. I do not think that that was a proper use of his powers. However, whether I like it or not, it is now a fact that the regional electricity companies' ability to use their monopoly to protect that use of gas has been effectively confirmed by the regulator. Just how far he will allow them to push up the price in response remains to be seen, but so far he has given all the indications of a toothless watchdog. That crucial part of the market is rigged against coal, even when the subsidy is applied to it.
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  The nuclear section of the market is protected by the non-fossil fuel obligation and by the substantial subsidy of the nuclear levy. The nuclear levy has taken a very interesting but extremely worrying turn. It was made clear in discussions in the Select Committee that that subsidy is being used to finance the expansion of nuclear generation at Sizewell.
  The Secretary of State, who, unfortunately, is out of action because of his heart attack, made it clear to the House that he thought that that subsidy was entirely for the benefit of the environment, to be applied to decommissioning for purely environmental reasons. It is not. It has been seized by Nuclear Electric in order to fund its current expansion. It is being misapplied by Nuclear Electric. The argument that it used to defend that action is that it is better off doing that than putting the money into a building society. That is an extremely doubtful proposition in the case of building a nuclear power station at Sizewell. The building society, in any normal market, would have been a better bet.
  Today, of course, we were reminded that there is an even more absurd element, which is that French-generated nuclear electricity, purchased and brought through the interconnector, benefits from the levy. What inquiries have the Government made into whether French electricity generators intend to use the benefit that they gain from the nuclear levy for decommissioning purposes when they commission their power stations? I do not think that there is any likelihood at all that that will be done.
  The argument is blown into smithereens. It is obviously not effectively a ring-fenced sum to be used for decommissioning purposes, which in itself, incidentally, is still a very powerful subsidy to the nuclear industry. It is being used as an operating subsidy for the nuclear industry on a considerable scale. But that subsidy exists alongside a piece of market protection in the non-fossil fuel obligation. The subsidy will not change the fundamental market position.
  Ellington colliery is not one of the dozen pits on the original list—it is one of the so-called core pits and is left to maintain its own market. Its market depends crucially on two things. First, it depends on electricity generation at the Blyth power station. Blyth is an old power station, but it is still working effectively. However, a threat hangs permanently over it. Secondly, the market depends on the electricity that is generated for the Alcan smelter. The coal for that smelter is supplied directly by conveyor from the Ellington colliery to the plant.
  If either of those markets were to go, the future of Ellington would wholly depend on British Coal finding a further market for coal, jostling alongside all the other claims on that further market from whatever is left of the original 12 pits. Earlier, we discussed the fate of those 12 pits.
  As my hon. Friend the Member for Gordon pointed out earlier, there is not much evidence that British Coal is doing well at seeking out that market. It seems to be dominated by a mentality of retrenchment and shrinkage, not one of going out aggressively to seek the market. I make that criticism against the background that, in domestic terms, the market is rigged against the pits.
  I wondered whether we would get any announcement today about the future of British Coal, but the debate was marked by the total absence of announcements from the Government about anything at all. Indeed, it was not until we started to debate this subsidy that the Minister showed

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  some signs of wishing to deal directly with questions from hon. Members and to tell us something. During the previous debate, we heard nothing from the Government that gave us increased confidence in the ability of British Coal to find a larger market for coal for any of the 12 pits or any of the pits that are not on the list but which communities feel will soon be the subject of the retrenchment approach of British Coal.
  Will there be a secure future for Ellington? Will that future rest in the aluminium industry, which already has many problems? That cannot be a safe future for Ellington. We want the Alcan contract to remain at Ellington. It is an extremely efficient method of operation —the delivery of coal direct from one plant to another. In the aluminium industry, coal must compete with hydro-electric power and the arrival of aluminium from eastern Europe, where no genuine costing has taken place. The dumping of aluminium has resulted from the disruption of the situation in eastern Europe.
  The market of electricity generation must be maintained if Ellington is to have a genuine future. Alongside the future of Ellington, we have a massive expansion of opencast. The impact of that on the subsidy element is not entirely clear. I have always taken the view that we must maintain enough opencast sites in our area, especially in Northumberland, to give some future to an industry that provides many jobs. However, that should not be done at the expense of massive despoliation of the environment in Northumberland or huge expansion of the areas involved. We are at that point now.
  British Coal is arguing that it must have an opencast site outside the village of Ellington in which to put the waste from Ellington colliery, which it currently puts into the sea. That is a fairly unconvincing bargain to offer a community whose pit does not have a guaranteed or secure future. Indeed, there are considerable doubts in the area about whether the pit will last long enough for the restrictions on the dumping of coal in the sea ever to necessitate putting the coal in an opencast site for which permission is granted on those grounds. Therefore, those grounds will not weigh heavily. I hope that they will not weigh with the Minister when he eventually considers the application.
  The future of all the coal pits—not simply the 12 pits that sparked the row—depends on a market that is rigged against the coal industry and was so rigged by the Government. They cannot escape the blame for that. They cannot refer to market conditions as though those conditions were simply handed to them. There are genuine market forces at work. However, the way in which those forces operate is predetermined to a significant extent by the decisions made by the Government when they privatised the electricity industry—the way in which they structured the regional electricity companies and protected nuclear power, and look like continuing to do so.
  Nothing that the Government have said, and they have said so little, has carried the debate forward. I am extremely worried about the future of the coal industry in my constituency. I share the concern of Opposition Members who have already expressed their anger about what has happened to the pits in their constituencies.
  I should mention the Minister's earlier touching reference to my party's election manifesto. He referred to
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  one of our apparent aspirations to generate 45 per cent. of electricity from wind power. We had no such aspiration. I have looked up the text of that manifesto and we are guilty, I admit to it, of giving excessive credence to Government figures. The relevant passage notes:
  "Government estimates show that up to 45 per cent. of electricity demand could be met from wind power."
  I do not believe that we should ever place such confidence in Government figures and the Minister will note that we went to argue that such a target could not be met.
  Mr. Simon Burns: Why put it in the manifesto then?
  Mr. Beith: We noted that we might produce 20 per cent. of our energy from all the renewable sources, including wind and wave power. [Laughter.] The Minister and his colleagues seem to think that that is funny, but they must consider problems such as emission targets, pollution and resource depletion and make some genuine attempt to address them.
  Mr. Martin O'Neill: I have a copy of "The Times Guide to the House of Commons April 1992", which contains a copy of the Liberal manifesto. Its section on energy does not bear much relation to what the right hon. Gentleman quoted; it is ambiguous, confusing and very Liberal in its approach. Under the heading, "The environmental balance sheet" and the sub-heading, "Renewable energy generation", it states:
  "45 per cent. of electricity demand could be met from wind power."
  Under the subsequent heading of "Positives"—whatever they are—it notes:
  "Britain has a massive advantage in natural resources that give it the potential to be at the forefront of renewable energy generation. Government estimates show that up to 45 per cent. of electricity demand could be met from wind power."
  That potential is referred to twice on page 345 of that guide. The right hon. Gentleman should have checked it. Admittedly, the Liberals' policies are invariably confused, but, in this case, they are not only confused but confusing to the people who read that manifesto.
  Mr. Beith: That possibility may have been referred to twice in that guide, but it appeared just once in the original manifesto. It is recorded as a quotation from the Government. To place undue credence on any Government figures is never a terribly good idea and that is why we argued for no more than a 20 per cent. contribution to energy supplies from all renewables.
  The Government are prepared to bolster artificially the position of nuclear power and I cannot understand how they can so readily dismiss the aspiration to increase the proportion of our energy supplies derived from renewables. If they and the Labour party think that that option is funny and the wrong way to go, they have a lot to learn about the desired energy policy.
  We are discussing whether the subsidy will ensure that coal has a better and fairer opportunity to win markets in the next few years. I do not believe that the subsidy will achieve that aim.
  11.7 pm
  Mr. Mark Fisher: It is interesting that the Minister made little attempt to claim very much for the motion, but perhaps that is scarcely surprising since the Government are throwing away billions of pounds worth of assets in coal reserves. The

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  money on offer is very small in comparison to them and in relation to the £1·3 billion a year that is given in subsidy to the nuclear industry.
  The subsidy on offer is largely illusory, since the Minister knows that, given the present structure of the energy market, the chances of that subsidy being called upon is also non-existent. The idea is also illusory, because we have learnt from what the Minister has already said in answer to interventions that the mechanisms of the subsidy are largely illusory. Although the Minister described those mechanisms, he admitted that the one time that British Coal has attempted to negotiate with National Power, the subsidy and the mechanisms were not in operation. The Minister is offering British Coal a subsidy, but it will not know in advance what it will be worth. It will therefore be unable to offer anything of value to the person with whom it is negotiating.
  The Minister probably knows that practical jokers, or confidence tricksters, perform a trick involving a pound note on a piece of elastic or string. The pound note is put in one's hand, but as one's hand closes, it is whipped away. I suspect that this subsidy is based on very much the same principle. The appearance is of a sum of money being provided, but it is very well attached to a piece of elastic, the other end of which is being held by the Minister. I doubt whether any of the money will ever be called down.
  The Minister has said how small the market is and has told us that it will be impossible for British Coal to create new markets. He knows very well that if new markets are not created, this assistance will not be called upon. When the illusion—I will not call it a confidence trick—is understood by the British people, who were outraged last October by the Government's action, there will be equal anger. The Government ought to behave better towards the coal industry. The reason for people's concern last October was their recognition of the debt that the country owes to the industry. This is a strange way to repay that debt.
  If the Minister had any sense of history, he would realise that the only reason for our being a manufacturing nation, the only reason for our having been a great industrial, economic and political power for the past 200 years, is that there was an industrial revolution based on coal. My city, Stoke-on-Trent, owes its very existence to the coal seam on which it is based. The Government owe the industry better treatment. In their outrage last October, the British people, even if they did not understand the full complexities of the energy market, sensed that something was wrong. Nothing in the provision with which we are dealing tonight will suggest to them that the situation is being put right. This subsidy will change nothing.
  It is clear that the Government are in a very curious and confused position. During today's debate on the closure of mines, the Secretary of State and the Minister for Energy repeatedly claimed that they could not interfere with the energy market, that pure market forces would determine everything. Despite that, the Minister is offering a subsidy. He is intervening, albeit in a thoroughly small and inadequate way, by providing a sweetener for any sales that British Coal may be able to secure. This demonstrates that the Government are able to intervene in the market; indeed, it is necessary that they do so. Thus, their earlier argument—that it is impossible to intervene in the energy market, as it is a pure market—is torpedoed.
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  This minimal assistance for the industry does not accord with the professed concern of the Secretary of State for Employment for the coal industry and all those working in it. It may be claimed that that concern is reflected to some extent in this very small subsidy. It is certainly not reflected in the way in which British Coal is treating miners who are made redundant. The Minister will know that workers in the coal industry can qualify at the age of 55 for early retirement.
  Trentham, which is in my constituency, closed on 4 June. Miners who reached early retirement age two or three weeks later have been denied early retirement procedures. That is in marked contrast to the way in which British Steel operated when it closed Shelton Bar and other works 10 years ago. However harsh the conditions of those closures were, British Steel was at least sympathetic towards people who had spent their entire working lives in the industry and were on the brink of achieving early retirement.
  The Minister is raising his eyebrows in apparent surprise. Let him ask Mr. Neil Clarke about the procedures for miners who are within days or weeks of achieving early retirement. Those in my constituency are told that they will have to wait a further seven years. For the past few years, miners have based their early retirement on retiring at the age of 55. In one case, a person was denied early retirement because of a matter of only two weeks. That is a disgraceful way to treat people who have given their whole lives to the industry. If the Minister wants his view that he cares about those who work in the industry to be credible, I hope that he will take that up with Mr. Neil Clarke and see what can be done.
  Similarly, I hope that the Minister will take up the question of the effect of so-called "voluntary redundancy" on miners' home security. I hope that he now understands that, because of his Department's requirement, British Coal has forced those redundancies through as voluntary redundancies, when he and the rest of the world know perfectly well that they are compulsory. Because they are nominated as voluntary redundancies, the insurance clauses in miners' mortgage agreements will not operate. All insurance clauses on mortgage policies are made null and void if somebody volunteers for redundancy.
  So miners have not only lost their jobs; if they fall behind with their mortgage payments, they have no insurance protection and stand to lose their homes as well within a few weeks or months. Is that what the Minister wants for people who have given their whole lives to the industry? He could do something about the behaviour of British Coal towards early retirement and pensions, and miners' home security. I urge him to do both.
  Will the Minister talk to the Department of Social Security and ensure that the Government make a ruling on how regulation 51(7) of the Income Support (General) Regulations 1987 operates? I hope that he understands that, under those regulations, if the Benefits Agency believes that somebody receiving a lump sum has deliberately reduced that lump sum with intent to claim benefit, it is entitled not to pay income support.
  On being made redundant from Trentham, a single parent constituent of mine spent his redundancy money on reducing his large mortgage because the job that he managed to find was low-paid. As a responsible parent, he knew that he could not sustain the mortgage that he had undertaken when he was a miner, so he used his redundancy payment to pay off the mortgage. When he

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  was made redundant a second time a few weeks later, the Benefits Agency refused to pay him income support on the basis that he had disposed of his capital. He had used his redundancy payment responsibly and found another job, as the Government wanted him to do, but when he was made redundant again it was implied that he had tried to con the system and therefore would not be allowed income support. That cannot be how those regulations are intended to be applied. In that instance, the case was overturned on appeal and the man found that he was entitled to income support.
  Nevertheless, if the Minister wants to act constructively he should look at the matter and, together with the Department of Social Security, issue guidelines so that miners in such a position are not denied income support when they have acted perfectly honourably. He could and should look at those important points, as those measures would take some of the pain and anxiety away from our constituents, whom the Government have thrown into that appalling position.
  The Minister has not made many claims for the subsidy, which is at least something. He should, however, look at those other points, because how the Government treat the men who have worked all their lives in that industry and the resources which they make available to them are every bit as important as subsidies to the price of coal. I hope that he will bear that in mind.
  11.19 pm
  Mr. Peter Hardy: In his wind-up speech in the earlier debate, the Minister accused the Labour party of being the captive of history. I am not sure whether the word "captive" is correct, but we are entirely justified in paying careful attention to history. Those of us who represent mining districts have a considerable and relevant history to study.
  Reference has been made to the links between some constituencies and the mining industry. The link is as deep in my constituency as in most others. Pits were closed in the 18th century and in the 19th century. Between 1814 and 1939, we lost four pits, we lost one in the early 1970s, one in the late 1970s and four in the 1980s.
  At no time in the past when a colliery closed—be it long ago or more recently—has it been against such a grim, severe and declining economic background as that of Britain today. It is time that the Government understood that the fundamental cause of Britain's economic weakness is the balance of payments deficit, which is enormous and is likely to grow considerably as a result of the present decisions being made about the coal industry.
  I realise that many of my hon. Friends regard the subsidy as little better than a myth, but I am more suspicious than many of my hon. Friends. I see the subsidy as part of a three-pronged approach to privatisation. It was interesting that, at one point in his speech, the Minister appeared to suggest—I hope that I am not misinterpreting his view—that, at some time, the Government could return for a little more. That suggestion aggravated my suspicions about a three-pronged approach.
  We have watched the Government privatise the energy resources of Britain, and arrange various sweetners to assist in that privatisation. We have seen unnecessary
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  increases in the price of electricity. The Government were careless about the bad effect of those increases on heavy energy users in industry. The prices were increased in advance of privatisation to make it more attractive.
  Mr. Eggar indicated dissent.
  Mr. Hardy: It is no good the Minister for Energy shaking his head, as the record is clear—the electricity price rose enormously and excessively before privatisation so that the sales could proceed, and the same happened with gas. The Government did not merely sell it for less than it was worth: they sold it against a background of excessive profits—and they could not care less about the effect on manufacturing industry or the poorer domestic consumer.
  I am suspicious. The Minister now has the capacity to dangle sweeteners, if they are needed, to assist the Government's friends. They are not our friends—the Conservative party, not the Labour party, will receive the little donations in gratitude.
  Mr. Kevin Hughes: Some of them are not so little.
  Mr. Hardy: My hon. Friend is right. I do not think that the Conservative party will receive the same sums for the purchase of a pit as it does from overseas residents seeking to encourage the Government to maintain tax breaks. The subsidy provision exists to encourage privatisation.
  The second prong of the Government's approach to privatisation involves pension prospects. The Government do not seem to understand that pensions are part of a worker's reward. I do not know how anyone can find the moral justification to grab workers' earnings in the form of pension funds. I think that the Government may find themselves in deep water over that issue.
  The third prong, to which the Minister referred in passing, concerns me deeply. On 29 March I intervened in a speech of the Secretary of State and was pleased with his answer, because it was unequivocal. He said that nothing would be done
  "to prejudice safety standards in the mines."—[Official Report, 29 March 1993; Vol. 222, c. 31]
  Since that debate in March, which does not seem long ago, British Coal can claim that productivity has increased by 22 per cent. If that astonishing improvement, which has not been matched in any other industry at any time since the second world war, can be achieved in the coal industry, why do the Government wish to make the dramatic changes in safety regulation?
  Again, I am suspicious. The Secretary of State gave the House an unequivocal assurance, as he described it—but shortly afterwards, the Health and Safety Executive took to the Department of Employment its proposals for dramatic changes in the mining industry's safety regime. I can think of no other reason for that, other than for it to join the subsidy and the attraction to the pension funds of the greedy eyes of those the Government would like to see own the coal industry rather than the community.
  I said that the subsidy was a myth. I am extremely sensitive to electricity prices. We have in my constituency perhaps the finest engineering steel industry in Europe, and certainly in Britain. My hon. Friends who represent the Rotherham area are well aware of its enormous achievements and of the records that it holds and repeatedly breaks. They know also of the problems that

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  confront that industry because electricity prices are far higher than they need be—and would be, were coal to account for a larger share of the generation market.
  If there are to be any subsidies, they should subsidise the privatisation of the coal industry but the maintenance of adequate levels of industrial activity in this country.
  I do believe that this is not a myth, but something more perverted—part of a three-pronged preparation for privatisation. It is part of the record and prospectus of a Government who have created the decline in our recovery that made our nation plunge down into the poverty league, so that, before long, Spain, Portugal and Greece will pass us in the EC's economic league, in the same way that Belgium, Italy, the Netherlands and Luxembourg have done in the last 10 years. For as long as such policies are pursued, that decline will be unavoidable.
  That decline is due to the short-sighted calculations of a Government who do not seem interested in the welfare of the economy—and because of that, I do not believe that the Government are sufficiently interested either in the safety of people who work below ground.
  If the Minister has time to reply, I hope that he will tell the House where we stand in relation to pit safety. Is safety to be no greater a reality than the subsidy? May we expect that the promise given to the House by the Secretary of State—who, unfortunately, cannot be with us today—on 29 March will be kept? Are we to see the disappearance of the role of the colliery deputy, who will no longer have a statutory power to secure safety in the mine? Will we once again see the Government sacrificing the interests of the nation and of the individual to the rather sordid sort of people with whom the Government seemed to have been concerned over the past 10 years?
  11.27 pm
  Mr. Dennis Skinner: My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) referred to redundancy payments made to miners and to others that ran foul of social security laws in respect of mortgage repayments, and so on. I hope that the Minister will pass on that information. The Department in question ought to make a statement, to ensure that people do not have to appeal because of variations throughout the country.
  Some local Department of Social Security offices are saying one thing, and some are saying another. A fortnight ago, I obtained about £1,200 in back money for one of my constituents—a miner who was made redundant. If that is happening on a wide and varied scale throughout the country, it is time that the regulations were made firm, to end the situation whereby people in certain parts of Derbyshire will be paid, whereas people in certain parts of Staffordshire and Yorkshire will not. I hope that that will be dealt with.
  The debate is about the subsidy and about the Government buying time after their announcement to save 12 pits. We knew that that was a confidence trick and, as many of us also knew at the time, the subsidy would not add up to a row of beans. It was a Portillo subsidy, and the Chief Secretary to the Treasury was quite happy about it. When it was discussed with the Secretary of State, it was probably said, "Look here, we will tell the House in this great White Paper debate that there will be a subsidy, but don't bother about it a great deal. You will be quite happy with it, Mr. Portillo, because at the end of the day not a great deal of money will be spent, if any at all."
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  We thought that that would happen. The Tories were bought off, but more importantly, the people outside were disgusted at this confidence trick carried through by the Government. This short debate about the subsidy will put on record over and over again that we do not expect a great deal to be paid. It is a pity that the Minister did not quite finish what he was telling me about how the mechanism would work. I was becoming intrigued, but then he recovered himself and said something about it being a commercial matter between British Coal and somebody else. For a time, I thought that he would reveal a little more.
  I would like a subsidy for mining similar to the set-aside scheme for farmers. Coal is a great national asset. It would be sensible to say that, as great tracts of land are set aside at £100 an acre—I think that the royal family made about £250,000 out of the scheme—such a scheme should operate for mining. It is said that farming is beset by the problems and elements of mother nature and cannot compete in the same way as someone working in a factory or a shed. Therefore, the argument goes, a subsidy must be paid because bad weather could result in crops not growing.
  Does not the same argument apply to the pits? Miners have to deal with mother nature underground, so there should be a set-aside subsidy for mining. That would mean that, when a colliery struck a bad seam, the miners could be told, "Set it aside. We will set aside money so that the pit can ignore the bad seam." The Minister spoke about some of the 12 pits and said that they are not making money. No pit in Britain makes money in the first half of the financial year, because that is when nearly all the holidays are taken. But the second half of the financial year, when there is only one holiday, Christmas, often makes up for the massive loss in the first six months.
  Mr. William Cash: The hon. Gentleman makes a great deal of the comparison between pits and agriculture. We are being ripped off by the European Community because the Germans are being allowed to set aside 19 per cent. of their land, whereas we are allowed to set aside only 12 per cent. In 1991, the Germans paid £9 billion to their miners but, according to the Minister, we paid only £180 million. I accept that there is a nuclear levy, but irrespective of that, our mining industry is being ripped off.
  I hope that the hon. Gentleman accepts that we are being ripped off right across the system, because Britain is being sold down the line in respect of agriculture, the single market and the coal industry. I want the European Community to work, but not on the terms being described at the moment.
  Mr. Skinner: For a short period, I thought that the hon. Member for Stafford (Mr. Cash) and I were on the same playing field. However, he then said that he wanted the European Community to work. I do not. I think that it has been an unmitigated disaster, and I want it to fail. However, I have always accepted that it is not as easy to grow food in a country such as Britain as it is to grow food in the Mediterranean countries and in California. Therefore, I have always accepted the idea of having subsidies or, better still, deficiency payments, so that we do not have to import too much food.
  My worry is that the money has gone into the wrong pockets. I would sooner see the money in the farmworkers' pockets than in the pockets of the rich business farmers. I

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  accept the point made by the hon. Member for Stafford about £20 for every family going into the common agricultural policy. I have no doubt that thousands of miners are saying, "If there can be that kind of subsidy for the CAP, we should have some sort of subsidy for the coal industry, because it also has to battle against the elements."
  Let us not kid ourselves. "Subsidy" is not a dirty word. We have to have subsidies to run a highly technological society. One cannot run a school without subsidies, although I know that the Government are trying. However, subsidies are paid even to opted-out schools, so that they have more money than schools that are still under local education authorities. That is true of almost all aspects of our lives. There could not be a royal family without subsidy. I am in favour of the demise of the royal family, but I understand how they manage to live in the lap of luxury.
  We are always hearing about Nissan coming to Britain. Of course Nissan came to Britain. The Government said, "Here is £300 million to come to build a factory in Sunderland." They said to Toyota, "You can have a bit more if you come to Derby." Every local authority in the area said, "We will give you some more advantages as well." That is a subsidy. There are subsidies for most things in life.
  We have always argued that there is a way in which to deal with the coal industry. It should not be dealt with on the basis of a phoney subsidy to buy time to con the British people. The subsidy should be based on a pit's work from year to year or over a five-year period. The period must be five years to deal with cycles within a pit, as it goes through bad work and good work. Proper payments are needed. We have always argued that we need a big coal industry, so that the strong can help the weak and vice versa, in good times and bad.
  The only thing that made me smile was the French interconnector subsidy. That subsidy goes from the Government, through the nuclear levy, and we then pay the French to send us electricity that competes with our electricity. The French get a big sum out of us. It is a joke that the French are able to send us electricity for which we have paid a massive price in the process.
  I am still trying to find out whether there is anything in the following idea. As the Government work on the principle that they help people who help the Tory party with donations, especially foreigners, I wonder whether any of the French subsidy money has an Asil Nadir lurking among it. That has not been discovered yet. I just throw the idea in. Is there somebody who has sent the Government some money?
  The French people say, "We have a really good score going here with the British Government. They are a bit thick and they are run by a wimp, but we are actually selling them electricity and they are paying us to send it." There is bound to be a hidden agenda, with somebody saying, "We must slip them a few quid," or, to use the parlance of Terry Venables, "bung them a bit." It is odd that we are getting electricity while the French are laughing.
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  I suggest to the hon. Member for Stafford, who follows these matters very carefully, "Check that out." He is a man for detail on French subsidies. It is just possible that he might discover something much more serious.
  I have seen figures of £1·2 billion and £1·3 billion for the subsidy to the nuclear power industry. That subsidy enables it to capture 22 or 23 per cent. of the market. It is a subsidy. The Government can argue that the money is to do with decommissioning, but anyone who knows anything about the industry knows that it is a subsidy. The only difference between the subsidies to which I have just referred and the one that we are discussing tonight is that the one that we are discussing tonight is a fairy-tale subsidy—it is about fantasy land—whereas the others are real.
  Mr. Beith: Cash in hand.
  Mr. Skinner: Cash in hand, as the right hon. Gentleman says.
  The sad thing is that a great national asset is going down the pan. We are not talking about rebuilding a factory, which can be done in a short space of time. As you, Mr. Deputy Speaker, will know, having been born and bred in a mining community—like many hon. Members present tonight—when pits have gone, they have gone. Once the ground is made unstable by opencasting, there is nothing that can be done.
  Suppose that, in 25 years' time, an enlightened Government come along and say, "All the gas has gone and all the oil has gone. We ought to get back to coal, because we don't have enough windmills." Suppose that they have made an effort but there are still not enough —that they have not got up to 5 per cent., never mind 45 per cent., even though the commitment has appeared in 15 manifestos. They will have to turn back to coal. The trouble is that, once opencasting has taken place, they will not be able to do that.
  My guess is that that is part of the conspiracy referred to earlier in the debate. British Coal has got off pretty lightly in this argument. I am not averse to attacking the Government every day of the week—
  Mrs. Alice Mahon: You do.
  Mr. Skinner: And I do. But British Coal is part of the conspiracy. It wants a small privatised industry; make no mistake about it. It is in this business; it wants pits such as that referred to by the hon. Member for Stafford—and all the others to which my hon. Friends, referred—shut. It wants a tiny little group of pits so that it can get the 30 million tonnes at the power stations next year. It does not want much else and, what is more, it does not want any competition.
  The best way of achieving that end is to ensure that, before the year is out, the pits are closed. British Coal will then have a dozen or 15—the figure could even be as high as 20, although it will probably diminish if the Government stay in power much longer—of the best pits left. It will have a captive market, just like the gas market.
  It will make a bomb and Neil Clarke will he running it. That is why I challenged him in July 1992 when I went to Hobart house with my hon. Friends from the mining group. I asked every member of the board, "Will you have anything to do with privatisation?" Ken Moses jumped up and said, "Don't try and talk to me, Skinner. I won't touch it with a bargepole." Neil Clarke said, "Don't anyone else

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  answer that question," and took his members—the board —out of the room. He did not want to let the cat out of the bag.
  British Coal wants that small industry so that it can make profits—
  Mr. Cash: Does the hon. gentleman accept that rumours are circulating round the coal industry at the moment to the effect that, in respect of the prospectus—bearing in mind that the applications for licences have to be submitted by 16 July—there are two sets of figures? The amount of money that is expected to be forthcoming for the top end—for management—is one figure, but there is also a real figure at the bottom line, which they will accept.
  In other words, there is a serious question mark over the figures. The Minister has an obligation to tell us whether there are two sets of figures for those who want to acquire those mines. If the mines are to be privatised, some people could get in on the inside track, and it could be the management of the coal industry.
  Mr. Skinner: That is another question that the Minister must answer. I hope that the Minister has heard quite clearly that there is a Cash rumour going round that there are two sets of figures. Let me buy that theory for a moment or two, and ask the Minister to reply.
  The other sad thing is that we are talking about men's and women's lives. We are talking about communities that have been smashed asunder. There have been closures throughout my time as a Member of Parliament, and there were closures while I worked in the pits. I saw the pit close in which my father worked and in which I worked. I saw all that, so I do not want to hear, "You closed more than we did." In my view, hardly any of the pits should have closed anyway. Parkhouse colliery, where I worked, was shut and there was a lot of coal left. It was opencasted later, which proved the point.
  We are talking about miners who will not get arty jobs —no voluntary redundancy. Everybody in Lancashire has been told that there are three jobs at Point of Ayr. Everyone in Yorkshire and in the constituency of the hon. Member for Stafford (Mr. Cash) who says, "I do not want to leave the industry," is told that there are three jobs at Point of Ayr. It is like the subsidy—a confidence trick from beginning to end, because not everybody can take those three jobs at Point of Ayr in the north Wales coalfield.
  There will be a lot more casualties. The Government might be able to whisk them away on some other scheme, so that they do not show up as unemployed. They will use all the techniques of statistics to say they have not been added to the dole queue, but each hon. Member who represents a mining area knows that we can count them, because we know almost everybody who lives on every street.
  The sad thing is that, if we think about it, we come back to another subsidy, because, if 100,000 people lose their jobs in Britain today, it costs £900 million per annum. We are talking about a public sector borrowing requirement of £50 billion. At end end of the day, it is not about us, but about people out there in the communities; that is why the Minister has an obligation to answer all the questions and to tell us precisely how the subsidy will be paid.
  He was on the track once: he was going to tell us. My guess is that, by the end of the financial year, hardly any,
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  if any, of it will be paid. I know that one thing is certain: any more of this and a lot more people will be on the dole queue.
  11.46 pm
  Mr. Kevin Hughes: The Minister mentioned the subsidies. As other hon. Members have said, the subsidies are bogus; they are not going to happen. Who has had any money? How many extra bags of coal have the Government lifted a finger to try to sell? Not one. Who will qualify for any of the subsidy? My view is that nobody will qualify because they were never intended to qualify for it.
  Let me put my cards on the table. I was born and bred in a mining community and I still live in the heart of a mining community. Only the other week, the Minister and I had a debate on the Adjournment about the closure of Thorpe Marsh power station. He knows only too well my concern for the two pits in my constituency that will be affected. I should like to see some subsidy going to those two pits because they have lost a third of their market due to the closure of Thorpe Marsh power station and they are both under market testing. I should like to know, and I have never had a proper answer yet, where on earth those two collieries are to get a third of the market and stay in operation under this so-called market testing?
  We are debating a very serious issue. Unfortunately, some Conservative Members seem to think that it is funny and that it is an opportunity to score cheap party political points. It is not. It is a very serious issue. This afternoon, in my opinion, which I know is shared by some Labour Members, the Secretary of State for Employment, who led for the Government, made a disgraceful speech.
  Mr. Burns: Rubbish.
  Mr. Hughes: It is not rubbish. The Secretary of State spoke rubbish for almost an hour. He tried to make cheap political points for television sound bites. I tell the hon. Member for Chelmsford (Mr. Burns) that this is a very serious issue. Hundreds of thousands of people will lose their jobs because of his Government's lack of an energy policy. Pits will be closed, power stations are now closing, railway jobs, engineering jobs and steel workers' jobs will be lost. There is no end to the knock-on effect of closing a pit.
  My constituency has an unemployment rate of 14 per cent., which is not funny. Two more pits are likely to close; Thorpe Marsh power station will close. Some Conservative Member should tell those people in Doncaster where they are to find jobs. There simply are not any around, and communities are being torn apart.
  I have watched the hon. Member for Chelmsford all day. He has sat there smirking and pulling stupid faces. He should be out of a job, trying to live on the current rate of unemployment benefit: that would wipe the stupid smirk off his face.
  Doncaster has been promised development area status and an enterprise zone. The Minister and I have discussed the matter on many occasions; as he knows, I would like him to tell the people of Doncaster what their position is likely to be—and, more important, when the Government will put some money back into the community that they have systematically raped since 1979.
  I have been passed a note asking me to end my speech, so I will end it shortly. As the Minister knows, Doncaster

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  borough council has worked very well with local industry in trying to regenerate Doncaster; it has worked closely with the people there. It is doing all that it can to regenerate Doncaster and put some new jobs into it, but it cannot do that alone. It needs the subsidies, it needs the enterprise zone and it needs development area status.
  Mr. Cash: On a point of order, Mr. Deputy Speaker. At least three Opposition Members have spoken. I voted against the Government on this issue twice—
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Opposition Members have spoken because I have called them; most had been sitting in the Chamber all day. With great respect, the hon. Member for Stafford (Mr. Cash) arrived late for the debate, and his interventions have been too long.
  11.51 pm
  Mr. Martin O'Neill: In his introduction—if it can be called an introduction—the Minister made it clear that, following a recommendation from the Select Committee on 26 January and a White Paper on 25 March, the Government are still no nearer determining what they mean by "subsidies". They can give us no clear indication of the amount involved; it could be anything between £10 million and £120 million. The Minister could come back and ask for more if necessary. Some hon. Members have said that it will not be necessary, because there will be no market; I am not so pessimistic, which is partly why I do not wish to oppose the motion.
  I think that British Coal will eventually want to take advantage of the position, and that there will be sales later in the year. I do not think that the sales will be significant, or that they will keep many people in employment; but I think that there will be some sales, and I hope that the subsidy will be there to be taken advantage of.
  Our present difficulty is that we have a British Coal management led by one of the most supine chief executives most of us have ever encountered. He does not seem interested in driving any of his senior management to look for new markets; the organisation has never had to sell any of its output before, because there has been a guaranteed market for it. For a number of reasons, that market no longer remains in its previous form.
  One of the tragedies of the Clarke regime in British Coal is that the chairman has not been capable of devising a strategy to enable the organisation to seek new markets and develop products that those new markets could require, either here or elsewhere on the continent. I have sympathy with the suggestion that the regime is not interested in expanding the market because it envisages a Rothschild-type model which will be in the order of 12 to 14 collieries, capable of being privatised in a neat little package. We shall just have to wait and see; I am not sure whether it will happen but, like other hon. Members, I suspect that it will.
  It is clear that the Government will have to do a great deal more homework in the next two or three weeks if they are to be able to tell us the sums that will be made available and the nature of the subsidy. They have had the statistics for some considerable time. Information given to the Select Committee by the National Union of Mineworkers could act as an outline, and information about the price
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  per gigajoule of colliery output would be a starting point. The calorific content of the coal is another variable, but such matters are not great mysteries. The statistics are available to British Coal, and the energy section of the Department of Trade and Industry should have them.
  I suspect that one of the major problems is that the dilatory, indifferent, dithering approach which has characterised the regime at the DTI in the 14 months since the general election, still prevails in the important sphere of the Government's so-called energy strategy. After all these months, the Government are still not able to tell us what the sum should be—how much there will be for each power station and what it should be across the board. Until they are able to tell us, we shall be entitled to take the view that the subidy is a mirage. Until we have specific figures, we shall unfortunately have to accept the motion on the nod. If we did not, we should be frightened that the subsidy would be needed in the summer and the House would not be sitting to sanction it.
  11.56 pm
  Mr. Eggar: With the leave of the House, may I point out gently to Labour Members that in the previous debate we heard various accusations about the market being rigged against coal. The gist of their comments today has been, "We want a subsidy, we want it big and we want it clear." There seems to be a slight inconsistency—I put it no stronger than that—in those two positions. I set out the procedures in response to a written question from my hon. Friend the Member for Waveney (Mr. Porter) on 16 June, and hon. Members will no doubt benefit from reading it.
  In the time available, I shall try to pick up some of the issues that have been raised. The hon. Member for Hemsworth (Mr. Enright) mentioned specifically Grimethorpe and Houghton Main. I have taken careful note of what he said and, as a number of the issues involve British Coal, I shall ensure that British Coal also studies his remarks. I noted his comments about RECHAR. Of course, more than £200 million extra is going to the coalfields as a result of the decision in October, and we need to consider carefully how the hon. Gentleman's council and local community can access some of the funds.
  Mr. Cash: Will my hon. Friend the Minister give way?
  Mr. Eggar: I shall deal with my hon. Friend in a moment. I hope that he will forgive me for not giving way, but I am under a considerable time restraint.
  The right hon. Member for Berwick-upon-Tweed (Mr. Beith) advocated renewables; in fact, he did not advocate them but tried to explain why the Liberal manifesto contained a reference to windmills—he had not meant it but it was intended only for those windmill nuts who happened to read it. It is unfortunate that my hon. Friend the Member for Calder Valley (Sir D. Thompson) is not here, because he described windmills as great lavatory brushes in the sky and he would no doubt have had something to say about Liberal party policy. There is also an inconsistency in the right hon. Gentleman's remarks because he is against subsidies for the nuclear industry but in favour of large subsidies for the renewables industry.
  The hon. Members for Stoke-on-Trent, Central (Mr. Fisher) and for Bolsover (Mr. Skinner) made some specific points, and I undertake to ensure that my colleagues in the Department of Social Security examine them. For a moment there was an interplay between my hon. Friend

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  the Member for Stafford (Mr. Cash) and the hon. Member for Bolsover. Images crossed my mind of the hon. Member for Bolsover as a Minister, accompanied by his private secretary, my hon. Friend the Member for Stafford, whose love of detail the hon. Gentleman recognises. I am not sure whether my hon. Friend the Member for Stafford would go along with the hon. Member for Bolsover. I have an interesting letter from the hon. Member for Bolsover. It is written on behalf—
  It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER proceeded forthwith to put the Question, pursuant to Standing Order No. 14 ( Exempted business).
  Question agreed to.
  Resolved,
  That this I-louse authorises the Secretary of State to pay, or undertake to pay, by way of financial assistance under section 8 of the Industrial Development Act 1982, sums exceeding £10 million in total but not exceeding £120 million in total to support sales of coal produced from underground mines in the United Kingdom.

  Coal Industry (Restructuring Grants)
  11.59 pm
  The Minister for Energy (Mr. Tim Eggar): I beg to move,
  That the draft Coal Industry (Restructuring Grants) Order 1993, which was laid before this House on 24th June, be approved.
  The order has two purposes. First, it specifies the types of restructuring expenditure for which grant may be paid in the present financial year. These include costs of redundancy and early retirement, transfer allowances and retraining. They also include costs incurred by British Coal Enterprise Ltd., the subsidiary of British Coal which promotes new job opportunities in areas affected by pit closures. Secondly, the order sets at 90 per cent., as last year, the maximum percentage of restructuring costs which can be met by grant in the current financial year.
  Restructuring grant has proved to be an essential part of the Government's assistance to British Coal. The grant helps the industry to adapt to changing circumstances. The payments support generous redundancy terms for miners and staff losing jobs as a result of closures and efficiency improvements. They have also helped British Coal Enterprise Ltd. to create nearly 90,000 job opportunities and resettle and retrain some 32,000 people since 1984.
  I commend the order to the House.
  12 midnight
  Mr. William Cash: The Minister sought in his previous speech to make light of the fact that there are those who are profoundly concerned about the way in which this matter has been handled since last October. He made some trite and rather irrelevant comments about whether I might or might not be the Parliamentary Private Secretary to the hon. Member for Bolsover (Mr. Skinner).
  If the Minister really wants to be the butt end of the coal industry, he should make irrelevant remarks of that kind. They were trivial, pathetic and irrelevant. The Minister should understand the extent to which people in the coal industry and in my constituency are deeply concerned about what is happening.
  I hope that the Minister will take this on board because his trivial and pathetic comments do not merit the kind of absurd—
  Mr. Alan Duncan:—language that my hon. Friend is using.
  Mr. Cash: I am glad that the hon. Member for Rutland and Melton (Mr. Duncan) butts in to say that that is irrelevant. We have a serious problem in relation to the extent and range of problems facing the coal industry.
  We have a massive problem in terms of Government public expenditure. My right hon. Friend the Chief Secretary to the Treasury recognises that. I am not sure whether the Minister for Energy, or whatever he is called at the moment, really understands the nature of the problem, given that we are offering minimal support to people in my constituency, in contrast to the cost to central Government of £85 million in the first year of the closure of the Trentham pit and prospectively the closure of the Silverdale pit. That is offset by the Government's minimal response to the amount of money that those pits require to remain open.

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  I recall very well the Minister's response at a private meeting that we had last October, when he was incapable of answering the questions that we put to him, and the extremely insipid response that we have had since—[Interruption.] The Minister's Parliamentary Private Secretary, the hon. Member for Chelmsford (Mr. Burns), has used language that must be completely and utterly out of order in the House.
  The coal industry faces a serious problem and that has been completely overlooked in the response of the Minister and the Secretary of State today. We are facing a critical problem in relation to the energy policy of this country. [Interruption.] I am not interested in the rather trivial comments made by a Parliamentary Private Secretary, the hon. Member for Chelmsford, in this context. The reality is that we are faced with a serious problem in respect of the communities in the coalfields. They are people who have worked hard in those pits over a long period. We are offering them a minimal response against the background of the Coal Board itself offering them redundancy payments under duress. We are offering them a minimal response when there is no justification either for the closure of the Trentham pit or for the prospective closure of the Silverdale pit.
  I am very interested that the Minister should think that this matter is so funny, judging by the expression on his face. I cannot understand why we are so pathetic in our response to the arguments that have been put forward not by the Opposition but by reference to our own principles. Why is it that we do not give people access to the core contract? Why is it that we perpetuate a monopoly in the United Kingdom in respect of domestic coal policy?
  Why is it that, in respect of European Community interstate trade, we are prepared to allow the Germans to get £9 billion of subsidy for their coal industry when we are given, even excluding the nuclear subsidy, a mere £180 million, bearing in mind the effect that that has on our coal industry and the people who work in it, not to mention the knock-on effect? I am glad that we are giving some money, but my concern is simply that we are giving a minimal amount; we are not enabling those people to get off the ground again following the closure of the pits.
  Those of us who believe in Conservative policies are anti-monopoly, and we want a level playing field in the European Community. We do not want our coal miners to suffer and our pits to be closed down when the Trentham pit has 300 million tonnes of British coal. Will the Minister explain why we are closing down those pits and the Silverdale pit, if that is what will happen, when we have hundreds of years' worth of assets in hand? Why is that happening?
  I am interested that the hon. Member for Rutland and Melton should be so concerned to support the Government on this issue, when he knows that there is a serious problem in his area as well as in mine. I am very much in favour of the Government's policy with regard to a fair and reasonable energy policy in the European Community. What I am concerned about is that we have rolled over—we have accepted that the pits are to close, when elsewhere, in Germany and in France, pits are kept open.
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  I see the Parliamentary Private Secretary shaking his head again. He knows perfectly well that that is going on. The statistics exist. There is no way of getting away from that.
  I do not understand, and I should be grateful if the Minister would explain, why our pits are closing when there is a £9 billion subsidy paid and authorised by the European Commission to the German coal industry, so that our energy users are at a disadvantage compared with those elsewhere in the European Community. This is Conservative policy—this is Government policy—to make sure that we have a fair and level playing field in the European Community. Shutting our coal pits and ensuring that we do not have a reasonable opportunity to compete on a level playing field is a travesty of our policies. Will the Minister please reply to me tonight?
  12.8 am
  Mr. Eric Illsley: I want to speak about the redundancies that have taken place since October. I draw the attention of the Minister to the way in which workers at the collieries have been blackmailed into accepting redundancies, usually at short notice. It is not that they want to accept the specific amounts of money, but they have no option. They are faced with the loss of thousands of pounds and have no option but to accept the terms of the redundancies.
  Since 1983, every redundancy scheme introduced by British Coal was time limited. As we approached the end of that time limit, British Coal threatened workers at collieries due to close with the loss of top-up payments or redundancy payments if they did not agree to the closure. There was always the promise of an extra premium payment.
  A slightly different tactic has been used since October. Under the present scheme, British Coal offers all the workers at a specific colliery the same weekly wage on which their redundancy payment is based. In other words, all the workers are offered the same maximum £300, regardless of their weekly wage while they were working at the colliery. In that way, the redundancy payment is enhanced and is offered to the miners, who have no option but to accept it as the colliery has no future.
  The men who worked at the collieries that have closed are frightened and concerned about their future employment. In October, the decision to close the 31 pits was followed by the White Paper. The pits that were supposedly given a reprieve have been closed. There is so much uncertainty about the collieries that will be left open by British Coal that miners do not have any view of their future employment.
  There is no certainty about which collieries will remain open. We heard warnings tonight that we could be heading for the Rothschild report scenario, which means that only 14 collieries will be left open in a few years. Some 18 months ago, the British Association of Colliery Management forecast that the industry could be supported by only four collieries. That is a much worse scenario than the Rothschild report.
  Many of the miners who have been placed on the scrap heap as a result of the redundancies in the coal industry are in their early 30s. We are not talking about men who have worked in the industry most of their lives and who are now approaching an age at which they can make good use of redundancy payments in early retirement—we are talking

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  about young men aged 30, 31 and 32. I met one recently who was only 26 years old. Those men now face a future of no further employment. Many of them will never work again, because the work is simply not there.
  In my area, where the Grimethorpe and Houghton Main collieries have closed, the unemployment rate is 17 per cent. overall. There are certain wards with an unemployment rate of more than 20 per cent. and in some cases it is approaching 30 per cent. Male unemployment is especially bad. There are no job prospects in these areas. There is no prospect of quick inward investment to replace the jobs that are being lost, so we face all manner of problems in these areas as a result of the pit closures.
  Earlier, the Minister talked about British Coal Enterprise. Part of the order deals with grants to that organisation. He also talked about 85,000 job opportunities. That is all they were—job opportunities. They were not real jobs. In no way has British Coal Enterprise provided 85,000 miners with jobs. Job opportunities and actual jobs are two different things. We have repeatedly asked British Coal Enterprise, the Government and British Coal to tell us how many jobs have been created by British Coal Enterprise. The figure has never been made available to us. All the comments about British Coal Enterprise are a load of rubbish. No jobs—or very few, if any—have been created.
  When workshops were being closed, British Coal Enterprise paid the workers to form their own company. British Coal contracted out the work that they were doing as British Coal employees to a private company set up by the lads who accepted redundancy. That meant that employees at other British Coal workshops were competing with their former colleagues who had been encouraged to set up their own company and contract to British Coal. Obviously, because the contract was cheaper, since British Coal did not have to pay national insurance contributions and so on, the new company got all the work.
  The redundancies that have been made at collieries in the past year have been compulsory. There was no voluntary element. Transfer to other collieries is no longer an option because the distance between them is too great. In any case, other collieries have no jobs to offer redundant miners. Those men are offered no choice, no transfer, no future, no alternative.
  British Coal workshops have also been subject to closure, in particular Ashington and Shafton. The employees at the other workshops, Bestwoocl and Tursdale, are mainly members of the Union of Democratic Mineworkers and—surprise, surprise—they have been provided with work at the expense of the employees at the other workshops. The work force at those UDM workshops were recently cock-a-hoop about contracts that they were set to win through a company called Vista UDM. Some of the collieries in Nottinghamshire are to be turned into recycling plants and those workshops are to have the contracts for their refurbishment and maintenance. Again, that will be done at the expense of the other workshops at Shafton and Ashington.
  Since November, the work done at Shafton, and presumably at Ashington, has been run down. Men have gone to work every day to find none available. Those workshops are starved of work and are obviously making a loss, so it was easy for the management to decide last
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  week that they should be shut. The work force were given just a couple of days to decide whether they should accept redundancy and closure, or fight the decision.
  Those workers were not offered the same redundancy payments on a maximum of £300 a week as those offered to the employees at the collieries. You, Mr. Deputy Speaker, will know as well as anyone that surface workers earn less than face workers. At the collieries, however, surface workers were given redundancy payments based on a weekly maximum wage of £300—the same as that available to face workers. The work force of the workshops, however, who are on an equivalent grade to that of surface workers, have been denied equal redundancy payments. They have had to settle for lower payments.
  The employees at the workshops are being made compulsorily redundant. The only transfer made was that of a team from the Shafton workshop, working on electrical equipment, who went to Bestwood. They set up their own company and were allowed to contract to British Coal, which is now buying from a private company the same work that it bought a few days earlier from its own work force at Shafton. Problems have arisen because the lads now see their former colleagues being kept in work at other workshops and encouraged to form private companies.
  The men are offered no choice of transferring because of the distances involved between Shafton, Bestwood and Ashington and because no jobs are available at those workshops.
  Shafton also has a problem because its apprentices—there are about nine of them—either have to maintain their apprenticeships by travelling 50 miles to work in Nottinghamshire, or give up their indentures and pack in. That is a difficult choice. Why can they not be found work at other collieries instead of being forced to transfer to another workshop to continue their training?
  The Government's decision to close the industry is dictated by pure recklessness and arrogance. I agree with the hon. Member for Stafford (Mr. Cash). The abuse to which he was subjected from fellow Conservative Back Benchers, when he was only making honest comments and sticking up for his constituents, was disgraceful. The Government pay no regard to miners, their families or their communities. They are to be destroyed by an arrogant Government in revenge for what happened in 1974. Everything can be traced back to the Heath Government, which the National Union of Mineworkers was blamed for bringing down in 1974.
  I should like to refer briefly to the mineworkers' pension scheme. There is much anger at the way in which British Coal has taken pension holidays. It is feared that the Government, as in the case of other pension schemes, will take this one over and seize its assets, which are worth about £14 billion, for the purpose of helping to deal with the public sector borrowing requirement, and will then pay pensions as they fall due. There is also a great deal of anger with regard to the managers' superannuation scheme. About £400 million is earmarked to pay for redundancies. People in management grades have come to my surgeries to say how incensed they are, not only at being made redundant but at the fact that their pension fund is to be used to provide the funds. Those people are worried about pension provision. The Government ought to reconsider their position. Pension schemes should be untouched, and redundancies paid for by other means.
  12.21 am
  Mr. Harry Barnes: In the case of Markham pit, which has just been closed, some workers were told that they could have jobs in the north-east of England, provided that they were prepared to go without transfer arrangements or any financial provision, and either find accommodation or travel daily from Derbyshire. That was an impossible situation, yet the redundancy was interpreted as being voluntary rather than compulsory.
  My hon. Friend the Member for Bolsover (Mr. Skinner) revealed that he had worked in the Parkhouse pit at Clay Cross, which was closed in 1962. Since that time, there has not been an operational pit in the immediate vicinity of Clay Cross, but many local people work in surrounding pits, which have become known as cosmopolitan pits. People travel to Bolsover, Shirebrook and Markham. Now that those collieries have been hit, there is a problem.
  I should like to quote from a report issued by social services officers in Derbyshire. Referring to the situation in Danesmoor—an area of Clay Cross not far from the home of my hon. Friend the Member for Bolsover—the report quotes a shopkeeper and comments:
  "'We sell disposable nappies in ones, as we do eggs. We also sell coal in bags. It is an expensive way of shopping but people cannot afford to buy in bulk.' This reveals the nonsense of unsold coal stocks whose sale could be subsidised to meet people's needs.
  The shopkeeper goes on to say: 'the only fresh meat we sell is sausages.
  Children often shop for their parents when they come home from school. Their meals appear to consist of potatoes, baked beans and eggs.'
  Concluding, he said: 'I like the people around here. They are friendly, honest and straight. Most of them are struggling against poverty.'".
  What we are talking about is the removal of jobs and opportunities and the consequent increase in deprivation. There is such deprivation throughout my constituency and the constituency of Bolsover, and nothing is being done to deal with it. Certainly British Coal Enterprise, which talks about job opportunities but not about jobs, is doing nothing. We cannot find out what jobs are supposed to be being provided in Derbyshire, North-East, in Chesterfield, in Bolsover or in any other constituency affected by the current closure programme.
  12.24 am
  Mr. Martin O'Neill: In some respects, this debate is more specific than the previous one, as it deals with various expenditure covered by the order and covers redundancy and early retirement. Several hon. Members have already spoken of the problems of poverty and uncertainty, which are the hallmark of this post-industrial society.
  Many people receive money that they think that they can use for specific purposes like paying off their mortgage, but they find that the social security regulations prevent them from doing so. Others find that, before they even reach that position, they must choose to end their employment if they are to get a reasonable sum in the form of a redundancy payment.
  The first point that I wish to make relates not to the social security regulations, to which my hon. Friend the Member for Bolsover (Mr. Skinner) referred in the previous debate, but to the redundancy payment scheme.
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  It would appear that a number of collieries may run into difficulties of some kind. Whenever there is a problem in a coalfield, we come across what has become known as the "moveable fault syndrome". A fault appears out of nowhere and is of such complexity that the colliery manager cannot guarantee that the workers will be able to go through that fault quickly. He therefore suggests that, for geological reasons, the colliery must close. No sooner does it close than a similar fault emerges in a neighbouring colliery and similar problems then arise.
  I am sure that you, Mr. Deputy Speaker, know from your experience in the coal industry that it creates considerable cynicism within the work force in the area when, conveniently, another geological problem appears just when British Coal no longer requires the services of a particular coalfield or colliery, for whatever reason.
  If we are to remove the gun of redundancy payments from miners' heads, and if they are to be allowed an opportunity to work through the geological faults that can arise, it would seem reasonable that the 31 December deadline for the expiry of the enhanced redundancy scheme be extended well into next year. If we are serious about the future of the 12 collieries, it is only reasonable that the men who work in them be granted an extension of the redundancy payment scheme.
  My hon. Friend the Member for Deryshire, North-East (Mr. Barnes) has already discussed the problem of changes of work and place of employment. We have all heard stories about miners' difficulties with payment of money that would enable them to move from one colliery to another. If the Minister cannot answer this point tonight, it would be helpful if he could write to us. We realise that he is concerned with a number of matters, but when we discuss such matters of detail it is distressing that he often seems to be unaware of issues that are significant to those most directly affected by the Government's policies.
  Assistance for removal expenses was one of the hallmarks of redundancies in the 1960s and 1970s. The fact that money was available for such purposes at that time is one of the reasons why the transfer of labour in the coal industry was achieved comparatively painlessly. It is not available now and, in some respects, the need is even more desperate than it was then.
  Mr. Thomas Graham: In my constituency, staff of the Royal Ordnance factory who took redundancy have now waited more than six months to receive unemployment benefit. Some of the miners were forced into taking redundancy payment. It is often months before some of the folk receive the unemployment benefit to which they are entitled.
  Mr. O'Neill: My hon. Friend makes a valid point. The only difficulty is that the Minister will immediately try to side step the issue on the ground that it is not his Department's concern. However, his Department is responsible for the fact that if, when people go for unemployment benefit or income support, the officials at the local office refuse to grant it, considerable time elapses before the appeals procedures are set in motion. In that time, considerable suffering and difficulty arise.
  One issue which has already been mentioned by my hon. Friend the Member for Barnsley, Central (Mr. Illsley) merits closer consideration, and this is the appropriate debate in which to discuss it—I refer to early retirement and the handling of British Coal's staff superannuation

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  scheme. The subject is causing considerable disquiet to people who work in the coal industry and to beneficiaries of the scheme.
  At present, there is a dispute involving £481 million, a debt owed to the scheme which is regarded in the scheme's books as an asset. At least 90 per cent. of the money should have been repaid by the government through social cost grants such as we are discussing. If the grant had been paid, the staff's superannuation fund would have been that much higher.
  As I understand it, under Government pressure, British Coal is seeking to offset the £481 million against its share of the £1 billion surplus provided under the scheme's rules. British Coal is currently enjoying a normal contributions holiday to its staff fund until April 1997. It no longer pays normal contributions to the scheme. Despite that, British Coal has the ultimate power to decide the rules on how the scheme's surpluses are to be distributed. That raises the question of who should control the pension fund assets and who should have the power to decide how the surpluses are used.
  Following the scheme's draft actuarial valuation, the trustees proposed that British Coal should run down its share of the surplus by extending its normal contributions holiday after 1997. However, British Coal would prefer to use its share of the surplus by withholding its stage payments to the scheme for early pensions—effectively enjoying a holiday from additional contributions. Not content with an extended holiday from normal contributions, British Coal is seeking a quicker method of benefiting from the surplus.
  The trustees argue that British Coal's proposals would be in breach of the scheme's rules. While they do not question British Coal's right to a share of the surplus, they dispute the way in which British Coal may use its share of the surplus. They claim that while British Coal is allowed to realise its share of the surplus through a holiday, from either normal or deficiency contributions, it is not allowed to take it in the form of a holiday from additional contributions, which should be regarded as a debt owed to the scheme and, therefore, scheme assets. The trustees and British Coal have sought joint clarification in the High Court on the legality of British Coal's proposals. The trustees are unanimous in their opposition to British Coal's proposals to cancel their debt to the fund and in their support for legal action.
  I made that point in detail because it is important—two factors have emerged. Almost uniquely, British Coal is successfully uniting all the pension fund trustees in opposing its move to use the funds in a way that the trustees consider inappropriate. The trustees believe that the practical effect would be to disadvantage scheme members by realising British Coal's share of the pension fund surplus sooner rather than later. British Coal's proposal would be detrimental to the staff fund in cash flow terms. The Government are in effect trying to pay for past redundancies at the expense of British Coal pensioners. Pension fund assets should not be used to meet a social cost.
  In addition, it might be more prudent of British Coal to wait before realising its share of the surplus. If the value of investment falls, pension fund surpluses can quickly turn into deficits. Moreover, British Coal's pension scheme is characterised by a shrinking work force and an increasing number of beneficiaries. It is important for that point to be on the record. There has been a lot of talk and many
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  questions on the subject, but this is the first opportunity to raise it properly. The fact that you, Mr. Deputy Speaker, have not interrupted me suggests that it is also in order to discuss that matter.
  Many hon. Members have elderly constituents who are extremely worried about their pension arrangements and their poll tax and council tax bills. The active and alert elderly in particular seek clarification. They are extremely annoyed at what they see as a Government-inspired attempt to take prematurely from the pension fund something to which the Government are not entitled at this stage.
  In discussions about retraining and re-employment, reference has been made to British Coal Enterprises, which has made a number of extravagant claims that do not bear close scrutiny. A report published jointly by the Coalfield Communities Campaign and Wakefield and Barnsley councils of miners examined a BCE claim that, in the year ended 31 March 1992, 67,347 opportunities were created; business funding was provided for 3,300 projects, with the expectation that they would create 39,000 jobs; 11,200 jobs were created through managed work spaces; and the employment advisory service created opportunities for 25,000 people.
  Much of that work was not the sole responsibility of British Coal Enterprises. In a number of instances, money was made available and BCE merely provided top-up funding. Some businesses relocated in areas in which British Coal Enterprises was operating, and in effect moved in jobs from elsewhere. One characteristic of small businesses is that they have a higher failure rate than larger businesses and the employment that they offer can be regarded as non-permanent. Some 90 per cent. of the jobs available are in that category.
  As to placements, in a study of 284 people, 52 were in continuous employment for 18 months, whereas 232 were out of work for an average of 18 months. Ten per cent. of those who got work had a fall in take-home pay of between £70 and £100 a week. Only those who returned to the coal industry to be employed by contractors carrying out additional work received higher pay than previously.
  I am trying to qualify the praise for British Coal Enterprise. Some of us have in our constituencies projects that have benefited from the largesse and support of British Coal Enterprise. However, we are not blind to the fact that some of the funded schemes have considerable limitations. Not all the jobs go to people who have worked in the coal industry, because some of those who are employed are in business in coal mining areas. The Opposition are prepared to give a fair wind to the grants, but we have some reservations about the way in which money has been spent.
  In a contracting industry that is under considerable strain, we must look at one other issue—the position of the social welfare organisation that will also be funded under these arrangements. The Coal Industry Social Welfare Organisation has a budget of more than £2 million and consists of a plethora of organisations. There is much nervousness throughout CISWO about the prospect of coal privatisation. It is feared that the trusts could be severely threatened by some kind of catch-all legislation.
  This may be the last coal debate before the presentation of privatisation measures. Whether they will be passed is open to question, but there is no questioning the fact that there is considerable anxiety within CISWO about the Government's intentions towards the organisation's

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  unique place in the industry. I say unique, because CISWO continues to enjoy the unalloyed support of British Coal management, and probably no other part of the industry enjoys such strong backing. A clearer indication of the Government's support for that important organisation would be helpful. I appreciate that the hour is late and that the Minister may not have the necessary information to hand. If he cannot reply to that in the debate, perhaps he will write to me.
  The Coal Industry Social Welfare Organisation is not a peripheral body. We have heard much in the debate, not least from the hon. Member for Stafford (Mr. Cash), about the importance of retaining and sustaining coalfield communities. There are in those communities many elderly people and others who suffer from serious illness as a consequence of service to the coal industry. Those people depend in a variety of ways on the activities of CISWO, and I shall give a few examples. Some 1,280 seriously disabled mineworkers are assisted with holidays, 218 seriously disabled people are provided with specific household items to improve the quality of life, and 2,333 seriously disabled people are provided with assistance for days out and the like.
  Facilities are made available to such people under grants through measures such as those that we are considering. It is important to hear about the Government's intentions for that organisation. I hope that at some stage the Government will tell us about the other issues that have been raised in the debate, such as redundancy and early retirement, changes of work and places of employment, retraining and new employment. If we receive assurances on those matters, we will not object to the order.
  12.44 am
  Mr. Eggar: With the leave of the House, Mr. Deputy Speaker. I am sorry that the hon. Member for Bolsover (Mr. Skinner) has left us, because I had intended to draw attention—[Interruption.] The hon. Member for Renfrew, West and Inverclyde (Mr. Graham) can pretend that he is the hon. Member for Bolsover, although he does not look exactly the same. The trousers of the hon. Member for Bolsover stay up rather more easily than his. I had intended to draw the attention of the House to a rather curious fact.
  The hon. Member for Bolsover is well known as an opponent of the European Community, so I was surprised to receive in my post the other day a letter from him that covered a letter from Mr. Arthur Scargill of the National Union of Mineworkers. The House may be interested to know that the hon. Member for Bolsover has apparently thrown aside all his views on the EC. He asked me, on behalf of the Government, to ensure that the NUM got funding from the European Community as part of the attempt to introduce redundancy payments because of the contraction of the NUM. It seems that that was a classic clash of the hon. Gentleman's principles. On the one hand, there is his allegiance to the union, about which we all know, and, on the other, there is his concern about the EC.
  If I had got to that point, I might have been able to prevent the slight lapse of humour of my hon. Friend the Member for Stafford (Mr. Cash). If my hon. Friend re-reads his speech tomorrow morning, or the day after, he
  156
  may reflect on whether using the tone and language that he chose to use this evening was really the best way in which to persuade his colleagues in the Government to see his point of view.
  Perhaps I was too generous to my hon. Friend in accepting the praise heaped on him by the hon. Member for Bolsover, who claimed that my hon. Friend had a grasp of detail. I do not think that my hon. Friend's contribution tonight could entirely be said to portray accurately his grasp of detail. Indeed, some might say that the speech was somewhat incoherent, somewhat contradictory and somewhat ill-informed. Some might even say that his speech betrayed ignorance of what had been going on at the Trentham pit, whose interests he claims to have furthered in recent weeks.
  My hon. Friend appears to be unaware of the fact that my right hon. Friend the Minister for Industry met other hon. Members who have interests in the Trentham pit and that, subsequent to that meeting, they accepted that my right hon. Friend had made a number of important announcements that benefited the area, such as the announcement of £7 million for English Estates, £7 million via Staffordshire training and enterprise council for a package of employment-related measures and £800,000 from the coalfield area fund. Hon. Members representing Stoke-on-Trent and elsewhere accepted that the Government had responded. I am sorry that my hon. Friend did not feel able to be as generous as other hon. Members.
  Mr. Cash: Will my hon. Friend give way?
  Mr. Eggar: If my hon. Friend will forgive me, I shall get on. With regard to the points made by the hon. Member for Barnsley, Central (Mr. Illsley) and, indeed, supported—
  Sir Teddy Taylor: Will my hon. Friend give way?
  Mr. Eggar: With great respect to my hon. Friend, I do not think that he was in the House during the debate. Let me deal with the points that have been raised during the debate.
  Sir Teddy Taylor: My hon. Friend has said that the hon. Member for Bolsover (Mr. Skinner) wrote and asked him whether he could have EC funding to help the administration of the NUM. If my hon. Friend raises such questions, he should tell us what he said. Did he say yes or no? That is a simple question.
  Mr. Eggar: I have already said in answer to a similar letter from Mr. Arthur Scargill that the Government cannot respond positively to the request from the NUM. I am not sure that I have replied to the hon. Member for Bolsover yet, but I have certainly replied in terms to other hon. Members.
  Sir Teddy Taylor: Tell us, then.
  Mr. Eggar: Of course. I am delighted that my hon. Friend has been able to draw that information out of me. I had not realised that he was so interested in the answer.
  The hon. Member for Barnsley, Central raised the question of British Coal Enterprise. If I may say so, I think that the hon. Member for Clackmannan (Mr. O'Neill) raised it in a rather more balanced way. I must say to the hon. Member for Barnsley, Central that, if British Coal

  157
  Enterprise did not exist, he and others would be clamouring for the existence of such an organisation. BCE has made an important contribution to the coalfielcl areas.
  The hon. Member for Derbyshire, North-East (Mr. Barnes) made a number of points. I will, as suggested, study the record and ensure that my hon. Friends study what has been said and respond to him. I will also pick up other points in writing.
  The hon. Member for Clackmannan spoke about the Coal Industry Socal Welfare Organisation, which is being considered in the context of the privatisation Bill. The hon. Gentleman also raised matters relating to the staff superannuation scheme—typically, in a rather more balanced way than the hon. Member for Livingston (Mr. Cook) did at Easter, when he caused a great deal of unnecessary concern among pensioners.
  The application of British Coal's share of the surplus in the staff superannuation scheme is a matter for the corporation. British Coal is right to consider the position of the taxpayer, who is making large contributions to a fund that is heavily in surplus. The corporation will not, of course, proceed further before it has the decision of the High Court. I again repeat that there is no question of the Government taking money from the staff scheme—or, indeed, from any other British Coal pension fund. Staff scheme pensions are not at risk; on the contrary, the beneficiaries' share of the surplus will be used to fund improvements to members' benefits. I am sure that you, Mr. Deputy Speaker, will be particularly interested in that assurance.
  This useful debate has enabled us to air a number of concerns. I repeat that I shall respond in due course to any points that I have missed.
  Question put and agreed to.
  Resolved,
  That the draft Coal Industry (Restructuring Grants) Order 1993, which was laid before this House on 24th June, be approved.

  European Community Documents
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With permission, I shall put together the motions relating to European Community documents.
  Motion made, and Question put forthwith pursuant to Standing Order No. 102(9) ( European Standing Committees).

  FOODSTUFFS (COLOURING)
  That this House takes note of European Community Documents Nos. 4116/92 and 6227/93, relating to colouring in foodstuffs; and supports the Government's intention of negotiating provisions which ensure the safe use of colours in food whilst permitting the continued availability of United Kingdom products in the form in which United Kingdom consumers wish to buy them.

  STRUCTURAL FUNDS
  That this House takes note of European Community Documents Nos. COM(92) 84, 9973/92, 5456/93 and 6006/93,
  158
  relating to Structural Funds; and endorses the Government's approach towards the negotiations on the review of Structural Funds regulations.—[Mr. Arbuthnot.]
  Question agreed to.

  Statutory Instruments, &c.
  Mr. Deputy 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(5) (Standing Committees on Statutory Instruments, &c.).

  CHANNEL TUNNEL
  That the draft Channel Tunnel (International Arrangements) Order 1993, which was laid before this House on 24th May, be approved.
  CIVIL DEFENCE (SCOTLAND)
  That the draft Civil Defence (General Local Authority Functions) (Scotland) Regulations 1993, which were laid before this House on 20th May, be approved.
  DRUG TRAFFICKING PROCEEDS (SCOTLAND)
  That the draft Confiscation of the Proceeds of Drug Trafficking (Designated Countries and Territories) (Scotland) Amendment Order 1993, which was laid before this House on 27th May, be approved.

  OVERSEAS FORFEITURE ORDERS (SCOTLAND)
  That the draft Criminal Justice (International Cooperation) Act 1990 (Enforcement of Overseas Forfeiture Orders) (Scotland) Amendment Order 1993, which was laid before this House on 27th May, be approved.—[Mr. Arbuthnot.]
  Question agreed to.

  AGRICULTURE
  Ordered,
  That Mrs. Angela Browning be discharged from the Agriculture Committee and Mr. Andrew Hunter be added to the Committee.—.[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

  EDUCATION
  Ordered,
  That Mrs. Angela Knight be discharged from the Education Committee and Mr. David Lidington be added to the Committee.—[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

  HEALTH
  Ordered,
  That Mr. Michael Trend be discharged from the Health Committee and Mr. John Whittingdale be added to the Committee.—[Sir Fegrus Montgomery, on behalf of the Committee of Selection.]

  TRANSPORT
  Ordered,
  That Mr. Nigel Evans be discharged from the Transport Committee and Mr. Peter Luff be added to the Committee. —[Sir Fergus Montgomery, on behalf of the Committee of Selection.]

  Castle Point Borough Council (Capping)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Arbuthnot.]
  12.53 am
  Dr. Robert Spink: I am pleased to have the opportunity tonight to explain the capping of Castle Point borough council. I read in my local paper, the Yellow Advertiser, last week that a Conservative councillor is angry because I have not felt able to back the council "to the hilt" on its past financial management. But like my predecessor, Lord Braine of Wheatley, I will always put my constituents' interests and simple justice first and foremost, rather than blindly supporting a council or any other body.
  I understand the councillor's frustration, but I am more concerned about the sense of frustration of all my constituents, especially those who find it difficult to meet a high council tax bill and those who previously relied on or benefited from non-statutory services. That frustration is exacerbated by the fact that the council had built itself a reputation for providing high-quality services at a low cost to the local community.
  Hon. Members will note that Castle Point is not a profligate council. Councillors have not wilfully overspent, disregarded Government policy or flagrantly embraced hare-brained spending schemes. The problem arose from previous years' errors in budgeting and accounting irregularities, which led to an extraordinary deficit of £2·3 million and which must be corrected in the current year. That is the reason for the council's high budget this year and for the Government capping it.
  I should like to set out the facts in three broad sections, because my constituents have a right to know the facts: first, exactly how the deficit arose and what happened to the £2·3 million; secondly, what action the council and the Government have taken to alleviate the problems caused by the deficit; and thirdly what action the council is now taking to ensure that such a problem cannot recur.
  I must set the record straight, since politically active groups and individuals in my constituency have been misrepresenting the situation and scaremongering among vulnerable people, who are rightly concerned. The £2·3 million deficit arises largely from incorrect budgeting for interest payable and receivable. The sums amounted to £793,000 in 1991–92 and £980,000 in 1992–93. In addition, other errors in budgeting and in controlling budgets occurred. The main items were an income shortfall of £260,000 for planning and land charges, a £140,000 shortfall on housing account advances and £90,000 depletion of capital plan—the inability to capitalise salaries.
  Those sums and a multiplicity of lesser variations make up the total deficit of £2·3 million. The money has not been stolen; it has not gone missing, or even been lost. It was spent on services in Castle Point—services to the people and the community of Castle Point. It was money spent over and above the amount that was collected by the council.
  So who is responsible for this problem? To make errors in budgeting is not, to coin a phrase, a hanging offence. It is usual for budgets to show variances in outturns. Budgets are simply financial plans and need to be managed like any other plans. I do not unduly blame the former finance
  160
  director for those errors, but he must carry some blame for his failure to manage the budget variances and for failing to report them to senior colleagues or to councillors.
  He must, however, carry the whole blame for hiding those deficits by using irregular and improper accounting practices over a long period. The council's auditors, Ernst and Young, and the independent financial consultants, Binder Hamlyn, concluded that there were accounting irregularities. On 5 November 1992, external auditors informed the chief executive of the council that an illegal transfer of funds between accounts had taken place and that this was the responsibility of the former finance director, who as late as last October had still failed fully to advise the council of its financial position.
  A chronological report giving the precise timings of the various events was provided and published in full by the chief executive at the council meeting of 14 June, so I shall not trawl through those facts now.
  Councillors are fully accountable, but they did not know of the deficit in time to act to prevent it from accruing. All fair-minded people will acknowledge that councillors could hardly act to resolve the situation when they simply could not have been aware of it, since they were misled by the information given by the former finance director, which they accepted in good faith and had no reason to disbelieve—until of course, the auditor drew attention to the problems.
  Nevertheless, councils must and do fully accept their accountability. The former finance director was retired on health grounds at the end of last year. I regret that: I believe that he should have been suspended, and subsequently forced to explain his actions following the final investigations of the auditors and accountants.
  It is not my job to defend the council; my responsibility is to defend my constituents, and in particular to ensure that they have an accurate account of what has happened. I therefore called on the council to publish the definitive Binder Hamlyn report. I am pleased to say that the report was indeed published, in full. I welcome the spirit of openness adopted by the council.
  On 9 June, the hon. Member for Thurrock (Mr. Mackinlay) said that the capping of Castle Point council was
  "the fault of the treasurer."
  Like me, he said that we should have a full disclosure.
  "if something is wrong at Castle Point".—[Official Report, 9 June 1993: Vol. 226, c. 397.]
  I trust that Castle Point's openness, and my statement tonight, will help to bring about a full and frank disclosure.
  The hon. Member for Thurrock went on to say that he looked forward to hearing from me on the subject; but, curiously, he prevented me from explaining by using up much of the time available in the capping debate. I am sure that you recall the incident, Mr. Deputy Speaker. That is why I am here tonight: I thank you for the opportunity.
  I note that the hon. Member for Thurrock has not cared to join us tonight. That is a great shame, because he has not been able to listen to my account. Such curiously paradoxical behaviour is not at all unusual in the hon. Gentleman. For instance, he aspires to be the sole socialist spokesman for all Essex, yet he has not seen fit to move his family home there. Is Essex not good enough for the hon. Gentleman? Does he not like Thurrock? Does he expect his tenure to be very temporary? I guess so—but I digress.

  161
  What has the council done to resolve the £2·3 million deficit, as it must in this year's budget? It made difficult decisions to raise more income: for instance, it doubled some car parking charges. It has also dramatically reduced costs and spending—for example, by imposing a moratorium on some discretionary expenditure, such as support for the welfare minibus scheme. The scheme, however, was eventually saved, and is still running.
  The maintenance of public toilets was cut, as was the senior citizens' concession. Indeed, it could be said that the council cut everything except the grass. I am pleased to report, however, that so fierce was the public outcry in Castle Point that the council has now resumed a limited grass-cutting programme. My constituents are grateful for that.
  The council also reduced staff numbers, and cut salaries across the board—from cleaner to chief executive—by 6 per cent. The councillors reduced their statutory attendance allowances by 6 per cent. Those decisions were made more difficult because Castle Point council, unlike more profligate and unwise councils, has always run a tight ship. There were no easy schemes to be cut, as there were at Harlow, for instance; there were no pots of unused reserves on which to fall back.
  The councillors were not at all happy to make such decisions, but in truth they had little choice. They worked hard to alleviate the problem: for instance, on the welfare minibus, individual councillors gave tens and even hundreds of pounds of their own money, and with the help of the whole community they kept the service running.
  I am heartened by the magnificent community spirit that has surfaced. Churches, charities and many local organisations responded to my call to help to support the welfare minibuses until normality returns next year. No one has done more than the previous and present mayors of Castle Point, Councillors Bill Dick and Betty Wood, who have led the way and, like many of their fellow councillors, have shown great honour, caring and dignity in a difficult time.
  After the first programme of action, the council was able to set a budget of £8,470,300. The Government imposed a spending limit of £7,970,000, so the council had to look again in order to close the gap of £500,300 which was effectively imposed by the capping. I said at the time that the adjustment could be achieved without further major cuts in staff or services, and that the Government had got it about right. Events have shown that to be the case. Indeed, as I said earlier, the grass-cutting programme increased by about £10,000 after the capping.
  The £500,000 capping reduction, the £60,000 cost of re-billing, and various other adjustments, have all been met by the council, and the new budget falls some £12,400 below the Government's capping level. Meeting the cap has been achieved by three key actions on the council's part. First, the Minister allowed the council to capitalise previous years' redundancy costs from this year's assets disposal which, in all, will save abut £250,000 in the current year.
  Secondly, the council's bankers have rescheduled the councils finances, which will save about £185,000 in the current year. Thirdly, the balance of funds needed was found from many budget income and expenditure adjustments. For example, there is a saving on the homelessness budget as the number of bed-and-breakfast families in Castle Point has fallen from 36 at the turn of the year, which was unacceptable, to zero today.
  162
  That is a welcome and worthy achievement by the councillors and the council's officers. In particular, it is the result of the personal drive and dedication of Councillor Malcolm Hume, the chairman of the housing committee. Today, we have a balanced budget. That is why I supported, and was right to support, the Government's capping order.
  On behalf of the council's chief executive, Mr. Barry Rollinson, I must pay tribute to Department of the Environment Ministers and officers, who have been tough but fair. They have listened carefully, and been as helpful as they possibly could. They helped by fixing the standard spending assessment in the first place, by giving directions and relaxations when they could, and in the careful setting of the capping level, which, as has been proved, was correct.
  I deal now with the action being taken by the council to prevent such a problem from recurring. I assure the House that the council has implemented, and is implementing, every recommendation in the auditors' report. That includes the commissioning of the independent financial consultants Binder Hamlyn, who specialise in local government finance.
  The council has rigorously followed the Binder Hamlyn recommendations. New procedures, structures and new and clearer routes of accountability are being implemented and, invigorated by the success of its fundamental short-term review, the council is embarking on a fundamental longer-term review, a further efficiency programme.
  That review will consider the large-scale voluntary transfer of council housing to a housing association which will have a great tenant-friendly credentials. I welcome that move very warmly, as it will be of great benefit to the tenants in my constituency. It will give them greater protection and greater control of their situations. I believe that it will also bring lower rents in the longer term.
  That review will also consider the contracting out of some financial and accounting functions to a specialised organisation. You will understand, Mr. Deputy Speaker, when I say that I welcome that initiative. The review will also involve a more purposeful market testing of all the council's services, and improved utilisation of all the council's facilities, buildings and assets.
  That said, there are still problems to be resolved. I have particularly stressed to the council the need for a more reasonable budgeted collection rate. The council should achieve 97 per cent.—as most will. However, a rate of only 90 per cent. has been set. That has put bills up and rendered transitional relief less effective, and has denied my constituents some of the protections that they should have enjoyed against the increased tax demand. That will result in an over-collection on budget and a surplus in the collection fund. However, that surplus cannot be legally used in the current year.
  The surplus does not, and never will, belong to the council. It belongs to my constituents, and it must be returned to them in the following year, by holding their next year's council tax bill even lower than it otherwise would be. The money must not be spent on services or salaries or put into reserves.
  Hon. Members will already have calculated that, without the extraordinary deficit of £2·3 million, the council's spending this year would not be the Government-set level of £7·9 million; it would have been only £5·6 million. The calculation is easy: £7·9 million less the £2·3

  163
  million deficit that must be met this year leaves £5·6 million only that is being spent on services. I want that low level of spending on services projected into coming years. That extremely low level applied five years ago, and it is a starting point for next year's council tax.
  I want to see the greater part of the savings from next year's low spending level passed on to the council taxpayer in lower bills. There should be no general reinstatements of this year's efficiency savings. We have gained them and we must keep those gains. The minor increases necessary in next year's budget that are needed to remove the moratorium on small discretionary items such as the £19 pensioner concessions must come from the longer-term further efficiency programme that I outlined a moment ago.
  My hon. Friend the Minister is aware that the process has been difficult for all involved, and especially for my constituents in Castle Point. However, Castle Point council can, and I trust will, emerge more professional and stronger in future years. If it does that, Castle Point will become an excellent model of an enabling authority, providing a high quality and high level of services, at low cost to the council taxpayers. In any event, I should like to express my deep concern about what has happened. I fully understand and share my constituents' sense of frustration.
  However, before I finish, I must warn each council taxpayer to continue to pay their current bills in full. New bills will be sent to them with the lower charges following the capping; they will receive them in August or September. Anyone who attempts to delay payment by waiting for those later bills will be under the most severe risk of legal action, with all the additional costs that that legal action will bring on them. I will have no means to protect them from that. I regret having to give that rather negative message, but it is my responsibility to defend my constituents in every possible way.
  1.14 am
  The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry): I congratulate my hon. Friend the Member for Castle Point (Dr. Spink) on having set out the issues so clearly. I thank him for the positive and constructive way in which he has approached the issue. It is always difficult to have a local authority in one's own constituency capped. It understandably raises a large number of concerns, and my hon. Friend has dealt with them admirably.
  The House will be aware of the process of local government finance—I will not take the House through it, given the time available. However, the House will recognise that, given the proportion of public spending which local government spending represents, local government cannot expect to be exempt from the need for spending restraint in the interests of our wider economic strategy. That is why we have had for some time the powers to enable us to cap local authorities that do not budget sensibly.
  Authorities therefore set their budgets in the light of our announced intentions. On 1 April, after authorities had set their budgets, my right hon. and learned Friend the then Secretary of State took his capping decisions, taking account of all relevant considerations. His decisions gave
  164
  broad effect to the provisional criteria. It is an indication of the success of the implementation of the council tax and the new realism that exists generally in local government that this year it was necessary to cap only three out of the 419 local authorities.
  Alas, one of those three was Castle Point. The proposed cap required a reduction of only £500,000, rather than the full reduction of £1·3 million.
  Subsequently, when Castle Point challenged our proposed cap, it became clear to us that the cap that we proposed would be tight. Castle Point had incurred significant redundancy costs in 1991–92 and 1992–93. We had issued a direction allowing those costs to be charged to capital account for 1992–93. However, the authority was unable to generate sufficient capital receipts in that year to provide cover for the full extent of its liability, and therefore only a portion of the cost could be capitalised. A significant amount—some £500,000—remained to be accommodated in the 1993–94 budget, so all of this was difficult.
  During the process of challenging the proposed cap, the authority told us that it was planning to generate substantial capital receipts during 1993–94. Were the authority to be able to use some of those receipts to meet intended redundancy costs, those costs would then not fall to be charged against its 1993–94 budget.
  We therefore concluded that it would be right to issue a direction to allow the authority to charge an amount of revenue spending to its capital account equal to the outstanding redundancy costs. On that basis, we also concluded that a cap at the level originally proposed would be right for Castle Point.
  Castle Point has provided us with the necessary information, and the appropriate direction has been issued. We are satisfied that the cap proposed is reasonable, achievable and appropriate in all the circumstances of Castle Point. I thank my hon. Friend for his comments about it being tough and fair. After consideration, discussion and consultation, we have arrived at a cap that is tough and fair with regard both to Castle Point and to taxpayers generally.
  It is for the authority to decide how to live within its cap, but we are satisfied that, as with each of the capped authorities, Castle Point will be able to provide an appropriate level of service if it chooses to do so. I think that my hon. Friend's estimate of the collection rate still needs to be a little more realistic. In fact, I hope that Castle Point will aim to collect 98 per cent. of its council tax. That is the target that we have set for other authorities.
  Ideally, no authority would be capped, but we should not let the fact that we had to cap three authorities detract from the achievement of local government this year of successfully introducing the council tax at affordable levels up and down the country. It is encouraging that most local authorities have accepted their responsibility for spending restraint.
  I hope that the spirit of co-operation demonstrated with the introduction of the council tax and the realism shown by most authorities will continue. Clearly, councillors and my hon. Friend have worked hard in Castle Point to sort out matters that are not of their own making—
  The motion having been made after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-two minutes past One o'clock.

HEALTH

  Folic Acid
  Mr. Peter Griffiths
  To ask the Secretary of State for Health what progress has been made in educating the public and health professionals about the importance of folic acid in the diets of women of child-bearing age to reduce the risk of their children being born with spina bifida.

  Mr. Sackville
  Guidance has been issued to all doctors, senior nursing staff, midwives and health visitors and pharmacists as well as key professional organisations. Copies of the guidance will be placed in the Library.

  NW

  NE

  SE

  SW

  SH As

  Thames

  Thames

  Thames

  Thames

  Neurosciences

  18·2

  36·3

  20·9

  19·0

  28·8

  Cardiac

  11·1

  16·1

  27·1

  14·4

  35·4

  Renal

  17·2

  31·5

  28·8

  16·1

  8·4

  Cancer

  21·4

  24·0

  20·7

  7·9

  12·9

  Plastics and Burns

  8·9

  7·4

  7·8

  2·

  0·9

  Children

  78·1

  87·3

  91·5

  69·3

  44·5

  The future number of consultants will depend upon the pattern of provision of these services in the Thames regions which will be determined by a number of factors, including the strategic intentions of purchasers, the findings of the specialty reviews and those of the research reviews of the special health authorities.

  Waterborne Diseases
  Ms Primarolo
  To ask the Secretary of State for Health, pursuant to her answer of 8 June,Official Report, column 238, if she will list the infectious diseases associated with poor water supply and sewage disposal and the incidence of those diseases in each of the last five years.

  Mr. Sackville
  There are many diseases which can be associated with poor water supply and sewerage disposal, few of which are commonly found in this country.

  GP Fund Holding
  Ms Primarolo
  To ask the Secretary of State for Health what estimate she has made of the total cost of general practitioner fund holding in 1991–92 to all parts of the national health service.

  Number of NHS sight tests paid for, analysed by regional health authority

  Thousands

  Regional health authority

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–901

  1990–911

  1991–92

  1992–93

  Northern

  592·1

  600·0

  627·6

  698·0

  740·4

  336·8

  275·6

  314·7

  —

  Yorkshire

  722·7

  730·4

  752·3

  843·2

  906·1

  403·5

  311·6

  368·2

  —

  Trent

  912·6

  950·0

  980·9

  1,095·3

  1,166·7

  515·0

  406·8

  483·6

  —

  East Anglia

  380·6

  408·8

  422·0

  468·7

  493·1

  191·5

  159·9

  194·3

  —

  North West Thames

  828·7

  853·4

  862·3

  943·7

  1,016·6

  384·4

  290·2

  354·3

  —

  2
  Manufacturers have been asked to increase the range of supplements and fortified foods available. The Health Education Authority has already begun to update its publications to include the new advice. Plans are under way to issue further public education materials this summer to raise women's awareness of the importance of taking folic acid when pregnant or planning a pregnancy.

  Specialties
  Ms Primarolo
  To ask the Secretary of State for Health how many(a) specialty beds and (b) specialists there were at the latest available date in each London region for (i) neurosciences, (ii) cardiac, (iii) renal, (iv) cancer, (v) plastics and burns and (vi) children; and what are the forecast numbers in each of those categories for each of the next five years.

  Dr. Mawhinney
  I refer the hon. Member to the reply I gave her on 24 June at columns 248–49. The whole-time equivalent number of consultants employed by each of the Thames regional health authorities and the special health authorities, by specialty, as at 30 September 1991, is shown in the table.

  Dr. Mawhinney
  I refer the hon. Member to the reply I gave her on 26 March at column 751.

  Specialty Reviews, London
  Ms Primarolo
  To ask the Secretary of State for Health on what assumptions she is proceeding in her review of London hospitals about the number of beds and specialists needed per head of population in each specialty.

  Dr. Mawhinney
  It is for local providers working with purchasers to maximise bed usage and to determine the number of consultants and the specialities they represent in order to meet their contractual commitments.

  Eye Tests
  Dame Jill Knight
  To ask the Secretary of State for Health how many national health service eye examinations have been undertaken since 1985 in each regional health authority and in England.

  Dr. Mawhinney
  The number of national health service sight tests paid for by family health services authorities in each financial year is shown in the table.
  3

  Regional health authority

  1984–85

  1985–86

  1986–87

  1987–88

  1988–89

  1989–901

  1990–911

  1991–92

  1992–93

  North East Thames

  894·5

  914·4

  943·4

  1,028·0

  1,055·0

  468·2

  361·4

  440·3

  —

  South East Thames

  734·6

  761·8

  803·6

  875·1

  927·8

  385·6

  296·9

  359·9

  —

  South West Thames

  625·8

  648·7

  652·9

  710·6

  735·3

  283·0

  220·4

  267·8

  —

  Wessex

  619·2

  645·9

  697·7

  739·4

  806·3

  343·2

  258·0

  312·0

  —

  Oxford

  489·6

  515·6

  546·1

  607·9

  657·3

  221·5

  205·7

  247·5

  —

  South Western

  761·6

  785·9

  826·6

  917·2

  1,017·5

  418·1

  324·5

  402·9

  —

  West Midlands

  1,096·6

  1,154·8

  1,188·8

  1,314·2

  1,438·4

  634·0

  488·2

  574·0

  —

  Mersey

  449·8

  465·7

  473·6

  531·6

  562·1

  259·8

  204·9

  246·3

  —

  North Western

  773·8

  810·6

  837·5

  922·0

  970·3

  435·3

  349·7

  413·6

  —

  England2

  9,882·2

  10,245·8

  10,615·4

  11,694·8

  12,492·8

  5,279·8

  4,153·7

  4,979·4

  35,527·6

  1 From 1 April 1989, NHS sight tests were restricted to certain eligible groups in the population. The figures for 1989–90 included 1·63 million sight tests paid for in 1989–90 but conducted in 1988–89 under the previous scheme.

  The remaining 3·65 million were conducted and paid for in 1989–90 but do not constitute a full twelve months of the scheme. The figures for 1990–91 which do represent 12 months under the new scheme, are not therefore directly comparable with those for 1989–90.

  2 Due to rounding, the sum of the components may not equal the total.

  3 Provisional figure. An analysis by regional health authority is not yet available.

  Mr. Jonathan Zito
  Dr. Lynne Jones
  To ask the Secretary of State for Health if she will order a public inquiry into the circumstances which led to the death of Jonathan Zito and its implications for community care policies.

  Mr. Bowis
  The two regional health authorities concerned, South and North East Thames, are jointly holding an inquiry into the events which led to the death of Jonathan Zito. Any further action is dependent upon the report of the inquiry.

  Dentistry
  Mr. Alfred Morris
  To ask the Secretary of State for Health if she will make a statement on the future of the rules governing free dental treatment.

  Dr. Mawhinney
  Sir Kenneth Bloomfield's review of the remuneration of general dental practitioners set out a number of options for changing the way in which we deliver general dental services. We have consulted widely on his report and shall announce our proposals in due course.

  Abortions
  Mrs. Ann Winterton
  To ask the Secretary of State for Health how many abortions have now been performed in total under the terms of the Abortion Act 1967 in the whole of the United Kingdom; and how many and what percentage of those abortions were performed in emergency to save the life of the mother.

  Mr. Sackville
  I refer my hon. Friend to the reply I gave her on 5 May at column 44 for the total number of legal abortions and the number and percentage of those performed in emergency "to save the life of the pregnant woman", notified to the Chief Medical Officers of England and Wales under the terms of the Abortion Act 1967.

  Information relating to Scotland is a matter for my right hon. Friend the Secretary of State for Scotland. Northern Ireland is not covered by the Abortion Act 1967.

  Nurses and Midwives
  Mr. Sims
  To ask the Secretary of State for Health if she will publish details of the numbers of whole-time equivalent NHS nursing and midwifery staff employed on 4
  each grade and pay point of the clinical grades, educational grades and senior nursing and midwifery pay spine in (a) 1990, (b) 1991 and (c)

  Mr. Sackville
  [holding answer 23 June 1993]: Figures for 1992 are not yet available. The information for 1990 and 1991 will be placed in the Library.

ENVIRONMENT

  Council Tax
  Mr. Burns
  To ask the Secretary of State for the Environment how long it is expected it will take to settle outstanding disputes over council tax banding valuations in the Chelmsford parliamentary constituency; and if he will make a statement.

  Mr. Baldry
  I refer my hon. Friend to the answer given to my hon. Friend the Member for Circencester and Tewkesbury (Mr. Clifton-Brown) by my hon. Friend the Minister for Local Government and Planning on 29 June 1993 at column 416.

  Construction Industry
  Mr. Sims
  To ask the Secretary of State for the Environment what are his proposals for a review of procurement and contracting arrangements in the construction industry; and if he will make a statement.

  Mr. Baldry
  I have today chaired a meeting of representatives of the construction industry at which it was unanimously agreed to appoint Sir Machael Latham to undertake a review of procurement and contracting arrangements in the construction industry. We want less litigation and conflict and more productivity in the construction industry.

  Sir Michael will begin work later this month and complete the review within 12 months. An interim report will be produced by the end of the year. Sir Michael will be assisted by a number of specialist assessors who will channel the views of their respective organisations. Where appropriate, groups of client and contracting organisations will stand behind the assessors and provide representative opinion on key issues.

  The review will be jointly funded by the Department of the Environment, the Construction Industry Council, the Construction Industry Employers Council, the National Specialist Contractors Council and the Specialist

  5
  Engineering Contractors Group. It will be closely supported by a number of other bodies, in particular the British Property Federation and the Chartered Institute of Purchasing and Supply.

  The terms of reference of the review, which have been placed in the Library, require Sir Michael to consider the current procurement and contractual arrangements, and the roles and responsibilities of all participants in a contract. Sir Michael's objective will be to present recommendations to Government and other bodies about practical reforms to reduce conflict and litigation and to encourage productivity and competitiveness.

TRANSPORT

  Market Testing
  Ms Mowlam
  To ask the Secretary of State for Transport how much the market-testing programme has cost his Department since November 1992.

  Mr. Norris
  The approximate cost of market testing since November 1992 is £430,000 including consultancies.

  Woolwich Tunnel
  Mr. Peter Bottomley
  To ask the Secretary of State for Transport which railway organisations have responsibility for considering the benefits and costs of a rail tunnel under the Thames at Woolwich.

  Mr. Norris
  London Transport, with the London Dockland development corporation, and consulting British Rail, are conducting further studies of the costs and benefits of a rail tunnel at Woolwich. In addition Union Railways has invited comments on its proposals for a "Union Metro", which would incorporate a rail tunnel at Woolwich.

  Mr. Peter Bottomley
  To ask the Secretary of State for Transport if he will consider a rail tunnel at Woolwich.

  Mr. Norris
  I shall certainly consider any well-founded investment proposal for a rail tunnel at Woolwich, and I look forward to seeing comments on the Union Metro proposal.

  InterCity Trains
  Mr. Richards
  To ask the Secretary of State for Transport what measures British Rail will be introducing to improve the locking mechanisms on InterCity trains; and if he will make a statement.

  Mr. Freeman
  British Rail is implementing the main recommendations of the "Slam Door" report issued by the Health and Safety Executive, which included the redesign and replacement of primary door locks.

  In addition InterCity has recently awarded a £17 million contract to ABB Transportation Ltd. to fit secondary door locks to the InterCity fleet of slam-door coaches.

  Jubilee Line Extension
  Mr. Peter Bottomley
  To ask the Secretary of State for Transport what recent consideration he has given to the Jubilee line extension.
  6
  Mr. Norris
  My right hon. Friend keeps in close touch with the negotiations on the private sector contribution to the funding of the extension.

  Passenger Service Franchises
  Mrs. Dunwoody
  To ask the Secretary of State for Transport which part of European Community law governs the submission of bids to run passenger service franchises by the boards of nationalised railways and their subsidiaries.

  Mr. Freeman
  There is no Community legislation which directly deals with the role of nationalised industries in bidding for passenger rail franchises.

  British Rail Maintenance Ltd.
  Mr. Denham
  To ask the Secretary of State for Transport when he expects to publish the report by McKinsey on the future of British Rail Maintenance Ltd.

  Mr. Freeman
  This is an internal BR report that was prepared in confidence for the British Railways Board. I will be making an announcement on the future of British Rail Maintenance Ltd. as soon as possible.

  Passenger Rail Vehicles
  Mrs. Dunwoody
  To ask the Secretary of State for Transport how many new passenger rail vehicles including locomotives, rolling stock and multiple units are scheduled for delivery to the British Railways Board during the financial years(a) 1993–94, (b) 1994–95 and (c) 1995–96.

  Mr. Freeman
  In addition to the answer I gave the right hon. Member in the Official Report on 12 March at column 768, delivery of new leased rolling stock is planned for 1995 and 1996 using the £150 million facility announced in the autumn statement. The number of leased vehicles will depend on which of the supplier's bids currently being assessed by BR is successful. In addition BR may undertake fuller operating leases for, rail vehicles subject to recent guidance issued by HM Treasury.

  BR Staff (Working Hours)
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what were the average hours worked per week by British Railways Board train drivers during the latest period for which figures are available.

  Mr. Freeman
  During the week ending 26 June 1993, BRB train drivers, excluding those absent through sickness or other reason for all or part of the week, worked an average of 47·8 hours.

  Mrs. Dunwoody
  To ask the Secretary of State for Transport what were the average hours worked per week by British Railways Board signalmen during the latest period for which figures are available.

  Mr. Freeman
  During the week ending 26 June 1993, BRB staff operating signals, excluding those absent through sickness or other reason for all or part of the week, worked an average of 50·8 hours.

  BR Staff (Maintenance)
  Mrs. Dunwoody
  To ask the Secretary of State for Transport how many British Railways personnel are employed on the maintenance of locomotives and rolling stock.
  7
  Mr. Freeman
  On 26 June 1993, BRB had in its employment 17,146 personnel on the maintenance of locomotives and rolling stock.

  Shipping Companies (State Aid)
  Mr. Luff
  To ask the Secretary of State for Transport, pursuant to his oral answer of 28 June,Official Report, column 643, if he will set a target date for the diminution of state aid to shipping companies in all European Community member states; and if he will make a statement.

  Mr. Norris
  It is not in our power to set a target date. This is primarily in the hands of the Commission. But we shall continue to take every opportunity within the Community to press for the early removal of state aids which distort competition among shipowners.

  Search and Rescue
  Mr. David Martin
  To ask the Secretary of State for Transport what progress has been made with the establishment of local coastal search and rescue committees since his announcement of 9 March 1992; and if he will make a statement.

  Mr. Norris
  The chief coastguard has now reached agreement with the Association of Chief Police Officers (ACPO) for England, Wales, and Northern Ireland, on the guidelines for the establishment of what will be called local search and rescue (SAR) committees. It is hoped that a similar agreement will soon be reached with the association for Scotland.

  The committees, jointly chaired by HM coastguard and police, will provide a consultative body to consider co-ordination problems on the shoreline, improved liaison between interested authorities, and to assess the availability, readiness, and effectiveness of rescue resources. Such requirements are already embodied within a memorandum of understanding between HM coastguard and the police.

  As far as practicable the jurisdiction of the committees will align with police force boundaries. Membership will comprise representatives of the emergency services, Royal National Lifeboat Institution—RNLI—Ministry of Defence helicopter bases, county and district council officials, harbour and port authorities, and recognised voluntary rescue services such as the Royal Life Saving Society—RLSS—and the Royal Society for the Prevention of Accidents—RoSPA. Additional members may be co-opted from time to time as necessary.

  Local search and rescue committees will be independent of my Department's district marine safety committees but will liaise as necessary with them on matters of mutual interest and concern.

  A copy of the joint coastguard and police document, "Guidelines for the Establishment of Local Search and Rescue Committees" will be placed in the Libraries of both Houses.

  Railways (Disabled Passengers)
  Mr. Alex Carlile
  To ask the Secretary of State for Transport what plans he has to make provisions for disabled passengers in the code of practice to be issued to the new railway operators; and if he will make a statement.
  8
  Mr. Freeman
  We have introduced an amendment to the Railways Bill, currently before the House of Lords, which will place a duty on the regulator to prepare and promote a code of practice for protecting the interests of disabled passengers, and to consult the Disabled Persons Transport Advisory Committee—DPTAC—in preparing or revising the code. This will be a published code of practice available to all new railway operators.

  Pilots
  Mr. Denham
  To ask the Secretary of State for Transport what is the maximum age at which a pilot is permitted to fly an aircraft for a commercial flight in the United Kingdom.

  Mr. Norris
  Under schedule 8 of the Air Navigation Order 1989, the holder of an airline transport pilot's licence shall not at any time after he attains the age of 60 years, act as pilot in command or co-pilot of any aeroplane for the purpose of public transport, if the aeroplane's maximum total weight authorised exceeds 20,000 kg.

  For aeroplanes below that weight, the licence holder may continue to fly an aircraft after he attains the age of 60 years, up to a maximum of 65 years, if the aeroplane is fitted with dual controls and carries a second pilot who holds an appropriate licence entitling him to act as pilot in command or co-pilot of that aeroplane.

  M27 Aircraft Crash
  Mr. Denham
  To ask the Secretary of State for Transport what was the age of the pilot who flew the aircraft which crashed on the M27 motorway on Wednesday 26 May.

  Mr. Norris
  I understand that the pilot is 63 years of age.

  Sheehy Committee
  Mr. Trotter
  To ask the Secretary of State for Transport to what extent he envisages that the recommendations of the Sheehy committee will apply to the British Transport police.

  Mr. Freeman
  As my hon. Friend is aware the terms of reference of the Sheehy inquiry did not extend to non-Home Department forces, but we nevertheless await the Home Secretary's response with interest. In the meantime we will study the report carefully and consider its recommendations in the context of the British transport police. I look forward to a further meeting in due course with my hon. Friend and representatives of the British Transport Police Federation to discuss this matter.

  Rail Privatisation
  Mrs. Dunwoody
  To ask the Secretary of State for Transport what plans he has to invite British Rail to bid for all franchises.

  Mr. Freeman
  Under clause 22 of the Railways Bill, British Rail could not be a franchisee; under clause 23(3) the franchising director could not therefore invite it to tender.

HOME DEPARTMENT

  Palace of Westminster (Fire Safety)
  Ms Walley
  To ask the Secretary of State for the Home Department, pursuant to his answer of 24 June,Official Report, column 259, if he will make available the report of Her Majesty's fire service inspectorate following its visits to the Palace of Westminster to monitor progress on the agreed programme of work over the past 10 years; and if he will list the specific points which have required the other visits to which he refers.

  Mr. Charles Wardle
  The record of visits to monitor progress on the programme of works leading to fire certification is not kept in the form of a report. The other visits have been numerous, usually to provide advice on a variety of fire safety matters such as the enclosure of stairways, fire doors, signs, and the appointment of in-house fire safety specialists. In both cases the information requested could be provided only at disproportionate cost.

  Police Complaints Authority
  Mr. French
  To ask the Secretary of State for the Home Department how many police officers were disciplined by the Police Complaints Authority in 1992.

  Mr. Charles Wardle
  None. Responsibility for discipline lies with chief officers. The Police Complaints Authority may recommend that disciplinary charges are brought and did so in relation to 56 charges in 1992.

  Mr. French
  To ask the Secretary of State for the Home Department how many cases were dealt with by the Police Complaints Authority in 1992.

  Mr. Charles Wardle
  Information on the different categories of cases dealt with by the Police Complaints Authority in 1992 is contained in chapter 10 of its annual report for 1992, available in the Library.

  Prisoner Transfers
  Mr. Cox
  To ask the Secretary of State for the Home Department (1) what criteria are followed by his Department in approving the transfer of a prison inmate from a closed prison establishment to an open prison establishment; and if he will make a statement;

  (2) how many prison inmates in prisons in England and Wales requested a transfer to a prison nearer their home during the last six months for which figures are available; and how many such requests were granted.

  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 to be given.

  Letter from Derek Lewis to Mr. Tom Cox, dated 4 July 1993:
  The Home Secretary has asked me to reply to your recent Questions about the criteria for the transfer of prisoners from closed to open prisons, and the number of prisoners who requested transfers to a prison nearer their home during the last six months.
  The principles which apply to the decision whether to downgrade an inmate's security categorisation are set out in
  10
  Circular Instruction 7/1988, a copy of which is in the House of Commons Library. Account is taken of a number of factors including time left to serve, attitude, positions of trust held and behaviour in any periods of temporary release. Any prisoner who has successfully completed a period of home leave is considered for transfer to an open establishment.
  Requests made by prisoners seeking transfers to establishments nearer their homes are dealt with locally and information is not collected centrally.

  Police Batons
  Mr. Richards
  To ask the Secretary of State for the Home Department whether officers of the North Wales police force will be equipped with side-handled extendable batons for the purpose of testing their effectiveness; and if he will make a statement.

  Mr. Charles Wardle
  I refer the hon. Member to the reply I gave to a question by the hon. Member for Cardiff, South and Penarth (Mr. Michael) on 21 June at column 2.

  Housing Estates (Crime)
  Mr. Thurnham
  To ask the Secretary of State for the Home Department what representations he has received about the delays in enforcing the law concerning criminal behaviour on housing estates.

  Mr. Charles Wardle
  As far as I can ascertain, no representations on this subject have been received recently. The deployment of resources to investigate crime is an operational matter and is therefore the responsibility of chief officers of police.

  Police
  Mr. Morley
  To ask the Secretary of State for the Home Department how many copies of the Sheehy inquiry report will be distributed to branches of(a) the Police Federation and (b) the Police Superintendents Association.

  Mr. Charles Wardle
  The Sheehy inquiry secretariat supplied two copies of the report to the Police Federation and Police Superintendents Associations headquarters. In addition, the Home Office distributed 60 copies to the Police Superintendents Association.

  Mr. Spearing
  To ask the Secretary of State for the Home Department what consultations he has had since 28 April with bodies representing London borough councils concerning his proposals for policing in London as contained in Cm 2281.

  Mr. Charles Wardle
  My right hon. and learned Friend met with the Association of Metropolitan Authorities on 17 June and again on 28 June. Copies of my right hon. and learned Friend's statement of 28 June and that of his predecessor, announcing the Government's intentions, and copies of the White Paper were sent to the local authority associations, including the Association of London Authorities, the London Boroughs Association and the Outer London Districts Metropolitan Police Consultative Association.

  Asylum
  Mrs. Roche
  To ask the Secretary of State for the Home Department how many asylum seekers have been denied access to the United Kingdom's asylum procedures on third country grounds in the past 12 months and been
  11
  subsequently removed from this country; and how many of these were subsequently returned by the third country to the United Kingdom.

  Mr. Charles Wardle
  In 1992, 441 port asylum applicants—excluding dependants—were removed from the United Kingdom following refusal of their application on the ground that they had arrived from a safe third country. Information on cases subsequently returned by the third country is not recorded.

  Pepper Sprays
  Sir Cranley Onslow
  To ask the Secretary of State for the Home Department what steps his Department is taking to evaluate the use of pepper sprays for police purposes.

  Mr. Charles Wardle
  We are assessing the information which is available about these products, in relation to their possible use by the police against dogs.

  Central European Time
  Mr. Pendry
  To ask the Secretary of State for the Home Department if he has reached a decision with regard to moving the United Kingdom to central European time; and if he will make a statement.

  Mr. Peter Lloyd
  I would refer the hon. Member to my reply on 24 June to a question from the hon. Member for Cannock and Burntwood (Dr. Wright), columns 255–56).

PRIME MINISTER

  No. 10 Downing Street
  Mr. Austin Mitchell
  To ask the Prime Minister what charges are made for the use of 10 Downing street for charitable or other fund-raising events; and what use is made of the catering and other facilities of 10 Downing street at such events.

  The Prime Minister
  Where charitable or other non-official events are held at No. 10 Downing street, the organisers are responsible for all catering and staff costs, as well as other miscellaneous direct costs. Organisers may use the kitchens or other facilities at No. 10 Downing street.

  Mr. Tony Banks
  To ask the Prime Minister (1) what are the rules governing the use of No. 10 Downing street for non-official purposes;

  (2) if he will give details of the rules governing the use of 10 Downing street for the purposes of fund raising for political parties.

  The Prime Minister
  [holding answer 22 June 1993]: Ministers under this and previous administrations have been allowed—at their own or party expense—to host non-official or party receptions or functions in Downing street. All catering, staff and other direct expenses must be met by the organisers of the event. Appropriate arrangements are required for security clearance.

  Mr. Tony Banks
  To ask the Prime Minister how many functions to raise money for political parties have been held at No. 10 Downing street since 1980.

  The Prime Minister
  [holding answer 22 June 1993]: Under this and previous Administrations, a variety of
  12
  functions have been held at No. 10 Downing street where the costs have been met by political parties. The purpose of such functions is not a matter for the Government, but I can confirm that since November 1990, there have been no functions at 10 Downing street at which funds have been raised for political parties, or for which tickets have been sold for the benefit of political parties.

  Mr. Tony Banks
  To ask the Prime Minister what charities benefited from functions organised in No. 10 Downing street in each year since 1984.

  The Prime Minister
  [holding answers 22 and. 23 June 1993]: Since November 1990, there have been a total of 25 receptions, dinners or other functions at No. 10 Downing street for charities or voluntary bodies. The organizations concerned have been:

  NSPCC

  Surrey County Cricket Club Youth Trust

  Lords Taverners

  MENCAP

  Age Concern

  EUREKA

  Wordsworth Trust

  Huntington's Disease Association

  Action Research

  Anthony Nolan Bone Marrow Trust

  National Council of Hospice and Specialist Palliative

  Care Crossroads Care1

  Animal Health Trust

  ORT

  Youth Clubs (UK) ChildLine

  Silver Trust

  Marie Curie Cancer Care

  Excalibur Scheme Motability

  Westminster Foundation for Democracy

  London Community Cricket Association

  International Spinal Research Trust

  Cambridge Arts Theatre Trust

  1 two functions

  Mr. Asil Nadir
  Mr. Tony Banks
  To ask the Prime Minister if he will give details of the functions attended by Mr. Asil Nadir in No. 10 Downing street since 1984.

  Mr. George Robertson
  To ask the Prime Minister how many times in the last 10 years Mr. Asil Nadir has attended functions in No. 10 Downing street.

  The Prime Minister
  [holding answer 22 June 1993]: I understand that Mr. Nadir attended six functions in No. 10 Downing street between 1984 and 1989. These were a dinner and a reception for the National Society for the Prevention of Cruelty to Children; a reception for the Harold MacMillan Trust; a lunch for the President of Turkey; and two lunches for industrialists.

  Vietnam
  Mr. Alton
  To ask the Prime Minister if he will raise the issues of the extent of religious freedom in Vietnam, and the continued imprisonment of persons in that country for their faith, with the Prime Minister of Vietnam during his forthcoming visit.

  The Prime Minister
  I intend to raise our concerns about human rights in Vietnam with the Vietnamese Prime Minister, Mr. Vo Van Kiet, during his forthcoming visit to the United Kingdom.

  Plaques
  Mr. William Ross
  To ask the Prime Minister if inscriptions on plaques which are unveiled in the course of visits by foreign Heads of State are viewed in advance by representatives of Her Majesty's Government.

  The Prime Minister
  We would agree in advance any inscriptions on plaques unveiled at official engagements. We would not expect to be consulted about private engagements.

  Republic of Ireland President
  Mr. William Ross
  To ask the Prime Minister if proposals by the person holding the position of President of the Irish Republic to visit the United Kingdom are communicated to Her Majesty's Government by the office of the President of the Irish Republic.

  The Prime Minister
  Proposals for visits to the United Kingdom by the President of the Irish Republic are communicated to Her Majesty's Government by the Government of the Irish Republic.

  Mr. William Ross
  To ask the Prime Minister what information he receives from the office of the President of the Irish Republic on thanks received in respect of visits by the person holding the position of President of the Irish Republic.

  The Prime Minister
  None.

  Heads of State
  Mr. William Ross
  To ask the Prime Minister if he will list the private visits to Northern Ireland by foreign Heads of State in each of the last three years.

  The Prime Minister
  The information is as follows:

  16 December 1990—President Robinson

  4 February 1992—President Robinson

  22 May 1992—President Robinson

  6–7 September 1992—President Robinson

  18–19 June 1993—President Robinson

  Mr. William Ross
  To ask the Prime Minister what criteria are used to distinguish between private and official visits to the United Kingdom by foreign Heads of State.

  The Prime Minister
  Official visits are those undertaken at the invitation of the British Government.

  Mr. William Ross
  To ask the Prime Minister if he will list the public engagements which have been fulfilled by Heads of State during private visits to Northern Ireland in each of the last three years.

  The Prime Minister
  The information is as follows:16 December 1990
  President Robinson attended the Installation of Archbishop Daly at Armagh and visited the Armagh Observatory.
  4 February 1992
  President Robinson met women's groups at the EOC Offices in Belfast; had lunch with the Law Society; met voluntary groups and cultural traditions groups in the Linenhall library; and attended a reception in Stormont castle.
  22 May 1992
  14
  President Robinson, as part of "Impact 92" in Londonderry, lunched with Church leaders, visited Foyle day care centre, opened "The Craft Village", visited community groups, and attended a civic reception and pageant.
  6–7 September 1992
  President Robinson attended the "Beyond Hate Conference" in Londonderry; opened Belcoo enterprise unit; lunched with Enniskillen Rotary; and met community groups in Enniskillen library.
  18–19 June 1993
  President Robinson visited the Northern, Ireland Voluntary Trust, Down museum, and West Belfast community groups; attended the Solicitors' Association annual dinner; and visited Coalisland enterprise centre and Ballance house, Glenavy.

  All the above visits were private. President Robinson attended each engagement at the invitation of the organisers.

  Yugoslavia
  Mr. Elletson
  To ask the Prime Minister which of the undertakings given by the Federal Yugoslav Government at the London conference on 26 and 27 August 1992 have been fulfilled; what assessment he has made of changes in their policy and actions towards the crisis in the former Yugoslavia; what changes he considers to be still required; and if he will make a statement.

  The Prime Minister
  The London conference established principles and a negotiating structure as the basis for a settlement of the problems of the former Yugoslavia and set out specific steps to secure an effective and durable cessation of hostilities. The Yugoslav authorities have failed to co-operate satisfactorily with the efforts of the international community to achieve peace in Bosnia and to resolve the problems of minorities in Croatia and Serbia. The international community is committed to the rigorous enforcement of United Nations sanctions against Serbia and Montenegro until the conditions for their lifting have been met.

  Mr. Elletson
  To ask the Prime Minister when the question of sanctions against the Republic of Croatia was last considered by Her Majesty's Government; and what plans he has to raise this matter again with the international community in the future.

  The Prime Minister
  Policy towards Croatia is regularly reviewed in the light of Croatian Government cooperation with the efforts of the international community both to ensure a peaceful resolution of the problems in the Krajinas and to achieve a lasting and equitable peace in Bosnia. Croatia was put on notice by the 8 June meeting of EC Foreign Ministers that restrictive measures would be initiated against Croatia if the situation so requires.

  Mr. Elletson
  To ask the Prime Minister to what extent the Croatian Government have complied with its obligations, as outlined in the London conference; and if he will make a statement.

  The Prime Minister
  The London conference established principles and a negotiating structure as the basis for a settlement of the problems of the former Yugoslavia and set out specific steps to secure an effective and durable cessation of hostilities. The Croatian Government are expected to do more to co-operate with efforts to achieve
  15
  peace in Bosnia. Croatia was put on notice by the 8 June meeting of EC Foreign Ministers that restrictive measures would be initiated against Croatia if the situation so requires.

  Mr. Elletson
  To ask the Prime Minister which of the undertakings made by the Serbian Government at the London conference on 26 and 27 August 1992 have been fulfilled; to what extent there have been changes in their policy and actions towards the crisis in the former Yugoslavia; if he will list the changes still required; and if he will make a statement.

  The Prime Minister
  The London conference established principles and a negotiating structure as the basis for a settlement of the problems of the former Yugoslavia and set out specific steps to secure an effective and durable cessation of hostilities. The Belgrade leadership has failed to co-operate satisfactorily with the efforts of the international community to achieve peace in Bosnia and to resolve the problems of minorities in Croatia and Serbia. The international community is committed to the rigorous enforcement of United Nations sanctions against Serbia and Montenegro until the conditions for their lifting have been met.

  Unemployment, Liverpool
  Mr. Parry
  To ask the Prime Minister if he will make a statement on his recent meeting with the hon. Member for Liverpool, Riverside and the deputation representing the unemployed in Liverpool.

  The Prime Minister
  I met the hon. Member for Liverpool, Riverside with a number of other people from the area on 16 June. I will be writing to him shortly about points raised at the meeting.

  Mr. Shabir Shan and Mr. Yasin Malik
  Mr. Madden
  To ask the Prime Minister, pursuant to his answer of 27 May,Official Report, column 663, what further information he has received about the detention in India of Mr. Shabir Shah and Mr. Yasin Malik; and if he will make a statement.

  The Prime Minister
  Our high commission in New Delhi is in regular touch with the Indian Ministries concerned, but have received no further information on the cases of Shabir Shah and Yasin Malik since receiving the aide memoire from the Indian Home Ministry which my hon. Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs forwarded to the hon. Gentleman under cover of his letter of 30 June.

  Table showing the proportion of the potential schools budget (PSB) delegated to schools: 1990–94

  (1) Local education authority (LEA)

  (2) Proportion of potential schools budget included in schools' budget shares

  1993–94

  1992–93

  1991–92

  1990–91

  Percentage

  Percentage

  Rank order number

  Percentage

  Rank order number

  Percentage

  Rank order number

  All LEAs where LMS in operation before April 1992

  1. Hertfordshire

  91·1

  87·1

  16

  86·2

  18

  n/a

  —

  2. Dudley

  90·5

  85·1

  59

  84·5

  54

  84·0

  35

  3. Solihull

  90·1

  85·8

  34

  85·6

  28

  85·3

  18

  4. Leicestershire

  90·0

  85·4

  48

  84·3

  58

  n/a

  —

  5. Wolverhampton

  89·9

  80·9

  97

  81·6

  93

  81·8

  69

  6. Brent

  89·8

  86·9

  20

  83·5

  72

  83·6

  38

  Mr. Gazanfer Ali
  Mr. Madden
  To ask the Prime Minister, pursuant to his answer of 8 June,Official Report, column 226, what further information he has received about court proceedings in Pakistan relating to Mr. Gazanfer Ali; and if he make a statement.

  The Prime Minister
  My hon. Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs wrote to the hon. Member for Bradford, West on 24 June with information on the two cases involving murder charges against Mr. Gazanfer Ali. Both cases have been further adjourned.

EDUCATION

  Class Sizes
  Mr. Pike
  To ask the Secretary of State for Education what were the class sizes in January in Lancashire in each of the last 10 years for which figures are available.

  Mr. Robin Squire
  The average sizes of single teacher classes in maintained primary and secondary schools in Lancashire local education authority for the years 1983 to 1992 are given in the table.

  Average sizes of classes taught by one teacher in maintained primary and secondary schools in Lancashire Local Education Authority1 1983–92 (Position as at January each year)

  Primary Schools

  Secondary Schools

  1983

  26·4

  20·9

  1984

  25·9

  20·8

  1985

  26·5

  21·1

  1986

  26·9

  20·8

  1987

  27·0

  20·3

  1988

  26·7

  20·2

  1989

  27·2

  20·0

  1990

  27·5

  20·2

  1991

  27·7

  20·7

  1992

  27·76

  20·7

  1Figures for 1990, 1991 and 1992 include self-governing schools.

  Delegated Funding
  Mrs. Gorman
  To ask the Secretary of State for Education if he will show, for each local education authority and for each year since 1989 for which information is available, the proportion of the potential schools budget delegated to schools, listing local education authorities by rank order of the proportion delegated in the most recent year for which information is available and showing the rank order in each year.

  Mr. Forth
  The information requested is as follows:
  17

  (1) Local education authority (LEA)

  (2) Proportion of potential schools budget included in schools'
  budget shares

  1993–94

  1992–93

  1991–92

  1990–91

  Percentage

  Percentage

  Rank order number

  Percentage

  Rank order number

  Percentage

  Rank order number

  7. Manchester

  89·1

  87·2

  14

  88·0

  6

  n/a

  —

  8.Leeds

  88·8

  86·8

  22

  86·3

  17

  86·1

  10

  9.Rochdale

  88·7

  88·3

  6

  88·5

  2

  85·7

  13

  10.Cheshire

  88·7

  88·3

  8

  87·4

  12

  84–3

  31

  11.Sefton

  88·4

  88·8

  2

  87·9

  7

  87·4

  4

  12.Cumbria

  88·4

  86·7

  23

  85·4

  34

  82·5

  60

  13.Westminster

  88·4

  85·6

  38

  84·9

  44

  78·0

  87

  14.Berkshire

  8·3

  89·1

  1

  87·7

  8

  87·7

  2

  15.Barking and Dagenham

  88·3

  87·8

  9

  85·2

  37

  87·0

  5

  16.Walsall

  88·1

  85·7

  37

  85·5

  29

  85·7

  14

  17.Oxfordshire

  88·1

  85·9

  32

  84·7

  48

  81·4

  76

  18.Northumberland

  87·9

  87·2

  15

  88·2

  5

  86·5

  8

  19.Lincolnshire

  87·8

  86·3

  26

  85·5

  32

  85·1

  20

  20.Bexley

  87·8

  88·3

  7

  81·3

  94

  81·3

  77

  21.Hounslow

  87·8

  84·8

  64

  83·3

  77

  81·6

  73

  22.Sunderland

  87·7

  88–3

  5

  88·4

  3

  86·9

  6

  23.Suffolk

  87·6

  87·0

  19

  97·6

  10

  85·7

  15

  24.Northamptonshire

  87·6

  87·6

  10

  86·0

  22

  84·7

  24

  24.Croydon

  87·5

  86·8

  21

  81·0

  95

  n/a

  —

  24.Stockport

  87·5

  88·3

  4

  88·7

  1

  n/a

  —

  27.Birmingham

  87·4

  84·3

  83

  83·4

  73

  83·0

  52

  28.Hereford and Worcester

  87·4

  85·5

  44

  84·0

  61

  n/a

  —

  29.Bury

  87·3

  87·1

  17

  85·3

  36

  81·9

  65

  30.Devon

  87·3

  87·3

  12

  87·1

  13

  83·1

  51

  31.Wiltshire

  87·2

  84·4

  77

  83·3

  76

  82·4

  62

  32.Bedfordshire

  87·2

  85·2

  52

  83·3

  75

  84·0

  34

  33.Essex

  87·1

  85·1

  57

  85·1

  41

  84·0

  33

  34.Enfield

  87·0

  86·4

  25

  84·7

  47

  81·5

  75

  35.Bolton

  86·9

  88·5

  3

  88·3

  4

  89·1

  1

  36.West Sussex

  86·8

  87·4

  11

  87·7

  9

  87·5

  3

  37.Ealing

  86·7

  86·1

  29

  82·9

  83

  81·7

  71

  38.Wirral

  86·7

  85·7

  35

  85·7

  27

  n/a

  —

  39.Merton

  86·7

  84·3

  81

  84·9

  45

  79·8

  82

  40.Staffordshire

  86·7

  85·4

  45

  84·8

  46

  84·6

  25

  41.Harrow

  86·6

  82·8

  94

  82·5

  90

  81·5

  74

  42.K nowlsey

  86·6

  84·4

  78

  83·2

  78

  81·9

  66

  43.Dorset

  86·5

  84·2

  85

  85·2

  38

  81·9

  68

  44.Trafford

  86·5

  84·7

  71

  83·9

  65

  84·4

  28

  45.Cleveland

  86·4

  84·4

  76

  83·4

  74

  83·6

  39

  46.Havering

  86·4

  86·1

  30

  85·1

  40

  83·9

  36

  47.Nottinghamshire

  86·3

  85·1

  58

  84·0

  63

  82·7

  55

  48.Redbridge

  86·2

  85·0

  61

  83·1

  81

  82·7

  56

  49.Shropshire

  86·2

  86·3

  27

  86·1

  20

  84·6

  26

  50.Sandwell

  86·1

  85·6

  42

  82·7

  87

  83·2

  49

  51.Bradford

  86·1

  84·7

  68

  86·7

  15

  86·0

  11

  52.Newcastle

  86·1

  84·9

  63

  82·4

  91

  79·8

  83

  53.Warwickshire

  86·1

  87·0

  18

  86·7

  14

  85·2

  19

  54.Coventry

  86·1

  83·0

  93

  82·8

  86

  80·9

  78

  55.South Tyneside

  86·1

  86·0

  31

  85·9

  23

  83·8

  37

  56.Calderdale

  86·1

  85·6

  40

  85·5

  31

  81·9

  67

  57.Salford

  86·0

  84·7

  66

  86·0

  21

  84·4

  29

  58.Barnet

  86·0

  85·2

  54

  83·7

  71

  84·4

  30

  59. Haringey

  86·0

  83·8

  90

  83·8

  69

  79·4

  85

  60. Cumbridgeshire

  86·0

  87·2

  13

  87·5

  11

  80·8

  79

  61. Hampshire

  85·9

  86·6

  24

  86·1

  19

  85·8

  12

  62.Durham

  85·8

  85·3

  49

  82·2

  92

  83·1

  50

  63. Avon

  85·8

  83·6

  91

  82·8

  85

  82·3

  64

  64. Doncaster

  85·8

  84·2

  84

  84·0

  60

  85·5

  17

  65. Waltham Forest

  85·8

  82·1

  95

  80·2

  96

  79·7

  84

  66. East Sussex

  85·7

  85·2

  53

  85·4

  35

  84·1

  32

  67. Sutton

  85·6

  84·7

  70

  85·2

  39

  83·4

  42

  68. Wigan

  85·6

  84·1

  86

  83·0

  82

  83·3

  47·

  69. Bromley

  85·6

  84·7

  72

  84·9

  43

  80·7

  80

  70. Richmond

  85·6

  85·0

  60

  82·6

  89

  80·0

  81

  71. Isles of Scilly

  85·5

  85·1

  56

  83·2

  79

  n/a

  —

  72. Surrey

  85·5

  85·7

  36

  84·6

  49

  85·6

  16

  73. Kent

  85·5

  84·5

  73

  85·8

  26

  84·9

  23·

  74. Barnsley

  85·4

  85·3

  51

  85·9

  25

  83·4

  43·

  74. Somerset

  85·4

  85·6

  39

  85·5

  30

  82·9

  53

  76. Gateshead

  85·4

  83·9

  89

  83·9

  66

  83·3

  46·

  74. Derbyshire

  85·4

  84·5

  75

  84·0

  62

  83·4

  45

  78. Sheffield

  85·3

  84·1

  87

  85·9

  24

  82·6

  59

  79. Oldham

  85·3

  84·3

  82

  83·1

  8·0

  816

  72

  80. Buckinghamshire

  85·3

  85·3

  50

  86·6

  16

  84·9

  22

  18

  19

  (1) Local education authority (LEA)

  (2) Proportion of potential schools budget included in schools'
  budget shares

  1993–94

  1992–93

  1991–92

  1990–91

  Percentage

  Percentage

  Rank order number

  Percentage

  Rank order number

  Percentage

  Rank order number

  81. Cornwall

  85·3

  85·0

  62

  84·0

  64

  83·6

  41

  82.Norfolk

  85·2

  86·2

  28

  84·4

  55

  83·6

  40

  83. Tameside

  85·2

  84·7

  67

  83·8

  68

  84·4

  27

  84. Rotherham

  85·2

  84·7

  69

  85·4

  33

  86·1

  9

  85. St. Helens

  85·2

  85·4

  47

  84·5

  52

  83·3

  48

  86. Kirklees

  85·2

  85·5

  43

  85·0

  42

  83·4

  44

  87. Humberside

  85·1

  85·2

  55

  84·6

  50

  81·7

  70

  88. Hillingdon

  85·1

  84·4

  79

  83·9

  67

  n/a

  —

  89. Wakefield

  85·1

  84·0

  88

  84·3

  57

  82·9

  54

  90. Newham

  85·1

  82·1

  96

  79·5

  97

  n/a

  —

  91. North Tyneside

  85·1

  84·8

  65

  84·6

  51

  82·3

  63

  92. Kingston upon Thames

  85·0

  85·6

  41

  84·4

  56

  78·5

  86

  93. Isle of Wight

  85·0

  85·8

  33

  83·8

  70

  82·5

  61

  94. Liverpool

  85·0

  84·5

  74

  82·9

  84

  84·9

  21

  95. Gloucestershire

  85·0

  83·2

  92

  84·5

  53

  86·8

  7

  96. Lancashire

  85·0

  84·3

  80

  82·7

  88

  82·7

  57

  97. North Yorkshire

  n/a

  85·4

  46

  84·2

  59

  82·6

  58

  Averages

  86·7

  85·6

  84·9

  83·8

  Inner London LEAs where LMS in operation from April 1992

  1. Islington

  92·6

  85·2

  2

  2. Corporation of London

  86·5

  87·0

  1

  3. Greenwich

  86·3

  79·6

  9

  4. Tower Hamlets

  85·9

  77·2

  11

  5. Camden

  85·0

  83·2

  4

  6. Hammersmith and Fulham

  84·6

  81·7

  5

  7. Lewisham

  83·8

  81·1

  6

  8. Lambeth

  83·6

  79·7

  8

  9. Southwark

  83·3

  79·1

  10

  10. Kensington and Chelsea

  81·7

  76·1

  12

  11. Wandsworth

  80·8

  84·2

  3

  12. Hackney

  n/a

  79·8

  7

  Averages

  85·0

  80·6

  National averages

  86·6

  85·3

  84·9

  83·8

  Notes

  1. All 109 local education authorities (LEAs) in England have local management schemes in operation and are required to publish budget statements showing planned expenditure, under section 42 of the Education Reform Act 1988. The figures above are derived from those statements. The LEAs are ranked according to the percentage of funds included in schools' budget shares in 1993–94, with those including most at the top of the list. All percentages are rounded to one decimal place; where more than one LEA is shown as having the same percentage, the rank order takes account of the unrounded percentage. In the case of the inner London LEAs (other than Westminster), the introduction of statutory local management schemes was deferred until April 1992; the 12 LEAs concerned are listed separately.

  2. The potential schools budget (PSB) in each LEA consists of the general schools budget (GSB)—ie all planned spending on schools—less planned spending on certain excepted or centrally held items: capital expenditure; expenditure supported by central government and EC grants; and expenditure on home to school transport, school meals, cleaning and grounds maintenance, and other transitional exceptions. With effect from April 1993 (April 1995 in the case of the 12 inner London LEAs shown separately), the total of schools' budget shares must account for at least 85 per cent. of each LEA's PSB. Where figures for 1993–94 are said to be not available (n/a), the LEA's budget statement had not been received in the Department by the end of June 1993; in relation to 1990–91, n/a indicates that no statutory local management scheme was yet in operation for the LEA concerned. Percentages and ranking order numbers are given for previous years.

  NB The percentages shown above may differ from those calculated by individual LEAs because of the effects of rounding.

  Education Assets Board
  Mr. Rooker
  To ask the Secretary of State for Education how many recommendations from the Education Assets Board are awaiting a decision by his Department; and if he will list them and the time they have been with his Department.

  Mr. Robin Squire
  There are 14 cases awaiting final determination by my right hon. Friend. These are:

  Institution

  Date received

  Grant Maintained Schools

  Dartford Grammar School for Girls, Kent

  December 1992

  Epsom and Ewell High School, Surrey

  March 1993

  Great Barr School, Birmingham

  August 1992

  Kingsley Park School, Northamptonshire

  September 1992

  20

  Institution

  Date received

  Pate's Grammar School, Gloucestershire

  November 1991

  Reading School, Berkshire

  April 1993

  Stratford School, London

  May 1992

  Thamesview School, Kent

  March 1993

  Wilsons School, Sutton

  June 1993

  Wymondham College, Norfolk

  December 1992

  Higher Education Institutions

  Falmouth College of Art and Design

  September 1991

  University of Greenwich

  September 1991

  University of West of England; Bath College of HE

  November 1991

  Further Education Institutions

  Somerset College of Arts and Technology

  June 1993

  Disabled Students
  Mr. Alex Carlile
  To ask the Secretary of State for Education if he will list the number of disabled people, in(a) full-time and (b) part-time education; and if he will make a statement.

  Mr. Boswell
  There were 11,000 full-time and 32,000 part-time students with learning difficulties and disabilities in further education colleges in England in 1991–92. Approximately 165,000 children had statements of special education needs maintained by local education authorities in England in 1991–92. Numbers of people with disabilities and learning difficulties in other sectors of education are not collected centrally.

  Mr. Alex Carlile
  To ask the Secretary of State for Education what plans he has to allow part-time disabled students to claim disabled students' allowance; and if he will make a statement.

  Mr. Boswell
  Disabled students' allowances are payable as part of a mandatory award. The Education Act 1962 restricts mandatory awards to designated full-time courses, and to certain part-time initial teacher training courses. Local education authorities can make discretionary awards for other part-time courses, including such allowances as they think fit.

  Grant-maintained Schools
  Mrs. Ann Taylor
  To ask the Secretary of State for Education if he will update the table given in his answer of 6 November 1992,Official Report, column 513, giving the number of copies distributed and the cost in each case of the booklets (a) "School Governors, How to Become a Grant-maintained School", (b) "Grant-maintained Schools—Questions Parents Ask", (c) "Grant-maintained Schools—What it Means for Stafl'', (d) "Grant-maintained Schools—Questions Staff Ask", (e) "Grant-maintained Schools—Experiences During the First Year" and (f) "Education into the Next Century".

  Mr. Robin Squire
  The total numbers of booklets which have been printed to fulfil expected demand and the current costs of producing each booklet are as follows:

  Total printed

  Current cost per booklet

  £

  (a) 300,000 since April 1992

  0·23

  (b) 1,635,005 since March 1990

  0·08

  (c) 193,000 November 1990—September 1992

  20·09

  (d) 225,000 since September 1992

  0·07

  (e) 470,000 since June 1991

  0·09

  (f) 2,750,000 since August 1992

  10·0592

  1 Estimate

  2 Booklet is no longer produced; it has been superseded by (d). This was the cost when it was last produced.

  Mrs. Ann Taylor
  To ask the Secretary of State for Education if he will list, for each local education authority, the date when his Department received a local management of schools budget statement made under section 42 of the Education Reform Act 1988 for the purpose of calculating grant-maintained schools' budgets for the financial year 1993–94, the date when an 22
  acknowledgement was sent, if that budget statement formed a satisfactory basis for the calculation of annual maintenance grant for the grant-maintained schools in the authority's area, and the date by which he expects that his Department will have informed (a) 30 per cent., (b) 40 per cent., (c) 50 per cent., (d) 60 per cent., (e) 70 per cent., (f) 80 per cent., (g) 90 per cent. and (h) 100 per cent. of grant-maintained schools of their final annual maintenance grant budget figure.

  Mr. Robin Squire
  The table shows the date the section 42 statement was received from LEAs with grant-maintained schools within their area and the date receipt was acknowledged by the LMS unit of the Department. LEAs were advised in February that provided they submitted complete and final budget details by 31 March such data would be used to calculate annual maintenance grant. Information from the following LEAs did not meet the required standard:

  Bromley

  Hounslow

  Humberside

  Liverpool

  Newham

  Oxfordshire

  Somerset

  Tameside

  Warwickshire

  Certain points on Leicestershire's budget statement remain to be clarified before a decision can be taken on whether it provides a satisfactory basis on which to determine annual maintenance grant.

  By 30 June 61 per cent. of grants had been finalised. I expect 70 per cent. to have been finalised by 23 July; 80 per cent. by 31 July; 95 per cent. by the end of August; and the remainder in September, although it is possible that one or two exceptional cases might take a little longer.

  Local Education Authority

  Date Section 42 Budget Statement Received

  Date Receipt Acknowledged

  Avon

  31 March 1993

  7 April 1993

  Barnet

  29 March 1993

  31 March 1993

  Bedfordshire

  31 March 1993

  31 March 1993

  Berkshire

  *31 March 1993

  31 March 1993

  Bexley

  30 March 1993

  7 May 1993

  Birmingham

  25 March 1993

  7 May 1993

  Bolton

  12 March 1993

  29 March 1993

  Bradford

  31 March 1993

  14 April 1993

  Brent

  10 March 1993

  29 March 1993

  Bromley

  *31 March 1993

  31 March 1993

  Buckinghamshire

  26 March 1993

  19 April 1993

  Calderdale

  29 March 1993

  7 May 1993

  Cambridgeshire

  1 March 1993

  29 March 1993

  Cheshire

  29 March 1993

  7 May 1993

  Croydon

  *31 March 1993

  7 May 1993

  Cumbria

  30 March 1993

  7 May 1993

  Derbyshire

  26 March 1993

  31 March 1993

  Devon

  31 March 1993

  19 April 1993

  Dorset

  29 March 1993

  7 May 1993

  Dudley

  *24 March 1993

  29 March 1993

  Ealing

  25 March 1993

  31 March 1993

  Essex

  31 March 1993

  7 May 1993

  Gloucestershire

  31 March 1993

  31 March 1993

  Hammersmith and Fulham

  31 March 1993

  31 March 1993

  Hampshire

  31 March 1993

  31 March 1993

  Havering

  *29 March 1993

  18 May 1993

  Hereford and Worcestershire

  30 March 1993

  7 May 1993

  Hertfordshire

  *31 March 1993

  5 April 1993

  Hillingdon

  31 March 1993

  7 May 1993

  Hounslow

  1 April 1993

  7 May 1993

  Humberside

  *30 April 1993

  11 May 1993

  Kensington and Chelsea

  *30 March 1993

  7 May 1993

  Kent

  *31 March 1993

  31 March 1993

  23

  Local Education Authority

  Date Section 42 Budget Statement Received

  Date Receipt Acknowledged

  Kingston-upon-Thames

  *29 March 1993

  7 May 1993

  Kirklees

  31 March 1993

  7 May 1993

  Lambeth

  *31 March 1993

  31 March 1993

  Lancashire

  26 March 1993

  31 March 1993

  Leicestershire

  *29 March 1993

  7 May 1993

  Lewisham

  31 March 1993

  7 May 1993

  Lincolnshire

  26 March 1993

  7 May 1993

  Liverpool

  27 May 1993

  28 May 1993

  Newham

  5 April 1993

  7 May 1993

  Norfolk

  31 March 1993

  7 May 1993

  Northamptonshire

  31 March 1993

  7 May 1993

  Nottinghamshire

  25 March 1993

  7 May 1993

  Oxfordshire

  5 April 1993

  14 April 1993

  Rochdale

  30 March 1993

  31 March 1993

  Sandwell

  29 March 1993

  7 May 1993

  Sheffield

  29 March 1993

  31 March 1993

  Shropshire

  24 March 1993

  7 May 1993

  Solihull

  30 March 1993

  7 May 1993

  Somerset

  *13 April 1993

  30 April 1993

  Southwark

  31 March 1993

  7 May 1993

  Staffordshire

  29 March 1993

  31 March 1993

  Surrey

  31 March 1993

  7 May 1993

  Sutton

  30 March 1993

  7 May 1993

  Tameside

  14 May 1993

  17 May 1993

  Tower Hamlets

  31 March 1993

  7 May 1993

  Trafford

  29 March 1993

  30 March 1993

  Walsall

  29 March 1993

  31 March 1993

  Waltham Forest

  29 March 1993

  7 May 1993

  Wandsworth

  *31 March 1993

  7 May 1993

  Warwickshire

  7 April 1993

  15 April 1993

  Wiltshire

  29 March 1993

  7 May 1993

  Wirral

  *31 March 1993

  14 May 1993

  Wolverhampton

  29 March 1993

  31 March 1993

  * The date of receipt given in each case is the date when a budget statement was first received. Where these dates are marked with an asterisk, revised statements or parts of statements have been received subsequently.

OVERSEAS DEVELOPMENT

  Know-how Funds
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library the most recent analysis of the Government's know-how funds.

  Mr. Lennox-Boyd
  A review of the know-how fund covering activities in 1992–3 is being prepared and will be published later in the year. A copy will be placed in the Library in due course.

  PHARE Funds
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs which countries are currently eligible for PHARE funds.

  Mr. Lennox-Boyd
  Countries currently eligible are Albania, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. The former Yugoslav Republic of Macedonia also receives assistance from the PHARE programme.

  Technical Assistance Funds
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what have been the priority areas of technical assistance under the PHARE and TACIS funds; and what proposals there are to change these.

  Mr. Lennox-Boyd
  PHARE priorities and programmes are described in an EC publication summarising PHARE activities in 1992 already placed in the Library. Member states agreed revised guidelines in December 1992 for the period 1993–97; a copy has been placed in the Library of the House. A revised TACIS regulation for 1993 and beyond was agreed in March, subject to the views of the European Parliament which are still awaited. The full texts are available in the Library, but in summary they cover:

  PHARE:

  Restructuring and privatisation of state enterprise in industry and agriculture

  Support for the private sector

  Modernisation of the financial system

  Development of a social safety net

  Nuclear safety

  Regional co-operation

  TACIS

  Human Resources Development

  Enterprise restructuring and development

  Infrastructure

  Energy, including nuclear safety

  Food production, processing and distribution

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the EC about improvements in the administration of the PHARE and TACIS funds.

  Mr. Lennox-Boyd
  My right hon. Friends the Foreign Secretary and the Minister for Overseas Development have discussed the question of improvements with Sir Leon Brittan. We welcome the programme of improvements which Sir Leon announced on 9 June, and I have placed a copy of his speech in the Library.

  Aid and Trade Provision
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer on aid and trade provision to the hon. Member for Ribble Valley (Mr. Evans) of 17 June,Official Report, column 679, which creditworthy low-income countries will now qualify and which countries which have benefited during the last five years will be disqualified.

  Mr. Lennox-Boyd
  Creditworthy low-income countries which are currently eligible for aid and trade provision support are China, Indonesia, India, Ghana, Lesotho, Pakistan, Philippines, Sri Lanka and Zimbabwe.

  Countries which have benefited over the last five years from the ATP but which are not included in those listed above are Botswana, Colombia, Egypt, Kenya, Malaysia, Morocco, Swaziland, Thailand, Tunisia, Turkey and Yemen.

  Commonwealth Development Corporation
  Mr. David Nicholson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what authorisation has been given to the Commonwealth Development Corporation to operate in additional countries.
  25
  Mr. Lennox-Boyd
  Following a request from the corporation, approval has been given for the CDC to operate in Vietnam. It expects to give priority to promoting private sector development.

FOREIGN AND COMMONWEALTH AFFAIRS

  Colombia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what human rights issues he plans to raise with President Gaviria of Colombia when he visits Britain in July.

  Mr. Heathcoat-Amory
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will raise with him the concern felt in this country about human rights in Colombia and the overall level of violence there.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance his Department gives to the Colombian security services.

  Mr. Heathcoat-Amory
  Since Colombia's appeal in 1989 for help in combatting drugs, the Department has provided assistance worth £9·1 million, with a further £0·3 million planned for this financial year. This has covered non-lethal equipment technical expertise and training to the Colombian law enforcement authorities. Areas of assistance have included bomb search and disposal, protection of VIPs, communications and riverine patrolling.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the effect of legislation introduced to deal with drugs and terrorism in Colombia on human rights and freedom of expression.

  Mr. Heathcoat-Amory
  Such legislation is necessary to defend the democratic rights and freedoms of Colombian citizens and should be impartially implemented and enforced.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to deny entry visas to Colombian military officers suspected of serious human rights violations.

  Mr. Heathcoat-Amory
  Colombian citizens do not need visas to enter the United Kingdom.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made of the effect of activities by the Colombian security servies on human rights.

  Mr. Heathcoat-Amory
  We remain concerned by reports of human rights abuses in Colombia. We have urged the Colombian Government to bring to justice those responsible. We support the Colombian Government's efforts to promote greater understanding of, and respect for human rights, within the security forces, whose efforts to combat drug trafficking and terrorism make a major contribution to the protection of the human rights of the majority of Colombians.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures the 26
  British Government will be taking to ensure that British investment in Colombia does not contribute to environmental damage and social unrest in Colombia.

  Mr. Heathcoat-Amory
  British investors are required to observe the relevant Colombian legislation relating to environmental protection. Investment in Colombia should encourage economic and social development.

  Conventional Arms Transfer Register
  Mr. Robert Jackson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has about returns, in addition to that by the United Kingdom, to the United Nations conventional arms transfer register; if he will place a copy of such information in the Library; and if he will make a statement.

  Mr. Douglas Hogg
  To date, we understand that 62 countries have submitted data to the United Nations register of conventional arms. The United Nations Secretary General will report to the United Nations General Assembly in the autumn on the returns received. A copy of this report will be placed in the Library of the House in due course.

  Bosnia
  Lady Olga Maitland
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will list the dates of interception of the violations of the United Nations no-fly zones in Bosnia since October 1992.

  Mr. Douglas Hogg
  NATO enforcement of the no-fly zone over Bosnia-Herzegovina began on 12 April. Between then and 23 June—the latest date for which United Nations reports are available—NATO fighters intercepted 28 violators in total, on the following dates —one violator on each date unless otherwise indicated:

  13 April

  30 April (2)

  13 May (2)

  18 May

  25 May (2)

  26 May (2)

  30 May

  7 June (2)

  8 June (2)

  13 June (2)

  14 June

  15 June (2)

  16 June

  17 June

  21 June

  22 June (3)

  23 June

  Diplomatic Service (School Fees)
  Miss Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs what has been the cost to public funds of school fees for children of persons working in the diplomatic service in each year for the last 10 years.

  Mr. Goodlad
  The cost to public funds of boarding school fees in the United Kingdom, and day school fees at posts overseas, for children of diplomatic service officers in each year since 1983–84 has been:

  £ million

  1983–84

  6·94

  1984–85

  7·46

  1985–86

  7·63

  27

  £ million

  1986–87

  8·11

  1987–88

  8·53

  1988–89

  8·61

  1989–90

  8·69

  1990–91

  9·19

  1991–92

  9·45

  1992–93

  9·82

  Nigeria
  Mr. Parry
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the recent election in Nigeria.

  Presidential election: 12 June 1993

  State number

  State name

  NRC votes cast

  Per cent.

  SDP votes cast

  Per cent.

  Voter turn-out Per cent.

  1

  Abia1

  151,227

  59

  105,273

  41

  26

  2

  Adamawa

  178,865

  53

  155,625

  47

  35

  3

  Akwa-Ibom1

  199,342

  48

  214,787

  52

  40

  4

  Anambra1

  159,258

  43

  212,024

  57

  29

  5

  Bauchi

  513,077

  61

  334,197

  39

  40

  6

  Benue

  186,302

  43

  216,830

  57

  33

  7

  Borno1

  128,684

  46

  153,496

  54

  23

  8

  Cross River

  153,452

  48

  189,303

  52

  39

  9

  Delta

  145,001

  31

  327,277

  69

  41

  10

  Edo1

  103,572

  33·5

  205,470

  66·5

  34

  11

  Enugu

  233,281

  55

  193,969

  45

  33

  12

  Imo

  193,202

  55

  156,700

  45

  31

  13

  Jigawa

  89,836

  39

  138,552

  61

  19

  14

  Kaduna1

  336,860

  46

  389,713

  54

  45

  15

  Kano1

  154,809

  48

  169,619

  52

  12·5

  16

  Katsina

  271,000

  61

  171,169

  39

  26

  17

  Kebbi

  209,872

  73

  77,102

  27

  35

  18

  Kogi1

  256,732

  54

  222,760

  46

  49

  19

  Kwara1

  80,209

  23

  272,270

  77

  53

  20

  Lagos1

  149,432

  14·5

  883,965

  85·5

  43

  21

  Niger1

  221,437

  62

  136,350

  38

  36

  22

  Ogun1

  59,246

  12

  425,725

  88

  52

  23

  Ondo

  160,994

  17

  802,024

  83

  55

  24

  Osun

  72,068

  16·5

  365,266

  83·5

  41

  25

  Oyo1

  105,788

  16·5

  536,011

  83·5

  40

  26

  Plateau1

  259,394

  38

  417,565

  62

  45

  27

  Rivers

  646,952

  63

  379,872

  37

  54

  28

  Sokoto

  372,260

  79

  97,726

  21

  29

  292

  Taraba

  89,836

  39

  138,557

  60

  30

  Yobe

  65,133

  37

  110,921

  63

  26

  31

  Abuja, Fct1

  18,313

  48

  19,968

  52

  25

  1 Published by the Nigerian National Electoral Commission.

  2 Provisional.

  Other results were collated and agreed by the National Electoral Commission and political parties but not officially released before the elections were annulled by military decree on 23 June.

  South Africa
  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the South African Government following the recent outbreaks of right-wing extremism; and if he will make a statement.

  Mr. Lennox-Boyd
  On 26 June the European Community and its member states issued a statement condemning the attack on 25 June on the world trade centre in Johannesburg.
  28
  Mr. Lennox-Boyd
  I refer the hon. Member to the answer given by my right hon. Friend the Foreign Secretary on 1 July at column 589, to my hon. Friend the Member for Basingstoke (Mr. Hunter).

  Mr. Hain
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will publish the information held by his Department(a) on the results in each state of the Nigerian presidential election on 12 June 1992 and (b) on the turnout figures.

  Mr. Lennox-Boyd
  The results and turnout figures for each state of the Nigerian presidential election held on 12 June 1993 have been published in Nigeria and are as follows:

  The South African Government are well aware of our total support for the negotiation process, and of our view that it represents the only possibility of achieving a peaceful transition to democracy. We have frequently expressed our total condemnation of violence, and our conviction that those who use violence in an attempt to derail the negotiation process must not be allowed to succeed.

DUCHY OF LANCASTER

  Market Testing
  Ms Mowlam
  To ask the Chancellor of the Duchy of Lancaster how much the market-testing programme has cost his Department since November 1992.
  29
  Mr. Waldegrave
  The cost of market testing the Office of Public Service and Science, including its agencies, HMSO and COI, since November 1992 has been around £589,000. As a result of market-testing activities during this period, savings of £1,769,000 have been made.

NATIONAL HERITAGE

  Market Testing
  Ms Mowlam
  To ask the Secretary of State for National Heritae how much the market-testing programme has cost his Department since November 1992.

  Mr. Sproat
  The Department of National Heritage has spent £80,690 on its own market-testing programme since 1 November 1992. The Historic Royal Palaces agency and the Royal Parks have spent £9,000 and £37,200 respectively on their market-testing programmes since November 1992.

  BBC
  Mr. Gale
  To ask the Secretary of State for National Heritage what replies he has received to the Government's consultation document about the future of the BBC.

  (a) Net estate over £1 million

  (b) Net estate over £2 million

  Year of death

  Number of estates applying for grants of representation

  Number of estates not taxed

  Number of estates applying for grants of representation

  Number of estates not taxed

  1988–89

  573

  156

  153

  46

  1989–90

  859

  245

  231

  63

  Scotch Whisky
  Mr. Steen
  To ask the Chancellor of the Exchequer what was the yield to the Treasury from excise duty on Scotch whisky for 1992–93 in cash terms, and as a percentage of total excise duty revenue; and what is the estimate of the corresponding figures for 1993–94.

  Sir John Cope
  Estimated figures are as follows:

  Year

  Percentage of total excise duty

  Excise duty on home-produced whisky £ million

  1992–93

  2·7

  690

  1993–94

  2·5

  700

  Business Exapansion Scheme
  Ms Harman
  To ask the Chancellor of the Exchequer if he will estimate the total cost to the Exchequer of the business expansion scheme tax relief on(a) all loan-linked investments where shares were issued before 16 March 1993 and (b) those loan-linked investments where shares were issued after 31 December 1992 and before 16 March 1993.

  Mr. Dorrell
  [holding answer 25 June 1993]: It is not yet possible to provide a reliable estimate of the amount of money raised through loan-linked business expansion scheme investments. A tentative estimate is that
  30
  Mr. Brooke
  By 31 May, we received more than 6,200 replies from members of the public and 300 responses from organisations. I have placed in the Library a copy of a report by Research International Advertising Media, analysing the replies from the public, and a list of the organisations which responded.

NATIONAL FINANCE

  Taxation
  Mr. Mandelson
  To ask the Chancellor of the Exchequer in respect of how many estates notified for probate, valued at(a) over £1 million and (b) over £2 million, no tax was paid in each year since 1988.

  Mr. Dorrell
  Estimates for the numbers of estates applying for grants of representation and estates paying no inheritance tax where death occurred in the financial years 1988–89 and 1989–90 are given in the table. Figures for more recent years are not yet available.

  approximately £650 million was raised, almost all of which was invested in newly built and second-hand residential property. Tax relief on this sum is estimated to amount to £250 million. Over £500 million was raised between 31 December 1992 and 16 March 1993; tax relief on that sum would be approximately £200 million.

  Scrip Dividends
  Ms Harman
  To ask the Chancellor of the Exchequer if he will provide an estimate of the revenue which would have been raised by the Exchequer in 1992–93 if scrip dividends had been liable to advanced corporation tax at the same rate as dividends paid in cash.

  Mr. Dorrell
  [holding answer 1 July 1993]: The Exchequer effects are very difficult to estimate. They would depend on the decisions taken by companies about what sort of dividends to pay. The main effect would have probably been a small cash flow benefit to the Exchequer from higher advance corporation tax largely offset by a reduction in subsequent mainstream tax payments.

WALES

  Market Testing
  Ms Mowlam
  To ask the Secretary of State for Wales how much the market-testing programme has cost his Department since November 1992.

  Mr. Redwood
  The estimated cost of the Welsh Office market-testing programme, since November 1992, is
  31
  £335,000. It has, of course, produced savings and improvements, which are expected to be substantial when the programme is complete.

  Radiography
  Mr. Alex Carlile
  To ask the Secretary of State for Wales how many full-time radiographers there are currently practising in Wales; how many there were in each year since 1979; and if he will make a statement.

  Mr. Gwilym Jones
  The information available centrally relates to staff directly employed by the national health service and is not reliable for years prior to 1984.

  Full-time radiographers (numbers) in post as at 30 September

  Number

  1984

  469

  1985

  486

  1986

  490

  1987

  523

  1988

  520

  1989

  543

  1990

  545

  1991

  567

  1992

  570

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what plans he has to make available a national health service bursary for training in radiography in Wales; and if he will make a statement.

  Mr. Gwilym Jones
  Bursaries are available for pre-registration radiography training. Post-registration and post-graduate training is a matter for the employers.

  Mr. Alex Carlile
  To ask the Secretary of State for Wales what plans he has to increase the funding for graduate and post-diploma training in radiography; and if he will make a statement.

  Mr. Gwilym Jones
  I refer the hon. Gentleman to the reply of 29 June to the hon. Member for Alyn and Deeside (Mr. Jones) at column 479.

  IACS Forms
  Mr. Alex Carlile
  To ask the Secretary of State for Wales how many complaints he has received from Welsh farmers about the integrated administration and control systems forms; what structure has been set up to deal with these complaints; and if he will make a statement.

  Mr. Redwood
  I have received several complaints which have been answered at an appropriate level within the normal departmental structure. I shall be keeping future requirements for form filling under close review.

TRADE AND INDUSTRY

  THORP
  Mr. Simpson
  To ask the President of the Board of Trade which nuclear power stations were designed to use reprocessed fuel; and in which power stations the reprocessed fuel from the thermal oxide reprocessing plant is to be used.

  Mr. Eggar
  No special design features are required in most water-moderated nuclear reactors to enable them to 32
  use reprocessed nuclear materials in their fuel. The use of reprocessing products arising in the thermal oxide reprocessing plant is a matter for the customers of British Nuclear Fuels plc.

  Mr. McGrady
  To ask the President of the Board of Trade (1) what radioactive materials or radio-isotopes are already on site, or have been delivered for use at the thermal oxide reprocessing plant for commissioning or other purposes, excluding consignments or irradiated fuel, within the last three months, or are expected to be delivered before 31 July;

  (2) if any of the completed or outstanding commissioning work to be undertaken at the thermal oxide reprocessing plant has resulted in any radioactive contamination of the plant;

  (3) what has been the cost of all commissioning of the thermal oxide reprocessing plant undertaken and completed to date; and if he will specify those areas and items of plant completed so far.

  (4) what is the approximate cost and timescale for each element of outstanding commissioning work on the thermal oxide reprocessing plant; and what areas or items of plant have yet to be completed.

  Mr. Eggar
  This is an operational matter for British Nuclear Fuels plc.

  Mr. McGrady
  To ask the President of the Board of Trade what consignments of radioactive materials or radio-isotopes have been or are to be transferred within the Sellafield site for the thermal oxide reprocessing plant centre.

  Mr. Eggar
  The majority of the irradiated fuel to be reprocessed during the first 10 years' operation of the thermal oxide reprocessing plant has already been delivered to storage ponds on the Sellafield site, including the receipt and storage facility attached to the THORP plant.

  Mr. Alton
  To ask the President of the Board of Trade what were the initial estimates for the cost of constructing and maintaining the THORP at Sellafield and the actual cost of construction and maintenance.

  Mr. Eggar
  [holding answer 22 June 1993]: For the costs of constructing the thermal oxide reprocessing plant, I refer the hon. Member to my reply to the hon. Member for Blaenau Gwent (Mr. Smith) on 17 December 1992 at columns 468–69. The plant's maintenance costs are an operational matter for British Nuclear Fuels plc.

  Post Office (Pension Payments)
  Mr. Morley
  To ask the President of the Board of Trade if he will list the public sector occupational pensions that formerly had facilities for payment through Post Office Counters Ltd. which have been withdrawn in the last 18 months.

  Mr. McLoughlin
  Those public sector occupational pensions administered by the Paymaster General's Office —that is, the national health service, England and Wales; national health service, Scotland and the principal civil service pension scheme—had this facility withdrawn on 1 April 1993. Fifty-nine thousand pensioners were affected.

  However, special arrangements were made to open a Girobank account for those pensioners who wished to continued to draw their pension at a post office.

  Loan Guarantee Scheme
  Mrs. Lait
  To ask the President of the Board of Trade how many applications for loans under the loan guarantee scheme have been made since the Budget; how many have been successful; and what were the figures in the same period in 1992.

  Mr. McLoughlin
  The number of applications made under the loan guarantee scheme between the Budget and 25 June 1993, the number of successful applications and the corresponding figures for the same period in 1992 are as follows:

  1992

  1993

  Applications Received

  738

  644

  Loans Guaranteed

  738

  637

  Applications under consideration

  0

  6

  The changes in the Chancellor's Budget statement which came into effect on 1 July include a measure that allow small firms which have been established for two years or more to obtain loans up to a maximum of £250,000 with a guarantee of 85 per cent.

  Cable Television
  Mr. Luff
  To ask the President of the Board of Trade when he expects to be able to award a licence for cable television services in the Worcester area; and if he will make a statement.

  Mr. McLoughlin
  I was pleased to be able to grant a Telecommunications Act licence on 28 June 1993 to Comment Cablevision Worcester Ltd. to install and run a broadband cable service in the Worcester, Redditch and Droitwich area. I look forward to the licensee offering the residents of Worcester and surrounding areas a wide range of TV and other telecommunications services.

  Steel
  Mr. Barry Jones
  To ask the President of the Board of Trade what is his policy concerning the dumping of steel in the United Kingdom by east European producers; and if he will make a statement.

  Mr. Needham
  Action against dumping is a matter for the European Commission, which is ready to investigate any evidence which the steel industry may put to it. As regards other trade measures, the Community has already agreed for 1993 some import restrictions in the form of quotas or tariff quotas on certain steel products from the Commonwealth of Independent States, Georgia, Bulgaria and the Czech and Slovak Republics.

  Mr. Barry Jones
  To ask the President of the Board of Trade what information he has as to overcapacity among east European steel producers; and if he will make a statement.

  Mr. Sainsbury
  According to figures produced by the United Nations Economic Commission for Europe, East European production of crude steel in 1992 amounted to 29·4 million tonnes, compared to capacity of 48·9 million tonnes, equivalent to an excess in capacity of almost 70 per cent. over production.

  Postal Services
  Mr. Callaghan
  To ask the President of the Board of Trade what representations he has received about the quality of the postal services.

  Mr. McLoughlin
  My Department regularly receives representations about a range of postal issues, including quality of service. Royal Mail continues to make significant improvements in this area. Nationally, in 1992–93, 91·9 per cent. of first-class mail was delivered the next working day and 98.4 per cent. of second-class mail was delivered within three days.

  Video Copyright
  Lady Olga Maitland
  To ask the President of the Board of Trade what measures the Government are taking to stop the infringement of copyright by illegal video duplication.

  Mr. McLoughlin
  Copyright owners have considerable powers under the Copyright, Designs and Patents Act, 1988 to take appropriate legal action themselves against those infringing their intellectual property rights. In addition, this legislation provides for significant criminal penalties for those who make or trade in unauthorised copies of audiovisual works, demonstrating the importance that the Government attach to combatting this illegal activity. The Patent Office's promotional literature and associated audiovisual aids continue to play a major role in increasing the general awareness of the rights existing in these works.

  Research and Development
  Ms Walley
  To ask the President of the Board of Trade what details he has of investment in research and development and innovation by industry in the west midlands region based in north Staffordshire.

  Mr. Sainsbury
  The details requested could be obtained only at disproportionate cost.

  Ms Walley
  To ask the President of the Board of Trade if he will set targets for Government investment in research and development for industry in the west midlands region based in Stoke on Trent.

  Mr. Sainsbury
  It would not be appropriate for the Government to set such targets: it is industry's responsibility to innovate. Moreover, since DTI schemes usually involve matching funding, targets would require assumptions to be made about the proportionate contribution local industry would be willing to provide.

  Nuclear Power
  Mr. Llew Smith
  To ask the President of the Board of Trade if he will place in the Library a full copy of the Energy Minister's speech on nuclear power to a London conference on 29 June.

  Mr. Eggar
  I have placed in the Library of the House copies of the press notice issued following my speech to the British nuclear industry forum on 29 June.

  Public Houses
  Mr. Wareing
  To ask the President of the Board of Trade when the European Commission last reviewed the block exemption of tied public houses.
  35
  Mr. Neil Hamilton
  In June 1990 the European Commission announced the results of a review it had undertaken of competition in the European Community beer market. This concluded, inter alia, that no change should be made to the block exemption which expires in 1997.

  Beer
  Mr. Wareing
  To ask the President of the Board of Trade, pursuant to his oral answer of 23 June,Official Report, column 294, what percentage of beer was sold through (a) tied public houses and (b) untied public houses in each year since 1988; and if he will make a statement.

  Mr. Neil Hamilton
  The available information is as follows:

  Beer sales since the Beer Orders (per cent. by channel)

  1989

  1990

  1991

  1November 1992

  On-trade:

  —tied

  44

  42

  36

  29

  —free

  37

  38

  43

  49

  Off-trade

  19

  20

  21

  22

  TOTAL

  100

  100

  100

  100

  Source: MMC report on Allied-Lyons plc and Carlsberg A/S, July 1992.

  1 Estimated.

  Brewery Industry
  Mr. Wareing
  To ask the President of the Board of Trade what part the Office of Fair Trading has played in his investigations into issues raised with him about Inntrepreneur leases in the brewery industry; and if he will make a statement.

  Mr. Neil Hamilton
  In considering whether any competition issues have been raised in the representations made to my Department about Inntrepreneur leases and related matters, my officials have worked closely with the Office of Fair Trading.

  Mr. Wareing
  To ask the President of the Board of Trade how many representations he has received from lessees of Inntrepreneur Estates complaining of the conditions of its tenancies; and if he will make a statement.

  Mr. Neil Hamilton
  Since the beginning of the calendar year, my Department has received over 100 letters from, or on behalf of, Inntrepreneur Estates Ltd. lessees.

  Mr. Wareing
  To ask the President of the Board of Trade what discussions he has had with Sir Alan Sheppard, chairman of Grand Metropolitan plc, about Inntrepreneur leases in the brewery industry; and if he will make a statement.

  Mr. Neil Hamilton
  My right hon. Friend the President of the Board of Trade has had no discussions with Sir Allen Sheppard, chairman of Grand Metropolitan plc, about Inntrepreneur leases. Officials have met recently with Mr. R. G. Williams, chairman and managing director of Grand Metropolitan Estates Ltd., which administers the property portfolio of Inntrepreneur Estates Ltd., to discuss a number of specific issues relating to Inntrepreneur leases.
  36
  Mr. Wareing
  To ask the President of the Board of Trade, pursuant to his oral answer of 23 June,Official Report, columns 293–94, what significant improvement has been achieved for the tenants of Inntrepreneur Estates as a result of his intervention; and what course of action he has urged upon such brewery companies.

  Mr. Neil Hamilton
  As I made clear in my answer to the hon. Member on 7 June at columns 161–62, the negotiation of individual leases is a commercial matter for determination between landlords and tenants. Nevertheless, in 1991 Ministers did secure certain assurances from the national brewers about treatment of tenants when introducing changes to leasing arrangements. I believe that these assurances have had some effect in helping to smooth what has been a difficult period of transition for brewers and tenants. I am, for instance, aware that a number of tenants nearing retirement have been offered more flexible lease arrangements. It would be wrong, however, to have expected these assurances to resolve all commercial differences between a brewer and its tenant.

  British Nuclear Fuels
  Mr. Simon Hughes
  To ask the President of the Board of Trade what criteria are used by his Department to assess the corporate plans produced by BNFL.

  Mr. Eggar
  [holding answer 22 June 1993]: When assessing the corporate plans of BNFL, my Department applies commercial criteria in line with current Government policy.

  Mr. Simon Hughes
  To ask the President of the Board of Trade when his Department last received a copy of the forward corporate plan produced by BNFL.

  Mr. Eggar
  [holding answer 22 June 1993]: DTI receives copies of all British Nuclear Fuels plc corporate plans following their approval by the board of the company.

  Furniture (Safety)
  Mr. Michael
  To ask the President of the Board of Trade what progress was made at the European Council on 14 June concerning the conclusion of the draft directive on the fire behaviour of upholstered furniture.

  Mr. McLoughlin
  [holding answer 30 June 1993]: On 14 June 1993 the Commission stated that the proposed directive on the fire behaviour of upholstered furniture had not been included in the 1993 legislative programme because of the difficulty in preparing adequate standards, particularly with regard to the safety of fire retardent treatments. Subsequent to this, at the Copenhagen European Council the Commission produced a list of items, in the context of discussions of subsidiarity, for which no legislation is now planned. The safety—flammability—of foam-filled furniture is included in this list.

  Textile and Clothing
  Mr. Nicholas Winterton
  To ask the President of the Board of Trade (1) if he will make a statement outlining progress which has been made in his negotiations with the United States of America on tariff peaks in the textile and clothing sector;
  37
  (2) what recent representations he has received from (a) the Apparel, Knitting and Textiles Alliance, and (b) others, about the need for an agreement to reduce United States tariff peaks on textiles and clothing as a prelude to wider multilateral negotiations with all other GATT signatories on wider tariff harmonisation, consolidation and removal;

  (3) if he will state his policy on the level of the United States of America's tariff peaks on textiles and clothing.

  Mr. Needham
  [holding answer 2 July 1993]: I have recently received correspondence from the Apparel, Knitting and Textiles Alliance about the need to reduce United States tariff peaks on textiles and clothing as a prelude to wider multilateral negotiations with all other GATT signatories on wider tariff harmonisation, consolidation and removal. It is the European Commission which negotiates on behalf of the European Community on tariffs. It remains United Kingdom and EC policy to obtain substantial reductions in peak United States textile and clothing tariffs in the course of the GATT Uruguay round market access negotiations. The EC is currently negotiating with the United States on the elements of a market access agreement which would include a substantial reduction in US textile and clothing tariff rates.

NORTHERN IRELAND

  Mental Health Act 1983
  Mr. Clifton-Brown
  To ask the Secretary of State for Northern Ireland how many people in Northern Ireland have been detained under section 2 of the Mental Health Act 1983 in each year since 1985.

  Mr. Ancram
  The Mental Health Act 1983 does not apply in Northern Ireland. The equivalent legislation is the Mental Health (Northern Ireland) Order 1986 of which article 4 applies to admissions to hospital for assessment. The number of admissions from 1986 are as follows:

  Year

  Number of admissions

  1986

  691

  1987

  539

  1988–89

  788

  1989–90

  771

  1990–91

  566

  1991–92

  642

  1992–93

  635

  The numbers are of admissions, not persons, as a person could be admitted more than once during the year. Data for 1988–89 onwards are on a financial year basis.

  Leadhill Primary School
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many new admissions of pupils there have been to Leadhill primary school in each of the past five years; how many new admissions are expected in September; how many classrooms were lost in June 1982 as a result of vandalism; when it is planned to replace those classrooms; and at which primary schools in the borough of Castlereagh there will be capital expenditure for the provision of new classrooms during the next three years.
  38
  Mr. Ancram
  Admissions to Leadhill primary school in each of the last five years and expected admissions in September 1993 are as follows:

  Year

  Number

  1988

  23

  1989

  25

  1990

  26

  1991

  25

  1992

  33

  1993

  32

  Four classrooms at Leadhill primary school were demolished following an arson attack in June 1983. They were replaced by three temporary classrooms.

  There are no plans at present for major capital expenditure for the provision of new classrooms at primary schools in the borough of Castlereagh, but the South Eastern education and library board regularly reviews the need for capital development at controlled schools in its area.

  Abortion
  Mrs. Ann Winterton
  To ask the Secretary of State for Northern Ireland if he will make a statement on the terms of the inquiry currently being undertaken by the Standing Advisory Commission on Human Rights on abortion law in Northern Ireland; and what steps were taken by the commission to alert right hon. and hon. Members representing constituencies in Northern Ireland prior to announcing the inquiry.

  Mr. Ancram
  The Standing Advisory Commission on Human Rights is not undertaking an inquiry. It has published a paper on abortion law in Northern Ireland, inviting a wide range of bodies and individuals to respond on ways in which the law could be clarified. Northern Ireland Members of Parliament have been invited to contribute their views.

  Mrs. Ann Winterton
  To ask the Secretary of State for Northern Ireland what representations he has received from right hon. and hon. Members representing Northern Ireland constituencies on whether the Abortion Act 1967 should be extended to Northern Ireland.

  Mr. Ancram
  None.

  Mrs. Ann Winterton
  To ask the Secretary of State for Northern Ireland if he will make a statement providing details of representations which he has received on the proportion of(a) people of Northern Ireland, or (b) the medical profession in the Province would support the extension of the Abortion Act 1967 to Northern Ireland.

  Mr. Ancram
  In the past 12 months, five representations have been received indicating that a majority of people in the Province would support the extension of the Abortion Act 1967 to Northern Ireland. Twenty-one representations have been received indicating that a majority of people would be opposed to such an extension and one that a majority of the medical profession would likewise be opposed.

  Mrs. Ann Winterton
  To ask the Secretary of State for Northern Ireland if he will list those churches or religious organisations from Northern Ireland which have expressed to him a view that the Abortion Act 1967 should be extended to Northern Ireland.
  39
  Mr. Ancram
  No churches or religious organisations have expressed such a view.

  Standing Advisory Commission on Human Rights
  Mrs. Ann Winterton
  To ask the Secretary of State for Northern Ireland by what authority the Standing Advisory Commission on Human Rights is established; who are its current members; who is its chairman; upon what basis and for what terms he appoints individuals to the commission; what is the annual cost of the commission; and if he will make it his policy to bring forward proposals for its abolition.

  Sir Patrick Mayhew
  The commission is constituted in accordance with section 20 of the Northern Ireland Constitution Act 1973. Members are selected on the basis of their legal or other relevant experience. They are appointed for a period of two years and their appointments may be renewed. The commission's membership on 1 July 1993 is as follows:Chairman..

  Mr. Charles Hill, QC

  Members:

  Mrs. J. Harbison, CBE

  Mrs. M. Clark-Glass, CBE

  Mr. R. T. Mullan

  Mr. F. A. Mackie, OBE

  Mr. A. L. Sherrard

  Mr. D. Nesbitt

  Mrs. J. Corr

  Professor S. F. Lee

  Mrs. J. Smyth

  Ms G. Keegan

  Ex-Officio Members1:

  Mr. R. G. Cooper, CBE

  Mrs. J. Mclvor, QSM

  1 The 1973 Act stipulates that the commission's membership must include ex-officio the chairman of the Fair Employment Agency, and the Northern Ireland Commissioner for Complaints and the Northern Ireland Parliamentary Commissioner for Administration. Mr. Cooper is chairman of the FEA and Mrs. Mclvor holds both commissioner posts.

  The annual cost of the commission for the period April 1992 to March 1993 was £240,200 (provisional figure).

  I greatly value the independent advice of the Standing Advisory Commission of Human Rights and the Government have no plans to bring forward proposals for its abolition.

SOCIAL SECURITY

  Benefits Uprating
  Mr. Simon Coombs
  To ask the Secretary of State for Social Security how much was spent on uprating benefits in April.

  Mr. Lilley
  The uprating of all the main benefits in April this year by 3·6 per cent. cost an additional £2·5 billion.

  Invalidity and Sickness Benefits
  Mr. Hain
  To ask the Secretary of State for Social Security what percentage of the adult male population receives(a) invalidity benefit and (b) sickness benefit.
  40
  Mr. Scott
  In March 1991, the latest date for which these figures are available, about 4·5 per cent. of the adult male population received invalidity benefit, and about 0·4 per cent. received sickness benefit.

  Available information is in the table.

  Males in receipt of benefit on 30 March 19911

  As a percentage of the adult male population2per cent.

  Sickness benefit

  85,000

  0·4

  Invalidity benefit

  976,000

  4·5

  1 Based on a 1 per cent, sample of claimants, rounded to the nearest thousand.

  2 Provisional estimate for mid-1991 of 21,542,000 males in Great Britain aged 16 and over; based on early 1991 census results.

  Mr. Illsley
  To ask the Secretary of State for Social Security whether he has any proposals for changing entitlement to sickness and invalidity benefits.

  Mr. Scott
  I refer to the reply to the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) earlier today.

  Medical Appeal Tribunal
  Mr. Clapham
  To ask the Secretary of State for Social Security how many domiciliary medical appeal tribunals there were in England and Wales in(a) 1992 and (b)

  Mr. Burt
  The president of the independent tribunal service advises that in 1992, 242 domiciliary medical appeal tribunals were held in England and Wales. The Department no longer has the figures for 1982.

  Pensioner Owner-occupiers
  Mr. David Atkinson
  To ask the Secretary of State for Social Security what representations he has received about the proportion of pensioners who are owner-occupiers and have paid off their mortgages.

  Mr. Hague
  Over half of all pensioners now own their own home—of these, 94 per cent. own their homes outright with no mortgage commitments.

  Back to Work Initiative
  Mrs. Angela Knight
  To ask the Secretary of State for Social Security how many inquiries there have been to the family credit helpline since he announced the back to work initiative in April.

  Mr. Burt
  Since I launched the helpline, which fulfilled our manifesto commitment, well over a quarter of a million inquiries have been answered.

  Disability Working Allowance
  Mr. Thurnham
  To ask the Secretary of State for Social Security what representations he has received about the number of people receiving the disability working allowance; and if he will make a statement.

  Mr. Scott
  Some organisations of and for disabled people have commented on the take-up of this benefit. Disability working allowance has been widely welcomed in
  41
  principle and we are working with organisations to ensure that more of the people who could take advantage of it are aware of the new opportunity which it presents.

  Social Security Review
  Mr. Winnick
  To ask the Secretary of State for Social Security when he will announce the completion of his review of social security.

  Mr. Burt
  The timetable for the expenditure review is long term. We will shortly publish background analytical material to the review with the intention of stimulating public debate about the future of the social security system. At this early stage, I cannot say what the long-term timetable will be.

  Social Fund
  Mr. John Marshall
  To ask the Secretary of State for Social Security what is the total value of payments made by the social fund since its introduction.

  Mr. Scott
  Since the social fund was introduced in 1988, over 16·3 million social fund awards have been made worth more than £1·5 billion, including maternity, funeral and cold weather payments as well as awards from the discretionary scheme.

  Family Credit
  Mr. Pike
  To ask the Secretary of State for Social Security how many families in the north-west were in receipt of family credit at the latest date for which figures are available.

  Mr. Burt
  At 31 October 1992, the latest date for which information is available, there were 63,000 families in the north-west region of England receiving family credit.

  Housing Benefit
  Dr. Lynne Jones
  To ask the Secretary of State for Social Security what further consideration he has given to the introduction of a universal housing benefit scheme covering both rent and mortgage payments; and if he will make a statement.

  Mr. Burt
  1 refer the hon. Member to my reply to her on 18 January, at column 101.

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

  Mr. Hague
  More than 1·5 million pensioners and their partners have gained from these increases since 1991. In addition, a large number of other pensioners have gained from consequential rises in the other income-related benefits.

  Sick and Disabled People
  Mr. Robathan
  To ask the Secretary of State for Social Security what is the most recent figure for the average increase in spending on long-term sick and disabled people since 1979; and what were the comparable figures for the period 1974 to 1979.
  42
  Mr. Scott
  During 1992–93 we spent almost £15 billion on benefits for long-term sick and disabled people. This represents an annual increase of £700 million per year since 1979 at 1992–93 prices, double the annual increase between 1974 and 1979.

  Pensions
  Mr. Nicholls
  To ask the Secretary of State for Social Security how much total pension incomes have increased between 1979 and 1992; and what was the equivalent figure between 1974 and 1979.

  Mr. Hague
  I refer the hon. Member to my reply to the hon. Member for Edmonton (Dr. Twinn) on 7 June at columns 139–40.

  Personal Pensions
  Mr. Harris
  To ask the Secretary of State for Social Security if he will make a statement on the results of his Department's policies to encourage personal pensions.

  Mr. Hague
  The Government's policy in encouraging personal pensions has proved to be highly successful with over 5 million people currently being personal pension holders.

  Invalidity Benefit
  Mr. Alan W. Williams
  To ask the Secretary of State for Social Security how many people were in receipt of invalidity benefit in January 1990; and what are the latest available figures.

  Mr. Scott
  On 31 January 1990 there were, 1,196,000 people receiving invalidity benefit'. The estimated average number receiving invalidity benefit at any one time during 1992–93 was 1,490,000.2

  Notes:

  1Source—1 per cent. sample of claimants, rounded to the nearest thousand.

  2Source—Departmental Report.

  Mr. Dewar
  To ask the Secretary of State for Social Security how many and what proportion of people in receipt of invalidity benefit have additional income from(a) an occupational pension, (b) a spouse earning less than £44·65 and (c) a spouse earning more than £44·65 a week, giving figures separately for men and women.

  Mr. Scott
  Information is not available in the form requested. Such information as is available follows.

  Using information from the 1989, 1990 and 1991 family expenditure surveys, we estimate that around 45 per cent. of men and 25 per cent. of women in receipt of invalidity benefit received an occupational pension.

  Information is not kept on the number of invalidity benefit recipients whose spouse earns above the earnings limit. However, at 30 March 1991, there were some 4,000 reduced rate adult dependency increases in payment arising from claims made before 16 September 1985. At that time, such increases were reduced because of earnings rather than not paid about a given level as is the present rule.

  Information about invalidity benefit recipients at 30 March 1991 who received an adult dependency increase is in the table.

  43

  Number of beneficiaries

  Adult dependency increase in payment

  Per cent.

  Total

  1,306,000

  415,000

  31·8

  Men

  976,000

  412,000

  42·2

  Women

  330,000

  2,000

  0·7

  Note:

  1. 30 March 1991 is the latest date for which information is available, figures based on a 1 per cent. sample of incapacity benefit claimants, and rounded to the nearest thousand.

  Students (Income Support)
  Mr. Denham
  To ask the Secretary of State for Social Security if he will restore income support to students who fall ill during the long vacation.

  Mr. Burt
  Since September 1990, financial support for most students has come from the education maintenance system, not the social security system. We have no plans to restore income support to students.

  Family Support
  Mr. Elletson
  To ask the Secretary of State for Social Security what is the annual spending from family credit; and what was the spending on family income supplement in 1979.

  Mr. Burt
  Family credit expenditure for 1992–93 was £864 million. This is 36 times more than the £24 million spent on family income supplement in 1978–79 in cash terms and 13 times more in real terms.

  Claimants (Co-located Facilities)
  Mr. Barry Field
  To ask the Secretary of State for Social Security what discussions he has had about co-locating facilities for claimants and the unemployed.

  Mr. Burt
  Officials from the Departments of Social Security and of Employment have examined ways of improving the interaction of employment service and Benefits Agency functions in order to improve the service provided to unemployed people. Recommendations which have been taken forward include better liaison between offices in the same area and moves towards standard opening hours. In addition, a number of measures are being piloted; for example, family credit advice and calculations for newly unemployed people, and locating BA staff in ES offices to give immediate advice about income support claims. The results of the latter pilot are now being evaluated.

LORD CHANCELLOR'S DEPARTMENT

  Murder Cases
  Mr. Gunnell
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will ensure that, in murder cases where hon. Members have raised the conviction with members of the Government, transcripts or notes of the trial are retained longer than the five-year norm.

  Mr. John M. Taylor
  Five years is the rule but if there is an appeal then the transcripts and statements made available for the appeal are retained indefinitely by arrangement with the Public Record Office.

  Conciliation Services
  Mr. Wicks
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make a statement about conciliation services.

  Mr. John M. Taylor
  The Government greatly value the work undertaken by local mediation and conciliation services in many areas of the country.

CHURCH COMMISSIONERS

  Women Priests
  Mr. Fabricant
  To ask the right hon. Member for Selby, as representing the Church Commissioners what estimate has been made of the reduction in the number of stipends payable to clergy as a result of clergy retiring or leaving the Church on the grounds of the ordination of women.

  Mr. Alison
  The commissioners have made no such estimates because they have no means of knowing how many clergy may actually resign. They are, of course, discussing the possible financial implications with dioceses using a benchmark of cost per 100 men.

  Redundant Church Buildings
  Mr. Corbyn
  To ask the right hon. Member for Selby, as representing the Church Commissioners what propor-tion of redundant church buildings have been transferred to housing associations and local authorities for social housing provision.

  Mr. Alison
  Since 1969 more than 100 or about one third of the sites of demolished redundant churches have been transferred to housing associations or local authorities, mainly for social housing purposes. Conversion of standing redundant church buildings present more difficulties, but, over the same period, 11 have been transferred to housing associations or local authorities for social housing purposes while terms have been agreed in a twelfth case.

  Women Priests (Pensions)
  Mr. Barry Field
  To ask the right hon. Member for Selby, as representing the Church Commissioners what are the proposed rules relating to the payment of a widow's pension for the husband of an ordained female cleric who dies in an incumbency.

  Mr. Alison
  Pensions for the widowers of female members of the scheme for those in the ministry—currently deacons, deaconesses and licensed layworkers—were introduced under the Church of England Pensions Measure in 1988. These pensions are calculated in exactly the same way as pensions for widows of male members of the scheme.

SCOTLAND

  Refugees and Asylum Seekers
  Mr. Worthington
  To ask the Secretary of State for Scotland what money is currently spent from the urban aid programme in Scotland on work specifically with refugees and/or asylum seekers.
  45
  Lord James Douglas Hamilton
  No projects specifically for refugees and/or asylum seekers are currently being funded. Such individuals may, however, benefit from other projects being funded in the areas in which they live.

  Mr. Worthington
  To ask the Secretary of State for Scotland what assistance, in cash, his Department has given, or plans to give, to assist the resettlement of Bosnian refugees or asylum seekers in Scotland.

  Mr. Stewart
  My right hon. and learned Friend the Home Secretary is responsible for the funding of reception and resettlement arrangements for former detainees and their dependants from concentration camps in Bosnia whom the Government have agreed to accept in the United Kingdom at the request of the United Nations High Commissioner for Refugees. The Scottish Office provides financial assistance to support the Scottish Refugee Council in its overall work with refugee communities in Scotland including asylum seekers from Bosnia. In 1993–94 grants totalling approximately £91,000 have been awarded.

  Scotland: nursing staff in care of the elderly: by qualification status and health board: as at 30 September 1992

  Whole-time equivalent

  Care of the elderly

  Qualified

  Registered

  Enrolled

  Unqualified

  Auxiliary / Assistant

  Scotland

  9,276·4

  4,728·8

  2,777·4

  1,951·4

  4,547·6

  4,547·6

  Argyll and Clyde

  861·1

  381·3

  219·5

  161·8

  479·7

  479·7

  Ayrshire and Arran

  542·0

  310·4

  222·0

  88·4

  231·6

  231·6

  Borders

  127·5

  69·2

  47·3

  21·9

  58·3

  58·3

  Dumfries and Galloway

  385·5

  213·3

  145·0

  68·3

  172·2

  172·2

  Fife

  610·9

  358·5

  193·7

  164·8

  252·4

  252·4

  Forth Valley

  559·0

  267·5

  203·0

  64·5

  291·5

  291·5

  Grampian

  842·7

  399·0

  205·4

  193·6

  443·7

  443·7

  Greater Glasgow

  1,898·2

  814·9

  436·2

  378·7

  1,083·3

  1,083·3

  Highland

  317·7

  176·6

  136·0

  40·6

  141·2

  141·2

  Lanarkshire

  780·0

  430·9

  206·4

  224·5

  349·1

  349·1

  Lothian

  1,296·7

  702·8

  418·6

  284·2

  593·9

  593·9

  Orkney

  87·2

  54·1

  17·2

  36·8

  33·1

  33·1

  Shetland

  77·7

  54·4

  29·0

  25·4

  23·3

  23·3

  Tayside

  779·3

  429·1

  248·4

  180·7

  350·2

  350·2

  Western Isles

  109·1

  66·9

  49·7

  17·2

  42·2

  42·2

  State hospital

  2·0

  0·0

  0·0

  0·0

  2·0

  2·0

  Damp Housing
  Mrs. Fyfe
  To ask the Secretary of State for Scotland when, at current and planned levels of capital allocation, he expects to eradicate dampness from public sector housing.

  Lord James Douglas-Hamilton
  All local housing authorities have been asked in their next housing capital programmes due to be submitted to the Scottish Office by 31 August, to set out a strategy for tackling damp housing in their areas, including quantified targets which can be used as a basis for assessing progress.

  Ethnic Minorities
  Mr. Worthington
  To ask the Secretary of State for Scotland if there has been any change in Government policy about the use of urban aid funds for work with the ethnic minorities.

  Lord James Douglas-Hamilton
  No. The urban programme remains a source of grant assistance for ethnic

  Homelessness
  Mrs. Fyfe
  To ask the Secretary of State for Scotland how many persons aged between 16 and 21 years were turned away from temporary accommodation in the latest year for which figures are available.

  Lord James Douglas-Hamilton
  Information on those turned away from temporary accommodation is not collected centrally.

  Care of the Elderly
  Mrs. Fyfe
  To ask the Secretary of State for Scotland how many trained and untrained nurses, physiotherapists, speech therapists, and occupational therapists work in care of the elderly within each health board area.

  Mr. Stewart
  The whole-time equivalent figures for qualified and unqualified nursing staff as at September 1992 are detailed in the table. Data on the number of qualified and unqualified physiotherapy, speech therapy and occupational therapy staff working in the care of the elderly are not held centrally.

  minority projects in eligible areas. Applications for all types of projects throughout Scotland compete on their merits for the available resources. Funds are not earmarked for particular client groups. There is in addition a separate ethnic minority grants scheme, introduced last year, which is not confined to particular areas.

  Mr. Worthington
  To ask the Secretary of State for Scotland if the guidelines about the use of urban aid are interpreted flexibly in the case of projects involving the ethnic minorities; and if he will make a statement.

  Lord James Douglas-Hamilton
  The urban programme is targeted on eligible areas of deprivation. The Scottish Office recognises, however, that the spread of ethnic minority populations can make it difficult for local authorities and voluntary organisations to devise projects which fully comply with the programme's geographical targeting requirements. Accordingly discretion is exercised in this respect when ethnic minority projects are considered.
  47
  Mr. Worthington
  To ask the Secretary of State for Scotland what projects for work with ethnic minorities have been approved under the urban aid budget in the past five years.

  Name of project and sponsoring local authority

  Type

  Capital costs £

  Revenue costs £

  1989

  Volunteer community interpreting project, Central regional council

  New

  15,500

  25,044

  Multicultural advice and information service, Stirling district council

  New

  48,500

  55,580

  Gryffe womens aid, Strathclyde regional council

  Supplementary

  4,521

  32,236

  English as second language project, Tayside regional council

  Extension

  —

  13,875

  Garnethill community hall, Glasgow district council

  Extension

  —

  25,680

  Dundee translators and interpreters project, Dundee district council

  Supplementary

  —

  3,978

  Shakti womens aid, Lothian regional council

  New

  15,729

  51,189

  1990

  Gryffe womens aid, Strathclyde regional council

  Supplementary

  7,738

  3,192

  Ethnic legal services project, Strathclyde regional council

  New

  18,527

  64,098

  Central Garudwara community halls, Strathclyde regional council

  New

  213,068

  20,622

  Creche for ethnic minority project, Strathclyde regional council

  Supplementary

  —

  21,852

  1991

  Interpretation and translation service, Grampian regional council

  New

  —

  33,155

  Asian cultural and educational project, Central regional council

  New

  —

  9,920

  1992

  The Dixon Community—Black elderly initiative, Strathclyde regional council

  New

  24,110

  64,334

  Ethnic minority enterprise centre, Strathclyde regional council

  New

  45,315

  162,460

  Chinese cultural community project, Central regional council

  Extension

  —

  13,750

  Dundee translators and interpreters project, Dundee district council

  Supplementary

  10,000

  —

  Multicultural advice and information service, Stirling district council

  Supplementary

  2,000

  11,690

  Glasgow translation and interpretation service, Glasgow district council

  New

  16,580

  83,909

  1993

  Dundee translators and interpreters project, Dundee district council

  Extension

  —

  68,169

  Multicultural advice and information service, Stirling district council

  Extension

  —

  55,580

  Ethnic minorities womens centre, Strathclyde regional council

  New

  42,179

  193,314

  48
  Lord James Douglas-Hamilton
  The information is as follows:
  49

  Name of project and sponsoring local authority

  Type

  Capital costs £

  Revenue costs £

  Chinese elderly care project, Strathclyde regional council

  New

  11,961

  119,095

  Multicultural elderly care centre, Strathclyde regional council

  New

  145,457

  180,654

  Volunteer community interpreting project. Central regional council

  Extension

  5,460

  56,354

  Asian cultural and educational project, Central regional council

  Supplementary

  —

  3,460

  Ethnic minority sports development project, Glasgow district council

  New

  —

  42,285

  Notes:

  New projects are approved on the basis of capital costs and four years' running costs. 25 per cent. of the costs shown are met by the sponsoring local authority, the remainder by the Scottish Office.

  Supplementary applications seek additional funding until the end of the previously approved period.

  Extension applications are approved for a further three years after the initial four years' funding has expired. This applies only to projects run by voluntary and community groups.

  Ambulance Service
  Mr. Wallace
  To ask the Secretary of State for Scotland (1) what arrangements he intends to put in place to secure the emergency carriage by air ambulances in Scotland of blood and other emergency medical products; and if he will make a statement;

  (2) what were the medical qualifications of the Scottish ambulance service staff who dealt with the request for the transport of emergency blood products by air ambulance to Shetland on 17 June;

  (3) what arrangements were in place on 17 June for persons to contact the medical director of the Scottish ambulance services by telephone out of office hours, and what changes are proposed in these arrangements.

  Mr. Lang
  [holding answer 24 June 1993]: It is for the Scottish blood transfusion service to supply blood or blood products requested by hospitals and to decide on the appropriate transport arrangements for delivery of these both for routine situations and in emergencies.

  Air ambulances are primarily tasked to collect or carry patients to hospital at the request of clinicians and are equipped accordingly. In a life saving situation and where it would be sensible and cost effective to do so, there is no reason why an air ambulance should not be used to carry blood or blood products for emergency medical treatment. This is a matter for arrangement between the Scottish blood transfusion service and the Scottish ambulance service which are divisions of the Common Services Agency.

  A protocol has now been agreed to the effect that the Scottish ambulance service will transport blood or blood products by air ambulance when in the opinon of any clinician in the Scottish national blood transfusion service there is a serious risk to life and there is no other sensible or reasonable option available. The ambulance service will give such requests priority subject only to the emergency evacuation of patients.

  Ambulance control staff do not have any medical qualifications but are able to seek medical advice when required from the medical director of the Scottish ambulance service who is an accident and emergency consultant and is on call 24 hours a day by radiopager.
  50
  In the event that he is unavailable, there is an arrangement with the accident and emergency department at the Aberdeen Royal infirmary to provide medical advice to the air desk controller. The arrangements on 17 June were in accordance with these procedures. No further changes are currently proposed but the position is kept under review.

  Forestry
  Mrs. Peacock
  To ask the Secretary of State for Scotland what contribution to the United Kingdom economy is made by the timber trade.

  Sir Hector Monro
  [holding answer 1 July 1993]: The total value added by the timber trade, including the forestry and wood processing industries, is about £8,000 million annually; this represents about 1½per cent. of the gross domestic product. The wood processing industry accounts for about 6½ per cent. of manufacturing industry.

  Mrs. Peacock
  To ask the Secretary of State for Scotland what plans he has to introduce a country certification scheme to prove to potential purchasers of British-grown timber United Kingdom forests are sustainably managed.

  Sir Hector Monro
  [holding answer 1 July 1993]: The Forestry Commission has already laid the basis for a certification scheme. Permission to fell trees is given by the commission's forestry authority arm only if the felling proposals are
  "in accordance with the Government policy to promote the sound management of woodlands as a renewable natural resource".

  A statement to this effect is included in plans of operation approved under the commission's woodland grant scheme and will soon be included in felling licences.

  Mrs. Peacock
  To ask the Secretary of State for Scotland what is his policy on allowing the independent inspection and certification of the United Kingdom's forest management policies implemented by the Forestry Commission.

  Sir Hector Monro
  [holding answer 1 July 1993]: The forestry authority arm of the Forestry Commission

  51
  implements the Government's forestry policy in Great Britain, regulates the forestry industry, and monitors forestry standards. There is therefore no need for any other organisation to carry out inspections or certification.

  Coastal Planning
  Mr. Dalyell
  To ask the Secretary of State for Scotland if he intends to revise the 1974 "Coastal Planning Guidelines for Oil and Gas Development".

  Mr. Stewart
  [holding answer 2 July 1993]: In line with the undertaking given in "This Common Inheritance" (Cmd 1200), all our planning guidelines are subject to review. The 1974 coastal planning guidelines for oil and gas development have already been supplemented by the 1977 national planning guidelines for petrochemical developments and by the 1981 national planning guidelines on priorities for development planning. Further refinements will also be included in a new national planning policy guideline on business and industry, which I hope to issue shortly.

  Uranium-tipped Shells
  Mr. Llew Smith
  To ask the Secretary of State for Scotland on how many occasions uranium-tipped armour piercing shells have been fired into the water from the Kirkcudbright ranges during tests.

  Mr. Aitken
  I have been asked to reply.

  Firing of DU shells from Kirkcudbright started on 29 March 1982. Since that date about 4,000 shells have been fired into the Solway firth from the range.

AGRICULTURE, FISHERIES AND FOOD

  Integrated Administration and Control System
  Mr. Clifton-Brown
  To ask the Minister of Agriculture, Fisheries and Food how many IACS forms have been submitted late in total and in each category of lateness specified in the IACS rules.

  Mr. Jack
  A total of 331 IACS forms have been received in England after the 15 May deadline. Of these 305 were received by 4 June and will attract a late claim penalty, and the remaining 26 have been received after 4 June will not qualify for any payment. The late claims represent a very small proportion of the 87,300 forms received.

  Mr. Clifton-Brown
  To ask the Minister of Agriculture, Fisheries and Food what proportion of IACS forms were returned by the closing date in each EC member state.

  Mr. Jack
  I refer my hon. Friend to the reply that I gave to my hon. Friend the Member for Isle of Wight (Mr. Field) on 30 June,Official Report, column 564.

  Set-aside
  Mr. Barry Field
  To ask the Minister of Agriculture, Fisheries and Food if she will set out the mechanisms for resolving set-aside disputes.

  Mr. Jack
  If an applicant is unhappy about any aspect of the way in which their claim for arable area and set-aside payments has been handled, they will always be offered an opportunity to discuss their concerns with a senior officer in the regional organisation of MAFF.
  52
  Mr. Barry Field
  To ask the Minister of Agriculture, Fisheries and Food what representations she has had to introduce an appeals procedure for set-aside disputes along similar lines to the milk quota tribunals.

  Mr. Jack
  None.

  Bovine Somatotropin
  Mr. Alex Carlile
  To ask the Minister of Agriculture, Fisheries and Food what representations she has received regarding the hormone bovine somatotropin; and if she will make a statement.

  Mr. Soames
  We continue to receive a number of representations from both individuals and organisations about the possible availability of bovine somatotropin (BST).

  No licences for BST products may be issued in member states under the moratorium agreed by the Council of Agriculture Ministers in 1990. This was extended to 31 December 1993 to allow the EC Commission time to prepare and present its report on the implications of licensing BST by the end of June 1993. The report is now expected to be available later this month. We will be considering the contents and recommendations of the report very carefully, taking into account the many divergent views we have received on the subject, in coming to a view on the future of the moratorium.

  Days-at-Sea Limitations
  Mr. David Porter
  To ask the Minister of Agriculture, Fisheries and Food if she will list the boats registered at Lowestoft now subject to days-at-sea limitations, together with the comparative track record in each case upon which the limits have been determined; and if she will make a statement.

  Mr. Jack
  Provisional days-at-sea allocations were issued in respect of 240 fishing vessels administered by the Lowestoft district fisheries office. The vessels' recorded half-days in 1991 and their provisional allocation are as follows—in order to protect commercial confidentiality the name and PLN number of the vessels are not included:

  Provisional Days at Sea Allocations: Lowestoft District

  Recorded Half Days in 1991

  Provisional Allocation

  404

  404

  0

  160

  118

  160

  0

  160

  180

  180

  12

  160

  294

  294

  216

  216

  273

  273

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  218

  218

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  53

  Recorded Half Days in 1991

  Provisional Allocation

  0

  160

  0

  160

  252

  252

  2

  160

  0

  160

  219

  219

  164

  164

  79

  160

  188

  188

  182

  182

  110

  160

  166

  166

  227

  227

  0

  160

  227

  227

  278

  278

  228

  228

  106

  160

  0

  160

  0

  160

  162

  162

  0

  160

  187

  187

  228

  228

  373

  373

  204

  204

  171

  171

  0

  160

  100

  160

  0

  160

  250

  250

  0

  160

  184

  184

  40

  160

  152

  160

  308

  308

  147

  160

  44

  160

  0

  160

  246

  246

  0

  160

  0

  160

  209

  209

  184

  184

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  50

  160

  0

  160

  0

  160

  46

  160

  0

  160

  137

  160

  71

  160

  0

  160

  0

  160

  0

  160

  0

  160

  95

  160

  13

  160

  0

  160

  42

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  0

  160

  54

  Recorded Half Days in 1991

  Provisional Allocation

  280

  280

  0

  160

  130

  160

  282

  282

  0

  160

  264

  264

  27

  160

  0

  160

  20

  160

  0

  160

  227

  227

  0

  160

  140

  160

  0

  160

  121

  160

  280

  280

  105

  160

  127

  16(1

  146

  160

  122

  160

  91

  160

  12

  160

  0

  160

  555

  555

  195

  195

  432

  432

  435

  435

  518

  518

  506

  506

  481

  481

  35

  160

  28

  160

  489

  489

  507

  507

  430

  430

  0

  160

  0

  160

  326

  326

  397

  397

  465

  465

  402

  402

  102

  160

  0

  160

  362

  362

  430

  430

  399

  399

  386

  386

  190

  190

  379

  379

  461

  461

  525

  525

  233

  233

  55

  160

  174

  174

  269

  269

  136

  160

  20

  160

  67

  160

  30

  160

  200

  200

  0

  160

  0

  160

  0

  160

  244

  244

  4

  160

  250

  250

  95

  160

  6

  160

  32

  160

  200

  200

  50

  160

  156

  160

  189

  189

  56

  160

  0

  160

  83

  160

  55

  Recorded Half Days in 1991

  Provisional Allocation

  0

  160

  80

  160

  83

  160

  0

  160

  0

  160

  74

  160

  179

  179

  80

  160

  264

  264

  350

  350

  220

  220

  231

  231

  153

  160

  0

  160

  0

  160

  0

  160

  0

  160

  58

  160

  475

  475

  200

  200

  176

  176

  0

  160

  0

  160

  0

  160

  138

  160

  0

  160

  193

  193

  0

  160

  0

  160

  54

  160

  44

  160

  196

  196

  0

  160

  209

  209

  234

  234

  290

  290

  13

  160

  0

  160

  94

  160

  0

  160

  0

  160

  0

  160

  0

  160

  127

  160

  0

  160

  243

  243

  99

  160

  229

  229

  58

  160

  0

  160

  0

  160

  170

  170

  0

  160

  0

  160

  0

  160

  384

  384

  284

  284

  270

  270

  64

  160

  0

  160

  0

  160

  0

  160

  0

  160

  135

  160

  0

  160

  12

  160

  PA Management Consultants
  Mr. Cousins
  To ask the Minister of Agriculture, Fisheries and Food if she will list the projects undertaken by PA Management Consultants for her Department in the last three years.
  56
  Mr. Jack
  [holding answer 15 June 1993]: PA Management Consultants were used on the following projects, during the last three financial years up to March 1993:
  Agricultural Development and Advisory Service (prior to becoming an Executive Agency):

  Project Costing and Management

  Computerised Management Information System

  Computerised Accounting System

  Development of computer system sub-strategies for the Food Science, Economics and Statistics, Animal Health Group and Horticulture areas of the department.
  Animal Tracking Computer System.
  Design of Food Related Computer Data Base.

EMPLOYMENT

  Passive Smoking
  Mrs. Peacock
  To ask the Secretary of State for Employment what proposal he has to amend health and safety legislation to provide a remedy for employees whose health is threatened by passive smoking at work; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 1 July 1993]: Adequate legal protection for employees against risks to health from passive smoking at work is already provided by section 2 of the Health and Safety at Work, etc. Act 1974. No amendment is therefore necessary.

  Smoking
  Mrs. Peacock
  To ask the Secretary of State for Employment how progress towards the "The Health of the Nation" goal of a large majority of employers implementing a no-smoking policy by 1995 is being monitored; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 1 July 1993]: Achievement of "The Health of the Nation" aim
  "that the large majority of employees are covered by a no-smoking policy by 1995"
  is being promoted by voluntary means, through encouraging employers to introduce sensible policies on smoking in discussion with their workforce. Early results from recent surveys indicate continuing progress towards realising this aim.

  Holidays
  Mr. Dobson
  To ask the Secretary of State for Employment when he intends to introduce the proposed legislation to give employees a statutory right to four weeks' paid annual holiday; and if he will make a statement.

  Mr. Michael Forsyth
  [holiday answer 1 July 1993]: The Government have no plans to introduce legislation providing for four weeks' paid annual holiday. The Government's policy is that annual holiday entitlements, like other terms and conditions of employment, are a matter for employers and employees to decide.

ATTORNEY-GENERAL

  Fraud Prosecutions
  Mr. David Evans
  To ask the Attorney-General what steps he is taking to speed up the process of prosecution in fraud cases.
  57
  The Attorney-General
  Prosecution of the most serious fraud cases, handled by the Serious Fraud Office, is already very much faster than before that office came into being. Currently the average period between the SFO taking on a case for investigation and the transfer of the case to the Crown court, is 15 months.

  Long criminal trials are the subject of an inter-departmental working group, which issued a consultation paper at the end of the last year, and of examination by the Royal Commission on criminal justice, whose report is expected very shortly.

  In assessing what steps should now be taken to expedite the trial process in serious fraud cases I, together with the Lord Chancellor and the Home Secretary, will consider the responses to the consultation paper and the views of the working group together with the report of the royal commission.

DEFENCE

  Pathfinder Initiative
  Mr. Cousins
  To ask the Secretary of State for Defence what steps he has taken to implement the Pathfinder initiative.

  Mr. Aitken
  This is a matter delegated to the Defence Research Agency under its framework document. I have therefore asked the chief executive to reply direct to the hon. Member.

  Letter from John Chisholm to Mr. Jim Cousins, dated 5 July 1993:
  In today's written answer, the Minister of State for Defence Procurement informed you that I would be replying to your question about the Pathfinder Initiative.
  The Pathfinder initiative which I launched last year is aimed at establishing closer alignment between the DRA and industry in order to bring about an earlier and more effective transfer of technology from ourselves to those who can carry it forward into development and production.
  There are 3 elements to Pathfinder—strategic alignment briefings at senior level, an annual conference, and a formal bidding process in which industry can put forward proposals for inclusion in our own research programme. All 3 elements are now very much under way. A first round of briefings took place last year, as indeed did the first conference, and we are about to announce the outcome of the initial tranche of industry bids. The process will be continuing this year with further briefings, a second conference planned for November 1993, and a second round of bidding by industry.
  So far both industry and academia have shown considerable interest and I am confident that the Pathfinder Scheme will yield the benefits that I envisaged when it was first devised.

  European Future Large Aircraft Project
  Mr. Clapham
  To ask the Secretary of State for Defence what resources Her Majesty's Government will commit to the European future large aircraft project; and if he will make a statement.

  Mr. Aitken
  The Government do not consider it necessary to commit defence resources towards the development of the European future large aircraft, since existing technology is adequate to meet short-term requirements for military transport aircraft. The future 58
  large aircraft will be considered as a candidate to meet future Royal Air Force requirements, if it is available at the appropriate time.

  Underground Nuclear Tests
  Mr. Cohen
  To ask the Secretary of State for Defence what assessment he has made of whether further underground nuclear tests are required to ensure the(a) credibility, (b) reliability or (c) safety of (i) the Trident system and (ii) the WE177 free-fall nuclear bomb; and what criteria are employed by his Department for assessing each of these factors in each case.

  Mr. Aitken
  We are confident in the safety and reliability of the WE177 free-fall bomb and that subject to completion of the necessary assessments—which do not require further underground testing—Trident will enter service as a safe and reliable system. We are similarly confident in the credibility of our nuclear deterrent, current and planned. We need, however, to ensure that we are able to maintain the highest levels of safety assurance over time. Testing has played a central role in this in the past; the development of alternative techniques is now a high priority.

  Nuclear Test Sites
  Mr. Llew Smith
  To ask the Secretary of State for Defence what has been the total cost since 1963 of the clean-up and restoration, in historic and present prices, of the radioactive and toxic contamination at the nuclear test sites at(a) Christmas island, (b) Malden islands, (c) Monte Bello islands, (d) Emu Field and (e) Maralinga.

  Mr. Hanley
  This information is not held centrally in the form requested and could be provided only at disproportionate cost.

  Britannia
  Mr. Mackinlay
  To ask the Secretary of State for Defence what contributions were received in the latest available year from the Governments of other countries to the running of the Royal Yacht Britannia.

  Mr. Hanley
  HMY Britannia's operating costs are funded entirely from the defence budget and no contributions are made by Governments of other countries.

  RMAS Golden Eye
  Mr. Jamieson
  To ask the Secretary of State for Defence who acquired RMAS Golden Eye when it was disposed of by the Royal Navy.

  Mr. Aitken
  At the request of the purchaser this matter is regarded as commercially confidential.

  Mr. Jamieson
  To ask the Secretary of State for Defence on what date the Royal Navy disposed of RMAS Golden Eye.

  Mr. Aitken
  RMAS Golden Eye was handed over by the Royal Navy to the successful tenderer during the week commencing 16 December 1991.

  Yugoslavia
  Mr. Foulkes
  To ask the Secretary of State for Defence what payments have been received from the United Nations as danger money for the United Kingdom troops with UNPROFOR in Bosnia; if this money has been paid to the men and women concerned; and if he will make a statement.

  Mr. Hanley
  The United Nations does not pay danger money for any United Kingdom personnel serving in the former Yugoslavia.

  Mr. Foulkes
  To ask the Secretary of State for Defence what discussions he has had with his counterparts in France and Canada regarding payment of a United Nations supplement to the UNPROFOR force in Bosnia; what was the outcome of such discussions; and if he will make a statement.

  Mr. Hanley
  There have been no such discussions.

  Depleted Uranium Ammunition
  Mr. Foulkes
  To ask the Secretary of State for Defence what precautionary measures were taken to minimise the dangers of inhalation of radioactive particles from depleted uranium ammunition by British troops during the Gulf war.

  Mr. Hanley
  Special instructions were issued to personnel undertaking explosive ordnance disposal whose work involved a direct risk of exposure to particles of depleted uranium. Advice was also issued to those involved in the transportation and storage of the ammunition.

  Submarines
  Mr. Foulkes
  To ask the Secretary of State for Defence, pursuant to his oral response to the hon. Member for East Lothian (Mr. Home Robertson) of 24 June,Official Report, column 507, what are his plans for the four submarines, Churchill, Dreadnought, Swiftsure and Revenge, in light of his decision to allocate the Trident refitting and decommissioning work to Devonport.

  Mr. Aitken
  I refer the hon. Member to the answer I gave the hon. Member for Dunfermline, East (Mr. Brown) on 29 June 1993 at columns 492–93.

  Radiation Compensation Scheme
  Mr. Quentin Davies
  To ask the Secretary of State for Defence whether his Department will join the radiation compensation scheme operated by the civil nuclear industry.
  60
  Mr. Aitken
  We intend to do so, subject to negotiations with British Nuclear Fuels plc and the Atomic Energy Authority and with the departmental trades unions.

  MOD Police
  Mr. Madden
  To ask the Secretary of State for Defence what instructions are issued to MOD police concerning their powers towards trespassers on MOD establishments; and if he will place copies of such instructions in the Library.

  Mr. Hanley
  [holding answer 29 June 1993]: Ministry of Defence police deal with trespassers on Ministry of Defence property on behalf of the Secretary of State on the direction of the commanding officer or head of establishment. The police officer will first ask the trespasser to leave MOD property. If the person refuses to do so he or she will be ejected using the minimum force necessary to effect the removal.

  If an incursion on MOD property is in contravention of byelaws, offenders may be arrested by MDP officers, who have constabulary powers, and prosecuted for breach of byelaws.

  As is the case in respect of other civil matters and criminal offences, all MDP officers, during their initial and refresher courses are trained in the use of their powers to deal with all aspects of trespass. The use of any of these powers is a matter on which the individual police officer must exercise his judgment at the time and according to the circumstances. His actions are subject to scrutiny by his supervising officers and the courts.

  The chief constable MDP believes that it would be impractical to issue force-wide written instructions to cover the police response to all aspects of the operation of the law of trespass. From time to time written guidance is included in local operation orders to provide an appropriate response arising from special events or in special circumstances.

  Vexatious Litigation
  Mr. Madden
  To ask the Secretary of State for Defence how many times in the past five years his Department's police have been declared vexatious litigants and charges not proceeded with; and if he will make a statement.

  Mr. Hanley
  [holding answer 30 June 1993]: I am not aware of any of my Department's police ever having been declared a vexatious litigant.

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

Personal Statement by the Lord Dean of Beswick
Lord Dean of Beswick: My Lords, with permission, I should like to make a personal statement. On 9th June in a debate on the National Health Service, (Official Report, col. 982), I made some reflections on a Member of another place, Mr. David Willetts, concerning his interests. That was contrary to the practice of this House as recently reaffirmed in the Second Report of the Select Committee on Procedure of the House 1991-92, and for that I tender my apologies to the House of Lords. I should explain to the House that, although the Register of Members' Interests published on 1st December 1992 and other documentation recorded him as having a pecuniary interest, he informs me that that was no longer the case by the time he spoke on 28th January 1993 in another place. I therefore accept his assurance and make my apology for any inconvenience or distress that that may have caused.

Falkland Islands Garrison: Food Supplies
2.36 p.m.
Lord Ironside Lord Ironside asked Her Majesty's Government:
What market testing activities have been identified for HM forces stationed in the Falkland Islands and to what extent foodstuffs are included.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, several support functions, including elements of food supply in the Falkland Islands garrison, are already manned by civilians or have been contractorised, and we continue to examine potential opportunities to increase that, taking operational factors into account. We also continue to examine alternative food supply methods.
Lord Ironside: My Lords, I thank my noble friend for that Answer. Many people are anxious about the state of the abattoir in the Falkland Islands. Can my noble friend reassure the House that the EC set-aside funds will be available to the Falkland Islands for upgrading the abattoir so that our forces can have access to locally produced lamb?
Viscount Cranborne: My Lords, that is slightly outside the scope of my department. However, I believe I am right in saying that the Falkland Islands are not part of the EC and that the state of the abattoir in the Falkland Islands is a matter for the Falkland islanders. My responsibilities certainly extend to the
1060
provision of adequate food supplies, slaughtered under proper conditions, for the Ministry of Defence and its dependants.
Baroness Seear: My Lords, the noble Viscount uses the word "contractorised". Where did he dredge up that appalling expression?
Viscount Cranborne: My Lords, all I can do is apologise unreservedly to the noble Baroness and express a firm purpose of amendment.
Lord Williams of Elvel: My Lords, is the noble Viscount aware that the word "contractorised" has been used extensively in discussions on Bills on dockyards and other matters in this House? It may be offensive to the noble Baroness but it is a word which has, I believe, now been accepted in your Lordships' House.
The noble Lord, Lord Ironside, referred to support services in the Falklands. Will he tell the House the total cost of the support services that are provided by Her Majesty's Government in the Falkland Islands? What percentage does that cost represent of the total budget for the garrison in the Falkland Islands?
Viscount Cranborne: My Lords, I am ashamed to say that I cannot answer the noble Lord's question. I shall, of course, write to him and place the answer in the Library. I can simply tell the noble Lord that, on average, a monthly container with 340 tonnes of supplies is sent out by ship to the Falkland Islands.
As regards the first part of the noble Lord's question, I have already had a rap over the knuckles by Members of your Lordships' House for the use of the word "redundee". I should like to take the opportunity to apologise for the use of that word which, I regret to say, is also current in the Ministry of Defence.
Lord Craig of Radley: My Lords, is the Minister aware of the considerable anxieties being caused in the armed forces by the arbitrary assumptions being made of the savings to be achieved through market testing? Will he also recognise that, during a period of major reorganisation in the aftermath of Options for Change, further disruption, turbulence and uncertainty caused by the pursuit of market testing at this time may well be highly demoralising for servicemen and women and their families?
Viscount Cranborne: My Lords, that is a long way from the Falkland Islands. I can say to the noble and gallant Lord that I know that market testing causes disruption and anxiety in the forces. Nevertheless, it is extremely important to reassure the forces that market testing will have nothing but beneficial effects for the taxpayer and that the in-house bid will be given every chance to prove that, where possible, it is at least as cost-effective as bids from the private sector.

Hong Kong: UK Passports Quota
2.42 p.m.
Lord Shackleton Lord Shackleton asked Her Majesty's Government:
Whether they will consider enlarging the quota of full British passports which can be granted to Chinese Hong Kong personnel who serve in the Royal Navy and the Army, if necessary by introducing legislation.
The Minister of State, Home Office (Earl Ferrers): My Lords, the quota of British citizenship places which is available to locally engaged service personnel was determined by the formula which is prescribed in the British Nationality (Hong Kong) (Selection Scheme) Order 1990. We see no case for altering the position.
Lord Shackleton: My Lords, can the noble Earl say how many Chinese servicemen, British-employed, will receive United Kingdom passports and be able to travel to this country? They have displayed great loyalty over a number of years.
Earl Ferrers: My Lords, as regards the number of Army people who are locally employed personnel who have been given passports on the first tranche, the figure is 159; for the Navy, it is 43.
The Earl of Selkirk: My Lords, is my noble friend aware that there are people from Australia, New Zealand, South Africa and Canada who are prevented from getting passports to come to this country after wartime service, perhaps even having been wounded during their service?
Earl Ferrers: My Lords, we had this problem right at the very beginning. It was decided that a certain quota of passports would be given to those people who reside in Hong Kong. The figure was 50,000. It was then decided how it should be broken up. It was considered that the appropriate method of doing so was to apportion to general occupation classes 36,200; to disciplined service classes, 7,000, and to the sensitive service classes, 6,300. That is the way in which the figures were broken up.
Lord Molloy: My Lords, is the noble Earl aware — I am sure he is— that those of us from both Houses who have visited Hong Kong periodically have been impressed with the loyalty to this country of the Chinese Hong Kong people, despite a Communist power breathing down their necks? Will the noble Earl be kind enough to consider the submission made by the noble Lord, Lord Shackleton, who asked the Question?
Earl Ferrers: My Lords, of course, we have considered this. I agree with the noble Lord, Lord Molloy, that the loyalty of those people has been impressive. However, the original figure of 50,000 was arrived at after a good deal of discussion and consideration, not only as to what was appropriate to Hong Kong but what would be appropriate to this country. For the reasons I have given, I believe that the figure should remain the same and that the
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break-up within that figure should remain the same, as originally suggested, with one or two amendments to the second tranche.
Lord Wyatt of Weeford: My Lords, is the noble Earl aware that we badly let down the 3 million Hong Kong Chinese residents by taking away all the passports to which they had previously been entitled? They never wished to come to live here. It was only as an escape route, should the Chinese turn nasty, and as a place to park themselves for a little while before moving to warmer and less socialist climes. Is the noble Earl further aware that those Chinese who served in the forces in Hong Kong would obviously be the first to be victimised if the Chinese turn nasty? They should, in honour, be given the same rights as others on the quota. If they are not included in the quota, then they should be.
Earl Ferrers: My Lords, I agree they are on the quota, but the way in which the quota was designed gives them a certain proportion while others also have a share. One must remember that that particular branch of people, the disciplined services, covers not only the Navy and Army but also the police, the prison services, the government flying service, the independent commission against corruption, customs and excise, the fire service and the immigration service. They all have to be fitted in, and they all have great claims. That is why the Army and the Navy have been given the quotas they received.
Lord Geddes: My Lords, as regards the reply which he gave to the supplementary question of the noble Lord, Lord Shackleton, is the Minister aware that the maximum number of locally employed personnel who have not yet received the status of a full British passport is estimated to be no more than 1,000? Is he further aware of the problems of recruiting already being experienced within Hong Kong because, as the noble Lord, Lord Wyatt, says, of the fear over their status from 1997 onwards? The cost of replacing those locally employed personnel with UK personnel is estimated to be an additional £3 million per annum.
Earl Ferrers: My Lords, I do not think that one can go too far down the road of investigating the alternatives. We went through all this problem when the Bill came to your Lordships' House and if we have a limited number, we have to abide by that limit. Having set the limit, we have to separate it into reasonable proportions. Many people have good claims to British passports: from the Army, 630 people have applied and from the Navy, 123 have applied. The first tranche of 159 have received passports: the Navy has 43. In the second tranche, there has been an alteration to the formula which gives both the Army and the Navy a benefit over what they would have had under the original regime.
Lord Bonham-Carter: My Lords, is the noble Earl aware that his answers to these questions indicate that the Government have created the problem for themselves? The problem is such that they are indicating that they have no sense of obligation

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whatever towards people who have been prepared to serve in the Armed Forces and to risk their lives for this country. Are they not ashamed of that?
Earl Ferrers: My Lords, not for the first time in his life, the noble Lord is wrong. The Government have made it perfectly clear, and the noble Lord knows this perfectly well, that we went to a great deal of trouble to give those people in Hong Kong certain British passports and certain British citizenship to which they had not previously been entitled. We did that in order to conserve the status of Hong Kong and to enable Hong Kong to continue. I disagree totally with the noble Lord when he says that the loyalties of those people have not been recognised. They have.
Lord Stoddart of Swindon: My Lords, I wonder if the noble Earl will help me with a little problem. Is it not a fact—perhaps he will correct me if I am wrong —that the citizens of Macao are to be allowed to become citizens of Portugal? As such, will they not, as European citizens under the Maastricht Treaty, and indeed before the Maastricht Treaty, be able to come to this country and settle here, to live and work here, and to vote here? Does he agree that it is strange that we should be allowing that to happen when former servicemen, people who have served this country, who are in this situation, will not be allowed to come here except under certain very stringent circumstances?
Earl Ferrers: My Lords, I am not in a position to know to whom 'the Portuguese authorities give their citizenship. But I can tell the noble Lord that anyone who has Portuguese nationality will be able to come to Portugal and, having done so, will have free movement within the European Community.
Lord Williams of Elvel: My Lords, is the noble Earl therefore recommending that those Chinese Hong Kong personnel who serve in the Royal Navy and the Army, to quote my noble friend's questions, should now defect and go to Macao in order to get Portuguese passports so that can live in this country?
Earl Ferrers: My Lords, the noble Lord tries to make a crafty point. I have not recommended that anyone do anything. I merely told the noble Lord's noble friend behind him what the facts were. Nor did I suggest that anyone should defect. I assume that the Portuguese authorities do not dish out their passports for free, as it were. There are certain criteria which have to be met before a passport is issued. The noble Lord is about to ask me what the criteria are. I am not part of the Portuguese Government and I cannot tell him. What I can tell the noble Lord, if he will contain himself for just half a second more, is that holders of a Portuguese passport who come into the European Community will have the right of free travel within the Community.
Lord Williams of Elvel: My Lords, has the noble Earl understood that the Portuguese Government have already said that they will give Portuguese nationality to all the people from Hong Kong who apply in Macao?
Earl Ferrers: My Lords, I have said what the position then is; and I have not recommended that anyone defect.
Lord Wyatt of Weeford: My Lords, in view of the obvious feeling in the House that the Government are wrong, will the noble Earl undertake to look at the position again and treat regulations as if they are to be used by human beings, rather than human beings being used by regulations?
A noble Lord: Hear, hear!
Earl Ferrers: My Lords, I was trying to see where that one vote of support came from. The noble Lord, Lord Wyatt, is, I believe, a little wrong if he concludes that because two or three people ask questions of a similar nature to that which he has asked the whole House agrees with him. I considered this case before today's Question, as the noble Lord would anticipate. I understand the position. He must realise, as I am sure he does, that the number of people who can be given British passports is limited. That was decided two or three years ago. Having decided that, one then has to allocate the numbers fairly between those people. Obviously, some people will be disadvantaged and disappointed. I can only tell the noble Lord that that is what the position is. If he now asks whether we will alter everything that was discussed three years ago, I am bound to say that I do not think that that is very likely.
Lord Stoddart of Swindon: My Lords, I understand what the noble Earl says. But does it not give him some concern that, although we are limiting considerably the number of people from Hong Kong who can come here, the Portuguese will be able to decide—and indeed will—that 900,000 people from Macao can come here without let or hindrance?
Earl Ferrers: My Lords, we can only conduct our own affairs correctly. We cannot conduct the affairs of other people in the way we might like to do.
Lord Shackleton: My Lords, I hope that the noble Earl takes this matter seriously. We have been a little distracted over the Portuguese. Here again, the House faces a situation in which we should hang our heads in shame. I remember an occasion (arid the noble Earl may remember it too) when this House reversed a decision with regard to the pensions of the Hadrahmi Bedouin Legion. The result was that. through the action of this House, the decision by the government of the day was reversed and the soldiers got their pensions. Can the noble Earl, in consultation with his naval colleagues, consider again whether the proportion is right? A decision was taken, but we ask the Government to think again.
Earl Ferrers: My Lords, of course I shall consider what the noble Lord says. I am bound to tell him, however, that the room for manoeuvre is very small unless one is going to alter the totality of the figure of 50,000. What the noble Lord is really suggesting is that a certain proportion within that total should have preferential treatment over the others. While I

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understand the reasons, I think that it would be quite difficult to propose that, but I shall take into account what the noble Lord says.

Cross-Channel Travel: Competition
2.57 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether it is still their intention that the Channel Tunnel should be in open competition with cross-Channel carriers.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, it is the Government's intention to maximise competition on all cross-Channel routes. But the physical and legal circumstances of the Channel Tunnel may require a different approach on some matters.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. But is he aware that there is still one major inequality, despite the exchanges which followed my Question at the beginning of April? Is he aware that the airline and ferry companies are being charged enormous fines under the carriers' liability Act, while no one will be penalised when train passengers arrive in London via the tunnel without immigration papers, and the reason for that is apparently inconvenience?
The Earl of Caithness: My Lords, those who arrive by train will be in a different position to those who arrive by ferry or by air, as the latter will be subject to the carriers' liability Act. But I remind my noble friend that what has taken place is an interpretation of Article 4 of the Treaty of Canterbury between Britain and France which states that frontier controls shall be organised in a way that will reconcile as far as possible the rapid flow of traffic with efficiency of the controls. That is why, with regard to the shuttle trains, we shall have our immigration officers in France and with regard to the through trains between the capital cities immigration checks will take place on the trains.
Lord Renton: My Lords, is there not a further problem in that those who arrive by air or by sea can be sent back to the places from which they came at the expense of those who brought them here, whereas, because our passport control will be at the other end of the tunnel and on French soil, that situation will not arise?
The Earl of Caithness: My Lords, indeed it will not arise because the person coming to this country by rail will have to go through the immigration procedure before he arrives here, rather than, if one comes by ferry or air, landing in this country and then going through immigration procedures.
Lord Clinton-Davis: My Lords, will the Minister concede that the ferry operators will labour under a very strong degree of prejudice as a result of this situation? How can he say that he is in favour of maximising competition, when in this area there will
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not be any competition and there is no level playing field whatsoever? Is there not, therefore, something radically wrong with the carriers' liability Act?
The Earl of Caithness: My Lords, the carriers' liability Act is a strengthening of our armoury on the matter of immigration. I believe that the noble Lord is wrong to isolate one particular aspect. He will need to look at the whole panoply of controls that exist with regard to the Channel Tunnel, some of which apply strictly to the Channel Tunnel and do not apply to ferries and airlines. One cannot isolate one issue.
Lord Campbell of Croy: My Lords, I fully support the principle of the 1987 Act. But does the Minister agree that it may fall into disrepute and appear to militate against open market policies if it is not applied evenly?
The Earl of Caithness: My Lords, we certainly hope that it does not fall into disrepute. I repeat to my noble friend what I said to the noble Lord, Lord Clinton-Davis. This is just one aspect of a whole panoply of controls over the ferries, the airlines and the Channel Tunnel. There are certain restrictions that apply to the Channel Tunnel with regard to security, for instance, which do not apply to ferries and airlines. The Channel Tunnel operators feel aggrieved that they are being singled out in that respect. If my noble friend looks at the situation overall he will be reassured.

Airline Safety
3 p.m.
The Earl of Kinnoull The Earl of Kinnoull asked Her Majesty's Government:
Following two fatal air accidents in Taiwan and Amsterdam, and Boeing's recent admission of a design fault in the engine pylons and pins of its 747 aircraft, what safety assurance passengers have before refitting takes place in several years' time.
The Earl of Caithness: My Lords, mandatory detailed visual and ultrasonic structural inspections have been required. They are designed to find any corrosion and cracks that could reduce the strength of the engine attachment and are to be repeated at specified frequent intervals pending modification of the assembly. The United Kingdom Civil Aviation Authority is satisfied that proper safety standards are thereby being maintained until modified mountings are fitted.
The Earl of Kinnoull: My Lords, I thank my noble friend for that assurance. But can he say what information he has that the same rigorous safety procedures will be adopted by all foreign airline operators both for the safety of passengers and for those who live and work under the flightpaths? Does he agree that it is hardly satisfactory for Boeing, having accepted a design fault, to announce that modification will take at least five years? Surely such a fault could be corrected sooner, could it not?
The Earl of Caithness: My Lords, with regard to the first point, there are three instructions that the FAA of America have issued. Because the engine in question is on a Boeing plane and the engines are either Pratt Whitney or Rolls Royce, the order that was put out becomes a mandatory order and therefore applies throughout the world. It would be up to each safety regulation authority of the country concerned to make sure that the order is implemented. With regard to the second point, I can reassure my noble friend that because of the checks that are being carried out within a specified time those planes that pass the checks are safe to fly. If a plane does not pass the check it is immediately grounded until the fault is corrected.
Lord Ewing of Kirkford: My Lords, is the noble Earl aware that I recognise his response to the Question as coming from the Civil Aviation Authority's briefing material on this matter? It was noticeable that he omitted to mention that part of the brief refers to the very expensive nature of the diagnostic tests falling on the operator. Will he make representations to make sure that Boeing, which after ail is said and done is the originator of the fault, bears the total cost of both the inspection and correction and that no cost falls on the travelling public?
The Earl of Caithness: My Lords, the noble Lord will notice some similarities between what I said and what the CAA has said. It is the safety adviser to the Government and it would be very stupid of the Government not to take account of their safety advisers. With regard to the second point, I take note of what the noble Lord has said.
Lord Boyd-Carpenter: My Lords, can my noble friend confirm that so far as concerns British civil aircraft, the advice of the Civil Aviation Authority has been fully accepted and is being applied? Can he also indicate, in the case of foreign civil aircraft, whether there is any comparable precaution?
The Earl of Caithness: My Lords, I can certainly confirm to my noble friend that the United Kingdom airlines are very aware of the instructions of the FAA with regard to the 747s, and work is being undertaken by those airlines that use the 747s. Boeing has a list of all those countries and airlines that use 747s. There are some 1,000 of them and they will be checking up in their own way. But the safety authorities of the country concerned are also carrying out the checks with the civil aviation authority arm.
Lord Foley: My Lords, does my noble friend agree that as the engine mountings of the Boeing 747 at this moment are slightly suspect, it would be a good idea if the very strict noise abatement procedures at British an-ports, particularly London airports, which cause certain dangers in flying procedures could be suspended for that type of aircraft until it has been given a completely clean bill of health?
The Earl of Caithness: My Lords, so far as I am aware, the 747s—unless the tests that are being undertaken find that the fuse pins and the lugs are inadequate—are perfectly safe to fly. I can recommend that to my noble friend. With regard to noise, every
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aircraft is noisy, but my noble friend will be pleased to know that the noisier Chapter 2 aircraft will be phased out so that the quieter Chapter 3 aircraft will give everybody who lives near the flightpath a better way of life.

Business
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m., my noble friend Lord Cranborne will, with the leave of the House, repeat a Statement that is to be made in another place on the Defence Estimates 1993.
It may be for the convenience of the House to know that the Committee stage of the Railways Bill will be adjourned at about 7 p.m. for about one hour and that during this adjournment. the Third Reading of the Local Government (Amendment) the Channel Tunnel (International Arrangements) Order 1993, the Civil Defence (General Local Authority Functions) (Scotland) Regulations 1993 and the Civil Defence (General Local Authority Functions) Regulations 1993 will be taken.

Railways Bill
3.6 p.m.
The Earl of Caithness: My Lords., I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 21 [Exemption of passenger services from section 20(1)]:
[Amendment No. 45 not moved.]
Clause 21 agreed to.
Clause 22 [Public sector operators not to be franchisees]:
[Amendment No. 45A not moved.]
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 46:
Page 24, line 37, at end insert:
("(1A) Nothing in subsection (I) above shall prevent—

(a) the British Railways Board (in this Act referred to as "the Board"); or

(b) a wholly owned subsidiary of the Board, from being a franchisee.").

The noble Lord said: In moving this amendment I should first like to make an observation. It has been quite frequently my experience that governments do not listen very carefully to what is said by those who differ from them. On this occasion I should like to make it very clear that I have much appreciated the courtesy of both my right honourable friend the Secretary of State and my noble friend who is handling the Bill from the Front Bench in this Chamber. From both of them I could not have received greater courtesy and I am very grateful for the care with which they have considered what I had to say.
Opinions will undoubtedly vary as to the merits of this measure. But there can be no doubt in anyone's mind—I am sure not in that of the Government—as to the need for a degree of public understanding of and support for the measure. In this instance I must tell my noble friend that, apart from those within the Government, I have yet to hear anyone speak with any degree of enthusiasm or liking for the measure. It seems to me that importing a whole range of new problems is not necessarily the best means of solving those problems with which one is or ought to be familiar.
Clause 22 shuts out all who have any taint (if that is the right word) of association with the Government or the public sector. This amendment would let British Rail in. In effect, it would be a step back from the clear intention of the Bill to kill off British Rail and to bury the corpse at an early date.
In the early stage of my remarks I want to make the point that this privatisation differs in important respects from others that have gone before. First, there is to be no immediate transfer of any significant property to the private sector. Secondly, a radical change of structure within British Rail will come first. That prompts one to ask the question: how much change can such an organisation digest in a fairly short period of time, bearing in mind that the reorganisation which took 10 years to develop was only finally put in place in April of last year?
There then arises the important question of the continuing and unquantified contribution from public funds. That again was not a feature of any of the previous important measures of privatisation. Further, the whole question of who is likely to bid for the franchises, of what services, when and on what terms, is still shrouded in mystery. We know that management buy-outs are being encouraged—those who are putting them together are receiving help in each case to the extent of £100,000. That sounds a lot of money. However, I wonder whether it will be enough to meet the fees of those who generally handle such business; they are not known for modesty in the fees that they expect.
I shall be grateful if my noble friend can shed any light on another matter. Can he say what the Government's reaction will be to a bid from a foreign-owned railway with support from its government? I have always understood that one of the major reasons for shutting out British Rail from the bidding is the need not to discourage those sensitive souls in the City. I do not visit the City all that frequently. Even so, I have not as yet seen any signs of burgeoning enthusiasm from that quarter to bid for franchises at an early date. Perhaps my noble friend can tell us more about that. However, I emphasise that in this particular measure of privatisation there are a large number of differences which carry with them the lesson that one ought not to expect to learn too much from previous essays into privatisation.
The Bill offers an almost idyllic vision of the destination of our railways. It is as encouraging as a travel agent's brochure. However, it is less clear as to
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when we can expect to arrive at our destination, what will be the cost of getting there, and what discomforts we are likely to meet on the journey.
In April 1994 there will be major changes. They will not wait for the entry of the private sector. As I said earlier, British Rail will be subjected to yet another far-reaching reorganisation. The scenery will be new, and so will the roles, even though many of the actors will remain the same. Perhaps I can take a moment of the Committee's time to consider the number of people who will be participating in that new chapter: the Secretary of State, the regulator, the franchising director, the passenger transport authorities, the passenger transport executives, British Rail itself, the new creature of Railtrack, the train operating companies, the supplying industry and the staff, to mention but a few.
There will be a degree of audience participation where the members of staff are concerned. Many of them will be doing much the same thing in the same place. They will give and receive instructions much as before; but they will be aware of changes, not all of them sensible or easy to understand, and some will seem plain stupid. I cannot help thinking that under those circumstances the errors—we all make them—of British Rail will quickly be forgotten or at least forgiven, while those who deny British Rail the right to bid will incur a considerable measure of censure.
The organisation to which I have made brief reference, and its component parts, will produce an immense complexity of relationships; a cobweb of regulations, rules, licences, agreements and memoranda are bound to come into existence. Inevitably there will be conflicts, disputes and misunderstandings. Those who fail—particularly future franchisees—will not have far to look for excuses, alibis and scapegoats.
I do not wish to prolong my remarks but I should like to ask my noble friend three questions in particular. First, are the Government satisfied that an organisation such as that proposed can possibly succeed, even taking for granted the dedication and wholehearted co-operation of all concerned? One must not go too far along the road of taking such matters for granted.
Secondly, what is the likely cost in terms of public funds? I recognise of course that it is impossible at this stage to be anything approaching precise, but it is not unreasonable to ask the Government to tell us the bracket within which the cost is likely to be placed. The Financial Memorandum is noticeably reticent, even coy, on the subject. I think particularly of the immortal words of which I should like to remind the Committee:
"The proposals in this Bill are not expected to lead to major reductions in public expenditure in the short term".
It strikes me that there is at least a possibility that that lame, coy and cautious phrase may in the end appear to be an extremely sanguine and optimistic view of the prospects.
Thirdly, how can we be sure that there will be the necessary investment to sustain the railway industry, which has always been and is always in every country in the world, with the possible exception of Switzerland, dependent on public support? How can

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we be sure that the resources will be available, that they will be properly focused on where they are needed and that value for money will be ensured? Everyone must agree that a measure of continuity in human affairs is very desirable. This amendment at least opens up the prospect of a better measure of continuity than there would be under the Bill. No one will deny that understanding by both staff and public is absolutely essential if legislation is to have a chance of succeeding when it emerges from the pages of the statute book into the realm of practical affairs.
The British Rail reorganisation of which I have already spoken was a 10-year process completed only last year. Results, as I have already said, do not come quickly in the world of the railways. Would it not, even at this late stage, be wise for the Government to pause and to give to British Rail a role something other than that of the ghost at the feast? I can imagine fewer roles less glamorous and less attractive than being a shadow franchisee and providing at the end of the day a bench mark, a standard, which others will be expected to meet after you yourself are dead and buried.
I should like to mention one further point briefly. I refer to the present chairman. Sir Bob Reid seems to me to be a quite outstanding manager. We do not have all that many in this country. I am sure—and I hope that many of your Lordships will agree with me—that he is a man who deserves better of the Government than to be made the undertaker of the organisation which he was appointed to lead and to which he has made such a signal and distinguished contribution. Amendments of this kind are not exactly what the Government are looking for, but I hope that it will be regarded not as a piece of fractious opposition but emerging from a real desire to see, first of all, that a chance is given to the railways without taking huge risks and venturing on to quite unknown and untested paths. I hope that the Government may see that it is in their own interests not to take risks which may seem not only wholly unjustifiable but which will be likely to meet with the most appalling penalties.
Lord Clinton-Davis: I hope that the Government will listen to the very prudent advice that has just been given by the noble Lord, Lord Peyton. As a former Minister of Transport he has obviously given the most careful consideration to the proposition that he has now advanced to the Committee. It is a proposition which I have argued from these Benches over some considerable time, going back to the paving Bill, but the Government have asserted that they cannot give way. Coming from the noble Lord, Lord Peyton, I think that the Government would be very wise indeed to give the matter further consideration.
The noble Lord referred to the unhappy role of British Rail as a shadow franchisee. I am bound to say that, having been adopting a shadow responsibility now for a considerable time, it is not always advantageous. While the Government can say that this debate is clearly well rehearsed, because we have discussed it at considerable length both here and in another place, some of us still hope that even at this
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hour the Government will see reason and indeed be consistent in applying their previous practices with regard to compulsory competitive tendering.
It is not too much to ask in this Chamber that the Government have regard to their own legislation and to their own practices. The root of these practices with regard to compulsory competitive tendering is that the public sector should be able to bid against the private sector and that the Government are confident in their belief that the private sector is more efficient and that it will be able better to benefit the consumer. Indeed, the Minister has constantly talked about the benefits that the consumer will derive from the provisions that he is placing before us in this Bill. They applied this doctrine—testing in-house services against the private: sector—in a wide area of activities; in local government, in the National Health Service, in London Underground and in the deregulated bus services. With respect to bus services, all publicly owned bus operators are free to submit tenders to provide bus services. The Secretary of State himself admitted that. In all those areas of activity the Government have said that it is wholly appropriate that the public service should be able to bid. So why in this Bill do the Government reject their own precepts in relation to CCT?
Perhaps the trouble is that dogma has collided with reality. In 75 per cent. of the cases of compulsory competitive tenders, in-house tendering has won. In all those areas—in 75 per cent. of the cases—what would have been the result if the public sector had not been permitted to tender? Well, 75 per cent. of the contracts would then have led to the consumer, or in the case of local government the charge payers, paying more. Is that not a fatuous result? Can it possibly be argued that that would have been desirable or just? It comes to this. In this Bill the Government want to have private investment regardless of whether it will improve the railway system and benefit consumers. That is an absurd situation.
Obstinacy flies in the face of probability. The probability is that unless publicly owned European railways decide to tender and are successful—a point alluded to by the noble Lord—the exclusion of British Rail from the ability to tender could easily result in a panoply of companies—and perhaps quite small companies—which are successful in the franchises—perhaps management buy-outs—running our railways with no, or at best, save in the case of management buy-outs, very limited experience. That cannot be a desirable situation.
The Government say that they are against British Rail on the grounds that it operates a monopoly. If I may say so, I thought that the noble Lord, Lord Marsh, dealt decisively with that argument in our Second Reading debate. British Rail enjoys around 7 per cent. of the passenger market and around 10 per cent. of the freight market. In no way can British Rail reasonably be considered to be a monopoly provider of transport. It has to compete with other modes of transport such as road, sea, air and so on. So that argument goes out of the window.
Then we come to the question of efficiency. Will the Government's proposals to exclude British Rail from

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the franchising operation improve our railway system? I know that ministerial speeches abound with assertions which are unproven and speculative. Bare assertions do not necessarily make the naked truth. Even if everything which they claim for privatisation elsewhere were true—though I noted a certain measure of reticence on the part of the Minister and his colleagues in lauding the benefits of bus privatisation—I thought that throughout the Minister was claiming that this scheme was sui generis and that it was quite different from any other form of privatisation. Indeed, at one stage, they called it "commercialisation" but that word seems to have been dropped. They said that the scheme was not like privatisation at all. The Minister has forgotten that term and reverts always to "privatisation" so I am not quite sure what it is now.
Then the Government say that British Rail does not function very well. It is the subject of a great deal of adverse comment. But within the limitations of a lack of sufficient investment I believe that British Rail has belied that assertion. Members of the Committee may examine paragraph 3 of the Government's own proposals New Opportunities for the Railways. There they will find the Government saying:
"British Rail has made significant improvements in recent years. Its efficiency compares well with that of other European railways. The productivity of the BR workforce is among the highest of any European railway. InterCity services and BR freight operate without direct subsidy".
So on the one hand the Government are saying marvellous things about British Rail but on the other hardly any debate takes place on this issue without major criticisms about the failure of British Rail to provide the services that it should provide. In comparison with our competitors from the Continent in particular, the main problem has always been that British Rail has not been well funded.
There is the argument which was dealt with by my noble friend Lord Eatwell during the Second Reading debate—that is to say, that somehow or other if one allowed British Rail to enter the franchising stakes a grossly unfair advantage would accrue to it. The Secretary of State said:
"If BR were to bid … it would always tend to make the most optimistic assumptions, believing that, if its forecasts proved unrealistic, somehow or other the taxpayer would be there in the background to bail it out"—[Official Report, Commons, 25/5/93; col. 786.]
That flies in the face of what the Minister is arguing. As my noble friend put it the other day, if a franchisee makes a bid on assumptions that prove to be unduly optimistic, though perhaps made initially in good faith, but then finds that it cannot operate the franchise properly, the situation is completely unsatisfactory at that stage. We shall come to debate this issue later on. It is no good then saying that the railway administration order will deal with that situation. There is bound to be a lacuna and a gap in the provision of services unless British Rail is forced to come in. Therefore, the Minister is standing his own argument on its head.
The Government then say that management buy-outs are to be supported and that it would be unfair for British Rail to be in competition with its
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own former managers. That is a simplistic view of a management buy-out situation. The noble Lord, Lord Peyton, referred earlier to that. The truth of the matter is that the management team usually has a very small minority interest. The strings are pulled by the main backers—usually merchant banks—which do not have a great working knowledge of the railway system. I do not believe that they can acquire it. Usually they have a very superficial knowledge. Their concern will be to protect their own investment regardless of the consequences elsewhere.
Another point was raised by the Transport Committee of another place in its now famous report, The Future of the Railways in the Light of the Government's White Paper Proposals. It was in no doubt whatsoever that British Rail ought to be given the opportunity to enter the franchising stakes. The Committee raised another argument. Paragraph 418 of the report says:
"Unless BR is allowed to bid, it is difficult to see how the Franchising Director can be sure that the final outcome represents the best possible deal for passengers".
That is the argument: what is the best possible deal for passengers? The report continues:
"Furthermore, debarring BR from bidding could produce an anomaly whereby a foreign railway company, such as SNCF, might gain the contract to run a service for which Britain's national operator had been prevented from competing".
Whether or not the Government are right as regards the law —on further reflection, I believe that they are right in saying that there is no conflict with the treaty obligations in their preventing British Rail from becoming a franchisee —in practice, the actual result is palpably absurd. As the noble Lord, Lord Peyton, has said, there is nothing to stop major foreign competitors. The German or French railways have been permitted for a very long time to finance their operations on a wholly different basis (which we should have done well to emulate) by being able to introduce private finance in their investment programmes. While British Rail is excluded, these other railway companies would not be.
Can there be anything more absurd than that situation? The Government concede this argument: to deny the French, Belgian or German railways the possibility of entering these franchising stakes would be a repudiation of the articles of the Treaty of Rome. That is a thoroughly absurd situation. It is wrong that British Rail, in these intervening years before full privatisation takes place—if ever it does, because I very much doubt whether anyone will be interested in acquiring the rump which remains of British Rail—should be in a situation which redounds to the enormous disadvantage of the staff employed by British Rail. What have they to look forward to running a rump service that nobody else wants to run; coming in when there is an emergency; not knowing whether they are going to get assistance from the Government to meet those emergencies? It will be a situation of total uncertainty. That is not good for the relationship between management and staff, nor is it good for the country. It is likely to be grotesquely expensive as well, because BR staff will be coming in

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to mount a rescue operation, which is always more costly than the situation which pertains at the present time.
For all those reasons, I hope that the Government will in fact seek to bring some measure of common sense to this situation. A degree of common sense is sadly lacking. If they are concerned about passengers' interests and those of the people working on our railways—which is vitally important in terms of all those things which have to be done as regards safety, running stations, making sure that one has secure operations and, as best one can, that the railways run to time; and also making sure that the important functions that will continue to reside in British Rail will be undertaken efficiently and well—then all these arguments necessitate a rethink on the part of the Government.
If the Government feel that that would be a U-turn or climb-down, which would not look well so far as their standing in the country is concerned, perhaps I may advise them that I happen to believe that the reverse would be the case. I believe that that would not be the case in relation to a Bill that is not received with wild enthusiasm by many people in the country, according to all the opinion polls. Indeed, one's own discussions with people suggest something rather more important. I think that the Government would be said to be listening to people instead of simply saying that they listen but then doing nothing about it. I am not in favour of the Government's stock with the public rising, but putting that aside and in the interests of the railway system, I believe that the Government would be doing themselves and the country a great service if they actually listened.
3.45 p.m.
Lord Marsh: Like many other Members of the Committee, I have been around the building for something like 30 years and I find great difficulty in remembering any other measure which has been so unpopular right across the board. The chances of the noble Lord, Lord Peyton, crossing the Floor of the House and achieving eminence in the Labour Party are narrow; I do not think that he would ever be nominated for the National Executive of the Labour Party. I do not make a great point of that because I would not stand much chance either. However, it is typical of this Bill that there is no support for it of any size in any group of people who are interested in this subject.
The Bill's unpopularity is almost unique. It is not quite unique because the Government's last exercise in franchising (when they sought to franchise the British commercial television industry) was magnificent in its disastrous failure. The Government had not thought through what they were doing and achieved the disaster that everyone outside government thought that they would achieve. Indeed, at the very end they managed to lose the most popular television company —the favourite of the then Prime Minister.
The other Bill that was also universally unpopular was the one which introduced the community charge. People of all parties and on both sides of this House and another place begged the Government to rethink
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the situation; but no, it was a principle. They said that once it was in place, everyone would be happy. We all know what happened. The cost was colossal, and the shambles of trying to retrieve the situation even worse. Yet against this Bill (when one sees its results) I think that that Bill may, with hindsight, be regarded as a relative success.
Therefore, one does not have to make the argument that this Bill is a mess. Few people outside ministerial circles believe otherwise and Amendment No. 46 deals with what is probably the worst part of a bad Bill. The problem with the Bill is primarily that it is motivated overwhelmingly by pure, blind, unthinking dogma—all the more surprising because it is supported by Ministers of whom such a stance is uncharacteristic. Indeed, it is uncharacteristic of most people in politics these days. Most people in this country and elsewhere do not really see the future of mankind depending on who owns which part of which industries. Elements of industry are subject to government intervention at some stages and to private intervention at others, and there is plenty of experience around the world of mixtures of the two.
But the driving force behind the Bill is that British Rail has to be privatised. I do not quarrel with that because, personally, I would pay a very high price to get the Government off the back of that organisation to some extent. Many of the problems of the railways, including the union problems which concern the Government so much in relation to British Rail, are problems which, for the most part, are 15 years out of date. Old Spanish customs still exist in that organisation. They are not defensible—by anybody—but British Rail's industrial relations problems nowadays are nowhere near worthy of the obsessive domination that they exercise in relation to this Bill.
If one looks at the industry, it is clear that many of British Rail's problems are directly related to public ownership, and they are problems of public ownership because all governments find it impossible to plan ahead. They find it very unattractive to be unpopular in that area, so they do sneaky little things. All governments do that—and I have played my share in it, as have many other Members of the Committee. Governments find it easy to cut investment because the man in the street does no know that that is what they have done. He does not realise that the trumpeting about cutbacks in investment in the public sector mean that costs go up much higher than would otherwise be the case. He does not realise that there will be a very high price to pay for that in the future. I agree with the noble Lord, Lord Clinton-Davis, that from every commentator's point of view the key problem with British Rail is the insecurity of investment and the relatively appallingly low level of investment compared with every other international railway operator.
So, why do the Government proceed with the Bill? It cannot make sense that British Rail is the main organisation which has been specifically excluded from making a bid. Companies which have never operated a railway can bid. Bus companies, shipping companies, pop record makers and almost any other company can bid. Foreign railway operators can bid.

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I concede that that might be sensible because if one is looking for the most sensible alternative to British Rail, one could turn to the other railway companies and invite one of those to bid. That is what anybody else would do. But the Government say "No" and that British Rail cannot do that.
However, British Rail is still crucial to the operation and will continue to manage the bulk of the railway operation for many years to come. First, it will set up the shadow companies. It will operate as shadow franchisee in an effort to provide the Government with the basis upon which to negotiate the franchises in terms of cost and operation. I think that most shareholders would complain bitterly if their company, which was about to make major investments, said, "After we have worked out exactly what investments to make and what new people to bring in, we'll work out what the costs are. We shall work it all out ourselves but before we go ahead—when we have found that we can do it very well—we will ask somebody else to take it away from us". That is an extraordinary way of trying to run a railway.
British Rail has to run the shadow franchises because it is the only body with that information in the United Kingdom. After it has done that, BR must then withdraw from any bid. Why? It is said that it will use the information that it has gathered to give itself an unfair advantage. But it has got that information. That is why the Government set it up to perform the operation and to get the numbers. It is a grotesque argument. The Government say, "We might get a better deal from a bus company, a shipping company or a record manufacturer than from British Rail. British Rail would probably bid very low". But British Rail might well bid at a much higher level than others because it has the only people who know what operational changes can be made and what their effects will be. So we come to the issue of privatisation (private ownership). I understand the Government being committed to that principle. Why not therefore say to British Rail, "Yes, you may bid, but, if you do, the bid that you make (whatever it is) must have a proportion of private capital as part of that bid"? There is nothing unusual about that. It has been done in this and other countries. The Government could have moved towards a degree of privatisation which would bring in private capital that would enable the railways' investment programmes to be protected and, in a different way, would achieve the Government's objectives.
Of course, the Government have made much of their encouragement of management buy-outs as an alternative to direct bids by British Rail. There is no doubt that to many people that sounds superficially attractive. It is certainly attractive to some senior BR executives who would be keen to take up that opportunity. I do not blame them. The history of most governments selling things is that they usually do so at a loss, and so anyone getting in on the ground floor can become very rich very quickly.
That is one of the most irresponsible elements of the Bill. I ask the Committee to consider the matter. British Rail will be a major element on the transport
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scene for a considerable time to come. Whatever happens, it will be in receipt of large sums of taxpayers' money for some time to come. During the period of change, some of its brightest executives will be headhunted by the new consortia bidding. British Rail will be facing fundamental changes across the board for several years.
Against that background, any commercial company, any responsible manager, would be doing everything possible to lock key executives into the company for the security of the company. But we are not doing that; we are offering them £100,000 apiece to leave the company. I find it difficult to understand. There will be a combination of headhunting taking some executives out of the company—BR will for some years continue to be the biggest operator in the country—while at the same time we offer some of those executives a chance to leave the main company in order to run a small part of it. I agree, in passing, with the noble Lord, Lord Peyton: when the Government have their list of financial advisers who will undertake management buy-outs for a bottom line of £100,000, I should be grateful for that list. One could not achieve that with financial advisers in the City for much less than double that figure as an absolute minimum. And those are people whose capital resources amount to a four-bedroomed house in the suburbs against which they will take a second mortgage. It is merely a device to pacify people who say, "Why not allow British Rail itself to bid?"
I hope that the Government are prepared to listen to the arguments which have been advanced to see whether they can move in that direction to some extent. It in no way makes any sense. It will result in British Rail having increased difficulties in operating the existing system in the future, and the cost to the Government will be colossal. Present Ministers will not be around when the worst results are seen. I suspect that some of those results will begin to show themselves at the next election. There will then be Members in parts of this place who will be saying loudly, I am sure, "We told you so".
Lord Boyd-Carpenter: Like my noble friend Lord Peyton, I take part in the debate as a former Minister of Transport, hut, unlike him, as someone who was a Member of another place when the railways were nationalised in 1948. That may be a relevant aspect of the matter the Committee is now discussing. We are discussing a Bill which is one of the series of denationalisation, or privatisation—whichever clumsy word the Committee prefers—measures designed to reverse the nationalisation process. As long ago as 1948—I believe it was physically in this Chamber because the other place was sitting here at that time—I made a speech critical of the Government's proposals, and indicating that sooner or later it would be necessary to reverse the nationalisation programme.
The debate on the amendment so far has been virtually a Second Reading debate. All three speakers who have taken part have not concealed their view that they do not wish to see privatisation; that they

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wish to see, broadly, a continuation of the present position, and, in particular, a continuation of nationalisation.
Lord Marsh: I am grateful to the noble Lord for giving way. I obviously did not express myself very well. When I said that I would pay a high price indeed to bring private capital into the railways to obtain a more stable system of support, I intended to say that I was not wedded to nationalisation. Quite the reverse. I believe that if we have to privatise, it would be difficult to find a more asinine way of doing so.
Lord Boyd-Carpenter: I am obliged to the noble Lord for his intervention. The feeling I had from listening to his, as always, very powerful speech was that he disliked the Bill as such. As the Bill's purpose is to privatise the railways, if one takes the view that the Bill should be thrown out, or, as the amendment proposes, wrecked by an amendment, then it would seem that one is opposing privatisation. Although I accept, of course, what the noble Lord said as to his interesting attitude towards the matter, he must accept that if the amendment were accepted the privatisation process would be halted substantially.
Lord Clinton-Davis: I am grateful to the noble Lord for giving way. What he is saying is belied by the Swedish experience. They said that they wanted to embark upon privatisation. They did so. But they allowed the Swedish railways to enter the franchising stakes. They have done so with great success. What the noble Lord is saying is not consistent with what has been practised in relation to privatisation elsewhere.
Lord Boyd-Carpenter: I am not at the moment discussing the practice elsewhere. I am discussing this amendment to this Bill.
Lord Clinton-Davis: The noble Lord—
Lord Boyd-Carpenter: If the noble Lord will preserve his patience for a moment, I oppose an amendment which would cut out a large element of the privatisation effected by the Bill. Now, does the noble Lord want to say something?
Lord Clinton-Davis: Again, I am obliged to the noble Lord. He cannot have it both ways. If, in fact, the Swedes have practised privatisation, and have allowed the situation to develop as I have described it, privatisation, or whatever one wishes to call it, has continued there. It is not a wrecking amendment that has been proposed, it is an amendment designed to follow a course which has been practised elsewhere. It can in no sense be said to be a wrecking amendment. It is an amendment designed to improve the Government's own proposals.
Lord Boyd-Carpenter: Of course, I hear what the noble Lord says; but he must realise that were the amendment to be accepted, it would have a wrecking effect on the Bill.
Noble Lords: No, no!
Lord Boyd-Carpenter: The noble Lord will know also that those who support the amendment wish to
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see the Bill substantially put out of action, because that must be its effect. I note with interest what the noble Lord said about Sweden, but we are riot discussing the peculiar circumstances of Sweden. We are discussing the nationalisation of British Rail carried out in 1948 and now subject to reversal if the Bill is carried in its present form. That its one of the reasons why certain Members of the Committee—and one accepts that they are fully entitled to hold those views—wish to see the process of denationalisation frustrated by the adoption of an amendment on these lines.
Perhaps Members of the Committee will put themselves in the position of someone who is concerned with becoming a franchisee, assuming that the Bill is carried in its present form. If such a person realises that he will be opposed by or in competition with the present railways board, he must realise that that will make his application for a franchise extremely difficult. There will be all the natural resistance of such an organisation. The present employees do not wish to see their present employers removed. The whole loyalty of the railway set-up will be directed towards British Rail being a franchisee rather than the other applicants. I am certain that all Members of the Committee who have spoken so far in the debate know perfectly well that the effect of adopting the amendment would be, very largely, to render nugatory the proposal to privatise British Rail. That is the issue.
There is no getting away from the fact that Members of the Committee opposite, perfectly understandably in view of their doctrinal views, believe in nationalisation and wish to see it retained. They disregard the fact that in recent years there have been a series of privatisation measures which on the whole have been a great success. This is yet another in that series. It is much more difficult. I am very far from underrating the considerable practical difficulties which will confront those who wish to take up a franchise. They will face very real problems. But those problems would be increased enormously if the proposed amendment were accepted. Members of the Committee who support the amendment know that perfectly well; and that is where the difference lies between us.
I wish to see effective, privatisation. I wish to see British Rail go into private ownership once again. I wish the nationalisation era of British Rail to come to an end. If one wishes that, one must feel that an amendment of this kind, however well intentioned, makes that infinitely more difficult. Therefore, I very much hope that the Minister, with his considerable expertise in these matters, will ask the Committee to reject the amendment. I hope that he will say that he fully understands, as we all fully understand, the emphasis which has been put on many of the practical difficulties which must be faced under the Bill. No one ignores those difficulties for a moment: they are real and will constitute great problems for the government of the day. But those problems will he made infinitely worse if the present railways board is included as a competitor for the franchise. Therefore, I hope very much that the Committee will reject the amendment.
4 p.m.
Baroness Castle of Blackburn: The noble Lord, Lord Boyd-Carpenter, makes an astonishing admission when he tells us that to amend Clause 22 in the way proposed would wreck the Bill. The amendment does not propose to reverse the franchising process nor does it propose that no private operator should be allowed to bid. It merely seeks to add another franchisee. What frightens the noble Lord, Lord Boyd-Carpenter, is that that franchisee is British Rail. He is so afraid of that nationalised industry that he is not prepared to allow it to compete for a single franchise anywhere in the network.
Lord Boyd-Carpenter: I thank the noble Baroness for giving way. The point that I was trying to make —and from the noble Baroness's speech I am not sure that I made it with the clarity which it demands —is simply that if British Rail could be an applicant for the franchise, that would constitute a great discouragement to other applicants for the franchise because they know that they would be up against the whole of the British Rail establishment. That is the point; perhaps the noble Baroness will deal with it.
Baroness Castle of Blackburn: Perhaps I may suggest that the noble Lord, Lord Boyd-Carpenter, does not intervene again because he continues to give away his real fears. Again he has admitted that competition from British Rail would frighten the private operators. Why is that? It is because it would be more efficient and potent and it would win. That is the truth. It was admitted in the debates in another place by one of the Ministers who argued that to allow British Rail to bid would prevent the break-up of British Rail's monopoly. However, that would be the case only if British Rail won. I assume that there will be an independent adjudicator who will decide which operator is entitled to the franchise. It will not be a state figure which will rig the market in British Rail's direction. The matter will be in fairly tough hands, run by people who will no doubt wish the privatisation to succeed.
We are told that the privatisation will succeed only if British Rail is kept out of the picture. That is astonishing. I know that the noble Lord, Lord Boyd-Carpenter, has spent his long political life conducting a vendetta against nationalisation for nationalisation's sake. There is nothing on the merits or the demerits of the argument. He merely has a hatred of anything which is publicly owned. He wishes such things to be destroyed at whatever cost to the national interest.
I was talking to some of my friends in British Rail management the other day because I was puzzled. I could not believe that that specific and laboured exclusion exists. As my noble friend Lord Clinton-Davis pointed out, competition for contracts has been going on for a long time in many publicly run fields. Until now, nobody has suggested that the public sector should be excluded from showing whether it can compete on merit. It is a total tyranny to brand British Rail as a failure, as the noble Lord, Lord Boyd-Carpenter, has done. He does not wish it to be
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allowed to prove whether it can compete. That is a level playing field for you in true Tory terms. The odds are always tilted against the public sector and in favour of private enterprise.
I asked my British Rail management friends why British Rail should not to be allowed to compete. They told me it is because it would win. That is what the Minister meant in another place when he said that if British Rail were to bid, it would lead to a perpetuation of the British Rail monopoly. That is because it would be a better bet for the passengers and travellers of this country and for our economy. I asked, "Well, now, how is it you would win?" He replied, "We're more efficient. I am sorry, but we are more efficient". I said, "Send me some proof".
As Members of the Committee may know, I have always liked to have the facts rather than have the prejudices which so typify Members of the Committee opposite. Two figures were sent to me which reflected a comparison between British Rail's operating efficiency and that of its European counterpart. The first figure is of train kilometres per member of staff employed. The figure for British Rail is 3,289 kilometres, whereas the European average is 2,320 kilometres. That is not a bad comparison. Might not such comparisons embarrass the private visitors—the franchise seekers—who were bidding against British Rail?
My information also shows that that figure was achieved at a time when support from public funds as a proportion of gross domestic product was, in the case of British Rail, 0.14 per cent., with the European average being 0.68 per cent. Therefore, we have hardly feather-bedded our publicly-owned railway system. Yet it has, by common consent, achieved great strides forward in productivity. I do not have the slightest doubt that it would have achieved a great deal more if it had ever been allowed to invest with the freedom that will be given to the private operators—indeed, as was given in the water industry. We have seen it all in the history of public ownership in this country. I blame my own governments for not having done something about it in the past.
When water was privatised I remember talking to the chairman of the North-Western water company. I asked him, "What is the advantage in privatisation?" He replied, "We can raise private capital." But British Rail has never been allowed to do so. It has been kept within a narrow straitjacket. Despite that, I think that it has done absolute wonders. Before anyone makes any changes in our rail system, freedom ought to be given first to British Rail to raise capital on the private market just as privately owned industries are allowed to do. That is the real solution.
I have seen the effects of investment on my own commuter line; namely, the Chiltern line upon which I regularly commute to this place. During the worst period a few years ago when British Rail was totally starved of money there was talk about closing down Marylebone station and its line. It was a terrible line. It was always long-winded, taking 55 minutes to get to High Wycombe. The trains were dirty and dark and the facilities on the station were lamentable. However, suddenly, the policy changed and some money was put

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into the line. I can tell Members of the Committee that the transformation has been magical. We now have new rolling stock which is clean and attractive. The train takes 35 minutes to reach High Wycombe instead of 55. Moreover, the trains are punctual and full of passengers.
British Rail tells me that already, in the short period during which that change in investment policy has taken place, the usage of the line has risen by 33 per cent. Of course, as one travels speedily in that clean, nice and comfortable train towards Marylebone, one realises the folly of struggling to compete on the M.25 and the M.40 to reach London by car. If this Tory Government had cared to put as much money and interest into railways as they put into more and more roads (which will only become more congested as traffic increases) we would not even have a sniff of a suggestion that nationalisation had failed.
The amendment is a test of the Government's credibility. It is a test to see whether they are afraid of the competition of the publicly-owned sector and whether they will be true to their own principles that there should be a free-for-all in competition with everyone being given a chance. The clause is the most revealing in the Bill. It shows the Government's uncertainty about their plans. If they could get away with it without loss of face, I believe that the Government would drop the Bill which they know will be a dog's breakfast and a bureaucratic nightmare: it will increase fares and costs to the country; it will infuriate passengers; and it will do nothing whatever for an integrated transport policy. For their sake, I beg the Government to reconsider, even at this eleventh hour, at least the present amendment.
4.15 p.m.
Lord Cochrane of Cults: I seem to be one of the very few Members of this place who actually said on Second Reading that he welcomed the Bill. However, having said that, I feel that I rather disappointed my noble friend on the Front Bench because I went on to say that the only reason I welcomed it was that it recognised that there was a problem with the railways. I fully support the amendment moved by my noble friend Lord Peyton of Yeovil.
Unlike my noble friend and the noble Lord, Lord Marsh, I have not frequented these corridors for anything like the time that they have. However, I have from time to time spoken on railways. In speaking to the amendment, I must say that I believe that it encapsulates and brings to light a complete non sequitur in the Government's thinking on the management of the railways. I understand that my right honourable friend the Member for Huntingdon gave an interview to the Financial Times not so long ago in which he said that British Railways was "deeply inefficient". It is rather hard to use such terms. If it is "deeply inefficient", the contradiction is that, at the same time, the people who are actually working the system are being asked to do a great deal of work on the shadow franchises which are to be the yardsticks.
Well, if one is "deeply inefficient", surely one would be like a computer—for example, garbage in, garbage out. As I have said, at the same time, the staff are
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expected to run a railway (which we are told is in dire trouble) and not let the situation become worse. However, if one's attention is distracted away from the job that one is supposed to be doing, it is like that very painful situation, of which I have a modicum of experience, of a fearful row among the directors of a private company. No work can be done. Everyone protects his own back and wonders what to do next. Endless hours are spent telephoning one another, and so on, and the result is enormous lawyers' bills and probably accountants' bills too. My noble friend on the Front Bench wrote to me after Second Reading when I suggested that legal fees could be £160 million. He said that the figure seemed to get bigger all the time, that he could not think why, and that he was quite sure that I was wrong. However, he did not suggest what it would be. I suggest that it may well be a good deal more.
The management buy-outs which are now to be encouraged will cost, as the noble Lord, Lord Marsh, said, very much more than £100,000. They are being promoted, as I said earlier, by supposedly deeply inefficient people. Have we really taken leave of our senses? Of course the railways are not inefficient. British Rail runs—as the noble Baroness., Lady Castle, has just said—a good railway in many parts. But, alas, due to lack of investment and historic mistakes and so on, the railway system is like the curate's egg—some bits are better than others.
I might remark that I travelled this morning from well beyond Edinburgh and arrived at King's Cross some 10 minutes early. The train from Edinburgh was held for us there due to a hitch on the Forth Bridge. That was done without any problem at all. I spoke to the senior conductor and said, "Jolly good. You held it and I got it with a gasp and a pant". He replied, "We were told not to leave until the last hurrying figure was aboard". I say full marks to British Rail for its organisation. Had the system been franchised, I would have had to change from regional railways in Scotland onto InterCity, and I wonder whether the same thing would have happened.
I support the strictures of my noble friend Lord Peyton about the Treasury. I have remarked before that the staff in the Treasury are in many ways a malign influence on much of our national life because they have their own culture which is devoted to things which, while they may have been worthy in Gladstone's day—counting candle ends and suchlike is the traditional expression—are now in many senses irrelevant to the speed and complexity of this country. It is said—I am sure it is true—that the staff in the Treasury get less than half their forecasts right. If you stick a pin in, you get half your forecasts right over a period of time. This Bill comes from the firm that invented green shoots. I fear that that is not an original remark but it is true nonetheless.
As things stand, any foreign railway can operate here. I do not know whether my next remark is politically correct or not, but would not one feel one had a little egg on one's face if one was on the Front Bench and announced that Irish Railways had secured the franchise for Cornwall or, more embarrassing still, Scotland? There we have it. Those companies can

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secure franchises under the Treaty of Rome but our chaps, who are efficient although denounced as inefficient, are not allowed to do so. Yet at the same time they are encouraged to try under another hat.
In practice it is looking as though there will be few offers for franchises except through management buy-outs. As the noble Lord, Lord Marsh, said, management buy-outs tend to be frightfully highly geared. But even so these employees of the railway, the management, will be asked to put in the next best thing to their shirts. On the whole, in the present climate—I am not talking about the past but rather about today's climate—I would rather continue to be a member at Lloyd's than take part in any significant share of a management buy-out of any part of British Rail.
I think it is fair to those involved that this anomaly should be removed, as proposed by my noble friend. If it is not removed, there will be severe effects on the morale of those who are at the sharp end of the railways and who day in, day out, have to make decisions such as the one I averted to earlier. They will perhaps lose the sharpness of their initiative and just keep their heads down. Things will deteriorate and we will have obtained no advantage whatever of any sort from these changes. With that continuing uncertainty, things are bound to get worse. Much of the system is good already but it is precariously good because it relies on individuals who require to be motivated. I believe that we should wholeheartedly support my noble friend's amendment, as I do.
Lord Tordoff: I shall make a brief intervention because time is pressing. However, I felt someone should speak from our Benches to state our position on these matters. I was interested to hear what the noble Lord, Lord Peyton, said about his right honourable friend the Secretary of State. I know the noble Lord has had consultations with the Secretary of State. I presume they have not borne fruit because otherwise he would not have pressed his amendment today in the excellent way in which he did.
However, I have no doubt that the noble Earl, Lord Caithness, will commend the Bill to this Chamber with the fervour that he commended the poll tax some years ago. But today we are addressing not the Government Front Bench but the Members of the Committee sitting behind the Government Front Bench, those on the Cross-Benches and those on our own Benches. I for one am glad to see that the Chamber is much better attended than is normal for a transport debate because this is an important matter. It seems to me that down the years there have been two positions on nationalisation and privatisation which have been as rigid as one another. This Bill to a certain extent gives us the opportunity to move away from that situation, but it is being supported in ways that are as dogmatic as the pro-nationalisers were all those years ago. That is a great pity as I believe that the railways deserve better than that.
The idea that ways should be sought to bring new capital and new investment into the railways is one that I applaud. There are many things wrong with this Bill which we have discussed on Second Reading and
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already in Committee, but there is one aspect that we need to test and that is whether the private system or the nationalised system is better able to run a railway service. There is only one way of testing that and that is by allowing the two systems to compete against one another. The only way to allow them to compete against one another is to allow British Rail to tender for the franchises. That is what this amendment seeks to do and that is why we are prepared to support it from these Benches.
Lord Taylor of Gryfe: I wish to intervene briefly as I was a member of the British Railways Board for 11 years. I believe I was appointed by the noble Baroness, Lady Castle. I sat under the distinguished chairmanship of the noble Lord, Lord Marsh, and was duly reappointed to the board by the noble Lord, Lord Peyton. When I sat on the board I always felt a sense of responsibility for a major industry that employed thousands of people not only in the industry itself but also in the supply industries. It was an industry which affected the total economy of the United Kingdom as it was a major carrier of freight and passengers. It was in that sense of trying to create the most efficient enterprise that I sat on the board. I can say from my personal experience that there was considerable dedication not only on the part of the board but also throughout the system. The employees felt committed to the railways. In many cases there was a long family tradition of service to the railways.
It is somewhat insulting to say at this stage that, because the railways are in the public sector, they are therefore inefficient and that the private sector can contribute some kind of magic which will transform the efficiency level of British Rail. That is simply not true. I have had experience of sitting on the British Railways Board and on the boards of a number of publicly owned companies. I found there was no less dedication to securing efficiency in the case of British Rail than in the case of some private companies in which I served.
The argument that one suddenly makes organisations efficient by privatising them is not borne out in fact. I remember sitting in this Chamber while we held long debates on the privatisation of a responsible and well founded institution known as the Trustee Savings Bank. The same kind of arguments were trotted out in those debates; namely, that somehow or other if the TSB was taken out of the inefficient public sector and made a private sector company it would undergo a transformation. I have the figures here for the TSB. It was a healthy bank and at one time it had no debt whatsoever. However, the figures for last year show that the TSB incurred £181 million of losses. The enterprise and imagination of the private sector have resulted in that bank accumulating £597 million of bad and doubtful debts. Therefore, one cannot prove that by suddenly changing the name on the door one magically makes the company efficient.
That is doubly true in the case of railways, which is a complex and specialised business. The people who run the railways know about railways. As has already been said in the debate, the people in the City who will advise on these matters have little or no experience of running this specialised industry.

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Today we address ourselves to the question of franchising and whether the state enterprise should be prohibited from putting down a benchmark on efficiency. How will such things be judged? The clever boys in the City cannot advise on railway efficiency, although they will collect fees for doing so. One must have a standard of comparison; one must have competition. I always assumed that this Government were in favour of competition, and they have not been too clever about franchising. The noble Lord, Lord Marsh, made reference to the previous experience of franchising: that is the television franchises. I was interested in a company which bid £2,000 for a franchise which was worth between £8 million and £10 million. Scottish Television was the only bidder. It was very clever. My shares multiplied by 10 overnight; £1,000 became £10,000. The taxpayer lost the value because there was no competitor and no other bidder. Therefore, the franchise went to STV.
Is that the kind of result the Committee wants in franchising the services of British Rail? If not, it should introduce the element of competition. Far be it from me to preach the gospel of competition because all the advice on its virtues should be coming from the other side of the Committee. But unless British Rail is permitted to bid in competition with private enterprise how can we be satisfied that the taxpayer is obtaining a good deal?
I make a plea to the Government. This is a difficult and complex piece of legislation and many parties are involved in making the arrangements, as mentioned by the noble Lord, Lord Peyton of Yeovil. It will emerge only on the eve of the next election when we shall realise the mistake that has been made. I do not especially wish the Government well, but I say in all seriousness that unless the privatisation of British Rail is carried out efficiently and unless there is an element of competition in franchising, they have no right to muck it about because it is an important British industry.
4.30 p.m.
Lord Marlesford: Perhaps we can all agree that this is the most important amendment that we have dealt with and that it will probably transpire to be the most important amendment tabled in Committee. It was moved in a most persuasive way by my noble friend Lord Peyton. My noble friend Lord Caithness knows that I have had some difficulties with the Bill and have been unhappy about it. However, the reason for my unhappiness is different from the reason for the unhappiness of Members of the Committee opposite.
I believe in privatisation, in particular the privatisation of British Rail, for three reasons. They are not dogmatic reasons but are practical and apply also to other industries. First, privatisation will attract private capital into British Rail, which is impossible while the industry remains nationalised. Endless attempts have been made to find a formula whereby it is possible to bring private capital into a publicly-owned industry. However, the liability of the Government to the minority shareholders, or to the suppliers of that private capital, means that the Treasury, inevitably and rightly, must say that that
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private capital is part of the PSBR. That means that. that supply of private capital will constantly he measured against hospitals, defence and all the other desirable items for which there is never enough money. The point about private capital, however, is most important.
The noble Baroness, Lady Castle, asked what good will come from privatisation. I realise that my point is a Second Reading point but it is relevant to what she said. Let us remember that when the telephone service was publicly owned we had to wait until it was graciously prepared to give us a telephone.
The second argument, which applies a great deal in the case of British Rail. is the need to introduce tougher and more entrepreneurial management. The third argument, which some Members may regard as the most important, is that it is easier and better to regulate what you do not own because there is no conflict of interest. My goodness, there is a need to regulate on behalf of the users of British Rail.
I cannot compete in experience in this matter with Members of the Committee who have spoken. We have heard from four former Ministers of Transport and a former chief executive of British Rail. My experience is more of a worm's eye view than a bird's eye view but it is at least more recent. For four years until last summer (when all the regions were scrapped) I was a member of the board of the Anglian region of British Rail. I can only tell the Committee of my conclusion from my observations on the inside. It is that the management is not good; indeed, it is remarkably poor. I have been involved with a number of industries, including Eastern Electricity, a former nationalised industry. There is no comparison in the management. The problem with British Rail is one of management; it is not the people on the stations or those who drive the trains. They are splendid people and can perform wonderfully. However, during those four years the standard of management that I observed was abysmal. I am afraid that I should be unable to sign or to underwrite the laudatory chips which my noble friend Lord Peyton offered to Sir Bob Reid.
Lord Marsh: I thank the noble Lord for allowing me to intervene. I followed his comments closely. How does he reconcile those comments with the policy in the Bill to make public money available to specific railway management buy-outs? How can the Government subsidise those self-same managers to take over total responsibility for running sections of the railways without government involvement?
Lord Marlesford: I have already said that I do not think that this is a particularly good Bill—
Noble Lords: Oh!
Lord Marlesford: No, I made that point most clearly on Second Reading. I am now speaking to the amendment. With great respect to the noble Lord, Lord Marsh, I do not believe that the point he makes is directly relevant to the amendment. At any rate, I believe that throughout the years British Rail has not provided a good service to travellers or to its other users.

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Perhaps I may turn straight to the point about franchising. It requires detailed estimates of future costs and the necessity of keeping to those costs. There is no other area in which British Rail is less successful. It is hopeless when it comes to knowing the cost of certain items, which costs are important, and which are not. If the Committee wants a trivial example—perhaps no more trivial than that given by the noble Baroness, Lady Castle, of her journey today—I shall offer one. Recently I received a letter from no less a person than Sir Bob Reid stating that the decision not to print the names of the stations on the timetables of provincial services will save money. Is that the kind of approach which gives one confidence in the figures which British Rail will produce in applying for a franchise?
Lord Peyton of Yeovil: What my noble friend states about British Rail is a matter of opinion. However, holding the opinions that he does, would he not think it slightly eccentric on the part of the Government to use British Rail and its personnel as shadow franchisees? It seems very odd indeed.
Lord Marlesford: My noble friend states that it is a matter of opinion. One could also say that it is a matter of experience. I do not claim grand experience. I merely give the Committee my experience of the quality of management of British Rail which makes me believe that it is better for the rail services not to continue to be run by the management of British Rail. That is the point that I seek to make.
Lord Peyton of Yeovil: Then why choose just those people as shadow franchisees to give a benchmark and a standard for everyone else?
Lord Marlesford: I hope, eventually, that a number of people will attempt to obtain franchises and that the lowest franchise bid from a reputable tenderer will receive it. To ask British Rail to indicate what it would bid is not realistic. I do not believe that the bid it puts forward would be one in which I would have confidence as a taxpayer or as someone who will use British Rail. I believe that it is a wrecking amendment.
Lord Tordoff: The noble Lord states that he would not have confidence in that franchise bid. That may be so. But is there no mechanism by which the franchise director can determine whether or not he has confidence in the bids? Why should he have more confidence in a private bid than in a bid from a publicly owned company? The amendment states the bid should be tested in the market place.
Lord Marlesford: The noble Lord puts his finger on the point. The difference is this. The public bid is not real money; it is not the bidders' own money. The bid from the franchisees involves money that they are putting up and which they can lose. They can also lose their jobs. Not many people lose their jobs in the publicly-owned industries, however bad the performance.
Noble Lords: Oh!
Lord Marlesford: I hear the roars of rage, indignation or disbelief. I am not talking about the running down of industries. I refer to people who make management mistakes. Remarkably few managers in publicly-owned industries lose their jobs as a result of bad management. I suggest that many of the unfortunate foot soldiers lose their jobs because the managers have not lost their jobs. The main point is this. I believe that it is better to have outside capital and outside management to run the services of British Rail. The amendment would wreck the chances of that. That is why I shall not vote for it.
Lord Eatwell: I wish to address the economic case which has been made for excluding BR from bidding and, so to speak, rigging the market. It is a case which has been reiterated by the noble Lord, Lord Marlesford; it was made by the noble Earl, Lord Caithness, at Second Reading. The case is based on the idea and the proposition which is quite correct that the commercial risk associated with British Rail as a publicly-owned company is less than the commercial risk associated with a privately owned company. At Second Reading, at col. 1526 of the Official Report of 15th June, the noble Earl stated:
"Allowing BR to bid would be the surest way to undermine potential City interests, because BR would be bidding … on the basis of using risk-free public money".
I am sorry to tell the noble Earl that that is economic nonsense. The case for excluding BR on those grounds is simply not sufficient, as any reasonably well educated transport economist would have told him. I am sure that there must he such persons in his department. I wish to sketch out why it is economic nonsense.
First, the noble Earl seems to have failed to realise that the advantage of lesser commercial risk not only accrues to the monetary bid which a public sector company might make; it also is an advantage which accrues to the passenger. If a public company wins the franchise, the passenger acquires an operator whose risk of failure is significantly less. Therefore the chance of that passenger's train not being present next morning because the company has failed is significantly less. In those terms, the product provided by a public sector company is significantly superior because it has a lower risk of failure for the passenger.
Secondly, let us pretend that the product provided is exactly the same and take up the point made by the noble Earl at Second Reading. He is quite right. The public sector can borrow money at a lower rate of interest than the private sector. The differential in that borrowing rate is a precise estimate of the market's evaluation of the risk associated with the private sector company, be it ever so blue chip, rather than the public sector. Therefore one has a market determination of the risk. One has a market determination of the advantage which BR would have from using public sector money. Thus all one has to do is to take that differential—one can look it up in the Financial Times every day—apply it to BR's bid, uprate the bid, and so have a perfectly level playing field. There is no difference whatever, whether it is public money or private money that is being used. One can use the

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differential in the interest rates to correct the difference in the bidding and thus exactly measure the difference in risk.
On the basis of those two points, the Government's economic case falls. There is no economic case for excluding BR from bidding. Indeed, there is an incredibly strong economic case for having the bid simply to increase the level of competition, as many Members of the Committee have said. Since there is no economic case for excluding BR from bidding, we must assume that the noble Earl has other, perhaps political, motives in mind.
4.45 p.m.
The Earl of Lindsay: I cannot compete with the noble Lord, Lord Eatwell, on economic theory. However, I stress that one of the great practical assets of the Bill is the encouragement that it will give to management buy-outs winning franchises. Such franchises, run by successful management buy-out teams, will slowly begin to take our rail system out of the strictures of the public sector and the constraints of the Treasury, neither of which a British Railways Board franchise will be able to do. There is, too, the longer term saving to the taxpayer from a management buy-out team which, again, a British Railways Board franchise will not achieve.
The amendment should not be supported on the ground that it completely undermines management buy-outs. I am surprised that the prospect of management buy-outs has had such a cynical reception in some parts of the Chamber. Criticisms have been levelled at that procedure and the Bill in general, but specifically on the issue of whether the British Railways Board is allowed to compete. One of the criticisms is that the railways will be robbed of skilled staff and that crucial personnel will be moved sideways or disrupted. We have already dealt with the deliberate encouragement that management buy-out teams are receiving. However, even if it is a third party bidder, his only realistic opportunity of impressing the franchise director is if he has recruited on his team a selection of experienced railway operators. The noble Lord, Lord Clinton-Davis, suggested that we shall have railway companies run by inexperienced operators. I cannot conceive that that will be allowed by any of the regulatory authorities which the Bill sets up.
With a management buy-out team rather than the BR Board, there will be a greater drive towards productivity. I know that it is already good, but no doubt there is room for improvement. A recent assessment carried out in Scotland on behalf of one of the possible ScotRail management buy-out teams shows that its headquarters administrative staff could total about 20 people. At the moment, Regional Railways has its headquarters in Birmingham where it has an office of 1,000 people. There is an extraordinarily disproportionate saving for a new administration for ScotRail which drops its staffing and payroll to 20 people. Once again, that is the kind of improvement that a former BR management, in partnership with private sector skills and fundings,
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would be able to bring about. It would be much easier for them to bring it about than if they simply continued their old jobs on the old BR payroll.
The noble Lord, Lord Peyton, among others. suggested that management buy-outs might be hampered through an inability to raise funds. I believe that the noble Lord, Lord Clinton-Davis, said that there would be a fairly small management input from the railway team and that most of the input would come from merchant bankers and so on. The capital requirement for winning a franchise is not so substantial. One is not purchasing capital assets; one is simply seeking working capital, leasing the track, the rolling stock and the infrastructure access. The requirement to arrange for massive sums is not there. In addition, many of the franchises will be involved negatively on the PSA. So once again one is bidding for an allowance rather than a positive sum of money.
I would also point out that a management buy-out team may not be the highest or the top bidder. It is entirely within the rights of the franchising director to choose the under-bidder, who perhaps has experience of rail management or whose financial backing is more certain, and thus ignore the top bidder.
I return to Scotland once more. I believe it was the noble Lord, Lord Marsh, or my noble friend Lord Peyton, who said that there would be little interest in the City. I am sorry to bang on about Scotland, but it is a part of the network I know best. The two or more groups of managers who are considering participation in a buy-out have interests within the City to support them. The operation is seen as viable, not a hopeless lame duck. Therefore, we shall possibly, north of the Border, see one of the great promises offered by the Bill fulfilled.
The spectre of foreign involvement in British Rail franchises is somewhat misleading. It is a suitably emotional one, perhaps, introduced for the purpose of this amendment. For one thing, most foreign state-owned railway companies face exactly the same problems as we in this country face. Monolithic, single entity, single managed companies rely heavily on state funding. With one eye on what we are doing in this country, they seek to unwind the great institutions which are so expensive, in the same way as British Rail has been so successful in the past few years in unwinding its single vision operation, trying to set up separately managed, self-contained profit centres which have to be separately accountable.
As regards foreign intervention, the franchising director is looking for private sector funds and skills, not for still further state funds and skills. I imagine that he is also not allowed to accept any subsidised foreign bid. Perhaps my noble friend will confirm that.
At the moment, there are unlikely to be any foreign bids for our own franchises. It may emerge in time that we become minority partners with some of our own management teams. If a foreign institution or company wants to invest in this country's infrastructure, rail system and management, I believe that we would welcome it, as we would welcome the Japanese wishing to build factories for the manufacture of cars or televisions sets.

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British Rail has a comprehensive and well established record of foreign investment, foreign advice, foreign vehicles and foreign expertise. Austria is one country which springs to mind. A considerable amount of Austrian expertise has been brought to this country because we cannot provide that expertise ourselves. We cannot afford to "home-grow" it.
For a long time, I have been a completely committed railway man. I admire everything that British Rail has done and is doing and all the plans it has on the table. I also firmly believe that our rail system must be fully integrated. It must be efficient. The treatment that it receives in infrastructure investment decisions and so on must be fair. However, I cannot bring myself to support the amendment. I believe that the Bill offers a unique opportunity to bring private sector skills and money into rail management and better teams within the railways. If we allow this opportunity to be undermined by the amendment, it will be a great loss.
Lord Mountevans: I support the amendment, not with any view towards wrecking the Bill—the Bill covers not only franchises, but a whole number of other mechanisms—but in an attempt to make franchises work.
I believe that the ability of BR to bid should be a milestone on the road to total privatisation. To be successful, a BR bid would, after all, have to take account of all the changed circumstances flowing from the Bill. There is the ability to lease stock and the status of Railtrack, which will have a commercial remit, which is planned to have a 10-year investment plan and which will, I gather, have at least three years of financial certainty ahead of it. That is something which the British Rail civil engineering side has never enjoyed.
A BR franchisee, an MBO (management buy-out) or a private sector franchisee will deal with Railtrack on the basis of a commercial and enforceable contract, rather than, as is now the case with British Rail, having simply an operational branch within the existing profit centre.
Even with the BR bid, there will be the freedom to operate commercially from one year to another rather than having to draw an immovable profit and loss line on 31st March each year. So far as I can see, franchises seem likely to be for seven or more years, meaning that the short-term perils of the PSBR and the public expenditure round would give way to longer term views. If that does not hold true, then no one will sign a franchise.
A BR bid would have to satisfy the franchising director's criteria and deliver on its promises. In other words, it would be halfway to operating as a private company. Given the length of the franchise, it could use the time available to develop those business skills, expertise and track record which would enable it, in the fullness of time, to become a fully fledged private operation.
A BR bid will already be on the table, as existing profit centre performance will be the touchstone against which the franchising director will assess the incoming bids. I find it surprising that no BR attempt
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is to be permitted to establish whether existing performance can be further enhanced as a result of the change in circumstances which I have mentioned.
Despite what my noble friend Lord Marlesford said, BR seems to me the best qualified operator at the moment. Others will no doubt demonstrate equal or greater skills and we must hope that that will come to pass. However, the experience, for example, of Stagecoach Holdings—a highly competent operator in another transport field—when it took over a small element of the Aberdeen-London service operated by InterCity demonstrates how difficult it can be to run a railway service.
The skills of running a section of a railway are not those of running a small business, nor are they those of the large groups in the transport sector which have been privatised in recent years, very successfully. Those people who care for their customers, manage staff and handle incidents—I simply take railway incidents like points failures and suicides—do not necessarily have the skills in managing cash flow, book-keeping or maintaining their position with City analysts.
The converse is also true. Time is needed to develop those skills within the new train operating companies. Whatever may be going on in Scotland, I believe that they are not universally available among all the other franchises designate. I can think of no better way of achieving that than by allowing BR to bid, using the range of skills that it already has nationally in terms of operation and allowing it the time to develop the ability of the divisions to operate as companies in the private sector. The parallel has already been mentioned, of how we went through a tendering process on London Transport as a prelude to full privatisation. Sweden has already been mentioned. There are many other opportunities or factors that one could mention, but debate has gone on for a long time, so I shall simply rest my case, not on an eternal right for BR to bid but as a halfway house in the process of managing change from where we are now to where we would hope to be in 10 years' time.
5 p.m.
The Earl of Caithness: Let there be no doubt in the minds of Members of the Committee that this set of amendments goes right to the heart of our policy. That was made very clear by the excellent speeches that we have had from four ex-Ministers of Transport and two ex-members of British Rail boards, some of whom were against and some of whom were for the Government. I hope that I shall be able to persuade the Committee that the amendments are at the same time profoundly undesirable and unnecessary. They are undesirable because they would undermine the whole franchising process. Here my noble friend Lord Peyton of Yeovil was undeniably honest when he said that it is a step back from the intention of the Bill. They are unnecessary because BR does not need to bid for the franchise director to be able to assess the relative merits of accepting a private sector bid and allowing BR to continue running the services in question.

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First, let us consider our objectives. We all want to improve services in a way which represents value for money for both the passenger and the taxpayer, who will indirectly continue to support socially necessary services. Securing value for money is not just about finding the cheapest operator to provide services. It is also about the quality of service on offer to the passenger and it is about transferring risk from the taxpayer. I am sure that all noble Lords can agree with these objectives.
Let me remind the Committee of our manifesto pledge. We believe that the best way to produce profound and lasting improvements on the railways is to end BR's state monopoly. The Government believe that private sector operators will focus more clearly on passengers and their requirements, recognising that, as in any business, you have to respond to your customers if you want to sell your product. Experience shows that the private sector is generally more responsive, more flexible, more innovative and more efficient. It will bring to the railways a fresh approach, building on the work done by British Rail. It will not be constrained in the way that a nationalised industry is constrained, for example, by public expenditure rules and statutory constraints on diversification.
I have described the attributes which we think the private sector can bring to the railways. These will complement what is already there. Franchisees will need the experience and skills of the existing BR workforcet—the drivers, guards and station staff. The railways could not run without them and we have always recognised that fact.
We also want to see BR staff bidding for franchises on the basis of management-employee buy-outs. Clause 128 specifically provides for the board to give its employees financial assistance when bidding for franchises, or indeed for outright sales of other parts of BR's undertaking. BR has already announced the details of the financial assistance that will be available. Broadly, BR will reimburse costs on the scale of 85 per cent. of the first £10,000 (not including the initial feasibility study) and 75 per cent. of the remainder, subject to an overall maximum of £100,000 for each bid learn. Assistance will be repayable only in the event of a bid succeeding. We would not be offering such support if we did not have a great deal of confidence in the skill and initiative of British Rail's managers and workers.
Let me now explain how these amendments, if passed, would underline our franchising policy. Allowing BR to bid would undermine private sector interest because I3R would be bidding on the basis of access to capital at preferential rates due to the implicit government guarantee that it would have. Private sector bidders would feel, with some justification, that a public sector bidder was very likely to be unduly optimistic in preparing his bid. Many in the private sector would probably think that they were wasting their money in even preparing a bid against British Rail.
British Rail is not accountable for its budgets in the same way as a private sector operator would be. If a franchise is awarded to a private sector operator whose bid was for £1 million of subsidy, then that is
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how much he would receive. He will not be able to come back for more. He will need to be properly capitalised to bear that risk. Here—
Lord Eatwell: The noble Earl is reiterating the point that he made at Second Reading and which I addressed in my remarks. I outlined in those remarks a way in which he could use market calculations to correct precisely for the differential risk associated with public money, which is cheaper, and privately raised money. Why does he not accept this market based scheme and then allow competition to take place?
The Earl of Caithness: I fully admit to the noble Lord that I am no transport economist. I am looking at the real and practical world in which businesses have to operate. I say to him without qualification that when one looks at a situation where one side is backed by the Government against a side that is not, it is fairly clear what the result will be. My noble friend Lord Boyd-Carpenter was absolutely right on this point. If a franchise were awarded to the public sector there would not be the same incentives on the part of the management and workers to make a success of their franchise. The reason is not greater efficiency, as the noble Baroness, Lady Castle, suggested. If that were the case, BR would continue to operate the service. I shall come to that point in a moment. The answer, as my noble friend Lord Marlesford pointed out, is that as a nationalised industry the taxpayer would always be there to bail BR out. With the best will in the world, this must affect the attitude of managers and workers in a franchise.
Lord Stoddart of Swindon: I am trying to follow the noble Earl and I am trying to understand what he says. As I understand it, he is saying that, because British Rail will be backed by the Government and will have access to finance, that would be wrong; it would be uncompetitive. On the other hand, the noble Earl told me the other day and has said so on other occasions that SNCF will be able to bid. Is not SNCF under the same circumstance as British Rail? Is it not backed by the Government, and will riot other potential franchisees take the same view; and therefore if SNCF is allowed to bid, and does bid, will it not meet the same situation?
The Earl of Caithness: I am very grateful to the noble Lord for reminding me that I have to deal with this point. I shall come to it later in my remarks.
What I have said so far brings me to a fundamental point; namely, the effect of these amendments on a management-employee buy-out. I have already explained that encouraging such buy-outs is an important aspect of our policy. There has already been an encouraging level of interest shown by BR management in putting forward bids for franchises. The noble Lord, Lord Clinton-Davis, compared what we were doing to competitive tendering. The situation is very different. The interest of management-employee buy-outs would evaporate if BR were allowed to bid for franchises. Indeed, my noble friend Lord Lindsay was absolutely right in what he said. We have received similar evidence that if BR were allowed

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to bid for franchises, management-employee buy-outs would not be in any way interested in pursuing the interest.
Also in the majority of the 25 profit centres into which BR will be divided, there is or potentially will be a management-employee buy-out ready to come in. That interest would evaporate for the very reasons that I mentioned. The managers would be placed in an impossible position, with a clear conflict of interest between developing their own bid and the preparation of BR's bid. We could not and cannot accept that situation. The Committee should be under no illusion that management and employee buy-outs will not be allowed to come off second best and that the corporate interests of BR will not prevail.
Another point which needs to be dealt with is the question of investment. All noble Lords are keen that there should be more investment in the railway sector. I am proud to be able to say that investment is now at record levels in British Rail services. That has been reflected, as the noble Baroness, Lady Castle, said, in a better service on her line.
But having listened to what Members opposite have had to say, I have no doubt in my mind that those Benches would still want British Airways to be funded by the taxpayer so that every plane bought would have to have taxpayers' support, and similarly every bus bought with taxpayers' money. The reason why British Airways is one of the few airlines in the world which now makes a profit is that it is not state subsidised. It has been let go into the private sector and has increased its investment as a result.
Lord Tordoff: Would the noble Earl please explain to the Committee what on earth that has to do with the amendment?
The Earl of Caithness: A great deal. I stressed it at Second Reading, and I am surprised that the noble Lord, Lord Tordoff, has not realised it. One way is that by bringing the private sector into the railways one can bring in a whole opportunity of new finance and new investment. As the noble Lord was one of the few to admit, because of Treasury rules you cannot bring private sector investment into British Rail. That is well known. Unless that private sector investment is over 51 per cent., the industry concerned—it was the case in the days of the Labour Party and it is still the case today —will be treated as a nationalised industry and, as the noble Lord, Lord Marsh, said, will still be related to public expenditure. It will be taken into account.
Lord Clinton-Davis: If this is all the fault of the Treasury rules, is there not a strong case for altering the Treasury rules? Is that not exactly what the French railways have done? They have been able to invest as a result of the private sector being able to assist their investment programmes?
The Earl of Caithness: I am sorry that the noble Lord takes such a lax view of public expenditure. It is important to have very good control over public expenditure. I feel it is absolutely right that, when one looks at the whole issue, one must consider the private
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sector. That, I say to the noble Lord, Lord Tordoff, is why we need to allow management-employee buy-outs in particular, which this amendment would absolutely stop. We need to resist these amendments so that the private sector will be allowed to provide the necessary investment and offer different ways of bringing money into this very important industry.
Lord Marsh: I am grateful to the noble Earl for giving way. I agree with the noble Lord, Lord Clinton-Davis, but I do not see why the Treasury rules should stop us if the objective is worth pursuing. Would the Treasury rules prevent British Rail from bidding as part of a private consortium?
The Earl of Caithness: If British Rail were part of a private consortium of which it had a majority shareholding, any private sector money that was included in the bid or was involved at a later stage in investment would be classed as public expenditure. The noble Lord knows that. That was the case when he was a Minister. I remember sitting in the Gallery and listening to him defending that situation in the other place.
5.15 p.m.
Lord Marsh: But suppose it were a minority partner. That has existed in this country and many other countries.
The Earl of Caithness: If it were a minority partner and therefore the private sector had a greater control over that company, it would not be BR bidding but a private sector company that was bidding—a company of which BR would be part. There would be az totally different situation because you do not have a nationalised industry as majority shareholder. The noble Lord, Lord Marsh, was scathing on the point, but what we hope is that the expertise of the management and workforce of BR will come forward as part of a private sector initiative as a management-employee buy-out, bringing in that private sector money.
Lord Marsh: No, I am sorry. I was persuaded by the noble and learned Lord, Lord Hailsham, to speak. I am trying to get to a point wherein it would be possible (if the Government are bound on this line) for British Rail to become part of the privatisation exercise. It seems to me that there is no reason at all why it could not do so as a minority bidder with—as part of—a consortium. Is the Minister saying that it would be entitled as British Rail to join a consortium for a part of the system? Itis a very simple question.
The Earl of Caithness: I need to reflect for a little on that question. The Committee would dislike it if I gave an immediate off-the-cuff answer which might be wrong. I am sure that the Committee would much rather I tried to give a correct answer. Perhaps we shall come back to that point.
I turn now to why I believe that allowing British Rail to bid for franchises is unnecessary. I know that many Members of the Committee, like the noble Lord, Lord Taylor of Gryfe, in particular, are concerned about value-for-money. Let me assure the Committee

1099
that we are also. That is why we have made it clear that the franchising director will take the cost of British Rail continuing to provide a service fully into account when considering prospective franchisees' bids.
BR will he running each of the groups of services to be franchised in a "shadow franchise" before each competition. The purpose of having a shadow franchise is to check that the grouping can function properly and make good operational sense and to provide a financial track record. The information generated by shadow running will help the franchising director to assess how much it would cost if BR continued to run the services, in addition to taking BR's operational performance record in terms of punctuality and reliability into account when judging bids for the franchise.
If there is no interest—this is a point of great importance—in bidding for a particular franchise, then BR will continue to run the service. Similarly, if the Franchising director does not believe that any of the bids he has received represents good value for money—that is a point of concern to the noble Lordߞhaving had regard to the transfer of risk implied by the bids and the extent of competition, he will not grant a franchise and BR will continue to run the services. So, far from being a ghost at the feast, as my noble friend Lord Peyton said, BR will still be very much in there. So while we are very keen to see the private sector provide franchised services, it is not a question of "franchise at any price", as the noble Lord, Lord Clinton-Davis, intimated.
The noble Lord, Lord Tordoff, asked for BR to be allowed to compete with the private sector. Although our approach would not allow BR to become a franchisee, let me make it absolutely clear that it would allow it to continue to operate services for as long as that represents better value for money than franchising the services.
We shall he discussing in more detail the position of the board in the event that the franchising director fails to award a franchise when we discuss Amendment No. 46C. We shall also be considering, when we come to Amendment No. 48D, the extent to which the franchising director must take into account, when awarding a franchise, the amount of grant required if BR continue to run the services being franchised.
Let me now deal with a point that the noble Lord, Lord Stoddart of Swindon, kindly reminded me that I had to deal with. It was a point also raised by my noble friend Lord Peyton. It is in regard to foreign, state-owned railway bidders. It will be for the franchising director to decide who to invite to bid. He will be subject to the objectives given by my right honourable friend the Secretary of State. The draft objectives which have been placed in the Library make it clear that his principal objective is to secure that passenger services are provided by the private sector. He will need to assess any bid involving a foreign public sector operator against that objective. Of course, a franchising director will take careful note of what state aids or subsidy a particular organisation is
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receiving. I am sure that the franchising director, given the objectives, will be particularly vigilant on that point.
Lord Stoddart of Swindon: Perhaps the noble Ear1 will give way. He has not answered my point. The question is, if the franchising director decides to invite SNCF or any other foreign nationalised railway to bid, will not the private operators be put off in exactly the same way as the noble Earl said that they would be if British Rail, as a publicly-owned organisation, was allowed to bid for a franchise? That is the question and the noble Earl has not answered i t. I do not believe that he will be able to.
The Earl of Caithness: The franchising director will be able to reassure the private sector, which would not be the case with BR, that he will be looking carefully at what state aids and subsidies any potential foreign operator is receiving. That is a different situation to that appertaining to BR.
Lord Stoddart of Swindon: Why will the franchising director not be able to give the bidders the same assurances in regard to British Rail?
Lord Tordoff: And why should the great British public be denied foreign subsidisation?
The Earl of Caithness: Obviously the franchising director will take into account what the potential operator receives in the way of subsidies and state aid. Therefore, if one is a private sector company in this country one knows that that will be borne in mind by the franchising director. I put it to the noble Lord, Lord Stoddart of Swinclon, that that is a different situation to that appertaining to British Rail, which will be operating the service prior to a franchising operation. As I said, the franchising director will look carefully to see whether the private sector potential operators can produce a better service and better value for money for the taxpayers of this country. If they cannot, BR will continue to operate the service.
Turning to the point raised by the noble Lord, Lord Marsh, to which I promised to give the Committee an answer, I can assure him that there is nothing in the Bill to prevent BR participating in a bid as a minority partner. I hope that that satisfies the noble Lord. That is a different point to those arising from the amendments. Let us be under no illusion as to the effects the amendments would have. However superficially reasonable the idea is of an amendment to allow BR to bid, it would effectively be—I choose my words with great care—a wrecking amendment. It would undermine our proposals to bring the private sector into the operation of passenger rail services, as set out in our manifesto. The private sector would see a powerful, incumbent figure backed by the taxpayer as an overwhelming deterrent to bidding. As I explained, management and employee buy-out teams would be placed in an impossible and intolerable position.
At the same time, I hope that I have been able to reassure the Committee that the cost of BR running the services will be properly taken into account. It will provide a yardstick against which the franchising

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director will be able to measure value for money and protect the public purse. If there are no satisfactory bids BR will continue to operate the services. I hope that the Committee will agree that BR does not need to bid and should not be allowed to do so. In conclusion, I put it to my noble friend Lord Peyton of Yeovil that we are confident that our proposals will work.
Lord Peyton of Yeovil: I have some sympathy with my noble friend. He did not seem to me to be wholly at ease in defending the Bill or in answering the case that has been made for the amendments. In particular, he did not refer to what the likely cost of the Government's proposals will be.
At the risk of boring everyone, perhaps I can repeat the sentence contained in the Financial Memorandum:
"The proposals in this Bill are not expected to lead to major reductions in public expenditure in the short term".
That deserves applause for coyness, though perhaps not for anything else. The value of the information that it communicates is minimal. I asked my noble friend to tell the Committee within what brackets a likely estimate of the impact on public funds would be. Does my noble friend wish to answer?
The Earl of Caithness: I apologise to my noble friend for not answering that specific point. It is too early to say what costs will be determined by the bids which are received. But we are satisfied that in the long run the greater efficiency of the private sector will lead to some savings in public expenditure and that is why it is worded in the way that it is.
Lord Peyton of Yeovil: I apologise for embarrassing my noble friend by extracting that answer. It means that we are embarking on quite unchartered seas with little knowledge of the liability on public funds that we shall be incurring.
In view of what has been said in regard to the amendment being a wrecking amendment, I should like to make my position clear. I favour privatisation. When I was a Minister I learnt what an appalling handicap publicly-owned industries suffer from in terms of interference, particularly interference based on short-term considerations.
The noble Lord, Lord Marsh, and I were together in this. Perhaps I can repeat what I said the other day. When he took over the chairmanship of British Rail I said to him that I knew that I had an impossible job; I thought that he had an impossible job, and I would support him in public and private as long as he or I remained there. However, I hoped that he would never allow me to be surprised. On that basis we got on quite well together. I do not believe the noble Lord will disagree with that.
My position is that I favour denationalisation, as it used to be called; privatisation as it has become. What I fear is that if the proposals put forward by the Government have the consequences that I anticipate, then the cause of privatisation will be set back and considerable damage will ensue to the railways as well.
I do not understand the confidence with which my noble friend said that the franchisee will not be able to
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come back for more. It is one thing for governments to take a tough line with British Rail, but this Administration will have at least a degree of responsibility for the new franchisees and will be in a weak position should one of them turn up on the doorstep one day and say, "I am sorry, everybody has let me down. I do not have the resources. You must help me out, otherwise both you and I will be in a nasty situation".
In the course of his speech my noble friend appeared to take a glossy view of management buy-outs and did not anticipate the real difficulties which are likely to attend them. I do not wish to repeat what I said earlier or to go over the ground again. I would only conclude by saying that I have no desire to wreck or to interfere with the process of putting industry back into the private sector but I believe that the particular proposals here are open to question. I believe that they would be improved, not wrecked, by the amendments which I have proposed and therefore I see no alternative but to take the opinion of the Committee.
5.30 p.m.
On Question, Whether the said amendment (No. 46) shall be agreed to?
Their Lordships divided: Contents, 150; Not-Contents, 112.

Division No. 1

CONTENTS

Addington, L.

Graham of Edmonton, L. [Teller.]

Airedale, L.

Allen of Abbeydale, L.

Greene of Harrow Weald, L.

Archer of Sandwell, L.

Greenhill of Harrow, L.

Ardwick, L.

Greenway, L.

Attlee, E.

Grimond, L.

Auckland, L.

Hampton, L.

Aylestone, L.

Hamwee, B.

Banks, L.

Hanworth, V.

Barnett, L.

Harris of Greenwich, L.

Beaumont of Whitley, L.

Hayter, L.

Belhaven and Stenton, L.

Healey, L.

Bonham-Carter, L.

Henderson of Brompton, L.

Boston of Faversham, L.

Hilton of Eggardon, B.

Bottomley, L.

Hollick, L.

Brimelow, L.

Hollis of Heigham, B.

Bruce of Donington, L.

Holme of Cheltenham, L.

Callaghan of Cardiff, L.

Hothfield, L.

Carmichael of Kelvingrove, L.

Houghton of Sowerby, L.

Castle of Blackburn, B.

Howell, L.

Cledwyn of Penrhos, L.

Hughes, L.

Clinton-Davis, L.

Hunt, L.

Cobbold, L.

Hutchinson of Lullington, L.

Cochrane of Cults, L.

Hylton-Foster, B.

Cocks of Hartcliffe, L.

Irvine of Lairg, L.

Crook, L.

Jay, L.

David, B.

Jay of Paddington, B.

Dean of Beswick, L.

Jeger, B.

Desai, L.

Jenkins of Putney, L.

Donaldson of Kingsbridge, L.

John-Mackie, L.

Dormand of Easington, L.

Judd, L.

Eatwell, L.

Kagan, L.

Ewing of Kirkford, L.

Kilbracken, L.

Ezra, L.

Kinloss, Ly.

Falkender, B.

Lawrence, L.

Falkland, V.

Listowel, E.

Foot, L.

Llewelyn-Davies of Hastoe, B.

Gallacher, L.

Longford, E.

Galpern, L.

Lucas of Chilworth, L.

Gardner of Parkes, B.

Lyell, L.

Gladwyn, L.

McCarthy, L.

Glasgow, E.

McGregor of Durris, L.

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Mackie of Benshie, L.

Rochester, L.

McNair, L.

Russell, E.

Mallalieu, B.

Saltoun of Abernethy, Ly.

Mar, C.

Seear, B.

Marsh, L.

Sefton of Garston, L.

Mason of Barnsley, L.

Serota, B.

Mayhew, L.

Shackleton, L.

Merlyn-Rees, L.

Shannon, E.

Merrivale, L.

Shaughnessy, L.

Milner of Leeds, L.

Shepherd, L.

Mishcon, L.

Soper, L.

Molloy, L.

Stedman, B.

Monson, L.

Stoddart of Swindon, L.

Morris of Castle Morris, L.

Strabolgi, L.

Mountevans, L.

Swinfen, L.

Mulley, L.

Taylor of Gryfe, L.

Munster. E.

Terrington, L.

Murray of Epping Forest, L.

Thurlow, L.

Nelson, E.

Tonypandy, V.

Nicol, B.

Tordoff, L.

Ogmore, L.

Turner of Camden, B.

Palmer, L.

Wallace of Coslany, L.

Pender, L.

Warnock, B.

Peston, L.

Waverley, V.

Peyton of Yeovil, L. [Teller.]

Weatherill, L.

Pitt of Hampstead, L.

Wedderburn of Charlton. L.

Plant of Highfield, L.

White, B.

Ponsonby of Shulbrede, L.

Wigoder, L.

Prys-Davies. L.

Williams of Crosby, B.

Quinton, L.

Williams of Elvel, L.

Redesdale, L.

Williams of Mostyn, L.

Richard, L.

Wilson of Rievaulx, L.

Rix, L.

Winchilsea and Nottingham, E.

Robson of Kiddington, B.

NOT-CONTENTS

Aberdare, L.

Glenarthur, L.

Arran, E.

Goschen, V.

Astor, V.

Gridley, L.

Astor of Hever, L.

Hailsham of Saint Marylebone, L.

Barber, L.

Bessborough, E.

Harding of Petherton, L.

Blatch, B.

Harmar-Nicholls, L.

Blyth, L.

Harrowby, E.

Boardman, L.

Harvington, L.

Borthwick, L.

Hayhoe, L.

Boyd-Carpenter, L.

Henley, L.

Brabazon of Tara, L.

Hesketh, L. [Teller.]

Braine of Wheatley, L.

Hives, L.

Brigstocke, B.

HolmPatrick, L.

Butterworth, L.

Hood, V.

Caithness, E.

Hooper, B.

Campbell of Alloway, L.

Howe, E.

Campbell of Croy, L.

Huntly, M.

Carlisle of Bucklow, L.

Johnston of Rockport, L.

Carnock, L.

King of Wartnaby, L.

Chalker of Wallasey. B.

Lane of Horsell, L.

Chelmsford. V.

Lindsay, E.

Clanwilliam, E.

Lindsey and Abingdon, E.

Clark of Kempston, L.

Long, V.

Constantine of Stanmore, L.

Mackay of Ardbrecknish, L.

Craigavon, V.

Mackay of Clashfern, L. [Lord Chancellor.]

Cranborne, V.

Crickhowell, L.

Macleod of Borve, B.

Cumberlege, B.

Mancroft, L.

Davidson, V.

Marlesford, L.

Denton of Wakefield, B.

Mersey, V.

Eccles of Moulton, B.

Milverton, L.

Ellenborough, L.

Montgomery of Alamein, V.

Elks, B.

Morris, L.

Elliot of Harwood, B.

Mowbray and Stourton, L.

Elliott of Morpeth, L.

Norrie, L.

Elton, L.

O'Cathain, B.

Ferrers, E.

Oppenheim-Barnes, B.

Finsberg, L.

Orr-Ewing, L.

Flather, B.

Oxfuird, V.

Foley, L.

Perth, E.

Fraser of Carmyllie, L.

Plummer of St. Marylebone, L.

Fraser of Kilmorack, L.

Reay, L.

Geddes, L.

Rees, L.

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Renton, L.

Sudeley, L.

Renwick, L.

Swansea, L

Rippon of Hexham, L.

Teviot, L.

Rodger of Earlsferry, L.

Thomas of Gwydir, L.

St. Davids, V.

Torrington. V.

Seccombe, B.

Trumpington, B.

Sharples, B.

Ullswater, V.

Skelmersdale, L.

Vaux of Harrowden, L.

Skidelsky, L.

Vivian, L.

Stewartby, L.

Wade of Chorlton, L.

Strange, B.

Wakeham. L. [Lord Privy Seal.]

Strathclyde, L.

Strathmore and Kinghorne, E. [Teller]

Westbury, L.

Wynford, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.40 p.m.
Lord Clinton-Davis: In the light of this very convincing situation, as the Committee has just adjudicated and in view of the fact that it was the Minister who asserted categorically not once but several times that the amendment is a wrecking amendment, what is the Government's current view of the position? Will the Minister now reflect on whether it is appropriate to continue with the Committee stage at all?
The Earl of Caithness: What a ridiculous comment! Of course we shall reflect on what has just happened and of course we shall continue the Committee stage.
Lord Clinton-Davis: That is not satisfactory. I am not crowing about the victory. I am; Asking for a very simple explanation of the Government's position. At the very least the view of the Chamber has major effects and implications for consideration of this Committee stage. It is no use the Chief Whip attempting to intervene, he was not even here so he has no authority to do so.
Lord Hesketh: Order, order!
Noble Lords: Withdraw!
Lord Clinton-Davis: The fact of the matter is that on any showing this development must have major implications for the rest of the Committee stage. If I have done any injury inadvertently to the Chief Whip I of course unreservedly withdraw it. But the Minister must not deal with the matter in this very flippant way.
Lord Henderson of Brompton: There is no Motion before the House and these proceedings are entirely out of order.
Viscount Goschen: I beg to move that the House do now resume.
Moved, That the House do now resume,—(Viscount Goschen.)
Lord Tordoff: There is now a Motion before the House that the House do now resume. Therefore, I support what the noble Lord, Lord Clinton-Davis. said, not in the sense of it being a wrecking amendment but in the sense that it is a major change to the Bill. The Government would be wise to consider the implications for the rest of the Committee stage. There are a number of amendments to the Bill which may be seen in a significantly different light as a result of the amendment that we have just passed. Perhaps

1105
the time to consider the position is when the House resumes and the Statement is being made. Perhaps the Minister would return afterwards and suggest what changes now need to be made.
The Earl of Caithness: It is quite clear what has happened. The amendment was agreed to. We must now proceed with the remainder of the Committee stage on the basis of the Bill, as amended. The Government will obviously take careful note and will decide what they wish to do. The House has fulfilled its function and given the other place another opportunity to consider this matter. What Members of the other place do with it is entirely up to them.
Lord Harmar-Nicholls: Is my noble friend aware that we always enter a Committee stage with the knowledge that it is only a stage in the progress of the Bill to the statute book? It is not without precedent that decisions which are made at Committee stage are often amended in another way before the Bill reaches Third Reading.
The Earl of Caithness: It would be wise for us to get on with I he full Committee stage. I take note of what my noble friend said.
On Question, Motion agreed to.
House resumed.

Defence Estimates 1993
5.44 p.m.
Viscount Cranborne: My Lords, with the leave of the House I shall now repeat a Statement being made in another place this afternoon by my right honourable friend the Secretary of State for Defence. The Statement is as follows:
"The House will be aware that every year the Government publish a defence White Paper, which sets out its policy and plans for the future and describes the activities of the Armed Forces in the MoD. This year's White Paper called Defending Our Future is published today. We are also publishing UK defence statistics for 1993, and a separate defence statistics bulletin showing expenditure on research and development.
"I have taken the unusual step of announcing publication through a Statement in this House because although the White Paper includes the traditional information, I believe that the approach we have taken in Defending Our Future is a new departure and much of the material in it is particularly significant.
"This applies in two areas. First, Defending Our Future reports on the adjustments to the Options for Change force structure taking into account recent changes in the international situation and presents that force structure as an integrated whole.
"Secondly, it then shows—in a way which has never been attempted before—how each of the elements of our Armed Forces can be matched to the various tasks which we require the Armed Forces to carry out. This matching of forces to tasks is crucial. The two must be in balance if we are
1106
to avoid, on the one hand, wastefulness and, on the other hand, overstretch. I believe that the analysis which we set out—which is an entirely new and ground-breaking approach—shows that this balance is being achieved.
"The force levels of the Armed Forces are kept under constant review. We are regularly analysing the international situation, evaluating the threats which we face, and making sure that we have the right mix of forces to meet that threat. It is a continuous process. It is not something we do every few years, stopping our planning while we do it. Since last year's defence White Paper we have continued that process of adjustment. Our conclusions are set out in detail in Defending Our Future; this afternoon I will describe the most important elements of what we are proposing.
"The international situation continues to change, and in a number of very important respects the security of the United Kingdom has been enhanced in the past two years. In certain other areas there have been new demands on our Armed Forces. Defending Our Future addresses both considerations.
"I turn first to the improvements in our security and the implications for our force structure. Russia remains the largest European military power and retains significant forces for its own defence; but it is also well disposed to the UK. Its offensive capability has dramatically reduced, equipment serviceability has deteriorated, and its defence industry is in decline. Since 1991 the Soviet Union has ceased to exist and Russian forces have now largely withdrawn from Ukraine, Belarus, and the Baltic states as well as from Eastern Europe. At the same time we have made great progress in establishing mutual trust with our former enemies. This means that a major external threat is even more unlikely to re-emerge in the foreseeable future than seemed likely in 1991, and this makes it sensible for us to make some reductions in the levels of relevant forces which were particularly aimed at countering the Soviet threat. Equally, the changed strategic situation has demanded that we confirm a series of enhancements to our capability in other areas. Let me begin with the reductions.
"For the Royal Navy the rapid decline in the size and operational activity of the former Soviet submarine fleet means that there is no longer the same need to sustain the current level of anti-submarine operations in the North Atlantic; nor is there the same need to patrol the Greenland-Iceland-UK gap. We therefore plan to reduce the submarine fleet to 12 SSNs and withdraw the Upholder class of four conventional submarines from service by 1995. We are examining the relative merits of their sale, lease, or storage. The reduced risks in the North Atlantic also mean that the surface fleet can meet its tasks in peace and war, including our contribution to NATO, with a force of about 35 destroyers and frigates.
"For the Army, we have decided that our requirement for indirect fire anti-armoured weapons can best be met through procurement of an

1107
air-launched weapon. Already the United States and Germany have both withdrawn from the MLRS III collaborative programme and we will follow them at the end of the current phase.
"For the Royal Air Force, the reduced threat of air attack to the United Kingdom means that a force of 100 Tornado F3 fighters will be fully capable of defending the United Kingdom and meeting our commitments to NATO's reaction forces. This is a reduction of 13 aircraft, and the force will he reorganised into six rather than seven squadrons. There will be no change in the numbers of Tornado GR1 aircraft. We have also decided that for similar reasons there is no short-term requirement for a medium surface to air missile, but there is likely to be a longer term need and we are continuing our studies into these options. There is a clear operational justification for each of these reductions, which otherwise would not have been agreed.
"I turn now to the other side of the picture, the enhancements to our current force structure that are appropriate to respond to new challenges and potential threats. The past 12 months have shown an increase in the number of operations, both in Europe and the wider world, in which our Armed Forces might be involved in conflict. There is a need to ensure maximum flexibility and mobility for our Armed Forces in the modern world. In the White Paper we present the measures which will improve our overall capability to respond to this changing situation, some of which have recently been announced to the House.
"For the Royal Navy, we recently announced procurement of a helicopter carrier which will enter service later in the decade and will significantly enhance our amphibious capability. No such dedicated carrier has been available to the Royal Navy since 1985. We are also proceeding with project definition of the class of ships to replace HMS "Fearless" and HMS "Intrepid".
"For the Army, I announced recently an increase in the planned size of the infantry to take account of new commitments and our intention to retain two additional battalions and to increase frontline strength by 5.000.
"We are also considering how best to equip the Army's six Challenger 1 regiments over and above the purchase of 127 Challenger 2 tanks which we have already announced. I will make a further announcement in due course. I am able to announce today that we are placing an order, worth some £75 million, for over 400 new medium load carrier vehicles. This will enable us to deliver ammunition quickly to forward locations in support of our new AS-90 self-propelled howitzers and provides a very good example of the practical steps we are taking to enhance the mobility and flexibility of our forces.
"We have also invited tenders for a future attack helicopter which will substantially enhance the Army's anti-armour capability.
"For the Royal Air Force, Defending Our Future confirms plans to replace or refurbish part of the
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Hercules transport aircraft fleet. We also intend to procure a substantial number of additional support helicopters to increase the flexibility and mobility of our Armed Forces. The Eurofighter 2000 is now secure and will be the cornerstone of the RAF capability in the future and we have plans 'to upgrade the Tornado GR I 's operational capability.
"These adjustments, taken together, represent a shift in the overall capability of our forces. We are reducing capability where the threat to the United Kingdom has itself been significantly reduced. We are gaining capability in those areas where we believe we shall be required to act. Changes to particular capability areas need, therefore, to be seen in the context of the whole programme and our security policy objective. For example, our plans to reduce anti-submarine and air defence capabilities must be viewed alongside improvements in areas such as Army manpower, the new helicopter carrier, armour and anti-armour and air transport helicopters—all key elements of the mobile, flexible and well equipped forces which we shall need for our future security needs. Choices always have to be made. It is my view and that of the Chiefs of Staff that we have made the right choices to enable us to face up to the challenges which confront us.
"I turn now to the major innovation set out in Defending Our Future. I mentioned al the beginning of my Statement the new analysis which we have undertaken of the way in which our Armed Forces carry out their commitments. Defending Our Future includes unprecedented detail about the rationale for our current and planned force structures and activities.
"During the Cold War defence planners dealt with a relatively simple equation, one side of which was the monolithic threat from the East. In the post-Cold War world that certainly has vanished, to be replaced by a broad spectrum of risk and uncertainty. The defence planner needs more sophisticated tools to ensure that the programme really is providing what such a fluid strategic setting demands.
"We have therefore identified broad policy areas within each of the defence roles set out in last year's Statement on the Defence Estimates and within each of these the specific military tasks, 50 in number, which the Armed Forces are required to undertake. We have then identified with some precision the force elements—for example, the number of infantry battalions or frigates or aircraft—required to meet each task. All this is set out in full in the White Paper. It gives Parliament and the public an insight that we have not had before into the purposes for which we use all the elements of our Armed Forces. It highlights the balance which currently exists between commitments and resources. It also demonstrates clearly how changes—for example, a decision to take on a new UN commitment or the approaching obsolescence of an item of equipment—may affect the detail of the

1109
programme. There are many valuable conclusions to be drawn from the analysis; let me give a few general examples.
"First, our analysis has also showed us how our defence needs are influenced by national commitments unique to the United Kingdom. Most of our European partners do not have commitments analogous to our responsibilities in Northern Ireland and to our dependent territories; nor, except for France, do our European allies maintain a national nuclear deterrent. The cost of these activities amounts to over £3 billion a year. This has to be borne in mind when comparisons are made between levels of defence spending.
"Secondly, the analysis also shows the value of NATO and the benefits of sharing the financial burden of our collective security of the defence of Europe. If NATO disappeared and we had to insure on a purely national basis against major external threat, then we would almost certainly have to spend a great deal more money than we currently do.
"Thirdly, another valuable insight is the overlap between the types of forces needed for the defence of Europe and the types of forces needed to contribute to our wider security interests, through UN operations, for example. The kind of mobile, flexible, well equipped and trained forces, with true warfighting capabilities, that we provide for our NATO commitments have proved equally suited to operations in the Gulf and in Bosnia—the Tornado and Sentry aircraft and the Warrior armoured personnel carrier, for example.
"But the most significant overall conclusion is that the planned force structure is capable of meeting all the tasks we require of it. At the same time we must of course ensure that its high quality of manpower, equipment and support is maintained; and I have touched on a number of the major items in our forward programme which will help us to do so. And we must watch carefully to ensure that we maintain the balance we have achieved between our commitments, our force levels and the resources devoted to defence. Again, the analysis will help us to do so.
"I do not expect the House to comment in detail on this material today, but I hope that by publishing this analysis our defence debates will be even better informed than in the past.
"Defending Our Future is a comprehensive account of the Government's defence policy. It rightly describes the tasks of the Armed Forces and the civil servants in the Ministry of Defence. I pay tribute to the outstanding way in which they carry out their duties. It also breaks major new ground in terms of open government. Never before have commentators on defence issues had such access to the defence planner's perspective. I hope that the House will understand and appreciate the seriousness of this endeavour, and I commend it to the House".
My Lords, that concludes the Statement.
6 p.m.
Lord Williams of Elvel: My Lords, I thank the Minister for repeating the Statement made in another place. As he pointed out, it is an unusual procedure to have a Statement announcing a White Paper. Any reactions we may have now may well be modified in the debate on the White Paper that I hope your Lordships will have in full in due course. I shall be pressing for an early debate on these Defence Estimates, as, indeed, they are.
I welcome the Government's attempt—I believe that it is an honest attempt—at open government by trying to put figures on military commitments, whatever those figures may in the end turn out to be. As your Lordships will be aware, figures tend to be a slightly movable feast, particularly in the area that the Minister has to cover; but, nevertheless, I appreciate that the Government have made a serious effort to inform your Lordships and the public of the figures that have lain behind the Statement and the White Paper.
In a sense, it enables us to carry out a defence review of a do-it-yourself nature because until now we have not had the sort of breakdown that the White Paper—I have not had the opportunity to read through it in detail—gives us. I was told on the television yesterday that there was a group inside the Ministry of Defence called ISG which elaborated all the commitments that the Government have undertaken and decided what resources were necessary to fulfil those commitments. We of course have no objections to reductions in defence expenditure. That is only right and proper, given the nature of the world in which we live and the breakdown of the Cold War, which we welcome. Nevertheless it would be useful if we could have—if there is such a thing as ISG inside the Ministry of Defence—its conclusions, because up till now, as I understand it from the Statement, it appears that we have the same commitments with fewer tanks, fewer men and women and fewer ships to meet those commitments. Clearly that is an imbalance which the Minister, in repeating the Statement, said that the Government were trying to avoid.
There are of course certain questions which arise immediately from what the Minister said. First, were we not told when Options for Change was announced that there would be no more cuts? Were we not given an assurance? Were we not told when there were further cuts made that that would be the last series of cuts? Can the Minister give us an assurance that there will be no further cuts when the autumn round of public expenditure is considered and announced to your Lordships—that this is not just Options for Change 2 or Options for Change 3 but that we can confidently expect that there will be no Options for Change 4?
Secondly, we were told at the time of Options for Change that our Armed Forces would be smaller but better equipped. I of course join with the Minister in his appreciation of the work that our Armed Forces do. But, better equipped! Are we satisfied with the performance of the rifle in the Gulf? Are we satisfied that Challenger 2, upon which there is to be no

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decision until it is announced by the Government, will meet all its operational criteria? What has happened to the support helicopters that are so desperately required and for which orders should have been placed a long time ago? What has happened to the Reserve Forces, which do not figure in the Statement?
Furthermore, would the Minister care to comment upon a statement made by a former Minister that our forces in Northern Ireland are too great for the problems that they encounter? Is that a general government view? If it is not a general government view, what is the answer to Mr. Hamilton's assertion? I accept that we are extremely good—I again place on the record our appreciation of the fact—in a peacekeeping role. I have no doubt that our forces in that role are as well equipped and as well able to perform as any others in the world. Nevertheless, there is a question of' how far we can continue to maintain what appears, according to a former member of the Government. a large contingent in Northern Ireland. I should be glad to have the Minister's view on that point. I take no side one way or the other. I should just like to have the Government's response.
The Statement referred to the submarine fleet. I would not quarrel with the idea that the Upholder class of submarines is not adapted to modern conditions. Nevertheless, we must accept that £900 million has been expended on those four boats. Who will buy those submarines? Will they be laid up? Are they going into storage, as the Statement suggests, or will they be sold to the highest bidder? Will there be any restriction upon who can bid for those submarines? Will it be the Argentines, the Iraqis or whoever? Will the Minister reassure us on that point?
If we are coming to value for money, I note that we have spent £900 million upon Upholder. That adds on to £120 million on the Rosyth installation, and then a further £500 million. About £1.5 billion of taxpayers' money has been expended. It is now apparently just going to be written off. Do the Government regard that as providing proper value for money?
My next question relates to the replacement for the WE 177 free-fall bomb. Your Lordships will be aware that. President Clinton has decided, as I thought I indicated to the Minister the other day at Question Time, that testing in the United States testing ground in Nevada would not be available for a period of time. It will not be available for any replacement for the free-fall bomb for the foreseeable future, and, so far as I know, but I should like the Minister to comment upon this, will not be available to test the Trident warheads with which we have to re-equip the Trident boats for their new role as a sub-strategic nuclear fleet rather than merely trying to blast Moscow out of sight. What is the Government's position in that regard? Are they not in some disarray as a result of President Clinton's decision?
My sixth question relates to defence industries. From these Benches we have argued time and time again that when the Government are preparing decisions on defence matters—and indeed, when they announce decisions—they should consult properly with those who are employed and those who employ
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people working in defence industries. What arrangements are the Government proposing in the light of the reductions or—I use the noble Viscount's expression—the shift in order to redeploy the important and skilled labour force in those industries?
All that I have said and all the questions that I have asked are initial reactions to the Statement. I hope that we shall have an opportunity to debate this matter in the near future. However, I hope very much that the noble Viscount will take seriously my questions, even if they are of an initial nature. This House and the country deserve no less.
Having heard the Statement, the abiding impression remains, unless the noble Viscount can disabuse me of it, that this is a matter of cutting expenditure and tailoring our defence requirements to the Treasury idea, rather than deciding what we require and what our commitments should be and then tailoring our defence resources to that end.
These new and very detailed figures, welcome as they are in their present form, can be regarded only as lamp-posts in what is admittedly an extremely complicated street. Perhaps I may adapt a remark of A. E. Housman, the notable poet and scholar, that it seems to us that the Government are using those lamp-posts like drunkards, not to light them on their way but to hide their nefarious activities. I hope that the noble Viscount can convince us that the opposite is true.
Lord Mayhew:: My Lords, it is difficult to comment on the Statement without first reading the defence White Paper. It is difficult to read the defence White Paper in the very short period since that White Paper became available to me. For many years now I have felt some resentment at the practice by which the White Paper is made available to the world's press early in the morning, including, for example, to the London correspondent of a Cuban or Libyan newspaper, but it is not until many hours later that its contents are revealed to Opposition spokesmen on defence. If I were the London correspondent of', say, the Havana Daily News, I should be able to comment far more effectively on the Statement that has been made. I say seriously to the Government that that matter needs looking into. I recall some 20 or 30 years ago making the same point in another place and being assured by the then Leader of the House. Mr. Richard Crossman, that something would be done about it. I ask that this Government might look at that again and, after those long years, do something about it.
On these Benches we have always agreed readily that the end of the conventional threat from the Soviet Union called for radical changes in defence policy and radical reductions in defence expenditure. We have always made that clear. That is why, although we criticised Options for Change for bearing especially hard on the Army, we described the overall reductions as modest. Indeed, we called for the Government to review the allocation of resources to the antisubmarine role in the Atlantic and to the air defence of the United Kingdom. That has been done to some extent in this White Paper and we appreciate that.
There were omissions in the Statement. The noble Lord, Lord Williams, drew attention to one of them.

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There is nothing about the noble Viscount's favourite weapon—TASM. That is the splendid idea of producing an entirely new air-to-surface nuclear missile system in 1993. That is an unbelievable, preposterous idea. It is plainly a kite desperately flown by the RAF because it would otherwise lose altogether its nuclear role. I have looked at the White Paper and it says that no decision has been made in that regard. Everybody knows that the Government will scrap the system. On these Benches we have suggested instead that if we must have a sub-strategic nuclear deterrent, which we doubt, that could easily be manoeuvred by a tactical warhead on a Trident submarine. I am looking forward to the noble Viscount, in perhaps a year or two's time, declaring that the investigations are at an end and that £3 billion has been saved by scrapping that ridiculous system.
Further, as the noble Lord, Lord Williams, pointed out, there is to be no more testing. I approve of that. On these Benches we agree with the Americans and with every other country in the world that the time has come when, without undermining our security, we can sign a comprehensive test ban treaty. Only the British Government stand out against that. At this time when the non-proliferation treaty is coming up for negotiation and renewal, the British Government stand alone for continuing nuclear testing. We have been told that it is not needed for Trident. It can be needed only for the noble Viscount's favourite weapons system, but that will be scrapped anyway. Let the Government put their weight behind negotiating and sign a comprehensive test ban treaty.
I have not had time to study what is called the "major innovation" of the White Paper. I have casually glanced at it. But I am bound to say that it shows signs of intelligence. It adapts to the fact that we are in a new world without a single appalling threat from the Soviet Union but that there is a varied, unpredictable mass of different threats of different kinds in different places. It may well be that when we study the White Paper we shall see that that is an innovation to be welcomed. I reserve my judgment on that. Nevertheless, the idea of multiple earmarking—the great slogan of the White Paper—is a treacherous idea. Multiple earmarking of forces for commitments of various kinds neither adds to the forces nor diminishes the commitments. Nevertheless, it may be a handy tool of planning and something to be welcomed.
Another matter which arises is the 50 military tasks. That reminds us of the large number of tasks which we cannot carry out ourselves without allies. On these Benches we beg the Government to recognise that in the future more and more of our commitments must be filled multilaterally and not by ourselves. It is most disappointing that in the Statement there is not a single mention of the Western European Union or the development of the European pillar within NATO. We shall return to those matters.
I do not wish to disappoint the noble Viscount but I suspect that the Government will be under heavy attack for some of their decisions in the White Paper. If so, I am bound to say that they have brought it upon
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themselves. I agree with the noble Lord, Lord Williams, that the Government gave assurances that Options for Change would not be just a small instalment of what was to come. I cannot quote the Government on that but that is the impression that I gained from their many statements. I also accuse the Government of not explaining fully and frankly to the public, to their own Back Benchers and to the Armed Forces the enormous significance of the departure of the threat of a Soviet conventional attack in the West.
Before the election the Government prided themselves on the year by year increase in real expenditure on defence. They projected themselves as the party of defence. Now, however, they must explain themselves to the public, to their Back Benchers and, above all, to the forces. The Government's handling and presentation of defence are a poor reward to the forces for the magnificent work that they are undertaking in Bosnia, Northern Ireland and other parts of the world.
Viscount Cranborne: My Lords, both noble Lords who spoke from their respective Front Benches have said what I think in the vernacular is a mouthful. I am well aware that I may not be able to cover all the points raised. However, like both noble Lords, I too look forward to a debate on the Statement on the Defence Estimates. I cannot speculate about when that debate will take place because, as the noble Lord, Lord Williams, knows (despite his implications), that must be arranged through the usual channels. All I know is that such a debate will take place. I greatly look forward to it.
I must tell the noble Lord, Lord Mayhew, that I was at one point rather encouraged by his remarks. He said that the White Paper showed signs of intelligence. If I did not know the noble Lord better, I would have thought that that was perhaps rather patronising. However, I take it in the spirit in which it was proffered. I also have to record my great regret that he spoilt what was perhaps the beginning of a charming friendship with his final sentences. In the circumstances, I think it would be easier if I glossed over them and waited until our further debate on the subject.
Nevertheless, I am grateful to both noble Lords for their understandably cautious welcome for the more open approach that the Government have done their best to adopt in this case. Indeed, it was perhaps a little absurd that under the CFE arrangements we were bound to disclose a great deal to the Russians, while at the same time previous classifications had prevented us from disclosing the same sort of information to our own people. I hope that both noble Lords will take that comment in the spirit in which it was intended. I should also like to record my appreciation for the tribute that both noble Lords paid to the men and women in our Armed Forces. I know that that will be noted with gratitude.
I shall not be drawn further down the path of the conclusions of the Ministry of Defence about the existence or otherwise of a group known as the ISG, about which the noble Lord tempted me. I look forward to hearing his analysis of the contents of the White Paper and the conclusions that he draws from it. I hope that our further debates will cover those

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points. However, I believe that it is sometimes a little dangerous to talk in terms of fewer people with the same task. The noble Lord knows as well as I do that, for example, nowadays frigates are much more capable than they were even 10 years ago; but they have fewer people on them. Therefore, the conclusions that can be drawn from the noble Lord's remark are perhaps not as simple as he made out.
I believe that both noble Lords asked me whether there would be further cuts. That is an easy taunt that I know noble Lords enjoy making. But I should point out that the conclusions we publish about matching capabilities to tasks is an important innovation, both internally and externally, for the Ministry of Defence. There is no doubt—and I must emphasise the fact to both noble Lords and to the House—that we are not talking about new reductions in defence expenditure beyond those announced in the last PES round last year; we are looking at the consequences of the new budgetary arrangements. I must tell the noble Lord, Lord Williams, that those arrangements are driven by one thing above all; namely, that the situation has changed worldwide even since 1991. I do not believe that he, any more than I, would like to see more expenditure on defence than is absolutely necessary, given the constraints on resources under which the Government are operating.
I shall not detain your Lordships for much longer. However, I merely refer the noble Lord, Lord Williams, to the exchange on the new rifle which took place in the House a few days ago. I have nothing to add to what was said on that occasion. As regards the support helicopter, the normal procurement policies are being followed and they will result in a substantial increase in the number of such helicopters, which we badly need. We hope that the procurement policies will ensure that those helicopters are procured on the best value-for-money basis possible.
I turn now to the reserve forces. I must give the noble Lord exactly the same answer as I gave in relation to the new rifle. A Statement was made on reserve forces. As the noble Lord well knows, there is a Statement due later in the year covering the volunteer forces—the Territorial Army. The noble Lord also asked about my former colleague, my right honourable friend the Member for Epsom and Ewell. I must tell the noble Lord that, as regards the forces in Northern Ireland, we judge the situation entirely on what we think are the operational requirements. If it is possible to reduce the number of infantry employed in the support role in Northern Ireland, we shall of course do so.
The noble Lord was also very exercised about another general point in connection with the submarine fleet. He knows that procurement is an expensive business and that vessels up to the point of delivery are expensive to the taxpayer. But that is only a small part of the through-life cost of any sort of equipment. Any investment appraisal worth its salt must be made on a through-life cost basis. As a former distinguished finance man himself, I am sure that he will appreciate that fact.
Finally, I am flattered that the noble Lord, Lord Mayhew, thinks that the TASM is my favourite
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weapon; indeed, judging from the number of times that he has raised the point, I thought that it was his favourite. I have no particular favourite weapons among those of a sub-strategic nature with nuclear capabilities. I must tell the noble Lord that the time when he will be put out of misery is fast approaching. I certainly do not think that he will have to wait for the year or two that he feared.
So far as concerns testing, again I have nothing more to add to the exchanges that we seem to have had, particularly with the benefit of the views of the noble Lord, Lord Jenkins of Putney, over many weeks and months. Testing is useful for safety purposes and in terms of increasing our knowledge of nuclear weapons. If we are to face a test-free world, I must tell both noble Lords that we shall have to rely more on modelling and on other techniques. It is not an insuperable problem; but it is certainly more convenient to test. That is why the United Kingdom thought that it would make a contribution to safety. If that is not to be the case, we must address ourselves to alternatives.
I am grateful for the cautious welcome that both noble Lords gave to the Statement. I greatly look forward to being able to emphasise the final point that the noble Lord, Lord Mayhew, made and with which I substantially agree; namely, the importance of our allies. They are, above all, the greatest force multiplier that we have.
6.27 p.m.
Lord Trefgarne: My Lords, I should like to stress how disappointed I was that the noble Lords, Lord Williams and Lord Mayhew, between them spoke for 22 minutes in response to the Statement about a White Paper which they could not have seen more than a hour or so ago and which they certainly had not read and despite the prospect of a defence debate in the not too distant future. Everyone knows that the time for discussing such Statements is limited. The result of the lengthy interventions of both nobles is that fewer Members of the Back Benches will be able to speak.
Noble Lords: Order!
Lord Graham of Edmonton: My Lords, perhaps I may remind the noble Lord that the 20-minute limit starts from the time that he himself rose to his feet to speak. There is no limit on the exchanges between the Front Benches. The noble Lord ought to know that.
Lord Trefgarne: My Lords, if I am mistaken I shall of course apologise and withdraw what I said. Nonetheless, both interventions were very lengthy and dealt with a White Paper that neither of them had seen, on an afternoon when there is much other business on the Order Paper.
I have one or two questions for my noble friend. First, can he confirm that the White Paper that has been presented this afternoon does not represent any further reduction in resources to the Ministry of Defence from that which was announced at the time of the Autumn Statement at the end of last year? Will he confirm that it is not a further round of savage cuts, as has been portrayed in the press and elsewhere, but is

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simply setting in place the order of battle—if those are the right words—for the Ministry of Defence given the resources that were announced at the end of last year?
I have a further question about the future of the Upholder class submarine. Is it not the case that conventional submarines are able to operate, either for political or operational reasons, in places where nuclear submarines cannot operate? Is my noble friend satisfied that by removing the conventionally powered submarine capability from the naval fleet we will not be losing some very important capability that we shall shortly live to regret?
Finally, I wish to ask about the F3 Tornado reductions. I believe that my noble friend said that they were to be reduced to 100. If we are to have these reduced numbers, it will be of increasing importance that we have adequate in-flight refuelling capability. Can my noble friend assure us that that will indeed be in place?
Viscount Cranborne: My Lords, I shall take to heart the point that has been made about the length of interventions. I hope my noble friend will always remind me when I am delaying your Lordships too long. As regards the questions my noble friend asked, he is absolutely right that there is indeed no change to the amount of money which is to be devoted to the Ministry of Defence budget from that declared in the public expenditure White Paper. I am grateful to him for enabling me to repeat that important fact.
As regards the Upholder class submarine, my noble friend, with his great experience in these matters, knows very well that SSKs can operate in shallow waters and have great advantages of quietness. Nevertheless he will also remember from his time in the Ministry of Defence that SSKs—the Upholder class in particula—were originally primarily designed for the Iceland, Greenland, UK gap. As the Statement said, the submarine threat has dramatically declined for the moment and we are happy that the new balance which the Statement addresses—as does the White Paper—is better and more cost-effectively maintained by a reliance on nuclear powered hunter killer submarines.
As regards the Tornado F3, my noble friend is absolutely right in his remarks. The number devoted to the UK air defence will be 100, organised into six, as opposed to seven, squadrons. That is 100 exclusive of the operational conversion unit.
Lord Jenkins of Putney: My Lords, I shall be brief. The noble Viscount has been kind enough to mention that President Clinton has finally agreed with me rather than with him. It is worth mentioning this because it seems to me that the Minister has treated the matter rather lightly. Is not the truth that the Government, who can be forgiven perhaps for communally shooting themselves in the foot, have suffered the grave misfortune of having in this White Paper shot below the waterline while it is being launched, because at the centre of this matter is nuclear testing and the non-proliferation treaty? The Government cannot go ahead with this any longer. Does this not present them with an opportunity
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which, had they known about it a few days earlier, they might have seized to dispose altogether of the necessity for Trident? They might not have had to make the candle end cuts which they have had to make throughout the whole of the services if they had saved themselves £3 billion a year, which they could have done by getting rid of Trident. They have an opportunity which I hope they will seize between now and the debate on the White Paper.
Viscount Cranborne: My Lords, I am aware that the noble Lord, Lord Jenkins, and I are fundamentally at variance over the need for a minimum nuclear deterrent for the United Kingdom. I have the greatest respect for the views of the noble Lord. It is significant that the White Paper makes no proposal to cut our proposed four Trident submarines—
Lord Jenkins of Putney: It would have done.
Viscount Cranborne: My Lords, indeed it would not. Trident is fully tested and safe. Certainly the announcement made by the President of the United States makes no difference whatsoever to the capability of our Trident. That is something which I think the noble Lord, Lord Mayhew, and I understand the noble Lord, Lord Williams, accepts. I hope the noble Lord, Lord Jenkins, accepts what I have said, as it is true. I must tell him that as regards testing the situation is exactly as I described it a few moments ago in answer to both noble Lords, from his own and the Liberal Front Benches.
Lord Craig of Radley: My Lords, this is an interesting White Paper which will repay great study. I am pleased to see that an effort has been made to make it more understandable as regards showing how defence studies are undertaken. However, there are a number of assumptions made in it. I wish to ask a question about one of them which concerns a matter in paragraph 204 of Chapter 2. That paragraph states that the assumptions are that all forces,
"must be manned, equipped, trained and exercised"—
I emphasise those final two requirements—
"to carry out the Military Tasks to which they are assigned".
It is generally known that the amount of training which has been undertaken in recent years has not been up to the high standards required to maintain the very best capabilities at the higher levels of operation. I hope that the Minister will give us an assurance that that assumption will be met.
Viscount Cranborne: My Lords, the noble and gallant Lord knows better than almost anyone in this House the importance of training. Certainly there would be no chance of our forces being effective unless they were adequately trained. In the case of his own service, I should point out that I believe one of the reasons so many people in our country endure low flying is that it contributes greatly to the effectiveness of the Royal Air Force. I wish to record my gratitude to the public for the tolerance they show.
Lord Mackie of Benshie: My Lords, I wish to press the Minister on the question asked by my noble friend Lord Mayhew as regards the Government's attitude inside NATO and the WEU. It is important that we

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get the political alliances right. At present NATO has not determined its role. It is high time that it did. The WELT is in a state of flux. We are not sure how the co-operation is progressing between France and Germany and how we shall fit into the picture. It is little use our having beautiful forces if there is no political direction.
I am sincerely sorry for our forces in Bosnia where fighting troops are subjected to insults from appalling irregulars who are undisciplined and often drunk. Our forces put up with that with a discipline which is amazing. Surely the force of NATO, which stood against the whole might of Russia, could assemble a rapid reaction force of sufficient quality to stop the appalling slaughter that we see in Sarajevo today. Without the political will and political leadership from this country, the best of forces are no use. The noble Viscount should comment on what is to happen to NATO and what we shall do about that.
Viscount Cranborne: My Lords, I am happy that the noble Lord has given me an opportunity to pay tribute to the remarkable job that the various elements of the forces active in Bosnia are doing. I would remind the noble Lord that in Bosnia the task of our troops has been clearly defined; namely, the delivery of humanitarian aid. The figures have been repeated by my noble friend Lady Chalker in particular many times in this House. They show for themselves that that objective has been fulfilled magnificently under extremely trying conditions. I know that the noble Lord is not doing so but a number of' people confuse the task which they would like our troops to carry out in Bosnia and the task that our troops have been asked to carry out there and that does them no service at all.
This country and Her Majesty's Government in particular have played a full role in developing the WELT as a European pillar of NATO. As the noble Lord knows, many developments have taken place on that front, in particular during the past 18 months. In terms of practicality, it is important to remember the immense experience and military capability which the NATO alliance possesses, which has been built up during many decades. That capability has been brought to the alliance in particular by the participation in it of the United States. I suspect that it would be unwise for anyone, including the noble Lord, to suggest that the WEU could take NATO's place, and I know that he would not do so. I am glad to see that the noble Lord does not agree with that suggestion. It is important that our policy, which is to develop the WEU as a European pillar of NATO, is sensibly brought about.
Lord Glenarthur: My Lords, my noble friend has given us much food for thought in this new-look White Paper, which deserves a great deal of study. However, I hope that he will understand and realise that a great deal of what it appears to suggest at a glance—and to some extent he has reinforced it—is pretty unpalatable, coming as it does on top of Options for Change.
I noted a particular phrase which my noble friend used. He said that planned force structures will meet the demands made against them. The fact is that the
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many demands which have been made against the Armed Forces during the past few years have been extremely exacting. They have taken their toll on a number of individuals, many of whom play a part in many different areas of the world. What assurance can my noble friend give that the commitments and the men for them will be properly matched? Overstretch is a real problem and I understand that it is becoming worse. I hope that when we have the opportunity to debate the issue more fully—and, like the noble Lord, Lord Williams, I sincerely hope that the usual channels can effect that speedily—my noble friend willgive us considerable reassurance on the matter.
Viscount Cranborne: My Lords, yes, I hope so too, and I believe so. That is one of the objectives of the new information that we have included in the White Paper. I hope that my noble friend will read it with care—I know that he will—because it attempts to provide some of the answers which he seeks and to give the rationale which enables us to make the assertions about our ability to carry out our commitments.
Lord Mason of Barnsley: My Lords, it is my belief that the Options for Change Statement and today's Statement flowing from it arise from a Treasury demand, as distinct from, primarily, a study of the defence of the realm. I know from experience that in such a situation the Secretary of State for Defence does not have a chance. His back is against the wall. He faces a Treasury demand; he has no allies in Cabinet. The other big spenders are guarding their budgets and prefer not to hear his pleas. I understand that position.
However, on this occasion, hard choices are having to be made. If we are to strut the international stage and remain members of NATO, the United Nations and the Security Council, the proper provision of satisfactory security for the state, for the maintenance of garrisons abroad and for peacekeeping roles in almost any part of the globe must be made. Otherwise let us stop acting like flying pickets and dispatching our troops world-wide to Hong Kong, Bosnia, Belize, Germany, the Gulf and, indeed, in large numbers to Northern Ireland.
Is the Minister aware that the troops are weary and under strain and that morale is taking a beating? Is he also aware that our commitments are too many for the present defence budget? The home life of our troops is being ruined and their marriages are constantly under stress. Unless there is a reappraisal of the many commitments within our medium European power capabilities, I totally oppose these cuts. I urge the Secretary of State for Defence to heed the views and the advice of the Defence Select Committee in another place and the all-party defence group. They are anxious about the strain and the stretch on our Armed Forces.
Is not the Minister aware that there is overstretch? The noble Lord, Lord Glenarthur, was also disturbed about that. Yes, there have been new demands in Europe and the wider world, to which the Minister referred—50 military tasks. Our forces cannot continue to accept these salami tactics. I am afraid

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that after this Statement there will be total despair in all three services. How can they have faith in a government who increase commitments and once again cut the cash?
Viscount Cranborne: My Lords, the experience of the noble Lord, Lord Mason, in these matters in well known and the whole House listens to him with the greatest of respect. However, I repeat that the matching of commitments and resources is a fundamental basis of the new White Paper. I hope that when the noble Lord has a chance to examine it in the detail which I know he believes it deserves he will see the rationale behind the conclusions that we have reached.
I agree with the noble Lord that there is no sense in asking too much of our Armed Forces. Equally, there is no sense in undertaking tasks beyond the capabilities or the resources which we have at our disposal. I do not believe that any noble Lord would agree to that. Although matters are tight—and I should be the last to deny it—we believe that in this White Paper we have demonstrated that there is indeed a rationale for our assertion that our proposals are closely fitted and sustainable.
As regards morale, I am well aware that as a result of the changes dictated by the fall of the Soviet Empire the Ministry of Defence is suffering a period of turbulence probably unequalled in the past 40 or 50 years. It would be unreasonable if such changes were not to be made; indeed, other countries have made changes or are in the process of making changes in the size of their defence budgets at least as great of those of the United Kingdom.
I must say to the noble Lord that indeed there is a period of turbulence. What impresses me more than anything else is the realism and professionalism with which our servicemen and women address themselves to the task. As far as I know there is very much the reverse of a fall-off in their efficiency during this difficult period.
The Earl of Perth: My Lords, will the Minister confirm that the Statement and the White Paper will in no way change the recently announced allocation of 18 ships to Rosyth?
Viscount Cranborne: My Lords. I can certainly give that assurance. Indeed, the Statement on Rosyth and Devonport was made in full knowledge of the contents of the White Paper.

Railways Bill
6.48 p.m.
House again in Committee on Clause 22.
[Amendments Nos. 46A and 46B not moved.]
Lord Tordoff Lord Tordoff moved Amendment No. 46C:
Page 24, line 40, at end insert:
("( ) Nothing in subsection (1) above shall prevent the Board from providing a service under section 26 below.").
The noble Lord said: I need some advice from the Government. Amendment No. 46C is connected with the amendment which we recently passed. Its purpose
1122
was to provide a fall-back position for those instances in which the franchisee became bankrupt and the franchise collapsed. The amendment ensures that it would be possible at that stage for British Rail to pick up the franchise and keep the service running. In view of what we have just decided, the amendment may be considered otiose. On the other hand, it may be considered still to be a fallback position in the event of another place changing its mind. I need advice from the Government as to their view on the amendment. Are they prepared to accept the amendment for the time being, or ought we to return to it at a later stage? In order that the Government can give a view, I beg to move.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): I hope that I can be of help to the noble Lord. Amendment No. 46C in the name of the noble Lord seeks to ensure that nothing in Clause 22 would prevent BR from providing services under Clause 26; that is to say, where a franchise agreement comes to an end but is not relet. In such circumstances the franchising director would be under a duty to secure the provision of those services until such time as they are again provided under franchise agreement. I can give the noble Lord an immediate assurance on that point. There is nothing in Clause 22 which would prevent the franchising director from entering into a contract with BR to provide those passenger services until a further franchise is let. The franchising director has powers in Clause 44 to enter into contracts with the board to provide passenger services that are not franchised. The amendment is therefore not needed because the Bill already provides for this.
However, it is quite a different matter to require the franchising director to secure the provision of services by BR in the event that he does not award a second or subsequent franchise, as Amendments Nos. 57B and 57C seek to do. He may choose to do so if BR is in a position to provide the services. But in the future when the majority of services have been franchised and are being run by private sector franchisees, BR's capability to provide services will have diminished.
I, of course, take into account this afternoon's proceedings. The decision that the Committee reached today may have a bearing on what BR is capable of doing. In such circumstances the franchising director will want to look to another franchisee to provide the services until a further franchise is let, or he may decide that the best solution is for him to secure the provision of services through his wholly owned company. Even when BR is still running passenger services, the franchising director will want to ensure that he obtains the best value for money in fulfilling his duty to ensure that services are provided until a further franchise is let. It would therefore not make sense to place a requirement in the Bill such as the amendments in the names of the noble Lords, Lord Tordoff and Lord Clinton-Davis, are proposing.
My noble friend has already made clear that BR will continue to run services until they are franchised for the first time. He has also made clear that if the franchising director does not believe that the bids he has received from prospective franchisees represent

1123
value for money and a first franchise is not let, then BR will also continue to provide the services. But I cannot commend to the Committee amendments which would tie the hands of the franchising director in the way proposed. I hope that the noble Lord will be content to withdraw the amendment.
Lord Clinton-Davis: I wish to speak to Amendment No. 47ZA which stands in my name. I wish to ask the Minister whether he will consider further a statement that was made by his noble friend in the earlier debate.
Lord Tordoff: If the noble Lord will forgive me, I believe that the amendment to which he speaks is connected with Amendment No. 46D, not Amendment No. 46C. Amendments Nos. 57B and 57C are grouped with Amendment No. 46C.
Lord Clinton-Davis: That is quite right.
Lord Tordoff: I am in difficulty because we are not entirely clear on the long-term impact of what we have already decided. I am sure that the Government Front Bench is in the same position. If I were more sure, I should be anxious to press the matter further. But I believe that we could find ourselves in a position in which BR has been run down to the extent that it will be difficult for it to pick up franchises in the, I think, likely event that some franchisees will fall because of bankruptcy.
The truth is that a number of people who are likely to bid for the franchises may be of no great substance. I have heard reference to certain bus companies wishing to take up franchises. If he were to consider their balance sheets, I hope that the franchising director would feel that they were not necessarily people worthy to obtain a franchise. However, it is possible that people will slip through the net. Assuming that they do. the chances are that there will be bankruptcies. People using local branch lines or rural lines may find themselves in great difficulty. As I understood what the Minister said, in those circumstances at present the franchising director will be enabled to bring BR back into the frame. Is that what the Minister is saying? Alternatively, is he saying that it is possible only where no franchisee has appeared? I am not quite clear on that. Perhaps the noble Earl can assist me.
Earl Howe: I sought to say that BR could indeed be brought back into the frame by way of a contract. If a franchise has not been let, the Bill provides for that. However, like the noble Lord, I am not yet in a position to determine the long-term effects of this afternoon's decision on the Bill and the ability of the franchising director to look further afield in examining tenders.
I cannot be as helpful to the noble Lord as I should like to be. However, I sought to say that the Bill already provides for BR, if necessary, to be brought back into the frame.
Lord Tordoff: I am grateful for that explanation. I need to read in detail in Hansard what the noble Earl said. I guess that he, too, needs to read it at some stage. I am sorry to be a little vague at present. It is a difficult situation. I would have pressed the
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amendment more firmly had the position been clearer. It is important that we are not in a situation where rural lines, and branch lines in particular, are left hanging because of the failure of a franchisee to fulfil his franchise because of purely commercial considerations.
I know that it is a different situation, but during the past week the catering facilities on the line from Waterloo to Exeter were suspended overnight. Suddenly notices appeared at Waterloo indicating that if you were travelling to Exeter on the Waterloo to Exeter line you could not obtai:n refreshments. Why?—because the franchisee went bust.
Lord Mountevans: I am grateful to the noble Lord for giving way. Does he agree with me that the facts that he has outlined with regard to the contractor providing the catering are not the best example of the working of privatisation?
Lord Tordoff: I am most grateful to the noble Lord. I am sure that his Front Bench will not hold it against him and take the Whip away from him, or anything like that. I shall not go down that philosophical route. However, the truth is that that indicates that franchisees can fall very abruptly. It is difficult enough for people who are travelling from Waterloo to Exeter if they cannot get a cup of coffee and a sandwich or all the good things that are provided by the catering services on British Rail. It is bad enough in that case, but how much worse for someone who wants to go home on a branch line from Exeter to deepest Devon if he suddenly finds that overnight the franchise for the very line itself has collapsed.
We need a fallback position and that is why I tabled the amendment. I hope that the assurances that have been given can be sustained by the Minister because many people will be upset if they do not have a service.
Earl Howe: Perhaps I may be of further help to the noble Lord. The franchising director will be required to examine the financial standing and managerial competence of prospective franchisees before issuing an invitation to tender. There is no question of any services being discontinued if a franchise falls in. The franchising director at all times will be under a duty to secure the continued provision of services on a particular line.
Lord Clinton-Davis: With respect to the Minister, it is completely impractical to take that view. Let us assume, as the noble Lord, Lord Tordoff, said, that a franchisee obtains a franchise. He then finds that the situation is completely untenable for economic reasons. With the best will in the world, he cannot continue to operate the franchise. Then the franchising director says, "I am sorry, you've got to do it, otherwise I shall prosecute you". The franchisee will say, "You can prosecute as much as you like. I have a reasonable excuse and I am not afraid". Then the franchising director will say, "I shall serve you with the appropriate notice". What good does that do? How does the franchising director ensure that there is no gap in the service that is provided? In my submission, certainly in a number of cases he cannot do it.
Lord Tordzoff: I endorse what the noble Lord, Lord Clinton-Davis, said. The fact is that if someone is put in a position where they may be trading while bankrupt, they must cease services immediately. Unless the franchising director has some fallback and some other organisation which can take over the franchise immediately, that line will suffer. The purpose of the amendment is to make sure that British Rail is there, in post, in order to fulfil that need.
However, clearly we shall not come to a conclusion tonight. I am grateful to the Minister for such help as he has been able to give but I am sure that we shall need to come back to this at a later stage. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Viscount Goschen: I beg to move that the House do now resume. In moving this Motion, I suggest that the Committee stage begin again not before 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Local Government (Amendment) Bill
7.3 p.m.
Read a third time, and passed.

Channel Tunnel (International Arrangements) Order 1993
Earl Ferrers Earl Ferrers rose to move, That the draft order laid before the House on 24th May be approved [33rd Report from the Joint Committee].
The noble Earl said: My Lords, this may seem to your Lordships a somewhat formidable document to digest. So it is, in terms of sheer volume of paper, and in that respect it is larger than the normal statutory instrument which is customarily presented to your Lordships. But what the statutory instrument does is relatively straightforward. It applies frontier controls—such as immigration, customs and prevention of terrorism—which are already in existence for airports and seaports, to this new mode of travel which has never existed before, which brings people and goods into this country by train, via the Channel Tunnel.
The second unique feature is that it extends our British frontier controls into a part of France and French frontier controls into a part of England. It also enables both France and the United Kingdom to co-operate together in dealing with crime and criminals in this new system of transport. The fixed link—or the tunnel system as it is also known—consists principally of three parts: the terminals which are at Cheriton, near Folkestone, and at Coquelles; two running tunnels through which the trains will pass; and a service tunnel.
France and the United Kingdom will each be responsible for policing the system on their own side, up to the frontier which is marked halfway across the Channel. Frontier controls in the tunnel system will be carried out near to the tunnel portals. That was one of the requirements of the Treaty of Canterbury, which provided for a protocol to be made,
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"to enable public authorities to exercise their functions in an area of the territory of the other state".
A protocol was signed at Sangatte in November 1991 by the then Home Secretary and his French counterpart. This order gives effect in English law to that protocol.
French and United Kingdom frontier control officers will be empowered to work in specified parts of one another's territory. Those particular areas will be known as "control zones" and they have been agreed by the two states. They are located at Cheriton and Coquelles, on board through trains, and at international railway stations, which are referred to in the order as "terminal control points".
The frontier control laws and regulations of one state will apply and may be enforced in the other. For example, United Kingdom immigration officers will be able to check passports at Coquelles and their French counterparts will be able to do so at Cheriton. Within the tunnel system, entry controls on passengers will be completed before they board the shuttle trains. The physical layout of the controls will be similar to those which are found at ferry ports. The controls on passengers who travel on through trains between Paris and London will operate in a different way, but they will be based on the same principles.
The through trains themselves will be the control zone. Immigration checks will usually take place on the train during the journey. If that is not practicable, immigration checks will take place at the point of arrival. That will, for example, be the case in respect of night sleeper services from Paris, which will terminate at Waterloo, when alternative arrangements might unnecessarily disturb sleeping passengers.
It is the Government's view that it is right to retain the ability to carry out immigration checks at our internal frontiers. The completion of the European single market does not, in our view, require the abolition of immigration controls on non-European Community nationals. Passport checks on all non-European Community nationals are, therefore, being maintained, together with unobtrusive checks on European Community nationals—checks which will be sufficiently simple to identify the people as being European Community nationals.
The order does not modify the Immigration (Carriers Liability) Act 1987. The reasons for not doing so are essentially practical ones. The Government considered carefully whether the carriers liability Act should be extended to cover traffic through the Channel Tunnel. We decided against it because the circumstances are different from those at airports and seaports. There will be British immigration officers at Coquelles on French soil before people get on to the shuttle train, and we are planning for British immigration officers normally to be present on the through trains. Checks may, therefore, be made before entry into the United Kingdom.
The controls on goods which cross the frontier through the Channel Tunnel will be the same as those which are exercised at other places of entry. These days customs checks are now based mainly on advance intelligence and they are carefully targeted to

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prevent the smuggling of drugs and other illicit materials. Customs controls at the tunnel will be conducted on the same basis as those which are undertaken at ports.
Many people have been concerned about the possibility of rabies reaching the country through the Channel Tunnel. Schedule 3 of the order sets out the measures which will have to be taken on the United Kingdom side of the tunnel system in order to prevent rabies-susceptible animals from getting into the area around the tunnels and to stop them from straying into the tunnels. These measures include the fencing of the terminal areas, as well as electrified grids in the tunnel portals, poisonous bait to control rodents and the regular cleaning of the tunnel system in order to prevent the build-up of organic matter. They are all designed to keep the tunnel free of rabies. There will he other, similar responsibilities at the French end of the tunnel.
The greater threat of rabies comes perhaps not from animals straying into the fixed link but from people who are irresponsible enough to attempt to smuggle animals into the country. The response to this at the tunnel end will be as stringent as it is at other places of entry. All the authorities will keep a sharp look-out for any breaking of the law.
The design of the tunnel system and the dividing of it by a frontier which is under the sea create a need to establish special arrangements for the jurisdiction of the courts. The jurisdiction of our courts is normally territorially based—in other words, the action which constituted a crime must have occurred within the United Kingdom. Under Article 3 of the order this jurisdiction is extended so as to give the courts full legal authority to try and to sentence defendants who are brought before them for certain offences which have been committed within the tunnel system or the control zones.
Articles 38 to 41 of the Sangatte protocol set out the procedures by which their jurisdiction may be determined. They provide, for example, that where it cannot be ascertained with certainty where in the tunnel system an offence has been committed, the state which receives a suspect shall have priority in exercising jurisdiction. Without these ground rules offenders could escape justice if the location of the offence was not clear.
The police have two main functions in the Channel Tunnel. The first is as frontier controllers in exercising the powers which they have under the Prevention of Terrorism Act 1989. Those powers will be exercisable in the United Kingdom and in a control zone in France which is either at Coquelles or on the through-train.
The second function is to carry out law and order duties in the United Kingdom end of the tunnel system. In the control zone in France the maintenance of law and order will be the responsibility of the French authorities. But the order introduces some novel measures to make sense of the practicalities of policing the tunnel: for example, to preserve the legality of arrests which are made in England and
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which unavoidably continue into France and to enable the police to arrest offenders who are caught in the act in the French half of the tunnels themselves.
One particular consequence of French officials carrying out their functions on United Kingdom soil is that a small number of uniformed French officers may be armed in the control zone at Cheriton. Article 7 of the order enables those officers to possess firearms without a firearms certificate. The conditions which are attached to the carriage of firearms will he set out in administrative arrangements which have been agreed with the French authorities. On through-trains, French officers will lock their guns away when the train crosses the frontier into the United Kingdom.
The procedures which are required by French law for implementing the Sangatte protocol have already been completed. If your Lordships approve this order, the way will then be clear for the two governments to bring the protocol into force. In due course, we shall be bringing before your Lordships similar arrangements in respect of controls in relation to through-trains to Belgium.
I commend this order to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 24th May be approved [33rd Report from the Joint Committee].—(Earl Ferrers.)
7.15 p.m.
Lord McIntosh of Haringey: My Lords, we are grateful to the Minister for the way in which he has introduced these regulations. As he says., they are exceedingly complex and it is still a matter for regret that the negotiations were not completed in time to be included in the Channel 'Tunnel Act of 1987. It would have been far better if the consideration of these matters had been subject to more detailed parliamentary procedure. They could have been included in a schedule to that Act, and could then have been debated and been open to amendment. These matters are of very considerable importance, not just because they are new and not merely for those who will use the Channel Tunnel, but because of the civil liberties aspects which they bring forward.
I say at the outset that we are not proposing to oppose these amendments. We think that, on the whole, the arrangements that have been made are, given the circumstances, about as simple as they could be. I always remember the first time I crossed the Oakland Bay Bridge and discovered that the tolls were only in one direction. I thought what a good example that was and how it could well, with advantage, be adopted in other places, for example across the Severn. Clearly having the French and UK controls together at one end of the tunnel is the right way to do it rather than stopping people twice.
It is also very welcome to learn that as far as possible, certainly between London and Paris, controls will take place on trains rather than with the necessity of additional controls at the origin and the destination. I appreciate the reasons which lead the Government to think that there may be exceptional circumstances when there would have to be controls

1129
initially at Waterloo. Nevertheless, the principle of having the trains at the control zone and not delaying passengers is clearly welcome.
I know that the noble Lord, Lord Mountevans, will want to come in on the carriers' liability Act, and he knows that this is not a matter which has been treated particularly as an issue of party policy on these Benches. Speaking personally, I am convinced by the argument which the Government have advanced; namely, that it would be impracticable, and therefore undesirable, to extend the carriers' liability Act to the Channel Tunnel.
I am less concerned, I am bound to say, with the issue of animals and rabies. I think that these issues are very substantially overblown if one considers the number of cases occurring. There was indeed a case of a British subject dying of rabies only last week—he was an ex-member of the SAS—but he turned out to have a phobia against the injection which could have saved him. I believe that a great deal too much fuss is made.
I am much more concerned with the issue of French police powers. It is not just that, as the Minister said, the French police are permitted to carry hand guns and that they will in the control zone at Cheriton be exempt from our normal regulations and hand gun licensing. They have always had, and continue to have, stop-and-search powers which are substantially in excess even of those which existed in this country before the "sus" laws were abolished.
It is also true that the French police, I am sorry to say, do not have a particularly good reputation in terms of the way in which they deal with ethnic minorities. I know that that can be said of some people in this country. I came through the green channel at Heathrow only three weeks ago to find that every single traveller who was being stopped and having his baggage examined was black. When one considers the statistical probability of that occurring by chance, one must be driven to think that there are elements of racial discrimination in our Customs and Excise controls and probably in our policing as well.
I do not wish to cast aspersions on the French police or customs officers which I would not equally cast upon our own, but it is a fact that the French police have more extensive powers than our police have. They have powers which we have positively and deliberately abandoned. It is a matter for concern that there will be, so far as I can see, no obligation on them to comply with the more restrictive legislation which exists in this country. I wonder whether the Minister would care to consider whether anything can be done to ensure that civil liberties, which we value very highly, are maintained on British soil.
There is also an issue about police complaints. We have a police complaints procedure, although it is perhaps not adequate. How will that apply to French police operating in control zones on British soil?
These are complex matters which ought not to be dealt with in the consideration of an order, particularly at relatively short notice. Clearly the intention behind the order is sound and this is not an issue which we would plan to hold up. But I must ask
1130
the Government whether there are more regulations to come. The Minister referred to further regulations by the Secretary of State for Transport. Can we expect further regulations from the Home Office side? If that is the case, what assurance can be given that the Home Office issues, and in particular the civil liberty issues, will be available for debate in a meaningful sense in this House?
Lord Renton: My Lords, the noble Lord, Lord McIntosh, made a most interesting series of comments which it is right that the Government should take on board. But his attitude and mine differ fundamentally. He is anxious lest people should be kept out of this country. I am anxious lest people who have no right to come in should be let in. Inevitably we find a most unusual and indeed an entirely new situation. It is a situation which inevitably produces anomalies. My noble friend Lord Ferrers has already mentioned one; namely, the anomaly (to those who are accustomed to the work of our courts) that British judges will have power to try offences committed in France—at the other end of the Channel Tunnel.
With regard to immigration control as it will be affected by people coming in through the tunnel, and dealing first with those who come to our country from France, as I understand it there will be passport control at the French end of the tunnel. That will be carried out in the usual way by immigration officers, who are wonderfully skilled people with a great grasp of various languages and immense experience gained after an initial period of training. They will allow through, with or without conditions, people who seem to them to be entitled to enter this country. However, they will find that occasionally there will be people attempting to enter illegally. Such people may already have been illegal immigrants in the past.
If those people landed at London airport there would be custodial arrangements to enable them to be brought eventually before the courts. But what will happen when their offence is discovered at the French end of the tunnel? Will there be custodial arrangements there? Will there be a building to hold them in custody? Or will those people be put on a train and brought through the tunnel to this country? If so, will there be security arrangements on each train? We need to know, so that we can be quite sure that illegal immigrants who attempt to come here in that way are caught. It is well understood that, although the offence of trying to enter this country illegally will have been committed in France, nevertheless they will be triable by our courts.
If I understood my noble friend correctly but—I shall have to study his speech with great care because he covered a great deal of detail—the arrangements for people leaving this country will be somewhat different. Occasionally criminals try to leave this country when they have no right to do so. They may have escaped from custody or they may have been obliged by the courts, for one reason or another, not to leave this country. It would help if we could be told how those people will be prevented from leaving, where they will be told and by whom, and where they will be put into a state of arrest.
Lord Sefton of Garston: My Lords, as my noble friend Lord McIntosh said, it would perhaps have been better when we first discussed the Channel Tunnel Bill to have had some of those questions answered then. During the Committee stage I tabled an amendment dealing with the safety of passengers and possible compensation for accidents caused in the tunnel. I sought to persuade the Government that there should be a requirement on operators of the tunnel to carry insurance in the same way as a driver of a motor car in this country has to carry third party insurance to cover him in the event of an accident.
I was assured by the Government that I had no cause for concern. If I remember rightly, they said that the likelihood was that an accident would not occur and they could see problems in establishing a requirement to have third party insurance. The Act enabled a private company to carry out that exercise. However, as in the Railways Bill, there is no guarantee al all that the franchisees, owners, lessees or whatever they are called in terms of that Act, will not go bankrupt.
The simple question that I asked then I ask now: what is the fallback if a compensation claim is made against the operators of the tunnel either in France or in England? Will the Government pick up the bill for any large-scale compensation? The probability is that Lloyd's, in the state that it is in now, would not be able to meet it.
Lord Mountevans: My Lords, the noble Lord, Lord Sefton of Garston, raises an interesting point. I have to admit that it had not occurred to me. I hope he will forgive me if I do not follow him down that avenue.
I welcome Her Majesty's Government's acceptance that the Treaty of Canterbury, allied with reality, will make it impractical to apply the carriers' liability Act to the Channel Tunnel shuttles or to the Channel Tunnel inter-capital services.
With regard to the tunnel through-trains, I am slightly concerned by something said by my noble friend when he introduced the draft order. He said that British immigration officers would "normally" —that is his word—be on the through-trains. What if, for whatever reason or circumstance, they are not? Does the exemption from the carriers' liability Act still apply?
Having given that welcome on behalf of my friends in what one might call the tunnel field of transport, it will come as no surprise to my noble friend when I say that I wonder whether the order that we are discussing tonight and its implications give Her Majesty's Government a golden opportunity to reconsider the carriers' liability Act and its application to maritime and air carriers. It is just as difficult for a ferry operator to board 2,000 passengers in 40 minutes in Calais as it is for SNCF in France or, eventually, SNCB—the Belgian railways in Belgium—to board a similar number of passengers in Brussels. Airlines have similar problems and I will not rehearse all the arguments and discussions that my noble friend and I have had on the matter over the years. However, I remind him that airlines are frequently not the employers of their check-in staff.
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If the reports in the media are to be believed, and they are not simply corning from the carriers, the whole issue is galloping towards the courts. I would prefer the matter to be resolved by rational discussion rather than by the judiciary. In replying to the debate this evening, I wonder whether my noble friend can say anything to the air and sea carriers.
7.30 p.m.
Earl Ferrers: My Lords, I am grateful for what your Lordships have said in regard to the order which, as the noble Lord, Lord McIntosh of Haringey. said, is so much more complicated than is normally the case. He asked, as did the noble Lord, Lord Sefton of Garston, why it was not possible to conduct the negotiations earlier and have them included in the original Act.
Both noble Lords will realise that it is a completely new system being undertaken and a great many discussions had to take place. The principles were decided in the Act. It was considered appropriate to leave the details to be negotiated between the French and British authorities and for such measures as were decided upon to be put before the House in the form of a statutory instrument. I believe that to be reasonable. I understand that had it been possible to include the result of the negotiations into the Act in the first instance it would have been easier. However, a great number of discussions had to take place for the orders to be in the position in which they now are. It is reasonable, therefore, that they should be tabled in the form of a statutory instrument.
The noble Lord, Lord McIntosh, slightly poohpoohed—if that is not the wrong word—the arrangements for rabies; I believe he said that they were overblown.
Lord McIntosh of Haringey: My Lords, I did not say that the arrangements for rabies were overblown. I said that some of the public reaction to the dangers were overblown. I am fully in support of the arrangements.
Earl Ferrers: My Lords, I am glad about that. I always remember his noble friend Lord Shepherd making a speech on rabies which was extremely forceful. It left a strong imprint on my mind. He said that if anyone had seen a person suffering from rabies, as he had done, he would never want to see a relaxation of the controls. We happen to be lucky in this country in not having rabies present and it is therefore in our interests to ensure that we do not import it.
The noble Lord, Lord McIntosh, referred to the French carrying guns. He said that their "stop and search" laws are more rigorous than ours and wondered what the outcome of such a situation would be. In the control zone in the United Kingdom the French police will only be carrying out frontier controls; law and order will be for the British police.
The noble Lord was concerned about what would happen if one wanted to make a complaint against a French policeman. Complaints against the French police will fall to be investigated by the French authorities. If one happened to be roughed up by a

1133
French policeman in the United Kingdom—that is extremely unlikely, but if that were to arise in one's wildest imagination—the complaint of assault would be made to the British authorities; if it happened in France, the complaint would be made to the French authorities. If the police were to go beyond the exercise of their functions, that would be a matter for our courts.
The noble Lord, Lord McIntosh, asked whether there would be any further regulations. The present order provides for the existing frontier controls to be applied to the tunnel. There will not be any new regulations as such in this context, apart from those applying to Belgian trains which these regulations do not cover.
My noble friend, Lord Renton, was concerned about how we would cope with illegal immigrants. He asked whether there would be custodial arrangements provided in England. The position is that at Coquelles, if illegal immigrants were detected they would not be allowed through the tunnel. There would not be any detention because they would not be in Britain. In Britain one deals with an illegal immigrant by detaining him. In France, with the shuttle service, the illegal immigrants will be prevented from entering the train which would bring them to England and therefore they would not be detained.
Lord Renton: My Lords, I am grateful to my noble friend. I referred to those illegal immigrants who had already committed offences in this country for which they were wanted. Not only should the immigration officer have power to have them immediately arrested, but also there should be people available to carry out the arrest and somewhere to detain them on the French side.
Earl Ferrers: My Lords, my noble friend quite rightly draws attention to a fairly technical point. I will give him an off-the-cuff answer and if I am wrong, I will write to him.
If a person presented himself to the British authorities and they found that that person was someone who had been in Great Britain as an illegal immigrant, the duty of the immigration officer would be to prevent that person from boarding the train. In fact, because he would be on French soil, my guess is that the immigration officer would contact the French authorities to find out whether there were any means by which the person could be detained in France. I will confirm whether or not my reaction is correct. If I am wrong, I will write to my noble friend.
My noble friend asked also about the arrangements that apply to criminals leaving the United Kingdom. The United Kingdom police will have power to arrest fleeing criminals on board through trains. They can be taken into the control zone and be brought straight back to this country.
The noble Lord, Lord Sefton of Garston, asked some questions in regard to claims for compensation. He asked whether the Government would pick them up. I am bound to say that that would not be so. It is a commercial undertaking and if there were a claim
1134
against any specific part of the system the person receiving the claim would be the person responsible for dealing with it—either rejecting it or meeting it.
Lord Sefton of Garston: My Lords, that was not the fundamental part of my question. I attempted to have embedded in the Act the principle of insurance. My question was that, in view of the fact that the Government had some responsibility in regard to the Channel Tunnel Act, if the company went bankrupt would they pick up the bill for compensation? Or are the travellers to understand that if a claim arose that was so big that it meant the company had to declare itself bankrupt, there would in fact be no compensation?
Earl Ferrers: My Lords, that is a commercial judgment which meets people frequently. The order merely puts into place the regulations and principles by which a commercial undertaking can be operated. If that commercial undertaking has a claim against it, then it must deal with it as best it can. There are risks with all commercial undertakings.
My noble friend Lord Mountevans referred to carriers' liability. There may be occasions when it is not possible to clear a train before arrival, perhaps because of a public order problem or because a large number of passengers need to be interviewed more fully. In those circumstances a static control will operate at Waterloo using 10 mobile desks which can be wheeled into position as necessary. Individual passengers who are selected on the train for further examination will be taken to a secondary examination area at Waterloo which will have the same facilities as those at ports and airports. The carriers' liability will not act in these circumstances.
My noble friend has always been worried about the carriers' liability aspect. I know that the Immigration (Carriers' Liability) Act is unpopular with those people who are caught by it. That is so with any Act. But what we do with the Immigration (Carriers' Liability) Act is to say that it should be the responsibility of those who carry people who board aeroplanes or ships in another country to ensure that they carry the proper documents. When those people are carried into this country, they are then dealt with by the immigration authorities in this country. Under the Channel Tunnel system this is different because the immigration authorities of Great Britain will be on French soil. Therefore, these people, when they go onto the shuttle service, will go first to the Eurotunnel kiosk, where they deal with their tickets, then to the French authorities and then to the British authorities. The British immigration authorities will be there to be able to check that anyone who gets on to that shuttle train is justified in doing so. Therefore, the circumstances are different.
The reason why there has to be this difference and why we have not applied the carriers' liability over the shuttle service is that the facilities are totally different. The people who board the shuttle service will have had their documents checked by our immigration authorities in the country of origin, whereas that is not

1135
the case with sea and air transport. I hope that, with that explanation, your Lordships will be good enough to approve the order.
On Question, Motion agreed to.

Civil Defence (General Local Authority Functions) (Scotland) Regulations 1993
7.42 p.m.
Earl Ferrers Earl Ferrers rose to move, That the draft regulations laid before the House on the 20th May be approved [31st Report from the Joint Committee].
The noble Earl said: My Lords, with your Lordships' permission. I should like to speak also to the draft Civil Defence (General Local Authority Functions) Regulations 1993. The Scottish regulations are essentially identical in principle to the English ones but allowance has to be made for the different local authority structure in Scotland.
The Civil Defence Act 1948 provides that the designated Minister—in this case, the Home Secretary and the Secretary of State for Scotland—shall make regulations which prescribe what functions each local authority shall have and perform for civil defence purposes.
The existing regulations, which were approved in 1983, were written against very different international circumstances from those which we see today. With the changed situation, it is right that the regulations should he changed in order to reflect the present needs.
Civil defence, in the minds of most people, has been virtually synonymous with protecting the population in the aftermath of a major nuclear attack. In fact it is a much wider concept. It is concerned with protecting the population against any hostile attack. The end of the Cold War does not mean that we should abandon civil defence. As your Lordships will be all too well aware, although the threat from the Warsaw Pact has gone, the world is still far from being a safe place.
The Government believe that it would be wrong to stop all planning to protect the public from hostile acts. But in the absence of specific threats, the right approach—and the one which the Government have adopted—is to assist local authorities to develop arrangements by means of which they can cope with a wide range of eventualities. An advantage of this approach is that it helps the response which a local authority can make to a peacetime disaster. Good emergency planning should concentrate on dealing with the consequences of a disaster, whatever that disaster may be, and not its cause.
We have consulted widely before preparing the new draft regulations. The Government have concluded that the very detailed obligations, which were placed on local authorities by the 1983 regulations, are today no longer appropriate. Those obligations have therefore been dispensed with. It is not often that a Minister can come to your Lordships with proposals to remove obligations and duties from local authorities and to make life easier for them. But I am fortunate this evening to be in the happy situation of
1136
so doing. The noble Lord, Lord McIntosh, scowls. It is a great surprise for him, but let me assure him that that is the case.
The regulations which relate to England and Wales make different provisions for metropolitan authorities compared with those for the shire authorities. In the metropolitan areas, there was widespread support for the idea that the responsibility for the management arrangements in the event of an emergency should lie with the metropolitan districts, the London boroughs and the City of London rather than, as now, with the fire and civil defence authorities. The new regulations make that change. The Government hope that, in practice, the boroughs and the districts and the fire and civil defence authorities will work together in partnership.
The regulations are also drafted in such a way as to allow the nature of this partnership to vary ry from metropolitan area to metropolitan area. This is as it should be if arrangements are to be tailored to the needs of the locality. The Government intend, therefore, to review how the regulations have worked in about 12 months' time.
Because of the proposed local government reorganisation, we thought it unwise to go for major changes in the civil defence functions of other councils. We have left undisturbed most of the functions from the earlier regulations which apply to county councils and to shire district councils—and which in Scotland apply to regional., islands and district councils respectively.
The approach which I have outlined will maintain a local authority civil defence capability. The Government will, therefore, continue to support this through the payment of civil defence specific grant at 100 per cent. The Government have, though, decided that the total level of grant which will be paid to local authorities in England and Wales should be reduced from £20 million this year to £15 million the following year. In Scotland this will be reduced from £2.4 million to £1.7 million respectively.
This decision has, I know, been unpopular with local authorities but I think that two points are sometimes overlooked. First, the new regulations will remove all the old detailed planning duties which were placed on local authorities by the 1983 regulations. Although smaller, the grant will now be available to fund the broadly based planning process of what is a changed situation. Secondly, the Government consider that the grant is a contribution—and a substantial one at that—to local authority emergency planning. The Government expect local authorities to continue to make their own contribution towards preparing for a local emergency.
During our consultations, there was a good deal of support for the introduction of a statutory duty on local authorities to plan for peacetime disasters. We have listened very carefully to the arguments. The Government do not rule this out in the longer term, but we are satisfied that much can be done within the existing legislation. We are, therefore, encouraging local authorities to discharge their civil defence duties in a flexible way. And these regulations will help them to do that.
The Government's aim is to assist local authorities in developing emergency planning arrangements which are relevant to the present situation and which will provide a firm base on which to meet any future civil defence requirements. I commend the draft regulations to your Lordships. I beg to move.
Moved, That the draft regulations laid before the House on 20th May be approved [31st Report from the Joint Committee].—(Earl Ferrers.)
Lord McIntosh of Haringey: My Lords, the House will again be grateful to the Minister for his explanation of the regulations. If my eyebrows rose mildly when he described the regulations as taking away responsibilities and obligations from local authorities, that is not because I am contesting that indeed they do so but because the issue is a good deal more complicated than the noble Earl set out in his opening speech.
Frankly, the issue of civil defence and civil emergencies in this country is a shambles as regards legislation. We are still dependent very largely on the Civil Defence Act 1948, the only Act which provides the funding for civil defence and civil emergencies on a statutory basis. The Conservative manifesto—not in 1992, not in 1987, but in 1983—made a commitment that there would be new legislation on this matter. But that commitment was only partially fulfilled by the Private Member's Bill brought forward by Sir Nicholas Bonsor in another place in 1986. As the Minister of State, Mr. Peter Lloyd, acknowledged in the Select Committee on Statutory Instruments only two weeks ago, it remains the case that there ought to be comprehensive consolidation legislation. It is not good enough for the Minister to be saying in June 1993 that no place can be found in the parliamentary programme for this legislation.
The matter is compounded by the fact that local government reorganisation, to which much of the regulations relate, is a rolling programme over a number of years. Anything we do now in changing the responsibilities between one level of local authorities and another may be all right in the metropolitan areas, which are not affected by the review, but are almost certainly not all right as the work of the local government commission continues.
At the moment nobody knows who is responsible for civil defence and civil emergencies. It is proposed that those functions should now become the responsibility of the London and the metropolitan boroughs which will have the freedom in practice to deal with the fire and civil defence authorities. However, as things change outside the metropolitan areas, it is very difficult to see how those changes can be reflected in a new, enduring and easily comprehensible situation for dealing with civil emergencies.
It is true that civil defence in the old sense, with huge bunkers in which local bigwigs are protected from nuclear attack, is no longer appropriate. But, as the Minister said, the demand for protection against civil emergencies is no less, and almost certainly
1138
considerably more, than it has been in the past. The regulations fail to take the opportunity, short of legislation, to deal with the confusion caused.
Perhaps I may give a few examples. Under the regulations it is possible for local authorities to consult each other about the way in which they are going to deal with civil emergencies. As I understand it, and the Minister will correct me if I am wrong, there is no provision for local authorities to consult with the fire services or the police. They are about to undergo reorganisation as well. However, common sense would dictate that it is the local authorities, the fire services and the police, and probably others, who will need to consult together in order to have effective emergency planning.
It is absurd that where civil defence authorities, whether boroughs or special authorities, have income from the use of sites, or other activities, for every £1 they receive in income which would otherwise go to improving civil defence, £1 is taken away from the Home Office grant. That is in the context of the reduction to which the Minister referred in central government funding from £26 million last year to £20 million this year and to £15 million next year. That is a very substantial reduction.
I am delighted that the noble Lord, Lord Renton, is in his place today. He will recall that on 6th February 1985 he introduced a Motion in your Lordships' House debating this very issue. In it reference was made to the Conservative manifesto promise made in 1983 to amend the Civil Defence Act 1948 in order to enable civil defence funds to be used for peacetime emergencies. The Minister at that time, the noble Lord, Lord Elton, made a soothing reply, but the fact remains that apart from Sir Nicholas Bonsor's Bill, that obligation has still not been fully fulfilled. When the Local Government Bill was going through Parliament in 1985 and also when the Local Government and Housing Bill was going through in 1989, particularly on the latter occasion, the noble Lord, Lord Renton, again made reference to the need for comprehensive, amending legislation. Here again, Ministers tried to be soothing but they did not actually promise that there would be a proper reform.
In accordance with the traditions of this House we are not going to oppose the regulations, but they are a mess. Opportunities have been lost over a number of years to correct matters. I can only hope that there will not be some emergency of the Lockerbie kind—one can imagine many things substantially worse—which will actually reveal the lack of preparedness not so much of local authorities, but of public authorities in this country as a whole. If that were to happen, we and the country would have to say that the Government had not paid adequate attention to the needs of civil emergencies. These regulations cannot be seen as a final solution to the problem.
Baroness Hamwee: My Lords, I too would like to thank the Minister for his introduction of the regulations. Like the noble Lord, Lord McIntosh, I have fears which arise from disasters and emergencies not respecting administrative boundaries. It is the view of my party—and here I speak personally as well —that local government at the most local possible

1139
level is best. But there are areas of government which require a strategic approach, and I believe that this is one of them.
Perhaps noble Lords will imagine an accident on a pleasure boat on the Thames. There are probably two riparian authorities and various other public sector bodies such as the Thames Water Authority and the Port of London Authority. Noble Lords will recognise that I speak of the "Marchioness" disaster. The noble Lord, Lord McIntosh, mentioned the example of Lockerbie. Coming as I do from west London, I am aware of the very real fears of people living in that area should there be a similar disaster on an aircraft approaching Heathrow.
There is also the example of a television tower which is the subject of a terrorist bomb attack and perhaps at the corner of four London boroughs—Croydon, Southwark, Lambeth and Bromley. I speak of Crystal Palace. As we have this discussion I feel that I should ask noble Lords to touch wood, but it is real discussion and I use examples of real places to give a little more vividness to the concerns which have been expressed.
The transport of chemicals and nuclear waste is a further example. Reading the regulations, I can only think that this is yet another instance where the internal market is to be the market which will apply. An internal market in emergency planning may not lead to the best arrangements. I fear that it will lead to patchwork funding and perhaps to a patchwork of standards. Certainly, with the patchwork of administrative boundaries which we have—for instance, with the boroughs, health authorities and police organisations—that must be a real concern.
The fire and civil defence authorities have a liaison role. But are their specific tasks merely to be supportive without a real, meaningful role for co-ordination? After a disaster, a lack of coordination, among other things, inevitably attracts criticism. I speak again about London, but it is quite a task to get all 33 London authorities to undertake planning in a co-ordinated fashion. It is not realistic to expect that there will be co-ordination unless it can be orchestrated. Responses to disasters have to be at several levels depending on the area affected and the complexity of the resources needed. It may not be enough for the response to be at local level. Perhaps we should be asking the Government to think again about taking a lead in defining the standards which they expect emergency plans to attain. All local authorities prepare civil defence plans, but I believe that the Government have never managed to prepare regional civil defence plans or to release details of draft emergency legislation.
These two statutory instruments are based on wartime legislation—or rather on legislation which directs itself to possible wartime problems. This may be an opportunity for the Government to protect public safety by transferring money to peacetime planning. Government responsibilities are fragmented between departments and the only money which is paid direct to local authorities for emergency planning is earmarked for preparations against hostile attack. That money can be spent "secondhand", so to speak,
1140
on peacetime planning if an authority decides to do so but, as we have already heard, that function is. inadequately resourced.
The noble Lord, Lord McIntosh, referred to the reduction in funding, as did the Minister. It will be reduced from £26.9 million in 1992-93 to £15 million in 1995-96. If the Government continue on that course, the reduction in funding will have been 43 per cent. in cash terms, or almost 50 per cent. in real terms, since the general election. The Minister said that that is partly because detailed planning duties have been removed. We all welcome a reduction in bureaucracy, but from the Minister's introduction I really do not believe that it is bureaucracy that is being reduced but, I fear, the real provisions for dealing with emergencies.
The Minister also said that the grant is only a contribution and that local authorities will be able to make their own contribution. We have had many debates about the ability of local authorities, in their current circumstances, to fund what they would wish to fund so that may be another problem on our hands.
The noble Lord, Lord McIntosh, also referred to the duty to consult other bodies and organisations which local authorities consider appropriate. That duty appeared in the original draft regulations, but has now been removed. I should like to add two questions to those already asked by the noble Lord. What has been the response of the other emergency services, such as the police and ambulance services, to the draft regulations? Finally, what is meant by the term "civil defence purposes" which appears in the regulations? What do those purposes comprise? There were 12 detailed planning areas in the 1983 regulations, but those are being revoked and there does not appear to be anything of substance on the statute book to replace them.
The Government rightly designate lead departments to deal with different types of emergency because emergencies cross departmental boundaries. They seem to recognise the need for co-ordination in Whitehall, so I should like to see them leading the way and facilitating local authorities to do the same. As I said, these are peacetime regulations, riding on the back of wartime legislation. I wonder whether it is the correct use of a statutory instrument. I welcome the Minister's reference to a 12-month review and hope that the regulations will be kept under review. The Local Government Commission does not plan to finish its work within the next 12 months, as I understand it, and is having a somewhat stormy ride at the moment. Clearly, that will need to be kept under careful and constant review.
Lord Glenarthur: My Lords, I, too, must thank my noble friend Lord Ferrers for introducing these regulations. It is not often that the House gets an opportunity to discuss civil defence or civil protection in this way so what my noble friend said is valuable. His speech was valuable not only for what it contained but also, I am afraid to say, for what it did not contain, and those are the points that I should like to address although many have been touched on already by the noble Lord, Lord McIntosh, and the noble Baroness, Lady Hamwee.

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We heard enough in those two speeches to leave us in some doubt about whether the powers and duties of local authorities and, indeed, of central government are up to the task that they face. The impression that has been created —and I share the concern—is that the powers and duties are fragmented and, in some cases, disorganised. To some extent, they are also confused. I am sure, however, that many people are working extremely hard to try to ensure that they are properly organised.
If I understood her correctly, the noble Baroness referred to co-ordination procedures in central government. That is a particularly important point. Some aspects of the hazards that are faced as peacetime emergencies are acted upon by some departments, and some by others. Perhaps I may give just two examples. The Control of Industrial Major Accident Hazards Regulations, which were implemented under the Seveso directive in 1982, meant that that operation was the responsibility of the Health and Safety Executive and thus the Department of Employment. Following the Chernobyl incident, the Government introduced the concept of having a lead department to be responsible for the Government's response to major disasters. Nuclear emergencies, for example, were the responsibility of the Department of Energy, but are now the responsibility of the Department of Trade and Industry unless the radiation is from overseas when they are the responsibility of the Department of the Environment or, if nuclear weapons were involved, when they become the responsibility of the Ministry of Defence. To me that sounds very confusing. I could give other examples, but I shall not weary the House by repeating them.
In that regard, I have two specific questions for my noble friend. When recommendations are made by an inquiry as part of the Government's response to a particular disaster, what mechanism exists for ensuring that those recommendations are acted upon? Is there some co-ordinating body which enforces them? To the best of my knowledge, neither the civil contingencies unit in the Cabinet Office nor any other bodies have the responsibility for oversight and co-ordination. I should be most grateful if my noble friend could reassure me on that point.
I turn briefly to the question of funding, which also has been referred to. The noble Baroness, Lady Hamwee, drew attention to the very substantial reductions in cash terms that are to be made over the next few years as the Government reduce the total emergency planning funding even further. I regard that as a particularly depressing piece of news although those involved have been aware of it for some time.
It is all very well to talk of a peace dividend as many do, but as my noble friend himself acknowledged, we live in particularly uncertain times. We live in uncertain times not only from a strategic point of view, but also because of the way in which we find ourselves open to the sort of emergencies which inevitably and sadly occur from time to time. It was only last year that the tragic accident in Amsterdam
1142
provided us with an example, just across the Channel, of the sort of tragedy that can befall people literally out of the blue. Therefore, the responsibility of trying to transfer some of the funding in the way that has been suggested—that is, away from what was essentially post-war and militarily derived expenditure on civil defence towards the "all hazards" approach with which my noble friend Lord Renton indoctrinated me several years ago when I took over at the Home Office from my noble friend Lord Elton —weighs heavily on local authorities and others. I hope that some way can be found for those dealing with the emergencies to benefit from the funds which until now have been available solely for civil defence.
Lord Renton: My Lords, I am grateful to my noble friend Lord Glenarthur for enabling me to shorten my speech in some respects, especially with regard to what he said about funding. I am also grateful, for once, to the noble Lord, Lord McIntosh, for the same reason, because of what he said about the legal position. I need not speak for as long as I had feared. Peacetime and wartime emergencies are now acknowledged to have much in common. They overlap. Preparations for dealing with them overlap by roughly two-thirds. One must not try to be too mathematical, but they overlap by more than a half.
The most damaging of peacetime and wartime hazards is nuclear fall-out, as Chernobyl showed us. It is the most damaging, the most widespread and the most difficult of all nuclear hazards with which to deal when we are trying to protect our people. I must ask my noble friend the Minister this first question: if there were another Chernobyl incident—assuming that it was a peacetime one—on the Continent, is he sure that we should not be taken by surprise and that we would have the facilities to deal with it immediately and on a wide scale?
The legal position is of course utterly absurd. However, I am relieved to know that it will be reviewed, if I have understood my noble friend the Minister correctly. A review is long overdue. As to the regulations, as the noble Lord, Lord McIntosh, said, we have no option but to accept them. They have already been approved in another place. I must ask my noble friend one more necessary and relevant question that arises from the Civil Protection in Peacetime Act 1986 which I had the honour of piloting through your Lordships' House. That Act gave power for civil defence funds to be used to prepare for peacetime emergencies. I should be grateful if my noble friend would tell us how much money has been used under that Act in the latest year for which figures are available and for what preparations they have been used. If it is possible to say, I should be interested to know, as I believe would other noble Lords, which type of local authorities have mostly taken advantage of it. Is it the metropolitan authorities and the urban authorities in London, or has it been out in the country where there has so often been better preparation for emergencies than we find in the urban areas?
People expect the Government and local authorities to protect them against disasters in peacetime and wartime. That is at least as important to the people as

1143
the greater relief of poverty and the provision of better education. If we are thinking in those terms because of the necessary financial approach, we should realise that the people expect to be protected and to have their moneys spent on their protection.
Finally, perhaps I may pay a tribute to my noble friend the Minister because he has had these responsibilities for some years. I should think that he has sometimes had a tremendous battle behind the scenes. I hope that in future he will receive the support inside Whitehall that he deserves and that is needed.
8.15 p.m.
Earl Ferrers: My Lords, I am grateful to your Lordships for the welcome, so far as it goes, given to the regulations. There is no doubt that everyone is concerned, particularly more recently, about disasters that can occur across the world and in our own country. I understand my noble friend Lord Renton when he says that people expect to be protected in peacetime and in wartime. They do, but they also expect to be educated, to have facilities provided by the NHS, to have houses and to have many other things. The difficulties that all governments face is to ensure that they have as much as they reasonably can have without the Government running foul of their economics. While I understand the great desire to ensure that plenty of money is aimed at these objectives, all objectives have to be considered within the total parameter of government spending.
I agree with a great deal of what your Lordships have said about civil defence being our concern in the past. When I first took over responsibility in the Home Office, the great aim was to encourage local authorities to deal with civil defence and to protect, as my noble friend Lord Renton said, the people for whom they were responsible against the possible result of nuclear fall-out. We now see a great change. We are now aiming more at peacetime disasters, notwithstanding the fact that other disasters can occur. We as a country have to prepare ourselves, and local authorities have to prepare themselves, to deal with any disaster, whenever it occurs. One can never be sufficiently satisfied that whatever disaster occurs we shall be able to cope because one never knows what disaster is around the corner or what form it will take.
All noble Lords have said that they wished the legislation could be updated and that civil emergencies did not just, as it were, ride on the back of civil defence regulations. I agree that there is a strong argument in favour of that approach. There is a credible argument for producing legislation which would combine the needs of both wartime and peacetime. While the Government do not rule out the possibility of legislation in the longer term, there are obvious difficulties in introducing legislation which would affect the duties of local authorities at a time when local government organisation itself is in prospect.
The Government do not think that the time is right to introduce such legislation, although I understand its desirability. A great deal can be done within the existing legislation. We believe that this is probably the best thing to do for the time being, while we of course do not rule out the possibility of introducing
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legislation at a later date. The changes I have described will bear substantially on the arrangements for civil defence.
The noble Lord, Lord McIntosh, asked about the position of local authorities which sold various pieces of capital equipment and lost a pound of grant for every pound raised by the sale. Officials are looking at ways in which local authorities can retain any income generated, and we shall be making a further announcement on that subject shortly.
The noble Baroness, Lady Hamwee, said that she was keen to see everything devolved to the locality. But she then said that we should have a patchwork of standards and planning and that the different local authorities will produce plans which are not common.
Baroness Hamwee: My Lords, I am sorry to interrupt the noble Earl and I thank him for giving way. I said—and I hope that the record bears this out—that, while I believe that local government is best carried out at the most local level, there are matters which require a strategic approach and I believe that this is one of them.
Earl Ferrers: My Lords, I am sorry if I misunderstood the noble Baroness and I apologise to her. She has a valid point. Local authorities are responsible for dealing with such matters as housing, burying people and so on. They must have the responsibility for planning. We wish to see that that planning is adequately and properly co-ordinated.
The noble Baroness was surprised to hear me say that the responsibilities have lessened. Of course they have lessened because we have removed all the planning duties which were in the 1983 regulations. The noble Baroness asked also what was the response of the other emergency services such as the police. The response has been a general welcome. The emergency services were consulted in England, Scotland and Wales.
The noble Baroness questioned also what were the civil defence purposes. Civil defence includes any measures not amounting to actual combat for:
"affording defence against any form of hostile attack by a foreign power or for depriving any form of hostile attack by a foreign power of the whole or part of its effect".
That is a quotation from Section 9 of the Civil Defence Act 1948.
My noble friend Lord Glenarthur was concerned that the powers and duties were fragmented, which was similar to the points made by the noble Baroness, Lady Hamwee, and my noble friend gave some examples. He wondered how all these matters would be co-ordinated. That was addressed by the civil emergencies adviser, Mr. Brook, and he has issued a document called Dealing with Disasters. That has been greatly welcomed by local authorities and deals with that very point. We hope that there will be co-ordination of effort by local authorities, all of which will receive a copy of that guidance.
My noble friend Lord Renton asked whether I was convinced that, if there were another Chernobyl, we should not be taken by surprise. The Chernobyl experience was terrible and one hopes that it will not occur again. However, the Department of the

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Environment has set up a radiation incident monitoring network which has been improved considerably since Chernobyl.
My noble friend asked also about the Civil Protection in Peacetime Act, how much money had been used and which local authorities had made use of it. I cannot give my noble friend those answers because local authorities do not have to provide that information. Therefore, I am sorry that I cannot be more forthcoming.
I hope that your Lordships will now be good enough to approve the order and I commend it to the House.
On Question, Motion agreed to.

Civil Defence (General Local Authority Functions) Regulations 1993
8.25 p.m.
Earl Ferrers: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
Moved, That the draft regulations laid before the House on the 18th May be approved [31st Report from the Joint Committee].—(Earl Ferrers.)
On Question, Motion agreed to.

Railways Bill
8.26 p.m.
Viscount Goschen: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Viscount Goschen.)
Lord Clinton-Davis: My Lords, on that Motion, I wonder whether the Minister has had an opportunity to analyse the effects of the vote which was taken shortly before the dinner break on any other clauses and amendments which we may be due to consider this evening.
The Earl of Caithness: My Lords, the situation is as I described it immediately after the vote. We shall proceed with the Committee stage, taking the amendments as they come. We shall see how it goes. The Bill is amended by your Lordships and we shall proceed with the other amendments.
On Question, Motion agreed to.
House again in Committee on Clause 22.
Clause 22, as amended, agreed to.
Clause 23 [Invitations to tender for franchises]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 46D:
Page 25, line 2, after ("shall") insert ("subject to subsection (3A) below").
The noble Lord said: In moving this amendment I shall speak also to Amendment No. 47ZA. The purpose of the amendments is to impose on the franchising director duties in relation to the invitation of bids for franchises, the selection of the successful franchisee and the publication of the reasons for his choice.
The Bill as it is drafted is extremely imprecise. It gives very little detail as regards the requirements which the franchising director is expected to follow in pursuing the franchising process. In Clause 23 the regulator is required to be consulted on the list of people to whom the invitation to tender should be sent. I find that rather odd. As I understand it, according to the Minister the franchising director determines to whom the invitations are to be issued. Does that have the effect in practice of excluding others who wish to tender, other than those who happen to meet with the support of the regulator and the franchising director? In other words, is that exclusive to them?
In any event, if it is open to others, is not the position prejudged because the franchising director, in consultation with the regulator, would have made a determination in his own mind as to who is suitable in advance of the consideration of others?
Then again, if that process is to be followed—and this is a point to which I referred the Minister privately and gave him notice that I should raise the matter—does that not offend Article 85 of the competition articles of the treaty? What is happening is that the franchising director and the regulator are making a judgment in advance. It could well be that undertakings—not only from outside the United Kingdom but also within it—could claim that they are not being given a proper opportunity to tender and that proper consideration has not been given to their tender. Consequently, that is a distortion of competition within the rules.
The provisions of Clause 23 represent a marked contrast with those of the Transport Act 1985, because that imposes considerable constraints on the way in which local authorities are expected to carry out the tendering process for subsidised bus services. Consequently, the amendments which are now put forward are based very much on the tendering provisions of the 1985 Act.
In terms of inviting bids, the amendments require the franchising director to bring an invitation to tender to the attention of interested parties and to send it individually to anyone who has requested such an invitation. The amendments would require the franchising director to base his choice of franchisee on,
"the most effective and economic application of the funds".
They would also require him to publish information on the tenders submitted and his reason for accepting the successful bid.
It is quite clear—indeed, there is no question about it —that under the Government's proposals the franchising system is of crucial importance. It will be of importance financially for rail operators, PTAs and of course the Government. In terms of policy it will be a determining influence on the shape and quality of rail services. Therefore, it follows that it is essential that it should be carried out in a properly regulated and transparent way. I simply do not believe that the Bill as drafted provides for that. The amendments would fill in the gaps.
When dealing with subsection (2)—I have dealt with the principle here—the provision states:

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"The Franchising Director shall prepare any such invitation … and shall issue that invitation to such persons as he may, after consultation with the Regulator, think fit".
What criteria will they apply? Moreover, does that really represent a proper way of proceeding, or even of complying with the Government's intentions in that regard?
Under subsection (3) the franchisee has to be in "an appropriate financial position" and to have "managerial competence". But how that is judged is open to doubt. For example, is it "managerial competence" in the operation of railways? Alternatively, is it just managerial competence? Further, what about the term "a suitable person" used in respect of the franchisee? What does that mean? Is it the sort of fit-and-proper-person procedure that is applied in relation to insurance legislation and regulations? Who is a suitable person? I do not think that we are helped either by what is in the Bill or what is in the Notes on Clauses which the Minister very kindly provided. I invite the Minister to respond to those points. I beg to move.
8.30 p.m.
The Earl of Caithness: I believe that the issues raised by the noble Lord, Lord Clinton-Davis, in moving the amendment show that there is little, if anything, between him and the Government. However, as I shall explain, I do not believe that it is necessary for us to accept the amendment in order to achieve the noble Lord's aims.
The first subsection of the noble Lord's amendment would require the franchising director to issue invitations to tender in a manner which he considers appropriate for bringing the competition to the attention of persons who may be interested, and in particular to all persons who have signified to him in writing that they wish to receive the invitation. The franchising director will be keen to attract the maximum response to franchise competitions. He will know, as do we, that the way to get good bids that reflect good value for money for the taxpayer is to have effective competition. I do not believe that we need to put the franchising director under a statutory duty in that regard. In so far as we want to guide the tendering process, we can do so through the objectives and guidance which the Secretary of State will set for the franchising director.
There is another important point here. We envisage franchise competitions being held broadly in three stages—pre-qualification, formal tender and negotiation and award. Members of the Committee will be aware that it is common practice to employ such a process to whittle down the number of prospective tenderers for a contract to a manageable number. in pre-qualification, prospective bidders are provided with an information memorandum sufficiently detailed for them to crystallise their interest, and those assessing pre-qualification returns are able to assess the weight and strengths of all the bidders across a range of areas: for example, have they the financial standing, management experience and resources to be serious players?
The process makes sense for those judging the competition and for the bidders because submitting a
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detailed tender is a time-consuming and expensive business. If one stands little chance of winning, it is better to know on the first cut. It also ensures that all prospective bidders have the opportunity to register their interest. A statutory duty phrased as in the noble Lord's amendment would not admit of that first pre-qualification stage.
Next there is the question of how the franchising director shall decide the outcome of a franchise competition. The noble Lord's amendment suggests that his grounds should be the most effective and economic application of the funds at his disposal for the payment of grant. I hope none of us would quibble with the proposal that they should be the grounds on which a franchise should be awarded. But I would draw the noble Lord's attention to the general duty in Clause 5 which already addresses the point. Although the duty in Clause 5 is framed in terms of the payments he makes, the duty clearly covers the agreements that the franchising director enters into, as they will dictate the payments he makes. We must ensure that the competition process is in accordance with EC rules.. I take the point that the noble Lord made on that issue. As I said before—and will doubtless say again—it is important that we should comply with EC rules.
The noble Lord also suggests that the franchising director should be under a duty to consult with the regulator before making an award. He may wish to do so; he may need to do so. Certainly in assessing the other passenger railway services on offer the franchising director will need to consult a number of people, including Railtrack. But I do not see any need for him to be under a statutory duty to consult the regulator, who will not be in a position to advise on what must be a careful judgment by the franchising director of the needs of passengers for railway services in the light of the budgetary resources available to him.
Finally, we come to the provisions in the amendment dealing with the provision of information by the franchising director. Perhaps I may address the, noble Lord's concerns more generally. Under the provisions of Clauses 65 and 67, the franchising director will be required to keep a register and publish an annual report. The franchising director's progress in granting franchises and holding competitions will be covered in public reports, and, indeed, the provisions of the franchise agreements he enters into will, subject to the necessary protection afforded by Clause 65(4), be open to public scrutiny as part of the franchising director's register. I am sure that Members of the Committee will understand that no tender competition can ever be held wholly in the public domain. Matters must be considered and discussed which are commercially confidential to those concerned.
Let us consider the possibility of a franchise being awarded to company A on the grounds that company B had bid on the basis of an innovative idea which the franchising director did not consider appropriate to the franchise in question but which would be applicable elsewhere. Should he be obliged to publish

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his reasons and thus reveal the proposal which might otherwise have stood company B in good stead for winning a future competition? I think not.
The noble Lord is concerned that, in awarding franchises, the franchising director must act in a responsible manner, as must any public body charged with spending money on behalf of the taxpayer. That is why the actions of public bodies, including the franchising director, are subject to investigation by the NAO and the PAC. I hope that I have reassured the noble Lord on the points that he raised.
Lord Clinton-Davis: I thank the Minister for his very full reply. I thank him in particular for his agreement that the provision must accord with European Community obligations. However, the question is, does it? I hope that the Minister will have an opportunity to return to the matter on a later occasion, but not tonight, when we may wish to raise such issues. Indeed, I give him notice that there are other matters in relation to other clauses that I may wish to raise in that context.
However, I feel that the vagueness of the criteria could lead to major problems and, indeed, even to judicial review, especially over the phrase "a suitable person". But, having said that, I shall read the Minister's response carefully and reserve the right to return to the matter. I believe the Minister and I are very much in accord about the principles involved. It is therefore a matter of whether he or I have got it right; or, alternatively, whether there is room for compromise between the two of us as regards the way in which we have dealt with the matter. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved Amendment No. 47:
Page 25, line 3, at end insert:
("( ) Before issuing any invitation to tender, the Franchising Director shall consult the Central Committee and every consultative committee likely to be affected by the proposed franchise agreement regarding the terms and conditions to be included in the draft franchise contract to which the invitation to tender relates.").
The noble Baroness said: We have now arrived at the point at which we finished late on Thursday evening when we were discussing consultative committees and how far they will be consulted. Amendment No. 47 tries to ensure that, before issuing an invitation to tender for a franchise, the franchising director is obliged to consult the statutory bodies which have been set up under the Bill to represent rail users about the terms and conditions that are to be included in the draft franchise contract.
The proposed franchising system is an important element of this Bill and the new regulatory framework for the railways. The provisions of the franchise agreements will have a direct impact on passengers, such as, for example, the minimum service specifications, the quality of service, the changes to service, the fares, the assets and any liabilities to passengers. Indeed, under Clause 69(8) consultative committees can be ordered by the franchising director to investigate whether a franchise operator is meeting the standards set for the provision of the services.
Surely therefore it must be right that, before issuing any invitation to tender, the franchising director should consult the statutory bodies which have been set up under the Bill to represent rail users on the terms and conditions of the draft franchise contract. After the response we received on Thursday I am not hopeful of getting anything much more favourable tonight. However, I am always ready to be surprised. Can the Minister tell us at this stage what directions will be given to the franchising director? Will any direction be given to him on how he should work with the consultative committees? Will there be a code of practice as to whom he should consult and when; and if that kind of document is to be produced, will it be possible for Members of this Chamber to see a copy of it before the Bill leaves us? I beg to move.
Lord Tordoff: I believe that it is the intention that we should discuss with this amendment Amendments Nos. 57D and 57F. The first amendment stands in my name and the second in the name of the noble Lord, Lord Teviot. First of all, I entirely support what the noble Baroness has said. The franchising director needs to have as much information and guidance as he can possibly get in enabling him to reach the decisions he must reach in a difficult situation. Certainly the consultative committees are important in that respect.
I wish to refer briefly to Amendment No. 57D. In those cases where a service has fallen in, it is important that the franchising director should not unilaterally decide whether a franchised service should be replaced. It would be a great temptation to say, "It has fallen in and therefore it is not needed". But in terms of the community in the area and the network as a whole it is important that the franchising director should seek information as widely as he can. Clearly where there is the possibility of an open access operator providing a parallel service it might still be necessary for a franchised service to be replaced. At the very least it is necessary for the consultative committees to be consulted before the franchising director reaches his conclusion. That is what Amendment No. 57D is intended to provide.
8.45 p.m.
Lord Teviot: At last this amendment has arisen. It has been put into a siding on this Railways Bill, if a siding existed. As it has been delayed, passengers could have consulted the Passenger's Charter and demanded free drinks at the bar. However, I shall leave that aside as I intend to make my serious speech on Amendment No. 57F.
As has been mentioned by the noble Baroness, Lady Stedman, and the noble Lord, Lord Tordoff, franchising is at the heart of the proposed transfer of rail operations to the private sector. As has been widely recognised, the present method of privatisation is quite different from earlier ones. This means that the real instrument of privatisation is not the Railways Bill itself but the individual franchise agreements to be entered into between the franchising director and the rail operators, to be known as franchisees. I do not know what our school masters would make of the word "franchisees". I understand it is expected that

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there will be around 30 of these agreements. This is perhaps a modest number when one is told that there will eventually be many thousands of different agreements under the new system, but the franchise agreements are certainly the most important and likely to provide the most work for lawyers and officials.
Some safeguards in the franchise agreements will be required under the Bill but the vast bulk of the clauses will be open to negotiation, including the services to be franchised, the minimum service required to be run, the investment to be made and the sum of money to be paid by the franchisee or, more probably, to be received by the franchisee by way of grant.
The purpose of my amendment is to ensure consultation by the franchising director before an agreement is entered into. I believe the Government accept the principle of consultation but I consider it essential for the Bill itself to provide for it. That is what I am putting forward. The organisations to be consulted are the rail users' consultative committees in the areas where the franchised services would run. The amendment would require consultation through the central committee, which will then refer the proposed franchise agreement to the relevant local committee. The local committee will then involve rail user groups in its area. The function of the latter is extremely important. The rail user groups now play a significant and constructive role in representing the interests of passengers in their area and at present work closely with British Ran. I understand that there are now over 200 such groups in the country, three of whom were invited to give evidence to the Transport Select Committee. These groups, who are well respected in their areas, are the Cotswold Line Promotion Group, the Friends of the Settle-Carlisle Line and the Southend Rail Travellers Association. The Committee will appreciate that those are varied groups from different parts of the country.
The object of consultation is to enable the franchising director to obtain the views of those most directly interested in the franchised service. I recognise that the ultimate decision must rest with the franchising director but I consider it right to ask him to be satisfied in his own mind that when he grants a franchise this will be beneficial for rail users.
There is considerable concern that prospective franchisees will not have adequate financial or technical resources or may not be prepared to provide a comprehensive service. The process of consultation will enable the franchising director to be aware of local needs and local opinion. The only problem I can see is that the franchising process must not be unduly prolonged. The amendment I am putting forward therefore proposes a strict time limit for the consultation period.
Viscount Goschen: Amendment No. 47 would require the relevant committees to be consulted on the terms and conditions of a proposed franchise contract before invitations to tender for a particular franchise are invited. While we accept the spirit of this amendment, we do not think it is necessary to make this a statutory requirement. We have already given a commitment that the franchising director will consult rail user groups, in particular the RUCCs. The
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franchising director will be able, through these consultations, to assess passengers' requirements. I can assure the noble Baroness, Lady Stedman, that the instructions and guidance which the Secretary of State will give to the franchising director will cover the need to consult the consultative committees and others before awarding a franchise.
Amendment No. 57F covers similar ground but gives the consultative committees a much greater role by way of commenting on a proposed franchise agreement. We sympathise with the thinking behind this amendment as expressed by my noble friend Lord Teviot but again I cannot accept it. As I said, the franchising director will be able to consult the consultative committees and other interested rail-user groups. The mechanism for doing so can be left to the franchising director; for instance, it may not always be necessary to consult via the central committee.
The franchising director will of course take into account the views that he has solicited from the committees and other groups. We do not believe that this need be put on the face of the Bill. Equally. the franchising director will not award a franchise if he thinks that that will not be in the interests of the passengers using those services. While we are very keen to see the private sector provide franchised services, it is not a question of franchise at any price. If the franchising director believes that BR will provide a better quality of service than a franchisee, taking into account value for money, he will not award the franchise agreement.
Amendment No. 57D would give the consultative committees a role in deciding whether the franchising director should secure the provision of services in the event that a franchise agreement comes to an end, or is terminated, and no further agreement has been entered into. I can assure Members of the Committee that the relevant provision—Clause 26(2) (a)—has no sinister intent. It simply recognises the possibility that as "open access" passenger operators enter the industry it may become unnecessary for the franchising director to secure the provision of certain services because adequate alternative services—provided by non-franchise operators—already exist. It is worth adding that the franchising director's judgment. of what constitutes adequate alternative provision of railway passenger services can be subject to judicial review should anyone believe that he is using this provision to avoid his legitimate duty.
In the light of that explanation I ask the noble Baroness to withdraw her amendment.
Lord Tordoff: Before the noble Baroness decides what to do with the amendment I must say that judicial review is using a steamhammer to crack a nut. The idea that that should be the only recourse is a little bizarre.
The Minister suggested that certain points of guidance would be drawn hp for the franchising director. Is there a possibility of those being put on the record before the Bill passes through the rest of its stages? That would be of great help. One does not want to put provisions on to the face of Bill which are totally unnecessary. However, if there is to be guidance by which the franchising director is intended

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to operate—and I hope that that information is passing rapidly to the Government Front Bench—it would be most helpful if Members of the Committee could see those guidelines before we reach the final stage.
Viscount Goschen: I thank the noble Lord, Lord Tordoff, for those remarks. Obviously, judicial review is for use in the ultimate eventuality. We consider that this is a decision for the franchising director. The objectives and guidance issued to the franchising director by the Secretary of State will cover his liaison with the statutory consumer committees. A draft is in the Library.
Lord Ewing of Kirkford: The noble Earl, Lord Caithness, has today circulated a letter which states that it is the Government's intention to table amendments at a later stage of the Bill to extend the role of the consultative committees and also to accept one or two amendments on the Marshalled List in the name of the noble Baroness, Lady Stedman. Surely the Government's position is clearer than has been explained and goes some way towards meeting the point outlined by the noble Lord, Lord Tordoff. On a quick perusal the letter appears to be most helpful. It would be even more helpful if at this stage we could have on the record that it is the Government's intention to table amendments to strengthen the role of the consultative committees as regards the relationship between the franchising director and those committees.
Lord Tordoff: Before the Minister responds perhaps I may point out that the letter from the noble Earl was pushed into my hand as I was about to stand up and speak to the amendment. Clearly, I have not had time to digest its contents but if it is an answer to my question I am grateful.
Viscount Goschen: The letter was for information only. I have indicated the Government's present position and the letter relates to tabled amendments with which we shall deal later.
Baroness Stedman: I too am grateful for the letter which I have not had time to read and digest. However, I notice that the Minister is prepared to accept some of my amendments. In the light of that and the Minister's explanation—
Lord Clinton-Davis: Before the noble Baroness withdraws the amendment, a specific point was made by the noble Lord, Lord Tordoff, inviting the Government to ensure that the guidance would be available for consideration by this Committee at a later stage. I detected that the Government were about to say "Yes" to that, but I do not believe that they did.
Viscount Goschen: I thought that I had mentioned that a draft copy had been placed in the Library.
Baroness Stedman: In the light of the Minister's comments and the letter, which looks as though it will be helpful, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 47ZA not moved.]
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Clause 23 agreed to.
Clause 24 [Transfer of franchise assets and shares]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 47A:
Page 25, line 42, at end insert:
("( ) In England and Wales, no execution or other legal process may be commenced or continued, and no distress may be levied, against any property which is, or rights which are, franchise assets in the case of any franchise agreement.").
The noble Earl said: In speaking to Amendment No. 47A, I shall speak also to Amendment No. 47B. Their purpose is to prevent property or rights which are designated as franchise assets under the provisions of this clause being seized by judgment creditors. Franchise assets will be those items—property, rights and liabilities—essential to the continued provision of a particular service. The intention is that, by designating them, the franchising director can protect their availability and provide for their smooth transfer from one franchisee to the next. Amendment No. 47A deals with the position in England and Wales and Amendment No. 47B provides the equivalent provision for Scotland.
Clause 24 is framed in terms of assets being designated at the commencement of a franchise within the franchise agreement or during the life of the franchise either in accordance with the provisions for so doing in the franchise agreement or by amendment to the franchise agreement. The list of assets so designated will be publicly available as part of the franchise agreement. A franchisee's creditors will therefore be able to check what if any property has been designated and will therefore be protected from seizure.
Continuity of service is a theme running throughout our proposals. The protection provided by these amendments is a further example of this and we believe that it is necessary in order to safeguard the uninterrupted operation of passenger rail services. I commend the amendments to the Committee. I beg to move.
Lord Tordoff: It would be churlish not to say that we are grateful to the Government for taking account of the problems which we identified. Whether the amendment deals with the point is beyond my competence to say but I believe the intention is right.
On Question, amendment agreed to.
9 p.m.
The Earl of Caithness The Earl of Caithness moved Amendment No. 47B:
Page 25, line 42, at end insert:
("( ) In Scotland, no diligence or other legal process may be carried out or continued against any property which is, or rights which are, franchise assets in the case of any franchise agreement.").
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 48:
After Clause 24, insert the following new clause:
Fares and approved discount fare schemes
(".—(1) A franchise agreement may include provision with respect to the fares to be charged for travel by means of the franchised services.
(2) Subject to the other provisions of this Act, if it appears to the Franchising Director that the interests of persons who

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use, or who are likely to use, franchised services so require, he shall ensure that the franchise agreement in question contains any such provision as he may consider necessary for the purpose of securing that any fares, or any fares of a class or description, which are to be charged are, in his opinion, reasonable in all the circumstances of the case.
(3) Every franchise agreement shall include provision requiring the franchise operator—

(a) to participate in every approved discount fare scheme,

(b) to charge fares, in cases to which such a scheme applies, at rates which are not in excess of the levels or, as the case may be, the maximum levels set by the scheme, and

(c) otherwise to comply with the requirements of every such scheme,

if and to the extent that the franchised services are services, or services of a class or description, in relation to which the approved discount fare scheme in question applies.
(4) The discount fare schemes which are to be regarded for 1 he purposes of this section as "approved" are those which are from time to time approved for the purposes of this section by the Franchising Director.
(5) In this section—
"discount fare scheme" means any scheme for enabling persons who are young, elderly or disabled to travel by railway at discounted fares, subject to compliance with such conditions (if any) as may be imposed by or under the scheme;
"discounted fare" means a lower fare than the standard fare for the journey in question;
"scheme" includes any agreement or arrangements.").
On Question, amendment agreed to.
[Amendments Nos. 48A and 48B, as amendments to Amendment No. 48, not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 48C:
After Clause 24, insert the following new clause: ("Passenger Transport Executive past investment in rail infrastructure
.—(1) Where a franchise asset, railway facility or item of rolling stock which has been the subject of investment by a PTE pursuant to an agreement made under Section 20 of the Transport Act 1968 or otherwise pursuant to its statutory functions is made the subject of a licence, facility agreement, access agreement or franchise agreement under this Part of the Act, then the Rail Regulator, Franchising Director and Secretary of State shall be under a duty in exercising their functions to take full account of such investment and ensure that the value of such investment is fully recognised in the terms of any such licence or agreement as aforesaid whether by an appropriate capital payment to the relevant PTA or PIE, cancellation of any outstanding liability on the part of the PTA or PTE in relation to it, or by provision of a proportionate share in any revenue accruing to the Rail Regulator, Franchising Director or Secretary of State, as shall be agreed with the PTE.
(2) In default of such agreement the matter shall be referred for decision to an arbitrator appointed by the President of the Law Society.").
The noble Lord said: This is an important amendment. It raises a fundamental issue concerning the investment by the PTAs in rail infrastructure, which in the past 15 years has amounted to over £600 million. That investment has been made either by underwriting the costs incurred by British Rail in servicing the capital debt on its capital expenditure or by making a direct grant to British Rail.
Under one of the proposals in the Bill most of the assets involved would pass either to Railtrack or one of the rolling stock meeting companies. However, in respect of assets which have been funded by a direct grant to British Rail, the PTA would continue to be
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responsible for paying the debt charges associated with that expenditure, which, of course, it would be quite happy to do if it still has control of the assets for the purpose of its passengers.
It is therefore essential that the passenger transport authority is not faced with a situation in which it is paying twice for the assets: that is, first through its own debt charges and, secondly, through charges which its franchisee would pay either to Railtra.ck or the rolling stock company as appropriate for the use of the assets.
The purpose of the amendment is therefore to ensure that duties are placed upon the regulator, the franchising director and the Secretary of State to ensure that when such assets are being used the expenditure incurred by the PTA is fully recognised either by taking over the liability or compensating the authority for the costs that it will continue to incur by having a lower charge for the use of the assets.
Again, this matter has been the subject of debate between officials of the department and the Association of Metropolitan Authorities. At this stage of the Bill, the important: factor is to ensure that in his response the Minister gives us some indication that he will be in favour of the amendment, even if he has to bring the provision back at a later stage. We should like to know what action he will take. I beg to move.
Lord Mountevans: I have some sympathy with the amendment which I take to be probing. I should like to widen the issue a little because although the amendment refers specifically to railway facilities—I take them to mean Railtrack items or rolling stock —and PTEs, we also have to remember that the county and district councils have some interest in the matter.
Not so long ago in this Chamber I moved a British Rail Bill. I can remember explaining to those noble Lords who were present that while the Bill was promoted by British Rail certain of the items were promoted by, for example, the West Yorkshire PTE or the Merseyside PTE. There are a number of other bodies that one can think of.
Perhaps one may consider some of the big projects going on at present. One knows that on infrastructure matters—for example, the Birmingham cross-city project—West Midlands PTE is investing some £40 million in infrastructure. In Liverpool, the Merseyside PTE is investing £33 million in a new signal control centre which relates not only to the tracks on which PTE-sponsored trains run but also to InterCity and Regional Railways service tracks.
There are other examples. However, perhaps one may consider rolling stock. We have the Leeds North-West scheme which was also covered by the Bill that I moved, although the sponsoring organisation then was in fact my noble friend's department. In that case, we have both an infrastructure and, hopefully, a rolling stock lease. We have Tyne and Wear PTE buying Pacers in the past, and Centro buying stock for the cross-city electrification, to which I have already referred. We have South Glamorgan County Council buying stock for its own venture with British Rail to reopen the Maesteg branch.

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I should like to widen the discussion a little to the counties. The counties have also invested considerably. At Second Reading my noble friend referred to what is called the Robin Hood line, running out of Nottingham, on which some £6 million, split variously between infrastructure and rolling stock, has been invested by Nottinghamshire County Council and Derbyshire County Council. Close to my own heart is a little station in Somerset called Templecombe which was closed by Dr. Beeching and reopened, quite literally by community support, 10 years ago this October. However, although the community raised a lot of the money, and Network SouthEast put forward some of it, a considerable amount of money came from Somerset County Council and from South Somerset District Council.
When such people have invested in rolling stock which will go to the leasing organisations, or in infrastructure, they feel to a certain extent that they are threatened with double jeopardy if they do not receive due credit. Let us take the Merseyside PTE-sponsored signal centre which will cost £33 million. The Merseyside PTE will eventually be paying off the capital charges. Meanwhile, it will be paying off the interest out of the PTE budget.
My noble friend Lord Carmichael stated simply that it is an important amendment. I tend to treat it as a probing amendment. I believe that some reassurances are called for here to make sure exactly what is the position in respect of the investments which have been made by the PTEs. I look forward very much to my noble friend's answer.
The Earl of Caithness: The PTAs and PTEs have done a great deal to promote the use of rail in their areas. They have supported investment in the railway network, in trains, in stations and in other track-related facilities, such as electrification. We welcome the work they have done in the past, and we want them to carry on that good work in the future. The noble Lord, Lord Carmichael, is rightly concerned to see that the PTAs' and PTEs' interests in investment, which they have supported through payments made under their Section 20 agreements with BR, are given due regard in the context of our privatisation proposals.
My right honourable friend the Minister of State for Public Transport has been in discussion with the AMA and the PTA chairmen about the treatment of past PTA/PTE investment and a further meeting is being arranged later this month. We are working on proposals which would meet the following principles: first, that the PTEs' interests in investment should be recognised so that the PTEs are not charged twice for assets whose purchase they have funded, that the continued use of investment for its intended purpose is ensured, that the PTEs have some say in the use of assets they have funded, and that the PTEs share in any development gain accruing to assets which they have funded in accordance with the existing agreement on development gain they have with BR; secondly, that there should be no hiatus in the provision of
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services; and, thirdly, that treatment of the PTEs should not make the access charging system more complex than need be.
I am pleased to say, and I hope that the noble Lord, Lord Carmichael, will agree with me, that the discussions so far have been carried out in a constructive spirit, with both sides determined to take a sensible and pragmatic approach. In that spirit I am confident that a satisfactory outcome can be achieved. Of course, we shall be able to update Members of the Committee at a later stage. I may say to my noble friend Lord Mountevans that much the same considerations apply to investment undertaken by other local authorities. We intend to take the same sensible, equitable and pragmatic approach to them too. I hope that both my noble friend Lord Mountevans and the noble Lord, Lord Carmichael, will bear with us for a little longer while the discussions continue.
Lord Carmichael of Kelvingrove: I am grateful to the noble Earl for that explanation. The contribution of the noble Lord, Lord Mountevans, was most valuable in adding to what I said. I am sure that if the PTAs are satisfied with the arrangements made with the Government, we shall be happy too. The Minister said that we would have information fairly soon. He is meeting the chairmen of the PTEs next week, I understand, and following that he will put the papers before us. Therefore, I am grateful for the help he has given and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 [Other terms and conditions of franchise agreements]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 48D:
Page 27, line 15, at end insert:
("( ) The Franchise Director shall not enter into a franchise agreement requiring him to pay any grant or make any other payment to a train operator unless he is satisfied that the level of grant or payment is less than would have been required had the Board continued to provide the railway passenger service.").
The noble Lord said: This amendment seems to me to be absolutely self-evident. The franchising director will make sure that any franchise into which he enters will be at a better level, from the public's point of view and that of the public purse, than he could have obtained from British Rail.
The franchising director will have all the facts about British Rail's costs over the years which will be historic facts after 10 or 15 years' experience of those costs. Therefore, presumably, he will be able to make a good judgment as to whether the applicant for the franchise is giving the public a better deal than the historic deal given by British Rail to the public. I shall be interested to hear the Minister's reply. I beg to move.
Lord Renton: Although the purpose behind the amendment is sound and it raises quite a good principle, I could imagine there being exceptions to it. One exception occurs to my mind at once, the only one so far. There may be a section of British Rail, an outlying branch or two, in a remote spot, which

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British Rail wished to apply to close. The franchising director may say, "I do not think we need let British Rail close it down because I could find someone who would purchase the franchise, provided he received an adequate grant". In those circumstances, the public could be deprived altogether of a service. But if a larger grant than had been received by British Rail were being paid, then the line could be kept going for the public. That is just an exception that occurs to me, and one that I believe should be borne in mind.
9.15 p.m.
The Earl of Caithness: I am glad to know that the noble Lord, Lord Carmichael, is just as, concerned about value for money as I am. Any fear that the franchising director may be tempted to ignore BR's performance when judging bids from prospective franchisees, I cart assure him, is entirely misplaced. We have made it clear that the franchising director will take the cost of BR continuing to provide a service fully into account when considering the bids of prospective franchisees. We discussed that at some length on the first amendment today. As I explained then, BR will be running each of the groups of services to be franchised in a shadow franchise. The information generated by shadow running will help the franchising director to assess how much it would cost if BR continued to run the services. The franchising director will, however, be looking at BR's overall track record when considering the performance of a shadow franchise, rather than at a bid underwritten by the taxpayer.
We have no desire to spend taxpayers' money if there is no benefit to be won. I am sure that every Member of the Committee is well aware of the powers of the Public Accounts Committee and the National Audit Off.-e. The franchising director will certainly be aware that he may be called before the PAC or investigated by the NAO if he is thought to be spending public money in a way which is wasteful. If the franchising director does not believe that any of the bids he has received represent good value for money, he will not grant a franchise and BR will continue to run the service. Again, that is what I said earlier.
Securing value for money is not just about finding the cheapest operator to provide services. It is also about the quality of service on offer to the passenger and it is about transferring risk from the taxpayer wherever possible. The franchising director will need to take all these factors into account. I believe it is wrong to suggest that the franchising director cannot award a franchise to a private sector bidder unless it is going to cost less than it would cost BR to continue running the services.
I am grateful for what my noble friend Lord Renton had to say on the amendment and for the example that he gave that came readily to his mind where the franchising director needs to consider all the factors involved in providing a service. Nothing that we discussed earlier, or the amendment to which the Committee agreed, affects the comments that I have made on this amendment.
Lord Carmichael of Kelvingrove: Again, I am most grateful to the Minister for his very full reply. I am also grateful to the noble Lord who raised the question of the branch line. It is not surprising to those of us who knew him—sharp in these ways as the noble Lord was—in the Commons that he picked on the point. It is one that I had personally not thought of. However, the Minister's reply went a long way towards solving even that very interesting point.
The Minister gave a long reply. It was enough to satisfy me that the Minister has recognised that I am as Scots as he is, and as anxious as he is to save money. Therefore I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Caithness The Earl of Caithness moved Amendment No. 49:
Page 27, line 28, leave out subsection (4).
On Question, amendment agreed to.
Lord Rix Lord Rix had given notice of his intention to move Amendment No. 50:
Page 27, line 29, at end insert:
("( ) The Franchising Director shall secure t he continuation of existing provision for discount schemes for disabled people and those accompanying such people subject to such improvements as shall from time to time be negotiated.").
The noble Lord said: This matter was referred to in the debate last Thursday. The amendment seeks to assure those in possession of a disabled person's Railcard that the value of the card will be at least retained at the current level, subject to such improvements as shall be negotiated from time to time, and that the scheme shall also permit, as currently, a person accompanying a disabled rail passenger to travel at the same concessionary fare as the disabled person. Otherwise, yet another extra cost of disability will be faced by those already in far too many cases on low incomes.
I would welcome, as would the Disability Consortium (a group of voluntary associations representing disabled people, disabled people themselves being represented on those associations) an assurance that people will be able to use the disabled person's Railcard to purchase through tickets. It will be immensely difficult for people with disabilities to attempt to locate ticket booths in various different stations en route.
This afternoon I received a letter from the noble Earl, Lord Caithness, saying that the Government were prepared to deal with the matter by giving instructions to the franchising director instead of dealing with it in the Bill. The noble Earl sent a copy of the same letter to the noble Lord, Lord Renton, with whom I had a brief discussion. We both feel that it would be better if the matter were dealt with in the Bill. However, the Minister has kindly suggested that we should meet him to discuss the matter further and we should like to take advantage of his offer. With that in mind I shall not move the amendment.
[Amendment No. 50 not moved.]
Baroness Flather Baroness Flather moved Amendment No. 50A:
Page 27, line 29, at end insert:
("( ) Any franchisee or licensee to provide the railway service shall include conditions requiring the franchisee/licence holder—

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(a) to make arrangements for promoting, in relation to employment by him, equality of opportunity between men and women and between persons of different racial groups:

(b) to review these arrangements from time to time and

(c) to provide a statement to the Franchising Director as required of the action taken to give effect to such conditions.").

The noble Baroness said: I should like to draw the Committee's attention to matters relating to employment on the railways and ethnic minorities. A significant proportion of BR's current workforce is of ethnic minority origin. Over the past year BR, together with the Commission for Racial Equality, has been working to reduce discrimination by putting in place policies and practices to ensure equality of opportunity. British Rail has made a commitment to take action to improve opportunities for ethnic minority groups, particularly in access to jobs such as that of train driver where at present there are very few black people
A framework is being put in place but it has yet to make an impact on the management of the business. Recent reports of racial discrimination such as that concerning four Asian train drivers highlighted in the Independent on Sunday of 27th June, suggest that there is still a long way to go before equality of opportunity becomes a practical reality.
Although under the proposed new arrangements some rail services will continue to be run by the current organisation, others will be run by private businesses, through franchise or licence arrangements. But because equal opportunities policies have not yet become an integral part of management practice in BR, there is a clear risk that inequality will persist when the operation is devolved and dispersed to several smaller businesses. That is why I believe it is essential to have in place a specific framework which will help to ensure that the new franchisees have a clear responsibility for implementing the policies which have already been laid down by BR.
We know from many years of experience that it is no good relying on the general duties against discrimination which the law imposes on employers. That is why 10 years ago Parliament approved the race relations code of practice. Despite that code and the guidance issued by the CRE as well as last year the excellent "Ten-Point Plan" issued by the Department of Employment, many employers have done very little to ensure that there is equal opportunity within their workforce. Public services have a special responsibility for acting fairly. Their customers are from all sections of the community. Their workforces should also reflect that at all levels.
We cannot leave it just to the good intentions of the new managers. We must make sure that the present policies of BR are carried out. The best way to do that is to include in the Bill a requirement as proposed in this amendment.
Requirements of this kind are not new. They have proved to be an important safeguard. Since 1976, local authorities have had a general duty to promote racial equality. Training and Enterprise Councils must make sure that their functions are carried out so as to
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provide equal opportunities. Broadcasting licence holders too must show how they are providing equal opportunities.
It is recognised that employers in the public services must set an example. A significant proportion of the current workforce is likely to be redeployed in the newly constituted businesses and the current organisation is expected to play a leading and important role in developing a framework of guiding principles and personnel practices, including the equal opportunities policy.
I urge my noble friend the Minister to provide that protection by making suitable provision in the Bill and accepting this amendment. I beg to move.
Lord Clinton-Davis: I rise briefly to support what has been urged on the Minister by his noble friend Lady Flather. The fact is that even today all is not as good as it should be in terms of the provision of jobs with British Rail. The situation could be infinitely worse if the position arises where a large number of new employers come on to the scene who have no specific experience in the field of ensuring proper access to jobs.
As the noble Baroness said, there are good precedents to be followed. I hope that her arguments commend themselves to the Minister and that we hear a positive reply.
Lord Redesdale: From these Benches I should like to say that one of the problems we have with the Bill is that in cutting back on unit costs any franchisee will look at labour costs as being areas where money might be saved. With a large-scale reduction in manpower it would not be right for provision not to be made as indicated in this sensible amendment; that is, to ensure that equal opportunities exist in future rail services.
The Earl of Caithness: I fully understand the anxiety mentioned by my noble friend Lady Flather when she so ably moved the amendment. I do not disagree with her. The Government want to see the promotion of equal opportunities. However, while Government policy is to encourage equal opportunities for the sexes, ethnic minorities and disabled people, we do not see why the railway industry specifically should be subject to such statutory obligations as the amendment envisages.
In the case of railway operations we see a progressive devolution from the public to the private sector, with BR's existing workforce transferring to new employers. That workforce is already multi-racial and BR already operates a policy of equality of opportunity for men and women. BR has had an equal opportunities officer since 1985 and in recent years have introduced a number of schemes, including equality targets for recruitment, ethnic monitoring and return to work schemes for parents with young children. I would hope and expect BR and its successors to build on that good record.
However, I remind my noble friend that it would be possible for the Secretary of State to require the franchising director, through the objectives, instructions and guidance that he will issue, to impose anti-discrimination requirements on franchisees. That

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gives the safeguard that my noble friend needs. Instead of writing it on the face of the Bill and singling out the railway industry, it will be possible for my right honourable friend the Secretary of State to give the guidance to the franchising director if it is felt at any stage that the aims we both wish to see—that is, of equal opportunities—are not being fulfilled in the spirit that we would hope.
Lord Clinton-Davis: But will the Secretary of State exercise those powers? We want to hear that the guidance will deal specifically with those matters.
The noble Earl said that the railway industry was being singled out in this matter. But the noble Baroness pointed out in her opening speech that provisions existed in relation to local authorities, the broadcasting licence holders and the training and enterprise councils. The Minister conceded that the practices to which he has given encouragement and which have been at least partially undertaken by British Rail, are commendable. That being the case, and as we are possibly going to be in a new scenario with a large number of other companies conceivably entering the scene, can he not say to the Committee, at least tonight, that he will give favourable consideration to the Secretary of State exercising his powers under the policy guidance in order to give a clear indication that the Government want these ideas to be followed by the new franchisees?
9.30 p.m.
The Earl of Caithness: I have listened with great care to the expertise of my noble friend and to the words of the noble Lord, Lord Clinton-Davis. I would like to talk to my right honourable friend the Secretary of State about what has been said and about the concerns of the Committee.
Baroness Flather: I am grateful to my noble friend For his remarks, which are somewhat encouraging but not as encouraging as I should have liked. As has already been pointed out, railways are not being singled out. There have been other examples. The noble Lord, Lord Clinton-Davis, pointed those out.
The other point I should like to take up is the question of British Rail already operating a policy. I made it clear that the policy is not totally successful and in place yet. It is on its way but is not there. Like British Rail, it is getting there, but has not yet arrived. Once the dispersal takes place it may become even more diffused through being divided up into small sections. I worry about that aspect.
It seems to me that a great deal of ground will have to be covered by the guidance that will be issued. Quite a number of issues that have been aired in the Chamber will be covered by the guidance. I would feel a great deal better if one could have sight of specific aspects which will be covered by the guidance. If there is to be guidance on equal opportunities, I hope that it will be available to us. I know that my noble friend the Minister said that the document is in the Library. Does it contain the guidance on equal opportunities?
The Earl of Caithness: I am happy to confirm to my noble friend that a copy of the guidance is in the
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Library. At the moment, from recollection and from having read it, I do not believe that the requirements that she particularly wants with regard to equal opportunities are in the document. We are looking again at the document with a view to updating it having taken account of the Bill going through both Houses of Parliament. That is the point that I would like to discuss with my right honourable friend the Secretary of State.
Baroness Flather: Am I then to 'believe that my noble friend the Minister will have another look at this aspect of the guidance? I am not clear as to the procedure of what will happen next. Will there be something in the guidance eventually? Is there some kind of assurance? On that basis I would be willing to withdraw the amendment. If there is no assurance of any kind except that the Government will think about it, I would be less than satisfied.
The Earl of Caithness: I hope my noble friend would not think that I would give a commitment to discuss this matter with my right honourable friend and dismiss it lightly. I cannot give her a guarantee that it will be included in the guidance. But rather than having it on the face of the Bill, it is the very flexibility of having the guidance that allows the Secretary of State to update it at any time. Although I cannot give the ultimate assurance that my noble friend would like, I can give her the assurance that I shall discuss with my right honourable friend the Secretary of State the matters that she has raised and then come back to her.
Baroness Flather: In that case. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 51:
Page 27, line 32, at end insert:
("( ) When entering into franchise agreements in respect of passenger railway services operated at the date on which this Act was passed by the subsidiary of the Board known as Inter City, the Franchising Director shall ensure so far as it is reasonably practical to do so that these services are operated by a single franchisee.").
The noble Lord said: It may be for the convenience of the Committee if we take Amendments Nos. 52 and. 53 with Amendment No. 51. The amendments have a certain amount in common. The first amendment, if carried, would effectively hold together the existing InterCity subsidiary of British Rail as a single business by requiring the whole network of services to be left as a single franchise. Prospective private sector franchisees have so far only expressed an interest in what is known in the business as the cherry-picking profitable routes, such as the east coast mainline. One of the apples in the eye of anyone looking for a quick buck is the Gatwick Express.
It is unlikely that arty private company would be willing to take on the whole network., including unprofitable routes such as the west coast mainline. Therefore, only BR, through its InterCity subsidiary or, possibly a buy-out by the existing management, would remain an option.
Amendment No. 51 is the introductory amendment. It expresses the opinion of the management of InterCity in its submission to the Transport Committee in another place. The management said:
"There is no single correct way to structure the business, but I believe that a unified InterCity has the strength and expertise to help overcome many of the challenges in reorganising a highly complex industry".
That appears in volume II of the report at page 292, paragraph 7.
InterCity has just declared a profit for the fifth successive year. That is very important. It is the only profitable long-distance railway network in the world. Its structure allows highly profitable routes like the east coast mainline to cross-subsidise non-profitable routes such as the west coast mainline, avoiding the need for public subsidy to the latter. The break-up of the InterCity network will mean, if it happens, that private franchisees would cream the profits from the lucrative routes while the nation will find itself paying public service obligation grant to lossmaking InterCity services for the first time in many years.
InterCity has been successful precisely because of the uniform management of the business. InterCity's strength rests on its proven reputation as a product or brand which has positive resonance with the public. It is one of the services which has caught on. In fact, market research has consistently shown InterCity to prompt far warmer responses from interviewees than merely asking them about British Rail.
Amendment No. 52 tries to give examples of private sector companies co-operating in the way envisaged by the amendment. The clearest of these is the grouping of independent television companies, or Channel 3. These companies operate separate regional franchises yet they are happy to co-operate on programme scheduling and marketing. There are obvious parallels here with the railway franchises.
An example of the chaotic alternative is to be seen with London's buses and many other bus services in other parts of the country. I can certainly give Glasgow as an outstanding example of the chaos which has been caused by the total free-for-all. Since the mid-1980s London Regional Transport has issued franchises on the basis of competitive tender. Many of those franchises have been won by companies other than London Buses with its traditional fleet of red liveried vehicles. The result has been a jumble of multi-coloured buses creating an image of dislocation and harming one of the best-known tourist images in the capital; namely, the London red bus.
However, it is only fair to say that the bus I catch frequently from where I live in London sets a very high standard. It is the Grey-Green service. Therefore, to be absolutely fair, although there are some very creaky and ragged buses in both London and Glasgow, there are one or two examples of excellent private buses. It would be wrong not to state that.
Amendment No. 53 allows the franchising director to designate two or more franchisees for coordination. These need not just be InterCity routes but could involve Network SouthEast or Regional Railways services also. The latter two companies have successfully integrated and "branded" a diverse range
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of British Rail operations, ensuring, for example, that all the railways surrounding London co-operate with one another and that previously impossible cross-country journeys can now be taken. The franchising process threatens to eliminate all those improvements by replacing coherent networks with fragmented local services. The amendment allows the process of fragmentation to be arrested.
The important idea behind these three amendments is that InterCity should be kept together. I hope that the Minister will look at them favourably. Their wording may not be exactly what he would like or be acceptable to him, but I hope that he can accept the fundamental purpose behind them. I beg to move.
Lord Redesdale: InterCity is the one aspect of British Rail with which nobody has any difficulty. It is a very efficient service. Most Members of the Committee will use it regularly, as I do to get to Newcastle and back. I have no complaints about it whatsoever. I hope that, through these amendments, the unified management of InterCity can be retained. I hope also that the planned fragmentation of management between directors for the North and for the South of the country, rather than a director for the whole country as at present, will not go ahead. The unified nature of InterCity should be kept intact.
Lord Swinfen: Why do away with the competition? I refer, for example, to the routes from London to Exeter and to what used to be the Great Western Railway and the Southern Railway. One can take two different routes. By keeping all the franchising in one entity, one does away with the competition.
I am interested and pleased to note that the noble Lord, Lord Carmichael, would like to keep discounts for various people, but I wonder why in paragraph (e) of Amendment No. 53 he does not include a discount for disabled persons, as he does in paragraph (e) of Amendment No. 52. I am sure that that is an oversight.
Lord Carmichael of Kelvingrove: If the noble Lord examines what has been said already, he will find that that was dealt with in an earlier amendment.
Lord Swinfen: Fair enough.
I also wonder why there should be a common identity for employees' uniforms and for train liveries. I do not see the need for that. Different franchisees will want their own liveries to show their distinctiveness. They will want them so that people will recognise them when they are doing a good job. Equally, people will be able to recognise them if they are doing a bad job.
Earl Attlee: I should like to support the noble Lord, Lord Carmichael of Kelvingrove, and to say, first, "If it isn't broken, don't fix it". The Minister will say that we need competition and that we must therefore have several franchisees. However, I am sure that he is aware that there is an awful lot of competition on the routes from cars, coaches and planes. We need InterCity to provide unified marketing against those other modes of transport.
9.45 p.m.
The Earl of Caithness: I listened with care to what the noble Lord, Lord Carmichael of Kelvingrove, had to say. I obviously wish to read the Official Report carefully tomorrow. There seemed to be some contradiction in what he was saying. He said, on the one hand, that people would cherry-pick, for instance, the East Coast main line. If there was any cherry-picking to be done, people would take the profitable InterCity route and leave the rest for other potential franchisees which, with the Bill as now amended, would include British Rail. That is something at which I should like to look.
We believe that it will be a stimulus to all operators if they are given a wide opportunity to pursue franchises that will include some InterCity lines and some non-InterCity lines. It would not be a question of cherry-picking a particular line such as the East Coast main line, because, as my right honourable friend the Secretary of State has made clear, franchises will be in blocks. So there will be the possibility of some profitable lines and the probability of lines still requiring the public sector obligation which will require subsidy.
I agree with the noble Lord, Lord Carmichael of Kelvingrove, that there have been significant improvements in service quality offered on InterCity routes in recent years and a marked improvement in customer care. But having said that, we believe, and I think BR would acknowledge, that there is still more to be done.
As a result of those service improvements it is fair to say that the InterCity name is not tarnished in the pubic mind in the same unfortunate way as perhaps BR is. Nevertheless, I fear that the thrust of the noble Lord's amendments runs somewhat counter to our franchising proposals.
Our proposals for franchising railway services are rather different from the franchising system that operates in some other businesses. Where, along our high streets, many shops are run under a franchise, through which a small shopkeeper is able to operate under the name of a well-known and recognised brand and sell a range of tried and tested products, our proposals for the railway are for the private sector to come in and mould the range of products on offer so that they match rather better the wishes of their customers, and that they do so under their own name.
We do not want to constrain franchisees' decisions on what colour they should paint their trains or—here I am pleased to be able to agree with my noble friend Lord Swinfen—what uniforms their staff should wear. That is hardly a proper subject for regulation. We can surely leave the private sector to decide how best to present its product in the market place. Indeed, rather than take steps to protect a national system, we see advantage in more local loyalties being fostered. However, as I have mentioned, I think that the image of the InterCity brand is slightly different from that of BR, and we are therefore considering proposals under which the brand might be made available to franchisees who wish to use it.
The noble Lord's amendments also raise a number of concerns where I think he and I are rather closer in
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outlook. He is seeking reassurance that franchisees will be required to co-operate in a number of respects to preserve network benefits. The Government have already given certain commitments in that regard. They are set out in the policy guide which has been made available to the Committee, but I am happy to repeat the key points today.
On through-ticketing, the Government have made it clear that passenger train operators will be required to participate in common arrangements for through-ticketing and revenue allocation, based at the outset on BR's existing systems. That will be a requirement of the train operator's licence. Operators will be able to issue through-fares across the range of ticket and fare types, as now.
On timetabling, franchising will proceed progressively and on the basis of the existing timetable. So the process will enable due regard to be given to ensuring timetable connections. There will continue to be a published national timetable. Railtrack will be required in its licence to ensure publication if that is not undertaken as a commercial initiative by the private sector.
On discounted fares, the Government have brought forward their own amendment to meet commitments given in the other place which will impose suitable obligations on franchisees.
On the question of joint marketing, it will be open to operators to co-operate through joint industry arrangements where they see benefit in presenting a united front to the passenger. Where necessary, licences or franchise agreements will be used to require collective participation. The Government see no difficulty in that provided that there is no suggestion of restrictive practices. The regulator cart be expected to exercise a general oversight of any such arrangements to ensure fair play.
My noble friend Lord Swinfen raised the question of competition on the former Great Western line. It is roughly the same area which will be the subject of a franchise and bidding for the franchise in the first place will be a competitive situation. now including British Rail as the Bill has been arnended by the Committee. Having remembered the glories of the Great Western days, I am sure that my noble friend will agree with me that the point about the advantage of local loyalties is best dealt with in a rather different fashion from that suggested in the amendment.
Lord Carmichael of Kelvingrove: I thank the Minister for the clarity of his reply. I thank him for the latter part of his reply, in which he suggested that we were perhaps rather closer together than we were on earlier amendments.
I felt that the noble Earl was rather grudging in his praise of InterCity. Taken as a whole, InterCity is a real success. It is the only long distance railway in the world which runs without a subsidy. All of us who use it are greatly impressed by it. More and more passengers are using the London to Scotland trains and, indeed, those trains are becoming a serious rival to the airlines, particularly on the London to Edinburgh route. On the other hand, because it its so profitable, it is able to maintain the west coast line which, although it is not profitable, is a vital line.

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I agree that some of the matters referred to in the amendment may seem rather petty. The noble Lord, Lord Swinfen, mentioned uniforms. That was merely a suggestion. InterCity has done so well because it has presented an efficient image. Members of staff are proud of their image and are proud of their uniforms. I agree with the noble Lord that it may be too much to include such matters in statute but I wished to convey to the Committee how, for example, the provision of uniforms has improved the image of InterCity. I merely wished that matter to be treated as a suggestion.
I am grateful to the Minister for his assurance that he will look again at certain matters. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 52 to 54 not moved.]
Clause 25, as amended, agreed to.
Lord Ewing of Kirkford Lord Ewing of Kirkford moved Amendment No. 55:
After Clause 25, insert the following new clause:
("Agreement between Franchising Director and Railtrack
.—(1) The Franchising Director may enter into an agreement with Railtrack to provide track and associated services for train operators.
(2) Any sums required by Railtrack by virtue of this section shall be paid by the Secretary of State to Railtrack out of money provided by Parliament.").
The noble Lord said: In moving this amendment, I shall speak also to Amendment No. 56. Both amendments deal with the question of the payment of the public service obligation grant to unprofitable routes and whether that payment should be made to the franchisee on the one hand or, as in Amendment No. 55, to Railtrack on the other. The purpose of Amendment No. 56 is to remove the franchising director from the arrangements for paying the public service obligation grant to British Rail in cases where British Rail is running the service.
I promise the Committee that I shall not delay it long. However, I sketch in the background because I believe that, since we resumed our discussions, the noble Earl has referred three times to the Bill as amended by the decision which the Committee gave on the amendment moved by the noble Lord, Lord Peyton, which permits British Rail to bid for the franchise. It may well be that I am naive. I am the first person to admit that there are times in my life when I am the most naive person in the world. But the fact that the Minister referred three times to the Bill as amended, thus permitting British Rail to bid for the franchise, gives me the clear impression that the Government have decided to accept the verdict of the Committee this afternoon.
If that is the case, then it radically alters the discussion that Members of the Committee will have on many of the amendments that are yet to be moved, not least Amendment No. 56, with which I shall deal shortly. I am really tempting the Minister down the path either to confirm my naivety or my confidence that the Government have agreed to accept the decision taken this afternoon by the Committee. I
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hope that he can confirm that that decision will stand and that the Government will not seek to reverse it when the Bill returns to another place.
I turn briefly to Amendment No. 55. The Bill contains provisions that the payment of the public service obligation grant will be paid to the franchisee. As Members of the Committee know, that is a grant paid for unprofitable yet socially desirable routes. The provisions of the Bill lay down that that grant would be paid to the franchisee. My amendment would make that payment to the track authority rather than the franchisee for the very good and proper reason that it is the track authority which has the responsibility for maintenance and development of the track and not the franchisee.
I am sure that Members of the Committee are becoming a little fed up with hearing reference to the Swedish system, but what is proposed is basically a carbon copy of what happens in Sweden at present, where the subsidy paid on unprofitable yet socially desirable routes is not paid to the franchisee—that is, those who run the service—but is in fact paid to the track authority. In our view, the proposal in the amendment makes far more sense in economic terms and far more sense as regards the development of the network than does the provision contained in the Bill and laid down by the Government.
I can understand what is in the Government's mind—at least, I think that I can; although it is always dangerous for an Opposition spokesperson to say that he can understand the Government's thinking—namely, that the obligation on the track authority to charge economic fees from the franchisee is an attempt to make the track authority into a profitable organisation in order, at a later date—that is, if the Government get their way—to privatise the track authority. I see that as the pattern lying behind the obligation on the track authority to charge an economic rent from the franchisee.
Amendment No. 55 would change the position completely. The public service obligation grant would not be paid to the franchisee but would be paid to the track authority in recognition of its responsibility to develop the network. The obligation then on the track authority will be to charge the franchisee the marginal costs—that is, the marginal costs of the electricity used, wear and tear, the necessary added man hours for signalling work, or anything of that description. However, they would be marginal costs and would certainly be very much lower than the economic costs that are laid down, although not clearly defined, in the legislation that we are discussing.
In our case it is quite a simple approach and quite a clear choice. We either pay the public service obligation grant to the franchisee and allow the track authority to charge an economic rent for the use of the track, or we pay it to the track authority in recognition of its responsibility to develop the network. The track authority would then charge the franchisee marginal costs.
I now turn to Amendment No. 56. Amendment No. 56 is one of those amendments that is affected by the decision as to whether or not the Government accept the verdict reached by the Committee this afternoon

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on the amendment of the noble Lord, Lord Peyton. I openly admit that Amendment No. 56 was clearly framed and tabled in the belief that all that would be left to British Rail would be those uneconomic and unwanted routes in which no one else was interested; what is described as the rump of the system. But I am the first to accept that if the Government accept the verdict reached by the Committee this afternoon, that situation is completely altered and Amendment No. 56 is accordingly affected.
All I can say about Amendment No. 56 at present is that it is very much a probing amendment. It seeks to remove the franchising director from the arrangement whereby for the uneconomic routes—those that we envisaged British Rail would have before the Committee accepted the earlier amendment—the Treasury (these are complicated arrangements) would pay the franchising director and then the franchising director would pay British Rail. Our Amendment No. 56 would remove the franchising director from that transaction and the grant would be paid direct from the Treasury to British Rail itself.
I say as an attraction for the noble Earl, Lord Caithness, that the measure would also help in relation to the arrangements that are defined in Clause 124 of this Bill—again these are complicated arrangements—whereby the freight side of British Rail may receive compensatory payments for the use of the track. That is defined in Clause 124, but our Amendment No. 56 would simplify that by making these payments direct to the company itself. Our amendment would also remove the franchising director from that transaction.
I close where I began. These amendments are to a great extent affected by the decision as to whether or not the Government have now decided to accept the will of this Committee. I look forward with great interest to hearing the noble Earl's reply. I beg to move.
10 p.m.
The Earl of Caithness: The noble Lord, Lord Ewing, in a beguiling speech tempted me to give an answer which he knows full well I cannot possibly give him today. The situation is clear. The amendment that the noble Lord mentioned was accepted by this Committee. That is the position and it is written into the Bill. I have referred to that on four occasions since eight o'clock. The Government must consider their position in the light of what has happened. It will take some time for the Government to reach a decision and I cannot possibly give the noble Lord an answer tonight.
I now turn to the amendments before us. We have indicated that we intend the franchising director to assume responsibility for making all subsidy payments, whether to franchisees or to BR, from April 1994. We believe it makes good sense for him to have overall control of the subsidy budget, while the Secretary of State will remain responsible for the overall size of that budget.
Clause 44 provides for the franchising director to enter into agreements with the British Railways Board for the provision of railway passenger services. By
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virtue of Clauses 15 and 17 the franchising director will be able to enter into access agreements with Railtrack to secure rights to use track for the benefit of franchise operators and of others with whom he contracts to provide railway passenger services. Clause 15(11) provides for the franchising director to make payments under such agreements.
Where at the end of a franchise the franchising director has been unable to grant a further franchise agreement, he will become responsible for securing the provision of the necessary services. He may do so through a wholly owned company which would in turn need an access agreement with Railtrack.
But I can see no advantage in the franchising director entering into agreements—be they with franchisees, the board or other train operators—for which the Secretary of State would pay. That does not strike me as a recipe for good financial management or for maintaining proper accountability for the expenditure of taxpayers' money. The Secretary of State will still be able to make payments to the BR board. He will be able to make grants to Railtrack. But I see no advantage in his paying for services delivered under contract to the franchising director.
As a general principle the Government do not believe in providing direct subsidy towards the cost of infrastructure. The purpose of government support is to provide railway services for passengers. It is much better targeted if provided directly to trained service operators rather than for infrastructure, which can and will be used by any services whether or not they are socially necessary and require subsidy. I wonder whether the noble Lord, Lord Ewing, being a reasonable man, will agree that the Bill is rather better than his amendment.
Lord Ewing of Kirkford: I look around in despair and say to the Minister that I find it difficult to accept his proposition that the Bill is rather better than my amendment. It may be that both are equally bad but I doubt whether one is better than the other.
Against that background and the Minister's reply I am prepared at this stage to withdraw Amendment No. 55 and not to move Amendment No. 56. However, I still have a doubt in my mind about the future of the Bill and I put down a marker that we may well wish to return to the subject at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 56 not moved.]
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 57:
After Clause 25, insert the following new clause:
("Change in control of franchise operator
.—(1) It shall be a term of a franchise agreement that no change in the persons having control over the franchise operator takes place for the relevant period unless such change takes place with the prior.approval of the Franchise Director and the Regulator.
(2) In this Part, "the relevant period" means the pericd beginning with the date of the award of the franchise and ending on the fifth anniversary of the date of its coming into force.
(3) The Franchise Director and the Regulator shall refuse to approve for the purposes of this section such a change—

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(a) if it appears to them that the change would be prejudicial to the provision under franchise by the franchise operator of a service which accords with the service specified in the franchise agreement or

(b) it appears to them that the change would be prejudicial to the duties conferred on them by sections 4 and 5 above.").

The noble Lord said: Again I can be brief. The amendment is also to a considerable extent predicated on the ultimate decision in relation to the earlier amendment which was adopted by the Committee.
Our purpose is to debar the takeover of any passenger franchise operation for a period of five years without the prior approval of the franchise director and the regulator. Subsection (3) sets out the conditions which would debar any takeover. There is ample precedent for that in Clause 21 of the Broadcasting Act 1990, which permitted the Independent Television Commission to cancel a Channel 3 franchise where the ownership of the franchise company changed. The ITC could sanction such a change but only subject to certain essential criteria.
In the context in which we are now discussing the matter we are seeking to avoid an unwanted takeover, for example, by a regional bus company which wishes to become a monopoly provider of transport or by an asset stripper. The amendment also has the effect of restricting opportunities which might otherwise be available for stalking-horse companies to acquire franchises on behalf of others who might be considered undesirable.
The Broadcasting Act provided for protection for only 12 months. We believe that in the circumstances of this case that would be too short. If the Government were prepared to concede the principle involved we should not be tied to any particular time limit. We can discuss the matter together, but the principle must be addressed. I wish to know what reasonable argument may be adduced against this eminently sensible proposition. Clearly there is a risk of an undesirable franchisee emerging. I do not believe that the Bill satisfactorily deals with that situation and should therefore be amended to make provision for that. I beg to move.
The Earl of Caithness: Clause 24(4) already provides for the franchising director's approval to be sought before a franchisee takes any action which would result in a franchise operator—his wholly owned company—ceasing to be a wholly owned subsidiary of his. The franchising director will need to take a judgment on the implications of any such transaction for the continued performance of the franchise operator in providing the services specified in the franchise agreement.
The noble Lord, Lord Clinton-Davis, is clearly concerned about the ownership of the franchise operator. I listened with care to what he said, but I did not find it terribly convincing. Surely the real concern is the delivery of services specified in a franchise agreement. It was, I believe, the noble Lord, Lord Marsh, who stated on the first amendment that we debated today that it does not matter about the ownership. The real concern is the delivery of the
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appropriate service. I share that view with the noble Lord, Lord Marsh. It is that which should be the franchising director's primary concern. If a franchisee, for whatever reason, is failing to perform to a specified standard, then there will be, as the noble Lord, Lord Clinton-Davis, acknowledges, a range of sanctions at hand for the franchising director to employ which will lead ultimately to the termination of the franchise agreement if necessary.
Lord Clinton-Davis: I do not find that answer particularly satisfying. However, I do not dissent from the proposition that the essential question is the delivery of service rather than ownership. The problem is that the two cannot always be separated. My case is predicated on the argument that the sanctions to which the Minister referred are hopelessly inadequate to deal with the practicality of the situation. We shall come to that issue later.
However, I worry about the fact that certain influences could be brought about which are not immediately apparent at the time that the franchise is granted and, because the sanctions are not adequate, a certain degree of prejudice will exist about the provision of the services. I do not expect the Minister to agree with that. We shall come to the effectiveness of the sanctions later. I shall study what the Minister said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 [Failure to secure subsequent franchise agreement]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 57A:
Page 27, line 44, after ("services") insert ("for the carriage of passengers by railway").
The noble Earl said: This is a technical amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 57B to 57D not moved.]
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 57E:
Page 28, line 14, at end insert:
("(3) In respect of services within or affecting a Passenger Transport Authority area the Franchising Director shall give notice to the Passenger Transport Executive, for the area in question, of any proposals to act within subsection (2) (a) or subsection (2) (b) above and require the Passenger Transport Executive to make a statement within 14 days of the notice or such lesser period as is reasonable in the circumstances.
(4) The statement under subsection (3) above shall specify the services for the carriage of passenger by railway which the Passenger Transport Authority, for the area in question, considers it appropriate to secure to meet any public transport requirements within that area and may also specify the minimum level of quality in respect of such services, together with requirements in respect of the fares to be charged, to persons using such services.
(5) Where a Passenger Transport Executive has submitted a statement under section 26(4) above the Franchising Director shall ensure that such services continue to be provided for a period of three months pending further discussions between the Franchising Director and the Passenger Transport Executive").
The noble Lord said: As drafted, Clause 26 places a duty on the franchising director to secure the provision of services if a franchise were terminated but no immediate award of a further franchise was made.

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However, subsection (2) does not require the franchising director to take into account the requirements of a passenger transport executive which, under Clause 29, will be a joint signatory to a franchise affecting its area, when securing services under those circumstances. The purpose of the amendment is to place a duty on the franchising director, first, to give notice to the PTE of intention to take action to secure the continuation of services, and to request it to make a statement of its requirements for any interim services within 14 days. Another purpose is that it allows the PTE to specify the services arid quality that it requires. Lastly, it requires a franchising director to secure those services in the interim period, pending further discussions with the PTE on the long return situation dealt with in subsection 26(5).
The general point of the amendment is to seek clarification of the Government's view on what role the PTEs would play in the interim period, if a franchise were not to be renewed, and how that would be secured. It is understood that the Government are minded to deal with it by giving the franchising director yet more instructions.
Our view is that it is not a satisfactory response and that there should be something on the face of the Bill to protect the interests of the PTAs and PTEs which will pay financially for the services in any period during which there is no franchise. It should also be noted that the Transport Act 1968 places a duty on PTAs and PTEs to meet those transport requirements.
I believe that this amendment is absolutely vital when considering the chaos that might be caused if there were a sudden collapse of a franchisee in an urban area, with no back up quickly to replace it. Therefore, I hope that the Minister will look at the amendment sympathetically. I beg to move.
The Earl of Caithness: In his lucid explanation of the amendment, the noble Lord, Lord Carmichael, came to the point at the end when he said that he was talking about the sudden collapse of a franchisee. That means that one is stressing the point that we are talking about circumstances where the franchising director might need to act very quickly indeed. It is difficult to make provision for him to do so while at the same time providing a notice period, as the noble Lord's amendment would require, for him to consult a PTE. That is something which we have discussed with the PTEs, which are, nevertheless, concerned that their ability to specify fares and quality should not be curtailed.
We do not expect instances of franchises ending without a subsequent franchise having been awarded to be common. Where they occur, we expect them to be short. All those involved will need to act quickly and pragmatically to plug the hole. The PTAs and PTEs, believe, recognise that. Furthermore, I do not think that it would be advisable to stipulate a period of time in respect of which the franchising director is to ensure that services continue to be provided. I think that such a question should be left for decision at the time, depending upon the circumstances which obtain.
Nevertheless, I am prepared to accept that the relationship between Clause 26 and Clause 29 is
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worthy of further refinement, and 1 am therefore prepared to reflect on the noble Lord's amendment to see whether, following further discussions with the PTAs and PTEs, we might be able to bring forward an amendment on Report which would meet his concerns.
Lord Carmichael of Kelvingrove: I am grateful to the Minister for showing such flexibility and it would be churlish of me not to thank him for whatever he brings forward when he has considered the amendment. We thank him for his sympathetic examination of it and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.,lb/>
10.15 p.m.
On Question, Whether Clause 26, as amended, shall stand part of the Bill?
Lord Clinton-Davis: I wish to raise a brief but important point with the Minister with regard to the questions that arise on failure to secure a subsequent franchise agreement or, related to that, to secure the position when a franchise agreement is breached. 1 raise the matter in the context of the PSO grant. Is the Minister envisaging that, in a situation where British Rail would be expected to pick up the tab, acting quickly and pragmatically as the Minister said, it is expected to do that without any assurance that it will be assisted through the PSO grant? If that were the case, it would be monstrously unfair, and indeed would render it much more difficult to fill in the gaps which would arise in a situation of that kind. I do not want to labour the point any longer, but it is important and we urge the Minister to clarify the situation, if he can, here and now.
The Earl of Caithness: That would be a question for the franchising director. It might not necessarily he British Rail that fills the gap. The franchising director is under a requirement, as it were, to fill the gap. Therefore he would turn to whomsoever was the appropriate party. It would be any train operator. It might be that British Rail did not have railway stock in that part of the world, and it might be better to turn to "Clinton-Davis Railways Limited" to fill the gap. That must be a question for the franchising director. The franchising director will have a budget and will of course be watching every franchise and what is happening. I take the point that the noble Lord made about a situation where one has the PSO grant, which will probably be applicable in the case of a franchise, but the franchising director will take that into account within his budget.
Lord Clinton-Davis: The franchising director will operate to a limited budget. He will have to consult with the Government about the application of that budget. We have foreseen in earlier debates the possible effect of the constraints on the franchising director which could well lead to serious prejudice so far as rural services are concerned, which are the most vulnerable. These matters cannot be quite as easily and glibly dealt with as the Minister has suggested. What we require from the Minister—perhaps not

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tonight, but certainly during the course of this Committee stage or the Report stage, is clarification as to what can happen here. The lack of clarification could have very serious effects upon what the Minister seeks to achieve; namely, filling in a gap with the least possible delay.
I am sorry; I should have declared my interest—the Minister has discovered an interest that I have not revealed to this Chamber: Clinton-Davis Limited, providers of railway services!
The Earl of Caithness: I certainly hope that the Committee does not think that I treated this matter glibly. It is of most serious concern. The noble Lord will be aware that we have given enormous thought to the question of the continuation of franchise, both at the end of a franchise or, in the unfortunate (and we hope very rare) event where there is a transfer mid-term, as it were, when a franchise does not work out as the franchising director had hoped. I take note of what the noble Lord says. I hope that I shall be able to reassure him at a later date.
Clause 26, as amended, agreed to.
[Amendment No. 57F not moved.]
Clause 27 [Additional railway assets: assumption of responsibility by, and transfer to, franchisees etc.]:
Lord Clinton-Davis Lord Clinton-Davis moved Amendment No. 58:
Page 28, line 40, leave out from ("the") to end of line 41 and insert ("Board").
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendment No. 58A:
Leave out Clause 27 and insert the following new clause:
Leases granted in pursuance of franchise agreements: no security of tenure
(" .—(1) In any case where—

(a) a franchise agreement makes provision for the franchisee, the franchise operator or a wholly owned subsidiary of the franchisee to enter into an agreement ("the contemplated agreement") with a person who has an interest in a network or a railway facility,

(b) the network or railway facility is to be used for or in connection with the provision of any of the franchised services, and

(c) the contemplated agreement creates a tenancy of any property which constitutes, or is comprised in, the network or railway facility,

neither Part II of the Landlord and Tenant Act 1954 (security of tenure of business premises) nor the Tenancy of Shops (Scotland) Act 1949 (security of tenure of shop premises in Scotland) shall apply to that tenancy.
(2) For the purposes of this section, a person shall be regarded as having an interest in a network or railway facility if he has an estate or interest in, or right over, any of the property which constitutes, or is comprised in, the network or railway facility.
(3) Any reference in this section to a network or a railway facility includes a reference to any part of a network or railway facility.
(4) In this section—
"agreement" includes a lease, underlease or sublease (as well as a tenancy agreement or an agreement for a lease, underlease or sublease);
"tenancy" has the same meaning as it has in Part II of the Landlord and Tenant Act 1954 or, in Scotland, as it has in the Tenancy of Shops (Scotland) Act 1949.").
The noble Earl said: Amendment No. 58A replaces Clause 27 with a new clause which reflects a
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simplification of the way in which we propose to allow for franchised train operators to control certain Railtrack-owned facilities in connection with passenger rail services, that is, stations, light maintenance depots and track and signalling—i.e. vertical integration. I should like to stress that this does not signal a change in our policy towards vertical integration. Rather, it reflects a change, a simplification, in approach. I hope, as a result, that it is welcomed by the Committee.
Our policy on vertical integration—that is to say, the operation by franchisees of the track as well as the trains —remains that, while control by a train operator of stations and light maintenance depots will be quite common, control by them of track and signalling will be quite rare. The Isle of Wight line is the only case so far envisaged for such full-scale vertical integration. We believe that vertical integration is neither practicable nor desirable across the great bulk of the railway network for a number of reasons.
First, operators who run both the track and the trains would inevitably face a conflict of interest when others applied to run services on their lines. That problem could be overcome only if we adopted intrusive regulation to ensure fair treatment for all operators.
Secondly, securing suitable levels of investment in rail infrastructure requires a strategic view of the kind that only Railtrack can provide.
Thirdly, the existence of a national body such as Railtrack will ensure that the safety aspects of track and signalling are co-ordinated across the network in a clear and systematic way. It would be much more difficult to achieve that if network responsibilities were spread across a large number of operators.
Lastly, we need a national body such as Railtrack to ensure that operational timetabling is co-ordinated efficiently across the whole network. If there is to be a fair deal for all operators, it must be better that the track operator does not also operate his own services.
I turn to the effect of my proposed amendment. Whereas Clause 27 currently provides for the train operator to have control of such facilities by franchisees as part of the franchise agreement, the new clause simply enables a franchise agreement to provide for the train operator to have control of stations or light maintenance depots (or track and signalling) by separate agreement with the owner of the facilities, normally Railtrack. The provision will apply only where the franchising director and facility owner (Railtrack) have previously agreed that such an arrangement should be entered into.
Because the policy is to provide for succeeding franchises to be able to manage these facilities, the clause curtails security of tenure under landlord and tenant legislation so far as the tenancy agreements between the facility owner and the franchised train operator are concerned to ensure that there is no obstacle to the handover between one franchisee and the next. That applies only to the agreement between owner and franchisee (whether that agreement is a

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lease, sub-lease or whatever). It does not apply to subsidiary arrangements between the franchisee and others (such as station traders).
The new clause also omits the provisions currently in Clause 27 disapplying the provisions under landlord and tenant law relating to compensation for tenant's improvements to business premises. That is because there is no public policy reason why the statutory provisions should not apply.
I commend the amendment to the Committee. I beg to move.
Lord Ewing of Kirkford: I wonder whether the Minister can clear up a nagging doubt in my mind. The amendment would leave out Clause 27. That clause happens to be the clause which was amended earlier by the amendment of the noble Lord, Lord Peyton. Can I have an assurance from the Minister—I am sure that he will find it easy to obtain—that his amendment in no way affects the decision to which the Committee came earlier in our proceedings on the amendment of the noble Lord, Lord Peyton?
The Earl of Caithness: The amendment of my noble friend Lord Peyton had effect on Clause 22. The previous amendment, Amendment No. 58, was consequential on that. I can give the noble Lord the assurance that he wants. It has absolutely no effect on the main amendment.
On Question, amendment agreed to.
Clause 27, as amended, agreed to.
Clause 28 agreed to.
Clause 29 [Passenger Transport Authorities and Executives: franchising]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 59:
Page 33, line 1, after ("may") insert ("(subject to section (Fares and approved discount jare schemes)(3) above)").
On Question, amendment agreed to.
10.30 p.m.
Lord Teviot Lord Teviot moved Amendment No. 60:
Page 33, line 2, after ("to") insert ("and tickets to be accepted from").
The noble Lord said: With the permission of the Committee I shall speak also to Amendments Nos. 61 and 61A to 61C, and listen with interest to what the noble Lord, Lord Carmichael of Kelvingrove, has to say on Amendment No. 61ZA.
The purpose of these amendments is simple. They will make it clear beyond any doubt that the passenger transport authorities and executives will be able to ensure that franchisees accept travelcards and other forms of multi-journey tickets as part of the requirements of the franchise. Clause 29(6) (c) clearly gives the passenger transport authorities and the passenger transport executives the power to specify fares to be charged on franchised services in their areas. That amendment was made in another place and was most welcome. It is not clear, in my view, that that power would enable them also to include travelcards within the definition of "fares".
Many of us are rightly concerned about the future of London Travelcards. However, we must not lose sight of the fact that in all the conurbations outside London, there are also travelcards administered, as a
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rule, by the passenger transport executives on behalf of the operators concerned. They are available on all modes of transport, including local rail services, and hope that all concerned, including my noble friend the Minister, will want that situation to continue when the Bill is passed.
Amendments Nos. 61A to 61C are extremely important as they relate to a situation which may arise in a dispute between the franchising director and a passenger transport executive. I accept that the Bill should contain provision for that situation, although my experience of the passenger transport executives leads me to believe that it is most unlikely to arise.
As drafted, subsection (15) of Clause 29 gives the franchising director the power to apply to the Secretary of State for directions if he considers that they are needed to expedite matters in a dispute. That could arise if the PTE was dragging its feet in some matter or other. I believe that, while the provision is necessary, it should be available also to the F'TE. It is unfair in the extreme for one party in a dispute to have access to a person who can determine the matter, while the other does not. We would not tolerate that in respect to access to the courts or Parliament, and we: should not tolerate it in the Bill.
Amendments Nos. 61B and 61C cover an even more important aspect of the disputes procedure Clause 29(16) (c) gives the Secretary of State quite unnecessary and—I choose my words carefully—excessive powers over PTE finance. Amendments Nos. 61B and 61C remove those powers, though 1 would. not object if my noble friend, at a later stage, were to replace them with something more reasonable.
As drafted the Bill allows the Secretary of State to direct a PTE to pay for any railway services secured under franchise in its area regardless of whether or not the PTA wants the services; regardless of whether or not it can afford them, arid regardless of whether or not it considers them to be value for money. In the last. analysis it is giving the Secretary of State the power to determine local rail service policy and how local council tax-payers' money is spent. That is quite unacceptable to me and I am sure that it will be unacceptable to other Members of the Committee.
Finally, I understand that the Minister has given assurance to the PTAs and PTEs that they will deal with those matters, but have not so far acted upon that assurance. In view of that, I have no hesitation in raising the point here if Ministers are unwilling to meet their obligations. I beg to move.
Lord Carmichael of Kelvingrove: I am happy to give general support to the noble Lord, Lord Teviot, for this group of amendments. I hope that I can rely on his support for Amendment No. 61ZA, which is also included in the grouping. He has said just about all that needs to be said about the intent of the amendments. I wish to support him in a general way.
The Earl of Caithness: The issues addressed in my noble friend's amendments and in the amendment of the noble Lord, Lord Carmichael, are fa.miliar to us and indeed have been the subject of discussions between representatives or the AMA., the PTAs and my right honourable friend the Minister for Public

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Transport. While the wording of the amendments means that I shall not be able to recommend that we accept them, I am pleased to say that I do accept the spirit of them and hope to offer the noble Lords satisfactory assurances such that they will agree to withdraw them.
We expect the franchising director and the PTEs to work together, to co-operate willingly with each other. But we have to recognise that it is possible for disagreements to arise. The PTAs/PTEs have raised this point with us themselves. The purpose of subsections (14), (15) and (16) of Clause 29 is to provide a procedure by which any disputes between a PTE and the franchising director can be resolved.
The procedure is based on that provided for resolving disputes between the PTEs and the British Railways Board in Section 20(6) of the Transport Act 1968. This provides for the PTEs or BR to refer disputes to the Secretary of State. I draw comfort from the fact that in 25 years this procedure has never been used. I think that the procedures provided in Clause 29 should be similarly regarded as a long stop, a last resort, and one which I hope will not be used.
The procedures confer considerable powers of direction on the Secretary of State. That is necessary if he is to be able to unlock a dispute that is so serious that one or other party feels unable to resolve it through discussion and negotiation. There is not intended to be any presumption in favour of either party. Subsection (14) of Clause 29 provides for the franchising director or a PTE to refer an issue to the Secretary of State.
My noble friend's Amendment No. 61A is aimed at extending this equality of opportunity to the provisions of subsection (15). We think it is entirely appropriate to do so. Unfortunately, there is a technical flaw in my noble friend's amendment, in that it fails to amend the subsequent reference to "he" (clearly the franchising director) in line 29 of the subsection. But I agree that this subsection should be amended and I therefore intend to consult my noble friend so that he can bring forward an appropriate amendment on Report.
Turning to subsection (16) and my noble friend's Amendments Nos. 61B and 61C, I should like to stress that the Secretary of State could not exercise unreasonably the powers of direction granted him under this clause—if he did so, his action would be open to judicial review. If a PTE and the franchising director failed to reach agreement on the specification of services to be provided by a franchisee and one or other party chose to refer the dispute to the Secretary of State, it would be open to him to find in favour of the franchising director's preferred specification, the PTE's, or, indeed, somewhere in between. If he decided to direct that the PTE's specification be adopted, then he could direct the franchising director to enter into a franchise agreement on that basis. If he decided to direct that the PTE's specification should not be adopted, then our intention would be to invite the PTE not to sign the agreement. But, within a year, financial provision would already have been made through the revenue support grant mechanism for the
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PTE to pay for railway services from funds provided to the PTA by its constituent district councils. The Secretary of State would therefore be able to direct that these sums could be recovered. Alternatively, the PTE might prefer to be directed to enter into an agreement, so that it would still be a party to the agreement, and have a role in monitoring the franchisee's performance.
This is a hypothetical state of affairs, and I would stress three things: I trust and hope such a situation will never arise; the Secretary of State is given the ability to make directions which he may exercise—he is not obliged to use them; if the Secretary of State used his powers of direction unreasonably, he would lay himself open to judicial review.
The AMA and the PTAs have indicated to us their concern about the breadth of the power subsection (16) (c) gives to the Secretary of State. I believe that such a power of direction is necessary, and would not be abused, for the reasons I have explained. However, given the PTAs' concerns, defended so lucidly by my noble friend, I am prepared to consider whether a suitable amendment might be brought forward on Report which would address those concerns. Some work has already been done on this and discussions have been held with the PTAs and PTEs. I would not want to mislead the House into thinking that the necessary amendment would be straightforward, but I accept the point and I am prepared to see what we can do.
Turning to Amendments Nos. 60 and 61, I believe my noble friend is seeking to ensure that PTEs are able to specify in franchise agreements that franchisees participate in their local, multi-modal Travelcard schemes. Amendment No. 61ZA applies similarly to participation in local concessionary fares schemes.
I would like to assure both my noble friend and the noble Lord, Lord Carmichael, that there would be nothing to prevent a PTE inserting such provisions in a franchise agreement, subject, as with any other such provision, to the agreement of the other parties; namely, the franchising director and the prospective franchisee. The franchisee would obviously want to know what the implications of belonging to such a scheme would be and would want to take them into account in preparing his bid. The same applies to participation by a franchisee participating in a local concessionary fares scheme established under the provisions of the Transport Act 1985.
I hope that I have given both my noble friend and the noble Lord, Lord Carmichael of Kelvingrove, some reassurance that we have taken and are taking on board the concerns which they have raised and that we are seeking to overcome the problem.
Lord Teviot: I am very grateful for my noble friend's lengthy and detailed reply. I hope that he will forgive me for not replying to all the points. I shall read everything with avid interest and take up all the points which he suggested. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 61 to 61C not moved.]
Clause 29, as amended, agreed to.
Clause 30 agreed to.
The Deputy Chairman of Committees (Lord Cocks of Hartcliffe): I now call Amendment No. 61CA, which occurs after Clause 30 and not after Clause 31, as shown on the Marshalled List.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 61CA:
After Clause 30, insert the following new clause:
("Report on financial implications for Passenger Transport Authorities.
The Secretary of State shall publish each year a report setting out the financial implications for Passenger Transport Authorities of the implementation of this Act and the steps he has taken to ensure that they are able to meet any additional costs which result.").
The noble Lord said: I shall be brief with this amendment because I understand that discussions are taking place in the department and that the Minister for Public Transport, Mr Roger Freeman, is having talks with the AMA. This is a major problem which must be addressed. The new clause is self-evident. At this point I am waiting to hear what the Minister has to say. He may have found out whether there has been a conclusion to the talks. I beg to move.
Viscount Goschen: The noble Lord is concerned that the valuable work which the PTAs do to support railway services in their areas should not be curtailed as a result of cost increases to them through privatisation of the railway. We are well aware of the problems which his amendment addresses. As the noble Lord mentioned, my right honourable friend the Minister of State for Public Transport has been discussing this issue with the PTA chairman. He is now discussing options with colleagues in the Treasury and in the Department of the Environment.
It is a problem which we must solve. My right honourable friend hopes to be in a position to put a proposal to the PTA chairman when he meets him later in the summer which will satisfactorily address their concerns. In the light of that explanation, I hope that the noble Lord will withdraw his amendment.
Lord Carmichael of Kelvingrove: I am grateful to the Minister. I believe that he has come some way towards what the amendment was attempting to achieve. We shall have a long time before Report stage. Perhaps the Minister will have made more progress by then. In the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 61CB not moved.]
10.45 p.m.
Clause 31 [Miscellaneous amendments of the Transport Act 1968]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 61D:
Page 36, line 24, at end insert ("to any person who is (within the meaning of Part I of the Railways Act 1993) the franchisee under a franchise agreement to which the Executive is a party;
(viiib) to let railway locomotives and other rolling stock on hire to a person not falling within paragraph (viiia) above-").
The noble Earl said: This amendment refines the provisions of Clause 31 as drafted. Many PTEs have invested in rolling stock to serve their areas. For the most part this rolling stock is vested in BR, the PTEs
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having made grants towards its purchase. We are discussing with the PTAs and PTEs the appropriate treatment of this stock and of all other past PTE-supported investment. We have welcomed the PTEs' willingness to invest and would certainly not want them to be deterred from investing in future. In some cases, the PTE owns the rolling stock itself. An amendment to the Transport Act 1968 is needed to allow PTEs to let such rolling stock on hire to franchisees.
Clause 31 provides for such an amendment to the Transport Act 1968 allowing PTEs to let rolling stock owned by them on hire. My amendment to the clause would allow a PTE to let on hire rolling stock it owns to the franchisee running services on its behalf who could then use it for services running beyond the PTE's boundaries. This would allow sensible operational deployment of rolling stock by a franchisee whose franchise may cover a much larger area than that covered by the PTE. I am sure that that is something we all want to see.
As Clause 31 is drafted, the PTE could only lease the stock on this basis with the Secretary of State's consent. That seems to us an unnecessary complication for what should be sensible operational deployment of rolling stock to the benefit of the passengers in the PTE area and all concerned. I commend the amendment to the Committee. beg to move.
On Question, amendment agreed to.
Clause 31, as amended, agreed to.
Clause 32 [Proposals to discontinue non-franchised etc. passenger services]:
Baroness Stedman Baroness Stedman moved Amendment No.62:
Page 37, line 15, leave out from ("then") to the first ("the") in line 16.
The noble Baroness said: In moving Amendment No. 62, I should like to speak also to Amendments Nos. 69, 71, 77, 78 and 84 to Clauses 32, 33 and 34 which deal with closures of non-franchised passenger services, of franchised passenger services and of operational passenger networks. They introduce a new concept into the closure procedure. The regulator is able to certify the closure of certain lines or networks as minor closures without the necessity for any procedure to take place to protect users' interests. A closure is regarded as minor if it satisfies the definition set out in Clause 32(9) for passenger services or Clause 34(8) for passenger networks.
A minor closure means the discontinuance of services or discontinuance of the operation of any part of a network along which there is no station (or no station in use) where the circumstances are, in the opinion of the regulator, such that, first, any trains that would otherwise use that stretch of line or part of the network in travelling between any two stations will instead pass along an alternative route, and where any passengers travelling on any 'such trains will not be required to make any additional change of train and will not incur any significant increase in the time which their journey takes.
I believe that the concept of a minor closure is wrong because the Bill fails to set out any procedure by which an operator is supposed to bring a proposal

1185
to the regulator for certification as a minor closure. Since there is no procedure for the certification of closures as being minor closures, several unfortunate consequences could follow. The franchising director, who in every other case of a proposed closure is obliged to consider whether he wishes to continue to require a service to be provided, is deprived of that option in this case. If the regulator decides that a proposal falls within the definition of a minor closure in these clauses, then that is the end of the matter. The Bill gives the regulator no choice in the matter and the franchising director has no role. The closure is just permitted to take place.
The minor closure procedure, as I see it, would enable some important strategic sections of railway line to be closed without any closure procedures being initiated; for example, part of the main line from London to Manchester (between Stone and Colwich Junction) or parts of the main cross country route—the avoiding lines at Gloucester and Weston-super-Mare being examples. The consequences of such closures could be serious for system capacity and neither the regulator nor the franchising director could prevent it happening under the minor closure procedures if the proposal to close those sections of line satisfied the minor closure criteria.
There is no procedure for certifying a minor closure, so there is clearly no consumer protection either. The regulator has complete discretion to determine what is meant by a "significant" increase in journey time. He does not have to consult anyone about it, and certainly not the RUCCs which for all other closure proposals are required by the Bill (as under the present arrangements) to receive objections to the proposed closure, to assess the hardship which will occur, and to make a report which may include suggestions for alleviating that hardship. All that must happen before a normal closure can take effect, but under the new concept of minor closures there will be no role for the RUCCs.
The extent of the provisions for persons aggrieved by this or that decision of the regulator to appeal against it is one of the features of the Bill. That is certainly the case with a normal closure procedure where Clause 37 sets out such a procedure. But there is no means of appealing against any decision by the regulator to certify a closure as a minor closure. His judgment cannot be challenged except through the courts.
In summary, minor closures are a new concept under the Bill. The arrangements for an operator to seek to have the regulator certify a closure as a minor closure are not specified in the Bill. The definition of minor closures is open to interpretation. The franchising director has no opportunity to decide whether he wants such a service to continue. The RUCCs have no role, and there is no procedure for users to make any input. The regulator cannot impose conditions in relation to a minor closure, and no one has the right of appeal against any decision by the regulator to designate a closure as a minor closure except through the courts.
The proposed amendments would delete all references to minor closures in relation to passenger services and passenger networks so that all such closures would have to be dealt with under the standard closure arrangements as is currently the case. I beg to move.
Earl Howe: Despite the noble Baroness's clear explanation of the amendments, I am sorry to say that I have real difficulty with them. Their effect would be to apply the closure procedures to the discontinuance of passenger services on any stretch of line regardless of how small that stretch was and regardless of whether the service was re-routed such that the closure was barely discernible to passengers.
The definition of a minor closure in Clauses 32(9) and 33(5) ensures that a proposed closure of a service can be treated as a minor closure only if it involves a stretch of line on which there is no station and for which there is an alternative route which does not involve an additional change of train or any significant increase in journey time. It follows that minor closures can only be of little, if any, consequence to the passengers using the service in question. That is a point I stress. I put it to the noble Baroness that her fears are misplaced.
It cannot be right that such minor closures need to be subject to the full weight of the same closure procedure as would apply to the proposed closure of a much more substantial line. A minor closure will have to be certified by the regulator. That is an additional safeguard as the regulator will have to decide in any event on closure were the full closure procedure to apply. There is no question of the regulator's decision being arbitrary. The definitions by which he is bound are very tight.
I hope that in the light of what I have said, the noble Baroness will be content to think again and will not press the amendments.
Baroness Stedman: I am grateful to the noble Earl for that reply. This is a complicated issue which stretches over two or three clauses. I believe that I am satisfied with the Minister's reply but I should like an opportunity to read it again in Hansard. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe Earl Howe moved Amendment No. 62A:
Page 37, line 27, at end insert ("or which are provided on an experimental basis, for the purposes of section 56A of the Transport Act 1962;").
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 62B, 71B, 71C, 78A, 84J, 101A, 107A to 107C, 108A and 129. These amendments need not detain us long. They simply tie up one or two loose ends.
The main amendment is Amendment No. 107B. Construction of some new railways—for example, the Midland Metro—was authorised by local Acts. Some of those Acts sensibly contained provision to the effect that closure of the existing line while the new railway was built over it was not to be subject to the existing closure provisions in Section 56 of the Transport Act 1962. The provisions of Amendment No. 107B preserve that exclusion from statutory closure

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procedures by providing that the new closure procedures in Clauses 32 and 33 and the alternative closure procedures set out in Schedule 4 will not apply where Section 56 of the 1962 Act has been disapplied by any enactment. Amendment No. 107A is a consequential amendment. Amendments Nos. 107C and 108A provide that "railway" has its wider meaning (set out in Clause 74(2)) for the purpose of the alternative closure procedure in Schedule 4 so that certain tram services can be covered, as at present.
Amendments Nos. 62A and 71B exclude from the new closure procedure in Clauses 32 and 33 respectively existing BR "experimental services". As many Members of the Committee will be aware, those services are commonly ones serving new stations along an existing line. They are not currently subject to the full closure procedure which applies to normal BR services. Amendments Nos. 62A and 71B tie up two loose ends: they continue to disapply the full closure procedures to existing BR experimental services and they bring such services into line with the exclusions already in Clauses 32(2) and 33(2) for new experimental services designated by the franchising di rector.
Amendments Nos. 101A and 78A are technical amendments and if can assure the Committee that they do not affect the substance of the new closure procedures. Similarly, the remaining amendments in this group are simply drafting amendments to ensure consistency of language or consistency of approach. I beg to move.
Lord Clinton-Davis: I could hardly follow what the Minister was saying. I hope that he understood what he was saying. We must reserve our right to return to these complex matters at a later stage if necessary.
On Question, amendment agreed to.
Earl Howe Earl Howe moved Amendment No. 62B:
Page 37, line 30, after ("designated") insert ("or which are of a class or description designated").
On Question, amendment agreed to.
11 p.m.
Lord Brabazon of Tara Lord Brabazon of Tara moved Amendment No. 62C:
Page 37, line 45, at end insert:
("(4A) In considering that question the Franchising Director shall have regard to the desirability of maintaining facilities which fulfil, or are capable of fulfilling, functions in relation to the carriage of freight by railway and to any increase in the cost of such carriage if the closure were permitted to take effect.").
The noble Lord said: In moving the amendment I shall, with the leave of the Committee, speak also to Amendments Nos. 70, 78B, 90, 90AA and 97A to 97C. I return again to freight on rail—an issue that I think has not been covered in our discussions today. I also have to say that whatever I have in my amendments is not affected by any previous decisions that the Committee may have made during the course of the afternoon.
The aim of the amendments is simple and, in my view, necessary. The clauses in the Bill that we are presently considering lay down an open and transparent procedure for the closure of passenger
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railway lines. Indeed, the procedure looks more rigorous than that currently in operation. However, I feel that there is one important aspect of the railway industry which that new procedure overlooks and that is what my amendments are directed towards. The rail freight industry has already achieved one important amendment in the other place; namely. to give the regulator the duty to promote the carriage of goods by rail. I am sure that all Members of the Committee welcome that new duty on the regulator. However, r feel that that duty needs reinforcing when considering the issues of closures and that he needs a specific locus to consider the needs of the rail freight industry when considering the merits or demerits of line closures.
Movements of freight, typically, do not follow the main passenger flows. Many are cross-country and many new flows will be focused on the new Channel Tunnel portal rather than concentrated on routes between main centres of population. As such, the track requirements of freight are not the same as those of passenger services. It follows that what may be a minor closure regarding passenger services may have major significance for rail freight. Safeguards for passenger services and lines do not automatically protect rail freight movements.
Members of the Committee will be aware of the long-term decline in the carrying of freight by rail and of the recent losses by the railways of, among other things, oil and cement traffic. In many cases, losses of traffic mean that sections of line become redundant and are then regarded by BR as a liability. Track may be lifted very quickly and 'vital pieces of land disposed of for non-rail uses. In other places the cost of keeping track serviceable under the present regime may become heavy given the limited amount of freight using it. Costs for freight spiral. That then becomes the driving force behind the withdrawal of freight: services, and again track may be lifted or downgraded to passenger running only.
However, there is nothing inevitable about the present decline. Indeed, it is in the freight area that the Government's privatisation policy is likely to have its most substantial success. I am advised that those companies already operating in the private sector of the rail freight industry are expecting liberalisation to deliver substantial economies in rail operations. If that: can be matched with cost-effective provision of the infrastructure, there is no reason why freight on rail should not once again thrive and grow.
We must not allow freight capacity to be cut, freight lines closed and lines capable of' reinstatement: sterilised by ill-considered property disposal. Looking not many years ahead, we shall surely need that capacity if the congestion on our roads and the environmental damage caused by heavy lorries is not to become intolerable. We should not measure the ability of the railway to carry freight on its present. performance, nor should we permit the longer-term potential of the railway to be jeopardised by short-term thinking.
My amendments address three areas. First, the definition of a minor closure is amended such that a closure cannot be a minor closure if there are significant implications for freight. I believe that that

1189
closes a serious loophole. Secondly, a duty is imposed on the franchising director, and through him the regulator, to take into account the effect on freight of any proposed passenger closure. That will prevent the absurd and regrettable situation arising whereby a passenger closure may be sanctioned, costs cascaded on to the remaining freight user of the line and the freight service closed as a result or continued only with the help of a government track charges grant. Finally, in the case of a closure which affects only freight, the amendments put into place similar notification and consultation procedures as for passenger closures.
It has been argued by some that Railtrack, or any other facility owner, will not have any reason to close freight facilities which may have a future use and that normal commercial pressures can be relied upon to prevent undesirable closures. Unfortunately I do not believe that this mechanism can be relied upon. We do not yet know what financial regime Railtrack will be working under but we can anticipate that it will be, quite rightly, stringent. Under these circumstances, long-term strategic planning may be a luxury which Railtrack cannot afford.
Furthermore much freight, particularly to start with, may only be making a marginal contribution to Railtrack's costs and consequently there will be only a marginal incentive to accommodate it. There will in particular be no incentive to keep facilities in reserve against future needs. In other words Railtrack's remit to run a cost-effective and efficient railway in the short term may be incompatible with a forward planning government's wish to hold railway capacity in reserve for the future. It is for this reason that these modest safeguards proposed in my amendments are required.
These amendments are not asking that no closures which affect freight or may affect the future development of freight should ever be allowed: what they achieve is, first, a situation where no closure can take effect without the freight implications being considered and, secondly, they give the regulator power to impose conditions before sanctioning a closure. Such conditions might be, for example, that track may be lifted but the formation be left more or less intact and the line of route kept clear. Another condition might be that the line or facility in question should be offered for sale to any private sector purchaser at a negotiated, and preferably nominal, figure for operational use. The amendments do not seek to prescribe the way the regulator may use his powers but without them there are no safeguards against a gradual and irreversible decline in the capacity of the railway to carry goods.
I wish to leave my noble friend in no doubt as to the seriousness I attach to these amendments. I hope very much that he will be minded to accept them or at the very least promise to come back with his own amendments on Report. I beg to move.
Lord Ewing of Kirkford: The temptation at this late hour is to allow these important amendments to pass almost without discussion. However, as the noble Lord, Lord Brabazon, said, we are dealing with one of the most important issues that has been raised today. If we are to get as much road haulage as possible off
1190
the roads and on to the railways—that is essential as we move towards the end of this century—and avoid the saturation of our roads with heavy goods vehicles, then we must keep the routes open and available to take that freight when the day comes when we move it from road to rail. I am fairly certain that the Minister will accept that we are moving into a new era with the opening of the Channel Tunnel and with all the possibilities that that creates for the movement of freight in terms of inter-Continental freight. It would be a great tragedy if we missed this one-off opportunity. Once rail networks, and especially freight rail networks are closed, it is almost impossible to have them reopened. One of the saddest sights I have seen over the past few years, particularly in Scotland, has been the regular closure of freight depots, particularly in Leith and in my former constituency of Grangemouth, which were two major rail freight depots. Those are both now practically non-existent. I add my voice to that of the noble Lord, Lord Brabazon, and hope that I can encourage the Minister to take a positive approach to these constructive amendments.
Earl Howe: I know that my noble friend attaches considerable importance to the protection of freight interests in respect of railway closure procedures and I have more than a degree of sympathy with his sentiments for I share his enthusiasm for the development of the rail freight industry in this country. I think I can provide some comfort to my noble friend even if I initially embark on a criticism of his amendments.
However, I cannot share my noble friend's view, as indicated by his amendment, that the way to promote rail freight is to allow it to shelter behind closure procedures designed for the rather different circumstances of the passenger railway and the social obligations associated with loss-making passenger services. That is a fundamental point of which we cannot lose sight.
Like previous governments going back many years, we believe that rail freight should be organised and managed as a strictly commercial business. The environmental benefits of rail should be recognised through specifically-targeted financial assistance and the industry allowed to develop in a deregulated market.
Amendments Nos. 70 and 90 deal with minor closures. In so far as the discontinuance of passenger services is concerned, which is my noble friend's principal worry, the rule is that a minor closure must not affect any individual station on the line in question and that there must be an alternative routing which can be used by trains at no inconvenience to passengers.
My noble friend's worry is that although a closure may not affect a passenger station it may affect a freight siding at a customer's premises. The withdrawal of passenger trains would leave the freight customer to meet the full cost of keeping that particular stretch of track open, thereby jeopardising the whole freight operation.
I am not sure whether my noble friend has any particular freight facilities in mind or has done any

1191
research into the likely scale of the problem which he fears. I suggest that his concern seems more theoretical than practical in this instance. I know of no circumstances or localities where freight facilities might be affected in the way he fears.
It is worth reminding the House that Railtrack will have considerable flexibility in determining its charges. It may well be prepared to stand a loss on a small stretch of track used by a freight customer if that customer makes a strong, positive contribution towards the overall cost of the network. Railtrack would be most unlikely to freeze out a customer if that meant throwing good business away with the bad.
The other amendments tabled by my noble friend are much more radical and taken together would amount to the introduction of a complete and detailed closure procedure for freight. They are aimed at preventing any passenger closures which have even a remote effect on freight services and they are equally aimed at preventing closure of freight-only facilities even where there are no passenger interests.
I know that groups representing rail freight interests are worried that the withdrawal of a passenger service can harm a freight service. That would be the case where the passenger service in question was the only remaining such service on a stretch of track, leaving the freight operator to pick up the Rill cost of the infrastructure. If we look carefully at this worry I hope that I can persuade my noble friend that his fears are misplaced.
First, the regulator and the Secretary of State are both under a general duty to promote the use of the railway network for the carriage of goods by rail and will no doubt bear these general duties in mind when taking decisions on closures. Secondly, access agreements between freight customers and Railtrack will be contractually binding for the term of the agreement. It is not open to one party unilaterally to raise prices or withdraw services without the consent of the other. Thirdly, if freight operators are left as the only users of a line after passenger services have gone and access agreements have expired they will be able to apply for a track costs grant to help to meet the track charges. Alternatively, it will be open to Railtrack to apply for a capital grant if major renewal work is required. In both cases there will be an objective assessment of the environmental benefits so that taxpayers can see exactly what their money is buying. That is a more honest way of proceeding than hiding marginal freight flows behind passenger traffic.
I turn briefly to freight-only closures. I should say straightaway that the Government stick firmly to the principle that rail freight is a commercial enterprise which should pay its own way unless there are exceptional circumstances such as the environmental benefits I have just referred to. In cases where freight operators are the only users of a line, then I believe it is only fair that they should pay the full cost of its provision. Negotiations with the owners of the line should be conducted on a wholly commercial basis, without reference to third parties who have no direct financial stake.
However, having said that, I have yet to hear a convincing argument as to why it is felt that Railtrack
1192
would wish to squeeze out a freight service unless that service makes a negative contribution to Railtrack's finances overall. Provided freight services cover their genuine avoidable costs, there is no incentive for Railtrack to ditch freight. I am therefore highly sceptical about the oft-cited fear that developers will come along and persuade Railtrack to sell perfectly good bits of infrastructure in order to build supermarkets or whatever, not least because most freight land is hardly suitable for such development.
As I mentioned at the outset, I can understand my noble friend's concern for the rail freight industry. All of us in the Committee share his belief that the industry must be given a chance to shine, and I am convinced that our policies, with the maximum of freedom and the minimum of intervention, are the right way forward.
As I made clear, the Government's views on the commercial independence of the rail freight industry and the need for deregulation have been known for many years. However, I accept that my noble friend has made some important points upon which both I and my colleagues in Government will wish to reflect further. In particular, we shall give some further thought to the powers already available to the Secretary of State, both in the Bill and in existing legislation. I refer my noble friend to Clause 4(4) of the Bill, on guidance to the regulator, and Section 54 of the Transport Act 1962 which allows for a goods closure notification procedure and could be amended under Clause 139 of the Bill to reflect the circumstances of a post-privatisation railway industry.
With those remarks, I hope that my noble friend will be content to withdraw the amendment at this stage.
Lord Brabazon of Tara: I am most grateful to my noble friend for his remarks, in particular those within the past minute when he became friendly, having previously criticised some of my proposals. I am grateful to the noble Lord, Lord Ewing of Kirkford., for his support. He was absolutely right when he said that with the opening of the Channel Tunnel we all hope that a new era will open up for rail freight. I recall, as will the noble Lord, Lord Carmichael, that that is what I said during the passage of the Channel Tunnel legislation, which seems so many years ago. I believe that that is right. Through their desire to promote rail freight—it has been stated by the Secretary of State and there will be a duty upon him and upon the regulator—the Government recognise that that is indeed what we wish to see.
My noble friend criticised my amendment in a number of different ways. In view of the late hour I do not propose to go through what he said. He made up for that criticism to some extent by what he said in the last few sentences of his speech. I shall read what he said with interest. I look forward to examining the specific proposals that he made at the end of his reply. In the meantime, I beg leave to withdraw the amendment. I also give notice that I shall not move the other amendments which are grouped with it.
Amendment, by leave, withdrawn.
Baroness Stedman Baroness Stedman moved amendment No. 63:

1193
Page 38, line 6, after ("publish") insert ("at every station affected and").
The noble Baroness said: This is a large group of amendments and I am afraid that I am responsible for 21 of the amendments in it. However, I shall not make 21 speeches. In moving Amendment No. 63 I shall speak to Amendments Nos. 64 to 68, 72 to 76, 79 to 83 and 85 to 89.
Six amendments apply to Clauses 32, 33, 34 and 35. Amendments Nos. 63, 72, 79 and 85 deal in the different clauses with the closure and the publication of notices. If the franchising director is of the opinion that a proposed closure ought to take effect then he has to publish a notice. It is standard practice at present, though I understand it is not a legal requirement, for British Rail to publish such notices at all railway stations affected by the proposal.
Under Clause 36(10), once a decision has been made on the closure proposal, the regulator is obliged to publish a notice of his decision at every station within the area affected. It is logical that the franchising director should be required to do something similar at the start of the process and these amendments would enshrine that concept in the new legislation.
On Amendments Nos. 64, 73, 80 and 86, the franchising director's notice of closure has to be published for two successive weeks in a local newspaper circulating in the area and in two national newspapers. Currently, British Rail publishes the notices in two local papers. The new proposals will ensure a wider coverage, but the decision to publish in only one local newspaper is felt to be insufficient and inflexible because of the rather less frequent publication of local newspapers and it being necessary in only one.
On Amendments Nos. 65, 74, 81 and 87, the franchising director's closure notice has to contain the addresses of the premises at which a statement of the reasons for the closure can be inspected or from which a copy of that statement can be obtained together with any fees payable for a copy of the statement. Currently, British Rail prepares the equivalent document and supplies it to the transport users consultative committee free of charge. It is invariably made available to objectors free of charge. The payment of a fee by objectors to obtain a copy of the statement is not desirable. It could well deter potential objectors from lodging an objection. The amendments seek to delete any reference to fees from the copies of the franchising director's statement.
On Amendments Nos. 46, 75, 82 and 91, the franchising director's closure notice must contain a statement that objections to the closure may be lodged with the regulator. Under the present legislation, objections are lodged with the relevant transport users consultative committee and they must be in writing. It would be impossible for the regulator or other parties to deal with telephone objections satisfactorily. The amendment is to deal with that.
On Amendments Nos. 67 and 76, the objections must be lodged within a specified period which is not less than six weeks from the date of the last
1194
publication of the notice in a national newspaper. Instead of a national newspaper, in Clauses 34 and 35, the local newspaper is specified. I believe that a local newspaper is quite satisfactory and acceptable, but the infrequent publication of some local newspapers means that the dates may have to be extended. It could reduce the effective period for objections by people who become aware of the proposal through their local newspaper. The deletion of "national" in Clauses 32 and 33 would ensure that whether the notice appears last in a national or a local newspaper becomes irrelevant and everyone would have six weeks to object.
Finally, on Amendments Nos. 68, 83 and 89, the franchising director's statement of the reasons for the closure may consist of, or include, the operator's reason for proposing the closure, with or without other reasons of the franchising director. The amendment seeks to ensure that the statement, which will be important to objectors in preparing their case, includes both the operator's and the franchising director's reasons for proposing closure. I believe it is entirely appropriate that objectors have a clear idea of the case which they may have to answer. I beg to move.
Earl Howe: I shall try to be brief, although it is difficult with this number of amendments. The amendments in this grouping are detailed amendments concerning the notice that the franchising director is required to publish if he considers a closure proposal should be allowed to take effect, and other related matters.
Amendments Nos. 63, 72, 79 and 85 would require the notice to be published at every station affected by a closure procedure. BR at present displays notices of proposed closures at stations, though there is no statutory requirement to do so. I have no difficulty with the intent of these amendments, but I do not believe that they are necessary. The publication requirements in the Bill are minimums and the franchising director is already required to publish his notices in national and local newspapers and in any other manner he thinks appropriate.
Amendments Nos. 64, 73, 80 and 86 would require the notice to be published in at least one local newspaper, in addition to two national newspapers. These amendments would add little to the Bill. The present formulation is, again, already effectively a minimum requirement, since the franchising director is empowered also to publish the notice,
"in such other manner as it appears to him to be appropriate".
Amendments Nos. 65, 74, 81 and 87 are apparently intended to remove the power of the franchising director to charge for copies of the statement of reasons for the proposed closure. I think it is only reasonable to permit charging if the charge is not obligatory. The level of any charge would of course have to be reasonable, perhaps to recover the cost of making copies available.
Amendments Nos. 66, 75, 82 and 88 would require that any objection to the proposed closure must be in writing. Again, this would add little to the Bill. Any serious objector would surely object in writing.

1195
Amendments Nos. 67 and 76 would alter the start date of the period within which objections must be lodged, to begin with the date of last publication in any newspaper.
Government Amendments Nos. 67A and 76A, to which I shall refer in a moment, have much the same effect in making the start date the date of publication in the local newspaper, which we expect would be the latest date, and so give the longest period for the lodging of objections.
Amendments Nos. 68, 83 and 89 would require the statement of reasons for the proposed closure to include the operator's reasons rather than, as drafted, permit their inclusion. I do not think that that would be right. The operator will have his own reasons for wanting to withdraw. Those may or may not be relevant to the franchising director's decision to invoke the closure procedures. It is the franchising director's reasons for proposing closure that are important and should be made public. If the franchising director wishes to pray in aid some of the operator's reasons, then he may, but he should not be obliged to. They may be completely immaterial.
I turn briefly to the government amendments in this grouping. Amendment No. 64A brings Clause 32 into line with the other closure clauses—for example, Causes 33 to 35. It is not controversial; it simply recognises the point that, when a rail user sees a notice of a proposed closure, he wants to know when that closure is due to take effect.
I can assure the Committee that Amendments Nos. 64B, 68A, 70F, 76B, 77A and 86A, all of which are in this grouping, are all technical and stylistic amendments which do not affect the substance of the provisions but which do improve the drafting of the Bill.
I mentioned a moment ago Amendments Nos. 67A and 76A. There may be some cases where a user of a service or facility which has been proposed for closure may only read a local newspaper which is published weekly or even fortnightly. We want to ensure that such a person still has the full six weeks within which to object to the regulator. These amendments therefore provide for the six-week period to begin on the date of publication of a proposed closure in a local newspaper, not a national newspaper. For the reasons I have stated, I cannot support the noble Baroness's amendments, but I commend my own to the Committee.
Baroness Stedman: I am grateful to the Minister for his explanation. I beg leave to withdraw my amendment.
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Amendment, by leave, withdrawn.
[Amendment No. 64 not moved.]
Viscount Goschen Viscount Goschen moved Amendments Nos. 64A and 64B:
Page 38, line I I, leave out from ("which"') to end of line 12 and insert ("it is proposed that the closure will take effect,").
Page 38, line 14, leave out ("the Franchising Director") and insert ("him").
The noble Viscount said: I beg to move these amendments en bloc.
On Question, amendments agreed to.
[Amendments Nos. 65 to 67 not moved.]
Viscount Goschen Viscount Goschen moved Amendment No. 67A:
Page 38, line 22, leave out ("national") and insert ("local").
On Question, amendment agreed to.
[Amendment No. 68 not moved.]
Viscount Goschen Viscount Goschen moved Amendment No. 68A:
Page 38, line 41, at end insert:
(""the area affected" means the area in which is situated the station or, as the case may be the, line mentioned in subsection (1) above;").
On Question, amendment agreed to.
[Amendments Nos. 69 and 70 not moved.]
Viscount Goschen: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Video Recordings Bill [H.L.]
Returned from the Commons agreed to.
Bail (Amendment) Bill
Returned from the Commons with the amendments agreed to.
Local Government (Overseas Assistance) Bill
Returned from the Commons with the amendments agreed to.

Criminal Justice Bill [H.L.]
Returned from the Commons agreed to with amendments and with a privilege amendment; the Commons amendments ordered to be printed.
House adjourned at half-past eleven o'clock.

  COMMONWEALTH DEVELOPMENT CORPORATION: OPERATION IN VIETNAM
  COMMONWEALTH DEVELOPMENT CORPORATION: OPERATION IN VIETNAM
  NORTH KOREA: NUCLEAR POLICY
  NORTH KOREA: NUCLEAR POLICY
  UN CENTRE FOR HUMAN RIGHTS: SPECIAL PROCEDURES SECTION
  UN CENTRE FOR HUMAN RIGHTS: SPECIAL PROCEDURES SECTION
  NIGERIA: PRESIDENTIAL ELECTION
  NIGERIA: PRESIDENTIAL ELECTION
  UN CENTRE FOR HUMAN RIGHTS: BUDGET AND WORKLOAD
  UN CENTRE FOR HUMAN RIGHTS: BUDGET AND WORKLOAD
  SOUTHERN SUDAN: AMBASSADOR'S REPORT
  SOUTHERN SUDAN: AMBASSADOR'S REPORT
  SUDAN: VISIT OF UN RAPPORTEUR
  SUDAN: VISIT OF UN RAPPORTEUR
  SOUTHERN AND WESTERN SUDAN: NAIROBI TALKS
  SOUTHERN AND WESTERN SUDAN: NAIROBI TALKS
  BT: SALE OF SHARES
  BT: SALE OF SHARES
  EUROPEAN SOCIAL FUND KONVER INITIATIVE GRANTS
  EUROPEAN SOCIAL FUND KONVER INITIATIVE GRANTS
  SEVERE HARDSHIP PAYMENTS TO YT APPLICANTS
  SEVERE HARDSHIP PAYMENTS TO YT APPLICANTS
  THE GREEN BELT: RESEARCH PROJECT
  THE GREEN BELT: RESEARCH PROJECT
  BEER IMPORTS
  BEER IMPORTS
  REPROCESSED PLUTONIUM EXPORT CRITERIA
  REPROCESSED PLUTONIUM EXPORT CRITERIA