Sitting of 9 June 1993

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

    Family life
    Mr. Fabricant: To ask the Secretary of State for Scotland what research his Department has undertaken into family life and Sunday church attendance in Scotland.
    The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): The Scottish Office has sponsored a number of research projects which touch upon various aspects of family life in Scotland. Full details are given in the 1992–93 edition of the Scottish Office Register of Research, a copy of which is in the House library.
    It is not for the Scottish Office to undertake research into church attendance.
    Mr. Fabricant: I am grateful for my hon. Friend's answer. Is he aware that other research has shown that more people regularly worship in Scotland on Sundays than in England and Wales? Is he aware also that Scotland is unique in the United Kingdom, in that people are able to shop legally on Sundays in Scotland? Does my hon. Friend agree that England and Wales have a lot to learn from Scotland and that shops in England and Wales should be allowed to trade on Sunday, too?
    Lord James Douglas-Hamilton: Both countries have a lot to learn from each other. Scotland is, as my hon. Friend suggested, a God-fearing nation. The situation in Scotland works very well, in large measure because Sunday opening has evolved in accordance with the wishes of the majority of residents. No doubt my right hon. and learned Friend the Home Secretary, who is responsible for such matters, will take those points into account when he reviews the position in England.
    Mr. Norman Hogg: Does the Minister agree that, notwithstanding what the hon. Member for Mid-Staffordshire (Mr. Fabricant) said, and notwithstanding the position of the Scottish Office, church attendance in Scotland could stand improvement? It was said in The Scotsman on Tuesday that I criticise the Church of Scotland, which of course is correct, as it was I who wrote that in the first place. Does the Minister agree further that Sunday trading in Scotland, as in England, is a matter for the people concerned, that it is no business of ours how people trade in England on a Sunday, but that most Scottish people support the Bill introduced by my hon. Friend the Member for Ogmore (Mr. Powell)?
    Lord James Douglas-Hamilton: I am grateful for the hon. Gentleman's comments. A substantial number of people support both the Church of Scotland—the national church—and the Roman Catholic Church. There are more than 752,000 names on the Church of Scotland congregational roll and more than 745,000 on the Roman Catholic Church roll. That is the reality, and we would do well to keep it in mind.
    Mr. McFall: Thirty-one per cent. of the Scottish population attend church. That is twice the number of Scots who support the Government's current policies. If we look at the Government's record on the family, we clearly see that "suffer the little children to come unto me" is not a motto which guides their actions. There are 800,000 people in Scotland on income support—that is one sixth of the population—and half of them are likely to be children living on the margins of society.
    What future do those impoverished children face? No doubt, they will join the 8,700 16 and 17-year-olds who have been rendered destitute by the Government's failure and by their youth training scheme. [HON. MEMBERS: "Question."] Instead of condemning the Church, will the Government join the side of the Church? Unlike the Samaritan, they walk on the other side of the road. Is it not ridiculous for the Government to take that action?
    Lord James Douglas-Hamilton: I am glad to reassure the hon. Gentleman that nearly £80 billion is spent on social services throughout the United Kingdom, which is an enormous sum. The hon. Gentleman will be reassured to know that we are undertaking research into vital sectors which can be of assistance in Scotland. They include the impact of the Child Support Act 1991 on civil law and strategies for integrated local authority child care. We will continue in that process.

    Industry and Employment
    Mr. Salmond: To ask the Secretary of State for Scotland when he last met representatives of chambers of commerce to discuss industrial and employment trends in Scotland; and if he will make a statement.
    The Secretary of State for Scotland (Mr. Ian lang): My ministerial colleagues and I have frequent opportunities to discuss a range of industrial and employment issues with representatives of chambers of commerce and other organisations. I visited Aberdeen chamber last December and Glasgow chamber in February, and I attended the first annual dinner of the Scottish chambers of commerce in Edinburgh at the end of April.
    Mr. Salmond: The Secretary of State will know that Aberdeen chamber of commerce, among many other organisations, is concerned about the impact of the oil tax changes that were announced in the Budget. The best estimates are that it could cost 10,000 jobs in the north-east of Scotland. Is it possible to have a straight answer to a straight question from the Secretary of State on this issue? Treasury Ministers have told the House that other Departments were consulted before the tax changes in the Budget. Was the Scottish Office consulted, and if not, why not?
    Mr. Lang: Consultations on all kinds of aspects of the Budget take place with a number of Departments. As the hon. Gentleman knows, internal consultations within

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    Government are never disclosed. What is clear from the changes proposed to the petroleum revenue tax is that some companies will benefit and some will suffer. What is also clear is that, in the longer term, there is every prospect of improved after-tax cash flow to companies as a result of the reduction in petroleum revenue tax.
    I have no doubt that the great success story of offshore exploration, reinforced by re-siting Department of Trade and Industry engineering and exploration jobs in Aberdeen, and reinforced again by the welcome announcement by Conoco only last week of the relocation of 200 jobs to Aberdeen, will continue.
    Mr. Kynoch: Will my right hon. Friend confirm that the percentage of the working population in Scotland in employment is one of the highest in the European Community, way ahead of that of Germany, France, Italy and Spain? That is most encouraging news, which we never hear from the doom and gloom mongers opposite.
    Mr. Lang: My hon. Friend is absolutely right. Only two countries in the European Community have a higher percentage of their population in employment. The encouraging statistics in the north-east of Scotland, where my hon. Friend's constituency is located, reinforce the encouraging prospects we face throughout the United Kingdom.
    Mrs. Adams: The Secretary of State will recall that I have visited his Department on several occasions regarding the industrial devastation that has been wrought on my constituency. The latest casualty is Babcock in Renfrew, where we are to suffer yet another large redundancy, probably of 450 people. That is on top of 500 last month at Rolls-Royce. Along with my hon. Friend the Member for Paisley, South (Mr. McMaster), I have continually asked for an initiative in Renfrew district to tackle the industrial problems we face. The Secretary of State has continually refused that. Will he now reconsider the matter?
    Mr. Lang: The hon. lady is being extremely unfair. There have been a number of initiatives in Renfrewshire over the past few years. The establishment of the Renfrewshire enterprise company is a major new initiative to encourage the regeneration of the economy of that area. The hon. lady should draw comfort from the Scottish Chambers' survey which shows optimism up in almost every quarter and in almost every sector of the economy in Scotland.
    Mr. Wallace: In his discussion with chambers of commerce, has the right hon. Gentleman had representations on the importance of maintaining the dockyard at Rosyth, not only in terms of jobs in Fife, but in terms of jobs throughout the Scottish economy? Those jobs include more than half the engineering apprenticeships in Scotland. Given that his predecessor, lord Younger, has said that if the contract for the refitting of the nuclear submarines goes to Devonport, it will be an unacceptable breach of faith, is the right hon. Gentleman prepared to put his job on the line for the jobs of thousands of Scots?
    Mr. Lang: The hon. Gentleman knows very well where I stand on that issue. I am sure that he is well aware of my involvement in the consideration of these issues within Government. However, as the matter is not yet resolved and not yet decided, I cannot say any more in detail about
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    it today, except to underline to the hon. Gentleman and to the House that I shall lose no opportunity to ensure that every argument in favour of Rosyth is advanced.
    Mr. Tom Clarke: Does the Secretary of State accept that that was a miserable reply, as the future of Rosyth is one of the most serious issues that Scotland has faced since the war, and certainly since Ravenscraig? Is he prepared to see 18,000 jobs lost? Is he prepared to see the merchant shipbuilding industry largely lost, along with an important dockyard? Will he, in addition to the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) who has some say in this matter, get off his backside and make it clear to the Prime Minister that if Rosyth closes, the Secretary of State is willing to go as well?
    Mr. Lang: Clearly, the hon. Gentleman did not listen to my previous answer or to the announcement made by my right hon. and learned Friend the Secretary of State for Defence some weeks ago. He made it clear that there would be two yards regardless of where the Trident refit contract was placed. The Opposition would carry more conviction on this issue if they had not systematically campaigned against our nuclear submarine and had not systematically campaigned for the cancellation of the last Trident submarine. They therefore carry no conviction on the issue whatever.

    NHS Staff
    Mr. Gallie: To ask the Secretary of State for Scotland how many additional nurses and doctors have been employed in the NHS since 1979; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): At 30 September 1992, there were 11,192 more qualified nurses employed in the national health service in Scotland than there were on 30 September 1979. The number of doctors, including general medical practitioners, increased by 1,448 over the same period.
    Mr. Gallie: When there are more doctors and more nurses, whose pay has risen by more than 40 per cent. in recent times, when nurses and junior doctors have shorter working hours, and when there are new hospitals and new clinics, why do Opposition Members always tell us that the morale of staff in the health service is at a low ebb?
    Mr. Stewart: As always, my hon. Friend is entirely right to say that, on this issue, as on other Scottish issues, Opposition Members are in the disinformation business. In real terms, NHS expenditure has increased by 45 per cent. since 1979–80, and on every indicator, the provision of services by the NHS in Scotland has improved steadily under this Government.
    Mr. Canavan: Is the Minister aware of the concern among nurses and patients at Falkirk royal infirmary about the current threat to the hospital's urology department, and the general tendency of the Forth Valley health board gradually to run down the Falkirk royal infirmary and centralise everything at Stirling? Will the Minister intervene to ensure that that trend ceases and Falkirk royal infirmary can provide the full range of services that the people of Falkirk district need and deserve?
    Mr. Sewart: The hon. Gentleman will recognise that those are decisions for the health board. However, I can reassure the hon. Gentleman by saying that the resources made available to Forth Valley of £139·6 million for the current financial year represent an increase of 3·3 per cent. over the 1992–93 base purchaser allocation. That is a sign of the resources available, but detailed decisions must be for the health board to make.
    Mr. Dickens: Does my hon. Friend recognise that the excellence of the health service in Scotland and elsewhere is such that people now, God willing, enjoy a much longer life? Is that not vividly illustrated by the fact that, in her first year on the throne Her Majesty the Queen sent 210 telegrams to 100-year-olds, and that last year she sent 2,800 congratulatory telegrams—[HoN. MEMBERS: "All to Scotland?"] No, not all to Scotland. Does that not illustrate the merits of the national health service during the past 14 years under Conservative Governments?
    Mr. Stewart: My hon. Friend is correct to say that more and more Scots are living longer and longer. My hon. Friend has given the House a useful indicator, and all other signs point in the same direction. Under this Government, the number of in-patients treated per annum has increased by 27 per cent. and day patients by 180 per cent. Every figure underlines the effectiveness of this Government's commitment to the national health service in Scotland.
    Mr. Wray: Does the Minister agree that the health service is the most caring and compassionate profession? It is the profession's duty to protect the sanctity of human life, and a shiver has been sent through the old, the hospice movement and the disabled by the Bill on euthanasia. Will the Minister oppose it with all his might, and will the Government oppose it?
    Mr. Stewart: All hon. Members will take their own decisions on that Bill in the light of their own consciences. Speaking as an hon. Member, not a Minister, I have received a large number of representations from constituents and from those invoved in the hospice movement, and they accord with my personal view, which is one of opposition to the Bill.
    Mrs. Fyfe: Will the Minister tell us this afternoon about the growth in the number of senior managers in the last year? His own statistics, published by the Scottish Office, show that the number has risen by no less than 30 per cent. in one year alone. How many nurses and midwives in training have we lost in the past 12 years; and how many beds have been lost in the past 12 years? More importantly, will the Minister state categorically what cuts he is contemplating for the health service when the Treasury comes looking for his share of the £50 billion deficit?
    Mr. Stewart: There has been no increase in senior management numbers in the health service; there has merely been a redefinition of the number of positions previously allocated to staff groups but now separately identified.
    As for the hon. lady's general point about cuts, there have been been no cuts in the health service or in provision for the health service in Scotland. [Laughter.] The hon. lady laughs. She is clearly incapable of reading the figures. —[Interruption.]—or of understanding them. How many
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    more figures does she want'? I can reassure her that provision for national health service spending in Scotland has increased not in nominal terms but in real terms by 45 per cent. since 1979–80. The Opposition simply cannot deny these basic facts.

    Scottish Homes Tenants
    Mr. Home Robertson: To ask the Secretary of State for Scotland if he will make a statement on the choice of alternative landlords which is available for Scottish Homes tenants.
    Lord James Douglas-Hamilton: It is for Scottish Homes, in consultation with its tenants, and within the scope of the guidance issued by my right hon. Friend, to make decisions on the choice of alternative landlords. Any proposals that secure the agreement of tenants are subject to his approval.
    Mr. Home Robertson: Can the Minister think of a suitable name for a Government who legislate to allow tenants to choose new landlords but then refuse to allow the tenants to choose their preferred alternative landlord? Will he acknowledge the fact that three quarters of Scottish Homes' tenants in East Lothian have made it clear that they would prefer to choose East Lothian district council'? Is he aware that that district council urgently needs more housing stock, and that the only obstacle to those tenants achieving their choice is a thrawn Tory in the Scottish Office who is not prepared to allow them what they want'?
    Lord James Douglas-Hamilton: I am aware that East lothian has a growing population—a factor which we will take into account. The current arrangements do not prevent a local authority from proposing to acquire Scottish Homes stock. It will be for Scottish Homes to decide whether there are special circumstances that would enable the local authority to become a suitable landlord.
    Scottish Homes has considered one local authority in this connection. Its tenants in Berwickshire were given the opportunity to vote to transfer to the local authority, but a majority voted against. As I say, if Scottish Homes judges that special circumstances arise, then the local authority will have this opportunity.
    Mr. McAllion: Is the Minister aware that the Government's unrelenting hostility to public sector housing is creating a kind of housing apartheid in Scotland? Council housing is reduced to the status of a safety net for those who cannot afford anything else, and there is a real danger of creating in Scotland the sort of demoralised ghettos which have for so long scarred the American urban experience.
    Why cannot the hon. Gentleman understand that the continued existence of tens of thousands of damp-ridden and decaying public sector houses is the responsibility of the Government; and that the situation will improve only when he and other Ministers get off their backsides and start to assist public sector housing in Scotland?
    Lord James Douglas-Hamilton: About £1 billion is spent on public sector housing each year. When the hon. Gentleman speaks about ghettos, he should bear in mind the fact that huge sums have been poured into Whitfield in his constituency, which both he and I have visited. The scheme is strongly supported by his constituents. The

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    whole drift of our policy is to prevent what the hon. Gentleman suggests. I read a few days ago that the Labour candidate had a good chance of being re-elected against a Militant candidate because of the success of Conservative party policies.
    Sir David Steel: The Minister's original answer is totally misleading. Does he not know that the number of tenants in Berwickshire that he referred to is six? We are not talking about special cases made to Scottish Homes but about the right of tenants generally to be able to choose either a private landlord or a local authority. Why cannot they be given that choice?
    Lord James Douglas-Hamilton: They can be given that choice in special circumstances. I anticipate that Scottish Homes would examine such considerations as the number of properties involved, their location and the percentage of houses already held by the local authority. Obviously, in some areas the local authority may be virtually the monopoly provider of housing. Scottish Homes is justified in its approach. For operational, practical reasons it has decided that the ballot paper will contain two options—the status quo and a move to a specified landlord. The tenant's independent adviser should be able effectively to feed to Scottish Homes the tenants' views about who the preferred bidder should be.

    "Scotland in the Union—a partnership for good"
    Mr. Galloway: To ask the Secretary of State for Scotland what further steps he has taken to assess public opinion in Scotland on his White Paper "Scotland in the Union—a partnership for good".
    Mr. Lang: The White Paper "Scotland in the Union —a partnership for good" has received a very positive response.
    Mr. Galloway: The dogs in the street are laughing at that answer. As the Secretary of State surveys the sea of. troubles in which his unrepresentative rump is floundering, does he ever gaze across the water to Barcelona, where the Catalan conservative party, Convergence in Union, is outstandingly successful notwithstanding its conservative free-market views? It is successful because it flies its free market colours as well as its Catalan colours and is not seen as a traitor to its own people.
    Would not the Secretary of State be well advised to study that example and organise a democratic referendum in Scotland, in which all the options facing the Scottish people could be tested? He could do himself and his party a favour and respect the democratic rights of the Scots by organising a referendum on this risible White Paper.
    Mr. Lang: In terms of unrepresentative rumps, I am not sure whether I can hold a candle to the hon. Gentleman, since he quite clearly disagrees with, and is disagreed with by, the rest of his parliamentary party. When I look for public opinion support in Scotland, I look at a recent by-election in Turriff, which was won by the Conservative candidate with an increase of 300 in his vote. He beat the Scottish National party into second place by 700 votes. That is an endorsement by public opinion in Scotland. The Labour party's membership throughout Scotland has fallen to 17,834. That is representative of very little.
    Mr. Raymond S. Robertson: Does my right hon. Friend agree that before any political party in Scotland can claim to speak for and, indeed, be representative of the Scottish people, it must first be representative throughout the length and breadth of Scotland? By its own admission, the Labour party, with only 17,000 members, may be many things, but it is not representative.
    Mr. Lang: My hon. Friend is absolutely right. It was quite clear from the result of the last general election that the policies espoused by the Labour party were not supported.
    Dr. Reid: Have we not reached a pathetic and sorry pass when an English Tory, the hon. Member for Mid-Staffordshire (Mr. Fabricant) could recognise in Question 1 the distinctiveness—indeed, he used the word "uniqueness"—of Scottish culture better than the Secretary of State for Scotland?
    Is it not pathetic that our country is presided over by a Prime Minister who boasts that he does not read our national newspaper and by four Scottish Office Ministers who have no idea of our national aspirations? If they believe that they represent Scotland in any way, why will they not do what my hon. Friend the Member for Glasgow, Hillhead (Mr. Galloway) asked, and organise a referendum to let, the people of Scotland speak? That would be better than subjecting us to mealy-mouthed quotes.
    Mr. Lang: It was my noble Friend lady Thatcher who described a referendum as device to defeat democracy. I believe that the proposals in the White Paper will lead to the improvement of the handling of Scottish business here. I have written to the leaders of the other political parties and I am glad to say that the leader of the Scottish National Party has written back to me indicating that she is willing to take part in discussions on behalf of her party over the implementation of the proposals in the White Paper, "Scotland in the Union—a partnership for good."
    Mr. Trimble: Does the Secretary of State intend to convene an all-party conference in Scotland on the White Paper? If he does not, does he appreciate the contrast between himself, who apparently does not want talks but has a policy, and his colleague the Secretary of State for Northern Ireland, who wants talks but does not have a policy?
    Mr. Lang: I do not propose to call the conference to which the hon. Gentleman refers, but I have indicated my willingness, indeed my enthusiasm, to discuss our proposals in detail with the leaders of the other political parties in Scotland. One of the distinctive features of the United Kingdom is the diversity of its component parts and one of the purposes of the White Paper is to accommodate that diversity as it is reflected in Scotland.
    Mr. McLeish: Will the Secretary of State own up to the fact that public opinion in Scotland is of marginal interest to his beleaguered Administration? Does he not accept that only 16 per cent. of public opinion now supports the Conservative party, that 98 per cent. of public opinion overwhelmingly opposes the madcap idea of privatising water and that 80 per cent. of Scots want substantial constitutional change rather than Tory tinkering at Westminster? Surely the Secretary of State will accept that if public opinion is to triumph, he must mend his ways.

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    More importantly, if it is to triumph, he must show that he is listening, or are we to see in future Tory losses mounting in Scotland at the same rate as his losses in Lloyd's?
    Mr. Lang: Public opinion polls are, of course, of interest to the Labour party as its popularity is shown rather highly in them from time to time. The hon. Gentleman will understand why I regard them with a certain detached approach, given their predictions before the last general election. The poll which matters in a democratic country such as ours is the general election poll. That is the poll which leads to the choice of a Government.

    Water
    Mr. Chisholm: To ask the Secretary of State for Scotland what is his estimate of the cost of (a) the implementation of EC water directives over the next 15 years and (b) other water investment over the same period.
    The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): The capital costs of meeting European Commission water and waste water directives and other investments is estimated at some £5 billion over the next 15 years divided equally between the two categories.
    Mr. Chisholm: Does the Minister realise that the Scottish people are sick and tired of the figures he has given today being used as a cover for water privatisation? Does he not understand that people in my constituency do not want front door water privatisation or back door water privatisation, whether by franchising or competitive tendering? Why cannot water investment be paid for by public borrowing? Why on earth should that mean cuts in other public expenditure, as Ministers have claimed? If the Secretary of State has difficulty in persuading his Cabinet colleagues, why does he not remind them that the figure of £5 billion over 15 years announced by the Minister today was exactly the same as the water debt written off at one stroke by his Government in 1989 as sweetener to the newly privatised English water industry?
    Sir Hector Monro: It is rather sad that the hon. Gentleman never listens to Questions in the House and apparently never reads the answers. I have explained to him and his Opposition colleagues time and again that they have to be patient. Another few weeks will make all the difference. They will find out what policy we intend to introduce from the six, seven, eight, nine or 10 options before us. If he waits until then he may have quite a surprise.
    Mr. Gallie: Is my hon. Friend aware that Opposition Members have consistently opposed standing charges in public services? Is he aware that Labour-controlled Strathclyde regional council has just imposed a standing charge on water services? Does he not think that that is shameful'?
    Sir Hector Monro: My hon. Friend is well aware of the situation in his constituency and in surrounding areas. Water costs are extremely high in Scotland and have increased year by year, particularly over the past three years. That must be carefully considered in deciding our future policy.
    Mr. Kirkwood: Has the Minister considered allowing publicly controlled local water authorities access to private money markets in a way that does not count against the public sector borrowing requirement? That would solve at a stroke the problem to which he referred earlier of the need for capital investment without the ideological difficulties that will be created by privatisation. Earlier, the Minister said that we might get a surprise when the announcement is eventually made. That can only be interpreted as meaning that the Government are abandoning their privatisation plans.
    Sir Hector Monro: The hon. Gentleman might be wrong again. If he is prepared to wait a few more weeks, he will find the answer to his concerns. His proposal is one of many that are being considered, and it has not been lost in the pile of results that have come in from all over Scotland.
    Mr. Connarty: The Minister has been listening to the comments by some about the uniqueness of Scottish culture and morality. Will he go with that trend and give an assurance that we will not be surprised by the Government's abandoning the safeguard whereby in Scotland users cannot have their water supplies cut off—and that there will be no repeat of the terrible scenes in England and Wales, with rising dysentery and the loss of water supplies that are vital to people's lives? Will he give an assurance today that he will not abandon that basic tenet of Scottish morality and civil law?
    Sir Hector Monro: Regional councils have many ways of getting people to pay their water bills. Until we have the legislation, the hon. Gentleman must be patient.
    Mr. Welsh: As the need for investment on a much smaller scale was a major reason given by the Government for abandoning water privatisation in Northern Ireland. will the Minister similarly abandon plans for privatisation in Scotland, where it is not needed—or is it simply a case of double standards?
    Sir Hector Monro: I thought that the hon. Gentleman's rebellious approach to water would have stopped him asking any more questions. like the rest of his colleagues, he will have to wait to see.

    General Practitioners (Drug Dispensing)
    Mr. Donohoe: To ask the Secretary of State for Scotland what representations he has received from residents of Springside and Crosshouse on preservation of the system of general practitioners dispensing drugs to their patients; and what response he has made.
    Mr. Stewart: My right hon. Friend the Secretary of State has not received any representations from residents of Springside and Crosshouse on the preservation of the system of general practitioners dispensing drugs to their patients.
    Mr. Donohoe: That answer surprises me because the service that is on offer in Crosshouse is under severe threat. A chemist has decided to open for business, and that jeopardises a long-term solution that was in place, whereby Crosshouse general practitioners dispensed drugs themselves. Given that the Minister has heard nothing,

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    will he meet my hon. Friend the Member for Kilmarnock and loudoun (Mr. McKelvey) and myself to discuss the matter?
    Mr. Stewart: I assure the hon. Gentleman that I understand the situation. He is correct in saying that a Crosshouse pharmacist applied for and was granted a national health service dispensing contract. The health board received correspondence from Crosshouse and Springside residents and a petition from Crosshouse community association. The board's pharmacy practice committee was aware of that correspondence when it reached its decision. As the hon. Gentleman knows, the matter went to the national appeals panel on 27 April, when the pharmacist's application was upheld. It would not be sensible for my right hon. Friend to intervene, given that all the appropriate procedures were observed.
    Mr. McKelvey: The point that the Minister is missing is that elected representatives have tried to intervene and we have been told by the council that we have no authority to act on behalf of our constituents—which I think is a damned cheek. More than 90 per cent. of the people in Crosshouse said that they were happy with the situation as it existed, but that was completely ignored by the committee and the appeals committee. What kind of patients charter is it when 90 per cent. of people are satisfied with the service but are overruled by a committee which takes no consideration whatsoever of their views?
    Mr. Stewart: The point is that a pharmacist did apply for a NHS dispensing contract, which was granted. I think there are powerful general arguments for continuing the separation of prescribing and dispensing—where that is generally sensible—because where there is such a separation the person writing the prescription will not be in a position to gain financially depending on the choice of drugs prescribed.

    Caledonian MacBrayne
    Mr. Graham: To ask the Secretary of State for Scotland whether he will make a statement about the proposed review by the board of Caledonian MacBrayne at Gourock.
    Mr. Lang: No review by the board of Caledonian MacBrayne has been proposed. However, the Government have decided to review options for the future organisation and structure of Caledonian MacBrayne, including the possible scope for introducing private sector participation in the provision of Caledonian MacBrayne's services.
    Mr. Graham: Is the Secretary of State aware that, once again, he has created tremendous uncertainty in the Inverclyde area by the threat of privatisation and possible job losses? There is also a threat to the islanders, who have already stated that they expect privatisation to mean increases in fares, less frequent services and, at the end of the day, islanders once again being driven off the islands and back to the mainland. I know that the Secretary of State was born in Greenock. Another infamous character called Captain Kidd was also born there, and I must say that the Secretary of State will look like a pirate if he continues with this mad stupid policy to privatise any part of the Caledonian MacBrayne services.
    Mr. Lang: The hon. Gentleman is unfair to Greenock; I was actually born in Glasgow. I hope that he shares my anxiety to remove any uncertainty and alarm among the people who use the Caledonian MacBrayne services. Caledonian MacBrayne provides services to the mainland and 23 islands, and we are committed to maintaining and advancing the economic and social conditions of the islanders. The question at issue is whether the present arrangements are the best way of fulfilling that commitment or can be improved on.
    Mr. Macdonald: Will the Secretary of State give a commitment that the findings of the Halcrow Fox report in regard to the impact of ferry fares and ferry costs on island businesses will be published and not covered up? Does he recognise that islanders view the prospective privatisation of Caledonian MacBrayne as the poll tax at sea? The last thing that island businesses need at this time is a prolonged period of uncertainty about Caledonian MacBrayne's future.
    Mr. Lang: The Halcrow Fox study has not yet been completed, let alone submitted to us. There is no question of its being buried away, as the hon. Gentleman implied, and not being taken into account. I know that the hon. Gentleman has tabled a written question, and that will be answered in due course. As to the islanders, I cannot believe that they hold the view of the Caledonian MacBrayne services that the hon. Gentleman describes. The revenue deficit subsidy stands at £7 million this year, and that represents some 18 per cent. of the company's total costs. We have substantially increased shipping subsidies—they now total over £17 million in Scotland as a whole—to ensure that the economic and social conditions of the islands are upheld and advanced.
    Mrs. Ray Michie: Why is the Secretary of State returning to the matter? We went through it all in 1988, when it was made clear that the privatisation of Caledonian MacBrayne would lead to higher fares, increased freight costs, no cross-subsidies from profitable to unprofitable routes and no back-up vessels being available—all a body blow to the islanders. Will the Secretary of State tell the House how much this latest consultant review is to cost? Does he admit that he is in danger of being pushed around by a london-based Treasury, which does not give a tinker's damn about what happens to the islanders of Scotland?
    Mr. Lang: I cannot at this stage tell the hon. lady the cost of the survey, since we are still waiting for submissions from the various possible consultants who might be contracted to undertake it. Most of the 1988 review as concerned with the Clyde, whereas what we are reviewing at present is the Caldeonian MacBrayne services to all 23 islands that it serves and also P&O services to Orkney and Shetland, which are privately owned services subsidised by the taxpayer. It is because the cost of that subsidy and the support for both shipping lines have advanced so substantially that we want to make sure that we are using the most effective and efficient way of maintaining our commitment to uphold services to the islands.

    Damp Housing
    Mr. Dunnachie: To ask the Secretary of State for Scotland what action he intends to take to measure and reduce the health risk to children of living in damp public sector housing.
    Lord James Douglas-Hamilton: In preparing their next housing plans and housing capital programmes, due by the end of August, all local housing authorities have been asked to set out strategies and targets for tackling housing in their areas that is subject to condensation and dampness.
    Mr. Dunnachie: I thank the Minister for that somewhat idiotic reply. We have had many surveys of housing in Scotland and yet nothing has been done to alleviate the suffering of the people of Scotland from damp housing, the high mortality rates of children who live in damp housing, and the schooling of kids in Scotland which is affected. All this, and all we get from the Minister is the same rubbish every time: £900 million for the whole of Scotland's housing. It is a disgrace that the hon. Gentleman, a Scotsman, should stand there and tell me that. Why does he not stand up and fight for the people of Scotland?
    Lord James Douglas-Hamilton: The sum of £900 million is certainly not a disgrace. It is very substantial funding if it is properly applied. The hon. Member must realise that the targeting of resources where they are most needed is what is required. We have laid down condensation and dampness as one of the three strategic priorities that local authorities must put forward in their housing plans. The hon. Member must bear in mind that figures resulting from the preliminary findings of the national house conditions survey show that only 2 per cent. suffer from very severe problems of condensation and dampness, and that top priority should be given to resolving those problems as quickly as possible.

    Edinburgh Royal Infirmary
    Dr. Strang: To ask the Secretary of State for Scotland when he last met the chairman of the lothian health board to discuss the plan for a major new teaching hospital to replace the Edinburgh royal infirmary.
    Mr. Stewart: Officials of the Scottish Office Home and Health Department regularly discuss the provision of hospital services with lothian health board and keep Ministers fully informed. Policy on the provision of acute hospitals in Edinburgh is primarily a matter for the board, subject to public consultation and the approval of my right hon. Friend.
    Dr. Strang: But since it is two years since the lothian health board decided to replace the Royal with a major new teaching hospital in the south of Edinburgh; since a site has already been acquired, why are the Government still not giving the go-ahead for investment? Is the Minister aware that we need not only a new hospital but a major new medical school? Will we get an early and positive decision on this or will the Government sabotage Edinburgh's reputation as an international centre of excellence for medical teaching and research?
    Mr. Stewart: I do not agree with the hon. Member's analysis of the present situation. Perhaps I can put it in context for him. The board consulted widely on the
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    delivery of acute services in Edinburgh, and my right hon. and learned Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), then Secretary of State, endorsed the outline conclusions in autumn 1989, including the teaching hospital in the south-east of Edinburgh and the substantial rebuilding of Edinburgh Royal, as the hon. Gentleman has said. The board is currently and sensibly reviewing that strategy against the background, for example, of the dramatic changes being experienced in the delivery of patient care.
    I cannot anticipate the outcome of the board's review. However, I can tell the hon. Member that I have no reason to believe that a new teaching hospital will not figure in any new proposals that will be put to Ministers.
    Mr. Eric Clarke: I am very surprised at the Minister's answer because, in consultation with my colleagues and hon. Members representing the lothian region, the hospital board told us that this hospital is a keystone because there will be only three major hospitals left—St. John's in livingston, the Western general and this one that is not even built yet. The alternative is to close down about seven other hospitals, with the exception of the sick children's. If we know that, the Minister should know that. I would like to know when he will give the go-ahead for this particular hospital.
    Mr. Stewart: Perhaps the hon. Gentleman did not hear exactly what I said, which was that I cannot anticipate the outcome of the review, but I have no reason to believe that a new teaching hospital will not figure in the new proposals. The revised strategy will require ministerial consent. That will be given only if we are satisfied that the proposed changes will lead to a better standard of care and will, therefore, be in the interests of patients. There will, of course, be an opportunity for public consultation when the proposals are known. The hon. Gentleman and his hon. Friends are welcome to have full meetings with my right hon. Friend on the details.

    Regional Assistance
    Mrs. Ewing: To ask the Secretary of State for Scotland what recent discussions he has held with representatives of (a) Grampian regional council and (b) the European Commission on the details of potential allocation of objective 5(b) status to west Grampian.
    Sir Hector Monro: The European Commission's proposals for the future operation of the structural funds are currently under discussion at official level in the Council of Ministers. Until negotiations on criteria for the selection of objective 5(b) areas are further advanced it would be premature to discuss the possible allocation of 5(b) status to west Grampian.
    Mrs. Ewing: Does the Under-Secretary not understand that there is a cross-party, Grampian-wide campaign to ensure that structural funds are allocated to the rural areas, which are very fragile, given their dependency on the fishing and farming industries? Why, therefore, is the Under-Secretary not prepared to meet an all-party delegation of Members of Parliament, representatives of the regional council and representatives of the district councils? I accept that meetings do not always lead to agreement, but does the Under-Secretary not understand

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    that there is a desperate need for a meeting to take place very quickly, because decisions could be taken by the Commission as early as July?
    Sir Hector Monro: I most certainly appreciate just how serious the situation is relative to west Moray, the north Moray coast and the fishing areas. I appreciate the strength of the case put forward by Grampian regional council and the local enterprise company. I can assure the hon. lady that my right hon. Friend the Secretary of State for Scotland is prepared to meet a delegation, which has already been suggested by the hon. Member for Aberdeen, North (Mr. Hughes) and my hon. Friend the Member for Aberdeen, South (Mr. Robertson). I am sure that my right hon. Friend will enjoy having the company of the hon. lady as well.
    Mr. Malcolm Bruce: I am grateful to the Minister for saying that he will meet a delegation. I had understood, however, that he told the hon. Member for Aberdeen, North (Mr. Hughes) that he did not think that a meeting was timely. If that view has changed, I welcome it. Will the Minister take on board the fact that people who live outside Grampian often feel that it is a rich area? Although part of it is rich, the west Grampian part of it is very deprived. Income levels there are 75 per cent. of the European average and 71 per cent. of the United Kingdom average. Serious consideration, therefore, needs to be given to the allocation of 5(b) status to west Grampian.
    Sir Hector Monro: Yes, I appreciate that the percentage of unemployment in west Moray, in the Forres area, is particularly high. My right hon. Friend is prepared to meet an all-party delegation and will look forward to doing so.
    Mr. Robert Hughes: May we have the matter absolutely clear? I received a letter this morning from the Secretary of State in which he said that it was premature to have a meeting and that it might have to be delayed until later in the year. Is the Under-Secretary telling us that the Secretary of State has reconsidered and that a meeting is now on offer? If so, can that very small delegation include Members of Parliament from the region?
    Sir Hector Monro: Yes. My right hon. Friend will do that.
    Mr. Tom Clarke: Will the Minister explain, on behalf of the Secretary of State, why the people of Grampian, or anybody else, can have faith in the Government's influence upon European affairs? Has the Secretary of State for Scotland told the Under-Secretary how the Home Secretary achieved five extra seats in Europe, the Secretary of State for Wales one extra seat for Wales and the Secretary of State for Scotland none whatsoever for Scotland? In view of that, what advice does the Secretary of State for Scotland intend to give to the Sycophantic Scottish Tory press so that it can present that as a success instead of a spectacular failure?
    Sir Hector Monro: That was very much a last-minute gasp by the hon. Gentleman, and he knows that it is far removed from anything to do with objective 1 or objective 5(b).

    Infertility Treatment
    Mr. Watson: To ask the Secretary of State for Scotland what plans he has to standardise the availability of infertility treatments through the NHS in health boards in Scotland.
    Mr. Stewart: All health boards in Scotland provide infertility services, the extent and level of which are—[Interruption.]
    Madam Speaker: Order. I should be much obliged if the House would settle down.
    Mr. Stewart rose—[Interruption]
    Madam Speaker: Order. The House must come to order.
    Mr. Stewart: All health boards in Scotland provide infertility services, the extent and level of which are for boards to decide in the light of local needs and circumstances.
    Mr. Watson: The Minister clearly is not aware that level 3 infertility treatment is available free of charge in Glasgow but costs £400 a time in Dundee and more than £1,000 a time in Edinburgh and Aberdeen—the only places in Scotland where such treatment is available on the national health service. A few minutes ago, the hon. Gentleman had the gall to say that Labour Members were guilty of spreading disinformation. That comes rich from a man whose Government have reneged on a pre-election commitment given by the Scottish Minister then responsible for health that such services would be provided centrally. If the Under-Secretary is not prepared to honour that pledge he will not only be accused of disinformation but will be guilty of colluding in what will be seen as a cheap and cruel vote-catching gimmick on thousands of childless couples in Scotland. Will he now give that commitment?
    Mr. Stewart: Of course I am fully aware of the detailed provision of infertility services in Scotland—at level I, which represent treatment offered by a GP or general gynaecologist, at level 2, which represent secondary or specialist care available at a district general hospital and are widely available on the NHS in Scotland and, as the hon. Gentleman pointed out, at level 3, with free in vitro fertilisation service at the Royal infirmary, Glasgow. Health boards must decide whether to provide or purchase those services from the resources allocated to them. That situation is not unique to Scotland; it applies throughout the United Kingdom.
    Mr. Kynoch: Does my hon. Friend agree that in vitro fertilisation is a very complex and costly procedure and that the success rate of the four centres to which he referred is far from consistent? Will he join in welcoming Grampian health board's move to reinvestigate the funding of IVF treatment in its area so that my constituents can be treated at a more favourable cost within the Grampian health board area?
    Mr. Stewart: My hon. Friend is absolutely right. He is right to give that example of a health board deciding to investigate what is sensible in the light of local needs and circumstances in its area.
    Dr. Godman: Is not there a need for not only the regulation of treatments throughout Scotland but for the supervision of all treatments throughout health boards? The recent scandal of the Inverclyde royal hospital showed that stark fact. When will the committee of inquiry publish or present to the Minister its report on matters at the Inverclyde royal hospital, and is the Minister satisfied with the remedial action that was taken by the hospital to diminish and give comfort to the women who were caught up in that needless and dreadful scandal?
    Mr. Stewart: The short answer to the hon. Gentleman's second question is yes, and I hope that he will be reassured by the meetings that he has been offered by my right hon. and learned Friend the Minister of State to discuss matters in detail. The answer to his first question is that there will be a full investigation under the inquiry conducted by Dr. McGoogan. The report will be made to the Secretary of State and the Minister of State and to the health boards. It will be made public. The hon. Gentleman makes a fair point, and the report will be completed as soon as is possible and practicable.

    Skye Bridge
    Mr. Charles Kennedy: To ask the Secretary of State for Scotland if he will make a statement on the progress of work in respect of the bridge to Skye.
    Lord James Douglas-Hamilton: The second caisson for the south pier of the main bridge is due to be placed on the sea bed this week. As with the first caisson, this marks a very important milestone in the construction of the bridge. The contractor is confident that the bridge will be completed on programme by mid-1995.
    Mr. Kennedy: I welcome the fact that the Prime Minister and the former Chancellor recognise the importance of the Skye bridge and are here for this question. As the Minister is aware of the sense of blatant injustice felt in Skye and lochalsh about the principle of a privately toll-funded bridge and high tolls being levied on locals for anything up to a generation, the related problems of Caledonian MacBrayne and the roll on/roll off service between Mallaig and Ardvasar, will he use the opportunity of the summer recess to accept the invitation that I have twice extended to him to meet the local people and hear what is being said about the massive economic and social implications that the structure, as presently constituted, will have?
    Lord James Douglas-Hamilton: I will meet the hon. Gentleman any time, but he must remember that the bridge will be of enormous benefit not only to his constituents but to the people of the Western Isles. As for the toll, he must remember that when traffic increases, this could reduce the toll or shorten the toll period. That is a factor which he and his constituents would be wise to bear in mind.

Personal Statement
Madam Speaker: We now have a personal statement. I remind the House that a resignation statement is heard in silence and without interruption.
3.31 pm
Mr. Norman lamont: This is not an easy statement for me to make today, but I am sure that the House will understand that and that I can rely on the traditional tolerance and generosity of hon. Members.
To give up being Chancellor of the Exchequer in the circumstances in which I did is bound to be an uncomfortable experience, but I have also been a Treasury Minister for almost seven years, a longer continuous period than anyone else this century. Indeed, I have been the only person ever to have held the three offices of Financial Secretary, Chief Secretary and Chancellor of the Exchequer.
I should like to pay tribute to the officials with whom I worked all those years. In my opinion, they are equal to the best in the world, and I am astonished how, when things go wrong, often it is the civil servants who are blamed when it is we politicians who make the decisions and it is we politicians who should carry the blame.
When the Prime Minister told me two weeks ago that he wished to make changes in his Government, I of course told him that I appreciated that he had a very difficult task. He generously offered me another position in his Cabinet, but, in my opinion, it would not have been right either for him or for myself if I had accepted. If he wished to change his Chancellor, it was surely right that I should leave the Cabinet. Perhaps I can make it clear that I wish the Prime Minister well and hope that his changes will produce whatever advantage for him and the Government he intended.
It has not been easy being Chancellor of the Exchequer in this recession, continually and wrongly described as the longest and deepest since the war or, even more inaccurately, since the 1930s. It is certainly not the deepest recession since the war and, when the figures are finally revised, it may turn out not even to have been the longest. But it is a recession which has affected many areas which have not experienced such severe recession before; and that was bound to have an adverse effect on the fortunes and popularity of the Government.
This recession was not caused by Britain's membership of the exchange mechanism. The recession began before we joined the ERM—and, incidentally, before 'I became Chancellor—and a large part of the fall in output occurred in late 1990 and early 1991, far too soon to be influenced by our membership of the ERM. No, this recession has its origins in the boom of 1988 and 1989. That boom made the recession inevitable.
But the recession is now behind us, and so I am able with confidence to wish every success to my right hon. and learned Friend the new Chancellor. He inherits, I believe, a fundamentally strong position. As Mr. Lloyd Bentsen, the United States Treasury Secretary, said in a generous letter to me last week, Britain is the only European country likely to experience any significant growth this year; and inflation is at a 30-year low. Since the war only two Conservative Chancellors have been responsible for bringing inflation down to below 2 per cent. Both of them
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were sacked. In my view, that tells us a great deal about the difficulties of reducing inflation in a democracy as lively and disputatious as ours.
I am delighted to hear from the Prime Minister that policy will not alter. My right hon. and learned Friend the Chancellor will understand if I say that he thus comes to the Treasury at a most favourable time. Much of the hard work has been done and he should be able to enjoy increasingly encouraging trends for a long time to come. I am sure that my initiative in bringing the autumn statement and the Budget together into one December Budget is a reform that will last, and I wish my right hon. and learned Friend well with what is a massive task.
I have been privileged to present three Budgets. All three achieved the objectives that I set for them. The first drew the sting of the poll tax; the second, by introducing the 20p income tax band, helped us to win the election; the third, unpopular though it undoubtedly was, made a significant step towards reducing our budget deficit. That, as I have frequently observed, is the greatest threat to our long-term position.
Having put up some taxes, it is vital that the Government now turn their attention to public spending. last year, I set up a new system for controlling public spending. I believe that it gives my right hon. and learned Friend the means to do what is necessary. I am sure that he has the will. We do not want more tax increases. We need tight control of public spending. My right hon. and learned Friend will have my full support if he is robust in tackling that problem.
I should now like to say a word about Britain's experience of membership of the exchange rate mechanism. Although many people are either for or against membership of a fixed exchange rate system, there are many others, including, for example, Alan Greenspan, the chairman of the United States Federal Reserve Board, whose views about fixed versus floating exchange rates have never been theological. My views are not theological either. I have always believed that one could run an economy on either a fixed or a floating rate basis, although at times one might be more appropriate than the other.
I tried to persuade my noble Friend lord lawson that it was not worth resigning over the ERM in 1988. Although I probably would not have joined in 1989, I did not believe then that a fixed-rate system was doomed to break up. Presumably those who hold that view blame my noble Friend lady Thatcher for committing us to a policy that was bound to fail. But I do not take that view now, and I did not take it then. When I accepted the office of Chancellor, I accepted the policy, believed that it could be made to work, and did all that I could to make it work. It certainly enabled us to get inflation down dramatically. Indeed, without the ERM, I doubt whether the Government would have had the courage and determination to get inflation down; that is a point to which I shall return.
The reason why our policy on the ERM ultimately broke down was that German policy developed in a way which, in my view, was mistaken and which was not anticipated—not least when German interest rates were put up last year. As members of the ERM, we were forced to respond in a way that meant that our own policy became increasingly over-tight. I became increasingly concerned last summer that our policy was too restrictive and that our membership of the ERM was impeding recovery.

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I raised with the Prime Minister the idea that we might suspend our membership temporarily at some future date if recovery were being prevented. He made it clear that he did not want to do that. Probably he was right. I accepted it. In any case, it would not have made any difference. We were talking about the distant future and we would have been overtaken by the same events in September that ultimately hit us. But I would not want the country to believe that these matters were never under consideration or that we were not aware of what was happening in the economy outside.
That perhaps explains why I did not do one thing that some have argued and urged might have enabled us to remain within the exchange rate mechanism—to put up interest rates in the summer of 1992. Because of the position of the domestic economy, I did not believe that that was an option. Furthermore, I did not believe that it would have been credible, and I am sure that I was right.
People have frequently asked me why we did not devalue within the system. I did not devalue because it would have meant higher interest rates at a time when we needed lower interest rates. One solution might have been a revaluation of the mark against all other currencies in the ERM, thus making room for lower German interest rates. I was not opposed to that, but, unfortunately, my friend and colleague, the late Pierre Beregovoy, the French Finance Minister was, despite my efforts at persuasion, implacably opposed to such a move.
I do not believe that any question of rejoining the ERM should remotely be on the agenda during this Parliament. Fortunately, my right hon. and learned Friend the Chancellor has already announced his policy. I am only thankful that, despite the residual doubts of some of my colleagues, I insisted on getting my own way and on keeping the ERM out of Maastricht as a treaty obligation. I need hardly remind the House how difficult our position would he today if the Maastricht treaty obliged us to rejoin the ERM.
Some argue that the credibility of the Government was destroyed on 16 September. But once I had reconstructed our policy, that was not the view of the markets, or of the stock exchange, which touched an all-time high not so long ago, or of the foreign exchange markets, where the pound's recovery has been strong enough to worry some business men—nor was it supported by that crucial indicator, long bond yields, which are lower than for some time and lower today than in September.
Markets and business men are cynical. They know that, in a fixed exchange rate system, there are certain things that Finance Ministers have to say. Credibility and confidence depend not on words but on objective conditions. I am glad to say that those objective conditions today are better than they have been for many years.
On the crucial question of credibility, I want to take this opportunity to give my right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor some advice. Nothing would be more effective in establishing the Government's credibility than if my right hon. Friend would have the courage to establish an independent central bank in this country. The time has come to make the Bank of England independent. It is my greatest regret that, after two and a half years of trying, I failed to persuade the Prime Minister of this essential reform.
Now that we are outside the ERM, the need is even more urgent. Britain is one of the few countries where
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monetary policy remains firmly in political hands, and the pressures on politicians to take policy decisions for political reasons can be quite irresistable. With an independent bank, we could have lower interest rates for a given exchange rate. Policy would be more credible and it would give us the necessary discipline for keeping inflation down on a permanent basis.
While my right hon. Friend the Prime Minister and I have been in general agreement on interest rate policy, I do not believe that even the timing of interest rate changes should ever be affected by political considerations. Interest rate changes should never be used to offset some unfavourable political event. To do so undermines the credibility of policy and the credibility of the Chancellor.
When my resignation was announced 10 days ago, the reaction of many was that it was a delayed resignation, a resignation that should have happened on 16 September. On that day, and during the subsequent days, I did of course consider my position carefully with friends and colleagues. I was anxious to do what was right for the country and for the Government. Sir Stafford Cripps, who is rightly regarded as an honourable man, did not resign after devaluing the pound. On the other hand, lord Callaghan, also an honourable man, did.
There are three principal reasons why I decided to stay in office. First, the events of last September were very different from those of 1967. They affected not just this country, but most of Europe. The Finance Ministers of no fewer than nine countries were forced to eat their words and either devalue or float. Five floated; four devalued; one both devalued and floated. In none did the Finance Minister resign or, to the best of my knowledge, come under any pressure to resign. Indeed, in one country the governor of the central bank was actually promoted: he became Prime Minister.
Secondly, membership of the exchange rate mechanism was the policy of the whole Government; and as the Prime Minister said, I was implementing Government policy. Our entry was not a decision in which I myself played any part. It was, however, a decision made after a whole decade of fierce public and private argument—a decision made by the previous Prime Minister, the present Prime Minister and the present Foreign Secretary.
Thirdly, I did not resign because that was not what the Prime Minister wanted. When the Prime Minister reappointed me after the general election, I told him two things: first, that I did not wish to remain Chancellor for very long; and, secondly, that he did not owe me any debt or any obligation. On 16 September he made it clear to me in writing that he had no intention of resigning himself, and that I should not do so either.
Of course, I discussed the question further with the Prime Minister subsequently. In all those discussions he emphasised that he regarded the attacks on me as coded attacks on himself, so I decided that my duty and loyalty was to the Prime Minister and that I should remain in office.
Two and a half years ago, I did play some part in helping the Prime Minister into the position that he occupies today. I have always believed, and still believe, that in supporting him then I made the right choice, and I now wish to say one thing to him; it goes to the heart of the way in which the Government conduct themselves.
There is something wrong with the way in which we make our decisions. The Government listen too much to the pollsters and the party managers. The trouble is that

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they are not even very good at politics, and they are entering too much into policy decisions. As a result, there is too much short-termism, too much reacting to events, and not enough shaping of events. We give the impression of being in office but not in power.
Far too many important decisions are made for 36 hours' publicity. Yes, we are politicians as well as policy-makers; but we are also the trustees of the nation. I believe that in politics one should decide what is right and then decide the presentation, not the other way round. Unless this approach is changed, the Government will not survive, and will not deserve to survive.
It is a great change to return to the Back Benches after 14 years in government, Madam Speaker, but I have always been proud to be a Member of this House and not just a Minister. Today, when I walked through Westminster Hall and up the stairs into the lobby, I felt exactly the same pride and excitement as when I first entered this House 21 years ago. I look forward with anticipation to the great parliamentary events and battles that lie ahead.
Madam Speaker: The ten-minute rule motion is not to be moved. We now come to the main motion of the day on the conduct of Government economic and social policy.
Mrs. Ann Winterton: On a point of order, Madam Speaker. Is it in order for the hon. Member for Ealing, Southall (Mr. Khabra) not to move his Bill when there are so many right hon. and hon. Members present who wish to demonstrate the overwhelming opposition of the House to any attempt to legalise euthanasia?
Madam Speaker: It is perfectly in order. The hon. Gentleman does not wish to move his motion. It is not a Bill; it is a motion. If he does not wish to move the motion, he is entitled not to do so.
Mr. Harry Greenway: On a point of order, Madam Speaker. It has come to my notice that the hon. Member for Ealing, Southall (Mr.Khabra) may seek to move his private Member's Bill from behind the Chair tomorrow. Would that be an abuse of the House or would it be acceptable?
Madam Speaker: It is not an abuse of the House—quite the contrary. A number of hon. Members in recent times have done precisely the same.

Pit Closures
3.51 pm
Mr. Mark Fisher: On a point of order, Madam Speaker. I ask for your help in protecting the rights and responsibilities of hon. Members. As you know, the miners who were made redundant in pits last week have been declared voluntarily redundant, and that means that they do not have mortgage protection insurance which they would have if they were made compulsorily redundant.
On behalf of myself and other Members of Parliament representing pits that were closed, I sought to take up this matter with the chairman of British Coal. He declined to meet us. One of his senior executives said, in a personal capacity, that the reason for that spiteful and vindictive move by British Coal, threatening the homes as well as the jobs of those miners, was "political"—his word. That means that the only way in which hon. Members can pursue the matter is through the House.
Would it not be right for the President of the Board of Trade to explain to the House why the Government made that vindictive move—exactly the sort of short-term move that the former Chancellor of the Exchequer has been talking about—bringing huge discredit on the Government and great fear and insecurity to men who, through no fault of their own, are losing their jobs and are now threatened with losing their homes as well?
Madam Speaker: The hon. Gentleman has already raised this matter with me through points of order on two previous occasions this week. As he knows, the matter is not in my hands. I have not been informed that any Minister wishes to make a statement to the House.

Orders of the Day
  OPPOSITION DAY
  [13TH ALLOTTED DAY]
  OPPOSITION DAY

    Government Economic and Social Policy
    Madam Speaker: I inform the House that I have selected the amendment standing in the name of the Prime Minister.
    3.52 pm
    Mr. John Smith: I beg to move,
    That this House condemns the Prime Minister's betrayal of election promises and commitments on economic and social policy; deplores the Government's intention to make the users of public services pay the price of Conservative economic and financial mismanagement; further deplores the failure to make changes in policies towards unemployment, industry and the skills revolution; and calls for new policies in these areas to strengthen British industry and the British economy, to end mass unemployment and to improve public services.
    Before we embark on our debate, right hon. and hon. Members will have in their minds the statement that has just been made by the ex-Chancellor of the Exchequer. I had the opportunity to cross swords with him many times when he held the illustrious office from which he has so recently departed, and I commend him for the dignity of his statement. It was, if I may say so, as effective a speech as any he made when he was in office.
    The right hon. Gentleman was wise to be wary in his endorsement of the Government's policies. What will no doubt be remembered by most of those who listened to his statement today was the revealing insight into the style and purposes of the Government from which he has so recently departed.
    I must confess that it flicked across my mind when I was listening to the right hon. Gentleman that there might have been the odd political influence affecting him at the time of the 1992 Budget, especially if it is compared with the 1993 Budget—but let that pass. He was no doubt, as he constantly reminded us, acting on orders. The orders no doubt came from the pollsters and other people who appear to have such great influence on the Conservative party's policies. People will remember for some time his reference to being in office, but not in power.
    When we think about the general election, we remember vividly that the Prime Minister and his colleagues made clear and specific promises to the electorate. It is reasonable to suppose that they were returned to power because people believed their promises. We now know how very few would vote for the right hon. Gentleman and his colleagues if there was an election today. There are reasons why the right hon. Gentleman has the lowest rating of any Prime Minister since polls began. The first and most important is that the right hon. Gentleman and his colleagues have cynically betrayed their pledges to the British people.
    We heard a great deal about tax from the Tories at the general election. 'The Prime Minister promised tax cuts year on year. There were frequent promises of lower taxes from the Prime Minister, from the ex-Chancellor and from the present Chief Secretary to the Treasury. I do not know whether they meant them or whether they were told by the
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    pollsters to say them, but they certainly said them. On 31 March, only 10 days before polling day, the right hon. Member for Kingston upon Thames (Mr. Lamont) said on Channel 4 news:
    "We will not have to increase taxes. I cannot see any circumstances in which that will be necessary."
    There were pledges on specific taxes as well. At an election press conference on 27 March, just a few days before polling day, the Prime Minister said:
    "We have no plans and no need to extend the scope of VAT."
    We know how sincere all that was. In this year's Budget, those promises were spectacularly overturned and those pledges were shamefully betrayed.
    I need not remind a suffering public that, from next April, VAT will be imposed on household heating bills at 8 per cent. In the following year, it will be hiked to 17·5 per cent. Tax increases in that Budget amounted to a staggering £17·5 billion. So it is not tax cuts year on year; it is tax increases year on year.
    What a shocking betrayal of the people. Millions of families will have to find those billions of pounds from their household budgets. I very much doubt whether those at the bottom of the scale—those on income support—will have their benefit properly increased to meet the full extra costs that they have to bear. I know even more clearly that there will be no relief for the millions of families and pensioners who are just above income support level. The stark truth is that every family in the land will have to foot the cost of this Government's perfidy.
    Mr. Alan Howarth: The right hon. and learned Gentleman referred to cynicism, and talked about style and purpose. It would be helpful to the House if he could comment on this. He has made it clear that a Labour Government would not reduce public spending. Indeed, his party is committed to policies that would increase public spending. At the same time, the shadow Chancellor has said that a Labour Government would not increase taxes. Will the right hon. and learned Gentleman therefore explain to the House how the Labour party, if it were in government, would pay for its policies?
    Mr. Smith: The hon. Gentleman brings to our attention the parlous state of our public finances. What we need to do above all is to deal with public finances, bring down unemployment and get back on course for economic growth—[Interruptioni.]
    Madam Speaker: Order. Hon. Members on both sides of the House must settle down—[Interruption.] let us have order below the Gangway. I call Mr. Smith.
    Mr. Smith: The hon. Member for Stratford-on-Avon (Mr. Howarth) knows perfectly well that the main reason why we have such a high public sector borrowing requirement is the cost of unemployment, which is the result of Government policies. It does not matter whether it is the fault of the right hon. Member for Kingston upon Thames (Mr. Lamont) or the Prime Minister, as the right hon. Member implied: the fault lies with the Conservative party.
    Mr. John Townend: Does the right hon. and learned Gentleman really think that a deficit of £50 billion this year can be brought down by the reduction in unemployment that 2·5 or 3 per cent. growth would create? If he is opposed to public spending cuts, why does he not

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    admit that the only alternative would be massive increases in taxation? His arguments today have justified the Government's public spending policy.
    Mr. Smith: If that is so obvious, why did the Prime Minister say during the election campaign—when he knew the exact state of our public finances—that there was no need for increases in taxation? He said that there would be tax cuts and no cuts in public expenditure, which would be maintained. Of course, there is an explanation for that, to which I shall return. We were not told the full truth about our public finances at the last general election.
    I shall now return to the promises made by the Conservative party. Incidentally, I hear that the Chancellor—the new Chancellor of the Exchequer—has been entertaining the Press Gallery at a lunch today, saying that it does not matter what one says during an election campaign: what matters is what is contained in the manifesto. His theory seemed to be that one could say whatever one liked during the campaign—if it was not in the manifesto, it did not matter. I hope that that will be repudiated.
    The Chancellor of the Exchequer (Mr. Kenneth Clarke): I did not say that.
    Mr. Smith: I am glad that the right hon. and learned Gentleman says that. I think that there are plenty of people who attended the Press Gallery lunch who are now in a good position to report it.
    I am glad that we have achieved some degree of agreement—that someone is responsible for what he says during an election campaign. On 28 January 1992, not long before the campaign, the Prime Minister told the House:
    "I have no plans to raise the top rate of tax or the level of national insurance contributions."—[Official Report, 28 January 1992; Vol. 202, c. 808.]
    To be fair to the Prime Minister, he has kept one half of the promise—the half that applies to those at the top of the income scale.
    How can the pledge that the Prime Minister made in the House possibly be squared with the increase of 1 per cent. in national insurance contributions that is to be imposed on every wage and salary earner in this country ? What is the difference between 1 per cent. extra national insurance and another 1p on income tax? There is a difference, but a difference that adversely affects the lower-paid. Both policies are clearly taxes on income, but national insurance hits the lower-paid harder as it starts lower down the income scale than income tax and there are no allowances to be set against its liability.
    What did Mr. Chris Patten—now Governor of Hong Kong, then chairman of the Conservative party—tell us about national insurance on 23 March 1992, during the election campaign? He said at a press conference:
    "Raising national insurance contributions would be a back-door stealth tax."
    We now know what the stealth was. It is the oldest trick in Tory politics to promise one thing and do another. That trick did not arrive with the pollsters during the past year or two; it has a much longer and more distinguished ancestry than that.
    The Conservatives did not tell us in the election campaign that, in their first post-election Budget, they would freeze all personal allowances and bring 300,000 of
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    the lower-paid into the income tax net. There we have it: national insurance increases, soaring VAT and a freeze on personal allowances—not quite the double whammy that we kept hearing about from the Governor of Hong Kong. It turned out to be the Tories' triple whammy, perpetrated on the British taxpayer.
    Now we see clearly what the Tory tax strategy is, as we can review the Tories' long period in office. During the 1980s, when they were flush with cash from North sea oil, the biggest and best handouts went to the rich. When the Government have come unstuck in the 1990s, it is the lower-paid and ordinary taxpayers who pay the price of their incompetence. It is like the old Victorian value: "It's the rich wot gets the pleasure, it's the poor wot gets the pain."
    It is not only on tax that the Government have broken their word. let us look at their pledges on public spending. Time and again, we were told during the election campaign that the Red Book set out the detailed plans of the Government's expenditure programme, and that it was based on sound public finances. The Government vehemently and continually denied that there would be any post-election cuts in public expenditure, a subject drawn to the public's attention occasionally by some of my percipient colleagues. The Prime Minister told us on 30 March, only 10 days before polling day, at a major election press conference:
    "If we were going to cut public expenditure, we would have done it before and I don't believe it is economically right. I have said that in the past, and there is no need to do it whatsoever. So you can rule out any prospect of that."
    Those words could not be much clearer: any prospect of public expenditure cuts emphatically ruled out—before the election.
    We now know what a false prospectus that was, and I hope that everyone, especially those conned into voting Tory last year, will keep that clearly in mind as cuts in public service unfold in the months ahead. We also know that the Prime Minister and his colleagues, especially the former Chancellor, massaged the public borrowing figures downwards in the 1992 Red Book.
    The Financial Times of 12 October 1992 told us that the former Chancellor had, in an internal Treasury note, instructed officials to recalculate projections for the public sector borrowing requirement in the five years to 1996–97, to pull them down if possible to zero by the end of the period. Despite—probably—valiant efforts inside the Treasury, its officials did not quite make it to zero, but they got the figure down to £6 billion at the end of the period. This was the projection for the PSBR before the election.
    After the election, the £6 billion mysteriously jumped to £35 billion in the 1993 PSBR projection. The Government were correctly condemned by the Treasury and Civil Service Select Committee for what it called the former Chancellor's
    "cavalier approach to massaging or falsifying statistics for political reasons."
    Even the deputy editor of The Spectator—I do not think that he can be accused of left-wing scaremongering, which is the major objection to the Labour party at the moment—felt obliged to comment on the 1992 Budget in his issue of 20 March this year, as follows:
    "The Budget executed a great deceit on the electorate. Since the election campaign of a year ago, honest dealing by the Tories has been rare. The first 1993 Budget provided evidence of the cynicism behind the smirks and mock sincerity on the faces of the First and Second lords of the Treasury."

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    What is the consequence for the nation of all this? It has been signalled clearly enough, especially by the Chief Secretary to the Treasury. Public expenditure cuts are now being secretly planned; not only will they totally overturn all the solemn assurances given by the Prime Minister before the election, but they will gravely undermine the crucial public services which are vital to the security and well-being of millions of our fellow citizens.
    Will the axe fall on pensioners entitled to exemptions from prescription charges, which are now at a record £4·25 an item? [Interruption.] That may be amusing for Conservative Members, but it is not for millions of people who are gravely worried that it might occur.
    Will it be hotel charges of £30 a night for overnight stays in hospital? Will it be a payment for visits to GPs or, as predicted in The Guardian of 5 June, will there be savage cuts—[Interruption.]I do not always support The Guardian or agree with everything it says—it would be surprising if I did, given what it sometimes says—but it was right to refer to the internal memorandum from the Department of Social Security, which talked precisely about cuts in invalidity benefits. There will possibly he cuts in housing benefit and in invalidity and sickness benefits.
    Mr. Tim Smith rose—
    Mr. John Smith: Perhaps the hon. Gentleman can clear up the matter.
    Mr. Tim Smith: The leader of the Opposition is indulging in the most disgraceful and irresponsible speech, and he knows it. He is frightening the most vulnerable people in our society. Is he aware that, as long as he fails to answer the questions that were put to him about the public sector borrowing requirement, the people of this country will conclude that he does not have the guts to tackle the most difficult economic question facing this country and that he is not fit to be leader of the Opposition. let alone Prime Minister?
    Mr. John Smith: Every time we refer to the Government's likely cuts, we are told that we are scaremongering. That allegation appears in the amendment to the Opposition motion. No doubt it has been drawn to the hon. Gentleman's attention that he might make that point during the debate. He has done it.
    The hon. Gentleman used to be connected with a Conservative party organisation and, on the issue of scaremongering, I should like to draw his attention to a document with which he may be familiar—the Conservative campaign guide for 1992. I have been able to obtain one of the few remaining copies that has escaped the central office shredder. I am glad to have it, and I can make it available to hon. Members who want to consult it.
    No doubt that guide was used by Conservative Members during the campaign. Page 12 states that there will be no increases in VAT. The material part states:
    "Following a series of unfounded and irresponsible scares from the Labour Party, the Prime Minister"—
    the words "Prime Minister" are in bold letters, so at least he is given status in the campaign guide—
    "has confirmed that the Government has no intention of raising VAT further."—
    The document also refers to a statement in the House, and says:
    "There will be no VAT increase. Unlike the Labour Party, we have published our spending plans and there is no need to raise VAT to meet them."
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    For good measure, the document quotes the right hon. and learned Member for Putney (Mr. Mellor), who, as Chief Secretary to the Treasury, said that the Government had no intention of widening the scope of VAT. Was it fair comment that the Labour party was scaremongering at the time of the last election?
    Mr. David Shaw: Will the right hon. and learned Gentleman give way?
    Mr. Smith: No. I am dealing with the last intervention.
    I thought that Conservative Members might think that this was scaremongering. That nasty Labour party was once again maliciously misinterpreting the honest and decent intentions of these credible and straightforward Ministers. The public know exactly what happened when the Conservatives were returned to office, and they will not be fooled so easily again. VAT went up by 8 per cent., to 17·5 per cent., affecting every family in the land. Gosh, weren't we irresponsible to allege that? Weren't we wicked to make such scurrilous accusations against such honest and decent people?
    Let me tell the Prime Minister that what scares the country is not what Labour predicts, because we are quite accurate in our predictions, but what the Government are capable of doing. The Government are prepared to promise anything to get elected and then to betray each and every promise afterwards.
    Although the betrayal of election pledges is bitterly resented throughout the country, it is only one of the reasons for the contempt in which the Government are held. Since the general election, we have seen one catastrophe piled on another. Not even the most inventive or ruthless scaremongering among my hon. Friends would have had the audacity to allege that any Government could be so consistently incompetent, so hopelessly accident-prone and so foolishly inept.
    I select but a few of the Prime Minister's recent triumphs: the billions of pounds lost in the panic and fiasco of black Wednesday; the grievous damage to our energy resources which the disastrous pit closure programme has inflected upon the country; the shady double dealing in the Matrix Churchill affair; the hopelessly bungled scandal of the education tests; and the disaster waiting to happen in the privatisation of our railways.
    In response to the plummeting popularity of the Administration itself, revealed at Newbury and in the shire county elections, we have the Prime Minister's botched reshuffle. If we were to offer that tale of events to the BBC light entertainment department as a script for a programme, I think that the producers of "Yes, Minister" would have turned it down as hopelessly over the top. It might have even been too much for "Some Mothers Do 'Ave Them".
    The tragedy for us all is that it is really happening—it is fact, not fiction. The man with the non-Midas touch is in charge. It is no wonder that we live in a country where the grand national does not start and hotels fall into the sea.
    Mr. David Shaw: Will the right hon. and learned Gentleman give way?
    Mr. Smith: No.
    To be fair to the ex-Chancellor from whom we have heard today, he reminded us in his last public speech

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    before today that his biggest problems, one might say his major problem, had been inherited. It was a cruel twist of fate to have to succeed the right hon. Gentleman the Prime Minister. No doubt he is now reflecting that he is well out of it all.
    There is proof abundant that this is a Government who are untrustworthy and incompetent—deeply untrustworthy, hopelessly incompetent. Perhaps their most defining characteristic is an aggressive, bullying and dogmatic obstinacy which assumes that they are entitled to control our affairs without the slightest recognition of the expertise of others or any opposing opinion.
    The tragic farce of the education tests is a case in point. The Government are now a laughing stock as boxes of unopened test papers accumulate in schools all over the land. Of more than 4,000 secondary schools, only a handful took part. It is not that the Government were not warned; parents, teachers and head teachers unitedly told them they were wrong, but the expertise of the teaching profession is of no interest to the arrogant Secretary of State for Education.
    Even the right hon. Gentleman's own advisers could not stay on the obviously sinking ship. The noble lord Skidelsky attacked what he called "the Byzantine complexity" of the proposals:
    "I was amazed,"
    he said,
    "at how insensitive they were to spending large sums of money on things that were no good."
    He should not have been so surprised; they have a long record of doing just that. At a time when educational spending is under threat, perhaps it is worth remembering that the Government's own advisers tell us that this year's tests alone will cost £35 million.
    It is of course interesting that the Government propose tests only for schools in the public sector. If they are such good news, why are the private schools to which most Conservative Ministers send their children not covered by the tests at all? Ministers know perfectly well that private schools do not want them, and they will not have to accept them—one role for schools that the Government favour and another for the rest. That is hypocritical as well as dogmatic.
    Fresh from those triumphs, the Secretary of State for Education is on a collision course again with parents, teachers and head teachers, with his threats to end graduate status for primary school teachers—ideas much more associated with the last century than with the next. When will the Government learn that the teaching profession is the fundamental profession? It should be strengthened, supported and encouraged—not threatened, undermined and abused.
    Dr. Robert Spink: What is the right hon. and learned Gentleman's view on testing? Would he abandon the three children in 10 who leave school still unable to read and write properly? How does he intend to drive up education standards? What is his education policy?
    Mr. Smith: There is a perfectly good case for sensible tests agreed with the teaching profession and with parents —as is occurring in another part of this country which is not England or Wales, but which happens to be governed by the same Government. That is how the issue is being
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    approached there, and there is no reason why the same cannot be done in England and Wales. It is not the principle of testing that is in question but the ham-handed, arrogant and foolish way in which this incompetent Government have handled it.
    What possible justification can there be for the absurdities being proposed in the name of rail privatisation? What on earth makes the Government so determined to scorn the opinions of transport experts and of nearly every member of the travelling public? Hardly a day goes by without more evidence of the cost, folly and dangers of the Government's privatisation plans.
    The latest assessment by Steer Davies Gleave, a transport consultancy that the Government themselves use, shows that the operating costs of a privatised rail network are likely to be £500 million more than the existing system. A Government in the grip of the privatisation virus appear immune to such compelling evidence.
    Mr. David Tredinnick: Were not the same arguments deployed against bus privatisation, which has been an overwhelming success?
    Mr. Smith: I do wonder about the Conservative party. One does not have carefully to prepare traps for it—it invents its own. Is the hon. Gentleman aware of what the people of this country think about bus privatisation? I dare say that he has not been on a bus for some time.
    Even worse, this week ABB Transportation, better known as British Rail Engineering ltd., announced 900 redundancies because of a shortage of new orders amid the uncertainties of rail privatisation. That company is the only British rolling stock manufacturer that makes all its components here in Britain. Thus is delivered a further blow to British manufacturing capacity and to the skills that are needed to sustain it.
    We know from other privatisation examples that the principal victims of the process are British suppliers—whether it is coal equipment, buses or trains. If we lose manufacturing capacity at York, Crewe and Derby, the inevitable result is that future rolling stock, whether for the national railway system or for london Underground, will have to be purchased abroad, adding a further dangerous twist to our already serious balance of payments deficit.
    We hear platitudes from the Prime Minister about his concern for manufacturing industry, but his policies do it the most deadly damage. Evidence of that is vividly shown not just in public finances, serous though they are, but in two other crucial aspects of economic performance—high and continuingly high unemployment, and a dangerous balance of payments deficit.
    Britain has the worst deficit of the Group of Seven leading industrial countries. Most alarming of all, even after the last Tory record-breaking recession, there was a balance of payments surplus of £6·7 billion at the end of the cycle. This year, as we struggle for recovery, we face an enormous £17·5 billion deficit—which, according to the Budget, is forecast to be even worse in 1994, at £18·5 billion.
    That simply reflects 14 years of neglect of Britain's manufacturing sector. In sector after sector, there really is no adequate British industrial capability. Our economy is too small to be able to create the wealth on which we need

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    to rely. As Goldman Sachs commented in its latest economic review—it put it quite well—the British economy has suffered from
    "an apparently permanent shift in the structure of the economy towards excess consumption and away from manufacturing, investment, exports and employment"—
    all the things that really matter to a successful economy.
    That is the key problem with the British economy. All the other depressing symptoms that we have to consider flow from that central cause. That is why we need a wholly new start in economic policies, not just a shuffle of personalities. It was deeply depressing that the need for a new approach was totally ignored by the Chancellor of the Exchequer when he breezily appeared on Radio 4 this morning.
    What we need is what the Opposition have long argued for—an industrial policy that recognises that Britain's fundamental wealth creator is our manufacturing industry, and that supports it by the encouragement of sustained investment in new technology, research and development, regional policy and, above all the skills of our work force.
    Dr. Spink: Will the right hon. and learned Gentleman give way?
    Mr. Smith: I have given way already.
    It is depressing that, as today's Financial Times reports, a Department of Trade and Industry study shows that United Kingdom companies spend significantly less than our competitors on research and development, and it is extremely worrying that the United Kingdom share of United States patents has fallen from 10 per cent. in 1980 to 6 per cent. in 1991.
    No wonder that, when Management Today, in its latest issue, asked leading industrialists whether they felt that the Government had a clearly defined industrial policy, 90 per cent. said no. When they were asked whether they believed that the present Government's policy was the most effective for United Kingdom industry, again 90 per cent. said no. They understand that the purpose of an industrial policy is to co-ordinate to maximum effect investment, regional development, technological improvement and export performance. We believe that to be vital; it is, after all, what other successful countries do.
    We need a new approach to tackle Britain's intolerable level of unemployment. Do not the Government yet realise that the biggest drain on our public finances is the cost of the unemployment that they have created—£9,000 a year for every person unemployed? It is the greatest misery in modern Britain—for individuals, families and whole communities—and, perhaps worst of all, a massive waste of invaluable human resources. We need action on unemployment, and we need it now.
    I again ask the Government to act to help our beleaguered construction industry. Why do not the Government do what we and so many others have urged and allow local authorities to spend their own capital receipts on house building and house improvement programmes, helping both the homeless and the hundreds of thousands of unemployed construction workers? Once re-employed, those workers will start to pay taxes instead of drawing benefits, and companies will make profits on which they will pay taxes, rather than declaring losses on which they pay no tax at all.
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    This policy is backed by the construction industries, local authorities, the Institute of Housing and many City commentators. Midland Montagu has urged the Government
    "to leap at the opportunity of adopting a policy full of common sense and compassion that efficiently targets the homeless, the housing market, the construction industry, and the South East."
    All we have heard from the Government is the usual dogmatic and obstinate refusal.
    It is no wonder that the Government have slumped in popularity. According to the front page of today's Daily Telegraph—on which I rely for my information about the Conservative party—senior Tories on the 1922 Committee executive are to hold an inquest on the failure of the ex-Chancellor's sacking to halt the biggest slump in morale since the Profumo affair 30 years ago. No doubt the Prime Minister will dismiss this too as scaremongering, but as a principal participant in the Profumo affair might have said, "He would say that, wouldn't he?"
    But he knows, does he not, the menace of these men in grey suits? After all, he was the beneficiary of their deadly manoeuvres against his predecessor—although he no doubt reflects that, while it took 10 years to move against her, after only 12 months they have him in their sights. If I were he, I would worry most if they sought to reassure me. Most of all, I would worry if they sought to show their solidarity with a man in a spot of bother by giving him a present—perhaps a watch inscribed, "Don't let the buggers get you down." After all, it appears to be a coded message that it is time for an early and a swift departure.
    The Prime Minister cannot complain about the giving of a watch. He himself says that it is not a hanging offence. What we know, from the botched reshuffle and the abrupt dismissal of the former Chancellor, is that a hanging offence in this curious Government is loyally to carry out the Prime Minister's own policies, especially to the accompaniment of effusive declarations of his support.
    The British people deserve a better Government, for they dislike intensely the concoction of betrayal, incompetence and dogmatism which are the characteristics of the present occupants of the Treasury Bench. What people are beginning to dislike just as much is the low ambition that these people have for our country.
    The people of Britain do not want the low-skill, sweatshop economy which is the miserable Tory response to the challenge of competiton from Europe and the wider world. What they want is for us to become a high-skill, high-tech, high-wage economy, able to compete with the best and to succeed on the basis of our ability and the quality of our products in the markets of the world.
    Mr. David Shaw: What are you frightened about? Why will you not answer a question on the nepotism and corruption on Monklands district council? [Interruption.]
    Madam Speaker: Order. Unless the hon. Gentleman resumes his seat and stays there, I shall take disciplinary action against him.
    Mr. Smith: The people of Britain do not want any more years of high and debilitating unemployment, which destroys opportunity, squanders talent and wastes our resources. They want economic policies which support steady growth and rising employment, and which give our young people a chance to succeed.
    The people of Britain do not want to see competition and dogma in the classroom. They want the best possible

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    education for their children in properly resourced schools from teachers whose vital contribution is valued, not scorned.
    They do not want the ever-increasing commercialisation of their health service. They want once again to feel secure in the knowledge that, when it is needed, they will be able to obtain the care that they and their families need at the time that it is required.
    The people of Britain do not want a Government who twist and turn, who betray their promises and dishonour their pledges. Above all, they want a Government that they can trust. No amount of reshuffling, repackaging or re-presentation can now disguise from the British people the stark reality of a discredited Government, presided over by a discredited Prime Minister.
    4.33 pm
    The Prime Minister (Mr. John Major): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof
    'welcomes the widespread indications of economic recovery in the United Kingdom at a time when many other major economies are in deepening recession; recognises that the interests of industry are at the heart of the Government's policy and acknowledges the comprehensive programme of training and employment opportunities for unemployed people that the Government has put in place; welcomes the Government's commitment to its Manifesto pledges including its commitment to improving the efficiency and effectiveness of public services through the Citizen's Charter; deplores the scare-mongering stories about public spending peddled by the Opposition; and applauds the Government for its determination to maintain low inflation, sound public finances and firm control over total public expenditure upon which a sustainable economic recovery depends.'.
    As the right hon. and learned Member for Monklands, East (Mr. Smith) sits down, I have little doubt what is in his mind: "That'll keep John Edmonds quiet for a week or so."
    Before I turn to the substance of the debate, I wish to say a word or two to my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) regarding his remarks at the commencement of today's debate. In his speech, my right hon. Friend spoke of a number of matters of very great importance, including the case that we have discussed on many occasions over the past two years for an independent central bank.
    I share my right hon. Friend's loathing of inflation. That is an issue that we discussed frequently. We both saw the case for an independent central bank, able to take decisions on the implementation of monetary policy. There is a genuine case for that. I do not dissent from my right hon. Friend's remarks about it.
    The very real concern that I have always faced is one that I believe is spread widely across the House: the need for accountability to Parliament for decisions on monetary policy matters. Were a way to be found to get the benefits of an independent central bank without the loss of parliamentary accountability, my views would be very close to those of my right hon. Friend, but I have to say to my right hon. Friend—I believe, from our many discussions, that it is a view he shares—that what is more important than the institutional arrangements is the underlying policy that is actually being followed. On that, I do not believe that an independent central bank would have brought down inflation any more rapidly than we
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    have been able to achieve. [Interruption.] That is something for which I am happy to pay tribute to my right hon. Friend.
    Also, I entirely share my right hon. Friend's vision of the economic goals of this Government— [Interruption.] —and of the difficult path that we have had to follow to achieve and maintain low inflation and restore sustainable growth—[Interruption.]—and employment. My right hon. Friend and I—[Interruption.]
    Madam Speaker: Order. The House must settle down. Hon. Members do not have to listen, but whoever is speaking has to be heard. There is a great distinction between those two statements. The Prime Minister.
    The Prime Minister: My right hon. Friend and I faced crises both before and after September last year. We worked together towards objectives that we shared, and we were always agreed as to our main goals: low inflation, sustainable economic growth, an increase in prosperity for all our people as medium and long-term objectives. I believe that history will look favourably on my right hon. Friend's economic and financial skills, but a strong Government need political skills as well— [Interruption.]—when leading a democratic society and, in particular, when handling a lively House of Commons with a small majority.
    Dealing with the problems of a small majority is a fundamental fact of democracy that no one dare or should even attempt to overlook. However, as we have shown in the battle over inflation and in our pursuit of European policy, against great difficulties in this House, we were not prepared in the Government to allow short-term difficulties to deflect us from what were the right long-term policies for this country. That was the position, and it is the position.
    I am grateful to my right hon. Friend for his support and help throughout the past two and half difficult years. I acknowledge the difficulties that he has faced and the courage with which he has faced those difficulties. and I accept the support that he has offered to the Government for the future. I welcome the opportunity to debate economic policies at a time when output is up, exports are up, productivity is up, confidence is up and, as announced today, when business starts are up.
    The right hon. and learned Member for Monklands, East has just made the speech that we expected of him. At the end of it, we are no better informed about his economic policies than we were at the beginning of it—or even about whether he has any economic policies or whether he has progressed beyond the sound bites that so frequently construct them.
    We do know something about the right hon. and learned Gentleman. We know that he is the man who announced the biggest tax increase in peacetime history, just before the general election. He is the man who said confidence would carry on falling, just before the CBI announced the highest level of confidence in 10 years, and he is the man who calls for a debate on the economy just as the economy is recovering. I hope that, with timing like that, the right hon. and learned Gentleman never takes up boxing, because it would be very painful. Many things can be said about him, but "floats like a butterfly, stings like a bee" is clearly not among them.
    What does seem right about the right hon. and learned Gentleman was said by the right hon. Member for

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    Chesterfield (Mr. Benn). I remind the right hon. and learned Gentleman what his right hon. Friend said about him:
    "I do not think that Members of Labour's Front Bench would have even two ideas about what to do with the economy if they came to power…a series of sound bites glued together and called an economic policy is not an economic policy."—[Official Report, 20 May 1993; Vol. 225, c. 420.]
    That remains as true at the end of the right hon. and learned Gentleman's speech as it was before.
    Today's debate goes right to the heart of the fundamental divide between the Conservative party and the Labour party. The Labour party stands for higher public spending, higher taxation and more state interference in business and industry. We stand for controlling public spending, bringing direct taxation down where we can and getting the state off the hacks of businesses and individuals.
    Let me deal with one matter that was fundamental to the right hon. and learned Gentleman's speech. let me turn immediately and clearly to social policy. I did not come into politics to dismantle the welfare state. I have no intention of doing so and neither does my party. At the moment, in different parts of the country there are many vulnerable people who are worried. They are worried because the Opposition systematically, day after day, leak after leak, sound bite after sound bite, have sought to frighten them. The Opposition have peddled scare after scare—
    Several hon. Members rose—
    The Prime Minister: I will give way later.
    The Opposition have peddled scare after scare, yet the leader of the Labour party is deep into moral outrage—righteousness to self-righteousness is second nature to him. He is an honourable man, one might say—surely not the man to spread scare stories; surely not a man to condone scare stories, so let me be charitable to him. Perhaps he did not know—had no idea—when the hon. Member for livingston (Mr. Cook) swore that we would privatise the national health service, when the right hon. and learned Gentleman must have known that that was untrue. He could not have known about that, because he is an honourable man.
    What did the hon. Member for Holborn and St. Pancras (Mr. Dobson) say? He said that the Government were
    "threatening to cut pensions and benefits for the worse off."
    In the autumn statement 13 days later, pensions and benefits rose. I am sure that the right hon. and learned Gentleman did not know what his hon. Friend would say, because he is an honourable man and would not have sanctioned it.
    It was the right hon. and learned Gentleman's party that repeatedly claimed that trust hospitals were leaving the health service. They were not: the Labour party knew that they were not, yet it needlessly scared sick people for a vote or two, time after time. The right hon. and learned Gentleman could not have authorised that, because he is an honourable man—or so I had thought. But then I discovered what he had to say:
    "What's going on…will lead to the privatisation of the NHS."
    That was flatly untrue, of course, and another scare. I wonder who could have spread it? The right hon. And
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    learned Gentleman spread it. In the Labour party the scares come from the top and behind that moral righteousness is someone who has no scruples whatever.
    The right hon. and learned Gentleman claims that the Conservative party won the election by telling untruths. let me remind him about that election. It was his party that published 10 patient case histories and had to withdraw them when it turned out that it had made them up. It was his party that made up untruths about a sick little girl and spread them across the country. That is the party that dares to talk to us about standards. There is a word for that, but it is not parliamentary.
    Let me turn to the subject of public spending. The Government know that, if the economy is to grow, the tax man cannot take more of the proceeds than the country can afford. In the Conservative party, we understand that people want more money in their own pockets and do not want the Government to spend their money for them. Of course, in the recession, spending had to increase. I do not apologise for that increase in spending—it was necessary in the recession and it was necessary to protect the vulnerable. I saw no support from Labour Members for any expenditure reductions throughout the recession and every support for dramatic increases week after week from every Member of the Opposition parties.
    Mr. Calum Macdonald: Will the Prime Minister give way?
    The Prime Minister: later.
    During that recession, not only did expenditure necessarily rise but income necessarily fell and that added to the borrowing requirement. Even though a great deal of that will reverse as growth returns, it is going to take time. That is why we have embarked on the public spending review. Governments have to take difficult decisions. We have to face structural increases in public spending, as any Government would. There are demographic changes, changes in student numbers and more elderly people, especially the very old.
    As we address those problems, the Opposition gaily spread mischief—a little fib here, a little scare there—yet as it does so it is carrying out a review into social expenditure. It does not have the courage to do it directly; it has farmed it out to the Commission on social policy. The only form of contracting out that the Labour party approves of is contracting out difficult decisions to other people.
    The right hon. and learned Gentleman cannot run away from what he said:
    "We"
    —that is, the Labour party—
    "should be prepared to re-examine everything. I have not ruled anything out".
    That is its position on social policy and Labour Members nod in agreement. Daily, the Labour party invites us to rule things out, while it examines everything—pensions, child benefit and every other aspect of social policy.
    How responsible the right hon. and learned Gentleman is. I suppose that that comment shows that he wants to grapple with real problems, but when he faces other audiences, he wants to rule everything out. Which is the real right hon. and learned Gentleman? The gritty, determined facer of problems who wants to examine everything where nothing is ruled out, or the wriggler, twisting and turning, saying one thing to one audience and another thing to another audience?
    Mr. John Garrett: Could the Prime Minister, First lord of the Treasury, tell us what he was doing during the long period of recession, which has caused so much misery throughout the country? Was he looking the other way? Was he train spotting? Was he walking into cupboards? Has there ever been a more wimpish approach to the problems that face this country than that which he has shown?
    The Prime Minister: I shall tell the hon. Gentleman directly: we have been presiding over a policy that brought inflation down to 1·3 per cent. and interest rates down to 6 per cent. so that this country is now poised for the largest growth in the European Community this year, next year and probably for the years beyond that. We have been taking the long-term view, not the short-term, option. That is what we have been doing-I am grateful to the hon. Gentleman for giving me the opportunity to point that out—while he has opposed every policy that has brought down inflation and interest rates.
    The Opposition will be glad to know that our review of public spending will be careful and thorough. There will be two criteria: are any changes fair, and are vulnerable people protected? When the answer is no, we shall not make the changes. When the answer is yes, we shall set out to the House the implications of those changes. There are no soft options. The Government's duty is to examine them all and pick the right ones. We know that we need to reduce public borrowing, which is why, in the last Budget, we decided that some increase in revenue was necessary.
    We decided to introduce value added tax on fuel and power, not least because it would help meet our Rio commitments, commitments that the Opposition urged us to extend. We had every reason to expect cross-party support. The liberal Democrats had stated in their green paper:
    "Liberal Democrats advocate as a first priority the imposition of a tax on energy…The UK is unusual amongst EC members in not applying even standard rates of VAT on domestic fuels…we would press forward…by ending the anomalous zero rate of VAT on fuel".
    Where were those men of principle in the Division lobbies after the Budget?
    What did the Labour party say? It said:
    "Zero rating on items such as food, fares, books and children's clothing should remain as an essential part of the VAT system."
    That was quite clear. It continued:
    "We will also use the tax system, as well as regulation, to help protect the environment."
    That can mean only one thing. In the list of zero-rated items, there is no reference to zero rating for domestic fuel. The Opposition intended to put it up, and they know it. If they did not, will they tell me now why it was not in their list of zero-rated items? The right hon. and learned Member for Monklands, East does not answer—no doubt, as a QC, he believes in the right to silence for an accused.
    When we introduced VAT on fuel and power, we made it clear that there would be extra help for less well-off pensioners and others on low incomes. I am glad to repeat that commitment. In recent months, the right hon. and learned Gentleman has made a great deal of the VAT increase, as have his hon. Friends.
    Ms Hariet Harman: So have the voters.
    The Prime Minister: So did the voters, says the right hon. lady. What the right hon. and learned Gentleman did not mention is that he was the Energy Minister who let
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    electricity prices rise. What was the increase—5 per cent., 10 per cent., 15 per cent.? No, it was 30 per cent. over and above inflation. What did the right hon. and learned Gentleman do to help the less well-off? I shall tell the House what he did—absolutely nothing. The position is clear.
    The right hon. and learned Gentleman cares about pensioners when he is in opposition—how he cares about pensioners in opposition—but in government he disregards them absolutely. One may think that that was a single lapse but, in case anybody thinks that that is so, let me say that the right hon. and learned Gentleman was a member of the Government who twice held back the Christmas bonus and cut capital spending on the health service. That is his record, and he should be ashamed of it.
    There is another case where the right hon. and learned Gentleman's actions do not match his words. Today, he again attacked our borrowing levels, but his election promises would have put up borrowing way above the present level. He is still at it. "Let's spend £6 billion of capital receipts," says the right hon. and learned Gentleman. "Let's spend an extra £1·5 billion on public sector pay." The shadow Chancellor says, "Let's renegotiate our rebate and pay more to the European Community."
    Is there any area of Government spending that the Opposition are prepared to cut? Perhaps the shadow Chancellor can tell us. Perhaps we could have another sound bite to tell us where he would find the necessary savings. Or perhaps the deputy leader of the Labour party can tell us; after all, she came into government to implement the cuts in education that her hon. Friend the Member for Eccles (Miss lestor) refused to make.
    Mr. Geoffrey Dickens: Will my right hon. Friend explain why, if the Opposition are sincerely worried about the disadvantaged people of this country, they demand more and more overseas aid, day in, day out? [Interruption.]
    Madam Speaker: Order. We all like a little bit of fun and hilarity, but we also want to hear the Prime Minister.
    The Prime Minister: The fundamental point about overseas aid is that, in order to sustain it as the Government have done, one needs to pursue the right economic policies, as we have also done.
    I am glad that the motion mentions manifesto promises—glad, but a little surprised because the right hon. and learned Gentleman has scrapped all his election promises. We stand by our manifesto policies. We promised action on trade unions, housing, lotteries, railways, education and asylum, and we have kept our promises. Bills on each of those matters have already passed through the House. We promised to uprate pensions and benefits, and we have done so. We promised to maintain child benefit, and we have done so. We promised to increase real resources for the health service, and we have done so; year on year, spending is at record levels. They are the promises we made, and we have kept each one.
    Mr. John Fraser: When the Prime Minister went on his trip down memory lane to Brixton and other ethnic areas, did he tell the people that he was going to take away the right of appeal for visitors?
    The Prime Minister: The hon. Gentleman knows as well as any hon. Member that the great improvement in race

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    relations in this country is directly related to the firm but fair immigration policies pursued by this Government. I am surprised to hear him venture down that track, in view of his record of favouring good race relations.
    We promised to deliver low inflation, and we have delivered on that promise. We promised to resume economic growth, and it is now resuming. Inflation, at 1·3 per cent., is at the lowest level for 30 years. Interest rates, at 6 per cent., are the lowest in the Community. There are now too many signs of recovery for even the Opposition to ignore them. Manufacturing output has increased for months in succession and unemployment has fallen three months in a row. It is too high—I share that view—but it is moving in the right direction, and sooner than most people expected.
    It is certainly sooner than the hon. Member for Dunfermline, East (Mr. Brown) expected, because, after the Budget, he said:
    "I make one Budget forecast—that, after the Budget, unemployment will rise this month, next month and for months afterwards".—[Official Report, 17 March 1993, Vol. 221, c. 289.]
    One day later, unemployment fell. The next month, it fell again, and the next month, it fell again. Another sound bite is needed, I think.
    The recession has been damaging, and recovery has not come easily, but it is now under way—[Interruption.]
    Madam Speaker: Order. Hon. Members must come to order. The bawling and shouting coming from the Back Benches this afternoon is utterly disgraceful. [Interruption.]I know who the Members responsible are, and I need no one to point them out for me.
    The Prime Minister: Some time ago, the right hon. and learned Member for Monklands, East admitted:
    "we change our policies as we move towards a different election…We'd be a very foolish Party if we went into an election in…1995–96 with exactly the same policies".
    That is certainly true. But whose policies were they? They were the right hon. and learned Gentleman's. He was the undisputed author of Labour's defeat. He was the man who drew up the disastrous shadow Budget. Hon. Members may remember the hype, the fake presentation, as if it were a real Budget, and the responsible tone—the right hon. and learned Gentleman even posed for photographs outside the Treasury. lots of passers-by do that, but they never get into the Treasury.
    The right hon. and learned Gentleman talks of broken promises, as does the shadow Chancellor, the hon. Member for Dunfermline, East. That is a good sound bite, but for the wrong party. The Labour party has broken every promise that it made about future policy at the election. Every one has gone to the social justice Commission.
    The right hon. and learned Gentleman said:
    "We must be prepared to examine in an open-minded way some of the fundamental features of our approach. What is the right balance between universal and selective benefits".
    It was not Milton Friedman who said that, nor my right hon. Friend the Chief Secretary, nor even lord Desai—no doubt he would have been sacked if he had said it. The right hon. and learned Member for Monklands, East himself said it. Yet time after time he accuses us of examining aspects of public expenditure that any responsible Government would need to examine.
    He is the man who said that his planned increases in pensions and child benefits were essential, and that his tax
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    proposals were fair, reasonable and popular. They have been so popular that he has dropped them all. So much for his promises. I would rather listen to the late Robert Maxwell on pension probity than to the right hon. and learned Gentleman.
    I know that the exchange rate mechanism and economic and monetary union are matters of some importance to hon. Members on both sides of the House. Since we left the ERM, there has been substantial debate about monetary policy and the possibility of economic and monetary union. In the negotiations at Maastricht I sought and secured an opt-out on the single currency because I was sceptical of its economic impact across Europe and its artificial deadlines, and because I believed that such a decision was for the House to make.
    Since then, economic developments in the European Community have strengthened the reasons for caution that I set out. The European Community economies have diverged rather than converged. As we come out of recession, our main partners are heading into a recession. Some of our European partners remain keen on early monetary union, although many of their central banks are less keen. Even the keenest must now see the difficulties. The criteria for monetary union will simply not be met. When I was negotiating at Maastricht, the idea of a monetary union in 1997 looked ambitious, perhaps even a little dubious. I have to tell the House that it looks wholly unrealistic today.
    The economies of Europe are not remotely ready for one currency throughout the 12, soon to be 16, countries, and I believe that they will not be ready—if they ever will be—for many years. That is not an anti-European view; I simply do not believe that the economic circumstances will be right, and if they are not right the damage that proceeding would cause the Community would be profound, and I should not wish to see it occur. If some of our partners decided to go ahead prematurely, that would be an economic mistake. I do not believe that we should go with them.
    We have sought reform of the exchange rate mechanism. I make no secret of the fact that I prefer stable exchange rates, and so does industry. But I cannot accept that the present operation of the ERM is satisfactory. Sterling was forced out, in the circumstances described by my right hon. Friend the Member for Kingston upon Thames, but so was the lira. The franc, the peseta, the escudo, the punt and others have at different times been put under great pressure. Certainly, I could not recommend that sterling return at present. We should need greater convergence between the monetary policies appropriate for all the Community economies, and we should need to be satisfied that the system would be operated to the benefit of all its members.
    In January, I made it clear that those circumstances would not apply this year. I now doubt whether they will apply for some years ahead—possibly they will not apply in this Parliament.
    Sir Peter Tapsell: There will be a widespread welcome throughout the party for what my right hon. Friend has just said to the House, and there will be great support for the policies that he has enunciated throughout his speech.
    The Prime Minister: I am grateful to my hon. Friend, and delighted to have a party at ease with itself.

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    It is clear that the Labour party has no policies at all, and certainly no economic policies. When it had policies, they lost it the election. As the hon. Member for Brent, East (Mr. Livingstone) put it—rather cruelly, I thought —the right hon. and learned Member for Monklands, East
    "bears the primary responsibility for tax and economic policies that lost Labour the election."
    And now Labour has none. That is not my view alone. It is clearly shared by Mr. Edmonds of the GM B, the union that sponsors the leader of the Opposition—or at least, it sponsored him until last Sunday. I am not sure whether things have changed since then.
    Mr. Edmonds says that Labour has an identity problem and asks whether the voters
    "know what Labour stands for".
    He says that Labour must shake itself out of its lethargy.
    He asks:
    "Where was the Labour movement"
    during the past few months? He may well ask.
    The Labour leadership cannot have been examining economic policy, because the shadow Chancellor would not recognise economic policy if it gripped him by the windpipe. The Labour leadership may have been absorbed in its falling membership, or it may have been trying to fight off the defeat of the right hon. and learned Gentleman's party reforms.
    There is one area of total agreement between the right hon. and learned Gentleman and myself: he wants one man, one vote—a novel concept for Labour. He is right about that, and he has my support. Unfortunately, he does not have Mr John Edmonds' support. Mr. Edmonds wants one member, one vote, so long as he can be the member and he, and nobody else, can exercise the vote.
    So long as the Labour party remains subordinate to the trade unions in policy, a paid for and wholly owned subsidiary of the trade unions, Labour Members will sit on that side of the Chamber. I shall tell the right hon. and learned Member for Monklands, East why he and his party fail to convince even the leader of the union that sponsors him. It is because Labour is a party without policies and without principles that it will remain, in the short and the long term, a party without power. [Interruption.]
    Madam Speaker: Order. Will hon. Members leaving the Chamber please do so quickly? [Interruption.] Order. Come along.
    5.9 pm
    Mr. Paddy Ashdown: I believe that what we have heard and seen this afternoon is nothing less than the beginning of the end of the right hon. Gentleman's premiership. I say that not because of the lack of success of his speech—although I have to tell him that, if he had bothered to turn round he would have seen his fate indelibly written on the faces of Conservative Members. I say it not because of the effectiveness of the speech by the leader of the Opposition, although, in its way, the right hon. and learned Gentleman's was an effective speech, typical of the speeches that he delivers [good for a knockabout but not providing too much revelation about Labour party policy.
    I say it because of the speech by the right hon. Member for Kingston upon Thames (Mr. Lamont). I believe that
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    the two speeches that we have just heard, and all the other speeches in the debate, will be forgotten when the right hon. Gentleman's words will be remembered and will reverberate down through the months and years that remain of the Government.
    I do not know when the Prime Minister will go. It may take weeks or it may take months. But when he does go, this afternoon will be the occasion that people will point to as the start of that process. As the House will have recognised, the right hon. Member for Kingston upon Thames delivered a speech of considerable dignity. He was clear about his own view of his role in what has happened over the time that he has held high office. However, the speech was devastating in its criticism of the Government and devastating, too, in its criticism of the right hon. Gentleman's friend, the Prime Minister.
    The right hon. Gentleman lifted the lid—particularly in the last three or four minutes of his speech—on a Government who lack clear leadership and are blown hither and thither by opinion polls, a Government prepared to fiddle with interest rates for political purposes and infected by short-termism—those are not my words, but those of the right hon. Gentleman—and a Government who lack direction.
    The right hon. Member for Kingston upon Thames has shown—more clearly than the words of any Opposition Member could have done—what lies at the heart of the Government of this country. The Conservative party is riven by a virulent civil war, and is without a leader who can mark any kind of course forward for the nation. [Interruption.] I invite Conservative Members to read tomorrow, not my speech nor that of the leader of the Opposition, but that of the former Chancellor, who was a part of the Government and who has taken the lid off it in such a devastating way. I say again that his is the speech that will be remembered.
    We now know that the Government cannot bring themselves to face the immensity of the problems that they have created. They cannot recognise the reality of the misery that they have inflicted on ordinary people's lives. They do not understand the concept of fairness, do not care about betrayal and cannot grasp the opportunities that now lie ahead for our country.
    The Prime Minister clearly thought that sacking his Chancellor would provide a way out of his problems. But the reverse has proved to be the case, as he was clearly exposed in the words of the former Chancellor today. The Government's crisis, as he expressed it, is not a crisis of men, but also a crisis of measures. It is no good the Prime Minister just changing the people: he must change the policies of the Government as well. That change was called for by the clarion voice heard at Newbury and in the county council elections.
    The Prime Minister has given his answer this afternoon. He has changed the Chancellor who he said did nothing wrong but intends to stick to the policies that have done this country so much damage. The departure of the Chancellor did not resolve the Government's divisions—it highlighted them. There are now two Conservative Governments—the Government of the new Chancellor of the Exchequer and the Government of the new Home Secretary. And stuck in the middle of this increasingly bad-tempered contest is the Prime Minister, relegated to the job more of referee than of leader.
    The Chancellor's departure did not clarify the Government's economic policies, either—it muddied the

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    waters still further. We are yet to have a clear statement from the new Chancellor of the Exchequer. Such reticence is uncharacteristic of the right hon. and learned Gentleman. When he was Home Secretary, he was never off our television screens, where he expounded the details of the Government's economic strategy. Presumably, it will now be the new Home Secretary who, having secured for himself in his deal with the Prime Minister a position on the Cabinet's economic committees, will now speak for the Government on such matters as the exchange rate mechanism. What has been sauce for the pro-European goose will now be sauce for the Euro-sceptic gander.
    Above all, the Chancellor's departure did not add to the Prime Minister's authority over his party or over his Government. As we saw this afternoon, it diminished his standing and undermined his authority, which I believe will never be recoverable. Only the present Prime Minister could achieve this singular double—to make people support Arthur Scargill and to make people feel sorry for the right hon. Member for Kingston upon Thames.
    The right hon. Member for Kingston upon Thames is entitled to feel aggrieved. He is entitled to ask what it was that he did wrong. Will the Prime Minister tell him which of his policies he found unacceptable? No; he made it clear that he will not. Nor will he tell him in which areas he was incompetent at his job. This morning we heard from the new Chancellor of Exchequer on the radio that his predecessor was simply hounded out of office by the press.
    Is it, then, the measure of our Prime Minister, that, in the very week in which he told the Financial Times that he would not be bullied into a reshuffle, he was? let me quote the Prime Minister's own words:
    "Neither now, nor at any stage in the future, are my reshuffles going to be preceded by assassinations of my colleagues."
    Despite that, that is exactly what the right hon. Gentleman allowed to happen.
    Deep in those words is a message for the whole Government. The Prime Minister agreed with his Chancellor's policies because they were the Prime Minister's policies, set down by No. 10. The Prime Minister never questioned his Chancellor's competence; they acted together. The Prime Minister and his Chancellor were a team. They stood shoulder to shoulder. The Prime Minister saw no need for the Chancellor to depart after black Wednesday. Why? Because, as the ex-Chancellor himself revealed so clearly, although it was damaging for the country to have a Chancellor who had lost credibility, it was convenient for the Prime Minister to have a Chancellor who protected him. That is the reason why the right hon. Gentleman did not resign.
    This afternoon we must do more than debate the Government's appalling record of mismanagement in the past: we must put forward the right policies for the future. As the new Chancellor said, he inherits an enormous hole —the black hole of the Budget deficit. Substantial public borrowing will often be necessary. But we do not believe that we can wish away a Budget deficit of this magnitude, which bears down on the whole nation and on our chances of recovery.
    We are dealing with the consequences of years of economic mismanagement under the Conservatives. We are now a nation living in debt—this year, 8 per cent. of our national income. The very Government who have told us that they are responsible with public money are now borrowing £1 billion a week. That is £50 every week for
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    every household throughout the land. The interest cost alone of the extra debt which the Government have generated is about £4 billion each year. That alone is the equivalent of 2·5p on income tax just to pay the interest on the Tory debt. Those are the results of deep structural problems in the British economy, but they have been exacerbated by the inept economic policies of the Government.
    Mr. Patrick Nicholls: The right hon. Gentleman speaks as though the recession is an entirely United Kingdom fact and has nothing to do with Europe. Surely the right hon. Gentleman, a passionate advocate of a united states of Europe, realises that the recession has applied throughout the Economic Community. If the right hon. Gentleman is really saying that the recession is entirely home-grown, he is revealing himself to be even more economically illiterate than I would have given him credit for. Is he admitting that or not?
    Mr. Ashdown: Of course I concede—I have always conceded it—that there is a worldwide recession in place, but the hon. Member for Teignbridge (Mr. Nicholls) has to address the question that was so clearly put by his colleague the ex-Chancellor. He made it quite clear that the depths of our recession, particularly in 1987, 1988 and 1989 when the Prime Minister himself was Chancellor, area direct result of the Government's economic ineptness in those years. The ex-Chancellor put the blame for the special position of our country and its deep recession and the damage that has been done on his Government's own policies. I invite the hon. Member for Teignbridge to read that speech.
    The country expects—the country demands—that all parties should concentrate now on putting together the policies to start to put Britain on the right road. We know who is to blame for the mess, and the country knows who is to blame for the mess. What people want to know is how we are going to get out of it and who is to get us out of it. The Government have tried one way of tackling the deficit; they have put up taxes. The Government say that they were forced to do that. If that were so, it might be understandable. I do not believe that it is always wrong for a Government to change their mind. If the country is being driven on to the rocks by Government policies, a change of course is needed. Frankly, I would much rather have a Government who changed their mind to be right once in a while than a Government who never changed their minds and were always wrong.
    But the Government's explanations for those events will not wash. They say—we heard it clearly in the Prime Minister's speech—that they were somehow taken by surprise by the figures that they inherited after the election, but who did they inherit them from? Themselves. Who had better access to those figures than they? They say that they did not know what was coming, but the projections for the future of the public sector borrowing requirement were widely canvassed by The Guardian and other newspapers well before the election date.
    The opposition parties—ourselves and Labour—at least sought to address that position. By contrast, the Government sought to hide it from the nation in order to get themselves elected. We tried to tell the country the truth. The Government deliberately told the people a lie. What is more, they knew that it was a lie. They could not have known otherwise. The leader of the Opposition says

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    that it was a betrayal. Perhaps it was, but it was worse than a betrayal; it was a deliberate act of deceit upon the people of this country.
    The Government put themselves forward on a false prospectus for the nation that would have done honour to a Maxwell pension fund prospectus. If the Government had been a company, they would be up before the courts for fraud. They knew it to be a fraudulent prospectus for the nation.
    Mr. Nicholls: Will the right hon. Gentleman give way?
    Mr. Ashdown: No, I will not give way. I have given way to the hon. Gentleman once. I have not the slightest intention of doing so again.
    Who will ever be able to believe a Conservative promise again? Now, of course, it is the nation that must pay for that deceit. The Government have decided that not the whole nation will pay for that deceit—of course not. It will be the poor and the most vulnerable who must pay for the Government's deception and for their mistakes. That was the real stinging injustice in this year's Budget—not just the imposition of VAT on domestic fuel without adequate compensation, but the fact that in the Budget overall the poorest tenth of our nation are proportionately asked to pay twice as much as the richest tenth. That is the depth of the injustice of this Government and of their economic policy.
    If there is a price to be paid to dig the country out of the hole that was created by Ministers, it should be fairly shared among the whole nation. We believe that there is a sense of fairness in the British people. It is a sense which has been continuously ignored by the Conservative party and by the Government, a sense which has been discouraged by their measures, and a sense which is not allowed to express itself through positive policies set out by the Government. But that instinct of fairness is still strong in our nation. It is the instinct that will undo the Government's second strategy, the second act of betrayal.
    Having found out that even putting up taxes has not done the trick, such is the scale of the economic mess that we are in, the Government are now telling us that they will resort to draconian public cuts—cuts again in our welfare state, our benefits system, which yet again hit the weakest, hit the poorest and hit the most vulnerable.
    So how should we tackle the deficit? Of course there should be savings in public expenditure where they are possible. An efficient tax and benefits system would save millions of pounds. If we had a competent or even reforming Government, savings would be found and could be made. The Government are bloated on bureaucracy. They make expensive mistakes such as the poll tax. They spend a fortune closing down coal mines. They waste money on flawed education tests. They use taxpayers' money to sweeten the implementation of grant-maintained schools. They deliberately boosted public spending before the election, knowing full well that they were not prepared to pay for that spending after the election. But, if savings can be made, they will be made on the margins. Savings alone will not cover the massive Conservative deficit.
    Of course we should be closing tax loopholes too, as the Labour party proposes, but that will have an affect only on the margins of the massive Conservative deficit. Of course we should be stimulating employment. Of course it is true
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    that the Government have failed to provide policies for that. However, even if we accept the Government's own forecasts of economic growth in this decade, we are still left with the projected deficit of £30 billion in 1997–98. That is the measure of the economic disaster that has been brought about over the past 14 years.
    I say to the Labour party that there is now no realistic growth forecast which by itself brings the public sector deficit down to manageable levels over an acceptable period. Frankly, Labour is deceiving itself and the public if it pretends otherwise. We will probably have to come to the crunch to answer the question that Labour seems so reluctant to answer. If the choice for paying for the Government's mistakes is between cutting into the body and the bone of our welfare state in a way that penalises the most vulnerable and spreading the burden fairly through taxation, there can be only one answer. Paying the price for the Government's mistakes is a burden that must be shared justly by us all, not paid for by the poor, the elderly and the vulnerable.
    Mr. Dennis Skinner: I do not know what the right hon. Gentleman's plan is to try to secure a victory in the Christchurch by-election, but he talks about fairly sharing the burden. He is talking in the context of raising taxes. let me explain to him that in the first 10 years of the Tory Government the richest 1 per cent. in Britain had £26·2 billion in tax cuts. Instead of calling upon working-class people in Christchurch or anywhere else, the right hon. Gentleman should be supporting the idea of clawing back that £26·2 billion from the richest 1 per cent. They have had the money, and they must foot the bill.
    Mr. Ashdown: I hope that Labour Front-Bench Members heard the statement by the hon. Member for Bolsover (Mr. Skinner). They are the ones he needs to persuade. They are the ones who will not say the kind of things that he has said. The hon. Gentleman has asked me what our strategy is for the Christchurch by-election. It is quite simple. It is to have the strategy that we had in Newbury—to tell the blunt truth to the people of this country. They want to hear and are prepared to hear about the seriousness of the economic position and about what must be done to solve it.
    They do not want betrayals, such as the Government's betrayal of the nation through their deceit at the general election. They do not want to hear either, as the voters of Newbury so clearly showed, a party such as the Labour party which is prepared to say what must be done, but not how it is to he paid for. That is how we won Newbury and, if we win Christchurch, that is how we shall win it.
    Mr. Nigel Forman: The right hon. Gentleman talks about the blunt truth. He said earlier that any public expenditure savings could be only marginal. Will he now tell the House the blunt truth? By how much would his party wish to increase the standard rate of income tax to close the deficit?
    Mr. Ashdown: The hon. Gentleman's own Chancellor could not at this stage give him figures about the public sector borrowing requirement and could not tell him what he will do in the autumn of this year. The hon. Gentleman makes a brave try, but I shall not answer his ludicrous question.
    Sir Peter Hordern: Why not?
    Mr. Ashdown: The hon. Member for Carshalton and Wallington (Mr. Forman) asked a question that his own Chancellor would not answer. I have made it clear—I have said something that the Labour party will not say—that rather than cutting into the bone and the body of the welfare state, if we have to balance our public sector borrowing sensibly and responsibly by finding tax, we shall take that view.
    Mr. Stanley Orme: How much?
    Mr. Ashdown: The right hon. Member for Salford, East (Mr. Orme) asks, "How much?" He knows perfectly well that the figures are not yet available to anyone—not even the Government. The right hon. Gentleman should realise that I have laid down some clear principles about how we should deal with the PSBR. His party will not do that.
    The people of Britain have worked long and hard to build a decent system of welfare provision. Governments have not paid for it; it has been the people and the taxpayers who have paid for it. It would now be an act of malice and vandalism for the Government to destroy that achievement. If the Government wish to add that to their other betrayals they will never be forgiven.
    I shall tell the Government what I believe the British people now want from them today. They want a Government who will be honest with them and Opposition parties that will face up to the truth. They want a Government who show that they believe in fairness and who do not penalise the poorest and the most vulnerable for their own mistakes. They want a Government who will set a clear strategy and who will stick to it. They want a strategy that will encourage small businesses, stimulate enterprise, initiate a powerful programme to get the long-term unemployed back to work, give a clear lead so that Britain can make the best out of its future in Europe, prudently invest in the future, especially in skills and in a modern infrastructure, and give independence to the Bank of England to act as a bulwark against inflation.
    Was it not amazing that we heard for the second time in the resignation speech by the right hon. Member for Kingston upon Thames that he wished Britain to have an independent central bank? Is it not extraordinary that the two previous Chancellors have taken that view, but that they have been prepared to say so only after they have resigned? I have described what the nation wants from the Government but, unhappily, we have a Government who will provide none of those things. Frankly, the sooner they leave us, the better.
    5.34 pm
    Mr. John Biffen: The motion makes no reference to the size of the deficit. However, the right hon. Member for Yeovil (Mr. Ashdown) quite properly identified the deficit as the subject that will give rise to growing political debate and differentiation between our approaches to economic problems over the remainder of this Parliament. As he has discovered, it is a topic on which one enters with some trepidation, as there is a natural desire for quantification which may take the general principles rather further than political prudence suggests. However, unless we are prepared to do that, this will he a missed opportunity.
    At this stage of a Parliament, the existence of a borrowing requirement of such magnitude is bound to cause a reconsideration of what has been traditional in
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    time-honoured policies. The leader of the Opposition—I regret that he has departed, but he will miss little—said that we needed a wholly new start in economic policies.
    I see that my hon. Friend the Member for Billericay (Mrs. Gorman) is present. I say to her and to others in the distinguished company in which we move, to our mutual satisfaction, that that view could be called "fresh start". That of course is exactly what impinges on our national political debate.
    We have had a fresh start in the area of Community affairs, and we are obliged to have a fresh start as the House attends to the very difficult problems of how one closes that £50 billion gap. The Government have sought to give us a gentle introduction to the task by publishing their own forecast on how the borrowing requirement may be reduced. I realise that it does not carry the significance of a committed plan, but it is a working guideline published in the 1992 "Financial Statement and Budget Report".
    It shows the current deficit of £50 billion dropping by £6 billion in the first year, and by £5 billion and £4 billion in the two years thereafter. I do not believe that that fall is anything like fast enough. I do not think that it is satisfactory, given that we are seeking a balanced and healthy management of our domestic economy.
    I hesitate to offer my alternative model, but I hope that, by the end of 1996, that figure will have dropped from £50 billion to about £15 billion to £20 billion. That is a formidable undertaking.
    Mr. Nicholas Brown indicated assent.
    Mr. Biffen: I see that I have the nodding acquiesence of the hon. Member for Newcastle upon Tyne, East (Mr. Brown). I think that he would agree that it is none the less a realistic target if the political will is there.
    It is important to understand how the deficit arose, and to do so calmly. The early parts of these debates are great spectator events, but now it is a rather tedious show. However, there was very little contribution in the early exchanges to the debate about the real nature of our problems. Of course the recession has been a major factor in the deficit. Nobody can say with much precision the extent to which it has been a factor, but I accept that it could be well over 50 per cent.
    However, there is an underlying thrust in public spending in respect of welfare. It is really a demographic consideration. The population at work are a declining percentage, and the population who are on benefits are a growing percentage. That carries the most profound implications for public spending and for the extent to which current public expenditure will crowd out capital public spending, which is the first charge on our economy.
    Let us think about the exchanges between those on the Government and Opposition Front Benches earlier this afternoon. In the current circumstances, it is almost impossible to have a constructive and intelligent debate about how we shall try to fashion our future welfare commitment.
    I have some mild hope that, when Gordon Borrie produces a report, sooner or later politicians can sit round and consider the funding and commitments in respect of publicly financed welfare, as was the case in the 1950s and onwards, when there was consensus between those on the

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    two Front Benches and between the major elements of the two significant parties about the financing and objectives of defence policies.
    In terms of public spending, until we can agree to some parameters for welfare spending, that vital sector will remain undetermined and, to some extent, always subject to those who will play a short-term card in the hope of gaining a modest advantage in bidding for the vote of welfare recipients.
    I do not have much optimism about the outcome of the current considerations of welfare expenditure and the massive review that is being conducted by my right hon. Friend the Chief Secretary to the Treasury. I was impressed by the orchestration of the great campaign. I have read all the heartache stories in the newspapers—but the policies were all put to me when I was Chief Secretary and the process was conducted in a miserable, subterranean fashion. I was not seeking to become a high profile politician.
    The conclusion that I have drawn is chat, whatever economies are secured by the Government—I wish my right hon. Friends in the Treasury every success—they will be modest in the context of the magnitude of the present borrowing requirement.
    Therefore, I inevitably turn to a consideration of the revenue. My right hon. Friend the previous Chancellor showed great fortitude in seeking a substantial increase in revenue through the extension of value added tax. Ultimately, there is no way that my right hon. and hon. Friends or, indeed, Opposition Members, can avert their eyes from the challenge of what to do about income tax.
    The revenue required to meet such a deficit means that we cannot conceivably exclude the role of income tax in closing the gap. That is true not merely in the practical terms of the money needed but, more importantly, because I do not believe that we can exclude income tax in terms of the perceived equity. We cannot go to the public of this country with a policy of increasing taxation in order to undertake the essential task of reducing the borrowing requirement and say that we have excluded income tax.
    Over the past decade or so, we have paid some penalties in concentrating our fiscal policy so overwhelmingly on reducing income tax. We have done so to the detriment of the other factors in the totality of taxation. We must clarify the concept—we shall require an increase in the standard rate and in the top rate of taxation.
    I understand why the right hon. Member for Yeovil (Mr. Ashdown) became coy about book-keeping. I have the same innate diffidence—I do not know how I have survived so far and not become a liberal. I simply do not believe that the sums needed can be achieved in the lifetime of this Parliament without thinking in terms of at least an extra 2p on the standard and top rate of income tax.
    Mr. Tim Smith: I am sure that my right hon. Friend is aware that the figures in the Red Book for 1995–96 show that, of the tax increases proposed of £10·6 billion, about £8 billion will be increases in income tax. That is a substantial increase, and to increase the standard rate by 2p in the pound would produce only another £4 billion. Therefore, I think that the Government have the balance about right.
    Mr. Biffen: I am sure that my right hon. and learned Friend the Chancellor will be pleased to have the assistance of my hon. Friend the Member for Beaconsfield (Mr. Smith), which makes my right hon. and learned Friend appear as a moderate against my own left-wing extremism.
    Mr. David Nicholson: My right hon. Friend has made a statement which has important implications, not merely for the conduct of our economic affairs, but for the debate between the so-called left and the so-called right inside the Conservative party. My conversations in recent weeks with Conservatives in my constituency, which my right hon. Friend knows well, have revealed that Conservatives—both retired and employed—would give the measure considerable support.
    Mr. Biffen: The prospect of my becoming a folk hero among Tory activists is not a career move that I sought in the autumn of my days.
    I have tried in general terms to sketch what I believe our policy objectives should be when dealing with the budget deficit. There is also the question of how to present those policies. My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) made a memorable resignation speech, which identified the difficulties that arise when there is no close and intimate understanding between Chancellor and Prime Minister—as Baroness Thatcher found with both lord Howe and Lord Lawson.
    I regret that my right hon. Friend is no longer able to serve the Administration, and hope that he will have the same experience as Selwyn lloyd and return to high office at a future date.
    My right hon. and learned Friend the new Chancellor clearly holds great fascination for the media. The number of times that I have been asked to comment on his hush puppies and other aspects of his sartorial and theological commitment are beyond belief—he is a cottage industry. However, that will pass, and my right hon. and learned Friend will be left with the problem of how to conduct a policy which I have elaborated and which I believe will be profoundly unpopular.
    Even after allowing for the impact of economic revival, my right hon. and learned Friend has been given the task of introducing a substantial increase in taxation and trimming public expenditure that will affect expectations. One of the most challenging tasks for a Chancellor in today's circumstances is to adjust expectations. We are distant from the politics of growth and easy redistribution. The more demanding challenge, which we now face, is to have to learn, in national accounting terms, to live within our means. That task now faces the Administration and the Chancellor.
    My right hon. and learned Friend the Chancellor has a good-natured approach to politics—he is of the Ronnie Scott tendency. It is a delicate point to put to him, but I am not sure whether his approach is quite right in the present circumstances. My views are drawn straight from the pantheon of Euro-scepticism—that will not cause my right hon. and learned Friend any difficulty, as he has shown great elasticity over European issues.
    In the late 1950s, when, De Gaulle came to office and had Antoine Pinay as his finance minister, he was in a similar position to that of my right hon. and learned Friend. National finances were out of kilter, and many established practices had to be challenged. The policy

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    slogan—one might say, "word bite" had the phrase existed in those days—was "vérité et sévérité"—truth and discipline. In the spirit of fresh start, I do not think that it would do the Government any harm to consider the economic problems that lie ahead in those terms.
    5.48 pm
    Mr. Roy Hattersley: One factor has become clear during the debate: one of the problems facing the country is that it is led by a man who is visibly incapable of carrying out the office that he now holds—a man who does not sound, look or behave like a Prime Minister. The first few passages of his speech this afternoon contained the most demeaning stuff that I have heard from a Prime Minister in my 28 or 29 years in the House.
    I thought that the Prime Minister's speech last week, in which he said, "I am here, I am well and I am staying," hit about rock bottom. When Prime Ministers talk about staying, it means that at the back of their mind is the idea of going. I thought that we had plumbed the depths, but the Prime Minister reached the nadir today, in what passed for political banter, in the opening and closing passages of his speech. The Prime Minister is now a problem for the nation, but at least that problem will not be with us for much longer.
    I congratulate my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) on his choice of subject for today's debate. I am second to none in my belief that the Labour party must and will win the next election on the merits of its policies, but the fact that we must fight and win on the merits of our policies is no reason not to remind the general public that, while we shall win next time on our merits, the Conservative party won last time on a calculated deception. The Conservative party made claims and promises which it must have known at the time could not and would not be fulfilled.
    This charge of calculated deception has, to a large extent, been endorsed today by the right hon. Member for Kingston upon Thames (Mr. Lamont), whose criticism of Government action—a willingness to put public opinion polls before the national interest, a concern for short-term political advantage at the expense of the nation's welfare —is exactly the charge that the Opposition motion levels at the Government today.
    Although he may well deny this, the right hon. sea-green incorruptible Member for Shropshire, North (Mr. Biffen) said very much the same. He pointed out that there may have been an over-reliance on reductions in direct rates of taxation. We all know why that was. It was not a matter of economic judgment: it was an attempt to buy votes, and it was successful during the election of 1987. But the attempt proved disastrous for the economic welfare of this country.
    One reason why I am delighted that we have pursued the point made today so eloquently by my right hon. and learned Friend is the fact that the deception of the last election was not an isolated event or single aberration. Indeed, deception at election times has been a course of conduct with the Conservative party—a way of life. We can see this in every election since 1979.
    I remind the Prime Minister that the 1992 manifesto promised to continue to protect the value of the pension against price rises
    "as we have for the last 13 years".
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    That was a commitment to continue a previous breach of faith, for the 1979 manifesto had said:
    "We will honour the increases in retirement pensions which were promised just before the election".
    That was a promise to increase pensions in line with inflation and in line with average earnings. The second half of that promise was wilfully and cynically broken, with disastrous consequences for pensioners who live on the basic pension alone.
    When the Government came to power, the basic pension was about 20 per cent. of average earnings. last year, it was 15 per cent. of national earnings, yet the 1992 manifesto talked glibly about helping those who need help most. Had it been honest about Conservative attitudes to the poorest pensioners, it would have said, "We shall continue to neglect men and women who rely on the basic pension." In fact, the manifesto read:
    "We shall continue to care for those in need"
    That was a lie, as the figures eloquently and tragically show.
    Over 14 years of Conservative government, the poorest members of society have grown increasingly poor compared with the richest. This Tory Government have the best record of redistribution in the history of British politics; they have consistently taken from the poor and given to the rich. That is bad enough, but the poorest 10 per cent. have actually become poorer in absolute terms during 14 years of Conservatism. They are 6 per cent. poorer now than they were when the Labour party left office—6 per cent. less purchasing power is in the possession of the poorest people in Great Britain. Yet the manifesto speaks of continuing to help those who need help most.
    So much for a Government who promised that general prosperity would trickle down and ensure that the poorest were helped—as long as the richest were allowed to flood ahead. Quite the opposite has happened, but this has been the strategy of Conservative party election decisions—a calculated decision not to help those who will not vote Conservative, but to focus help and attention on the voters whom the Tories want to muster to make up their 40 or 45 per cent. of the vote. All that matters to them is returning to power, no matter how cynically or unscrupulously, and no matter how much damage is caused to the people who most need the Government's help.
    The facts of the Government's perfidy are beyond dispute. My right hon. and learned Friend set them out eloquently earlier today; other speakers will do the same, offering more and more examples of differences between promise and performance.
    The most interesting question is: why have the Government done this so consistently and consciously over the past 13 years? Part of the answer is ministerial incompetence, which the Prime Minister acknowledged when he sacked the Chancellor of the Exchequer. Of course, that has not done the Government's standing any good. When the audience do not like the tune, it is no good the organ grinder sacking the monkey—he has to go himself. If the Prime Minister does not understand that, he does not understand the first rule of politics.
    Incompetence is not the only reason. Another is a kind of arrogance combined with cynicism, the belief that the Tory party was born to rule and that any unscrupulous measures are justified to ensure a continuation of that condition. The cynicism comes from knowing that the Tory party can tell lies on election day, can break its

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    promises the week afterwards and then the Tory tabloids will not exploit and expose Tory perfidy as they would that of any other party.
    I know that the Prime Minister is putting it about that he is hurt and angry because of the way he has been treated by Conservative newspapers. I hope that it will be some consolation to him to consider how the Conservative newspapers would have treated a Labour Government who had presided over the two-year shambles that has passed for an Administration for this country. I believe that The Sun, the Daily Express and the Daily Mail would have said things about a Labour Government which are undreamt of in the Prime Minister's limited vocabulary. If he feels that he has had a rough time, let him congratulate himself on the fact that a biased and corrupt Tory newspaper system is prepared to support him in a way that it would support no one else.
    But the most important reason why the Tory party has consciously and consistently broken its promises is much more fundamental than the shortcomings of Ministers or the cynicism of politicians. The whole idea on which the Tory management of the economy is based has proved to be wrong. let us take two or three election examples. The election of 1987 heralded a new dawn of economic success, by two simple economic means of ensuring increased prosperity: 2p off the standard rate of tax, and the deregulation of credit institutions. Then the country was to be floated off on a boom led by consumer spending. This is orthodox, short-term, inchoate Conservative economics.
    Of course, the country was plunged into crisis by a boom in credit, which produced the worst trade deficit in our history and resulted in the record interest rates from which we are still suffering. The ideal was wrong, the principle was wrong and the theory was wrong.
    I believe that some of the less intellectual members of the 1922 Committee think that by deregulation, by the Government holding back and playing no part in the promotion of industrial activity and having no concern for regional policy, and by neglecting training, this country can become prosperous in a Haitian sort of way—by becoming a low-skilled, low-earning, unregulated, laissez-faire economy. It cannot be done. If the Prime Minister does not realise that, all the suffering of the past 14 years and all the recurring economic crises have been for nothing.
    Preposterously, the same principle now applies across a whole range of policy. For my sins, I sat through an education debate in the House a few weeks ago in which Tory Members, apparently with conviction, said that competition works in everything else, so it will work in education. Competition has been seen to fail in industry after industry, and the idea that it will solve our education problems is dogmatic nonsense.
    Everyone in this country who knows anything about education realises that the way to improve the literacy of people leaving school at 16 is to ensure that they have all had one or two years of nursery education at the other end of their school careers. That is a simple, well-known principle. But instead of concentrating resources on nursery education, the Government are prepared to let Britain lie at the bottom of the European table for
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    availability of nursery places and to pursue some doctrinaire nonsense about comparisons between schools which will allow head teachers to compete with each other.
    I repeat that the whole idea is wrong. Even those few members of the Government who might have wanted to keep their promises could not have done so, because their policies are built on philosophical sand. They are trying to build policies on a half-understood idea—Adam Smith advocated by people who have never read him or who cannot understand him and do not realise that those simple precepts do not apply to the sophisticated world of 1993.
    We in the Opposition must remember that, whatever the changes in the Treasury and whoever succeeds the Prime Minister, the idea will still be wrong and the mistakes will still be made. There is no intellectual or political recovery for the Government because their entire policy is based on a misconception. The knowledge that our idea is day by day gradually being proved right will surely sustain us to the next general election and enable us to win on our policies and on the merits of what we propose.
    6 pm
    Sir Terence Higgins: The tone of the debate was set by the leader of the Opposition. The matters that we are debating are of tremendous importance to all our constituents because their prosperity and welfare depend on the solution to the problems of economic management that face us. The leader of the Opposition is totally incapable of dealing seriously with these matters, and trivialised them throughout his speech. Those who have suffered throughout the recession from which we are now emerging will not have regarded his speech as amusing. When he sought to deal with the problems, he made no attempt whatever to analyse them.
    Since the right hon. and learned Gentleman's speech, the tone of the debate has improved somewhat, and I should like to deal with some serious issues.
    My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) rightly identified the root cause of our present problems as the over-stimulation of the economy following the stock exchange crash of 1987 and the need to control the subsequent inflation. Throughout the world, and certainly in the Treasury, there was a misunderstanding of the underlying economic situation at that time. The Opposition and the liberal Democrats advocated far more stimulus than that in which the Government engaged.
    The question that arose was how best to reduce inflation, and it is worrying that it has taken such a long time to do that. My right hon. Friend the Member for Kingston upon Thames spoke about the exchange rate mechanism. If the then Chancellor, now the Prime Minister, had telephoned me the night that he was thinking of joining the ERM and asked about the least painful method of getting back on course—in fact, he did telephone me—and if I had had total foresight and had known the best way to do that, I would have told him to join at the prevailing rate and to withdraw from the ERM in about September 1992.
    Any other way to reduce inflation, as we did, would have been even more painful. Had we sought to reduce it to the extent that we did through general deflation, the effect on the economy would have been far more

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    traumatic, as my right hon. Friend the former Chancellor said. In any event, it is doubtful that we would have had the resolution to do that.
    I am firmly convinced that the so-called fault lines in the ERM are so fundamental that it would not be appropriate for us to consider rejoining the ERM in the foreseeable future. The basic fault line in the system is the fact that an independent central bank in Germany is preoccupied with reducing inflation and is concerned only with German interests and not with the overall economic situation in Europe or the world.
    While that situation persists, it would be inappropriate for more than a small number of countries even to consider joining the ERM. A move towards a European central bank would not provide a solution because the tensions that would confront it as a result of a lack of economic convergence in the Community would be too great for it to deal with.
    In his resignation speech, my right hon. Friend the Member for Kingston upon Thames spoke about the need for an independent central bank in Britain. However, for the reasons set out by the Prime Minister, that would be wrong. It is a little paradoxical for my right hon. Friend the Member for Kingston upon Thames to say that we need an independent central bank to control inflation when, without such a bank, we have reduced inflation to its lowest level for about 30 years.
    I shall concentrate on the more important issues of the future. In economics, timing is absolutely crucial. I am worried that we are in danger of making more fundamental mistakes. As always, I listened with great pleasure to my right hon. Friend the Member for Shropshire, North (Mr.Biffen), who did not touch on timing but concentrated on the deficit. The recovery is still fragile and there is a danger that if action to bring the deficit under control is taken too rapidly the recession will be prolonged, the recovery will be aborted and the deficit may be increased rather than decreased.
    It is perhaps ironic that, at a time when we are about to move by way of the proposals for a unified Budget to a Budget more closely resembling that of a household, we are in danger of adopting a Keynesian relic or the fallacy that what is right for the individual in recession is right for the Government. An individual should rightly tighten his belt when he falls on hard times, but that is not the appropriate procedure for the economy as a whole.
    The idea of a significant fiscal deficit is not at all inappropriate at present. We must wait until the cyclical factors begin to take effect. If we seek to take action on the deficit before that happens, an effective recovery may take a long time. No one knows how much of the deficit is structural and how much is cyclical. There have been some recent analytical studies, and I have one here by Greenwell Montagu.
    It is important to ascertain that, but the Red Book contains a number of estimates showing that the deficit is declining, even under the relatively slow rates of projected economic growth, and that it is significantly below the round, headline figure of £50 billion which has been bandied about.
    My plea to the Chancellor is to consider carefully the importance of the timing for getting us out of the recession and for controlling inflation. The issue is not about the size of the deficit but about whether it is funded. One of the curiosities of the last Budget was a sudden sleight of hand by the then Chancellor who, having said that there was a
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    full funding rule, which everyone had always supposed meant fully funded from sources other than the banks, suddenly said that some of it would be funded from the banks and that that would now be called full funding.
    That has never been understood by that expression. The question is whether the present deficit can be fully funded in the original sense. My own feeling is that it should be possible to do so at prevailing interest rates. I shall not go into the nitty-gritty of the yield curve, but it should be possible to fund it to a very large extent.
    The present trends in money supply figures should not give us too much cause for concern at this stage in the cycle. Although it may not be possible to fund it fully, I am rather doubtful about the case for further cuts in interest rates, not least because it is becoming increasingly apparent that further cuts in interest rates by the Government are likely to be passed on only to a very small extent, if at all, by those lending to industry or to consumers.
    Therefore, the incoming Chancellor, in balancing those difficult equations, will need to take into account whether it is possible to cut interest rates, given the need to fund the deficit and maintain the overall economic balance.
    I want to mention two other ways in which the deficit might be controlled—public expenditure and taxation. My right hon. Friend the Member for Shropshire, North referred to each of them. I have always thought that there was a considerable case for a Budget purdah in regard to taxation. Now that we are to bring together the two sides of the equation, there is a strong case for extending that purdah to public expenditure.
    It is appropriate to say that we are carrying out a general review of public expenditure. Rumours may then circulate and be stimulated by the Opposition as to what particular cuts might be envisaged, but it is tremendously important for Ministers, particularly Treasury Ministers, not to refer to any of those possibilities.
    It is not just a matter of sub-post offices, pharmacists, prescription charges or pensions. The concern that has been stirred up by the Opposition and, in particular by the press has caused real and genuine concern about issues which had not been decided. Rumour after rumour has been presented on the newspaper placards and elsewhere as fact when no decisions have been taken.
    It is therefore tremendously important that Ministers should adopt a stance of purdah in regard to taxation and to public expenditure. We are in danger of taking action to protect those below the benefit level while disregarding those just above it.
    I hope that the new Chancellor will look again at the papers in the Treasury on the proposals for a tax credit scheme. We considered such a scheme way back in the 1970s and we were about to legislate in the following Budget, but we lost the election to the Labour party. It was frustrated by a combination of Joel Barnett and Barbara Castle when they came into office.
    Dame Elaine Kellett-Bowman: I had the privilege of serving on the tax credit Select Committee. We were very much in favour of it and it would have been simple to implement such a scheme then before the figures became too astronomic. We were fully committed to bringing it in, and it was a disaster that the Labour Government put it to one side.
    Sir Terence Higgins: I am grateful for my hon. Friend's endorsement, because the idea is certainly worth looking at again in the context of the relationship between benefits and taxation.
    Public expenditure is not normally an appropriate means of regulating the cycle. What we want is what we have—a public expenditure plan over a number of years. Subject to my earlier point about timing, that needs to be taken into account, but it is not an effective method of cyclical regulation.
    The tax system is more appropriate, but any proposal should to be related to rates and not to structure. It is a mistake to alter the structure of taxation for short-term management reasons. That is one reason why I believe that the extension of VAT to fuel is not an appropriate solution. I should have preferred a straight change on rates, not least because it is reversible whereas, because of pressure from the European Community, eroding the zero rate base of VAT is not reversible because the Community would not allow it.
    The Treasury Select Committee said that it believed that the recession would be longer and deeper than anyone else supposed, and it was right. We based our argument on the fact that forecasters invariably underestimate turning points. Whether the economy is going up and then coming down into recession or going down and then recovering, in every cycle since the war the errors have been bigger.
    We were clearly at a turning point, and we said that the recession would be longer and deeper than anyone supposed, and we were right. The record shows there to be a degree of symmetry in the strength of the subsequent recovery. We must all hope that that is so, but I have two worries. We do not know how much our existing industrial and other capacity has been eliminated during this very long recession, and I am concerned that the banking system, which has eroded its own capital base to a large extent by a series of unfortunate errors, may not be able adequately to finance the recovery.
    We need to consider carefully what might be done to help because, although we all know that companies go bust in a recession, companies often go bust as the recovery begins because they run out of working capital. I hope that my right hon. Friend will look at the banking system.
    I conclude by wishing my right hon. and learned Friend the Chancellor well in his new high office. As my right hon. Friend the Member for Kingston upon Thames said, we have managed to get down inflation, which was absolutely crucial for a prolonged and successful recovery. In many respects, the economy is in good shape and a recovery is possible. The new Chancellor is a graduate of Gonville and Caius college, Cambridge, my own college. The late lain Macleod was the last Chancellor to come from that college.
    As far as the future of the country is concerned, the basic stance which was taken by Iain Macleod, combining tough economic policy with compassion for those most in need, formed a firm basis for the Conservative party. I very much hope that the new Chancellor will bear that in mind when he makes the immensely difficult decisions which will have to be made to get the economy going again and to achieve a successful and prolonged recovery.
    6.13 pm
    Dr. Tony Wright: This day and this debate have acquired a significance that none of us had envisaged. We did not know about the dramatic events earlier today, but they form an essential part of the debate. I do not say this with any particular relish, and certainly not with malice, but we have seen the disintegration of a Prime Minister. We are witnessing also the disintegration of the Government and of a regime and of an ideology that sustained that regime over many years. When people look back on this day, they will identify it as the moment when that became clear to everyone.
    The remarks of the former Chancellor of the Exchequer met a resonse from the Prime Minister that essentially confirmed everything that the former Chancellor said. The Prime Minister paid tribute to the right hon. Member for Kingston upon Thames (Mr. Lamont) for his outstanding achievement, but said that he had had to go because the polls made that necessary. One has never known a more lamentable statement from a Prime Minister. It is a total abdication of leadership. I say that not with any malice but with a good deal of sorrow in many respects.
    The motion refers to promises broken, but the promises that the Government kept are more fundamentally worrying. When the present regime began in the late 1970s —this is germane to the remarks of the right hon. Member for Worthing (Sir T. Higgins), who mentioned lain Macleod and his times—the Conservative party, untypically in the modern period, fell into the grip of a theory or ideology which has sustained it ever since, and which has brought that party and this country to the present travail and shambles.
    That theory required a number of actions. They included cutting direct taxation, to stimulate a great flowering of innovation, invention and enterprise; rolling back the state, by privatising where that could be done; and dismantling the trade unions, because they were said to be the key to industrial decline.
    There were other parts of the story. Sir Keith Joseph, the man with the perennial frown—for whom I had a good deal of regard and respect—worried away at other problems. He went around assuring us that crime was derivative of socialism, and that socialism corroded moral fibre. He said that, if only socialism could be corrected, crime would be overcome. He argued also that, if only one could do away with the dreadful socialists, there would be a great revival of the family and of family life. The whole set of ideas advanced at that time sustained the programme that followed.
    Never since 1945 have a Government so meticulously done, from 1979, the things that they said they would do. They have stuffed the trade unions, privatised wherever they could, and eroded the basis of direct taxation. The Government have done everything they said had to be done to reverse the historic decline in the British economy and to regenerate society. The problem is that it has not worked, but has produced the present shambles.
    I will not detain the House with the figures, but it will be aware of the condition of British manufacturing industry, our share of world exports in manufactured goods over the past 20 years, the state of family life, and the crime rate. We are now experiencing the consequences of the Government's ideology and of the promises that they have kept.

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    No longer can the Conservative party claim that it is the party of economic management, sound money and low taxes. Right up until the last general election, many people still believed that it was—but the party of sound money now presides over the biggest hole in public finances that anyone can remember.
    What is to be done? As we heard today, and as we hear every day, the Government are adrift. They do not know how to respond, because their ideology has not prepared them for the present situation. The danger is that many in the Government's ranks, faced with that hole in public finances, see the possibility of eroding the post-1945 welfare state not as a desperate necessity, but as another opportunity. Using the argument that public finances demand this, the Government can launch another assault against the welfare system, which would be morally reprehensible.
    I remind the House of the remark by the late Richard Titmuss, that services for the poor end up being poor services. If one undermines the principle of universality, one creates ghetto services for poor people and erodes the basis of the system.
    Different population groups are classified as C1s, C2s, and so on. I suggest that we shall soon be hearing about another category, whom I shall call the just-abovers. They are a powerful group of people—those who are just above the level at which benefits are paid and who, as they see it, get nothing out of the system. If certain Conservative Members are serious about some of the public finance changes that they talk about, they will hit the just-abovers very seriously [and there are lots of just-abovers in places such as Christchurch. I warn Conservative Members against going down that path.
    There are serious arguments to be made about the means of financing the welfare system. We are having them on this side of the House, and Conservative Members, in their antique way, are having similar arguments. However, our commitment is rather different. We must do all in our power to maintain the integrity of the welfare system, and hold seriously to our views on social housing, poverty and inequality.
    My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) reminded the House that greater inequality makes certain things happen. We now have more inequality. The Government said that no one should worry about such things as social justice, because they were just Labour hang-ups—and if only they were forgotten about, there would be prosperity and tranquillity. That has not happened. So we have an immediate serious problem about welfare to address. The Labour party perhaps burnt its fingers at the last election by trying to talk honestly about tax and telling people that, if they wanted services, they had to pay for them—a fairly direct messag—and we know what happened as a result.
    Now, it is not us but others who are telling some of the truth. A report produced this week by the City brokers Greenwell Montagu says that the tax burden has sunk to a 15-year low as a result of what they call
    "over-aggressive tax cutting in the 1980s".
    It argues that the real revenue prize for the Chancellor is the £100 billion of tax allowances and exemptions. They include the generous tax shelters which allow companies to reduce corporation tax bills, and tax relief on mortgages.
    There is a pot there that can be used. There are choices to be made in the short term about how to fund this hole
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    in the public finances, and different approaches to it. The Opposition must be fairly robust in arguing for our values as we approach that.
    There is a larger choice, too. The choice that opened up in the late 1970s—which has sustained this Government ever since—is now disintegrating. There is a short-term choice of how to finance the deficit and another choice of a completely different sort of direction for the economy and society—one that has far more to do with the values of community, partnership and decency than we have known in the past 14 years. I think that people are ready for that different approach; the tragedy is that the Government are blocking it.
    6.31 pm
    Sir Peter Hordern: The hon. Member for Cannock and Burntwood (Dr. Wright) seems to have a very favourable view of what took place in the 1970s. My recollection is somewhat different. He seems to regret that many of the nationalised industries have been privatised, that action has been taken to reform the trade unions, and even that taxation has been reduced. My recollection of the 1970s is that we did indeed live in times of severely nationalised industries and total control of the Government by the trade unions. I remember a White Paper produced by Dame Barbara Castle, called "In Place of Strife", which had to be withdrawn.
    I also recollect that there was an even larger deficit. I am the first to complain about the size of the Government's deficit, but there was an even larger deficit under the Labour Government in the 1970s, which then stood at 9 per cent. of GDP. The International Monetary Fund then came in, the Government had to write a letter of intent to Dr. Johannes Witteveen, and capital spending in the public sector was cut by 23 per cent. in every way. I am not talking about reductions of growth, but about actual capital reductions. There was the highest rate of taxation, both personal and on companies, and that was enough to ensure that Labour was defeated, at that time and ever since.
    The electorate are no fools; they will not easily forget what happened then. When they see that the Labour party is still in hock to the trade unions, with John Edmonds dictating to the leader of the Opposition what policy he should have, I must tell the Opposition that they are, frankly, unelectable.
    My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), the former Chancellor, made a very interesting personal statement, which I commend. He made the interesting point that he had argued for an independent central bank. I have been on about this for some time. If I understand my right hon. Friend the Prime Minister correctly—if his only objection concerns parliamentary accountability—I think that this is something we can press forward with.
    As the House knows, the Federal Reserve Board in the United States is accountable, in the sense that it gives an account of itself to the appropriate Senate committees. I do not know what the appropriate committee here would be; I suppose it could be the Treasury Select Committee. I can think of some improvements that I would wish to make to that Committee but, regardless of that, I think that it, or some such body, would be a suitable

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    organisation to which the governor of the central bank could give evidence. In fact, he already gives evidence to the Treasury Select Committee.
    My right hon. Friend the Member for Kingston upon Thames and lord lawson, both former Chancellors, have said that our anti-inflation policy would be more credible with an independent central bank. I have advocated that for a long time, and I hope that my right hon. Friend the Prime Minister will consider the matter.
    Sir Terence Higgins: My right hon. Friend must also consider how, in such circumstances, we would co-ordinate fiscal and monetary policy.
    Sir Peter Hordern: In exactly the same way as it is co-ordinated in the United States and the Federal Republic of Germany, where the independent central bank is given a responsibility to control inflation. For that reason, it is totally in control of interest rates.
    It would be desirable, as my right hon. Friend says, for them to be closely co-ordinated. It is by no means possible, either in Germany or the United States, but I maintain that it is a better position than the one we have here. Monetary policy is not as credible as it might be if the central bank were independent. An independent central bank's position would be very much easier if there were not such a large deficit. I think that my right hon. Friend would agree that monetary policy cannot be conducted with such a large deficit. I will come to that, in a moment.
    My right hon. Friend referred to the independence of the central bank and the ERM, as did my right hon. Friend the Prime Minister. Some people think that our membership of the ERM is all we need to explain our present difficulties. They look back to a golden age, before we entered the ERM, and say that entry of the ERM was the cause of our problems. But, as my right hon. Friend said, the root of our difficulties was the surge in credit in the late 1980s.
    The Government did not stand idly by at that time. Interest rates had been as high as 15 per cent. for a year before we joined the ERM in October 1990, and for most of the year before that they had been up to 14 per cent. Interest rates were reduced by 1 per cent. on the day we joined the ERM, so there is no question of having an easy time before. It was nothing of the kind. Interest rates cannot be at 15 per cent. for a year without slowing down the economy. That is what it was intended to, and did, achieve.
    Inflation was 10 per cent. when we joined the ERM, and it is now less than 2 per cent. In the late 1980s, we went on a spending spree with borrowed money, and we are still paying the bill. We shall go on paying the bill, in my opinion, for some time to come.
    It is not surprising that the Government are unpopular in the country. We were not popular after lord Howe's Budget in 1981—I remember the same kind of scenes as we have seen in the House today after that Budget—but I remind the Opposition that we won the 1983 election with a majority of well over 100. The recovery that we are now seeing in better unemployment figures, improved investment and greater company and consumer confidence will continue. Inflation is at its lowest level for many years, as are interest rates. We have the right ingredients for sustained economic growth.
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    Some economic forecasters and commentators say that we should cut interest rates still further, and allow sterling to fall against other currencies. It is extraordinary how often in the economic cycle there is pressure to inflate the economy at a time when there are clear signs of recovery. Exactly the same happened in 1972, when the Government were persuaded to execute a U-turn and print money. It was wrong then, and would be now.
    In those days—I have been a monetarist since 1966—to be right-wing was to oppose printing money, and to oppose prices and incomes policies. To be right-wing nowadays is to cut interest rates to the point of invisibility, and do everything possible to sink sterling. If any policy is more calculated to cause inflation, I do not know of it. After all that the country has been through, it would be criminal to throw away all the progress that has been made after such necessary sacrifices and pain.
    The sacrifices and pain have fallen on the private sector. There has been no similar restraint in the public sector, with the commendable exception of public sector wages. As a result, we are due to borrow £50 billion this year, which is simply too much. If we must have value added tax on fuel and power, we might as well have it at once. To be blamed for imposing VAT on fuel and power without getting any revenue for a year seems perverse.
    I can understand why economic forecasters believe that it would be better to inflict VAT on fuel and power when the economy is growing faster, but it is a great mistake to try to finesse the situation on clever City forecasters' advice. As for putting their advice in the Red Book—I hope that my right hon. Friend will see that this does not happen again—that is carrying attention to the views of these people to the point of adulation.
    The ancient Greeks had a good way of dealing with forecasters. If an oracle got it wrong, he was dragged out of his cave and stoned and his bones were left to bleach in the sun. So it should be with these oracles.
    I can tell my right hon. Friend what impresses the City. It is £50 billion. It is far too high, both as a figure in itself and in the scope that it gives for markets to make things difficult for the Government. After all we had a public sector surplus of 3 per cent. of gross domestic product only four years ago. It is the pace of decline that is so alarming. So we need to see some positive signs of addressing this deficit quite soon.
    Some favour cutting the growth in public spending, and others favour increasing revenue. Incidentally, the speech of the right hon. Member for Yeovil (Mr. Ashdown) this afternoon was utterly disgraceful. To talk of great matters of principle and of the need to raise taxes, without giving a single idea of any figure, was cynicism of the worst possible kind.
    Cutting growth of public spending and increasing revenue are both in order. We have a higher proportion of public spending as a proportion of GDP at 45·5 per cent. than under the last Government of 1979–80, when it was 44 per cent. So what is to be done? There are always scare stories from Departments at this time of year, but it is the Treasury's duty to investigate savings and efficiency in Departments.
    I have often wondered why there are so many civil servants in the Ministry of Defence. Come to that, why are there so many admirals and generals? Why has so little attempt been made to release Minstry of Defence

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    property, much of it unoccupied for over a year? There are still substantial savings to be made at the Ministry of Defence, particularly in the procurement programme.
    Since district health authorities are now simply purchasing authorities, why do we not cut out two thirds of them by amalgamating them into new single authorities and cut out regional health authorities altogether? What is the point of them?
    We shall have a problem in the next century, with more people living longer and fewer people to support them. I know that the Labour party is looking at this matter with great care. We also need a national insurance system which is properly funded. Why do we not therefore abolish the upper earnings limit and have a graduated scheme against which contributors could make separate provision for all kinds of benefit outside and in addition to the state sector? We need to encourage people to provide for themselves in sickness and in old age, over and above what the state can do.
    There is a case for increasing the rate of corporation tax. If capital gains tax were reduced, the yield would increase substantially and the assets themselves be put to better use.
    I wish my right hon. and learned Friend well in the difficult task that lies before him. There are no easy solutions. We must remember that we cannot be immune from the pressures of the world economy. The best that we can do is get ourselves into a competitive position and remain there. low inflation is the key to the low long-term interest rates and sustained economic growth that we all wish to see.
    6.43 pm
    Mr. Ronnie Campbell: A lot of water has gone under the bridge since 1979, and we should look back to that time and see what has happened since then.
    When the former Chancellor, the right, hon. Member for Kingston upon Thames (Mr. Lamont), said that it all began in 1988, he was right, because at that time we had a slashing of taxes—not all wrong, by the way, especially with the top rate of tax—and some of the figures, which were staggering then, are even more staggering when we read them now. With that Budget, the richest 1 per cent. were getting away with £30,000 a year less tax than they had paid in 1979—a loss to the Treasury of £8·6 billion in that year. As my hon. Friend the Member for Bolsover (Mr. Skinner) said in an intervention not long ago, the accrued sum is £26 billion over the past 10 years. The richest 5 per cent. were saving £9,000 a year under that Budget—a loss to the Treasury of £12—5 billion.
    I am trying to put in perspective where the money went and where the recession started. As the ex-Chancellor said, it started there. Yet we were giving sums of money of this size to the richest 5 per cent. and the richest 1 per cent. in the country. Now we hear that there is a loophole in directors' pay. We read that John Birt, the BBC director-general, has been able to have his salary paid through a private company, which means that he does not pay his contributions or his taxes to the Exchequer. That has happened not just with people like Birt; it is happening with a lot of executives. Many directors are having their money paid through private companies and fiddling the taxpayers and the Treasury.
    We have had this "fast buck" economy for some years, and during that time the number of jobs in manufacturing
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    industry has fallen from 7·1 million in 1979 to 4·5 million in 1992. That means that manufacturing industry has been halved since this Government came to power. People want to know why the Treasury is not getting enough money. It is because the Government have destroyed half the country's manufacturing industry—and those are the Government's own figures, not mine. The figures can be obtained from the library.
    The United Kingdom trade deficit in manufactured goods will reach £17 million compared with £5·5 billion surplus when the Government came into office. There was a surplus when they came in; now we are £17 billion in the red. That shows the calibre of this Government. At present, the unemployment figure is 3 million or perhaps 4 million. It is 3 million officially, but it is 4 million if we add in the 18 fiddles that the Government have used during their time in office to get the unemployment figures down. One million of those on the dole are under 25—the Government's own figures, not mine.
    We have seen the collapse of DAF, with no intervention from the Government. Thousands of jobs in DAF have gone. In the mining industry 15,000 jobs are going. We see 7,000 jobs going in British Aerospace 10,000 jobs in British Shipbuilders and Swan Hunter, 6,000 jobs in Imperial Chemical Industries, 7,500 jobs in Guest, Keen and Nettlefold and 11,000 jobs in the car industry.
    We live in a low-wage economy where, because wages are being driven down, the British workers' wages are already 18 per cent. lower than those of their counterparts in France. British workers are 30 per cent. down on their counterparts in the Netherlands and 42 per cent. down on their counterparts in Germany. Their wages have been driven down by the Government year after year. British workers work longer hours than any of their counterparts in Europe, and get fewer holidays than anyone in Europe does.
    The Government have a terrible record. Over the years, they have had £100 billion from North sea oil and the sale of the nationalised industries. I shall repeat that, in case the Chief Secretary did not get it: the Government have had £100 billion from North sea oil and the sale of the nationalised industries. That is a colossal amount of money.
    What did the Government do with that money? There was the fiasco of the poll tax, to begin with. We have seen what has happened to the poll tax. Time after time the Government were warned about what would happen, but they took no notice of anyone. This Government's attitude is arrogant. They dismiss the views of everyone. Even today the Government display an arrogant attitude towards the health service and education. They will listen to no one.
    The Chief Secretary was one of the architects of the poll tax. And what did the poll tax cost the taxpayers? Tory arrogance cost them £19 billion, which amounts to £400 for every man, woman and child. The poll tax should stick round their necks for the rest of their lives. The people of Britain should make sure that they are not allowed to do anything like that again.
    What about black Wednesday? Because the Government could not make up their mind, because they were at odds with each other, that one day cost the taxpayer at least £5 billion. The Chancellor and the Prime Minister could not make up their minds about whether to stay in the exchange rate mechanism or to come out of it, so taxpayers lost £5 billion in one day. The Government

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    are supposed to be running the economy for the people of this country. I reckon that they are running it for themselves.
    What have the Government done to local government in the past few years? They say that local government is not efficient, but if the things that I have just mentioned had been done by local government, either local government would have been surcharged or local government people would have been put in gaol. The Government have taken £23 billion from local government. I do not doubt that, when they sit round the table trying to get rid of the £50 billion deficit, local government will yet again be the target.
    One Minister said in the newspapers—he would not be named, so I cannot name him—that local government is an easy option because the Government can cut local government and not get the blame; the local authorities, which are mainly Labour, get the blame for doing the cutting; the Government just withdraw the grants. That is true. I bet that when the Government get round to cutting, local government will be hammered and will be cut to pieces.
    The Government are spending £50 billion more than they receive in taxes. Half the country, of course, are fiddling their taxes, just like the executives who, as I said earlier, are paid through private companies and avoid paying their taxes. The Government will have to raise taxes, but they will not tax the rich more—the banks and big business. The poor and working people will be taxed more.
    Prescription charges have already been increased by 13 per cent. in one smash go to bolster the health service, which is crumbling before our very eyes. The idea has been put forward that people should pay when they go into hospital and that they should also pay to see their doctor. It is also suggested that people should pay for using our roads. Student fees may go up even more. It is all on the table for the Government to decide. And all of it will be down to the poor, not to the rich. It is time that the Government taxed the rich more instead of taking more money away from the poor. It was not the poor who brought in the poll tax, or the likes of it.
    Britain was once the workshop of the world. It has been reduced to an unimportant, third-rate, capitalist power off the shores of Europe. It is a fast-buck economy. Factories are closing, pits are closing and shipyards are being brought to their knees. The Government have closed everything, just like a matchbox or a deck of cards. Millions of people have been thrown out of work, their lives and hopes shattered by the free play of market forces. Mysterious speculators, City gents, members of boards of directors or big monopolies and the banks cheerfully sell millions of pounds to make even more millions of pounds.
    There are only two choices. Either we serve the interests of the wealthy and the powerful, or we serve the interests of the millions of workers of this country, as well as the interests of the unemployed, the homeless, the old, and even the middle class. They face ruin under this unjust, outmoded system. There is no third option. The Tory principles are simple: rob the poor and the needy and give to the rich and the greedy.
    6.55 pm
    Sir Thomas Arnold: I join my right hon. and hon. Friends in congratulating the Chancellor of the Exchequer on his appointment, although I wish that the circumstances of his appointment had been somewhat different.
    At the opening of this Parliament, the Queen's Speech included the sentence that the Government
    "will set policy in the medium term to ensure that the United Kingdom meets the convergence criteria set out in the Maastricht treaty".—[Official Report, 6 May 1992; Vol. 207, c. 51.]
    I took that to be the economic strategy of the Government at the time. Therefore, I welcome very much indeed the extremely sceptical remarks that the Prime Minister addressed to the House this afternoon on the subject of the exchange rate mechanism and therefore, by extension and implication, some of our responsibilities under the Maastricht treaty.
    Later this year the Government will come forward with another Queen's Speech. I hope that at that time they will feel able to restate what was said this afternoon: that there is no intention of going back into the ERM in the foreseeable future. Personally, I should like the Government to go further and to state now, if at all possible—I address this remark specifically to the Chief Secretary since he is sitting on the Treasury Bench—that there will be no attempt to re-enter the ERM during the lifetime of this Parliament. That would, I believe, greatly reassure my right hon. and hon. Friends and would send a signal to the markets and other commentators about the Government's specific intentions.
    There is still the suspicion in some quarters that the Government intend to set policy in such a way as to enable us in due course to rejoin the ERM. Although it was helpful and certainly of great use in bringing down inflation, membership of the ERM led to the imposition of conditions and restraints on our economy that ultimately proved unacceptable, not just to the markets but to sentiment in this House.
    I do not believe that we can return to the position where the economy is required to answer the demands of policy rather than the other way round. I hope that henceforth the Government's economic strategy will be not to set policy in the medium term by meeting the convergence criteria set out in the Maastricht treaty—the phrase to which I have already referred—but to set about promoting the recovery that I believe is now under way.
    The amendment to the Opposition motion begins by saying that the Government
    "welcomes the widespread indications of economic recovery in the United Kingdom at a time when many other major economies are in deepening recession".
    I agree with that statement. I agree also with my right hon. Friend the Member for Worthing (Sir T. Higgins), who said that the state of the economy remains fragile. Some of the indications are very healthy, but there is still a long way to go. Conditions in the north of England are better in many respects than they are in parts of the south-east and the south-west.
    I hope that my right hon. and learned Friend the Chancellor of the Exchequer will not be put off from promoting a policy for recovery and expansion by too many fears about inflation. I entirely agree with my right hon. Friend the Member for Horsham (Sir P. Hordern) that we must learn from the lessons of the early 1970s and

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    we must not repeat those mistakes. Nor should we forget that, in the early 1980s, with the development of the medium-term financial strategy, a framework for policy was established that was tailored to the domestic monetary needs of the British economy. That is surely what we should be doing again.
    There are some worrying signs that the growth in money and credit has not been as robust as it should be if the recovery is to take firm roots. In terms of both broad money and narrow money—to take two of the Government's indicators, monitoring ranges, targets, or whatever they are called—there have been some signs that perhaps more needs to be done.
    It may be sensible for the Government to loosen monetary policy, while seeking to tackle the deficit by tightening fiscal policy. I would see nothing wrong with that. The Budget was not so long ago that we can know for sure how the economy will move as a result of the measures taken at the time, and, should it become apparent later this year that some tightening of fiscal policy is required, I would support that, and I support the remarks of my right hon. Friend the Member for Shropshire, North (Mr. Biffen).
    We should not take too much of an ideological view of those matters any more than we should take an ideological view of monetary policy. If it becomes clear that cutting interest rates is a good way of providing some further stimulus, it should be considered. It should, nevertheless, be within a framework that sets out a discipline and the Government's plans for the growth of money in line with the domestic needs of the economy.
    It is to that theme that I return in conclusion. The Government must do everything possible during the rest of this Session and in the next Session to ensure that the economy reponds to our domestic needs. They should put aside any thought of re-entering the ERM during the lifetime of this Parliament and should not set policy by the extremely stringent, tough demands of the convergence criteria of the Maastricht treaty because that will not work and will only hinder recovery.
    7.2 pm
    Mr. Barry Jones: I thought that my right hon. and learned Friend the leader of the Opposition left the Chamber the victor of this afternoon's debate. He precisely, and often quite humorously, pulverised the Government's record.
    The House today heard speeches from the former Chancellor and the Prime Minister. In effect, we may have heard not just one resignation speech but two. I listened to the former Chancellor's resignation speech. I have never heard the word "loyalty" used to such devastating effect —with contempt, with reproach, with anger. He skewered the Prime Minister on that word. It was one of the most dramatic moments that the House has witnessed, even compared with the personal statement made by lord Howe about the then Prime Minister, Margaret Thatcher. I thought that I heard the former Chancellor complain that, in Cabinet and elsewhere, the Prime Minister had bullied him in his work at the Treasury.
    The Prime Minister's speech was tragic. Many Labour Members thought that it was a speech of parliamentary suicide which dwelt over-long, and foolishly, on an apprently hypnotic leader of the Opposition. The
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    parliamentary by-election in the constituency of Christchurch may almost be a plebiscite on the future of the Prime Minister.
    The right hon. Gentleman used a boxing metaphor. He may have seen the show at the Mermaid theatre, which is devoted to the life and times of the greatest, Muhammad Ali, whose autograph I once obtained in these precincts on a copy of Hansard. Muhammad Ali did go one fight too far. I encountered Ali in the Central Lobby only weeks after his disastrous fight with Larry Holmes and clearly, with the benefit of hindsight, he should not have embarked on that fight. Larry Holmes had once been just his sparring partner. To continue the metaphor, at the Dispatch Box today, we saw a Prime Minister who was not just lethargic and dispirited but, almost by the process of government and leadership, or the need to give that quality, punch-drunk.
    I was disappointed at the Prime Minister's comments. I wanted him to say that he believed in the primacy of manufacturing industry. I wanted him to show the House and the nation at large that he had policies and a programme to restore the economic and industrial greatness of our nation. There was not a clue of that, no sign of that and no determination to provide that leadership, that vision and that policy.
    Like my hon. Friend the Member for Blyth Valley (Mr. Campbell), who made a powerful speech, I ask myself, where has the £100 billion of North sea oil revenue gone? Why was it not invested in manufacturing industry? Why did the steel, chemical and textile industries contract? Why did our collieries and shipyards close? Why are our businesses going bankrupt? Why is our economy coming apart at the seams? Those where the questions that the Prime Minister should have addressed and, albeit in the bear-pit of the Chamber this afternoon, he should have attempted to give the country and hon. Members the answers.
    A dilemma has arisen in my constituency and some of my constituents are in a predicament. Corporate Jets, part of British Aerospace, was recently sold. My constituents are perplexed and angry. British Aerospace owned that company until a week ago, and 600 of my constituents who work there awoke one morning last week to find that the production process and, in effect, they themselves had been sold to an American company. British Aerospace is our nation's largest employer, but it decided to sell the executive jet—an aeroplane that can fly the Atlantic and is arguably the best of its kind in the world—to an American competitor. That is symptomatic of what is wrong with Britain's industrial policy.
    My constituents want to know whether the President of the Board of Trade knew that British Aerospace was going to sell Corporate Jets, whose great executive jet can beat the competition throughout the world. They want to know whether the Prime Minister knew that Corporate Jets was going to be sold. They want to know whether, as employees of an American company, they have an industrial future and whether they will continue to produce that wonderful aeroplane for more than three years. They look to the Government for a guarantee.
    Speeches must, of necessity, be brief. I believe that the nation needs a strong regional policy. It wants investment in manufacturing industry, more apprenticeships and investment in schools and skills training. We need investment in manufacturing industry to sustain what is left of the welfare state. The nation does not want

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    dispiriting diversions such as that caused by the Asil Nadir scandal or the cynicism and menace of the Matrix Churchill case. It wants Cabinet leadership which has the nation interest at heart. We have today seen evidence that the Conservative party can no longer give the nation the leadership it needs.
    7.10 pm
    Mr. John Townend: I was most disappointed by the leader of the Opposition's speech. It was a brilliant, witty and humorous speech worthy of the music hall, but it had no real content. The right hon. and learned Gentleman showed himself to be wholly devoid of the necessary attributes one looks for in a Prime Minister. Having admitted that we have a public sector deficit of £50 billion, and when asked whether he would deal with it by reducing public expenditure or increasing taxation, he stood at the Dispatch Box and said that he would deal with it by reducing unemployment.
    That is fatuous. If unemployment goes down, the deficit will of course also go down but, even if unemployment were nil, we would still have a deficit because only half of the deficit is due to the recession. The rest is structural. By his answer, the right hon. and learned Gentleman showed that he is barren of ideas and knowledge and wholly incapable of being Prime Minister.
    I begin my main speech by saying how sad I was to learn of the previous Chancellor's departure. I worked with him as Chairman of the Back-Bench finance committee, and I am sure that history will be kinder to him than the media and some of his colleagues. He knows that I disagreed with his policy in the summer of last year but since white Wednesday, as I call it, he put in place the right policies for recovery: low interest rates, a competitive pound and low inflation. He had a healthy scepticism for the exchange rate mechanism and, if he were honest, he thought that a single currency was for the birds. He was determined to do all in his power to cut spending and reduce the deficit. His Budgets were innovative and elegant, and he introduced two great reforms which will come to be appreciated in time.
    First, our method of devising the Budget always seemed ludicrous. We did not decide how much we had to spend. Instead, every Ministry decided how much it wanted, we added it all up and then decided how we could finance the total. The previous Chancellor changed the system—the Budget will now be worked out from the top down instead from the bottom up.
    My right hon. Friend's second innovation was to bring the fixing of taxes and the dealing with public expenditure together at the time of the Budget. That is a first-class reform, which will start this year. It must be a bitter blow that he was not allowed to present it.
    The new Chancellor, whom I congratulate on his appointment, faces two very important tasks. The first is to ensure that the recovery which, as some of my hon. Friends have said, is not yet strong—indeed, in some areas it is virtually non-existent or fragile—continues to strengthen. As other European economies go into an even deeper decline, and as the American economy falters, there is a danger that Britain's recovery could slow down.
    The new Chancellor should do everything possible to ensure that that does not happen. I suggest that he uses the
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    freedom of a floating pound to lower interest rates as necessary and to slacken the monetary stance. If need be, he should at the same time tighten the fiscal stance, but I shall deal with that in a moment.
    My initial worry about the new Chancellor was that, after white Wednesday, he was one of those who wanted to rejoin the ERM at an early date. However, he has recently expressed the view that it is unlikely that we shall rejoin during this Parliament. I hope that it is a real conversion rather than a diplomatic one. I should like to think that it proves that he now supports a floating exchange rate. If he confirms that, many of my colleagues will breathe a sigh of relief.
    The second vital task facing the Chancellor is, of course, the reduction of the public deficit which will this year rise to £50 billion—more than 8 per cent. of gross domestic product. If the Chancellor succeeds in his first task of obtaining higher growth, it will go some way to solving the deficit problem. If, however, he fails, and if the recovery grinds to a halt, the deficit will get worse. Even if he is successful, other action will be needed. The big debate in the House and in our party is whether we should reduce the deficit by increasing taxation or reducing public expenditure.
    In his last Budget, the former Chancellor presented a package of tax increases worth £10 billion. I must tell the new Chancellor bluntly that he should turn his attention to what I admit is the difficult task of reducing public expenditure and forget any idea of increasing income tax, especially the standard rate.
    The Tory party won the election for two basic reasons. First, the British public preferred the Prime Minister to the former leader of the Opposition. Secondly, they believed that we would take less out of their pay packets than the Labour party, and that Labour was the party of spending and taxation. We should heed the warning of George Bush's experience across the Atlantic. He said, "Watch my lips." The people watched his lips, and he did not do what he had promised. As we know, he lost the election. If we go into the next election with direct tax rates higher than those at the previous election, we shall Jose all credibility. We shall be finished, and there will be no significant difference between us and the Labour party.
    We are already committed to the proportion of GDP taken by taxes rising from 34·5 per cent. this year to 37 per cent in 1997–98. That compares with only 29 per cent. in the United States and 31 per cent. in Japan and Switzerland. There is no alternative to cutting public expenditure.
    I accept that there will be difficulties. I have heard it said that we cannot cut overseas aid because 20 Conservative Back Benchers will not vote for it and that we cannot touch social security because a further 15 would not accept that. Everyone favours cutting Government expenditure in the generality but not in the particular. I must tell my Back-Bench colleagues—I am sorry that there are not more of them here—that cuts will have to be made across the board and everyone's pet service is likely to be affected.
    The alternative—there is only one—would be a massive —I stress that word—increase in taxation which many Conservative Members would not stand for and which the country would not accept. When the package is proposed, it must be accepted as a whole. We cannot choose from it a la carte—we cannot allow people to say that they like one part but not another.

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    The increase in public spending is a major cause of our deficit. I wish to put the matter in context, because many people believe that the deficit was caused mainly by the recession. In the past four years, public sector spending went up by no less than £30 billion in real terms. In the four years to 1991, it went up in real terms by £3 billion. Since 1988–89, public spending increased from 39·25 per cent. of GDP to 45·5 per cent. of GDP this year, an increase of 6·25 per cent.
    So much for all those accusations of public expenditure cuts. On those figures the Government could be accused of being profligate. I feel that the Government made a big mistake in not grasping the nettle in the public spending round last year. If they had started earlier, the problem would have begun to be solved earlier.
    I shall take a few moments to make suggestions about where savings could be made. It is easy to say, "Cut spending," but not so easy to say where the cuts should be made. During the recession every business in the country has had to cut its costs and slim down its work force. Whole layers of management have been abolished. Barclays bank, for example, has got rid of 6,000 people. But in the bloated public sector no such exercise has taken place; indeed, the number of civil servants is rising.
    If we compare the present public sector with the industries that used to be in the public sector but have now been privatised—British Telecom, British Gas, the electricity companies and so on—we see enormous differences. Those privatised industries have cut costs significantly and reduced their Labour forces, yet they have increased efficiency. Under British Telecom the telephone service is infinitely better than it used to be, and BT now has 33,000 fewer employees. This year the British Airports Authority has reduced its work force by 19·5 per cent. and PowerGen has reduced its work force by 20 per cent.
    If local government—excluding teachers—and the civil service did only half what the private sector has done, billions of pounds would be saved. Indeed, if they reduced manning levels by only 5 per cent.—private companies have had to do much more—they would save 2 per cent.
    There was a lot of laughter when my hon. Friend the Member for littleborough and Saddleworth (Mr. Dickens) mentioned overseas aid. But we are spending more than £2 billion on overseas aid. That is very worthy, and if we had the money I should support it. However, not only do we have a Budget deficit: we have a large balance of payments deficit. We are borrowing foreigners' money to give to other foreigners, and we shall have to repay the loan with interest. In our present straitened circumstances we could easily knock £0·5 billion off aid.
    The fact that expenditure per head on major services is significantly higher in Scotland, Wales and Northern Ireland than it is in England is kept rather quiet. The local government grant per head in Scotland is 50 per cent. more than in England. In Scottish schools we spend almost 50 per cent. more per pupil, and on health we spend more than 30 per cent. more per head in Scotland than in England.
    I found the figures for the north of England, because it always used to be said that spending was lower in England because England has wealthy areas in the south. But the figures for Scotland are significantly higher than those for the north of England. That is not fair and we cannot afford it. We should move progressively to a system in which the amount spent per head in all the countries of the kingdom
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    is roughly the same. Our English children have the right to have the same spent on their education as is spent on the education of the Welsh, the Scots and the Irish.
    Ms Glenda Jackson: Do the people in Scotland, Wales and Northern Ireland pay a different rate of income tax from that paid in England?
    Mr. Townend: The hon. lady makes a relevant point. No, they do not. We all pay the same tax, so it is unfair that over the years excessive sums have been spent in Wales and Northern Ireland. There is one exception for Northern Ireland: I accept the need for higher expenditure on law and order there.
    We must examine the social security budget, however hard it is to do so. We are not the only country that is having that problem. Germany is having it; the Germans are having to consider their swollen social security budget, and France is having the same problem. We are spending £60 billion a year. Anybody who deals with social security will tell us that more and more people are playing the system and abusing it.
    Mr. Alan Duncan: We are spending £80 billion.
    Mr. Townend: I accept that I made an error. When we are spending £80 billion there is always room for significant increases in efficiency in absolute rather than in percentage terms, and for cutting out waste. The number of people claiming invalidity benefit has doubled in 10 years. I hardly think that the health of the nation has declined by 50 per cent. during that period. We must consider whether some benefits should be taxed, and whether they should be universal or targeted.
    Central Government support for local authorities accounts for another £60 billion a year. Increases in local government grants should be limited to the level of inflation for non-wage costs and to 1·5 per cent. for wage costs. Many hon. Members will accept that there is still an enormous amount of waste in many local authorities, especially in some of the Labour-controlled authorities.
    I support strong defence, but do we need to incur the cost of keeping troops in Germany now that the communist threat has declined? Would it not be cheaper to bring them back to this country? We should save not only on our budget but on our balance of payments deficit.If we are to be the policemen of Europe, with our troops in Bosnia doing the work of Europe, is it right that wealthy countries such as Germany and some of the Scandinavian countries do not contribute? If we are sending our troops should not those countries make financial contributions, as happened in the Gulf war?
    In all Departments there are savings to be made, but in the past, when savings have been made, they have been used to improve and develop services. I quite understand that, but I suggest to my right hon. Friend the Chief Secretary that in the present difficult situation any savings should go back to pay off the deficit. The Chief Secretary has a thankless task, and he needs the unstinting support of the new Chancellor and of the Prime Minister to force spending Ministers to reduce their demands. I am sure that he will get that support. All three of those Ministers will need the 100 per cent. support of Conservative Members, and they will get it. We need it if we are to have any chance of winning the next election.

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    If we fail, and we do not deal with the deficit problem, we shall have difficulty in funding it. Eventually interest rates will be forced up, and if that happens while the recovery is still fragile the recovery will be set back. But if we deal with the deficit, and if we have the courage to grasp the nettle and to deal with the problem of public spending, having solved the problem of inflation and achieved a competitive pound and low interest rates, we shall get the economy of this country going, so that in four years' time we shall win yet another election victory.
    7.26 pm
    Mr. William Ross: I have listened with interest to many of the speeches made in the debate, and not least to the remarks of the hon. Member for Bridlington (Mr. Townend). I am sure that, when the hon. Gentleman was speaking about education expenditure in Northern Ireland, Scotland and Wales, he noted that by general consent the education establishment in Scotland and Northern Ireland produces somewhat better results than are produced in England. I welcome his implied commitment to raising expenditure on education in England so as to achieve the same satisfactory results as we achieve in Northern Ireland and in Scotland. I cannot speak for Wales; I shall leave that to a citizen of that part of the United Kingdom.
    This interesting debate has produced a lot of material for the press and the other news media. However, I must confess that both the motion and the amendment are lacking in content and deal only in generalities in a way that does not tell us much. Amusing as the speech by the leader of the Opposition was, neither his speech nor that of the Prime Minister told us much more. We are left with little to vote for, but we may find something to vote against. That may be negative, but in that it is rather like much of what is now going on in the governance of the country.
    The real problem facing us all is the £50 billion deficit in the budget. I do not believe that Ministers can welcome that. The House will recall that the Government have increased public expenditure over recent years; the hon. Member for Bridlington drew attention to that fact. Much of the increase took place just after the departure of Baroness Thatcher from the Front Bench. The increases in expenditure were considerable.
    Never mind the current deficit; let us look for a moment at what the result of that will be if it continues at anything like the projected figure over the next few years. The total public debt will double in a very short time, and that will lead to huge increases in interest charges to service that debt. Much of the debt is not used for productive purposes. The money is simply spent on social security, education and other matters, and any return from those will be very long in coming.
    Once the public debt rises to those proportions, the most intense pressure will be put on interest charges. There is no way that the Government, or the Opposition, can escape that. It is therefore essential that the reduction of the deficit is the first priority of the Government. The question that has to be answered but which has not been answered—those on the Opposition Front Bench have not given much of an answer either—is how to reduce the deficit. The recurring statements from hon. Members of all
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    parties to the effect that we are not to rejoin the ERM make a blooming good start. I am glad that nearly every hon. Member now seems to agree with the members of my party, who never wanted to be in it and who stated their opinion clearly all the way down the line.
    Mr. Austin Mitchell: Hear, hear.
    Mr. Ross: I am glad that I have the support of the hon. Member for Great Grimsby (Mr. Mitchell), although those on his Front Bench do not share his very sensible views on the matter.
    That position on the ERM is a good start, but it is not the end of it. The Government understand that they have to raise taxes and a number of speakers have touched on that today. One speaker drew attention to something that I never could understand: why do the Government take three or four bites at the same bitter lemon? They tell us that they are to impose VAT on fuel next year, and they get bad publicity. They will get another dose of bad publicity next April when the 8 per cent. increase takes place. And they will get a third dose when the 17·5 per cent. increase is completed the following year. If they are to do something nasty to people, they should do it once and get it over and done with. However, if the Government want to bring continuing pain on themselves, that is their worry and not mine.
    My objection to the imposition of VAT on fuel is twofold. First, the increase will bear heavily on the lower paid. There will always be people who will be severely hurt by the measure, no matter how much the Government raise social security payments to cover the unemployed and the poorer sections of the community. My second point is more far-reaching: the Government have cleared the way for further increases and changes in the scope of VAT. Having once breached the zero VAT rule that has prevailed for many years, they may go on and start slapping VAT on other items in future years. That is something that no hon. Member would wish to contemplate.
    If the Government want cash, they should do as I suggested in my speech on the Budget —increase income tax. It is flexible, it provides instant money and, as soon as the economic conditions allow, it could be easily reduced again. The VAT increase will be very difficult to get rid of once it has been imposed.
    Mr. Peter l. Pike: Is not the reality that income tax, of all taxes, is the fairest as it takes into account ability to pay, and that that is why income tax should be used if the Government need to raise more income?
    Mr. Ross: There is a great deal of truth in what the hon. Gentleman says, and that is why I would have favoured it.
    If Ministers, like the rest of us, had been out in the real world, talking to those who were earning comparatively good salaries and who were concerned about those with no job, they would have found many of those folk willing to pay extra tax in order to relieve the burden that has been created by the Government's mismanagement.
    The Government must have a long-term strategy, and if the former Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont), is to be believed, there is precious little sign of that around. Part of the original long-term strategy was membership of the ERM. The ex-Chancellor told us that he tried very hard to make

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    it work, and membership of the ERM was the basis of the policy of the Government. Those of us who were against membership have been proved correct in our assessment that fixed exchange rates do not work.
    The ERM was, to a large extent, a bomb shelter for the Government. That expression has been used in another context about the Government. But it was a fragile bomb shelter, because its protective strength depended entirely on the Germans paying the price. Once the Germans said that they were no longer paying the price, the bomb shelter crumbled immediately.
    We should also consider carefully what the former Chancellor said about the need for courage and determination. He said that he did not believe that the Government had the courage and the determination to carry through the necessary economic policy, and it was for that reason that they needed the ERM. In other words, he is telling the country, the world and the House that the Government lacked the backbone to govern, to take the flak, and to do what was necessary to explain their policies and stick by them.
    I wonder how someone who was, until recently, the second most senior Minister in the Government could say that, and could then say that they are still fit to govern. Those may seem harsh words, but the Conservative party must ponder them.
    The same frailty of purpose shows when Conservative Members, including the former Chancellor, tell the House that they believe in a central hank. Such a bank would have only one purpose—to act as a bomb shelter for Government decisions. If people stand before the electorate and ask for votes, they then should have the guts to govern. They should have the guts to take responsibility for the economic policy which has to be carried through for the long-term welfare of the community. The promotion of a central bank is an abdication of the responsibility which people seek at elections, and no Government should shelter behind it.
    Chancellors of the Exchequer cannot be popular. They are not in office to he popular; they are there to do what is right. I hope that the new Chancellor will have the strength of purpose to do what is right. I hope also that he will be supported by the Cabinet and by the whole of his party in doing that. We have been told, not only by several speakers in today's debate, that recovery is under way. The Government amendment says that recovery is under way. If that is so, why has a new Chancellor been appointed when the policies of his predecessor—initiated after the brilliant Wednesday in September of last year—were beginning to work? The ex-Chancellor told us why. The pollsters and the news media drove him from office. That is a damning indictment of the strength of the Cabinet and of the Conservative party.
    If we are to get out of the deficit in which we find ourselves, largely as a result of the policies pursued by the Treasury in the 1980s, the Government must increase revenue and must cut back public expenditure. They must aim also for much higher growth.
    I was never convinced by the view expressed by Conservative Members during the 1980s that it did not really matter what sort of industry there was, and that service industry could replace manufacturing industry. It always seemed to me that manufacturing industry, the production of goods, had a greater depth and strength than could ever be found in service industries. As hon. Members have repeatedly said in such debates over the
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    years, manufacturing industry is the source of wealth of this country. Of course, I believe that it goes further than that. like Churchill, I would have chosen the open sea rather than Europe when considering where to sell the goods that I produced.
    In this debate there is not much comfort for Conservative Front-Bench Members. One cannot but wish them well. We have all had a hard time of it, but there is not much comfort for the Government, the governing party or the country in the days and months ahead. There has not been much comfort in what we have heard from the Opposition, either. It is time to face reality. This is supposed to be the House of the great communicators. It is time to tell people outside what the reality is, what the medicine is and what the long-term hope and vision are. If we do that, folk will take the medicine, once they believe that it is necessary. Up to the present they have neither been told what is necessary nor been convinced by what they are being told.
    7.40 pm
    Mr. James Clappison: The debate has touched on some important issues, such as public spending, revenue and the borrowing requirement, but it has also had some of the characteristics of a parliamentary set piece and all the rituals that go with such an occasion. There were all the charges, counter-charges, froth and bubble that one usually associates with such occasions. The right hon. and learned Member for Monklands, East (Mr. Smith) took his full part in the ritual, as did the right hon. Member for Yeovil (Mr. Ashdown), but with—I do not mean to be too damning of the right hon. Gentleman —much less skill than the right hon. and learned Member for Monklands, East.
    I would not concur with the judgment of the hon. Member for Alyn and Deeside (Mr. Jones) that the right hon. and learned Member for Monklands, East was hypnotic. I do not think that the public will be entranced by his lack of alternative concrete policy. The test that the right hon. and learned Gentleman must pass will come later, not today.
    Opposition Members should not have too many illusions about public confidence in the Labour party and the policies that it has espoused over the past 14 years. In particular, they should have no illusions about the extent to which Conservative values are now shared. Those values are now shared more widely than ever before among the electorate, particularly values concerning the delivery of high-quality public services and value for money. [Laughter.] The hon. Member for Great Grimsby (Mr. Mitchell) may find that remark funny, but I am sure that the people of Grimsby do not. It is an important issue throughout the country.
    Opposition Members should have no illusion about the need for sound finance, which has been an important hallmark of the Government over the past 14 years, the need to constrain public expenditure as a proportion of national income and the need to aim to balance the Budget over the Budget cycle.
    I concur with what my right hon. Friend the Member for Worthing (Sir T. Higgins) said about timing and economics and about economic judgments being somehow different from judgments that are made in everyday life. Of course that is right, but Conservative values are echoed throughout the country. That is particularly true in respect

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    of public services. Whatever other charges can be levelled against Conservative Front-Bench Members. it cannot justly be said that over the past 14 years there has been a lack of resources in public services, and certainly not when measured in real terms. That is true in respect of education and health.
    On education, it was noticeable that the right hon. and learned Member for Monklands, East chose to make testing the focus of his attack on the Government. It is an important subject and there is certainly an issue about the administration of such tests, but it is not the touchstone of whether adequate revenue and resources have been devoted to education.
    I should have thought that there was a more accurate reflection of the increase in real terms of expenditure on education and the vastly increased proportion of young people who are now entering higher education compared with the number under the previous Labour Government. Opposition Members talk about a high-skill economy and a better trained and educated work force. They might care to reflect on the fact that nearly one in four school leavers now go into higher education, compared with one in eight under the previous Labour Government.
    Whatever Opposition Members might say about health —of course they disagree with the health reforms and think that the Government are wrong—they cannot dispute that spending has increased massively by about a half in real terms over the past 14 years. Opposition Members used to talk about the proportion of gross domestic product spent on health. That proportion, too, has risen. There has been a massive increase in resources, which has been reflected in public confidence in the quality of our public services, particularly the health service and education, and that has been reflected in election results over the past 14 years.
    Opposition Members have talked about public finances. I echo the sentiment that was expressed by my right hon. Friend the Member for Horsham (Sir P. Hordern) when he talked about the state of finances and considered the timing of public finances, especially debt and debt repayment. Over the past 14 years, although public spending has increased in real terms, the Government have had success in constraining the proportion of Government expenditure as a proportion of national income.
    They were able to bring the proportion beneath 40 per cent., which was a considerable achievement. They have also had considerable success in balancing the Budget. As my right hon. Friend the Member for Horsham rightly said, repayments of debt were made until as recently as 1990. For a substantial part of the latter 1980s, repayments were made, and that reduced the absolute level of debt. We all know that things have changed since then, in large measure because of the recession.
    I must now express the views that were forcefully put to me in my county of Hertfordshire. Hertfordshire is one of the areas of the south-east that have endured the recession. It had a good period in the middle of the 1980s, but it went into recession earlier than some other parts of the country. By its good standards of prosperity and growth, it has suffered during the recession. I am glad to say that the people of Hertfordshire have kept faith with the Conservative party over that period, and they look to the
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    Conservative party to provide growth now. Certainly, there is no lack of concern about unemployment in Hertfordshire. Conservative Members feel for our constituents who have endured unemployment and for businesses that have had to struggle. There is no doubt about the struggles that many have faced.
    The most important issue for the success of local economies, the national economy and the state of public finances is growth. Just as recession led us into the current state of public finances and the public sector borrowing requirement of £50 billion, so we must look to growth to put workers back into jobs and to put businesses back into profit—workers working once again and paying tax as before. We have to look to growth as the principal way of dealing with the public sector borrowing requirement.
    I firmly endorse the use of the word "fragile" by my right hon. Friend the Member for Worthing. It was an apt description; growth is fragile. In the past few weeks, I have spoken to many business men, business men's leaders, local chambers of commerce, the Confederation of British Industry and others, and the word "fragile" has been used many times. They are delighted to see the signs of growth. Across the board, they see growth coming and a change in the atmosphere, but the word that keeps coming back is "fragile". They believe that growth is being sustained, but that it needs to be nurtured and built on.
    I strongly endorse the comment of my right hon. Friend the Member for Worthing that the overriding priority must be the nurturing of growth. All other policies must be subordinate to that, both for the sake of businesses and for the sake of the PSBR and the country's finances. Anything that disrupted that growth or that turned us back into recession would have a bad effect on public finances, as well as being undesirable from the point of view of business. I urge Ministers to make the matter a top priority. That is the test that the Government and Opposition Members will face. The real test for Opposition Members does not lie in the ritual of these set-piece occasions; it is whether their policies are more or less likely to bring about growth.
    Mr. Andrew Smith indicated assent.
    Mr. Clappison: I am glad to see that the hon. Gentleman agrees. That is the first time today that real commitment has been given to growth. The leader of the Opposition made a speech which, although it involved great ritual, did not set out Labour's alternative strategy for growth satisfactorily. We heard little about what the Labour party has set forward as its policies for growth.
    Where are those policies? The minimum wage, the centrepiece of the Labour party's main policies, is one of the few policies not discarded since the election. The hon. Member for Oxford, East (Mr. Smith) looks less interested now. Does he think that that policy is more or less likely to promote growth? More important, what do business men, who are more reliable witnesses, think? Can the hon. Gentleman find many business men who support his contention that the minimum wage would improve job prospects and growth?
    I can tell the hon. Member for Oxford, East that business men in my constituency are not exactly dancing with glee at the prospect of a minimum wage, nor are they dancing with glee at the prospect of being signed up for the social chapter. That does not lead business men to have any joy in my constituency—nor, I suspect, would it

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    induce international investors to queue up for an aeroplane ticket to london rather than to Frankfurt or Paris.
    We could also do with less talk about sweatshops. There should be less of that derisive talk. That expression was used again this afternoon by the right hon. and learned Member for Monklands, East. It does this country no good whatever to hear that sort of talk. What is important is for the competitive advantages of this country to be sold abroad as effectively as possible and not to be talked about in terms of sweatshops. Thousands of constituents of hon. Members on both sides of the House are benefiting from that internationally competitive position, attracting inward investment into this country.
    Ms Ann Coffey: I wonder whether the hon. Gentleman is aware that, in a recent survey in Japan among Japanese firms that were asked about the factors that encouraged them to invest in this country, Labour cost was the least consideration. The consideration that was important to those firms was local authorities' enthusiasm for their being here, the English language and grants that were available. I wonder whether the hon. Gentleman would feel better—I can see that he has a great interest in the economy—if he dealt in the facts of the matter.
    Mr. Clappison: I doubt very much that Japanese investors would be impressed by the prospect of a return to the 1970s or by the implementation of the social chapter. They would not be impressed by bureaucracy, unnecessary costs, more regulation or higher Labour costs, all of which are implicit in the social chapter and in the other policies of Opposition Members.
    One of the expressions about which we have heard much less recently from the Opposition is "two nations". That was quite a fashionable part of Labour's vocabulary throughout the 1980s. The internationally competitive position of Great Britain has brought about a great deal of inward investment into the parts of the country that the Labour party used to characterise in terms of two nations, especially areas such as south Wales and the north-east. Those are areas that are represented predominantly by Opposition Members. The jobs and prosperity that that investment has brought under a Conservative Government have made a substantial difference to those areas. Talk of sweatshops does not bring any benefit to the electorate or to the residents of those areas.
    There is one other thing that the Labour party should do: it should start to acknowledge the fact that growth is taking place. The right hon. and learned Member for Monklands, East chose to quote from a manufacturing journal about the state of manufacturing industry. He would have done better to listen to the real voice of employers—to what the Confederation of British Industry says. In its most recent survey, it found that there was increasing business confidence.
    The right hon. and learned Gentleman should have looked at the CBI's most recent forecast for growth, which it revised upwards this year from 1·4 per cent. to 1·6 per cent. That is a modest revision upwards, but it will translate into thousands of jobs and far greater prosperity for many families. The CBI sees even more robust growth taking place the following year, with an increase from 2·4 per cent. to 2·6 per cent. growth. Growth is taking place, which is the fundamental fact that Opposition Members cannot avoid. The real test for them has yet to come.
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    As I have suggested in endorsing views expressed by my hon. Friends, growth must be the main engine for dealing with the public sector borrowing requirement. I, together with many of my hon. Friends, believe that the Government must devote the utmost attention to that. There is great controversy about how much of the deficit is cyclical and how much is structural. There is considerable uncertainty about that and there are differences of opinion.
    It is certain, however, that every penny of that debt is mounting up and that interest has to be paid on it. In those circumstances, it is entirely right for a Conservative Government, who are committed to good housekeeping, to conduct a public expenditure review in the terms announced by my right hon. Friend the Chief Secretary to the Treasury. It is also entirely right for my right hon. Friend to give the undertaking accompanying that review that the interests of the most vulnerable and of those most in need will be given high priority. It is entirely right that such a review should take place.
    I endorse the words of my hon. Friend the Member for Bridlington (Mr. Townend) when he spoke about the attitude that we should take towards that review and about the framework in which it is taking place—of priority being given to those most in need. It is an extremely necessary review, in the medium term and in the long term, and there are some fundamental issues concerning the proportion of the population in work and the proportion of the population who must be supported by those in work when there is an increasingly aging population. Those are all most important issues. It is right for the Government to address them now and it would be a dereliction of their duty if they did not do so.
    During the review, my right hon. Friend the Chief Secretary must be given unstinting and unqualified support. There may be some decisions that we find difficult to accept—there always are. Hon. Members have interests and everybody considers each cause and each interest to be needy. However, at the end of the day, there must be support.
    My hon. Friend the Member for Bridlington mentioned overseas aid. He said that there might be 20 Conservative Members who would vote against any cuts in the overseas aid budget. He may have been thinking of me as one of those hon. Members, because last year I signed an open letter to the then Chancellor of the Exchequer urging him to protect overseas aid. Many of the others who signed the letter were Opposition Members. Twenty other Conservative Members signed the letter, and my hon. Friend the Member for Bridlington may have me in mind. I have always believed that overseas aid is an important priority. I have held the basic, instinctive view that, although we may have problems in this country, they are as nothing compared with the problems in the parts of the world that overseas aid assists.
    Be that as it may, the needs of our public spending review must take priority over such feelings and sentiments. If it comes to pass that there must be a reduction in overseas aid, I shall go through the lobbies in support of the Government. I know that in doing so, I shall reflect the views of many of my constituents, including many who regard overseas aid as an important priority. The Government must be given a free hand and support within a framework of policies in which the interests of those most in need are given the highest priority.

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    I endorse the comments made about the undesirability of increasing taxation, but it is a matter of judgment. My right hon. Friends must take into account economic circumstances and the likely effect on demand. They must bear very much in mind the long-term Conservative commitment to a low-tax society, with the low taxation of both individuals and the corporate sector. I invite them to consider that issue carefully when forming a judgment.
    I was interested in the absence of any comments about revenue from Opposition Members, particularly the right hon. and learned Member for Monklands, East. He called for the debate on public spending and criticised the public sector borrowing requirement and one might have expected him to say something about Labour's proposals on the subject.
    The absence of any comment was particularly surprising, because the hon. Member for Dunfermline, East (Mr. Brown) went on the radio this morning and shared with the "Today" programme his views on revenue; the right hon. and learned Member for Monklands, East did not share those views with the House today. At the top of the hon. Gentleman's list of priorities for raising more revenue was a new tax, which he described as the public utility dividend.
    I would welcome hearing about the so-called public utility dividend when the Opposition Front-Bench team wind up the debate. The subject seems to warrant close examination, not just because of any anomalies or injustices that it may create or because the so-called public utilities are already subject to the regulator and already pay tax through corporation tax—a factor that the hon. Member for Dunfermline, East did not seem to consider. The Opposition should consider not just those factors, but the effect of any such taxation on the ability of the utilities in private hands to invest.
    Opposition Members soon lose sight of the vital thread between profit and investment and the effect on the ability of the utilities to invest and provide a better service to customers, about which we have heard and which, over the past 14 years, have been increasingly accepted by the public. Opposition Members have had to concede that fact, as they have opposed successive privatisations, only to relent of their opposition and abandon their pledges. Those privatisations are now accepted as a fact of life.
    The right hon. and learned Member for Monklands, East betrayed his instinctive hostility towards privatisation when he addressed the House on railway privatisation. The credibility of Opposition Members does not rate highly when they talk about public finance and privatisation. They are hostile towards privatisation, but they should consider what their advice on privatisation has been and what the effect on public finances would have been had their advice been taken. That is a substantial issue for them to consider.
    If the Opposition had had their way, there would have been no privatisation in the past 14 years and thus no receipts from privatisation. There would have been no receipts—cumulatively worth £30 billion with interest— from the privatised utilities. If we had listened to the advice of Opposition Members and the right hon. and learned Member for Monklands, East, we would have paid a price of £30 billion. If we had listened to their advice and there had been no privatisation, we would have had £30 billion
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    less to spend on public services, £30 billion more to find in taxation or a public sector borrowing requirement of £80 billion rather than £50 billion. Their advice would have come at a high price, and I invite them to explain to the House the impact of their proposal to introduce a public utility dividend.
    I believe that contributors to today's debate have been carried away with the ritual and we have not heard an alternative strategy that any reasonable person would expect Opposition Members, particularly the right hon. and learned Member for Monklands, East, to set out. That is the real test for Opposition Members. The Opposition's credibility is no higher as a result of their endeavours in today's debate. They have made no contribution to the debate.
    8.7 pm
    Mr. Austin Mitchell: Today's debate has had the feel of a debate on a no-confidence motion. The hon. Member for Hertsmere (Mr. Clappison) seemed to approach it as such when, in his sweetly sanctimonious way, he defended an imaginary Government. He said that all the problems were caused by the Labour party and that, after 14 years in opposition, the faults were all those of the Opposition. That is an amazing achievement for the Opposition.
    It feels as though we are discussing a sort of no-confidence motion. However, we are discussing a statement of obvious fact. The Government deceived the people at the last election. They concealed the mess, and now that they face the mess that they created they do not have the foggiest idea how to get out of it because they are suffering from a crisis of leadership. This shambling decrepit Government are going nowhere. To use an image from Scarborough, the Holbeck Hall Government are sliding slowly into the sea while the Chancellor plays his jazz piano in the bar room to alleviate the suffering of the hotel residents.
    Today's debate has not been great, but it has been revealing. Particularly illuminating was the hurt, doubt, misery and pain on the face of the ex-Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont) at the way in which he was treated for following his Prime Minister's policies to the letter. I offer him an old adage, when it was said of Harold Macmillan in 1962:
    "Greater love hath no man than this, that he lay down his friends for his own life."
    That is what happened to the former Chancellor.
    Equally revealing was the Prime Minister's vapid performance—it was low level stuff and he showed no dignity. It reminded me of his speech at the last Tory party conference when he was expected to rise to the occasion and give the Tory party a lead. He sank to it and told his followers, "When a child's got to go, a child's got to go —we need more toilets on the motorway."
    I drove to Banbury this morning and thought that I saw the Prime Minister's monument as I approached Banbury because on the M40 I saw a huge sign in yellow and black stating, "Emergency WC". I thought that the Prime Minister's vision had been realised on the M40. That shows the height of the Prime Minister's thinking. He is the man who has to lead us out of the mess that we are in. Everyone can make his own judgment about the Prime Minister's stature and whether he is up to the job. The embarrassed faces of those behind the Prime Minister

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    when he made his speech today showed that the prevailing consensus in the Conservative party is that he is not up to the job as the Holbeck Hall hotel slips into the sea.
    I want to be open with the hon. Member for Hertsmere about the Labour party's faults. The problems are not all of the Prime Minister's making—he inherited a mess. He won the prize of power just as that power turned to dross and has had to cope with the disasters that arose from the misguided policies of the 1980s. As my hon. Friend the hon. Member for Cannock and Burntwood (Mr. Wright) said, the Government came in promising what they would do, and did it.
    The Government claimed to have performed a miracle through their policies. That claim was about as valid as the hyped up profits created by creative accountancy and lax accountancy standards in this country in the companies operating in the 1980s. Creative public relations laid claim to the Tory miracle. The 1980s were an enormous wasted opportunity—the benefits of North sea oil have been thrown away by the Government. The only benefit that we gained was the huge credit bubble of asset inflation. Asset prices rose and more credit was allowed—the one stoked the other in a sort of North sea bubble which began with an enormous depression produced by the Government's economic incompetence and ended in another severe depression.
    Those depressions decimated large swathes of manufacturing industry in this country. It is the industry that we live by, the manufacturing that pays our way in the world and which alone can generate growth and support our services and standards of living. Most of our trade is still in manufactured goods. Whatever the Minister may think about the financial sector, we depend essentially upon manufacturing. If we do not produce, we cannot consume or maintain our standards of living.
    Manufacturing has been closed down more rapidly here than in any other advanced industrial country. In the 1980s we lost more jobs in manufacturing than any other manufacturing country, and a larger share of our own market-40 per cent. of our domestic market in manufactured goods is now taken by imports, double the proportion in France and Germany. All this is the product of Government policies throughout the 1980s.
    Now, at the end of the period, the Prime Minister has to clear up the mess. It was concealed in the 1980s by North sea oil and by the £30 billion privatisation receipts. There was no need to increase taxes; the tax base could be narrowed because of the revenue from privatisation. Now those revenues are drying up because we are reaching fell-off-the-back-of-the-Government end of privatisation. Now that North sea oil's contribution is set to attenuate, we have to clear up the mess—an horrendous trade deficit that will reach record levels when the figures are published in six months' time; and a public sector deficit which is at crippling levels. The burden of debt grows apace on both counts.
    Such growth as the Government are achieving—they are achieving some—results from the competitive devaluation into which they were forced—to our shame —by the men in red braces, not the men in red ties, who I wish had forced them into it. But the Government are putting back on their straitjacket in the form of the Maastricht treaty, which effectively will compel them to go back to the exchange rate mechanism. So their pathetic recovery has a finite time to run, because they have no idea what to do next.
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    The Government think that the market will provide. All the market does in this sort of extreme situation is compound decline: it compounds prevailing trends. Those trends are towards peripheral decline in this economy, and that will be highly damaging.
    I can offer the Government an agenda. First, they must let the pound fall further. Any country with a balance of payments deficit as large as ours must let its currency fall. There is no other way of closing the deficit. The pound has come down by 16 per cent. since devaluation, since when it has risen again by 7 per cent. The result, as an article by Edward Balls in the Financial Times last week showed, is that we are still less competitive than we were in 1987. The pound has further to go. It must come down if we are to boost exports and win back the markets that we have lost.
    As part of this process, interest rates must come down too. They are still higher in our economy than in the American and Japanese economies. Industry will not invest at these rates; we cannot stimulate the economy at these rates.
    My third piece of advice to the Government is: do not worry about the deficit, as the hon. Member for Southend, East (Sir T. Taylor) is always telling us. It exists for good Keynesian reasons. There is no point in trying to cut it back at this time. Nor should we attempt to fund all of it. Why go to the trouble, expense and burden of debt of funding the whole deficit? We should require the banks to buy and hold Government debt. Why should they not? They have the money to do it.
    Moreover, although this might hurt the vested interests of the City and the fees and Commissions earned there, we should ask whether we should fund the debt at all. Why not require the Bank of England to give the Government ways and means advances—without charging interest on them at market rates, as it does at the moment? The advances should be free of interest to the Government. That would have no inflationary consequence, because inflation is not a monetary phenomenon—it is caused by pressure on resources.
    At the moment, resources are slack. The banks enormously expanded credit in the late 1980s, then suddenly contracted it at the end of the decade. That gap in credit has to be made good. Why should we not use public credit, with advances from the Bank of England on which we do not pay interest and so do not build up a burden of debt? These advances could be used to stimulate the economy and to do the work that must be done to achieve economic growth.
    I am not an expert on these matters, but the idea must be looked at. The only things stopping us trying the approach are the vested interests of the City and its desire to manage Government debt and to keep on creating that debt.
    Fourthly, we need a sensible industrial strategy— investment in training and infrastructure. Now is the time for that. I have to admit that Opposition Members have not understood that supply side measures do not generate their own demand. Clearly, there is no point in training unless we also stimulate demand so that there are jobs for the people whom we have trained. In that way, an expanding industrial sector will be ready to benefit from the competitive advantage that we give it.
    At this early stage in the life of a Government I am afraid that we are at a turning point. We have been there before—politics and politicians treading water, and no clear direction for the nation and the parties to move in.

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    We were in the same situation in 1961–62, when the Macmillan Government began to falter, just as this Government are faltering. Again, in 1978–79 the Labour Government whom I was elected to support and did support began to falter in the same way. At both junctures, a new impetus and dynamism emerged, in 1978–79 in the form of Thatcherism, with its easy answers which have now failed, and in 1962–63 in the form of the Labour party's planning for the white heat of technology.
    The worrying thing about today is that we are treading water but no impetus has yet emerged. It will certainly not emerge from the Government, who have run out of options and policies. All that could possibly emerge from the Government is a new impetus from the new Chancellor, who is something of a wild card and who may have the makings of a Maudling. He is unpredictable. But it will be nothing more than a new tune played by the jazz pianist on a fairly decrepit piano.
    There will be no new ideas from the liberals either. They are essentially a collection of protests, a bucket to spit into, not a coherent party. I thought the leader of the party made a brilliant speech today. The problem with the liberals is that they do not have debates within the party, only conflicts in the leader's head, which is a rag-bag of policies from which he plucks out and offers whatever happens to be fashionable. Then he puts it back again.
    It is only a few months since the liberals were telling us that the answer to all our problems was to move to the narrower band of the exchange rate mechanism at a rate that is now agreed to have been grossly overvalued. Nevertheless, the cry was, "Narrow bands now, narrow bands now." I can remember that cry coming dramatically from the lips of the liberal's economic spokesman.
    I am disappointed that no alternative has yet emerged from the Labour party. That could be a question of the party; it could be a question of my temperament—an obtuse Yorkshireman used to bull-at-a-gate tactics, wanting to get on with it, to get the boot in now and to provide the sort of opposition that the leader of my union, the General and Municipal, wants us to provide. I must accept that the Scottish method is cannier, slower, more cautious, more intellectual. We are in a policy purdah at present. It is certainly sensible to develop new policies for new situations. That was what happened between 1959 and 1962, when the Opposition finally emerged with a powerful range of new policies. That is an understandable phenomenon. It is just that my natural Yorkshire bloody-mindedness wants us to do more now.
    All three parties are obsessed with Europe, European approaches and methods and the problem of Maastricht, but those issues are remote from the considerations of most of our people who sense an overwhelming national failure. They sense that the nation is faltering, is not going anywhere, and that its industrial base is not strong enough or viable enough to provide jobs, generate growth and improve the lot of our people. It is not providing a platform for work and skills and the growth that is needed to improve people's lives.
    There is a sense of national failure and it will not be solved by endless talk about Maastricht, about putting Europe at the heart of everything that we do or about putting Britain at the heart of Europe. It will be solved only by addressing the fundamental problem that our
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    manufacturing base has shrunk too much to be viable. Unless we widen and deepen it, make it competitive and generate skills, Britain will not survive as a nation of which we can be proud.
    8.21 pm
    Mr. Tim Smith: It is always a pleasure to follow the hon. Member for Great Grimsby (Mr. Mitchell). Before he spoke, I had intended to say that there was more consensus in the House on interest rate and exchange rate policy than for some time, but the hon. Gentleman rather shattered that when he said that we need to reduce interest rates and devalue further. He suggested a splendid scheme for borrowing all the money interest-free, but even if that were viable it would be highly inflationary.
    We need a policy that will promote growth, create jobs and tackle unemployment. It must promote manufacturing and Britain's exports, increase productivity and reduce our unit Labour costs. It should deregulate as far as possible and reduce the burdens on industry, thus making the United Kingdom attractive to investors.
    By and large such a policy currently exists. Interest rates are lower than they have been for about 25 years, and inflation is lower than for 30 years. The exchange rate is much more competitive, and during the recession productivity has made tremendous strides. Britain's exports are more competitive than for many years, and there are tremendous opportunities for more.
    The prospects for recovery are good, but there are two qualifications, one of which is domestic and the other international. The domestic one is that there is still less consumer confidence than we would like, largely because of the threat of unemployment and the fact that many people still suffer from negative equity. There is some way to go to overcome those problems.
    Internationally, we are competing in markets that are rapidly contracting. I am not sure that people appreciate the dire state of the German economy, where industrial production fell by 12 per cent. in the past year. Although it is a difficult market for us, British exporters are having great success there, simply because high costs are pricing many German manufacturers out of the market.
    The main threat to recovery is the size of the public sector borrowing requirement, which has been mentioned many times in the debate. I am sorry that the leader of the Opposition refuses to address the issue and say how he would tackle it. He simply engages in scaremongering about reducing expenditure, although the Government have made it quite clear that above all else they will protect the most vulnerable in society.
    I am also sorry that the leader of the liberal Democrats refused to say how he would set about increasing taxation. He said that, in his opinion, £30 billion of the deficit was structural and should be tackled by increasing taxes. If he tried to deal with all that by way of income tax, it would require an increase of 15 per cent. in the standard rate. The right hon. Gentleman should say precisely what he has in mind for tax increases.
    Prospects for the PSBR are hard to forecast. There are advantages in having forecasts in the Red Book from a panel of independent forecasters. Although the Government have forecast for next year a PSBR of £44 billion, the independent forecasts range from a low of £32

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    billion to a high of £60 billion. That illustrates the difficulty of forecasting from a range of large figures. We should not get too hung up on £50 billion or £44 billion.
    The deficit is clearly too high, and has risen rapidly. Only five years ago, the public sector debt repayment was £15 billion, and some optimistic Members spoke about repaying the national debt by the year 2000. The situation can be reversed with equal rapidity if we can secure the necessary economic growth, because there is no doubt that much of the deficit is cyclical and not structural.
    However, we must tackle it in the meantime, because of the cost of servicing the debt. I accept the tax increases in the Budget of £6 billion next year and £10 billion the following year, but I should not like to see further tax increases. If the Government need to do more to tackle this large deficit, they will have to reduce public expenditure.
    I disagree with my right hon. Friend the Member for Shropshire, North (Mr. Biffen), who said that we should increase income tax by 1p or 2p in the pound. I intervened in his speech to say that there were to be income tax increases of £8 billion. It is not quite that, but out of the £10 billion proposed for 1995–96, only £2 billion is accounted for by VAT on domestic fuel and power. The other 80 per cent. is accounted for by increases in other taxes. When the increases in income tax and national insurance contributions are added, they amount to more than half that, to almost £5 billion.
    Therefore, the Red Book already proposes substantial tax increases and I disagree with those who say that they are unfair. They are spread to cover all taxpayers, because the allowances and the basic rate limit will be frozen and various other restrictions will be introduced. In two years, that will increase the income tax bill of every taxpayer. That will be sufficient, and, as I have said, further inroads on the deficit should be made by tackling public spending, because much public expenditure could be reduced without affecting the most vulnerable in society.
    Prospects are now better than for some time. Business confidence is higher than for more than 10 years, and the prospects for manufacturers and exporters are good. Manufacturing performance has been impressive. Our motor components manufacturers are selling to Germany, to Mercedes. Rover now produces motor cars that can compete with BMW and Mercedes.
    Industry needs a period of stability in exchange rates, interest rates and inflation. Given that, there will be gradual economic recovery, which we shall all welcome.
    8.28 pm
    Mr. Peter l. Pike: The debate is on important issues. The Prime Minister challenged my right hon. and learned Friend the leader of the Opposition about our programme at the election, but he failed to recognise the key difference between the Opposition and the Government. The side that wins the election has one important advantage over the people who lose, which is that the winner has an opportunity, in theory, to deliver its election programme—or break its promises. The Opposition do not have that opportunity.
    The issues that we are now discussing reflect the simple fact that the Government have broken so many of the manifesto promises they made last April. They have not lived up to the statements that they made to the people in order to win the general election.
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    I wish to challenge the Government on one or two important points. I have raised the first issue time and again, and Ministers, have failed to answer it. The Government's public expenditure plans in the past and for the future always include figures representing receipts from the sale of assets such as National Power, British Telecom or PowerGen. I shall not debate the folly or otherwise of the railway privatisation as it is not appropriate to the debate, but assuming that the Government continue with the policy, what will they do when they have no more assets to sell to supplement their programme? They have to tell us what they will do then.
    It all comes back to the fundamental question that we are debating today. Everyone is saying that we have to do something to reduce the £50 billion public sector borrowing requirement. The options are to increase taxation or to reduce public expenditure or, in theory, a combination of the two. The other possibility, which we all want, is a growth in the wealth of the country.
    As I represent a key manufacturing area, I feel that there has to be growth in the manufacturing sector and in employment in manufacturing industry to get our balance of payments into surplus and reduce the appalling deficit in manufactured goods. Whoever is in office, we will never get the economy right until we recognise, once again, that the nation's wealth, and indeed its bread and butter, depends on our manufacturing base. Until we tackle that and get it right, we shall continue to have difficulties.
    The Government say that they do not want to increase taxation, but we saw numerous examples of increased taxation in the Budget. Time and again in the past 14 years, they have got away with conning the public. They have done it cleverly by reducing direct taxation and increasing indirect taxation.
    The overwhelming majority of people in my constituency now pay a higher percentage of their earnings in tax than they did under the Labour Government. They pay less in direct taxation, but their indirect taxation has increased.
    When the Tories won the election in 1979, they increased VAT from 8 per cent. to 15 per cent. They then increased it to 17·5 per cent. to reduce the impact of the poll tax. Everything that was zero-rated is gradually being brought into the scope of VAT, and it has now been extended to domestic fuel and power. We all know that that was only the first step. Everything that is zero-rated at present is also under threat.
    I believe that domestic fuel and power should remain zero-rated. The case for their being zero-rated was good in the first place, as it was for children's clothes, food and transport. The public believe, as I do, that the Government will gradually bring those items within the scope of VAT, as well as books and newspapers.
    The Government are obsessed with not increasing income tax, which is based purely on the ability to pay and is the fairest possible way of raising revenue.
    The hon. Member for Beaconsfield (Mr. Smith) said that the Government will protect the most vulnerable people in our society. We have heard that phrase time and again; we have also heard about better targeting. I know what has happened in Burnley after better targeting and the protection of the most vulnerable. The poorest and most deprived sectors of the community have lost and the wealthiest have gained. That is what better targeting

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    means in Tory terms—making the poor pay and suffer more, and giving a little more to those who at least need it because they are already wealthy.
    I referred to the increase in VAT. I received from the library a table of the increases in the price of leaded petrol. I shall not debate the rights and wrongs of duty on fuel for cars, but it was 48·8 per cent. in January 1979 and it is now 71·1 per cent. of the price we pay on a gallon of fuel, assuming that one is still using four-star leaded petrol, which I do not. That is only another example of how the Government have shifted taxation on to national insurance, VAT and other duties. For 14 years, they have managed to get away with conning people that they would lose as a result of higher income tax.
    Last year, the Government got away with telling people who pay no tax that they would pay more if Labour were elected, when they would have been further from paying tax. I do not know how people believe some of the ways that the Government manage to con people.
    I shall now turn to low pay, which I mentioned in a question to the Prime Minister last April. I also received a letter from him last week. The Prime Minister and the Government fail to recognise the scandal of low pay. In the 1990s, it is tragic to erode the protection of workers and working conditions that were fought for for so many years.
    Why should we say that workers are not entitled to fair pay and conditions for a fair day's work? Why can we not have the social chapter and why is Britain second-class? It is because we have had a Tory Government since 1979. Why are we abolishing the wages councils, and why can we not have a national minimum wage? It will not lose jobs, as Conservative Members claim. That is a fallacy.
    In my constituency, people work for scandalously low pay. I see that my hon. Friend the Member for Pendle (Mr. Prentice), who represents the constituency adjacent to mine, is in his place. Some people in our constituencies work for £60 a week before deductions. The Minister says that they get family credit, but it is appalling that in 1993 some people have to work for poverty wages. They have been unemployed, and are so desperate to be in work that they are prepared to accept low pay rather than to be on benefit. All credit to them, but it is a disgrace and a scandal.
    Lancashire county council had a report published by the low Pay Unit. My constituency has a high percentage of people on very low pay. The report shows that Blackpool had a percentage that was not quite as bad as that for my constituency, that pay was slightly higher there. That was clearly because a high percentage of people in Blackpool are still protected by wages councils in catering, hotels and tourism. Once those wage councils are abolished, the people of Blackpool will see wages at the bottom end drop to the same level as in Burnley and north-east Lancashire.
    As to the use of housing capital receipts, I have never in peacetime known so many housing problems. Homelessness has become a national rather than a big city problem, and councils are unable to meet their obligations to provide home improvement grants in the private sector, build their own houses, or improve their existing housing stock.
    Housing associations, which the Government favour and which Labour does not oppose, say that they cannot
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    build affordable housing and that a ghetto is being created, because only those at the top end of salary scales and those on full benefit can obtain a housing association property.
    But for Government dogma, the capital receipts that already exist could be used. A concession has been granted for the current year, but we do not know whether it will be extended. Historical capital receipts, to which I shall refer later, cannot be used.
    As to the current year's receipts, I was in the Chamber when the former Chancellor of the Exchequer, who is now in his place again, made his statement about their use—but that is more of a con trick than a reality. local authorities such as my own have lost their urban programme money. The Prime Minister said, "You should be glad that some authorities have city challenge." It is little use telling an authority that, although it did not receive city challenge money, it should be happy that others did and to pay for it.
    In Burnley, receipts taken into account have been increased in the Government's calculations, and capital allocations have been reduced in the specific capital grant, from 75 per cent. to 60 per cent. That not only takes account of Burnley's theoretical capital receipts—so it will not even break even—but overstates the situation, so that Burnley will lose. Capital receipts will not help, and Burnley will be able to do less about its housing as a result of the change.
    If the Government allow historical capital receipts to be used over a sensible, phased period, and directed at areas of need—I accept that some benefiting areas do not need them—we could tackle the housing crisis and get back into employment building and construction workers and those who make items such as baths, taps and window frames. That would give them consumer spending power, and they would pay tax and national insurance instead of claiming benefits. As people moved house, they would buy curtains and carpets.
    I could develop that theme, but I hope that the Chancellor of the Exchequer accepts that capital receipts should start to be used. That would not only help to tackle the housing problem, but would start, in a sensible, phased manner, to get the economy moving in the direction we want, reduce unemployment and lower the public sector borrowing requirement. I hope that the Government will face reality and acknowledge that they can take certain initiatives, if only they would be willing to change their policies and direction.
    8.44 pm
    Mr. David Willetts: I find myself next to the former Chancellor of the Exchequer, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), who made a significant personal statement earlier and reminded the House of his historic achievement in bringing inflation below 2 per cent. The main policy issue that he raised as a point of disagreement between himself and my right hon. Friend the Prime Minister was the case for an independent central bank. He argued for it on the ground that there was a need to bring extra credibility to monetary policy.
    I take this opportunity, as my right hon. Friend the Member for Kingston upon Thames is fortuitously in the Chamber, of commenting on that proposal. I believe that my right hon. Friend did his own record a disservice, because credibility is gained not by legal change and

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    statutory measures but above all by showing the markets that Governments are prepared to take the tough measures necessary to bring inflation down.
    This Government have gained precisely that credibility as a result of standing by policies that brought inflation below 2 per cent. My right hon. Friend the Member for Kingston upon Thames referred to the improvement in the yield curve. That was achieved because credibility was gained without having a new, legally independent central bank.
    It is also possible to gain greater operational independence for the Bank of England without putting it on a new statutory footing. Indeed, significant progress was made under my right hon. Friend's Chancellorship. I think back with some embarrassment to my own experiences 10 years ago as a Treasury official working on monetary policy.
    In those days, the Bank of England used to send the Treasury a draft of its report on the conduct of monetary policy which was to appear in the Bank's Quarterly Bulletin. We used to sit around working out whether the sentence was correct, and whether this or that paragraph was entirely consistent with the Treasury view. We used to send long letters back to the Bank of England explaining why it should not say X or ought to formulate a point rather differently. That no longer happens.
    Instead, in a welcome policy innovation, the Bank of England produces an independent report on the Government's inflation performance and on prospects for inflation. Neither Ministers nor officials would wish or dare to tamper with that. It has brought significant credibility to Government policy.
    The irony in my right hon. Friend's remarks this afternoon was therefore that the objective which he seeks —gaining greater credibility for monetary policy by operational independence for the Bank of England—is one towards which significant progress was actually made during his Chancellorship.
    My right hon. Friend's statement was in striking contrast to the speech of the leader of the Opposition, which contained nothing of substance. No one has a clearer idea now than at the beginning of the debate of where the right hon. and learned Member for Monklands, East (Mr. Smith) stands on the big questions of fiscal policy. The right hon. and learned Gentleman calls a Supply day debate on taxing and spending but tells the House nothing of Labour's policies. Does he believe that the PSBR is too big, that public spending is too high or too low, that tax increases are necessary or not? For any leader of the Opposition with pretensions to government to devote a 30-minute speech to spending and taxing without answering any of those questions was an intellectual and political failure of considerable proportions.
    The debate was simply an attempt by the Opposition to exploit the ritual of the annual public expenditure round. The well-known stories appear, like the first cuckoos of spring, with speculative press reports as to what might happen in the Public Expenditure Survey Committee. One would have thought that, after years of such stories circulating, people would learn to take them with more of a pinch of salt than they appear to be doing this year.
    Mr. Robert Hughes: Perhaps the hon. Gentleman has a lesson for us. Perhaps we do believe what we read in the press; perhaps the actuality is worse.
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    Before the Budget, the word was that VAT would be imposed on books and newspapers: everyone got very excited about that, and we received letters from newspaper proprietors and the like. What happened, however, was worse. Is the hon. Gentleman saying that he welcomes the imposition of VAT on domestic fuel? When he stood for election, did he tell the voters that his party would introduce it?
    Mr. Willetts: I am talking about the prospects for this year's public expenditure round. My right hon. Friend the Member for Worthing (Sir T. Higgins) made an interesting observation when he asked why Budget purdah could not be extended to that. But surely the point is that Treasury Ministers already face a dilemma similar to that presented by the run-up to a Budget.
    If Treasury Ministers rule out every tax increase that they do not intend to implement whenever the possibilities are mentioned, eventually the shape of the Budget will become apparent. Similarly if every scare story in the press about a public expenditure idea that will not come about is ruled out, we shall be left with a clear indication of the state of the Treasury's negotations with spending Departments. That is no way in which to conduct the public expenditure round.
    The hon. Member for Aberdeen, North (Mr. Hughes), challenged me to say what would emerge from the round. The best indication can be found in previous negotiations. last year, the Chief Secretary to the Treasury scored a considerable achievement: he achieved a reduction of £2 billion in public expenditure plans for 1994 and 1995 on what had previously been planned. Normally, planned spending is increased every year as the year in question approaches.
    Let us look at the figures for expenditure increases. Following an unsustainable 6·5 per cent. increase in real spending in 1992–93 and a 3·75 increase in 1993–94, the plans provide for a 1·25 per cent. increase in next year's spending and a 0·75 per cent. increase in the year after that. Despite all the scares about cuts, the public expenditure round will actually involve a rather different Treasury battle—a battle to hold to its previous plans. If it can do that, it will be doing well.
    The Chief Secretary has also announced a fundamental medium-term review of public expenditure. The Opposition have launched their own fundamental review of public spending, under the chairmanship of Sir Gordon Borrie. I do not feel that the Opposition are in a position to attack the Government for their review when the Opposition are carrying out a review of their own. We are told that the Opposition's review rules out no options; we are told that it is very wide-ranging. I was rather surprised to receive a letter from Sir Gordon Borrie inviting my suggestions for Labour's review on social spending: surely it is impossible to be more wide-ranging than that. I am still waiting for a letter from the Chief Secretary—but that is another story.
    In considering medium-term expenditure on the welfare state, it is worth trying to identify some areas in which cuts are possible. I believe that, given the decision by the European Court of Justice that pension ages must be equalised, a manifestly sensible move would be to equalise them at 65. I also believe in better targeting of social security benefits: it is absurd that the most affluent fifth of pensioners with large incomes from occupational pensions

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    and personal savings receive more income from the state in benefits than the poorest fifth. It is difficult to defend such a position.
    The decisions faced by the Government, however, do not just concern expenditure; they also concern taxation. As my hon. Friend the Member for Beaconsfield (Mr. Smith) rightly pointed out, the Budget contained an announcement of significant increases in personal taxation. The row about the increase in VAT has distracted attention from the fact that the freezing of personal tax allowances, and future increases in national insurance contributions, will mean asking the personal sector—especially the more affluent members of society —to pay higher taxes to bring down the deficit.
    The best way in which to raise further revenues is to enable the economy to grow as rapidly as possible. Part of the explanation of the fiscal difficulties that we have experienced over the past two years is that tax revenues have proved much more sensitive to the state of the economic cycle than was expected by either the Treasury or outside forecasters. The recession has five times as much impact on the PSBR through lower tax receipts than through higher spending. The real problem has been the collapse in tax revenues. As we look to economic recovery, it is reasonable to expect those tax revenues to pick up. For that reason, we must do everything possible to encourage strong growth.
    There is nothing inherently virtuous about slow growth. Sometimes people are tempted to talk about it as though it were more reliable, sober and respectable than rapid growth—as though economic growth were like alcohol, best taken in moderation. That is not true at all. If the country has the capacity to sustain rapid growth without inflation, we should seize the opportunity.
    At this point, we must engage in a rather esoteric debate about unused capacity in the economy. If the economy contains a large amount of unused capacity, we can look forward to several years of strong growth with low inflation. The experts differ: estimates of unused capacity range from 3 per cent. from Mr. Gavyn Davies to 10 per cent. from Professor Patrick Minford. As both are members of the Treasury's panel of outside forecasters, we can doubtless expect some interesting discussions of that technical point on the panel.
    I belong to the group that believes that there is a significant amount of unused capacity in the economy. I believe that the supply side reforms that the Government introduced in the 1980s have had a permanent effect, raising the growth potential of the British economy. The interpretation of the recession put about by the leader of the Opposition this afternoon has been proved wrong by the evidence.
    The right hon. and learned Gentleman spoke of an ill-trained work force and a collapse in investment, but the figures and the research simply do not bear him out. Industrial investment is rising more rapidly than GDP, and hence rising as a percentage of GDP; moreover, it fell much less during the current recession than during the previous one. Companies continued to invest during this recession.
    I see that the leader of the Opposition is now in the Chamber. He said a good deal about a crisis in the training
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    of our supposedly ill-trained work force. This week, two independent academic experts have produced a report on what they call
    "employee commitment and the skills revolution".
    Let me quote two paragraphs from it:
    "The Training in Britain inquiry"—
    in 1986–87
    "found that 33 per cent. of employed people aged 19–59 had received training in the past three years.
    In our sample of employees aged 20–60,"—
    and, remember, this was a piece of research conducted during the recession—
    "54 per cent. had received training over the past three years. This is a dramatic increase in such a short period.
    Nearly all the reported training was related to the current job, and four-fifths of it was provided by employers."
    The performance of the British economy on training has improved dramatically, and it is precisely because of the success of our supply-side revolution in the 1980s that we can look forward now to the prospect of years of strong growth without inflation.
    8.58 pm
    Mr. Alan Keen: I will be extremely brief. I could be even briefer if I were just to list the Government's economic achievements, but that would not be worth standing up for.
    The debate is really about the Prime Minister and the economy rather than about the economy on its own—they are linked so closely. I would like to try to explain something that a lot of people have found extremely puzzling, and that is why the Prime Minister is always smiling, through good times and bad. As sporting metaphors have been used already tonight, I thought that I would use a footballing metaphor in my explanation.
    We are all happy when our teams are at the top of the league—that is understandable—so the Prime Minister should have been happy when the economy was doing well. But as the economy started to struggle and as the football team began to fall down the league table, he still smiled, and that was a denial of the fact that his team was slipping down. As it went further down the league table, he was still smiling, even as the revenue began to fall, the supporters stayed away, some of the best players had to be sold off and they even had to sell the training ground. He still seemed extremely happy, because he had told British firms that having to sell three of their four factories and sack half their work force was just slimming down. So he was still not unhappy, despite his team's falling performance.
    As he approached the bottom of the league table, surely he must now have been slightly unhappy? But he was still smiling. He then began to tell us that there was a recession and a chance of relegation after all, but he did not really recognise that until the last minute. Then suddenly he became very happy because, he said, things could not get worse, soon we would be bumping along at the bottom of the league table and the situation could only improve. However, he had forgotten relegation. In the Prime Minister's case and in the real world, we are talking not about relegation but about resignation, and that is what we look forward to very soon.
    I should like to give my best wishes to the new Chancellor of the Exchequer, as I gave my best wishes to the ex-Chancellor. Some people, perhaps unfairly, have said that the new Chancellor has made a mess of education, of the health service and of the Home Office. I

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    do not know whether that is true, but if it is, he must be extremely frustrated at the Treasury, because someone has beaten him to it. Nevertheless, I wish him well.
    8.59 pm
    Mr. Gordon Brown: I begin by acknowledging the central importance to the debate of the resignation statement made by the ex-Chancellor of the Exchequer. I also welcome the new Chancellor to his job and to his first debate on Treasury affairs, and I congratulate him on the fact that in only nine months he has made the transition from Chancellor-in-waiting to Prime Minister-in-waiting. I doubt that he will have to wait terribly long after today's events. Given that only yesterday he said that he had to turn the economy round, may I tell him that, if he is to achieve anything in his new job, he must also make the transition from the failed Conservative agenda to a new agenda for policy-making that will succeed.
    First, we need a fresh industry policy for Britain that will bridge the technology, research and investment gap that is identified by everyone who looks at the issues, and ensure long-term, sustainable growth. Secondly, we need a long-term skills strategy for our country that will implement for Britain the skills revolution by reallocating resources and persuading employers to use resources for training their work force.
    Thirdly, we must have immediate action against the surge of mass unemployment. If the Chancellor is to cut borrowing in the long term, he must cut unemployment and raise the long-term growth rate of the economy. If he feels that he must make a choice between public spending and tax reforms, let me tell him that, before he starts to cut the budgets for housing benefit or for invalidity benefit or for pensions, he should look at the very substantial tax abuses that our colleagues on the Opposition side of the House have identified—tax abuses that even the former Chancellor on his last day, in an interview in The Guardian, exposed.
    As his first Budget approaches in November, let me give the new Chancellor some advice on his Budget purdah to which, given his outstanding track record for reticence, he may be temperamentally unsuited. I suspect that Budget purdah will only work for him if he is told to go away and lie down in a dark room, made to keep taking the tablets and compelled to think carefully about whether he has even one new proposal for the economy to offer.
    The Chancellor believes that he comes to the job with something of a clean sheet. May I just remind him that Opposition Members know that he not only supported loyally but was vociferous in supporting all the changes that were made by previous Chancellors, many of which have done so much damage to the economy? When I consider his outspoken support for Government policy, I think particularly of his speech at the Welsh Conservative Conference exactly five years ago this weekend.
    The Chancellor is obviously very proud of that speech. He said:
    "There can no longer be any doubt that we are now enjoying extraordinary economic growth, so the real question facing us today is, will it last? If the experience of the sixties and seventies is all we had to go by, I would have to answer no, but I believe that under Mrs. Thatcher Britain has seen such a change, and such irreversible change, that I can answer yes—yes, it can last. In the old days, borrowing always threatened to get out of control. Today all that has changed."
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    One Chancellor of the Exchequer departed after creating an unsustainable boom and boasting about it. A second Chancellor eventually went after failing to secure the strong recovery that was promised. The new Chancellor, therefore, should learn not to exaggerate the successes of Conservative policy at any time.
    We have a new face as Chancellor. It would have been better this evening if we had also had a new policy from the Government. The whole purpose of the debate is to determine whether the change of personnel in the Cabinet has been matched by a change in policy. Having heard the Prime Minister this afternoon, it is clear that, although he has changed his Chancellor, he has no intention of changing the social and economic policies of the Government in favour of the people of this country.
    The revelations of the former Chancellor of the Exchequer were the key feature of the debate: that there is no chance of change under this Prime Minister. His revelations were about the way that affairs have been conducted in Downing street. What was significant about the ex-Chancellor's revelations was that, in the case of every central event, when mistakes were made it was the Prime Minister's insistence upon making those mistakes that caused the problems that the country faces: the intensification of the recession before the right hon. Gentleman became Chancellor, the use of interest rate policy in advance of the election, the timing of decisions such as the decision to join the exchange rate mechanism.
    These were not indictments of isolated policy errors. It was not just about mistakes of timing over this or that decision. Today we had a crushing indictment of the style of the Prime Minister and of the character of his Government. What the country feared, and now knows, is not that the Government have got it wrong on just about every major issue that they have tackled but that they have no strategy, no purpose and no sense of direction, that they are driven by events, not controlled by them, that they listen to Saatchi and Saatchi before they make their decisions, that there is nothing at the centre, just a void, that there is no central philosophy governing events.
    The former Chancellor's indictment was perhaps the harshest we have ever heard from a campaign manager about the candidate he supported and with whom he worked as a colleague for more than five years at the Treasury. The Prime Minister should now confirm what the ex-Chancellor has alleged: that interest rate decisions were taken with a view to politics, not the economy, that the policies did not matter too much, just how they were presented, that everything was done with the next 36 hours in mind.
    Having heard the former Chancellor's statement, I can understand his sense of grievance at the Prime Minister. He now knows, at first hand, what is meant by the phrase, "Unemployment is a price worth paying." His unemployment, the Prime Minister considered, was a price worth paying for a few more months in office. Can the ex-Chancellor say that he has any regrets now? He could be forgiven for regretting that he ever trusted the Prime Minister. The second in command was sacked for obeying the orders of his leader. If the policy was that of the Prime Minister, the whole country will now ask: why was it that the Chancellor, not the Prime Minister, paid the price for the mistakes?
    What we have found, of course, over the past few weeks is that it is not just the former Chancellor who believes what is said in the resignation statement. There are others

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    who sense that this Government have lost their direction. People as close to the Prime Minister as the former Chancellor believe exactly the same. On every central aspect of criticism that was made by the former Chancellor, is not the new Chancellor already on record as agreeing with him?
    The Chancellor gave an interview immediately after the county council elections, in which he made it clear:
    "We are in a dreadful hole."
    That is hardly an endorsement of the Government's record under the Prime Minister. The Chancellor went on to say—this is significant because of the turn of events:
    "The key thing is not to get into a panic"—
    advice the Prime Minister did not seem prepared to take—
    "or start looking for a head to go in the basket to appease our more worried Back Benchers."
    It is comforting for the ex-Chancellor that the new Chancellor did not think that the answer was to get rid of the old Chancellor, to have any summary executions from the Government or to panic with a reshuffle, or that those actions would solve the problem.
    The Chancellor went on:
    "We have to approach this thing with common sense and decide how we are to get out of this dreadful hole we are in. That requires a medium-term view, an agenda for the Government over the next two or three years. It requires an agreement about how we are going to present the agenda in a way that gives back a sense of purpose to our followers."
    The new Chancellor was in no doubt that what was needed was a new agenda and for the Government to give a sense of purpose to their followers. What is the difference between what the former Chancellor said about the Prime Minister and what the new one is saying? They both agree that the Prime Minister and his Cabinet have lost their way and their sense of direction.
    What has been the Prime Minister's reaction in the past few weeks? It is certainly not to turn up at events where he should be to answer debates that he has been involved in. What change has come about as a result of the Prime Minister's recognition of the problems of the county council elections? Have we had a new industry policy? [HON. MEMBERS: "No."] A new deal for the unemployed? [HON. MEMBERS: "No."] Have they dropped rail privatisation? [HON. MEMBERS: "No."] Have they thought again about coal privatisation? [HON. MEMBERS: "No."] Have they even thought about prison privatisation or dropping VAT on fuel and the charges to pensioners?
    In response to one of the worst years ever for a Government, in response to one of the biggest by-election defeats ever inflicted, in response to the creation of a situation in which we no longer talk about the Tory shires, but only about the Tory shire, we have had a series of Cabinet promotions, with one member of the Cabinet dropping off at the end. After 1 million redundancies in the country under this Prime Minister, had we not the right to expect more than just one redundancy from the Cabinet?
    The Prime Minister explained why only one person went from his Cabinet and there were no new changes in policy. When he was asked at a press conference in Paris only a few days ago, he said:
    "All that was necessary was to refresh the Government."
    There was not a change to help the country, the economy, unemployed people or our trading position, but somehow
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    the Cabinet was in need of refreshment, as if the problem was boredom in the Cabinet rather than crisis throughout the country.
    As a means of refreshing the Cabinet, what happened? What decision was made? The refreshing answer to all our problems was the right hon. Member for Wokingham (Mr. Redwood) becoming Secretary of State for Wales. The right hon. Member for Wokingham presumably went to Wales because Wokingham and Wales both start with "W". He was plucked from relative obscurity and given a road map to take him to Cardiff. A Cabinet that needs to be refreshed by the inclusion of the new Secretary of State for Wales is indeed a Cabinet in need of refreshment.
    The only new initiative after a year of disaster that has come from the Prime Minister is that he thinks that the presentation of events must be improved—as the former Chancellor confirmed today—and not the policies. The fact that 1 million more people are unemployed under his leadership is simply a problem of presentation.
    Ten million pensioners facing the imposition of VAT must be an excellent policy sadly misrepresented. Spending cuts in health or other services are a great idea, if only it could be got across. According to the Prime Minister, the only problem is how policies are communicated. That is such a pathetic explanation that I can understand why, after 30 minutes with the Prime Minister, the former Chancellor could not understand why he had been sacked, and was eventually reduced to faxing rather than writing a letter.
    As the Government will find, the truth is that one can change the style, the presenters, the ad men and the public relations agency but, if there is no strategy, no direction and no purpose—as we now know—everything remains the same. I must warn the Prime Minister that he may think that the economic crisis is over, but for him the political crisis is only just beginning. He should be clear that, if the ex-Chancellor was the last to know at the last reshuffle, he—the Prime Minister—will be the last to know at the next reshuffle. Next time, it will not be the Prime Minister telling the Chancellor to go; it could be the Chancellor telling the Prime Minister to go.
    I can imagine how events will unfold, but the former Chancellor knows only too well. The Prime Minister may think it safe to relax and go to a party—[Interruption.] It is safer for the Prime Minister to be beside the Chancellor in the next few days watching him. I can imagine how events will unfold. like the former Chancellor, the Prime Minister will think that his troubles are over, that the worst of the crisis is behind him and that he has survived. He will think it safe to relax and go to a party, perhaps at the invitation of a Cabinet colleague, such as the Chief Secretary, as happened only a few days ago. Perhaps it will be a birthday party at the Spanish club, with a relaxing glass of champagne.
    The Prime Minister will arrive back in Downing street and will notice the Chief Whip's car parked outside No. 11. In a flash he will remember that absent from the agreeable gathering he has just left were the Chief Whip, the chairman of the party and his next-door neighbour, the Chancellor—the three men who did not go to dinner. He will then recall that the Chancellor's freely announced and admitted ambition is to take over the office of Prime Minister.
    The next morning, at 9 am—as the former Chancellor knows all too well—there will be a telephone call. The Chancellor is on his way to No. 10 Downing street, not to

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    discuss the economic crisis but to hear the unwelcome political news. The Chancellor, the chairman of the Tory party and the Chief Whip will tell the Prime Minister that his time has come. He will turn in despair to his political friends and find that he has none—et tu, Portillo?
    The Conservatives have come a long way in managing change at the top. They are no longer the men in grey suits but, as the Chancellor found out, the men who did not come to dinner. Although lady Thatcher put up iron gates at the end of Downing street, they are not enough to save the Prime Minister. To protect himself, he will have to brick up the door of No. 11 Downing street. He will find that the greatest threat to his position is the enemy within.
    The Prime Minister's problem is obvious—he can blame one Chancellor, but it is difficult to blame two. Having sacked one Chancellor when things got tough, he cannot when things get tough again sack another, because the country will ask not what is wrong with the Chancellor but what is wrong with the Prime Minister.
    The country requires a strategy for government. It is interesting that the Prime Minister came into the Chamber a few moments ago—he has to be told what to do by the Opposition now, because he has no ideas of his own. This country requires a strategy, a long-term view, an economic and social policy that deals, as the former Chancellor said today, not with only with the problems of today but with the problems of a whole decade. The country needs a social policy based on the needs of the people and on principles, not on an expedient approach to events.
    That cannot be delivered by a Government who govern for 36 hours at a time, motivated only by the next day's headlines. We argue that it must be done by a Government who are fair to people, fair to pensioners and fair to those in poverty, a Government with a modern approach to the public services, a Government with an industrial policy. It cannot be done by a Government dominated, as the former Chancellor said, by short-termism and by the approach of Saatchi and Saatchi.
    What about industrial policy? The Confederation of British Industry is complaining that there is no proper partnership between Government and industry. It has said that, despite all the talk from Downing street, there is no real attempt at a partnership between Government and industry to secure long-term growth. Today the Government's, and the country's, record on research and development has been published, showing that we have one of the worst records in Europe.
    Of course, the complaints about the Government's strategy come not only from the CBI, the engineering employers, the Labour party and the trade unions; complaints have come from within the Department of Trade and Industry itself. The DTI report shows that we are 30 per cent. behind the world's best in productivity, and 40 per cent. behind in skills, and says that the factors that determine competitiveness and that must be improved as a matter of urgency are
    "education and training, finance for business, innovation, international trade, physical infrastructure".
    In all those areas, companies can do best when they have the support of Government in partnership with them. But, because of a dogmatic approach to industrial policy, we are doing badly in all those areas.
    Is not the trade deficit a real problem, which the Government cannot wish away as a short-term problem that need not be tackled? Is not our industrial capacity weaker than it should be? Is it not true that, as the CBI has
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    said and the former Chancellor has acknowledged, there should be a long-term policy for Britain? Is not our skills base low because we have not thought about the long term and about investing in the future? Does not everything that has been said about the lack of strategy and long-term direction, and about the lack of thinking about the future, apply directly to the contraction of our industrial base and the failure to support manufacturing and trade under the Conservative Government? A Government bogged down in short-termism, as the former Chancellor said, cannot solve the problems of our skills base either.
    The training budget has been cut. We are 20th out of 22 in the international skills league, falling behind not only Germany and Japan, but Korea and Taiwan. Is that not also the result of the abject failure, confirmed today, ever to be prepared to think for the long term? When we are cutting budgets for people who are unemployed, when there are 80,000 fewer training places than when the recession started in 1990, is it not the height of irresponsibility for a Government to fail to use the best resource of our country—the talents and skills of the people in our community?
    While I am on the subject of long-termism, will the new Chancellor, who says that he is tough on vested interests, agree that the banks have largely failed to meet the country's needs, that their charging and Commission policies have to be reviewed, and that he should now lay down minimum standards? If he is to take on people other than the weak and the poor, that is the vested interest that the Chancellor should take on, in the interests of the people of this country.
    It is also because the Government have no long-term view that exactly what we predicted would happen to our public services and our welfare state is now happening. Because they have no long-term view and no sense of social cohesion, because they think only of tomorrow's headlines, they think that they can get away with breaking promises to the sick, to the disabled and to pensioners in this country.
    The Prime Minister spent a great deal of time accusing the Labour party of scaremongering about public expenditure. let me just remind the Prime Minister, and the country, what he said:
    "We will stand by the figures in the Red Book. I see no reason why we should not meet our promises. We have seen these concerns in the past and it has not been necessary to change plans."
    Any Prime Minister worth his salt, instead of trying to run away from those promises, would be trying to honour them today.
    The right hon. Gentleman said:
    "If we were going to cut public expenditure, we would have done it before now, and I do not believe it is economically right. So you can rule out any expectation of that."
    If the Prime Minister is to carry any integrity from now on —and that is doubtful—he must not do to his promises on public expenditure what he has done to his promises on tax. He must keep the promises that he made to the poorest people in our country.
    I will tell the Prime Minister why he should do that. I have a paper that the Government have circulated around the Departments. The Prime Minister says that the Labour party is creating unnecessary scares and fears. It is the Government who are creating those fears by what they are threatening to do to the sick and to invalids in this country. The Prime Minister must look at the papers, which say clearly that taxation of invalidity benefit is

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    "a long-standing policy objective…We should review the upper age limit for invalidity benefit. We should be seeking to reduce the levels of average payment. We should be considering taxing the reformed or the replacement benefit."
    What is the purpose of the changes? Is it somehow to help the sick and disabled? No, the document makes that clear:
    "One of my objectives, which has been discussed with the Chief Secretary"—
    this comes from the Secretary of State for Social Security—
    "is to curtail expenditure on benefit."
    We are talking about a Treasury-driven review to cut public expenditure, not in the interests of the sick and disabled but simply for the purpose of saving money at the expense of people who are sick. [Interruption] let the Conservative Members who are shouting recall that they told the invalid, sick and disabled members of the community at the election that they would stand by their promises. Conservative Members said that they had nothing to worry about, that those benefits would not be cut and that it was the Labour party that they could not trust. let billboards in every part of the country show the truth—that the Tory party can never be trusted again.
    Mr. Jacques Arnold: Will the hon. Gentleman tell us why we should believe that the documents are what he claims they are? Will he tell us where he got the documents?
    Mr. Brown: The hon. Gentleman seeks to do what the Chief Secretary, the Secretary of State for Social Security and the Chancellor refused to do—to deny the authenticity of the claims.
    Mr. Arnold: Will the hon. Gentleman give way?
    Mr. Brown: I admire the hon. Member's attempts to appeal to those on the Front Bench on that matter, but there is no doubt that, despite all the claims that public spending would not be cut, the Government are looking to cut that benefit. They are looking to tax it, to reduce eligibility for it and to cut the level of average payment, and are even looking at a replacement benefit.
    Mr. Arnold: Will the hon. Gentleman give way?
    Madam Deputy Speaker (Dame Janet Fookes): Order. The hon. Gentleman knows full well that, if the hon. Member who has the floor does not give way, he must resume his seat.
    Mr. Brown: I have a message for the Prime Minister this evening from my constituents who are sick and disabled and who are worried about the Government's plans. He may try to eliminate compassion and caring from everything that is done in Downing street.
    Mr. Arnold: Will the hon. Gentleman give way?
    Madam Deputy Speaker: Order. I do not expect to have to tell the hon. Gentleman twice.
    Mr. Brown: It is a commentary on Conservative Members that, when the House discusses invalidity benefit, they try to shout down anyone telling the truth about the dangers to it.
    My message to the Prime Minister is that he may be able to eliminate compassion from everything that goes on
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    in 10 Downing street. He may even, by a temporary legislative diktat at Westminster, abandon caring and compassion in his legislation. But he will never persuade the British people that caring and compassion should not be right at the centre of social policy in this country.
    This is a Government who made promise after promise to win the previous election. A promise not to devalue was broken. A promise of an immediate post-election recovery starting on Friday was broken. The promise that every teenager would have a job or training, broken; the promise of tax cuts year on year, now broken; the promise of no rises in VAT, broken; the promise that they would balance the books, broken; the promise that there would be no spending cuts, now broken; the promise that national insurance would not go up, broken. Ten broken promises that mean that the Conservative party will never be trusted again.
    This is the Prime Minister who, as Chancellor, created all the necessary conditions for continuing recession and who subsequently, as Prime Minister, has sacked a Chancellor whose main offence was that he had only obeyed orders—a Prime Minister who gave the orders and even now assures us that they will not be changed, a Prime Minister who has no strategy whatever, and a Prime Minister who, when pressed on all the difficulties that face our country and economy, pleads only that we should trust him, when the record shows that he has no credibility.
    This is a Government with no industry policy because they are short-termist, no policy for the homeless unless it can capture tomorrow's headlines, no interest in pensioners unless an advertising agency tells them that it matters, no policy for the long term because it is not on the agenda of their party posters, and no strategy for the unemployed because they have simply written them off as voters. What is clear now from the debate is that no strategy for economic and social recovery exists within the Conservative party. What is clear is that the whole Tory party now doubts whether the Chancellor and the Prime Minister can get a strategy together.
    The Chancellor said that we were in a dreadful hole. The former Chancellor says that the Conservative party deserves to lose without a strategy. There is only one change that can benefit Britain—it is to change the Prime Minister and the Government, and it should happen now.
    9.31 pm
    The Chancellor of the Exchequer (Mr. Kenneth Clarke): I begin by thanking the hon. Member for Dunfermline, East (Mr. Brown) for welcoming me to the Dispatch Box. I look forward to facing him for some considerable time to come. I have heard him speak on this subject before. I have listened to debates, I have heard that speech before, and I have no doubt that I shall hear it many times. It is the speech that he always gives. It is an extremely good foil to the speech by the right hon. and learned Member for Monklands, East (Mr. Smith). I put them both into the same category: good on jokes, very weak on content. That is true every time they go to to the Dispatch Box.
    At 9.18 pm—after 18 minutes of the speech that we have heard before—the hon. Gentleman paused and asked an unusual question, "What should we do now?" That is a question to which he never returned.
    "What is truth? said jesting Pilate; and would not stay for an answer"
    and we were back into the lists that we have had before.

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    The hon. Gentleman has an intriguing and forceful speaking style. He does great damage to the Dispatch Box, but it is certainly a very vigorous delivery. He has a particular technique of launching into lists—there is a strategy for this, a strategy for that and a strategy for something else, rapped out in rapid Scottish tones. He has about as much policy content as the average telephone directory, and that has been the case every time I have heard him deliver this particular speech.
    If I may say so—it is a modest claim, given the competition that it faced—I thought that the best parts of the hon. Gentleman's speech came when he was quoting me. He has done the usual research. His attack on our broken promises and all the rest of it were half-sentences taken from shredded speeches that somebody delivered on a wet night somewhere in Dudley, and then quoted out of context in order to maintain the pretence that we have broken our promises. I will return to our promises and I will say how we are delivering them. Given the copious nature of the hon. Gentleman's research, I am relieved that he had to go to a Welsh conference in 1987, which I dimly recall visiting, and that he gave a quote about which I have no regrets at all.
    It is a few years since I last spoke in the House on economic subjects. I was last on the Economic Policy Committee of the Cabinet in 1985–87, when I used to reply to Budget debates. Nothing was quoted from that. The hon. Gentleman had to go to the Welsh conference to find something that he thought was wrong. In Budget debates when I debated with the hon. Gentleman's predecessors —sometimes with the right hon. and learned Member for Monklands, East—we had the same arguments. Those years-1985 to 1987-were the finest of the Thatcher decade. We had emerged from a recession. When we began the recovery, the Opposition laughed at the idea of recovery.
    When we took the tough decisions that were necessary to make this country more competitive and entrepreneurial, the Opposition opposed every one. They stopped asking for debates on the economy. We did not have Supply days any more because we had sustained recovery, when Britain created more jobs than the rest of Europe put together and when we created a more competitive economy. That is the process through which we are going again for the same goal, and the Opposition have learnt nothing whatever from their experience.
    This political row today—I always enjoy such rows—is not directed by the Opposition at the things that matter to men and women outside the House. Our constituents know that unemployment has come down a little. They want to hear from us how we are going to get unemployment down and make them feel more secure in their jobs. Our constituents know that we have got inflation down to European levels. They want to know how we are going to keep it there to keep our competitiveness.
    Our constituents know that, thanks to a recession that has been more prolonged than anybody expected, we are borrowing money beyond the level that we should. We are spending more than we are raising. They want to know how that can be tackled. In an hour of entertaining rhetoric from Opposition Front-Bench Members, they did not have a single answer to any one of those questions.
    Let us deal with the reality of where we are. The hon. Member for Dunfermline, East did not touch on the difficult but encouraging position that the economy is in.
    368
    Let me give a short list of my own. Retail price inflation has fallen to a 30-year low. Underlying inflation is lower here than in Germany, lower than in America and lower than the European Community average. Retail sales have been at record levels; in the three months to April this year, they were up 3·2 per cent. on the year earlier. Car production has been rising; in the three months to April this year, it increased 14 per cent. on the previous three months.
    Unemployment has fallen for three months in a row; it started falling just after the hon. Member for Dunfermline, East predicted a continued increase in unemployment. Manufacturing output is now growing at its fastest rate for five years. Manufacturing exports reached record levels at the end of last year. Manufacturing investment rose strongly in the last three quarters of this year and non-oil gross domestic product has grown by 0·7 per cent. in the first quarter of this year.
    That is the economic inheritance that I have received from my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) working in partnership with my right hon. Friend the Prime Minister. That is the achievement of the Government's policies, both before we entered the exchange rate mechanism, while we were in the ERM and since we departed from it. It is an achievement that no socialist Government in Europe can match for certain, and no semi-socialist Labour Government in Britain would have got near to.
    Mr. Brian Wilson: I have a genuine inquiry. In view of the litany of triumphs that the Chancellor has recited, does he have any idea why his predecessor was sacked and he was parachuted into his place?
    Mr. Clarke: I have described the state of the economy —a matter to which the Labour party has not addressed itself for the past 10 and a half hours.
    Quotations have been given—one was given a moment ago. During the past six months, my right hon. Friend the Prime Minister and I have spent much time defending my right hon. Friend the former Chancellor against attacks on him from outside which have always disregarded the present state of the economy. We are now committing ourselves to improving it further. The first issue that the Labour party should have addressed [but has not—is how to sustain that recovery—
    Mr. Peter Mandelson: This is even making the Prime Minister's speech sound good.
    Mr. Clarke: The hon. Member for Hartlepool, who is laughing at me so loudly, was practising public relation techniques when we last emerged from a recession. If he thinks that what we have achieved so far and will achieve again is done simply by investing in a lot of plastic red roses and smart suits, he has another think coming.
    The Labour party talks only of our manifesto and promises. I do not think that we shall ever hear anything again about the fatuous promises that it made at the last election. If I had been facing him from the Opposition Benches the hon. Member for Dunfermline, East would be talking not about the state that I have just described but about the consequences of adding about £35,000 million worth of extra public spending to the deficit that we now suffer as a result of the recession.

    369
    I was misquoted by the right hon. and learned Member for Monklands, East, who should have been at the Press Gallery lunch where I spoke. I take seriously the commitments that we made in our manifesto, which are credible and deliverable—they will be delivered. The political technique of taking half-quotations out of speeches and using them out of context is no foundation for a credible leader of the Opposition or shadow Chancellor.
    I want to consider the issues contained in our manifesto, depart from the tone of debate set by the Opposition and return to some factual demonstrations. The manifesto said that we would increase funding for the national health service in real terms—we have. Spending is set to increase by 1 per cent. in real terms this year and capital spending is at the record level of £2 billion. The manifesto said that we would protect pensions against inflation, as we have done for the past 13 years—we have. Due to the way in which we have done so, pensions and other benefits increased by 3·6 per cent. this April. Inflation today is just 1·3 per cent.
    When I was on the Public Spending Committee last year with my right hon. Friend the Member for Kingston upon Thames, we bore in mind the fact that we had said that we would go for capital investment in the roads programmes, housing associations, British Rail and london Underground. We have done all that. Funding for the roads programme has been maintained this year in spite of the fact that construction prices are much lower and allow for even more work to take place. We have given £750 million worth to the housing associations and investment in British Rail will be about £1,000 million this year.
    What was the Labour Government's reaction—[Interruption.] What was the reaction to those achievements which were obtained last year in a tight public spending round? The Labour party's reaction was the same that it has given this year—to trot out during a tight public spending round complaints that we were to stop inflation-proofing pensions, cut this for the sick and that for the poor. The Labour party does it every year. I have been not only an Economics Minister but a Health Minister, and I cannot count the number of times it has claimed that we will stop prescription charge exemptions for pensioners.
    The right hon. and learned Member for Monklands, East even brought out the hoary old chestnut about how we will charge for visits to GPs. That was a revisit to shabby triumphs. The Labour party won the Vale of Glamorgan by-election by claiming that we were going to charge for visits to GPs, and another John Smith lost the constituency once the health reforms were in place and Labour's accusation turned out to be untrue—
    Mr. Gordon Brown rose—
    Mr. Clarke: I am impressed by the way in which the bodyguard leaps in to protect his right hon. and learned Friend, who today did not repeat a solitary thing that he promised at the last election, let alone make up his mind about what he wants to do next. At the end of the Maastricht debate, he did not know whether he was going to vote yes or no. At the end of his inquiry into proportional representation, he decided not to plump one
    370
    way or the other and to hold a referendum. He does not know what to do with clause 4—keep it, scrap it or, as the hon. Member for Blackburn (Mr. Straw) suggests, rewrite it.
    The Opposition's jokes are highly entertaining, and I have to confess that, although it is the duty of the Minister to struggle to keep a straight face, I sometimes fail to do so. Sometimes I struggle to keep a straight face when I see the wholesale lack of commitment to any sort of policies on the part of the Labour party.
    I should like to turn to a matter dealt with seriously by my right hon. Friends the Members for Shropshire, North (Mr. Biffen), for Worthing (Sir T. Higgins) and for Horsham (Sir P. Hordern) and by my hon. Friend the Member for Havant (Mr. Willetts). They dealt with the Budget deficit, a subject on which there was deafening silence from the Opposition.
    At the heart of our manifesto was a pledge to control public spending—one of the reasons why we get returned to office. We have to return the Budget to balance and over time we have promised to reduce the share of the national income taken by the state. It is generally acknowledged that the public sector borrowing requirement of £50 billion is too high, and it will be my day-by-day task in the months ahead, with my right hon. Friend the Chief Secretary, to deal with it.
    The overwhelming cause of this large borrowing is the fact that the recession went on longer than expected—not just longer than the Government expected, but longer than almost every forecaster and business organisation expected. The Labour party was no more on target than the forecasters—it always accepted the figures in the Red Book.
    We may enjoy ourselves in debate, but to us falls the responsibility of tackling a projected PSBR of £50 billion, which lies like an iceberg in the path of the recovery which we hope to sustain and about which we have heard nothing positive from the Labour party.
    My predecessor, my right hon. Friend the Member for Kingston upon Thames, said only recently that as a Conservative Chancellor he hated borrowing almost £1 billion a week. I agree with him. Any Conservative Chancellor hates that and would be determined to tackle it. If Labour had won the election and had carried out its election pledges, it would cheerfully have borrowed much more and, when tackled about it, would have said that it would be paid for out of growth—the best the leader of the Opposition can come up with.
    We have set out how we will tackle the deficit—through a combination of economic growth, the tax increases announced in the last Budget and tight control of public spending. Every sensible man and woman in the country knows in his or her bones that the Government have a duty to contribute to that. A continued deficit on such a scale would put at risk the conditions for recovery that we have worked so hard to achieve. Britain is not by any means the only developed country facing this problem. However, we are the only major European economy showing the signs of growth that I have outlined.
    Budget deficits are a feature of the last world recession and they are hitting other countries more strongly than ours. For example, in Germany, projections for the deficit have been increased to DM70 billion and the German Government expect their economy to contract this year. The Commission is not increasing its expectation of

    371
    growth in Germany, as it is for Britain. It expects that economy to contract, and that will undoubtedly mean higher future deficits.
    In France, the deficit is almost 5 per cent. of the national product and the new Government have introduced harsh spending cuts and tax increases to reduce it. In the United Kingdom, inflation is below the average, we have limited economic growth, our interest rates are the lowest in the EC and our competitiveness has markedly improved.
    Mr. Ronnie Campbell: Will the right hon. and learned Gentleman give way?
    Mr. Clarke: No. I apologise to the hon. Gentleman.
    The improvement in our competitiveness is one of the Government's finest achievements during our period of office and it has stopped Britain being the sick man of Europe, as it used to be, into, throughout and out of every parliamentary Session. That is not due only to the depreciation of sterling since September. Even in the recession, we are in a good position compared with many of our competitors, because productivity is increasing, earnings are growing at their lowest rate for 25 years and our costs are falling, whereas costs in our competitor countries—[Interruption.]
    Mr. Campbell: Will the Minister give way?
    Mr. Clarke: No, I will not.
    Mr. Campbell rose—
    Madam Speaker: Order. The hon. Gentleman must resume his seat.
    Mr. Clarke: Our forecast for growth this year has been increased since the autumn statement from 1 per cent. to 1·25 per cent. Almost every independent forecaster—lastly and most recently, the European Commission—has increased the estimate for growth this year. I am cautious. I do not say that the recovery can be expected to unfold rapidly. Prudent economic policies will be needed to sustain it and many things must happen to world conditions as well.
    The Government stand ready to share the credit for a strong recovery when we have achieved it, but not before. Nevertheless, we currently have the prospect of increased growth, higher tax receipts and less pressure on public spending.
    Mr. Campbell rose—
    Mr. Clarke: I shall give way shortly. I am trying to discover whether the liberal Democrats have a serious answer. Growth will obviously contribute—our own forecasts show that—but even a strong recovery will not in itself restore public finances. No sensible observer believes that growth in itself will solve the deficit. Only the right hon. and learned Member for Monklands, East believes that, as he revealed in a shallow interview on the "Today" programme. He said that Labour was against cutting public spending or raising taxes. Labour is not in favour of doing anything in particular. That is the traditional position of the liberal party. let us see if it is moving closer to us.
    Mr. A. J. Beith: The new Chancellor knows that that is not our position, because he heard my right hon. Friend the Member for Yeovil (Mr.
    372
    Ashdown) argue that rises in income tax may be necessary as part of a means of tackling the debt. Does the Chancellor intend to devote some of the remaining minutes of the debate to answering the serious criticisms of the conduct of Government policy made by the right hon. Member for Kingston upon Thames (Mr. Lamont), especially what he said about decisions on interest rate policy and about the way in which such future decisions would be made?
    Mr. Clarke: Throughout my speech, I have set out medium and long-term objectives. I have said repeatedly since becoming Chancellor, as I said before that, that the conduct of policy of any kind should not be based solely on the pursuit of short-term popularity. Every Government since I have been in the House have been unpopular during most of the time that they were in office, but the British public have the common sense to know that their Governments must sometimes go through such periods. I am setting out the medium-term objectives that will be purposefully pursued.
    We had all this talk about raising income tax at the last election. I share the views of my hon. Friend the Member for Beaconsfield (Mr. Smith) on income tax. As my right hon. Friend the Prime Minister pointed out, before the election the liberals committed themselves to raising fuel taxes and green taxes. They talked about the anomaly of VAT on fuel. All that heroic being in favour of taxes is about the same as the heroism of the liberal party on every other subject. They vote against it when it comes before them. That is how they look a difficult decision squarely in the eyes.
    Mr. Gordon Brown: Given that the Chancellor puts such a premium on promises, will he confirm that the Prime Minister said that there would be no increase in VAT? Having said that the country was in a dreadful hole and that we needed a new agenda, will he summarise the changes in economic policy that he proposes?
    Mr. Clarke: I remember that occasion well. At the last election, before the Labour party moved on—[HoN. MEMBERS: "Answer that quotation."]—I will answer the quotation. It illustrates perfectly the point that I was making 20 minutes ago about taking half-quotations out of context. I do not know why the, hon. Gentleman returned to it.
    Mr. Brown rose—
    Mr. Clarke: It is no good the right hon. and learned Member for Monklands, East looking at the Transport house brief: he must listen to the context.
    That particular phrase had a nice little clip put round it. At that stage in the general election which we were all fighting, the Labour party was telling the country that our plans meant, if necessary, to raise the rate of VAT to 22·5 per cent. The Labour party ran a great scare on 22·5 per cent. VAT before the party moved to the more elevated ground of Jennifer's ear to try to show their concern for the great public services of the country.
    Mr. Brown: Will the Chancellor give way?
    Mr. Clarke: No. Jesting Pilate must wait for the answer this time. That quotation was dealing with raising the rate. We have not raised the rate.
    Mr. Brown rose—
    Mr. Clarke: Going back to the manifesto, it contains no word about VAT or national insurance contributions. We have not broken our manifesto pledges. I helped to write the manifesto and I confirm what my right hon. Friend the Prime Minister said. We will deliver that manifesto and getting the wealth-creating economy right is part of it.
    Mr. Brown: Will the Chancellor give way on that point?
    Mr. Clarke: No. [Interruption.]
    Madam Speaker: Order.
    Mr. Brown: What about the deficit?
    Mr. Clarke: The hon. Gentleman does not want to know about the deficit. He has left me three minutes to talk about the deficit.
    We have raised taxation. My right hon. Friend the Member for Kingston upon Thames was right to make the impact of that taxation begin to fall next year, so that the recovery could be sustained for longer. The Labour party is against that. It would restore the tax increases in the Budget, thereby adding £6,000 million to the deficit.
    The only solid piece of policy in the opening speech was talk of allowing local authorities to spend all their capital receipts. That would add another £6,000 million to the public sector borrowing requirement. When will they ever learn?
    We have raised taxation and now we shall look seriously at public spending. We are looking fundamentally at the budgets of health, social security, the Home Office and education. We are about to agree a public spending remit. That is serious government. It will require tough decisions. That is how Conservative government got us out of recession before and that is how we will get out of recession again.
    I am delighted that some of my right hon. and hon. Friends were urging the need for tough decisions today. I am sure that, in due course, they will be voting for those tough decisions to deliver what we must do, because we cannot rely on the Opposition. Six letters and they are anybody's. Any lobby will get their support, although usually it is more fundamentally the lobby that is dominated more by the GM B and the other trade unions than by those who actually sponsor them.
    It will be hard work, earning our living as a country in the 1990s. We have the beginnings of recovery—we must sustain it. We have set out a medium/long-term strategy, for the results of which we are prepared to answer at the next election.
    These debates are all very entertaining, but as my best joke was stolen some time ago, it is the parties opposite that must go back to the dark room and think precisely what contribution they really want to make to serious economic discussion in this country.
    Question put:
    The House divided: Ayes 278, Noes 302.

    Division No. 291]

    [10.00 pm

    AYES

    Abbott, Ms Diane

    Ashdown, Rt Hon Paddy

    Adams, Mrs Irene

    Ashton, Joe

    Ainger, Nick

    Austin-Walker, John

    Ainsworth, Robert (Cov'try NE)

    Banks, Tony (Newham NW)

    Allen, Graham

    Barnes, Harry

    Alton, David

    Battle, John

    Anderson, Donald (Swansea E)

    Bayley, Hugh

    Anderson, Ms Janet (Ros'dale)

    Beckett, Rt Hon Margaret

    Armstrong, Hilary

    Beggs, Roy

    374

    Beith, Rt Hon A. J.

    Galloway, George

    Bell, Stuart

    Gapes, Mike

    Benn, Rt Hon Tony

    Garrett, John

    Benton, Joe

    George, Bruce

    Bermingham, Gerald

    Gerrard, Neil

    Berry, Dr. Roger

    Gilbert, Rt Hon Dr John

    Betts, Clive

    Godman, Dr Norman A.

    Blair, Tony

    Godsiff, Roger

    Blunkett, David

    Golding, Mrs Llin

    Boateng, Paul

    Gordon, Mildred

    Boyce, Jimmy

    Graham, Thomas

    Bradley, Keith

    Grant, Bernie (Tottenham)

    Bray, Dr Jeremy

    Griffiths, Nigel (Edinburgh S)

    Brown, Gordon (Dunfermline E)

    Griffiths, Win (Bridgend)

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

    Grocott, Bruce

    Bruce, Malcolm (Gordon)

    Gunnell, John

    Burden, Richard

    Hall, Mike

    Byers, Stephen

    Hanson, David

    Caborn, Richard

    Hardy, Peter

    Callaghan, Jim

    Harman, Ms Harriet

    Campbell, Mrs Anne (C'bridge)

    Harvey, Nick

    Campbell, Menzies (Fife NE)

    Hattersley, Rt Hon Roy

    Campbell, Ronnie (Blyth V)

    Henderson, Doug

    Campbell-Savours, D. N.

    Heppell, John

    Canavan, Dennis

    Hinchliffe, David

    Cann, Jamie

    Hoey, Kate

    Carlile, Alexander (Montgomry)

    Hogg, Norman (Cumbernauld)

    Clapham, Michael

    Home Robertson, John

    Clark, Dr David (South Shields)

    Hood, Jimmy

    Clarke, Eric (Midlothian)

    Hoon, Geoffrey

    Clarke, Tom (Monklands W)

    Howarth, George (Knowsley N)

    Clelland, David

    Howells, Dr. Kim (Pontypridd)

    Clwyd, Mrs Ann

    Hoyle, Doug

    Coffey, Ann

    Hughes, Kevin (Doncaster N)

    Cohen, Harry

    Hughes, Robert (Aberdeen N)

    Connarty, Michael

    Hughes, Simon (Southwark)

    Cook, Frank (Stockton N)

    Hutton, John

    Cook, Robin (Livingston)

    Illsley, Eric

    Corbett, Robin

    Ingram, Adam

    Corbyn, Jeremy

    Jackson, Glenda (H'stead)

    Corston, Ms Jean

    Jackson, Helen (Shef'ld, H)

    Cousins, Jim

    Jamieson, David

    Cox, Tom

    Janner, Greville

    Cryer, Bob

    Jones, Barry (Alyn and D'side)

    Cunliffe, Lawrence

    Jones, leuan Wyn (Ynys Môn)

    Cunningham, Jim (Covy SE)

    Jones, Jon Owen (Cardiff C)

    Cunningham, Rt Hon Dr John

    Jones, Lynne (B'ham S O)

    Dafis, Cynog

    Jones, Martyn (Clwyd, SW)

    Dalyell, Tam

    Jones, Nigel (Cheltenham)

    Darling, Alistair

    Jowell, Tessa

    Davidson, Ian

    Kaufman, Rt Hon Gerald

    Davies, Bryan (Oldham C'tral)

    Keen, Alan

    Davies, Rt Hon Denzil (Llanelli)

    Kennedy, Charles (Ross,C&S)

    Davies, Ron (Caerphilly)

    Kennedy, Jane (Lpool Brdgn)

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

    Khabra, Piara S.

    Denham, John

    Kinnock, Rt Hon Neil (Islwyn)

    Dewar, Donald

    Leighton, Ron

    Dixon, Don

    Lestor, Joan (Eccles)

    Dobson, Frank

    Lewis, Terry

    Donohoe, Brian H.

    Litherland, Robert

    Dowd, Jim

    Livingstone, Ken

    Dunnachie, Jimmy

    Lloyd, Tony (Stretford)

    Dunwoody, Mrs Gwyneth

    Llwyd, Elfyn

    Eagle, Ms Angela

    Loyden, Eddie

    Eastham, Ken

    Lynne, Ms Liz

    Enright, Derek

    McAllion, John

    Etherington, Bill

    McCartney, Ian

    Evans, John (St Helens N)

    Macdonald, Calum

    Ewing, Mrs Margaret

    McFall, John

    Fatchett, Derek

    McKelvey, William

    Faulds, Andrew

    Mackinlay, Andrew

    Field, Frank (Birkenhead)

    McLeish, Henry

    Fisher, Mark

    Maclennan, Robert

    Forsythe, Clifford (Antrim S)

    McNamara, Kevin

    Foster, Rt Hon Derek

    McWilliam, John

    Foster, Don (Bath)

    Madden, Max

    Foulkes, George

    Mahon, Alice

    Fraser, John

    Mandelson, Peter

    Fyfe, Maria

    Marek, Dr John

    Galbraith, Sam

    Marshall, Jim (Leicester, S)

    375

    Martlew, Eric

    Salmond, Alex

    Maxton, John

    Sedgemore, Brian

    Meacher, Michael

    Sheerman, Barry

    Meale, Alan

    Sheldon, Rt Hon Robert

    Michael, Alun

    Shore, Rt Hon Peter

    Michie, Bill (Sheffield Heeley)

    Short, Clare

    Michie, Mrs Ray (Argyll Bute)

    Simpson, Alan

    Milburn, Alan

    Skinner, Dennis

    Miller, Andrew

    Smith, Andrew (Oxford E)

    Mitchell, Austin (Gt Grimsby)

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

    Molyneaux, Rt Hon James

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

    Moonie, Dr Lewis

    Smith, Llew (Blaenau Gwent)

    Morgan, Rhodri

    Smyth, Rev Martin (Belfast S)

    Morris, Rt Hon A. (Wy'nshawe)

    Snape, Peter

    Morris, Estelle (B'ham Yardley)

    Soley, Clive

    Morris, Rt Hon J. (Aberavon)

    Spearing, Nigel

    Mowlam, Marjorie

    Spellar, John

    Mudie, George

    Steel, Rt Hon Sir David

    Mullin, Chris

    Steinberg, Gerry

    O'Brien, Michael (N W'kshire)

    Stevenson, George

    O'Brien, William (Normanton)

    Stott, Roger

    O'Hara, Edward

    Strang, Dr. Gavin

    O'Neill, Martin

    Straw, Jack

    Orme, Rt Hon Stanley

    Taylor, Mrs Ann (Dewsbury)

    Patchett, Terry

    Taylor, Matthew (Truro)

    Pendry, Tom

    Tipping, Paddy

    Pickthall, Colin

    Trimble, David

    Pike, Peter l.

    Turner, Dennis

    Pope, Greg

    Tyler, Paul

    Powell, Ray (Ogmore)

    Vaz, Keith

    Prentice, Ms Bridget (Lew'm E)

    Walker, Rt Hon Sir Harold

    Prentice, Gordon (Pendle)

    Wallace, James

    Prescott, John

    Walley, Joan

    Primarolo, Dawn

    Wardell, Gareth (Gower)

    Purchase, Ken

    Wareing, Robert N

    Quin, Ms Joyce

    Watson, Mike

    Radice, Giles

    Welsh, Andrew

    Randall, Stuart

    Wicks, Malcolm

    Redmond, Martin

    Wigley, Dafydd

    Reid, Dr John

    Williams, Rt Hon Alan (Sw'n W)

    Rendel, David

    Williams, Alan W (Carmarthen)

    Richardson, Jo

    Wilson, Brian

    Robertson, George (Hamilton)

    Winnick, David

    Robinson, Geoffrey (Co'try NW)

    Wise, Audrey

    Roche, Mrs. Barbara

    Worthington, Tony

    Rogers, Allan

    Wray, Jimmy

    Rooker, Jeff

    Wright, Dr Tony

    Rooney, Terry

    Young, David (Bolton SE)

    Ross, Ernie (Dundee W)

    Ross, William (E Londonderry)

    Tellers for the Ayes:

    Rowlands, Ted

    Mr. Gordon McMaster and

    Ruddock, Joan

    Mr. Peter Kilfoyle.

    NOES

    Ainsworth, Peter (Easf Surrey)

    Bonsor, Sir Nicholas

    Aitken, Jonathan

    Booth, Hartley

    Alison, Rt Hon Michael (Selby)

    Boswell, Tim

    Allason, Rupert (Torbay)

    Bottomley, Peter (Eltham)

    Amess, David

    Bottomley, Rt Hon Virginia

    Ancram, Michael

    Bowden, Andrew

    Arbuthnot, James

    Bowis, John

    Arnold, Jacques (Gravesham)

    Boyson, Rt Hon Sir Rhodes

    Arnold, Sir Thomas (Hazel Grv)

    Brandreth, Gyles

    Ashby, David

    Brazier, Julian

    Aspinwall, Jack

    Bright, Graham

    Atkins, Robert

    Brooke, Rt Hon Peter

    Atkinson, David (Bour'mouth E)

    Brown, M. (Brigg & Cl'thorpes)

    Atkinson, Peter (Hexham)

    Browning, Mrs. Angela

    Baker, Rt Hon K. (Mole Valley)

    Budgen, Nicholas

    Baker, Nicholas (Dorset North)

    Burns, Simon

    Baldry, Tony

    Burt, Alistair

    Banks, Robert (Harrogate)

    Butcher, John

    Bates, Michael

    Butler, Peter

    Batiste, Spencer

    Butterfill, John

    Bellingham, Henry

    Carlisle, John (Luton North)

    Bendall, Vivian

    Carlisle, Kenneth (Lincoln)

    Beresford, Sir Paul

    Carrington, Matthew

    Biffen, Rt Hon John

    Carttiss, Michael

    Blackburn, Dr John G.

    Cash, William

    Body, Sir Richard

    Channon, Rt Hon Paul

    376

    Churchill, Mr

    Hendry, Charles

    Clappison, James

    Heseltine, Rt Hon Michael

    Clark, Dr Michael (Rochford)

    Hicks, Robert

    Clarke, Rt Hon Kenneth (Ruclif)

    Higgins, Rt Hon Sir Terence L.

    Coe, Sebastian

    Hill, James (Southampton Test)

    Colvin, Michael

    Hogg, Rt Hon Douglas (G'tham)

    Congdon, David

    Horam, John

    Conway, Derek

    Hordern, Rt Hon Sir Peter

    Coombs, Anthony (Wyre For'st)

    Howard, Rt Hon Michael

    Coombs, Simon (Swindon)

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

    Cope, Rt Hon Sir John

    Howell, Rt Hon David (G'dford)

    Cormack, Patrick

    Hughes Robert G. (Harrow W)

    Couchman, James

    Hunt, Rt Hon David (Wirral W)

    Cran, James

    Hunt, Sir John (Ravensbourne)

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

    Hunter, Andrew

    Curry, David (Skipton & Ripon)

    Jack, Michael

    Davies, Quentin (Stamford)

    Jackson, Robert (Wantage)

    Davis, David (Boothferry)

    Jenkin, Bernard

    Day, Stephen

    Jessel, Toby

    Deva, Nirj Joseph

    Johnson Smith, Sir Geoffrey

    Devlin, Tim

    Jones, Gwilym (Cardiff N)

    Dickens, Geoffrey

    Jopling, Rt Hon Michael

    Dicks, Terry

    Kellett-Bowman, Dame Elaine

    Dorrell, Stephen

    Key, Robert

    Douglas-Hamilton, Lord James

    Kilfedder, Sir James

    Dover, Den

    King, Rt Hon Tom

    Duncan, Alan

    Kirkhope, Timothy

    Duncan-Smith, Iain

    Knapman, Roger

    Dunn, Bob

    Knight, Mrs Angela (Erewash)

    Durant, Sir Anthony

    Knight, Greg (Derby N)

    Dykes, Hugh

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

    Eggar, Tim

    Knox, David

    Emery, Rt Hon Sir Peter

    Kynoch, George (Kincardine)

    Evans, David (Welwyn Hatfield)

    Lait, Mrs Jacqui

    Evans, Jonathan (Brecon)

    Lamont, Rt Hon Norman

    Evans, Nigel (Ribble Valley)

    Lang, Rt Hon Ian

    Evans, Roger (Monmouth)

    Lawrence, Sir Ivan

    Evennett, David

    Legg, Barry

    Faber, David

    Leigh, Edward

    Fabricant, Michael

    Lester, Jim (Broxtowe)

    Fenner, Dame Peggy

    Lidington, David

    Forman, Nigel

    Lilley, Rt Hon Peter

    Forsyth, Michael (Stirling)

    Lloyd, Peter (Fareham)

    Forth, Eric

    Lord, Michael

    Fowler, Rt Hon Sir Norman

    Lyell, Rt Hon Sir Nicholas

    Fox, Dr Liam (Woodspring)

    MacGregor, Rt Hon John

    Fox, Sir Marcus (Shipley)

    MacKay, Andrew

    Freeman, Roger

    Maclean, David

    French, Douglas

    McLoughlin, Patrick

    Gale, Roger

    McNair-Wilson, Sir Patrick

    Gallie, Phil

    Madel, David

    Gardiner, Sir George

    Maitland, Lady Olga

    Garel-Jones, Rt Hon Tristan

    Major, Rt Hon John

    Garnier, Edward

    Malone, Gerald

    Gill, Christopher

    Mans, Keith

    Gillan, Cheryl

    Marland, Paul

    Goodlad, Rt Hon Alastair

    Marlow, Tony

    Goodson-Wickes, Dr Charles

    Marshall, Sir Michael (Arundel)

    Gorman, Mrs Teresa

    Martin, David (Portsmouth S)

    Gorst, John

    Mawhinney, Dr Brian

    Grant, Sir Anthony (Cambs SW)

    Mayhew, Rt Hon Sir Patrick

    Greenway, Harry (Ealing N)

    Mellor, Rt Hon David

    Greenway, John (Ryedale)

    Merchant, Piers

    Grylls, Sir Michael

    Milligan, Stephen

    Gummer, Rt Hon John Selwyn

    Mills, Iain

    Hague, William

    Mitchell, Andrew (Gedling)

    Hamilton, Rt Hon Archie (Epsom)

    Mitchell, Sir David (Hants NW)

    Hamilton, Neil (Tatton)

    Moate, Sir Roger

    Hampson, Dr Keith

    Monro, Sir Hector

    Hanley, Jeremy

    Montgomery, Sir Fergus

    Hannam, Sir John

    Moss, Malcolm

    Hargreaves, Andrew

    Needham, Richard

    Harris, David

    Nelson, Anthony

    Haselhurst, Alan

    Neubert, Sir Michael

    Hawkins, Nick

    Newton, Rt Hon Tony

    Hawksley, Warren

    Nicholls, Patrick

    Hayes, Jerry

    Nicholson, David (Taunton)

    Heald, Oliver

    Nicholson, Emma (Devon West)

    Heath, Rt Hon Sir Edward

    Norris, Steve

    Heathcoat-Amory, David

    Onslow, Rt Hon Sir Cranley

    377

    Oppenheim, Phillip

    Stephen, Michael

    Ottaway, Richard

    Stern, Michael

    Page, Richard

    Stewart, Allan

    Paice, James

    Streeter, Gary

    Patnick, Irvine

    Sumberg, David

    Patten, Rt Hon John

    Sweeney, Walter

    Pattie, Rt Hon Sir Geoffrey

    Sykes, John

    Pawsey, James

    Tapsell, Sir Peter

    Peacock, Mrs Elizabeth

    Taylor, Ian (Esher)

    Pickles, Eric

    Taylor, John M. (Solihull)

    Porter, Barry (Wirral S)

    Taylor, Sir Teddy (Southend, E)

    Porter, David (Waveney)

    Temple-Morris, Peter

    Portillo, Rt Hon Michael

    Thompson, Patrick (Norwich N)

    Powell, William (Corby)

    Thornton, Sir Malcolm

    Rathbone, Tim

    Thurnham, Peter

    Redwood, John

    Townend, John (Bridlington)

    Renton, Rt Hon Tim

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

    Richards, Rod

    Tracey, Richard

    Rifkind, Rt Hon. Malcolm

    Tredinnick, David

    Robathan, Andrew

    Trend, Michael

    Robertson, Raymond (Ab'd'n S)

    Trotter, Neville

    Robinson, Mark (Somerton)

    Twinn, Dr Ian

    Roe, Mrs Marion (Broxbourne)

    Vaughan, Sir Gerard

    Rowe, Andrew (Mid Kent)

    Viggers, Peter

    Rumbold, Rt Hon Dame Angela

    Waldegrave, Rt Hon William

    Ryder, Rt Hon Richard

    Walden, George

    Sackville, Tom

    Walker, Bill (N Tayside)

    Sainsbury, Rt Hon Tim

    Ward, John

    Scott, Rt Hon Nicholas

    Wardle, Charles (Bexhill)

    Shaw, David (Dover)

    Waterson, Nigel

    Shaw, Sir Giles (Pudsey)

    Watts, John

    Shephard, Rt Hon Gillian

    Wells, Bowen

    Shepherd, Richard (Aldridge)

    Whitney, Ray

    Sims, Roger

    Whittingdale, John

    Skeet, Sir Trevor

    Wiggin, Sir Jerry

    Smith, Sir Dudley (Warwick)

    Wilkinson, John

    Smith, Tim (Beaconsfield)

    Willetts, David

    Soames, Nicholas

    Wilshire, David

    Spencer, Sir Derek

    Winterton, Mrs Ann (Congleton)

    Spicer, Sir James (W Dorset)

    Winterton, Nicholas (Macc'f'ld)

    Spicer, Michael (S Worcs)

    Wood, Timothy

    Spink, Dr Robert

    Yeo, Tim

    Spring, Richard

    Young, Sir George (Acton)

    Sproat, Iain

    Squire, Robin (Hornchurch)

    Tellers for the Noes:

    Stanley, Rt Hon Sir John

    Mr. David Lightbown and

    Steen, Anthony

    Mr. Sydney Chapman.

    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments):
    The House divided: Ayes 301, Noes 271.

    Division No. 292]

    [10.15 pm

    AYES

    Ainsworth, Peter (East Surrey)

    Blackburn, Dr John G.

    Aitken, Jonathan

    Body, Sir Richard

    Alison, Rt Hon Michael (Selby)

    Bonsor, Sir Nicholas

    Allason, Rupert (Torbay)

    Booth, Hartley

    Amess, David

    Boswell, Tim

    Ancram, Michael

    Bottomley, Peter (Eltham)

    Arbuthnot, James

    Bottomley, Rt Hon Virginia

    Arnold, Jacques (Gravesham)

    Bowden, Andrew

    Arnold, Sir Thomas (Hazel Grv)

    Bowis, John

    Ashby, David

    Boyson, Rt Hon Sir Rhodes

    Aspinwall, Jack

    Brandreth, Gyles

    Atkins, Robert

    Brazier, Julian

    Atkinson, David (Bour'mouth E)

    Bright, Graham

    Atkinson, Peter (Hexham)

    Brooke, Rt Hon Peter

    Baker, Rt Hon K. (Mole Valley)

    Brown, M. (Brigg & Cl'thorpes)

    Baker, Nicholas (Dorset North)

    Browning, Mrs. Angela

    Baldry, Tony

    Budgen, Nicholas

    Banks, Robert (Harrogate)

    Burns, Simon

    Bates, Michael

    Burt, Alistair

    Batiste, Spencer

    Butcher, John

    Bellingham, Henry

    Butler, Peter

    Bendall, Vivian

    Butterfill, John

    Beresford, Sir Paul

    Carlisle, John (Luton North)

    Biffen, Rt Hon John

    Carlisle, Kenneth (Lincoln)

    378

    Carrington, Matthew

    Hayes, Jerry

    Carttiss, Michael

    Heald, Oliver

    Cash, William

    Heath, Rt Hon Sir Edward

    Channon, Rt Hon Paul

    Heathcoat-Amory, David

    Churchill, Mr

    Hendry, Charles

    Clappison, James

    Heseltine, Rt Hon Michael

    Clark, Dr Michael (Rochford)

    Hicks, Robert

    Clarke, Rt Hon Kenneth (Ruclif)

    Higgins, Rt Hon Sir Terence L.

    Coe, Sebastian

    Hill, James (Southampton Test)

    Colvin, Michael

    Hogg, Rt Hon Douglas (G'tham)

    Congdon, David

    Horam, John

    Conway, Derek

    Hordern, Rt Hon Sir Peter

    Coombs, Anthony (Wyre For'st)

    Howard, Rt Hon Michael

    Coombs, Simon (Swindon)

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

    Cope, Rt Hon Sir John

    Howell, Rt Hon David (G'dford)

    Cormack, Patrick

    Hughes Robert G. (Harrow W)

    Couchman, James

    Hunt, Sir John (Ravensbourne)

    Cran, James

    Hunter, Andrew

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

    Jack, Michael

    Curry, David (Skipton & Ripon)

    Jackson, Robert (Wantage)

    Davies, Quentin (Stamford)

    Jenkin, Bernard

    Davis, David (Boothferry)

    Jessel, Toby

    Day, Stephen

    Johnson Smith, Sir Geoffrey

    Deva, Nirj Joseph

    Jones, Gwilym (Cardiff N)

    Devlin, Tim

    Jopling, Rt Hon Michael

    Dickens, Geoffrey

    Kellett-Bowman, Dame Elaine

    Dicks, Terry

    Key, Robert

    Dorrell, Stephen

    Kilfedder, Sir James

    Douglas-Hamilton, Lord James

    King, Rt Hon Tom

    Dover, Den

    Knapman, Roger

    Duncan, Alan

    Knight, Mrs Angela (Erewash)

    Duncan-Smith, Iain

    Knight, Greg (Derby N)

    Dunn, Bob

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

    Durant, Sir Anthony

    Knox, David

    Dykes, Hugh

    Kynoch, George (Kincardine)

    Eggar, Tim

    Lait. Mrs Jacqui

    Emery, Rt Hon Sir Peter

    Lamont, Rt Hon Norman

    Evans, David (Welwyn Hatfield)

    Lang, Rt Hon Ian

    Evans, Jonathan (Brecon)

    Lawrence, Sir Ivan

    Evans, Nigel (Ribble Valley)

    Legg, Barry

    Evans, Roger (Monmouth)

    Leigh, Edward

    Evennett, David

    Lester, Jim (Broxtowe)

    Faber, David

    Lidington, David

    Fabricant, Michael

    Lightbown, David

    Fenner, Dame Peggy

    Lilley, Rt Hon Peter

    Forman, Nigel

    Lloyd, Peter (Fareham)

    Forsyth, Michael (Stirling)

    Lord, Michael

    Forth, Eric

    Lyell, Rt Hon Sir Nicholas

    Fowler, Rt Hon Sir Norman

    MacGregor, Rt Hon John

    Fox, Dr Liam (Woodspring)

    MacKay, Andrew

    Fox, Sir Marcus (Shipley)

    Maclean, David

    Freeman, Roger

    McLoughlin, Patrick

    French, Douglas

    McNair-Wilson, Sir Patrick

    Gale, Roger

    Madel, David

    Gallie, Phil

    Maitland, Lady Olga

    Gardiner, Sir George

    Major, Rt Hon John

    Garel-Jones, Rt Hon Tristan

    Malone, Gerald

    Garnier, Edward

    Mans, Keith

    Gill, Christopher

    Marland, Paul

    Gillan, Cheryl

    Marlow, Tony

    Goodlad, Rt Hon Alastair

    Marshall, Sir Michael (Arundel)

    Goodson-Wickes, Dr Charles

    Martin, David (Portsmouth S)

    Gorman, Mrs Teresa

    Mawhinney, Dr Brian

    Gorst, John

    Mayhew, Rt Hon Sir Patrick

    Grant, Sir Anthony (Cambs SW)

    Mellor, Rt Hon David

    Greenway, Harry (Ealing N)

    Merchant, Piers

    Greenway, John (Ryedale)

    Milligan, Stephen

    Grylls, Sir Michael

    Mills, Iain

    Gummer, Rt Hon John Selwyn

    Mitchell, Andrew (Gedling)

    Hague, William

    Mitchell, Sir David (Hants NW)

    Hamilton, Rt Hon Archie (Epsom)

    Moate, Sir Roger

    Hamilton, Neil (Tatton)

    Monro, Sir Hector

    Hampson, Dr Keith

    Montgomery, Sir Fergus

    Hanley, Jeremy

    Moss, Malcolm

    Hannam, Sir John

    Needham, Richard

    Hargreaves, Andrew

    Nelson, Anthony

    Harris, David

    Neubert, Sir Michael

    Haselhurst, Alan

    Newton, Rt Hon Tony

    Hawkins, Nick

    Nicholls, Patrick

    Hawksley, Warren

    Nicholson, David (Taunton)

    379

    Nicholson, Emma (Devon West)

    Steen, Anthony

    Norris, Steve

    Stephen, Michael

    Onslow, Rt Hon Sir Cranley

    Stern, Michael

    Oppenheim, Phillip

    Stewart, Allan

    Ottaway, Richard

    Streeter, Gary

    Page, Richard

    Sumberg, David

    Paice, James

    Sweeney, Walter

    Patnick, Irvine

    Sykes, John

    Patten, Rt Hon John

    Tapsell, Sir Peter

    Pattie, Rt Hon Sir Geoffrey

    Taylor, Ian (Esher)

    Pawsey, James

    Taylor, John M. (Solihull)

    Peacock, Mrs Elizabeth

    Taylor, Sir Teddy (Southend, E)

    Pickles, Eric

    Temple-Morris, Peter

    Porter, Barry (Wirral S)

    Thompson, Patrick (Norwich N)

    Porter, David (Waveney)

    Thornton, Sir Malcolm

    Portillo, Rt Hon Michael

    Thurnham, Peter

    Powell, William (Corby)

    Townend, John (Bridlington)

    Rathbone, Tim

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

    Redwood, John

    Tracey, Richard

    Renton, Rt Hon Tim

    Tredinnick, David

    Richards, Rod

    Trend, Michael

    Rifkind, Rt Hon. Malcolm

    Trotter, Neville

    Robathan, Andrew

    Twinn, Dr Ian

    Robertson, Raymond (Ab'd'n S)

    Vaughan, Sir Gerard

    Robinson, Mark (Somerton)

    Viggers, Peter

    Roe, Mrs Marion (Broxbourne)

    Waldegrave, Rt Hon William

    Rowe, Andrew (Mid Kent)

    Walden, George

    Rumbold, Rt Hon Dame Angela

    Walker, Bill (N Tayside)

    Ryder, Rt Hon Richard

    Ward, John

    Sackville, Tom

    Wardle, Charles (Bexhill)

    Sainsbury, Rt Hon Tim

    Waterson, Nigel

    Scott, Rt Hon Nicholas

    Watts, John

    Shaw, David (Dover)

    Wells, Bowen

    Shaw, Sir Giles (Pudsey)

    Whitney, Ray

    Shephard, Rt Hon Gillian

    Whittingdale, John

    Shepherd, Richard (Aldridge)

    Wiggin, Sir Jerry

    Sims, Roger

    Wilkinson, John

    Skeet, Sir Trevor

    Willetts, David

    Smith, Sir Dudley (Warwick)

    Wilshire, David

    Smith, Tim (Beaconsfield)

    Winterton, Mrs Ann (Congleton)

    Soames, Nicholas

    Winterton, Nicholas (Macc'f'ld)

    Spencer, Sir Derek

    Wood, Timothy

    Spicer, Sir James (W Dorset)

    Yeo, Tim

    Spicer, Michael (S Worcs)

    Young, Sir George (Acton)

    Spink, Dr Robert

    Spring, Richard

    Tellers for the Ayes:

    Sproat, Iain

    Mr. Sydney Chapman and

    Squire, Robin (Hornchurch)

    Mr. Timothy Kirkhope.

    Stanley, Rt Hon Sir John

    NOES

    Abbott, Ms Diane

    Bray, Dr Jeremy

    Adams, Mrs Irene

    Brown, Gordon (Dunfermline E)

    Ainger, Nick

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

    Ainsworth, Robert (Cov'try NE)

    Bruce, Malcolm (Gordon)

    Allen, Graham

    Burden, Richard

    Alton, David

    Byers, Stephen

    Anderson, Donald (Swansea E)

    Caborn, Richard

    Anderson, Ms Janet (Ros'dale)

    Callaghan, Jim

    Armstrong, Hilary

    Campbell, Mrs Anne (C'bridge)

    Ashdown, Rt Hon Paddy

    Campbell, Menzies (Fife NE)

    Ashton, Joe

    Campbell, Ronnie (Blyth V)

    Austin-Walker, John

    Campbell-Savours, D. N.

    Banks, Tony (Newham NW)

    Canavan, Dennis

    Barnes, Harry

    Cann, Jamie

    Battle, John

    Carlile, Alexander (Montgomry)

    Bayley, Hugh

    Clapham, Michael

    Beckett, Rt Hon Margaret

    Clark, Dr David (South Shields)

    Beith, Rt Hon A. J.

    Clarke, Eric (Midlothian)

    Bell, Stuart

    Clarke, Tom (Monklands W)

    Benn, Rt Hon Tony

    Clelland, David

    Benton, Joe

    Clwyd, Mrs Ann

    Bermingham, Gerald

    Coffey, Ann

    Berry, Dr. Roger

    Cohen, Harry

    Betts, Clive

    Connarty, Michael

    Blair, Tony

    Cook, Frank (Stockton N)

    Blunkett, David

    Cook, Robin (Livingston)

    Boateng, Paul

    Corbett, Robin

    Boyce, Jimmy

    Corbyn, Jeremy

    Bradley, Keith

    Corston, Ms Jean

    380

    Cousins, Jim

    Janner, Greville

    Cox, Tom

    Jones, Barry (Alyn and D'side)

    Cryer, Bob

    Jones, leuan Wyn (Ynys Môn)

    Cunliffe, Lawrence

    Jones, Jon Owen (Cardiff C)

    Cunningham, Jim (Covy SE)

    Jones, Lynne (B'ham S O)

    Cunningham, Rt Hon Dr John

    Jones, Martyn (Clwyd, SW)

    Dafis, Cynog

    Jones, Nigel (Cheltenham)

    Dalyell, Tam

    Jowell, Tessa

    Darling, Alistair

    Kaufman, Rt Hon Gerald

    Davidson, Ian

    Keen, Alan

    Davies, Bryan (Oldham C'tral)

    Kennedy, Jane (Lpool Brdgn)

    Davies, Rt Hon Denzil (Llanelli)

    Khabra, Piara S.

    Davies, Ron (Caerphilly)

    Kinnock, Rt Hon Neil (Islwyn)

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

    Leighton, Ron

    Denham, John

    Lestor, Joan (Eccles)

    Dewar, Donald

    Lewis, Terry

    Dixon, Don

    Litherland, Robert

    Dobson, Frank

    Livingstone, Ken

    Donohoe, Brian H.

    Lloyd, Tony (Stretford)

    Dowd, Jim

    Llwyd, Elfyn

    Dunnachie, Jimmy

    Loyden, Eddie

    Dunwoody, Mrs Gwyneth

    Lynne, Ms Liz

    Eagle, Ms Angela

    McAllion, John

    Eastham, Ken

    McCartney, Ian

    Enright, Derek

    Macdonald, Calum

    Etherington, Bill

    McFall, John

    Evans, John (St Helens N)

    McKelvey, William

    Ewing, Mrs Margaret

    Mackinlay, Andrew

    Fatchett, Derek

    McLeish, Henry

    Faulds, Andrew

    Maclennan, Robert

    Field, Frank (Birkenhead)

    McNamara, Kevin

    Fisher, Mark

    McWilliam, John

    Foster, Rt Hon Derek

    Madden, Max

    Foster, Don (Bath)

    Mahon, Alice

    Foulkes, George

    Mandelson, Peter

    Fraser, John

    Marek, Dr John

    Fyfe, Maria

    Marshall, Jim (Leicester, S)

    Galbraith, Sam

    Martlew, Eric

    Galloway, George

    Maxton, John

    Gapes, Mike

    Meacher, Michael

    Garrett, John

    Meale, Alan

    George, Bruce

    Michael, Alun

    Gerrard, Neil

    Michie, Bill (Sheffield Heeley)

    Gilbert, Rt Hon Dr John

    Michie, Mrs Ray (Argyll Bute)

    Godman, Dr Norman A.

    Milburn, Alan

    Godsiff, Roger

    Miller, Andrew

    Golding, Mrs Llin

    Mitchell, Austin (Gt Grimsby)

    Gordon, Mildred

    Moonie, Dr Lewis

    Graham, Thomas

    Morgan, Rhodri

    Grant, Bernie (Tottenham)

    Morris, Rt Hon A. (Wy'nshawe)

    Griffiths, Nigel (Edinburgh S)

    Morris, Estelle (B'ham Yardley)

    Griffiths, Win (Bridgend)

    Morris, Rt Hon J. (Aberavon)

    Grocott, Bruce

    Mowlam, Marjorie

    Gunnell, John

    Mudie, George

    Hall, Mike

    Mullin, Chris

    Hanson, David

    O'Brien, Michael (N W'kshire)

    Hardy, Peter

    O'Brien, William (Normanton)

    Harman, Ms Harriet

    O'Hara, Edward

    Harvey, Nick

    O'Neill, Martin

    Hattersley, Rt Hon Roy

    Orme, Rt Hon Stanley

    Henderson, Doug

    Patchett, Terry

    Heppell, John

    Pendry, Tom

    Hinchliffe, David

    Pickthall, Colin

    Hoey, Kate

    Pike, Peter L.

    Hogg, Norman (Cumbernauld)

    Pope, Greg

    Home Robertson, John

    Powell, Ray (Ogmore)

    Hood, Jimmy

    Prentice, Ms Bridget (Lew'm E)

    Hoon, Geoffrey

    Prentice, Gordon (Pendle)

    Howarth, George (Knowsley N)

    Prescott, John

    Howells, Dr. Kim (Pontypridd)

    Primarolo, Dawn

    Hoyle, Doug

    Purchase, Ken

    Hughes, Kevin (Doncaster N)

    Quin, Ms Joyce

    Hughes, Robert (Aberdeen N)

    Radice, Giles

    Hughes, Simon (Southwark)

    Randall, Stuart

    Hutton, John

    Redmond, Martin

    Illsley, Eric

    Reid, Dr John

    Ingram, Adam

    Rendel, David

    Jackson, Glenda (H'stead)

    Richardson, Jo

    Jackson, Helen (Shef'ld, H)

    Robertson, George (Hamilton)

    Jamieson, David

    Robinson, Geoffrey (Co'try NW)

    381

    Roche, Mrs. Barbara

    Taylor, Mrs Ann (Dewsbury)

    Rogers, Allan

    Taylor, Matthew (Truro)

    Rooker, Jeff

    Tipping, Paddy

    Rooney, Terry

    Turner, Dennis

    Ross, Ernie (Dundee W)

    Tyler, Paul

    Rowlands, Ted

    Vaz, Keith

    Ruddock, Joan

    Walker, Rt Hon Sir Harold

    Salmond, Alex

    Wallace, James

    Sedgemore, Brian

    Walley, Joan

    Sheerman, Barry

    Wardell, Gareth (Gower)

    Sheldon, Rt Hon Robert

    Wareing, Robert N

    Shore, Rt Hon Peter

    Watson, Mike

    Short, Clare

    Welsh, Andrew

    Simpson, Alan

    Wicks, Malcolm

    Skinner, Dennis

    Wigley, Dafydd

    Smith, Andrew (Oxford E)

    Williams, Rt Hon Alan (Sw'n W)

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

    Williams, Alan W (Carmarthen)

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

    Wilson, Brian

    Smith, Llew (Blaenau Gwent)

    Winnick, David

    Snape, Peter

    Wise, Audrey

    Soley, Clive

    Worthington, Tony

    Spearing, Nigel

    Wray, Jimmy

    Spellar, John

    Wright, Dr Tony

    Steel, Rt Hon Sir David

    Young, David (Bolton SE)

    Steinberg, Gerry

    Stevenson, George

    Tellers for the Noes:

    Stott, Roger

    Mr. Peter Kilfoyle and

    Strang, Dr. Gavin

    Mr. Gordon McMaster.

    Straw, Jack

    MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House welcomes the widespread indications of economic recovery in the United Kingdom at a time when many other major economies are in deepening recession; recognises that the interests of industry are at the heart of the Government's policy and acknowledges the comprehensive programme of training and employment opportunities for unemployed people that the Government has put in place; welcomes the Government's commitment to its Manifesto pledges including its commitment to improving the efficiency and effectiveness of public services through the Citizen's Charter; deplores the scare-mongering stories about public spending peddled by the Opposition; and applauds the Government for its determination to maintain low inflation, sound public finances and firm control over total public expenditure upon which a sustainable economic recovery depends.

    Council Tax
    Madam Speaker: I now call Mr. Secretary Curry—I mean, Mr. David Curry.
    10.28 pm
    The Minister for local Government and Planning (Mr. David Curry): I do not blame you, Madam Speaker, for being slightly confused; I am fairly confused about this myself. [Interruption.]I have never been modest when starting something: give me six months and we shall see.
    I beg to move,
    That the draft Council Tax limitation (England) (Maximum Amounts) Order 1993, which was laid before this House on 7th June, be approved.
    This debate is the last piece of local government finance business for the first year of the council tax. That tax is now fully in place and has widespread support. It avoids the unlimited bills of the old rating system and the problems of the community charge. It is fair to local taxpayers without being administratively burdensome for authorities.
    The successful introduction of the tax would not have happened without the help and close co-operation that we have received from local government. The council tax is a success story for which local authorities up and down the country can take much of the credit. The experience that we have all gained in working on it with local authorities has been fruitful, and we have built up trust and lines of communication between local and central government at all levels. My right hon. Friend the Secretary of State and I are determined to continue to build upon that approach.
    With regard to council tax capping, local government cannot—and, I believe, now does not—expect to be exempt from the need for the restraint of overall expenditure. last year local authority expenditure in England was £60 billion—that is £1,000 per head. Taking the United Kingdom as a whole, local authority expenditure accounts for a quarter of total public expenditure, and more than 9 per cent. of our domestic expenditure.
    However, it is not our aim that authorities should be capped. As in previous years, we announced provisional capping criteria in the autumn preceding budget setting. Our aim was to achieve as much as possible by setting out clear and fair guidelines in advance, so that the maximum was done by voluntary restraint, leaving as little as possible to be done by capping. But we made it clear that, should any authority budget too high, we would cap it, and hence safeguard council tax payers against excessive bills, and also safeguard the public expenditure position.
    In the event, 416 of the 419 English authorities have set their budgets within the cap. That is by far the highest number since capping began. The fact that 416 authorities have set affordable budgets and council taxes is further evidence of the sense and responsibility of local government.
    Of course, Government have had their part to play. This year, standard spending assessments increased on average by 3·1 per cent. at a time when inflation reached its lowest level for decades. We are satisfied that each authority's SSA this year is a fair measure for its spending on the basis of the most up-to-date information that we have. But we are already seeking improvements in SSAs,

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    and, as is well known, in the coming year we are undertaking a thorough review of the SSA and the area cost adjustment that is a component of it.
    We especially wish to be able to have regard to the new information available to us from the 1991 census, and to take advantage of the need to incorporate that more up-to-date information to consider how we can improve the SSA system as a whole. I have to be careful when I say SSA, because I am more used to talking about SSSIs, and I appreciate that SSAs are not the same thing.
    We have invited every local authority to submit any comments that it wishes to make on SSAs, or to put forward any evidence that it may have that would support changes in the method. Throughout the review my officials have had, and will continue to have, frequent discussions with the associations that represent local authorities. Our object is, with the help of local government, to obtain SSAs that we judge are the best and fairest measures for local authority spending given the information and data available to us.
    Mr. Jeff Rooker: When he conducts the review, will the Minister think it worth while to ask local authorities, especially education authorities, about discretionary funding to students in further or higher education? More than half the authorities in England have cut that funding, and that has had an especially bad effect on mature students with household responsibilities, who may he unemployed at the time. The fact that more than half the authorities have had to cut that discretionary funding in order to remain within the capping limits is of concern to Members on both sides of the House, but because the funding is discretionary, the information is not usually collected. The Government should take a hard look at the effect of the new council tax on discretionary funding.
    Mr. Curry: As I said, we are examining the whole methodology of the SSAs. I have encountered in my constituency in North Yorkshire the problem that the hon. Member for Birmingham, Perry Barr (Mr. Rooker) mentioned, so I recognise that it is a subject for concern. But I must make one cautionary statement. It would be wishful thinking to believe that one can carry out a review from which everybody will gain.
    If some authorities believe that they are being underpaid in the present system, there must, by definition, be others that are doing relatively well out of it. Therefore, when we correct the balance, we are likely to find a number of complainants and a number of beneficiaries. They may be different people, but I have no doubt that those who complain will wish to line up as vigorously as they do at present.
    I understand the point that the hon. Member for Perry Barr made. Nothing is excluded from the review, but, at the same time, we must make sure that it is practicable, that there is a time scale in which to do it, that local authorities are consulted and that the details with which they have to work are available to them as soon as that is possible within the constraints of the new budgetary timetable. The hon. Gentleman will understand that.
    What of this year's capping round? On 1 April my right hon. and learned Friend the then Secretary of State took his capping decisions. He had regard to all relevant considerations, including the budgets that authorities had set and the provisional criteria that he had announced to
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    the House on 26 November. He decided to adopt criteria for identifying the authorities in respect of which capping was necessary which broadly gave effect to those provisional criteria. Authorities were, therefore, selected for capping which had budgeted excessively or whose budget represented an excessive increase over the previous year.
    On the basis of the criteria, my right hon. and learned Friend identified three authorities—Castle Point, Gloucestershire, and Harlow—for capping. At the same time, my right hon. and learned Friend proposed for each of these authorities a cap, or maximum, for its budget.
    The toughest cap that we could propose would require a designated authority to reduce its budget so that it was no longer excessive or represented an excessive increase. But we could do that only where, having regard to the authority's individual circumstances, we believed such a reduction would be achievable—that is, that it could be made in such a way as to avoid significant disruption to essential services.
    In other cases, we would require only smaller reductions which we judged it would be right to demand of the authority, given its particular circumstances, in the financial year.
    In the circumstances of Harlow and Castle Point, we judged that it would not be right to demand the full reductions in a year for those authorities. For Gloucestershire, however, we proposed a cap which would require the full reduction. In terms of the council tax for a band D dwelling with two adults, our proposals meant for Harlow a tax reduction of £288; for Gloucestershire and Castle Point reductions of £55 and £18 respectively.
    Authorities were notified on 1 April of their designation, the general principles on the basis of which they were designated, and the amount of the proposed cap. They then had 28 days to tell us whether they accepted the proposed caps. If they did not accept, they could suggest an alternative cap and put forward a case in support of it.
    All three authorities suggested alternative caps. Castle Point and Gloucestershire wished to retain their original budgets. Harlow proposed a cap of around £2·1 million less than its original budget, but still £4·6 million in excess of the proposed cap.
    My predecessor met representatives of each of the three authorities to hear their oral representations in support of their cases. Before taking his decision, my right hon. Friend the Secretary of State considered all the points very carefully, including those made at the meetings.
    For Castle Point, whose difficulties arise solely from the need to meet in 1993–94 a £2·2 million deficit which was due to incorrect budgeting in previous years—
    Mr. Andrew Mackinlay: By whom?
    Mr. Curry: By the treasurer. For Castle Point, it was clear that the cap at the level proposed would be very tight. However, the authority told us that it was planning to generate substantial capital receipts during 1993–94 from asset sales. If we issued a statutory direction, Castle Point could use some of these receipts to pay for about £0·5 million redundancy costs that would otherwise be charged against their 1993–94 budget. We decided that it would be right to issue such a direction, and on this basis we concluded that a cap at the level originally proposed would be right for that authority.

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    For Harlow, all parties on the council agreed that a cap of more than £11·2 million was required. We considered Harlow's case and considered that, given the magnitude of the budget reductions—about 30 per cent.—and the relatively short time in which they must be made, the original proposed cap was too tight. We judged that a relaxation of £600,000 to a cap at £11·8 million would be appropriate given Harlow's circumstances.
    For Gloucestershire, we decided after very careful consideration of all available relevant information that the cap should be set at the level originally proposed.
    In all cases, we have undertaken an extremely searching analysis of the authorities' individual circumstances. We are satisfied that the caps that we have now decided are reasonable, achievable and appropriate in all the circumstances of the authorities concerned. In the one case in which we have relaxed the proposed cap—Harlow—the tax reduction for a band D dwelling with two adults is now £263 and for a band G dwelling, £438.
    If the order is approved by the House, we shall then serve the statutory notices on the three authorities formally setting their caps. Within 21 days thereafter they must reduce their budgets in line with the caps; new lower council taxes must be set as soon as practicable afterwards. Each of the capped authorities must meet from within its budget the costs of issuing the new council tax bills. It will be for each authority to decide how to live within its budget, but we are satisfied that they will be able to provide an appropriate level of service if they choose to do so.
    Ideally, of course, no authority would be capped. But we should not let the fact that we have needed to cap three authorities detract from the fact that it is a considerable achievement for local government to bring in the council tax at an affordable level throughout the country. For the council taxpayers of Castle Point, Gloucestershire and Harlow, the order will mean reductions in their bills and it will require those authorities to curb their excessive budgeting, and I commend it to the House.
    10.40 pm
    Mr. Jack Straw: The Labour party is wholly and unequivocally opposed to the capping of a council's budget. It is an abuse of central power, it demeans democracy, it undermines the right of local people to decide what services they are ready and willing to pay for, it is in breach of one promise after another from the Conservative party, it serves no economic purpose, and it has not worked in its own terms.
    The Conservative party was elected 14 years ago on pledges to give back power to local people. Those pledges have been broken. Also, 144 separate Acts of Parliament have been forced through in those 14 years, each cutting councils' power a little more, each transferring more power to Whitehall or to the unelected quango state. Although only three authorities are specifically named in the order, all councils—all 419 of them—have been capped this year. That is what every council understands.
    Former Councillor Bill Dixon-Smith, the former leader of the Association of County Councils, who lost his seat in Braintree when the Conservatives were swept from power in Essex, not least in revulsion against the capping of two authorities in that county, pointed out that the capping
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    powers given to the Government and their use of them has meant that in every case the council tax has been set not by local authorities but by central Government.
    Capping orders are but the culmination of the transfer of power from local taxpayers to the central state. Such orders give greater power to the Secretary of State over democratically elected local councils than any powers otherwise exercised outside wartime. Given the seriousness, given the fact that hundreds of people will lose their jobs as a direct result of the order, given that thousands will suffer through reductions in services and given, too, that the Secretary of State actually signed the order and is present, I must say to the Secretary of State that it is outrageous that he has left it to his Minister to speak to the order rather than doing so himself.
    I welcome the new Minister to his job and I wish him well. Had the Secretary of State spoken, I would have welcomed him to his new job, but I can understand his reticence, for this Secretary of State was once the Minister for the community charge—the apostle for the poll tax, who evangelised the new system in even less guarded terms than his predecessor in both jobs, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard).
    Mr. Mackinlay: The right hon. Gentleman has never been a councillor.
    Mr. Straw: He would not have been elected as a councillor.
    The Secretary of State said that the poll tax was
    "by far and away the best alternative to domestic rates."
    He made a speech of 27 pages—I have every page of it with me, in case anybody doubts it—which began with the words
    "The morality of the community charge".
    He claimed in those 27 pages that the poll tax was "morally superior" to the domestic rates. [Interruption.] He obviously believes it. He said:
    "The community charge really will put the community in charge."
    He went on to tell the Conservative party conference on 13 October 1988 [Conservative Members were cheering in the aisles at it [that the poll tax was
    "the clearest, simplest and fairest local tax ever. We can go out and win with it."
    Wiser counsels in the Conservative party knew him to be wrong.
    The Secretary of State did not devote his florid rhetoric only to the poll tax. He devoted it to any tax based on capital values. In case the Secretary of State has not spotted this, I point out that the new council tax is based solidly on capital values. In his speech to the Conservative Greater london local government conference—that may be an oxymoron these days—on 22 November 1988, the Secretary of State said:
    "Rate bills based on the value of a home would be a disaster for London. Capital value rates would be a swingeing tax on home ownership."
    What does he say about that now?
    The Secretary of State—this comes directly to the point —said in an interview in the Municipal Journal in August 1988 that the new financial arrangements that he was piloting would lead to very much more independence. He then talked about his belief in the Tory view of local control and local power. In case my hon. Friends have missed that, I shall repeat those words.
    I sense that the Secretary of State claims not to have changed his mind; perhaps he still takes that Tory view of

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    local control and local power. The Secretary of State has an extraordinary set of views. He is in favour of the poll tax as the fairest tax of them all and he is against any idea of a council tax or a capital tax, yet he proclaims the importance of independence, local power and local control.
    The reality when the Secretary of State made those speeches and the reality even more today is that the Government have removed local control and local power to a point where the major decisions are made not by local councillors but by the central state. As Conservative Woking said in The Independent in January:
    "capping has removed the ability of elected councillors to pay for services that local residents want and have voted for."
    The capping system is patently undemocratic. It serves no wider economic purpose in the control of public expenditure. If the Minister, who confessed to being confused when he opened the debate, wants to spend his next six months learning the job, I modestly advise him to read the Treasury's White Paper issued in 1988 called, quaintly, "A New Public Expenditure Planning Total". In that White Paper, the case not just against capping but against central Government even collecting the figures for what local authorities spend out of their own resources is set out, page after page.
    The Prime Minister, when Chief Secretary to the Treasury, was the author of that White Paper. He pointed out that other countries that have more successful economic policies than we have do not have capping. In some federal countries, such as Germany and the United States which are both unquestionably more successful than us, the federal constitutions do not allow central Government to think about the powers that have been taken here.
    The Minister might also look at the answer that the Chief Secretary gave me on 11 January 1993. I asked him to assess the effect on jobs and services, on interest rates and on other major macro-economic indicators of various changes in local authority spending. I assumed that that had been done before the Government decided to go down the road to central control. The answer was that the Treasury had not done the work and that it could not give an answer.
    The Minister could also look at the results of the report that the london School of Economics local government unit published in the local Government Chronicle last July. It pointed out that, while capping led to enormous disruption to councils and to local democracy in any one year, over time it had not affected the trend in local government spending because all authorities were forced either by direct Government control or through political pressure to spend at the level of the standard spending assessment.
    This year, capping has already led to the cutting of thousands of jobs in local authorities. I remember the then Secretary of State in December claiming that no jobs would be lost as a result of his settlement. It is interesting to note the Minister's silence tonight in the light of the evidence from across the country that thousands of jobs have indeed been lost.
    In the three authorities named in the order, there is a very serious situation. Gloucestershire is a relatively low-spending authority. When it was Conservative-controlled, it was a byword for parsimony and it had the worst record of any authority in the country for the provision of nursery schools and classes.
    Ms Jean Corston: Does my hon. Friend agree that it is outrageous that Gloucestershire should be on the list, particularly as the Minister has just told us that the Secretary of State's criterion for deciding whether a county should be on the capping list was that a significant reduction in essential services should be avoided? Gloucestershire has not even got nursery education which we in the adjoining county of Avon have. Which essential services is it being suggested that the people of Gloucestershire should do without? Does my hon. Friend agree that those are the sorts of question that the Minister should be asking?
    Mr. Straw: My hon. Friend has far more knowledge of Gloucestershire than I have, and of the comparison between Avon, which has been an excellent Labour authority—incidentally, it has not been capped—and Gloucestershire, which has spent the last few years away from Conservative control attempting to deal with the legacy of appallingly low services that it faces, with no nursery education at all.
    The chief executive has written to the Department of the Environment to say that 250 jobs will be lost as a direct result of the proposals, in addition to the 800 jobs which were lost in previous years as a result of capping. Of those 250 jobs, 150 were among teachers—teachers and essential support workers. How will the loss of 150 jobs in Gloucestershire, which the Government are forcing on that county, lead to an increase in educational standards about which we hear the Conservative party parroting day by day?
    Mr. Roger Knapman: Is the hon. Gentleman aware that Avon council is so marvellous that every inhabitant is voting to do away with it and to revert partly to Somerset and partly to Gloucestershire?
    Mr. Straw: No, I am not aware of that, and nor are the people of Avon, who gave their verdict on the Conservative party in Avon, as across the rest of the south-west, on 7 may.
    My hon. Friend the Member for Thurrock (Mr. Mackinlay), who speaks for the whole community of Essex—
    Mr. Mackinlay: The south-east.
    Mr. Straw: My hon. Friend speaks for the south-east as well. He speaks for my home county, Essex, and will deal in more detail with the position in Harlow and Castle Point.
    Like many other local authorities on a low budget, Harlow was not subject to any capping until changes in the legislation in 1990–91. It has provided excellent services. As the hon. Member for Harlow (Mr. Hayes) should be aware, Harlow is a new town with significant social problems. It has the highest level of unemployment in the county, and its manufacturing base has been seriously undermined in the past 14 years. Its council has sought to make a reality out of the new town and to build community services.
    The capping order will lead to a reduction in Harlow's budget, even after the adjustment, of about 47 per cent. It is expected to be able to halve its budget in one year. Already, there have been 200 redundancies. As a consequence of the cuts, there will not be an overall cut in public spending of the sort the Minister is seeking. It is likely that £2 million of expenditure that Harlow was

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    previously bearing because of the parsimony of Conservative-controlled Essex county council will be borne by Essex county council, which, happily, is no longer in the Conservatives' control.
    There will be big increases in charges for elderly people's bus passes and sheltered accommodation. As a gentleman from Harlow said to me today, whatever he gains on the swings by way of a cut in his council tax bill, he will lose on the roundabouts because he will pay out of his pocket through direct charges for services that he previously received for nothing. Various leisure and support services are to be cut.
    Mr. Jerry Hayes: I am delighted that the hon. Gentleman mentioned roundabouts. It is almost legendary in Harlow that a couple of years ago the Labour-controlled council—which has clear priorities in such matters—spent £28,000 on planting flowers on the roundabout in Harlow. The hon. Gentleman committed a sort of Freudian slip. The council has taken away its grant to the citizens advice bureau, while spending £130,000 on a photocopier. Is that the sort of council and the sort of policies that—[Interruption.]It is all very well the hon. Member for Blackburn (Mr. Straw) waving me away, but those are the sorts of question to which the people of Harlow need answers.
    Mr. Deputy Speaker (Mr. Geoffrey lofthouse): Order. The hon. Gentleman is expecting to catch my eye later in the debate. If interventions are of that length, he will probably not be successful.
    Mr. Straw: If that is the best the hon. Gentleman can do, I look forward with great interest to his speech. What is wrong with spending money on flowers—on roundabouts or anywhere else? Why do we need the full panoply of the central state to determine whether local electors should be allowed, out of their own pockets, to spend a few thousand pounds of flowers? I am delighted when Blackburn borough council spends money on flowers. When lambeth council recently had to cut the money it was spending on flowers, local Conservatives were the first to complain.
    The situation in Castle Point was glossed over. It is the only Conservative-controlled authority among the authorities that we are discussing. It has the smallest overall budget—£500,000 means far more to Castle Point than it does to Harlow or Gloucestershire. The cap is to be kept on, but—hey presto!—Castle Point is being allowed to spend £500,000 of capital receipts not for the purposes that the Chancellor proclaimed in his autumn statement —creating jobs and building houses—but on redundancies. That is the ultimate perversion of economic policy: capital being spent, not to create jobs, but to destroy them.
    No system of central Government control over local spending is acceptable in a democracy, but what makes this control all the more outrageous is the fact that it is based on the so-called system of standing spending assessments, which are capricious, incomprehensible, unfair and politically biased. The system makes Westminster, Kensington, Chelsea and Cheltenham more deprived than Hartlepool, Barking, Walsall and Stoke. It makes no allowance for long-term unemployment or for the incidence of ill health.
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    The system has preposterous consequences. It has been damned by the Audit Commission, especially for the way in which the SSAs are now used for purposes for which they were never intended. Today they are used, as the Audit Commission report "Passing the Buck" pointed out, to distribute 80 per cent. of total local authority spending. The system was designed at a time when less than 50 per cent. was distributed in this way. Today, the system is used to exert central control over total local government expenditure, but it was never designed for that purpose.
    Ministers admit that the system is flawed. That is why the Minister said that the Government are setting up a review, but the last thing he will do is make it independent. The Government know that if a fair system of SSAs were established, we would end the jobbery inherent in the system which results in local authorities such as Westminster and Wandsworth benefiting unreasonably at the expense of other authorities that need the money.
    Mr. David Clelland: Is my hon. Friend aware that if Labour-controlled Gateshead council had been given the same SSA as Westminster was this year it would have been able to set a zero council tax for the next two years; or that if Labour-controlled Newcastle city council had been given the same SSA as Wandsworth, far from setting a zero rate, it would have been able to give council tax payers money? Is he confident that the system will be corrected under the so-called review?
    Mr. Straw: I am sorry to tell my hon. Friend that I have no such confidence. Wandsworth received, in addition to the usual largesse, £30 million of transitional relief. That amounted to one tenth of the relief for the entire country —enough to plant flowers, not just on every roundabout in Gateshead, but beside every road in the country. The hon. Member for Harlow has not complained about that.
    Shorn of all its economic mumbo-jumbo, the Conservative case for capping comes down to claims that central Government have—I quote from their consultative document—
    "the duty to protect local taxpayers from unacceptably high bills."
    In February, the former Secretary of State said:
    "we must … hold faith with the local taxpayers, for whom capping is an important protection."—[Official Report. 3 February 1993; Vol. 218, c. 342.]
    In the debate on 3 February, the hon. Member for Harlow said:
    "The whole point of the cap is to protect the people in Harlow."—[Official Report, 3 February 1993; Vol. 218, c. 356.]
    There is some profound arrogance for the House to digest. What happens if people in Harlow, Gloucestershire or even Castle Point take a different view from the self-appointed guardians of their purses in Whitehall and Westminster? Are people to be allowed a say about whether they want protection, or will they get it whether or not they ask for it?
    Mr. Paul Marland: We do want it.
    Mr. Straw: The hon. Member for Lloyd's says that they do want it. The local elections last month were fought on the issue of which party gave value for money and decent services. There is no better witness to that than the press notice from the right hon. Member for Sutton Coldfield (Sir N. Fowler), who is the chairman of the Conservative party when he is not directing Group 4. He said:

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    "For once, I am happy to agree with Labour. The decisive factor in this campaign should be which party will provide local services at the lowest cost to local people."
    We fought the campaign on that issue, and the Conservative party got its answer on 7 May. Across the country Conservative policies and Conservative capping were decisively rejected by voters. In Gloucestershire the Conservative party lost 13 seats. In one night, it went from being the largest party to being the smallest. In Essex, the Conservatives lost 25 seats.
    Mr. Marland: No.
    Mr. Straw: That is right. We understand the hon. Gentleman's problems and do not want to intrude on his private grief. Obviously, he has so many problems on his mind that he has not bothered to look at the library brief or read the local paper.
    The rout was even more dramatic in Essex where, as I have said, the Conservatives lost 25 seats. Labour went
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    from being the smallest party to becoming the largest. Nowhere was the election more closely fought than in Harlow, thanks to the forensic skills of the hon. Member for Harlow. He fought against the district council's record and in favour of capping. As a result, the Conservatives in Harlow were wiped out. They lost their one remaining seat.
    The people in Gloucestershire and Essex have spoken. They do not want the protection of this incompetent and politically corrupt Government. They do not want capping. They want decent services, and they are ready to pay for them. The new Secretary of State is keen on morality in taxation. Perhaps he will remember that the legitimate case for capping was crushed on 7 May. Capping is undemocratic and will lead, as it has already led, to the loss of thousands of jobs. It will harm many innocent people. It is an abuse of power by a contemptible Government, and it must and will be opposed. We shall vote against it.
    Mr. Deputy Speaker: There are 56 minutes remaining for this debate and no fewer than eight hon. Members, including Front-Bench spokesmen, hope to catch my eye. With co-operation on the length of speeches, all hon. Members who wish to speak may be successful. It is up to hon. Members themselves.
    11.3 pm
    Mr. Jerry Hayes: It is wondrous to follow the hon. Member for Blackburn (Mr. Straw) who is the magician of the Opposition because he never fails when he appears with his top hat to bring out a dead rabbit. What he said sums up very well the position in Harlow. The hon. Gentleman said that at the local elections the people of Harlow were talking about this wicked Government and their capping. He was probably worried about more important matters—such as the crisis over the leadership of his party, the unions and perhaps his re-election to the shadow Cabinet—and overlooked one or two basic issues.
    Here are the facts. There was a swing to the Conservatives in Harlow of 2·1 per cent.—probably the only place in the whole country, apart from Buckinghamshire. [Interruption.] We are talking about democracy, but the Opposition do not want to listen to the facts. There was a swing against Labour of 4·3 per cent., which says it all. The people of Harlow will be very grateful—[Interruption.] Opposition Members are not prepared to listen. What a great shame, especially considering that the hon. Member for leeds, West (Mr. Battle) trained for the priesthood.
    The overwhelming majority of people in Harlow will be delighted if we have capping, given that the Labour-controlled council spent £24 million last year. The council blew its reserves because it thought, whimsically, that Labour would win the general election and bail it out. Nothing was left. From where was it all going to come? The people of Harlow. People in band C would have to pay more than £800 and people in band D more than £1,000. I have received hundreds of letters from pensioners on very low incomes just above income support who would have to pay £1,400 a year, and for what? That is what depresses me most of all.
    The hon. Member for Blackburn is an Essex man; he lives just down the road from where I used to live. He knows Essex and the people of Harlow—[Interruption.] I still live in Essex, 20 minutes up the road from him. If the hon. Member for leeds, West would pay attention and listen, he might learn something.
    The Opposition support what the council did in Harlow. Four years ago, it spent £28,000 on flowers for one roundabout. It was not for the whole of Harlow, but for one roundabout. At the time, the council was saying that it had to close old people's homes and reduce provision for old people. The hon. Member for Blackburn would not answer questions about that, because he was too ashamed. The council closed down the citizens advice bureau, yet it spent £130,000 on a photocopier. [Interruption.]
    I am sorry that Opposition Front-Bench Members find it funny. I find it sad, because jobs are going to be lost because of the incompetence of Harlow council. The Labour-controlled council was warned 10 years ago by me and by Tory councillors that it should bring in advisers to
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    see where expenditure could be gradually brought down. The council ignored that advice, not at its peril but at the peril of hundreds of workers in Harlow. I regard that as an utter disgrace.
    I have spoken on many occasions in the House about the legendary incompetence of Harlow council and I will not go back to that now. We are debating the spending cap, but the crisis in Harlow is due to the incompetence of the ruling Labour group, whose idea of prudent financial policy was to meet more than half its revenue spending during the past three years from reserves and interest and to carry on spending at four times its standard spending assessment until the money ran out.
    The ruling Labour group had no strategy for meeting a 55 per cent. hole in its income this year. It deliberately created the crisis by totally exhausting its reserves last year; it is now trying to blackmail the Government and national and local taxpayers into picking up the tab for its mistakes. Even if there were no cap for small councils this year, Harlow would be facing the same crisis—a massive 55 per cent. reduction in its income to meet revenue spending and no means of filling it, except by robbing its own citizens, particularly pensioners.
    What is the ruling group's attitude to collecting local tax? A recent survey showed that Harlow was the ninth worst council for collecting the community charge and that it has the 352nd worst performance in providing information about the council tax. The council's excuse was, "Perhaps we weren't ready." All credit to Harlow council for considering ways of improving the collection of the poll tax—but it did that on the very day that the last instalment was due, so it was a worthless exercise.
    The first person in Harlow to be prosecuted for non-payment of the poll tax was the council's leader, Mr. Richard Howitt, who might be listening to this speech or might read it. I suppose that he has done the most sensible thing—
    Mr. Marland: Moved to Wandsworth.
    Mr. Hayes: No, but he wants to move to Europe. He has put forward his name as a European Parliament candidate; he is the original Euro-evacuee—not that he will be elected, of course.
    Labour-controlled Harlow council did not send out its council tax bills until after the local elections. In view of the figures that I gave the House, I wonder why. Its bills were the highest in the country and were sent out two months after those of everyone else.
    Harlow's bills were two and a half times higher than the next highest, five times higher than the average for Labour-controlled district councils, six times higher than the average for all district councils and seven times higher than the average for Conservative-controlled councils. Harlow had to inflate its bills by nearly 60 per cent. to cover uncollected community charges. Caring, Labour-controlled Harlow council responded to that crisis of its own making —I hope that Labour Members do not laugh at this—by increasing its income by introducing an extra charge of £5 per week on the frail and elderly who live in warden-assisted, sheltered accommodation.
    Harlow argues that it must maintain spending at four times its standard spending assessment because of the recession, and then expects those paying council tax to be immune from the same recession to meet band C bills nearly 50 per cent. higher than last year, when inflation is

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    running at 1·3 per cent. The council has the audacity to include in its special pleading the statement that the business rate on its own properties increased this year, yet in all its propaganda and meetings with Ministers, there was not one word of consideration about the impact of a 50 per cent. increase in local taxation on local people.
    The council persuaded one of its pet trade unions, the National Association of local Government Officers, to stump up £2,000 for a totally bogus report. It employs a policy unit at a cost of £1 million a year but ignores its special advisers. I refer in particular to the council's treasurer, who warned that the use of reserves at the current rate would exhaust the general reserve by 31 March 1993. The council did a courageous thing—it sacked him. He is gone.
    We hear a great deal from Labour about democracy, and from the shadow Secretary of State about letting the people have their say. Recently, Harlow's controlling Labour group tried to gag Conservative and liberal Democratic councillors by unilaterally removing their voting rights on committees.
    Mr. Mackinlay: They are not allowed to do that.
    Mr. Hayes: The hon. Gentleman has said something sensible, and I hope that it will be recorded in Harlow. For the sake of Hansard, the hon. Gentleman said that they are not allowed. Of course not, but that is the sort of arrogance we have come to expect. That is precisely what was done—I have the letters to prove the truth of that, if the hon. Gentleman wants to dispute it. I am delighted that, in a few moments, we shall have the great joy of hearing from the hon. Member for Thurrock (Mr. Mackinlay). Essex holds its breath.
    Dame Elaine Kellett-Bowman: Has my hon. Friend noticed the phenomenon that Labour councillors in opposition always believe in open government, whereas Labour councillors in power believe in secrecy?
    Mr. Hayes: My hon. Friend is entirely right about the arrogance and corruption of power. There is no excuse for telling councillors in opposition that they do not have the right to vote, but that is precisely what Harlow council has done.
    Thurrock has a standard spending assessment of £87·27 per head, while poor old Harlow has a miserly and unfair £103·37 per head. As for revenue support grant, Thurrock receives £28·74 in tax, while hard-done-by Harlow must scrape by with only £45 per head. Perhaps, when he is given his turn, the hon. Member for Thurrock will tell us how on earth his local authority manages to provide services with such amazingly low levels of support, and why Harlow cannot.
    Harlow council spends £19,000 every year examining its daft proposal for eight mini-town halls. It is called democracy in decentralisation. The council obtains its advice from Dr. Derek Hawes, of the school for advanced urban studies at Bristol university. I have known Dr. Hawes for many years; for more than 27 years he ran housing splendidly in Harlow. He is a good local government officer, and I suspect that until 10 minutes ago he was advising Harlow council.
    I sought Dr. Hawes's advice, because he knows more about the government of Harlow than anyone in it. In a letter to me, he wrote:
    "As to Harlow: the first thing is to say that it is perfectly feasible to produce good and efficient local services for a
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    budget of £11·5 millions, if only they would accept that they should do the basics well and cut the extravagances … In the medium term they need to dispose of the housing stock in a series of planned disposals to housing associations, perhaps retaining the sheltered service and developing the 'enabling' and care-in-the-community dimensions. On the assumption that a unitary authority is formed in due course, covering a wider area of West Essex, this would be an important ingredient in developing care services with Health and Social Service agencies."
    That says it all. That man effectively ran housing and social services in Harlow for 27 years; he is an expert in local government, and advises on local government; he advises Harlow council. He says that what the Government are doing for £11·8 million can be done well for £11·5 million. I commend the motion to the House.
    11.17 pm
    Mr. Andrew Mackinlay: We must not only consider the three councils that are the primary subject of the order; as my hon. Friend the Member for Blackburn (Mr. Straw) pointed out, every local authority is affected by it, because if the House rejected it tonight, authorities up and down the country would be liberated and allowed, in subsequent years, to fix the budgets they considered appropriate to promote and protect their communities. Therefore, a great deal is at stake.
    Among the local authorities that are not included in the order, but are nevertheless affected by the capping regime, is my own council, Thurrock—referred to earlier by the hon. Member for Harlow (Mr. Hayes). It has struggled and is suffering; it had to make painful decisions in order to achieve a budget below the capping limit. I commend the political courage and judgment of Councillor Jimmy Aberdein and Thurrock's controlling group—and, indeed, the many Labour-controlled councils up and down the country that have had to make similar painful, heart-breaking decisions to come within the capping limit.
    The Minister has said that he is prepared to look again at the formula by which standard spending assessments are arrived at. It is my council's view that it has been denied, because of the existing Government formula, something like £3·5 million. The formula is an absurd, unfair and crude mechanism which has been adopted by the Government in order to arrive at the standard spending assessments, with all their discrimination in favour of some of the councils controlled by their friends and to the disadvantage of many other councils, including areas which are poor, such as my own area of Thurrock in Essex.
    Before I move away from Thurrock, I want to point out that my council covers a relatively poor area. Its people, are being deprived of the benefits which would have accrued from their council's innovation and enterprise in conceiving such developments as lakeside, had the Government not altered the rating system. Thurrock ratepayers would have been advantaged by many millions of pounds had the system not been tampered with. It is a great loss to a poor area when its people cannot benefit from the enterprise and initiative shown by the Labour-controlled Thurrock council. They have been robbed.
    The hon. Member for Harlow (Mr. Hayes) referred to my council and tried to compare it with his own, but it is like trying to compare an apple with an orange. One of the things that he should recognise after representing Harlow for so many years is that Harlow is quite different from some other areas because it is a new town. The broad

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    thrust of the grounds for the appeal which the Minister spurned and which was submitted by Harlow council on behalf of Harlow people was that new towns have special problems.
    There was also an unspoken but implied contract between Governments, both Conservative and Labour, which created, supported and sustained new towns with the people they sought to attract to live in them. There was a commitment that residents would be able to enjoy pleasant and healthy surroundings, attractive places in which to bring up their children and in which to retire. Such a quality of life was part of the deal in encouraging those people to come and spend their lives in the new towns. It is that contract, that concordat, that the Government are ratting on tonight by the order which will cap Harlow.
    Mr. Rooker: My hon. Friend reminds me of one of my visits to Harlow a couple of years before the general election, when I was dealing with community care for the Opposition. Harlow council had put in place one of the finest day care centres that I saw in the whole of the country. Yet Harlow was not a social services authority. It had been forced to provide it because Essex county council did not wish to do so. It is one shining example of what Harlow did for its residents above and beyond its statutory duty, to meet a need that was not provided for by the then Tory-controlled county council.
    Mr. Mackinlay: I am grateful to my hon. Friend, because he makes a point that needs to be reiterated tonight. Harlow's Labour council was using what limited powers it had to supplement the deficient services provided from Chelmsford by the Conservative-controlled Essex county council. I hope that in future that will be remedied, but the Conservative Essex county council was denying important and essential services to people in Harlow and in other parts of the county, including my own borough of Thurrock.
    Mr. Hayes: If that were true, why is it that Harlow Labour party did not send a deputation to Essex county council to ask for those services until December 1992?
    Mr. Mackinlay: I do not know where the hon. Member has been, but the Labour party throughout the county of Essex has been protesting about the acute deficiencies of the county council's services and the fact that it has been spending way below even this mean Government's assessment of an appropriate level of spending. Those Conservative county councillors have been found out and discredited. The Conservatives who hitherto controlled Essex county council have been rejected by the electorate.
    I am deeply concerned about the high level of unemployment in Essex. It will be aggravated by the capping of Harlow and Castle Point, where many of my constituents work. The level of unemployment in Harlow is at an unprecedented level, and it will be made worse by the hon. Member for Harlow going into the lobby tonight to support the Government's capping of his local authority. He will be faced with the charge that his performance tonight resulted in additional unemployment in his constituency and throughout the county of Essex.
    New towns are unique. They were designed to be attractive. An important feature of new towns is their open
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    spaces, with flowers and trees, and their areas for recreation. This capping order will result in those features having to be neglected. The hon. Member for Harlow rubbished the fact that Harlow had decided that it was appropriate to allocate some money for the provision of flowers. Expenditure of that kind has always been implicit in the concept, design and ethos of new towns.
    The age balance in new towns is, by their very nature, distorted. Harlow in particular will have to face the fact that it has a higher than average aging population. Homelessness there is increasing, due to the inability of the council to build homes for families to rent. The nature of new towns always was that they should be allowed to develop so that children brought up there could stay there. Homelessness, however, is rising in Harlow, and it will be aggravated further by the order.
    Tragically, extensive leisure facilities will be lost. They serve not only the people of Harlow but those who live elsewhere in Essex and in Hertfordshire, including people who reside in Conservative-controlled areas and who legitimately use Harlow's recreation and leisure facilities.
    In view of what the hon. Member for Harlow said, it is fair to place on record the fact that Harlow council has been highly commended for its efficiency by a number of important agencies. The council has recognised the political reality that the Government have put a pistol to its head. Over the past three years, therefore, it has made efficiency savings of £2 million, even though, since 1979, the people of Harlow have been denied resources amounting to about £31 million, due to the Government's rate support grant machinations. The capping limit which is being dictated to the council tonight means that its budget will in reality be nearer £9·5 million, rather than the £11,800,000 that is stated in the order. The consequences will be devastating for many people who live in that area.
    The decrease in concessionary fare facilities will lead to the use of buses going down while fares go up. That will have a knock-on effect. I have referred already to the loss of recreational facilities. Play schemes, swimming pools, day centres for the elderly and handicapped and centres that give help and advice to families will also be closed. That is a tragedy, and ultimately the charge for those losses must be laid against the hon. Member for Harlow.
    Trevor Brooking, a former captain of England football team and an Essex resident, said of Harlow council:
    "I was very impressed by the quality, range and level of sporting and recreational facilities provided by Harlow Council. I am concerned for the future well-being of local people, should services be cut as a result of reduced finance."
    That should be fully understood by the House. We should also take into account the general attitude of Conservatives in Harlow, whom I see represented by the Trojan horse, the hon. Member for Harlow, who has betrayed the people of the town.
    The minority Conservative group in Harlow produced a bogus alternative budget, which no doubt it sent to the Secretary of State. Not only is it ill informed, but it is without substance. Had the council implemented that so-called alternative budget, it would have been acting illegally, as the budget excluded provision for debt charges and other unavoidable charges. Despite that, the so-called alternative budget exceeded the capping limit by about £1 million.
    Meeting the limit would have required 85 per cent. cuts in the voluntary sector, closure of family centres and a reduction in many other important amenities. When the

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    record of this debate is read in Harlow, I hope that residents will realise that not even Tory councillors were able to meet the Government's unreasonable criteria, as reflected in the orders.
    My hon. Friend the Member for Blackburn (Mr. Straw) challenged the Government and the hon. Member for Harlow to show their mandate for supporting the order. They have not been able to answer the fact that, for almost three decades, Labour has been returned to control Harlow council, and that, as recently as a few weeks ago, it was overwhelmingly supported in the county council elections. It is a painful fact that the hon. Member for Harlow was elected on 9 April 1992, but he was elected on a bogus prospectus, which we debated and exposed earlier today. Many Conservative Members were elected on a false and dishonest—or, to use a parliamentary word, fraudulent—programme.
    Another area must be mentioned. It will not have escaped your attention, Mr. Deputy Speaker, that, rather unusually, and no doubt to the embarrassment of the Government, one of the orders is against Castle Point, which is a Conservative-controlled council. Indeed, it has been under Conservative control since the time of the ark. It is being capped tonight. It is not unreasonable for hon. Members to ask why. From a sedentary position, when the Minister was speaking, I shouted out, "Why has this cap been imposed?" I do not know whether it was recorded by the Official Report, but the Minister said that it was the fault of the treasurer.
    That was breathtaking and somewhat cowardly, especially as the treasurer cannot defend his position here. The Minister did not take account of the comments of the right hon. Member for Kingston upon Thames (Mr. Lamont), who said earlier today, "I am astonished how we in this place blame public officials for the decisions that we politicians take."
    If something is wrong at Castle Point—I assume that there is, or we should not be debating the order—we have a right to full disclosure of what has gone wrong and who is to blame. I look forward to hearing the hon. Member for Castle Point (Dr. Spink). One cannot escape the fact that ultimately Conservative councillors must be to blame for the shambles at Castle Point. I hope that the House will receive a full and frank disclosure. If that is not forthcoming, there should be an independent inquiry into what has happened there.
    I hope that the House will agree that the order is unfair and inappropriate and that it discriminates against ordinary people. It is time that the House rejected capping. We should also reject the order to send out a message of hope, that there will be a change in the local government regime in the not too distant future.
    11.35 pm
    Mr. Paul Marland: I am saddened by the fact that I have to speak tonight because Gloucestershire county council need never have been charged-capped as there are many other options available to it.
    I am sad for the schoolchildren of Gloucestershire because the axe will fall on them as a result of the liberal-Labour mishmash of government. It is a disgrace that the liberal-Labour coalition intends the axe to fall on
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    the 4,200 teachers in Gloucestershire. Gloucestershsire county council employs 5,800 non-teaching staff but the huge reduction will not be made among their number.
    The appalling situation in Gloucestershire has arisen not in the past few years but in the past eight years since the Conservatives left office. Horrendous debts have built up. They have risen from a mere £25 million to £125 million under the Labour-Liberal coalition. It now costs £1 million a month to service those debts.
    Mr. Knapman: Will my hon. friend confirm that, within a very short space of time, the liberal Democrat administration has, in addition to increasing the debts by about £100 million, run down substantial cash balances and often spent a considerable amount of money against the advice of council officers? Will he also confirm that the hon. Member for Cheltenham (Mr. Jones) was one of the county councillors and that he bears a considerable personal responsibility for tonight's sad necessity?
    Mr. Marland: I thank my hon. Friend warmly for his intervention. It saves me making the next section of my speech as he said exactly what I was going to say. The liberal-Labour record on Gloucestershire county council is utterly shameful.
    The capping comes as no surprise to Conservative Members because it is the second year that Gloucestershire county council has gone over budget and appealed to the Department of the Environment, supported by all Members of Parliament for the area. No effort was spared. It is the second year that the Government have carefully examined the situation in Gloucestershire and considered a variety of reports which have been produced in an effort to justify the county council's overspending. The council has been found wanting.
    It is the second year that Gloucestershire county council has done nothing to help itself when there is much that it could do. It is also the second year that the citizens of Gloucester will have to pick up a bill for £600,000 for rebilling by the district council. The citizens will of course relish the £55 reduction for each household, but the Labour-Liberal coalition has a shameful record. All the other county councils can live within their budgets, so why cannot Gloucestershire county council?
    Mr. Bob Cryer. Tell us about Lloyd's.
    Mr. Marland: That remark was totally out of place. The hon. Member for leicester, East (Mr. Vaz) knows what it is like to be swindled by what seems to be a respectable organisation, and I respect what he has done to help investors in the Bank of Credit and Commerce International. Precisely the same thing has happened to me and to thousands of other investors at Lloyd's, and I shall use my best offices to ensure that justice is done.
    Mr. Keith Vaz rose—
    Mr. Marland: I shall not give way, because this is a debate about charge capping, not about financial services. I mentioned the subject only because the hon. Member for Bradford, South (Mr. Cryer) goaded me with it.
    To be constructive, I ask what Gloucestershire county council should do now and in the future. First, it should drop the ridiculous idea of a judicial review. That would simply cost the citizens of Gloucestershire more money, and I do not believe that it would get them anywhere.

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    Secondly, the council should re-examine its plan to lay off 150 teachers, and look to the 5,800 non-teaching staff for the redundancies.
    Thirdly, Gloucestershire should make a plan to reduce its debts. As I have already said, the council has £125 million-worth of debts—but it also has £500 million-worth of assets. It should liquidate 20 per cent. of its assets and pay its debts. Gloucestershire owns 8,000 acres of agricultural land. Why does a county council need that sort of agricultural holding? It should sell it and pay the debts. Gloucestershire is the only county in the country that cannot live within the guidelines laid down by the Government.
    What should the Government do? They, too, should play a part in putting Gloucestershire on the straight and narrow for the future. I am glad that they are undertaking a review of standard spending assessments, and I am confident that it will be deep and thorough. I believe that the Government should consider the area coast adjustments, too, to find out whether any extra money could come to Gloucestershire under those auspices. They should also compare Gloucestershire's lot with that of Oxfordshire, Devon, Warwickshire and all the other counties that liberal and Labour councillors in Gloucestershire are always saying get a much better deal. That is probably not true, but I should like to be reassured that the claim has been thoroughly examined.
    The sad thing about the capping is that the children will be the losers. I hope that the responsibility for that will hang heavily not only tonight but in the future on the shoulders of Opposition Members who seek to decry and belittle what is done by Conservatives. The guilty councillors are members of Opposition parties, and Opposition parties bear the blame for what is going wrong in Gloucestershire. Gloucestershire councillors have brought the mess upon their own heads. As my hon. Friend the Member for Stroud (Mr. Knapman) said, they have disregarded the sensible advice of their chief officers and ended up in the situation in which they find themselves tonight.
    There is now no alternative. like my hon. Friends the other Members for Gloucestershire constituencies, I have received many letters complaining about the profligacy of Gloucestershire county council, and the people of Gloucestershire will welcome the £55 reduction for each household in the county. last year the county council was given a little extra money on the understanding that it would put its house in order. Unfortunately, it did not do so. The capping is the inevitable result of persistent overspending by the representatives of Opposition parties who sit on Gloucestershire county council.
    Tonight my thoughts are with the children, with the families in Gloucestershire who have small children at school. They are the people who will bear the brunt of this folly, so it is with a heavy heart that I shall endorse the capping.
    11.44 pm
    Mr. Nigel Jones: I welcome the Minister and Secretary of State to their new jobs.
    Capping represents a denial of local democracy. Because of the shortage of time, I shall not comment on
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    Harlow or Castle Point. I want to concentrate on Gloucestershire because I live there and I have three children in state schools there.
    In Gloucestershire, we had a referendum in the county council elections on 6 May. People were asked to make an important choice: did they want capping or not; did they want cuts in services or not; and if they did not want cuts, were they prepared to pay a little more for a decent level of services? The answer came back loud and clear: no cuts. In my constituency, where there are 13 county council divisions, only one Conservative clung on to her seat, with a majority of just 94 votes. In the constituency of the hon. Member for Gloucester (Mr. French), just one Conservative member held his seat, with a majority of six votes. In the constituency of the hon. Member for Gloucestershire, West (Mr. Marland), not a single Conservative was returned. Occupying the 63 seats, there are now 30 liberal Democrats, 20 Labour representatives, only 10 Conservatives and three independents.
    Having been so roundly defeated, what did the Tories do after the election? Did they scuttle away to their little hole? No. They voted to put in a Labour chairman and vice-chairman of the county council. When Conservative canvassers knock on the doors in Gloucestershire next time, asking for votes to defeat socialism, we will know what to say to them: "Pull the other one, comrade."
    Gloucestershire's budget problems are recent. The 1991–92 budget, set by a minority liberal Democrat administration, was at SSA. It was not capped. It involved some very difficult decisions, which I, among others, had to make—£7·8 million of savings, or cuts. The administration that followed the minority liberal Democrat administration was a very curious beast—a Conservative-Labour alliance. We call it a "Lab-a-Tory" pact. That administration set the 1992–93 budget, which was capped. After the appeal, the Minister allowed us £2·59 million more on spending. This year, the 1993–94 budget was proposed by Conservative councillors and seconded by Labour councillors. It was £10·3 million above the cap. The Government are now reinforcing that cap with the help of the hon. Member for Gloucestershire, West and others.
    The Secretary of State has acted unreasonably and in bad faith. In November, the previous Secretary of State accepted that Gloucestershire should have an increase of 3·4 per cent. When the final spending limits were announced, he limited Gloucestershire to an increase of 1·8 per cent.; yet we have heard from the Minister tonight that the average increase is 3·1 per cent. So why are the Government penalising Gloucestershire? They allowed Bedfordshire 3·5 per cent., Kent 5·2 per cent., East Sussex 7·6 per cent., and West Sussex a massive 10·1 per cent. increase. Why has Gloucestershire been given only a 1.8 per cent. increase?
    The hon. Member for Gloucestershire, West says that the council has excessive debts of £121 million. I find that very hard to take from a supporter of a Government who are borrowing more than that every day of the week. Gloucestershire's borrowings are not out of line—they are not significantly above the national average. Moreover, every penny of its borrowings was authorised by the Government with the backing and the vote of the hon. Member for Gloucestershire, West. So, on closer examination, we find that his criticism is sheer hypocrisy.
    How does the Minister justify to parents increasing class sizes and damaging the education of

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    Gloucestershire's children? Gloucestershire is one of the lowest spenders per pupil; it is 76th out of 102 on primary education, 100th out of 101—bottom but one—on secondary education. Why do the Government think that it costs less to educate children in Gloucestershire than anywhere else? How does the Minister explain the gap in funding for the local police? The Home Secretary tells our chief constable that he can employ 1,184 officers, but there is not enough money in the capped budget to do it. That means that 40 officer posts and 73 civilian posts will be held vacant when we have a crime wave and regular invasions on new-age travellers. It is utter lunacy. Do not Government Departments talk to each other?
    How does the Minister think that we are going to pull Britain out of recession when, by this action today, the Government will make 250 people in Gloucestershire redundant, more than half of them teachers? Why have the Government ignored the people of Gloucestershire? Why have they ignored the 25,000 parents who signed a petition against the cuts, which was presented to No. 10 Downing street? I think that I know why. It is because they see no sense, they hear no sense, and they speak no sense. Their ears have healed over. They are not a new user-friendly, listening Government; they are the same old crew, shuffling around and sinking into a morass of their own making. The people of Gloucestershire are paying the price of the Government's incompetence.
    What will the four Gloucestershire Conservative Members do tonight? Are they going to go down the children of Gloucestershire and vote to cut Gloucestershire's police force? If they do, they might as well close down the Conservative office, because the people of Gloucestershire will never forgive them.
    11.50 pm
    Mr. Doug Henderson: I welcome the hon. Member for Skipton and Ripon (Mr. Curry) and the right hon. Member for Suffolk, Coastal (Mr. Gummer) to environmental matters. We all look forward to their future contributions and especially to those by the Secretary of State, to see what the learning curve has meant to him since he was so firmly committed to the poll tax some time ago.
    It is unfortunate that we do not have longer to debate these matters. There has clearly been great interest by hon. Members as important issues are at stake. Perhaps, in future, Government managers will consider allocating a similar period to that which was allocated in 1990. Nevertheless, in a short time, we have had a good debate.
    The Minister said that he believes that the council tax is fair. He is new to the job. When he takes a little time to understand the issues, he will find that that is not the view to many people, especially people at the bottom end, on bands A and B, who find that they are paying only a third of the council tax of people in large castles. They do not believe that it is fair. Single people in particular who are in band A and B homes find that they have a very raw deal.
    The Minister said also that he intended to review the standard spending assessment system. There is a large job to do. The Minister has to explain why areas on Tyneside that, on any estimation, are deprived are not given the same rating as Wandsworth or Westminster, and why Huntingdon is considered to be more deprived than Chester.
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    We had a theatrical performance from the hon. Member for Harlow (Mr. Hayes). He condemned the flower-planting in his borough. It is interesting that in a previous debate on this subject he supported the publicly owned theatre in his borough. His contribution might have been a rehearsal for the Christmas pantomime. If he is asked to play a part, he will be known as Dame Interflora. It ill becomes the hon. Gentleman to criticise the job losses that have occurred because of the actions that have been forced on his council. His Government have caused the loss of thousands of jobs in the manufacturing sector in an important town in Essex.
    My hon. Friend the Member for Blackburn (Mr. Straw) explained the real reasons why the order should be opposed. It should be opposed because it is undemocratic. The Government say that they want to give power to people locally. They have harped on about that ever since they were elected in 1979. Capping regulations do the very opposite, because they deny local people the right to decide the services that they want in their borough and how much they are prepared to pay for them. My hon. Friend the Member for Blackburn also pointed out that even if the capping regulations are intended to reduce the level of expenditure, they do not work, as the london school of economics survey has shown.
    We also had an interesting contribution from my hon. Friend the Member for Thurrock (Mr. Mackinlay). He pointed out that capping is not only about the three councils mentioned in the order; it is about all councils throughout the country that face cuts in jobs and cuts in services. The Opposition are against capping orders because they are hypocrisy from a Government who said that they wanted to make peace with local government. We are against such orders because they reveal a lack of democracy. We are against such orders because of the consequences for jobs and for services. We are against the order tonight because it will not work.
    11.54 pm
    Mr. Curry: By leave of the House, I thank the hon. Member for Blackburn (Mr. Straw), whose area has a standard spending assessment of £143 a head, for his good wishes for the area with an SSA of £86·98 per head, which is slightly below that of Thurrock. That disposes of the suggestion of political bias in the SSA system. The figure for Newcastle is £749 per head. I do not resent that. I started my professional career in Newcastle on the Newcastle Journal and I look forward to further visits to that part of the world.
    The speech by the hon. Member for Blackburn was extremely entertaining. His misfortune was that I rather than my right hon. Friend the Secretary of State was dealing with the debate. He had a magnificent compilation of all my right hon. Friend's past philosophy. Clearly I shall warn him in future so that he can learn "On Ilkley moor baht 'at", which may be more appropriate in the circumstances.
    The Opposition's great tragedy is that there are only three councils for them to talk about because 416 were able to accept the capping criteria. They would have loved legions of councils to debate, but there are only three. How the Opposition milked them! They painted a Guernica-like picture for Gloucestershire, with people dying in the streets because of the cap. If all that is so bad, how was it that when, last year, we relaxed the cap for Gloucestershire by

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    £2·6 million, which was apparently needed for essential services, £1·4 million was put back into reserves at the end of the year? I find that extremely difficult to understand.
    What is most important is the Opposition's attitude to public expenditure which came out of the debate. The philosophy of the hon. Member for Blackburn is "Let it rip". Clearly, his vision of virtue is spending. Time and again he praised councils because they spent and spent and spent. He then said that no system of central control over local spending was acceptable. Now we know. If there is ever a Labour Government, they will let it rip. All their friends in the town halls will say, "Come on, sign the cheques. We shall fill them in." That is the policy that the Labour party has just enunciated.
    The hon. Member for Blackburn prayed in aid Germany and the United States, which were very selective examples. If he had looked at some systems that are not federal, such as those in Sweden, Norway, Denmark, the Netherlands and Italy, or even at the past remarks of the hon. Member for Dagenham (Mr. Gould), he would have found that the capping of local authority expenditure is regarded as an essential component in the control of public expenditure.
    What we are doing is saving the taxpayer, the one person who was never mentioned by the Opposition. The taxpayers deserve our consideration. We should safeguard the nation's finances and ensure that we get efficient and effective local government. That is permitted and that is perfectly possible under this system. It is something that local authorities are finding—
    It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted business).
    The House divided: Ayes 292, Noes 240.

    Division No. 293]

    [11.58 pm

    AYES

    Ainsworth, Peter (East Surrey)

    Bowden, Andrew

    Aitken, Jonathan

    Bowis, John

    Alison, Rt Hon Michael (Selby)

    Boyson, Rt Hon Sir Rhodes

    Allason, Rupert (Torbay)

    Brandreth, Gyles

    Amess, David

    Brazier, Julian

    Ancram, Michael

    Bright, Graham

    Arbuthnot, James

    Brooke, Rt Hon Peter

    Arnold, Jacques (Gravesham)

    Brown, M. (Brigg & Cl'thorpes)

    Arnold, Sir Thomas (Hazel Grv)

    Browning, Mrs. Angela

    Ashby, David

    Budgen, Nicholas

    Aspinwall, Jack

    Burns, Simon

    Atkins, Robert

    Burt, Alistair

    Atkinson, David (Bour'mouth E)

    Butcher, John

    Atkinson, Peter (Hexham)

    Butler, Peter

    Baker, Rt Hon K. (Mole Valley)

    Butterfill, John

    Baker, Nicholas (Dorset North)

    Carlisle, John (Luton North)

    Baldry, Tony

    Carlisle, Kenneth (Lincoln)

    Banks, Robert (Harrogate)

    Carrington, Matthew

    Bates, Michael

    Carttiss, Michael

    Batiste, Spencer

    Cash, William

    Bellingham, Henry

    Channon, Rt Hon Paul

    Bendall, Vivian

    Clappison, James

    Beresford, Sir Paul

    Clark, Dr Michael (Rochford)

    Biffen, Rt Hon John

    Coe, Sebastian

    Blackburn, Dr John G.

    Colvin, Michael

    Body, Sir Richard

    Congdon, David

    Bonsor, Sir Nicholas

    Conway, Derek

    Booth, Hartley

    Coombs, Anthony (Wyre For'st)

    Boswell, Tim

    Coombs, Simon (Swindon)

    Bottomley, Peter (Eltham)

    Cope, Rt Hon Sir John

    Bottomley, Rt Hon Virginia

    Cormack, Patrick

    406

    Couchman, James

    Hunter, Andrew

    Cran, James

    Jack, Michael

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

    Jackson, Robert (Wantage)

    Curry, David (Skipton & Ripon)

    Jenkin, Bernard

    Davies, Quentin (Stamford)

    Jessel, Toby

    Davis, David (Boothferry)

    Johnson Smith, Sir Geoffrey

    Day, Stephen

    Jones, Gwilym (Cardiff N)

    Deva, Nirj Joseph

    Kellett-Bowman, Dame Elaine

    Devlin, Tim

    Key, Robert

    Dickens, Geoffrey

    Kilfedder, Sir James

    Dicks, Terry

    King, Rt Hon Tom

    Dorrell, Stephen

    Knapman, Roger

    Douglas-Hamilton, Lord James

    Knight, Mrs Angela (Erewash)

    Dover, Den

    Knight, Greg (Derby N)

    Duncan, Alan

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

    Duncan-Smith, Iain

    Knox, David

    Dunn, Bob

    Kynoch, George (Kincardine)

    Durant, Sir Anthony

    Lait, Mrs Jacqui

    Dykes, Hugh

    Lang, Rt Hon Ian

    Eggar, Tim

    Lawrence, Sir Ivan

    Emery, Rt Hon Sir Peter

    Legg, Barry

    Evans, David (Welwyn Hatfield)

    Leigh, Edward

    Evans, Jonathan (Brecon)

    Lidington, David

    Evans, Nigel (Ribble Valley)

    Lightbown, David

    Evans, Roger (Monmouth)

    Lilley, Rt Hon Peter

    Evennett, David

    Lloyd, Peter (Fareham)

    Faber, David

    Lord, Michael

    Fabricant, Michael

    Lyell, Rt Hon Sir Nicholas

    Fenner, Dame Peggy

    MacGregor, Rt Hon John

    Forman, Nigel

    MacKay, Andrew

    Forsyth, Michael (Stirling)

    Maclean, David

    Forth, Eric

    McLoughlin, Patrick

    Fox, Dr Liam (Woodspring)

    McNair-Wilson, Sir Patrick

    Fox, Sir Marcus (Shipley)

    Madel, David

    Freeman, Roger

    Maitland, Lady Olga

    French, Douglas

    Malone. Gerald

    Gale, Roger

    Mans, Keith

    Gallie, Phil

    Marland, Paul

    Gardiner, Sir George

    Marlow, Tony

    Garel-Jones, Rt Hon Tristan

    Marshall, Sir Michael (Arundel)

    Garnier, Edward

    Martin, David (Portsmouth S)

    Gill, Christopher

    Mawhinney, Dr Brian

    Gillan, Cheryl

    Mayhew, Rt Hon Sir Patrick

    Goodlad, Rt Hon Alastair

    Mellor, Rt Hon David

    Goodson-Wickes, Dr Charles

    Merchant, Piers

    Gorman, Mrs Teresa

    Milligan, Stephen

    Gorst, John

    Mills, Iain

    Grant, Sir Anthony (Cambs SW)

    Mitchell, Andrew (Gedling)

    Greenway, Harry (Ealing N)

    Mitchell, Sir David (Hants NW)

    Greenway, John (Ryedale)

    Moate, Sir Roger

    Grylls, Sir Michael

    Monro, Sir Hector

    Gummer, Rt Hon John Selwyn

    Montgomery, Sir Fergus

    Hague, William

    Moss, Malcolm

    Hamilton, Rt Hon Archie (Epsom)

    Needham, Richard

    Hamilton, Neil (Tatton)

    Nelson, Anthony

    Hampson, Dr Keith

    Neubert, Sir Michael

    Hanley, Jeremy

    Newton, Rt Hon Tony

    Hannam, Sir John

    Nicholls, Patrick

    Hargreaves, Andrew

    Nicholson, David (Taunton)

    Harris, David

    Nicholson, Emma (Devon West)

    Haselhurst, Alan

    Norris, Steve

    Hawkins, Nick

    Onslow, Rt Hon Sir Cranley

    Hawksley, Warren

    Oppenheim, Phillip

    Hayes, Jerry

    Ottaway, Richard

    Heald, Oliver

    Page, Richard

    Heath, Rt Hon Sir Edward

    Paice, James

    Heathcoat-Amory, David

    Patnick, Irvine

    Hendry, Charles

    Patten, Rt Hon John

    Heseltine, Rt Hon Michael

    Pattie, Rt Hon Sir Geoffrey

    Hicks, Robert

    Pawsey, James

    Higgins, Rt Hon Sir Terence L.

    Peacock, Mrs Elizabeth

    Hill, James (Southampton Test)

    Pickles, Eric

    Hogg, Rt Hon Douglas (G'tham)

    Porter, David (Waveney)

    Horam, John

    Portillo, Rt Hon Michael

    Hordern, Rt Hon Sir Peter

    Powell, William (Corby)

    Howard, Rt Hon Michael

    Rathbone, Tim

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

    Redwood, John

    Howell, Rt Hon David (G'dford)

    Renton, Rt Hon Tim

    Hughes Robert G. (Harrow W)

    Richards, Rod

    Hunt, Sir John (Ravensbourne)

    Rifkind, Rt Hon. Malcolm

    407

    Robathan, Andrew

    Taylor, John M. (Solihull)

    Robertson, Raymond (Ab'd'n S)

    Taylor, Sir Teddy (Southend, E)

    Robinson, Mark (Somerton)

    Temple-Morris, Peter

    Roe, Mrs Marion (Broxbourne)

    Thompson, Patrick (Norwich N)

    Rowe, Andrew (Mid Kent)

    Thornton, Sir Malcolm

    Rumbold, Rt Hon Dame Angela

    Thurnham, Peter

    Ryder, Rt Hon Richard

    Townend, John (Bridlington)

    Sackville, Tom

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

    Sainsbury, Rt Hon Tim

    Tracey, Richard

    Scott, Rt Hon Nicholas

    Tredinnick, David

    Shaw, David (Dover)

    Trend, Michael

    Shaw, Sir Giles (Pudsey)

    Trotter, Neville

    Shephard, Rt Hon Gillian

    Twinn, Dr Ian

    Shepherd, Richard (Aldridge)

    Vaughan, Sir Gerard

    Sims, Roger

    Viggers, Peter

    Skeet, Sir Trevor

    Waldegrave, Rt Hon William

    Smith, Sir Dudley (Warwick)

    Walden, George

    Smith, Tim (Beaconsfield)

    Walker, Bill (N Tayside)

    Soames, Nicholas

    Ward, John

    Spencer, Sir Derek

    Wardle, Charles (Bexhill)

    Spicer, Sir James (W Dorset)

    Waterson, Nigel

    Spicer, Michael (S Worcs)

    Watts, John

    Spink, Dr Robert

    Wells, Bowen

    Spring, Richard

    Whitney, Ray

    Sproat, Iain

    Whittingdale, John

    Squire, Robin (Hornchurch)

    Wiggin, Sir Jerry

    Stanley, Rt Hon Sir John

    Wilkinson, John

    Steen, Anthony

    Willetts, David

    Stephen, Michael

    Winterton, Mrs Ann (Congleton)

    Stern, Michael

    Winterton, Nicholas (Macc'f'ld)

    Stewart, Allan

    Wood, Timothy

    Streeter, Gary

    Yeo, Tim

    Sumberg, David

    Young, Sir George (Acton)

    Sweeney, Walter

    Sykes, John

    Tellers for the Ayes:

    Tapsell, Sir Peter

    Mr. Sydney Chapman and

    Taylor, Ian (Esher)

    Mr. Timothy Kirkhope.

    NOES

    Abbott, Ms Diane

    Clwyd, Mrs Ann

    Adams, Mrs Irene

    Coffey, Ann

    Ainger, Nick

    Cohen, Harry

    Ainsworth, Robert (Cov'try NE)

    Connarty, Michael

    Allen, Graham

    Cook, Frank (Stockton N)

    Anderson, Donald (Swansea E)

    Cook, Robin (Livingston)

    Anderson, Ms Janet (Ros'dale)

    Corbett, Robin

    Armstrong, Hilary

    Corbyn, Jeremy

    Ashton, Joe

    Corston, Ms Jean

    Austin-Walker, John

    Cousins, Jim

    Banks, Tony (Newham NW)

    Cox, Tom

    Barnes, Harry

    Cryer, Bob

    Battle, John

    Cunliffe, Lawrence

    Bayley, Hugh

    Cunningham, Jim (Covy SE)

    Bell, Stuart

    Cunningham, Rt Hon Dr John

    Benn, Rt Hon Tony

    Dalyell, Tam

    Benton, Joe

    Darling, Alistair

    Bermingham, Gerald

    Davidson, Ian

    Berry, Dr. Roger

    Davies, Bryan (Oldham C'tral)

    Betts, Clive

    Davies, Rt Hon Denzil (Llanelli)

    Blair, Tony

    Davies, Ron (Caerphilly)

    Blunkett, David

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

    Boateng, Paul

    Denham, John

    Boyce, Jimmy

    Dewar, Donald

    Bradley, Keith

    Dixon, Don

    Bray, Dr Jeremy

    Dobson, Frank

    Brown, Gordon (Dunfermline E)

    Donohoe, Brian H.

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

    Dowd, Jim

    Burden, Richard

    Dunwoody, Mrs Gwyneth

    Byers, Stephen

    Eagle, Ms Angela

    Caborn, Richard

    Eastham, Ken

    Callaghan, Jim

    Enright, Derek

    Campbell, Mrs Anne (C'bridge)

    Etherington, Bill

    Campbell, Menzies (Fife NE)

    Evans, John (St Helens N)

    Campbell, Ronnie (Blyth V)

    Fatchett, Derek

    Campbell-Savours, D. N.

    Field, Frank (Birkenhead)

    Clapham, Michael

    Foster, Rt Hon Derek

    Clark, Dr David (South Shields)

    Foster, Don (Bath)

    Clarke, Eric (Midlothian)

    Foulkes, George

    Clarke, Tom (Monklands W)

    Fraser, John

    Clelland, David

    Fyfe, Maria

    408

    Galbraith, Sam

    Mitchell, Austin (Gt Grimsby)

    Galloway, George

    Moonie, Dr Lewis

    Gapes, Mike

    Morgan, Rhodri

    Garrett, John

    Morris, Rt Hon A. (Wy'nshawe)

    George, Bruce

    Morris, Estelle (B'ham Yardley)

    Gerrard, Neil

    Morris, Rt Hon J. (Aberavon)

    Gilbert, Rt Hon Dr John

    Mowlam, Marjorie

    Godman, Dr Norman A.

    Mudie, George

    Godsiff, Roger

    Mullin, Chris

    Golding, Mrs Llin

    O'Brien, Michael (N Wkshire)

    Gordon, Mildred

    O'Brien, William (Normanton)

    Graham, Thomas

    O'Hara, Edward

    Grant, Bernie (Tottenham)

    O'Neill, Martin

    Griffiths, Nigel (Edinburgh S)

    Orme, Rt Hon Stanley

    Griffiths, Win (Bridgend)

    Pendry, Tom

    Grocott, Bruce

    Pickthall, Colin

    Gunnell, John

    Pike, Peter L.

    Hall, Mike

    Pope, Greg

    Hanson, David

    Powell, Ray (Ogmore)

    Hardy, Peter

    Prentice, Ms Bridget (Lew'm E)

    Harman, Ms Harriet

    Prentice, Gordon (Pendle)

    Henderson, Doug

    Prescott, John

    Heppell, John

    Primarolo, Dawn

    Hinchliffe, David

    Purchase, Ken

    Hoey, Kate

    Quin, Ms Joyce

    Hogg, Norman (Cumbernauld)

    Radice, Giles

    Home Robertson, John

    Randall, Stuart

    Hoon, Geoffrey

    Redmond, Martin

    Howarth, George (Knowsley N)

    Reid, Dr John

    Howells, Dr. Kim (Pontypridd)

    Rendel, David

    Hoyle, Doug

    Robertson, George (Hamilton)

    Hughes, Kevin (Doncaster N)

    Robinson, Geoffrey (Co'try NW)

    Hughes, Robert (Aberdeen N)

    Roche, Mrs. Barbara

    Hughes, Simon (Southwark)

    Rogers, Allan

    Hutton, John

    Rooker, Jeff

    Illsley, Eric

    Rooney, Terry

    Ingram, Adam

    Ross, Ernie (Dundee W)

    Jackson, Glenda (H'stead)

    Rowlands, Ted

    Jackson, Helen (Shef'ld, H)

    Ruddock, Joan

    Jamieson, David

    Salmond, Alex

    Jones, Barry (Alyn and D'side)

    Sedgemore, Brian

    Jones, Jon Owen (Cardiff C)

    Sheerman, Barry

    Jones, Lynne (B'ham S O)

    Sheldon, Rt Hon Robert

    Jones, Martyn (Clwyd, SW)

    Shore, Rt Hon Peter

    Jones, Nigel (Cheltenham)

    Short, Clare

    Jowell, Tessa

    Simpson, Alan

    Keen, Alan

    Skinner, Dennis

    Kennedy, Jane (Lpool Brdgn)

    Smith, Andrew (Oxford E)

    Khabra, Piara S.

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

    Kilfoyle, Peter

    Smith, Llew (Blaenau Gwent)

    Leighton, Ron

    Snape, Peter

    Lestor, Joan (Eccles)

    Soley, Clive

    Lewis, Terry

    Spearing, Nigel

    Litherland, Robert

    Spellar, John

    Livingstone, Ken

    Steinberg, Gerry

    Lloyd, Tony (Stretford)

    Stevenson, George

    Llwyd, Elfyn

    Stott, Roger

    Loyden, Eddie

    Strang, Dr. Gavin

    Lynne, Ms Liz

    Straw, Jack

    McAllion, John

    Taylor, Mrs Ann (Dewsbury)

    McCartney, Ian

    Tipping, Paddy

    Macdonald, Calum

    Turner, Dennis

    McFall, John

    Tyler, Paul

    McKelvey, William

    Vaz, Keith

    McMaster, Gordon

    Walker, Rt Hon Sir Harold

    McNamara, Kevin

    Wallace, James

    McWilliam, John

    Walley, Joan

    Madden, Max

    Wardell, Gareth (Gower)

    Mahon, Alice

    Wareing, Robert N

    Mandelson, Peter

    Watson, Mike

    Marshall, Jim (Leicester, S)

    Wicks, Malcolm

    Martlew, Eric

    Williams, Rt Hon Alan (Sw'n W)

    Maxton, John

    Williams, Alan W (Carmarthen)

    Meacher, Michael

    Wilson, Brian

    Michael, Alun

    Winnick, David

    Michie, Bill (Sheffield Heeley)

    Wise, Audrey

    Milburn, Alan

    Worthington, Tony

    Miller, Andrew

    Wray, Jimmy

    409

    wright, Dr Tony

    Tellers for the Noes:

    Young, David (Bolton SE)

    Mr. Andrew Mackinlay and

    Mr. Allan Meale

    Question accordingly agreed to.
    Reserved,
    That the draft Council Tax Limitation (England) (Maximum Amounts) Order 1993, which was laid before this House on 7th June, be apporoved.
    Dr. Robert Spink(seated and covered): On a point of order, Mr. Deputy Speaker. You are the defender of Back Benchers' right in the House. You will know that we have been debating the cap tonight, so it is perhaps appropriate that I should wear the cap to raise a point of order. How can I represent my constituents? Will you advocate to Madam Speaker that she should choose me to put my council's case in an Adjournment debate next week?
    Mr. Deputy Speaker: That is not a question for me to answer. I strongly suspect that the hon. Gentleman knows the procedures of the House full well and how to apply for an Adjournment debate.

    Beach Safety
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
    12.11 am
    Mr. Roger Gale: It is always a privilege to secure an Adjournment debate. It is a special privilege for me on this occasion, because 10 years ago to the hour, I was first elected to Parliament.
    The subject of the debate relates directly to my constituency with its holiday resorts, its 17 miles of coastline and, in particular, to its beaches. In my maiden speech on Thursday 30 June 1983, I quoted from a reference to Margate in Kent, which was described in 1780 as
    "a place of gaiety and dissipation".
    It was in Margate that the "discreet bathing machine" was introduced and bathing, discreet or otherwise, has been taking place from Margate's main sands and coves since that time.
    I am fortunate to represent a constituency that offers holidaymakers a safe and well-managed beach, comparing favourably with the best in Europe. However, other beaches on our coastline are less well managed, less hospitable, and much less safe.
    As I have implied, British families have for generations enjoyed going to the beach. Buckets and spades, sand castles and swimming are part of this country's leisure heritage—a heritage that survives the alternative lure of the sun and cheap booze of the Mediterranean. But, sadly, every year families are devastated when a tragic accident turns summer holiday fun into fatality.
    British beaches can be dangerous, and not just because of heavy surf or sudden changes in wave and weather conditions. Unexpectedly steep underwater gradients and racing tides can lurk beneath deceptively calm seas. It is not only the reckless and the non-swimmers who get caught out.
    In the 10 years that I have served my constituents in this House, the Royal Society for the Prevention of Accidents has consistently shown coastal drownings at 20 per cent. of the 500 total drownings per year in the United Kingdom. last year, 149 drownings took place at our seasides, and to that figure must be added some 3,000 rescues—or near misses, if you will. That total of fatalities and incidents —accidents on cliffs and shoreline, sailboards, small craft and inflatables involving coastguard and lifeguard interventions—is far too high and demands co-ordinated action.
    The most recent survey of beach safety provision took place in the summer of 1990, when a safety expert from the Royal life Saving Society, United Kingdom, the principal provider of lifeguard training and the United Kingdom's leading drowning prevention agency, visited 51 beaches in Britain. He looked at the large and popular resort beaches where the large number of visitors using the beach in season makes the provision for the safety of bathers particularly important. His findings were, to say the least, disturbing.
    Each site was graded according to the measures taken by the operators to protect the general public. On that basis, the survey found that more than 50 per cent. of the sites visited were judged as having inadequate provisions for beach safety, and only one site was judged an excellent beach.

    411
    For example, all manner of coloured flags fly on our beaches supposedly to indicate water conditions, but with no clear explanation of their meaning. In Brighton, for instance, a royal blue flag was raised to announce safe bathing, which in other places may be advertised by green, yellow or chequered flags. There is no standard system operating within Britain, and the significance of warning flags must therefore be lost on the general public.
    Information offered on the beach or by local tourist offices is often obscure and inadequate. No beach operator can eliminate natural tides or currents, but it is seldom easy for visitors to obtain clear information about these hazards, and at half the sites visited by the Royal life Saving Society warning signs were non-existent, poorly placed or misleading.
    On many beaches, rescue equipment simply does not exist; on others the equipment that is provided is too heavy, outdated or badly placed. Reports cite examples of emergency telephones being nowhere near the beach or hidden behind sand dunes. Far too frequently, as we know from local experience, there is no clear separation of swimmers from the considerable hazards of water skiers, jet skis and wind surfers. Each sport has or should have its place.
    Finally, and most important of all, far too few significant resort beaches offer the services of professional and properly trained life guards on duty when they are needed. We have all witnessed the bronzed Adonis who is more interested in eyeing up the talent on the beach than watching the toddlers on the water line.
    Beach management is left to the discretion of the owner of the beach, whether it is a private owner or a local authority. The local authority has the power to make byelaws under the public health legislation relating to public bathing, and the owners have a moral duty of care under common law, but there is no statutory obligation, regulation or guideline. That is in sharp contrast to the provisions of the Health and Safety at Work etc. Act 1974, which requires swimming pool managers to protect the safety of pool users as far as is reasonably practical. The result of the lack of regulation or co-ordination is that locally applied safety measures vary from beach to beach depending on whom it belongs to.
    The need for national guidelines for public safety at the coast has been recognised for some time by the leading organisations. last month, following consultations with local authorities, the police and coastal safety organisations the Royal life Saving Society and RoSPA produced "Safety on British Beaches", which contains the first comprehensive guidelines for beach operators and for the safe management of beaches.
    I am delighted that the Home Office was involved in the production of this document, and my hon. Friend the Member for Salisbury (Mr. Key) as the Heritage Minister responsible for tourism, wrote the foreword to the guide and publicly launched it, recognising the need for
    "A more uniform and consistent response to the hazards presented on British Beaches."
    At present, aspects of safety are fragmented between the Department of Transport, responsible for coastguard service; the Department of the Environment, responsible for litter and other environmental matters, the Home Office, responsible for public safety and byelaws, and the Department of National Heritage, represented by my hon. Friend on the Front Bench tonight, with his responsibility for tourism and sports.
    412
    My hon. Friend, who I warmly welcome to the challenges of his new job, will not take it amiss when I say that, as a first step, it is important that responsibility for beach safety is co-ordinated within Government, and that Government lay down and monitor national minimum standards.
    Her Majesty's Coastguard, which is part of the Department of Transport, has been empowered to develop local maritime water safety committees. The current written brief for those committees makes no reference to consultation with professional lifeguards who, with the Royal National lifeboat Institution, are directly in contact with the public and most familiar with the dangers to which the public are exposed.
    The coastguard held successful trials with lifeguard units, using its own dedicated channel zero. The result is that lifeguard units can communicate directly with Her Majesty's Coastguard in the event of an emergency, and are becoming integrated in the overall search-and-rescue network, involving also helicopters and in-shore lifeboats.
    That excellent initiative needs to be extended from a trial to a nationwide service, with lifeguard units meeting minimum requirements jointly agreed by Royal life Saving Society and Her Majesty's Coastguard-appointed "declared facilities". If the national search-and-rescue committee, responsible for the management of search and rescue around our coasts, is truly to review safety around our whole coast—on the beaches as well as at sea—it must ensure that the lifeguard's voice is represented and heard.
    It will never be possible to make all our hundreds of delightful beaches and coves completely safe. To try would involve unrealistic expenditure of time, manpower and resources. It is possible, however, to provide information that tells the tourist which beach is guarded, patrolled, managed and safe and which is exposed, unguarded and hazardous. It is possible also to vary the hours of lifeguard work, so that groups need not huddle together at noon in the pouring rail, while leaving beaches busy but unprotected on long, hot summer evenings.
    It is possible to provide, check and regularly maintain essential lifesaving equipment when and where it is likely to be needed, and to set a uniform standard for beach warning flags, standard professional qualifications for lifeguards, and standard and readily identifiable lifeguard uniforms. It is possible to introduce without undue regimentation zoning for water skiers, windsurfers and bathers.
    For the price of some of those grotesque monuments to modern civic pride that litter our promenades to no useful purpose, and with a sense of seaside priorities, we could provide all that—even within limited budgets. It is possible to do all those things and to set standards that will attract visitors because of the security they offer—standards that we can then set as an example to the rest of Europe.
    That makes sound economic sense; above all, it makes sense because it is possible to avert a significant number of the tragedies that strike holidaying families every summer. It is sobering on this summer night to remember that some of those statistics, which in real terms mean heartbroken and devastated homes, will already have been chalked up this year, and that more will certainly follow in the coming summer months.
    My hon. Friend the Minister can institute action tonight that would definitely lead to an improvement. I urge him to start his new ministerial career by doing so.
    12.22 am
    The Parliamentary Under-Secretary of State for National Heritage (Mr. fain Sproat): I thank my hon. Friend the Member for Thanet, North (Mr. Gale) for raising an important issue tonight. I know that my predecessor, my hon. Friend the Member for Salisbury (Mr. Key), had a strong personal interest in the safety of our beaches, and that he was pleased to attend the Royal life Saving Society symposium on 25 May to launch new guidelines for safety on British beaches. I am delighted to continue where he left off, and to reply to my hon. Friend's Adjournment debate.
    I welcome the initiative of the Royal life Saving Society and of the Royal Society for the Prevention of Accidents in producing their guidance document, "Safety on British Beaches". The Sports Council, English Tourist Board and Home Office were all consulted during its preparation. It gives operational guidelines for safe beach management, alerts operators to their responsibilities and to the range of safety options available to them, and seeks to engender a more uniform and consistent response to the hazards on British beaches. I am sure that it will prove helpful in raising safety standards.
    My hon. Friend suggests that we should go further, and lay down a new structure of Government standards. He also suggests that there is a need for greater co-ordination within Government. I fully accept that a number of Departments have an interest in this policy area, and that a variety of regulatory mechanisms impact on beach safety. I believe that that is inevitable, given the range of activities taking place around our coastlines.
    As I will describe shortly, my Department has two relevant policy responsibilities, but we also work closely with other Departments on specific issues of mutual interest. However, I recognise the strength of my hon. Friend's views, and am happy to raise his concerns with my right hon. and noble Friend the Minister of State, Home Office, in view of his responsibilities for water safety.
    As I have said, my Department has two particular interests in beach safety. As the Minister responsible for tourism. I am very aware that safe beaches are an important component of a quality tourism product, particularly for families holidaying at the seaside. One of our main tourism policy objectives is to encourage the industry to improve the quality of what it offers the public —for example, through the tourist boards' work in grading accommodation and promoting staff training.
    Quality is vital if our domestic tourism sector is to cope with ever-increasing international competition. The Government welcome the efforts that seaside resorts have made to improve the quality of their product and to attract more visitors: for example, some 40 resorts are participating in the English tourist board's seaside resorts initiative, which includes both marketing and development activities.
    As part of that initiative, resort authorities are working with the private sector and the tourist boards on three-year action programmes aimed at developing potential and improving quality. Indeed, I know that my hon. Friend's constituency is covered by one of those programmes. I very much hope that initiatives to maintain and improve beach safety will figure in the work that is being done in seaside resorts.
    414
    I also have an interest in beach safety, as the Minister with responsibility for sport. The safety aspects of water sports are very much in everyone's minds following the tragic canoe accident at lyme bay. The Government are deeply concerned about that event, and my Department is in discussion with the Department for Education about its wider safety implications.
    We shall all be studying closely the lessons emerging from the various inquiries that are already in train. They comprise the inquiries being conducted by Dorset constabulary and separately by Devon county council, and the coroner's inquest, which will be held in due course. My right hon. Friend the Secretary of State for Education has undertaken that, if important questions remain unanswered after these, he will not rule out the possibility of pursuing other forms of inquiry.
    A document relevant to our discussions following lyme bay is the report of the water sports safety review, which we published in April. The review group was asked to report on the effectiveness of existing provision for safety in water sports, and to make recommendations. Its overall conclusion was that sports organisations were addressing safety concerns in a comprehensive and responsible manner. However, it identified the need for further action to enhance the individual competence of casual participants, and recommended that sports governing bodies should adopt a wider role in that regard.
    The review group also saw a need for action to improve co-ordination, and to prevent duplication of effort among the many bodies involved with safety issues. Finally, it recommended the development of broad management strategies based on extensive discussion as the most appropriate means of resolving potential water conflicts. The review report contains 10 recommendations; I know that they are now being given considered carefully by the organisations to which they are addressed.
    My Department is also involved in a number of other issues designed to promote and enhance water sports safety. In April 1992, the Select Committee on the Environment published a report on coastal zone protection and planning. In responding, the Government promised a discussion paper on coastal management, which is intended to address the scope for further regulation of sport and recreation activities along the coast. My Department has been involved in the preparation of this document which the Department of the Environment hopes to publish shortly.
    My Department also works closely with the Department of Transport which has an important role in relation to marine safety. Following the publication of the inquiry into river safety by Mr. John Hayes, my right hon. Friend the Secretary of State for Transport announced the setting up of district marine safety committees to review for each area the way in which responsibilities for safety, rescue and accident prevent are currently distributed, and to consider the need for improvements.
    He also announced the setting up of a national marine safety steering committee to ensure national co-ordination and consistency of approach. My Department is represented on this national committee, and the Sports Council is currently considering how it can best become involved in the work of the various district committees.
    The final Government initiative of relevance to beach and water safety that I should like to touch on is the decision of my right hon. Friend the Secretary of State for Education to include swimming and water sports safety in

    415
    the provisions of national curriculum physical education. The main requirements are that children should be able to swim at least 25 m and demonstrate an understanding of water safety by the age of 11. These provisions will become compulsory in August 1994, and I welcome them as a positive contribution towards water safety.
    I fully accept what my hon. Friend says about the need for co-ordination. I have outlined some of the areas where we are working closely with other Government Departments. I also recognise the need for closer working relationships nearer to home. My Department works through its sponsored bodies, which, in turn work with a
    416
    large number of organisations from both public and private sectors. I will be chairing a national seminar on 28 June which will examine the areas where greater co-ordination and co-operation would be of most benefit. This will provide the springboard for a series of regional conferences which I hope will produce positive outcomes in a wide range of areas.
    I conclude by. thanking my hon. Friend for raising this very important subject tonight.
    Question put and agreed to.
    Adjourned accordingly at twenty-nine minutes to One o'clock.

LORD CHANCELLOR'S DEPARTMENT

  Statute Law Database
  Mr. Garnier
  To ask the Parliamentary Secretary, Lord Chancellor's Department what progress is being made with the development of the statute law database; and what effect that work will have on the range of printed material published by Her Majesty's Stationery Office for the Statutory Publications Office.

  Mr. John M. Taylor
  Good progress is being made with the development of the database, which is due to provide immediate access to up-to-date statute law by April 1995. In order to meet this target, the Lord Chancellor has authorised the suspension of work done by the Statutory Publications Office in providing certain material for publication by Her Majesty's Stationery Office. Newly enacted Acts in the "Statutes in Force" series will continue to be available as at present, as will the annual volumes of public general acts and measures and of statutory instruments. However, work has been suspended on revised material for "Statutes in Force" and on other tables and indexes. The Lord Chancellor and Her Majesty's Stationery Office will keep under review the balance between printed material and information available from the database, having regard to the potential for improved facilities which the database is expected to provide.

  Departmental Cash Limits
  Mr. Garnier
  To ask the Parliamentary Secretary, Lord Chancellor's Department what changes will be made to the cash limit and running costs limit of class IX, vote 1, administration of justice in England and Wales.

  Mr. John M. Taylor
  Subject to parliamentary approval of the necessary revised estimate, the cash limit for class IX, vote 1 will be decreased by £1,389,000 from £796,918,000 to £795,529,000 and the running cost limit will be decreased by £1,389,000 from £431,979,000 to £430,590,000.

  The revised estimate gives effect to a decrease of £1,466,000 in running costs, to allow for an increase in the external financing limit of the Land Registry Trading Fund.

  It is also required to give effect to running cost transfers of £77,000 from other Government Departments in relation to the Lord Chancellor's responsibilities in respect of the magistrates courts.

  Social Security Commissioners
  Mr. Hanson
  To ask the Parliamentary Secretary, Lord Chancellor's Department what is the average length of time taken by the office of the Social Security Commissioners to determine individual cases referred to them.
  246
  Mr. John M. Taylor
  The average time is 5·5 months from the date a case is referred to a commissioner as ready for determination.

  NATIONAL HERITAGE
  Mr. Steinberg
  To ask the Secretary of State for National Heritage what plans he has to visit Durham city in 1993 for the ninth centenary of Durham cathedral.

  Mr. Brooke
  [pursuant to his reply, 12 March 1993, c. 752]: I had the pleasure of visiting the Durham cathedral ninth centenary celebrations on 5 June, coinciding with the 60th annual general meeting of the Friends of Durham Cathedral.

HOME DEPARTMENT

  EC Home Affairs Ministers
  Mr. Allen
  To ask the Secretary of State for the Home Department if he will make a statement on the outcome of the meeting of EC Home Affairs Ministers in Copenhagen on 2 and 3 June.

  Mr. Michael Howard
  The meeting of immigration and police Ministers took place in Copenhagen on 1 and 2 June.

  Ministers considered progress in relation to the implementation of free movement of persons in accordance with article 8A of the treaty of Rome, and in pursuance of the conclusions of the European Council in Edinburgh, they considered the terms of their report to the European Council in Copenhagen.

  Ministers took note of several papers submitted by the ad hoc group of immigration concerning the asylum work programme and preparation for the implementation of the Dublin convention on asylum, and the draft external frontiers convention. They approved a resolution on the reception of particularly vulnerable groups of people from the former Yugoslavia.

  Ministers adopted a resolution on the harmonisation of national policies on family reunification, and a recommendation on checks on and the expulsion of third country nationals residing or working in member states without authorisation.

  Discussion at the meeting of Trevi Ministers on 2 June focused on the establishment of EUROPOL and in particular the EUROPOL drugs unit. Ministers signed the ministerial agreement on the establishment of the EUROPOL drugs unit and invited the forthcoming European Council in Copenhagen to come to a decision on its location. They also discussed reports and proposals from working groups on matters including terrorism, organised attacks on foreigners, environmental crime, international motor cycle gangs, money laundering and co-operation with eastern Europe.

  I am placing in the Library of the House copies of the recommendations and resolutions approved by the Immigration Ministers, together with the ministerial agreement on EUROPOL and the press communiqués issued following the meetings.

  Firearms
  Mrs. Helen Jackson
  To ask the Secretary of State for the Home Department what restrictions exist on membership of gun clubs for persons who have had a licence to hold a gun withdrawn by the police.

  Mr. Charles Wardle
  Unless the club is one which my right hon. and learned Friend the Home Secretary has approved under the terms of section 15 of the Firearms (Amendment) Act 1988, members of a rifle or pistol club require a firearm certificate in order to shoot. Revocation of their certificate by the police would effectively debar a person from membership. A rifle or pistol club which wishes to be approved by my right hon. and learned Friend so that its members may shoot without holding a firearm certificate must satisfy him that the members are of good character. Any club which had among its members a person who had had a firearm certificate revoked would be unlikely to satisfy this test.

  Members of shot gun clubs should have a shot gun certificate. While individuals without such a certificate may, exceptionally, use a shot gun at a time and place approved by the local chief officer of police for shooting at artificial targets, this is not intended to provide opportunities for regular shooting by persons who do not possess a certificate. Before granting their approval to such shoots, chief officers must be satisfied that the arrangements involve no danger to the public.

  Offender Support Organisations
  Mr. Simon Hughes
  To ask the Secretary of State for the Home Department if he will list all those organisations funded by him which give support and assistance to(a) perpetrators of crime and (b) their families; and in each case state what funding from Government they have received in each of the last three financial years.

  Mr. Maclean
  The Home Office publishes each year a list of grants made by Government Departments to voluntary bodies. The list is broken down by subject area and includes a category comprising bodies working with offenders. The 1990–91 list has not yet been published, but I am placing in the Library, and sending the hon. Member, an extract setting out the Home Office's grants together with the index of categories. Full information about 1992–93 has not yet been collated, but I shall send the hon. Member the relevant extract as soon as it is available.

  The main schemes for funding work with offenders are the probation supervision grants scheme and the probation accommodation grants scheme. The former provides for grants to voluntary bodies working in partnership with area probation services which run non-residential projects for offenders under supervision in the community. The latter scheme funds voluntary organisations which provide supervised accommodation for offenders. About 130 supervision projects and 5,000 bed spaces are funded under these schemes.

TRANSPORT

  Trans-Pennine Crossing
  Ms Walley
  To ask the Secretary of State for Transport what discussions he has had with the Trans-Pennine Consortium about the proposed private crossing of the Pennines along the A628 corridor; and if he will make a statement on the criteria to be applied to the project.

  Mr. Key
  None. I would be willing to discuss any private sector proposal, but it would be considered in the light of current Government policy, including that on development in national parks.

EMPLOYMENT

  Disabled People
  Mr. Callaghan
  To ask the Secretary of State for Employment what further steps she intends to take to improve the employment prospects of disabled people.

  Mr. Michael Forsyth
  My right hon. Friend the Secretary of State intends to announce as soon as possible the outcome of the review of the Employment Service's special schemes which will result in more effective arrangements for providing special employment help to disabled people. The Employment Service will also publish very shortly a document on the funding arrangements for sheltered employment with proposals which should increase the employment opportunities under the programme for severely disabled people.

  Safety-at-Work Notices
  Mr. Riddick
  To ask the Secretary of State for Employment what proposals her Department has to introduce regulations which would require safety-at-work notices to be in a particular colour.

  Mr. Michael Forsyth
  The Safety Signs Regulations 1980 require safety signs, which are defined as signs using shapes, symbols and colours to convey health and safety information, which are used at work, to conform to certain general rules regarding their shape and colour. These regulations implement EC directive 77/576/EEC.

  The Health and Safety Commission is currently preparing proposals to implement EC directive 92/58/EEC on the minimum requirements for health and/or safety signs at work. This directive replaces 77/576/EEC. It maintains the same general rules concerning the colour and shape of signs of the earlier directive. However, it also specifically requires safety signs to be used wherever there are risks to health and safety which cannot be controlled adequately by other means. The directive has to be implemented by 24 June 1994.

  Golf Safety
  Mr. Bennett
  To ask the Secretary of State for Employment when the Health and Safety Executive expects to publish the guidance on golf course and range safety.

  Mr. Michael Forsyth
  We expect that this document will be published in autumn 1993.

  Passive Smoking
  Dr. Godman
  To ask the Secretary of State for Employment what statutory provisions govern the extent to which or means by which a person can sue for damages or compensation for illness caused by passive smoking in the workplace; and if he will make a statement.

  Mr. Michael Forsyth
  [holding answer 8 June 1993]: There are no statutory provisions expressly dealing with illnesses caused by passive smoking in the workplace. However,
  —Regulation 6 of the Workplace (Health, Safety and Welfare) Regulations 1992, section 4 of the Factories Act 1961 and Section 7 of the Offices, Shops and Railway Premises Act 1963, which are in part repealed by the 1992 regulations, deal with the ventilation of workplaces;
  —Regulation 25(3) of the 1992 regulations deals with the provision of suitable arrangements in rest rooms and rest areas to protect non-smokers from discomfort caused by tobacco smoke.

  Breaches of duty under these provisions are actionable in so far as they cause damage.

  Labour Statistics
  Mr. Alex Carlile
  To ask the Secretary of State for Employment what percentage of the work force has been employed in(a) service industries, (b) the construction industry, (c) manufacturing industry and (d) agriculture in each year since 1979; and if he will make a statement.

  Miss Widdecombe
  The available information is for Great Britain and covers employees in employment and the self-employed. Employees in employment data can be obtained from the NOMIS database in the Library. Historical data for self-employed people is available in the Library on page 54 of Historical Supplement Number 3, issued with the June 1992 edition of the Employment Gazette. Recent estimates for the self-employed are as follows:

  Self-employed people—industrial analysis

  Thousands

  Great Britain

  June 1992

  1 December 1992

  Service industries

  1,799

  1,799

  Construction

  585

  559

  Manufacturing industry

  279

  285

  Agriculture, forestry and fishing

  247

  236

  1 Latest date available.

WALES

  Agricultural Training Board
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales when he expects to make a statement concerning the future funding arrangements for the agricultural training board in Wales; and what plans he has to increase funding levels.

  Mr. John Redwood
  The future funding arrangements for agricultural training in Great Britain were announced by the Minister of Agriculture, Fisheries and Food on 1 April 1993. My Department is having discussions with ATB-Land Base to establish whether additional support should be provided for agricultural training in Wales.
  250
  Mr. Barry Jones
  To ask the Secretary of State for Wales if he will make a statement on the future composition and role of the Agricultural Training Board for Wales.

  Mr. John Redwood
  This is a matter for the directors of ATB-Land Base, who are considering it, in consultation with my Department.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what is the current(a) budget and (b) staffing of the Agricultural Training Board for Wales.

  Mr. Redwood
  The direct administrative costs of the Agricultural Training Board-Land Base organisation in Wales in 1993–94 will amount to about £400,000 with additional overhead costs being borne centrally. There are currently 14 staff employed in Wales some of whom work on a part-time or short-term contract basis.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many farming apprenticeships are generated by the Agricultural Training Board for Wales; and if he will make a statement.

  Mr. Redwood
  The agricultural apprenticeship scheme came to an end some years ago with the introduction of the youth training schemes. In Wales the board has continued to run a trainee of the year scheme, sponsored by National Westminster bank, and this draws on young people who are involved in YTS schemes, certificate courses and simply learning on the job interspersed with short courses.

  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales if he will make it his policy to secure that the relationship between the Welsh Forum and the Agricultural Training Board in Wales is similar to the adopted arrangements in Scotland.

  Mr. Redwood
  Yes.

  Nature Conservation
  Mr. Llew Smith
  To ask the Secretary of State for Wales what plans he has to introduce legislation to enhance the protection of wildlife and to give local authorities in Wales new powers to protect sites of nature conservation interest.

  Sir Wyn Roberts
  I refer the hon. Gentleman to the answer I gave to the hon. Member for Pembroke (Mr. Ainger) on 26 May 1993, c.553.

  Newchurch Report
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales if he will place in the Library a copy of the Newchurch report commissioned by the West Glamorgan health authority.

  Mr. Gwilym Jones
  Copies of' the report "West Glamorgan and Environs Service Review" published by West Glamorgan health authority and West Glamorgan family health services authority have been placed in the Library of the House. The role of the consultants, Messrs. Newchurch, was to provide independent advice to assist the authorities in compiling their report. The only element of the report that reflects the consultants' own judgment is chapter 13, the critique.

  Diabetics
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales, pursuant to his answer of 27 May,Official Report, column 711, how he assesses whether the target set in the St. Vincent declaration has been met without holding central information on the incidence of blindness among diabetics.

  Mr. Gwilym Jones
  I refer the hon. Gentleman to the answer I gave him on 17 May. However, the Welsh Office is committed to collecting information on a broad range of conditions, including diabetes.

  Water Pollution
  Mr. Llew Smith
  To ask the Secretary of State for Wales what assessment he has made of pollution levels of rivers and streams in Wales in the last 12 months; and if he will make a statement.

  Mr. Gwilym Jones
  Water quality of rivers and streams in Wales is regularly monitored by the National Rivers Authority and the results of samples obtained are recorded on public registers maintained by the authority. The authority publishes comprehensive river quality surveys every five years, and pollution incident reports annually, copies of which are placed in the Library of the House.

TRADE AND INDUSTRY

  Plutonium
  Mr. Llew Smith
  To ask the President of the Board of Trade what is the current weight of plutonium, stored under safeguards, arising from foreign reactors(a) in spent fuel, (b) under reprocessing and (c) in separated form at Sellafield; what notifications to (i) the International Atomic Energy Agency and (ii) the European Atomic Energy Agency in regard to safeguards provision Her Majesty's Government have made regarding foreign origin plutonium at Sellafield; and if he will set out the responsibilities British Nuclear Fuels plc has to his Department and the respective international authorities in regard to safeguards.

  Mr. Eggar
  Details of the civil plutonium stocks, broken down into the categories specified by the hon. Member, are given in the plutonium figures published on 4 February 1993 and placed in the Library of the House. As operator of the Sellafield site, British Nuclear Fuels plc meets the requirements of the Euratom safeguards authorities by supplying, via my Department, inventory change reports, material balance reports and physical inventory listings as laid down in Safeguards Regulation 3227/76. These reports are forwarded by Euratom to the International Atomic Energy Agency.

  Mr. Llew Smith
  To ask the President of the Board of Trade what quantities of plutonium created in the Wylfa nuclear plant have been subject to application of export licences since 1975.

  Mr. Eggar
  I cannot answer for previous Administrations. Irradiated fuel from Britain's various civil Magnox reactors is reprocessed together and therefore the plutonium arising, whether in store or exported, is not linked to the specific power station in which it was created.

  THORP
  Mr. Llew Smith
  To ask the President of the Board of Trade what communications he has received from British Nuclear Fuels Ltd. regarding the future strategy for handling radioactive wastes from the thermal oxide reprocessing plant.

  Mr. Eggar
  I receive communications from British Nuclear Fuels plc on a wide range of issues, including the arrangements for the management of waste arising from reprocessing at Sellafield.

  European Safeguards and Development Association
  Mr. Llew Smith
  To ask the President of the Board of Trade, pursuant to his answer of 20 May,Official Report, column 288, what benefits and new information accrued to his Department as a result of the departmental representation at the European Safeguards and Development Association meeting; how many personnel from the Atomic Energy Authority were present at the meeting; and if he will make a statement on the costs incurred by the attendance at the meeting.

  Mr. Eggar
  The 15th symposium of the European Safeguards Research and Development Association included, inter alia, sessions on challenges and trends in modern safeguards, safeguards concepts and national programmes. These provided information important in the development of international safeguards policy, for which my Department has a responsibility. Other sessions dealt with technical aspects of safeguards implementation and technology. Full proceedings of the symposium will be published shortly.

  In connection with the United Kingdom's programme of safeguards research and development my Department funded participation in the symposium of four AEA personnel and contributed to that of a fifth. The cost of this and departmental attendance was approximately £9,000. Attendance of other AEA personnel at the symposium is a matter for AEA.

  Nuclear Decommissioning
  Mr. Llew Smith
  To ask the President of the Board of Trade what action he proposes to take following the National Audit Office report on decommissioning civil nuclear facilities.

  Mr. Eggar
  The National Audit Office report of 4 June is being considered by the Public Accounts Committee. The Department's accounting officer will be giving oral evidence to the Committee on 30 June. The Government will give a detailed response to the subsequent PAC report in the usual way through a Treasury minute.

  Waste Incineration
  Mr. Llew Smith
  To ask the President of the Board of Trade what plans he has to examine the proposals put forward in the 17th report of the Royal Commission on Environmental Pollution (Cm 2181) on the use of waste as fuel for energy in incineration plants.

  Mr. Eggar
  I welcome the 17th report of the Royal Commission on Environmental Pollution (CM 2181) and note its view that incineration will prove to be the best
  253
  practicable environmental option for municipal waste requiring disposal. Energy recovery is accepted as a legitimate means of recycling and I have already agreed with my hon. Friend the Minister for the Environment and Countryside that we should re-examine the idea of setting waste-to-energy targets. The Government will be making a full response to the Royal Commission's report in due course.

  Firework Injuries
  Mr. Nigel Griffiths
  To ask the President of the Board of Trade how long after 5 November estimated figures for the number of firework injuries are made available to his Department.

  Mr. McLoughlin
  [holding answer 27 May 1993]Returns are usually received by the Consumer Safety Unit by the end of February the following year.

  North Sea Licences
  Mr. Page
  To ask the President of the Board of Trade if consortia from the 14th licensing round who withdraw will be given the opportunity to resubmit their applications.

  Mr. Eggar
  No consortium has withdrawn as a whole from any application made under the 14th offshore licensing round.

  Mr. Page
  To ask the President of the Board of Trade what account his Department takes of withdrawal of consortia from one bid for North sea licences when considering granting approval to that consortia for other bids.

  Mr. Eggar
  No account will be taken of the withdrawal of a company from one or more of its sole or consortium applications under the 14th offshore licensing round when considering any other applications it has made.

  Assisted Areas
  Mr. Milburn
  To ask the President of the Board of Trade what weighting he will give to factors other than statistical measures of unemployment in determining the outcome of his Department's review of the assisted areas.

  Mr. Sainsbury
  [holding answer 27 May 1993]: The factors, other than statistical measures of unemployment, which will be taken into account in the review were set out in the review consultation document issued last year. A range of weights will be applied to these factors in determining the resulting status of the travel-to-work areas.

  Date

  Sample time

  Location

  Sample depth M.

  Parts per million

  8 January

  1200

  Quendale

  Surface

  100

  8 January

  1300

  Garth's Ness

  Surface

  10,000

  8 January

  1430

  Loch of Spiggie

  Surface

  Not analysed

  9 January

  0900

  Ireland

  Surface

  715

  9 January

  1020

  May Wick

  Surface

  18

  9 January

  0230

  Hamnavo

  Surface

  115

  9 January

  1400

  Papil

  Surface

  28

  10 January

  1200

  Quendale

  Surface

  43

  Inward Investing Firms
  Mr. Milburn
  To ask the President of the Board of Trade how many inward investing firms that had received financial assistance closed; how much grant they had received; and what was the total employment at the date of closure, in each region in each year since 1987–88.

  Mr. Sainsbury
  [holding answer 8 June 1993]: Since the beginning of April 1987 to date 651 projects by foreign owned companies supported by either regional selective assistance or regional development grant, were completed. £95·8 million was paid in grant in support of 18,269 jobs. A check on whether all these companies now continue to trade since their projects were completed would involve disproportionate cost.

  Offshore Oil
  Mr. Ainger
  To ask the President of the Board of Trade if he will make it his policy to make public the base line surveys carried out by oil companies in Cardigan Bay, St. George's channel and the Bristol channel prior to commencing exploratory drilling activities.

  Mr. Eggar
  [holding answer 7 June 1993]: Any surveys carried out by oil companies are provided to the Government in confidence. Any further dissemination is a matter for the companies.

  Gas and Electricity
  Mr. Nicholls
  To ask the President of the Board of Trade what plans he has to make regulations relating to price indications given in connection with the resale of gas and electricity.

  Mr. Eggar
  We have carefully considered this matter. There appears to be insufficient evidence to suggest that there is significant abuse. We therefore do not believe that there is a strong case for making regulations at this time. Nonetheless, we will keep the situation under review and we remain ready to reconsider the position at any time in the light of new evidence.

  MV Braer
  Ms Walley
  To ask the President of the Board of Trade if he will publish in full the details of all water samples analysed by Warren Spring Laboratory following the Braer disaster, together with the dates each sample was taken.

  Mr. Norris
  I have been asked to reply.

  The Department of Transport's marine pollution control unit was the customer for the sampling work carried out by Warren Spring Laboratory during the Braer spill.

  The information is as follows:
  255

  Date

  Sample time

  Location

  Sample depth M.

  Parts per million

  10 January

  1400

  Garth's Ness

  Surface

  10,000

  11 January

  1000

  Vatnabrek

  1–10

  0·00

  11 January

  1130

  The Nev

  Surface

  0·00

  11 January

  1400

  The Nev

  Surface

  0·00

  11 January

  1300

  Vaila Sound

  14–10

  0·00

  11 January

  1600

  Scalloway

  1

  2·15+

  12 January

  1000

  Oxna

  1

  0·18

  12 January

  1015

  Oxna

  5

  0·25

  12 January

  1040

  Hildasay

  1

  0·81

  12 January

  1040

  Hildasay

  5

  0·81

  12 January

  1045

  Hildasay

  1

  0·96

  12 January

  1045

  Hildasay

  5

  0·96

  12 January

  1110

  Papa

  1

  1·12

  12 January

  1110

  Papa

  5

  1·44

  12 January

  1115

  Papa

  1

  1·44

  12 January

  1120

  Papa

  1

  1·59

  12 January

  1125

  Papa

  5

  1·52

  12 January

  1125

  Papa

  1

  1·67

  12 January

  1155

  Bur Wick

  1

  1·75

  12 January

  1155

  Bur Wick

  5

  1·75

  12 January

  1200

  Bur Wick

  1

  1·91

  12 January

  1200

  Bur Wick

  5

  1·91

  12 January

  1230

  Inner Harbour

  1

  0·57

  12 January

  1230

  Inner Harbour

  5

  0·73

  12 January

  1510

  Oxna

  1

  0·57

  12 January

  1520

  Oxna

  1

  0·73

  12 January

  1530

  Oxna

  2·5

  0·81

  12 January

  1530

  Oxna

  15

  0·81

  12 January

  1530

  Oxna

  10

  0·89

  12 January

  1530

  Oxna

  5

  0·96

  12 January

  1530

  Oxna

  2·5

  0·96

  12 January

  1530

  Oxna

  2–5

  0·89

  13 January

  1110

  West Hildasay

  2

  0·69

  13 January

  1115

  West Hildasay

  10

  0·45

  13 January

  1221

  Clift Sound

  2

  0·77

  13 January

  1222

  Clift Sound

  10

  1·00

  13 January

  1244

  Clift Sound

  10

  0·85

  13 January

  1246

  Clift Sound

  1

  1·11

  13 January

  1302

  Clift Sound

  1

  0·52

  13 January

  1311

  Clift Sound

  1

  0·41

  13 January

  1315

  Cift Sound

  10

  0·44

  13 January

  1318

  Clift Sound

  1

  0·24

  13 January

  1344

  Clift Sound

  10

  0·27

  13 January

  1354

  Clift Sound

  1

  0·36

  13 January

  1356

  Clift Sound

  10

  0·45

  13 January

  1418

  Clift Sound

  1

  0·26

  13 January

  1430

  Clift Sound

  1

  0·36

  13 January

  1432

  Clift Sound

  1

  0·67

  13 January

  1435

  Clift Sound

  1

  0·84

  Note After 13 January, the Scottish Office Agriculture and Fisheries Department assumed responsibility for all sampling.

NATIONAL FINANCE

  Domestic Energy (VAT)
  Mr. Nicholas Brown
  To ask the Chancellor of the Exchequer what estimate he has made of the impact on the retail prices index(a) during the 1994–95 financial year and (b) during the 1995–96 financial year, of increasing the rate of VAT on domestic fuel and power to 8 per cent. and 17·5 per cent. respectively.

  Mr. Nelson
  The extension of VAT to domestic fuel and power is estimated to add just under 0·4 per cent. to the retail prices index in 1994–95, and just over 0·4 per cent. further in 1995–96.
  256

  Pensions
  Mr. David Shaw
  To ask the Chancellor of the Exchequer what is the average public sector pension in payment and the average length of service of public sector pensioners in the current year.

  Mr. Portillo
  Information about average pensions and lengths of service of all public sector pensioners is not kept centrally. Estimates of the average pensions payable from the main public service schemes in the latest year for which information is readily available is as follows:
  257

  Number of pensioners

  Average pensions

  Scheme

  Year

  Members

  Dependants

  Members £

  Dependants£

  Civil service

  1993–94

  399,600

  123,500

  4,093

  1,700

  NHS (England and Wales)

  1993–94

  312,600

  46,800

  4,125

  2,391

  NHS (Scotland)

  1993–94

  49,100

  5,800

  3,647

  1,638

  Teachers (England and Wales)

  1993–94

  306,000

  22,000

  6,300

  2,000

  Teachers (Scotland)

  1993–94

  32,100

  3,500

  6,459

  2,129

  Armed forces

  1993–94

  263,500

  84,900

  4,326

  2,338

  Local government (England and Wales)

  1991–92

  573,000

  111,100

  2,515

  1,127

  Local government (Scotland)

  1991–92

  85,4671

  2,0361

  1 Figures include both scheme members and dependants.

  North Sea Oil and Gas
  Mrs. Ewing
  To ask the Chancellor of the Exchequer if he will list the total amount of revenue which has accrued to the Treasury from the development of North sea(a) oil and (b) gas in each year since exploration and development began.

  Mr. Dorrell
  Revenues raised from United Kingdom oil and gas production are as follows:

  £ million

  Year

  Annual revenues

  1968–69

  1

  1969–70

  2

  1970–71

  5

  1971–72

  10

  1972–73

  15

  1973–74

  15

  1974–75

  20

  1975–76

  25

  1976–77

  81

  1977–78

  238

  1978–79

  565

  1979–80

  2,313

  1980–81

  3,743

  1981–82

  6,492

  1982–83

  7,822

  1983–84

  8,798

  1984–85

  12,035

  1985–86

  11,348

  1986–87

  4,783

  1987–88

  4,618

  1988–89

  3,168

  1989–90

  2,368

  1990–91

  2,312

  1991–92

  979

  11992–93

  1,278

  1 provisional estimate.

  It is not possible to subdivide these amounts as to those derived from oil production and from gas production, or those from areas outside the North sea.

  Mrs. Ewing
  To ask the Chancellor of the Exchequer if he will list the number of projects which have specifically been funded by revenues from North sea oil and gas revenues in each year since tax revenues accrued from exploration and development.

  Mr. Dorrell
  None. It is not the policy of this Government, or any other in recent history, to hypothecate tax revenue to particular projects.
  258

  Corporation Tax
  Mr. Milburn
  To ask the Chancellor of the Exchequer what was the total corporation tax paid by the 25 largest United Kingdom companies, measured by turnover, in each of the last five years.

  Mr. Dorrell
  The 25 largest United Kingdom companies and company groups, based on the levels of turnover in their latest accounts, had corporation tax liabilities, including advance corporation tax, as follows in the years 1987 to 1991:

  £ billion

  Year

  Number

  1987

  3·1

  1988

  3·0

  1989

  3·5

  1990

  3·5

  1991

  3·3

  Liabilities for 1992 are not available yet. Corporation tax liabilities exclude double tax relief for tax paid overseas.

  Commemorative Coins
  Mr. Burns
  To ask the Chancellor of the Exchequer what plans Her Majesty's Government have to issue new commemorative coins.

  Mr. Kenneth Clarke
  Her Majesty the Queen has been graciously pleased to approve the recommendation of my predecessor, the right hon. Member for Kingston-upon-Thames (Mr. Lamont), that a 50p coin be issued featuring a special design to commemorate the 50th anniversary next year of the D-Day landings of June 1944. It is intended that the coin should be available in 1994 for general circulation. There will also be collector versions in base and precious metal.

FOREIGN AND COMMONWEALTH AFFAIRS

  Cambodia
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Government policy in regard to the current activities of the Khmer Rouge in Cambodia; and what action will be taken to ensure that human rights initiatives are maintained in that country.

  Mr. Goodlad
  We deplore the Khmer Rouge's refusal to co-operate with the United Nations Transitional
  259
  Authority in Cambodia (UNTAC) and the attacks on United Nations personnel and ethnic Vietnamese. We believe that the results of the election last month show that the vast majority of the Cambodian people reject the Khmer Rouge and its ways.

  We co-sponsored the resolution at the United Nations Commission on Human Rights in Geneva in February requesting the United Nations Secretary General to appoint a special representative to co-ordinate the United Nation's human rights presence in Cambodia and mandating the centre for human rights to run a human rights programme in Cambodia after the withdrawal of UNTAC. The former President of the Philippines, Corazon Aquino, has been nominated special representative.

  Israel
  Mr. Vaz
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans the Government have to ask the United Nations to intervene in the case of the 400 Palestinians expelled from Israel last December.

  Mr. Douglas Hogg
  We voted for United Nations Security Council resolution (UNSCR) 799 which calls for the return of the deportees. We welcome the recent Israeli Government announcement that they have no plans to resort to deportations and their hope that compliance with SCR 799 can be achieved.

  Nuclear Non-proliferation
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library a copy of the statement made by the head of the United Kingdom delegation to the first preparatory committee meeting for the fifth review conference of the nuclear non-proliferation treaty held in New York in May.

  Mr. Douglas Hogg
  I refer the hon. Gentleman to the reply I gave to the hon. Member for Leyton (Mr. Cohen) on 7 June, c.86.

  Cyprus
  Mr. Deva
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will implement the recommendations of the Third report of the Select Committee on Foreign Affairs of Session 1986–87, HC 23, on Cyprus, in connection with contracts between northern Cyprus and the outside world.

  Mr. Goodlad
  Government policy on contracts remains as stated in the published observations on the report.

  Paris (Visit)
  Mr. Llew Smith
  To ask the Secretary of State for Foreign and Commonwealth Affairs what matters were discussed and decided during his most recent visit to Paris.

  Mr. Douglas Hogg
  Discussion between the French Foreign Minister and my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs concentrated on the situation in former Yugoslavia. They agreed to continue to work closely together for a solution.

  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the subjects discussed with the French Foreign Minister at the meeting in Paris on 1 June.
  260
  Mr. Douglas Hogg
  Discussion between the French Foreign Minister and my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs concentrated on the situation in former Yugoslavia. They agreed to continue to work closely together for a solution.

  Yugoslavia
  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will call for a specific investigation of alleged Croatian atrocities and war crimes in the former Yugoslavia at the next meeting of the United Nations Security Council.

  Mr. Douglas Hogg
  The investigation into violations of international humanitarian law in the former Yugoslavia, by all parties to the conflict, is being conducted by the United Nations Commission of Experts established under United Nations Security Council resolution 780.

  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to support the principle of trials for suspected war criminals in the former Yugoslavia regardless of the ethnic origins of either the perpetrators or the alleged victims; and if he will make a statement on the United Nations Security Council's decision to set up an international tribunal to deal with such war crimes.

  Mr. Douglas Hogg
  We fully support the UN Security Council's decision to establish an ad hoc tribunal to try those responsible for violations of international humanitarian law in the former Yugoslavia. The tribunal is mandated to bring alleged perpetrators from any of the parties to justice.

  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to support the reconvening of the London conference on the former Yugoslavia; and if he will make a statement.

  Mr. Douglas Hogg
  There may be a case for reconvening the London conference at the right time. But, before going ahead, there would need to be prior agreement among all parties on objectives and a clear idea of the desired outcome. We would give particular weight to the views of the co-chairmen of the steering committee of the international conference on the former Yugoslavia, Lord Owen and Mr. Stoltenberg.

  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Croatian Government following the establishment of road blocks around the village of Kruscica; and if he will make a statement.

  Mr. Douglas Hogg
  None. We are investigating reports which suggest that Kruscica is being blocked.

  Mr. Wareing
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with Lord Owen since the Foreign Ministers' meeting in Washington DC on 22 May; and if he will make a statement.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs had an informal meeting with Lord Owen on 6 June and on 8 June attended the General Affairs Council in Luxembourg,
  261
  which Lord Owen briefed on his efforts to achieve a negotiated settlement in Bosnia. The normal arrangements will be made to inform the House of the outcome of the Council.

HEALTH

  Doncaster Health Care Trust
  Mr. Redmond
  To ask the Secretary of State for Health when she expects to receive the financial results of the Doncaster Health Care Trust for the year 1992–93; and if she will make a statement.

  Dr. Mawhinney
  Doncaster health care trust, in common with all other national health service trusts, is required to present its annual accounts to an annual public meeting no later than 30 September following the year-end accounts.

  For the financial year 1992–93, the trust will need to hold this meeting on or before 30 September 1993.

  North Western RHA
  Mr. Callaghan
  To ask the Secretary of State for Health if she will make a statement on hospital closures in the North Western regional health authority.

  Mr. Sackville
  This is a matter for North Western regional health authority. The hon. Member may wish to contact Sir Bruce Martin, the RHA chairman, for details.

  Equal Opportunities
  Ms Primarolo
  To ask the Secretary of State for Health whether the equal opportunities guidance from the Department of Health management executive requires the completion of a job description prior to(a) advertising, (b) interviewing or (c) appointing persons to a post within a hospital or medical school.

  Dr. Mawhinney
  Departmental guidance EL(91)71, a copy of which is available in the Library, recommends that job descriptions should be issued to members of all hospital appointments committees to provide an objective basis for shortlisting and interviewing. Appointments to medical school posts are made by universities, which are the responsibility of my right hon. Friend the Secretary of State for Education.

  Nurses
  Mr. Donohoe
  To ask the Secretary of State for Health what is the current status of the consultation exercise being undertaken by the United Kingdom central council in conjunction with her Department concerning proposals to amend the criteria for community nurse status; and when she expects the United Kingdom central council to produce its final proposals.

  Mr. Sackville
  The United Kingdom central council's current consultation on its proposals for the reform of post registration education and practice finishes at the end of September. We would expect to receive its final proposals in the autumn.

  Mr. Donohoe
  To ask the Secretary of State for Health if she will make a statement on the decision of the United 262
  Kindom central council not to recognise courses and seminars taken by practice nurses for accreditation towards community nurse status.

  Mr. Sackville
  This is a matter for the United Kingdom central council as the body with statutory responsibility for the type and standard of nursing, midwifery and health visiting training.

  Population and Mortality
  Ms Primarolo
  To ask the Secretary of State for Health what is(a) the population and (b) the standardised mortality rate for each health region.

  Mr. Sackville
  The information for 1991 (the latest year for which information is available) is shown in the table:

  Population and standardised mortality ratios for England and Wales by regional health authority for 1991

  Provisional estimate of resident population at mid-1991 (thousands)

  Standardised mortality ratio 1 1991

  England and Wales

  50,954·8

  100

  England

  48,068·4

  100

  Wales

  2,886·4

  101

  Northern

  3,084·2

  113

  Yorkshire

  3,661·5

  103

  Trent

  4,700·4

  102

  East Anglian

  2,091·9

  92

  North West Thames

  3,560·4

  95

  North East Thames

  3,756·7

  99

  South East Thames

  3,686·2

  96

  South West Thames

  3,023·1

  92

  Wessex

  2,983·0

  91

  Oxford

  2,559·9

  94

  South Western

  3,298·0

  92

  West Midlands

  5,254·9

  103

  Mersey

  2,407·5

  108

  North Western

  4,000·7

  111

  1 A standardised mortality ratio (SMR) is a single figure measure of mortality and is used to examine the relationship between: (1) the actual number of deaths in any given area and for any given period, and; in this instance (2) the number that would have been expected had that area experienced the sex and age specific mortality rates observed in England and Wales as a whole during that year. England and Wales in this instance is the 'standard' by which the other areas arc measured and accordingly has an SM R of 100.

  Health Authority Chairmen
  Mr. Redmond
  To ask the Secretary of State for Health if she will discontinue the payments of salaries to health authority and trust chairmen and non-executive directors and replace them with payments for loss of earnings.

  Dr. Mawhinney
  We have no plans to do.

  Triazolam
  Mr. Oppenheim
  To ask the Secretary of State for Health if she will make a statement on the availability of products containing triazolam in the United Kingdom.

  Dr. Mawhinney
  All licences for triazolam products, including the brand named Halcion, to Upjohn Limited are being revoked on 9 June 1993. Triazolam products, which were available for the treatment of insomnia between 1978 and 1991, will therefore remain withdrawn.
  263
  On the advice of the Committee on Safety of Medicines, licences for Halcion were suspended in October 1991 on grounds of safety and all triazolam products were withdrawn from the market at that time, pending proceedings to revoke the licences.

  The three bodies who have heard representations from Upjohn against the proposed revocation of the triazolam licences have given conflicting advice. The Committee on Safety of Medicines and the Medicines Commission were both concerned about the safety of triazolam and advised that the 0·25 mg product licences should be revoked but they differed as to whether or not the 0·125 mg licences should be revoked. In contrast, a panel of persons appointed by the licensing authority under the Medicines Act 1968 concluded that the benefits of both dose forms of triazolam outweigh the risks and appeared largely reassured by the revisions of the product information proposed by Upjohn.

  The licensing authority has based its decision on consideration of the safety of triazolam. It has taken into account the views of each of the advisory bodies in reaching the decision and carefully considered the underlying reasons for the differences in the conclusions and advice received. The licensing authority has not accepted the conclusions of the panel and is not reassured of the safety of triazolam.

  The licensing authority has examined measures alternative to revocation of the licences for triazolam but has concluded that restrictions in the dose, duration of treatment or availability of triazolam would not provide adequate safeguards against its hazards in normal use.

  The first concern must be for patients. Because we are not satisfied as to the safety of triazolam, we believe it is right to be cautious.

  In summary, the licensing authority has considered the basis of the panel's conclusions carefully but remains not reassured of the safety of the triazolam products, and considers that the risks of triazolam outweigh its benefits in normal use.

  Copies of the report of the panel of persons appointed and detailed reasons for the licensing authority's decision are available in the Library.

  NHS Estates
  Mr. Congdon
  To ask the Secretary of State for Health if she will make a statement on the plans for the NHS Estates executive agency.

  Mr. Sackville
  We are pleased to report that the National Health Service Estates Management and Health Building Agency (NHS Estates) has had a successful year as an executive agency of this Department. We have agreed the agency's 1993–96 three-year corporate plan and the annual business plan. Targets for 1993–94 are to:

  (i)Deliver all products and services on time and within cost.

  (ii) Review with customers the quality of services provided, frequency and style depending on the nature of the contract terms.

  (iii) increase revenues from the NHS and private sector to 67 per cent. of the cost of services purchased. (100 per cent. in 1995–96).

  (iv) increase income from United Kingdom consultancy services by 5 per cent. to £640,000.

  (v) Untie £725,000 of Agency resources to the NHS (market test) and recover through sales. (Total £1·2 million now, £2·4 million 1995–96).

  (vi) Achieve BS5750 quality assurance accreditation by 31 March 1994.

  264

  (vii) Explore the scope for market testing functions carried out on behalf of the NHS Management Executive by 30 September 1993.

  (viii) Keep within agreed Public Expenditure Survey baselines and additionally make 4 per cent. (£400,000) efficiency savings on the running costs element.

  (ix) Complete relocation of new headquarters to Leeds, saving £1·1 million per annum.

  (x) Co-ordinate an induction and training programme for all staff (75 per cent. of agency staff are new personnel). This will be ongoing and will be incorporated in the appraisal programme.

  (xi) Develop an overall measure of efficiency based on a cost weighted activity index by 1995–96.

  National Health Service Staff
  Mr. Roger Evans
  To ask the Secretary of State for Health if she will make a statement about her plans to publish new advice to staff in the national health service about relations with the public and the media.

  Mrs. Virginia Bottomley
  Sir Duncan Nichol has now issued new advice, "Guidance for staff on relations with the public and the media", under cover of executive letter (93)51. The guidance has been issued to national health service employers, including regional, district and family health services authorities and national health service trusts. The guidance provides a framework within which local procedures can and should be developed to enable staff to raise legitimate concerns about health care issues in a responsible way. Copies of the executive letter and accompanying guidance have been placed in the Library.

  National Health Service Trusts
  Mr. Milburn
  To ask the Secretary of State for Health whether NHS employees acting as non-executive directors of trusts may receive remuneration from both sources.

  Dr. Mawhinney
  National health service employees who are eligible to act as non-executive directors of trusts are entitled to receive the standard level of remuneration of £5,000 per annum, regardless of any other earnings.

  National Health Service Employees (Cars)
  Mr. Milburn
  To ask the Secretary of State for Health what is her Department's policy about NHS employees being provided with foreign-produced cars.

  Dr. Mawhinney
  The decision as to which vehicle to provide to national health service employees required to travel regularly on official business is entirely for local management.

  Ambulance Service
  Ms Lynne
  To ask the Secretary of State for Health what are the latest available response times for ambulances dealing with 999 calls in Bordon, Hampshire.

  Mr. Sackville
  Information on the Bordon area is not available centrally.

  In 1991–92, the Hampshire ambulance service as a whole responded to 97 per cent. of emergency calls within the 19-minute patients charter standard.

  Ms Lynne
  To ask the Secretary of State for Health what representations she has received about providing paramedic cover in ambulances serving Bordon, Hampshire, in response to 999 calls.
  265
  Mr. Sackville
  I have received one letter from my hon. Friend the Member for Hampshire, East (Mr. Mates).

  Hampshire ambulance service, which includes the Bordon area, is well on the way to meeting the Government's target of having one paramedic on each front-line ambulance by the end of 1995.

SOCIAL SECURITY

  Cost Increases
  Mr. Callaghan
  To ask the Secretary of State for Social Security what he estimates will be the increase in social security costs in the next year; and what is the breakdown of those costs between increases due to costs related to(a) unemployment and (b) other factors.

  Mr. Scott
  The estimated increase in social security expenditure from 1992–93 to 1993–94 is £6,152 million, of which £2,035 million is due to costs related to unemployment

  National Insurance
  Ms Mowlam
  To ask the Secretary of State for Social Security how many men and women paid both class 1 and class 2 national insurance contributions in 1991–92 and 1992–93; and what those figures represented as a percentage of the combined total of both classes of NI contributions in each year.

  Mr. Hague
  Figures for 1991–92 and 1992–93 are not yet available. The latest figures are in the table.

  1990–91

  Men

  Women

  Total

  Mixed class ½1number of contributors

  242,000

  70,000

  312,000

  Percentage of total class 1 and 2

  1·7 per cent.

  0·7 per cent.

  1·3 per cent.

  1 Figures show the number of contributors who paid at least one class 2 contribution and some class 1 contributions during the tax year. It is not possible to distinguish between those who were concurrently or consecutively employed and self-employed.

  Ms Mowlam
  To ask the Secretary of State for Social Security what plans he has to change the situation whereby a self-employed person who also works part-time for another employer is required to pay both class 1 and class 2 national insurance, regardless of the level of the combined incomes; and if he will make a statement.

  Mr. Hague
  We have no such plans. The current arrangements ensure that where someone has earnings from more than one employment, regardless of the level of the combined incomes, the total contributions payable under class 1 and class 2 are subject to an annual maximum; currently £1,795·84.

  If someone works for an employer and earns less than the lower earnings limit, currently £56 a week, no class 1 contribution is due. Similarly, self-employed people who expect their earnings to be less than a prescribed level, currently £3,140 a year, can apply to be excepted from paying class 2 contributions.

  Where contributions from more than one occupation are payable, they are aggregated for the purposes of calculating entitlement to contributory benefits.

  Disability Living Allowance
  Mr. Bradley
  To ask the Secretary of State for Social Security how many awards of the higher rate mobility component of disability living allowance have been made to date under the severe mental impairment regulations which took effect from 1 April 1992.

  Mr. Scott
  As at 31 May 1993, 2,062 such awards had been recorded.

EDUCATION

  School Transport
  Mr. Vaz
  To ask the Secretary of State for Education when the current three-mile rule for free transport for children to schools was introduced; what plans he has to revise it; and if he will make a statement.

  Mr. Forth
  The present definition of "walking distance" —two miles for pupils aged five to seven, three miles for eight to sixteen-year-olds, measured by the nearest available route—was introduced in the 1944 Act. Section 39 deals with the grounds on which a parent is not guilty of an offence if his child fails to attend school regularly. It, along with other factors, is taken into account by local education authorities in considering, under section 55 of the 1944 Act, when free transport is necessary.

  The Government have no plans to revise the present provisions.

  Teacher Training
  Mr. Vaz
  To ask the Secretary of State for Education what proposals he has regarding the qualifications necessary before an individual may embark on a teacher training course; and if he will make a statement.

  Mr. Robin Squire
  My right hon. Friend has issued a consultation document today, containing proposals for reforming courses of initial training for primary teachers. The only major change proposed to entry qualifications is that there should be a new requirement that with effect from 1 September 1998 all entrants to such courses who were born on or after 1 September 1979 should have attained a standard equivalent to GCSE grade C in science. The qualifications for entry to initial training courses for secondary teachers were set out in DFE circular 9–92 and are unchanged. Copies of both documents have been placed in the Library.

NORTHERN IRELAND

  Departmental Buildings
  Mr. Llwyd
  To ask the Secretary of State for Northern Ireland if he will list the buildings currently owned or rented by his Department, together with(a) the estimated value, (b) the annual rent and (c) the annual maintenance cost of each building in the current financial year.

  Mr. Mates
  The information requested could be obtained only at disproportionate cost.

  Available information is detailed in Northern Ireland Estimates and United Kingdom Supply Estimates which are held in the Library.

  Rates Arrears
  Mr. William O'Brien
  To ask the Secretary of State for Northern Ireland how many(a) business and (b) domestic rate payers are in arrears with their 1992–93 rates payments in Northern Ireland.

  Mr. Atkins
  Rate collection operational matters are the responsibility of Mr. David Gallagher, chief executive of the Rate Collection Agency. I have asked him to arrange for a reply to be given.

  Letter from D. W. Gallagher to Mr. William O'Brien, dated 4 June 1993.

  You recently asked a Parliamentary Question about how many business and domestic ratepayers were in arrears with their 1992–93 rates payments in Northern Ireland. As I am responsible for the Rate Collection Agency, the Secretary of State for Northern Ireland has asked me to reply.

  At 31 March 1993 there were 666,026 rated properties in Northern Ireland of which 171,237 were owned by the Northern Ireland Housing Executive which collects rates together with rent fortnightly from its tenants and pays the rates in bulk to the Rate Collection Agency. Of the remaining properties 5,852 non-domestic and 23,729 domestic had arrears outstanding at 31 March 1993.

  Should you require any further information please let me know.

  Fire Services
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what has been the recommended complement of staff for the Northern Ireland fire brigade in each of the last five years.

  Mr. Atkins
  The recommended complements are as follows:

  Whole-time

  Retained

  Control

  Others

  1988

  731

  803

  62

  228

  1989

  733

  980

  62

  229½

  1990

  733

  980

  59

  218½

  1991

  831

  980

  59

  225½

  1992

  847

  980

  59

  222½

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many incidents the Northern Ireland fire brigade has responded to in each of the last five years.

  Mr. Atkins
  The number of incidents was as follows:

  Whole-time pumping appliances

  Retained pumping appliances

  Emergency tenders

  Aerial appliance

  Foam tenders

  Emergency support units

  1988

  5

  6

  5

  3

  2

  2

  1989

  5

  6

  5

  3

  2

  2

  1990

  5

  6

  5

  3

  2

  2

  1991

  5

  6

  5

  3

  2

  2

  1992

  5

  6

  5

  3

  2

  2

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland how many fire stations have been upgraded in each of the last five years; and if he will list those stations which have been recommended for upgrading but have still to be upgraded.268

  Number

  1988

  22,970

  1989

  28,109

  1990

  25,099

  1991

  30,299

  1992

  27,288

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland if he will make a statement on the operation of the pay formula as it applies to the Northern Ireland fire brigade and the impact of the 1·5 per cent. pay increase; and what steps are proposed to reinstate the departure in the current year from the agreed pay formula.

  Mr. Atkins
  The Government are not a party to the firefighters' pay agreement and have no role in the negotiation of firefighters' pay, which is negotiated on a United Kingdom basis within the National Joint Council for Local Authorities' Fire Brigades, on which employers' and employees' organisations are represented. The current pay agreement provides for annual increases in firefighters' pay to be linked to the upper quartile of movements in pay for skilled manual workers. However, the Government have made it clear that the fire service employers are expected to comply with the policy on public sector pay, that any increases in the 1993 pay round should not exceed 1·5 per cent. Resources for the Fire Authority for Northern Ireland for the 1993–94 financial year have been determined accordingly. It is too early to speculate about the operation of the fire service pay formula after the current year.

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland to how many incidents retained firemen responded to with below the Home Office recommended level of crews in each of the last five years.

  Mr. Atkins
  I am advised by the Chief Fire Officer that accurate figures on the number of incidents retained firemen responded to with below the Home Office recommended level of crews are not available on a Province-wide basis. However, I am assure that the number of such incidents in each of the last five years was negligible.

  Mr. Beggs
  To ask the Secretary of State for Northern Ireland if he will publish details of manning levels in the Northern Ireland fire brigade over each of the last five years.

  Mr. Atkins
  The information is as follows:

  Mr. Atkins
  Ballymena fire station was upgraded in 1990, Bangor in 1991 and Lisburn in 1992.

  The following stations recommended for upgrading have still to be upgraded.

  Glengormley (to be completed this year)

  Portadown

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  Enniskillen

  Newry

  Lurgan

  Coleraine

  Newtownards

  Omagh

  "Making Belfast Work"
  Mr. Peter Robinson
  To ask the Secretary of State for Northern Ireland if he will list the names and locations of the maintained schools and the controlled schools within the area of the Belfast education and library board which are excluded from the "making Belfast work" initiative.

  Mr. Ancram
  The information is as follows:Maintained schools within the area of the Belfast education and library board which are outside the catchment area for the "making Belfast work" initiative:

  Our Lady of Lourdes CB Primary School, 700 Antrim Road, BT15 5EQ

  Holy Rosary Primary School, 70 Sunnyside Crescent. BT7 3DB

  St. Anne's Primary School, Lisburn Road, BT10 0LF

  St. Mary's Star of the Sea Primary School, 730–760 Shore Road BT15 4HL

  St. Bride's Primary School, 36 Derryvolgie Avenue, BT9 6FP

  St. Therese of Lisieux Primary School, 472 Antrim Road, BT15 5GF

  St. Michael's Primary School, 514 Ravenhill Road, BT6 0BW

  St. Joseph's Primary School, 31A Holland Drive, BT5 6EH

  Controlled schools within the area of the Belfast education and library board which are outside the catchment area for the "making Belfast work" initiative:

  Primary

  Belmont Primary School, 82 Belmont Church Road, BT4 3FG

  Rosetta Primary School, 21–23 Knockbreda Road, BT6 0JA

  Strand Primary School, Strandburn Street, BT4 1LX

  Harding Memorial Primary School, 105–107 Cregagh Road, BT6 8PZ

  Strandtown Primary School, North Road, BT4 3DJ

  Seaview Primary School, Seaview Drive, BT15 3NB

  Orangefield Primary School, Marina Park, BT5 6BA

  Carr's Glen Primary School 629–633 Oldpark Road, BT14 6QX

  Sydenham Primary School, Strandburn Street, BT4 1LX

  Ballygolan Primary School, 41–83 Serpentine Road, BT36 7HB

  Greenwood Primary School, 436–456 Upper Newtownards Road, BT4 3HS

  Stranmillis Primary School, Knightbridge Park, BT9 5eZ

  Cavehill Primary School, Upper Castle Park, BT15 5FG

  Knocknagoney Primary School, Knocknagoney Road, BT4 2NR

  Dundela Infants Primary School, Wilgar Street, BT4 3BL

  Lowwood Primary School, Sheringhurst Park, BT15 4BL

  Forge Integrated Primary School, 6 Balmoral Avenue, BT9 6MW

  Secondary/Grammar

  Ashfield Girls', Holywood Road, BT4 2LY

  Ashfield Boys', Holywood Road, BT4 2LY

  Orangefield High School, Cameronian Drive, BT5 6AW

  Wellington College, Annadale Embankment, BT7 3AE

  Grosvenor High School, Cameronian Drive, BT5 6AX

  Nursery

  Glenbank, Ligoniel Road, BT14 8BW

  Brefne, 11 Salisbury Avenue, BT15 5EZ

  Glendhu, Holywood Road, BT4 2LT

  Pensions Payments
  Mr. William O'Brien
  To ask the Secretary of State for Northern Ireland how many future pensioners in Northern Ireland have received forms requesting information as to the payment of retirement pensions; and if he will make a statement.

  Mr. Hague
  I have been asked to reply.

  The administration of retirement pensions is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member with such information as is available and a copy will be placed in the Library.

  Letter from Michael Bichard to Mr. William O'Brien, dated 8 June 1993:
  As Chief Executive of the Benefits Agency it is my responsibility to answer questions about relevant operational matters. I am therefore replying to your recent Parliamentary Question to the Secretary of State for Social Security asking how many future pensioners in Northern Ireland have received forms requesting information as to the payment of retirement pension.
  In any one year the Benefits Agency issues automatically to addresses in Northern Ireland, on behalf of the Social Security Agency in Northern Ireland, about 21,000 invitations to claim retirement pension for people approaching pension age (65 for a man and 60 for a woman). The claim form asks the person to choose the method by which they wish their pension to be paid. This can be either directly into a bank or building society account every 4 or 13 weeks or by weekly order book at a post office.
  I hope you find this reply helpful. A copy will appear in the Official Report and a copy will also be placed in the Library. I am copying this letter to Mr. Alec Wylie the Chief Executive of the Social Security Agency in Northern Ireland.

ENVIRONMENT

  Waste Incineration
  Mr. Llew Smith
  To ask the Secretary of State for the Environment when he received the recent report on incineration of waste by the Royal Commission on environmental pollution, Cm 2181; and what response he plans to make to the report.

  Mr. Yeo
  My Department received the report on the incineration of waste by the Royal Commission on Environmental Pollution on 20 May 1993. The Government will publish their formal response to the report in due course.

  Local Government Finance
  Ms Janet Anderson
  To ask the Secretary of State for the Environment what estimate he has(a) for each local authority, (b) for each region and (c) for England for the amount and proportion of local authority income coming from (i) council tax, (ii) national non-domestic rate, (iii) transitional relief and (iv) council tax benefit; and if he will make a statement.

  Mr. Baldry
  I have today placed in the Library figures for the amount of national non-domestic rate which authorities are entitled to receive from the non-domestic rate pool in 1993–94, the amounts in respect of council tax, including transitional relief and council tax benefit, which
  271
  they have budgeted to receive, and the percentages of each authority's budget requirement which they represent. A summary for each region and England is given in the table.

  Transitional relief grant and council tax benefit grant are paid only to billing authorities and together with receipts of council taxes from council taxpayers constitute

  Budget requirement (including parish precepts)

  Income from non-domestic rate

  Council tax requirement

  Region

  £ million

  £ million

  Per cent.

  £ million

  Per cent.

  The South-West

  3,180

  1,140

  36

  900

  28

  West Midlands

  4,020

  1,260

  31

  910

  23

  Yorkshire

  3,800

  1,190

  31

  850

  22

  North-west

  5,560

  1,650

  30

  1,280

  23

  The North

  2,090

  620

  30

  470

  23

  East Midlands

  2,850

  970

  34

  680

  24

  East Anglia

  1,370

  500

  37

  340

  25

  London

  7,270

  1,670

  23

  1,460

  20

  The South-East

  7,390

  2,580

  35

  2,050

  28

  England

  37,530

  11,580

  31

  8,930

  24

  Notes:

  The budget requirement is the amount authorities have budgeted to receive from revenue support grant, non-domestic rates and council taxes.

  The income from non-domestic rates is the amount of redistributed non-domestic rates payable to an authority's general fund.

  The council tax requirement either (a) includes income required to cover any estimated deficit on the collection fund brought forward from 1992–93 or (b) excludes income met from an estimated surplus on the collection fund brought forward from 1992–93.

  THORP
  Sir Thomas Arnold
  To ask the Secretary of State for the Environment, pursuant to the answer by the President of the Board of Trade of 25 May,Official Report, column 488, if he will make a statement on the current timing of the decision in respect of revised discharge authorisations in connection with the commissioning of the thermal oxide reprocessing plant at Sellafield.

  Mr. Yeo
  We have received the report of Her Majesty's inspectorate of pollution and the radiological inspectorate of the Ministry of Agriculture, Fisheries and Food on their public consultation on the draft authorisations for the Sellafield site including THORP. My right hon. Friends the Secretary of State and the Minister of Agriculture, Fisheries and Food are currently considering it.

  Nature Conservation
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what plans he has to introduce new powers for local authorities to protect sites of nature conservation interest.

  Mr. Yeo
  I refer the hon. Member to the answer I gave on 7 June to the hon. Member for Pembroke (Mr. Ainger),Official Report, column 101.

  Radioactive Discharge Limits, Sellafield
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what information he has recieved on resolutions submitted to the Paris Commission on sea dumping on Sellafield's radioactive discharge limits for its annual meeting in Berlin on 14 to 19 June.

  Mr. Yeo
  As part of the normal distribution of papers for the Berlin meeting, my officials have received copies of recommendations tabled by the Danish and Irish delegations. Both recommendations make reference to discharges from Sellafield.
  272
  the amounts in respect of council taxes which are payable to billing authorities and major precepting authorities. It is not possible to say what proportion of an individual authority's income from council taxes is made up of any particular component.

  Gulf Ecology
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Linlithgow (Mr. Dalyell) of 19 May,Official Report, column 182, if he will place in the Library a copy of the United Nations environmental programme on ecology in the Gulf.

  Mr. Yeo
  A copy has been placed in the Library.

  "Today" Interview
  Mr. Llew Smith
  To ask the Secretary of State for the Environment if he will place in the Library a copy of his interview on BBC Radio Four's "Today" programme on 1 June.

  Mr. Gummer
  No.

  Radioactive Waste
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what regulations govern the direct disposal of solid radioactive wastes to the sewage system from university laboratories; and if he will make a statement.

  Mr. Yeo
  Disposals of any radioactive waste to the sewage system must be authorised under the Radioactive Substances Act 1960, unless the level of radioactivity is so low that the waste is covered by one of the exemptions to the Act. Authorisations are granted subject to such limitations and conditions as the regulator, the chief inspector of Her Majesty's inspectorate of pollution, thinks fit.

  Self-build Housing
  Mr. Dunnachie
  To ask the Secretary of State for the Environment (1) what proportion of the United Kingdom housing budget allocated to self-build housing was taken up in percentage and money terms in the latest year for which figures are available;
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  (2) what proportion of the United Kingdom housing budget was allocated to self-build housing in the United Kingdom in percentage and money terms; and what percentage was taken up in the latest year for which figures are available.

  Mr. Baldry
  [holding answer 27 May 1993]: Within the United Kingdom housing budget there is no specific allocation made to support self-build housing. Therefore the figures requested are unavailable.

  Mr. Dunnachie
  To ask the Secretary of State for the Environment what steps are taken to ensure that the money allocated for self-build housing is available both to individual and to self-build groups.

  Mr. Baldry
  [holding answer 27 May 1993]: In England the Housing Corporation has a statutory function to promote and assist the development of self-build groups and help to arrange advantageous private finance for these groups. The corporation may also pay Housing Association Grant to self-build groups who are registered housing associations.

  Office of Water Services
  Mrs. Helen Jackson
  To ask the Secretary of State for the Environment what discussions he has had with OFWAT as to the cost of water in the next financial year; and what are the criteria by which he will decide on the level of 'K' in OFWAT's price fixing.

  Mr. Yeo
  [holding answer 7 June 1993]: My right hon. Friend's predecessors have from time to time had discussions with the Director General of Water Services. Under the Water Industry Act 1991 the Director General has the duty to set limits to the prices companies may charge: my right hon. Friend has no powers to interfere in any way with the exercise of that responsibility.

  The 1993–94 price limits have already been settled and are being implemented by the companies. The companies' licences set out the criteria for the scope of variations in price limits between periodic reviews. The Director General has published a number of consultation papers concerning his approach to setting price limits at the first full review in 1994, which will take effect from 1 April 1995. Under section 2 of the Water Industry Act 1991, the Director General must enable companies to obtain the funds to finance their duties while protecting the interests of their customers.

  Rural Planning Permissions
  Mr. Alex Carlile
  To ask the Secretary of State for the Environment what plans he has to repeal the Wildlife and Countryside Act 1981 to ensure that more consideration is given to environmental concerns during the consideration of planning permission by rural local authorities; and if he will make a statement.

  Mr. Yeo
  [holding answer 7 June 1993]: Town and Country Planning legislation together with the Wildlife and Countryside Act 1981 ensures that full account is taken of the likely effects that development proposals would have on the environment. Guidance to local authorities and others on how the conservation of our natural heritage is to be reflected in land use planning and development control is set out in circulars 27/87 and 1/92.
  274
  This will be updated in a planning policy guidance note, to be issued shortly. Nature conservation issues are frequently a material consideration in determining planning applications, especially those in or near sites of special scientific interest.

  Market Testing
  Mr. Flynn
  To ask the Secretary of State for the Environment what is the cost to date and the expected future cost of his Department's market-testing programme; how many staff are engaged full time in work relating to market testing; which firms of consultants have been used in connection with the market-testing programme; and how they were selected.

  Mr. Gummer
  [holding answer 7 June 1993]: The total cost of the programme to date has amounted to approximately £1,329,000. It is not possible to estimate the future cost of my Department's programme.

  There are 11 staff in my Department directly assigned to the market-testing programme.

  My Department has used the following consultancy services to assist in the development of the market testing process since November 1991.

  Dr. Alan Kemp

  Shreeveport

  Simon Thorpe Consultancy

  Hoskyns Group plc

  Prime Strategy Consultants

  Symonds

  Capita Management Consultancy

  Coopers and Lybrand

  Smith and Williamson

  Mr. P. Dworkin

  Touche Ross

  Peter Burholt Consultancy Ltd.

  Lane Whittlesey Business Consultants

  Mouncy and Partners

  The consultants were selected using the normal departmental competitive tendering procedures, with the exception of Dr. Kemp, who was at the time already employed as a special adviser to the then Secretary of State.

  National Rivers Authority
  Mr. Morley
  To ask the Secretary of State for the Environment when he expects to announce the merging of the National Rivers Authority with Her Majesty's inspectorate of pollution.

  Mr. Yeo
  [holding answer 8 June 1993]: The 1992 Conservative manifesto committed the Government to bringing together the key regulatory functions of the National Rivers Authority and Her Majesty's inspectorate of pollution, and waste regulation functions of local authorities, in a new Environment Agency. The required legislation will be introduced as soon as the necessary parliamentary time can be found.

  EC Environment Council
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what proposals he plans to put forward at the EC Environment Council meeting in Aarhus on 14 to 16 May.

  Mr. Yeo
  The meeting in Aarhus, at which my hon. Friend the then Minister for the Environment and Countryside represented the United Kingdom, was an
  275
  informal Council. Ministers discussed three topics proposed by the Danish Presidency: transport and the environment, the review of the structural funds regulations, and employment and the environment. No formal conclusions were adopted nor decisions taken.

SCOTLAND

  River Tay (Floods)
  Mr. Bill Walker
  To ask the Secretary of State for Scotland what representations he has received about the flood problems of the River Tay; and if he will make a statement.

  Sir Hector Monro
  More than 40 representations about flooding in Tayside have been received since the flooding in January. Most advocated that some form of flood management should be developed.

  I am pleased to say that Tayside regional council has commissioned a comprehensive study of the Tay catchment which will enable flood management, warning and defence strategies to be assessed against criteria of cost and effectiveness.

  For our part, the Government have agreed to meet 50 per cent. of eligible fees and associated expenses for the study up to a maximum contribution of £110,000.

  Local Government
  1. Mr. Nigel Griffiths
  To ask the Secretary of State for Scotland how he intends to announce the future of local councils in Scotland.

  Mr. Lang
  I intend to announce my decisions on the new structure of local government in Scotland in a White Paper to be published before the summer recess.

  Mr. McMaster
  To ask the Secretary of State for Scotland if he will make a statement on his plans for the role of community councils in the structure of local government in Scotland.

  Mr. Stewart
  [holding answer 7 June 1993]: Community councils can play a very effective representational role on behalf of their local communities. The second consultation paper "Shaping the New Councils" invited comments on the role of community councils. We are still considering the views expressed and any proposals to change the existing role of community councils will be announced later.

  Construction Industry
  Mr. Nicholas Winterton
  To ask the Secretary of State for Scotland how many people are currently employed in the construction industry in Scotland.

  Mr. Stewart
  The latest provisional estimates indicate that 114,500 people were employed in the Scottish construction industry in December 1992.

  Training
  Mr. Foulkes
  To ask the Secretary of State for Scotland when he last met the chairmen of the enterprise companies in Scotland to discuss the funding of training programmes.
  276
  Mr. Stewart
  My right hon. Friend and I frequently meet chairmen of local enterprise companies to discuss a range of economic development and training issues.

  Mr. Ernie Ross
  To ask the Secretary of State for Scotland when he last met the chairman of Scottish Enterprise to discuss training.

  Mr. Stewart
  My right hon. Friend and I met the chairman of Scottish Enterprise on 26 April 1993 to discuss a range of issues including training.

  Mr. McKelvey
  To ask the Secretary of State for Scotland what assessment he has made of the employment training programme in Kilmarnock and Loudoun and Ayrshire.

  Mr. Stewart
  This is a matter for Scottish Enterprise, which has a statutory duty to keep under continuous review the suitability and adequacy of such training where its provision is delegated to other bodies, such as local enterprise companies and their agents. Employment training was replaced by training for work on 1 April 1993.

  Quangos
  19. Mr. Galbraith
  To ask the Secretary of State for Scotland what is the total number of people he appoints to quangos and the total remuneration given to them.

  Mr. Lang
  As at 1 September last year, I made just under 4,000 public appointments. The majority of them are not paid. For those where a salary is paid, the total amount of remuneration, at the same date, was £2·1 million. This figure does not include a number of appointments which are fee paid and where, of course, the amount of fee depends on the days of attendance.

  Graduates' Employment
  Dr. Bray
  To ask the Secretary of State for Scotland what proportion of graduates in Scotland gained a permanent home employment by 31 December after graduation in 1988–89 and in 1990–91.

  Lord James Douglas-Hamilton
  Fifty-seven per cent. of those graduating in 1988–89 were in or had firm offers of employment by 31 December 1989. Of those graduating in 1990–91, 46 per cent. were in or had offers of such employment by 31 December 1991.

  Gross Domestic Product
  Mr. Peter Atkinson
  To ask the Secretary of State for Scotland if he will make a statement on the gross domestic product per head in Scotland between the years 1981 and 1990.

  Mr. Stewart
  In current prices, GDP per head in Scotland in 1981 was £3,542. In 1990, it was £7,747. After allowing for inflation, this represents a real increase of 30 per cent.

  Ferry Services
  Mr. Macdonald
  To ask the Secretary of State for Scotland if he will make a statement on ferry services to the Scottish islands.

  Lord James Douglas-Hamilton
  I refer the hon. Gentleman to the answer given by my right hon. Friend earlier today to the hon. Member for Renfrew, West and Inverclyde (Mr. Graham).
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  Mr. Macdonald
  To ask the Secretary of State for Scotland what arrangements have been made to engage consultants to look at the privatisation of Caledonian MacBrayne; and if he will make a statement.

  Lord James Douglas-Hamilton
  [holding answer 7 June 1993]: I refer the hon. Gentleman to the answer given by my right hon. Friend on 26 May, Official Report, column 589, to the hon. Member for Aberdeen, South (Mr. Robertson).

  Mr. Chisholm
  To ask the Secretary of State for Scotland what is his policy on the development of a roll-on roll-off ferry service between Scotland and northern Europe.

  Mr. Stewart
  The development of any service, and the choice of location of the relevant ferry port, must be a matter for the commercial judgment of the potential operator. As the hon. Member is aware from my letter to him of 8 January this year, Scottish Enterprise has commissioned consultants to estimate the financial, economic and environmental impacts of developing new east coast port facilities, in response to potential market interest. The final report of the consultants is, I understand, still awaited by Scottish Enterprise.

  Defence Procurement
  Mr. Oppenheim
  To ask the Secretary of State for Scotland if he will make a statement on the effect of defence procurement on Scottish industry.

  Mr. Stewart
  The Ministry of Defence's expenditure in Scotland on equipment in 1990–91 totalled £600 million, which was 8 per cent. of the MOD's total expenditure on equipment within the United Kingdom. It is estimated that MOD's equipment procurement accounted for 1.4 per cent. of Scottish GDP in 1990.

  Associated employment in Scotland within contractors supplying MOD direct in 1990–91 was 13,000, 10 per cent. of the United Kingdom total and approximately 0·5 per cent. of the Scottish work force.

  Gipsies, Cambuslang
  Mrs. Ann Winterton
  To ask the Secretary of State for Scotland what action was taken by his Department in connection with the representations made by the hon. Member for Congleton on Monday 10 May relating to gipsy encampments at the Cambuslang industrial estate.

  Lord James Douglas-Hamilton
  The Scottish Office contacted the Crown Office, which confirmed that the police and the relevant local authority were aware of the situation. I understand that the level of activity on the industrial estate was not sufficient to warrant further action at that time.

  Local Services
  Mr. McMaster
  To ask the Secretary of State for Scotland when he last met representatives of public bodies to discuss the provision of local services.

  Mr. Stewart
  My right hon. Friend last met the Convention of Scottish Local Authorities on 18 January 1993.

  Forestry Commission
  Mrs. Gorman
  To ask the Secretary of State for Scotland what recent discussions he has held on the future of the Forestry Commission.

  Sir Hector Monro
  My right hon. Friend regularly meets individuals and organisations with interests in forestry to hear their views and discuss matters of mutual concern. In these discussions, issues such as the future of the Forestry Commission naturally arise.

  Mr. Chris Smith
  To ask the Secretary of State for Scotland whether primary legislation is required if a decision is made to privatise the Forestry Commission in whole or part.

  Sir Hector Monro
  [holding answer 26 May 1993]: Ministers have come to no decisions about the effectiveness of the current incentives for forestry investment or the ownership and management of Forestry Commission woodlands, which are the subject of review. Only once they have done so would they consider any consequent requirements for primary legislation.

  National Environmental Agency
  Mr. Connarty
  To ask the Secretary of State for Scotland what changes in responsibility or statutory duties he envisages for local authorities following the setting up of a national environmental agency in Scotland.

  Sir Hector Monro
  I refer the hon. Member to the reply given to my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch) by my right hon. Friend on 25 February,Official Report, column 722.

  We plan to transfer to the proposed Scottish environment protection agency the existing district and islands councils' responsibilities in Scotland for waste regulation and local authority air pollution control under part I of the Environmental Protection Act 1990 and the islands councils' responsibilities as river purification authorities.

  Southern General Hospital, Edinburgh
  Mr. Eric Clarke
  To ask the Secretary of State for Scotland what is the expected starting date and completion date of the new Southern general hospital in Edinburgh.

  Mr. Stewart
  Policy on the provision of a new teaching hospital in Edinburgh is a matter primarily for Lothian health board, subject to public consultation and the approval of my right hon. and noble Friend. I understand that Lothian health board plans to issue proposals for public consultation in due course.

  Road Haulage
  Mrs. Adams
  To ask the Secretary of State for Scotland what safety restrictions he has laid down for movements of very large loads and convoys by road in Scotland.

  Lord James Douglas-Hamilton
  The Secretary of State for Scotland lays down no safety restrictions for the movement of very large loads and convoys. In the United Kingdom, the Secretary of State for Transport is responsible for authorising abnormal indivisible load movements.

  Water
  Mr. Canavan
  To ask the Secretary of State for Scotland when he now expects to make a statement on his policy on the future of the water industry in Scotland.

  Sir Hector Monro
  A decision on the future structure of water and sewerage services will be made when responses to the consultation have been fully considered. My right hon. Friend will make a statement in due course.

  Mr. Welsh
  To ask the Secretary of State for Scotland how many of the submissions he has received to his consultation document on water and sewerage have been from the 10 regional water companies in England and Wales; and if he will make a statement.

  Sir Hector Monro
  I refer the hon. Member to the reply that I gave him on 22 March,Official Report, column 474.

  Damp Housing
  Mr. Davidson
  To ask the Secretary of State for Scotland what action he intends to take to measure and reduce the health risk to children living in damp public sector housing.

  Lord James Douglas-Hamilton
  In preparing their next housing plans and housing capital programmes, due by the end of August, all local housing authorities have been asked to set out strategies and targets for tackling housing in their areas subject to condensation and dampness.

  Voluntary Organisations (Grants)
  Mr. Knox
  To ask the Secretary of State for Scotland what was the value of grants from his Department to voluntary organisations in each of the past three years, at constant prices.

  Mr. Stewart
  Grants paid to voluntary organisations by the Scottish Office in each of the last three years at 1991–92 prices, were £20·2 million in 1990–91, £20·7 million in 1991–92 and £24·7 million in 1992–93.

  Stobhill Hospital, Glasgow
  Mr. Michael J. Martin
  To ask the Secretary of State for Scotland when he will next meet the Greater Glasgow health board to discuss the future of Stobhill hospital; and if he will make a statement.

  Mr. Stewart
  My right hon. Friend the Secretary of State has no immediate plans to meet with Greater Glasgow health board to discuss Stobhill or any other hospital that is subject to the board's comprehensive review of acute and maternity services. He looks forward to receiving the board's detailed proposals in due course.

  Angling
  Mr. Colvin
  To ask the Secretary of State for Scotland what assessment he has made of the significance of the field sport of angling to the economy of Scotland; and what measures he is taking to encourage the sport.

  Sir Hector Monro
  I have made no assessment of the significance of the field sport of angling to the economy of Scotland. However, the governing body for angling received grants totalling over £30,000 from the Scottish 280
  Sports Council in 1991–92. In common with all other sports, the governing body has full autonomy and the responsibility for increasing participation and improving standards of angling in Scotland.

  Homelessness
  Mr. Wray
  To ask the Secretary of State for Scotland if he will make a statement on his plans to deal with the homeless in Scotland.

  Lord James Douglas-Hamilton
  Local authorities have the statutory responsibility for dealing with homelessness. Their capital allocations this year total £513 million and homelessness is one of the three key issues which housing authorities have been asked to address in their housing strategies and output targets. In addition, the Government have made available extra capital allocations of almost £23 million earmarked for homelessness projects over the period 1991 to 1993.

  Labour Statistics
  Mr. Norman Hogg
  To ask the Secretary of State for Scotland what percentage of the work force in each of Scotland's new towns is currently unemployed.

  Mr. Stewart
  Statistics for the area of each new town are not maintained by the Department of Employment. The following percentages have been provided by the development corporation:

  per cent.

  Cumbernauld

  9·7

  East Kilbride

  8·9

  Glenrothes

  11·7

  Irvine

  13·3

  Livingston

  9·0

  Education Spending
  Mr. Harry Greenway
  To ask the Secretary of State for Scotland how much is spent on average per pupil at(a) primary school level and (b) secondary school level; and if he will make a statement.

  Lord James Douglas-Hamilton
  In 1991–92, the latest year for which figures are available, net current expenditure per pupil in Scottish primary schools was £1,633. The comparable figure for secondary schools was £2,834. These figures do not include the cost of home to school transport, school meals, education authority central administration and loan charges.

  Council Tax
  Mr. McMaster
  To ask the Secretary of State for Scotland if he will estimate the average council tax payment due in each district council area in Scotland in the current financial year; and if he will make a statement.

  Mr. Stewart
  [holding answer 7 June 1993]: The table gives, for each district and islands council area in Scotland, estimates of the average amount of council tax billed per inhabitable dwelling in 1993–94. The amount billed includes district and region council taxes and excludes council water charges. In calculating the average, no

  281
  allowance has been made for the effects of council tax transitional relief and council tax benefit in reducing the amounts that have to be paid.

  Council tax, amount billed per dwelling, Scotland: 1993–94

  Authority

  Amount billed £

  Borders

  Berwickshire

  361

  Ettrick and Lauderdale

  385

  Roxburgh

  362

  Tweeddale

  433

  Central

  Clackmannan

  457

  Falkirk

  378

  Stirling

  556

  Dumfries and Galloway

  Annandale and Eskdale

  422

  Nithsdale

  423

  Stewartry

  394

  Wigtown

  400

  Fife

  Dunfermline

  448

  Kirkcaldy

  443

  North East Fife

  542

  Grampian

  Aberdeen City

  456

  Banff and Buchan

  370

  Gordon

  459

  Kincardine and Deeside

  451

  Moray

  361

  Highland

  Badenoch and Strathspey

  407

  Caithness

  346

  Inverness

  422

  Lochaber

  445

  Nairn

  458

  Ross and Cromarty

  440

  Skye and Lochalsh

  415

  Sutherland

  366

  Lothian

  East Lothian

  529

  Edinburgh City

  583

  Midlothian

  485

  West Lothian

  409

  Strathclyde

  Argyll and Bute

  440

  Bearsden and Milngavie

  590

  Clydebank

  424

  Clydesdale

  445

  Cumbernauld and Kilsyth

  396

  Cumnock and Doon Valley

  370

  Cunninghame

  393

  Dumbarton

  493

  East Kilbride

  463

  Eastwood

  515

  Glasgow City

  458

  Hamilton

  440

  Inverclyde

  396

  Kilmarnock and Loudoun

  393

  Kyle and Carrick

  533

  Monklands

  415

  Motherwell

  380

  Renfrew

  456

  Strathkelvin

  531

  Tayside

  Angus

  403

  Dundee City

  459

  Perth and Kinross

  473

  Orkney

  301

  282

  Authority

  Amount billed £

  Shetland

  298

  Western Isles

  319

  Scotland

  454

  Dr. Godman
  To ask the Secretary of State for Scotland (1) what information he has concerning council tax appeals being made in each local authority area for the latest date for which information is available;

  (2) how many proposals for changes in council tax banding have so far been made to valuation offices in each local authority; and what proportion of households this represents.

  Mr. Stewart
  [holding answer 8 June 1993]: This information is not yet available centrally.

  Mr. Salmond
  To ask the Secretary of State for Scotland what is his Department's forecast of the number of people in Scotland who were previously exempted from paying the community charge on the grounds of severe mental impairment and who(a) are liable for the water charge element of the council tax, (b) are liable for all or part of the property element of the council tax or (c) will be in receipt of 100 per cent. council tax benefit for the property element.

  Mr. Stewart
  [holding answer 25 May 1993]: Such estimates are not available. My Department does not make estimates concerning the personal circumstances of persons who may be liable to pay the council tax.

  Mr. Salmond
  To ask the Secretary of State for Scotland what is his Department's assessment of the number of people in Scotland who(a) will be in receipt of 100 per cent. council tax benefit for the property element of the tax and (b) will be exempt from payment of the personal element of the council tax on the grounds of severe mental impairment.

  Mr. Stewart
  [holding answer 25 May 1993]: My Department does not make any assessment of the circumstances of people entitled to council tax benefit.

  Councillors (Payments)
  Mr. McMaster
  To ask the Secretary of State for Scotland if he has any plans to increase the level of payments to elected members of local authorities for(a) attendance, (b) special responsibility, (c) travelling and (d) subsistence; and if he will make a statement.

  Mr. Stewart
  [holding answer 7 June 1993]: All the payments to members of local authorities by way of allowances and travel and subsistence were increased earlier this year. The comments received from the Convention of Scottish Local Authorities on the first year's operation of the new system introduced in April 1991 are being considered in the wider context of local government reform and the review of internal management.

  Hospital Waiting Lists
  Mr. Dunnachie
  To ask the Secretary of State for Scotland how many people were waiting for urgent hospital treatment in each major specialty at 31 March in each regional health authority.
  283
  Mr. Stewart
  [holding answer 7 June 1993]: Available information about waiting lists and waiting times is published quarterly in the "NHS Patient Treatment and Waiting Time Bulletin", copies of which are in the Library of the House. The information collected does not classify patients according to degree of urgency: this is for individual clinicians' judgment. We do know, however, that about half of all admissions are immediate, and that about half of all waiting list admissions are within four weeks.

  Public Appointments
  Mr. McMaster
  To ask the Secretary of State for Scotland if he will list each occasion since 1987 when his Department has(a) appointed and (b) successfully nominated Michael Hirst to non-departmental public bodies; which such positions he currently holds; what salary, honoraria or allowances are attached to these positions; and if he will make a statement.

  Mr. Lang
  [holding answer 7 June 1993]: Sir Michael Hirst was appointed to the board of governors of the Queen's college, Glasgow in 1989 for the period to 31 December 1992. The position carried no salary or fee. The college is now part of Glasgow Caledonian university and is no longer a non-departmental public body. Sir Michael has not held and does not currently hold any other appointment to a non-departmental public body in Scotland and my Department has not nominated him for membership of any other non-departmental public body.

  Nurse Education
  Mr. Nigel Griffiths
  To ask the Secretary of State for Scotland when he announced the proposal to review nurse education; what date he set at that time for announcing the results of this review; and when he now expects to make this announcement.

  Mr. Stewart
  [holding answer 27 May 1993]: Following the announcement by my right hon. Friend on 24 July 1992 that NHS trust status was no longer an option for colleges of nursing and midwifery currently managed by health boards, general managers were advised on 24 September 1992 that they should continue meanwhile to be responsible for the management of the colleges. At that time the Home and Health and Education Departments were instructed to under a review. Its aim was to assess the educational and financial implications of the broad range of options for the future management and resourcing of nursing and midwifery education in Scotland, with particular reference to the role of the NHS and further and higher education. While, at that time, it was hoped to reach firmer conclusions by the end of the financial year 1992–93, complex issues have emerged which require very careful consideration and in-depth scrutiny. The review is almost complete. Once the implications of the various options have been considered, my right hon. Friend will advise health boards of his decisions.

  Cockles
  Mr. Welsh
  To ask the Secretary of State for Scotland (1) what changes in legislation he envisages to extend the ban on cockle fishing by boat to land-based cockle tractors;
  284
  (2) what representations he has received on extending the ban on cockle fishing by boat to land-based cockle tractors; and how many were satisfied and unsatisfied with present arrangements.

  Sir Hector Monro
  [holding answer 7 June 1993]: Cockle dredging by boat is subject to control under the provisions of the Inshore Fishing (Scotland) Act 1984. This legislation is kept under review. A number of representations have been received suggesting that similar powers be taken to control land-based cockle tractors. However, there are no current proposals to amend this legislation.

  Mr. Welsh
  To ask the Secretary of State for Scotland what information he has on the operation of land-based cockle tractors during the ban on cockle fishing by boat; and if he will make a statement.

  Sir Hector Monro
  [holding answer 7 June 1993]: I am aware that land-based dredging takes place and of the strong local feelings to which this can give rise. Where it is judged to be a public nuisance, local authorities can promote byelaws to control or prohibit it.

  Mr. Welsh
  To ask the Secretary of State for Scotland (1) what powers are available to him to control the dredging of cockle beds by land-based cockle tractors during the ban on cockle fishing by boat; and if he will make a statement;

  (2) if he intends to delay the resumption of cockle fishing by boat in order to allow sufficient recuperation time for cockle beds which have been dredged by land-based cockle tractors; and if he will make a statement;

  (3) what further steps he intends to take to enforce a total ban on cockling; and if he will make a statement;

  (4) what steps he is taking to keep the total ban on cockle fishing by boat under review; and what plans he has to extend the ban to land-based cockle tractors.

  Sir Hector Monro
  [holding answer 7 June 1993]: The Inshore Fishing (Scotland) Act 1984 gives powers to control fishing activities from vessels in Scottish inshore waters. However, these powers do not extend to land-based activities. If land-based dredging activities are judged to be a public nuisance, local authorities can promote byelaws to control or prohibit them.

  There is no evidence that a total ban on cockle fishing from vessels in Scottish inshore waters is justified and none is in force. Local management measures are introduced as and when circumstances require them. Such measures are reviewed regularly, taking account of scientific assessments of stock levels and the views of interested parties.

  Housing
  Dr. Godman
  To ask the Secretary of State for Scotland what information he has concerning the building of homes by housing associations in(a) Inverclyde, (b) Strathclyde and (c) Scotland as a whole over the next three years; and what proportion of these dwellings is to be let to those people with (i) physical disabilities and (ii) learning disabilities.

  Lord James Douglas-Hamilton
  [holding answer 8 June 1993]: This information is not collected centrally. The assessment and funding of development proposals by

  285
  housing associations are matters for Scottish Homes and private lenders and the hon. Member may wish to pursue the matter with Scottish Homes.

  Agricultural Research and Development
  Dr. Strang
  To ask the Secretary of State for Scotland what funds, in cash and constant prices, were allocated to the Scottish Department of Agriculture, research and development budgets for each year since 1978; what is the projected spending for 1993–94 and 1994–95; and what proportion of the departmental budget for research and development is accounted for by(a) the Central Science Laboratory, (b) the Veterinary Medicines Directorate, (c) the Central Veterinary Laboratory and (d) ADAS.

  Sir Hector Monro
  [holding answer 8 June 1993]: Successive volumes of the Cabinet Office "Annual Review of Government Funded Research and Development" contain information on outturn and planned expenditure by the Scottish Office Agriculture and Fisheries Department on agriculture and fisheries research and development from 1977–78 onwards. Relevant figures extracted from the review are shown in the table. It should be noted that, for 1981–82 and later years, the figures are presented on a full economic cost basis.

  Cash £million

  Constant price1 £ million

  1977–78

  18·2

  55·3

  1978–79

  20·8

  57·0

  1979–80

  23·6

  55·4

  1980–81

  29·1

  57·8

  1981–82

  36·2

  65·5

  1982–83

  38·1

  64·4

  1983–84

  41·3

  66·7

  1984–85

  43·6

  67·0

  1985–86

  44·6

  65·0

  1986–87

  42·5

  60·0

  1987–88

  41·2

  55·2

  1988–89

  44·8

  55·9

  1989–90

  47·3

  55·4

  1990–91

  49·6

  54·7

  1991–92

  51·7

  53·5

  1992–93

  51·7

  51·7

  1993–94

  54·1

  n.a.

  1994–95

  55·5

  n.a.

  At constant 1992–93 prices using the GDP deflator.

  The Central Veterinary Laboratory currently holds a subcontract—value £7,800—for one of the Department's commissioned agricultural research and development projects.

  Dr. Strang
  To ask the Secretary of State for Scotland how many people were employed, for each year since 1978, directly by the Scottish Department of Agriculture on research and development programmes related to agriculture, fisheries and food; and how many people were employed, for each year since 1978, on Scottish Department of Agriculture research and development programmes commissioned from outside.

  Sir Hector Monro
  [holding answer 8 June 1993]: It is not possible to answer the first part of the question directly because the amount of time spent by relevant Scottish Office staff on research and development (R and D) programmes in the areas in question varies from time to time and from individual to individual.
  286
  However, for the period since 1981 the total staff numbers at the Department's Fisheries Research Services (FRS), at which the most substantial relevant R and D effort is carried out, have been as follows:

  Number

  1981

  248·5

  1982

  252·0

  1983

  256·0

  1984

  259·0

  1985

  257·5

  1986

  252·5

  1987

  254·5

  1988

  252·5

  1989

  255·0

  1990

  256·0

  1991

  252·0

  1992

  254·5

  1993

  256·0

  (Figures for earlier years cannot be readily extracted).

  Less than 10 per cent. of the overall effort of the Scottish Agricultural Science Agency (SASA)—whose staff are also directly employed by the Department—are on R and D and no members of staff are exclusively engaged on it.

  Most of the non-R and D activities at FRS and SASA consist of monitoring, and the provision of scientific and technological advice and information to Government and other bodies.

  Almost all of the Department's programme of agricultural and related R and D is carried out at the Scottish agricultural research institutes (SARIs), the Scottish agricultural college (SAC), and the royal botanic garden, Edinburgh (RBGE) which employ their own staff. Total staff numbers in the SARIs for the period from 1978 are as follows:

  Number

  1978

  1,397

  1979

  1,376

  1980

  1,345

  1981

  1,331

  1982

  1,338

  1983

  1,323

  1984

  1,328

  1985

  1,299

  1986

  1,390

  1987

  1,275

  1988

  1,176

  1989

  1,100

  1990

  1,179

  1991

  1,231

  1992

  1,270

  1993

  1,275

  The number of SAC and RBGE staff wholly or partly engaged in research and development for the years 1989 to 1993 is as follows:

  Year

  SAC

  RBGE

  1989

  301

  46

  1990

  299

  47

  1991

  270

  48

  1992

  272

  46·5

  1993

  270

  47

  Information on earlier years is not held centrally.

DEFENCE

  French Security Services
  Mr Llew Smith
  To ask the Secretary of State for Defence what representations he has made to his French counterpart on activities by the French security services in relation to British defence manufacturers.

  Mr. Aitken
  I refer the hon. Gentleman to the answer my right hon. Friend the Prime Minister gave on 7 June,Official Report, column 12.

  Departmental Vehicles
  Mr. Cohen
  To ask the Secretary of State for Defence what evaluation exercises were carried out to test the fire-resistant properties of the truck cargo heavy duty vehicles used by his Department.

  Mr. Aitken
  The truck cargo heavy duty vehicles are constructed from proprietary materials that have fire resistant properties. An engineering assessment has been undertaken which shows that the vehicles will resist fires to which they may be subjected.

  Defence Equipment Exhibition
  Mr. Battle
  To ask the Secretary of State for Defence if he will list the companies exhibiting products or services at this year's Royal Navy and British Army equipment exhibition; and how many of these companies are from outside the United Kingdom.
  288
  Mr. Aitken
  The list of exhibitors has not yet been finalised, but is expected to number some 150.

  Bosnia-Herzegovina
  Mr. Wareing
  To ask the Secretary of State for Defence what effects the road blocks established by Croatian forces around the village of Krusica have had on the assistance being given by the Prince of Wales's Own Regiment to the provision of humanitarian aid to the civilian population in that area of Bosnia-Herzegovina; and if he will make a statement.

  Mr. Hanley
  A well-organised group of Bosnian Croat women have established a road block on the only road into the village of Kruscica, and are preventing Prince of Wales's Own Regiment and the UNHCR from crossing it to deliver aid. British forces on the ground are monitoring the situation within the village of Kruscica closely and they assess that the population of Kruscica, who are resourceful and resolute, are surviving well; some aid does reach the village via mountain tracks and as crops near harvest more food will become available. British forces also assess that it would be unwise to try to use force to cross the road block because it would probably destabilise an already volatile situation.

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

Royal Parks: Cycle Tracks
Lord Thomson of Monifieth Lord Thomson of Monifieth asked Her Majesty's Government:
What steps they are taking to improve the provision of cycle tracks in London's Royal Parks.
Viscount Astor: My Lords, my department appointed consultants to consider all aspects of traffic in the Royal Parks including what scope there is to improve the facilities for cyclists. Their report is expected shortly. We shall consider carefully its recommendations.
Lord Thomson of Monifieth: My Lords, I thank the Minister for that reply. However, will he bear in mind that the independent review of Royal Parks initiated by the Government underlined the need for a cycle network in the Royal Parks? Will he also bear in mind that many thousands of people now cycle in the Royal Parks for both recreation and as a means to get to work? Yet a number of Royal Parks—Regent's Park, Primrose Hill, St. James's Park, Green Park—have no cycle provision. Kensington Palace Gardens has very little provision and the provision in Hyde Park is rather inadequate. When he receives the report will he do his best to improve the facilities?
Viscount Astor: My Lords, the traffic consultants were appointed following a recommendation in the first Jenkins Royal Parks Review report. Of course we shall consider carefully what further provision for cycling is proposed when the consultants make their report. We support any form of environmentally friendly transport. However, in the case of Royal Parks we have to balance that consideration against our duty to manage the parks for the quiet enjoyment of all other park users.
Lord Stallard: My Lords, will the noble Viscount bear in mind his remark concerning all other users. I am not anti-bikes, but they are a hideous nuisance in most Royal Parks. I hope that cycles are never allowed in Regent's Park; we have enough trouble in Regent's Park and other parks. If we are to enjoy the parks as they ought to be enjoyed we should cut out cycling and skating. Perhaps someone else will ask a Question about skateboards and skating; they are another nuisance in Royal Parks. If cycles have to be in the parks, they should be licensed and taxed.
Viscount Astor: My Lords, our Royal Parks offer many facilities. One can go boating on the Serpentine and on the pond in Regent's Park. One can ride, roller skate, jog, play cricket, tennis, golf and football. One can sail model boats and even swim in the Serpentine.
924
The 46 million people who use the parks every year take part in all those activities, including using the parks for their own enjoyment.
Viscount Craigavon: My Lords, I welcome the positive remarks in the report on the Royal Parks, to which the noble Lord, Lord Thomson, referred. The report states:
"Nearly 60 per cent. of people questioned in the market research supported separate paths for cyclists".
Will the Minister indicate his priorities? When we refer to cycle paths, are we seeking recreational facilities within the park or the creation of convenient routes through the park to connect with roads outside?
Viscount Astor: My Lords, as I said, the Royal Parks have to balance the cyclists' preferences with the duties to manage the parks for the enjoyment of the public. We are keen on recreational cycling and there are a number of tracks, routes and paths. However, the parks should not be turned into fast commuter routes for bicyclists and bicycle messengers to zoom through the park at very high speed. That is not the point. Their place is on the roads.
Lord Ewing of Kirkford: My Lords, when the cycle tracks are available for use, will the Minister arrange for his Ministerial colleagues to use them extensively so that they could learn to back pedal in a much more graceful manner than they have been doing?
Viscount Astor: My Lords, a new cycle track is to be constructed soon around the perimeter of Richmond Park through the generosity of a private sponsor. That will allow recreational cyclists access to areas of the park unreachable from the roads, on a track specifically designed to be sympathetic to the local environment.
I do not cycle around the park. I occasionally jog around the Serpentine. I should be delighted if the noble Lord would like to join me one morning.
Lord Hailsham of Saint Marylebone: My Lords, will my noble friend remind the noble Lord, Lord Ewing, that one cannot back pedal a free-wheel cycle?
Viscount Astor: My Lords, my noble and learned friend is, of course, entirely right with that observation.
Lord Donoughue: My Lords, we welcome and agree with the positive approach of the Minister. Will he confirm again that the first priority is the safety of families and especially of children in parks? One of the main threats to them, apart from the skaters, is the messengers on bicycles for their business travelling at speeds of up to 30 miles an hour? It would be helpful if those cyclists were constrained.
Viscount Astor: My Lords, recently there have been a number of accidents in the parks through these cycle messengers, not only crashing into each other but crashing into members of the public on paths in the park where cycles should not be. However, the parks offer an alternative range of entertainment for the public and it is important that that is their main

925
priority. Of course, recreational cycling is part of the entertainment. But, as I said, the parks should not become a motorway for cyclists going to work.
Lord Stoddart of Swindon: My Lords, the Minister has just raised a serious point. People who are injured by cyclists have no redress because cycles do not have to be insured. I know that the Government are short of money, but if that is a growing problem will they introduce a national bicycle insurance scheme to cover people who are injured by cyclists?
Viscount Astor: My Lords, the noble Lord, Lord Stoddart, makes an interesting suggestion. If he wishes to introduce a Private Member's Bill, I am sure that your Lordships will look at it with great interest.

Maastricht Treaty: German Constitution
2.43 p.m.
Lord Jay Lord Jay asked Her Majesty's Government:
When they expect the German constitutional court to rule on the constitutional validity in Germany of the Treaty of Maastricht.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I heard this morning that the German constitutional court will hold an oral hearing on the constitutional validity of the Maastricht Treaty on 29th June, but that a ruling is unlikely to be given before September.
Lord Jay: My Lords, in that case, as the German authorities are wisely carrying out a careful, detailed and unhurried examination of the treaty, particularly in its constitutional aspects, is it not highly desirable that this House should do the same?
Baroness Chalker of Wallasey: My Lords, I am quite sure that your Lordships' House will give a very thorough investigation to the Bill which has now had its Second Reading. I look forward to the further stages.
Lord Bruce of Donington: My Lords, will the noble Baroness give the House an undertaking that her department's lawyers will carefully examine the recent opinion produced by Mr. Clive Stanbrook, QC, who has given some wise opinions on the subject? In any event, will she make quite sure that when the ministerial sub-committee on European questions, OPD(E), next meets, her lawyers will be there, together with the Attorney-General, who is a permanent member of the sub-committee, in order that there should be no public conflict as regards their views?
Baroness Chalker of Wallasey: My Lords, I sincerely hope that the QC named by the noble Lord took advice from him because the QC's advice would obviously not be complete without the noble Lord's views.
When any Cabinet committee meets, we now know, after the noble Lord's superb performance in the
926
House yesterday, that we must be extremely careful what we say or it will end up in a new series of "Yes, Minister"!
Lord Stoddart of Swindon: My Lords, the noble Baroness will recall that during the two-day debate many dire warnings were sounded as to what would happen and the dire consequences if Britain did not ratify the Maastricht Treaty. If the German courts will not allow the Germans to ratify it, will those dire consequences be visited upon them? Perhaps the noble Baroness could outline exactly what the consequences are.
Baroness Chalker of Wallasey: My Lords, I think that I have been in your Lordships' House long enough now to know that it would be quite wrong to speculate, not only about the courts of the United Kingdom but about those of a member country within the Community. I can only say to the noble Lord that I believe that there would be very serious consequences indeed for the Federal Republic of Germany, particularly for the new Bundeslander, if they were not to succeed. However, that is a matter for the German Government.
Lord Richard: My Lords, can the noble Baroness tell us whether there has been a preliminary ruling in the case? I understood that the German court had given some indication on a preliminary basis, but that the permanent one was to come in September. Can she confirm the position? If so, what is it?
Baroness Chalker of WallaseyNo, my Lords, I cannot confirm what the noble Lord, Lord Richard, said. What I do know is that the German Foreign Ministry expects the court to take about three months. That is the reason for the Answer I gave earlier. There are various speculations around, but I cannot confirm what the noble Lord said in his question.
Lord Jenkins of Putney: My Lords, has the noble Baroness given thought to the possibility that as our debates on the Maastricht Treaty were delayed pending the referendum in Denmark, perhaps they ought to be further delayed pending the decision of the German courts?
Baroness Chalker of Wallasey: My Lords, I think that after the result of the Third Reading in another place, there is no need for that.

ODA: Higher Education Grant
2.47 p.m.
Baroness Perry of Southwark Baroness Perry of Southwark asked Her Majesty's Government:
On what criteria they decided to reduce the higher education grant of the Overseas Development Administration by 30 per cent. within an overall budget reduction of only 15 per cent.
Baroness Chalker of Wallasey: My Lords, the higher education grant, now known as the Fund for International Co-operation in Higher Education (FICHE), will continue in 1994–95 and in 1995–96 at

927
about £3 million. We are re-allocating resources where they can most effectively be used. We shall be able to provide for the new links which are so valuable.
Baroness Perry of Southwark: My Lords, I thank the Minister for her Answer. Nevertheless, she will be aware that there is real concern in the higher education community about the reduction in the grant. Can she assure us that Her Majesty's Government are aware of the value of the links created by the universities in the UK with the developing countries and that these links create real good will and international trade for Britain, as the people who come are often leaders in their own countries?
Baroness Chalker of Wallasey: My Lords, I think my noble friend knows only too well how keen I am to develop new links between British universities and developing countries. It is not only those links about which we have spoken that are so valuable to the future leaders in those countries. It is also the value for our own students in British universities who gain much from the exchange and cross-fertilisation of ideas with students from the developing world. That was the reason I sought to ensure—because I know my noble friend wished me to—that there could be new links in the coming years.
Lord Taylor of Blackburn: My Lords, is the Minister aware that the figures that she has announced, according to a quick calculation, are about 3.5 per cent. less than they were three years ago? If that is so, is that not going back on what the Minister has already said?
Baroness Chalker of Wallasey: My Lords, I must tell the noble Lord that that is indeed not going back. The FICHE programme, which has now been established, is a four-year programme, which gives it much more ability to plan ahead. That programme will be better targeted so that we can make the maximum use of it for students from abroad rather than having to chop and change from year to year. I am confident that under this new system we can make a great deal more of it than we were able to do in the past.
Viscount Caldecote: My Lords, does my noble friend remember the report of the Select Committee of this House on the technical aspects of overseas aid? In that report emphasis was placed on the importance of adequate education and training in the countries receiving support so that full use could be made of the technical equipment supplied under the programme? Can she give an assurance that that point has been taken into account in the reallocation of funds?
Baroness Chalker of Wallasey: My Lords, I am glad to assure my noble friend that that very wise recommendation of the Select Committee has been one of the many aspects uppermost in our minds in trying to make the very best use of all the facilities and opportunities that we have. The technical education given by the British universities to students from developing countries is quite outstanding. I wish not only to see it continue but, when resources are there, to see it expanded.
Lord Callaghan of Cardiff: My Lords, will the Minister take encouragement from the fact that I was recently told by the director of the Cambridge University Commonwealth Scholarship Scheme, of which the noble Lord, Lord Carrington, and I are two of the trustees, that the level of the Indian students who were taking their taught PhD degrees was so high that they were raising the standard of the taught courses for our own people here at home? Would she therefore regard it as a very good investment to increase the amount that is given for those scholarships?
Baroness Chalker of Wallasey: My Lords, I believe that the noble Lord is absolutely right. I too was delighted to hear that news. I believe that it also teaches us something in regard to our own first degree courses; namely, that the competition from students studying for their first degrees in overseas universities is very high and many of the courses are just as good as anything that we can produce. We must look to our own standards too.
Lord Judd: My Lords, does the Minister agree that there is sometimes a distinction between financing higher education here and meeting the real front-line development needs of the third world? Does she also agree that obviously our colleges and universities have a vital role to play, and that their quality as academic communities will be greatly enhanced by an international culture? Does she further agree that the ODA is primarily about development overseas, and that that must always be the guiding principle in the disbursement of funds?
Baroness Chalker of Wallasey: My Lords, I am only too glad to say to the noble Lord that development must be about those benefits which overseas persons and their countries can gain from education in this particular case, and from other things too. Whereas there can be much valuable education either in the country or in the region of the student, where we concentrate our efforts and will increasingly do so, there is also very good reason to bring students to this country for specialist courses. To do that effectively we want to have good links. That is why I am so pleased that the FICHE system now has a four-year programme, and that we can give it the priority that I know my noble friend Lady Perry of Southwark wants us to give it.

Fertility Treatment: Selection of Patients
2.54 p.m.
Lord Astor of Hever Lord Astor of Hever asked Her Majesty's Government:
Whether they will review the guidelines governing the selection of National Health Service patients for fertility treatment.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, guidance has been issued by the Human Fertilisation and Embryology Authority, by the Royal College of Obstetricians and Gynaecologists and by

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the Department of Health. The Government have made it clear that health authorities should think carefully before providing fertility treatment to people without a stable family background.
Lord Astor of Hever: My Lords, I thank my noble friend for that very helpful reply. What guidelines are given to health authorities to prevent multiple births of the sort recently reported? Will she consider recommendations made in the Warnock Report regarding regional co-ordination of fertility treatment?
Baroness Cumberlege: My Lords, the report of the Royal College of Obstetricians and Gynaecologists, which was issued last year, contains advice on the need for careful monitoring to reduce the risk of multiple births. In respect of centres licensed by the Human Fertilisation and Embryology Authority, the authority makes it clear that not more than three eggs (or embryos) should be placed in a woman during any one cycle of treatment.
With regard to my noble friend's second question, we rely on health authorities locally to decide what services are needed. The department recognises that they may require guidance and last August issued an effectiveness bulletin on the management of sub-fertility.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that in a recent case fertilisation produced six tiny children in a previously barren woman? Is it not necessary to be very cautious indeed about treatment of this kind with all the dangers that it involves?
Baroness Cumberlege: My Lords, I agree with my noble friend. The thought of six babies at once is anathema to me. But I should like to stress that the case in Grimsby was exceptional. That was only the third set of surviving sextuplets to be born in the UK since 1983 as a result of infertility treatment.
Lord Molloy: My Lords, in view of the increase in concern among the general public quite recently à propos this matter, would it be possible for the noble Baroness to consider having further discussions with the appropriate medical department, if she has not already done so, or will she seek to obtain their more recent views?
Baroness Cumberlege: My Lords, clearly, if the Government's advice is not followed, then there will be a need to re-examine that advice and also to have further discussions with the professions concerned.
Lord Orr-Ewing: My Lords, will my noble friend draw the attention of the authorities to the undesirable long-term social consequences of multiple births of this sort? Is she aware that these instances are particularly discouraging to those married couples who are waiting in the queue and who would look after their children within a happy marriage and give them the tender care which is so essential? Is that situation not preferable to getting two unmarried people of doubtful background to harbour six very small children for a long time?
Baroness Cumberlege: Yes, my Lords. I agree with my noble friend. At this moment, however, the Government have no plans for an outright ban on infertility treatment for unmarried couples or single women. But the judgment certainly has to be made whether the child will be part of a stable family background. That is the important point.
Lord Williams of Mostyn: My Lords, will the Minister bear in mind a slightly different perspective; namely, that there are many good and responsible prospective parents who are unable to have children and who regard that as quite a deep wound, indeed almost a source of bereavement? Does she agree that a rational, organised, not haphazard approach to the matter is needed, so that people all over the country would have equal, sensible, access to the facilities that are available?
Baroness Cumberlege: Yes, my Lords. I sympathise with the point that the noble Lord makes. I believe that not being able to have children is, in a sense, a great bereavement. But this particular treatment is still very new. Indeed, six out of seven courses fail. The average success rate of live births from IVF in the main age-group is about 15 per cent. I believe it is right that such a new treatment should be tried out in a few centres first before it is spread more widely.
Lord Renton: My Lords, does it not seem from my noble friend's original Answer that there is scope for saving public money on quite a considerable scale within the National Health Service on this matter? Is that a factor that will be borne in mind with regard to the development or otherwise of this service?
Baroness Cumberlege: My Lords, it is up to local health authorities to decide where they spend their resources. In this specific treatment a great deal of money comes not only from the National Health Service, but also from private, charitable and research funds.
The Duke of Norfolk: My Lords, is it not true that we need further ethical guidelines on this subject? We seem to be wandering around without quite knowing what we are going to do. Will the Minister say what progress the Government are making in seeking those ethical guidelines?
Baroness Cumberlege: My Lords, a document has been published by the Human Fertilisation and Embryology Authority for consultation on the question of ethics. The consultation period ended on 1st June. The Government consider that decisions on what, if any, further legislation or controls may be needed are best taken after the authority has advised on the outcome of its consultation exercise.

Business
Lord Hesketh: My Lords, in anticipation that your Lordships will agree to the Motion which is about to be moved by my noble friend the Leader of the House, I should like to say a word about this afternoon's debates standing in the names of the noble Lord, Lord Jay, and the noble Baroness, Lady Jay of Paddington.

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As the mover is allowed 15 minutes, Front Bench spokesmen at least 10 minutes, and the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate, that means that all other speeches should be limited to a maximum of 10 minutes in the case of the debate in the name of the noble Lord, Lord Jay, and to a maximum of 13 minutes in that of the noble Baroness, Lady Jay of Paddington. If any noble Lord were to speak at greater length, he would be doing so at the expense of subsequent speakers in that debate.
Perhaps I may remind your Lordships that 13 minutes indicated on the annunciator is the 14th minute in the making.

Business of the House: Debates this Day
3.3 p.m.
The Lord Privy Seal (Lord Wakeham): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debate on the Motion in the name of the Lord Jay set down for today shall be limited to 2 hours and that in the name of the Baroness Jay of Paddington also set down for today to 3 hours.—(Lord Wakeham.)
On Question, Motion agreed to.

House of Lords' Offices: Select Committee Report
3.4 p.m.
The Chairman of Committees (Lord Ampthill): My Lords, I beg to move that the fifth report from the Select Committee on House of Lords Offices be agreed to.
Moved, That the fifth report from the Select Committee (HL Paper 89) be agreed to.—(The Chairman of Committees.)
Following is the report referred to:

1. CAR PARKING The Committee has approved new arrangements for car parking within the precincts of the House of Lords and nearby. The arrangements will be kept under review.

2. ACCRUALS ACCOUNTING, CAPITAL ACCOUNTING AND ASSET RECORDS The Committee has considered the appropriateness to the House of Lords of accruals accounting, capital accounting and asset records in addition to the cash-based accounting required under normal Government accounting conventions. The Committee has agreed—

(a) that accruals accounting is appropriate for the Refreshment Department (where it is already in use), and cash accounts should be maintained for the other operations of the House;

(b) that an asset register should be compiled for major assets; and

(c) that fuller costs should be established for the running of the Refreshment Department, including the cost of capital equipment.

3. CHILDCARE VOUCHERS The Committee has given approval in principle to a scheme for the provision of Childcare Vouchers to subsidise childcare required to enable staff with children to work at the House of Lords. This scheme is intended to help the House to recruit and retain high-quality staff, to promote equality of opportunity between men and women, and to provide an effective childcare facility. The introduction of the scheme will
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be preceded by a survey to assess the level of demand. The Committee's endorsement of the scheme is subject to the outcome of the survey.

4. STAFF OF BLACK ROD'S OFFICE The Committee has approved the following changes in the staffing of Black Rod's Office, recommended by the Clerk of the Parliaments on the basis of a report by the Staff Adviser—

(a) the creation, for three years in the first instance, as recommended by the Staff Adviser, or longer if recruitment for so short a time proves difficult, of an additional post at Grade 7 in Black Rod's Office. It is proposed that recruitment to the post should be set in hand immediately; and that the employer should be the Corporate Officer of the House of Lords, in accordance with the Parliamentary Corporate Bodies Act 1992;

(b) the abolition of the post of Assistant Superintendent;

(C) the creation of a post of Principal Attendant to replace an Attendant post. This change will take place only after the abolition of the post of Assistant Superintendent.

5. APPOINTMENTS The Committee has been informed of the appointment of

(a) Mr. C.H. Rogers as Internal Auditor, on a period appointment for five years;

(b) Mr. G. Embleton as Deputy Establishment Officer, on secondment from the Ministry of Defence for three years;

(c) Miss A. Archbold, partner in W.B. Gurney and Sons, as Deputy Shorthand Writer.

Lord Cocks of Hartcliffe: My Lords, I should like to thank the committee for its work, particularly the chairman, and to say how much I welcome paragraph 3, where approval in principle has been given to a scheme for the provision of childcare vouchers. That will assist staff who work in the House of Lords, who have children, to have them looked after. It is a progressive step.
The Chairman of Committees: My Lords, I am grateful to the noble Lord and surprised that at last we are able to please him with one of the reports. We have previously not been so successful. I agree that it is a move in the right direction.
Lord Bruce of Donington: My Lords, I rise to emphasise a point that is made in paragraph 2 of the fifth report. My first comment deals with a purely technical matter and my second deals with a matter that will affect every Member of your Lordships' House who uses the refreshment and bar facilities. It is therefore not a matter in which we take only an academic interest.
In regard to the accounting matters dealt with in paragraph 2, I find it a little strange that accruals accounting is operated in the Refreshment Department, but that cash accounting is operated elsewhere. That does not make for good accounting practice and means that any balance sheet ultimately presented does not really disclose a true and fair view of the situation.
In regard to the asset register, it must be quite clear to your Lordships that the Refreshment Department, and indeed your Lordships, have the use of a number of substantial assets in this House, including some of the costly chairs upon which we recline or sit and the tables against which we may prop either ourselves, our elbows or both. Those items can be extremely expensive.
I would infer from paragraph 2(a) of the fifth report that there is no asset register at the moment. 1 find that

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a little surprising. Your Lordships' House has many valuable assets in its precincts. I should have thought that they would have been registered a long time ago, particularly in view of the fact that various administrations have always emphasised to us the necessity for the maintenance of strict accounting and "value for money".
Be that as it may, those are matters to which attention is being drawn. I have no doubt—it may take a number of years before the arrangements materialise—that a proper accounting basis will be adopted. Those are the technical points that I wish to raise.
Another matter that involves every Member of this House is seen by comparing what is said in paragraph 2(a) with paragraph 2(b). Paragraph 2(a) intends to establish an asset register, which will contain items worth thousands of pounds. But here is the rub. Paragraph (c) says,
"that fuller costs should be established for the running of the Refreshment Department, including the cost of capital equipment".
As any accountant or businessman knows perfectly well, that really means that if the report goes through, in the future there will be incorporated in the costs of the Refreshment Department a measure of depreciation per annum on the asset register that is established. In view of the fact that we may be sitting upon, leaning against or treading upon assets worth thousands, if not hundreds of thousands of pounds, it only takes a little imagination to realise that the annual depreciation that is envisaged will involve a substantial increase in all refreshment bills. And that is the real purpose of the change.
I am quite sure that the noble Lord realises that that does not deceive me and, indeed, other accountants in the House. I sincerely trust that he will now come clean and say that that is the real purpose —to make all future restaurant bills and the costs recorded contain a measure of depreciation on top of the other overhead costs that are incurred.
The Chairman of Committees: My Lords, I am grateful to the noble Lord, as ever, for his interest in what the offices committee does. Before the anxiety of the House becomes too great, I shall deal with his final point.
It was at the request of his noble friend Lord Peston, who is anxious to put the Refreshment Department accounting on to a more sensible basis, that those matters were investigated. The noble Lord, Lord Peston, was absolutely right. Whether or not the fears expressed by the noble Lord, Lord Bruce of Donington, will prove justified is a matter he could take up with his noble friend. I doubt whether they will prove to be justified. It is good accounting practice.
Since Ibbs, this House has devoted itself to making sure that we are making the best possible use of our resources. The preparation of the asset register began as soon as responsibility for the Palace of Westminster ceased to be exercised by the Property Services Agency, about which I do not believe the noble Lord
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will wish me to say anything, either friendly or otherwise—it would be difficult for me to say otherwise.
We are now embarked upon a major project of discovering what exists within the Palace of Westminster. With regard to the Refreshment Department, which includes the kitchen equipment, a wider problem exists. The assets on which we sit, to which the noble Lord referred, and the tables on which we lean, are not contained in any inventory at this juncture. There is a complication, in as much as governments, both central and local, conduct their accounts in a manner with which the noble Lord is not familiar in his professional life. However, we are embarked on a huge project to make certain that the considerable assets for which we are responsible are used in the best possible ways.
I hope that the noble Lord's anxieties regarding the balance sheet will not exercise him too greatly. There is no balance sheet as such in the accepted sense of the term and there cannot be in the way to which he is of course accustomed. But we are doing our best and I hope that we are succeeding in bringing very quickly up to date the way in which we are accountable in this House.
Lord Bruce of Donington: My Lords, I thank the noble Lord for his remarks. Perhaps I may pursue the matter a little further. Will he convey my anxieties to the noble Lord, Lord Peston, which I shall reinforce to him personally? When the committee is considering any change in the basis of determining fuller costs to Members of the House in the Refreshment Department, will he bear in mind that the Members of this House give their services free in the service of the community and in the service of the country, and that they would not expect any substantial change to be made to the present basis upon which they are charged?
Lord Tordoff: My Lords, before the noble Lord replies, is it not the case, however, in reply to the noble Lord, Lord Bruce of Donington, that the costing of our refreshment services is based more on variable costs rather than on fixed costs? As a member of both the committees, I am aware of no suggestion that fixed costs should be brought to bear any more than they have in the past.
The Chairman of Committees: My Lords, the noble Lord, Lord Tordoff, is absolutely correct. That is the right way to approach this point. I will of course do what the noble Lord, Lord Bruce of Donington, wants me to do, which is to talk to his noble friend. I look forward to seeing which of us has the most effect on his noble friend.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the noble Lord, Lord Bruce of Donington, is on to a very real point here? If in future depreciation will be taken into account when deciding what prices will be—and it should be—it can either be met by raising prices or by having a subsidy to cover the extra. At this stage I do not think one would expect my noble friend to decide which that is likely to be. But it is just as well that at an early stage it should be

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known that this new procedure will mean extra money from somebody, whether it is the purchasers of food or the people who subsidise it.
The Chairman of Committees: My Lords, I am sure that the noble Lord is right. This is a point that the noble Lord, Lord Bruce of Donington, has fully realised and is the reason he raised it. We shall take these matters very seriously into account. I beg to move.
On Question, Motion agreed to.

Transport in London
3.12 p.m.
Lord Jay Lord Jay rose to call attention to the problems of transport in London; and to move for Papers.
The noble Lord said: My Lords, I rise to draw attention to London's traffic problems and particularly those of the London Underground. Before doing so, as I see the noble Earl, Lord Caithness, on the Front Bench opposite, I cannot refrain from complimenting him on the extraordinary versatility which enables him to appear as an expert on almost every subject and indeed to be a spokesman for almost every department in Whitehall.
Nevertheless, I do not believe that the Government realise the damage which is being done to London Underground by the continued under-funding and under-staffing in recent years, and in particular by the severe cut in funds for investment in the 1992 Autumn Statement. In answer to my Question on 25th February the noble Earl, Lord Caithness, said in effect that there had been no cut. But in this respect the noble Earl was wrong. The facts are these. In their November 1991 Autumn Statement the Government promised London Transport a grant of £633 million for capital investment in its existing system of trains, structures and services in the year 1993–94. London Underground planned on that basis. But in the November 1992 Autumn Statement that £633 million was cut by £184 million to only £449 million—a cut of nearly 30 per cent. That was the cut I was referring to in February.
London Underground itself states that this return to "stop-go funding", as it justly calls it, is, in the words of London Underground's 1994 business plan,
"a severe setback to London",
and will lead,
"to the cancellation or postponement of many planned projects".
This damaging decision comes on top of nearly 10 years of deterioration in services due to under-funding which began when this Government took control of London Transport from the old GLC by an Act of 1984. Until the 1980s, for 40 years or more, services on London Underground had been remarkably reliable. Our Underground was recognised, particularly, I often found, by foreign visitors, as the most efficient such system in the world. One could regularly rely on the time taken for a particular journey. Indeed I found myself that even in the worst blitz months of 1940,
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except where lines were actually physically damaged, the times did not differ very much from those prevailing in the 1920s and 1930s.
Since the mid-1980s all that has changed. There are repeated and exasperating delays. One is told, if one can hear the communications system, which is rather rare, that signalling failures have occurred, that engineering repairs are operating. that points have failed or that there are not enough trains. One finds, without needing to be told, that an essential escalator has stopped working. Totally unexplained stoppages occur. Hardly a day passes without a regular traveller being held up by one or another of these delays. As a result, one now has to allow 30 per cent. or 50 per cent. more time for a given journey than was normal before the 1980s. Indeed the situation has now been reached where every morning on the radio a list is read out of stations which are completely closed, something which never happened before the 1980s. That is largely due to under-manning.
All that is precisely what one would expect from protracted false economies on maintenance, renewal and improvement. We should not indeed forget that the King's Cross fire of November 1987 was caused by failure to clean an escalator for a long period, apparently due to lack of maintenance staff. The labour force of London Regional Transport, as it was then called, had been cut by 30 per cent. between 1984 and 1988.
The Fennell Report on the King's Cross fire quoted the lift and escalator engineer at King's Cross as saying that he did not succeed in monitoring escalator standards to his satisfaction or have enough staff to do so. The staff of that department had been cut from 350 to 250. The chief officer of the Safety Inspectorate said that his department was,
"under-manned by more than 30 per cent".
One would have thought that, in order to stimulate general growth and employment in the economy, which presumably we are all anxiously looking for, the economy urgently needs -capital expenditure on essential public services. The present would have been an ideal time to overhaul these arrears. After all 2.5 million people use London Underground every day. Most of them travel to and from work and sustain London's economy, including that of the City of London. Yet, instead of that, the cut in investment from £633 million to £449 million will, according to London Underground itself, have the following effects.
First, plans to renovate and refurbish 47 Underground stations this year will be postponed. Secondly, the installation of measures to protect travellers from crime will be postponed this year at 56 Underground stations. Thirdly, escalator replacement and upgrading will not go ahead this year at 24 stations. Fourthly, the redesign and improvement of trains on the District, Piccadilly and Metropolitan lines will not start this year. Fifthly, plans to ease overcrowding at 13 stations which would have started as planned will now be deferred. Finally, modernisation of the Northern Line rolling stock and signalling, so often criticised by the public, will be postponed from this year to at least 1996.
As a result of all those changes, orders for new trains are being cut down and skilled staff are being released. The total effect of the cut announced in the Autumn Statement means, in London Underground's words:
"It will take 20 years to reach an acceptable modern standard rather than 10 to 12 years as the 1991 Statement implied".
As I said, falling orders for new trains will increase unemployment elsewhere. I hope that the Minister can at least assure the House that the promise to preserve all the safety measures recommended by the Fennell Report in 1988 will be honoured.
As I see it, it is far more urgent to overcome those pressing and damaging deficiencies than to debate long-term enterprises (valuable as they will be later on) such as the extended Jubilee Line and Crossrail, even though, as I said, they will be valuable in their time. That applies in particular to the Jubilee Line in view of the fact that it is less costly, and it is also uneconomic nowadays to have a major tube line ending in central London. Whatever we do, Crossrail will not carry any travellers in that sense.
I conclude with just two thoughts on the basic economics of transport in London. Last November when the Government made their cut of nearly 30 per cent. in London Underground capital programmes, they increased the total road budget by 4 per cent. The method by which the figures are decided throws an interesting light on the Department of Transport's perhaps unconscious attitude. The adoption of a new road or motorway project depends—the Minister will tell me if I am wrong—partly on the time estimated to be saved by those who use it. If they are thought to be people with high incomes, the time is counted as more valuable and the case for the road scheme is strengthened.
I should like to know whether, in the case of London Underground schemes, allowance is made for the time lost by millions of Londoners owing to the present delays. Unless the Minister can show me that that is allowed for, I shall assume that it is not so taken into account. It cannot be right to count the time lost or saved in one case and not in the other.
The case for a public grant towards maintenance and investment in London Underground rests on the basic fact that without it the economic life of London simply could not continue. Congestion on the roads would prevent a large proportion of London's working population from getting to work at all. The service that the Underground supplies to the individual traveller is paid for by the passenger's fare. But the service that it gives by enabling London, including the City, to carry on can be paid for only out of public funds. Indeed, it is because of that "externality", as the economists insist on calling it, that in Paris, where the public revenue grant is very much larger (over £500 million, I believe), part of that grant comes from a levy on employers who employ people in Paris and know that their staff could not get to work at all without the underground.
I hope that for all those reasons Ministers will reconsider this absurdly damaging cut and will restore the investment grant at least to the figure which the
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Government themselves recognised in November 1991 as being necessary to end the present inevitable delays and so provide London with an efficient and modern Underground system at least within 10 years.
My Lords, I beg to move for Papers.
3.26 p.m.
Lord Mountevans: My Lords, I am grateful to the noble Lord, Lord Jay, for once again giving the House the opportunity to debate transport in London. At the outset I feel that I must declare two interests: one on behalf of British Rail and one on behalf of the British Tourist Authority. In fact, I have a third interest. It is not a pecuniary one but one which I feel is particularly important; namely, I am a non-motorist and therefore depend on public transport in London.
Although it is natural to look at transport in London as a concern for Londoner's alone, we should not overlook the many millions of visitors who also use the various systems and contribute, so I am told, some 17 per cent. or 18 per cent. of London Transport's fare boxing, largely by using marginal capacity outside the rush hours. I find that slightly unbelievable as I am sure do many other noble Lords, but that is what we are told.
Londoners and our visitors share a number of public transport needs. First, we need an efficient and reliable system, embracing both rail and road, with good multimode ticketing and good information provision. Secondly, we need a free-flowing road system. I firmly believe that we need more red routes and clearways. We need parking and other regulations that are easily understandable and consistently enforced—not least when the London boroughs take over that responsibility. Thirdly, we need road investment, whether it is financed from central or local taxation, or from hypothecated tolls as happens, for example, in Bergen in Norway; or financed by the American system of tax exempt bonds, which I am not aware has ever been used in this country to finance infrastructure projects but which I feel would bear examination. After all, it has, for example, been used not only to fund Dallas Fort Worth Airport but also to fund tollways and indeed to fund a metro.
Fourthly, we need rail investment. As importantly perhaps, we need that rail investment ring-fenced for major projects and we need a steady timetable. I welcome Crossrail. I look forward to Chelsea-Hackney and to Thames Link 2000. I look forward to the Jubilee Line extension; expansion of the Docklands Light Railway; the Croydon Light Rail project; and the international terminus in the vicinity of King's Cross. But I wonder when, if ever, those much needed projects will see the light of day. I feel that we need a specific timetable for construction start-up and completion. We have to take a longer view there. We also need to ensure that that timetable is so devised that the works, which in the long-term will give us better transport infrastructure and thus better transport, do not cripple us short-term by means of the congestion penalty which is inevitable in any major construction work.
Next there are buses, which is a great under-utilised transport resource. London Transport tells me that

939
the load factor on buses—that is, passengers carried as a proportion of the capacity offered—is only some 40 per cent. in peak times and under 20 per cent. in off peak times. There must be ways whereby we can tap and exploit that under-utilised resource.
We can do it by the means that I have already detailed under the heading of roads. The bus cannot but benefit from red routes and clearways; it cannot but benefit from proper enforcement of all the parking regulations.
I hope that perhaps we can do it by privatisation and deregulation, provided that such plans secure increased investment, new marketing techniques and continued value for money, underwritten by that absolute essential, a good multimode ticketing system which takes account of all the franchisers who may be running our railways, the bus companies which may be running our buses, and that still nationalised industry, the London Underground. We also need the travel card. As I said before, we need good information provision because, no matter how much one invests in the infrastructure, in plant or even in staff training, if the system does not appear to be user-friendly the customer will not be attracted to it.
Multi-ticketing is particularly important and it is going to be a huge problem in a few years time for all the separate interests involved with public transport in London. If Holland can produce a ticket which is available on all transport modes nationwide, it should not be beyond the wit of us to do the same.
I have only one almost sentimental reservation about the changed scene which we expect for the buses, and that concerns the future of the big red bus which is so much a symbol of London, as are our policemen and our taxicabs. I would certainly support any move to preserve the red bus, even post-franchising and deregulation.
Perhaps I may turn briefly to two other topics. The first concerns taxicabs both for the London visitor and the London resident. They need a safe and reliable system of taxicabs and hire cars. The working party which has been looking at the problems of the London taxi seems to be an unconscionably long time in its deliberations. When can we look for progress? There is another working party topic which is about 50 yards behind me now; namely, London's river, which I seriously believe is an under-utilised transport resource. Again, I wonder whether my noble friend can report progress on that particular topic.
I believe, rather more than the noble Lord, Lord Jay, that we are well served by public transport, on which, as I said, I depend. I feel that I get good value for money and I find it generally very reliable. Of course it has problems both in terms of short-term investment funding and in longer-term capital project funding. But one man's problems are surely another man's opportunities. If we can address the former by seizing the opportunities which they offer us and perhaps by looking in different directions from those we have looked in before and looking for different means of finance to solve our investment problems in particular, I believe that we shall slowly but surely give London that world-class transport system which a world-class city needs.
3.33 p.m.
Lord Ezra: My Lords, I would like to join with the noble Lord, Lord Mountevans, in expressing appreciation to the noble Lord, Lord Jay, for introducing this debate. There have been many debates in this House on the transport issue, particularly relating to London. I recall participating in a debate on 6th May 1991 on transport in the South-East introduced by the noble Lord, Lord Clinton-Davis. I am glad to see that he is participating today. On that occasion I said that in the past two years there had been about nine debates on this subject. There have been many since. Indeed, I put down an Unstarred Question in July 1992 on the subject of the London Underground. So in this House and in the other place we have been continuously concerned with the whole question of transport.
What is regrettable today is that despite deeply felt concern about transport arrangements, particularly in London, so little real progress seems to have been made. Indeed, as the noble Lord, Lord Jay, pointed out, in the present circumstances we are almost worse off than we were. We are worse off than we were because when I introduced my Unstarred Question in July last year the noble Viscount, Lord Astor, who replied, gave me certain very firm assurances about the investment which the Government were going to put into the Underground. Regrettably, in the Autumn Statement in November of that year, as the noble Lord, Lord Jay, pointed out, that investment was reduced by one-third.
I find that quite incredible. After all, we are now entering the Single European Market. We have had a lengthy two-day debate on the issue of Maastricht, Europe and the Single Market. We are the capital city, and hopefully we are going to play our part in these great new developments. On these Benches we fully support what the Government are trying to do. But if we are going to make it difficult for people to get to work then how are we going to perform that great task? The cutting back of investment in the Underground to such a substantial degree is something which I completely fail to understand.
The intention was to create a modern metro system within 10 years. In replying to my Unstarred Question in July 1992 the noble Viscount concurred that that was the Government's intention. But now we know from London Underground that as a result of the cuts we are unlikely to get this modern metro system within 20 years, if ever.
I really hope that in replying the noble Earl can explain to us what the Government's intentions really are on this matter. Do they want to make sure that in our metropolis and in the new, big European and world role which we hope to play, that we get things working efficiently, or not?
It is not only a question of the Underground. I turn to the buses. We have a reasonably efficient bus system at the moment. If it suffers from any defects it does so because of congestion on the roads. The buses have been going out to tender. Fifty per cent. of the bus routes are now under tender. If that process is continued then by 1998 all the buses will be out to tender. It is felt that it would then be a profitable

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operation. But we are now going to get deregulation. Nobody knows what the impact of that will be. We do not know what impact deregulation will have on traffic flows, on the bus user and on the environment.
I am connected with the city of Sheffield in a business way. I know that deregulation there has brought no benefits. It has meant that there has been congestion on the favoured routes and a lack of interest in the less favoured routes. It has meant that because margins have been cut the quality and the standards of the buses used have deteriorated and therefore there has been an adverse impact on the environment.
I am not sure that the Government are right, for purely political considerations, to pursue the question of deregulation not knowing what impact it could have on London. They should consider this again very deeply. As far as the public services are concerned we have a problem with the Underground whose investment has been cut back arbitrarily by 30 per cent. We have an unknown factor being introduced as a result of the proposed deregulation of the buses which could have an impact which we cannot even guess at on the flow of traffic and the service to the bus users, let alone the cost of setting up yet another regulatory authority. Here again, I am a bit surprised at the Government's policy that, instead of using London Transport as the regulatory authority, they have decided to set up a different one. It has been estimated that that will cost several millions of pounds in additional expenditure per year. The more regulatory bodies that we set up, the more expenditure that creates.
So, we have those uncertainties, but we also have the uncertainty of the congestion on the streets of London. Over 30 local authorities and several other organisations, such as the police, are concerned in this matter. There is confusion in relation to parking. In some cases, the police have the authority, but in other cases it rests with the local authorities. How is that to be sorted out? On the question of congestion, what are our long-term solutions? The vehicle population of Britain will increase substantially in the years ahead according to the figures that had been given to us by the Department of Transport. What effect will that have on congestion in the metropolis? In spite of the fact that there is a Minister responsible for transport in London, there still seems to be a need for a total strategic review.
I have formed the impression that we are not making very much progress given the cutbacks in regard to the Underground, the uncertainty that could be introduced by the deregulation of the buses, the confusion over parking regulations and the lack of any policy for dealing with congestion at peak periods. I hope that the noble Earl will not regard these views as party political, but as expressing concern about what is happening in our capital city. If we cannot have an effective transport system serving the metropolis, what hope can we have of seriously competing effectively with the rest of the world? I hope that the Minister will be able to enlighten us about what positive policies the Government may have in these matters for the future.
3.42 p.m.
Lord Cocks of Hartcliffe: My Lords, I should like to thank my noble friend Lord Jay for introducing this debate. He may well wonder why I, as an émigré from the west country, have the impertinence to speak in a debate about London's transport. However, I feel that we tend to knock ourselves too much in this country. I happen to know a little about the East End of London because I am the deputy chairman of the London Docklands Development Corporation. While others may dwell on the problems, I think that it might be appropriate if I were to tell your Lordships a little of the good news about what is happening there.
Your Lordships will know that the East End of London has had a rough time over many years. From time to time I attend meetings at West Ham town hall. I always pause to look at the Book of Remembrance which stands in the entrance hall and the pages of which are turned regularly. I do so not only to look at the names of the servicemen and women who lost their lives in the war, but also to see the list of the names of the people who were killed in their homes—often several people in one house—during the blitzes which were particularly heavy in the East End of London. The area has suffered greatly and we, in the corporation, are trying to assist in its regeneration.
Your Lordships will also know that the docks themselves ran down not through any fault of the labour force. Over many years it was the subject of a great deal of black propaganda. So it was not the fault of the labour force that the docks ran down and became disused; it was because of changes in shipping techniques, particularly the advent of containerisation which gave very great advantages to the new ports which were constructed and developed, particularly on the eastern side of the country. Something had to be done about the area and the corporation has, as I have said, tried hard to regenerate it.
A great deal of the transport infrastructure which is needed in the area is, in fact, already in place and serving London. For a long time the Docklands Light Railway was almost a standing joke. It was heavily criticised—and quite rightly. In my early years at the corporation I suffered a great deal of frustration when using that railway. Its lowest ebb was in about September 1991 and lasted to mid-1992 but things have improved immensely. It is now possible to travel on it. It is a reliable service. Its trains run on time and its efficiency is well up to 90 per cent., reaching the targets which have been set for it by the new management. Its ownership was transferred from London Transport to the corporation in April last year. The management team of Sir Peter Levine and Malcolm Hutchinson have wrought a sea change in the efficiency of the operation. The system is now not only of benefit to the people who have to travel on it into work, but also a great advantage to the local people who can use a reliable system.
It is also planned to begin the light railway extension to Beckton in the Royal Docks area later this year. That will provide a link for the regeneration of that area which, as your Lordships will know, is an enormous expanse which is at present undeveloped

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but which contains literally miles of quayside around some of the finest inland docks in the world. So, things are looking good there.
Last month the Prime Minister opened the Limehouse link, which is the remarkable tunnel—a superb feat of British engineering—which has circumvented a lot of the travel problems. There is now a continuous highway running from Tower Hill right through to the Royal Docks. The possibility of a 15-minute car or taxi journey from the City of London through to City Airport is now a reality rather than just an advertising puff.
All that has helped. In addition, the bus services there are very much more efficient than some of the systems which were described by earlier speakers. City Airport is not utilised as much as it should be because difficult access to it in the past has not encouraged people to use it, but it is now fully available and it is actually faster to get from the City of London to City Airport than to travel from the centre of London to Heathrow or Stansted. Such things should be known. I certainly hope that the new services to Western European capitals will he used by your Lordships and others. It is a private sector initiative, but it is fully supported by the corporation and by the London Borough of Newham which realises the benefits in terms of jobs.
However, to follow what was said by the noble Lord, Lord Ezra, I think that there is a need for a strategy for the planning of transport in London. We do not need a detailed plan, but some kind of framework is required. Recent work by the London First initiative and by the Confederation of British Industry has highlighted the present uncertainty which has inhibited private sector participation. We need a strategy which is founded on the better integration of transport and land use policies, better use of existing resources and assets, greater environmental awareness of developments and public and private sector joint working. If we can develop those, the future will be very much better.
I should like to mention briefly the need for the Jubilee line extension. Everything is now awaiting the final word to begin. The extension will be an important psychological boost for London because it will make people abroad, possibly looking to invest in the capital city and its surrounds, realise that we are in earnest about making our transport system work. The extension has all-party support. I understand that the European Investment Bank will invest some funds, so I hope that the final details can be tidied up and the go-ahead given.
The river must also be used more. It should be regarded as an asset and not a barrier. It is the biggest motorway in the country. It requires no maintenance or servicing. We must make better use of it, and sort out the problems of bridge control and consider further crossings.
I believe that we should regard our debates as the source of printed material which is read abroad. If people abroad are looking to invest in London, they should realise that there are not just complaints but that things arc going on, not merely in the East End of
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London but in other places. I am glad to have the opportunity to tell your Lordships that all is not as black as it is sometimes painted.
3.50 p.m.
Baroness Sharpies: My Lords, I thank the noble Lord, Lord Jay, for bringing today's debate. Like many of your Lordships, I have a London Transport permit of which I make extensive use. My contribution today is drawn entirely from my personal experiences. I find journeying far easier than it was a few years ago. We should be grateful to have the minibus companies operating within the region. They, I am glad to say, provide a much cleaner and more comfortable service than that provided previously.
I am inclined to write letters. When I have written to complain about the quality of the driving which usually, as I am sure your Lordships are aware, consists of people relying upon their brakes rather too much, or to congratulate other drivers on a smooth journey, each reply has been prompt and courteous. I cannot say the same about years ago.
The introduction of smaller buses must have speeded up the traffic flow. The underground system is no longer a system of which we should be ashamed. It is far cleaner than it was. Great efforts to improve it have been made with the vast refurbishment schemes. However, many of us find the long pedestrian tunnels at some stations somewhat threatening. I wonder whether security cameras could be installed to help provide greater safety.
As other noble Lords have said, congestion must be the main target. The various measures already introduced have improved matters. Some form of congestion charge might help, although I appreciate that that will meet with considerable opposition. There are two areas which spring to mind. Why cannot there be large car parks in the suburbs, as in Paris, with fast shuttle bus services into the centre, or, alternatively, car parks near to underground stations in the outer suburbs?
Will my noble friend the Minister tell the House whether consideration has been given to allowing cars to park with only their nearsides against the kerb? In other words, they do not park facing the traffic. That works well in South Africa. It seems to be much safer, because driving across a road to park is, of course, in itself a dangerous move. It has been a pleasure to take part in a debate when I can find much to praise.
3.54 p.m.
The Viscount of Falkland: My Lords, I thank the noble Lord, Lord Jay, for giving us the opportunity, yet again, to talk about traffic in London. It will come as some relief to noble Lords who have taken part in similar debates that on this occasion I shall not be dwelling for any length of time on the benefits of two-wheeled travel.
On a previous occasion when I came into the House to make a speech on the subject of road safety I was arrested for speeding along the Embankment. It came as no surprise to me today that I landed up in one of the worst, if not the worst, traffic jams we have had in London this year. I was on my way to an appointment

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near London Airport. It gave me an opportunity to ponder upon the state of London traffic. I was on my motor cycle, and so I was able to survey it with some detachment.
One of the points that first struck me, which has been confirmed by other noble Lords, in particular, my noble friend Lord Ezra, was that when things go wrong there is very little room for manoeuvre. This morning, one of the flyovers leading to the M.4 was blocked. It takes traffic onto the A.30 going West. The traffic was almost at a standstill for miles and miles and miles. As is inevitable on a hot morning, with engines reaching temperatures which made it difficult to stop them stalling, there were added difficulties because some cars and one lorry had stopped, causing various problems. There was chaos.
My noble friend Lord Ezra painted a bleak picture of the future of the London Underground and the uncertainty caused by the deregulation of buses. Whenever there is a problem or a diversion it further reduces the little margin that one has with which to work. What also struck me was how extraordinary is the British temperament generally. I saw very little ill temper over the 10 miles going out of London, and an acceptance of the difficulties which it would be hard to find elsewhere, especially in Europe. I have some experience of driving in France and Italy. There are great differences between us and those countries. In some ways we are worse off and in some ways we are better off. With our phlegmatic approach to difficulties, we behave well.
The only reason why there are so many cars, causing that lack of a margin, is, as other noble Lords have said, that we do not have an adequate or satisfactory transport system in our capital. It is extraordinary that our transport system does not compare with those in countries such as France and Italy, to name but two neighbouring countries.
The fundamental problem of public transport in London must be dealt with. People of course have a mystical relationship with the motor car. People drive motor cars, whether they are company cars or they have bought them themselves, because they prefer to drive them even in bad conditions rather than to chance public transport. When I use the bus system in London, I find it generally unsatisfactory. The service one receives, the standard of driving and the temperament of the driver when he is taking fares, are inconsistent. There are sometimes unpleasant rows on buses. Can one blame the drivers? They themselves have to put up with the astonishing congestion caused by all the motor cars coming into London with a driver only and no passengers. The situation is chaotic. I look forward to hearing from the Minister about what is the Government's attitude to that problem and whether he has anything that will cheer us in the medium or long term.
In the meantime, we are fortunate in having a population which is generally good-mannered when using the roads. Some people may disagree. People have become more aggressive, but generally any foreigner who drives in London —particularly any Italian or Frenchman—will say how good-mannered
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we are. We usually allow other motorists in to a line of traffic from side roads in a way which is inconceivable in Milan. Overall, the standard of driving is good, particularly during the week, although it is not of such a high standard at weekends. People who drive regularly drive well and safely. That is reflected in the accident statistics. Most accidents in this country occur at relatively slow speeds and at predictable places: road junctions and roundabouts.
Perhaps I may take advantage of this debate initiated by the noble Lord, Lord Jay, to make one or two suggestions, as the noble Baroness, Lady Sharples, did, as to how we could improve the present chaotic situation. There are two factors in particular which have struck me as being in need of attention.
First, there appears to be confusion about the yellow hatched box which is found at road junctions and traffic lights. I wonder whether the appropriate organisations might not put more effort into informing people who are not quite sure what the position is that it is quite safe for them to enter the yellow hatched box if they are turning across traffic. They do not have to linger, dawdle or come to a standstill behind the box. However, it is, of course, illegal to enter the yellow hatched box when one is travelling straight ahead. One should not be left in that area when the traffic lights turn red so that one blocks traffic which has been released to cross the junction. I believe that the police should take more action—if they have the manpower to do so—to ensure that offenders who come to a standstill in that yellow box are reprimanded and warned. I do not say that they should necessarily be penalised, unless they are persistent offenders. However, it would certainly make a difference and speed up traffic if people realised that the further forward one goes when travelling across traffic the better, even when there is a yellow hatched box. That speeds up the progress of traffic overall considerably, particularly in the rush hour.
Drivers in London are mostly very good at giving way. Taxi drivers in particular are extremely thoughtful. They respond well to courtesy from other drivers, although if one creates difficulties for taxi drivers, which is an unwise thing to do at any time, they will probably respond in fairly forthright terms. Although I promised not to mention motor cycles, perhaps I may just say that motor cyclists are very well treated by taxi drivers, who do most of their training —what is called "the knowledge"—on two-wheeled vehicles.
I wish that drivers in this country would be less touchy about the situation when traffic is filtered from a three-lane carriageway to a two-lane carriageway. There is an enormous amount of sensitivity about whether one should go ahead of another car or stay behind it. That does not happen in France, where there seems to be a better understanding that one should filter into a line of traffic when one reaches the bottleneck. That is preferable to filtering into the other line of traffic a mile before the bottleneck. That results in two lanes being full of traffic while the third lane is empty for about a mile.

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Those are just a few of the niggling points which could be addressed in order to speed up traffic. The present situation is unsatisfactory.
I return to what has been said by many noble Lords. The noble Lord, Lord Mountevans, in particular said that we deserve better in this city. We deserve a proper transport system. We need to get people out of their cars and on to a public transport system. I am sure that even company car owners would use such a system if it were clean, reliable and reasonably priced. I ask the noble Earl whether there is any likelihood of that happening within my lifetime.
4.4 p.m.
Lord Colwyn: My Lords, it is always a pleasure to follow the noble Viscount, Lord Falkland. This morning I had an argument with a motor cyclist. He was travelling very fast so I did not recognise him, but I do not think that it was the noble Viscount.
I, too, am grateful to the noble Lord, Lord Jay, for initiating the debate this afternoon. I declare an interest in that I have lived and travelled in London for most of my student and professional working life.
Stringent parking restrictions, single and double yellow lines, red routes, parking wardens and clamping have helped but in practice have done little to cope with the increase in the numbers of private and commercial vehicles and have made travel in the capital very difficult. Public transport is unable to cope because of the sheer volume of traffic and the problem of what to do with the vehicles once they are in the capital.
The purpose of my brief intervention this afternoon is to make a further case for the encouragement of cycling as a means of transport in London. This is the second time that the subject of bicycles has come up today and I apologise to those noble Lords, if there are any still in their places, who earlier on declared a dislike of all cyclists.
I am aware of the fact that your Lordships have recently debated the case for the control of combustion-engined road transport in city centres and a proposition to maximise the environmental, public health and cost benefits of bicycling as a means of personal transport in Britain. I do not wish to go over the arguments again. However, my noble friends on the Front Bench have stated for many years that they are aware of the problems of increasing congestion in our towns and cities and have made minor gestures to the increasing number of cyclists. Yet surely the department, which is responsible for devising the strategy to control mechanised transport and should be promoting travel that is beneficial to public health, should have concluded that cycling now deserves the highest priority.
Annual cycle sales now rival those of cars, yet the relatively low use of cycles on the roads of Britain seems to have led our transport policy makers to ignore the massive benefits which could be derived from encouraging more people to cycle. Those of us who do cycle and take action to benefit our own and others' health do so, particularly at this time of year, in an environment which is increasingly polluted by traffic. I am concerned that there are relatively few
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monitoring stations for air quality and none for noise. Cyclists are having to choose to wear smog masks to filter out some of the damaging by-products from motor vehicle exhausts.
Cyclists and pedestrians should benefit this year from a reduction in air pollution resulting from the inclusion of the check on exhaust emissions in the MOT tests and the requirement that all new cars be fitted with catalytic converters. They should also benefit from the requirement that utilities now have sole responsibility for making good road surfaces which they have dug up.
The Government must move away from a transport policy which is focused on increased ownership and use of the car. That policy has been formulated in the belief that growth in car use and expansion of the road network are indicative of progress and higher standards of living.
The gestures which the Government have made towards cycling have included the appointment of regional cycling officers and directives to local authorities that the needs of cyclists should be considered. Since 1978 about 30 innovative projects have been promoted jointly by the Department of Transport and certain local authorities. Recently the department has backed campaigns to give pedestrians, cyclists and buses priority over cars and lorries.
The attraction of cycling and the possibility of cycling becoming more popular for a proportion of the journeys that people now make must surely now be taken seriously by the Government. While the Minister acknowledges that cycling is a healthy and environmentally friendly method of travel and that cyclists have as much right to use the roads as anyone else, it seems that the admitted dangers of cycling may well bring about an unintentional outcome of policy that it is preferable for cycling to be discouraged.
Only 1 per cent. to 2 per cent. of civil servants in the Department of Transport deal with cycling, even on a part-time basis, and their effectiveness in promoting cycling is questionable as their sole focus seems to be on safety aspects. There is a considerable level of under-reporting of cycling accidents which, when compared with general casualty rates, under-estimate the relative dangers of cycling and dilute the strength of those campaigning for better provision for cycling.
There is also insufficient data to calculate the savings as regards health and the reduction of costs for the NHS by having a fitter population if cycling were to become a more common mode of transport as it is, for example, in the Netherlands. There is evidence that regular cycling could improve significantly physical fitness and would lead to a reduction in some of the considerable sums spent each year in treating patients with circulatory and respiratory diseases.
I agree with the BMA report on cycling which clearly set out three practical measures which might improve the prospects for cycling and reduce the problems of transport in London: first, the need for motorised travel to be reduced—cutting the volume of private cars and improving public transport; secondly, personal travel should be encouraged which incurs the lowest cost for the health and welfare of the community; and thirdly, the adverse effects on health

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by motorised travel must be reduced. Accidents, pollution, noise and vibration, stress and anxiety, danger, loss of land and planning blight, and severance of communities by roads have all been identified as ways in which our current transport system damages public health.
The Government should take a much more positive role in using all the means at their disposal actively to promote cycling rather than treating it as a marginal form of transport. They could raise their standards on motor-traffic noise and pollution and properly enforce regulations and take steps to restrict speed through comprehensive, self-enforcing traffic calming measures, to reduce the risk of serious injury by allowing drivers more time to take avoiding action.
Cycling should also be better integrated with public transport. I refer to rail use and cycling—an ideal combination for fast and convenient travel which is still relatively rare in Britain and fraught with problems, as the regulations governing the carriage of cycles on trains are neither clear to the cyclists nor to the staff who operate the system.
Although, generally speaking, the public image of the bicycle as presented by the media and institutions has rendered it largely irrelevant, there are signs that it is changing. A survey by the Consumers' Association in 1990 found a majority in favour of alleviating traffic problems by providing more cycle lanes, even if it meant less road space for cars and reduced traffic speed and a Gallup survey in the Guardian a year ago found that 63 per cent. of motorists supported city centre car bans and that 85 per cent. felt that bus, rail and tube services should be improved.
Cycling should be actively promoted as a serious means of transport; the Department of Transport and local authorities should positively discriminate in favour of cyclists and pedestrians in planning transport routes and amenities.
The noble Lord, Lord Jay, reminded us earlier of my noble friend the Minister's expertise in many fields. I look forward to hearing his solutions to the problems in 20 minutes or so.
A final thought for my noble friend—and the noble Viscount, Lord Falkland, mentioned it earlier—which might help to keep traffic in London, or perhaps out of it, is that as I cycled to the House this afternoon I passed a news stand in Bond Street declaring an Evening Standard headline: "M.4. melts in heat"!
4.12 p.m.
Lord Tordoff: My Lords, as they say, follow that! I had not intended to talk about two-wheeled machinery, but the noble Lord, Lord Colwyn, always makes an extremely useful contribution about cycling in these debates and on these Benches we support him. If we have any quibbles about bicycles it is as regards their slightly irresponsible use in certain areas where people ride on pavements and generally get in the way. Also, I notice the increasing frequency with which one sees bicycles at night which are not properly lit. That is not a general condemnation of cyclists, and I realise
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that some of them ride on the pavements because there are no proper cycleways for them, which is the proper answer to that problem.
Like many other noble Lords, I am grateful for this opportunity to join in the debate which has been presented by the noble Lord, Lord Jay. Some of us may have wished that it could have been somewhat delayed after our exertions of yesterday and the day before. I feel that the debate might have been rather better attended had so many Members of your Lordships' House not been here until ten to three this morning. Nevertheless, we shall do our best and, so far, noble Lords have done their best.
I am assisted in what I shall say by information provided by my noble friend Lady Hamwee who is chairman of the London Planning Advisory Committee. She has referred me to a report which was commissioned by that committee on London as a world city. The report has been widely regarded. One of the key priorities identified was easier and safer movement within the capital city. In other words, the report says that poor transport is a disincentive to overseas companies moving into our capital city.
The economy of the whole country depends to a large extent on the economic health of London. As noble Lords will know, I speak as someone who comes from the north and I am a great regionalist but, nevertheless, I recognise that the country is not healthy if the capital city is not healthy.
Transport is an important facilitator in the capital city. It enables other things to happen, and progress is stifled if transport is bad. Transport is a key factor in the quality of life of people who live and work in London, as has been apparent from the speeches that we have heard this afternoon.
A number of solutions are proposed by all sides to deal with congestion in London. Road pricing is being considered, but our view is that, although we should not dismiss road pricing, if there must be a stick there should also be a carrot. That carrot must be proper public transport which is reliable, which turns up when you expect it and which is clean and not over-expensive.
The report of the firm of consultants, Coopers & Lybrand Deloitte, concludes that:
"London is, and can remain, a pre-eminent world city but its status is at risk, not because of any inherent and irredeemable disadvantages, but simply by default".
On the subject of planning the report says that:
"The key priority is for easier and safer movement around London; we give this a higher priority than improving either national or international transport links".
I find that extremely interesting. It goes on to state:
"London also needs better bus and light rail systems. These public transport improvements must be given secure funding",
and that takes me back to the point made by my noble friend Lord Ezra and the noble Lord, Lord Jay, in his admirable opening speech as regards security of funding. The Minister may tell us that funding for London Underground has not diminished, but it is not secure. In one part of the year it is told that it will be allocated a certain amount of money to spend in the next five years and a few months later that sum is cut. Security of funding is almost as important as the level of funding itself.

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The report states that it believes that:
"An environmental audit of London is needed and we believe priority attention should be given to air quality, noise levels…".
My attention was drawn to an article in yesterday's Evening Standard, the headline of which is:
"This smog can shorten the lives of Londoners".
The rzeport says:
"Londoners' lives are at risk because of toxic smog smothering the city.
"High levels of tiny dust particles are damaging their health and could be shortening their lives, it is claimed, especially during the recent heatwave.
"The alert comes as an unpublished American report blames poisonous fumes from car exhausts and industry for increasing the death rate in cities by as much as 26 per cent".
That is in America, but the report goes on:
"worryingly, London has the same or higher pollution levels than six US cities in the I6-year study on the health effects of exhaust and chemical fumes".
Therefore, there is a serious problem in that regard not only in terms of inconvenience but also in terms of the physical health of the inhabitants of this capital city.
We have all said before and will continue to say that the answer to that is improved public transport. But what steps are the Government taking to improve public transport? No doubt the noble Earl will tell us that bus deregulation will be the great answer to the problem. Quite frankly, I do not believe that. Again, as has very sensibly been said, the present method of franchising has improved facilities on the buses in the City. I live in Pimlico when I am in London. The 24 bus route is now an excellent service which it was not before. That seems to me to be the better way forward; indeed, it is the way forward that we suggested when the bus deregulation Bill was before your Lordships' House many years ago and we talked about the possibility of compulsory tendering for buses rather than total deregulation. Now the Government seem to be wishing to go down the track of deregulation. I cannot for the life of me understand why. I do not understand why they have not learnt the lessons mentioned by the noble Lord, Lord Ezra, which arose as a result of bus deregulation in Sheffield and in many other places. In my view, to deregulate totally brings all the disadvantages and none of the advantages.
One of the problems that we have referred to previously, and to which we shall refer again, is the lack of any strategic overview of transport in London. We know that the Director of Transport is looking after the red routes. But if he strays away from them, he has no control. I understand that even he is beginning to recognise his lack of ability as regards operating outside that'very narrow band of red routes. That was something we also raised many years ago.
There is no question that during the passage of the rail privatisation Bill, which will be before the House next week, one of the issues will be the possible loss of concessionary fares which is worrying people in the capital city. I know that Mr. Steven Norris, to his eternal credit, has put his job on the line by saying that he will resign if concessionary fares are discontinued.
Lord Clinton-Davis: My Lords, there are reshuffles.
Lord Tordoff: Well, my Lords, as the noble Lord, Lord Clinton-Davis, just said, and as I was about to suggest, no Minister will be in office for ever and,
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whether he jumps or is pushed, we need a better assurance than that from the Government. We need an assurance on the Floor of the House from a government Minister. The noble Earl, Lord Caithness, has an opportunity this afternoon to give the assurance that such concessionary cards will be continued and legislated for in the future.
In a brief 10 minutes it is impossible to cover the whole spectrum of London transport. We have not discussed the airport situation, although the noble Lord, Lord Cocks of Hartcliffe, rightly referred to the City Airport. No one is more pleased than I that transport to that worthy venture is now much easier than it was originally. I wish it well, as I have done from the start. But we are now talking about an extra runway for London and a fifth terminal for Heathrow, without contemplating the impact that such developments will have on surface transport in our capital. The City Airport is a very useful way of alleviating those problems.
If the noble Baroness, Lady Gardner of Parkes, had returned from her overseas trip earlier, I am sure that she would have joined in the debate on the subject of minicabs. Again, that has already been referred to this afternoon. I believe that the Government really need to sort out their ideas. Many people are most worried, especially women, about the dangers that they face in travelling in unlicensed minicabs.
One could continue across the whole wide range of London transport. However, there is not sufficient time to do so this afternoon, although we are running a little early. What is necessary is a strategic overview of London transport and traffic. We are not getting that from the Government; indeed, we have not had it from them. It is a crucial matter. If such problems are to be solved at some stage in the future, then it is crucial for the comfort and health not only of the great city of London in its widest sense but also of the individual people working in London that such matters are taken on board by the Government in the form of some sort of strategic overview.
4.24 p.m.
Lord Clinton-Davis: My Lords, I should like to join with those who have thanked my noble friend Lord Jay for having initiated the debate and for having made such a powerful case at the beginning. It has been an interesting debate, albeit a short one. As with most debates about transport, the contributions have given rise to innumerable issues which in turn have given rise to major criticisms of government transport policy. For example, I noted the slightly more muted criticisms of the noble Lord, Lord Mountevans; but, nonetheless, they were criticisms. He posed some most important questions: questions about the use of cars and about other issues to which I hope the Minister will respond.
In opening the debate from the Liberal Democrat Benches, the noble Lord, Lord Ezra, observed that he was staggered by the lack of progress in resolving the massive transport problems of the capital. He wanted to know what the impact of deregulation would be. I should also like to know, as I am sure would the whole House. But I doubt whether the Minister would be

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able to give us any real answer, at least not today. However, I hope that he will observe the precedents that have been taking place throughout the country. They are not wholly good; indeed, I think that even the Minister has conceded that point in previous speeches.
The problems affecting the capital today, such as traffic congestion and pollution which are choking the capital, the daily trials of Londoners and commuters (an experience from which Ministers are largely shielded) the overcrowding, the inadequacies of a public transport system—and that not through a lack of management expertise, but through chronic under-investment, a lack of strategy and a failure by the Government to pursue an integrated transport strategy—all indicate that the Government have failed lamentably to deal over the past 14 years with the major problems affecting the capital.
How all that contrasts with the position in other major capitals of Europe. There was the First World War song,
"Take me back to dear old Blighty, Put me on the train to London Town".
If today that train was on a Network SouthEast route, that soldier would be lucky to get on in any degree of comfort, lucky to avoid signal failures or some other technical reason for delay; and, indeed, lucky to arrive promptly or at all. Of course, he would have the Passenger's Charter. I do not wish to denigrate the idea of that charter. After all, it was a Labour idea, as was the Citizen's Charter. But what passengers would prefer is not compensation but an assurance that the problems to which your Lordships referred in earlier speeches will be dealt with; for example, they want clean trains, trains running on time and safely, clean and safe stations adequately staffed that do not represent a threat to the safety of passengers and proper provision for passengers with disabilities and, indeed, for women.
What we have had from the Government is an obsession with privatisation and deregulation, but no strategic planning to provide greater access to the public on public transport at lower environmental cost. There has been a pathetic failure to link land use and transport planning. That point was also made by the noble Lord, Lord Mountevans. I believe that the noble Lord, Lord Tordoff, was right to emphasise the fact that a good public transport system is central to the health of London, to its environment, to its economy, to its social problems and also vital to tourism which is a pretty good money earner for the country. The fact is that public and private transport in the capital is in a shambles today. The cost of congestion in London is estimated by the CBI to be in excess of £10 billion a year. Yet our long-suffering commuters pay the highest fares in Europe and also pay a dreadfully high price in terms of inconvenience and delay.
Radical change is called for, but all we get from the Government is, at best, an ad hoc response: there is no vision, no strategy, no certainty that major projects like the Jubilee Line, Crossrail and the urgent modernisation of Network SouthEast or the
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rehabilitation of the Northern Line will actually go ahead. What we are getting are statements saying that this or that is now on line. I shall come to that matter in a moment because such statements are far from being the reality.
The Government should he asking themselves what all this prevarication is costing the City and indeed our nation. The Secretary of State is a member of the Magic Circle. He is an illusionist of enormous skill and he has translated those powers to his position as Secretary of State. Unlike the man who manages to construct lovely patterns from bits of torn up paper, all we get from the Secretary of State, rather in the manner of the late Tommy Cooper, are the torn up bits of paper.
Let us take, for example, the Jubilee Line. One moment we have it and then it is gone. So with Crossrail, the Tunnel link, the west coast main line, and the Northern Line. There were bold announcements followed by qualifications about financing and whether joint ventures would be available and who the partners would be. Today we are none the wiser about those matters despite the fact that yesterday the Crossrail Bill received its Second Reading in another place. Yesterday the Minister for Transport in London said in that debate that the private sector wanted to see legislation in place and then it would consider investment. Can we be sure that whatever proportion is expected from the private sector will be forthcoming? Can we be sure that the Government will make their provision? Can we be sure that the crossrail route will ever be constructed? It would be enormously sad if Crossrail were not to go ahead. It was the idea, incidentally, of the late GLC but that has never of course been acknowledged by this Minister or by the Conservative Government.
Prevarication is costly—it is continuing—in terms of jobs on the railways and in the railway construction industries. It is also costly in terms of continuing congestion in London and in terms of deferred hopes for Londoners. We on these Benches support Crossrail and the Jubilee Line but a sense of urgency needs to be injected into these matters to relieve overcrowding and to reduce journey times right across the South East. These new routes are also critical as a stimulus to creating more economic activity in the country as a whole as well as in the capital. What is the Government's thinking as regards where the money is to come from? Are the Government prepared to underwrite the required capital if need be?
According to an article in the Independent of 22nd May, the Jubilee Line tube extension is facing the axe to counterbalance the Government's commitment to the £1.8 billion London Crossrail project. The article stated:
"Ministers told banks on Wednesday to remove a key clause in a private sector financing agreement which would oblige the Government to repay the banks' money if the line was not completed by 2000. A banking source said that if the clause were to be removed it would wreck the deal".
The article also stated:
"Mr. Portillo says other infrastructure projects represent better value".

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What is the truth of all that? Is the article wholly misleading? What is the truth in particular about what the Minister had to say in that regard?
The Government fail to provide any coherent policy in relation to London Transport. I believe that what we need is a public transport system that must provide an attractive alternative to use of the car. We need a public transport system that is safe, clean, efficient, reliable, comfortable and is good to travel on and for workers to work in. We need an authority that is capable of and responsible for providing a strategic and integrated transport plan for the capital and that is capable of directing investment; promoting greater integration between rail, Underground and bus services and giving greater priority to cyclists and pedestrians, as the noble Viscount, Lord Falkland, mentioned.
All new road and rail developments need to be made subject to stringent social, economic and environmental cost benefit analyses. Clearly private sector support must be maximised but it must not become, at best, a much delayed condition precedent for building schemes that may last decades or, at worst, an unfulfillable condition precedent altogether. We must build on the Passenger's Charter and we must build on the standards for service that London Transport and other transport bodies in London are seeking to provide. We must also maximise the use of Travel Cards and Network cards so as to offer an easier integrated journey when using rail, tube and bus services. The noble Lord, Lord Tordoff, referred to that matter and we shall return to that point during debates on the railways legislation.
I noticed, incidentally, that the Minister for Transport in London, Mr. Norris, has been in the habit of giving a number of undertakings. He has given undertakings about Travelcards and other matters. He is a great giver of undertakings but the trouble is that this Government have become the great undertakers for London Transport altogether. We need to adopt a wide view as regards an integrated strategy for London. However, the Government have opted to deal with this matter in a piecemeal way which is absolutely shambolic.
I do not have time to talk about matters affecting roads. However, the situation as regards the private sector and roads is equally shambolic.
I shall now turn to a point that was raised by the noble Lord, Lord Tordoff. Traffic pollution is choking the capital. That observation emerged from a report prepared recently by the Conservative controlled London Boroughs Association which built upon its previous report issued in 1990. The later report stated that the Government must stop permitting such high levels of air pollution in London and implement drastic measures. The report also stated:
"It is negligent for the Government not to take a stronger role than it is currently, when the health of London's residents and environment is at stake".
The association indicted the Government for failing to deal with the levels of toxic gases emerging from the over-use of motor cars and other vehicles in London. What is the Government's answer to those criticisms that come mainly from their own supporters?
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I also wish to refer to Network SouthEast. I do not know whether many noble Lords watched the television programme about Network SouthEast. That programme illustrated the enormously difficult task that faces the management of Network SouthEast through a chronic lack of investment. That lack of investment has brought about the chaotic situation that so many commuters experience every day of their lives. That situation is not the fault of British Rail or of the people who work for British Rail. It is the fault of those who have operated a stop-go policy on investment in London Transport. That situation is not good enough.
My noble friend Lord Jay has already referred to the matter I am about to mention. At one time the Government made a pledge that they would provide substantially more investment than ultimately was the case. This stop-go policy on investment is acutely damaging not only to British Rail, London Transport and the Underground system, but also to the interests of London. The chairman of London Transport, Sir Wilfrid Newton, said on 8th March 1993:
"London needs vision and resolve to ensure its continuing success. London's future success as a world city demands further improvements to the fabric of its public transport. In today's circumstances this is a testing challenge for all concerned—but most of all for the Government".
In my submission the Government have failed to measure up to that challenge and have acted irresponsibly. There is no indication that the Government will measure up to the challenge in the future.
4.39 p.m.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, London is on any account one of the largest and most important cities in the world. Like all major world conurbations, London faces difficult and complex travel demands. The task of dealing with those demands is enormous and expensive. I am grateful to the noble Lord, Lord Jay, for raising this important subject this afternoon. I welcome the opportunity it gives me to respond on behalf of the Government.
It was the recognition of the complexity and scale of the transport problems facing London that led the Government to create the new post of Minister for Transport in London following the last General Election. As far as I am aware, no other city in the UK has a full-time Minister devoted to improving a particular aspect of its affairs in this way.
Some of your Lordships, like the noble Lords, Lord Ezra and Lord Tordoff, would like to create a new tier of local government or a new transport agency, elected or unelected, to take over the activities of all the existing bodies in London. We do not agree with that but we do accept the need for improved co-ordination. My honourable friend the Minister for Transport in London is responsible for co-ordinating policies for all modes of transport in London. His role is to encourage the various organisations involved to pursue consistent policies and, where necessary, to address deficiencies in the market. The Minister is a member of the Cabinet sub-committee on London. He also chairs the Transport Working Group, which

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brings together representatives of public and private sector transport operators, the business community and consumers, and provides an important forum for exchanging information and ideas.
A good example here is the initiative taken by the Minister for Transport in London to establish the River Thames Working Group, which is examining the scope for maximising the transport potential of the Thames for both passengers and freight. My noble friend Lord Mountevans will welcome that initiative. But the Government are certainly not seeking to impose a detailed strategic transport plan on London. On the contrary, we want to set the private sector free to play its role to the fullest possible extent and we want the travelling public to have as much choice as possible in deciding how they travel in London. Our objective is to develop a framework of policies within which others can implement their plans in response to the demands of people to travel or to move goods around London.
A great deal has been said this afternoon about the deficiencies of London's transport system. Unfavourable comparisons have been made by the noble Viscount, Lord Falkland, and, needless to say, by the noble Lord, Lord Clinton-Davis, with the transport systems of other major European cities such as Paris. We hear a lot about how good the transport system of Paris is; indeed, I am the first to pay tribute to what has been achieved in Paris, but I think some of the comparisons that have been made are very selective. I could easily quote selectively to demonstrate London's superiority. It is, for instance, quicker from central London to Heathrow or Gatwick by public transport than from Charles de Gaulle to the centre of Paris. For all the hype about French planning, there is no direct rail link from Charles de Gaulle airport to the centre of Paris. The noble Lord, Lord Cocks of Hartcliffe, was right; it is in the nature of the British character to dwell unduly on our shortcomings. The French, in stark contrast, are more concerned with advertising their achievements and future potential to the world.
Lord Clinton-Davis: My Lords, I apologise for interrupting the noble Earl hut, having mentioned Paris, would he agree that Paris has already completed three cross-city lines, that it has a fourth under construction arid is planning a fifth, while the Government dilly and dally here?
The Earl of Caithness: My Lords, I was absolutely right. The noble Lord has the true character of the representative Briton. He is very keen on exposing all the shortcomings of this country. We hear it in every speech that he makes. Overall, London's transport system does not compare too badly by international standards. But the Government certainly accept that there are deficiencies which will need to be overcome to enable London to retain its position as a leading world city and as the premier European capital in the years ahead.
Lord Tordoff: My Lords, perhaps the noble Earl, instead of rebuking the noble Lord, Lord Clinton Davis—which must be a great temptation and one which I can understand from his point of view—could answer the question that was asked. It seemed to me to be a perfectly valid question.
The Earl of Caithness: My Lords, I am going to answer many of the points that your Lordships have put to me but, needless to say, because of time constraints I shall not be able to answer them all. We must never forget that London has to compete with cities like Paris to maintain its position as Europe's foremost financial and business centre. As all your Lordships are agreed, to be competitive we will need a transport system which can respond efficiently to changing patterns of demand and which—within the practical constraints—will be safe, cost-effective and will respect the environment. The noble Viscount, Lord Falkland, was right to remind us that we are restricted by our existing infrastructure. Let us not forget that 12 per cent. of London is covered by roads whereas in Paris the percentage is 20; and that compares to a modern city like Milton Keynes, where 30 per cent. of the city is covered by roads. It is perhaps a pity that the burghers of London rebuilt the road system in 1667 on the old mediaeval plans and did not plan for the M.25. A key priority must therefore be to address the problem of congestion, and that means addressing both the quantity and quality of transport which will be available in the years ahead. It also needs the co-operation and good sense of all transport users and pedestrians. Although we are all fallible, I know that the noble Viscount, Lord Falkland, will be only too keen to set a good example in this respect.
The Government's strategy has three main elements. First, we are improving the management of the road and rail networks in order to make more efficient use of the existing system. Secondly, we are injecting large sums of public money into investment projects, with the bulk of the resources targeted on modernising and expanding the Underground and surface rail networks. Thirdly, we are making greater use of private sector resources and management through the privatisation of British Rail and London Buses, the deregulation of bus services in London and the development of joint ventures to build and operate major new schemes like the Heathrow-Paddington Express, the Channel Tunnel Rail Link and CrossRail. In terms of the road network, we are no longer planning major improvements to the radial routes within the M.25 which would attract more cars into central London. Our roads programme is geared to upgrading the North Circular Road to help to improve orbital movement, providing better access to Docklands and the rest of east London, and dealing with congestion black spots. The noble Lord, Lord Cocks of Hartcliffe, welcomed the recent opening of the new Limehouse Link by my right honourable friend the Prime Minister, which completes the new road system giving quick access from central London to Docklands and London City Airport. Your Lordships may have seen from the press that passenger figures for London City Airport in the first

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five months of 1993 are up 44 per cent. on 1992. The airport is expecting the launch of four new routes over the coming months, to Amsterdam, Belfast, Dublin and Frankfurt, bringing to 12 the number of destinations served. I am delighted that there is better road access.
My noble friend Lord Colwyn will welcome the fact that increasingly we are switching the emphasis to improving road traffic management in order to make more effective use of the existing network. The measures include the Red Route system, more effective on-street parking control, more priority for buses, the extension of integrated signal control, with greater emphasis on safety and traffic calming, together with provision for pedestrians and cyclists. Red Routes will benefit cyclists in a number of ways, including reducing accidents and complementing the strategic 1,000-mile network for London. The measures include cycle lanes, shared-use bus lanes, and signals and crossing points where established cycle routes intersect with a Red Route. However, as my noble friend Lord Colwyn will realise, inevitably most of the provision for cyclists must come from the local authorities who have responsibility for 96 per cent. of London roads. It is not just the department that has responsibility in this area. If indeed it was only the department that had responsibility there would be even louder complaints from the noble Lords, Lord Tordoff and Lord Clinton-Davis.
My noble friend Lord Mountevans was right to say that a key requirement is effective enforcement of parking policies. The new system will start being phased in from next month and I am sure it will bring substantial rewards. Our transport management initiatives, in combination with limited road improvements, will go part of the way to dealing with the problem. But as prosperity returns we can expect renewed traffic growth and deteriorating traffic conditions overall. That is why we are investigating the possibility of measures such as congestion charging. We are engaged on a major research programme which will be completed towards the end of 1994.
The noble Lord, Lord Tordoff, welcomed the fact that the main aim of congestion charging would be to reduce congestion; but that would not be an end in itself. We shall also have to look closely at the possible impact on London's economy, environment and quality of life. Irrespective of whether congestion charging is introduced, our aim is that Londoners should have a much improved public transport system, capable of responding efficiently to the extra demand and offering a good-quality, reliable alternative to the private car. This will require investment in the rail network—both overground and underground—and my noble friend Lord Colwyn will be interested to know that in London the ratio of spending of taxpayers' money is £3 on public transport to £1 on roads. That is in marked contrast to the remainder of the country where it is £1 on public transport and £1 on the roads.
Over the past few years the Department of Transport and the operators themselves have carried out a number of major studies to identify the key
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worthwhile public transport schemes which will relieve congestion and support the economic development of London over the next decade or so. Most of those schemes have been mentioned in the debate. They include the modernisation of existing lines, such as the Central Line on the London Underground and the Kent Link and London Tilbury and Southend lines on Network SouthEast.
By replacing obsolete equipment, modernisation results in a more efficient, more reliable and more comfortable service. It also generally produces an increase in capacity through the use of modern signalling systems and more frequent and, in some cases, longer trains.
As well as upgrading the existing system, there are the plans to create new capacity. The 1992 Autumn Statement made it clear that funds were earmarked for the building of the Jubilee Line extension, provided that the promised private sector contribution was forthcoming. The negotiations with the administrators have taken longer than we had hoped. I cannot comment on them until they are concluded. The private sector, London Transport and the Government must be satisfied on the terms of what is a detailed and difficult agreement.
The Budget Statement in March included the announcement that the fast rail link between Heathrow and Paddington would go ahead as a joint venture between British Rail and BAA plc. It also reaffirmed the Government's commitment to securing the benefits which CrossRail will bring to London but suggested that the project might best proceed as a joint venture, an approach which has since been confirmed as the way forward. The CrossRail Bill received a Second Reading in another place yesterday, and I am glad that the noble Lord, Lord Clinton-Davis, welcomed that.
We have also recently announced the Government's readiness to provide public sector support for a joint venture to build the proposed Channel Tunnel rail link to central London. Other proposed projects include Thameslink 2000, extensions to the East London line, and the Chelsea-Hackney line.
Our strategy depends crucially on major investments in rail schemes, and those are very expensive. Until the mid-1980s there had been a continuing decline in population and employment in London. It was a period of retrenchment in investment in public transport. There was no golden age under the GLC. There was then a huge expansion in demand for public transport. Travel on the London Underground was more than 40 per cent. higher in 1990 than it was in 1980, while travel on Network SouthEast was nearly 18 per cent. higher. That led to the ambitious investment plans to catch up with the increased demand.
The noble Lord, Lord Ezra, I think surprisingly for him, asked only for more money to be thrown at the problem. I should have thought that he would have welcomed the fact that we also sought to improve the efficiency and quality of public transport services by setting British Rail and London Transport tight financial controls and agreed objectives. Investment

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levels increased. Where new equipment has been introduced, the quality of the service has improved and capacity has been enhanced. More recently, the Citizen's Charter has given management a new impetus to raise the standards for passengers on all services.
Lord Ezra: My Lords, I thank the noble Earl for giving way. I referred specifically to the problem of the investment in London Underground and to the debate which I initiated in July last year during which certain figures were mentioned which seemed encouraging. However, in the Autumn Statement those were cut by a third. That is what I expressed anxiety about.
The Earl of Caithness: My Lords, I shall come to that point in the next few minutes. I have it ahead of me.
The recession has, of course, affected the revenue flowing into the operators reducing the funds they have available to carry out the investment themselves. Inevitably, that has led to calls for more support from the taxpayer, often by those who call equally loudly for Government adherence to spending targets.
I now turn to the crucial point. I understand the disappointment voiced by the noble Lord, Lord Jay, and backed by the noble Lord, Lord Ezra, about the Autumn Statement of 1992. It undoubtedly represents a scaling down of their aspirations, although investment is still on a firmly upward trend and much higher than in the 1970s and 1980s. Everyone was aware that this was a particularly tight year. Difficult decisions will doubtless have to be taken, but no more difficult than those being taken by other parts of the public sector and by hard-pressed private sector businesses. However, investment in public transport has been maintained at a high level. London Transport, for instance, expects to invest some £1.5 billion in its core business over the next three years. In real terms, this is about twice the average annual level of investment which London Transport achieved in the late 1970s, and early 1980s. Let me reassure the noble Lord, Lord Jay. This means that the £750 million modernisation of the Central Line is continuing and is well on course for completion in 1995. The Underground's train refurbishment programme is also continuing apace.
The noble Lord, Lord Clinton-Davis, asked the Government whether we would be prepared to underwrite the capital. In total, the Government are now putting the huge sum of around £2 billion of taxpayers' money into transport investment in London each year. That compares within an overall budget for the Department of Transport of around £7 billion.
I will excuse the noble Lord, Lord Clinton-Davis, but the noble Lords, Lord Ezra, and Lord Jay, must surely agree that we have to recognise that there are limits to what we can expect the taxpayer to contribute. Higher expenditure often means higher taxation, and that will certainly not assist the recovery of London's economy. It is therefore essential that we tap the resources and expertise of the private sector as far as we can. The proposed privatisation of British
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Rail and London Buses, together with the deregulation of London bus services, will give the private sector a much bigger role in the provision of transport services in London and make the service, with which my noble friend Lady Sharples is much happier, even better.
Existing British Rail services will be franchised to the private sector. The aim will be to give the private sector the fullest possible opportunity to manage and operate railway services, receiving grants where those are justified in return for meeting required levels of service and quality standards.
I can confirm to the noble Lord, Lord Tordoff, that the privatisation and deregulation of London's buses will take account of the experience gained outside London. Operators will be free to operate services on a commercial basis, subject to meeting the necessary safety standards. This will allow the development of new and innovative services that meet the needs of passengers. Most services will be able to operate without the need for subsidy. Experience outside London has shown that 80 per cent. of bus routes operate without subsidy. But where a commercial operation would not be viable, a new London Bus Executive will be able to arrange for commercial operators to provide socially necessary services on a subsidised basis. We will also need to ensure that comprehensive information is available to passengers. Our proposals will also provide for the preservation of a London-wide concessionary fares scheme, the scope and funding of which will, as now, be a matter for the London boroughs.
I shall not touch upon Travelcard, because I should hate to pre-empt what I wish to say next week. I look forward to the debate on the Railways Bill and, having given it, of course, due consideration, to the speedy passing of that excellent measure through your Lordships' House.
Perhaps I can sum up our approach to transport in London. What we are seeking is a system that will help and support economic recovery and prosperity in London in the years to come. We want to set the market free wherever possible to serve the customer and to provide optimum choice. But we also recognise the need for an overall framework of policies within which the various players in the market can operate and make their plans. We face major challenges ahead. The public sector has an important role to play in meeting those challenges, but increasingly we must look to the private sector to help us in finding solutions. That is one area in which we are among the world's leaders.
4.59 p.m.
Lord Jay: My Lords, I should like to thank everyone who has taken part in the debate. I have one confession to make: my enthusiasm for bicycling is less intense than it was 70 years ago.
Like the noble Lord, Lord Ezra, I find the Government's attitude on the issue extraordinary. The modest request which I made to the Minister was that he should restore the funding for London Underground's capital spending to the figure which the Government approved only 18 months ago. If I

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understood his speech correctly on that point, the Government flatly refuse even to do that. That is extraordinary. Here is a modest improvement which would have been welcomed by everyone, but the Government turned it down flat. This is not the most popular Government we have known in recent times and here is something which would at least please some people. I am reminded of the ancient classical tag that those whom the gods wish to destroy they first drive mad. Perhaps that is the best comment on the Government's attitude on this issue today. My Lords, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

National Health Service: Role of the Private Sector
5 p.m.
Baroness Jay of Paddington Baroness Jay of Paddington rose to call attention to the increased role of the private sector in the National Health Service; and to move for Papers.
The noble Baroness said: My Lords, my purpose this evening is to suggest that the NHS is under threat, that the growing role of the private sector in the health service is being driven by powerful political and ideological forces which must eventually undermine the fundamental principles on which that service has been built for the past 45 years.
My fear is that the Treasury's determination to cut public expenditure, combined with the opportunistic activities of private health care providers, will inexorably lead to a redefinition of what the health service is all about. A growth of private sector involvement in the financing and management of our hospitals, our GP surgeries and our community services must, I suggest, produce a mixed economy in health care where there is a tiered structure of provisions and little democratic accountability. No doubt when the noble Baroness speaks, she will deny that the basic tenets of the health service to provide universal health care free at the point of delivery are in danger. I am perfectly sure that she will be sincere in that denial. But my concern is that, pressurised by the Treasury and by their 1992 manifesto promise to ensure a year by year increase in the levels of real resources committed to the NHS, health Ministers are rushing to square the circle by attracting private money, without really considering what the long-term impact of commercialisation may be.
I should like to take a few minutes to remind your Lordships just how quickly the current enthusiasm for private financing in the health service has accelerated. Last month, the noble Baroness, Lady Cumberlege, said in reply to a question from my noble friend Lord Dean of Beswick that:
"this is not a new idea. We have been working with the private sector for … years".—[Ojficial Report, 13/5/93; col. 1365.]
But I would suggest that what is happening now is of a different order from anything we have seen before.
In the last Autumn Statement, the then Chancellor of the Exchequer gave the Treasury imprimatur to schemes to secure a greater level of private sector investment in public sector projects. On 21st April this
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year, the specific rules which govern the use of private finance in the NHS were relaxed. Hospital trusts and health authorities can now authorise up to 10 million to contract privately funded and managed projects. The previous limit was £¼ million. At the same time, it was announced that one of the Department of Health junior Ministers in another place would be formally responsible for "private health and income generation in the NHS".
The political momentum has continued apace, with the Secretary of State for Health making a significant speech to the CBI on 26th May, entitled "Private Finance and the NHS". In it, she looked forward enthusiastically to private sector financing of community care; to expanding private sector involvement in local health clinics; and to privately owned and operated "recovery hotels" for people who had just had operations.
At the same time as the political machine is driving forward down this particular road, the ideological, intellectual right has stepped in to provide theoretical justification for what might otherwise be seen as a pragmatic exercise in the face of cuts. The honourable Member for Fareham in another place, who was previously the director of the Centre for Policy Studies, has just written an influential pamphlet, published by the Social Market Foundation. It develops the theme, "Opportunities for Private Funding in the NHS". He lists six different areas of action which include ambitious ideas: building and operating a medical unit, operating a complete hospital, providing full scale primary and community care.
In her CBI speech, the Secretary of State commended the pamphlet as "an important paper". The author has clearly provided Ministers with what I would describe as a glibly attractive case for radical change in the health service. The Secretary of State also said on the same occasion that,
"as a spending Minister when the Treasury opens a door, you move smartly through it".
I am sure that this is often true, but not when the open door leads into the trap of increasing privatisation in an essential public service.
My alarmed reaction to these rapid developments is not based on dogma but it is based on principle. As I said before, Ministers have said that there is nothing new, they are simply extending and making more flexible a useful practice. It is true that this practice has been going on since 1983 when some subsidiary services and support services, such as cleaning and catering in hospitals were, in the jargon, "market tested", and sometimes privately contracted out. Most of us have come, somewhat reluctantly, I have to say, to accept that arrangement. We have also accepted the important role of private nursing homes for the elderly used by the NHS. A strong case has been made for leasing some major items of medical equipment from the private sector. It may well be common sense for the NHS to raise credit in the money market if this can be appropriately accounted for and directly invested in the service.
None of those activities by themselves provides a threat to the underlying principles of the NHS. But if

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private companies raise capital to build and develop health services for themselves there is a real danger that their priorities will be commercial, not concerned with providing equitably for the health needs of a population. If private companies build and run hospitals and health centres, they are private organisations whose performance and accountability may be difficult to question. We have already seen some examples of that in the recent past.
Perhaps we may examine briefly some possible scenarios which those developments could produce. It has been suggested that the public expenditure review may recommend that hotel charges are made for hospital stays and that there may be charges for visits to GPs' surgeries. So, if hospitals are to be like hotels, why not let an experienced hotel company run them? Let us say that Trust House Forte acquire the contract; soon they, together with the local NHS trust boards, are offering the kinds of attractive packages for which they are famous: winter breaks, for example, at the new Westminster and Chelsea Hotel —a luxury room with breakfast and dinner plus surgery on one's varicose veins.
Similarly, we hear that major retailers may be brought in to provide health service premises. One can see the attractions—a bright new health centre next door to the coffee shop in Tesco's car park, or just past the sweater counter at Marks and Spencer. But can we really believe that any of those extremely successful commercial companies will not be interested primarily in their profits and their market position rather than the comprehensive social priorities which guide the NHS today?
Who will use and be able to choose the commercially run services? Are they really going to be available to everyone at the point of need? I heard an interesting interview the other day with the Secretary of State for Transport discussing how road tolls for new motorways could be financed. He talked about a dual licence system in which motorists who wanted to use the motorways could pay a premium, others would be second-class drivers, driving on second-class roads. I really do not think that it is too fanciful to imagine an adaptation of that kind of arrangement developing in the health service. For example, one could buy a first-class voucher for a four star hospital room or a limited number of visits to the local GP's private clinic. Or, on the other hand, if one is poor or chronically sick, one would probably find oneself getting a progressively depressed, resource starved, exclusively public service. The lock-up surgeries which were so violently criticised in Sir Bernard Tomlinson's recent report on health care in London will, in that case, go on being a feature of inner city health care well into the next century.
General access to health care is bound to be reduced. History has shown time and again that whenever any kind of charges are introduced, whether for prescriptions, eye tests, or dentistry, demand—probably from those who are most in need—falls rapidly away.
My fears are not just about access but are also about accountability. We may, in a few years' time,
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have privately organised health providers working with undemocratically selected independent NHS trusts. To whom will they be ultimately responsible? Where will the public accountability lie? Where are the national safeguards to protect financial probity and standards of service?
We have already seen some disturbing results of dubious entrepreneurship between health authorities and the private sector in the West Midlands and Wessex regional health authorities. Those have only now been exposed, years after they took place, by the Public Accounts Committee and the National Audit Office. My worry is about what happens when independent local trusts are contracting services from commercial organisations, when no public funds are involved. Who will be the watchdogs then? Surely the NHS does not want to be exposed to the same kind of embarrassment and ridicule as has hit the Prison Service as a result of the activities of Group 4. But a privately run hospital or GP service must be the same in kind as a privately run prison or escort service. There is little scope for quality control or public accountability.
Ministers talk about increased private sector involvement as a way—perhaps the only way—of bringing new money into the health service. But before the Department of Health succumbs to Treasury pressure and Ministers accuse those in the Labour Party of being unrealistic in insisting that the NHS is funded from increased public sources, I hope that Ministers will look again at the UK's international record on health expenditure and compare our rather appalling figures with those of other countries, which, we are constantly told, have suffered the same recent economic misfortunes as ourselves. Incidentally, it is disturbing to see that in Answers to recent parliamentary Questions, both in this House and in another place, Ministers have said that comparative data is not available. International comparisons are indeed published. Given all the caveats about comparative statistics, they make alarming reading. The Compendium of Health Statistics published by the Office of Health Economics states:
"Health care expenditure in the UK remains one of the smallest among industrialised countries both in relation to population and to national wealth … allowing for currency fluctuations the UK figure of £582 per person suggests British spending is i below the EC average".
It is also worth looking at the figures of our European neighbours, both in terms of the totals of expenditure and the breakdown between public and private funding. In this country, if we accept that 6 per cent. of GNP goes on health care, the public contribution to that is 87 per cent. In Belgium, 7.2 per cent. goes on health care, 89 per cent. from the public sector; in the Netherlands 8.3 per cent. of GNP goes on health care, 73 per cent. from the public sector; and in Sweden 8.8 per cent. of GNP goes on health care, 90 per cent. of it from the public sector.
The question that we have to address is how much as a nation we can afford to spend on health care and whether we are willing to spend it. There can and should be ways of devising an increase in public funds for health. Handing over key functions to the private

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sector is not acceptable to those of us who are committed to a free and comprehensive service. It is privatisation by the back door.
The public are beginning to recognise the situation. A poll published last weekend showed that 74 per cent. of those questioned were suspicious of the Government's intentions towards the NHS; and 62 per cent. believed that the Government planned to create a two-tier system in which the better off paid for treatment and only a safety net was provided for everyone else. Interestingly, 71 per cent. of those questioned would be prepared to pay higher taxes to maintain the NHS in its present form. Another recent MORI poll showed that public concern over the health service has jumped very sharply in the past month and is now regarded as an issue of concern for one-third of Conservative voters.
None of this is surprising, when the media are full of speculation about charges and changes, and conservative commentators say, as Charles Moore does, writing in the Spectator on 29th May:
"In 50 years or so people will look on the NHS rather as they look on council housing today—as a necessary, if badly run, piece of public benevolence which serves only a minority and from which it is best to be emancipated".
My Lords, that is precisely what I fear.
Surely health Ministers must listen to public anxieties, and must not respond to the siren voices of Right-Wing theorists or surrender to the sharpest blows of the spending axe, both of which demand an even greater reliance on the private sector. I urge the Government to think again about jeopardising the principles of the most trusted public service in the country. My Lords, I beg to move for Papers.
5.15 p.m.
Lord Crickhowell: My Lords, it is six years since I last spoke in a debate on the health service, when I was still in the House of Commons. I am tempted to do so tonight only because of the mounting sense of incredulity that I have experienced as I have listened to the criticisms that have been voiced in recent months about the possibility of extending the contribution of the private sector to the National Health Service. Certainly all my fears were reinforced by the speech that I have just heard. They were reinforced, not in the sense that the noble Baroness intended—namely, to make me think that the health service was at risk—but in that there is a great deal of thoughtless nonsense being talked on this subject.
During my time as Secretary of State for Wales with responsibility for the health service in Wales, there was a lot of talk about cuts. Between 1979 and 1987 the amount of money spent on the health service in Wales increased by about one-third. By the time I left the department (in 1987) we had more doctors, nurses and professional employees than ever before. There were well over 4,000 more nurses. They were being paid 30 per cent. more, after allowing for inflation, and we were treating something like 24 per cent. more patients. During the same period we carried out the most massive programme of capital building in the history of the health service. Spending in Wales over half a billion pounds, we completed five general hospitals in those years and started one, as
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well as a number of smaller hospitals and specialist services. But despite those substantial increases in expenditure, we never had enough. I found, as indeed, Aneurin Bevan had found within months of setting up the National Health Service, that demand always exceeds supply. The extraordinary advances in medical science help to ensure that that is so. When I took up my responsibilities, hip replacements (to take just one example) were comparatively rare. By the time that I left, very large numbers of those operations were being carried out.
During the early 1980s—I suppose at a time when the noble Baroness suggested we were taking rash steps towards privatisation by contracting out cleaning services—I decided to go rather further. I was engaged on providing what I believe today to be probably the most comprehensive service of renal dialysis anywhere in Europe. One of the things we did was to decide to market test the provision of subsidiary renal dialysis units. The first two National Health Service hospitals that we market tested were in Carmarthen and Bangor. We of course allowed those hospitals to tender themselves, but we tested them in the open market. As a result of that competitive tendering exercise we appointed two international companies to provide the service for us. One I recall was American. I cannot remember where the other one came from. They were both major companies, providing similar services elsewhere.
As regards the patients, they probably never knew. The unit was contained inside the National Health Service hospital. It was not identified in any way as being a private sector provision. But the service was quite outstandingly good. It met all our hopes and aspirations. I asked myself the question early on: how was it that a private sector company charged, as the noble Baroness reminded us, with the job of making profits for its shareholders, could provide a more cost effective and efficient service inside a hospital than could the local health authority?
As I was going round that renal dialysis unit in Carmarthen, I asked the nurse. She said, "I'll give you just one example. It's the way you do things. The business of renal dialysis depends crucially on a piece of plastic in the apparatus. It does the filtering job. In a normal national health hospital it would be used once and thrown away. We have found that we can use those items 12 times and what is more, for probably the third, fourth, fifth and sixth times, you actually get a better performance than you did the first time you used it because you've got rid of the newness and the effects of the plastic in the apparatus. We've simply tested to optimise the effective use of that one piece of equipment." They are not very expensive but a very large number of them were being used. That is just one example of the way in which a private sector operator sets about running a service and does it comprehensively and efficiently.
Encouraged by those experiments I decided that we should go further. I remember telling the then Secretary of State for Health and Social Security, Norman Fowler, that we had been successful and hoped that we would press on aggressively down that road. Against that background, to be told that we are

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going too fast when it has taken six years to jump the limit from ¼£ million a project to £10 million seems to me to be a rather remarkable statement. I believe that we are going much too slowly. We ought to have been doing much more.
Let me take another example. I remember that we looked at a problem that we had in providing for cardiac operations in North Wales. We were about to construct a major cardiac unit in the hospital in Cardiff. Given the rural and scattered population of North Wales, it did not make sense to provide the same facility in a hospital in the north of the country. So we sent some of our cardiac patients to private sector hospitals which provided that service within the locality and they did the job excellently. That was a sensible and proper use of resources. So we made that start. We did not go rushing down that route for ideological reasons. We asked the private sector to tender for a comprehensive cardiac service in Cardiff and we rejected the proposals because we did not think that they met our standards.
I speak now in this debate with the wider experience of working for various organisations in both the public and the private sector. I am chairman of the National Rivers Authority. In that authority we are enthusiastically going down the road of market testing and going out to seek competitive tenders for the various operations that we conduct. We are not doing it because we are forced by the Government to do it. We already contract out a large number of our operations and we find that in many cases we can obtain a more efficient and cost-effective service if we go down that route.
I shall give another example. I am a director of Associated British Ports which used to be a public sector organisation. It used to employ 12,000 or 13,000 people in the docks. It now operates in rather more docks and employs 2,000 or 3,000 people. It subcontracts and contracts out most of the services provided in the docks. We do it because we believe that we obtain a more efficient service. We do not tell ourselves that we are not able to decide on priorities or that we cannot control the business or audit it—that was the suggestion that was made by the noble Baroness who introduced the debate. We control it and audit it rather efficiently and effectively.
I remember going recently to the container wharves at the Port of Tilbury where my company has just taken a joint interest. We have only just taken it, so we have not set up the arrangements. I asked the dock manager how he found contracting out the engineering services. There is nothing more important than the engineering services of a dock because if the lock gates do not open or the pumps do not work, the port ceases to operate. I was told that it had taken a huge load off him as port manager. He said, "We have extremely tight contracts which give big rewards for successful management and impose heavy penalties if one does not get it right. I go away and sleep at night. I concentrate on the job that I should be doing, which is assessing the management priorities of my port."
I have yet another example. Even now in the studios and workshops of the television industry much
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of the work that used to be done by the companies themselves is being privatized—in the private sector more and more companies now use that word; they talk about "privatising" particular operations because they get a most cost-effective service that way.
All my experience leads me to believe that that is a good route in order to obtain more resources and better value for money. The reality that we have to confront is that there will never be enough money to meet all the demands for health care. There will certainly never be enough money to meet all the demands that fall on government. Noble Lords who were in the Chamber earlier will have heard considerable demands made for more money to be spent on public transport in London. The sums talked about were in billions, not hundreds of millions. That goes right across the public service. It is not a problem that hits only Conservative governments. It has hit every Labour Government that ever existed too.
I believe that if we want to provide an efficient health service for our people we should go down that road; we should get in those extra resources; and we should benefit from the additional efficiency and cost-effectiveness that the arrangement will provide. I only wish that we would do it more aggressively and with greater enthusiasm than we have done over the past five or six years.
5.29 p.m.
Lord Kilmarnock: My Lords, I am sure that we are all grateful to the noble Baroness, Lady Jay, for introducing this important and timely topic. I hope to shed more light than heat upon it. First,un peu d'histoire. Over the years there has been a remarkable stability in central government expenditure on health as a percentage of GDP. In the period 1974 to 1979 under the Labour Government, it was on average just under 5 per cent. Under the Tory Government from 1980 to 1990 it was just over 5 per cent. Similarly, central government expenditure on health as a percentage of total government expenditure has varied remarkably little over the same period from 1974 to 1990. It was 12.75 per cent. in 1974 and 13.29 per cent in 1990, with a high point under the Conservatives of 14.45 per cent. in 1989. That blip was in the "loads o' money" boom period; otherwise the picture is again one of relative stability.
Turning to private health expenditure as a percentage of GDP, we have a different, but not dramatically different, picture. From 1973 to 1992 it rose gradually from 0.4 per cent. to an estimated 0.8 per cent. of GDP today. As a percentage of total health expenditure in the country it rose from 3.03 per cent. in 1973 to an estimated 6.85 per cent. in 1992. By either measure it has roughly doubled over the past 20 years but still remains a smallish percentage of the whole.
Therefore we have a fairly stable picture over a period of two decades giving us, in 1990, a total overall health expenditure—as the noble Baroness said—(public and private) of around 6 per cent. of GDP. That compares with 14 per cent. in the United States of America with 37 million citizens without cover—a problem that Mrs. Clinton is trying to address but

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God knows with what prospects of success. With that comparison in mind we should give at least two cheers, and possibly, I suggest, two-and-a-half, for our achievements to date, even at 25 per cent. below the EC average.
It must be about 10 years ago—the noble Lord, Lord Rea, recalls this and may refer to it—when we debated in this House a report by the Nuffield Provincial Hospitals Trust called Public/Private Mix for Health. It is a collection of essays by the leading health economists of the time, some of whom are still active. It is the only time that I can remember debating an entire book in your Lordships' House. I thought that I would refresh my memory of its contents and see what the main fears and concerns were a decade ago.
Cost containment, according to Professor Forsyth (one of the contributors) was a major preoccupation then as now—and against an even more harrowing background. By 1975 public authorities accounted for nearly 60 per cent. of GNP, and half of that went on the welfare state. Taxation did not keep pace with expenditure. Total state revenue rose from 42.7 per cent. in 1951 to 46.6 per cent. in 1975, but even so the PSBR had to rise from 2.2 per cent. in 1951 to 11.3 per cent. in 1975—an even higher figure than today—to accommodate expenditure.
That clearly could not go on, and it did not. In 1976 the IMF had to be called in and the Labour Government began the painful process of reducing public spending. After 1976 the target for real growth in the NHS was trimmed to 1.5 per cent. until 1982, when it was reduced to 0.5 per cent. by the Conservatives. But the out-turn, since that turn of the screw, has been consistently higher with an average of over 3 per cent. per year and a leap to 7 per cent. last year. Whatever the target, it is hard to cap health spending. The Red Book target of 1993–94 is only 0.6 per cent.—at least that is the figure I was given by the Library. Perhaps the noble Baroness can say whether or not it is correct. If so, it will be interesting to see how it turns out.
The debate in 1982 was somewhat different from today. The merits and demerits of insurance-based systems were under discussion. The attempt to exercise overall control of public and private sector beds through the Health Services Board had been dropped. There was a running argument as to whether the private sector should contribute to nurse and doctor training. It was recognised that the abolition of the private sector would infringe liberty, but it was thought that it should be regulated so as not to conflict with NHS aims. It was felt that it should be an additional resource rather than a shift from one sector to another. If it continued to grow, especially if encouraged to do so by tax concessions, it was thought that it should be made correspondingly more accountable. But the general feeling was that it should not be encouraged to expand too far. Rudolf Klein wrote,
"If the private sector continues to grow, the risk is that the overflow mechanism may turn into a waste-pipe; that the exit of the most articulate, politically resourceful customers of the state sector will drain away effective political support for it. This would suggest that there is a point at which the growth
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of the private sector would threaten the whole balance of health care in Britain, tilting it away from the social equity model to the market model".
So in fact the argument was not really about a "mix", which was in the title of the collection of essays, but about a "balance". A 4 per cent. to 5 per cent. private sector share in total health expenditure was okay; anything more than that was a threat to the NHS.
I am sorry to go into so much history, but I felt that it was important as a background because I believe that the nature of the debate has changed since then. The private sector share has crept up to nearly 7 per cent. of all health expenditure—a little above Klein's ceiling but not a lot. The main change is the introduction of an internal market together with the purchaser-provider concept—probably the most original contribution to thinking on the public sector for the past 10 years. There is a move away from the polarisation between the social equity and market models towards a greater interpenetration of the two. The idea is to make the market work in the interests of social equity. Some noble Lords may, and evidently do, think that that is neither possible nor desirable. But I shall suggest otherwise.
I agree with the noble Baroness that the framework needs to be clear. The British electorate has voted repeatedly for the continuance of a tax-based system, free or largely free, at the point of use. No government have dared to move significantly from that position, and nor will they. There are economic advantages in maintaining the Government as a monopsony buyer. That brings a downward pressure to bear on costs and avoids both the American-style escalation and lack of cover.
Despite a new army of managers, administrative costs are much lower than in an insurance-based system. Of course we have national insurance but as we all know here—perhaps it is not so clear outside —that makes only a small contribution to the NHS. There could be a case for an earmarked health tax, as advocated by my noble friend Lord Owen, meaning that parties could go to the country with a specific pledge to add a penny to the health tax, to maintain the status quo, or reduce it and switch to private insurance. People could vote accordingly. There is some merit in that.
Yet even a change to a more transparent tax base would not change the basic parameters which I am sure will remain. Public finances in this country are in a state of near crisis, with the PSBR higher than anywhere other than Italy and Greece, and pushing up towards the level that brought in the IMF in 1976. The Treasury will look for savings. Cost containment will be paramount. That will be the pattern for the rest of the century and probably beyond. Therefore, if we want to preserve the many advantages of our system, which still has massive public support, we simply have to look at new types of delivery; we have no choice.
The Social Market Foundation, with which I am associated, and to which the noble Baroness, Lady Jay, referred, recently published a paper called The Opportunities for Private Funding in the NHS by David Willetts MP. That was followed by a seminar addressed by a colleague of the noble Baroness, Lady

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Cumberlege, Mr. Tom Sackville, who started from the base of the private finance initiative in the Chancellor's Autumn Statement, raising the level of expenditure below which trusts and HAs can make their own decisions about using private finance from £250,000 to £10 million, as the noble Baroness said.
Mr. Sackville also pledged, very significantly, that,
"The private sector capital input into joint ventures or contracted-out services will be additional to NHS allocations in every case".
He agreed,
"It would always be difficult to rival the public sector in its ability to spread risk",
but he went on to say that,
"The private sector often has a comparative advantage in managing risk".
I believe that that is what the noble Lord, Lord Crickhowell, was saying. He gave the example of short-term contracts, with BUPA and others, to clear waiting lists and also longer contracts for long-stay accommodation.
I do not want to go into detail on the merits or otherwise of those various schemes. They are there as available policy options, as are all such ideas which emerge from the think tanks. I know that they will stick in the gullets of some people because of the introduction of a profit motive. That has been confirmed already this evening. I believe it needs a conceptual or philosophical debate, for which there is no time today. But into such a debate I would inject the following thoughts.
The charge of "privatisation", or "creeping" or "backdoor" privatisation—as the noble Baroness said —can be answered by saying that the public sector needs to decide what should be provided collectively, but does not have to run that provision itself. In last Sunday's Independent on Sunday Christopher Hulme wrote,
"A road built by a private contractor is not necessarily a private road".
Next, profit rewards a private supplier say 10 per cent. return on capital; public services are paid for out of taxes and Government borrowing. If government borrowing rises, the cost of borrowing may be 10 per cent. interest. There is no essential difference in economic terms between profit and interest. It is at least arguable that the private sector may deliver some —not necessarily all—services more cost-effectively and in a more user-friendly way.
"What about the 'ethos'?", people may cry. The public sector ethos working in the public interest must be better than the private sector's self-interest. That will be the argument. It is a fascinating question and requires more debate. But if the game between rent-seeking public servants and profit-seeking private providers is played on a level playing field, the result may not be a foregone conclusion. One should never forget Shaw's aphorism that every profession is a conspiracy against the laity.
I am being provocative, and deliberately so. I am aware that there are also political questions which I have not touched on. Further private involvement in the National Health Service will mean a decrease in union power. That is a political question and there are no doubt others. My contention this evening is simply
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that unless we are prepared to confront these questions honestly and openly, we are not going to reach the best public-private mix for all our people.
5.41 p.m.
Lord Rea: My Lords, all noble Lords can understand why the Government are interested in encouraging more private sector involvement. First, there is the apparently laudable aim of shifting some of the burden from the taxpayer or the public sector borrowing requirement to the users of services at the time. As my noble friend said, at present some 87 per cent. (according to the OECD figures) of total health expenditure in this country is met from public funds. That may seem quite high but we are by no means the top of the league. Believe it or not, Luxembourg is at the top of the list, where 92 per cent. of all health expenditure comes from public funds. Among those with a lower proportion of public expenditure on health there are several countries where the public spend on health per head is actually higher than the total expenditure per head, both public and private, in this country, the United States being the leader, with only 42 per cent. of all expenditure on health care coming from public funds. Their expenditure from public funds on health per head works out, according to the 1989 figures given by the OECD, which are slightly out of date, at around 1,000 dollars per head out of a total spend of some 2,500 dollars per head. That compares with 900 dollars per head from all sources in this country. There is little doubt which country has the better health service. I agree with the noble Lord, Lord Kilmarnock—I do not envy the First Lady her task.
Less often publicly stated, although we have covered this ground, is the opportunity which private expenditure on health provides for investors to make a profit. Clearly no firm or individual will run a service if there is nothing in it for them. We on this side of the House in principle oppose profits made from other people's misfortune. I am aware that innovation and enterprise can be spurred by the pursuit of personal gain, but there are equally effective and more honourable incentives in the search for better health care. The health service itself could have discovered that plastic sheets used for renal dialysis can be re-used. It did not necessarily require the private sector to come up with that one. A properly-run health service could do that too with the right incentives.
I thought it might be useful to subdivide the ways in which the private sector is becoming increasingly involved in the National Health Service and health care in the United Kingdom. In the first place there is health care provided independently of the NHS—private medicine as such—where the patient pays the provider directly or through a private insurance scheme. This sector, while increasing fairly rapidly, as the noble Lord, Lord Kilmarnock, pointed out, has been levelling off, if not falling, in the past year or two. The rise in the cost of private health schemes is now running at more than twice the increase in the cost of the National Health Service. This, coupled with the recession, is making people and firms think twice

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before taking out private medical insurance. While it is held that an increasing independent private sector could save the National Health Service money, there are dangers. The noble Lord, Lord Kilmarnock, quoted a passage from Professor Rudolf Klein that I had also picked out to illustrate my point. I should like to remind noble Lords of the last sentence:
"This would suggest that there is a point at which the growth of the private sector would threaten the whole balance of health care in Britain, tilting it away from the social equity model to the market model".
Read 10 years later, is that not rather prophetic, considering that the whole National Health Service is now being forced into a pseudo-market model?
Another way in which the private sector is being brought into the National Health Service is that mainly addressed by my noble friend's Motion—the purchase of private medical care by the National Health Service, using taxpayers' money. Two examples from my own practice, which I remind noble Lords is not a fund-holding practice, may illustrate this. There was a major push last year—and it is still being maintained to some extent—to reduce waiting lists of more than two years' duration. Several of my patients had relatively minor skin blemishes—one a tattoo—which they wanted removed by plastic surgery. They were offered, and accepted, surgery at a private clinic in Welbeck Street, at taxpayers' expense. This came out of the budget of the district health authority, which left less money for keeping wards open, many of which were closed during that same year.
Several other patients who were mentally unstable suffered breakdowns and required urgent admission under the Mental Health Act. There were no National Health Service beds available and they were admitted to a private mental hospital, Grovelands Priory Hospital, at a cost of some £3,000 per week. I gather from an article in the Observer a few months ago that other private psychiatric hospitals charge up to £5,000 a week—again, at taxpayers' expense. The number of National Health Service acute psychiatric beds had recently been reduced without regard to the higher than average needs of the locality—Camden—in which I practise. Grovelands Priory Hospital was still caring for National Health Service patients when I was last in contact with it recently. It is almost certain that looking after those patients in National Health Service hospitals would have cost less.
There is a third way in which the private sector can be involved—through the provision of capital. This has been discussed by more than one speaker. Trusts and health authorities can now borrow up to £10 million of finance from private sources. This will help to keep the PSBR down in the short run but the National Health Service still has to pay the interest. It is the taxpayer who pays it. Capital expenditure in the NHS should surely be regarded as different from its recurrent running costs. If the money were provided by public borrowing there would be more control of the assets. I believe that it will be found that, if private finance is used, private rather than public interest will tend to predominate, which is the point made by my noble friend.
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In publishing The Health of the Nation the Government recognise that factors outside the Health Service play a major, if not the major, part in determining people's wellbeing and health. While the publication of that report was a major step forward by the Government, the document carefully avoided stating that a major determinant of health in the United Kingdom—or in any country for that matter —is the extent of deprivation experienced by sections of the population. Recent work has emphasised how important are early life experiences—particularly nutritional experiences, even in the womb—in the subsequent health of individuals. Those who are least well off or who come from the least well-off backgrounds, suffer the most serious illnesses in later adult life. Deprived communities and individuals need more medical care to compensate for that. They are the least able to pay for it. So the tilting of health care away from the social equity model to the market model is precisely what is not required to address the major public health problems of this country.
A final word about the market model. One of the problems of the internal market is that more administrators are required. The experience of everyone working in the National Health Service is that managers are now everywhere. There is now an army of administrators, as the noble Lord, Lord Kilmarnock, said. I wonder whether the noble Baroness can attempt to tell us when she winds up how these costs have changed during the years since the National Health Service and Community Care Act 1990 has been implemented.
Perhaps I may quote to her a passage from the debate which we had 10 years ago. It is from the speech of her noble friend Lord Trefgarne, who was replying to the debate. He said:
"it does seem that our administrative costs compare favourably with those of other countries. It would not be sensible to move to any alternative system which, while theoretically meaning less Government involvement, in practice led to more bureaucracy and more involvement in the detailed regulation of health services".—[Official Report, 27/4/83; cols. 998–91
I sometimes wonder whether the noble Baroness is not rather sad that those words were not listened to.
5.52 p.m.
Lord McColl of Dulwich: My Lords, I too would like to thank the noble Baroness for introducing this debate. I was not quite sure what the debate was going to be about. I had hoped that we would have something young, vigorous, enthusiastic and happy but, alas, we have just had the usual depressive, morbid propaganda. There is the undermining of the NHS. It is usually that the NHS is sinking fast. I have heard that for 30 years now but it seems to be still afloat. There was reference to creeping privatisation by the back door. Then, of course, there was the usual attack which we have just heard from the noble Lord, Lord Rea, about the army of administrators. I wish people really would stop attacking the civil servants and administrators. I do not believe that it is a fair thing to do considering that we spend less on administration than most other western countries as far as the health services are concerned.

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Then, of course, we have had the usual international comparisons, which were highly selective. Why quote only Belgium, the Netherlands and Sweden? It is simply that they happen to fit what is being said. But if one actually considers the proportion of GNP put in by most western governments it is about 5 per cent. It is about 5 per cent. in this country and 5 per cent. in the United States. It is that percentage in many of the Western countries, but the difference is how much the private side contributes. It is 1 per cent. in this country but 7 per cent. in the United States and considerably more than our 1 per cent. in most of the western European countries. So there is a case to be made out for having a greater contribution from the private side.
Then we have had the usual criticism that we are going to have a two-tier system. Having worked for the past 40 years in the NHS, and having seen the private side as well, when I hear about a two-tier system I always ask the question: which tier are they saying is the better tier? As someone who is working in the NHS, I have been confused over the years by the very differing signals coming from the Labour Party about charging patients and about private practice and privatisation. Perhaps I may remind your Lordships that the Prime Minister, Clement Attlee, a year after the NHS was introduced, said in another place:
"We propose to make a charge of not more than Is. for each prescription under the National Health Service. The purpose is to reduce excessive and, in some cases, unnecessary resort to doctors and chemists, of which there is evidence which has for some time troubled my right hon. Friends the Minister of Health and the Secretary of State for Scotland".
Here is the fascinating piece:
"The resultant saving will contribute about £10 million".
In fact, it went up to £30 million, which is about 6 per cent. or 7 per cent. of the total expenditure of the NHS in those days and is, of course, considerably more than we raise from prescriptions, and so on, at the moment. He went on to say:
"although this [saving] is not the primary purpose of the charge".
No, no, perish the thought!
I am confused about the influence which the Labour Party has had on private practice in this country. After all, it was the Labour Party which provided the greatest boost to private practice. I do not believe that that was their intention, but by trying to phase out the private pay-beds under the NHS, which amounted to 4,000 in 1974 and which was only 1 per cent. of the total number of beds, it galvanised the forces into a great increase in private practice. When some of the major trade unions took out block contracts to provide their members with private insurance that also had a tremendous impetus on the private side.
The other confusing signal was that the Secretary of State for Health herself was a private patient. So that confused the issue. However, to be fair, there was another Member of the other place who went into St. Thomas's Hospital at about the same time. Although she was an NHS patient, they very kindly put her into a separate room. Five minutes later she came out and told the sister that she must be "among the people"
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out in the ward. So she went out into the ward. She had not been there more than 10 minutes when the people in the ward rose up in rebellion and told the sister that if that woman did not get back into the single room they were all walking out.
To continue with the subject of cash and finance, who was it who introduced cash limits for the first time into the hospital service of the National Health Service? It was the Secretary of State in those days, David Ennals. He went on to begin to move resources out of London. That was the Resource Allocation Working Party. I believe that he was right so to do. But why now that these movements continue are they being opposed by the Labour Party? Is not that rather strange?
In 1985 I had the privilege to chair a government working party on the supply of artificial legs and wheelchairs. That was an amazing state of affairs. The civil servants were working with the monopoly suppliers of artificial legs and wheelchairs to provide a service which can only be described as somewhat "cosy". There was no competition and the key was that there was no export of those items. That is always a very good indicator of what a service is like. Why did they not export? Well, they had no need to export because they had "cost-plus" contracts going on for 30 years, with no system for controlling the costs and the "plus" very much in excess of the agreed percentage. The moment that we introduced some competition and tendering so that we could increase the number of companies supplying artificial legs and wheelchairs —the moment that we brought in some competition and a bit of privatisation—the service began to improve.
There have been many pleas from many of the million people who work in the National Health Service that petty party politics should be taken out of the health service. They are not saying for one moment that they do not want to remain accountable to Parliament. No, but they do want the propaganda to stop. The classic example was "Jennifer's ear" in the last election when prominent politicians appeared with a little girl who was said to have a pain in the ear. That was claimed to be the fault of the Government because she was on a long waiting list, waiting to have grommets put in. Of course, the British people knew that there was something wrong with that because the British people know that the treatment for a child with a painful ear is not to have grommets put in but to have antibiotics to treat the infection. There is no waiting list for antibiotics, and the treatment can be given today. That sort of irritating propaganda really ought to stop.
I should like to make a strong plea that we take such propaganda out of the health service. After all, 7 million people are being treated in hospital and most of them are very pleased with the results. They simply do not believe the propaganda because it does not accord with their own experience. My plea that the propaganda should stop is made because the folks who are worried by it are elderly, defenceless people who, by and large, may not vote at all, but they sit at home listening to the radio and television and hearing all these dreadful stories about how terrible the health

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service is becoming, and they are becoming frightened. My plea is: please stop grinding the heel into the faces of those defenceless people.
6.2 p.m.
Lord Colwyn: My Lords, plans for bringing private finance into the NHS have been discussed for many years and, as we have heard from the noble Baroness, Lady Jay, to whom I am very grateful for the initiation of the debate this afternoon, the Treasury has changed direction since the 1992 Autumn Statement and is now keen to encourage joint ventures with the private sector.
The current crisis in health care is faced by the NHS and by other healthcare systems throughout the world. It is a crisis caused by the common problems of rising population levels in a world threatened socially, economically, politically and environmentally. In Britain, as in other Western countries, the problem is specifically one of a mounting population of elderly, rather than the baby boom of the third world—but the effect is much the same. An increasing number of people are suffering ill health.
As I have said many times in this House, the solution is not necessarily one of throwing more money at the problem. An increase in funding usually means spending more on the same. But that is precisely the formula which is not working. There is a need for a more radical rethink—a rethink which I believe the Government's reforms of the NHS do start to address.
The real solution to the problem—the long-term solution —is, as any good doctor knows, to treat causes, not symptoms—that is, to practise prevention before intervention. That is absolutely routine in my own profession—that of dentistry. We have been practising prevention for many years and have been very effective in bringing down levels of dental disease throughout the country. Some 25 years ago, no fewer than 41 per cent. of adults between the ages of 45 and 54 in the UK had lost all their teeth. Today the equivalent figure has fallen to around 11 per cent. and is set to fall even further. Not only is this a reflection of the hard work of the dental profession—a record we can justifiably be proud of—but it is also evidence of the increasing demands and needs of patients. Dental science has progressed to the extent that it is no longer inevitable that we all end up with a full set of artificial teeth. However, the high quality technical work does often require expensive materials which are individually crafted for each individual patient. There are high labour costs.
While there would be widespread acclamation for the state if it were able to cover every individual for any and every item of health care, we know that this is impossible, involving funding beyond acceptable Treasury limits. We must seek to preserve current levels of expenditure on the NHS, but look to other methods for raising the extra resources. The British Dental Association has provided a responsible lead in this regard. In its response to Sir Kenneth Bloomfield's report, which outlines the options for altering the system of remuneration for dentists working within the NHS, it has proposed that for all
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adults and children, the examination and diagnosis should be entirely free—and surely this right if we wish to encourage regular attendance—and for those adults who are not currently exempt from charges, the cost of treatment would be a matter for the dentist and patient to agree.
In a speech to the General Dental Council on llth May, the Secretary of State stressed her commitment to a
"high quality dental service, one which is effective on both cost and clinical grounds",
but no mention was made of that dental service being, or remaining within the NHS. I am looking forward to the publication either today or tomorrow of the Select Committee report on dental services.
Intervention is what modern western medicine is mostly all about. It is better described as "emergency" medicine. Almost by definition that means hi-tech, drug-based medicine —in other words, high-cost medicine. It is the perception which lies behind the criticism of the National Health Service or—as more accurately described the "National Sickness Service". A public service genuinely seeking to promote and maintain optimum health among its citizens—a genuine National Health Service—would espouse prevention as a first principle.
Prevention is largely a matter of public, and to some extent also professional, education over questions such as the link between food and health, exercise and health, relaxation and health, stress-management and health and the environment and health—questions, in other words, largely of diet and lifestyle. It is also a matter of teaching self-responsibility. People should be encouraged, through comprehensive and accurate information, to take responsibility for their own health, to understand a wide range of choices in health care, to be given access to those choices and to be shown how to take advantage of them.
This, I venture to suggest, is precisely what that element of the private sector which interests me as well as dentistry—the field of alternative and complementary medicine—is strongest on, and why it has so much to offer. Its growing appeal to more and more people suggests something important, something which no policy-maker should ignore: that a public national health service—the emphasis being on the positive promotion of health as opposed to sickness —should distinguish between health and medicine. It teaches that health is not synonymous with medicine, nor medicine with health. A genuine NHS should distance itself from medicine to some extent and instead adopt aspects of social and education policy. It may be the role of a genuine NHS, for example, to show people how to manage on less funding and still be healthy and happy.
Clearly there is public spending implied here, but my belief is that the savings as a result of such a policy would more than offset the cost. The amount of savings to the Exchequer are only possible to guess at this stage, but some estimates have put them at billions. In particular, there is likely to be a huge reduction in the massively high level of spending on drugs, many of them causing more harm than good.

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Undervalued alternatives like EDTA chelation therapy for cardiovascular disease, which I have written to many of your Lordships about recently, would also save huge amounts. There are other examples that I could quote. That element of the private sector, at least, is not about making money, but rather making people well. It is about low-cost, low-profile health care. That is the only sensible option, probably the only realistic option, left in the world into which we seem to have already moved.
In conclusion, I remind noble Lords of my right honourable friend the Prime Minister's words at the 1991 Conservative Party conference:
"There will be no privatisation of health care, neither piecemeal, nor in part, nor as a whole, not today, not tomorrow, not ever while I am Prime Minister".
I have difficulty in associating his statement with the changes in dentistry, but I shall look forward to hearing my noble friend's comments.
6.10 p.m.
Lord Dean of Beswick: I express my appreciation to my noble friend Lady Jay for giving your Lordships the opportunity to debate this subject. I noticed that the first speaker from the Conservative Benches did not afford the usual courtesies to the mover of the Motion. I hope that that was done by mistake and not deliberately. If he did that deliberately, he would be better served if he started to understand the courtesies of the House.
However the noble Lord gave us the benefit of his experience as chairman of a highly paid quango. He told us of the benefits of privatisation and how it could save money. Would he have put forward that argument if he was now Secretary of State for Defence? The maintenance of the engines of our Phantom strike force was contracted out by the Government against the wishes of the defence chiefs. That has resulted in a substantial part of the RAF's top strike force being grounded. The people doing the maintenance work on the engines were not just inadequate, they were so damned awful that they damaged the engines. That will mean that taxpayers will have to find a substantial sum of money to correct that damage. The contracting out was the result of political ideology. Privatisation is making this country's defence a gamble dependent upon price and political philosophy. I suspect that the Government are far too hooked on privatisation. They would do well to look a little more at the merits of each case.
I listened with interest to the noble Lord, Lord McColl, who spoke for about eight minutes. He made a political speech. He even went back 40 years and quoted Clem Attlee. I do not know what that has to do with the situation today. He then tried to advise everyone else not to become political. It may be his privilege as a distinguished doctor to give out such advice.
Lord McColl of Dulwich: My Lords—
Lord Dean of Beswick: My Lords, I am not giving way. I am sorry. We do not give way in these debates. The noble Lord got one thing wrong. He castigated, in
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his absence, my noble friend, Lord Ennals, for being the first man to start moving resources out of London. I believe that the noble Lord said that.
Lord McColl of Dulwich: My Lords, perhaps I may make it clear that I was not criticising the noble Lord, Lord Ennals. I was saying that he did the right thing and that I was surprised that he now criticises the Government for continuing what he started.
Lord Dean of Beswick: My Lords, my memory of what took place is different. The first Secretary of State after the Conservatives won the 1979 election was the noble Lord, Lord Jenkin of Roding. I seem to remember that he was taken to court for breaking the law by cutting resources in London. I believe that my explanation of what took place is more accurate. However, we are not discussing that matter.
Two Members of your Lordships' House have mentioned Mr. Willetts. We do not usually mention the names of Members of another place in your Lordships' House. However, one cannot get away from naming David Willetts MP because he is the architect of what is now happening. He produced a document. So I took the trouble to see what qualifications and credentials he has which enable him to pose as an expert on the privatisation of the NHS. He is the Member of Parliament for Havant. He served on the Social Security Select Committee. From 1978 to 1984 he was an official at the Treasury. From 1984 to 1986 he served as a member of the Prime Minister's Downing Street Policy Unit. He was also political adviser to Mr. Nigel Lawson, as he then was, when he was Chancellor of the Exchequer. I understand that when he was doing all that he had two little sweeteners going because the Government had placed him on two quangos. He was a member of a family practitioners' committee and also a member of the local district health authority. He was not doing too badly.
I do not know whether the Government placed Mr. Willetts on those committees as a Trojan horse to see what was going on. I understand that he is also listed as a consultant to a private health group. I have Hansard of another place dated 26th January this year. Mr. Willetts made a powerful speech on the NHS, but he forgot to mention that he had a pecuniary interest in what was being discussed. While it is not a hanging offence in another place, the normal courtesy is—although the interest is registered—to declare the interest openly when one speaks on a subject. Everyone then knows about it. His judgement may be found to be lacking on one or two things.
I happened to be in another place today when Mr. Norman Lamont made his statement. It was more of a factual than a political statement. There was a great ring of truth in what he said. We have had two debates in your Lordships' House in the past 12 months or so when another former distinguished Cabinet Minister, who I understand is not too well at the moment (the noble Lord, Lord Joseph) made a similar statement. He said that the country was in a mess at the time because, "We got it wrong". He meant that his own

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Government had got it wrong at the time. Norman Lamont said the same thing today from the Back Benches in another place.
Mr. Willetts was one of the advisers who advised the Government to go down the road that they have gone down. Does he have any credibility or qualifications which enable him to tell us what is best for the health service? I say he has none at all.
There are some interesting points from a report produced by Mr. Willetts. He gives some of the reasons for privatisation. He states:
"Many of the efficiency gains from bringing in private money and management come from escaping traditional NHS labour practices. Many of the firms involved would not wish to negotiate with NHS unions, nor accept conventional job demarcations.
"The political sensitivity surrounding private provision is much reduced if it is manifestly supplying an extra new facility".
There are some highly paid people employed by the NHS. Thousands of people at the lowest end of the wage scale in this country are employed in the NHS, and those are the people who are Mr. Willetts' target.
The noble Lord, Lord Crickhowell, mentioned the uprating to £10 million of the sums health authorities are able to negotiate without going to the Treasury for approval. When I asked my Question a few weeks ago I was not opposed to that. The Minister will remember that in my supplementary question I was concerned about public accountability.
An article on the front page of yesterday's Financial Times calls the NHS to account and highlights two cases which I raised in this Chamber. One is the scandal of the £63 million which went west in Wessex in deals between the regional health authority and the private sector. Mr. Willetts' constituency is right in the centre of the Wessex region. He has never said a word about the matter. He is not worried by the fact that £63 million has gone down the drain and it has been necessary to close beds, reduce operations and reduce other activities of the National Health Service in that region as a result. Therefore, where do we stand in relation to this question of looking after the public purse?
If the Government continue to go down the road of involving more private investment, so be it, if it is genuine and it works. However, if there is no control over those sums of money as mentioned in the Financial Times yesterday, there will be a bonanza for fiddling. It should not be thought for one moment that the private sector is full of guardian angels and that it epitomises honesty. It is not. Noble Lords are probably aware that the Chief Executive of the National Health Service, Duncan Nichol, has asked the Audit Commission to investigate fraud in the National Health Service on the basis of what was uncovered in the West Midlands and in Wessex and is now emerging elsewhere. If it is known to be happening and the facts are now emerging the problem will be enormous.
When my colleague asked the Minister whether she could guarantee that there would be no more scandals like those in the Wessex and West Midlands regions, she had to say that she could not. She does not know. I know. Some of them are on the way. We know about thern already. It is the biggest scandal concerning
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waste in the operation of public finance by fiddlers, and in some cases deliberate lawbreakers, that we have seen in this country for a long time. It is a shame if Members of the Government are prepared to stand back and say that it is happening in the private sector and they can do nothing about it. If those people were in local government they would have been surcharged and brought before the courts.
I ask the Minister whether in any future measures involving private sector investment the Government can include penal clauses so that if people are found to be breaking the law deliberately, even if they are favoured sons of the government party who have been made chairmen, they will be subject to the processes of the law. No appointed person should be exempt, and some appointees are involved.
Having said that, I am extremely grateful to my noble friend for introducing the subject. I have to tell the House that the question of computer fraud which I mentioned will not go away because next month the Public Accounts Committee will publish its recommendations as to what should be done about what has happened.
6.24 p.m.
Lord Mancroft: My Lords, one of the good things about debates in your Lordships' House on subjects of this nature is that we can usually rise to a level of debate which is not found in another place. Like other speakers I am grateful to the noble Baroness for raising the subject so that we can debate it in the House today.
However, speeches like the one I have just heard give credence to the idea that there is no thinking about the health service on the Opposition Benches and that the Opposition have to put forward speakers who bring the debate to a political level. That is not helpful or constructive.
When she opened the debate so ably and usefully, the noble Baroness said that she hoped that the subject would be discussed without ideology or some of the hifalutin ideas which we are led to believe our political masters regard as important. She mentioned a report produced by a Right-Wing organisation—whose name I forget—which searches for a justification for privatisation or private sector involvement in the health service. I do not know whether there is any need for justification other than the pragmatism which the noble Baroness mentioned. I have no personal feelings about what my noble friend Lord McColl called creeping privatisation when he discussed the propaganda which surrounds the subject.
I believe that we need only two underlying principles when discussing the subject: quality of care and cost-effective treatment. I believe that private sector involvement in the health service can bring both. There are enormous benefits to be had from private expertise, management and quality of care.
There are huge benefits to be gained from the injection of private capital into the health service. Even after the raising of the limit of the amount which may be spent before Treasury permission must be sought to £10 million, as my noble friend Lord Crickhowell said, that is still peanuts, relatively

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speaking. The most important asset in health care is the building. Where can one find a building now for a quarter of a million pounds? The cost of the Chelsea and Westminster Hospital has been mentioned. I cannot remember the exact figure, but we are talking of millions of pounds. When starting out on providing proper health care, £10 million is still small fry. I should like to see the amount increased still further, even if we were to go one step at a time.
If I have any qualification to speak in today's debate it is that I have been involved in a relationship between a health authority and a private company. That was not in the same way as my noble friend Lord Crickhowell, but on the other side as a director of a private company which entered into a contractual arrangement with a health authority in the Midlands. That was an interesting experience. I am no longer involved, having been concerned only with the start-up period.
It was fascinating. The object of the exercise was to provide a 24-bed in-patient facility for the care of those suffering from drug and alcohol problems, which is a subject in which I have an interest. We started by offering a partnership deal to the health authority, in the same way as two doctors in a practice. We were told that that was not acceptable and that it had to be a share deal. We said that that was fine and we would have a share deal. We even offered the health authority a majority shareholding. That was fine. Then two weeks later the health authority came back and said that it could not do that either.
After 18 months of negotiation the health authority asked whether it could have partnership deal. We said that that was what we had offered 18 months ago, but we were happy to go along with it. Finally, amid great rejoicing, we signed a partnership deal with the health authority. Two weeks later the health authority rang us up and said that it had made a mistake and had been told by London that that was illegal and the health authority was not allowed to sign partnership deals. We said that it might not be legal for the health authority but it was legal for us to do so. We said that if the health authority liked to renegotiate the deal we should be delighted, and would it like the share deal we had suggested after we had offered the partnership which the health authority had originally turned down.
At the end of the day we succeeded in making a deal. We bought, built and opened a 24-bed facility, 15 per cent. under budget and within six months from the day of purchase to the day of opening. The health authority had not managed to achieve that before. The facility was popular, even though the local clinicians were not very keen because they saw us as being in competition. They said that the facility was not necessary because very few people attended what used to be called the "drunk tank" at the local general hospital and there was no great call for the service. We were full in three weeks and the facility has remained full ever since. That may have had something to do with the fact that we provided an infinitely better level of care at £169 a day whereas the health authority had
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provided a dreadful Victorian level of care at £220 a day.
The health authority contracted for eight out of 24 beds, which cost it about £400,000 per year. That is quite a lot of money but the authority was our partner and owned half of the facility. Therefore, it received half of the profit, which was £400,000 per year. In other words, the authority had its beds for free. I believe that that is quite a good deal. The patients thought it was quite a good deal and the parents, relatives, children and employers of the patients thought it was quite a good deal, as did the neighbouring health authorities. They queued up to buy beds from us.
There are benefits to be had. However, I am concerned about one aspect which the noble Baroness mentioned; that is, the ability of health authorities to monitor such projects. My experience of the health authority in the Midlands was that it had no ability to monitor. It was known what was in the contract because that was in black and white but when the officials of the authority came in, they had no ability to see whether or not they were getting what they were paying for. We had to say to them, "You paid for this", and show it to them. We discovered that the clinicians who were purchasing and responsible for managing existing facilities within the health authority were not qualified to do that. That is a cause for concern.
We discovered also that the managers who were running the health authority—and they had a budget of £180 million which is not a small budget by any standards—had no ability to manage even our small affairs. Their ability was zero in that regard. They were late for meetings and never had the paperwork together.
I tell your Lordships a fascinating story about that. Originally we decided to purchase the building together and three weeks before we purchased it the officials rang us and said, "Listen, we have spent under budget this year. We should be most grateful if you could let us buy the building. In that way, we could hide some of the money". We told them that if that is what they wanted to do, they should go ahead and do it. In many ways that was good because it meant that they continued to own the building. We asked the officials whether they would like to use their lawyers or our lawyers. They asked to use our lawyers because they said that they did not retain lawyers.
We asked our lawyers to take on the work. They rang us up and said, "Are we buying the building on behalf of the health authority?" We told them that they were. They then asked us to guarantee payment because on the last occasion that they had been retained by the health authority, it had not paid the bill. That is not satisfactory but that is the way in which the authority conducted its business. We taught it that that was not a good way in which to do business. It would be extremely beneficial for health authorities to learn that lesson.
There are huge problems as regards forming contractual relationships between private limited companies, which are governed by the Companies Act and the rules of the Inland Revenue, and an

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organisation which has never heard of the Companies Act, and not only has never met the Inland Revenue but also does not know how to read a balance sheet. Therefore, forming a marriage between those organisations is problematical. That is an area in which the Government could do some work.
My honourable friend Mr. Sackville outlined how he would like the Government to proceed, but I suggest that the health authorities need much more practical experience than the Government are planning to give. They need assistance as to what kind of deals should be done and how the contracts should be written, monitored and audited. I believe that the Department of Health should provide a small team to visit health authorities and teach the finance departments what they should look for and what kind of contractual arrangements they should have in mind. That would be extremely constructive.
We need to think about levels of profitability. It is unacceptable that private contractors should make ludicrous profits from their relationships with a health authority. We need to sit down in advance to consider what is an acceptable level of profit. When we did our deal in Nottingham I visited the Department of Health and I said, "I think this is what it will cost. This is the kind of deal that is envisaged. What do you think?" The department thought about it and wrote back to me saying that it thought that a 25 per cent. to 30 per cent. profit on turnover is acceptable. We then geared the project to that figure. We said that we would look at it again after a year and if we thought it was unacceptable we would change it. When starting out on such projects, there is a need to be open. One of the nice things about doing a deal with the health authority is that however incompetent it is, it will not rip you off. It is extremely pleasant for anybody operating in industry today to know that.
I believe that these ideas are good and could be developed. I believe that the Department of Health needs to look at removing the largest capital feature of the relationship—buildings—from the equation. I see no reason that health authorities could not lease or let their existing buildings to private providers. I do not know whether or not it would be a repairing lease; that is for them to work out. However, I believe that that would be a good idea because it is difficult for a company to say that it would like to do a deal with a health authority but it must spend £10 million to provide the building when it does not know whether or not there will be any business at the end of it. Therefore, there is no reason that health authorities should not allow private operators to operate within their existing buildings. I believe that removing the property side of the deal from the relationship would be helpful but, again, that is an area for negotiation.
The other area which needs to be looked at is the resistance of clinicians. The noble Lord, Lord Dean, mentioned working practices in his speech. We found that most of the employees who came from the health service to work for us had no concept of what work was about. At 5.30 they went home whether or not there was a patient to process; that was unacceptable. The chief nurse whom we employed came with a list of
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qualifications as long as your arm but lasted for only five minutes. She was not prepared for the rigours of the real commercial world. That was very sad.
The highest level of resistance we met was from a local clinician who fought us tooth and nail. The reason was that merely by opening our doors and welcoming in patients, we showed up the appalling quality of service which he provided. I have been aware of that feature of health service life for some time in that particular area of operation.
I believe that increased private sector involvement, if it is very carefully monitored and audited, must be good. We should do all that we can to encourage it. However, progress needs to be made slowly, although not slowly in financial terms. It needs to be watched much more carefully by the Department of Health. If the department expects health authorities to act in a more commercial manner—and it should expect that —then it too must learn to act in a more commercial manner.
Having said that, apart from two exceptions—accident and emergency and mainstream medical care —I believe that every other specialist area would, should and can benefit from private expertise. I hope that the Government will continue to encourage that.
6.38 p.m.
Viscount Bridgeman: My Lords, I have along-standing engagement and I ask your Lordships' indulgence if it is necessary for me to leave before the end of the debate. I thank the noble Baroness, Lady Jay, for initiating the debate on such a topical and important subject. I find that I am developing a theme to which my noble friend Lord Mancroft has just spoken.
I too must declare an interest as a director of a company in the private health care sector. A brief history of that company may be relevant to the debate. The company was originally concerned primarily with nursing agencies, which survived the onslaught against them by the Labour Government in the 1970s. In 1977 the company was acquired by the National Enterprise Board and, largely because private health care was not the flavour of the month with the then government, it was disposed of two years later. Fortunately the company prospered in its new home and in due course it became a publicly listed company.
Let us contrast the environment in 1977 with the position today. Under the purchaser/provider regime, the private sector has the freedom and opportunity to compete on a level playing field and to provide good medical services at affordable prices. That one company's activities currently provide an interesting snapshot of how it now relates to the National Health Service in any number of ways but primarily in four areas. First, there are the company's nursing agencies, where 25 per cent. of the company's nurses and carers provide supplemental staffing to the health service across the whole of the UK.
Secondly, the company has contracts with a number of health authorities and helps them to cope with the large number of mentally ill patients who are in the community as a result of the Mental Health Acts. Treatment is provided in a specialist unit of a

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hospital owned by the company which serves a wide geographic area in which it would be uneconomic for individual health authorities to establish their own units.
Thirdly, the company runs a National Health Service rehabilitation unit under contract. Here again, the workload spans several health authorities.
Lastly, there is a doctors' deputising service in centres of population in the Midlands and the North of England. It is probably true to say that, without the services of that and similar private-sector companies, the family general practitioner service in cities such as Liverpool and Manchester would not be able to function. I hope that that is not an unrepresentative example of one company's involvement with the National Health Service.
I should like to make one further point. I was talking recently in a totally private capacity to the chief executive of a large NHS hospital which was contemplating the development of a private wing with private-sector funding. How, I asked, did that go down with those concerned and particularly with the health service unions? He said, "Oh, everybody is happy. More patients will get treated because the consultants will not waste so much of their time poisoning their fellow humans with carbon monoxide in traffic jams between two or more hospitals and the hospital will make money out of it". He particularly mentioned that the ancillary staff and their unions appreciate that, at the very least, they are better off working for a profitable rather than an unprofitable employer—and that hospital is not yet a trust. However, perhaps my friend was having an easier ride compared with some of his colleagues. But, nevertheless, it is an interesting example of the very welcome attitude of the unions in such cases.
We live in an exciting and challenging time for both sectors of the health care industry. Let us not try to score points by questioning who needs whom more. It is just clear for all to see that the public and private sectors can derive great benefit from each other. The gainer is quite simply health care in this country. Now that the purchaser-provider system is becoming ever more widespread, the simple criterion for private health involvement is the product, what it offers and what it will cost. The challenge and opportunity are there for both sectors. All my observations lead me to the conclusion that the challenge is being accepted with enthusiasm by both sectors.
6.42 p.m.
Viscount Addison: My Lords, I too should like to thank the noble Baroness for initiating the debate. My interest in the broader spectrum of health on this occasion stems from two facts. First, my grandfather, and the colossal strivings which he made as first Minister of Health; and, secondly, my involvement in complementary therapy, initially through my wife's training as a fully qualified aromatherapist and then a later involvement with the International Federation of Aromatherapists. Having been used by all and sundry as a "massage guinea pig", and having constantly tested my wife's obvious knowledge in anatomy and
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physiology and in the chemistry of oils, I feel that I have enough—to coin a phrase—"hands on knowledge" to speak.
It is becoming imperative that the broader band of both complementary medicine and therapy is controlled by government legislation. Neither the First Diploma Directive 89/48/EEC of April 1991 nor the Second Diploma Directive 92/51/EEC, due to be implemented in June 1994, appear to regulate occupations in the field about which I wish to speak.
I believe that there is a strong consensus that it is wrong to say, "Let's wait and see what comes out of Brussels". There is a need for the tightening up of ground rules in the quality of training offered in the various complementary therapies, as well as educating the general public in order to safeguard them against the hazards brought about by the ignorance of poorly trained therapists.
There are many aspects which require attention in the care sector. For instance, in aromatherapy, anyone can give the public a treatment after having received the minimum of training; in fact, he or she can actually start teaching the subject. Technical colleges, run by local authorities, are one of the offenders. Aromatherapy courses are offered which probably cover a few hours of an evening each week. Tuition is given for a fraction of the fee required at a registered aromatherapy school.
Those quickie courses do not include any knowledge whatever on anatomy and physiology, client care or the chemistry of oils. Students attending those establishments are taught some kind of massage and knowledge of a few oils. The students have no idea why the oils are beneficial. They are not taught the oils' constituents or properties so, therefore, they are also unaware of the toxicity of certain oils.
Aromatherapists who have gone to great lengths to get trained properly in a recognised school are finding themselves having to struggle to earn a living because they are continually in competition with someone who has done a quickie aromatherapy course, who then does the therapy on a part-time basis and is in a position to undercut anyone else. There are nurses who have been medically trained who have now taken up complementary therapy instead of orthodox medicine. They, too, are finding it very difficult to survive because of the commercial angle which is very rife at present.
Recently there has been grave concern about children accidentally ingesting the oils. Properly trained aromatherapists are made aware of the dramatic safety precautions required on labels and on the labelling of bottles, and of the use of child-proof tops and bottles. Here, marketing within certain companies is clearly at fault for not labelling oils more clearly.
Associations like the IFA can monitor their own members, but they have no control over the therapist who does not go through a recognised training route. The public are also at risk when, after reading a book on aromatherapy, they may obtain essential oils over the counter. The IFA receives hundreds of letters a week—written in by members of the public who have read some magazine or other and now want

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information on the oils. Both time and money are spent by the IFA (which is a charity organisation) on educating the public about contacting a registered IFA aromatherapist. Brochures containing those names are given out to the public. But the public are under the impression that they, too, can buy any of the oils and give themselves a do-it-yourself treatment.
The International Federation of Aromatherapists is the only organisation that has set up its own Education Council, Examination Board and examiners. A registered school must implement certain rules regarding the experience of their tutors and teach to the IFA syllabus. At the end of the course the student not only has to pass the in-house examination, but must also enter the IFA's own external examinations which have been in progress since March 1990—examinations which cover anatomy, physiology, massage, business and aromatherapy in all aspects of theory and practical—before being admitted as a full member of the IFA. Those external examinations are evidence that the student has been taught to the high standard required by the IFA. That then protects the student and, ultimately. the general public. Moreover, an insurance cover of £1 million is obligatory.
Because of the demand by the public in particular for aromatherapy, there has to be some legislative hacking from the Government in an effort to tighten up a complementary therapy which not only is in the interest of the public but which is also in the interest of the medical profession. I say that because it is now being used in hospitals, hospices and in intensive-care units.
In September, the nursing profession is introducing its own magazine based on information on a number of complementary therapies. It includes aromatherapy and details where to go for training. This, now, is another threat to the qualified aromatherapist. It is visualised that, naturally, the public would rather have aromatherapy treatment from a medically trained person rather than from a qualified aromatherapist who, incidentally, has probably gone through the same extensive training in anatomy and physiology as the medically trained therapist. So where does that leave the aromatherapist'? It will be another struggle for survival unless something is done to acknowledge the people who are prepared to go through a training worthy of legislation.
In summary, it seems that associations like the IFA leading the way by its demands for good training can control some schools and can make a difference to some extent. Yet, with legislative backing, more can be done. Not only will it support the properly trained qualified therapist, it will also serve the public with something that is evidently wanted; namely, complementary therapy. But most important is the fact that the safety of the public will be guarded, as well as their satisfaction. It is now evident that these complementary therapies can be used for most health problems without the side effects often brought about by some conventional medicine. At the same time they would release much of the burden weighing heavy on the massive shoulders of the health service
6.50 p.m.
Baroness Robson of Kiddington: My Lords, I, too, wish to thank the noble Baroness, Lady Jay of Paddington, for introducing this debate this afternoon. I believe it was the noble Lord, Lord Crickhowell, who said it was a coincidence that we should have two debates today which have called attention to the private sector contribution in our national life. The first debate concerned transport and roads and rail, and this debate concerns the National Health Service.
I find it easy to accept the fact that it makes sense to encourage the private sector to contribute to roads and railways. My only reservation is that I believe the Government have not raised an enormous amount of enthusiasm within the private sector for this kind of investment. I am also happy to accept that the private sector can make a contribution to the National Health Service.
The noble Lord, Lord McColl, accused us of always bellyaching about the National Health Service and of only talking about what is wrong with it. He said we never praise it. I must inform the noble Lord that in my view the NHS, which was introduced in 1948, was and remains one of our finest institutions. It has completely transformed the lives of people in this country. The National Health Service is considered by British people to be almost a right of citizenship. All of us in this House, as well as the majority of the public, are aware of the ever increasing demands that are being placed on the service due to technical advance and demographic change. The public are quite rightly worried about where the cash for those ever increasing demands will come from.
The Treasury is at the moment considering the introduction of further charges on, for example, prescriptions for exempt groups. That has created a fear in the public's mind that the principle of the NHS, which is that it should be free at the point of need, is being further eroded. The possible introduction of bed charges has added to that fear. Perhaps the Government should consider taking the public more into their confidence before these possible changes ppear in the press and create a natural fear among the public. Mrs. Bottomley's statement on the increased involvement of the private sector at a conference organised by the CBI on 26th May needs careful examination, despite her assurance that the NHS does not exist to make a profit and is "not for sale". She also said that,
"care had to be provided on the basis of clinical need, irrespective of the ability to pay".
Private involvement in the NHS is not a new idea. That involvement already exists and has done so for years. In 1974 I was the chairman of the South-West Thames Regional Health Authority. That authority began to introduce private contracting. We had a fully staffed legal department. It did not take long for us to realise that we would be financially better off contracting private firms to carry out our legal work. There was also a works department at the regional health authority. That department was solely responsible for all new hospital design in the region. We began to dismantle that works department by

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introducing private firms of design consultants and thereby reducing our staff within the regional health authority. I believe we saved some money by doing that, but I doubt whether in the end we saved a great deal of money as we still needed to keep engineers and architects to oversee the design and construction of our hospitals to ensure that standards were maintained.
It is important to stress that when one contracts out to the private sector one still needs to monitor standards. As many noble Lords have mentioned, the private sector is already involved in the provision of kidney dialysis and the leasing of medical equipment as well as providing facilities for patients recovering from operations. The private sector also provides practically the majority of residential and nursing care. Facilities for residential and nursing care and for recovering from operations are all governed by a licensing system which can ensure a reasonable control of standards and the monitoring that must follow the licensing system. The fact that residential and nursing homes must be licensed gives a feeling of security. But what concerns all of us is how the NHS will deal with the contribution of private industry to the health service.
The noble Lord, Lord Dean of Beswick, mentioned the tragic waste of money at Wessex Health Authority, the West Midlands Health Authority and in the London Ambulance Service. According to the article in the Financial Times in those cases the entire health authority board were only informed of the contracts when they had already been signed. We must ensure that the non-executive directors on any health board or any trust board take complete responsibility for the actions of the health authority. It is not right to leave decisions to an executive administrator, however efficient he may be. The decision must be taken by the whole board. That is, after all, a responsibility that all company directors have to fulfil. The department must emphasise that point again and again to ensure that these tragedies do not recur.
I have said that it is possible because of the licensing system to maintain some kind of control over the provision of residential and nursing care. However, what worries me greatly about Mrs. Bottomley's statement is her forecast that the private provision of home help and other domestic care services might be entered into. That gives me great cause for concern because adequate control of standards will be difficult in such a dispersed service. Mrs. Bottomley made no suggestions on how supervision will be carried out. We all believe in community care but the increased emphasis on it is already causing problems because of a shortage of finance. We do not want any further problems with community care because of a lowering of standards in the service provided.
The other matter that Mrs. Bottomley very often omits to mention—it was not mentioned in the Tomlinson Report, Mrs. Bottomley did not mention anything about it in her address to the CBI and nothing is mentioned in her statement—is the enormous contribution made by the voluntary sector on both finance and provision of care. The
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organisations involved are non-profit making, and much greater support by the department of these bodies might be of enormous benefit to both patients and staff.
I happen to be chairman of the National Association of Leagues of Hospital Friends, which raises £31 million a year for the health service. That is not an enormous sum of money compared with what the health service absorbs, but it provides much-needed equipment for hospitals. Above all, an enormous number of voluntary hours are put in, not only by my organisation but by all the health care organisations. I hope sincerely that the Government will not disregard that in their reorganisation of the health service.
Of course we all recognise that the private sector has a role to play in providing choice in health care for those who can afford it. However, the provision of private health care must not result in a reduction in the health services available under the National Health Service. Our foremost concern is that access to health care services may be reduced through an increased role for the private sector. I am not satisfied that there are, as yet, enough safeguards, but it may be that the noble Baroness will be able to tell us that the safeguards are built in. As far as I know, there is no independent national body to oversee how the NHS operates or how changes impact upon patients and users of the service. That will be even more important the greater the contribution of the private sector.
7.2 p.m.
Lord Williams of Mostyn: My Lords, I thank the noble Baroness, Lady Jay, for giving us the opportunity to debate this subject. I have listened to your Lordships' contributions with great care. I cannot overlook in the beginning my old sparring partner the noble Lord, Lord Crickhowell. He has said on previous occasions that the inevitable consequence of anything that I say to your Lordships is to confirm him in his former views. I am happy to reassure him that he does exactly the same for me. If I may say so, I was touched by the care which the noble Lord, Lord Mancroft, applied to this matter, without bogus party dogma and with an interest which was informed and impressive.
In my view, what the noble Baroness, Lady Robson, lately said is right. There is a significant danger that this galloping privatisation, whipped on —urged on indeed—with vim and vigour by the noble Lord, Lord Crickhowell, will have deleterious effects. There is a chasm between us. We shall never agree because we differ fundamentally on a philosophic basis. If the noble Baroness, Lady Jay, had not been quite so wilful and headstrong and had listened to the advice of an older man—namely, myself—we could have had this debate next month. We would have achieved perfect symmetry. In mid-July it would have been the 45th anniversary of what I agree with the noble Baroness, Lady Robson, is one of the noblest achievements this country has brought about.
Nothing will be heard from us, I emphasise to the noble Lord, Lord McColl of Dulwich, which will run down the National Health Service. I entirely agree

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that people should not be frightened by bogeymen, nor should they be left fearful and afraid because of political uncertainties, which is how they presently are. We do not govern those political uncertainties. The noble achievement, it is worth repeating, is the provision of health services and care to those who need them on a national basis, accountable, admired, loved.
There are many of us here who know America and have a good deal of regard for part of its way of life; but the fear of being ill, of being old or of becoming infirm stalks that country even now, despite its wealth and advantages. That fear has been vanquished here and it has been vanquished here on one basis only: the construction and maintenance of the national health system. I do not wish to play with figures about which country on the continent of Europe provides one-half per cent. more of its gross annual product. The true comparison is what we have here, what we fought for and invested personal commitment in, not just money, as compared with what America lacks.
The worry that we have—and it is independent of party political achievement—is that fear is going to return that you will not be able to be old, infirm or ill because you will no longer have the benefits for which you thought you had contributed. It is deeper than that. Those who have no knowledge of this country and its meaning do not understand that it has different characteristics. It is still, despite its recent misfortunes, ordered, calm and peaceful compared with its neighbours. It is in that fortunate state because there is a consensus that some things must and should be provided by us all for us all and that there is still a moral perspective beyond that of selfishness, greed and private profit. That is why I said when I began that there is a gulf and a chasm between us which we shall not bridge: nor do I want to.
The Prime Minister has spoken of his desire to see a country more at ease with itself. This country is becoming uneasy. There is a deep malaise. Much of the fabric is disintegrating. Who can walk around this great capital without a sense of shame and anger that the physical fabric is falling apart and that public services are being devastated? I see a head being shaken in dissent. It must be a lone dissent among the people who inhabit this great city with the flotsam that lives in its streets.
I say, for your Lordships' consideration at least, that these things do not come about by chance or misfortune. We refuse to believe that nothing can be done. We decline to accept that these consequences have no human cause nor any human remedy. This present Government, so long as it remains, is distinguished by two characteristics. Those are, first, incompetence and, secondly, arrogance. I have done my best to work out in my own limited way which had done more harm to this country, and I simply have not been able to decide between them.
When I began, the noble Lord, Lord Colwyn, was not in his place. I wished to refer to his speech, since he has provided a useful quotation which I was about to seize on. Since Colwyn is not too far from Mostyn, perhaps he will forgive me. I am sure it is Colwyn Bay and not Old Colwyn, but I will use his quotation if I
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may. In the last century, those who ran companies on bogus prospectuses used to go to prison. Nowadays they seem to go to Northern Cyprus, but I put that on one side. If one floated a bogus prospectus, one went to prison. They did things differently then because, as we all know, the past is a foreign country. Perhaps I may follow behind the noble Lord, Lord Colwyn, with regard to the false prospectus, quotation for quotation, perfectly virginal and intact. The quotation is:
"There will be no privatisation of health care, neither piecemeal, nor in part, nor as a whole, not today, not tomorrow, not after the next election, not ever while I am Prime Minister".
I quote John Major, October 1991. What a hostage to fortune: "Not while I am Prime Minister".
How that statement is capable of being reconciled with what the noble Lord, Lord Crickhowell urged, I cannot understand. His point is quite separate. I respect his approach; it is plain, and clearly expressed. We shall wait, silent, respectful and agog for the Minister to be able to explain it to us. I hope that there will not be too much smoke and mirrors but just a straightforward explanation. Alternatively perhaps we might even hear those little words, "We got it all wrong", or, "We have changed our minds".
Lord Crickhowell: My Lords, if the noble Lord will give ground, perhaps I may take this opportunity to say this. If I was discourteous to the noble Baroness who opened the debate, I apologise for that. However, I am quite unable to understand why anything that I said—I described having presided over the greatest improvement to the health service in the Principality that has ever taken place—was irreconcilable with the principles spelt out by the Prime Minister, with which I wholly agree. What is the conflict in providing those services with the aid of the private sector?
Lord Williams of Mostyn: My Lords, I listened to the peroration of the noble Lord, Lord Crickhowell. It was that we have been far too slow at privatisation; that we need to be much quicker at it; that we should have got on with it more quickly in the past. That is on one hand. On the other hand, I repeat the words:
"There will be no privatisation of health care, neither piecemeal, nor in part, nor as a whole, not today, not tomorrow".
I do not find those principles reconcilable. I have not had the benefit of a substantial Jesuit education, my own having been Calvinistic Methodist. If the noble Lord, Lord Crickhowell, cannot understand the difference, I believe that the chasm remains.
The contention for which we stand is that the National Health Service is unique. It is the provider of treatment and care, in the community and in hospital, for surgery and for accident, and because the vast, overwhelming bulk of our fellow citizens prefer it that way. That is the truth. Whatever political allegiances people have, they revere the service that is provided. They wish to be able to trust in it. They feel affection and regard towards it.
I entirely agree with the observation of the noble Lord, Lord Mancroft, that one needs efficient management. One needs the efficient management which was referred to when considering contracting

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for artificial limbs or working out the difficult conclusion that a filter might be used more than once. But that is a defect of internal management. It is not a defect of the National Health Service in public control any more than one could say—I never would, of course, in your Lordships' House—that the failure of the Lloyd's insurance market means that no private organisation ought to conduct a private business in this country. That would be an absurd suggestion. Therefore I shall not make it.
What is worrying to us is the corruption of the National Health Service. It is a word that I choose with some care. It has become corrupt when we have a situation in which a hospital of the quality of Bart's can be spoken of by the Secretary of State for Health, in words which will come to haunt her, "I am not an arm of National Heritage". Harefield, with its personal commitment and investment of people, may well be axed on a superficial, careless, contemptuous review.
The corruption is this: that the National Health Service is increasingly being run by place men. They are not accountable. The chief characteristic which commends them to those who appoint them and direct them is malleability. Whatever our political views, we should not be content with that. A good many of the 127 speeches given yesterday and the day before—some of which, alas, I missed—were on the basis that our democratic controls were to be stripped from us. They are going, my Lords. They are eroding before our very eyes. It should not be a qualification for public life and public control in these important sectors that one is simply there to take one's riding instructions. That is a corruption which we shall live to regret.
The noble Lord, Lord Dean of Beswick, referred to the other corruption. Now is not the occasion to deal with it. We shall return to the issue when we have better ammunition and fully primed guns, and when notice has been given to those who may be criticised.
The fact is that this Government do not listen, do not read and are not capable of having an open mind. The impression abroad is that they have become stale and arrogant with too much power—that they are already terminally concussed after a year of existence. Confidence has gone away, as has my time. I must apologise to your Lordships. I should have listened to the Leader of the House more carefully and have realised that 14 minutes meant that 13 minutes had gone.
As I say, there is a chasm between us. We shall not resolve it. However, what is being done in many areas of the National Health Service is vandalism; it is barbarism; and come the next election this Government will have lived to regret it.
7.17 p.m.
Baroness Cumberlege: My Lords, I am grateful to the noble Baroness, Lady Jay, for initiating the debate because it gives me an opportunity not only to acknowledge the benefits which the NHS gains from its partnership with private enterprise but to lay some ghosts, some fears, concerning its fundamental values.
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Like the noble Lord, Lord Kilmarnock, and the noble Baroness, Lady Robson of Kiddington, I should like to start with a little history and a look back with the noble Lord, Lord Williams of Mostyn, to the start of the NHS and the 1946 Act.
Re-reading the Act it is disappointing in that the people for whom the NHS was established scarcely merit a mention. It is more about doctors who at that time were fearful about the introduction of the new service. To win their support the Act ensured that GPs should remain as private contractors. So today "My doctor" is self-employed, not employed by the NHS. In that sense, the privatisation of GPs was written into the 1946 Act.
I make that point because it illustrates that pragmatic decisions have had to be made from the start which have tarnished the "white as driven snow" theory. Since its earliest days, there has been cross-party consensus that NHS charges for those who can afford to pay them have a limited, but useful, part in raising extra revenue. As my noble friend Lord McColl pointed out, the Labour Party still denounces that principle in opposition; although it has embraced it in Government.
The NHS is reliant on the drugs used for combating disease, the vaccines used for immunisation, and the equipment used in theatres, wards, X-ray departments, kidney dialysis and so on. Those are manufactured by the private sector. The NHS has never sought to enter the drug industry nor the manufacturing industry in a serious way.
I know that there was a time, and perhaps there still are instances, where long stay hospitals have had gardens and farms to produce food in order to create a therapeutic environment for patients. But the NHS feeds 7.5 million acutely ill people a year. It buys its food from the private sector.
The noble Baroness, Lady Robson of Kiddington, referred to the South West Thames region's capital programme. She is a former chairman of that region. We shall invest a huge amount—over £2 billion this year—in a hospital building programme. Although the design in the past may have been in-house, construction has always been largely undertaken by private contractors. Fortunately, the NHS has never fallen into the trap of having large direct labour departments like local government.
The point I wish to make is that the NHS has always been a mix of public service and private enterprise. The demarcation line between the two is one of tradition rather than one of logic. The noble Lord, Lord Kilmarnock, was absolutely right when he said that the NHS ethos is not eroded if the NHS does not supply every service.
The noble Baroness, Lady Jay, painted a fanciful picture of people paying for a better service within, the National Health Service, but it was a Labour Government who, in 1971, made payment; for amenity beds a policy.
When I started as a district chairman of the Brighton Health Authority I was surprised to find that for years much of the laundry had been done; by a private company. I was surprised, not because I did not think it was a good idea but because it was

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happening locally, long before it was national policy to test the market. To pick up the point of the noble Baroness, Lady Robson, it was a contract that was closely supervised and well managed.
The involvement of the private sector in aspects of the work of the health service has brought enormous benefits to patients. The savings that have resulted from putting domestic, catering and laundry services out to tender have achieved a staggering £1 billion over the past 10 years, all of which has been ploughed back into patient services.
My noble friend Lord Crickhowell pointed out in his interesting speech that it was only a few years ago that hip replacements were unknown. In 1990–91, 44,500 of those operations were carried out, relieving many of the elderly people, who benefited, from severe pain and enabling them to lead active lives. But one of the problems until recently with that particular operation has been the waiting times for the operation. Three or four years ago, people believed that waiting times of over two years were a necessary evil, a price to be paid for treatment on the NHS. Last week I visited the Mersey region, where there has been an almost total elimination of waiting lists over one year, accompanied by a stringent monitoring of the time to see a specialist, with a maximum wait of 13 weeks. Other regions are catching up. These are very tangible achievements and we take pride in them. But the Government are not complacent. Where we can reduce these waits further by using resources more effectively, then that is what we must do. If we can save £1 billion on domestic services we must ask: Where can we find more savings elsewhere, to improve services still further and translate those savings into shorter waiting times and better patient care?
Again, while I was chairman of the Brighton Health Authority in the early 1980s, when hip replacement operations were getting behind we bought them from a private hospital, the King Edward VII at Midhurst, whose services were excellent. There was no question of NHS patients paying for the treatment, any more than if they had been treated in an NHS ward. No one that I can recall complained about being sent to a private hospital. On the contrary, they were relieved to have had their operation, because people are pragmatic. They want good efficient health care and they are not terribly worried from "whence cometh their help".
Despite the huge cumulative expenditure invested in the NHS outlined by the noble Lord, Lord Kilmarnock, we must continue to be pragmatic. Public expenditure is under review and however much those on the Opposition Benches would wish otherwise, the NHS cannot be immune from that task of reviewing its expenditure. Controlling borrowing is vital to sustain economic growth and we need that growth to provide resources for the NHS. For without wealth there is no welfare.
My noble friend Lord McColl pointed out that it was a Labour Government who placed a ceiling on NHS expenditure. None of us wants to return to the days when the IMF governed this country because the
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Labour Government could not balance their books. If we are to control expenditure, let us at least be in charge and set our own priorities.
The noble Baroness, Lady Jay, gave some interesting comparative international figures but I am sure she agrees that expenditure is no measure of the health of the country, nor the quality of services given. I very much agree with my noble friend Lord Crickhowell that the greatest disservice we can inflict on the NHS is stagnation and fossilisation of thoughts and ideas. The NHS must be a part of today's world. The speed of change in medical advance has to be matched by a readiness to change the services that back up medical treatment. The Government have found that change has been propelled by medical advance and social expectations rather than dogma. If the Government are accused of having as a dogma the elimination of waste and inefficiency, then that is a banner this Government are proud to parade. If this Government are accused of innovation, of freeing hospitals from bureaucracy under their new trust status, then that also is a banner that we will parade. If we are accused of trusting our own GPs as fund holders to arrange the best treatment for patients, we will also march behind that banner.
The Government are aware that the speed of change is fast. We are witnessing a development of three strands of health care: high-tech hospitals, lower-tech nursing homes and care in the community. Each has its place and each must be sustained and improved. I particularly commend to this House the good start that community care has made, the anticipation of so many organisations in healthy alliances and the strides being made in the Health of the Nation programme which is aimed to reduce preventable disease and to promote health.
My noble friend Lord Colwyn, in a powerful speech on dentistry, showed how dentistry has led the way in this respect. He also went on to talk about complementary medicine, as did my noble friend Lord Addison. This is an important aspect and both those speeches highlighted the importance of people taking responsibility for their own health. That is a view very much shared by this Government.
My noble friend Lord Crickhowell mentioned the highly successful and effective health scheme for renal dialysis which he introduced when he was Secretary of State for Wales. Six years ago those of us on the other side of Offa's Dyke looked not only with interest but with envy as the Welsh were able to expand their services, making the most of all their national resources. I am glad that his patience has been rewarded and that we are now able to follow where the Principality led.
My noble friend Lord Addison, in giving a very informative speech on the value of complementary medicines, recognised the part that they can play in the NHS. I am impressed how increasingly lay and professional people recognise that complementary medicines are a very useful alternative source to traditional medicines and we are now increasingly seeing GPs, and particularly GP fund holders, using those services, I believe with good effect.

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The noble Baroness, Lady Robson of Kiddington, mentioned the huge contribution made by the voluntary and independent sector and I endorse very much her views. Our services would be much the poorer without them. But again, increasingly we are placing contracts with the voluntary sector and using their skills and expertise in new ways.
My noble friend Lord Bridgeman mentioned his experience of a private sector company which provided nursing agency, mental hospital, rehabilitation and a doctors' deputising service. I am grateful to my noble friend for sharing with us that experience of working with a private company providing a variety of services to the NHS. As I said earlier, the Government welcome the provision of such services from the private sector and accept that they can often play a significant role in enabling the service to provide a fuller comprehensive range of services.
The noble Lord, Lord Kilmarnock, urged us to strike a balance on the level of health care expenditure in the private sector. I was interested in the figures given by him on the percentage of the total health expenditure spent in the private sector. The Government, though, have no target figure or maximum percentage for which they are aiming. We are committed to purchasing health care services as cost-effectively as possible, whether from the public or the private suppliers.
The noble Baroness, Lady Jay, and my noble friend Lord Mancroft addressed the issue of quality of health care if provided by the private or independent sector. I can address the noble Baroness's fears. Purchasers will endeavour to let contracts only if the suppliers can provide a quality service and prove that they can give good value for money. I agree with my noble friend that the experience to date shows not only the good value for money but also the better quality of care that can be achieved.
My noble friend's personal experience was of great interest. He may be right that not all managers are sufficiently street-wise to deal with the private sector. That is why the Government are putting so much investment into management and administration—a point raised by the noble Lord, Lord Rea. The noble Lord asked me about the proportion of health service expenditure that goes on these areas. Of course we wish to keep it to a minimum; but we are very determined, in the multi-billion pound business that we are running, to have effective management, skilled in that particular field.
The noble Baronesses, Lady Jay and Lady Robson of Kiddington, and the noble Lord, Lord Dean of Beswick, were concerned about accountability and safeguards where the private sector is involved. The issues concerning, in particular, the West Midlands and Wessex regional health authorities have been very well rehearsed in this House. As the noble Lord is aware, the Government fully recognise the seriousness of the issues concerning the management structure and controls in both the Wessex and West Midlands authorities. Those concerns have been echoed in the Audit Commission reports in the public interest, and in the Public Accounts Committee hearings. The
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Government are determined that every action is taken to ensure that the problems do not occur elsewhere. But as noble Lords will be aware, it would be unrealistic for me on this occasion, as on others, to give a categorical undertaking that that situation will never ever happen again.
Even with its few shortcomings—and I would never profess that the National Health Service is perfect; it is too large an organisation for me to make any claim of that sort —I believe that we have a superb health service with an army of dedicated, committed people working in it. We are rightly very proud of it. Unlike the noble Lord, Lord Williams of Mostyn, I do not believe that the NHS is disintegrating or falling apart. On the contrary, I believe that it has been enormously strengthened by the reforms that have been introduced. I believe that it has a new lease of life.
The noble Lord quoted the Prime Minister. I cannot understand the noble Lord's ambivalence on the statement made by my noble friend the Prime Minister. Unlike the Labour Party, we have a very clear policy. But we also welcome new ideas and new thinking. We do not stagnate in old philosophies and old dogma. But our new thinking must be anchored to the timeless values of the NHS: a service available to all on the basis of clinical need, regardless of the ability to pay. That is written into our manifesto.
I agree with my noble friend Lord McColl that there is nothing so destructive, so unkind, or so demoralising to old and sick people as to raise a spectre of the NHS betraying its principles. Trying to put the Government down is fair sport, but causing grief to vulnerable people is totally unacceptable. No one denies the Labour party its place in the history of the NHS, but for 31 of the 45 years that the health service has existed it has been Conservative governments who have looked after it and who have pursued the policies which have enabled it to evolve and improve. If it was really believed that the Conservative Party wished to destroy the NHS, it could surely have achieved that after 31 years.
By being prepared to embrace change we have improved patient care and strengthened the NHS at a time when the external pressures on it are mounting. The health service needs a constructive debate about how to respond to those pressures, so that we can continue to preserve its fundamental values. Casting doubt on the Government's motives, or seeking to scare through the emotive use of the word "privatisation", has no part in that debate. I hope that we can cast aside ideology, ditch dogma, and concentrate on how to build an even better health service for this decade and beyond.
Lord Williams of Mostyn: Before the noble Baroness sits down, perhaps I may ask this question in the simplest of forms: Is it, or is it not, still government policy that there will be no privatisation of health care, piecemeal, in part or as a whole, not today, not tomorrow?
Baroness Cumberlege: My Lords, I believe I made it absolutely clear. We stand by what was written in

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our manifesto. We want a service that is available to all on the basis of clinical need, regardless of the ability to pay—
Lord Williams of Mostyn: My Lords, I must not trespass, but my question—
Noble Lords: Order!
Lord Williams of Mostyn: My Lords, my question was not that. My question was quite simple. It was the question of the noble Lord, Lord Colwyn, which I respectfully reinforced. It is a perfectly simple one. Is that declaration still government policy, or not?
Baroness Cumberlege: My Lords, of course it is. I have explained very clearly what we mean by privatisation. I can understand that the definition may riot be the same as that which the Labour Party wish to put on it. But our policy is absolutely clear and for a third time in this debate I shall state it. We will offer a service to all on the basis of clinical need regardless of the ability to pay.
7.36 p.m.
Baroness Jay of Paddington: My Lords, I should like to thank everybody who has taken part in this debate. I think that what has been demonstrated, not least by that last exchange, is how political an issue the National Health Service is. I do not think that we should duck that or run away from it. But perhaps it was something to do with the temperature outside today which led to some of the remarks about the contributions made by myself and other people.
I was surprised, for example, to hear the noble Lord, Lord Crickhowell, describe my contribution as thoughtless, and to hear the noble Lord, Lord McColl, say that I was a propagandist. Were they to look at some of the criticisms of the health service, about which they were so concerned, made, for example, by their noble friends Lord Mancroft and Lord Colwyn, they would find them at least as formidable as those made by speakers on this side of the House. Indeed, echoing my noble friend Lord Williams of Mostyn, I can say that I am a total supporter of the National Health Service. I want to see it succeed, and I am very glad to hear the reassurance that the Minister has just given us.
Of course, the old concepts of debate about whether the private sector has any role in the health service are irrelevant. Perhaps I may respectfully say to the noble Baroness that whatever problems the Labour Party caused in that respect, I do not think they can have caused them in 1971, when Sir Edward Heath was Prime Minister.
My argument was designed to suggest that we are now on the verge of a very new system. We are not concerned with an argument about the old priorities, but that the joint pressures of the public expenditure cuts, which the noble Baroness frankly recognised, and the pressures of the private health care sector will, as she says, take us fast in the direction which concerns me very much.
As the noble Lord, Lord Kilmarnock, said—and the point was emphasised again by my noble friend
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Lord Williams of Mostyn—there is a deep philosophical divide on this issue. I do not wish to see the National Health Service become simply a regulator of health care in this country. That is what we cannot accept. That is where the philosophy is different. It must be a provider; and its provision must be free at the point of need.
I accept the point made by my noble friend Lord Williams that we should debate this question again at the time of the anniversary of the health service. We should have the philosophical debate. I look forward to it. Meanwhile, I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Bail (Amendment) Bill
7.40 p.m.
Lord Bethell: My Lords, I beg to move that this Bill be now read a second time.
The Bill seeks to confer on the prosecution a right of appeal against decisions to grant bail. It has been inspired by a feeling which is widespread in this country, to the effect that a certain type of offender or suspect frequently re-offends while on bail. This is a matter of concern both to the police and the other forces of law and order. It has been highlighted by recent research. For instance, it has been suggested that in the county of Northumbria as much as 51 per cent. of detected crime is committed by people on bail, if one takes into account cautions and admissions of previous offences by convicted people about to be sentenced. Research by the Home Office suggests a rather lower figure but there is no disputing the fact that the figure is most significant.
The case which first raised deep concern on this issue in recent times was that of Andrew Hagans who raped and murdered Mrs. Anna McGurk in August 1991 while he was on bail and charged with another rape. He had been ordered by the court to stay in a bail hostel. Her constituency Member of Parliament, Mr. Douglas French, and a group called the "Friends and Family of Anna McGurk" have been campaigning to change the law relating to bail and admission to bail hostels for sex offenders and violent offenders. In particular, the "Friends and Family" group wrote to all Members of Parliament in August 1992, the anniversary of Mrs. McGurk's death, continuing to keep the issue alive. I believe that it was largely in the wake of that case that my honourable friend Mr. Michael Stephen took part in the campaign when he introduced this Bill into another place under the 10-minute rule.
Other high profile cases which have highlighted the issue have involved tragic circumstances, including the death of Daniel Davies and Donna Cooper, young children who were mown down by people in stolen cars and, in February this year, the murder of Cathy Ainsworth, shot by her ex-boyfriend, Adrian Black, while he was on bail.
Deep concern has been expressed not only by the Association of Chief Police Officers but also by the Police Federation of England and Wales, for whom I am a parliamentary adviser. Their concern is based on

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the fact that, as the number of people granted bail increases, so does the number of offences committed by people on bail. Home Office research suggests that the number of such offences increased by 26,000 in the five years leading up to 1990.
Supporters of this measure take into account the fact that any offender who is refused bail by a magistrate is entitled to appeal against that decision before a judge. We now believe, because of the circumstances just mentioned, that in certain cases the prosecution should also have the right to appeal, specifically when a defendant is charged with an offence punishable by a term of imprisonment of five years or more, or if he or she is charged with an offence under Sections 12 or 12A of the Theft Act 1968. That is the provision laid down in Clause 1 of the Bill before your Lordships.
Those last mentioned offences involve removing a vehicle without the owner's consent or authority, including the offence commonly known as joy riding. On many occasions the offence is seen as trivial but on some occasions recently it has resulted in tragic consequences. There are those who feel that something must be done to prevent it, especially when committed by those who have already committed or are charged with a similar offence.
It is proposed under Clause 1 that the prosecution should have the right to appeal against the granting of bail to offenders on those charges to either a High Court or, more usually, a Crown Court judge. However, certain strict conditions are laid down which limit the right of the prosecution or the police to launch such an appeal. That has been done since we have fully realised the need to take into account the rights of any accused person and the danger of keeping in prison any suspect for any length of time, however small, after a magistrate in effect has said that he or she may go free.
Subsection (2) of the clause provides that an appeal may only be made if the prosecution objected to bail being granted and the objection was made before bail was granted. Court clerks are required by existing rules of court to take a note of arguments for and against bail, ensuring that there will be no dispute as to whether or not such objection has been made.
Subsection (3) provides that oral notice of appeal is necessary. That seems to be the most effective method of launching the appeal to all parties concerned, so long as they are present in court and there is no doubt as to the status of the defendant.
Subsection (4) provides that written notice of the appeal must be served on the court and the defendant within one hour of the conclusion of the proceedings in the magistrates' court. Rules of court will allow the prosecution to discontinue the appeal at any time up to its hearing, such circumstances causing the defendant to be released immediately on bail, with conditions if necessary, imposed by the magistrates.
Subsection (5) provides for the magistrates' court to remand the defendant in custody on receipt of oral notice of appeal.
Subsection (6) provides that the hearing of the appeal must commence within 48 hours from the date
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on which oral notice of appeal against bail is given. That is one of the key measures in the Bill and I draw it in particular to your Lordships' attention. The intention is to keep to a minimum the time held in custody of anyone under this measure.
With this Bill we believe that we have achieved a reasonable balance between the demands of good order and protection of the public on the one hand, and the rights of the accused person on the other. We do not quarrel with the fact that a magistrate should make a presumption in favour of bail and grant bail unless there is strong reason why he or she should not do so. There have been many recent cases of people held in custody for many months on end only to be released after trial, having been found not guilty, without a stain on their character. Whenever that occurs it is deeply regrettable.
Magistrates will rightly hesitate before following the prosecution's advice unless they are satisfied that an accused may be a danger to the public, may interfere with a witness, or abscond (as happened recently in one well known fraud case). There is no criticism of magistrates in the way that the Bill is drafted. It is merely designed to provide an additional safeguard to the public interest and to give the prosecution the same right of appeal as is presently enjoyed by the defence in certain circumstances. The law, if enacted, will in some cases of special concern put the prosecution on the same level.
I appreciate that the Government may wish to return to this issue later when tackling the whole question of bail, but they may wish to broaden the type of case where the right of appeal is available to the prosecution to enlarge the two categories listed in Clause 1 of the Bill. In the meantime, I hope that they will find it possible to support this Private Member's Bill.
It is made clear in Clause 2 that the law will apply only in England and Wales. I do not propose that the provision should be extended to Northern Ireland since there is not a general presumption in favour of bail in that part of the United Kingdom. I am often reminded that in Scotland the right of appeal of the prosecution has existed for a great many years without apparent problem.
I should like to make one final point. As I pointed out, this is a Private Member's Bill and it was only with some difficulty that its sponsor, Mr. Michael Stephen, was able to have it passed through another place. The problem is always one of time. Your Lordships will examine the Bill with great care and are perfectly entitled to table amendments, press them and pass them. That is your Lordships' prerogative. However, I think it right to point out that if any amendment should be passed in this House the effect would certainly be that the Bill would not reach the statute book. There would not be time available in another place to consider any changes made by your Lordships' House. In other words, an amendment to the Bill would effectively kill it. I point that out so that it is clear to all where we stand on the matter.
Therefore, I can only draw the Bill to your Lordships' attention. It does not cover the whole question of the granting of bail, which remains one of

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considerable debate throughout the country. But I believe that it takes us a step in the right direction until such time that the Government find it possible, when their agenda is less crowded, to tackle the whole issue anew. I commend the Bill to your Lordships.
Moved, That the Bill be now read a second time —(Lord Bethell.)
7.50 p.m.
Lord Mishcon: My Lords, the whole House is grateful to the noble Lord, Lord Bethell, for the clear way in which he explained the purpose of the Bill. He placed many apprehensions in my mind—and that may be true of other Members of your Lordships' House—when he said that any amendment to the Bill would kill it. That places a grave responsibility upon those like myself who realise that the purpose of the Bill is a worthy one, but also that when the liberty of the subject sounds in the corridors of our courts, great care—great priority—is given to the subject. When liberty of the subject is affected by a Bill in this House, the tradition of this House and of Parliament as a whole is to give it the greatest care in order to ensure that that liberty is not infringed. I must point out to the noble Lord, Lord Bethell, that there was no Second Reading debate in the other place and therefore the responsibility on your Lordships is extremely grave.
We have had debates in this House dealing with the question of bail and this House pronounced from all sides its wish to see that bail was granted, as provided in the Bail Act 1976, wherever possible—the presumption being in favour of bail. There is not the slightest doubt that we had in our minds at that time not only the overcrowding of our prisons, but also what happens to somebody who is remanded in custody. There are risks to his marriage; there are risks to his home from the point of view of landlord and tenant; there are risks from the point of view of his job. In those circumstances we decided to see that bail was granted—and I repeat—wherever possible. The result has been that many more are on bail now than there were before. In cases where there is any doubt the presumption applies.
As all of us will, I share the noble Lord's anxiety about the cases which he narrated so clearly and about which all of us are concerned. There is little wonder that with more people on bail, more offences will be committed. But, according to my information, the proportion of those on bail who commit offences has not increased.
I repeat that there is every reason for a Bill with the purpose expressed by the noble Lord being passed by Parliament, but he has placed on me an onus to show your Lordships that the Bill has been hastily drafted. It contains many points that I wish to draw to your Lordships' attention, and I repeat my sorrow that he should have said that any amendment, if passed by your Lordships, will defeat a Bill which deserves to have another end.
Perhaps I may begin by saying that originally the Bill was intended only to apply to cases where there was a serious risk to the public. That has been taken out. The Bill now before your Lordships merely
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provides for the cases mentioned by the noble Lord, Lord Bethell; namely, where there is a term of imprisonment of five years and where there are offences committed under the Theft Act.
That means that there is no limit, so far as the prosecution is concerned, when it gives notice that it intends to appeal against the magistrates' decision. We also find that it is not limited to a prosecution by the Crown Prosecution Service. We all know that there are private prosecutions and that institutions can prosecute. It is not the preserve or the monopoly of the Crown Prosecution Service. Therefore immediately an amendment occurs to one as to whether or not there should be a limitation upon who the prosecutors are and the responsibility cast upon them. As the noble Lord told the House, as soon as somebody representing a prosecution gives notice to the Court of Appeal, the person concerned has to be—I repeat, "has to be"—committed by the magistrates for at most 48 hours. But that excludes weekends and public holidays. Is that right?
I could go on, as indeed I must, with the other provisions of the Bill which are at the least doubtful in regard to their fairness. For example, the Bill provides that,
"Upon receipt from the prosecution of oral notice of appeal from its decision to grant bail the magistrates' court shall remand in custody the person concerned, until the appeal is determined or otherwise disposed or.
The next clause reads,
"The hearing on an appeal … shall be commenced within forty-eight hours".
It does not say that it shall be determined within 48 hours. That means that there is a possibility of a judge adjourning the matter. In the meantime the person who has been granted bail by the magistrates and has not had his appeal heard, is remanded in custody. Something must be done about that.
There is no reference in the Bill to whether the appeal is to be heard in the Crown Court in open court, or in chambers. If it is to be in chambers—one magistrate has already referred to this in criticism of the Bill—it means that somebody is granted bail in open court before the public and then is denied bail, if the appeal is successful in private. That magistrate has asked whether that is in accordance with our normal view of the way in which justice should be carried out.
There is no reference, and the noble Lord did not refer to it, to the effect upon legal aid. In criminal cases legal aid is granted with a criminal law certificate. The appeal is a civil appeal. That means that the person concerned—now the prisoner—has to apply for a civil aid certificate. If the hearing is to be in open court, has the solicitor the right of audience or must it be counsel? If it is counsel, a special application must be made under legal aid, which I can tell the noble Lord takes a considerable time to determine. What is to happen in the meantime?
I am sorry to have to point out all those matters. I do it not on my own behalf but so that the House realises the seriousness of the matter, with which they need not necessarily associate me. NACRO has pointed out that it finds the Bill full of deficiencies and hopes that it will be amended. The Criminal Law Committee of the Law Society feels that the Bill is

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wrongly drawn and ought to be considered by the Government in the following way. I hope that the Minister, with his usual courtesy, is listening to me.
The Home Office has set up a group to consider bail and all the problems associated with it, and is listening to the researches that the group is carrying out. All the right people are represented on the group—the Justices' Clerks' Society, the magistrates, the probation service, the Law Society and the police. At a committee meeting of the group —I will obviously not read out the copy of the minute that I happen to have but the Minister will know about it—there was criticism of the provisions of the Bill.
Is it not sensible that we do not panic, that we do not have slotmeter legislation, and that we and the Government carefully consider the recommendations of that group which they themselves have set up before we rashly go in for legislation in regard to which we are told—this is the sorrowful thing we are told—that if we dare to amend it in any direction the Bill will fall. Is it not better for the Government to do that? The purpose of the Bill, as I said in my introductory remarks, is a perfectly worthy one. But it is hasty legislation that we are asked to pass affecting the liberty of the subject. This House should never do that.
8.1 p.m.
Viscount Tenby: My Lords, after the high excitement of the past two days it is perhaps salutary to busy ourselves once more with down to earth, but nevertheless important, legislation. We are accordingly grateful to the noble Lord, Lord Bethel!, for introducing the Bill this evening. Before dealing with certain points in it, I ought to disclose two interests. First, I am a magistrate, and, secondly, I represent the interests of the Justices' Clerks' Society of England and Wales in this House.
That this Bill has moved so rapidly through the other place indicates the widespread concern which exists within the community about the matter of bail. There have, alas, been many instances which have been referred to already this evening of serious offences being committed by those who have been bailed, and no doubt some aspects of this will be taken into account in any future measures which may be considered by the Government at a later date. But why is the present position with regard to the granting of bail so unsatisfactory? I would suggest that there are three main reasons for this state of affairs.
First, if the issue be a monster, it is a monster created by Parliament itself in the shape of the Bail Act 1976. Magistrates, who are frequently reviled in the popular press —not an entirely dishonourable position to be in, given present standards—for giving bail in unsuitable cases, do so because that Act quite specifically requires them to give bail unless there are compelling reasons, which are formally laid down, for them not to do so. The presumption has been, and will continue to be, whatever the implications of this Bill, to give bail. What we on the Bench are therefore doing is carrying out the wishes of Parliament. And who is to say that that is a wrong position to adopt? After all,
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under English law a man or woman is presumed not guilty unless subsequently found against by a jury of his or her fellows.
A second, less frequent, reason may be that the prosecuting authorities have not been in a position to provide the necessary information which would enable a Bench to take an informed view. And lastly —the noble Lord, Lord Mishcon, has referred to this and has shot some of my birds already this evening —there is always the underlying fear that, the criminal justice system being what it is—bureaucratic, cumbersome and largely insensitive—the period between any plea and the eventual disposal will be a long one, often running into months. There is therefore a powerful disposition not to remand in custody for many months a person who may well ultimately be found not guilty of the offence with which he or she is charged.
These are all powerful arguments where there is the least doubt for tipping the scales in favour of bail. However, though of course there are mistakes—and they are very much regretted—do not let us become obsessed with the matter as a result of every tabloid scare story, often based on wrong or insufficient information.
Having said that, I clearly cannot oppose a measure which seeks to redress the balance in some degree. After all, in natural justice, if an offender has the right to appeal against a Bench's decision not to grant bail, a similar right should surely exist the other way for the prosecution. Perhaps therefore I may make certain points which I hope will prove useful in some fine tuning and interpreting the Bill in the corridors of power. I beg those in authority to listen to the points that I make. I do not know how matters will fall out following what the noble Lord, Lord Mishcon, has said. But these are matters which do at least imply that, to say the least, there has been some looseness in the drafting.
In Clause 1(1) (b), taking a vehicle without consent or aggravated taking alone are listed—presumably on the grounds of public safety—as offences on which an appeal may be made. But, if the safety of the public is the issue, why are driving while disqualified and drink driving offences not included as well? And, conversely, taking without consent also embraces the offence of "being carried", which, though serious enough in criminal terms, cannot be seen as a threat to the safety of the public. Accordingly, it is my view that these additions on the one hand and exclusion on the other should be made clear in the Bill.
As regards subsection (2) my only comment would be a technical one, in that the use of the word "objected" to bail being granted implies an adversarial context to the proceedings which clearly cannot be intended. "Make representations" or some other form of words would be more appropriate. Subsection (3) of Clause I, however, poses some problems. The phrase "conclusion of the proceedings" is used. Does this mean that oral notice of appeal must be given immediately after the case in question, or at the end of the day's business? I believe that this should be made crystal clear. Then again, presumably oral notice of appeal immediately after the case in question—if that

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is the intention—will provide sufficient authority to detain a defendant for one hour despite the original granting of bail by magistrates which would legally permit that person to walk freely from the court.
Turning to subsection (4), several problems present themselves. I quote:
"Written notice of appeal shall … be served".
By whom? The issue should surely be of sufficient importance to warrant the proviso that, say, no one below the level of branch crown prosecutor should issue such an appeal. Otherwise, there is always the danger of frivolous applications. And on whom should such an appeal be served? It is no good, my Lords, sticking the notice under the court front door during the lunch break and hoping that the law will be served thereby. In my experience it is human nature to get rid of something for delivery in the quickest and least troublesome way. I am strongly of the opinion that service should be on the Clerk to the Justices or on his named, delegated representative. Otherwise, tears will flow, mark my words.
And then, what happens if written notice is not served within one hour? Should the defendant then be released, even though subsection (5) provides that such persons should be remanded in custody until the appeal is determined? Natural justice suggests that he or she should be.
Finally—and this point is not covered by the Bill at all —if a defendant, as he or she has every right to do, appeals to a judge against a Bench's decision to refuse bail and that appeal is granted by the judge, it ought perhaps be made clear that the prosecution would have no future right to appeal against that bail decision since it would, so to speak, be giving the prosecution two bites at the same cherry.
As I hope I made clear at the beginning, the points which I have raised are neither intended to impede the passage of the Bill nor to emasculate it in any way. Rather, the intention is to strengthen it and remove any ambiguities. I am sure that it will receive the same sympathetic support from your Lordships, and improvements, as it had in the other place, for the matter, like so much in the field of law and order, is an urgent and important one.
8.10 p.m.
Baroness Seccombe: My Lords, I am pleased to support this Bill which was introduced by the honourable Member for Shoreham in another place. Having spent 25 years as a magistrate, I fully understand that a defendant is innocent until found guilty and has a right to bail unless certain criteria apply. I support that stance wholeheartedly and of course in the vast majority of cases bail is appropriate. In no way do we want to see a draconian society where everyone is locked up, but it is right that in some cases a defendant should be refused bail. Sadly, all too often, we see people back in court having been arrested for allegedly having committed another offence.
I am very conscious of our duty to try to give protection to the public. That has been emphasised to me by my husband's involvement as chairman of our local Victims Support scheme. I believe that the Bill
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will be widely welcomed by the public and particularly by those who nave surtered as a result of a defendant's actions. Of course, we should never forget that it does not follow that someone charged with an offence will be found guilty.
I also share the concerns of the noble Viscount, Lord Tenby, and the noble Lord, Lord Mishcon, over drafting points in the Bill. I hope that, if we are not able to amend—to do so would kill the Bill—these points will be taken on board, whether it be by a rule or some other appropriate instrument. It seems to me that unless the situation is made clear to all courts, there will be different interpretation. I particularly go back to the question of the noble Viscount, Lord Tenby, regarding the end of the proceedings. There could be a difference depending on whether the matter is raised at the end of that particular case in the morning session or, as the noble Viscount said, at the end of the day.
It is important that these matters are clarified. The bail information scheme now operating in many courts is giving them much more detailed information on which to come to a decision. It seems to me that if a defendant has the right to challenge the magistrates' decision so should the prosecution. I have always felt that bail applications are some of the most challenging situations that magistrates face as the implications can have such a profound effect on the defendant and his family. But certainly magistrates do not have a monopoly of wisdom and we can only do our best. So it is in that spirit that I welcome the Bill and I am delighted that the Government are supporting it.
8.13 p.m.
Lord Williams of Mostyn: My Lords, not for the first time my noble friend Lord Mishcon and the noble Viscount, Lord Tenby, have done your Lordships' House good service. We on our side give our fullest and firmest support to the principles behind the Bill. I say that quite unambiguously particularly since our colleagues in another place, Mr. Blair and Mr. Alun Michael, have been among the first to articulate the concerns of the public. Indeed, last year, when I was chairman of the Bar Council I made a number of speeches about this problem having consulted members of ACPO and the Police Federation.
Suggestions by way of improvement by Mr. Alun Michael were accepted in another place in some significant respects. We wish to honour the principle of the Bill, but to have, as the noble Baroness, Lady Seccombe, said, an effective and competent piece of legislation that will not break the record of the Criminal Justice Act and have to be amended in less than seven months' time.
But there are some specific areas of concern. The noble Lord, Lord Bethell, mentioned the Scottish experience and I believe that we need to learn from that. The giving of these powers should not be contemplated unless the prosecution has a sensible apprehension of danger to the public or that there is some other weighty reason in the public interest like, for instance, absconding in important cases.
The Bill is silent as to that. It is not sufficient for us to have silence and hope for the best because the best,

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alas, very rarely happens. So we respectfully ask for the Minister's explicit assurances on the rules for Crown prosecutors. I endorse the point made by my noble friend Lord Mishcon; namely, that this is a decision which should be in the hands of the Crown Prosecution Service and not those of a mischievous, interfering private prosecutor. The only way to cure that at the moment would be for the director to take over a private prosecution and therefore disentitle the private prosecutor to continue. That is an absurd bureaucratic sledge-hammer to crack a nut.
I respectfully endorse what the noble Viscount, Lord Tenby, said. There ought to be an explicit mechanism whereby the sanction for appeal must be in the hands of a Crown prosecutor of a specified seniority, whether it be a regional director or whatever rank. One simply cannot have a junior employee coming to a decision of this kind.
I believe that nothing which the Government can say by way of assurance will cure the point made by my noble friend Lord Mishcon on Clause 1(5) because it is mandatory that
"the magistrates' court shall remand in custody the person concerned, until the appeal is determined".
That seems to me to imply that if a Crown Court judge started to hear a case and thought that he was unlikely to allow the appeal, but it went over into a second or third day, the unfortunate defendant would have to be remanded in custody. That cannot be right. I do not believe that it is an intended consequence of the noble Lord's Bill. After all, what one needs is to deal with the present mischief which undoubtedly exists in our view. But we want an ordered, uniform approach in England and Wales without clogging up the system with inappropriate appeals.
My noble friend Lord Mishcon mentioned the 48-hour limit. It is a significant improvement. The Bill originally spoke of five days. Mr. Michael in another place secured Mr. Stephen's assent to a limit from five days to 48 hours, but it still excludes public holidays and weekends. So one can have a Saturday, a Sunday, Christmas Day on Monday and Boxing Day on Tuesday. That is quite a significant deprivation of liberty as the noble Baroness has pointed out, and contrary to the principle which we normally apply.
Some strenuous effort should be made to enable bail appeal courts to sit in the evening and at the very least on Saturday morning. The courts are available. It is a perfectly simple device and from my own experience most bail appeals do not last very long as most bail applications, however vigorously disputed and contested, do not last very long in the magistrates' court. The issues are fairly simple.
Therefore we generally support the Bill as firmly as we can. But there are significant defects at the moment. My colleagues in another place have given every fair wind to the Bill but they have sought explicit assurances from the Government. I respectfully repeat the question put by my noble friend Lord Mishcon as to whether this matter should be in Government hands and receive a degree of expertise and consideration that it has not been able to receive because of the pressure of time. That is not a criticism
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of the sponsor in the other place and it is no criticism of the noble Lord, Lord Bethell, who has patiently expounded his aims. Despite the fact that we very much support the Bill and recognise and honour the public's unease, we are deeply concerned as to whether it will have the right consequences. I do not reiterate the technical questions which the noble Viscount, Lord Tenby, raised, but they are well worth paying attention to.
8.20 p.m.
Viscount Astor: My Lords, I should like to join other noble Lords in congratulating my noble friend Lord Bethel! on introducing the Bill and on giving us such a clear explanation of it.
As your Lordships will know, this Bill comes to us from another place where it was sponsored by the Member for Shoreham, to whom we also owe a debt of gratitude.
The Bill has made remarkable progress so far, no doubt because it seeks to deal with an issue which has, justifiably, given rise to much public concern. As we all know, magistrates up and down the country daily take decisions about the granting of bail. In taking those decisions, they are required to make very difficult judgments about the likely behaviour of defendants, often on the basis of limited information.
It is, therefore, a great credit to them that the vast majority of such decisions are sound and give no grounds for concern. We have good cause to respect the conscientious and professional way that magistrates—both stipendiary and lay—approach their duties.
But at the same time, we are all aware that there have been a small number of cases in which the decision to grant bail has had serious and, in some cases, tragic consequences. It is, of course, very easy to be wise after the event and I am sure that in those cases all concerned acted in what seemed to them to be the correct and most responsible manner. But once the decision to grant bail had been taken it could not be challenged, even if the prosecution had grave misgivings about the risks involved.
It is this element of the process which the Bill before us seeks to address by providing specifically that where the defendant is charged with certain serious offences and is granted bail despite prosecution objections, the prosecution shall have a right to appeal against that decision.
This is a very significant step and one which, as noble Lords have said, should not be taken lightly. Nevertheless, the risks are such that, provided there are adequate safeguards for the position of the defendant, the Government accept the general principle. It is, I fear, inevitable that the defendant should be held in custody pending the hearing of an appeal. It is all the more important, therefore, that the appeal should be heard as quickly as possible and we are pleased to see the requirement for an appeal to be commenced within 48 hours. In our view, this strikes the right balance between the practicalities of arranging for an appeal to be heard and the principle of holding a defendant in custody no longer than is absolutely necessary.

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There have been a number of interesting points raised in connection with this Bill which my noble friend will certainly wish to comment upon, but perhaps I may deal with a couple. The noble Lord, Lord Mishcon, said that there had been no Second Reading debate in another place. That is entirely true, but there was a debate in Standing Committee E on Wednesday 21st April, which took up 23 pages of Hansard, so the Bill was considered in another place. I think it is important that all of your Lordships recognise that point. The noble Lord also asked me about all the work that is going on. It is absolutely true that a lot of work is being undertaken to investigate offending on bail and to improve the decision-making. But this Bill is a safeguard against bail decisions that can have serious consequences. We therefore feel that the Bill could go ahead without affecting all the work that is taking place with regard to offending on bail.
To answer the questions raised by the noble Lord, Lord Williams of Mostyn, perhaps I may say that if my noble friend is successful in securing the passage of this Bill, it will be necessary to draw up rules of court before it can be brought into force and that will provide an opportunity for consultation with practitioners. The rules of court will cover procedural arrangements, including the service of documents, arrangements for hearings, and discontinuance procedures so that no one is kept in custody unnecessarily if the prosecution decide not to pursue the appeal. Rules of court will make provision for several matters which have been mentioned, including the service of documents and time limits. The Crown Prosecution Service will be issued with guidance on the circumstances in which appeals should be lodged. These will include consideration of the seriousness of the risk to the public.
Once again, I congratulate my noble friend on introducing the Bill and wish him success with it.
Lord Mishcon: My Lords, before the noble Viscount sits down, can he kindly inform the House, bearing in mind what the noble Lord, Lord Bethel!, said about amendments killing the Bill, how rules can possibly provide that only the Crown Prosecution Service should be able to make the appeal, or that only a senior officer of the Crown Prosecution Service can deal with the question of whether there should be an appeal? Lastly, can he say whether the word "commence" is the correct word in the Bill, when it is quite obvious that the purpose behind the Bill, one imagines, is that the appeal is determined within the limited period, not commenced within it? As my noble friend Lord Williams of Mostyn pointed out, one has to carry in one's mind the question of adjournment. With great respect, how can all these matters be dealt with by rules? Should not the Bill be taken over by the Government and dealt with as only the Government's draftsman can deal with it?
Viscount Astor: My Lords, the noble Lord, Lord Mishcon, makes an important point. I am dealing with this Private Member's Bill from the Government's point of view. As your Lordships are aware, it will be my noble friend who will answer some of the more detailed points that have been raised
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about it. I am simply putting the Government's view of the Bill, and it is to the Bill that I am addressing my remarks. The noble Lord asked me about the Government's future intentions. I am afraid that I cannot be drawn on that because I must concentrate my remarks on the Bill. I believe that my noble friend will be able to answer the points which I am leaving to him.
Lord Taylor of Blackburn: My Lords, although I have not taken part in the Second Reading debate, perhaps I may ask the Minister a question because the situation is not clear to me. If the noble Lord, Lord Bethell, is right and amendments are made to the Bill on Report, would that mean that the Bill would automatically not go through the Commons?
Viscount Astor: My Lords, I do not think that I can speak for another place. I think that my noble friend was saying that there is a timetable difficulty if Private Member's Bills have to go back to the Commons at this stage. I know that the noble Lord will realise that I cannot commit another place any more than its Members can make commitments on behalf of your Lordships' House.
8.27 p.m.
Lord Bethell: My Lords, this has been an extremely interesting Second Reading debate and I am grateful to all noble Lords who have taken part in it. I appreciate the points that were raised by those who participated from the Benches opposite and in particular the comments made by the noble Lord, Lord Mishcon, and the noble Viscount, Lord Tenby. With their specialist knowledge they have no doubt raised certain areas that need to be covered by the rules of court which will be laid down at a later date, as the Minister has suggested.
I am advised by those who are familiar with the timetables in another place that it will not, I am afraid, be possible to amend the Bill in this House if it is your Lordships' wish that it should become the law of the land. That is a result of the political situation as it exists today—
Noble Lords: Oh!
Lord Bethell: My Lords, you may find this unsatisfactory, but if you do, may I ask you please to bear in mind the opposite: that there is overwhelming support for a measure of this sort not only in another place but in the country at large? There is deep concern in the country about the number of people who re offend while on bail, particularly about those who commit violent offences while on bail and about those who go joyriding, who take cars and who very often plough, with tragic results, into children or people going about their lawful business. No disrespect is meant to your Lordships' House, but it is for those reasons that Members of another place have acted swiftly. I hope that they have also acted with due care. I do not know whether it is in order for me to point this out, but I shall do so until I am corrected. An Early-Day Motion was presented in another place which attracted more than 100 signatures from right across the political spectrum—from Mr. Tony Benn to

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Sir Teddy Taylor, with all the gradations in between. That was not a sign of agreement with every jot or tittle in the Bill, but a feeling that something must be done; that if something must be done it should be done now, and in this Session; and that if there is anything unsatisfactory, it should be tidied up later. There will be less tragedy if the Bill is passed than if it is not passed or if it is amended out of existence.
Lord Howell: My Lords, I am most grateful to the noble Lord for giving way. I accept everything that he has just said about the urgency and seriousness of the matters with which he is grappling, but bad laws should never be passed. If, as some of my noble friends have suggested, there are aspects of the Bill which give cause for concern, it is our duty to examine them in detail.
The noble Lord told us that the Bill attracts wide support. If we send the Bill back after amendment, I cannot believe that it is beyond the competence of the Government's business managers, with the assistance of the Opposition's business managers, to find time to consider the wiser thoughts of this House as expressed in any amendments it may care to pass.
Lord Bethell: My Lords, if the noble Lord believes that this is a bad Bill—
Lord Howell: My Lords, no, I did not say that.
Lord Bethell: My Lords, the noble Lord should of course not support it.
Lord Howell: My Lords, I did not say the Bill is a bad Bill. I say that there are aspects of the Bill which apparently—I have listened to the arguments—produce bad law. Those parts of the Bill should be amended. I am not opposed to the Bill. I want to get it right. I hope that the noble Lord has the same ambition.
Lord Bethell: My Lords, I fully appreciate what the noble Lord has said, and that must be taken into account. I am merely pointing out the practical aspects of the Bill's timetable. He must make a judgment about whether to put down any amendments and, if any amendment is put down, whether to support it, bearing in mind the legislative timetable. He will of course do as his judgment and conscience dictate. That is his duty and his right. However, I thought it only right to point out the situation in which we find ourselves. I feel that the Bill is satisfactory. In that, I believe that I have the support of my noble friend the Minister. I hope that it will pass into law. Of course, the noble Lord is fully entitled to take a different view.
Lord Williams of Mostyn: My Lords, we want to do all that we can to help. We have heard informed contributions from the noble Baroness, my noble friend Lord Mishcon and the noble Viscount, Lord Tenby. They, of all the people here this evening, know what they are talking about. The noble Lord, Lord Bethell, said that there is overwhelming support for a measure of this sort. One has a duty to be careful. We want the gap filled appropriately. No fair-minded
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person could say that an irresponsible quibble had been raised this evening. Indeed, I do not believe that the noble Lord thinks that any of the questions are irresponsible. But it will not do—I believe that he must see this—merely to say, "This is not a marvellous Bill, but we have to get it through". Nor will it do, with great respect, for the Minister to say, "We will cobble up some rules". There is no rule-making power in the Bill.
I am aware of the noble Lord's commitment to the Bill. He has spoken about the ACPO and the Police Federation. I discussed these matters with them on numerous occasions last year. I respectfully suggest that what my noble friend Lord Mishcon proposed is the way forward for everyone; that is, that the noble Lord should have much more assistance from the Government in the drafting of a Bill which would be good and have unanimous support. We all support the principle. The noble Lord and his Bill are entitled to some assistance from the Government's expertise and draftsmanship.
Viscount Astor: My Lords, with the leave of the House, perhaps I may help your Lordships a little. If this were a Government Bill, it might contain different provisions. It might be larger and it might cover different areas. My right honourable friend the Home Secretary took the view that, because there was considerable support for it on both sides in another place, the Government should take the Bill seriously, and they did so.
The Bill originally contained a number of measures which were unacceptable to the Government, in particular, Clause 2. Those were changed. The Bill was looked at closely. The Government will use the rules of court and guidance to ensure that there are safeguards against any abuse of a right to appeal. Of course guidance cannot cover private prosecutions. It covers decisions made by the CPS.
I accept that your Lordships might be worried because the Bill has limited aspirations as it does not contain all the other matters to which the noble Lord, Lord Mishcon, referred. We are dealing with a Bill which the Government feel takes a step in the right direction. That is why the Government were prepared to support the Bill.
Lord Williams of Mostyn: My Lords, if it is a step in the right direction, why not complete the journey?
Viscount Astor: My Lords, I have to deal with the Bill as I find it. I cannot deal with a Bill that does not exist.
Lord Williams of Mostyn: My Lords, I understand that. I have stressed, I am sure far too often, that we all want the Bill in an improved form to have a safe passage. But the conscience about which my noble friend Lord Mishcon and the noble Viscount, Lord Tenby, speak, and the practical experience that the noble Baroness adds, raise serious questions. The Government want the Bill through in an improved form. So do we, and so does everyone who has spoken. Surely it cannot be beyond the wit of well thinking people to offer the noble Lord, Lord Bethell, some reasonable measure of expertise and time.
Lord Bethell: My Lords, if I may get a word in, I hasten to point out that if the Government were to make me such an offer, no one would be happier. I am committed to trying to achieve a Second Reading of the Bill this evening. I have done what I believe it to he my duty to do—to explain the Bill to your Lordships to the best of my ability and to point out the pitfalls that could befall it in a certain eventuality. The Government must make their own decision as to whether they think it appropriate to take over the Bill. I shall proceed, when I have the opportunity, to invite your Lordships to give the Bill a Second Reading.
Lord Mishcon: My Lords, this may be the last interjection from anyone. It will be the last interjection from me. I am deeply grateful to my noble friend Lord Williams for having put the matter in the correct perspective. The policy is approved. Detail is very badly wanting in regard to the Bill. I suggest that the Bill has a Second Reading, because the policy behind it is approved by us all.
I turn to the Minister with a plea, and some degree of hope in my eyes as I do so. I hope that he will limit himself this evening to the observation that he will give serious consideration to what has been submitted in this debate as to the possible defects of the Bill with a view to seeing that they are removed by joint consultations. If the Minister merely gives the assurance that he will consider the matter in that light, we can all go home with the Second Reading passed, and the noble Lord, Lord Bethell, happy in the thought that he has succeeded at this stage.
Baroness Seear: My Lords, is it really not possible for the Government to say that they will help the noble Lord, Lord Bethell, with some amendments based on what has been said, bring the Bill back quickly and hustle it through the other place?
Viscount Astor: My Lords, I have already said that I cannot speak for another place any more than they can speak for your Lordships. However, I can give the noble Lord, Lord Mishcon, the assurance that I always take very careful note of what he says.
Lord Bethell: My Lords, I think that we have come to the end of the matter now, to some extent satisfactorily. I very much hope that the Bill reaches the statute book. As I pointed out, I should be only too pleased if the Front Bench were to take it out of my hands. I am sure that they would do a much better job than I could. I am merely doing my humble best.
I thank noble Lords for their participation in the debate and leave the question of a Second Reading to he decided.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Sports Facilities
8.41 p.m.
Lord Dean of Beswick Lord Dean of Beswick rose to ask Her Majesty's Government whether they have additional proposals to improve and increase public sports facilities.
The noble Lord said: My Lords, it is some time since your Lordships' House debated sport. I believe that I initiated the debate on the previous occasion when we discussed the subject. I am sorry that the debate is taking place at this time of the night, after two very late sittings of the House, so that noble Lords are less inclined to stay for the debate. I should have thought that with all the difficulties facing sport at present the subject would have been worthy of a more substantial debate in order that all the representative points of view could be considered.
I shall not speak for long. I shall not speak about professional sport because I believe that that is well catered for by its own public relations staff who represent the individual sports. Little notice is taken of what is said about them because they are professional in name and in their activities. They run their own houses on a financial basis and control their own sports in their own way.
A few weeks ago I had the privilege of being invited to the annual general meeting of the Central Council of Physical Recreation. Afterwards, at the walkabout lunch following the meeting, I had the opportunity to meet groups of people representing various sports such as girls' netball, crown green bowls, flat green bowls, ten-pin bowls and so on. In this debate I am concerned with the lower end of the sports pyramid.
One of the main factors is the lack or shortage of finance. I recognise that it is difficult to talk about increases in finance for sport at a time of serious recession and economic difficulty, but I should like to make one or two principal points.
In the not too distant future substantial sums of money will be available from the national lottery. Sport will be a recipient of some of that money. I am told that one of the bodies which presently distributes money to sport does so at a cost of only £2 for every £100 distributed. However, it is possible that another body will be brought into being and given the job of distributing money for sport and that the cost will be much higher. I hope that the Government will think twice before making any alteration that will increase the administrative costs of distributing that money.
One of the main detrimental factors affecting sport in this country at the level with which I am concerned is the burden of the new uniform business rate. My noble friend Lord Howell referred to this subject when he was in another place. I believe that thousands of voluntary clubs have gone out of existence because they could not afford to keep going.
I am told that there are an estimated 150,000 voluntary sports clubs affiliated to the national governing bodies of sport, many of which own their own premises but are non-profit distributing and are reliant on volunteers to run their affairs. Independent sources estimate that £40 million is paid by voluntary clubs to the Treasury. A recent survey carried out in 1992–93 by the Central Council of Physical Recreation showed that 241 per cent. of clubs were being refused relief on the uniform business rate by local authorities. It is not an arbitrary matter, it is left to the discretion of local authorities. In Scotland, the cost of relief to the regional councils is estimated at nearly £3 million

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and in Northern Ireland at £1.33 million. At present there is no accurate figure in relation to the position in England.
I should like to put this very important point to the Minister concerning VAT. I understand that there is a new EC directive. The total amount that the Treasury claims from VAT on voluntary sports clubs is not clear, but the European Commission's sixth directive published in January 1993 stated that member states should be exempting voluntary sports clubs and associations. Great Britain is the only country in Europe not to exempt those clubs. The Central Council of Physical Recreation is having discussions with the Treasury and Customs and Excise officials to try to find a solution. If the Government could follow the same road as our colleagues in Europe immediately pre-Maastricht that would be money well spent.
There is no question about the benefits derived from sport at an early age. I do not want to give detailed figures, but the Royal College of Physicians has carried out a survey which shows that 13 per cent. of boys and 10 per cent. of girls are overweight. The national fitness survey showed that 70 per cent. of men and 91 per cent. of women do little or no exercise. It has been established that if young people have the opportunity to participate in physical exercise or games as youngsters they will carry on with that into adult life. That makes for a healthier Britain. There is general agreement that if youngsters have something wholesome to do, such as participating in any type of sport, whether it is soccer, cricket or running, or even fell walking, that keeps them out of mischief.
My noble friends Lord Howell and Lord Donoughue may have figures but I shall not spend more time quoting figures. However, there has been a dramatic fall in the availability of facilities for children of school age as a result of the disposal of school playing fields, and other facilities such as swimming pools, because of government policy. I do not wish to make this a political issue but I do not want the Minister to say that that has not happened, because it has.
I am a Mancunian by birth and I still live just outside Manchester. I remember when swimmers in Manchester who were good enough to make the Olympic team—and there were quite a number of them—used to train at High Street baths in the centre of Manchester. Those baths are now either in danger of closure or the decision has been taken to close them. That has caused absolute outrage because the number of local authority places where children can swim has diminished. It may be that one of my colleagues will wish to make further comments on that.
In 1990–91 local authorities received nearly £65 million for the sale of school playing grounds and other facilities. It is estimated that 40,000 playing fields and 70,000 sports pitches have been disposed of. When we are trying to keep our children off the streets and away from the juvenile courts it is tragic that that kind of massacre of facilities is taking place. I hope that the Government will take that on board because I am sure that the provision of such facilities would
1022
save the Government a great deal of money by keeping children away from juvenile crime. Many people voluntarily devote their lives' work to aiding such children and that is an extremely worthwhile exercise.
I do not wish to speak at length and other noble Lords wish to contribute to the debate. Therefore, I shall be brief and conclude my remarks with a few comments about funding and finance. I understand that the Secretary of State in another place has given a clear undertaking on more than one occasion that any money from the national lottery going to sport will be new money. In other words, it will not be used to raid the existing grants which are received from the Government—it will be additional money. That extra money will enable the voluntary sporting bodies to develop much-needed sports facilities.
I should have liked to speak for longer and I have available a mass of detail but I have confined myself to making one or two important points of principle. I know that this matter will be dealt with thoroughly by my noble friend Lord Howell who has had more direct involvement in sport than I have and I am sure that my noble friend Lord Donoughue will also have an important contribution to make. I ask the Government to consider carefully the points which I have made and, when there is time available, perhaps we may return to this matter for a fuller discussion.
8.55 p.m.
Lord Addington: My Lords, it is not often that as only the second speaker in the debate one can stand up and say in all honesty that most of the areas that one was going to cover have at least been touched upon by the first speaker; but that has happened today.
My first point concerns support for voluntary bodies. That is extremely important. As the noble Lord, Lord Dean, pointed out, we tax our voluntary sporting bodies extremely heavily. That is all the more unfortunate because they are increasingly having to provide sports education. That is a result of the Government introducing the national curriculum which has much going for it, but there is increasing pressure on the amount of school time available for non-core subjects. Those subjects are being pushed to one side. It means that extra curricula activities are pushed aside; for example, team games. It takes a long time to organise and drill a team, especially in technical sports like cricket and rugby. Those will always be the first to go if there is pressure on teachers' time.
Having warmed myself up for tomorrow's debates on the Report stage of the Education Bill, I turn now to the voluntary clubs and why they need that extra relief from taxation. All clubs, even at a very basic level, will need to generate some income; for example, to pay for outfits. You cannot play in a football team or a rugby team if all the players are wearing different jerseys because you will pass the ball to the wrong player. It is that simple. Therefore, there is always a need for some income.
As the noble Lord, Lord Dean, said, even clubs at the bottom end of the scale want to be competitive. In most organised team games people benefit from being

1023
competitive on the sports field. To be competitive they will need to have training sessions, which means hiring facilities if they do not own them, or maintaining facilities if they do own them. The teams will need coaching and physiotherapy.
In my sport of rugby union we are amateurs up to an extremely high level. Therefore, we need to generate money in order to compete at that high level. Coaches, physiotherapists, trainers, pitches, facilities and sports medicine all require money. If that is to be clone, there must be a lowering of the tax burden, especially if those clubs begin to take on the burden of sports education. We must make sure that more money is made available, especially for technical British sports.
The first and easiest way in which the Government can do that is by lowering the taxation burden to something akin to charitable status. If that were done, the Government would not have to go through the rigmarole of handing out more funds but would merely have to stop themselves from removing quite so much from those non-profit-making organisations which are raising the funds.
In all those sectors the growth in junior coaching has been phenomenal over the past few years. That is taking on an extremely important role in education. Surely the Government should have some sympathy for that kind of activity.
As the noble Lord, Lord Dean, said, as schools sports grounds and other communal local authority-owned land are being sold off, those clubs are under pressure to become more organised and to raise more funds because they must own their own facilities. For example, if training facilities are not available, they must be rented through the private sector. The Government really should address their mind to that issue.
Local government reorganisation is taking place. New councillors may have different priorities and sports facilities may suffer as a result. Therefore, it surely makes sense for the Government to relieve the voluntary clubs of that heavy tax burden.
Everybody agrees that if we encourage people to take part in sporting activities, they will benefit from a sense of achievement and it will also improve their health. For example, it has been said that a high percentage of the population is overweight. Most people who take part in sporting activities will lose weight. As has been pointed out to me even though a low-level activity may not do a great deal of good, if you are taking a gentle walk, at least you are not spending your time stuffing your face with chips. You must provide people with an incentive to take part in sporting activities. The Government must ensure that communal space is available and they must recognise the fact that basic sporting facilities need to be made available to the general public for most of the year.
I make no special plea for any particular type of activity because sport is as susceptible to fashion as are most other forms of activity. Aerobics have replaced jogging as the "in" way to keep fit. Walking has become increasingly popular. One person pointed out to me that once you have a car, a great variety of places can be reached from which to take a walk.
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However, an environmentalist pointed out that the atmosphere is then polluted by the car while it is travelling to the countryside and the countryside is ruined by people trampling across it. That is a debate which we could discuss for hours and in which we could involve dozens of elements of your Lordships' House.
We want a more cohesive approach from the Government and leadership from the centre. At present, we do not know where we are going. I agree with the noble Lord, Lord Dean of Beswick, that the new national lottery funding must be seen to be extra funding. I say that because if it starts to replace anything, even very slowly, we shall be forced back into a very similar situation to the one in which we find ourselves at present. Indeed, we do not know how much money will he generated by the national lottery. That is another political decision. After all, the sureties and so on could change in the future. The in-fighting between the arts and sports lobbies may not be a pretty sight if both are forced to cut back on resources.
I hope that we can hear from the Government tonight what their attitude would be towards trying to introduce better tax incentives for those voluntary bodies which are taking on so much of the basic sports education and introduction in the country and offering people the opportunity to start and participate.
9 p.m.
Lord Howell: My Lords, we are all grateful to my noble friend Lord Dean of Beswick and to the noble Lord, Lord Addington, for raising matters on this rare occasion of a sporting character. They both touched on areas with which I shall not necessarily deal in the hope of being effectively brief, although that may be difficult. Nevertheless, I can only hope that we shall have more such opportunities.
On the other hand, if we look at the attendance in the Chamber for the debate this evening and then look at the speakers' list to see the names of those who have indicated their wish to speak, it must be said that it will not-give much heart to British sport to know that there are four of us listening and two or three of us waiting to speak. But sport is much more important than this absence of speakers would indicate.
I begin by picking up the Prime Minister's statement that he is very depressed. He told the women Conservatives last week that he was depressed not about the state of the economy or about the finances of the nation; he said that he was depressed because England had lost 2-nil against Norway and that he was further depressed because we had lost three one-day cricket test matches and the First Test. I should like to tell the Prime Minister, very kindly, that the reason we are losing in sport is just as great a matter of concern to the Government as are their economic and financial policies. Indeed, part of the case that I shall make is that it is naturally and inevitably the fact that we shall do badly at international sport if we deny the grass roots of sport in our schools and in our local authorities the nurture that is absolutely essential. The one follows the other.

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In the government of the noble Baroness, Lady Thatcher, there was a total obsession, not with the best interests of sport but with the Football Spectators Bill, which we spent many hours discussing in Committee, and so on, and which was supposed to deal with the problem of hooliganism. Following the recent match in Norway, we find that even the parts of the Bill that are still in place which deal with how to stop thugs going abroad have had no effect. Indeed, large numbers of people were arrested, thereby disgracing the name of our country, because, yet again, the Government failed to listen to what we told them.
It is no use the new Secretary of State at the Home Office saying that he wants the Norwegians to prosecute. That is a very old story. I called for that myself time and again in the World Cup and elsewhere. However, he is right: the rest of the world is fed up with the British so-called "supporters" that we import into their countries. They do not want to prosecute them; they want to get rid of them back to this country. The only way to deal with the matter is to stop such people travelling abroad once they have a record of any sort. We told the Government that the Bill would not deal with the problem; indeed, it has not done so. If the Government want to amend it, I would be most happy.
Incidentally, I should like to stress that I am not particularly encouraged by the fact that Mr. Robert Key was one of the few Ministers to be moved in the recent reshuffle. I should like to pay my tribute to him. In fact, he had made a considerable mark. He listened to people and put himself around to be talked to, and so on. Moreover, he was gaining confidence. Therefore, I think that it is rather sad that he was moved at this moment in time, although I wish his successor well.
The debate is about local authority contribution to sport and recreation. The essential point to be made about sport and recreation is that it is a social service. Unless it is treated as such—it involves people's leisure time and helping them to spend it constructively and develop their personalities by playing sports—we shall never get the matter right. On the whole local authorities are the great providers of sport. I entirely agree with what the noble Lord, Lord Addington, said about the voluntary sector. I endorse every word he said. On the question of concessions for rating and business relief and other such matters, I very much hope the Government will go as far as they can, although this is perhaps not a very good time. However, as I said before, it is essential to understand that sport is a social service.
I have only one quotation in my speech. It comes from a document of the Sports Council which I have with me. It reads:
"The decline of sport in schools—particularly team games —has been a matter of great concern to the Sports Council. In its submission to the Minister for Sport's Policy Review, school aged sport was identified as the Council's main current concern. Team sports have been hit particularly hard by the decline in the time available to teachers and pupils for extra-curricular activities. Local management of schools and financial pressures on local authorities present further challenges to the future of sport in schools".
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That is a very serious statement. The schools are the foundation of the whole of British sport—that is, of international and national sport as well as encouraging thousands of people to take up sports for the enjoyment and pleasure thereof. That is sport's true purpose: the joy and the happiness that it provides. It is the health of our communities that concerns us, as well as the future skills and performances of our national teams. Sport in the schools and the sports provision of local authorities are the bedrock upon which all that must be built. They are indissoluble. We should be concerned with sport in schools but particularly the provision for sport in primary schools. I go further and say that the drift away from proper sport provision in our schools originated in teacher training colleges. If we are having trouble in providing tennis players for Wimbledon, we are hardly likely to rectify that position until more tennis players are nurtured in schools, and that is not likely to occur until we provide the appropriate facilities and teachers who are trained in tennis coaching. Nothing I have seen in teacher training colleges comforts me in this regard.
Someone once said that there is not one qualified PE teacher in any primary school in this country. That may be a slight exaggeration but I believe it is near the truth. Teacher training colleges are now trying desperately to rectify that situation. However, they are hampered by inadequate funding. I come back to the Prime Minister's problems that I mentioned earlier. We should observe the performance of the England football team. We may find that a difficult thing to do but we may well do that at a later date and I wish them better luck on that occasion. Anyone who knows anything about football can see that the team lacks basic skills in football. Players are unable, even at this level, to trap the ball properly unless they have two or three yards to spare. One can see that on football pitches every Saturday afternoon. There is an inability to shoot straight or to pass the ball accurately. Those basic skills need to be taught to children in primary schools and certainly at an early stage in secondary schools.
Our England batsmen are often left in no-man's land during cricket matches. They do not know whether to go forward or back. They stay where they are and they are called out. Captains and bowlers do not know where bowlers should be bowling. That was very evident last week. When the captains decide where their bowlers are bowling, they do not know how to set the field for their bowlers. If they are bowling down the leg side, they put the fielders on the off side and vice versa. Those are elementary observations. I never thought I would have to point them out.
The noble Viscount, Lord Astor, will reply, I am sure, with his usual aplomb, courtesy and concern. I beg of him to ask the Department for Education to stop talking absolute balderdash about the number of PE teachers in schools. We do not have enough PE teachers and it is no good saying there are enough to go round. I have been connected with Carnegie College for some years now. That is the oldest of our PE colleges. That college is trying to run a course for

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curriculum leaders but there is a shortage of funds. The staff at the college have informed me that the biggest problem they face is not being able to offer in-service training of primary school teachers as they do not have the funds to do so.
I now turn to the national curriculum. What we need is a strong statement from the Government on the philosophy and the purpose that they envisage for physical education within the school curriculum. We do not have such a philosophy and we suffer as a result. What do the Government perceive as the role of PE in schools and what do the Government perceive as the purpose of sport in schools?
A member of my family is a teacher and she has told me that in her school the ludicrous tests and the preparations for them which we have all heard about meant that all PE was abandoned during the period when the school was obsessed with preparing for the tests. The tests were not conducted but they nevertheless had to be prepared for. That shows that PE is not acknowledged as playing a central role in the development of the child. As I have reminded the House on a previous occasion, when Rab Butler's Act was passed physical education and religious education were the two compulsory subjects in the curriculum, as it was considered that they dealt with the spiritual and physical development of the child. Rab Butler got the matter right and we have been going downhill ever since we abandoned his principle.
As regards local government and schools, I believe the Government's policies are undermining their own purpose. Young people are being priced out of sports facilities as a result of Government policy and the cut-backs in local government spending. There can be no doubt at all about that. Playing fields are being sold off at a time when we have massive unemployment among young people, with delinquency, as my noble friend Lord Dean pointed out, and vandalism in our societies and communities. There is no proper maintenance of these sports facilities. I draw to your Lordships' attention that this is an inevitable result of the compulsory tendering regime. What is happening now in all our local authorities—I ask the Minister to take this point back—is that, if you say you are going to have compulsory tendering of management, maintenance, grass mowing and so on, then when people have to find savings all those areas in sports recreation will be denied to us, because they will often be put out to the private sector. I am not arguing that case at the moment: all I am saying is that the inevitable result is that spending in local government is very much restricted. Consequently, cuts fall on development work, coaching and the teaching of skills and on holiday courses and work for the disadvantaged such as we have been talking about, together with the unemployed, and so on.
I move rapidly on to the role of school sports associations, which I have talked about on many occasions, in this House and in the other place. The help of school sports associations is essential for all sports provision in the community and for our national teams. It is now almost an impossibility to find teachers who will turn out in their spare time on Saturday afternoons or evenings during the week
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because such a feeling of alienation has grown up between the Government and the teaching profession. It started, incidentally, with a decision of the Government that teachers have to clock in. I think they have to do a certain number of hours during the year—I believe 1,400 hours—and teachers are saying, "I have been giving my service to school sports on Saturday mornings and Saturday afternoons for years and I am now told that that is being discounted and I have to do 1,400 hours. I will do those hours, and I will not do any more." We have a chronic crisis in school sports associations. I would ask the Government to consider what they are going to do about this and how they are going to get the teachers back into running school sports and specialist team sports, athletics and so on.
I would like to say one word about the national lottery, of which I am a great supporter. The problems of local authorities now relate not to capital projects but to revenue considerations. We are told that most of the money from national lotteries will go on capital projects. As I have said on other occasions, every capital project has a revenue consequence, and you cannot depart from the revenue consequence. The biggest need for local authorities at the moment is to put right all the facilities that have been built since the war, which are crumbling. The facilities that are decaying can only be dealt with by revenue money. We do not need any more capital projects, or very few of them. We do not need many capital projects built for most of our local authorities. We need to employ coaches and to buy equipment. We need to have maintenance and we need to open up with the Sports Council rating relief; and we need to raise money in ways that have been suggested.
My final point is that we cannot avoid the cost of sport and recreational policy. When I was a Minister I had an exercise done—I think it was at Huyton, near Liverpool, which my noble friend will know well—on finding the cost to the community of dealing with all the damage, the delinquency and vandalism on that estate. It was necessary to find how that equated with the amount of money spent on sports and recreational facilities on that estate. The answer was outstanding: it was that we were spending money on repairing broken windows and all sorts of damage to facilities because we were not spending money in the first place to get people happily engaged in healthy sport, which is the way to terminate delinquency. We have to have more policemen on our forces, and on our beats. But how much better to have young people doing constructive tasks so that we do not need so many additional policemen on the beat.
There can be only one choice facing the country with regard to sports and recreation in the community. It is an absolutely essential service. There is only one way to deliver such a social service. It is through the local authorities. I again congratulate my noble friend for bringing that important point to the attention of the House.
9.21 p.m.
Lord Donoughue: My Lords, I apologise that my name was erroneously omitted from the list of speakers. I am sorry that my intervention adds 25 per cent. to the list and takes us to a later hour. It is a cosy gathering. One feels that we might more conveniently and convivially have met in the bar. However, I am confident that the quality of speeches more than compensates for the absence of quantity.
First, like my predecessor, I thank my noble friend Lord Dean for giving us the opportunity to debate sport. I agreed with all that he said, especially his stress on the base of the pyramid. Sport, as we would all agree, is an issue which concerns a wide range of citizens from all walks of life. A healthy society, both physically, mentally, socially and even medically, is one which has a vibrant sporting life.
There are many aspects to sport and to this Question. A number have been well addressed by my noble friends Lord Dean and Lord Howell. My noble friend Lord Howell especially speaks with more knowledge and experience than anyone in either House of Parliament.
Of particular importance are the roles of sport in relation to the nation's health and as a way of improving the social behaviour of our youth. It is not even financially sensible to save money by cutting sports facilities and then to have to spend 10 times as much on juvenile vandalism. However, I wish to focus especially on the impact of central and local government on the nation's sporting landscape.
I was a member of the original Sports Council set up by my noble friend Lord Howell nearly 30 years ago. We were excited and inspired then by a new vision of expanding sports facilities and sport access to the whole nation. I give two examples. One was the drive to build multi-purpose sports halls; barely a dozen then existed. In the next two decades some 1,500 were built. We were also deeply concerned that local authorities should open facilities, in particular in schools, to wider dual use.
I fear that some of that momentum has been lost. The local authorities, always the engine-rooms of sports provision in this country, have been squeezed particularly hard in that area. Spending on sport has been cut by 25 per cent. from £600 million to £450 million between 1987–88 and 1991–92. Further cuts are expected. Overall sports and recreation budgets were 5.1 per cent. of expenditure in 1987–88 and by this year are down to 4.3 per cent.
According to a recent Sports Council analysis, the United Kingdom spends one-third less on sport than any other EC country except Portugal. That is a disgrace and a betrayal of British sport. Public money matters. When applied to sport it is an investment, not only in sport itself but in the activities which relate to sport—tourism, media technology, and so on. It also pays off for the national Treasury. The Sports Council estimates that the Treasury receives £3.5 billion annually in tax revenue on sport and sports-related activities. That is seven times what it spends on sport. Adequate grants to sport are an investment in the nation's health, leisure and its industry.
Sport is basically a vital part of our quality of life.
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Yet in simple health terms, as my noble friend Lord Dean pointed out, the White Paper The Health of the Nation found that 70 per cent. of men and 91 per cent. of women do not take sufficient exercise for a healthy lifestyle. As I think he pointed out, 13 per cent. of boys and 10 per cent. of girls—and, I imagine, a much larger percentage of the Government Front Bench—were classified as overweight. How much of that is due to the absence of convenient and accessible public sports facilities?
The situation in schools is particularly worrying and that was quite rightly stressed by my noble friend Lord Howell. The 1991 report of the National Association of Head Teachers established that 56 per cent. of all schools said that they had insufficient sports facilities to conduct the new PE curriculum. The 1990 report of the Secondary Heads Association shows that three-quarters of their children have less than two hours of sport and physical recreation a week. I personally know, from experience with my own children at an inner London comprehensive school, how unsatisfactory sports provision can be. And it is getting worse. The Secondary Heads Association report to which I referred stated that 70 per cent. of state schools had suffered a decrease in extra-curricular activities in recent years. One reason for that deterioration is the policy of selling off local authority playing fields, made easy by the Government's 1981 regulations.
The CCPR estimates—as my noble friend Lord Dean mentioned —that £100,000 worth of sports fields are being sold off a day by local authorities. As he said, they received £65 million for the sale of sports facilities in the last recorded year for which we have figures. How can this massacre of facilities, as he quite rightly said, be justified? It is reversing our policies of expanding sports provision carried out by governments of both parties in the previous quarter of a century.
This difficult and undesirable situation is made worse again by the new provisions that where schools have dual use facilities, the schools alone are deemed to control them. I think that is bound to deter local authority and community efforts to establish such dual use facilities. Once more, that reverses the important and often difficult progress made in the field over previous decades. Dual use is an integral part of the Sports Council's policy for Britain. I should like the Minister to say something tonight to give us reassurance on dual use in the future.
The whole nation is concerned at Britain's present sports performance at national level, as my noble friend Lord Howell mentioned. Our cricket is depressing, our tennis is virtually non-existent at Wimbledon level, our Olympic performance is mediocre, our soccer is embarrassing. Tonight we tremble at what will happen across the Atlantic; one wonders, will our national team revert to the ancient habit of actually passing to its own side? But captains and team managers get the blame.
A nation's sport flowers only if its roots are properly nurtured. If we neglect the grassroots of our sport which are basically in our schools and the local clubs, then we are certain to do badly at the top. That

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is why we must halt the neglect and decline of public provision for sport. That is why we must invest, not only in Manchester for the Olympic 2000—though we must certainly do that—but also in our youth who will be competing at the Olympics and on football and other sporting fields long after that. We must not focus only on the Olympian heights. The needs of ordinary, everyday sportsmen with no pretensions to such high levels are of equal importance in our society, as my noble friend stressed.
I might add, since the national lottery has been mentioned, that it would be quite wrong to assume —as the noble Lord, Lord Addington, said, in what I thought was an excellent speech—that the new national lottery will perform miracles in this field. In this House we shall have other opportunities to discuss that point. But I stress that the lottery is supposed to be new money, additional to normal sports expenditure. I look forward to the Minister's reply to the question of my noble friend Lord Howell regarding the stress on capital projects and the need for current assistance. I should also like to ask him, in relation to the Manchester Olympics, what happens to the money that we have been told has been set aside for Manchester's bid if that bid fails? Will it be used for other sports? We should like the Minister to give us some assurance on that point.
But we need not be all doom and gloom about sport. Millions of people up and down Britain derive great pleasure each week from participating in and watching sport of all kinds. I may say that my noble friend Lord Peston (I am told privately, and perhaps it is unfair to reveal it publicly) even derives pleasure from going to Highbury to watch the Arsenal.
I am deeply concerned that the great progress made in national sports provision over recent decades is being jeopardised by—if I may quote what Mr. Lamont said in another place today when he denounced it—this Government's short-termism. I look forward—I have to admit more with hope than expectation—to some reassurances from the Minister. Above all, I think that we would all welcome a clear statement of the Government's attitude to nurturing sport at the grass roots, and especially in the schools.
9.31 p.m.
Viscount Astor: My Lords I welcome the opportunity provided by the noble Lord, Lord Dean of Beswick, to set out what this Government are doing to improve and increase public sports facilities. As always, we have had an interesting debate. I was intrigued by the noble Lord, Lord Howell, until I looked him up in Dod's and saw that he was a Minister in the Department of Education and Science from 1964 to 1969. I then understood how he equated our success in the 1966 World Cup with an increase in Labour's majority in the election that followed. It is a good line and I enjoy it. But I have to deal with the present day in 1993.
I always thought that to the noble Lord, Lord Donoughue, sport was a day out at Towcester race course. So I was delighted to discover his interest in and knowledge of some of the other sports in which he and I are also interested.
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The Government are doing much in the area of sports facilities of which they can be justly proud. It would be wrong to concentrate solely on the provision of new facilities, as some noble Lords have said. Of perhaps greater importance is to make better use of what we have by attracting more customers. This means improving the sensitivity of management to customer demands and the quality of what is provided for any given price. Before the taxpayer is asked to pay more for additional facilities, or the private sector has the confidence to invest in partnership arrangements, they are entitled to see value for money demonstrated in what is already provided and in how it is managed.
I should like to pay tribute to what local authorities have provided in recent years in the leisure field. There has been a considerable increase in sports facilities over the past 10 years; in particular, increases in the number of sports halls and leisure centres. The number of public indoor swimming-pools in England has increased from 964 in 1981 to 1,050 in 1990. There are now over 1,500 sports halls and leisure centres in England compared with just 771 in 1981–82. There were only 30 artificial pitches in England in 1981, where now there are nearly 300. Of course, there have been unfortunate examples of out-of-date and expensive facilities being closed as part of a replacement and rationalisation programme, and in some cases as a result of poor management. But overall as these figures demonstrate, there has been a very substantial increase in the number of sports facilities open to the public.
It is sometimes alleged that playing fields are being sold off at an alarming rate to the detriment of both existing and future sports provision. There is no firm evidence to support such a view. My department granted the Sports Council some El million in 1991–92 to carry out for the first time a comprehensive survey of playing field provision to be up-dated on a continuing basis—a register. The results should be available later this month. Our policy remains firm that before playing fields are disposed of by local authorities, the local authorities should take account of long-term community needs. The Government and the Sports Council have been playing their part in improving the quality and competence of management, which is essential if the quality of provision is to be increased.
I would like briefly to refer to some of the incentives and measures available to leisure managers to increase efficiency and improve their services. One of the tools which managers can refer to is the Citizen's Charter. Its six key principles are: published standards of service; customer views to be taken into account in setting those standards; clear information about the range of services to be provided; courteous and efficient customer service; well-signposted avenues for complaint with independent review whenever possible; and independent validation of performance against standards and a clear commitment to improving value for money. We have had a very positive response to the Citizen's Charter guidelines.
A recent most important development was the introduction of national vocational qualifications launched last November in the sport and recreational

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field. The new qualification and occupational standards should provide a framework for the development and training of staff and volunteers in the sport and recreation industry on a par with opportunities in all other sectors of the economy.
This initiative has encouraged a new unity. In addition to the education and training consortium which has been set up by leading sports organisations to promote the implementation of NVQs, an important further step has been the development of the "Running Sport" initiative, planned jointly by the Sports Council, the British Olympic Association, the National Sports Development Centres and the British Association of National Sports Administrators.
Let me turn to competitive tendering, an issue raised, among others, by the noble Lord, Lord Howell. Competitive tendering for the management of sports and leisure facilities is an example of where it is now increasingly accepted by the private sector that there will be circumstances in which the in-house team can do a better job that it could do. Conversely, there are examples of where the public sector has much to learn from the private sector. Initially there were fears on the one side that local government invariably kills initiative and on the other that the profit motive is incompatible with a high quality of service. Both those fears were exaggerated. Compulsory competitive tendering has succeeded in stimulating a positive review of local authority practices and improved efficiency in the sphere of leisure management, whether performed in-house or externally.
Despite the recent troubles in Oslo, the past two years represent a turning point for football in Britain. Prompted by the appalling tragedies at Bradford and Hillsborough, and the subsequent report into football by Lord Justice Taylor, the football authorities and clubs have recognised the need to put right the damage caused by years of neglect and to turn football stadiums into facilities which we as spectators can be proud of as we enter the next century. Earlier today I was in Bath, addressing the Institute of Building Control, which over the next few days will be looking at safety issues in football and in sport.
I should like to turn to resources and the resources available to local authorities and to other and new sources of provision. That is a point brought up by the noble Lords, Lord Addington and Lord Donoughue. Provisional indications are that gross capital expenditure by local authorities in England increased from £161 million in 1986–87 to £240 million in 1992–93.
Local authorities in England and Wales are entitled to spend nearly all—rather than a proportion—of the capital receipts they realise between 13th November 1992 and 31st December 1993. Authorities are not obliged to spend the receipts during that period and can spend them on any kind of capital expenditure. That measure represents a substantial increase in local authorities' spending power. On the assumption that authorities' receipts continue at about the levels they themselves forecast for 1992–93, the concession should add about £1.75 billion to local authority capital spending in England and Wales. I hope that they are
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finding ways of putting those receipts to good use, including for sport and recreation projects which represent such a good investment both for the individual citizen and the community at large.
An important theme of the Government's approach to the provision of sports facilities is that we should move away from the concepts of separate local authority sports facilities and separate private sector commercial leisure. The Government are keen to encourage partnerships and many have already been created successfully. Charitable trusts can also be used to assist such partnerships and keep entrance fees low. That has been suggested by the commercial leisure operators represented by Business in Sport and Leisure in its discussions with the Association of District Councils and others.
It may be helpful to quote a hypothetical example. A local authority needs a new swimming pool, but has a site that is attractive to the private sector that could take a well-designed ten-pin bowling alley and other commercial facilities. The private sector acquires the whole site for development. It could then set up a charitable trust for the swimming pool which would be used to teach children to swim and be open to the public at large. All sectors of the community could be represented on the trust. The trust would be exempt from at least 80 per cent. of uniform business rate and by taking advantage of gift aid and covenants to reduce building costs, entrance costs could be kept to a minimum. The swimming pool would be a true community facility.
Grass roots sport in Great Britain has benefited by almost £3.5 million following the launch of the Government's Business Sponsorship Incentive Scheme for Sport or "Sportsmatch". Launched last November, the scheme aims to increase the amount of business sponsorship going into grass roots sport by offering pound for pound matching funding for new and extended sponsorships. In the difficult economic circumstances which companies were experiencing, even as we come out of recession, the Government were concerned at the impact on grass roots sponsorship of sport. Priority areas for the scheme are the. young, disabled people, ethnic minorities and deprived urban and rural areas. For Great Britain as a whole some £3.7 million a year is being put into the scheme of which £3 million is for England. After a small allowance for administrative expenses that should bring around £7 million per year of additional funding into grass roots sport.
I now deal with some of the points raised by noble Lords. The noble Lord, Lord Howell, asked what the Government are doing to promote sport in the school curriculum. PE, which includes sport, is one of the 10 foundation subjects in the national curriculum. The attainment target and programmes of study for PE were introduced for pupils in Key Stages 1 to 3 from August 1992. The introduction of PE for pupils in Key Stage 4, which is 14 to 16, will begin from August 1995.
The noble Lord, Lord Howell, was also concerned about the training for teachers to teach national curriculum PE. We want to ensure that initial teacher training courses are more closely related to the needs

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of schools and their pupils by improving the focus on national curriculum requirements. Most secondary school PE teachers are trained through undergraduate courses, ensuring that sufficient time is available for thorough training. We also intend that some primary teachers should undergo training which prepares them to become subject specialists or curriculum leaders in PE.
The noble Lord, Lord Dean of Beswick, asked whether the Government intend to do anything to address the inconsistencies which exist between local authorities in the area of discretionary rate relief. I sympathise with some clubs' concerns, given the variation in practice which appears to exist between local authorities in this area. However, local authorities value their independence a great deal, as I am sure the noble Lord, Lord Dean, realises far better than I do.
The Government's view is that the element of local discretion in the granting of rate relief is vital for ensuring that relief is targeted at more deserving cases, having regard to the interests of the local community. It is the Department of the Environment which has the responsibility for the current system of discretionary rate relief for voluntary clubs. In January this year, and at my department's instigation together with the Department of the Environment, Department of the Environment officials wrote to all charging authorities in England reminding them of the need to consider each case on its merits when granting discretionary rate relief and that failure to do so would leave them open to the risk of legal challenge. Furthermore, we reminded authorities of the advice in the guidance that they should consider notifying organisations of the reasons for refusal.
The noble Lord, Lord Dean, also asked me about VAT and the European directive. I understand that Customs and Excise are currently considering the position of non-profit making sports clubs under EC VAT directives. I am fully aware of the case made by sport and my department has made its views known to Customs and Excise.
The noble Lord, Lord Addington, asked why charitable status is not given to sport. The principle of charitable status for sport is a matter for the Chancellor of the Exchequer. The Government's position is that it would be wrong to single out sport in this way when there are other equally worthy causes which do not enjoy this benefit. But partly at our instigation, the Sports Council, in partnership with Touche Ross, has published an information leaflet on the benefits of charitable status and how to obtain it. Any sports organisation obtaining charitable status would qualify for mandatory rate relief at 80 per cent. The leaflet, which was published in March, should prove very helpful to sports clubs in their efforts to obtain charitable status within the existing legislation.
The noble Lord, Lord Donoughue, asked me what would happen if Manchester does not win its bid for
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the Olympic Games. We are not talking about losing. We are optimistic about Manchester's bid. The Government have backed Manchester's bid with money. We hope that Manchester wins its bid to hold the Olympics. But regardless of the decision of the IOC—none of us can forecast what that decision may be—Manchester will still get a new indoor velodrome, a multipurpose arena and an excellent development site in east Manchester. We will fulfil our promise to legislate for the protection of the Olympic symbols, which will provide long-term benefit for British sport. There are a great many other key decisions to be made but I think that these decisions are more appropriate to be made after the IOC announcement in September.
Your Lordships have brought up the national lottery. Sport will be fortunate in having a major new source of funding from the national lottery when it becomes operational by the end of 1994. The Government have decided to utilise the expertise of the Sports Council and the proposed new UK Sports Commission as the distributing bodies for the sports element of the proceeds. I am happy to give an assurance to the noble Lord, Lord Dean of Beswick, that control of costs will be a very important factor. The lottery funds will be an additional source of funding. The Government have always made that clear. We will have ample opportunity next Thursday to discuss the National Lottery etc. Bill in Committee Sport is a key area for my department.
Lord Howell: My Lords, before the Minister comes to his peroration—and I appreciate his expert contribution—can he at least take back for consideration the point, fiat the lottery should not be pre-eminently for capital works but that revenue consequences and revenue considerations should be much more to the forefront? I do not expect the Minister to give me an assurance now—and we shall certainly come back to this matter next week—but I do think that the Government need to rethink this point so that they get the balance right.
Viscount Astor: My Lords, I quite understand the points made by the noble Lord, Lord Howell. At Second Reading I said that we were looking at capital funding together with endowments and various options that might be available. It is a slightly complex subject all on its own and I believe that it probably deserves our considered opinion next week. I give the noble Lord an assurance that it is something which we are looking into very carefully.
As I have said, sport is a key area for my department. I agree with your Lordships about its importance, for the many reasons which your Lordships have mentioned. My department and the Government will play our part in the future of sport in this country.
House adjourned at ten minutes before ten o'clock.

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