Sitting of 23 June 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  MESSAGE FROM THE QUEEN

    DOUBLE TAXATION RELIEF
    The VICE-CHAMBERLAIN OF HER MAJESTY'S HOUSEHOLD reported her Majesty's Answer to the Address, as follows:
    I have received your Addresses praying that the Double Taxation Relief (Taxes on Income) (Uganda), (Ukraine), (India), and (Ghana) Orders 1993 he made in the form of drafts laid before your House. I will comply with your request.

  PRIVATE BUSINESS
    DAWAT-E-HADIYAH BILL
    Lords amendments agreed to.
Oral Answers to Questions
  TRADE AND INDUSTRY

    Trading Standards Officers
    Mr. Gerrard: To ask the President of the Board of Trade what assessment he has made of the impact of local government reform on the work of trading standards officers.
    The Parliamentary Under-Secretary of State for Technology (Mr. Patrick McLoughlin): The aim of local government reform is to improve the accountability, efficiency and effectiveness of all local government services.
    Mr. Gerrard: Does the Minister accept that an increase in the number of local authorities with trading standards powers will mean their having to set up their own specialist teams to deal with specific sectors of trade? How does he intend to ensure that that does not exacerbate the current national shortage of qualified trading standards officers, and that the money will be available to provide the extra numbers required?
    Mr. McLoughlin: The hon. Gentleman prejudges the Local Government Boundary Commission. That is a dangerous thing for him to do. I am aware of concern about small unitary authorities providing training standards services. However, the reform process involves extensive consultation and affords an ample opportunity for any potential difficulties to be anticipated and solutions developed. The hon. Gentleman's own borough council is a unitary authority, and perhaps he is concerned because it does not provide a good service. That would not be surprising, as it is Labour controlled.
    Mr. Waller: Is my hon. Friend aware that the joint committee arrangement that enables the five districts in West Yorkshire to run a combined countywide trading standards service is regarded as successful? Does he agree that the range of expertise required to fulfil the wide responsibilities that trading standards officers have these days makes the economies of scale afforded by joint arrangements most valuable, and that that should be considered in the context of the Local Government Commission's recommendations?
    Mr. McLoughlin: I am grateful to my hon. Friend. His example shows how joint arrangements can work successfully. The matter can be considered in the context of the proposals of the Local Government Commission, when the House eventually decides on them.
    Mr. Nigel Griffiths: Does the Minister realise that when the Government abolished the metropolitan county councils there was a surge in consumer frauds, counterfeit goods and activities by loan sharks? Does he recall that Tory councils, such as Westminster today, have slashed their budgets for consumer protection? Will he answer the question that my hon. Friend the Member for Walthamstow (Mr. Gerrard) asked: what will he do to ensure that the 220 vacancies for professional trading standards officers are filled immediately?
    Mr. McLoughlin: That is a damning indictment of Barking and Dagenham, Camden, Greenwich, Hackney, Hammersmith and Fulham, Haringey, Hounslow, Islington, Lewisham, Merton, Southwark and Waltham Forest, which are all Labour controlled. Is the hon. Gentleman saying that those authorities are incompetent in carrying out their duties?

    Manufacturing (North-East)
    Mr. Mandelson: To ask the President of the Board of Trade what plans he has to strengthen the manufacturing base of the north-east.
    The Minister for Industry (Mr. Tim Sainsbury): My Department's policies and programmes are aimed at strengthening the manufacturing base of all regions.
    Mr. Mandelson: Is the Minister aware of the high expectations among people in the north-east of the Government's new industry policy following the Chancellor's Mansion House speech last week? When the Chancellor was asked for details of that policy at Question Time last Thursday, he said that he could not pre-empt the work of the President of the Board of Trade. What would the Chancellor have been pre-empting?
    Mr. Sainsbury: I hoped that the hon. Gentleman would recognise what was done for industry in the recent Budget of my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont), which was much appreciated by industry. I am sure that the hon. Gentleman is also well aware of the initiatives that my Department has taken and is continuing to take in dialogue and partnership with industry to broaden and strengthen Britain's manufacturing base.
    Mr. Bates: Will my right hon. Friend join me in congratulating the 50 north-east manufacturing firms that met in Middlesbrough on Monday of this week to launch the Teesside Manufacturing Challenge? Is he aware that

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    that excellent initiative is a self-help initiative designed to fund manufacturing apprenticeships at the excellent Teesside Training Enterprise, Ltd., which already provides similar apprenticeships for more than 600 young people in the region? Is not that further evidence, if it were needed, of the dynamism, vitality and foresight of manufacturing industry in the north-east?
    Mr. Sainsbury: It is indeed, and I am happy to join my hon. Friend in congratulating the private sector on the initiative, which has the ambitious target of doubling manufacturing output and has rightly identified training as one sector which needs attention and improvement if the target is to be met.
    Mr. Jack Thompson: Is the Minister aware of the vast number of skilled personnel in the northern part of the northern region who are unemployed? The result is that skills related to the shipyards, mines and heavy engineering are now decaying as there are no longer the skilled personnel to pass on their skills. That is a major problem in that part of the region along the Tyne valley and Northumberland, which is not receiving the necessary response from the Government. I accept the comments of my hon. Friend the Member for Hartlepool (Mr. Mandelson), who represents a constituency in the southern part of the northern region. Instead of Ministers making a two-hour visit to the region—which the Minister and his colleagues have done—would it not be better if they visited the region, perhaps during the recess, for two or three days or even two or three weeks to discover the truth of the northern region?
    Mr. Sainsbury: I know that the hon. Gentleman is concerned about such issues. He will be aware that there has been too high a level of unemployment in that region for a long time—since before the last world war. We have discussed the issue and my hon. Friend the Minister for Energy has been to look at the position on the ground, and will be visiting the district again soon. We shall continue with a range of initiatives, about which the hon. Gentleman is aware, to do all that we can to help to provide employment opportunities for those wanting jobs in his region and throughout the north-east.
    Mr. Devlin: Is my right hon. Friend aware of the high concentration of manufacturing businesses in the north-east of England that have already achieved BS5750? Is that not part and parcel of the excellent initiative that the Government have pursued in bringing one third of all inward investment to the European Community into this country? The emphasis on quality, which is now moving through north-east manufacturing business at all levels, will enable them to compete much more strongly in future.
    Mr. Sainsbury: My hon. Friend is right to identify the importance of quality as one way in which we can achieve success for our manufacturing industry. He is also right to recognise the contribution to jobs in the north-east made by inward investment. That contribution will continue to be made by inward investment, because the Government believe in promoting it.

    Post Office
    Ms Estelle Morris: To ask the President of the Board of Trade when he expects to make a statement on the future of the Post Office.
    Mr. McLoughlin: No decisions have yet been taken on the future organisation and structure of the Post Office; a statement will be made to the House once decisions have been taken.
    Ms Morris: Does the Minister realise how unsatisfactory his reply is? Does he further realise that we have been waiting almost a year for the Government's plans on the future of Parcelforce and the structure of the Post Office? Does he accept that that unjustfiable delay is the worst possible environment for the Post Office to operate in? Will he take this opportunity to acknowledge that the Post Office is popular, successful and profitable, and that the best way in which he can help it is to leave it alone?
    Mr. McLoughlin: It is rather typical of the Opposition to oppose any changes. They are following their usual practice of opposing the changes that we have introduced in the nationalised industries and nationalised structures over the past 14 years. It is rather a pity that the hon. Lady did not take time to praise the Post Office for the way in which it showed increased profits yesterday and announced a very good annual report.
    Mr. Dover: Is not it true that the Post Office is currently constrained in its ability to invest because it has to compete with other nationalised bodies? Is not there a real risk of the sub-post office network closing because there are restrictions on what those post offices are allowed to do? Would it not be by far the best bet to opt for privatisation, when all those restrictions will be removed?
    Mr. McLoughlin: I am grateful to my hon. Friend. As I have said, we are still considering several points. With regard to Post Office Counters Ltd., of the 20,000 post offices, 19,000 are in private ownership.
    Mr. Malcolm Bruce: Will the Minister recognise that a new pressure group for the Post Office was launched last week called PPS—Protecting Postal Services? That pressure group has been founded because there is widespread concern about the Government's intentions in relation to the future of the Post Office. Would not it he helpful if the Minister relaxed the external financing limits so that the Post Office can invest? The Minister lifted restrictions to allow sub-post offices to develop their services. However, further delay on the ideological privatisation of the Post Office is not what is needed: what is needed is the continuation of the service that is so necessary for urban and rural communities throughout the United Kingdom.
    Mr. McLoughlin: I am not quite sure what the hon. Gentleman is talking about, because 19,000 of the sub-post offices are already in private hands and therefore have no restrictions whatsoever.
    Mr. Page: I congratulate the Post Office on its recent and most successful figures, but when my hon. Friend the Minister considers the future of the Post Office, will he set in place a structure that will attack the present estimated deficit of some £400 million to £500 million in losses through fraud and organised crime in respect of the distribution of benefits and pensions?
    Mr. McLoughlin: I am grateful to my hon. Friend. His work on the Public Accounts Committee provides him with extra experience of these areas. The Government remain committed to the maintenance of a nationwide

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    network of post offices. It would not be appropriate at this time to prejudice contractual negotiations between Post Office Counters Ltd. and Government Departments. However, total Government business transacted by Post Office Counters Ltd has increased over the past three years and is expected to increase this year.
    Mr. Cousins: Does the Minister accept that it is a disgrace that, after a year, no conclusions have been reached and t here have been no statements to Parliament? How does he propose to celebrate the first anniversary of the Post Office review—with the price hikes, loss of investment and export business and the loss of tens of thousands of jobs which the chairman of the Post Office predicted yesterday? Is not the Government's policy on the matter now a combination of fumble, fright and fat fees for consultants while the British people, the British Post Office and British business suffer?
    Mr. McLoughlin: No.
    Sir Michael Grylls: Does my hon. Friend agree that the best way to improve the service from the Post Office is to encourage competition? What plans does my hon. Friend have to do just that?
    Mr. McLoughlin: I am grateful to my hon. Friend. As I said earlier, we are considering a number of options in the review. Some of the points that my hon. Friend has made will be very much borne in mind.

    Warship Yards
    Mr. Clelland: To ask the President of the Board of Trade what plans his Department now has to ask the European Commission for access to the intervention funds for British warship yards; and if he will make a Statement.
    Mr. Sainsbury: I asked Commissioner van Miert on 26 May to reconsider the circumstances under which British warship building yards might become eligible for the shipbuilding intervention fund.
    Mr. Clelland: It is regrettable that the President of the Board of Trade cannot be here to deal with this matter and we sympathise with him about his illness—[HON. MEMBERS: "Oh!"]My hon. Friends must be patient. 'There are thousands of people in this country whose health has also suffered as a result of 14 years of Tory Government, but they are not being looked after quite as well as the President of the Board of Trade.
    Is the Minister aware that what the people of Tyneside now want from him is direct action? He should get across to Brussels, speak to the Commission and obtain the preventive medicine which is needed to relieve the stress on the workers of Swan Hunter. As the Minister's right hon. Friend the President of the Board of Trade will no doubt now confirm, it is far better to prevent collapse in the first place than to have to live with the hope of recovery afterwards.
    Mr. Sainsbury: I am grateful for what the hon. Gentleman said about my right hon. Friend—I am only sorry that he ruined it by what he said subsequently. As for Swan Hunter's eligibility for the shipbuilding intervention fund, I wrote to the Commissioner. I have not yet had a reply to my letter. I hope that it will be a reply in the affirmative. If it is not, I shall certainly be ready to go to Brussels to discuss the matter with him, because I share the
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    hon. Gentleman's belief that eligibility for the shipbuilding intervention fund would help the receiver in his task of finding a buyer for the Swan Hunter yard.
    Mr. Wilkinson: Has not Swan Hunter had a unique capability among British yards over the years in being dual-capable, inasmuch as, in addition to building some of the very best warships that the Royal Navy has ever received, it has built geographic survey vessels for the Antarctic, cable-laying ships and auxiliaries? In those circumstances, how can the Commission of the European Community rightfully deny intervention funding to that yard? Is it not about time that Her Majesty's Government did what is in the interests of the British shipbuilding industry and the British nation, rather than always acting at the behest of Brussels?
    Mr. Sainsbury: I am sure that my hon. Friend would like the Commission to exercise restraint in giving state aid in other countries of the Community. Quite rightly, the shipbuilding intervention fund is regarded as a state aid and is, therefore, controlled under the seventh directive. If we were to go against the arrangements, we should be doing what we sometimes rightly complain about other countries doing.
    My hon. Friend will also be aware that the arrangements under which warship building yards are not eligible for the shipbuilding intervention fund were approved by the Commission in 1985 because we had considerable state aid to the shipbuilding industry at the time, which we agreed with the Commission on the understanding that warship building yards would not be eligible for the shipbuilding intervention fund. I have approached the Commissioner now because I believe that the circumstances have changed sufficiently to justify reconsideration of that ruling.
    Mr. Bell: The House will welcome the Minister's reply to my hon. Friend the Member for Tyne Bridge (Mr. Clelland). The Minister will know that there are those who wish to buy Swan Hunter's yard. Will he confirm that Swan Hunter has a role to play in the building of warships and merchant vessels? If he could see Commissioner Karel van Miert very early on, he would give the country and the people of the north-east the impression that his Department is serious, anxious and positive about the matter.
    Mr. Sainsbury: As the hon. Gentleman knows, the receiver has received a number of strong expressions of interest from reputable parties for the Swan Hunter yard. We are keeping in the closest possible touch with the receiver and we will certainly do all that we can to help him in his task of finding a buyer. I recognise that the Swan Hunter yard has had great achievements in the past and has great skills in the present which could be used in warship and merchant shipbuilding.

    Trade Trends
    Mr. Dickens: To ask the President of the Board of Trade if he will make a statement on recent trends in (a) exports and (b) imports; and if he will make a statement.
    Mr. McLoughlin: In the past 12 months, export volumes of goods have risen by 6–6 per cent., while imports have risen by only 5 per cent. This sustains the marked improvements in our export performance in recent years,

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    and I know that United Kingdom exporters will build on those gains as they reap the benefits of our improved competitiveness.
    Mr. Dickens: Does my hon. Friend believe that those encouraging figures are based on the advantage that the United Kingdom has from the floating pound, or is it possible that some British companies are selling abroad at a favourable price because of the shallow domestic market—in other words, dumping? If that is the case, I would be a very happy man. We would be giving many nations a taste of their own medicine, which the textile companies in my constituencies have received for many years.
    Mr. McLoughlin: I am not sure whether I would go along with my hon. Friend in respect of United Kingdom companies dumping. United Kingdom companies are winning export markets in very competitive areas, and I am sure that we all welcome that.
    Mr. Purchase: Despite the Minister's assurances on exports, is not it true that, although there has been a welcome start of a recovery in manufacturing, imports are set to grow at twice the rate for exports that was given by the Minister? Is not that due entirely to the Conservative party's antipathy to manufacturing and the wipe-out of capacity that has taken place during the past 13 years of their rule?
    Mr. McLoughlin: It will come as no surprise to the hon. Gentleman that I neither follow nor recognise his figures. The hon. Gentleman talks about a reduction in manufacturing. He represents a Wolverhampton constituency, and will remember well that British Steel Bilston closed down under the last Labour Government.
    Mr. Batiste: Is not one of the most important factors in our improving export performance the fact that, over the past decade, we have had the lion's share of inward investment into the EC? Is not it time that we acknowledged that the best companies in the world believe that Britain is the best place in Europe in which to manufacture?
    Mr. McLoughlin: I agree entirely with my hon. Friend. My constituency benefited from a huge inward investment of £770 million from Toyota. That investment could have gone anywhere in Europe, but Toyota chose the United Kingdom because it recognised this country as the best place to invest.
    Ms Short: Will the Minister admit that we have a disastrous problem in the British economy, as we are losing £1 billion on our balance of payments every week? After 14 years of Tory rule, the British economy is in deep crisis because our manufacturing—[ Interruption.]Conservative Members should not be so ignorant. These are the facts. The British economy is in deep crisis and the strategy of the Government towards manufacturing has been a disaster. The economy will not prosper unless the Government adopt an industrial strategy that will encourage long-term investment in manufacturing. Will the Minister admit that that is the truth and say whether the Government have any strategy to deal with the crisis?
    Mr. McLoughlin: We had a very good debate only the other Friday about the factors contributing to Britain's
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    competitive advantage. Between 1974 and 1979, our competitiveness fell dramatically, and the Government have gone a long way towards improving the position.
    The hon. Member for Wolverhampton, North-East (Mr. Purchase) referred to exports. Compared with the first quarter of 1993, exports of medical and pharmaaceutical equipment are up by 28 per cent; of power generation equipment by 42 per cent; of office machinery by 45 per cent; of machine tools by 47 per cent; of radar equipment by 60 per cent; and of computer hardware by 70 per cent. I should have thought that even the hon. Lady would regard that as good news.
    Mr. Butcher: Does my hon. Friend agree that, of all the countries in the European Community, Britain more than any other shares with the United States a common attitude and a common policy to free trade? Does he therefore agree that Britain is uniquely placed to lead a discussion with the United States Government on the creation of a North Atlantic free trade area encompassing north America and the EEC, which would have the advantage for us of stimulating the western coasts of western Europe and for the Americans of stimulating the north-eastern seaboard of America, which is currently a depressed area?
    Mr. McLoughlin: The Government believe in removing or minimising all obstacles to trade. We will certainly consider my hon. Friend's suggestion.

    Consumer Guarantees
    Mr. McKelvey: To ask the President of the Board of Trade if he will give the date on which he received the last representations on consumer guarantees; and when he expects to announce the results of his consultation.
    Mr. McLoughlin: The last response was received in April of this year. However, the Director General of Fair Trading has embarked on a further study of consumer guarantees, and the EC Commission is also preparing a discussion paper. We have thought it best to await the outcome of these initiatives before making any announcement ourselves.
    Mr. McKelvey: For heaven's sake, the DTI has been sitting on these responses since October—it has had nine months in which to consider these matters. Does not the Minister feel that British firms would gain an advantage if we had proper and effective consumer guarantees? We should then be more than able to compete with the import of foreign goods and thus do something to help our balance of trade deficit.
    Mr. McLoughlin: Since April, when representations were last made, a number of matters have moved on, and we have thought it best to await the outcome of the initiatives that I described to the hon. Gentleman.

    Business Regulation
    Mrs. Ann Winterton: To ask the President of the Board of Trade what steps he is taking to remove unnecessary administrative and regulatory burdens on businesses.
    The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): Departments are conducting comprehensive reviews of regulations for which they are responsible and will shortly provide me

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    with their candidates for repeal and simplification. Seven private sector business task forces are producing their own hit lists, which I hope will be radical and extensive.
    Among many other initiatives, we are determined to force EC institutions to recognise the job-destroying effect of over-regulation from Brussels and roll back the tide of Euro-regulation.
    Mrs. Winterton: Is my hon. Friend aware that regulation is stifling business? Does he agree with the Institute of Chartered Accountants, which seeks to abolish burdensome auditing requirements on small firms? Is he aware that, when businesses register for value added tax, they are sent a 180-page hook, a 20-page leaflet, a 17-page leaflet, a 14-page leaflet, a 12-page leaflet and two six-page leaflets, all of which warn of dire consequences if the contents are not fully understood? When do the Government intend to put their money where their mouth is and reduce burdensome regulations on business?
    Mr. Hamilton: I congratulate my hon. Friend on her enthusiasm for the cause which I have embraced. I am most grateful to her for coming to the House today with that catalogue to demonstrate to hon. Members on both sides of the House the difficulties that small companies must endure before they can even get on with the business of trading at all. As my hon. Friend will know, there is a consultation exercise under way at present, which we hope will lead to the removal of an important but unnecessary regulation the requirement for a compulsory audit for small companies. I am most grateful to my hon. Friend for the strong support that she gives to this worthwhile cause.
    Mr. McAllion: Is the Minister aware that, if the Government persist with their policy of promoting inward investment on the back of reducing what they call the burdens of labour and social costs, they will find themselves in competition with the likes of Thailand, where the social costs are so low that health and safety regulations are generally ignored and where recently more than 200 workers lost their lives in a factory fire? Does the Minister understand that although that policy may make Britain a place in which it is easy to do business, it will also make it a place in which workers' lives are held to be cheap and of no account'? Labour Members want no part of that strategy.
    Mr. Hamilton: The Government are concerned with inward investment. What the hon. Gentleman and his party would produce is not only outward investment but the export of jobs. As the Member for Dundee, East, the hon. Gentleman has significant experience in these matters because, as a result of his neanderthal attitude and that of the Transport and General Workers Union, a large number of jobs that would otherwise have gone to Dundee did not go there.

    Manufacturing Base
    Mr. Nicholas Winterton: To ask the President of the Board of Trade what steps he is taking to prevent the erosion of the United Kingdom's manufacturing base.
    Mr. Sainsbury: The success of United Kingdom industry is the primary concern of my Department and all the policies of the Department are directed towards that end.
    Mr. Winterton: Although I warmly welcome my right hon. Friend's response to my question, is he aware that the United Kingdom continues to export its manufacturing base, whether in traditional industries or even in high-tech ones'? If he wants chapter and verse, I will give it to him. Does my right hon. Friend accept that the way in which the Government can improve the position of United Kingdom manufacturing industries, which are the only real source of genuine economic growth in this country, is to achieve a further modest reduction in interest rates, introduce 100 per cent. capital allowances and give my right hon. and learned Friend the Chancellor of the Exchequer every encouragement in his Mansion House speech to have a Budget in November for economic growth'?
    Mr. Sainsbury: I know that my hon. Friend has great enthusiasm for manufacturing industry, but I hope that he will not entirely neglect the contributions made to employment and, indeed, exports by other aspects of British business. He made suggestions which are, as he knows, matters for my right hon. and learned Friend the Chancellor. My hon. Friend referred to exporting our manufacturing base. I am not sure to what he is referring, but I hope that he will join me in congratulating British manufacturing exporters on their achievement in increasing exports by 6·5 per cent. last year in extremely difficult world trade conditions.
    Mr. Robert Ainsworth: Will the Minister accept that the Under-Secretary of State for Technology has a selective recognition of trade figures, because the deficit grew in April and May, with imports growing by 0·6 per cent. and exports falling? The basic cause of that is the size of our manufacturing base. When will the Government have some underlying strategy to improve the situation?
    Mr. Sainsbury: May we be clear about exports? Total exports, excluding oil and erratics—which is the most sensible way of looking at them—were at a record level in the first quarter of this year and 6·5 per cent. higher than a year earlier. Having said that, of course we all share the objective of broadening our manufacturing base and enabling British manufacturing industry not only to increase exports but to gain a larger share of the home market.
    Mr. Knapman: Will my right hon. Friend confirm that our manufacturing base will be helped by the initiative introduced by my right hon. Friend the President of the Board of Trade to cut red tape and bureaucracy? Is my right hon. Friend the Minister aware that, according to the Library, 265 new rules, regulations and directives will come from Brussels in the near future? Can we help my right hon. Friend best by supporting or by opposing those directives?
    Mr. Sainsbury: My hon. Friend is right to identify excessive regulation and over-zealous application of bureaucratic rules as damaging to all industry, but particularly to small industry. My hon. Friend the Under-Secretary of State for Corporate Affairs is doing a magnificent job. We all wish him the greatest success in wielding the axe against regulations that are unnecessary, excessive or over-bureaucratic, from whatever direction they come—Whitehall or Brussels.
    Mr. Bennett: Does the Minister agree that one of the most successful parts of manufacturing industry in Britain is our mining engineering equipment industry? Does he realise that it faces devastation of the home market as a result of so many rapid closures of pits? What does he intend to do to help it to win export orders, especially in eastern Europe where there is clearly a major need for mining engineering equipment?
    Mr. Sainsbury: I recognise that our mining engineering industry has considerable skills. My hon. Friend the Minister for Energy has met representatives of the industry and is working closely with the industry to help it at a time when obviously there has been a reduction in demand for deep-mining equipment in Britain and internationally.
    Mr. Clappison: Will my right hon. Friend join me in acknowledging the warm welcome that has been given by exporters of manufactured goods to the improvements in the Export Credits Guarantee Department scheme announced in the autumn statement and the Budget? Does he agree that those exporters who benefit from the scheme have a vital role to play in developing and sustaining our improving export trend?
    Mr. Sainsbury: I am happy to agree with my hon. Friend. As he knows, the announcement in the Budget of additional ECGD support followed earlier announcements at the end of last year and a reduction in rates by the Department earlier last year. There have been successive moves to improve the service provided by ECGD to our exporters. I am glad to say that our exporters have responded magnificently to that encouragement.

    Brewing Industry
    Mr. Wareing: To ask the President of the Board of Trade what representations he has received alleging abuses of monopoly power within the brewery industry; what his response has been; and if he will make a statement.
    Mr. Neil Hamilton: My right hon. Friend the President of the Board of Trade and I have received several representations about the brewing industry, but these have mainly been about the treatment of tenants. If the hon. Gentleman has any evidence of abuse of monopoly power or other anti-competitive practices, it is open to him to raise these with the Director General of Fair Trading.
    Mr. Wareing: Is the Minister aware of the so-called white knight policy administered by Inntrepreneur estates on behalf of Grand Metropolitan breweries, which seeks not only to circumvent the Government's Beer Orders but to extinguish the rights of its tenants in the brewery trade? Indeed, every year, 9 per cent. of those pubs go into bankruptcy. An examination of the document will show that the company's practice is sheer exploitation of the tenants and a dereliction of its duty under the Beer Orders. Will the Minister carry out a full public investigation into the activities of that brewery and that scheme?
    Mr. Hamilton: The Department was sent anonymously a copy of the document to which the hon. Gentleman referred. It has been examined by my officials. Following a minute examination of what it contained, they discovered no apparent breaches of the Beer Orders.
    As the hon. Gentleman will know, as a result of the intervention of Ministers, which secured sympathetic
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    treatment of the tenants of many companies—not only the one to which he referred—we have managed to secure a significant improvement in the lot of many people who were otherwise worried about the circumstances in which they found themselves. It must be in the interests of brewers to develop a constructive relationship with their tenants. I hope that Grand Metropolitan will continue in the course of action that Ministers have urged on it.
    Mr. John Greenway: Does my hon. Friend agree that, if there is one monopoly in the brewing industry that people should welcome, it is the small brewers of real ale? Does he agree that small brewers, such as Malton brewery in my constituency, provide an excellent beer for visitors to Ryedale during the summer months? If there is a problem in the brewing industry, we should address the Treasury about it to ensure that our brewers have fair and equal treatment under the tax regime affecting beer
    Mr. Hamilton: I am a great personal supporter of the British brewing industry. This evening, I shall attend the launch meeting of the all-party beer group and would welcome the presence there of as many hon. Members as possible to enjoy the wonderful product, unique to this country, which offers so much enjoyment and so many employment opportunities to so many people.
    Mr. Fatchett: When the price of beer has gone up above the rate of inflation, when consumer choice is still restricted and when many tenants are being pushed out of their home and business by the practices of companies such as Grand Metropolitan, why have the Government taken such a soft line with the brewers? Is the real explanation that the brewers have always been large donors to Conservative party funds and that Sir Allen Sheppard, the chairman of Grand Metropolitan. is a member of the management committee of the Conservative party? Is not this another case of the Government standing against small businesses and in favour of the vested interests that contribute to their funds?
    Mr. Hamilton: I think that it is the hon. Gentleman who sounds as if he is under the influence. I doubt very much whether his evaluation accords with that of the brewers, who certainly do not think that the Government have let them off lightly. As the hon. Gentleman would know if he bothered to examine the facts, in many respects there is more competition in the industry today than before the supply of beer report. The development of independent pub chains in the industry is significant and is a consequence of the Beer Orders. Does the hon. Gentleman know, for example, of the significant reduction in the amount of beer sold through tied pubs and that recently the wholesale price of beer has diminished significantly? Perhaps one reason why the retail price of beer has increased is that pub chains and, in particular, breweries that have maintained tied pubs have greatly increased the facilities available on their premises, the costs of which must be recouped.
    Mr. Ian Bruce: Having tried to implement the Monopolies and Mergers Commission report that suggested that our former regime was anti-competitive for beer, in trying to help the small brewers, surely my hon. Friend realises that the small brewers do not think that our intervention has been helpful. Will he reconsider whether

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    we should simply remove the Beer Orders and allow the brewers, including the small brewers, to run the market as they did previously, when it was more competitive?
    Mr. Hamilton: The best thing that the Government can do for the time being is nothing. The brewing industry has been through a period of convulsion, which, as far as I can see, has not been welcomed by any party. Consequently, I am not in a position to announce that we shall review the Beer Orders. They became effective fully only last November, so it is too early to determine the full consequences. We now need a period of stability to allow the industry to settle down. In due course, further inquiries will be instituted by the European Commission when the review of the block exemption for tied pubs comes along in a few years' time. These issues will not go away, but it would not be right for the Government to stir things up yet again at this time.

    Coal Subsidies
    Mr. Etherington: To ask the President of the Board of Trade how many requests he has received from British Coal for a portion of the subsidy for expanding the coal market.
    The Minister for Energy (Mr. Tim Eggar): My right hon. Friend and I have not received any specific requests for subsidy from either British Coal or private sector producers.
    Mr. Etherington: Does the Minister accept that that is likely to he the position for the foreseeable future? Does not he understand that, in effect, this subsidy was offered merely as a panacea to Tory Back Benchers who objected to the pit closures? Was not the White Paper whose proposals included the subsidy based on efforts to thwart the many positive aspects of the Select Committee's report, which had widespread support among the population?
    Mr. Eggar: The hon. Gentleman seems conveniently to ignore the Select Committee's major recommendation—that the Government should make a subsidy available to bridge the gap between the cost of British-produced coal and world import prices. That is exactly what we did. My understanding is that, at present, independent coal producers and British Coal are having discussions with the generators about the possibility of agreeing additional contracts for the sale of coal. It is clear that, until those negotiations are at an advanced stage, it will not be appropriate for the Government to get into the business of handing out subsidies. We cannot do that in an open-ended way.
    Dr. Michael Clark: Does my hon. Friend agree that, following publication of the White Paper, adequate financial provision was made to assist the British deep-mined coal industry? Does he share my disappointment that none of this funding has yet been called upon? Can he assure the House that the two major generators, which are major users of fossil fuel, are not abusing their dominant position and are aware of their national responsibilities?
    Mr. Eggar: I very much agree with the sentiment behind my hon. Friend's question, which concerns the clear national responsibility of generators. During the coal review, the generators made it quite clear to my right hon.
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    Friend and me that they believed they would he in a position to contract for additional supplies of coal. We look to them to fulfil that indication. It is clear that, at a time when they have large stockpiles—coal burn is normally low at this time of the year—it is difficult for them to contract for supplies. However, we hope that they will enter into serious negotiations in the very near future.
    Mr. Caborn: Will the Minister be honest with the House and the country and admit that the Select Committee's recommendations were totally ignored in terms of the central point that the President of the Board of Trade made on 13 October—unless the market for coal is enlarged, there will be no extra sales? The Government negated their responsibility. They gave a fix to Back Benchers and deceived the country by failing to address the central question of a larger market for coal.
    Mr. Eggar: The hon. Gentleman simply cannot get away with rewriting the Select Committee's report, although he tries to do so time after time. The Select Committee did not recommend a restriction on gas stations; nor did it recommend the closure of Magnox stations. The hon. Gentleman should not go around misleading the country about what the Select Committee said; he should refer to the words of its report.
    Mrs. Peacock: Is my hon. Friend aware that the two generating companies are refusing to negotiate any further contracts with British Coal unless the price is well below 80p a gigajoule? Is not that ridiculous when world prices are around 120p a gigajoule? The companies are looking for huge Government subsidies. Would not those simply transfer taxpayers' money into the companies' profits?
    Mr. Eggar: The issue of the exact level of the world price is very complex. [HON MEMBERS: "Oh."] There is no point in the refusal of Opposition Members to recognise the marketplace. They cannot simply pluck a figure out of the air and claim that it is the market price. It was precisely because there are different perceptions of the world market price that, about 10 days ago in the House, I answered a question by saying that we were inviting from British Coal and from the independent coal producers indications of their production costs and of what they thought the world price was. Once we have received their responses, we shall be able to enter into discussions about the appropriate level of subsidy.
    Mr, Robin Cook: Does not the Minister know that, since March, British Coal has been offering extra contracts at 40 per cent. below the core contract price? At that knock-down price, the generators can produce electricity more cheaply than they can from gas, nuclear power or even imported coal available on long-term contracts. Does not the fact that the generators would still rather ask consumers to pay for electricity produced from more expensive sources provide the final proof, if any were needed, that the market is rigged against coal?
    Why does not the Minister admit that the White Paper was a fraud and was never intended to save the jobs of miners at the 12 pits, but was intended to save the jobs of Ministers in the House?
    Mr. Eggar: Why does not the hon. Gentleman, for once, make his position clear? Does he want to close down

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    the nuclear industry and the North sea oil industry and stop the development of gas-fired stations? Where does he want jobs to be lost?
    Mr. Cormack: Is my hon. Friend aware that there is widespread feeling in this country that British Coal has not been as zealous in protecting the industry over which it has charge as it might have been?
    Mr. Eggar: I hear what my hon. Friend says. It is because of the point made by my hon. Friend the Member for Batley and Spen (Mrs. Peacock), both today and previously, that the Government have determined, and British Coal has agreed, to go forward with the sale and lease of pits to the private sector that British Coal does not wish to continue to operate. It has already advertised nine such pits for leasing, and I understand that there has been a degree of interest from the private sector in examining further the possibility of taking them on.

    Polly Peck
    Mr. O'Hara: To ask the President of the Board of Trade if he will make a statement about recent discussions between his Department and the administrators of Polly Peck.
    Mr. Neil Hamilton: My officials have in the past held, and continue to hold, long meetings with the joint administrators of Polly Peck International plc and their legal advisers in respect of matters arising in and about the proceedings under the Company Directors Disqualification Act 1986 currently being brought against various persons involved in the management of Polly Peck International.
    Mr. O'Hara: The Minister will be aware that the rise of Polly Peck began in stolen orange groves in occupied northern Cyprus. I know from a previous answer that his Department does not keep statistics of trade with northern Cyprus, but is the Minister aware that, according to recent statistics from the so-called Central Bank of Northern Cyprus, no less than two thirds of exports from that area were to the United Kingdom and that no less than 60 per cent. of those exports were agricultural produce from a subsidiary of Polly Peck? Will the Minister make it clear to the administrators of Polly Peck that those so-called assets of Polly Peck in northern Cyprus belong not to Polly Peck, or to Asil Nadir but, legally, to displaced refugees, such as those from Morphou? Will the Minister at last do something to stop the illegal trade between northern Cyprus and this country?
    Mr. Hamilton: It behoves all Members of the House, by virtue of the great latitude that parliamentary privilege gives them, not to abuse that privilege and hence prejudice the outcome of any current criminal proceedings. To prejudice those proceedings could result in a failure to convict the guilty.
    Mr. Anthony Coombs: I appreciate what my hon. Friend has just said, but does he appreciate that many of the assets held by Polly Peck and regarded as its own were actually illegally acquired from Greek Cypriot owners as a result of the Turkish invasion in 1974? Is there not a very strong case, given the recent behaviour of the Turkish
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    Cypriot regime, for the British Government to toughen trade sanctions against the illegal regime in northern Cyprus, particularly on citrus fruits and tourism?
    Mr. Hamilton: I think that we have strayed a little from the affairs of Polly Peck. I put my hand into the middle of a hornet's nest, which I had not anticipated. My only concern is to ensure that the administration of Polly Peck is conducted as quickly and efficiently as possible, so that creditors of the company are paid out and those who have committed offences are brought to justice as a consequence.
    Mr. Robin Cook: Is the Minister aware that for the guilty to be convicted, they must first be charged? It is now two years since the administrator discovered seven separate donations to the Conservative party. Can the Minister tell us whether Companies House, the Department of Trade and Industry investigation unit or the Serious Fraud Office have investigated why none of those donations was disclosed in Polly Peck's accounts? If they have been investigated, can the Minister tell us why, in the two years, no charge has been brought for such an obvious breach of the Companies Act 1989?
    Mr. Hamilton: I can easily explain that to the hon. Gentleman. Whether he will understand is another matter. As he is aware, criminal proceedings are currently outstanding against a number of the directors of Polly Peck. If Asil Nadir returns to this country, he will he subject to charges. As a consequence of being convicted of those charges, it would be possible for the court to disqualify him as a company director for a period of 15 years. As a bankrupt, he is currently disqualified as a company director. As a matter of course, my Department does not seek to impede the way in which the Serious Fraud Office carries out its investigations, because that might prejudice the outcome of proceedings. If we did as the hon. Gentleman suggested, we would prejudice the possibility of bringing Mr. Nadir to justice, because if we were to embark on disqualification proceedings against him at the same time as the Serious Fraud Office, he would inevitably apply to the court for a suspension of proceedings on grounds of prejudice. That could well delay the possibility of bringing the main action against him on which greater and more draconian penalties could be imposed.
    Mr. John Marshall: Does my hon. Friend agree that it is most unfortunate that Mr. Nadir said that he would co-operate with the administrators of Polly Peck and then sought to frustrate them at every turn? Is not it equally unfortunate that he says at press conferences that he wants justice and then flees from it? Is not it high time that he came back to Britain and faced the music?
    Mr. Hamilton: I entirely agree with my hon. Friend. Mr. Nadir should put up and shut up, and I commend that last piece of advice to the hon. Member for Livingston (Mr. Cook).

    Coal Industry
    Mr. Corbvn: To ask the President of Trade v, hat recent discussions he has held with British Coal on the future of the coal-mining industry.
    Mr. Eggar: My right hon. Friend and I meet members of the board of the British Coal Corporation as necessary to discuss a range of issues.
    Mr. Corbyn: Will the Minister confirm that, in those discussions, he has talked to British Coal about the principle of market testing the 12 pits? Does he agree that market testing is a cruel con and a deception because the Government have already ensured that there is not a market for that coal and that there is a rigged market against the coal industry? What they are trying to do, and have been trying to do since 1979, is punish miners by closing pits and destroying the coal-mining industry, when it could be a safe and secure source of energy for the next 300 years.
    Mr. Eggar: The hon. Gentleman would not recognise a market if he fell over it. He simply does not understand that British Coal has to find customers for the coal that it is producing. Currently, about 45 million tonnes of coal is stockpiled, either with the generators or with British Coal. If British Coal is to get additional sales—it has told us that there are additional markets available for coal—it must be able to compete with other forms of electricity generation. Surely the hon. Gentleman recognises that.
    Dame Elaine Kellett-Bowman: Will my hon. Friend remember in all the discussions with British Coal, that gas, nuclear and oil-producing communities are just as important as coal-mining communities? Will he accept that I am grateful for the robust comments that he made earlier, and may I ask him to obey the instruction on my badge, "Don't bash gas"?
    Mr. Eggar: I always pay close attention to whatever my hon. Friend says.
    Mr. O'Neill: The Minister said that the difficulty in selling coal to the generators is attributable in part to the summer weather and high levels of stocks. In order that the collieries can sell coal and benefit from the subsidies that
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    he is apparently still prepared to provide for some time, will he be prepared to extend the enhanced redundancy arrangements so that collieries are not closed prematurely before 31 December, when the agreement expires?
    Mr. Eggar: Clearly, we extended—partly in response to points that the hon. Gentleman and his hon. Friends made the period up until 31 December. It is too early to say what the future for those terms will be, but we want to allow a proper opportunity for market testing to take place and we want the private sector as well as British Coal to be able to enter into serious discussions with generators. I recognise that we have to give that a reasonable amount of time.
    Mr. Oppenheim: Bearing in mind that, for decades, British Coal was protected from low-cost imports, that, for decades, it was protected from competition from gas-fired generation and that for decades, the Government insisted that it should be given cosy, Government-inspired contracts with generators, if the market has been rigged, surely it has been rigged in favour of coal. Everyone is concerned about miners' jobs, but should not we remember that there are consumers as well as producers of coal and that if we further rig the market in favour of coal, we will lose jobs in other sectors of the economy that rely on cheap energy?
    Mr. Eggar: My hon. Friend makes a very good point. The basic core contracts that have been agreed between British Coal and the generators contain a subsidy from British consumers directly to the British Coal Corporation of about £500 million for every year of the contract, making certain assumptions about world prices. In addition, since 1979, some £18 billion of taxpayers' money has gone into the British Coal Corporation on restructuring and other grants. It simply is a complete misrepresentation of the situation to pretend that the market has been rigged against coal. In fact, a considerable subsidy has been available to it for a number of years, both from the Government and the consumer.

London Specialty Review
3.31 pm
Mr. David Blunkett(by private notice): To ask the Secretary of State for Health to make a statement on the conclusion of the London specialty reviews.
The Secretary of State for Health (Mrs. Virginia Bottomley): In my statement to the House on 16 February, and in the accompanying document, "Making London Better", I set out the framework for improving the health service in London. The Government's key objectives are clear: to improve the quality of patient services and the health of Londoners, to improve, in particular, family doctor and other community health services and to preserve and enhance London's national and international reputation as a centre of excellence in treatment, teaching and research.
The independent reviews of specialist services were announced at that time in response to a recommendation in the Tomlinson report. They were set up to address a problem that is recognised throughout the health service by professionals, practitioners and beyond—the extensive duplication and fragmentation of specialist services across the capital. There is a wide consensus that accepts that not only is such duplication not cost-effective but that it can inhibit the full potential for excellence in patient care and in teaching and research.
The independent advice from the specialty reviews published today will be an important consideration as we take forward the long overdue changes that London's health service genuinely needs. I am grateful to the chairmen and their teams for their hard work.
Their advice, although important, is only one of many considerations. The process of change is one of evolution and direction, not of imposition. The specialty reviews are not a blueprint for the future. Proposals for improving services are already being developed locally by the institutions themselves, by health authorities and by others directly concerned. They have all shown an impressive degree of commitment to forming practical solutions to London's problems.
The Government believe that it is paramount that proposals are guided by the needs of patients. We shall take decisions on the basis of sensible plans that take the whole picture into account and that will lead to a better health service for London and for Londoners.
There are difficult decisions ahead. As I told the House before, no change is no option. I also recognise the need for acting as swiftly as we reasonably can, not least because uncertainty is in nobody's interest. We will concentrate on inner London, where the most serious problems exist.
The Government have shown their strong commitment to the NHS in London. Seventy eight major new capital developments will take place this year to improve family doctor and local health services. We will invest an extra £170 million in capital development over the next six years, building up primary care services where they are needed. We are targeting a further £10 million this year on reducing waiting times, improving on the one third fall in waits for hospital admissions of more than one year that has been achieved since March 1992.
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I want London to have the best specialty centres in the world into the 21st century, alongside other first-class services. To achieve this will require effort, determination and change. The process is well under way. The will exists. The task now is to build on this commitment to build the modern health service that our capital city deserves and demands.
Mr. Blunkett: My thanks to you, Madam Speaker, for agreeing to this private notice question. I concur with the Secretary of State in thanking the members of the review groups.
Does she agree that it is not an academic exercise? It is about real patients and real centres of excellence, from training and research at Hammersmith to highly renowned, high productivity at Harefield. Having moved from Tomlinson and the London review to the four Thames regions and beyond, will she tell the House what needs assessment has been carried out to make a judgment against which we, as representatives of the public, can make our decisions?
Will she now acknowledge that Labour Members were right on 16 February to call her statement a "fudge" which misled her own Back Benchers to believe that not many hospitals were threatened and no hidden agenda existed?
How can anyone trust the Secretary of State to provide one extra penny when the Government's whole agenda is cut and closure, when the chairman of the London Implementation Group is suggesting in today's Evening Standard that existing funding promises have already been dropped, and when the Secretary of State talks about £170 million—I use her word—"extra" investment in primary and community care and it turns out to be money taken from other areas and not extra to the health service?
How can anyone have faith in the Secretary of State when she refuses to accept responsibility and fails to be accountable? This afternoon she said nothing at all about the specialty reviews. Is the market in charge, is the right hon. Lady in charge or, more likely, is nobody in charge of what is going on? What is the agenda? What is the timetable? How is consultation to be meaningful when one report conflicts and overlaps with another?
Will the Secretary of State now agree to establish a London regional health authority to do the job? Will she agree to pause, to think and to be open and honest with us all? Will she agree to start again?
Mrs. Bottomley: I am disappointed that the hon. Gentleman seems to take every opportunity to develop a great scare story about the proposals. The hon. Gentleman himself said that the status quo in London is no longer an option. I believe that to be the case. We have set out in "Making London Better" a sensible framework for making decisions, but they need the ownership of local districts, who are the purchasers and commissioners for health care.
We also need to broke a change with the research institutions and the universities because the treatment of patients needs to be considered, as well as research and education. They are certainly extremely complex matters.
The independent reviews play an important part in that decision making, but they are independent, they have declared their independence and will now want to be considered across the service.
The task is to achieve change. There are a great number of discussions under way across London. I commend the

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way in which so many have already constructively participated in that. There are also substantial improvements such as the £200 million Chelsea and Westminster hospital that opened only the other day. We have the £11 million approval to go ahead at the Homerton and the improvements to the accident and emergency services at King's College hospital as well as the Royal London.
The hon. Gentleman is always doom laden. The only capital in which he is interested is political capital. We are interested in a health service for the future in London, and the necessary decisions will be made as fast as is reasonably possible.
Mrs. Marion Roe: Does my right hon. Friend agree that the most pressing need in London is for primary health care services to be built up from family doctors and others in the community? Does she also agree that it is very hard to justify such extensive duplication of specialist services when more resources need to be diverted to no less vital services at local level?
Mrs. Bottomley: My hon. Friend has identified the issue precisely. That is why, when we announced "Making London Better", we gave a clear commitment that progress would be made only as the primary care services were developed. That is the significance of the 78 capital schemes that are already under way to improve the family health and community services, and the further falls in waiting times.
The duplication and fragmentation of the specialty services will increasingly inhibit the ability of London and Londoners to benefit from the best of modern medical treatment and research. There are too many examples of smaller units duplicating the service provided by a neighbour, involving patients travelling between the services. The specialty reviews identify precisely how we can have those specialist services, but in such a way that they can compete not only nationally but internationally in the future.
Ms Liz Lynne: Has the Secretary of State any intention of maintaining national centres of excellence such as Harefield hospital? Does she agree that to break up specialist teams that have been highly successful would be an act of sheer folly? Will she allow us to see the full costings of the reviews, so that we can know the real reasons behind the proposed changes?
Mrs. Bottomley: The position is clear. Our proposals are about improving services and strengthening excellence. As the independent reviews made clear, the proposals were not costed; it is now for the London Implementation Group, along with the regions, to say what are achievable and realistic changes.
We shall start in the centre in introducing the changes, but I hope that the process will not take as long as it took St. George's hospital to move from Hyde park corner to Tooting. That took well over 20 years. I do not believe that staff in London's health service could sustain the uncertainty for as long as that.
All agree that change is needed; we want to make that change effectively and well.
Mr. Roger Sims: Is it really a proper use of what will always be limited resources to provide 14 centres for cardiac surgery and 13 for cancer treatment in
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London? Does it not make sense to try to concentrate resources in a more limited number of areas, for the benefit of the patient?
Will my right hon. Friend confirm that the reviews are simply advice, and not firm proposals—which is how parts of the media have already interpreted them?
Mrs. Bottomley: My hon. Friend has got it exactly right. The reviews consist of independent advice. There is, however, widespread agreement that the size of London's specialist services inhibits their ability to achieve the excellence that many would wish to achieve. As I have said, there has been wide support for our introduction of what all will agree is complex and difficult change. The president of the Royal College of Physicians, for example, said that the proposals in the specialty reviews were "fair, reasonable and rational".
Mr. Peter Shore: Among the recommendations are proposals to close the Queen Elizabeth hospital for children—a 130-bed hospital—and to transfer its services to the Royal London hospital, which has capacity for only 50 beds. I do not know how that can improve the services available to sick children in north-east London.
At the same time, the closure of Bart's—particularly that of its accident and emergency department—will mean that more patients will attend the London accident and emergency department. As the right hon. Lady well knows, only four months ago the accident and emergency department of the Mile End hospital was closed. Can she at least guarantee that there will be proper consultation with all concerned before any decisions are made, and that no closure or transfer will take place until alternative and adequate facilities have been put in their place?
Mrs. Bottomley: I give the right hon. Gentleman an absolute assurance on both those points. The need for consultation before significant changes take place is clear, and we have made it our commitment time and again to introduce changes only on the basis of improvement in services. I ask him to look at some of the primary care developments taking place in his constituency, because there has been a substantial investment in underdeveloped GP services: 78 capital projects; hospital at home; and facilities for community nurses and general practitioners. As the right hon. Gentleman knows, I have some knowledge of his constituency and the underdevelopment of the family doctor services always created heavy pressure on some of the hospital services. These changes matter for London and Londoners.
On the two matters about which the right hon. Gentleman seeks assurance, the answer is yes.
Sir John Wheeler: Can my right hon. Friend confirm that distinguished medical people and others who constituted the review teams have advised that there is a real danger of specialist research services in London being overtaken by those elsewhere in the United Kingdom unless those services are concentrated on specific sites to enable their continuation?
Mrs. Bottomley: It is understandable that Members of Parliament will be concerned about their own hospital or institution when they think that change must be under way and I accept and recognise that. My right hon. Friend makes a very important point when he talks about the

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opportunity of change, because there are real opportunities for strengthening specialist centres, research and teaching, and it is very difficult to find any member of the medical, the academic or the research community who will do anything other than warmly endorse the approach that we are taking.
Mrs. Audrey Wise: To what extent was there unanimity or disagreement within the review teams? Will the Secretary of State also tell us whether consultation will involve the people who live in the areas affected?
Mrs. Bottomley: I do not know whether there was disagreement among the review teams because they were independent. I met all the chairmen and they took to the task with great diligence. They are people of significant eminence and calibre within the health service. They spoke with a range of people on their teams to bring forward their recommendations for strengthening and improving the specialist services. Of course, before any significant changes take place in London, as elsewhere, those matters have to be the subject of public consultation. I repeat that changes will be made only on the basis of improving services for patients.
Mr. David Congdon: I recognise the need for change in London's health services, but will my right hon. Friend clarify how the process of change will be managed—especially the interaction between the proposals announced earlier in the year, following Tomlinson, and the specialty reviews announced today?
Mrs. Bottomley: The London Implementation Group will be working with the regions to take forward practical and sensible proposals. It will be informed by the independent reviews and also by the review of research in the special health authorities. It will then be its job, within available resources and on the basis of the improvements in primary care, to consider the needs of patients and above all to discuss realistic options for the future with the district health authorities—the people who commission health care for patients.
I repeat that no change is no option. Patients are already, being treated in their constituencies, closer to home. London hospitals have fixed overheads based on the past; we have to help them to build and reconfigure the health service for the future.
Ms Glenda Jackson: Will the Secretary of State explain the criteria exercised by the independent review bodies, which have recommended that the renal transplant unit at the Royal Free, where the first successful kidney transplant outside the United States of America was undertaken, must be moved to the Middlesex because of the lack of academic development on site but that a plastic and burns unit should be moved to the Royal Free although it claims that there must be professional links with UCH? There seems to be a grave discrepancy about what constitutes a specialty in this instance.
Mrs. Bottomley: It is not for me to justify every last element of the independent reviews; that is precisely the nature of the reviews. The Labour party believes that everything must be done. with a command and control approach. We wish to achieve the change. Our responsibility is to ensure that London has a health service
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for Londoners and that research and education is consolidated and strengthened. The recommendations, as they affect the Royal Free, will no doubt be a subject for discussion with the region, with local hospitals and with the implementation group to ensure that all points are properly satisfied.
Mr. Michael Shersby: In view of the fact that Harefield hospital is situated not in central London but on the furthest extremity of the county of Middlesex, and in view of the fact that its world famous heart transplant unit is a national asset, can my right hon. Friend give me any assurance about its future?
Mrs. Bottomley: My hon. Friend would not want me to rule out change for ever and a day. No holder of my office would ever say that any particular hospital or institution will never be subject to change. This proposal has been made in the past. However, the most serious and intense problems are in central London where there is great competition and where fixed overheads are becoming ever more acute. I do not see any prospect of Harefield moving from its present site in the near future.
Mr. Brian Sedgemore': Will the Secretary of State confirm that a number of the specialty review teams have recommended that even in the instances where St. Bartholomew's has better clinical and research facilities they should, nevertheless, be transferred to the Royal London hospital rather than vice versa? Does not that make a mockery of the democratic process and consultations about a merger between St. Bartholomew's and the Royal London? Does she not recognise that it will end with herself, Sir Tim Chessells of the London Implementation Group and Admiral Staveley from the North East Thames regional health authority being dragged before the courts in a series of judicial reviews for improper and unlawful conduct?
Mrs. Bottomley: I somewhat resent the hon. Gentleman's comments. In all matters concerning the specialty reviews, I believe that we have acted with great reasonableness, and we established those reviews precisely so that we could have such questions answered. I urge the hon. Gentleman to consider. the remarks that I understand were made by members of the review teams at their press conference this morning where they made it clear that there had been no collusion between the different review groups and that they had in no way been subject to pressure from the centre in making the proposals that they thought were right to improve and strengthen specialty services.
Mr. Peter Bottomley: The original proposal was to spend more than £50 million moving the regional neurosciences unit from the Brook on Shooter's Hill to King's College and Maudsley.. There would be a general welcome if that proposal, which would clearly waste much of the capital in south-east London, were scotched. Will my right hon. Friend try to ensure that 'the Ministry of Defence can agree with the national health service that the Queen Elizabeth military hospital should be made available so that the local area and the commissioning agency can consider using the Queen Elizabeth military hospital as a substitute for the Brook and the Greenwich district hospital?
Mrs. Bottomley: My close Friend—[HON. MEMBERS: "And honourable?"]—and honourable Friend, indeed, most of the time—has raised a matter of great concern in his constituency. He makes a point that applies to all the specialty reviews: each is considering a particular specialty, but for each there is a local context. We have already discussed costing, but there is a broader context, too. My hon. Friend the Minister for Health is already having discussions with the Ministry of Defence on the future options for the Queen Elizabeth military hospital, to which my hon. Friend referred, and the role that it may play in the reviews.
Ms Kate Hoey: Will the Secretary of State confirm that no decision to close either St. Thomas's or Guy's hospital has been taken and that, in spite of some of the rumours that have been going round, the joint trust board is still considering the issue? Will she also confirm that if some of the specialty reviews went ahead there would be no possible way in which St. Thomas's or Guy's could close, because of the extra work that would be necessary at both those sites?
Mrs. Bottomley: I give the hon. Lady a clear assurance that no decision has been taken on that matter. As I understand it, the decisions on the site appraisal for Guy's and St. Thomas's will be influenced by the specialty reviews. However, it is important for all hon. Members to appreciate that the specialty reviews are not a map of how any of us believes that the services will be precisely distributed. The distribution will need to be affected by the site options, and by a realistic appraisal of the way forward. The warmest praise must be given to the staff at both the hospitals mentioned by the hon. Lady. They realise that in such a small area of London we cannot have King's, Guy's and St. Thomas's all competing with each other and all having a flourishing future. The reviews will be closely considered before final decisions are made.
The hon. Lady is concerned about her constituents, so I say to her that within Southwark, Lewisham and Lambeth no fewer than 112 proposals to improve the family doctor service are going ahead. As 90 per cent. of care takes place in the community, that is most important to her constituents.
Mr. Matthew Carrington: Will my right hon. Friend confirm that the Charing Cross hospital has been highly commended by the specialty reviews, especially for
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its work with cancer, plastics and neurosciences? When reviewing the future of hospitals in west London, will she bear in mind that the Charing Cross is not only a superb hospital but that it is also by far the best located to serve the population of west London?
Mrs. Bottomley: Once again, my hon. Friend is a great advocate for the hospital that serves his constituents so well. As he says, the independent reviews have identified a number of areas in which it provides a high quality specialist service. That fact now has to be considered alongside viable long-term options, and my hon. Friend knows as well as anybody that, within range of his constituency, his constituents can go to the Hammersmith, the Chelsea and Westminster, the Marsden, the Royal, Brompton and also to St. Mary's or Queen Charlotte's, which are not so far away. The duplication of specialist centres in London is extremely costly and inhibits the ability to make the progress that we all want to see in London.
Mr. Simon Hughes: Given the undertaking that the Secretary of State gave to the right hon. Member for Bethnal Green and Stepney (Mr. Shore), and given that there is all the difference in the world between rationalisation and reduction, can the right hon. Lady 'say that no resident of London, worker in London or visitor to London will have any services that are currently available taken away as a result of the review process?
Mrs. Bottomley: I give the hon. Gentleman a clear assurance that the changes in London are about improving health and health care. He will know that in his area there has already been investment in King's accident and emergency department, and the £10 million development of the theatre blocks. The changes will be designed to ensure that there is further progress in reducing waiting times and in improving primary care—the 112 schemes in Lambeth, Southwark and Lewisham that I mentioned to the hon. Member for Vauxhall (Ms Hoey) are an example of that—as well as in strengthening the district general hospital services and in the proper development of the specialist services. The changes are about improvement.
Several hon. Members rose—
Madam Speaker: Order. We shall move on. The subject will doubtless be with us time and time again.

European Council (Copenhagen)
4 pm
The Prime Minister (Mr. John Major): With permission, Madam Speaker. I will make a statement about the European Council Copehagen, which I attended with my right hon. Friend the Foreign Secretary.
The principal issue before the Council was how to promote economic growth throughout the Community. Although Britain is now emerging from recession, a number of European countries are still seeing their economies shrink—five are expected to be in recession during this year. Unemployment has grown throughout the Community and now totals 18 million—in most countries it is still rising, and in some it is rising quite sharply. Against that background, the President of the Commission presented options for economic revival in the medium term. That document has been placed in the Library of the House, together with the conclusions of the Council.
I largely agreed with the diagnosis set out by the President of the Commission, although not with all his proposed remedies. In the subsequent debate, I was encouraged by the wide recognition that the Community had to improve Europe's overall competitive position and to address the trend of rising unemployment throughout all of the past 20 years.
The Council agreed a number of practical measures to improve Europe's economic prospects. We stressed the importance of low inflation, specifically in order to improve cost competitiveness and achieve sustainable growth; we reaffirmed the priority given at the Edinburgh Council in December to growth and investment in our public expenditure programmes; we decided to expand the temporary lending facility of the European Investment Bank from 5 billion to 8 billion ecu, with a particular emphasis on helping small and medium-sized companies; we agreed that it was vital to reduce fiscal deficits—without that, much of Europe will not be in a position to reduce its interest rates.
The argument that the Community had to keep down costs in order to improve competitiveness and create new jobs was widely supported at the Council. It was felt that, unless that was achieved, we would find ourselves increasingly uncompetitive against, not only the Pacific countries, but also our primary competitors in the United States and Japan. It was also recognised that all Europe, without exception, had to face the problem of the rising costs of social provision, brought about by demographic and other changes.
The European Commission has been invited to present a White Paper on a medium-term strategy for growth, competitiveness and employment for discussion at the European Council in December. Member states will be submitting proposals for the White Paper. I believe that that will enable the Community to build on the European Council's new emphasis on competitiveness. Over the next six months, we shall press for reforms to increase flexibility in the labour markets and reduce unemployment. I hope that that will lead to a genuinely radical report at the December Council.
Following earlier Council discussions of subsidiarity, the European Commission has now produced a first list of items on which it has decided not to propose legislation. I will place that list in the Library. At the next Council, the
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Commission will produce a further list, showing existing legislation that will be either repealed or amended. Subsidiarity was a controversial provision in the Maastricht treaty some time ago, but we now have strong support for our position from a number of member states. Subsidiarity is becoming a central element in the Community's decision making.
There was a substantial discussion of the Community's external policy. I would draw attention to only four specific items. First was the importance of urgent progress in the Uruguay round. I am in no doubt that a general agreement on tariffs and trade will benefit all Community members without exception, but there is a long way to go in a short time if a satisfactory agreement is to be reached during this calendar year.
Secondly, the Council was keen to see rapid progress in the enlargement negotiations with Austria, Finland, Norway and Sweden. We set 1 January 1995 as the target date for their entry—earlier than previously expected. Their membership, in my judgment, will strengthen the Community.
Thirdly, looking to the longer term, the Council agreed that the six associated countries of central and eastern Europe should be invited to join the Community in due course. It will, of course, take some time until they are ready. In the meantime, we will help them by increasing the Community's political links and by opening our markets more rapidly to their goods. A package to that effect was agreed.
Fourthly, the Council acknowledged the need to recognise Russia's international status, and agreed to my proposal to offer summits between the Community and Russia twice a year.
The deteriorating situation in Bosnia was discussed both by Foreign Ministers and by Heads of Government. Those discussions included the possibility of lifting the arms embargo. We agreed that the Community should encourage the efforts of Lord Owen and Mr. Stoltenberg to promote a fair and viable settlement. This view was widely shared, and is reflected in the Council's declaration on Bosnia-Herzegovina.
I argued that lifting the arms embargo would jeopardise the humanitarian operation and provoke a bloodier and perhaps wider war, with perilous consequences. We agreed after discussion that it was better to seek a peaceful settlement acceptable to all sides. But, as the Council made clear, this cannot be a solution dictated by the Serbs and Croats and at the expense of the Muslims.
The Council also agreed that the Community should support the efforts of the United Nations Secretary-General to secure additional troops and funds to implement the safe areas resolution. The United Kingdom is, of course, as the House is well aware, already making a full contribution.
This was a practical Council. It addressed directly the concerns of the peoples both east and west. It put in hand work on a new economic approach to make Europe more competitive and increase growth and employment. We will return to those matters at Brussels in December.
Mr. John Smith: I thank the right hon. Gentleman for his statement. I should like first of all to welcome some aspects of the Council's deliberations and conclusions.
On enlargement, it is gratifying that the Council agreed that the objective should be to have the accession of

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Austria, Finland, Sweden and Norway agreed by 1 January 1995, arid that a positive approach has been taken to the associated countries of eastern and central Europe. I welcome also the positive statement on racism and xenophobia in Europe, which is timely and constructive. I hope that the Prime Minister will find it possible to do the same.
On the need for growth in the Community's economies and the vital importance of reducing unemployment, I welcome the increase in funds available to the European Investment Bank, which I hope will be of advantage to British enterprises. I also welcome the recognition in the communique that the recovery must be investment led.
However, there are some issues covered in the Council's discussions which must be a cause for concern to the House. The first of those concerns the grave and deteriorating situation in Bosnia-Herzegovina. It was important that the Council did not agree to the lifting of the arms embargo, which would have made a bad situation even worse. However, does not the Prime Minister recognise that such proposals gain currency because of the total failure to achieve the previously agreed policies in a number of crucial areas?
First, is it not the case that the designated safe areas are not in fact safe and that extra troops are required to make them more secure? The Secretary-General has asked for an extra commitment of 7,500 personnel. What is the United Kingdom Government's response to that request? Should not the Government follow the French example by agreeing to augment the British provision?
Secondly, is it not the case that the borders of Bosnia-Herzegovina have not been sealed? Why do the Government still rule out the use of limited air strikes to help achieve that objective?
Thirdly, is it not the case that sanctions are still wholly inadequately enforced'? Should not they now be extended to include Croatia in view of the recent deplorable activities of the Croats towards their Muslim neighbours?
Fourthly, is it. not obvious that there is a lack of any clear political objective since the Washington agreement effectively torpedoed the Vance-Owen plan? What is the point of making declarations about not accepting a territorial solution dictated by Serbs and Croats at the expense of the Muslims if they are not made effective?
On economic recovery, I note with interest that the United Kingdom Government are party to a communiqué which invites consultations to be encouraged among the social partners. Would it not be helpful if the Government accepted the need for such a dialogue here in the United Kingdom?
Do the Government not appreciate that the importance of public investment in the economic infrastructure arid in skills development, which the Council has recognised in its conclusions, is just as relevant to the United Kingdom economy? Is it riot the lack of such investment over the past 14 years which has caused Britain to be ranked 19 out of 22 in terms of economic strength by the World Economic Forum, below Spain, Portugal and Finland?
Surely the Government are not in a strong position to give advice or a lead to our partner nations when the same survey showed that, after 14 years of Conservative government, Britain was rated 21st out of 22 in the funding of research and development, and bottom—22nd out of 22—in industrial production.
Instead of seeking to turn the clock back by opposing social progress in Europe, should not the Government
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have as their objective the creation of a high-productivity, high-skill and high-wage economy in Britain and in the Community, instead of seeking to compete on the basis of low costs and low skills, with all the adverse consequences that that would have for the people of this country?
The Prime Minister: The right hon. and learned Gentleman raises a number of points that I will deal with in turn. I am grateful for his welcome to the agreement on enlargement for the European Free Trade Association countries and our further approach to the eventual arrival in the Community of the central and east Europeans. That is the right way forward.
There was no dissent whatever on the racism and xenophobia proposals that were made and agreed in the conclusions of the Council. It is precisely for that reason that I did not mention them, but I welcome them; they were partly inspired by British initiatives, and I am delighted that they were generally agreed.
As for growth and the European Investment Bank the extra funds for the European Investment Bank are more modest than we ourselves would have accepted. We would have accepted a larger increase in the European Investment Bank funds, and that may yet come about when the matter is discussed in ECOFIN over the next few weeks.
On the subject of Bosnia, I am grateful for the right hon. and learned Gentleman's support for the position that we have taken on the arms embargo. I know that it is not shared universally in the United Kingdom, but I believe passionately that it is the right position for the United Kingdom Government to take at the moment.
As for safe areas, the Secretary-General has indeed called for an extra 7,500 troops, and I understand this afternoon that the French Government have agreed to send an extra 800 towards that particular contingent. I understand that some other European Governments—in some cases, perhaps, some who have no troops there—may also consider sending further troops. I do not immediately have that in mind, but we are sending 12 Jaguars to assist with other elements of operations in and around Bosnia, and they will depart very shortly.
On sanctions, their extension to Croatia may indeed be necessary. We do not judge it necessary at the moment, but it is certainly not something that I would wish to rule out. We may wish to go down that path.
As for the political objective, it is really the most straightforward of all political objectives. We want first and foremost to stop the fighting and stop the killing. That is why we have made such a substantial contribution to the humanitarian effort, and also the diplomatic effort, over recent months.
On the various points on economic recovery that the right hon. and learned Gentleman mentioned, despite his criticisms of the position in the United Kingdom, we are now clearly coming out of recession. Five of our European partners are now heading into recession. A number of our European partners now have unemployment on a very sharply rising trend, whereas ours is on a downward trend. In addition, we now have rising exports, in sharp contrast with a number of our European partners.
As for the low-wage, low-cost economy, I have to remind the right hon. and learned Gentleman of some underlying realities in terms of job creation and prosperity

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right across Europe. It is to address those realities that we have raised the question of competitiveness and of social costs.
Taking the Community as a whole, labour costs in manufacturing—dear, I know, to the hearts of Opposition Members—rose by 4 per cent. a year throughout the 1980s. The increase in the United States was 1 per cent. a year, and in Japan there was no increase. That trend cannot continue unless we wish to see rising unemployment in this country.
Average labour costs were 20 per cent. higher in the Community than in the United States and Japan, and non-wage labour costs—predominantly social on-costswere almost twice as high on average in the Community as in the United States. That is not a coincidence, given the rising level of unemployment over the 20-year period.
I shall illustrate that point for the benefit of the right hon. and learned Gentleman. In Europe, growth achieves far fewer jobs than in the United States and elsewhere. I say that with no pleasure. However, in recent years, four times as many new jobs have been created in the United States as in Europe, from the same amount of economic growth. That suggests that dramatic changes are needed if we are to attack the problem of the 17 million people in Europe who are unemployed.
I understand the attraction of improving the terms and conditions of people in work. I should have thought that people would also be concerned with bringing back into work the 17 million people who are out of work. That is why we have raised the question of competitiveness and the need to look carefully at social costs.
Mr. David Howell: Is not the sheer common sense of my right hon. Friend's emphasis on competitiveness and minimising overheads—thus maximising the growth of private sector jobs—becoming more obvious as time goes by? Does he agree that those who took a different line at Copenhagen and urged that social overheads be increased were paving the way not only to fewer jobs in Europe but also to protection, which would in turn lead to still fewer jobs and still less prosperity in Europe?
The Prime Minister: I agree with my right hon. Friend, particularly about the dangers of going down the route that would lead ultimately to protection. That would be the only way in which an uncompetitive industry could be safeguarded within the EC.
There has been a sharp change in the attitudes of a number of our European partners to competitiveness and social costs—a change not just in their oratory but in what they are doing in their countries. For example, the German Government are proposing to cut the levels of unemployment and other benefits because they believe that to be necessary. In Holland, cuts are planned in social security benefits and child allowances. The Italian Government plan to raise pension ages and introduce new health service charges.
That is not because, ideologically, those countries wish to do that, but because they must recognise that there is a limited amount that can be afforded unless all our industry is to be priced out of business. We would then have unemployment on a scale that would be unimaginable.
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[ Interruption.] At that point, the hon. Members who sit below the Gangway would blame the politicians who did not take action in time.
Mr. Paddy Ashdown: The Council's emphasis on unemployment was welcome. The Prime Minister may have found it odd. that the Council was dominated by the question of unemployment and of getting people back to work, whereas the Chancellor, in his Mansion house speech, could scarcely bring himself to utter the word "unemployment".
In my judgment, the Prime Minister is absolutely right to say that the challenge to Europe is how competitiveness can be maintained and improved while the social cohesion of our nations is maintained.
The Prime Minister talked about underlying reality. He should visit one of our most successful employers such as Toyota, where I was on Monday. The company will tell him of the underlying reality of maintaining competitiveness. It will tell him that that underlying reality lies in investing in the work force. It lies in investing in training. It lies in valuing one's work force and in providing them with the necessary social benefits. That is what Toyota believes will provide the high-value-added, high-investment, highly skilled work force that we need for the future. Does the Prime Minister realise that, by tracking a different course and cutting Britain out of that debate, he is doing our country, our workers and our economy considerable damage for the future?
I want to refer to Bosnia. The emphasis that the Council has at last placed on taking steps to protect the Muslims is very welcome, but if it is to will the ends, it must also will the means. Where will the troops come from? Is it not the case that the French have more troops in Bosnia than we have? If the French are prepared to reinforce, are we not prepared to make a contribution beyond that which we have already stated we will make? Does the Prime Minister realise that, if we are not prepared to say where the troops will come from, we shall yet again he condemning the European Community to make a statement that will not be put into practice?
Does the right hon. Gentleman realise that the present wretched situation in Bosnia was entirely inevitable from the very moment when we let the Serbs understand that they could carry out aggression and that we would not stop them? Has he any idea of the size and cost of the failure, not of the soldiers on the ground but of the politicians in Europe these last nine or 10 wretched months?
The Prime Minister: First, let me try to respond to the right hon. Gentleman's second point, on Bosnia. Right from the start, there were, in reality, only two ways of dealing with this whole wretched miserable war. [HON. MEMBERS: "For whom?"] For anyone. The first alternative was to put in literally hundreds of thousands of western troops. [ Interruption.] That is the view of every political or miltary leader who has been deeply involved in the matter. No one was prepared for that.
I wonder whether, if we had done that,' we would have had the right hon. Gentleman's support when the dead and injured troops came back here. The only other way to deal with the problem was the way that we have chosen, which is to deal with the humanitarian aspects and seek a negotiated settlement—painful and difficult though that may be. That is what we have sought to do.

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The right hon. Gentleman is wrong to say that the French have more troops in Bosnia than we have. The French have more troops in Yugoslavia as a whole but Britain has more troops in Bosnia than any other nation at present.
The right hon. Gentleman asked where the 7,500 troops will come from. The commitment of troops arises from a United Nations resolution. It is not just the countries of the European Community that have committed themselves to contributing towards those troops: we have made a substantial contribution. Other European Community countries have indicated that they are considering doing the same.
Beyond the Community, others will also make a contribution. It does not help anyone for the right hon. Gentleman to assume that it is just the Community that must deal with this matter, when that is patently not the case.
On the right hon. Gentleman's earlier point about investment, it is not odd that we spent so long discussing these matters at the European Council. We had been pressing for a long time for a realistic and frank discussion in the Community of what really deals with growth. My right hon. and learned Friend the Chancellor has been stressing the need for flexibility and social changes for a long time; he was doing so long before he became Chancellor—sometimes, when he held other positions, to the frustration of others.
If the right hon. Gentleman wants to know about investment, he asked the wrong question of Toyota. He should have asked, "Why did you invest in this country?" The answer to that question lies in the supply side policies that the Government and their predecessors have followed since 1979.
Several hon. Members rose—
Madam Speaker: Order. Before we proceed any further, I remind the House that I am now looking for single direct questions to the Prime Minister. I want brisk exchanges so that I can call as many hon. Members as possible.
Mr. John Biffen: I welcome the proposals for Community enlargement, and congratulate my right hon. Friend on his work to that end. But in the spirit of what is practical, which he said underlined the Copenhagen Council meeting, was consideration given to revising the timetable for economic and monetary union in the light of the current state of the European economies?
The Prime Minister: In the interests of observing your admonition, Madam Speaker, I am tempted simply to say "No", but my right hon. Friend's question deserves a more comprehensive answer. Revising the timetable was not considered but, of course, the convergence criteria that we agreed in Maastricht need to be met before there can be any progress. As I have told the House before—I am happy to reiterate it today—I do not think that there is a snowball in hell's chance of those criteria being met on the previous timetable.
Mr. Neil Kinnock: I say to the Prime Minister with regret that, coming from him, "flexibility" and "deregulation" in the labour market are euphemisms for lower wages, lower skills and greater insecurity. That is no way out of the difficulties that this country and other comparable countries face, because attempts by economies
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such as ours to go down market in the world economy simply mean impoverishment and social fragmentation, as they have in many parts of the United States.
I share the right hon. Gentleman's enthusiasm for competitiveness. The road to that competitiveness, lower costs and wealth creation must lie in encouraging innovation, deepening and broadening skills, and achieving greater success in the modern world, not in a wage-cut world.
The Prime Minister: On the right hon. Gentleman's latter point about innovation and deepening and broadening skills, I stand full square with him. It is not least for that reason that we have greatly increased the number of our young people going into higher education—our target of one in three by the turn of the century is nearly met. The encouragement that we have given people to develop skills in polytechnics and elsewhere is well known to the right hon. Gentleman. On his earlier point about euphemism, I tell him that it is a euphemism for more jobs, more prosperity and more growth.
Sir Peter Hordern: Does my right hon. Friend believe that Mr. Delors and the European Commission have any idea of the risk to employment that is brought about by the working time directive and other such measures, and increasing competition from the far east and the United States? Does my right hon. Friend see a serious risk of protectionism and a lack of will to bring about a successful conclusion to the Uruguay round?
The Prime Minister: In my remarks to the European Council, I stressed again specifically the damage that we believe is done by the working time directive and a number of other directives that I particularly specified. There are differing views in the Community about that, but I think that the views that oppose ours are less strongly held today than they were a few months ago.
There is a danger that some nations in the European Community may have a tendency towards protectionism, rather than dealing with the underlying problem of making changes that will ensure that they are competitive around the world. That view is not shared across the Community.
A number of other states join us strongly in our belief that we need to deal with our costs—employment on-costs are perhaps predominant among them—to ensure that we are competitive. If we were to get in a position where protection led to a trade war among the United States, Japan and Europe, let no one be in any doubt whatever of the devastating effect that that would have throughout Europe, and the devastating impact that it would have on jobs in each and every country of the Community.
Mr. James Molyneaux: Is the Prime Minister aware of the widespread support for his determined efforts to instil some common sense into the deliberations of the Council, not least in the area of the irresponsible meddlings in Bosnia? In the past, it would seem that our European partners have tended to say "Go on" instead of "Come on" in terms of military commitment.
The Prime Minister: I am grateful to the right hon. Gentleman. Some of our European partners have, of course, made a substantial contribution. Others perhaps have tended to stand back a little more. I think that the

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right hon. Gentleman puts it more crisply than I would have done, but I understand, as does everyone else, precisely what he meant and whom he means.
Mr. Bowen Wells: Will my right hon. Friend confirm that there was no discussion of the social charter at Copenhagen? Was there any recognition of the serious harm that it does to competitiveness throughout Europe?
The Prime Minister: There was certainly a recognition of the harm it does, because I referred to it in the remarks that I made. I am bound to say that there was less obvious enthusiasm for the social charter, and there was no indication from other member states that they were inclined to take a harshly critical view of us for not being part of it. Clearly, many of them still have their old oratory and their own ideas to cling to. But I have hopes that, as month succeeds month, reality will dawn ever more clearly across the Community.
Mr. Andrew Faulds: As for safeguarding the future of Bosnia, we have nothing but words, words and words. Does the Prime Minister realise that he should be ashamed of himself, as should his Foreign Secretary and the supposed leaders of the European Community, for his total spinelessness and pusillanimity? [ Laughter.] Stupid bastards! They are laughing about this.
Madam Speaker: Order. The hon. Gentleman had better calm down—as indeed Ministers on the Front Bench had better calm down.
The Prime Minister: In the interests of brevity and in view of your injunction a moment ago, Madam Speaker—no.
Mr. Alan Howarth: Does my right hon. Friend agree that there is a large constituency across Europe for the Conservative vision of an unbureaucratic, decentralised Community of member states joining together for sensible, practical and limited purposes, and that that has been increasingly reflected in the willingness of other member Governments to follow his lead in embracing both subsidiarity and enlargement?
The Prime Minister: My hon. Friend is right about the changing mood across the European Community. When there was clear year-on-year growth of 3·5 per cent. a year, many people were inclined to overlook some of the difficulties of central bureaucracy. Now that that 3·5 per cent. year-on-year growth has disappeared, public opinion is perhaps ahead of political opinion across Europe in being suspicious of moves towards centralisation. I regard that as an attractive change of opinion, because I believe that it will bring more realism among politicians of all shades across Europe about what can and should be attempted in any reasonable time scale.
Mr. Alfred Morris: What is the Prime Minister's assessment now of the prospects for success in the Uruguay round, and what discussions did he have with other Heads of Government in Copenhagen about the pace of progress, in particular with Mr. Mitterrand?
The Prime Minister: I have often said how important I believe the settlement of the Uruguay round is. I bitterly regret that we have not had a settlement for the past two years. For far too long, Heads of Government across the world have committed themselves to reaching a settlement of the Uruguay round by the end of that year. The end of that year has come and no settlement has come with it. I regret that very much. So I am concerned that we do not yet have an agreement.
There are clearly problems to he overcome. Some progress has been made. The progress made on the oilseeds agreement in the Community was definite progress. We may be able to form a clearer judgment after the G7 summit in Tokyo in a month or so.
Mr. Nicholas Winterton: Is my right hon. Friend aware, as I suspect he is, that Europe is becoming more and more uncompetitive with the rest of the world year by year, and that, in. addition, Europe is losing manufacturing capacity to the rest of the world? Is it right that, when we are beginning gradually to come out of recession and most of Europe is going into recession, we are not spending more time seeking business in north America, south America and the Pacific rim, where the real wealth of the world is currently being created?
The Prime Minister: I am certainly aware of the competitiveness points. I am keen to ensure that primarily Britain but also the whole of Europe seeks to become more competitive and goes to those markets to pick up the business that can best be undertaken in Britain or elsewhere in Europe. We must do that.
But that will not be achieved, as my hon. Friend said, unless we are competitive. That means that we must address seriously all the component costs that go into the cost of our goods. Predominant among those are labour and social costs. I know that that will be interpreted by Opposition Members in the way that they always interpret it—as recommending a sweatshop economy. That type of thinking about a sweatshop economy leads to 17 million people being unemployed across Europe. The people who genuinely care about creating jobs and employment are the people who will take action to make this country competitive, and they sit on these Benches.
Mr. Peter Shore: On the key question of unemployment and recession in the Community, is not the Council of Ministers' policy becoming almost completely schizophrenic? Is it not strange indeed that we should be urged to increase public expenditure, including public investment in infrastructure and other projects and that money should be put aside to subsidise interest rates up to a production of 3 per cent. when at the same time all member states are committed to economic and monetary union and are prisoners of the exchange rate mechanism that keeps European interest rates more than twice as high as the interest rates in Japan and the United States of America? That is not merely schizophrenic, but completely absurd.
The Prime Minister: The right hon. Gentleman is perhaps addressing his remarks to the wrong Head of Government. Within existing levels of public expenditure, we have sought to ensure the priority of capital investment as against revenue expenditure. That is what happened in

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the public expenditure survey carried out last autumn, and certainly that will be a priority in our public expenditure this year.
The right hon. Gentleman touches on an intriguing point with the proposition that is to be discussed by ECOFIN to have subsidised interest rate lending by the European Investment Bank to small and medium-sized companies. He may be interested to know that a reason why that has gone to ECOFIN is that I flatly opposed it on the grounds of competition.
Sir Peter Tapsell: Did any Head of Government at Copenhagen make the point that it was somewhat futile to have a Community summit with unemployment at the head of the economic agenda when the terrible and still worsening unemployment position in the Community has been caused largely by the past, present and continuing high interest rate policies of the independent central bank of Germany?
The Prime Minister: No one entirely agreed with the point made by my hon. Friend. The clear indication in the summaries that we saw and discussed is that, although the recessionary impact of the past few years has accelerated the growth of unemployment across the Community, there has been an underlying growth in unemployment that has gone on through boom and slump during the past 20 years. There has been an inexorable rise during the past 20 years.
Apart from the impact of the recession over the past few years, it is the realisation of that underlying and inexorable rise over two decades that has finally prompted so many European Heads of Government to decide that they must address this problem seriously and urgently.
Mr. Dennis Skinner: When the Prime Minister talks about unemployment, is he aware that he is making a good case for getting out of the Common Market? When I saw the press conference during the past few days, for the life of me I did not realise that they were discussing some of the things that he has mentioned today. Every time, he was asked when he was going to sack his Minister of State, Northern Ireland Office. I will ask him that now: is the Prime Minister going to sack him or keep him?
The Prime Minister: The hon. Gentleman may be surprised to know that that was not discussed in Copenhagen.
Sir James Kilfedder: May I congratulate the Prime Minister on a successful summit, in which he played a positive and leading role? Can he say whether there was any discussion of federalism, as expected, or did the summit concentrate on the need to deal with competitiveness to get rid of high unemployment and inflation?
The Prime Minister: It may have been a subliminal theme, but it did not see the light of day too often. At the outset, I invited colleagues to throw away Euro-theology. Perhaps federalism comes under that heading.
Mr. Peter Mandelson: Does it not worry the Prime Minister that, as the public see splits over policy in Bosnia, inaction over unemployment and disagreement about some of the most fundamental social rights and standards in Europe, they will become increasingly disillusioned about Europe's ability to act together? Does not the right hon. Gentleman think that he has some
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pesonal responsibility, above all, for ensuring that Europe's ability to work together is increased, rather than constantly frustrating and undermining it, as seems to be his approach to European affairs in general?
The Prime Minister: The hon. Gentleman's idea of how Europe should work together is that Britain should roll over and do what everybody else invariably wants. That is not the way I see European co-operation; it is not the way for any British Government to behave; and it is not what we are going to do.
Mr. Patrick Cormack: While disagreeing emphatically with what the hon. Member for Hartlepool (Mr. Mandelson) has just said, may I ask my right hon. Friend what steps the Community is now taking to inform the Serbs—those in Serbia and those in Bosnia—that safe havens in Bosnia will be made safe and that they will not be allowed to keep territory that was acquired brutally?
The Prime Minister: That, essentially, was the message of the communiqué that resulted from the summit. Today, the European Community's co-chairman, Lord Owen, will meet the partners—the Serbs, the Croats and the Muslim representatives—to discuss their ideas about the search for a settlement. I have no doubt that that point will be made again by Lord Owen, just as it is being made frequently by my right hon. Friend the Foreign Secretary and other European Foreign Ministers. My hon. Friend is right: this point needs to be emphasised continually. He has my promise that it will be emphasised.
Mr. Tam Dalyell: In Copenhagen, did anyone think to send to Mrs. Brundtland an indication that Norway would be more welcome if it were to change its policy on whaling?
The Prime Minister: I know the point that the hon. Gentleman has in mind. My right hon. Friend the present Secretary of State for the Environment has on a number of occasions made very plain the British Government's position on that matter; but it was not a subject for discussion at Copenhagen.
Mr. Tim Rathbone: Will my right hon. Friend remind the House of the fact—and re-emphasise it—that there seemed to be across-the-board agreement about the importance of low interest rates to the re-establishment of growth and the reduction of unemployment?
The Prime Minister: Yes, there certainly was some agreement about the attractiveness of that. However, perhaps just as important is the fact that there was agreement that the way to achieve the economic circumstances that would enable interest rates to come down is to reduce fiscal deficits right across the Community. We in this House are well aware of our own difficulty with the fiscal deficit. It is a difficulty faced by many other European countries. The need to reduce fiscal deficits throughout Europe in order to achieve low interest rates was well understood and clearly expressed.
Mrs. Margaret Ewing: While welcoming the accelerated time scale for enlargement of the Community, may I ask the Prime Minister what discussions took place about the implications of that extension for the various institutions of the Community? We have to deal with this matter in a practical manner, but we must also ensure that

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there is democratic accountability to every citizen of the Community. Will the Prime Minister be more forthcoming about the time scale that is envisaged in the case of eastern and central European countries?
The Prime Minister: The hon. Lady has touched upon a very practical and important point. As part of the enlargement negotiations, some consideration will have to be given to institutional change. The voting weighting of the incoming countries is an obvious illustration. But really substantial institutional change is likely to be discussed at the next intergovernmental conference, which will follow the EFTA states' entry to the Community.
Mr. Raymond S. Robertson: Does my right hon. Friend agree that the best way to secure stability and democracy in eastern Europe would be to bring the countries there into full membership of the European Community and, in the meantime, to open up free trade with them?
The Prime Minister: My hon. Friend is quite right. I can say with absolute conviction that we have been the foremost proponents of ensuring that the central and eastern European countries are enabled to join the Community when they are ready and if they wish to join. Two or three years ago, it seemed a rather forlorn hope that the whole Community could be persuaded to agree to that policy; it has now not only agreed to the policy but set it out as a firm Community objective.
Mr. Bob Cryer: In the course of the discussion of the competitive position, did the Heads of Government consider the position of farmers and a cut in the common agricultural policy, which accounts for most of the £2·5 billion that this country pays each year? Do the Heads of Government ever sit back and consider the benefits that are supposed to flow from membership of the Common Market? Or would an unaccustomed silence fall if they were to try?
The Prime Minister: An unaccustomed lot of unemployment in the hon. Gentleman's constituency would follow if we were to fail to consider the benefits of joining the European Community. Sixty per cent. of our exports—this will apply to the hon. Gentleman's constituency, as well as to every other Member's—result from our trade relationship with the European Community.
If the hon. Gentleman thinks that his constituents will stay in work without jobs, he is living in cloud cuckoo land. On the question of agriculture, it may have escaped the hon. Gentleman's notice, as he lives in his own fantasy land, that this country led the way to securing an agreement on reform of the common agricultural policy.
Sir Teddy Taylor: Is it not a shame that no time was given to discussion of the crisis in agriculture? Despite these wonderful reforms, spending this year is breaking all records, as is the size of the cereal mountain. Does the Prime Minister agree that the best way of cutting costs and creating jobs would be to wind up this absurd policy, or to promote the idea that member states should be able to disengage from it, in the interests of farmers, consumers and jobs?
The Prime Minister: My hon. Friend is not right.
Sir Teddy Taylor: Want to bet?
The Prime Minister: I did not know that my hon. Friend was a natural better, but I may well be tempted to take him on. I do not think that he is right about this matter. The common agricultural policy has been discussed on many occasions. If it were to be discussed at every meeting of Heads of Government, it might be attractive to my hon. Friend to have Council meetings lasting three weeks, but it would not be attractive to me.
Ms Joyce Quin: Can the Prime Minister explain, why, in television interviews after the Council meetings, the Dutch Prime Minister and the French Foreign Minister both repudiated his views about European Community social legislation? Can he explain also why employment in the Netherlands has dropped sharply throughout the past four years even though that country has high levels of employment protection?
The Prime Minister: The hon. Lady is clearly unaware that the Netherlands is at present cutting social protection.
Mr. James Paice: Is not the best news for Britain the decision to bring enlargement forward to 1 January 1995? Will my right hon. Friend confirm that that would not have happened without the commitmen't at Maastricht; that, as a result, Britain will for the first time be one of a majority who are net contributors: and that, for the first time in Europe, those who pay the bills will be the voting majority?
The Prime Minister: I can confirm what my hon. Friend has said. There will be many advantages in a larger Community, including the EFTA states. It will certainly be a material advantage to have four more net contributors to the Community budget: that will add very dramatically to proper financial discipline when the Community makes decisions on spending.
Mr. Harry Cohen: How do lower wages, less social provision and greater unemployment, allegedly for the sake of competitiveness, differ from the policies that led to the great depressions of the 1920s and 1930s?
The Prime Minister: The hon. Gentleman would do well to go back and study the causes of the great depression. The policies that he advocates, with great sincerity and great regularity, are precisely those that would ensure that we had more unemployment. It would be worse and longer—in fact, for ever.
Mr. Ian Taylor: The Prime Minister showed at Copenhagen that, when we argue positively about a wide range of European issues, we have nothing to fear about the Community or its Councils. Will my right hon. Friend continue in that positive vein by stressing that economic convergence may take longer than expected, but that it is still in this country's interests that it should occur, and that the same thing applies to fiscal balances? In those circumstances, will he come forward, before the next summit, with positive ideas about how the European Monetary Institute might conduct its, affairs from 1 January, and perhaps revive the idea of the hard ecu?
The Prime Minister: My hon. Friend is entirely right about the importance of economic convergence and the specific fiscal and other criteria that we set out in the Maastricht treaty. Quite apart from the part they play in the move to economic convergence across Europe, those

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criteria are right on their own merits for control of the economy in each and every European country. All the countries will consider how the EMI will work.
Mr. Tony Banks: Did any discussion take place in Copenhagen about the nightmare scenario involving the thousands of obsolete and leaking nuclear weapons held in the old Soviet Union? Has the Prime Minister any firm proposals to assist the various states of that former country to decommission and get rid of those terrible weapons?
The Prime Minister: Yes, that issue has been discussed in the past, and it was discussed again in Copenhagen. We are helping the Russians and other eastern European countries, bilaterally and as part of the Community, to deal with that problem. It is my intention and that of the other European Heads of Government to raise that matter yet again at the G7 summit in Tokyo. We require the assistance of the United States and Japan in particular if we are to make a comprehensive attempt to tackle the problem.
There is no doubt that any repeat of the accident at Chernobyl would have devastating consequences across a wide part of Europe. It is therefore very much in our interests to take this matter seriously now, and to seek to do something about it.
Mr. Roy Thomason: Has my right hon. Friend seen the article published in yesterday's edition of the Financial Times which said that Mr. Delors is now having to temper his ambitions as power is moving from Brussels to the member states within the Community? Does my right hon. Friend believe that the Copenhagen summit was a further step in that welcome direction?
The Prime Minister: I think that we see in many parts of the Community a more philosophical approach than was once the case.
Mr. William Cash: Given that my right hon. Friend has conceded that the convergence conditions under the Maastricht treaty are unworkable and are likely to lead to higher unemployment, would he care to explain how, in the movement towards 1996, we could get the unanimity required to unravel that treaty? How will that be achieved when about six of the member states have a vested interest in the subsidies they get, and are likely to continue to ensure that that treaty stays in force?
The Prime Minister: No, no: my hon. Friend has, uncharacteristically, misunderstood the point. It is not my view that convergence is unworkable. I think that it is necessary and desirable, quite apart from being part of the move towards economic and monetary union. What I believe to be unrealistic is the belief that convergence will be reached across the Community according to the timetable set out in the Maastricht treaty.
I thought that that was unlikely when we were asked to sign up to that treaty, which is one reason why we did not do so. Since then, however, the change in economic circumstances throughout the Community has made it
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even less likely that that convergence will be achieved. It is desirable in its own right, but, in my judgment, it is now unrealistic to expect it by 1996 or anything like that date.
Mr. Anthony Coombs: Is my right hon. Friend aware that, although Britain currently attracts more than one third of foreign investment into the Community, the chairman of Daimler-Benz recently said that, due to unrealistic social and environmental costs, he would never build another car factory in his home country? Is that not a demonstration of how right the Prime Minister has been to emphasise the huge improvements and advantages that the British car industry now enjoys over that of Germany? Our car costs are 60 per cent. lower than those of Germany; that is one reason why Rover is currently outselling Mercedes-Benz in Europe.
The Prime Minister: My hon. Friend is right. I am happy to quote, approvingly, the President of the Commission, who referred to this country as a "haven for foreign investment".
Mr. Iain Duncan Smith: Does my right hon. Friend accept that one of the main reasons why the terrible war in the old Yugoslavia has erupted as it has was Germany's rush to recognise Bosnia and Croatia, against our better judgment? Many hon. Members are concerned that, in Copenhagen, the Germans once again attempted to drive us into a position that is wholly untenable. Does my right hon. Friend accept that we would not think of deploying further troops without a full debate in the House?
The Prime Minister: As I said earlier in response to a question from an Opposition Member, I do not envisage that any further British troops will be sent to Bosnia in the near future.
On the substantive point in my hon. Friend's question, the biggest single element behind what has happened in Bosnia is the collapse of the Soviet Union and of the discipline that that exerted over ancient hatreds in the old Yugoslavia. Once that discipline had disappeared, those ancient hatreds reappeared, and we began to see their consequences when the fighting occurred. There were subsidiary elements, but that collapse was by far the greatest.
Mr. David Shaw: Can my right hon. Friend recall the amount of job creation from small businesses from 1983 to 1987? Did he explain to his European colleagues how we achieved that? Can he confirm that the policy in Europe on small businesses and deregulation will be improved in the future?
The Prime Minister: I can tell my hon. Friend that we argued strongly for a policy that would lead to job creation across Europe. We will contribute to the White Paper which is now being produced and which will be discussed at the Brussels summit. I have no doubt that the contributions to it will be many and varied. We will certainly set out a series of supply side considerations of the sort to which my hon. Friend referred.

Points of Order
4.55 pm
Mr. Phillip Oppenheim: On a point of order, Madam Speaker. Yesterday, during the debate on party funding, the hon. Member for Hammersmith (Mr. Soley) quoted from a letter alleging links between the President of the Board of Trade and an alleged fund-raising operation involving the Saudi Arabian Government. The author of that letter was not identified, and no substantiated evidence was produced to show that anything in that letter was true. The letter was quoted after the Saudi Arabian ambassador had specifically denied the allegations that appeared in The Guardian, and after the chairman of the Conservative party had also denied them.
I warned the hon. Member for Hammersmith that I intended to raise this matter with you, Madam Speaker. Although it is understandable that he should wish to divert attention from the appalling performance of the Opposition spokesman, was he not stooping low by raising an unsubstantiated allegation, and doing so when the President of the Board of Trade was patently not in a position to deny it?
Madam Speaker: Whatever happened yesterday or on previous days is a matter for the occupant of the Chair at that time. The incidents raised by the hon. Gentleman are not points of order. Points of order are not a court of appeal on what happened previously. If hon. Members believe that points of order should be raised, they should be raised at the time and dealt with. This is not a court of appeal at which we look back on something that took place previously.
Mr. Andrew Faulds: On a point of order, Madam Speaker. I should like to apologise to you and to the House for my temporary lapse a few moments ago, but it is aggravating to witness hilarity when one is discussing the sufferings in Bosnia.
Madam Speaker: Sometimes I have to exercise judicial deafness.

BILL PRESENTED
  CIVIL RIGHTS (DISABLED PERSONS) (SCOTLAND)
  Mr. Gordon McMaster, supported by Mr. Alfred Morris, Mr. Tom Clarke, Sir David Steel, Mrs. Margaret Ewing, Mr. Bill Walker, Mrs. Irene Adams, Mrs. Maria Fyfe, Mr Jimmy Wray, Mr. Jimmy Dunnachie, Mr. Archy Kirkwood and Mr. Adam Ingram, presented a Bill to prohibit, in Scotland, discrimination against disabled persons on the ground of their disability; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 2 July 1993, and to be printed. [Bill 213.]
  STATUTORY INSTRUMENTS, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101( 3) (Standing Committees on Statutory Instruments, &c.).

  PARALYTIC SHELLFISH POISONING
  That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 6) Order 1993 (S.1., No. 1523) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Kirkhope.]
  Question agreed to.

  Young Offenders (Detention)
  4.58 pm
  Lady Olga Maitland: I beg to move,
  That leave be. given to bring in a Bill to permit the detention in secure units of young offenders below the age of 14 years; and for connected purposes.
  The Bill would give juvenile magistrates the power to commit persistent young offenders below the age of 14 direct to a secure unit, without having to refer that decision back to social services.
  The Bill is needed urgently. All too often, local authorities thwart public opinion and the police by refusing to take advantage of the law, whereby only they can apply to have young thugs sent to a secure unit, either while on remand or for sentence. Those local authorities, with their soft liberal attitude, prefer to send the offender back into the community; where, within hours, he reoffends. There is nothing that the law can do to stop them, but society has had enough. It is time to act against persistent offenders who do not respond to normal cautions. Juvenile crime today has reached spine-chilling levels. The crimes are nastier and on a greater scale than ever before, It is a nationwide crisis.
  The Association of Chief Police Officers and the Police Superintendents Association of England and Wales estimate that the true rate of juvenile crime has leapt by 54 per cent. in the last decade. Not a week goes by without a report of grotesque misbehaviour by a young teenager, who then gets away with it.
  Those thugs, who are aged between 10 and 14, must be kept off the streets. Magistrates are in despair over having to hand the offenders back to the social services; legally they cannot do otherwise. It is no use the Government planning more secure units or secure training establishments if it is not possible to send young offenders to them. My Bill seeks to redress that.
  The inability to put a persistent offender into secure accommodation was highlighted in November by the tragedy in Stockton, when a stolen car, occupied by a number of runaways from children homes, collided with another car, killing one woman and injuring three others. The driver was typical of. the hard core of persistent offenders for whom magistrates were completely unable to insist on the provision of secure accommodation. Had that offender been put into a secure unit at the time, that woman would not have died.
  My constituency of quiet, leafy and prosperous Sutton is not an area where one would expect to find a hard core of tough, young criminals. However, we have a gang of a dozen youngsters, who, with another dozen acolytes, have run up scores of offences of burglary—of both shops and residential premises—drug dealing, stealing cars, joyriding, ram-raiding and so on. The gang are all aged 14 or under. As they operate in pleasant suburbia, they are more money-oriented than their violent brothers in the inner cities, and can earn up to £2,000 a night with the help of adult Fagins.
  Money and robbery becomes a drug to them. One young thug admitted to being addicted to stealing. The boys are arrogant and defiant, and know that they are above the law. They are skilled, fast and sophisticated in their work, and the scale of their crimes is disproportionate to their numbers.

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  The group to which I have referred call themselves the Sutton burglary posse. They are so confident that they stole a printing press and ran off calling cards, which they leave at the addresses that they rob. The cards say: "Sutton Burglary Posse was here—phone 999." In 18 months, those youngsters, all aged between 12 and 14, have stolen £1·5 million-worth of goods and caused hundreds of thousands of pounds worth of damage to property, for which long-suffering retailers and householders have to bear the entire cost in increased insurance premiums and repairs.
  The Sutton burglary posse even has the nerve to telephone rakish minicabs, which, for a percentage of the profits, will collect the youngsters and their loot and cart them off home. If caught, the boys stand hands in pockets, boasting of their successes and telling the police. "There is nothing you can do to me." At present, they are right.
  Moreover, they know their rights—telephoning solicitors before their parents, or, in other cases, calling social services in the middle of the night to get them out of the police cells. Once free, they escape back into crime.
  They have no fear of the consequences, for there will be none. Instead, they laugh when arrested and joke with friends when they appear in court. When released, having been given yet another supervision order to cover perhaps scores of charges, they celebrate in an almost carnival atmosphere.
  One ringleader in Sutton has been arrested more than 40 times, with 200 charges against him. He has admitted twice as many offences. On one occasion, he appeared in court to face 21 charges ranging from actual bodily harm to burglary, receiving, stealing cars, carrying an offensive weapon and so on. All that the frustrated magistrates could give him, accepting that social workers would not put him into a secure unit, was a one-year supervision order. Afterwards, he was congratulated by fellow posse members and his social worker on getting off so lightly.
  His mother was furious. She had pleaded, "Lock him up for his own good." Not surprisingly, the local newspaper, the Sutton and Cheam Herald, ran the headline,
  "Posse boy walks free—age saves chronic burglar from harsher sentence."
  Since then, he has committed another six offences. So much for socia) services' claim that he is a reformed lad. His solicitor pleaded for him by saying:
  "He has not offended for three weeks now."
  His friends are no different. One has been arrested 31 times, with scores of charges. Do not be taken in by his small size and completely angelic looks. He can barely reach a car's pedals, but he has no compunction about stealing high-performance cars and purposely baiting the police into a car chase.
  Another one was barely 13 when he was first arrested. Today, aged 14, among his many offences is a charge of blinding another boy with a pen. He carries a double-edged Stanley knife, which I am told is now highly fashionable among his group. It is good for heavy scarring.
  Another boy, by his 15th birthday, had been arrested 60 times, and on each occasion only conditional discharges and supervision orders could be passed. There was
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  absolutely nothing that the magistrates could do, and the local authority was not prepared to apply to commit him to a secure unit. Now he is at last in Feltham, but the damage to society has already been done.
  There are such posses all over the country. Many are nastier, with hideous reports of bloody violence. Police are angered, and society is furious at the contemptuous way in which they swagger back to the streets.
  We would not be facing such a serious crisis if social workers and their political masters were more responsive to society's needs. The fact is that they are ideologically against putting a persistent offender into secure accommodation. Their argument is that such units are universities for crime and that, in any case, it is cruel. These juveniles are already in highly select schools of crime by virtue of the company that they keep.
  What seems to be forgotten by social workers is that society pays an intolerable price for these crimes that far outweighs the cost of re-educating juveniles. I have visited three such units—Orchard Lodge at Crystal Palace, Glen House near Southampton, and Middlesex Lodge at Hillingdon. They are small, with a high ratio of adults to youngsters; the maximum number that a unit takes is eight.
  Their purpose is as much re-education as removing them from society. They teach youngsters how to lead structured, normal lives, and give regular schooling with plenty of one-to-one teaching. Years of truanting have left such youngsters largely illiterate. Evidence shows that, by keeping a young person for several months, or ideally for a year, much good work can be achieved.
  The decision about whether social services should refer a child to a secure unit is a geographical lottery. Sutton local authority is resistant, but Newcastle upon Tyne made more than 160 referrals in 1986, whereas in nearby Gateshead, only one child was locked up for similar behaviour. In Sunderland, crime was halved when an 11-year-old who had committed more than 200 offences was put in a secure unit. Research in Northumbria has shown that one in three juveniles reoffend while on bail.
  Time is against us. It is quite unacceptable for youngsters to continue to punish the community. Magistrates must have the power to send them to' secure units. The Bill will redress the balance.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order.
  Question put and agreed to.
  Bill ordered to be brought in by Lady Olga Maitland, Sir John Wheeler, Sir David Mitchell, Mr. John Gorst, Mr. Nigel Forman, Mr. Michael Shersby, Mr. Patrick Cormack, Mr. Michael Stephen, Mr. David Lidington, Mrs. Cheryl Gillan, Dr. Robert Spink and Mr. Geoffrey Clifton-Brown.

  YOUNG OFFENDERS (DETENTION)
  Lady Olga Maitland accordingly presented a Bill to permit the detention in secure units of young offenders below the age of 14 years; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 2 July, and to be printed. [Bill 214.]
Orders of the Day

  Agriculture Bill [Lords]
  As amended (in the Standing Committee), considered.
  Ordered.
  That the Agriculture Bill [ Lords], as amended, be considered in the following order, namely, new Clauses relating to Part I, amendments relating to Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 22, new Clauses relating to Part II, amendments relating to Clauses 23 to 26, Schedule 3, Clauses 27 to 33, Schedule 4, Clauses 34 to 45, new Clauses relating to Part III, amendments relating to Clauses 46 to 49, remaining new Clauses, amendments relating to Clauses 50 to 57, new Schedules, amendments relating to Clause 58, Schedule 5, Clause 59.—[ Mrs. Gillian Shephard.]

New clause 18

  PUBLICITY FOR DETERMINATIONS (No. 2)
  '.-( 1) As soon as reasonably practicable after granting an application under section 2 or 5 above, the authority granting the application shall make public in such manner as it thinks fit—

  (a) the fact that it has granted the application, and

  (b) the principles of the approved scheme or, as the case may be, of the approved variation.

  (2) As soon as reasonably practicable after deciding under section 6 above to withdraw an approved scheme's approval, the authority making the decision shall make its decision public in such manner as it thinks fit.'.—[ Mr. Jack.]
  Brought up, and read the first time.
  5.10 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Michael Jack): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): With this, it will be convenient to discuss also Government new clause 17—Publicity for determinations (No. 1).
  Mr. Jack: With your indulgence, Mr. Deputy Speaker, I shall make a short statement for the clarity of the House. I wish to inform the House that my wife and I held between us some 4,000 shares in Northern Foods plc which were acquired as a result of the company I worked for before coming into Parliament being taken over by Northern Foods. I say this as a matter of courtesy to the House.
  I turn now to new clause 18 with which there are clearly parallel measures in clause 17. The Bill would require a milk marketing board to bring the principles of its reorganisation scheme to the attention of registered producers. Ministers would have to consult representatives of producers, processors, retailers and consumers of milk.
  The principles of the scheme will be in the public domain. Under the provisions of clause 4, the reorganisation scheme may be modified between submission and approval if Ministers cannot approve the scheme in its original form. A scheme as approved may therefore be different from that originally submitted for approval.
  If Ministers decide to approve a scheme, it is important that those affected by it should know what has been approved. The new clause would require Ministers to make public the principles of an approved scheme. The same format would apply to any proposed changes to the
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  potato marketing board. The new clause would also require Ministers to publicise any approved variations to the scheme. That is in the spirit of ensuring that all those who need to know what is going on can find out the facts.
  Dr. Gavin Strang: I preface my remarks by congratulating the Minister on his appointment. I hope that he finds his term of office rewarding and worth while.
  The new clause is better than nothing. It focuses attention on one of the Bill's great weaknesses. We have received considerable support from industry, and certainly from the Dairy Trade Federation which agrees that it is wrong that the new scheme is not subject to parliamentary approval.
  The Bill should have provided for the approved reorganisation scheme setting up the successor body and associated matters to come before both Houses of Parliament for approval. There is no question but that we are talking of something of tremendous importance to the agriculture industry, food industry and consumers in Britain.
  My second point focuses on what we consider to be the other flaw in the legislation. The new clause makes it clear that the applicants will be the boards. It refers to "after granting an'application", but an application may be made only by the England and Wales milk marketing board, the Northern Ireland milk marketing board or the Scottish milk marketing board. That substantially predetermines the outcome of the revised arrangements.
  If the only scheme that can be approved is one that is submitted by a board, the boards will put forward single co-operative arrangements or something along those lines. The new clause rules out completely the option of integrated regional milk co-operators which certainly should have been given careful attention. That option would have provided for a number of integrated co-operatives owned by the producers covering England and Wales.
  The requirement that the only scheme that can be approved is one submitted by the board pre-empts us. We will have a huge, voluntary single co-operative, probably dominating the marketplace. We are grateful, to the Minister for his clarification of the new clause. Of course it is desirable that such matters should be brought to the attention of the public. We simply regret that the revised schemes are not subject to parliamentary approval.
  Mr. Jack: I understand the points that the hon. Gentleman makes and I thank him for his most courteous and kind words of welcome to the Dispatch Box. However, there was uniformity of agreement in Standing Committee that everyone wanted these matters to be dealt with as quickly as possible. I am sure that the hon. Gentleman will understand that the additional process that he suggested would slow up the measure.
  The hon. Gentleman's remarks were very much addressed to the successor to the milk marketing board, but that will not be the only thing on offer. As we already know, other interested parties are proposing their own schemes which involve the taking of milk for the purposes of manufacture or liquid milk delivery. Those in the dairy industry will have to consider a multiplicity of alternatives.
  In Standing Committee, on Second Reading and now, Ministers who will have to make the decision on what is an appropriate scheme, as detailed in clause 3, will obviously

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  take into account the concerns put to them in the House, but bearing in mind the large number of people who will look carefully at the successor schemes and the points that they put forward. There will be a widespread public debate as people consult and discuss the issue and I can assure the hon. Gentleman that the principal details will be laid in the Library of the House.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New clause 13

  FUNCTIONS UNDER SECTION 19 OF THE AGRICULTURAL MARKETING ACT 1958
  '. The functions of a committee appointed under section 19 of the Agricultural Marketing Act 1958 (consumers' committees and committees of investigation) shall not include the consideration of anything done by a milk marketing board—

  (a) by way of preparing for the enactment of this Part of this Act, or

  (b) in connection with an application under this Part of this Act or the carrying out of an approved scheme.'.—[ Mr. Jack.]

  Brought up, and read the First time.
  Mr. Jack: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: Wit h this it will be convenient also to discuss Government new clause 14—Functions under section 19 of the Agricultural Marketing Act 1958.
  Mr. Jack: In taking these two clauses together, it is important to stress that the establishment of committees of investigation and consumer committees is provided for by the Agriculture Marketing Act 1958.
  The committees' purpose is to consider complaints about the operation of the milk marketing scheme and the parallel operation for potatoes and to monitor their effect on consumers respectively. The approval and monitoring of the implementation of the reorganisation schemes are dealt with not by that mechanism but by the Agriculture Bill and, as the Bill says, are matters specifically for Ministers. It is unnecessary for the committees to oversee reorganisation.
  The new clause makes it clear that the committees have no particular or specific role in boards' activities relating to schemes of reorganisation before or after enactment.
  Mr. D. N. Campbell-Savours: I welcome the Minister to the Dispatch Box and look forward to sparring with him many times in the future.
  As the Minister will know, I agreed with the former Minister of State that I would not speak about the new clause on Report, as he had agreed.to withdraw it to allow consultation to take place outside the House. The Minister may also know that his hon. Friend has subsequently released me from that commitment.
  Some concern is being expressed about the new clause. It appears to preclude the right of a consumer organisation outside the Government, the House and the milk marketing boards to complain about the operation of the scheme during the transitional period preceding vesting day when that transition might be considered to be the cause of any difficulties caused to milk consumers by the scheme. In effect, the transition could be used as an excuse for failure to report to Ministers and to put that report in
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  writing. Moreover, by removing the power of the committee of investigation to investigate any act or admission by the board through the use of the same "transition" arguments—or excuses—the new clause may well prevent a perfectly legitimate investigation from taking place.
  Ministers may have had in mind the possibility of prolonged and delayed investigation when the new clause was tabled, but it does not necessarily follow that an investigation will be prolonged or delayed. At a time when the milk marketing board is in turmoil—it is going through a period of great uncertainty—the new clause may well act against the public interest. Indeed, precisely that has happened on more than one occasion in recent months.
  We believe that the powers in the Agricultural Marketing Act 1958 should be retained, in the widest possible sense—if only for brief investigations—and that other powers that might be available to Milk Marque or to consumer organisations are insufficient.
  Mr. Jack: I thank the hon. Member for Workington (Mr. Campbell-Savours) for his words of welcome. I have listened carefully to what he has said.
  At times of change, there is a danger that people will use certain language to try to create a crisis where none exists. The hon. Gentleman said that the board was in a state of turmoil; my early observation suggests that it is working extremely hard to establish its future, while continuing to serve both consumers and providers of milk. Certainly, no flood of letters has arrived on my desk suggesting that it is in turmoil or that it is paying insufficient attention to detail.
  The purpose of the committees, under the 1958 Act, is to consider complaints about the operation of the milk marketing scheme and to monitor its effect on consumers. By "complaints", I mean specific complaints about the day-to-day operation of the board. The committees are intended to examine the details of complaints; they were never designed to examine matters of policy. That is what the elected members of the board are there to do. They are the farmer representatives: they sit on the board to consider the complaints and concerns of the industry. It is important not to confuse the two sets of activities.
  The committees were not established to judge what might be the nature of a successor organisation. The Bill sets out clearly the terms on which that job would be done. The hon. Member for Workington put his points precisely. Let me say to him with equal precision that this is not the committees' task, that I do not think that the board is in a state of turmoil and that the terms on which the interests of consumers, producers and others will be taken into account are clearly defined in clause 3.
  Question put and agreed to.
  Claused read a Second time, and added to the Bill.

New clause 1

  MARKET DISTORTIONS ARISING OUT OF REORGANISATION
  '.—(1) Where it appears to Ministers that distortions have arisen in the supply and marketing of milk, Ministers may by regulation introduce measures to assist in the orderly supply and marketing of such product.
  (2) Measures may only be introduced under subsection ( 1) above where Ministers are satisfied that there has been an abuse of dominant market position arising out of—

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  (a) favourable treatment as to price and supply of milk to customers with whom a qualifying successor body is connected by reason of equity; or

  (b) favourable treatment as to price and supply of milk to customers with whom a qualifying successor body is connected by reason of equity held by producers where such producers hold a majority share of the issued capital.

  (3) Where Ministers are satisfied that such an abuse of dominant market position exists, they may specify a course of action to be taken by the qualifying successor body.'.—[Dr. Strung.]
  Brought up, and read the First time.
  Dr. Strang: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient also to discuss the following: new clause 7—Future regulation (No. 1)—
  .—(1) In the case of a scheme of re-organisation submitted by the Milk Marketing Board of England and Wales the approval of the appropriate authority shall be deemed withdrawn if by vesting day any successor body to the said board has failed to appoint to its Board of Directors or equivalent a nominee of the appropriate authority for a period of three years from vesting day.
  (2) It shall be the duty of such nominee to report quarterly to the appropriate authority on all matters relating to the purchase and sale of milk by the successor body including matters which in the opinion of the nominee could affect competition in the marketing of milk in England and Wales.
  (3) Each report of the nominee shall be issued by the appropriate authority to such persons as in its opinion are representative of the interests of producers of milk and processors of milk within 14 days of its receipt.
  (4) For the purpose of this section reference to a "successor body" shall mean any body proposed by a board in a scheme of re-organisation to be engaged in milk trading and in respect of which a statement of the nature required by section (2) (c) has been submitted.'.
  New clause 8—Future regulation (No. 2)—
  .—(1) In the case of a scheme of re-organisation submitted by the Milk Marketing Board of England and Wales it shall be a requirement of any approval of such a scheme that on vesting day or, if the target figure specified in subsection (2) below is attained before that date then on the day it is attained, the appropriate authority shall be advised by any successor body to the said board of the names of the producers contracting to supply milk to it and by the said board of the volume of milk which those producers had sold to it in the year 1st April 1992 to 31st March 1993 ("the period") and the total volume of milk sold to it during the period.
  (2) Where the milk sold to the said board during the period by the producers contracting to supply a successor body represents 50 per cent. or more of the total volume of milk sold to the said board during the period ("the target figure"), the appropriate authority shall refer the trading practices and operations whether actual or intended of any such successor body to the Monopolies and Mergers Commission for investigation.
  (3) For the purposes of this section reference to a "successor body" shall mean any body proposed by a board in a scheme of re-organisation to be engaged in milk trading and in respect of which a statement of the nature required by section (2)(c) has been submitted.'.
  Dr. Strang: The new clauses are designed to focus attention on the threat posed to consumers by the arrangements following. the winding up of the milk marketing boards. The Milk Marketing Board of England and Wales will be replaced by Milk Marque—an
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  organisation that may well command at least 80 per cent. of the milk produced by farms in England and Wales. Equivalent bodies will replace the Northern Ireland and Scotland boards.
  Completely new arrangements will operate; there will be no control over the price of milk. It has already been made clear that milk prices will rise by 20 per cent. as a direct result of the winding up of the boards. That will have a serious impact on many people: families on low incomes, with children, spend about one seventh of their total food expenditure on milk or milk products. Such an immediate and sharp increase in the price of milk is surely a matter for concern.
  An important related aspect is the impact on the doorstep delivery system. One of the strengths of our present arrangements is that a substantial amount of milk is still sold on the doorstep; a sharp price increase will undoubtedly put even more pressure on the system.
  It is generally believed that about 80 per cent. of farmers will join the new organisation, Milk Marque. Indeed, the figure may be nearer 90 per cent. I well understand why so many farmers are choosing to join Milk Marque. A further threat arises from the fundamental issue of EC quotas, which prevent farmers from increasing milk production in response to higher prices. In a normal marketplace, if prices rise sharply and a product becomes more profitable, the industry will produce more of it; supply relates to demand. The rigid milk quotas—a dairy farmer suffers a tremendous penalty if he exceeds his quota—pose a real threat to the future arrangements for both consumers and the dairy industry. A large, voluntary, private virtual monopoly over 80 per cent. of milk production could well operate against a background of tight quotas.
  Some hon. Members will ask, "What about imports from the continent?" It is true that there is no problem with cheese and butter, in which there is a free movement of trade; but, given the cost of moving fresh milk across the channel to provide a proper service, I doubt whether anyone seriously believes that there will be an adequate brake on the dominant market power of Milk Marque. One consequence may be increased imports of UHT milk, but that remains to be seen. There is no doubt that it is a matter of serious concern that we should move from a highly regulated arrangement—which has had the support of producers, dairy companies and consumers in the past—to an unsatisfactory and unstable system.
  The Government have been warned by various voices in the industry. Perhaps the new Minister was not aware of that; I shall therefore quote an observation made at the end of last year not long after the Bill was published. Mr. Brian Smith described the Bill as a
  "recipe for a price explosion."
  He continued:
  "In a year when the regulatory bodies of privatised previously state monopolies have stepped in to curb price increases, the Government is creating a situation where a very dominant selling organisation of a product whose supply is fixed by quota is to have no regulatory checks and balances at all".
  Mr. Brian Smith is the president of the Dairy Trade Federation, which I believe represents about 87 per cent. of the dairies in this country.

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  5.30 pm
  To their credit, the milk marketing boards have made no secret of the fact that they intend to increase the price of milk by 20 per cent. We are worried not only about the increase in price following the winding up of the boards' arrangements but about what may happen if Milk Marque dominates and exploits the market to secure higher prices than can reasonably be justified.
  On 5 March, Milk Marque launched its two-stage customer initiative, a document setting out the new arrangements for buying milk from Milk Marque. The document provoked quite a reaction and, as a result of representations from the Ministry of Agriculture, Fisheries and Food and the Office of Fair Trading, it had to backtrack to some extent. It appeared that Milk Marque was already threatening people as early as last March that if they did not sign up to buy milk from Milk Marque they might have difficulty in getting milk supplies in future. As a result of the representations, Milk Marque withdrew some of the statements in the document.
  I remind the Minister of what the Dairy Trade Federation said about Milk Marque's document in its official press release of 9 March. It reads:
  "The Dairy Trade Federation expressed concern about the proposals by Milk Marque (the dominant private cooperative designated to succeed the Milk Marketing Board) to increase milk prices by 20 per cent.
  'This proposal is exactly what we feared when we learned of the Government's proposals to remove the present statutory controls from the MMB' said DTF President Brian Smith. 'It is a monopoly using its power to increase prices to consumers…We ask the Government to set up independent supervision of this dominant monopoly'."
  This is the purpose of the new clauses. A number of other new clauses, which have not been called for debate, propose a range of options, but we are not too concerned about the nitty-gritty of them; we are keen to focus attention on the dangers of the new arrangements arid to ask the Government to establish a regulatory body.
  I said that the boards had made no secret of their intention to secure an increase in the price of milk. It is also fair to say that they have made no secret of the potential threat to doorstep delivery. Let me make it clear: everyone wants the service to continue and recognises that it is an important asset, which is especially valuable for the elderly and sick. It should also be maintained because many jobs are involved. It is not unique to this country, but a higher proportion of milk is sold through doorstep delivery here than in many other European countries.
  In an interview on 9 March on "Farming Today", Mr. Derek Beresford was asked:
  "So you could see the doorstep delivery being squeezed by increased costs, lack of…supplies and more milk going into the supermarkets?"
  Mr. Beresford replied:
  "This is true. And it's something that we have to address. I, for one, and I'm sure a lot of my colleagues are wanting to…sustain the doorstep delivery as long as we possibly can."
  As the House will recognise, it is all very well to want to sustain it but what counts are the hard facts of the marketplace.
  Figures from the National Dairymens Association show that in 1982 about 86 per cent. of all liquid milk was sold through the doorstep delivery system. In 1992, the proportion had fallen to 56 per cent. The milk marketing board's annual accounts, which were presented the other
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  day, record a further dramatic fall, and I estimate that roughly half of all milk is now sold through doorstep delivery.
  There must be a point at which the system becomes unviable. If there is much more of a decline in the proportion of milk sold in that way, it could have a catastrophic effect on the system. Within the framework of the new arrangements with which we are, sadly, to be saddled, the Government should surely do all they can to encourage the industry—I admit that there is probably not a great deal that they can do—to sustain the doorstep delivery service.
  The problem arises out of the nature of the successor body. The options have diminished to the extent that there will be one large producer co-operative. The Minister of State rightly said that we should not lose sight of the fact that there are other companies in the marketplace. For example, Northern Foods has made clear its intention to enter directly into supply contracts with farmers. It is seeking to secure a substantial proportion—or all, if possible—of their supplies by that means, but that does not alter the fact that all the signs are that Milk Marque will account for about 80 per cent., or perhaps even 90 per cent., of the milk sold from our farms. The existence of one huge, single operator in the marketplace gives us cause for concern.
  I do not believe that it is a very satisfactory long-term arrangement for the producers. The only protection is that offered by the Office of Fair Trading or the European Commission. The Commission has given an undertaking that it will not intervene for two years, and what happens then remains to be seen. That does not apply to the Office of Fair Trading, whose director general could, I suppose, intervene within a few months of the new arrangements coming into force. He could decide that there was an unsatisfactory monopoly which should be referred to the Monopolies and Mergers Commission.
  I merely point out that such a situation would not be very satisfactory. It would place farmers in an insecure position if they were to join a co-operative knowing that it might soon be referred to the MMC because of its dominance over liquid milk. In view of what we are to be saddled with, there is clearly a need for a regulatory body. Regulation should not be left to the Office of Fair Trading. We should establish a body with the explicit aim of monitoring the situation, advising Ministers and, if necessary, referring the issue to the MMC.
  There are alternatives. New clause 7 suggests that such a body should include as a director—if I may use that term—someone appointed by the appropriate authority. In practice, it would mean that the Scottish co-operative would include a representative from the Scottish Agriculture and Fisheries Department. The same would apply for Northern Ireland. The Milk Marque board would include a representative from the Ministry of Agriculture, Fisheries and Food who would be charged with preparing a quarterly report which would be passed to the Ministry so that a close watch could be kept on what was happening.
  Mr. Geoffrey Clinton-Brown: I have listened carefully to what the hon. Gentleman has said, and I listened carefully over many weeks to what he said in Committee. I am surprised that he takes that stance on Milk Marque's dominance of the market, when the whole thrust of the Bill is to free up the

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  market so that any buyer can come in and buy milk if he wants to. What on earth is wrong with farmers coming together in a strong co-operative to face a market of strong buyers?
  Dr. Strang: The problem is simply that whereas, under the present arrangements, there are clear controls—the price negotiated between the Dairy Trade Federation and the boards—the new situation will not be a proper free market, because quotas will control production, and a very large organisation will almost certainly be able to dominate the marketplace. That is not our fear alone; it is expressed by others in the industry, including the Dairy Trade Federation. Indeed, I have already quoted the federation to that effect.
  We must not lose sight of one fundamental fact, which is more important than the boards—the existence of quotas. That control of supplies is so important because it means that the market will never operate as it should. That is why we have expressed concern. I hope that, even at this late stage, the Government will show some appreciation of the dangerous path that we could take. They should be aware of the need to be alert to what might happen and to take action to prevent the development of a milk market that could not be justified, in which consumers would be exploited and the dairy companies could set unrealistic and unjustifiable prices.
  Mr. Paul Tyler: First, I add my welcome to the Minister of State, and to his right hon. Friend the new Minister of Agriculture. I hope that they have discovered from their bedtime reading of the Committee proceedings what a constructive Committee it was. There was all-party agreement on objectives, if not always total unanimity about the solutions.
  I approach the new clauses tabled by the hon. Member for Edinburgh, East (Dr. Strang) with much sympathy. Clearly we are intervening in a difficult balanced market, but I feel that the hon. Gentleman is aiming at the wrong target. The threats to consumers are likely to come not from the monopolistic tendencies of Milk Marque or of the new boards in Scotland and Northern Ireland, but from a dominance of the whole market by the buyers, to which the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) obliquely referred. The problem in this country is that, for so many years, the buyers have dominated the milk market, just as they have dominated the food market.
  5.45 pm
  The people most concerned about the situation are the producers, to whom the hon. Member for Edinburgh, East referred. I am not sure how many dairy farmers there are in his constituency, but I have a great many in mine, and they are constantly concerned, in relation to other commodities as well as milk, about the domination of food buying and processing by a small number of huge companies—the processors and the supermarket cabals.
  In recent years, as we have all seen, despite the recession in so many other areas, and the severe depression in agriculture, those companies' profits have bucked the trend and broken all bounds. Surely that is the background against which we should be concerned about what will happen to consumers. The threat to consumers comes not from 80 per cent., or even 85 per cent.. of
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  producers signing up with Milk Marque, but from the weakening of Milk Marque and the other boards so that they cannot exercise real power in the marketplace.
  We know, too, of the growing discrepancy over the lifetime of the Government between farmgate prices—the prices that producers receive—and retail prices. That discrepancy has been created not by market boards but by retail chains and the processors behind them.
  I believe that the solutions proposed by the hon. Member for Edinburgh, East are misguided. The whole concept of "Ofmilk", if I may use that shorthand description, is sour. It does not seem intelligent to impose new disciplines and boards when we are trying to improve competitiveness, vis-a-vis not only the buyers to which I have referred, but the strong organisations in other member states of the EC, where significantly. over many generations, producers have come together to form strong co-operatives.
  My hon. Friends and I come in the main from farming communities, and we strongly believe that we now have the best chance, perhaps the last chance, to create a continental-style producer co-operative in this country. As hon. Members on both sides of the House have said, clearly the market will be competitive. Anyone who has met the buccaneers of the Northern Milk Partnership will know that Milk Marque will not get an easy ride.
  There will be many people in the market, and the competitive restraint that they will impose, plus the important disciplines available through the Office of Fair Trading, the Monopolies and Mergers Commission and the EC Commission, will be sufficient in terms of regulatory authorities and restraint.
  I believe that the hon. Member for Edinburgh, East was technically wrong when he said that the Community would not intervene for two years. The Minister gave us an explicit assurance in Committee that the Community had given an undertaking that, if there were complaints, it was prepared to intervene during the first two years of Milk Marque and the other boards. With so many organisations clearly already in the field and watching every move that Milk Marque makes, I cannot believe that there will not be a complaint if there is any real cause for concern.
  I followed, with great concern, what the hon. Member for Edinburgh, East said about the milk quota. When the Bill is finally put to bed with Royal Assent, and Milk Marque and its competitors are on the road, there will still be an extraordinary marketing situation because of the quota. Again, in Committee we were given many assurances by the then Minister about the Government's future policy on quotas. I hope that those assurances will he repeated today by the new regime.
  As a country, we must not dilute our efforts to ensure that the redistribution of quota among member states meets more sensibly the natural provisions and needs of each state's market requirements. It is rather absurd that quota has become so set, and so difficult to shift and adjust.
  I hope—I believe that the Minister agrees with me—that, in the long term, quota can become a tradeable asset across national boundaries. I am conJinced that our producers in this country are by far the most efficient, and we have some of the best territory and climatic conditions for the production of milk, especially in Cornwall.
  We are told both by the industry and by Ministers that our milk producers are the most efficient in the world, so surely they will be able to compete effectively if milk quota

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  becomes a buyable asset throughout the Community. We should press hard for that development; that is how we should try to loosen up the present regime for quota. We received assurances to that effect in Committee, and I hope that the Minister and his right hon. Friend will ensure that that aim remains a priority in their negotiations around the Council of Ministers table.
  The issue is not how successful Milk Marque and the other boards will be in attracting producer support, nor is it whether they obtain 85 or 75 per cent. or only 51 or 49 per cent. support. The critical issue is how they use their market position.
  In Committee, the Minister gave assurances that the critical criteria will be the adjudication of the proposed scheme or schemes and the way in which the organisations monitor the new regime after its vesting day. I think that there was broad support for that on both sides of the Committee.
  If the regime behaves in a monopolistic way, there will be many avenues of redress for those affected by its behaviour. It would be wrong to set up yet more regulation, regulatory boards and bureaucracy at a time when industry is crying out for less.
  Mrs. Elizabeth Peacock: I welcome my hon. Friend to the Dispatch Box today and to his new office of Minister of State, Ministry of Agriculture, Fisheries and Food. I am sure that he will bring his extensive experience of the food industry to his new post and that that will be an additional advantage. I also welcome my right hon. Friend the Secretary of State.
  The House will recall that on Second Reading I said that my interest in manufacturing industrial matters was well known. As chairman of the all-party wool textile group, I spoke about the wool guarantee and perhaps we shall return to that subject later. For many years, I have been closely involved in the milk industry, although not in a financial way. I declare an interest in that my husband is employed by one of the largest dairy companies in the country.
  One aspect of the reform of the milk marketing scheme fundamentally contradicts the principles of our party and the Government and the purpose of the Bill that we are being asked to support. We are told that the Bill's intent is to create a free market in bulk milk so that our farmers and milk processors have a stimulus to compete more effectively with our European counterparts—that is wholly acceptable and welcome. However, we are also asked to give the Minister powers to approve the creation of a monopoly milk broker, the Milk Marque, which has aspirations to control 80 per cent. of the bulk milk market of England and Wales. We would not permit a processor to control 80 per cent. of the market in England and Wales, so why are we, the party of competition, even considering allowing such a position to develop?
  There is now more demand from processors for the farmer's milk than available supply and no possibility of an expansion of production to meet that demand because, since 1984, production has been reduced by 17 per cent. as a result of the EC production quotas. Those quotas are likely to tighten still further rather than relax before the end of the decade.
  In those circumstances, where farmers are guaranteed a market for their milk, the creation of a monopoly broker is both unnecessary and undesirable, particularly when more than half the output goes into the fresh liquid milk
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  market, which is essentially a domestic market. It is not subject to foreign competition because of the cost and logistics of transporting fresh milk.
  I should very much like doorstep deliveries to continue. They will continue if we use them and the more people who use them, the better the prospect for their future. Ultimately, if doorstep deliveries disappear, it will be the elderly, sick and disabled and those with small children without the capacity to go to supermarkets who will suffer. That is not a new campaign of mine—I have long campaigned for doorstep deliveries to continue. That system is often envied; some of the eastern bloc countries are looking at our scheme to see whether they can introduce similar ones.
  I accept that producers need to organise themselves properly to negotiate effectively with processors. Four or five regionally based organisations would achieve that end and would, above all, safeguard the consumer against any part of the supply chain having too much power—an issue which we must all consider carefully. The establishment of a single milk brokerage more than twice the size of the second-largest buyer of milk in Europe is not imperative.
  The dangers are all too obvious. Against a background of cutting costs in his organisation, the chief executive of the milk marketing board has already signalled his intention to use his monopoly power to force up milk prices by 20 per cent. when Milk Marque starts trading next year. Consumers will not thank us if that happens. What assurances are we giving consumers that that will not be allowed to happen? We are saying that, once the scheme ends, normal EC and United Kingdom competition laws will apply, leaving the competition authorities the job of sorting out a potentially unhealthy and chaotic process of our making. That is an abdication of our responsibilities. We have the power to establish a proper free market in bulk milk and now is the time to do it.
  It is bizarre when it is left to the Opposition to table a new clause to ensure such a free market by limiting the size of any successor organisation. That should be a central plank of our reform as we are the party which is supposed to be committed to the principle of competition. I hope that my hon. Friend the Minister will have some reassuring comments to make when he replies. I think that new clause 8 is well worth supporting.
  Mr. Campbell-Savours: The Opposition agree with much of the speech of the hon. Member for Batley and Spen (Mrs. Peacock). She has exposed what was exposed in detail in Committee—that the Bill will not create conditions of competition in the market place. As the hon. Lady said, her party has historically been wedded to principles of competition. We are being asked to accept that, having set itself the objective of securing 80 per cent. of the market of Britain's farmers and milk producers, the Milk Marque will act in the public interest. It cannot possibly act in the public interest if it has that share of the market.
  I ask my hon. Friends and Conservative Members to give an example of an organisation which'has 80 per cent. of the market but which does not abuse its position. I shall give way to any Minister who can give an example where there has not been an abuse of monopoly power. The general view throughout the industry, among the Dairy Trade Federation members and all those with whom I have discussed the subject, is that there will be an abuse of

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  market power. The Government repeatedly told the Committee that the competition authorities which exist within the European Community, the Office of Fair Trading or the Monopolies and Mergers Commission could deal with the matter rapidly, but that is a myth. The process will not work in that way. That is why we have tabled the new clauses today.
  Concern is being widely expressed about whether Milk Marque can abuse its market position. The Opposition's approach to the debate is two-pronged. We have tabled new clauses 9, 10 and 11 and amendment No. 3 to provide for a strong regulatory regime. That was a fierce approach to a potential problem, but it has not been possible to debate those issues today.
  Secondly, we tabled a series of amendments to provide a weaker approach, giving Ministers the right to introduce regulations and powers to assist in establishing an orderly market. New clause 1 would introduce those powers into the Bill. They would apply in two different circumstances. The first arises where Milk Marque owns or partly owns processing facilities. The second arises where milk is supplied to processing facilities that are owned by farmers who, as producers, are nationally or regionally contracted to Milk Marque. There is concern that, in the second set of circumstances, farmers who are so contracted and are conscious of operating margins will use their milk supply power to require Milk Marque to supply processor operations in which the farmers have a shareholding. In the case of the former, would Milk Marque want to own processing facilities? Such an intention is set out in the document entitled "Rules of Milk Marque." I dealt with this point in detail in Committee. However, I believe that it will be of benefit if I draw the attention of the House once more to those rules. We believe that it is distinctly probable that, long after Mr. Andrew Dare and his formidable colleagues have retired, a future management of Milk Marque might set out to enter the processing business.
  6 pm
  To prove my point, the rules that will govern Milk Marque's operation once it is set up state that it wants to
  "carry on directly or indirectly for the benefit of its Members …including the business of producing milk cream, butter, buttermilk, cultured milk, evaporated and semi-evaporated buttermilk or cultured milk, milk-sugar…cheese, whey preparations, milk powder, condensed whole or separated milk…ice-cream, margarine and any other commodity of which milk is a substantial ingredient."
  It also wants to
  "carry out such operations and to manufacture or deal with such goods…as may seem to the Board of Directors directly or indirectly to advance the interests of the Society…to carry on any other trade or business whatever which, in the opinion of the Board of Directors, can he advantageously carried out on, in connection with or ancillary to any of the above mentioned businesses or is calculated directly or indirectly to enhance the value of or render profitable any of the property, undertaking, rights or privileges of the Society."
  I wanted to place those rules once more on the record. They prove that one day Milk Marque will own its own processing arms. We can therefore envisage that, if Milk Marque has 80 per cent. of the market and its own processing arms, it may well show preferential treatment to those processing arms.
  Mr. Clifton-Brown: What is the difference between the situation of which the hon. Gentleman complains and the Co-operative Wholesale Society which is the country's largest retailer and farmer and one of this country's largest dairy producers and processors? What is the inherent difference in that situation and the situation of which the hon. Gentleman complains?
  Mr. Campbell-Savours: The answer is very simple: it does not have 80 per cent. of the market and it did not set out to secure 80 per cent. of the market in any area in which it operates.
  If Milk Marque succeeds, it will inevitably develop into an integrated broker and processor of milk. I am not sure whether the competition authorities in the form of the Office of Fair Trading and the Monopolies and Mergers Commission will necessarily have the power to stop that happening. I believe that Parliament may well have to exercise some influence in these matters. If the OFT and the MMC can deal with the difficulties, fair enough. However, if they cannot, powers must be available to Ministers.
  New clause 1 includes the phrase:
  "may by regulation introduce measures".
  That does not place any compulsion. The real dangers will arise when there is a milk shortage or a developing milk shortage. Professor David Harvey of Newcastle university has predicted that, by the end of the century, there may be a further cut of 20 per cent. in quota. If there is to be that level of reduction in quota in the Community—that applies equally in the United Kingdom—and milk is in short supply, it will be fought over fairly aggressively.
  Over the past 10 years, there has been a 16·5 per cent. cut in quota. I understand that we may be due for a further 2 per cent. cut in quota next year. Irrespective of the predictions, we are en route for a major milk shortage. With cuts in export subsidies on processed milk and commodity products, no one will volunteer to close plants.
  The marketplace will become increasingly aggressive. In those conditions, an aggressive Milk Marque will want to look after its own processor interests. The farmers who supply Milk Marque and have interests in processing plants will also want to ensure that Milk Marque provides milk to those plants.
  In the new world, there will be no EC rough equivalent available, if only because the Community, during the same period, will want to cut expenditure. We cannot expect there to be a barrel of brass available to buy out processing plants in future.
  I am also concerned about the investment decisions that will take place in the new world market place. Mr. Haskins of Northern Foods has said that, because of the changes that might take place in the marketplace, investment decisions that he might be considering may be deferred if not changed. Mr. Haskins said:
  "One thing is for sure: if farmers were to club together, with 80 per cent. to 90 per cent. of the milk, you won't find Northern Foods investing in such a climate."
  One of the largest milk processors in the United Kingdom is already talking in terms of not investing—
  Mr. Jack: Why did Northern Foods buy Northern Dairies?
  Mr. Campbell-Savours: The Minister should ask Mr. Haskins that question. Mr. Haskins' reply would not be the one that the Minister expects.
  Mr. Haskins continued:

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  "We would invest elsewhere. We'd go to Ireland or France. Once you make an investment (we've got a £20 million UHT investment to make, for example) you are dependent on your raw material supplies.
  If you are not happy about the manner in which that raw material is going to be supplied, then you'll hardly invest in the business. Why should I have to buy from a monopoly when I've only got 24 per cent. of the market?"
  Of course, he was being very facetious.
  People in the industry in this country are already pointing with concern to the conditions that will exist in the new marketplace. The Opposition new clauses to some extent set out to redress problems which we believe Ministers have failed to address.
  Mr. Jack: We have been treated to an interesting insight into Opposition competition policy. I would like to deal with some of the points raised by the hon. Member for Edinburgh, East (Dr. Strang). However, before I do that, I thank the hon. Member for North Cornwall (Mr. Tyler) and my hon. Friend the Member for Batley and. Spen (Mrs. Peacock) for their kind words of welcome.
  The hon. Member for Edinburgh, East opened the argument by referring to the threat to the consumer and to questions about milk price rises.
  I once earned my living buying for a supermarket. If somebody came to me and said, "The organisation of the business that we are involved in has changed and I would like to charge you 20 per cent. more for our product," I would have shown him the door. The short answer is that the people who are presently engaged in buying milk products will ensure that they can remain competitive in the marketplace. In respect of many products in which ingredients other than liquid milk products are used, consumers can make alternative purchases. That demonstrates the dynamics of the marketplace which will be opened up by this measure.
  For example, yoghurt is a dessert. Many forms of dessert could be used. One could substitute a dessert for a piece of fresh fruit. That is the competitive nature of the fruit business.
  Mr. Campbell-Savours indicated dissent.
  Mr. Jack: It is no use the hon. Member for Workington running away from the way in which marketplaces work and shaking his head. If he has ever pushed a supermarket trolley, he will know that such decisions must be made by the consumer. I do not believe that there will be an overnight price rise.
  A large number of outcomes may befall a Milk Marque that abuses its dominant position in the marketplace. Several hon. Members mentioned the Monopolies and Mergers Commission, the Office of Fair Trading, the Director General of Fair Trading and the European Community in respect of articles 85 and 86 of the treaty. All those wait to entrap a Milk Marque which abuses its so-called dominant market position.
  Dr. Strang: Is the Minister suggesting that the chief executive of the milk marketing board was not serious when he said that Milk Marque will pay 20 per cent. more for milk?
  Mr. Jack: It is not my task to comment on the pricing policy that those who run Milk Marque or any other organisation care to make, in bidding up those who might seek to do business with it. The hon. Member for Workington (Mr. Campbell-Savours) commented on
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  Northern Foods. It is interesting to note that, on "Farming Today", when I last listened to it, Mr. Haskins said, "Come with us and you will get a better price." Clearly, people are setting out their stall to ensure that the deal that they are offering will attract supplies. In so doing, perhaps they are taking into account the fact that there will be a different marketplace for milk.
  I now refer to the nature of the competitive process. If we follow the logic of what the Opposition are putting forward, we at least are removing the present totally dominant situation. The Bill would remove the existing milk marketing board, which has an absolute monopoly except in one or two cases of those who bottle, produce and sell from their own farms or those who make certain dairy products. We are introducing competition and choice. More important, we are safeguarding those who struggle to get milk supplies, for example, for those who are specialist cheese or other dairy product producers. In so doing, we are helping to enhance enterprise and opportunity.
  Mr. Tyler: On the point about the regulatory and competitive framework within which Milk Marque will have to proceed, in Committee we were given an explicit assurance that the European Commission could intervene, if asked to do so, within the first two years. I want to make that point absolutely clear because it is very important to those of us who are concerned about the framework.
  6.15 pm
  Mr. Jack: I have studied the matter with care and I have read the letter which Sir Leon Brittan has written on the subject. As the hon. Gentleman knows, that letter was sent to my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer), the previous Minister of Agriculture, Fisheries and Food. Sir Leon Brittan says, "I have looked at the proposals and I am prepared to stay my hand subject to certain factors, for example the determination of the terms upon which people may leave Milk Marque as suppliers." However, he also says, "I will be keeping a close eye on what is going on, and if people complain to me that there is abuse of a dominant market position, I do not fetter my hand to act if necessary," That must equally be the situation that the Director General of Fair Trading will face. A lot of people will be watching.
  The hon. Member for Workington told us of the hidden agenda. With his forensic approach to politics, he dearly loves to find so-called hidden agendas and new truths. The hon. Gentleman has been a company director; he understands such matters. From the articles of association of the business that he was involved in, he will know that a business lays out the full scope of what it might like to do in future. Therefore, Milk Marque would not wish to fetter its position if, to come back to the dynamics of the competitive market, things begin to change.
  I am sure that, initially in year one, Milk Marque will attract a large number of milk suppliers, but they, being canny farmers, will be looking over the proverbial hedge to see how their mates are doing. If they are doing rather well because they have signed up with a local co-operative supplying a local dairy or any other organisation that cares to bid for their milk, they might exercise their rights to move. Milk Marque might find that the situation changes and that the nature of the business needs to adapt.
  The Opposition's dinosaur approach to politics would not allow Milk Marque the ability to change. Goodness

  345
  knows what the consequences might be. That shows that the Opposition do not understand the dynamics of the marketplace and how they can work to safeguard the interests of small producers, for example, and how the marketplace will deal with price.
  Mr. Campbell-Savours: May I ask the Minister a very simple question? We can accept his allegation that we do not know how the marketplace works, but do members of the Dairy Trade Federation—the people who do the processing in the industry, who have briefed us in detail and indeed written several of the amendments that were moved in Committee—also know nothing about the business, or is it just the Minister who understands those matters?
  Mr. Jack: When people have enjoyed a relatively cosy and intimate relationship, as the DTF and the milk marketing board have done for many years, would not one expect them to try to argue for the status quo? Life is so much easier. We are opening up the industry and addressing the central point of the Opposition's argument. If the Opposition are concerned about the dominant market position, why did they vote against breaking up the body which has the dominant market position—the milk marketing board?
  Dr. Strang: There is all the difference in the world between a regulated monopoly in which there is a law that lays down the conditions and a price is agreed between the Dairy Trade Federation and the board, and the voluntary free market that we are moving into. There are no restraints at all on the companies and co-operatives in the new market situation. It is like going back to publicly owned utilities, with a monopoly, public ownership, tight control, and then moving to private ownership. There is absolutely no comparison. The Minister cannot say that there is a contradiction. The Bill is bound to wind up the boards, so we should look at the new circumstances.
  Mr. Jack: I am glad that the Opposition are looking at the new system. The Opposition's amendments—some of them were not selected—provided a window to the new Opposition thinking. Whenever there appears to be domination of one group as against another in the marketplace, they want a directorate-general and they want to start setting prices for products. They are missing the dynamics of the competitive process. If, in years two, three, four or five, other organisations which are presently bidding for supplies of milk do better than Milk Marque, who knows what will happen? Those processes are the best safeguard against the abuse of a dominant position, backed by clear law in respect of the way in which the Monopolies and Mergers Commission and indeed the European Community can act. I can think of no greater sword of Damocles hanging over the new organisation than those very powerful pieces of law. The central issue is that the Conservative party introduced competition to break down the dominant market.
  The hon. Member for Edinburgh, East asked about doorstep deliveries. When I go home, I relish the visits of Mr. Morris, our local milkman. He would be deeply distressed if I said something that put his livelihood at risk. Mr. Morris will be delighted that the abolition of the milk marketing boards means that the dreaded 2p levy that he
  346
  has to pay will disappear. That will improve the competitiveness of his business. I have noticed that Mr. Morris's business has expanded over the years, as have those of many others who make doorstep deliveries. All kinds of goods are available for the convenience of the consumer, because those who make doorstep deliveries realise that they are in a highly competitive market. The argument has been that, as supermarkets have entered the milk business, those who make doorstep deliveries have had to adapt, and they have adapted. Some have said that they wished to retain the convenience of doorstep deliveries—others have found it better to buy milk from a supermarket. Conservative Members believe in choice. Equally, I am glad that those who make doorstep deliveries have reacted.
  Mr. Andrew Welsh: Will the Minister confirm a Government commitment to a Scottish milk development council if the industry wished to set one up?
  Mr. Jack: We shall look at all the proposals when we have a clear sight of what is to succeed the present system. I am aware of the interest in development councils and will examine the proposition.
  I was about to comment on a point about the dynamics of competition. The hon. Member for Edinburgh, East asks whether there is a possibility of milk coming from abroad. A French producer, for example, may decide, as a result of the lower labour costs and competitive manufacturing environment that we have created on this side of the channel, to establish a factory here. That factory might produce high value-added dairy products and the producer might think that the transport cost of approximately 5p to move milk from mainland Europe to within 100 miles of Calais may be worth doing. Who knows? There is always that possibility.
  Equally, I can reassure the hon. Member for North Cornwall, who made an important point about milk quotas. My right hon. Friend the Minister and I commit ourselves firmly to continuing to campaign for what is good for Britain and the dairy industry in terms of the future of quotas. The hon. Gentleman raised an important point and we are very much wedded to that. We understand some of the imbalances in the Community and there are longer-term agreements. We shall want to campaign for what is best for Britain.
  Mr. William Cash: Will the Minister be good enough to confirm that the increase in quotas for Greece and Italy which has not been properly supervised militates against the interests of British milk producers, particularly the large number in my constituency? We cannot allow the situation to be perpetuated. I accept that the Government want to campaign for Britain, but will they do something about it?
  Mr. Jack: I am disappointed that as assiduous a European student as my hon. Friend has not reflected on the facts. The uncovering of the activities in Italy has meant, first, that £70 million has been returned to the Commission and, secondly, a reduction in the Italian total production of milk products. They have had an increase in their formal quota, but as a result 1·76 million tonnes of milk will be taken out of production. As a further bonus to farmers in his constituency, the I per cent. reduction in milk quotas did not occur. I call that a tour de force for

  347
  those of us who are trying to stop abuse in the Community. I am glad that my hon. Friend raised the question and I hope that he will accept the answer.
  My hon. Friend the Member for Batley and Spen at heart has some sympathy with new clause 8. The idea of an automatic referral if Milk Marque got 50 per cent. of the milk supply before the process of vesting was continued would cause tremendous disruption in the industry. I do not think that that would be widely welcomed. It also gives rise to an interesting point: what happens if other organisations are as successful as she expects Milk Marque will be? Would she want those to be referred?
  Mrs. Peacock: Certainly.
  Mr. Jack: My hon. Friend says that she would, but I think that people want a speedy resolution of the matters. Bearing in mind what I have said to my hon. Friend about competition law, I hope that she will accept that we shall be looking carefully at the interests of all concerned. Much of what has been said by my hon. Friend and others will be in the minds of Ministers when they look at the schemes. The fact that the company that she refers to is now in the business of bidding for its supplies of milk shows us clearly that we have entered a competitive situation. The company could not previously have secured its own supplies of milk. I believe that it welcomes that. It would not have made an investment such as the purchase of Express Dairies if it had not seen a long-term future in the dairy industry.
  The hon. Member for Workington mentioned a number of the new clauses. He and the hon. Member for Edinburgh, South both referred to new clause 7. I thought that they might be campaigning for new jobs as representatives on the board from north and south of the border respectively. Theirs is not a terribly sensible idea. The amendments that they have tabled do not take forward the role of the so-called place person on the new board in any meaningful sense. I do not think that the proposals would add in any way to safeguarding the interests of the people in whom they claim to be interested. The points that I have made on competition law would do far more to discipline the minds of Milk Marque in the future than the ideas that those hon. Gentleman have put before the House this evening.
  For all those reasons, I believe that we have put an unassailable case before the House this evening. The dynamics of the marketplace will safeguard against the fears that Opposition Members have put forward. The law on competition and the threat of investigation from the EC are powerful safeguards against abuse. Opposition Members have not looked far enough forward to see what would happen in the development of the milk business. Their amendments would fetter that development; ours would encourage it.
  Question put and negatived.

New clause 6

  DISPUTES PROCEDURE
  .—(1) The appropriate authority shall not approve a scheme of reorganisation unless the terms of purchase and supply of each successor body proposed to be engaged in milk trading make provision for the resolution of disputes between such a successor body, these purchasing milk from it and those supplying milk to it.
  (2) For the purposes of this section reference to a "successor body" shall mean any body proposed by a board in a scheme of re-organisation to be engaged in milk trading and in respect of which a statement of the nature required by section (2)(c) has been submitted.'.—[ Mr. Campbell-Savours. ]
  Brought up, and read the First time.
  Mr. Campbell-Savours: I beg to move, That the clause be read a second time.
  Mr. Deputy Speaker: With this it will be convenient to discuss also amendment No. 83, in clause 3, page 3, line 27, at end insert
  '(aa) Whether the scheme makes sound provision for the settlement of diputes between the successor body and its customers;'.
  Mr. Campbell-Savours: In winding up a few moments ago, the Minister used an interesting phrase. He said, "I think what people want is a speedy resolution of these matters." That is precisely what the new clauses are about. New clause 6 is particularly important to the processors as they move into a free market. The Government keep on saying, and said again today, that if the membership of the DTF—the processors and dairies—is concerned about what happens in the market, it can use the courts, the Office of Fair Trading, or the Monopolies and Mergers Commission, or it can go to the EC's regulatory authority. Of course, we all know that that is a long-drawn-out process and that much damage can be done in the interim period unless a proper disputes procedure is set up. The new clauses deal specifically with that disputes procedure.
  Hon. Members may need to be reminded of what the previous Secretary of State said on those matters when we debated the Bill on 23 March this year. I asked whether Ministers had ruled out arbitration for the disputes procedures. The former Secretary of State replied:
  "In advance of the board's proposals I would not like to say that I have ruled out anything of that nature but I see no role at the moment for further statutory interference in the way in which the market will operate. I shall certainly not be dogmatic as I am not a dogmatic person."—[Official Report, 23 March 1993; Vol. 221, c. 793.]
  Those are the words of the former Minister, to whom I refer as a Secretary of State. That is what he was and what the right hon. Lady now is. So much for dogmatism. In Committee, we saw no movement at all on the question of disputes procedure.
  We have no fast-track approach to sort out problems such as unreasonable refusal to supply, disputes about the use of assets as marketing tools—we debated that issue at length in Committee—the poaching of contracts, the selective predatory pricing to producers and perhaps even unreasonable collection and delivery conditions. To some extent, collection problems can be dealt with in Milk Marque's own rules. Curiously enough, Milk Marque's rules provide for a disputes procedure, but, in the main, deal only with internal matters.
  Section 19 of the Agricultural Marketing Act 1958 provides for consumer and investigation committees, to which reference has already been made. However, they are to be wound up under this non-statutory arrangement. The scheme proposed by the milk marketing board provides for a joint committee and an arbitration procedure. The problem with that scheme is that a draft scheme of reorganisation, which is not statutory, does not provide for a joint committee or arbitration. Therefore, there is no machinery in place to deal with the issue of disputes.

  349
  6.30 pm
  What can we do if Milk Marque gets too big for its boots and finds itself embroiled in disputes? The answer is to insist on a procedure for the resolution of disputes to be clearly defined at the time that a scheme is approved. The Minister will have to do that because, effectively, he will approve the schemes. He can say to those who submit schemes, "I require that a disputes procedure in which I have confidence be inserted in the scheme before I approve it." The matter is in his hands.
  The Dairy Trade Federation supports new clause 6. I quote:
  "The DTFs concerns about dispute resolution under new milk marketing arrangements stems from the anticipation, on the Board's own reckoning, that their successor is likely to command a high percentage of the market in the supply of raw milk…Sub-clause I would require each successor body of a Milk Marketing Board to make provision for the settlement of disputes and for the appropriate authority not to approve a scheme of re-organisation without such provision. The arrangement for dispute resolution would cover not only those purchasing milk from a successor body, but also those supplying milk to it. At the heart of the proposal lie concerns that disputes relating to volume and supply can be speedily dealt with, rather than requiring the parties concerned to engage in lengthy court proceedings, possibly after the supply has been cut off."
  Amendment No. 83 would further extend the principles that I am arguing in this debate and contains another disputes procedure. That disputes procedure is from the Unigate stable. When Ministers determine whether schemes should be approved, Unigate wants them to have regard to whether the scheme. makes sound provision for the settlement of disputes, as is the case of the more widely represented Dairy Trade Federation.
  On the referee issue, the Dairy Trade Federation proposes that the milk marketing boards' sale and conditions arbitration procedure set out in rule No. 30, effective from I May 1991, should be applied in the case of schemes approved by the Minister and suggests that a requirement to use that procedure must be built into the approval that Ministers might give. I do not know if the Minister is aware of that procedure—I understand that he has had to do a lot of reading since his new appointment. If he is not aware of it, I shall quote precisely what Unigate says:
  "Unigate believe that a referee is necessary to safeguard the interests of producers of milk…Various suggestions have been made re a 'Referee' ranging from an 'OFMILK', to a supervisory body, to retaining the type of arbitration arrangements that exist between the MMB and milk buyers collectively…While Unigate recognises that there arc wider issues involved and that there are advantages and disadvantages to all of these options, Unigatc believes that there is a simpler approach which would satisfy those concerns, i.e.: Compulsory arbitration between individual purchasers, buyers of milk and Milk Marque, if a dispute were to arise which could not be resolved in any other way. The MMB current sale conditions currently provide for this type of arbitration between an individual buyer and the MMB (with the parties deciding on their own arbitrators)."
  Is it possible for such an arrangement to be built into whatever approvals are decided by Ministers, or are they prepared to go further in the way that I have suggested in new clause 6 with perhaps a more substantial power?
  Mr. Jack: I have listened to the impassioned pleadings of the hon. Member for. Workington for a variety of approaches to the question of the resolution of disputes. On the basis of what he said, I am not persuaded that there
  350
  is a need for us to go beyond the normal way of dealing with disputes in situations of competition which will be created by the removal of milk marketing boards.
  The flaw in the forensically based argument of the hon. Gentleman is that he seeks to impose a raft of new ideas on Milk Marque but does not reflect on the fact that there will be others in the business. Other people who are competing for supplies of milk will have to lay out to their prospective suppliers the terms on which they will do business. If I were one of them, a question that I, as a farmer who is used to buying a whole range of supplies for my enterprise, would ask is: what happens if I fall out with a supplier? I would want to investigate that.
  I would want to examine the terms of trade—this shows the lack of understanding of Opposition Members of the way in which markets work. I am sure that one of the factors that may affect farmers in deciding their point of supply is the basis of the contract and what it says on these matters. I would want to make an informed judgment. For example, I might want to get my adviser to say, "Which of these processes will be the fairest to you?"
  As a knowing and commercial man and one who has been in business for some time, I would know what to look out for in terms of a dispute and the resolution of such difficulties. The hon. Gentleman knows that arbitration in normal commercial terms is one route. Another route is legal action. His point was that those processes could take some time and that continuing practical day-to-day difficulties may result. He will know that the Department of Trade and Industry made an announcement on 14 April which pointed the way forward for a more developed and selective way in which competition policy might address some of those internal difficulties. As a humble Agriculture Minister, it is not for me to trespass into those areas, but it shows the Government's thinking to ensure that competition policy can deal with those matters.
  My predecessor also mentioned the possible extension of the Competition Act 1980 into those areas. He rightly did not fetter his hand on that until he saw precisely the final scheme put forward by the milk marketing boards. If we look into the near distance, we can see some hopeful possibilities for dealing with some of those issues. But it is not our view—this is the central issue—that there is a requirement for new mechanisms to deal with such disputes. Farmers are business people. They understand what they are letting themselves in for and will read the fine print.
  Mr. Campbell-Savours: Does the Minister accept that it is more likely that there will be a dispute when one is dealing with the operations of a voluntary monopoly, which might control 80 per cent. of the market, than in other conditions, in which the supplying organisation has a far smaller share of the market? Does he accept that the scale of share would aggravate the condition that could lead to a dispute?
  Mr. Jack: The short answer is that the scale of share would aggravate the position only if the person who had the dominant position abused that position by unfair actions. That brings us precisely back to the arguments about the operation of competition policy. Such unfair actions would be an abuse of the privileges of having a dominant position.
  The hon. Gentleman should examine any personal circumstances in which he has been in dispute with people

  351
  in trade matters. He will find that disputes occur in the normal day-to-day business dealings of small or large companies. II is interesting to note that many large companies are trying hard to improve their customer relations because they wish to minimise the besmirchment of their otherwise excellent record in matters of dispute. Urged on by the Government's excellent initiative on the citizens charter, many people are opening up the ways in which they deal with complaints. Perhaps the hon. Gentleman does not give weight to that point.
  Mr. Campbell-Savours: It is a good example.
  Mr. Jack: I am glad that the hon. Member says that it is a good example because the example is percolating its way into the private sector, into which we hope that supplies of milk will go.
  Mr. Tyler: The Minister cast the hon. Member for Workington (Mr. Campbell-Savours) in the role of a latter-day Sherlock Holmes with forensic skills. I see him more in the role of an old testament prophet producing 10 commandments in the land flowing with milk and honey. The new clause is over-reaction and over-regulation.
  There is a serious point here. I listened carefully to the Minister's response. His predecessor admitted on several occasions in Committee that we were in a sensitive transition from a robustly managed market into what we hoped would be a more competitive market. As both Opposition and Conservative Members acknowledge, that transition inherently contains stresses and strains.
  The Minister's predecessor said in Committee that he would examine the scheme that was suggested. He said that he would not prejudge it because, as he rightly said, that would impede his judicial role when the scheme came before him in due course. However, he said that it was important to consider ways in which disputes could be avoided, not merely resolved, under the terms of the scheme.
  I took the point made by the Minister today about the proposals that have been made by the Department of Trade and Industry. I hope that those proposals will be helpful in this and other matters. The central point is surely this. We do not seek to over-regulate. We are trying to reduce regulation and free up a market. It must be done in a way that does not damage any parties that we can help. But to include in the Bill some provision which would impede the progress towards a freer market would he a retrograde step.
  Question put and negatived.

New clause 8

  FUTURE REGULATION (No. 2)
  .—(1) In the case of a scheme of re-organisation submitted by the Milk Marketing Board of England and Wales it shall be a requirement of any approval of such a scheme that on vesting day or, if the target figure specified in subsection (2) below is attained before that date then on the day it is attained, the appropriate authority shall be advised by any successor body to the said board of the names of the producers contracting to supply milk to it and by the said board of the volume of milk which those producers had sold to it in the year 1st April 1992 to 31st March 1993 ("the period") and the total volume of milk sold to it during the period.
  (2) Where the milk sold to the said hoard during the period by the producers contracting to supply a successor body represents 50 per cent. or more of the total volume of milk
  352
  sold to the said board during the period ("the target figure"), the appropriate authority shall refer the trading practices and operations whether actual or intended of any such successor body to the Monopolies and Mergers Commission for investigation.
  (3) For the purposes of this section reference to a "successor body" shall mean any body proposed by a board in a scheme of re-organisation to be engaged in milk trading and in respect of which a statement of the nature required by section (2)(c) has been submitted.'.—[Dr. Strung.]
  Brought up, and read the First time.
  Motion made—[Dr. Strang]—and Question put, That the clause be read a Second time:—
  The House divided.. Ayes 150, Noes 269.

  Division No. 305]

  [6.43 pm

  AYES

  Adams, Mrs Irene

  Hinchliffe, David

  Ainger, Nick

  Hoey, Kate

  Ainsworth, Robert (Cov'try NE)

  Howarth, George (Knowsley N)

  Armstrong, Hilary

  Howells, Dr. Kim (Pontypridd)

  Ashton, Joe

  Hoyle, Doug

  Austin-Walker, John

  Hughes, Kevin (Doncaster N)

  Banks, Tony (Newham NW)

  Hughes, Robert (Aberdeen N)

  Barron, Kevin

  Hughes, Roy (Newport E)

  Battle, John

  Hutton, John

  Bayley, Hugh

  Jackson, Glenda (H'stead)

  Benn, Rt Hon Tony

  Jackson, Helen (Shef'ld, H)

  Bennett, Andrew F.

  Jones, Barry (Alyn and D'side)

  Benton, Joe

  Jones, Jon Owen (Cardiff C)

  Bermingham, Gerald

  Jones, Lynne (B'ham S O)

  Bray, Dr Jeremy

  Jowell, Tessa

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

  Keen, Alan

  Burden, Richard

  Kennedy, Jane (Lpool Brdgn)

  Byers, Stephen

  Khabra, Piara S.

  Caborn, Richard

  Kilfoyle, Peter

  Callaghan, Jim

  Kinnock, Rt Hon Neil (Islwyn)

  Campbell, Mrs Anne (C'bridge)

  Lestor, Joan (Eccles)

  Campbell, Ronnie (Blyth V)

  Lewis, Terry

  Campbell-Savours, D. N.

  Livingstone, Ken

  Cann, Jamie

  Lloyd, Tony (Stretford)

  Clapham, Michael

  Loyden, Eddie

  Clarke, Tom (Monklands W)

  McAllion, John

  Clelland, David

  McAvoy, Thomas

  Clwyd, Mrs Ann

  McCartney, Ian

  Connarty, Michael

  McFall, John

  Corbyn, Jeremy

  McKelvey, William

  Cousins, Jim

  Mackinlay, Andrew

  Cryer, Bob

  McLeish, Henry

  Cunningham, Jim (Covy SE)

  Mahon, Alice

  Dalyell, Tarn

  Mandelson, Peter

  Davidson, Ian

  Marshall, Jim (Leicester, S)

  Davies, Ron (Caerphilly)

  Maxton, John

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

  Meale, Alan

  Dewar, Donald

  Michael, Alun

  Dixon, Don

  Michie, Bill (Sheffield Heeley)

  Dobson, Frank

  Milburn, Alan

  Dowd, Jim

  Morgan, Rhodri

  Dunwoody, Mrs Gwyneth

  Morley, Elliot

  Eagle, Ms Angela

  Mudie, George

  Enright, Derek

  Mullin, Chris

  Etherington, Bill

  Murphy, Paul

  Evans, John (St Helens N)

  O'Brien, Michael (N W'kshire)

  Fatchett, Derek

  O'Brien, William (Normanton)

  Flynn, Paul

  O'Hara, Edward

  Foster, Rt Hon Derek

  Peacock, Mrs Elizabeth

  Foulkes, George

  Pike, Peter L.

  Fyfe, Maria

  Pope, Greg

  Galloway, George

  Powell, Ray (Ogmore)

  Gerrard, Neil

  Prentice, Ms Bridget (Lew'm E)

  Golding, Mrs Llin

  Prentice, Gordon (Pendle)

  Gordon, Mildred

  Prescott, John

  Griffiths, Nigel (Edinburgh S)

  Primarolo, Dawn

  Griffiths, Win (Bridgend)

  Purchase, Ken

  Grocott. Bruce

  Quin, Ms Joyce

  Hain, Peter

  Raynsford, Nick

  Hardy, Peter

  Robertson, George (Hamilton)

  Hill, Keith (Streatham)

  Roche, Mrs. Barbara

  353

  Rogers, Allan

  Turner, Dennis

  Rooker, Jeff

  Walley, Joan

  Rowlands, Ted

  Wardell, Gareth (Gower)

  Ruddock, Joan

  Wicks, Malcolm

  Sheerman, Barry

  Williams, Rt Hon Alan (Sw'n W)

  Sheldon, Rt Hon Robert

  Williams, Alan W (Carmarthen)

  Short, Clare

  Wilson, Brian

  Simpson, Alan

  Winnick, David

  Skinner, Dennis

  Wise, Audrey

  Smith, Andrew (Oxford E)

  Worthington, Tony

  Soley, Clive

  Wray, Jimmy

  Spellar, John

  Wright, Dr Tony

  Steinberg, Gerry

  Strang, Dr. Gavin

  Tellers for the Ayes:

  Taylor, Mrs Ann (Dewsbury)

  Mr. Eric Illsley and Mr. Gordon McMaster.

  Tipping, Paddy

  NOES

  Ainsworth, Peter (East Surrey)

  Douglas-Hamilton, Lord James

  Alison, Rt Hon Michael (Selby)

  Dover, Den

  Allason, Rupert (Torbay)

  Duncan, Alan

  Amess, David

  Duncan-Smith, Iain

  Arbuthnot, James

  Dunn, Bob

  Arnold, Jacques (Gravesham)

  Durant, Sir Anthony

  Ashby, David

  Dykes, Hugh

  Ashdown, Rt Hon Paddy

  Eggar, Tim

  Aspinwall, Jack

  Evans, Jonathan (Brecon)

  Atkinson, David (Bour'mouth E)

  Evans, Nigel (Ribble Valley)

  Atkinson, Peter (Hexham)

  Evans, Roger (Monmouth)

  Baker, Rt Hon K. (Mole Valley)

  Evennett, David

  Baker. Nicholas (Dorset North)

  Faber, David

  Baldry, Tony

  Fabricant, Michael

  Banks, Matthew (Southport)

  Fenner, Dame Peggy

  Bates, Michael

  Field, Barry (Isle of Wight)

  Bendall, Vivian

  Fishburn, Dudley

  Beresford, Sir Paul

  Forman, Nigel

  Biffen, Rt Hon John

  Forsyth, Michael (Stirling)

  Body, Sir Richard

  Forth, Eric

  Bonsor, Sir Nicholas

  Foster, Don (Bath)

  Booth, Hartley

  Fox, Dr Liam (Woodspring)

  Boswell, Tim

  Fox, Sir Marcus (Shipley)

  Bottomley, Peter (Eltham)

  Freeman, Rt Hon Roger

  Bowden, Andrew

  French, Douglas

  Bowis, John

  Fry, Peter

  Boyson, Rt Hon Sir Rhodes

  Gale, Roger

  Brandreth, Gyles

  Gallie, Phil

  Brazier, Julian

  Gardiner, Sir George

  Bright, Graham

  Garnier, Edward

  Brooke, Rt Hon Peter

  Gillan, Cheryl

  Brown, M. (Brigg & Cl'thorpes)

  Goodson-Wickes, Dr Charles

  Browning, Mrs. Angela

  Gorst, John

  Bruce, Ian (S Dorset)

  Greenway, John (Ryedale)

  Bruce, Malcolm (Gordon)

  Griffiths, Peter (Portsmouth, N)

  Burns, Simon

  Grylls, Sir Michael

  Burt, Alistair

  Hague, William

  Butcher, John

  Hamilton, Neil (Tatton)

  Butler, Peter

  Hampson, Dr Keith

  Campbell, Menzies (Fife NE)

  Hanley, Jeremy

  Carlisle, Kenneth (Lincoln)

  Hannam, Sir John

  Carrington, Matthew

  Haselhurst, Alan

  Carttiss, Michael

  Hawkins, Nick

  Cash, William

  Hawksley, Warren

  Clappison, James

  Heathcoat-Amory, David

  Clark, Dr Michael (Rochford)

  Hicks, Robert

  Clarke, Rt Hon Kenneth (Ruclit)

  Higgins, Rt Hon Sir Terence L.

  Clifton-Brown, Geoffrey

  Horam, John

  Coe, Sebastian

  Hordern, Rt Hon Sir Peter

  Congdon, David

  Howard, Rt Hon Michael

  Conway, Derek

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

  Coombs, Anthony (Wyre For'st)

  Howell, Rt Hon David (G'dford)

  Coombs. Simon (Swindon)

  Howell, Sir Ralph (North

  Couchman, James

  Norfolk)

  Cran, James

  Hughes Robert G. (Harrow W)

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

  Hughes, Simon (Southwark)

  Curry, David (Skipton & Ripon)

  Hunt, Sir John (Ravensbourne)

  Davis, David (Boothferry)

  Hunter, Andrew

  Day, Stephen

  Hurd, Rt Hon Douglas

  Deva, Nirj Joseph

  Jack, Michael

  Devlin, Tim

  Jackson, Robert (Wantage)

  Dicks, Terry

  Johnson Smith, Sir Geoffrey

  354

  Jones, Gwilym (Cardiff N)

  Roberts, Rt Hon Sir Wyn

  Jones, Nigel (Cheltenham)

  Robertson, Raymond (Ab'd'n S)

  Jones, Robert B. (W Hertfdshr)

  Robinson, Mark (Somerton)

  Kellett-Bowman, Dame Elaine

  Roe, Mrs Marion (Broxbourne)

  Kennedy, Charles (Ross,C&S)

  Rowe, Andrew (Mid Kent)

  Kilfedder, Sir James

  Ryder, Rt Hon Richard

  King, Rt Hon Tom

  Sackville, Tom

  Kirkhope, Timothy

  Sainsbury, Rt Hon Tim

  Kirkwood, Archy

  Scott, Rt Hon Nicholas

  Knapman, Roger

  Shaw, David (Dover)

  Knight, Mrs Angela (Erewash)

  Shaw, Sir Giles (Pudsey)

  Knight, Greg (Derby N)

  Shephard, Rt Hon Gillian

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

  Shepherd, Colin (Hereford)

  Knox, Sir David

  Shepherd, Richard (Aldridge)

  Kynoch, George (Kincardine)

  Sims, Roger

  Lait, Mrs Jacqui

  Skeet, Sir Trevor

  Lang, Rt Hon Ian

  Smith, Tim (Beaconsfield)

  Lawrence, Sir Ivan

  Smyth, Rev Martin (Belfast S)

  Leigh, Edward

  Soames, Nicholas

  Lennox-Boyd, Mark

  Speed, Sir Keith

  Lester, Jim (Broxtowe)

  Spencer, Sir Derek

  Lidington, David

  Spicer, Michael (S Worcs)

  Lightbown, David

  Spink, Dr Robert

  Lloyd, Peter (Fareham)

  Sproat, Iain

  Lord, Michael

  Squire, Robin (Hornchurch)

  Luff, Peter

  Stanley, Rt Hon Sir John

  Lyell, Rt Hon Sir Nicholas

  Steen, Anthony

  Lynne, Ms Liz

  Stephen, Michael

  MacGregor, Rt Hon John

  Stern, Michael

  Maclean, David

  Stewart, Allan

  Maclennan, Robert

  Streeter, Gary

  McLoughlin, Patrick

  Sumberg, David

  McNair-Wilson, Sir Patrick

  Sweeney, Walter

  Madel, David

  Sykes, John

  Maitland, Lady Olga

  Tapsell, Sir Peter

  Mans, Keith

  Taylor, Ian (Esher)

  Marland, Paul

  Taylor, John M. (Solihull)

  Marshall, John (Hendon S)

  Taylor, Matthew (Truro)

  Martin, David (Portsmouth S)

  Temple-Morris, Peter

  Mates, Michael

  Thomason, Roy

  Mawhinney, Dr Brian

  Thompson, Sir Donald (C'er V)

  Merchant, Piers

  Thompson, Patrick (Norwich N)

  Michie, Mrs Ray (Argyll Bute)

  Thornton, Sir Malcolm

  Milligan, Stephen

  Thurnham, Peter

  Mitchell, Andrew (Gedling)

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

  Mitchell, Sir David (Hants NW)

  Tredinnick, David

  Moate, Sir Roger

  Trend, Michael

  Molyneaux, Rt Hon James

  Twinn, Dr Ian

  Monro, Sir Hector

  Tyler, Paul

  Montgomery, Sir Fergus

  Viggers, Peter

  Nelson, Anthony

  Waldegrave, Rt Hon William

  Neubert, Sir Michael

  Walden, George

  Newton, Rt Hon Tony

  Wallace, James

  Nicholls, Patrick

  Waller, Gary

  Nicholson, David (Taunton)

  Ward, John

  Nicholson, Emma (Devon West)

  Wardle, Charles (Bexhill)

  Norris, Steve

  Wells, Bowen

  Oppenheim, Phillip

  Wheeler, Rt Hon Sir John

  Ottaway, Richard

  Whitney, Ray

  Page, Richard

  Whittingdale, John

  Paice, James

  Widdecombe, Ann

  Patnick, Irvine

  Wilkinson, John

  Patten, Rt Hon John

  Willetts, David

  Pawsey, James

  Wilshire, David

  Pickles, Eric

  Winterton, Mrs Ann (Congleton)

  Porter, Barry (Wirral S)

  Winterton, Nicholas (Macc'f'ld)

  Porter, David (Waveney)

  Wolfson, Mark

  Portillo, Rt Hon Michael

  Wood, Timothy

  Powell, William (Corby)

  Yeo, Tim

  Rathbone, Tim

  Young, Rt Hon Sir George

  Redwood, Rt Hon John

  Rendel, David

  Tellers for the Noes:

  Renton, Rt Hon Tim

  Mr. Sydney Chapman and Mr. Andrew MacKay.

  Richards, Rod

  Ritkind. Rt Hon. Malcolm

  Question accordingly negatived.

Clause 3

  DETERMINATION OF APPLICATIONS
  Mr. Campbell-Savours: I beg to move amendment No. 4, in page 3, line 15, after 'principles', insert 'and details'.
  Madam Deputy Speaker (Dame Janet Fookes): With this it will be convenient to discuss the following amendments: No. 6, in clause 4, page 4, line 20, after 'above', insert
  'following consultation with parties likely to be affected directly or indirectly by the proposed modifications'.
  No. 7, in page 4, line 26, at end insert
  ', and it shall also give then a statement as to what consultation has taken place with producers, consumers, retailers and purchasers as to the proposed modifications.'.
  No. 8, in page 4, line 36, at end insert—
  '(d) provided the authority with a statement as to the nature of any consultations which have taken place with those producers, retailers, consumers and purchasers of milk as it thinks appropriate on the proposed modifications.'.
  Mr. Campbell-Savours: This set of four amendments is about the issue of consultation. It follows a long series of debates in Committee where we repeatedly raised the question of consultation. We raised the profile of the issue because throughout our own consultation with the industry and our discussions with people in the industry, in particular the processors, we repeatedly heard comment on the lack of consultation. In Committee the Minister told us that a particular organisation had been consulted but the two representatives of that organisation, sitting at the back of the Committee Room, shook their heads. So great has been the misunderstanding of Ministers about their responsibilities to outside organisations.
  The Government have dragged their feet on consultation since the beginning with the result that at one stage or another. in the process the dairy trade, food manufacturers, retailers and producers have all expressed opposition to aspects of the Bill. We are entitled to know why the Government have been so tardy. Why have we had to drag Ministers, struggling, protesting and bickering, through the hoop of consultation? Even today the Bill says far too little about consultation.
  7 pm
  Furthermore, it makes totally inadequate provision for approved applications to be endorsed by the House of Commons. I accept that paragraphs (a) and (b) of clause 3(2) refer to the principle of consultation, saying that the authority must be satisfied
  "that the board has taken reasonable steps to bring the principles of the schemes to persons who are registered producers"
  and referring to the fact that the authority must consult purchasers, producers, retailers and consumers about the principles of the scheme. However, the provision is far too limited. The prospect of an unregulated monopoly fiercely requires the placing on the Government of an obligation to consult. And the consultation must be on principles, and not just about the details of the scheme.
  Details of the scheme could arguably include the machinery for fixing prices; the arrangements for dealing with shortages in the market place; the standards of quality of milk sold by Milk Marque; the provision, or otherwise, of an independent arbitration or disputes
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  procedure, as referred to in another amendment; the availability to producers outside the scheme of any assets that might be retained by Milk Marque, such as National Milk Records, Genus and Central Testing, which, as I said to Ministers at the Committee stage, would amount to a questionable placing of those assets; the arrangements in an over-supplied market where supplies might be rationed, as referred to in the intention to purchase document that the milk marketing board sent out to prospective buyers in March; the approach to be adopted by the milk marketing board and the residuary body to outstanding claims; the question of the incurring of expenditure by the Milk Marketing Board on the promotion of Milk Marque, which I understand to be causing quite some comment in the farming press of the United Kingdom; the attitude to be taken by Milk Marque to the supply of milk in conditions of vertical integration with processor plants in the future, in the way that I was suggesting in the debate on earlier amendments; the provision that is being made for the pensioners of the board's existing operation, which is to be dealt with in an amendment to be moved by my hon. Friend the Member for Sherwood (Mr. Tipping); and the treatment of direct sellers, some of whom remain uneasy about certain aspects of the Bill, despite the fairly substantial, concessions that the Government have been prepared to make.
  There are several areas in which future arguments should be avoided at all costs. To avoid those arguments, if we are not to have the disputes procedure for which we have argued today, we must have a proper process of consultation. Why should the industry have to worry about this potential lack of consultation in the future? I do not know whether the Minister has read the comments that Lord Howe made in another place. The noble Lord said that the principles of the scheme are its main elements—those elements that are enough to give a sufficient picture of the scheme as a whole so that consultees can reasonably be expected to form the view without needing the full details before them. The noble Lord said that excluded would be, for example, details such as the schedule of properties or the commercially sensitive and confidential elements of the scheme.
  I remind the Government that this is enabling legislation and that Parliament is having its last say. In the wider sense of the approval of schemes, these matters will not come before us again. If only for that reason, there is a real need for the most sophisticated type of consultation procedure to be put in place. We need the fullest possible transparency, not only with regard to the scheme originally submitted but with regard to variations and modifications.
  If the Government are minded to turn down these amendments, they would do well to recall the bitter experience of the milk marketing board in respect of its consultation on the milk requirements of the processors. The consultation did not work. It was wrong. It did not operate correctly—a fact that the Minister should bear in mind when responding. On that occasion the voice of the industry was unanimous in crying, "Stop the bullying." That was the industry's response to the way in which the milk marketing board conducted its affairs. The then Secretary of State had to intervene and almost instruct the board to withdraw the document that it had sent out, which had clearly upset so many of the processors. Of course, the milk marketing board responded.

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  Many of these matters could be dealt with if the proper consultation procedures were put in place. We have the support of the Dairy Trade Federation and the Food and Drink Federation for the amendments. Those organisations feel strongly about these matters, and the Government should respond sympathetically.
  Mr. Jack: The hon. Member for Workington (Mr. Campbell-Savours) is right to raise the very important subject of consultation. In the short time that I have been in the Ministry of Agriculture, Fisheries and Food it must be one of the most-consulted Government Departments. Hardly a day goes by without someone writing to us about something. It is not as if we live in a secret world in which things happen and decisions are taken without probing. The very fact that we are debating these matters today is a further example of the type of probing that can take place in respect of an exercise like this. If, at the end of the day, people are concerned about what the board proposes, the House can always be used as a forum for such discussion. The potential role of Parliament should not be ignored.
  The amendments seek to define in clear terms various ways in which the consultation process might be carried out. I am concerned about that. I can see no circumstances in which, once the board produces its suggestions, people—whether suppliers or processors—will not come forward and give us their views in no uncertain terms.
  With regard to the obligations of the authority and Ministers in respect of these matters, clause 3(2)(b) makes it abundantly clear that the authority to which the application is made shall not grant it except in stated circumstances. The provision goes on to talk about consultation, and makes it very clear indeed that the process must be carried out thoroughly. It also makes clear that, in determining our role in this matter, we have to take into account the interests of consumers and producers of milk. Our obligations could not be clearer.
  Mr. Campbell-Savours: Why does the provision preclude detail?
  Mr. Jack: I imagine that the hon. Gentleman, because of his political persuasion, has never made an application—perhaps I do him a disservice, so I shall speak very quietly—for shares in a company. [ Interruption.] We have discovered a new truth about the hon. Gentleman. I do not want to cast aspersions. Opposition Members have cast enough of them in the past 24 hours. I say to the hon. Gentleman as an honourable man, that if his eye had lighted on the prospectuses for the sale of shares in many companies that have sought to raise extra capital in the market, or have made a new issue, he would have seen the amount of detail that is necessary to satisfy even the most sophisticated of investors. Every single detail would not be provided, despite what the amendment proposed. If the amendment were accepted every lease, terms of property and every other single fact would have to be accumulated in some vast volume. A pantechnicon with that volume would arrive at the home of every consultee and a forklift truck would be needed to carry it in.
  I do not believe that that is what the hon. Member for Workington had in mind. I believe that he wants sufficient detail and information to he given so that people can make informed choices. We. shall look carefully at the propositions that are presented to us for the means to provide such information.
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  I do not want the hon. Gentleman to think, however, that our decision-making process will be clothed in total secrecy. Once we have looked at the boards' proposals, we will produce our description of them. We will include such detail as we consider necessary to enable consultees to comment on the matters that will affect them. We will exclude, quite properly, commercially sensitive information and details that are irrelevant to the judgment of the proposals on, for example, lists of property.
  The hon. Gentleman, with his commercial experience, will appreciate the type of questions that people who are interested in the proposals will want to raise. If I were a supplier of milk, I would want to know the terms upon which my business would be conducted. I should like to know what I was expected to do. I should also like to know what Milk Marque was expected to do and when I would be paid. I should like to know how my milk would be paid for, when it would be collected and under what terms of the contract. Those are the things that matter to farmers. I do not believe that they would be wildly concerned as to whether the office typewriter is leased, bought or whatever.
  Mr. Campbell-Savours: What about the boards' other assets?
  Mr. Jack: I shall come to them in a moment, but they will want Co know about the terms under which their members may acquire their milk.
  I appreciate that the document that was sent out by the Milk Marque did not get a warm and friendly press. I can understand why. The hon. Member for Workington is assiduous in his preparation, however, and if he delves into that document he will find that it contains some warm and friendly phrases. It talks about wanting to develop partnerships and offer service. That is the language that producers understand. The document also provides a variety of specimen types of contract. Those are the details for which those who are seeking supplies of milk will look. I feel certain the propositions from the boards will reflect on those issues.
  The central issue is found in clause 3, which puts a clear responsibility on Ministers to ensure that the right detail is considered. We want to be able to paint our pictures. I am sure that the hon. Member for Workington will want to put his own questions and we may want to ask some in our consultation document. That important safeguard will ensure that people can give us their views.
  7.15 pm
  Someone may say that he would have liked to have seen more detail on a certain point. Such a sensible question is what proper consultation is all about. As the hon. Gentleman will be aware, all the various interested bodies will certainly not be backward in coming forward with their propositions concerning the proposed major change.
  I have considered the Opposition amendments and I cannot recommend my right hon. and hon. Friends to support them.
  Mr. Campbell-Savours: How sad.
  Mr. Jack: It is a great sadness because some of them are drafted in such a way that they would not work.
  Mr. Campbell-Savours: Perhaps that was the reason for them.
  Mr. Jack: The hon. Gentleman has admitted that he has drafted amendments that do not work, but he invites

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  the House to support them. They are the product of the "Don't work" party. For that reason, I need not detain the House with a detailed examination of them.
  Amendment negatived.
  Mr. Jack: I beg to move amendment No. 10, in page 3, line 44, leave out 'milk production' and insert 'the occurrence'.
  Madam Deputy Speaker: With this it will be convenient to discuss also Government amendments Nos. 11 and 12.
  Mr. Jack: The amendments, unlike those tabled by the Opposition, work and make a small technical correction to clause 3(5). which deals with the possible basis for the distribution of hoard assets to producers. The present reference to milk production is fine in so far as it could refer to a person who is registered as a producer on a specified day or within a specified period.
  If a board wanted to base its distribution of assets on a producer's litreage of milk or the value of it, it would refer to milk produced and marketed. Some milk is produced and not marketed, however; for example, if it is fed to calves on farms. The new wording makes the necessary distinction.
  Amendment agreed to.
  Amendments made: No. 11 in page 3, line 45, after 'year)', insert 'of any relevant matter'.
  No. 12, in page 3, line 48, at end insert—
  '(6) For the purposes of subsection (5) above, the following are relevant matters—

  (a) the production of milk, and

  (b) the sale of milk by the person responsible for producing it.

  (7) For the purposes of subsection (6)(b) above, milk shall be treated as sold if it is sold in the form of milk or in the form of a product which is wholly or partly derived from milk or which includes milk as an ingredient.'.—[Mr. Jack.]

Schedule 1

  QUALIFYING SCHEME. OF REORGANISATION
  Mr. Jack: I beg to move amendment No. 13, in page 33, line 19, at end insert—
  '(3) Where information specified under sub-paragraph (1) above identifies a person as a purchaser of milk from the board, the scheme must provide for the information to be disclosed only with his written consent.'.
  Mr. Jack: The Bill covers the possibility that a reorganisation scheme might contain provision for a board to pass information to a successor organisation. I do not envisage that Ministers would approve the passing of commercially sensitive information to a trading successor body. I am, however, aware of the concern of the dairy trade that the safeguards in this respect should be as watertight as possible. The amendment responds to its concern by making it necessary for a board to obtain a purchaser's written consent in the relevant circumstances.
  Amendment agreed to.

Clause 7

  INFORMATION
  Mr. Jack: I beg to move amendment No. 14, in page 6, line 41, leave out '21' and insert '14'.
  Madam Deputy Speaker: With this, it will be convenient to discuss Government amendment No. 15.
  Mr. Jack: The Government were subjected to strong words—perhaps "attack" is too forceful a word—in Committee about their failure to listen and to take into account some of the interesting ideas that the Opposition put forward. We did listen, however, because the amendments respond to an interesting, sensible proposition from the Opposition.
  Clause 7 would enable Ministers to require any person to supply them with the information that they need to decide whether to approve a milk marketing board reorganisation scheme or any application from a board for a variation or withdrawal of its scheme. It provides that if Ministers require information from the milk marketing board to which the reorganisation scheme relates and the board fails to provide that information, its application is treated as having been withdrawn.
  The Bill currently gives a board 21 days to show that any failure to supply information was accidental. In Committee the Government agreed to consider a reduction in that limit to 14 days. We accepted that suggestion, hence the amendment. Amendment No. 15 introduces a parallel change for the potato marketing board.
  I thank Opposition Members for their suggestion and I am delighted that I have been able to move the amendment.
  Mr. Campbell-Savours: I dreamt that one up in the bath.
  Amendment agreed to.

Schedule 2

  PROVISIONS RELATING TO CARRYING OUT OF APPROVED SCHEME OF REORGANISATION
  Mr. Jack: I beg to move amendment No. 16, in page 35, line 13, leave out 'for no' and insert 'without any'.
  Madam Deputy Speaker: With this it will be convenient to discuss also Government amendments Nos. 17, 28 to 41, 18, 19, 42, and 20 to 27.
  Mr. Jack: The amendments make technical, drafting adjustments to the provision specifying the treatment for tax purposes of transfers made under an approved reorganisation scheme.
  Amendment agreed to.
  Amendments made: No. 17, in page 35, line 13, after 'consideration', insert
  'being provided by the persons acquiring them'.
  No 28, in page 35, line 18, at end insert—
  '3A.—(1) Where—

  (a) in accordance with an approved scheme, shares in a subsidiary of the relevant board ("the transferred company") are transferred otherwise than under section 10 above to a qualifying body ("the successor"),

  (b) immediately after the transfer, the successor is a member of a group of which the relevant board is a member, and

  (c) the scheme provides as mentioned in paragraph 3(1)(b) above,

  sections 178 and 179 of the Taxation of Chargeable Gains Act 1992 shall not apply on the transferred company ceasing to be

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  a member of a group of which the relevant board is a member if, immediately after doing so, it is a member of a group of which the successor is a member.
  (2) Where by virtue of sub-paragraph (1) above sections 178 and 179 of the Taxation of Chargeable Gains Act 1992 do not apply, then, on the transferred company ceasing to be a member of a group of which the successor is a member, those sections shall apply—

  (a) as if any assets acquired by the transferred company, at any time when it was a member of a group of which the relevant board was a member, from any member of that group had been acquired by it at that time from the successor, and

  (b) as if the transferred company and the successor had at all material times been associated companies for the purposes of those sections.

  (3) In this paragraph—
  "group" has the meaning given by section 170 of the Taxation of Chargeable Gains Act 1992; and
  "relevant board" means the board to which the scheme relates.'.
  No. 29, in page 42, line 39, at end insert—
  '( )where the trustees acquire the shares or securities on a disposal, the person making the disposal shall be treated as if the consideration for the disposal were of such amount as would secure that on the disposal neither a gain nor a loss accrues to him,'.
  No. 30, in page 43, line 34, leave out 'share is' and insert 'shares are'.
  No. 31, in page 43, line 37, after 'him,' insert—
  '(aa) to trustees on terms which provide for the transfer of the shares to persons by virtue of their being, or having been, registered producers:.
  No. 32, in page 43, line 46, leave out 'share' and insert'shares'.
  No. 33, in page 43, line 47, leave out 'it' and insert 'they'.
  No. 34, in page 43, line 49, leave out 'share' and insert 'shares'.
  No. 35, in page 44, line 1, leave out 'share' and insert 'shares'.
  No. 36, in page 44, line 2, leave out 'it' and insert 'they'.
  No. 37, in page 44, line 7, leave out 'a share' and insert 'any shares'.
  No. 38, in page 44, line 8, leave out 'share is' and insert 'shares are'.
  No. 39. in page 44, line 18, leave out 'debenture' and insert '(a)'.
  No. 40, in page 44, line 19, after 'board,', insert 'and
  (b) is either—

  (i) issued'.

  No. 41, in page 44, line 21, at end insert
  ', or

  (ii) included in an issue of debentures to trustees on terms which provide for the debentures to be transferred to persons by virtue of their being, or having been, registered producers.'.

  No. 18, in page 45, line 2, leave out 'for no' and insert 'without any'.
  No. 19, in page 45, line 2, after 'consideration', insert 'being provided by the person acquiring them'.
  No. 42, in page 45, line 32, at end insert—
  '(3A) For the purposes of sub-paragraph (3)(b) above, a person to whom property is leased shall be treated as a person to whom property is transferred if the scheme could, without breaching the requirement in paragraph 7(2) of Schedule Ito this Act, have provided for the property concerned to be transferred to him.'.
  No. 20, in page 46, line 33, leave out from 'company' to 'to'
  No. 21, in page 46, line 34, after 'class' insert
  'without any consideration, or with only a nominal consideration, being provided by the members acquiring them'.
  No. 22, in page 47, line 2, leave out 'for no' and insert 'without any'.
  No. 23, in page 47, line 2, after 'or'. insert 'with only'.
  No. 24, in page 47, line 2, at end insert
  'being provided by the members acquiring them,'.
  No. 25, in page 47, line 36, leave out 'for no' and insert 'without any'.
  No. 26, in page 47, line 36, after second 'or', insert 'with only'.
  No. 27, in page 47, line 37, after 'consideration,', insert 'being provided by the persons acquiring them,'.—[Mr. Jack.]
  Mr. Paddy Tipping: I beg to move amendment No. 85, in page 49, line 19, at end insert—
  '(4) If as a result of a deficit in the funding of the pension scheme, the scheme is unable to meet its obligations to any or all of its members, the substitute principal employer or its successor shall have the power and be under a duty to require eligible milk producers to make contributions for the purpose of making good the deficit.
  (5) The appropriate authority shall create a residuary body to the milk marketing board which shall exercise the power and be subject to the duty mentioned in subsection (4) above, if—

  (a) the substitute principal employer or its successor at any time ceases business without there being a further successor, or

  (b) the appropriate authority considers it otherwise desirable to create such a body.'.

  The purpose of the amendment is straightforward. It seeks to protect the interests of present and future pensioners of the milk marketing scheme, who represent quite a large group—8,600 contributors and 5,500 pensioners, of whom, I understand, 1,000 are widows. I understand that the fund has assets of £300 million.
  Pensioners of the fund are rightly concerned about its future. Quite simply, it is their future that we are debating. They have contributed to the fund and they want to be consulted on the way forward. They feel that there has been a lack of consultation and that so far their views have been rebutted. With the high profile of pension issues in the news, they are concerned. It is clear that, in any scheme of reorganisation, real changes must he made. Change is often worrying and past and present pensioners are clearly anxious about the future.
  A number of issues can be identified. What is the present position of the pension fund'? Can it meet its liabilities? Is it in surplus or in deficit? Should there be a surplus—I understand that there is supposed to be one—how will it be dealt with? There is a strong case to be made that any surplus should he applied only to the beneficiaries of the scheme, since they have contributed to the scheme and built the foundations of the company. They believe that any surpluses should be applied to them rather than to funding reorganisation. They want the milk marketing scheme and successor bodies to give commitments in line with those that currently exist—such as a commitment that index-linked pensions will be continued.
  The amendment addresses the issue of a possible deficit. The successor bodies must take responsibility for any deficits. The key issue is how pensioners will he split

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  among the successor pension schemes. The existing pension scheme may be split two ways—into a new Milk Marque scheme and a new Dairy Crest scheme.
  Views differ quite markedly among pensioners about which might be the most profitable successor company. Both companies face major challenges. It is unclear how pensioners will be allocated to successor pension schemes. Will they have a choice, or will they, for example, simply be allocated to one scheme or another?
  Pension matters are a live issue for the Government at the moment. I understand that the Department of Social Security promised to offer advice on how such pensioners might be dealt with. Its advice has been long promised, but slow in coming. I know that this is not a responsibility of Agriculture Ministers, but I look for a commitment from them that they will pursue this matter and try to facilitate the provision of advice that is needed to take the discussion forward.
  Amendment No. 85 seeks to provide a safety net. It allocates responsibility for underwriting pension schemes. Pensioners want Dairy Crest and Milk Marque to do well. They have worked hard to build the foundations of the milk marketing board and want the successor companies to succeed. Having built the foundations, they do not want the roof—their pensions—to collapse over their head. The amendment would effectively secure their future.
  Mr. Tyler: I simply want to endorse the general comments of the hon. Member for Sherwood (Mr. Tipping). The hon. Gentleman and I and others on both sides of the Committee wanted to ensure that the interests of pensioners were not adversely affected by these changes.
  In Committee, the point was made many times—it would be wrong not to repeat it tonight—that the milk marketing board has given good service to this country, to producers and to everybody else in the industry. It would clearly be unacceptable for servants of the milk marketing board not to be treated so well in the future as a result of changes to the viability of the pension scheme.
  The hon. Member for Sherwood made some general points, but his specific point about the way in which the successor pension schemes will operate is one on which, I hope, the Minister will be able to give us further reassurances, following those given by his predecessor in Committee.
  It was clear, I think to all members of the Committee, that this important issue was causing much concern and anxiety among many people. I hope that the Minister will reiterate the assurance that was given in Committee that pensioners will not be forgotten.
  Dr. Strang: I am glad to have the opportunity to support my hon. Friend the Member for Sherwood (Mr. Tipping). I am sure that the whole House will recognise that we have a responsibility to ensure that the interests of pensioners and future pensioners are properly safeguarded.
  The changes are being initiated by the Government. They have decided that the boards should not continue and that, as a result, Milk Marque and Dairy Crest will operate independently. The Government have a responsibility to be rather more forthcoming than they have been to date about their determination to ensure that staff are not disadvantaged as a result of the Bill. That is the least
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  to which the staff are entitled. My hon. Friend the Member for Sherwood put the case admirably. I hope the Minister will now take the opportunity to respond positively.
  Mr. Jack: I am most grateful for the considered and careful way in which Opposition Members have introduced this subject. I can well understand its sensitivity. At a time of any change, those who are nearing retirement want to know that their future sources of income have a degree of security.
  The problem with amendment No. 85 is that it casts the role of the Government as one of last resort in creating a mechanism by which deficits of the successor pension operations could be made good. If the hon. Member for Sherwood (Mr. Tipping) studies what is about to happen, he will understand that the Government are not unwilling to acknowledge the importance of the issue to current and future pensioners. However, it is not proper for the Government to accept the responsibility that he offers us.
  The Government accept a responsibility to pensioners under the operation of pension law. He will be aware that the Goode committee is looking into the matter. His remarks alluded to just that. There is already a complex and well-tried set of laws dealing with the responsibility of pension trustees to safeguard the interests of pensioners.
  Mrs. Peacock: Will my hon. Friend give way?
  Mr. Jack: I shall conclude this point first.
  I acknowledge that there have been cases in the past where the conditions of trust have not always been fulfilled, but by and large those who have operated the pension funds for large and small companies in Britain have carried out their duties with absolute probity and correctness, recognising their liabilities in law if they so fail. Those people will be responsible for the transference and the future of the pension funds, and I shall turn to that matter when I have given way to my hon. Friend.
  7.30 pm
  Mrs. Peacock: My hon. Friend is quite right to say that the majority of pension funds carry out their duty very well indeed. However, there are pensioners of the milk marketing board who, having listened to what has happened to pension funds recently, are worried that they may be in a difficult position. They will be listening carefully for my hon. Friend's reassurance. Although this is not a matter for his Department, it is considered very much part of the Bill.
  Mr. Jack: Let us explore this matter with care; it needs to be handled sympathetically and carefully. I shall do my best to paint a picture that will be at least of some satisfaction to hon. Members. My first task in addressing the problem was to find out whether any assurances had already been given to pensioners.
  I have in front of me a copy of a letter dated April from Mr. R. S. Steven, chairman of the milk marketing board, to pensioners saying that he wrote on 29 January
  "on the subject of your pension".
  As it is a short letter, perhaps it is worth looking at the text. It is the first important strand of the views of those who will be responsible for taking decisions. The letter says:
  "As work on the reform has progressed, we have had a pensions working group consisting of senior Milk Marketing Board and Dairy Crest management, a pensioner who is also a trustee and our actuaries and legal advisers actively considering this matter with the following objectives: meeting current members' reasonable expectations and allaying

  365
  pensioners' concerns; ensuring reasonable security measured by strength of funding, providing for similar contribution rates between Milk Marque and Dairy Crest at least in the short term; enabling the trustees of all funds to follow a flexible, balanced investment strategy and avoiding the need as far as practical for the proliferation of pension arrangements".
  The letter continues:
  "We intend to make progress in time for the next trustees' meeting on 18 May".
  I find that helpful as a statement of intent to address those issues.
  What does the board promise for the future? The letter might be deemed to be a statement of good intent, but is it backed by anything else? The milk marketing board and the Dairy Crest board have agreed to proposals for changes in the arrangements to be put to a meeting of the pension scheme trustees on 1 July. My hon. Friend the Member for Batley and Spen (Mrs. Peacock) will be pleased to know that the trustees will then give scheme members an opportunity to comment before they take a final decision, probably at the end of August. That is important because it means that members will have an opportunity to comment on what is proposed.
  The hon. Member for Sherwood rightly asked about the state of the fund. At the back of his mind is the thought that perhaps those with an acute financial approach might see the pension fund as an opportunity for rich pickings. An actuarial valuation of the English and Wales MMB group fund at 31 March 1993 is being finalised and I understand that it is likely to show a small surplus of about 5 per cent. on an ongoing basis and no surplus, using assumptions prescribed by the Government Actuary for the purposes required by the Inland Revenue for checking surpluses in the scheme. The most recent actuarial valuation on the so-called "Board C" scheme has received a small surplus on a winding-up basis and a small deficit on an ongoing basic.
  I am informed by those who understand the technicalities that there is also a small surplus in the part-timers' fund. The Scottish boards have advised us that it is almost certain that there will be no surplus in their pension plan. That shows that the principal schemes have been looked at and are in appropriate and satisfactory order. If we couple that with the fact that proposals will he put to pensioners and the letter that Mr. Steven sent out, it is clear that there is great concern about this matter.
  It is also important to consider the wider perspective. As I have mentioned, pension schemes and their trustees are subject to the principles of trust law. To pick up on the point raised by my hon. Friend the Member for Batley and Spen. that is most important because the trustees have a duty to safeguard the interests of all scheme members. That position of trust will clearly determine future propositions.
  The Occupational Pensions Board also has a role to play, so we have another monitoring body. The OPB has an ongoing role to ensure that the schemes continue to have sufficient funds to meet their liability to pay guaranteed minimum pensions broadly equivalent to the state earnings-related pension scheme; in other words, no one can enter opted-out funds unless those funds can do the job that they are supposed to do. The Occupational Pensions Board is asking whether the funds can. Clearly, that will be a function of the successor pension
  366
  organisations. In other words, they will have to be properly funded in the first place to enable those jobs to be done. I find that reassuring.
  The OPB will continue to have a supervisory role in future. It will require a certificate from the schemes' actuary every three years and an annual statement from the schemes' administration. If documentation is not up to scratch, there can be problems in terms of cancelling the schemes' contracting-out certificates. Therefore, we have continuing monitoring to ensure that the schemes will have sufficient funding to do the job that the hon. Member for Sherwood wanted them to do.
  Under present law, no pension scheme member may be transferred to another scheme without his consent unless an actuary certifies that the value of his rights and benefits will be maintained. In other words, there will be a further check, and no shanghaiing. There will be no transfer there unless the actuary says that the new scheme will do the same job.
  The operation of pension law, the position of the trustees, the open and full disclosure of plans and the letter that Mr. Steven wrote show that the people who decide who will be on the MMB and how the Milk Marque and Dairy Crest pension run will take all that into account. Bearing in mind, too, that the existing members of the board will be involved in Milk Marque, I do not think that there will be any intention to put forward a scheme that will significantly disadvantage, upset or worry people.
  Everything I have said paints a picture of reassurance in ensuring that the position of pensioners will be maintained as they would want: their pensions will be paid in accordance with expectations, particularly those that Mr. Steven outlined in his letter.
  Mr. Tipping: I thank the Minister for the way in which he has pursued the matter. I know that he will look at it again when the scheme of reorganisation comes before him and his colleagues. With permission, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Jack: I beg to move amendment No. 69, in page 50, line 34, leave out from 'which' to first 'or in line 35 and insert:
  'imposes a prohibition (whether absolute or qualified) on the transfer'.
  Madam Deputy Speaker: With this it will be convenient to discuss also Government amendments Nos. 62, 70, 71, 56, 57, 63, 72, 73, 58, 64, 74 to 76, 59, 65, 54, 51, 55, 52, 53, 77, 66, 78, 79, 60, 67, 80 to 82, 61 and 68.
  Mr. Jack: The amendments are intended to complete and, in some cases, correct the provisions of schedules 2 and 4 that deal with the transfer of the property of the milk and potato marketing boards. The broad purpose is to ensure that third-party rights cannot be exercised in such a way as to disrupt or hold up the implementation of a reorganisation scheme—for example, where a lease gives a lessor the right to repossess a property. When a lessee wishes to assign a lease, the Bill will prevent that right from being exercised in the case of a board transferring a lease to its successor. The right would be exercisable only when the successor body wished to assign the lease. Where third-party rights are overridden by provision of that sort, resulting in a material reduction of the third party's interest in the property, the board of the successor body

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  will be liable to pay compensation. That is only an example, but it illustrates the principle that underlies all the property provisions.
  Amendment No. 55 does not fall into that category, and it would be discourteous of me not to draw attention to it. It is intended to ensure that, if a flotation is proposed as part of a reorganisation scheme, it will not be jeopardised by a potential claim by former producers to the title of shares in the company. Leaving open even the possibility of such a claim, which would have to be publicly disclosed, could be more than enough to stop the flotation from going ahead.
  The amendment removes a potentially serious source of delay from the reorganisation timetable. The Government consider that the sort of claim with which the amendment is intended to deal would have no more than a remote chance of succeeding; action is no less necessary for that, however. The amendment deals with the matter in a manner that does not prejudice the right of potential claimants to challenge approval of a reorganisation scheme, or their right to compensation if their arguments are eventually upheld. If a court found that, for example, a former producer who had not received shares in a company had a valid claim, that producer would be entitled to financial compensation and his claim would be directed against the residuary body.
  Amendment agreed to.
  Amendments made: No. 62, in page 50, line 42, leave out 'penalises' and insert 'has the effect of penalising'.
  No. 70, in page 50, line 43, leave out
  `, or a transfer without consent,'.
  No. 71, in page 50, line 44, leave out from 'which' to first 'of in line 45 and insert 'imposes a prohibition (whether absolute or qualified) on the transfer'.
  No. 56, in page 50, line 46, leave out 'if and insert 'unless'.
  No. 57, in page 50, line 46, leave out 'private' and insert 'public'.
  No. 63, in page 51, line 5, leave out 'penalises' and insert 'has the effect of penalising'.
  No. 72, in page 51, line 6, leave out
  or a transfer without consent,'.
  No. 73, in page 51, line 7, leave out 'prohibits the effecting without consent' and insert
  'imposes a qualified prohibition on the effecting'.
  No. 58, in page 51, line 12, leave out 'private' and insert 'purposes other than public'.
  No. 64, in page 51, line 19, leave out 'penalises' and insert 'has the effect of penalising'.
  No. 74, in page 51, line 20, leave out 'without consent'. No. 75, in page 51, line 40, leave out 'prohibits' and insert 'imposes an absolute prohibition on'.
  No. 76, in page 51, line 43, leave out paragraph (b).
  No. 59, in page 51, line 44, leave out 'private' and insert 'purposes other than public.
  No. 65, in page 52, line 29, leave out 'penalises' and insert 'has the effect of penalising'.
  No. 54, in page 52, line 47, at end insert—
  'Restrictions on change of location
  43A.—(1) For the purposes of this paragraph, a provision is a qualifying provision if—

  (a) it is contained in a qualifying agreement,

  (b) it imposes an absolute or qualified prohibition on the movement outside a specified area of property to which the agreement relates, and

  368

  (c) the prohibition which it imposes is imposed for purposes other than public purposes.

  (2) For the purposes of sub-paragraph (1) above, an agreement is a qualifying agreement if—

  (a) it is an agreement under which moveable property is leased to a milk marketing board or to a subsidiary of such a board, and

  (b) an approved scheme makes provision for the transfer of rights and liabilities of the lessee under the agreement.

  (3) Where an approved scheme—

  (a) identifies a qualifying provision as one to which this paragraph applies,

  (b) specifies a relevant modification in relation to that provision,

  (c) specifies a commencement date in relation to the modification, and

  (d) specifies one of the relevant bodies as the body against which any claim under paragraph 43B below, in relation to that provision, is to be made,

  then, subject to any provision of regulations under sub-paragraph (4)(c) below, that provision shall have effect subject to the specified modification on and after the commencement date specified in relation to it.
  (4) The appropriate authority may make regulations—

  (a) with respect to the giving of notice of a provision of an approved scheme which does any of the things mentioned in paragraphs (a) to (c) of sub-paragraph (3) above,

  (b) with respect to the giving by the authority of a certificate of compliance in relation to the giving of notice under paragraph (a) above, and

  (c) excluding sub-paragraph (3) above where no certificate of compliance under paragraph (b) above has been given before such date as may be specified in the regulations.

  (5) Where by virtue of sub-paragraph (3) above a qualifying provision is modified in its application to any property, the fact that, at any time in the week beginning with the date on which the modification first has effect, that property is outside the permitted area shall not be treated as constituting a breach of the provision if the property—

  (a) is in the area which was the permitted area before the modification had effect, or

  (b) is in transit from that area to the permitted area.

  (6) In sub-paragraph (3)(b) above, "relevant modification", in relation to a qualifying provision, means a change, in relation to any of the property to which the provision applies, in the area by reference to which the qualifying provision has effect.
  (7) In sub-paragraph (3)(d) above, the reference to the relevant bodies is to—

  (a) the milk marketing board to which the scheme relates, and

  (b) the body or bodies to which property, rights or liabilities of that board are, under the scheme, to be transferred under section 10 above.

  (8) In sub-paragraph (4) above, "appropriate authority" means—

  (a) in the case of an approved scheme relating to the England and Wales Milk Marketing Board, the Minister of Agriculture, Fisheries and Food and the Secretary of State acting jointly, and

  (b) in any other case, the Secretary of State.

  (9) For the purposes of this paragraph, any provision which has the effect of penalising the movement of property outside a specified area shall be treated as prohibiting it.
  43B. Paragraph 43 above shall apply in relation to a person who suffers a diminution in the value of any property or interest in consequence of the operation of paragraph 43A above as it applies in relation to a person who suffers a diminution in the value of any property or interest in consequence of the operation of paragraph 42 above.'.
  No. 51, in page 52, line 47, at end insert—
  43C.—(1) Where an approved scheme provides for rights and liabilities of a lessee under a qualifying agreement to be transferred to a company on a day earlier than the vesting day under the scheme, the provision shall have effect by virtue of this paragraph if, immediately before the day of the transfer, the company is a qualifying transferee.
  (2) In sub-paragraph (1) above, "qualifying agreement" means an agreement under which moveable property is leased to the board to which the scheme relates or to a subsidiary of that board.
  (3) For the purposes of sub-paragraph (1) above, a company is a qualifying transferee if it is—

  (a) a company in relation to which the scheme provides for the taking of steps with a view to securing its quotation on the Stock Exchange,

  (b) a subsidiary of a company falling within paragraph (a) above, or

  (c) a company which, if the scheme is carried out, will become a subsidiary of a company falling within paragraph (a) above before that company is quoted on the Stock Exchange.'.

  No. 55, in page 52, line 47, at end insert—
  '43D.—(1) Where—

  (a) an approved scheme provides for the taking of steps with a view to securing the quotation of a company on the Stock Exchange, and

  (b) the board to which the scheme relates makes under the scheme a qualifying transfer of shares in a subsidiary of its,

  then, if the shares transferred were subject in the hands of that board to a resulting or constructive trust, they shall by virtue of the transfer cease to be subject to that trust.
  (2) For the purposes of sub-paragraph (1) above, a transfer is a qualifying transfer if—

  (a) it takes place in connection with the carrying out of the provision mentioned in paragraph (a) of that sub-paragraph, or

  (b) the transferee is a qualifying person and the shares transferred arc of the same class as other shares in the subsidiary which fall to be transferred as mentioned in that paragraph.

  (3) For the purposes of sub-paragraph (2) above, the transferee is a qualifying person if the shares are transferred to him—

  (a) by virtue of his being, or having been, a registered producer, or

  (b) as trustee for persons who are entitled to participate in the trust by virtue of their being, or having been, registered producers.

  (4) For the purposes of this paragraph, shares of a company shall not be treated as of the same class unless they are so treated by the practice of the Stock Exchange or would be so treated if dealt with on the Stock Exchange.'.
  No. 52, in page 56, line 9, after 'above', insert 'or paragraph 43C above'.
  No. 53, in page 56, line 11, leave out 'vesting day' and insert 'day of the transfer'.—[Mr. Jack.]

New clause 17

  PUBLICITY FOR DETERMINATIONS (No. I)
  '. As soon as reasonably practicable after granting an application under section 25 or 28 above, the Ministers shall make public in such manner as they think fit—

  (a) the fact that they have granted the application, and

  (b) the principles of the approved scheme or, as the case may be, of the approved variation.'.—[Mr. Jack.]

  Brought up, read the First and Second time, and added to the Bill.

New clause 14

  FUNCTIONS UNDER SECTION 19 OF THE AGRICULTURAL MARKETING ACT 1958
  '. The functions of a committee appointed under section 19 of the Agricultural Marketing Act 1958 (consumers' committees and committees of investigation) shall not include the consideration of anything done by the Board in connection with an application under this Part of this Act or the carrying out of an approved scheme.'.—[Mr. Jack.]
  Brought up, read the First and Second time, and added to the Bill.

New clause 2

  RESTRICTION ON REVOCATION OF SCHEME (No. 1)
  '—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.
  (2) The Minister shall not lay before Parliament a draft of an order under section 22 of this Act or paragraph 5 of Schedule 1 to the Agricultural Marketing Act 1958 unless—

  (a) a poll of persons who are registered producers has been carried out for the purpose of ascertaining the level of support among them for the making of that order, and

  (b) a majority of the votes cast in that poll has been cast in favour of the making of the order.

  (3) —(a) The Minister may direct the Board to carry out such a poll as is mentioned in subsection (2) of this section and the Board shall comply with the direction within such time (if any) as may reasonably be specified in the direction.
  (b) Such a poll shall be carried out as if it were a poll under section 36(1) of this Act.'—[Mr. Campbell-Savours.]
  Brought up, and read the First time.
  Mr. Campbell-Savours: I beg to move, That the clause be read a Second time.
  Madam Deputy Speaker: With this it will be convenient to discuss also the following: new clause 3—Restriction on revocation of scheme ( No. 2):
  '.—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.
  (2) The Ministers shall not make either such an order as is specified in section 22(i) of this Act or an order to revoke the Potato Marketing Scheme in accordance with Schedule I of the Agricultural Marketing Act 1958 until—

  (a) a poll of persons who arc registered producers has been carried out for the purpose of ascertaining the level of support among them for the making of either kind of order mentioned above, and

  (b) a majority of the votes cast in such a poll has been cast in favour of the making of such an order.

  (3) The Ministers may direct the Board to carry out such a poll as is mentioned in subsection (2) of this section and the Board will comply with such a direction within such time (if any) as may reasonably be specified in such direction.
  (4) Such a poll as is mentioned in this, section shall be carried out as if it were a poll under section 36(i) of this Act.'.
  New clause 4—Restriction on revocation of scheme (No. 3):
  '.—(1) This section applies until a decision has been made by the Council of the European Communities to introduce a regulation on the establishment of a common organisation of the market in potatoes.
  (2) Before determining that it appears to them that it is necessary or in the public interest that the Potato Marketing Scheme should be brought to an end or that the Scheme should be revoked in accordance with the provisions of Schedule I of the Agricultural Marketing Act 1958, the Ministers shall first cause a poll of registered producers under that Scheme to be carried out for the purpose of ascertaining the level of support among them for bringing the Scheme to an end or revoking it, and shall not make such a determination unless a majority of the votes cast in such a poll is in favour of so doing.
  (3) A poll under this section shall be carried out as if it were a poll under section 36(1) of this Act with the substitution in that subsection for "The Board" of "The Ministers".'.
  Amendment No. 49, in clause 23, page 13, line 27, at end insert
  `(2A) Where subsection (2) above applies, no order shall be made under subsection (1) above unless the Ministers have consulted on a proposal to bring the Potato Marketing Scheme to an end with such persons appearing to them to he representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.'.
  Amendment No. 50, in page 13, line 33, at end insert
  `(3A) Where subsection (3) above applies, then to the extent that the regulation of the Council of the European Communities permits member states to make their own arrangements within a common organisation of the market in potatoes, the Ministers shall consult on those matters with such persons appearing to them to be representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.'.
  7.45 pm
  Mr. Campbell-Savours: I apologise to the hon. Member for East Lindsey (Sir P. Tapsell): he wanted to move the new clause, but I told him that he could not. As he will find out, I had a reason.
  I am nonplussed: I do not know what is happening to the future of the potato marketing scheme. However, l am not alone; the industry—both producers and processors—is in the same position. The policy formation of recent weeks appears to have been based on a nod and a wink to journalists, producers and the potato marketing board. Meanwhile, the industry is in turmoil, at a time when large potato surpluses have driven producers all over Europe into bankruptcy, and the board is again under severe pressure as it fulfils its obligations under the scheme.
  We have all seen a number of reports suggesting a ministerial shift of position. On 4 June, Farmers Weekly reported:
  "Gillian Shephard, the first woman to head Britain's Ministry of Agriculture, is considering a stay of execution of the Potato Marketing Scheme and a blitz on red tape…Mrs. Shephard said reviewing the potato scheme was one of her first priorities."
  What is the reality? I must confess that I suspected that these statements were being orchestrated by the Whips as part of an exercise in disinformation to head off a Tory revolt. There is no doubt that there is a potential for such a revolt over this part of the Bill; perhaps Ministers have realised that only recently. Yesterday's events in my office, while not confirming my suspicions, should worry not only me but the industry.
  The hon. Member for East Lindsey has tabled two amendments, arid I can almost guarantee that the Government will accept them. Why? Because, sadly, the amendments do almost nothing. They merely ensure that no order can be made to wind up the potato marketing scheme unless Ministers have consulted those involved in
  372
  the industry. The two amendments do not restrict the Government's actions in any way; they do not tie the Government's hands.
  I suspect that the hon. Member for East Lindsey does not know that the amendments that he tabled were a compromise, and that the amendment that really mattered was never tabled. I know that, because I tabled it yesterday, when I received it in my office. It features on the amendment paper as a starred amendment: that means that we cannot debate it, but we should be debating it. I am not sure whether the hon. Gentleman even saw it, but it would have tied the Government's hands on the future of the potato marketing scheme. It would have done the trick. It states:
  "The Ministers shall not lay before Parliament a draft of an order under section 22 of this Act or under paragraph 5 of Schedule I to the Agricultural Marketing Act 1958 unless they certify that they are satisfied that no grants, subsidies or measures for stabilisation of the market are available for the benefit of potato producers in other Member States of the European Community which are not equally available for the benefit of potato producers in Great Britain."
  What a wonderful amendment. I always believed that the Tories would table it. I waited and waited: every day I went to the Vote Office to look at the latest amendments. I was convinced that it would be tabled yesterday morning, but it never arrived. When I finally saw it, it was exactly the amendment that should have been tabled.
  What I find remarkable about the new Minister of Agriculture's attitude is that, when her Department was consulted about the amendment the Government were not prepared to accept it. I say that having unearthed a very interesting speech made in the House on 27 February 1989. It reads:
  "It is in this atmosphere of change that I would like to plead for the retention of two areas of stability so that we might…qease the process of change for farmers. The two crops involved are sugar and potatoes."
  The speaker went on to say:
  "potatoes…are the second highest value crop in the country, after cereals. They…are of great importance in underpinning agricultural incomes for both large and small farms There can be no doubt that the future of the potato crop is looming large in producers' minds. As my right hon. Friend knows, that is because the future of the Potato Marketing Board is under discussion. As hon. Members will understand, that board is always criticised when it refuses quotas, but I think that its response to the consultative document issued by the Government has been thorough and serious.
  I also believe that the consumers in the United Kingdom enjoy a far wider variety of quality potatoes than that enjoyed by their European counterparts. That variety and quality, coupled with good marketing methods, has increased our national consumption of potatoes…In my constituency potatoes are extremely important and growers there—and, I believe, throughout the country—are unanimous in their support for option 3 in the consultative document"—
  I do not need to remind the House what option 3 was—
  "which will retain area and quality control in a self-financing way. I hope that, during the consultation, my right hon. Friend will consider that unanimous response carefully."—[Official Report, 27 February 1989; Vol. 148, c. 99·100.]
  Who said that? Was it my hon. Friend the Member for Pembroke (Mr. Ainger)? Was it my hon. Friend the Member for Edinburgh, East (Dr. Strang), or my hon. Friend the Member for Glanford and Scunthorpe (Mr. Morley)? No, it was the new Secretary of State. We therefore know that potato producers in the United Kingdom have a supporter in the Cabinet who will fight for them and not compromise. I am sure that the right hon. Lady will want to make that clear tonight. If she was

  373
  prepared to make that speech before the general election, why was she not prepared to accept today's starred amendment which was put informally to people in her Department? That is the heart of our case.
  New clause 2 seeks to delay the introduction of an order winding up the potato marketing scheme until the European Commission has taken a decision. The starred amendment would have dovetailed with the new clause and greatly strengthened the Government's negotiating position at the Council. Their position would have been strengthened had the right hon. Lady been prepared to accept it.
  The new clause would allow an earlier wind-up only if a poll of producers cast their votes by a majority in favour of the termination of the scheme. Why do we want to delay the wind-up? The answer is that the Labour party is not convinced that the Europeans will take a real decision, establishing either a light or heavyweight regime. There is no evidence to suggest that they will. A promised agreement on the back of the annual price fix has collapsed in tatters. We thought that Ministers would come home the other week with a potato agreement. The Council of Ministers itself appears to be riddled with differences of opinion about what is needed.
  The history of the proposed Council regulation COM(92)185 has been done to death by a thousand objections. It started in November 1982, when it first went to the Commission, and it is due to return to the Council of Ministers some time in September. It has been rejected by the potato marketing board, the European Parliament, the Committee of Professional Agricultural Organisations, COGECA and the Economic and Social Council.
  The only person who appears passionately to support this nonsense is the former Minister of Agriculture, Fisheries and Food—unless the Minister of State wishes to say that he has some residual sympathy for it. Perhaps he will argue for it, or perhaps the right hon. Lady will argue for it if she replies to the debate.
  While the Commission promotes the debate, the political realities in. nation states are proving major obstacles. Commission officials may try to enforce a level playing field, but the reality is that farmers and politicians are resisting. Why? The argument is not uniquely about level playing fields; it is about the survival of producers in generally depressed economic conditions.
  There is a general recognition that subsidies to potato producers throughout the Community have become entrenched. In Committee, my hon. Friends and I spoke at great length about EC subsidy regimes. Indeed, it is fair to say that our debate in Committee had some influence on more recent debates in another place where many speakers dwelt on whether it was possible to create a level playing field when the House of Lords European Communities Select Committee debated the issue some weeks ago.
  In Committee, we were able to identify subsidies in Denmark to promote sales, research, quality control and disease protection, which would have amounted to the equivalent of £6 million in the United Kingdom, taking into account the comparative size of the two industries.
  We also identified four schemes in Italy funded by an organisation called ALMA. One scheme paid £74 a tonne to growers, a further £50 to producers of alcohol, subsidies of £9 a tonne to producer organisations, £6 a tonne to
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  co-ops, subsidies for new potato production and the private storage of potatoes. We are told that, in January last year, the Italians paid £26 million in aid to their producers.
  France has its own intervention schemes, paying millions to main crop growers—last year, the sum involved was £13 million, although I have been told that I have grossly underestimated it. The French Government are right now paying their early potato growers almost £1,300 a hectare to destroy 1,000 hectares of potatoes in Brittany. French growers receive low-interest priority loans which would survive any new EC regime, which is not supposed to be based on such subsidies. Of course, the French will still receive their cheap loans, because they have already negotiated them. The French even subsidise regular growers to remain in business.
  Spain spends millions on loans for storage at preferential interest rates. It even introduced its own import deposit scheme with delayed payments. The Portuguese provide concessional loans for storage, a £32 a tonne export subsidy, special subsidies for co-operatives and intervention buying. They have set a minimum import price of £75 a tonne. What a wonderful Common Market it is where one can set a minimum import price of £75 a tonne and get away with it. Even so, we still think that such schemes will somehow be abolished when the marvellous level playing field is established. It will not happen.
  Holland, the much-cited paragon of potato producing virtue, offers starch subsidies, rent subsidies, loan guarantee funds, concessional export guarantees and a carefully tailored small business welfare payments system. Ireland is this year subsidising its production, as even Luxembourg does too.
  The subsidies that we have identified are but the tip of an iceberg. Whatever assurances are given by EC Governments, the subsidies will remain in one form or another. Political realities are such that politicians and local institutions in rural parts of the Community will not allow a volatile European potato industry to collapse in ruins. Only in Britain have politicians been prepared even to consider the prospect of such a disaster.
  I have a question for the new Secretary of State. I shall read out an answer given to a friend of hers only this morning in the European Parliament. A copy has just been faxed to my office. The copy reads:
  "As Commissioner Christophersen said in his reply to Written Question No. 3435/92 by the Honourable Member"—
  Mr. Peter Crampton—
  "the inventory of state aid"
  which I understand is the document that lists all the subsidies which have been paid in Europe over the years—
  "was designed to provide information on state aid to the whole agricultural sector. This being the case, where a Member State has granted aid in the potato sector, data relating to such aid is included by the Member State in its contribution to the inventory for the year or years in question. As was also indicated in the reply, Member States do not provide such data with a view to its publication."
  Oh yes, the information is not for publication.
  "However, a copy of the updated information provided for the inventory by each Member State is supplied by the Commission, on a confidential basis, to the other Member States and to the Chairman of the European Parliament's Committee on Agriculture."
  So, although we have been told that Ministers do not have the information, they do have it. We should do well to recall what was said in Committee on the subject, yet

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  here is the Commissioner responsible telling us that Ministers have that confidential information, which I know Members on both sides of the House want to see, because it is the only means of establishing whether a true level playing field exists within the EC.
  8 pm
  The realities cry out. The scheme cannot work until there is not only a level playing field in Europe, but an agreed system of market support. We cannot leave potato producers naked in a market in which bankruptcy follows high yields. That does not mean public money. The potato marketing scheme has cost very little taxpayers' money over the years. In the context of the wider Community, the level of subsidy paid to potato producers in the United Kingdom is the lowest by far. We run a cheap system in this country. The taxpayers' contribution is low because of the nature of that scheme.
  Indeed, it is such a good scheme that I have a letter from the Irish equivalent of the National Farmers Union telling me that there are Ministers in the Irish Government who would like to have a potato marketing scheme, but they are not convinced that they would have the support of their English counterparts. Perhaps if Conservative Members are prepared to jump in to the debate—I shall leave them lots of time—they may influence Ministers. Then Ministers may get some spine and some fire into them to go out and defend our scheme, which has worked so well.
  People in Ireland realise that an increasingly heavyweight regime—that is what will develop as countries bottle out on removing subsidies—can be no substitute for a managed market that costs the taxpayer almost nothing. They realise that the only way to avoid spurious national schemes being set up is to set up efficient methods of matching production with expected demand. Why do the Government not commit themselves to retaining the existing scheme, or to introducing a revised scheme, which would be my preferred option?
  In Committee. we did not argue for a pure scheme such as the existing arrangement. We accepted the principle of revision, because the 'processors have a real argument—so strong an argument, indeed, that I spent the first few months of my present brief trying to devise another scheme to replace the potato marketing scheme, which would take into account the interests of both processors and producers.
  I have to tell the Minister that we nearly did it—[ Interruption.] Oh yes, I am sure the Minister has been fully briefed about that. We nearly got there, but in the end there were a few minor obstacles.
  The problem was that we did not have the weight of the officials behind us to bang heads together and make people sort the problems out and devise a new scheme. It was just my researcher and I, and a few colleagues, and it is difficult to operate in such a climate when one is trying to sort out the problems of an industry worth several hundred million pounds, involving 14,000 producers, many of whom—including Mr. Robertson—have some rather curious views.
  No one wants a half-baked, unworkable level playing field dreamed up by the Commission. If the Government insist on going down their route, they must tell us what public moneys are available to deal with volatile market
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  surpluses and gluts. Do they have a secret cash store to fund a glut, in these times of stringent control of public expenditure?
  No doubt Ministers will argue that the United Kingdom market enjoys no more stability than those of our European partners. We have heard that argument before, and I am sure we shall hear it again tonight, unless the Secretary of State intends to change tack. However, I remind her that that argument has been convincingly rubbished by the Nottingham report.
  In case some of my hon. Friends are not aware of it, I shall tell the House that that report, produced by a noble Lord and a professor at Nottingham university, and called, I believe, "Potatoes—an uncommon regime", challenged the case for closing down the operations of the potato marketing scheme. With the use of tables examining coefficients of yield variability and price variability across the Community, the report proved—conclusively, in my view—that the United Kingdom has high yield variability and low price variability. That was an important finding. The report showed that the scheme was working.
  Mr. Jack: Who paid for it?
  Mr. Campbell-Savours: Yes, the report was paid for by the potato marketing board. But all the research done for the Minister is carried out by agriculture officials. Why should we treat that as any more objective than the research done at Nottingham university?
  When the Secretary of State winds up tonight, she will say, "Treat me as an honest broker. You know my sympathies. Campbell-Savours rattled out that speech at the Dispatch Box three years ago, so you know where I stand." She may have strong views on those matters which she may want to signal to other members of the Cabinet at some future stage, if there is to be a policy reversal.
  But one thing worries me about the right hon. Lady: I do not know whether she is unassailable. I do not know how long she will last. She may be the Chancellor of the Exchequer in a few months' time; Chancellors do not seem to last long these days. Is it not possible that the present Minister of State, Department of Employment, or the Parliamentary Under-Secretary of State for Corporate Affairs, or possibly the Chief Secretary to the Treasury or the Secretary of State for Social Security, or some other prominent member of the No Turning Back group will take on responsibility for agriculture? Perhaps the present Minister of State will be moved to another Department and we shall get one of those mad right wingers at the Ministry.
  Mr. Julian Brazier: Order.
  Mr. Campbell-Savours: The trouble is that, if the Bill reaches the statute book in its present form—
  Mr. Brazier: Order.
  Mr. Deputy Speaker (Mr. Michael Morris): Order. there is only one occupant of the Chair.
  Mr. Campbell-Savours: I am glad that you admonished him, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. I admonished hon. Members.
  Mr. Campbell-Savours: We want an assurance that is sought by the potato marketing board and the United

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  Kingdom potato producers. I am conscious that the Secretary of State has constituents, and that there are 300 producers in her constituency. This is a difficult matter for her to handle. I understand that.
  However, we want an assurance that if the Government are given the enabling powers in the Bill they will not use them before the next general election—[ Interruption.] Let me explain why. A rebellion is being bought off with two compromise amendments on consultation. Judging by correspondence and conversations that I had with hon. Members when the former Secretary of State was in office, I have no doubt that there was to be a rebellion on the potato marketing board.
  Conservative Members were prepared to vote with my hon. Friends, and if a rebellion had been on the cards, we would have put on a three-line Whip to defeat the Government. Conservative Members believed that, as the former Secretary of State intended to motor on with the changes and trigger the enabling Jegislation by introducing regulations, the only way to stop him was to support the Labour rebellion. However, that Conservative rebellion has been bought off.
  If it was bought off on the basis of consultation, we want an assurance tonight that, if the Secretary of State is given those powers, the legislation will not trigger the regulations. If the right hon. Lady is no longer in her post tomorrow or the day after—I say this with gentle and deferential respect—her role will be filled by someone else. In those circumstances, hon. Members might well say that we should have blocked the possibility of triggering the regulations when we had the opportunity. If we receive the necessary assurances from the Secretary of State tonight, or even an indication from her, I am sure that my hon. Friends will not force the new clause to a Division.
  Sir Peter Tapsell: I shall relate my remarks specifically to amendments Nos. 49 and 50, in my name, which were somewhat contemptuously described by the hon. Member for Workington (Mr. Campbell-Savours). It is always a pleasure to follow the hon. Member in a debate, as he manages to invest every subject with a marvellous frisson of cloak and dagger excitement which might otherwise be lacking. I should perhaps start by assuring him that I did not receive any approach from Saudi Arabia over the tabling of my amendments.
  I have to declare an interest in that a considerable number of my constituents grow potatoes and work in the potato industry, and almost all my constituents eat fresh potatoes.
  I greatly welcome my right hon. Friend the Secretary of State to her new post. Although we traditionally discuss such amendments in the House in an informal and light-hearted way, my right hon. Friend, who has a long farming background, knows of the importance of the subject under discussion and the deep feelings on it held by potato growers throughout the country. They are fiercely wedded to the potato marketing schemes, the quota and the intervention fund. Unlike anywhere else in Europe, Britain's staple diet has traditionally been potatoes, which have always aroused strong feelings in this country, and even stronger ones in John Bull's other island.
  I have known only one other female Minister of Agriculture—delectable Madame Edith Cresson. When feelings among French farmers were running rather
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  high, Madame Cresson had to be rescued in a smart white helicopter from a group of angry farmers. I am certain that my right hon. Friend, who will be a listening Minister in a listening Government, will not find herself in a similar position in relation to the farmers of England, who practically vote Tory to a man—least, they have until now and will, I hope, at the end of the debate gain renewed faith in and enthusiasm for Toryism. I hope that my right hon. Friend will not be tempted to follow the example of Madame Cresson, notwithstanding the fact that she went on to be, not just Chancellor of the Exchequer, but Prime Minister of France.
  There has been some form of potato marketing board in this country since the 1930s, and there have been many changes at various stages over the years in the way that it has been organised. The name "potato marketing board" is misleading to the layman who does not study such matters because the potato marketing board does not sell any potatoes. It would be more appropriate if it were called the potato growers association. If it were, it might attract less criticism from what I might describe as free marketers—ething that I have never been.
  8.15 pm
  I want to reassure those of my hon. Friends with a passion for completely unlicensed markets that there is a totally free market in potatoes beyond the farm gate, which is not always appreciated. I say that for the particular benefit of my hon. Friend the Member for Wealden (Sir G. Johnson Smith), whose potato farmers constitute a distinguished group in Sussex. The wide support for the present arrangements among potato growers derives from the fact that the arrangements provide a certain stability of price without involving the taxpayer in the cost of intervention buying. Due to our island climate, yields in Britain are more variable than those on the continent, and it is extremely important for our potato growers to be certain about price.
  The phrase "the heart of Europe" is often bandied about. Like many such platitudes, it is meaningless as Europe has no heart and never will have. If one were to ask where the allegorical heart might be, one could say that it was the common agricultural policy. One of the ironies of our affairs in the House is that, at a time when many of my right hon. and hon. Friends are keen on closer European union, they are often critical of the common agricultural policy. However, when one goes to continental Europe one finds that the cement that holds the European concept together is the CAP, which is liked by the French and the Germans.
  Every country in the world, including the United States and Japan, supports agriculture—tain has done so since the beginning of the 1939 war. It is right that we should do so for an enormous range of reasons. Agriculture is not like industry; it needs support. However, the problem of the CAP has been its excesses. I fully accept that urban taxpayers cannot be expected to sign huge cheques every year to support commodities which nobody wants to buy. But the great merit of the potato marketing scheme is that, unlike the CAP, its mechanism keeps supply and demand in balance to a considerable extent.
  Far from abolishing the potato marketing scheme, we should hold it up to the Community as an example of the sort of device that it should consider using for a variety of other commodities. It avoids the excesses of the CAP

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  financial arrangements, with large imposts falling on the taxpayer. The MacSharry plan was devised to overcome the excesses of the CAP, which cannot be blamed on the potato marketing scheme.
  When something works, why fix it? The view of every potato grower in my constituency is that the potato marketing scheme works. They will be very upset if it is abolished.
  In the European context, potatoes have been the only major arable crop not to be covered by a CAP regime. Although potatoes have often enjoyed governmental support and grants on the continent, as the hon. Member for Workington said, we are now told that there is to be a CAP regime for potatoes. I do not necessarily agree with the hon. Member for Workington that that is another conspiracy, or that it will never come about.
  In preparation for this debate, I read the Commission's report of December 1992 and I even read the Rapporteur's report on the subject to the European Parliament. The Council is considering the scheme and I imagine that it will eventually come to fruition. As the House will know, 11 am not an enormous enthusiast for European arrangements, but if we are to have a regime for potatoes, I hope that it will be sensible and not too light weight.
  The declared aim of the Commission's regulation in Brussels in December 1992 was:
  To ensure stability of the market in potatoes and a fair income to the producers."
  That is perfectly acceptable and that is the aim of the potato marketing scheme. However, as so often with the Brussels Commission, its good intentions may produce quite opposite practical results. As the hon. Member for Workington and many others have suggested, the Commission may propose such a light weight Community regime in potatoes that, far from ensuring
  "stability of the market…and a fair income to the producers",
  it may produce the exact opposite.
  However, there is nothing in the British arrangements at present which appears to be contrary to the Commission's proposals, the Rapporteur's report and the European Parliament's response. As subsidiarity is stressed increasingly in European affairs, if the EC produces a potato regime, it would be a very good test of whether subsidiarity has any real meaning if we were allowed to retain the potato marketing scheme that we already have.
  Under the British scheme, stability arises from the constancy of acreage planted and the certainty of future acreage which is encouraged by the quota system. In practice, the potato marketing board's buying-in programme is less important than the quota system. However, it also helps to maintain confidence and at no cost to the taxpayer.
  We can contrast that with the situation in Brittany today, to which the hon. Member for Workington referred. Very considerable sums of French taxpayers' money—not CAP money—are being spent to help the Brittany potato growers, precisely because they do not have a scheme like ours.
  Turning from the European context, I want now to consider the British critics of the scheme. It is fair to say that three main criticisms are most usually advanced within the United Kingdom against the case for the retention of the potato marketing scheme.
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  The first criticism is that the Tory party is supposed to believe in free markets and the potato marketing scheme restricts that. Secondly, it is said that the housewife is forced to pay a higher price for her potatoes than would otherwise be the case if there was no such scheme. Thirdly, it is said that the processing companies are concentrating their capital investment in continental Europe to the disadvantage of British employment and our balance of payments because of the scheme.
  I hope to demolish those three propositions. First, with regard to free markets, I have already said that there is a totally free market in potatoes outside the farm gate. In that regard, I want to refer to the Nottingham report. Nottingham university is in the first constituency that I was elected to represent in 1959. I have a very high regard for Nottingham university, and I was a member of the university council for many years.
  The Nottingham report is a distinguished document, which I have read with the greatest care. I believe that it demolishes most of the criticisms against the potato marketing scheme. The report states:
  "The current system of market intervention is one that works with the market rather than against it."
  The abolition of the potato marketing scheme, far from producing a free market in the technical and economic sense of the phrase, might have precisely the opposite effect.
  The processors are potentially a monopolistic group of mainly international companies. They take 33 per cent. of the total market in potatoes in this country and 25 per cent. of the home-grown crop. The market in frozen chips is dominated by one processing firm—three firms take 90 per cent. between them and one takes 60 per cent. The market in crisps is dominated by three firms.
  If the Government decided to abolish the potato marketing scheme, my farmers assure me that they would be handing over a large and diversified agricultural industry to a small group of international companies which would be able to determine the acreage of potatoes planted and their price. Many farmers have put it to me that there is a much stronger case for referring the processing companies to the Monopolies and Mergers Commission than there is for abolishing the potato marketing scheme.
  We do not have as strong a co-operative movement among potato growers in this country as there is on continental Europe. That is another reason for not allowing the oligopolistic tendencies of the processors unfettered expression.
  I want now to consider the argument about forcing up the prices to housewives. Fresh potatoes still form three quarters of the market and are, in economic jargon, a price inelastic commodity. The consumption of fresh potatoes in Britain does not change much with price changes at the farm gate, although fresh potato consumption has been steadily rising in the United Kingdom for years unlike the trend in any other European country.
  As I said at the beginning of my speech, we are a potato eating people. The potato is our staple diet. We are the only European country of which that is true. The competitors of the potato are pasta and rice, both of which are imported products. In any event, it is the retail chain, not the producer, that mainly determines the price to the housewife.
  In the earlier part of this year, farmers in my constituency received about 3p a lb for their potatoes

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  loose. The housewife pays about 20p a lb for loose potatoes in the shops and about 30p to 40p a lb for packaged potatoes depending on their quality and variety. That shows what a small part the price paid to farmers plays in relation to the price that the housewife pays.
  I am assured that farmers receive only about 30 per cent. of the retail price of pre-packaged potatoes, only 10 per cent. of the retail price of frozen chips and only 3 per cent. of the retail price of potato crisps. It is therefore absurd for processors to argue that the British potato grower is in danger of pricing the processor out of the retail market. As I have said, potato consumption does not change much with a change of price at the farm gate, but what do change are the profit margins of the big international processors. That is no doubt the reason why the chairman of the processors wrote to me and a great many other hon. Members a letter that I received this morning in which he strongly urged me to vote for legislation which would abolish the potato marketing scheme.
  8.30 pm
  Another criticism is that processing is being forced overseas by the potato marketing scheme. That criticism was completely shot down by the Nottingham report. If anybody cares to read the section on processing, he or she will see that one sentence reads:
  "British potato processors are not adversely affected by the potato marketing scheme."
  At great length the report explains the justification for that remark. I will not delay the House by giving all the detail, but I do not see how anybody could read that section of the Nottingham report without being convinced by it.
  The continental producer, of course, usually has a much smaller production unit. He uses less expensive capital equipment and, in general, produces potatoes of a lower quality and at a lower price than our potato producers. My farmers feel that the producers want to be able to get their higher quality British potato at a depressed price and to acquire total dominance of the British potato market, although they buy only a quarter of the home-grown crop.
  We were told much by the previous Minister of Agriculture, Fisheries and Food about how well the processing investment was going overseas. When one studies the matter overseas, one is immediately informed that the market has approached satiation point in Holland—some companies there are going bankrupt or have already gone bankrupt.
  The reason for the adverse trade balance in processed potatoes is that the international processors, having sunk so much capital into continental Europe, are bringing processed potatoes into Britain. Having made that big investment overseas, it is extremely unlikely in the present circumstances that, if we abolish the potato marketing scheme, they will suddenly start to invest more capital in new equipment in this country when there is already overcapacity in Europe.
  The import-export argument is often used. Potatoes are a bulk commodity and are too expensive to move in most cases, so the scope for large-scale exports of British fresh potatoes is unlikely to be great. The balance of payments argument, which is the third argument against the potato marketing scheme, does not stand up to analysis.
  The employment point is also often advanced against the scheme. Again the arguments point in exactly the
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  opposite way. There are about 16,000 registered potato farmers, but there are 14,500 active growers at the moment, employing about 60,000 workers. In rural areas, that is extremely important, particularly in Lincolnshire. Despite the large capital investment of big growers in equipment, by modern agricultural standards potato growing is still a relatively labour-intensive industry.
  A farmer on a typical 1,300-acre farm in my constituency, with 150 acres of potatoes under the quota, told me last week that he now employs eight full-time workers and that five of those eight would be made redundant if he switched out of potatoes because of the uncertainty which could flow from a destabilised free-for-all regime. That is undoubtedly the case. It is virtually certain that the abolition of the potato marketing scheme would force many small potato growers in particular out of business. The Nottingham report, which was published as recently as April, estimated that 7,000 potato growers—40 per cent. of all potato growers—might go out of business without the potato marketing scheme, at a loss of half a million tonnes of potato production, which would presumably then have to be imported.
  With her recent ministerial experience at the Department of Employment, my right hon. Friend the Secretary of State will understand the serious social and employment implications of those statistics, particularly in areas such as my constituency where we have about 14 per cent. unemployment on the coast and where potato growing provides much valuable employment. I suspect that the same is true in many other parts of the country. Whatever Ministers might say to the contrary, every potato grower in my constituency would he most alarmed if the scheme was abolished. They are all convinced that that would lead to much greater price fluctuations and much uncertainty. At a time when CAP regimes are being introduced for sheep, beef and set-aside, it makes no sense at all for the traditional British potato to be the only arable crop enjoying no form of agricultural protection.
  I very much hope that my right hon. Friend will feel able to accept the two amendments that I have tabled. [Interruption.] Despite what the hon. Member for Workington says, amendment No. 49 would ensure that she would not use her powers under the legislation to close the schemes without the fullest consultation with everybody connected with the industry. Amendment No. 50 would build into the legislation the fact that, if the Community produced such a light weight potato marketing scheme that it would be virtually useless in stabilising the market, she would again have to consult all interests before using the European initiative as an excuse to abolish the potato marketing scheme. I hope that, as a listening Minister, she will seriously consider accepting my two amendments.
  Mr. Tyler: I am delighted to follow the hon. Member for East Lindsey (Sir P. Tapsell) and I echo many of his points, but I hope to do so very briefly rather than repeat them. The hon. Gentleman led neatly to my first question. Given the evidence that he has put before us and the evidence that we have had from many other sources, exactly who is in favour of abolishing the marketing scheme? The answer is the Potato Processors Association—that is all; it is just one potato. When I met a group of Cornish and other south-western potato farmers in Central Lobby just a few hours ago, they said, "There must be some reason for the extraordinary influence of

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  that comparatively small number of people." The only way in which they could interpret it—I do not cast any aspersions—is chequebook diplomacy, which has been rather notorious in recent days. I suggested that it might be a case of crisp bank notes rather than cheques.
  On Second Reading, Conservative Members were critical of plans to abolish the board and the scheme. The right hon. Member for Westmorland and Lonsdale (Mr.Jopling), himself a former Minister, said:
  "The potato scheme has worked extremely well over the years…I am much disappointed that there is a danger of the potato marketing scheme disappearing."—[Official Report, 23 March 1993; Vol. 221, c. 814.]
  The hon. Member for Cambridgeshire, North-East (Mr.Moss) said:
  "many people, including my potato growers and farmers, may question whether it is worth having any EC regime at all, since it will do so little."—[Official Report, 23 March 1993; Vol. 221 c. 820.]
  There is widespread concern right through the industry not—just among processors—and the hon. Member for East Lindsey has rightly reflected that concern this evening.
  I stand slightly uncomfortably between the hon. Members for Workington (Mr. Campbell-Savours) and for East Lindsey. The new clauses tabled by the hon. Member for Workington and the amendments tabled by the hon. Member for East Lindsey are both of value. They fit together—indeed, it is critical that they should fit together. My hon. Friends and I endorsed the amendments tabled by the hon. Member for East Lindsey precisely because we hoped that they would be placed before the House—and, if necessary, put to the vote.
  There is widespread concern among all producers, be they seed producers, early producers, such as the famous early producers from Cornwall, or main crop producers. Demand is growing. The reason for that, even in the comparatively short period since the completion of the Committee's consideration of the Bill, there has been a major development—the failure of the Council of Agriculture Ministers to make any progress whatever in the development of a regime.
  There has been another, perhaps more encouraging, development—the arrival at the Dispatch Box of the new Minister. I draw attention to the second section of the report in Farmers Weekly to which the hon. Member for Workington somewhat peculiarly did not refer:
  "Mrs. Shephard said reviewing the potato scheme was one of her first priorities"
  we shall have the benefit of her advice on that tonight.
  "She would approach the subject with an open mind she promised. She wanted to see the 'lightest possible regime' but intended examining MAFF's plans for the scheme as well as the EC's suggestions for potatoes. As an MP for the mainly arable constituency of Norfolk South West she is well aware of potato producers' objections to the plans to scrap the scheme and the Potato Marketing Board. 'I have heard strong expressions of feelings about it,' she admitted."
  That is significant. I hope that her arrival will prove to be the positive development that can be set against the negative developments in Brussels.
  Why did the Agriculture Ministers fail to agree? They failed because all the other producer states are enjoying the greatest degree of subsidiarity that they can exploit in the interests of their own producers. We are the only country that seems not to be prepared to do its best by its own producers. Those of the other 11 member states that produce potatoes—I do not know whether Luxembourg, for example, does—are desperately trying to keep in place
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  the most advantageous schemes that they possibly can to help in what has become an extremely competitive situation. As the hon. Member for East Lindsey rightly said, we should be doing the same. In the absence of an effective regime to help the whole industry throughout the Community we have an obligation to try to make that happen. At present, the imbalance is increasing because the Governments of other member states are doing their best to make sure that it does.
  We have heard a number of references to the university of Nottingham report, the title of which has been misquoted. The proper title is "An (Un)Common Potato Regime: the EC and the PM B". I want to read two or three extracts in which the argument not only for the retention of our scheme but for its use as a model for others is put succinctly. The report says:
  "The record of several European countries in the potato sector demonstrates that potato producers require some form of collaboration or cooperative in order to achieve stable and reasonable incomes through time. The yields and returns from the crop are inherently unstable—much more so than for other arable crops. Certain vegetable crops may have similar problems, but there the Community has adopted intervention and withdrawal as measures to aid producers' incomes in such sectors. For those crops, at least, the Commission has recognised that yield instability, perishability, and difficulties with storage require an element of supply management; albeit after the crop is grown. For potatoes the problem is greater because of the relatively larger area grown and consumed. It is the single largest vegetable item produced and eaten in the Community. Hence, stable supplies and prices are more relevant than ever."
  The report continues:
  "The PMS represents a model for farm policy-makers that deserves consideration and repetition in other sectors."
  As the hon. Member for East Lindsey said, rather than disposing of the PMS, we should be replicating it in other parts of the market.
  Finally, the report states:
  "Oligopolistic processing and retailing sectors will tend to exploit growers unless there is some countervailing power available to the production sector. The Potato Marketing Board surely has some role to play in this."
  Thus, the conclusion of that excellent report was not just that the potato marketing scheme and the board represent something of which we should be loth to dispose, but that it is peculiarly important to retain them at this juncture.
  8.45 pm
  At the moment, potato growers are facing the worst of all worlds. One of the Cornish farmers who came to see me this afternoon showed me the figures for his potato crop for 1992–93. The total cost, excluding management time and professional fees, came to £80,000 for about 60 acres. That yield is not remarkable or incredible, but it is not bad either. The income from that crop was £43,200. Such huge losses cannot be repeated year after year without more and more growers being driven out of business. That farmer said that, if the growers have another similar year or if the scheme goes and therefore the fluidity of the prices becomes even more alarming, he will have to make half his staff redundant. It should be remembered that my area is also an area of very high unemployment:
  In those circumstances, we shall find that the other member states, which have in place the best support systems that they can devise for this sector of the industry, will carve up the market and we shall be at their mercy. To coin yet another new phrase, it will be the most uneven ploughing field yet.

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  The Minister is still in her honeymoon period. She has three great advantages. I am sure that other hon. Members from both sides of the House who have farming communities in their constituencies will agree that the right hon. Lady's arrival in Whitehall place has been warmly welcomed for three reasons. First, she has a farming background and it is to be hoped that that will help her to understand the problems of the industry. The speech that was referred to earlier will perhaps give added encouragement to that view. Secondly, the right hon. Lady is known to be a good listener—although whether the hon. Member for East Lindsey is right in thinking that the whole Government are good at listening is perhaps a matter for dispute. Certainly, the right hon. Lady's predecessor did not go round the farming community and achieve such a reputation. Thirdly, and perhaps most important for the farming community, the right hon. Lady is not her predecessor. That is why I hope that she will not automatically adopt her predecessor's views this evening.
  Amendments Nos. 49 and 50 are welcome and useful. I hope that the right hon. Lady will think so, too. I hope that the House will either accept them without a Division or, if a Division is called, will vote to add them to the Bill. The Minister must answer the very real concern about the circumstances that have arisen following the failure of the Council of Ministers to develop even a light weight regime—let alone a more effective regime. I hope that, in the hiatus that has followed that meeting, she will be able to reassure the potato producers of this country that they will not be given a potato in a poke—an intolerable state of affairs in which all the producers of all the member states receive better treatment than they do.
  Mr. John Greenway: I welcome my right hon. and hon. Friends to their ministerial appointments. Having entered the House with them in the 1987 intake, I am not surprised at the progress of their careers. They will bring a great deal of common sense to the agricultural industry and do a lot of good work for it. While it is a great joy to have a lady Minister of Agriculture, Fisheries and Food, I remind the House that we had a lady Minister of State not long ago—Baroness Trumpington. She took a leading role in the reform of the potato marketing scheme when we previously examined it. I well remember her visiting my constituency and confronting many of my farmers with the bad news that the potato marketing board would disappear. She listened to their arguments and said, "Perhaps we can have another think about it."
  I sense that we are in the same situation now because there has been much debate about the future of the potato industry and the scheme. If one thing is clear, it is that no clear consensus has emerged. Despite the welcome fact that the Government have accepted the amendments carried in another place that there should be parliamentary control over the enabling power to revoke the potato marketing scheme, it is right that there should be some greater certainty about the need for more consultation before the scheme is revoked.
  The House must be concerned about the wide discrepancy in the view of the growers and processors. As we know, growers see the scheme as providing both stability and the prospect of a reasonable return on their potatoes. If there is no scheme, there will be a potato glut and a fall in incomes, and growers would be forced out of business. Indeed, the threat of the abolition of the scheme has created the current uncertainty among growers,
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  coupled with the failure of the Commission to make any real progress in the creation of a Community-wide potato regime.
  At the other extreme, potato processors such as McCains in Scarborough on the edge of my constituency, which buys from many potato growers in north Yorkshire, say with some force that they want to buy more locally grown potatoes. We must face the fact that, in their view, the scheme prevents them from doing so and does not give the growers enough encouragement to grow the right variety and quality of potatoes for their factories.
  Mr. Nick Ainger: Will the hon. Gentleman give way?
  Mr. Greenway: I will not take any interventions because we want to wrap up the debate quickly.
  The last thing that the House should want is a solution imposed by Ministers. I want the growers and processors to find a common solution. We largely achieved that with regard to the future of the milk industry. Where we are now with the potato industry is where we were two or three years ago with the milk industry. There was a lot of resistance to change and the two sides of the industry failed to reach a common position. As we found that common solution with milk, I believe that we can achieve the same in the potato industry.
  I want north Yorkshire and the United Kingdom as a whole to have an expanding potato industry with more United Kingdom-grown potatoes processed in United Kingdom factories with that product sold at home and overseas. The proposed Community-wide scheme is some way off and may not happen, so there is time for the matter to be debated further, although I suspect that we do not have unlimited time.
  The present scheme does not protect United Kingdom growers from low-priced imported products and that has undermined the market, certainly in Yorkshire. But there is an opportunity for more discussion and consultation to find a solution. The potato industry needs an agreed solution—that is the best way forward. The industry does not need a political solution or an imposed one. Amendments Nos. 49 and 50, to which I have added my name, provide the mechanism by which we can not only have that further consultation and discussion but provide some greater assurance about the future of potato growers.
  Farmers and potato growers in Ryedale and north Yorkshire, and workers in McCains modern processing plant at Cayton, Scarborough, should be on the same side of this matter, not at loggerheads. That is what happened in sugar and it should happen in potatoes. A partnership solution between growers and processors is what the potato industry in the United Kingdom badly needs.
  Mr. Ainger: I tried to intervene on the hon. Member for Ryedale (Mr. Greenway) because I wanted to make the point that there is a forum where producers and processors can get together and discuss acreage and types of potatoes to be grown—the Joint Consultative Committee. When one looks at the minutes of the JCC and talks to its members, it is interesting to see that the processors have never demanded a higher acreage or different varieties to be grown. When one reads the minutes of those meetings, it is stretching the imagination to believe what the processors say because they have a forum and an opportunity to address their concerns. It leaves hon.

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  Members with the belief that the processors are concerned not about growth or the type of potatoes grown but the price of them.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) took us on a nice trip around Europe. At last, we discovered—I hope that it is good news for Ministers—what has been going on in other member states with regard to support and intervention. It is worth while comparing what is currently happening in our potato industry with that of Brittany.
  In Central Lobby today, I met local producers from the constituency of the hon. Member for North Cornwall (Mr. Tyler). I was told—I shall use acreage terms—that if an early potato producer in Pembrokeshire could get an income of £1,000 per acre, he would get a reasonable living. We are looking at £800 to cover his costs. In fact, producers now get between £400 and £500, so obviously there is a massive loss.
  The potato marketing scheme has been implemented. Total assets of about £2 million—25 per cent.—have been allocated to early growers. However, that will leave them with a significant loss this year, which unfortunately follows a significant loss last year. This year, about 15 per cent. less acreage has been planted and it has been estimated that there will be a further cut of about 30 per cent. as a result of the poor season this year. That is important because the early potato sector has an excellent record of import substitution. In 1987, 385,000 tonnes of new potatoes were imported. That has fallen to approximately 260,000 or 270,000 tonnes now. When we have a balance of payments problem, it seems crazy to allow production of a basic staple food such as potatoes to fall and to encourage imports in.
  I return to the comparison that I was making between Pembrokeshire and Brittany. We have a looming crisis. The levy-payers—the producers—will benefit to the massive tune of £500,000. As my hon. Friend the Member for Workington told us, the French Government are intervening directly using French taxpayers' money, not producers' money. The Government have already contributed, according to my figures, more than £1·3 million to their early potato growers. That is the equivalent of about£530 to £560 to each one.
  Government intervention is not the only factor in France. The French potato industry has developed powerful co-operatives which in effect set quotas and market the produce directly from the producer. They also supply the seed. They control the acreage in the same way, to a certain extent, as the JCC does.
  9 pm
  If the Bill is not amended we shall face the prospect in the near future of only British producers being left unprotected in the face of Government intervention and powerful co-operatives establishing quota and acreage, marketing and so on in continental Europe. It is bizarre that the first part of the Bill abolishes the milk marketing boards and encourages the establishment of a powerful co-operative to replace them, yet it sweeps away the potato marketing board and puts nothing in its place.
  This is my first opportunity to welcome the Secretary of State to her new post. I urge her to listen to what the producers are saying and what people in rural communities are saying. As the hon. Member for East Lindsey (Sir P. Tapsell) said. the potato industry makes a vital contribution to rural areas in terms of employment
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  and income. The Secretary of State represents a rural area so she knows that well. It seems ludicrous to leave the Bill unamended. We have heard that it is highly unlikely that we shall get an EC regime. We shall leave our British producers unprotected in a market in which their EC competitors are determined to export to Britain maincrop and early potatoes. I trust that the Secretary of State will have something positive to say in her reply.
  Mr. Clifton-Brown: You allowed me to catch your eye, Mr. Deputy Speaker, on the basis that I spoke briefly, which I intend to do. First, I welcome my right hon. Friend and my hon. Friend to their posts. They bring a new look to the industry which I am sure will be welcomed.
  I listened to the debate for many weeks in Committee. The hon. Member for Workington (Mr. Campbell-Savours) went on at some length. I thought that I had heard it all. When he announced this evening that he had come up with a better scheme than all the experts had done since the potato marketing board was set up in 1958, and that it almost worked, I nearly fell off my seat. I am sure that the PMB will rush to employ his services as a consultant. But, under the Labour party's new probity, I am sure that he will refuse any consultant's fee.
  I declare my interest as a potato grower. Let me bring a little sanity to the debate. In the past 10 years the amount of processed potatoes that we import has doubled from about a quarter of a million tonnes per year to a little more than half a million tonnes a year. On a yield of 20 tonnes per acre that works out to some 30,000 acres. That is 30,000 acres of potatoes that we could be growing in Britain. It amounts to a loss to our balance of trade of £125 million. That is a large sum of money. So there is a good case for looking carefully at our potato market.
  It is plain that the potato marketing board has been an outstanding success. The hon. Member for Workington quoted many figures from the Nottingham report which was commissioned by the PMB, so although it may be independent, we cannot expect it to come out glowingly against the PMB.
  It is a fact that in the last three of the past 12 years price fluctuations were higher in the United Kingdom than elsewhere and that in any four years price fluctuations were lower here than elsewhere. Therefore, the comment that we have heard so often this evening that the PMB has brought stability into our potato market is simply not borne out. Indeed, in the past season large tonnages of potatoes were changing hands at well below the cost of production, at £30 a tonne or less. The hon. Member for Pembroke, North (Mr. Ainger) has told us that this year many of his early growers are losing money. Last week I heard that an ex-farm price in Pembroke was £41 a tonne whereas at this time of year one would expect the price of potatoes to be £100 a tonne.
  The kernel of my remarks is that we are now in a changing market. It will become increasingly easy with technology and better chilling.methods to import not only fresh potatoes but every sort of processed potato, so we must consider our potato market.
  I recognise from letters and representations from my constituents that they welcome the PM B/PMS overview of our policy. I have made representations to my right hon. Friend and, indeed, her predecessor to the effect that we should go slowly on abolishing the PMS. It would be folly to abolish the PMS the moment that the Bill is enacted and, as the hon. Member for Workington has rightly

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  pointed out at length, to suffer the subsidies that would follow. It would be folly to lose the stability that the board brings until we have a regime, however lightweight, across Europe, to which we can oblige our Community partners to adhere under Maastricht.
  I welcome the thrust of the Bill, but I urge my right hon. and hon. Friends to think carefully and not to throw the baby out with the bath water. I urge them to go slowly. In that respect I welcome amendment No. 49, which calls for consultations with the industry, but I do not welcome amendment No. 50 because a poll of the industry would produce a difficult result. [Laughter.] Hon. Members who laugh must know that 60 per cent. of the market is produced by just 2,000 of the 16,000 growers. Why, then, should a poll on a per member basis produce the ultimate answer about what should happen to the market?
  One needs to consult widely to see the best way forward for potato growers and, above all, for consumers and processors, so that we start to repatriate some of the half a million tonnes produced abroad which should be produced here. I look forward with eagerness to what my right hon. Friend has to say.
  Mr. Welsh: I think that the massive impor of frozen chips has more to do with a lack of processing capacity than with the workings of the potato marketing board. Nevertheless, I share the wish of the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) to see increased home production. He again proves that absolutely nobody supports the abolition of the PMB. I have not even heard the Government defend such a policy. Perhaps they will do so before the evening is through.
  Although I, too, welcome the new faces in the ministerial team, I hope that they will bring new thinking and a fresh approach. In particular I hope that they will listen to the industry and those involved in production.
  I support maximum consultation with the industry. I remind the Government of the massive and strongly felt opposition in Scotland to any abolition of the PMB. Although it is not a perfect institution, it has by and large served the interests of producers and consumers over the long term. If the Government had listened to Scottish farming views, the PMB would be in no danger of abolition. The scheme would certainly be modernised and improved, but there would not be the threat of abolition. I wonder whether the Scottish Office shares completely the views about abolition which have been expressed elsewhere. It seems that there are two voices. I hope that what I interpret as the Scottish Office voice will prevail. Perhaps it will and the Minister will surprise us all before the evening is through.
  I remind the Government about the importance of the potato industry to Scotland. It is a major employer and a major source of employment in other, related industries. These decisions are of major importance to us. Scotland's ware industry and its crucial seed industry require both stability and direction if they are to plan ahead properly. I remind the Minister of the capital-intensive nature of the seed potato industry. I am told that the investment requirment is about £3,500 per hectare. Thus, any delay or doubt in decision-making simply destabilises the industry and, with uncertainty, investment simply stops. These
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  amendments would eliminate at least some of the uncertainty and allow the industry to participate in decisions about its own future.
  There is a need for proper planning horizons. There is too much short-termism in the approach to agriculture. In the case of the potato industry, producers require firmer guidance as to the Government's intentions so that the industry may plan ahead properly. Producers have to look to markets and contracts. The sooner the Government clarify their decisions, the better. I am told that the actual production of potatoes takes a year and a half of forward planning. This extends to four years or more when capital investment, banking decisions, machinery, and so on, are taken into consideration.
  That brings me to the argument about a level playing field. This is not just the use of a cliche; it really is an attempt to ensure that the industry will not -face massive disadvantages. Our industry has the quality and the expertise to beat any of its competitors if it is allowed a level playing field. The United Kingdom's potato industry is not a burden on British taxpayers, yet it has to compete against its European Community counterparts whose Governments positively finance their potato sectors. I am told that £7 million in loans was given to Spanish producers last year, that Italy supplied £50 million to its producers, that France has put £13 million, if not more, into its industry, and that Portugal gives growers an export subsidy. The British Government will put our industry at a great disadvantage if they abolish the potato marketing scheme while these competitors enjoy exactly such advantages.
  The French Government are acting very quickly to help their industry. Currently they give Brittany's early potato growers assistance to the tune of millions of pounds to prevent market collapse in an area that provides about 80 per cent. of French early potatoes. The British Government must understand that it is little wonder that our industry is concerned about the abolition of market stabilisation measures here while direct competitors have such advantages given to them by their Governments. Does the Minister accept the concern of potato growers about the need for a level playing field? Can she give a guarantee that the potato marketing scheme will not be abolished while other European countries implement market stabilisation measures that are not available here? Can the Government guarantee that they will not revoke the scheme before the European Commission requires that to be done? Otherwise our industry will face massive disadvantages.
  The industry requires consultation, stability and a level playing field so that it may plan for the future. Potato production is massively important to Angus—indeed, to Scotland—and the Government's overall strategic decisions will affect, in turn, a mass of associated industries and services. I am thinking of transportation, the supply of machinery and the very important processing sector.
  In summing up, I put to the Government a plea for clarity of action so that producers and 'processors may begin to plan ahead. Confidence—or, more important, the lack of it—is a major factor affecting this sector of the industry.
  A change of Ministers should provide an opportunity for second and cooler thoughts on the subject and allow those affected to have a real say in deciding their future. I

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  do not expect, however, that the Government will allow that freedom and that sort of decision-making power to our agriculture industry, more is the pity.
  Mr. Cash: I agree absolutely with my hon. Friend the member for Lindsey, East (Sir P. Tapsell). [Interruprion.] We have corresponded on this matter. I want to get it on the record—because I have a direct constituency interest in this matter—that I endorse what he has said and many of the other remarks made during the debate.
  9.15 pm
  The Minister of Agriculture, Fisheries and Food (Mrs. Gillian Shephard): This has been an extremely interesting debate. Not the least interesting feature has been the light in which we have now all been led to regard the hon. Member for Workington (Mr. Campbell-Savours). He has revealed himself as a capitalist, an entrepreneur, a faulty drafter of clauses, but an excellent drafter of potato marketing schemes. We have been treated to a vision of the hon. Gentleman in his bath and, finally, when he read the extract of what I said in 1989, he showed himself to be a wonderful female impersonator.
  What is clear about the hon. Gentleman's performance is that his customary paranoia has not deserted him. He accused the Ministry of Agriculture, Fisheries and Food of rejecting his starred amendment, but he must know that that is a matter for Madam Speaker. I reject his accusation.
  I noted that my hon. Friend the Member for East Lindsey (Sir P. Tapsell), in moving his amendment, attempted to compare me to the unfortunate Madame Cresson. I will pass over that comparison, the white helicopter and everything else. He spoke about processed potatoes, and I 'wonder whether he has noted the massive changes in the pattern of potato consumption in this country since 1975. In 1975, we consumed 143 lb of potatoes per head per year; in 1992, we consumed 110 lb per head per yeara considerable reduction. In the same period, the consumption of crisps has increased. In 1975, we consumed a mere 7 lb per head per year; in 1992 it increased to a staggering 17 lb per head per year. I am amazed by those figures. All I can say is that it is obvious the hon. Member for Workington has not been indulging, but I might have been. As to frozen chips, in 1975 we consumed 4·7 lb per head per year; in 1992 consumption rose to 18 lb.
  Those figures should be noted because they indicate a great change in the demands on our potato processors. I would remind hon. Members, as did my hon. Friend the Member for Ryedale (Mr. Greenway), that processing also provides employment.
  The hon. Member for North Cornwall (Mr. Tyler) should note that 30 per cent. of potato producers were in favour of abolition of the potato marketing scheme.
  Mr. Tyler: I think that I am right in saying that that poll was taken some years ago and that a different situation has now arisen—particularly with the failure of the Council of Agricultural Ministers to arrive at a satisfactory alternative.
  Mrs. Shephard: The EC position must be taken into account when we look at the issue, but I am sure that the hon. Gentleman would agree that many producers see the downside of what is, in many respects, an excellent scheme.
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  My hon. Friend the Member for Ryedale made a very balanced contribution and reminded us of the need to look at change in the consumption of potatoes and the demands on potato producers. The hon. Member for Pembroke (Mr. Ainger) referred to the JCC and Government intervention. The Government are intervening in the market this year to the extent of £1·5 million, which is not an inconsiderable sum.
  We heard the usual sensible, balanced comment from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I considered the Nottingham university report, which was commissioned by the potato marketing board. The university did not consult processors and its report contains some arithmetical errors. Nevertheless, it made interesting reading and I have studied it carefully.
  The hon. Member for Angus, East (Mr. Welsh) reminded us of the need to consider the lack of processing capacity in Britain and to consider the reason for that.
  Speeches have been balanced, but hon. Members have hinted heavily that we need to remember the changes that have occurred in the potato market.
  I know that the Bill's provisions have caused a lot of anxiety among farmers, despite the fact that they are only enabling provisions. Representing the constituency that I do, and in the light of my words on 27 January 1989, I obviously understand the concerns of growers—
  Mr. Campbell-Savours: No one would have known that the hon. Lady made that speech if I had not found it.
  Mrs. Shephard: I could have referred the hon. Gentleman to it with no trouble at all. He should ask in future.
  I understand that growers are concerned that the scheme that they know well and on which they have come to rely over the years might disappear.
  Since taking up my post, I have considered the recent poll taken by the potato marketing board, but the view of the majority is not universally held. We must remember that retailers and processors as well as consumers—interestingly, nobody has mentioned consumers during the debate—have an input. Potatoes are an important crop in Britain. It has become a high-tech and successful industry. Producers set great store by it, but, as my hon. Friend the Member for Cirencester and Tewkesbury pointed out, a third of potatoes eaten in 1992 were in processed form and only 23 per cent. of those came from a United Kingdom provenance. We must consider the trend in the market if we are to retain a healthy potato industry.
  Mr. George Kynoch: Does my right hon. Friend accept that we must not consider only the healthy trend in the market but ensure good production planning? Many of my constituents, to whom I referred in a recent letter to her, recognise that the acreage control is necessary for good management planning in potato production. Will she go further and say that she will press this point with our colleagues in Europe, rather than accept a rather loose European regime being imposed on us?
  Mrs. Shepherd: I have received a representation from my hon. Friend and I shall bear his remarks in mind when we are working in Europe on this matter.
  The Bill provides for two possibilities, depending on the existence or otherwise of an EC regime for potatoes. Let

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  me deal first with the situation should there be a regime. As hon. Members will know, the proposal that the Commission made last November is very lightweight. It does not provide any market support measures and if it is adopted in its present form it will mean the end of national arrangements here and elsewhere. We made it clear that, in the context of that proposal, we would not press for retention of quota and support buying arrangements because no other member states wished to adopt quotas. It clearly would not be in the interests of our growers, even if we were allowed to do so, to adopt quotas while others could grow as many potatoes as they liked.
  Mr. Ainger: Does the right hon. Lady accept that in France the powerful co-operatives that supply seed and eventually market the produced potatoes operate, in effect, a quota system? Although the French Government do not set quotas, those powerful co-operatives are effectively operating a quota system.
  Mrs. Shephard: I am not sure whether that is the case, although I would probably bow to the experience of the hon. Gentleman. If we limit our acreage, we could put our growers at a disadvantage without knowing the outcome of the EC scheme.
  Mr. Malcolm Bruce: Is the Minister aware of the concern expressed by potato farmers in my constituency that the large seed developers and the seed merchants are taking more control over exactly what farmers can do, including for species of potato that have been established for 20 or 30 years? Is that not a restriction on the market that should be investigated? Farmers are telling me that the Plant Varieties and Seeds Act 1964 says that monopolistic practices by seed merchants and developers cannot be investigated because of a ruling of the House. Is that. sensible, and should not it be changed?
  Mrs. Shephard: I accept, of course, that all growers wish to grow for a particular market. If there are matters which the hon. Gentleman wishes to draw to my attention I shall be happy to look at them. However, most growers are anxious to work with the market that they have.
  Mr. Welsh: Can the Minister guarantee that she will not abolish the potato marketing scheme or give up the advantages of the potato marketing board before any European scheme is adopted?
  Mrs. Shephard: I am coming to what I am prepared to do. The Bill prepares us to respond to any Community regime and to retain the constructive and desirable activities of the board, such as research and development and market promotion, if that is what growers want.
  The Bill allows for establishement of a successor body for that purpose. Without the Bill, we would have no alternative but to revoke the scheme and wind up the board without the possibility of a successor and the protection of its important functions.
  I should mention briefly what is happening in Brussels. The proposal was considered by the May Council together with presidency proposals incorporating marketing standards. There was no agreement on that and the Special Committee for Agriculture has been asked to do further
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  work. The proposal was not discussed at the June Council and it remains to be seen when it will be brought forward again.
  Mr. Campbell-Savours: Will the Minister clarify something? If there is no European regime, is the Minister sure that she will then not revoke the scheme, or does she think she may have to revoke it even if there is an agreement?
  Mrs. Shephard: Funnily enough, I was about to deal with that. In addition to all the other things we have described him as, the hon. Gentleman is perhaps a little impatient, but also has some foresight. I was about to say what might happen in the continued absence of an EC regime.
  The Government have not made any decision to revoke the scheme. My hon. Friend and I want to acquaint ourselves first-hand with all the arguments, and we have set in motion meetings with the industry bodies concerned. We shall then be in a position to discuss the matter in an informed way with the Secretaries of State for Scotland and for Wales, who are also involved in making any decision.
  I have made it clear that I want to spend a considerable amount of time and effort listening to growers, processors, retailers, packers and consumers before reaching any conclusions about the future of the scheme.
  I am also aware that statutory decisions need to be taken shortly with regard to the 1994 crop year. The potato marketing board has to announce its quota arrangements by the end of August so that growers can plan their 1994 plantings. I am prepared to allow the present arrangements to apply to the 1994 season in order to give myself time.
  The Government have retained the full spirit of the amendments made in another place. We have tidied up the amendments which their Lordships accepted would be necessary, but the thrust of the amendments is unaffected. They have as their most important effect the requirement to bring any decision to revoke the scheme, apart from one made in the context of an EC regime, back to Parliament for approval. That is sufficient safeguard for growers' interests in that it will ensure that a case for or against revocation would be heard in full and that informed debate would be guaranteed, should the Government consider that revocation is appropriate.
  That brings me to new clauses 2, 3 and 4. The effect of the clauses would be that, in the absence of an EC potato regime, Ministers could not begin to take action to revoke the scheme even if it were patently obvious that it were necessary to do so, unless a poll of producers had shown a majority to be in favour of revocation. The informed debate in Parliament to which I have referred could not begin unless a certain group, of potato producers gave Parliament the go-ahead.
  I am more than willing to listen to the views of growers and other interested parties, and to take them into account. However, I do not think it is on to subordinate proper parliamentary consideration of any issue to the views of a particular interest group. I do not think that Parliament's hands should be tied in that way; moreover, such action would remove the essential safeguard contained in the 1958 Act to prevent the potato marketing

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  board from damaging the interests of consumers. I hope that, in the light of the assurances that I have given, the House will reject the new clauses.
  9.30 pm
  Amendment No. 49 appears to me to reflect the procedure that I would propose to adopt before making any decision on the future of the scheme. I am sorry that it was rubbished by the hon. Member for Workington and by my hon. Friend the Member for East Lindsey (Sir P. Tapsell) into the bargain. I am happy to accept it. Amendment No. 50 is a little more problematic, because the wording is odd. It suggests that we should consult on the possibility of national measures after certifying that it was necessary to bring the potato marketing scheme to an end because its continued existence was inconsistent with an EC regulation. I do not think I could accept that the Government should be committed in those circumstances. I think the spirit of the amendment is that I should consult, and take account of the industry's views. As I am already committed to such action, I hope that the House will not accept the amendment.
  I want a flourishing potato industry. I want our processors—who also provide a good many jobs—to be easily able to obtain the supplies that they want to process, so that we can discourage costly imports rather than using our own excellent potatoes. I want our producers, processors, retailers, packers and consumers to be delighted with this country's arrangements for the potato market, and I am prepared to take time to engage in discussions with interested bodies to ensure that that is what we achieve.
  Dr. Strang: I think the House will agree that we have had an excellent debate, which has reflected the industry's views. The Minister's reply did more than justice to the discussions in which we have engaged.
  The Minister referred to the position that would accompany an EC regime. Given our experience, that is the last thing that we want. The danger is that even a regime that started off relatively lightweight would end up like all the others, involving a huge cost to the taxpayer. That is an unsatisfactory way in which to support the market. I very much hope that there will be no question of the Government's allowing the EC to operate a fully fledged common potato regime: such a regime would probably create more of the problems experienced by other sectors of agriculture in this country, such as beef, milk and cereals, and bring about huge, costly surpluses.
  The important part of the Minister's speech, however, related to the position without an EC regime. As she and other hon. Members have pointed out, the Council of Ministers has not made the progress towards a common regime that was expected. No one can be sure of the outcome, but it seems reasonable to assume that it will be some time before such a regime is agreed.
  The Minister's response was very helpful. She said that, as things stood, the Government did not intend to wind up the potato marketing board: she said that no decision had been made and that she wanted to spend a long time consulting the industry about the future. She stated that the potato marketing board and the joint committee could go ahead and fix the target acreage and that the quotas could be in place for next year. They are positive advances and fully reflect the consensus in our debate, which did justice to the industry.
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  When the Minister examines the matter further, I believe that she will recognise the strength of the case for the potato marketing board. My hon. Friend the Member for Workington (Mr. Campbell-Savours) made a valuable contribution to the debate in destroying the argument initially put forward by Ministers that there were no other support arrangements within the EEC and that there was something peculiar about Britain's special domestic arrangements ror supporting our potato market. That is not the case. Many other Community countries have elaborate arrangements for supporting their potato industries.
  We have had a most valuable debate. Anyone who is in any doubt about the change in the Government's position should have a casual look at some of the statements made by the Minister's predecessor, on Second Reading and especially in Committee. It is clear that the Government were intent then on unilaterally winding up the potato marketing board, but the Minister has now made it clear that the Government are not going ahead. For that reason, we shall not press the new clause.
  Question put and negatived.

Clause 23

  ACTIVATION OF PART II
  Amendment made: No. 49, in page 13, line 27, at end insert
  '(2A) Where subsection (2) above applies, no order shall be made under subsection (I) above unless the Ministers have consulted on a proposal to bring the Potato Marketing Scheme to an end with such persons appearing to them to he representative of the interests of producers, purchasers, retailers and consumers of potatoes as they consider appropriate.'.—[Sir P. Tapsell.]

Clause 29
  INFORMATION
  Amendment made: No. 15, in page 17, line 28, leave out '21' and insert '14'.—[ Mrs. Gillian Shephard.]
Schedule 4

  PROVISIONS RELATING TO CARRYING OUT OF APPROVED TRANSFER SCHEME
  Amendments made: No. 77, in page 60, line 46, leave out from 'which' to first
  'of' in line 47 and insert 'imposes a prohibition (whether absolute or qualified) on the transfer'.
  No. 66, in page 61, line 1, leave out 'penalises' and insert
  'has the effect of penalising'.
  No. 78, in page 61, line 2, leave out `, or a transfer without consent,'.
  No. 79, in page 61, line 3, leave out 'prohibits the effecting without consent' and insert
  'imposes a qualified prohibition on the effecting'.
  No. 60, in page 61, line 7, leave out 'private' and insert 'purposes other than public'.
  No. 67, in page 61, line 14, leave out 'penalises' and insert
  'has the effect of penalising'.
  No. 80, in page 61, line 15, leave out 'without consent".
  No. 81, in page 61, line 29, leave out 'prohibits' and insert
  'imposes an absolute prohibition on'.
  No. 82, in page 61, line 31, leave out paragraph (b).
  No. 61, in page 61, line 32, leave out 'private' and insert
  'purposes other than public'.
  No. 68, in page 62, line 5, leave out 'penalises' and insert
  'has the effect of penalising'.—[ Mrs. Gillian Shephard.]

Clause 47

  FALSE STATEMENTS TO OBTAIN PAYMENTS
  Mrs. Gillian Shephard: I beg to move amendment No. 43, in page 24, leave out lines 39 to 42 and insert
  'knowing or recklessly makes a statement which is false or misleading in a material respect'.
  I shall be brief. This is a technical amendment which does not affect the substance of part III. The creation of a single offence of knowing or recklessly making a false or misleading statement brings the offence into line with similar provisions in the Bill and in other statutes.
  Amendment agreed to.

Clause 48

  TIME LIMIT FOR PROSECUTIONS
  Mrs. Gillian Shephard: I beg to move amendment No. 44, in page 25, line 3, leave out 'brought' and insert 'commenced'.
  Mr. Deputy Speaker: With this it will be convenient to discuss also Government amendment No. 45.
  Mrs. Shephard: I shall be equally brief. These are technical amendments. They do not alter the substance of part III. The purpose of substituting the word "commenced" for the word "brought" is to make the provisions compatible with Scottish criminal law.
  Amendment agreed to.

New clause 15

  COMMERCIAL ACTIVITIES OF MILK MARKETING BOARDS: DISTRIBUTION OF PROFITS
  '.—(1) It shall be deemed to be an overriding requirement of a milk marketing scheme that any distribution in respect of profits attributable to any relevant commercial activities shall be made so as not to discriminate, as between persons who are registered as producers under the scheme—

  (a) by reference to the identity of the person to whom milk is sold, or

  (b) by reference to whether milk is sold in the form of milk or in the form of a product which is wholly or partly derived from milk or which includes milk as an ingredient.

  (2) The powers conferred by a milk marketing scheme on the board administering the scheme shall be deemed to include whatever powers are necessary for the purpose of giving effect to the requirement under subsection (1) above.
  (3) For the purposes of subsection (1) above, the following are relevant commercial activities, namely—

  (a) the separation of milk,

  (b) the heat treatment of milk,

  (c) the retail packaging of milk,

  (d) the manufacture of milk products, and

  (e) the provision of services for reward, otherwise than under the arrangements for the sale of milk to the board.

  (4) In that subsection, the reference to a milk marketing scheme is to a scheme having effect under—

  (a) the Agricultural Marketing Act 1958, or

  398

  (b) the Agricultural Marketing (Northern Ireland) Order 1982,

  for the marketing of milk.
  (5) This section shall apply in relation to any distribution the amount of which is declared on or after the passing of this Act, irrespective of when the profits concerned were made.'.—[Mr. Jack.]
  Brought up, and read the First time.
  Mr. Jack: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 46.
  Mr. Jack: In the interests of brevity and taking into account Community law, may I say that the new clause will ensure that all registered producers are treated equally after the passing of the Bill in terms of the distribution of profits that the milk marketing boards make from their commercial activities.
  Mr. Campbell-Savours: The new clause is of particular importance to Northern Ireland. If accepted, it would mean that all producers who were part of the milk marketing scheme in Northern Ireland would be eligible for a share in the profits of the processing arm, Dromona Foods. It would mean that the 400 producers who currently sell to Strathroy Milk Marketing, and not to the Northern Ireland milk marketing board, will receive a share of Dromona's profits. Some challenge that, arguing that that will happen after none of their milk has passed through a Dromona plant; that they have chosen to go the Strathroy route, their milk is exported to Ireland and they are paid a premium for this; and that they have not received a share of Dromona's profits in the past.
  The Northern Ireland milk marketing board has told us that it wants to use Dromona's profits to help to offset the extraordinary costs of reorganisation, but if that were done under new clause 15, it could be charged with not distributing the profits fairly. Some people feel that it is odd that Strathroy producers should benefit from a share in Dromona's profits yet should not have to pay the costs of reorganising the Northern Ireland milk marketing board, which they will be free to join in the future.
  Will the Minister explain the position? What is her interpretation of the impact of new clause 15 on that group of people?
  Mr. James Molyneaux: The hon. Member for Workington (Mr. Campbell-Savours) has rightly said that the new clause is of great importance and interest to Northern Ireland, and it will be very much in the minds of all 17 Northern Ireland Members of Parliament regardless of their party affiliation.
  As the hon. Gentleman said, the new clause amends not only the schemes in Great Britain but the scheme in Northern Ireland, although, as you will have noticed, Madam Speaker, the Bill does not apply to Northern Ireland except with regard to taxation matters. It should also be recognised that the current scheme in Northern Ireland differs from the schemes in Scotland and in England and Wales. As I understand it, the purpose of the new clause is to make it an overriding requirement that any distribution of profits attributable to commercial activities will be made in a manner that does not discriminate between registered producers under the scheme.
  That requirement is based on the false premise that all registered producers operate similarly under the scheme.

  399
  After all, the concept of discrimination implies that like situations are treated differently. However, under the scheme, registered producers are permitted to operate differently. For example, they may sell their milk to the board or they may withhold it, if they choose to process their own milk or to export it. Those processors and exporters of milk are known as withholding producers, whereas those who sell their milk to the board are known as supplying producers. Both withholding and supplying producers are registered producers under the scheme, but it is clear that they operate differently. The new clause requires that they be treated identically with respect to sharing the profits of the scheme's commercial activities.
  It must be recognised that about 400 producers, who produce approximately 10 per cent. of the milk in Northern Ireland, export that milk to the Republic of Ireland. They are registered under the scheme, but they supply no milk to the board and make no contribution whatever to the costs of operating the scheme. The new clause makes it an overriding requirement that such withholding producers share the profits of the commercial activities conducted under the scheme in exactly the same manner as producers who supply their milk to the board.
  Those profits are made from the commercial business of converting the milk supplied into products and marketing them. The new clause requires that withholding producers share the profits made from the milk supplied to the board by supplying producers. The Bill, and subsequently an Order in Council for Northern Ireland, will wind up those schemes, and the board will then reorganise into organisations that all producers, both supplying and withholding, will be entitled to join. Clearly, that reorganisation will involve substantial costs and extraordinary charges—for example, accounting adjustments to cover write-offs, deferred taxation and costs such as redundancy.
  If the profits of' the commercial activities are used to meet those charges in whole or in part, that could be interpreted as distribution of profits. If the new clause is accepted, it must be made clear that the Government do not intend the use of commercial profits to cover what I have called extraordinary charges and that those costs arising from reorganisation should be interpreted as a distribution of profits. If that is not the Government's intention. the Government are saying that those withholding producers are entitled to share in the profits of the board's commercial activities, but are not required to share the costs and the extraordinary charges associated with reorganisation.
  Can the Minister assure me that the new clause will ensure equality of treatment for all registered producers in respect of the costs of reorganisation and any associated accountancy adjustments, as well as ensuring equality of treatment for all producers in respect of any distribution of the profits of commercial activities? Knowing the reasonable way in which the right hon. Lady and the Minister of State have reacted to all the sensible proposals made this evening and in Committee, I am confident that my proposals will meet with a favourable response.
  9.45 pm
  Mr. Jack: I thank the right hon. Member for Lagan Valley (Mr. Molyneaux) for his courtesy in giving me notice of the general subject that he wanted to probe. I hope that I can deal with his specific points as well as the
  400
  more general issues raised by the hon. Member for Workington (Mr. Campbell-Savours). The hon. Member for Workington chose to describe a specific point of concern, but it must be seen in terms of the wider context and the policy that applies to that subject.
  I shall first deal with the general issues relating to the basis for the distribution of profits from commercial activities. All registered producers have to operate within the terms set by the relevant milk marketing scheme, even where they are not bound to sell their milk to the board. The pricing structure of the entire market is dictated by the agreements reached between the board and the Dairy Trade Federation and the relevant joint committee. The Agricultural Marketing Act 1958 requires all registered producers to contribute to the debt of a board on a winding up, not just to those producers who sell to the board.
  Therefore, to discriminate between producers who sell to the board and those who do not for the purpose of distributing commercial profits is not, in the Government's view, justifiable. It is certainly not acceptable to the European Commission, which believes that it would be contrary to the provisions of the European Community's regulations authorising the board's activities and to the principles of the Common Market. The Government have taken account of the Commission's views and the likelihood of action against us under article 169 of the treaty if we fail to act. Those are the clear benchmarks against which the distribution of profits is to take place. I hope that hon. Members who have raised issues on the subject will be able to draw the appropriate conclusions.
  The right hon. Member for Lagan Valley raised separate issues about some of the expenses involved—for example, in connection with reorganisation. I think that he will immediately understand that my point about the distribution of profits from commercial activities is a separate issue. It deals specifically with how that particular gain is to be apportioned among members. It is possible for all registered producers to take a share of the costs involved with reorganisation, and that must be a decision for the appropriate board. The key factor is that costs and some of the other issues related to the distribution of profits mentioned by the right hon. Gentleman are separate.
  Where Northern Ireland matters affect the legislation, the Minister of State, Northern Ireland Office—my near-neighbour, the hon. Member for South Ribble (Mr. Atkins)—asked me to ensure that he was kept informed of those issues. In light of what the right hon. Member for Lagan Valley has said, I shall undertake to do that. I shall give careful and detailed study to some of the other issues to see if there is anything about which it would be appropriate for me to write to him.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New clause 16

  BRITISH WOOL MARKETING BOARD: POWER TO GRANT RELIEF
  '. For the purposes of section 727 of the Companies Act 1985 and Article 675 of the Companies (Northern Ireland) Order 1986 (power of court to grant relief in certain cases), the

  401
  British Wool Marketing Board shall be treated as a company and its members shall be treated as officers of it.'—[Mrs. Gillian Shephard.]
  Brought up, and read the First time.
  Mrs. Gillian Shephard: I beg to move, That the clause be read a Second time.
  Madam Speaker: With this it will be convenient to discuss Government amendment No. 47.
  Mrs. Shephard: My hon. Friend the Member far Hexham (Mr. Atkinson) tabled a new clause in Committee seeking to address a point of concern to the British wool marketing board. That arose from the fact that, in terms of legal liability, members and officers of the board did not currently enjoy a degree of protection equivalent to that ordinarily available to directors of limited companies.
  The new clause tabled by my hon. Friend the Member for Hexham proposed to apply section 727 of the Companies Act 1985 to the board and the Government undertook to consider that point sympathetically. We have now done that. We understand the board's desire, given the ending of the guarantee, to take steps to address the usual risks associated with operating within a more commercial business environment.
  New clause 16 therefore places the board members and executives on an equal footing with company directors with regard to scope for release from liability. Amendment No. 47, which amends clause 59, is linked to that and confirms the application of the new clause to Northern Ireland. I hope that it will be accepted by the House.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

Schedule 5

  REPEALS AND REVOCATION
  Mrs. Gillian Shephard: I beg to move amendment No. 48, in page 66, leave out line 31 and insert—
  1. The repeals in the Agriculture Act 1957 are without prejudice to sections 50(2) and 51(2) above.'.
  This is a purely technical amendment. It deletes the current reference in schedule 5 to termination of the wool guarantee having effect from 1 May 1993. It follows from a Government amendment adopted in Committee to alter the date of the coming into effect of clause 50—then clause 48—from 1 May 1993 to the date of the enactment of the Bill. It also confirms that repeal of schedule 1 to the Agriculture Act 1957 does not affect the saving clauses in relation to the wool and potato guarantees. I hope that the House will accept the amendment.
  Amendment agreed to.

Clause 59

  SHORT TITLE, COMMENCEMENT AND EXTENT
  Amendments made: No. 46, in page 30, line 6 at end insert
  'section [Commercial activities of milk marketing boards: distribution of profits],'.
  No. 47 in page 30, line 6 at end insert
  'section [ British Wool Marketing Board: power to grant relief],'.—[Mrs. Gillian Shephard]
  Order for Third Reading read.
  Motion made, and Question proposed, That the Bill be now read the Third time.
  9.52 pm
  Mr. Paul Marlow: It is a tremendous disappointment to me that my carefully prepared and statesmanlike speech cannot now be delivered in full because of the pressure of time. However, I take this opportunity to welcome my right hon. Friend the Minister of Agriculture Fisheries and Food and my hon. Friend the Minister of State, Ministry of Agriculture, Fisheries and Food to the Front Bench.
  Hon. Members and members of the trade outside—
  Dame Elaine Kellett-Bowman: The profession.
  Mr. Marland: I beg my hon. Friend's pardon. Members of the profession and hon. Members will be very reassured by the way in which my right hon. Friend the Minister and my hon. Friend the Minister of State have offered so kindly to be part of a listening Ministry and to leave the door open to people who want to see them at any time. There is a great deal of informed opinion on the Conservative Benches which would very much like to take advantage of that opportunity. I congratulate my right hon. Friend and my hon. Friend on the trenchant way in which they have gripped their brief.
  I believe that three issues are of the utmost importance. First, there is the disputes procedure. I hope that my right hon. Friend will carefully study the proposals that were put forward by the milk marketing boards for a successor body. Secondly, with regard to Milk Marque's plans for the future, I have some sympathy with the view of the hon. Member for Workington (Mr. Campbell-Savours). Milk Marque is asking for a very wide brief. I urge my right hon. Friend to look carefully at that matter. Part of Sir Leon Brittan's brief in allowing a single voluntary co-operative to be established in this country is that it should not have such a wide brief as it is looking for.
  Thirdly, we should keep an eye on the exploitation of the present milk shortage by producers and manufacturers, in the interests of our producers and manufacturers, especially our producers. We do not want to turn off the users of milk. If the price is too high, they will surely look elsewhere to source their manufacturing. Housewives and other milk drinkers will give up drinking milk or look elsewhere for milk substitutes. We do not want that to happen.
  In the fullness of time, the tight quota regime might be relaxed. Furthermore, under the auspices of GATT, we might find that Commonwealth countries that had to give up their markets in this country when we joined the EC will look hungrily at our market to sell their surplus milk. Even our nearest neighbours, the Irish, are beginning to buy dairy companies in this country to take advantage of our larger market and their 200 per cent. excessive self-sufficiency.
  The Bill must lead to a regime which will ensure long-term success and short-term prosperity for the milk producer. In that spirit, I really wish Milk Marque well. We need a viable dairy industry providing jobs for rural communities. We need satisfied customers'who continue to drink United Kingdom milk and consume United Kingdom dairy products, rather than becoming dependent on imports and milk substitutes.
  I assure my right hon. Friend the Minister that many Conservative Members are anxious to see Milk Marque succeed and the United Kingdom dairy industry survive.

  403
  When the time comes for her to give her seal of approval to any scheme which is put forward by the milk marketing boards for a successor body, I should like her to remember that many Conservative Members are willing and anxious to give advice if my right hon. Friend considers that she needs it.
  9.56 pm
  Mrs. Gillian Shephard: I shall respond briefly to my hon. Friend the Member for Gloucestershire, West (Mr. Marland). I thank him for his kind remarks. I assure him that we shall look most carefully at all the points that he raised in this excellent debate. I thank him also for wishing the Bill well.
  9.57 pm
  Dr. Strang: The Bill has three important objectives: first, the winding up of the milk marketing boards; secondly, the enabling power to wind up the potato marketing board of Great Britain; and, thirdly, the ending of the wool guarantee. The Labour party opposes all three objectives. We believe that there was an opportunity in the 1980s to adapt the milk marketing boards. That was the view not only of the milk marketing boards but of producers and the Dairy Trade Federation. That opportunity was missed and we are concerned about the arrangements which will follow.
  As for the potato marketing board, it would be churlish not to welcome the Minister's statement this afternoon. It was a viable statement, but of course the Bill contains the enabling power to wind up the potato marketing board on a future occasion. However, from what the right hon. Lady said, I trust that we have a good chance of ensuring that the board continues as long as there is not an EC regime.
  We believe that the decision to end the guaranteed wool price was wrong. This is the worst of all possible times to do it. As hon. Members will be aware, wool prices are utterly depressed. All three changes were not sought by the industry. We have a very successful industry and milk of the highest quality in Europe. We have a very successful potato industry. The wool marketing board has served the industry well. For all those reasons, there is no case for this measure. It is based on Tory dogma and we will vote against the Bill.
  Mrs. Gillian Shephard: I regret that the Opposition's contribution has ended on that note because I believe that we achieved a degree of consensus during the debate. The Government feel that the changes for milk and for wool represent new challenges for agriculture and that our magnificent industry will rise to those challenges. We will take a careful look at the potato industry.
  I would particularly commend to the House the Government's marketing initiatives, which will be greatly strengthened by the Bill. I believe that the future looks good for one of our foremost industries and I am delighted to commend the Bill to the House.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 264, Noes 137.

  Division No. 306]

  [9.50 pm

  AYES

  Ainsworth, Peter (East Surrey)

  Amess, David

  Alison, Rt Hon Michael (Selby)

  Arbuthnot, James

  Allason, Rupert (Torbay)

  Arnold, Jacques (Gravesham)

  404

  Ashby, David

  Freeman, Rt Hon Roger

  Ashdown, Rt Hon Paddy

  French, Douglas

  Aspinwall, Jack

  Fry, Peter

  Atkinson, David (Bour'mouth E)

  Gale, Roger

  Atkinson, Peter (Hexham)

  Gallic, Phil

  Baker, Rt Hon K. (Mole Valley)

  Gardiner, Sir George

  Baker, Nicholas (Dorset North)

  Garnier, Edward

  Baldry, Tony

  Gillan, Cheryl

  Banks, Matthew (Southport)

  Gorman, Mrs Teresa

  Bates, Michael

  Gorst, John

  Bellingham, Henry

  Greenway, John (Ryedale)

  Bendall, Vivian

  Griffiths, Peter (Portsmouth, N)

  Beresford, Sir Paul

  Grylls, Sir Michael

  Biffen, Rt Hon John

  Hague, William

  Blackburn, Dr John G.

  Hamilton, Neil (Tatton)

  Bonsor, Sir Nicholas

  Hampson, Dr Keith

  Booth, Hartley

  Hanley, Jeremy

  Boswell, Tim

  Hannam, Sir John

  Bottomley, Peter (Eltham)

  Harvey, Nick

  Bottomley, Rt Hon Virginia

  Haselhurst, Alan

  Bowden, Andrew

  Hawkins, Nick

  Bowis, John

  Hawksley, Warren

  Boyson, Rt Hon Sir Rhodes

  Heathcoat-Amory, David

  Brandreth, Gyles

  Hicks, Robert

  Brazier, Julian

  Horam, John

  Bright, Graham

  Hordern, Rt Hon Sir Peter

  Brooke, Rt Hon Peter

  Howard, Rt Hon Michael

  Brown, M. (Brigg & Cl'thorpes)

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

  Browning, Mrs. Angela

  Howell, Sir Ralph (North

  Bruce, Ian (S Dorset)

  Norfolk)

  Bruce, Malcolm (Gordon)

  Hughes Robert G. (Harrow W)

  Burns, Simon

  Hughes, Simon (Southwark)

  Burt, Alistair

  Hunt, Sir John (Ravensbourne)

  Butcher, John

  Hunter, Andrew

  Butler, Peter

  Hurd, Rt Hon Douglas

  Campbell, Menzies (Fife NE)

  Jack, Michael

  Carlisle, Kenneth (Lincoln)

  Jackson, Robert (Wantage)

  Carrington, Matthew

  Jessel, Toby

  Carttiss, Michael

  Johnson Smith, Sir Geoffrey

  Cash, William

  Jones, Gwilym (Cardiff N)

  Clappison, James

  Jones, Nigel (Cheltenham)

  Clark, Dr Michael (Rochford)

  Jones, Robert B. (W Hertfdshr)

  Clarke, Rt Hon Kenneth (Ruclif)

  Kellett-Bowman, Dame Elaine

  Clifton-Brown, Geoffrey

  Kennedy, Charles (Ross,C&S)

  Coe, Sebastian

  Key, Robert

  Congdon, David

  Kilfedder, Sir James

  Conway, Derek

  King, Rt Hon Tom

  Coombs, Anthony (Wyre For'st)

  Kirkhope, Timothy

  Cormack, Patrick

  Kirkwood, Archy

  Couchman, James

  Knapman, Roger

  Cran, James

  Knight, Mrs Angela (Erewash)

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

  Knight, Greg (Derby N)

  Curry, David (Skipton & Ripon)

  Knight, Dame Jill (Bir'm E'sfn)

  Davis, David (Boothferry)

  Knox, Sir David

  Day, Stephen

  Kynoch, George (Kincardine)

  Deva, Nirj Joseph

  Lait, Mrs Jacqui

  Devlin, Tim

  Lang, Rt Hon Ian

  Douglas-Hamilton, Lord James

  Lester, Jim (Broxtowe)

  Dover, Den

  Lidington, David

  Duncan, Alan

  Lilley, Rt Hon Peter

  Duncan-Smith, Iain

  Lloyd, Peter (Fareham)

  Dunn, Bob

  Lord, Michael

  Durant, Sir Anthony

  Luff, Peter

  Dykes, Hugh

  Lyell, Rt Hon Sir Nicholas

  Eggar, Tim

  Lynne, Ms Liz

  Evans, David (Welwyn Hatfield)

  MacGregor, Rt Hon John

  Evans, Jonathan (Brecon)

  MacKay, Andrew

  Evans, Nigel (Ribble Valley)

  Maclean, David

  Evans, Roger (Monmouth)

  McLoughlin, Patrick

  Evennett, David

  McNair-Wilson, Sir Patrick

  Faber, David

  Madel, David

  Fabricant, Michael

  Maitland, Lady Olga

  Fenner, Dame Peggy

  Malone, Gerald

  Field, Barry (Isle of Wight)

  Mans, Keith

  Fishburn, Dudley

  Marland, Paul

  Forman, Nigel

  Marshall, John (Hendon S)

  Forsyth, Michael (Stirling)

  Martin, David (Portsmouth S)

  Forth, Eric

  Mates, Michael

  Fox, Dr Liam (Woodspring)

  Mawhinney, Dr Brian

  Fox, Sir Marcus (Shipley)

  Mayhew, Rt Hon Sir Patrick

  405

  Merchant, Piers

  Sproat, Iain

  Mitchell, Andrew (Gedling)

  Squire, Robin (Hornchurch)

  Mitchell, Sir David (Hants NW)

  Stanley, Rt Hon Sir John

  Moate, Sir Roger

  Steel, Rt Hon Sir David

  Molyneaux, Rt Hon James

  Steen, Anthony

  Monro, Sir Hector

  Stephen, Michael

  Montgomery, Sir Fergus

  Stern, Michael

  Nelson, Anthony

  Stewart, Allan

  Neubert, Sir Michael

  Streeter, Gary

  Nicholls, Patrick

  Sumberg, David

  Nicholson, David (Taunton)

  Sweeney, Walter

  Nicholson, Emma (Devon West)

  Sykes, John

  Norris, Steve

  Tapsell, Sir Peter

  Oppenheim, Phillip

  Taylor, Ian (Esher)

  Ottaway, Richard

  Taylor, John M. (Solihull)

  Page, Richard

  Taylor, Matthew (Truro)

  Paice, James

  Temple-Morris, Peter

  Patnick, Irvine

  Thomason, Roy

  Patten, Rt Hon John

  Thompson, Sir Donald (C'er V)

  Pawsey, James

  Thompson, Patrick (Norwich N)

  Peacock, Mrs Elizabeth

  Thornton, Sir Malcolm

  Pickles, Eric

  Thurnham, Peter

  Porter, Barry (Wirral S)

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

  Porter, David (Waveney)

  Trend, Michael

  Portillo, Rt Hon Michael

  Trimble, David

  Powell, William (Corby)

  Twinn, Dr Ian

  Rathbone, Tim

  Tyler, Paul

  Redwood, Rt Hon John

  Viggers, Peter

  Rendel, David

  Walden, George

  Renton, Rt Hon Tim

  Wallace, James

  Richards, Rod

  Waller, Gary

  Rifkind, Rt Hon. Malcolm

  Ward, John

  Roberts, Rt Hon Sir Wyn

  Wardle, Charles (Bexhill)

  Robertson, Raymond (Ab'd'n S)

  Wells, Bowen

  Robinson, Mark (Somerton)

  Wheeler, Rt Hon Sir John

  Roe, Mrs Marion (Broxbourne)

  Whitney. Ray

  Rowe, Andrew (Mid Kent)

  Whittingdale, John

  Ryder, Rt Hon Richard

  Widdecombe, Ann

  Sackville, Tom

  Wilkinson, John

  Shaw, David (Dover)

  Willetts, David

  Shaw, Sir Giles (Pudsey)

  Wilshire, David

  Shephard, Rt Hon Gillian

  Winterton, Mrs Ann (Congleton)

  Sims, Roger

  Winterton, Nicholas (Macc'f'ld)

  Skeet, Sir Trevor

  Wolfson, Mark

  Smith, Tim (Beaconsfield)

  Wood, Timothy

  Smyth, Rev Martin (Belfast S)

  Yeo, Tim

  Soames, Nicholas

  Young, Rt Hon Sir George

  Speed, Sir Keith

  Spencer, Sir Derek

  Tellers for the Ayes:

  Spicer, Sir James (W Dorset)

  Mr. David Lightbown and Mr. Sydney Chapman.

  Spicer, Michael (S Worcs)

  Spink, Dr Robert

  NOES

  Adams, Mrs Irene

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

  Ainger, Nick

  Byers, Stephen

  Ainsworth, Robert (Cov'try NE)

  Callaghan. Jim

  Ashton, Joe

  Campbell, Mrs Anne (C'bridge)

  Austin-Walker, John

  Campbell, Ronnie (Blyth V)

  Bayley, Hugh

  Campbell-Savours, D. N.

  Bennett, Andrew F.

  Canavan, Dennis

  Benton, Joe

  Cann, Jamie

  Bermingham, Gerald

  Clapham, Michael

  Bray, Dr Jeremy

  Clelland, David

  406

  Clwyd, Mrs Ann

  McLeish, Henry

  Connarty, Michael

  McMaster, Gordon

  Cousins, Jim

  Mahon, Alice

  Cryer, Bob

  Mandelson, Peter

  Cunningham, Jim (Covy SE)

  Marshall, Jim (Leicester, S)

  Dafis, Cynog

  Maxton, John

  Dalyell, Tarn

  Meale, Alan

  Davidson, Ian

  Michael, Alun

  Davies, Ron (Caerphilly)

  Michie, Bill (Sheffield Heeley)

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

  Milburn, Alan

  Dewar, Donald

  Miller, Andrew

  Dixon, Don

  Morgan, Rhodri

  Dobson, Frank

  Morley, Elliot

  Dowd, Jim

  Mowlam, Marjorie

  Dunwoody, Mrs Gwyneth

  Mudie, George

  Eagle, Ms Angela

  Mullin, Chris

  Enright, Derek

  Murphy, Paul

  Etherington, Bill

  O'Brien, Michael (N W'kshire)

  Evans, John (St Helens N)

  O'Hara, Edward

  Ewing, Mrs Margaret

  Olner, William

  Flynn, Paul

  Pickthall, Colin

  Foster, Rt Hon Derek

  Pike, Peter L.

  Foulkes, George

  Powell, Ray (Ogmore)

  Fyfe, Maria

  Prentice, Ms Bridget (Lew'm E)

  Gerrard, Neil

  Prentice, Gordon (Pendle)

  Golding, Mrs Llin

  Primarolo, Dawn

  Gordon, Mildred

  Purchase, Ken

  Griffiths, Nigel (Edinburgh S)

  Quin, Ms Joyce

  Griffiths, Win (Bridgend)

  Raynsford, Nick

  Gunnell, John

  Robertson, George (Hamilton)

  Hain, Peter

  Rogers, Allan

  Hall, Mike

  Rooker, Jeff

  Hardy, Peter

  Rowlands, Ted

  Hill, Keith (Streatham)

  Ruddock, Joan

  Hinchliffe, David

  Salmond, Alex

  Howarth, George (Knowsley N)

  Short, Clare

  Howells, Dr. Kim (Pontypridd)

  Skinner, Dennis

  Hughes, Kevin (Doncaster N)

  Smith, Andrew (Oxford E)

  Hughes, Robert (Aberdeen N)

  Soley, Clive

  Hughes, Roy (Newport E)

  Spellar, John

  Hutton, John

  Steel, Rt Hon Sir David

  Jackson, Glenda (H'stead)

  Strang, Dr. Gavin

  Jackson, Helen (Shef'ld, H)

  Taylor. Mrs Ann (Dewsbury)

  Jones, Barry (Alyn and D'side)

  Tipping, Paddy

  Jones, Jon Owen (Cardiff C)

  Turner, Dennis

  Jones, Lynne (B'ham S O)

  Walley, Joan

  Jowell, Tessa

  Warden, Gareth (Gower)

  Keen, Alan

  Watson, Mike

  Kennedy, Jane (Lpool Brdgn)

  Welsh, Andrew

  Khabra, Piara S.

  Wicks, Malcolm

  Lewis, Terry

  Williams, Alan W (Carmarthen)

  Litherland, Robert

  Wilson, Brian

  Lloyd, Tony (Stretford)

  Winnick, David

  Llwyd, Elfyn

  Wise, Audrey

  Loyden, Eddie

  Worthington, Tony

  McAllion, John

  Wright, Dr Tony

  McAvoy, Thomas

  McCartney, Ian

  Tellers for the Noes:

  McFall, John

  Mr. Peter Kilfoyle and Mr. Eric Illsley.

  McKelvey, William

  Mackinlay, Andrew

  Question accordingly agreed to.
  Bill read the Third time, and passed, with amendments.

  Council Tax (Wales)
  Motion made, and Question proposed,
  That the draft Council Tax Limitation (Wales) (Maximum Amount) Order 1993, which was laid before this House on 21st June, be approved.—[Mr. Redwood.]
  10.13 pm
  Mr. Paul Murphy: I am grateful to the Secretary of State for moving the motion formally. I know that he intends to make a longer speech later perhaps to explain why he decided this week not to cap Aberconwy borough council in north Wales. Of course we welcome the decision ostensibly to let that council off the hook. However short the debate might be, it will give the House the opportunity to examine the Welsh Office system of controlling our local authority expenditure in Wales, in particular as it affects Aberconwy borough council. I know that it will be of considerable interest to the Minister of State, Welsh Office, because he represents a great part of that borough.
  We are all completely united in the sympathy we express to the people of Aberconwy over the tragic flooding in that area some weeks ago. It is that, above all else, which has caused the Secretary of State to change his mind over the capping decision for Aberconwy. We should not have the impression that, because the capping has been lifted, all is well with Aberconwy. I understand that the burdens on that local authority as a direct result of the flooding tragedy extend to well over 1,000 homes that have been affected in some way or another. At least half those homes are in the ownership of the local authority. That means that an enormous bill, affecting both capital and revenue, will fall on that relatively small council in north Wales. Some estimate that the floods will cost £3·5 million on local authority housing repairs alone. In addition, damage was done to the roads and other infrastructure.
  I note that when, in this Chamber, the Secretary of State referred to those floods, and when his Minister of State referred to them outside the House, both praised the work of the local authorities. The Secretary of State also told us that the so-called Bellwin formula would apply to the council. That formula is supposed to top up the finances of the local authority where it meets an unforeseen circumstance or tragedy, such as occurred there.
  We have to tell the Secretary of State, however, that there is much wrong with the way in which the Bellwin formula operates. It is over-complex. Only what are termed "relevant costs" are considered. I can only begin to imagine the disputes that could well occur between local authorities, Government Departments and others about what "relevant costs" will be. Under the formula, any works connected with the alleviation of the problems caused by the flooding must be dealt with within two months. Any engineer would tell us that that would be almost impossible to achieve.
  The financial basis of the Bellwin formula has yet to be updated from last year. Perhaps most tellingly of all, my hon. Friend the Member for Pontypridd (Dr. Howells) will tell us that the formula did not successfully apply in his borough of Taff Ely, because it did not meet the rather stringent conditions laid down in the Bellwin formula. Obviously, I hope that that is not the case in north Wales, and that the Bellwin formula will give as much financial aid as possible to that stricken area.
  408
  This week, in reply to a parliamentary question that I tabled, the Secretary of State said that, although he is not capping Aberconwy as he intended, reserves will have to be used, and that cuts may have to be made in other services that Aberconwy borough council provides to avoid capping above the figure that we are agreeing today.
  Mr. Allan Rogers: Does my hon. Friend agree that the Secretary of State's announcement not to cap Aberconwy is in a sense hypocritical, because the original budget was based on the Government's perception of the needs of the community? All the Secretary of State is saying is, "You can keep that money, but the cost of this disaster is over and above that." If the alleviation of the capping is intended to help with the cost of the flooding, it does not help in any way in relation to other needs. People's primary needs will be neglected to fulfil the needs caused by the flooding.
  Mr. Murphy: The amount that we are talking about is £168,000. That is the difference between the capped budget, as it was before the Secretary of State changed his mind, and what the borough council decided was necessary to provide the various services that it is called upon by the House of Commons to provide. My hon. Friend is quite right: this will merely get us back to square one. The council will have to provide out of its own budget much more than the £168,000 of difference between the two figures. That can mean only that its services—housing, environmental health, and so on—will suffer as a result of the tragedy in the borough. It is eminently unfair that such a tragedy must be accompanied by curtailment of basic services.
  I fancy that Aberconwy must be way down the list of local authorities that anyone might have thought likely to be capped. Why should it be capped? The town is relatively innocent and has a recently besieged council. With a population of 55,000, it is quite small, even by Welsh standards. As I have said, it is represented in this House by the Minister of State. Its council is probably the nearest thing to a coalition local authority that Wales has. Last year, when the budget was set, three councillors were Liberal, three were Labour, one was Conservative, and the mayor was independent. A Conservative on the Council of Welsh Districts was the representative of Aberconwy borough council.
  Most significantly, the decision to appeal against capping was reached unanimously by parties all of which are represented in the House of Commons. In 1988 the council commissioned a survey. Even then it felt that it was getting rough justice from the Welsh Office. The Chartered Institute of Finance and Accountancy said:
  "Aberconwy borough council is a relatively low-spending, highly rated authority, with expenditure on tourism accounting for up to one fifth of its budget. The block grant has failed adequately to reflect these three factors."
  The local authority has received only one letter of complaint since it set the budget that was to be capped by the Welsh Office. Even the chairman of Llandudno's hoteliers and restaurateurs—not a very revolutionary body of people, I imagine—has written to the Welsh Office praising the council for what it has done over the past few years to achieve service records.
  Let us look at the spending figures. Only 12 Welsh local authorities had a smaller year-on-year increase than Aberconwy borough council. Other councils had bigger

  409
  increases. South Pembrokeshire. which has an independent council, had a budget increase of 23·5 per cent., and in Dinefwr the increase was 22 per cent. Such figures are replicated throughout Wales. But, because of the standard spending assessment system, Aberconwy has been trapped as an unwilling victim of the capping system. This is ludicrous.
  Above all, the inability of standard spending assessments to deal properly with the fact that, in effect, Aberconwy is the tourist capital of Wales means that, in reality, it has been capped.
  Mr. Jonathan Evans: The tourist capital?
  Mr. Murphy: Many hon. Members will realise that tourist areas do not attract from such bodies as the Welsh Development Agency, the local authorities and the European Community the investment that industrialised areas attract.
  It is important to remember also that they have to spend money not only on their own residents but also on holidaymakers. They must spend money on promenades, swimming pools, theatres, cinemas, parks and so on. That expenditure is not taken into proper account by the SSA system and the grants available through the Welsh Office.
  The hon. Member for Brecon and Radnor (Mr. Evans) may deride my opinion about Aberconwy being one of the tourist centres of Wales, but he should appreciate that, of all serviced hotel beds in the Principality, almost 20 per cent. are within the boundaries of Aberconwy.
  What makes the SSA system even dafter is that the reason south Pembroke is not affected by the capping order, unlike Aberconwy, is that that system takes into account the provision of caravans as well as hotels. If there are more caravans in a particular borough, it is counted as having more beds, so it gets more money. If there are more hotels in a borough, it gets less money. That quirk and the ludicrous notion has meant that Aberconwy has been caught in the trap of the insane SSA system.
  Hon. Members should also note that the Audit Commission recently published a report on SSAs in which it concluded that they are, effectively, instruments for dealing with capping rather than the distribution of grant. It also drew attention to the fact that they are oversimplified and based on out-of-date information contained in the 1981 census. I hope that our new Secretary of State for Wales will do what his English counterpart has done and review the whole system of SSAs to ensure that, in future, authorities such as Aberconwy, which is not by any stretch of the imagination profligate, are not caught by that ludicrous system.
  If there were no SSAs, I am sure that the Government would argue that the power to cap remains an important means of controlling local authority spending. In a recent answer to my hon. Friend the Member for Blackburn (Mr. Straw), however, the Chief Secretary to the Treasury said that the Treasury had not worked out the effects of local government spending on the economy and on macroeconomic indicators such as jobs, services and interest rates.
  410
  No one can tell me that, because little Aberconwy council will spend a few hundred thousand pounds more than the Secretary of State believes it should, that will have a detrimental effect upon our economy.
  The practice of capping was born out of a distinct hatred of Labour local government. The Secretary of State has gone wrong, however, because he could not find any Labour local authorities to cap. He has had to pick on Aberconwy as a last resort. Under the regime, budgets are not set by locally elected politicians, as they should be. Councils are now effectively capping themselves. What is worse, the system of SSAs is condemned by councils of every political persuasion, and of none, in Wales and beyond.
  In July 1991, The Times stated that capping
  "is an offence against local democracy far more outrageous than anything Mr. Delors is proposing for monetary and political union."
  Most hon. Members and those of all parties serving in local government would agree with that analysis.
  The decision to cap in Wales is particularly pernicious because, until now, we have never had to operate under such a system. The Minister of State and the Under-Secretary could tell the House that, year after year, there has been no need for capping in Wales. Under the old system, councils and districts worked with the Welsh Office to avoid that. It is a pity that that did not happen this time, because we would then not have to deal with this daft nonsense.
  Worse than that, however, what is now occurring is completely against the grain of local democracy, which is so important to the Welsh culture. That culture is deeply offended by the bypassing of local democracy and the growth of quangos. I fear that it means that the Welsh Office is simply following what is laid down in Whitehall. That is not good for anyone in Wales who is involved with local government, education or any other service.
  Unlike some of the English local authorities, of all parties, Welsh local authorities have never been profligate. They are now faced with savage cuts as a result of the worst rate support grant settlement in living memory. Wales is heavily dependent on public services, however, and our local authorities are in the front line of their delivery. It is an affront not simply to local democracy but to people who have to rely on those important services that capping must be considered in the first place.
  We must work towards achieving a fairer system of local government finance and grant distribution. We must abandon capping and replace it with proper accountability through the ballot box, as in most other European countries. Who do these Ministers think they are to tell local authorities in Wales what should occur? What if Aberconwy or any other authority in Wales decides that it wants to offer better services than it can provide with the money that it receives from the Welsh Office? Why cannot it do that? It will be held accountable when local elections are held.
  More often than not, such authorities know more than Welsh Office Ministers about the realities and priorities in their areas. Instead of bullying small local authorities like Aberconwy, the Conservative party would do better to put its own financial house in order.
  10.30 pm
  Mr. Elfyn Llwyd: I have the honour of representing part of the borough of Aberconwy; it is not simply the Minister of State's patch.
  Aberconwy commissioned a report on its grant-related expenditure assessment in 1988. It advanced a strong case to the Secretary of State, highlighting many of the points to which the hon. Member for Torfaen (Mr. Murphy) referred. Those special points are relevant perhaps more to Aberconwy than any other borough or district in Wales.
  The main industry in Aberconwy is tourism, a by-product of which is the need to provide promenade cleaning, extra street cleansing, public toilets, refuse collection and so on. Aberconwy has 18 per cent. of total Welsh serviced accommodation. That gives some idea of the scale of the tourist operation in the area.
  Aberconwy has been making its voice heard in the Welsh Office, apparently to little effect, because it has been less than happy about the way in which SAAs have operated. It proposed a sensible and well-argued case and commissioned an expensive but well-documented report. It has made the case for the borough to be treated differently.
  The extra expenditure that I have referred to falls directly on the local taxpayer, bearing in mind that the commercial rate element will be calculated solely by reference to the registered charge payer, which excludes all visitors, who of course generate the need for extra services. As a prime tourist area, Aberconwy is particularly vulnerable to that anomaly, with its high incidence of holiday serviced accommodation and large day visitor population.
  The Welsh Office has had five years to consider Aberconwy's case, but it has not given any positive response. One graphic example, perhaps, of the special nature of Aberconwy is the fact that the borough has six fairly extensive promenades to maintain—all at considerable cost.
  Uniquely, Aberconwy is underprivileged because it receives no funding from Europe. I plead with the Minister about objective 5b status. I recently went to Brussels to argue the case for the borough. I sincerely hope that the Minister of State and the Secretary of State will consider Aberconwy's case. The A55, welcome though it is, runs across the north Wales coast. To the east, there is some assistance from European funds, and to the west likewise, but the A55 is effectively ensuring that any investment speeds through Aberconwy. I am sure that the point is obvious from the way in which it now qualifies. It qualified five years ago under the criteria that then applied, but it has a strong case now and I urge the Welsh Office to consider it in due course. I am sure that it will.
  The recent standard spending assessment changes in social benefit have also had a considerable effect on the finances of Aberconwy. Information on the enhanced population generally and for recreation is derived from two particular statistical sources—the "All Wales Tourism Statistics" and the "Long Distance Travel Survey".
  In principle, the council does not query the basis of the source of information, but it takes issue with the weighting factors used in respect of serviced accommodation and caravans—another point which the hon. Member for Torfaen rightly referred to in opening the debate. Serviced
  412
  accommodation such as hotel bed space has a weighting factor of one, while caravans attract a factor of four multiplied by the number of caravans concerned.
  As stated in the report to which I referred, it is contended that large caravan sites do not face the level of requirement to spend as a result of tourism because many caravan parks are self-contained. The difference in waiting clearly gives great advantage to those areas where large caravan or camp sites exist.
  I should also refer to the application of the composite secondary indicator which causes wide variations in the calculation of the SSA. There is little doubt that where high unemployment exists there is greater need to spend, but does the factor of population in unfit properties cause authorities to spend on such matters, or are they content to derive benefit in terms of SSA without placing an increased call on their expenditure? Similarly, in more densely populated areas, it is reasonable to conclude that it is relatively more costly to service population areas that are more diverse.
  Unemployment in the borough was 8·6 per cent. in April 1991, 9·7 per cent. in April 1992 and 10·3 per cent. in April 1992—a total of 2,293 people out of work. There is also the added need for attraction-related expenditure such as promenades, swimming pools and leisure centres, all at great cost and highly necessary in the competitive world of leisure.
  Tourism is the principal industry; it is vital to the borough. It is reasonable to expect, therefore, that the cost of supporting and investing in that industry should be adequately recognised by the block grant mechanism. Significant tourist areas such as Aberconwy do not extract the same level of outside investment from the development agencies, county councils and the EC as manufacturing industrial areas. That places a heavy demand on the district council to fill the void.
  The economic success of areas such as Aberconwy is dependent on the holiday industry which is becoming increasingly competitive. The true costs of tourism to a local authority are difficult to determine. An independent survey commissioned by the council in 1984 concluded that the total direct and indirect revenue costs to the council approximated at a minimum one fifth of the council's annual net rate requirements. While the figures may be open to interpretation, they illustrate that the cost of tourism to the council should not be overlooked and is a significant factor.
  It is important to recognise that expenditure on tourism falls into two different categories—population and attraction-related expenditure. I have mentioned attraction-related expenditure, but the population factor is of equal importance. It results from an influx of visitors which creates a demand for extra services.
  Population-related services include planning, street cleansing, refuse collection, car and coach parks, all at great cost. However, the central problem in evaluating the effect of increased population as a result of tourism is that there is no comprehensive or accurate source of information on bed nights and day ' visitors. Proxy information is used based on the information which the Welsh tourist board collects. That is based partly on an inventory maintained by the tourist board collected from providers of accommodation which may or may not be accurate, but it is hardly a scientific approach to the problem.

  413
  The council estimates that visitor nights and day trips are far in excess of those shown in the GREA for enhanced populations. A recent survey by Gwynedd county council in 1984 estimated that the WTB figures for Aberconwy could be out by as much as 30 per cent. which is a decidedly important figure. The situation is exacerbated by the introduction of the new caravan data, and the abolition of the long-distance travel survey information. Aberconwy is not an area of high caravan occupation; as I have said, it is an area of serviced accommodation. The new data will put more emphasis on caravan occupation. I consider that misplaced, as caravans do not require the same servicing by public authorities as traditional holiday accommodation.
  It is a supreme irony that Aberconwy should be saved from capping, albeit for a short while, by the recent flood disaster. However, effectively it will still suffer from rate capping. Under the Bellwin formula, it will have to find 15 per cent. of the qualifying expenditure in dealing with the effects of the storms and floods that hit the area some weeks ago. That will inevitably mean a cut in services; there is no other answer. The cut will be all the more serious because of the large number of elderly retired people who live in the borough.
  I hope that the Government will look again at Aberconwy's plight and its reasoned, persuasive arguments, and will ensure that it can set a budget for next year that will enable it to enhance and improve local services rather than cut them—which is likely to be the regrettable, and avoidable, cost to the charge payers of Aberconwy. I ask the Government to reconsider the way in which they have been let off the hook, as the hon. Member for Torfaen put it earlier. They have hardly been let off the hook in real terms; the burden is extremely heavy. I urge the Welsh Office to reconsider.
  10.41 pm
  Mr. Nigel Jones: I send greetings to the House from my hon. and learned Friend the Member for Montgomery (Mr. Carlile), who is on a parliamentary delegation to Romania.
  I welcome the Secretary of State to his new role. I know that he will have a wonderful time meeting the people and visiting the places in a beautiful nation which is also very near Gloucestershire. I also welcome the Government's change of mind over the capping of Aberconwy. It seemed bizarre when it was first announced that the Government intended to cap it to reduce average council tax hills by the magnificent sum of 2p a day.
  The position was summed up by the distinguished journalist Iorwerth Roberts in the Daily Post on Wednesday April 28. He said:
  "Aberconwy has no record of irresponsible spending, and its council tax is no higher than many of its neighbours. Making an example of it for the sake of a mere £8 a house seems to be using a sledgehammer to crack a tiny nut."
  It is good that the new Secretary has seen sense, and is allowing elected local councillors to set a budget at the level that they judge is needed to provide high-quality, properly managed services at a price that local people are prepared and able to pay.
  It does not surprise me that the right hon. Gentleman has made that decision. He is a fair-minded man; I have some experience of that. Last year, he was the Minister
  414
  who heard the capping appeal from my own county council, Gloucestershire, and I am sure that he was instrumental in raising the cap on that occasion. I feel a tinge of regret that, having shown a talent for listening then, and again in the case of Aberconwy—a talent rare in the present Government—the right hon. Gentleman has moved into his new job too soon, leaving this year's English capping decisions to a new and disappointing team at the Department of the Environment.
  It would have been perverse of the Government to continue with their plan to cap Aberconwy, which is not a loony, high-spending council. The hon. Member for Torfaen (Mr. Murphy) reminded the House of the severe damage and disruption caused to the area on 10 and 11 June, when serious flooding took place. Along with other hon. Members, I seek an assurance that the Government's lifting of the cap is not the end of the story for the people of Aberconwy. As the Secretary of State will know, 4,000 people are registered as having been affected by the floods, in which 5 in of rain fell in three hours. The House will know of the widespread discontent among local authorities about the formula that the Government use to determine standard spending assessments. SSAs are to accuracy what Evel Knievel is to road safety.
  Only today, at the Association of District Councils' conference in Bournemouth, a motion was passed, with support from all parties, expressing no confidence in the formula. I understand that a Conservative councillor from Buckinghamshire was tempted to table an amendment saying that he had little confidence in the formula, but he was persuaded to withdraw it at the last moment.
  Following the disaster in north Wales, the Government should consider an additional parameter. When calculating SSAs, they should take into account an area's propensity to flood. I cite as an example the Meadows estate and the surrounding area at Llandudno junction, which have flooded four times in 16 years. It seems that natural disasters are becoming more frequent as a result of ecological change.
  As the hon. Member for Torfaen said, the Bellwin formula is insufficient to deal with the problem. Only 85 per cent. of the money can be recovered. If a local authority needs to spend £5 million, £750,000 has to be met from its budget. In Aberconwy, between 600 and 700 council houses are currently uninhabitable because of the floods, yet social fund loans are available only to those on income support and are currently taking six weeks nationwide to process.
  In addition to the welcome lifting of the abhorrent cap, we need a system of crisis fund payments. The Prime Minister will have received a letter from Roger Roberts, whom the Minister of State will know as his Liberal Democrat opponent at the election. Roger Roberts is asking for £2 million as a starter for the crisis fund payments. Many elderly people's bungalows have been flooded for the second time in two years, but there seems to be little hardship help. Will the Secretary of State give an assurance that help will he forthcoming? Will he use his new-found influence in Cabinet to persuade the Government to abandon capping once and for all because it is a democratic abomination?
  10.47 pm
  The Secretary of State for Wales (Mr. John Redwood): The hon. Member for Torfaen (Mr. Murphy) asked me to explain the basis of my decision and I am happy to do so.
  In coming to my decision on a final cap for Aberconwy, I took very careful account of all the relevant information available to me, including the representations made to me by Aberconwy and the severe flooding that occurred between 10 and 11 June. I saw the extensive damage for myself when I visited the borough on 11 June and, as the House knows, I announced on 14 June that financial assistance through the Bellwin scheme would be available to local authorities to meet 85 per cent. of their revenue costs for emergency arrangements and repairs.
  Aberconwy's preliminary assessment is that the revenue costs for remedial work and for the accommodation of the temporarily homeless will be about £3 million. The authority considers that its share of that under the Bellwin rules, coupled with the loss of revenue from tourism and conference facilities which have been damaged, could amount to more than £500,000, although I hope that that will prove to be an overestimate.
  The authority will have to meet the costs by drawing on its reserves and curbing the budget for other services. I am told that it currently has reserves of £448,000, which would enable the council to meet its obligations. It is not legally permissible to put a higher figure in the order than the original budget and I have decided that, in these exceptional circumstances, the confirmation of the provisional cap of £8,566,950 could prejudice Aberconwy borough council's ability to maintain an acceptable level of services for its residents while meeting the costs of the floods. For that reason I ask the House to approve a final cap of £8,734,695, the sum of the authority's original budget—the maximum permissible.
  Mr. Murphy: The Secretary of State said that the local authority has about £400,000 worth of reserves. He will, of course, be aware' that district auditors and the Audit Commission are anxious that all local authorities should have a reasonable balance in their accounts. Would not it be wrong to take away such a large sum and leave the council with no balances at all, as a result of having had to tackle the flooding, which is totally beyond its power?
  Mr. Redwood: The hon. Gentleman is right that some reserves must be left and it is up to the council, its advisers and its auditor to decide what would be a prudent reserve. I am sure that the hon. Gentleman would agree that £448,000 for a council of that size leaves it considerable scope to pay the bills that will, unfortunately, fall to it as a result of the tragedy.
  I stress that the flooding is the sole reason for my decision to relax the cap. If the events of the weekend of 10 June had not taken place I should be asking the House to approve the proposed cap of £8,566,950 notified to the authority on 26 April. Aberconwy has been generously treated under recent local authority revenue settlements. Hon. Gentlemen have asked questions tonight about the adequacy of its standard spending assessment, but I must tell the House that its SSA of £8,487,933 for 1993–94 represents an increase of 14·5 per cent. over that for 1992–93, and that for the three years 1991–92, 1992–93 and 1993–94 taken together its SSA has increased by 58·39 per cent., a level of increase more than 14 percentage points higher than the average increase in district SSAs over the
  416
  same period. I hope that the House will agree that that is a large increase, at a time of recent restraint on general public expenditure.
  The hon. Member for Torfaen was a little more cautious in his remarks than the hon. Member for Caerphilly (Mr. Davies), who went to Llandudno shortly after I did, and tried to terrify local people into believing that there would be no Government support whatever for the council at this time of great stress. That is most regrettable, as I promptly announced the Bellwin formula, which provides substantial aid in such difficult situations, and I have now announced that there will be no restrictive cap on the authority, so it will be allowed to spend at its previous budget level.
  Of course, the hon. Member for Torfaen is right to say that I expect the council to make some use of its reserves and to manage its resources well.
  Mr. Ron Davies: The Secretary of State referred to the increase in the expenditure that the local authority is allowed during the current financial year. When he has been in the job a little longer he will have had the chance to read the records and then he will realise that that apparent increase is a direct result of this year's financial settlement for Welsh local authorities, in which the bulk of support was transferred from the county authorities to district authorities. It creates a false impression to suggest that the districts are doing well.
  Secondly, the right hon. Gentleman is totally misinformed if he believes that when I visited Llandudno I suggested that no Government aid would be forthcoming. However, I certainly pointed out to many people who were closely interested that under the Bellwin formula a substantial initial cost would have to be borne directly by the local authority, which would mean cuts in services to meet the expenditure incurred as a result of the flooding.
  In addition, 15 per cent.—
  Madam Deputy Speaker (Dame Janet Fookes): Order. I believe that this is an intervention, but it very long, and I must ask the hon. Gentleman to resume his seat.
  Mr. Davies: May I finish my sentence, Madam Deputy Speaker?
  Madam Deputy Speaker: No, because this is far too long for an intervention. The hon. Gentleman may seek leave to intervene again, but not just at the moment.
  Mr. Redwood: The hon. Gentleman got into a muddle about whether the money was going to the county or to the districts. I am under no delusion; the money was switched to the districts, and that was exactly my point. I was saying that Aberconwy, which is a district council, had a generous settlement this year and the previous two years, compared with other districts, with counties and with local government across the United Kingdom. I think that the hon. Gentleman has become muddled on that subject and I am sorry that he is so confused.
  I am grateful for the hon. Gentleman's clarification of his true position on the generous aid and support that the Government have offered for the floods. However, that was not the impression given in the newspapers in the region after his visit. I am glad that the fact that the hon. Gentleman's remarks were misconstrued in the press has been read into the record of the House.
  Mr. Ron Davies: I am grateful to the Secretary of State as I can now complete the point that I was making. I am not responsible for the way in which the newspapers interpret the Government's parsimony. I was saying that the local authority will have to meet the initial cost of many of the works and, under the Bellwin formula, will have to find 15 per cent. of the cost. That is not, in any circumstances, a generous settlement, especially when the cost of the works will have to be met at the direct expense of services being provided by the local authority.
  Mr. Redwood: The hon. Gentleman is responsible for the remarks that appear as quotations from him in the newspapers, but I am sure that the House is grateful for clarification of what he really meant on that visit. I am sure that the constituents of my right hon. Friend the Minister of State will be interested to see the record corrected in that way.
  The general issue of standard spending assessments was raised by various hon. Members in our short debate. Tourism, visitors and recreation is taken into account in the SSA formula. I have the calculations used to work out the SSAs in the guide that we issued to the House. It is made clear that those calculations include enhanced population—caused by visitor nights and day trips of people coming from 25 miles away or more for business and non-business purposes. The formula contains a genuine attempt to reflect the extra costs to authorities caused by visitors and tourism such as that incurred by Aberconwy. It is partly because of that element of the formula that Aberconwy enjoys an above-average SSA per head compared with other Welsh districts.
  I promise that there is an opportunity each year for the formula to be reviewed. It is done in a consultative way in Wales, which I widely welcome. It is up to Aberconwy and its supporters to put their views on the formula to the Welsh consultative council.
  Mr. Llwyd: Earlier I referred to the fact that a detailed report was commissioned from experts on the subject. It was made known that the attempt to reflect the current position was not succeeding. That point was made with clarity, but it did not achieve anything.
  Mr. Redwood: That is for the consultative council, which includes all the important interests in local government in Wales. Just as Aberconwy can commission a study that proves one thing, so other districts and counties can commission studies that might purport to prove something else. The consultative council and Ministers have to make a different judgment on the balance of the factors in the SSA in order to be fair to the various pressures on different councils around Wales. I am pleased to inherit a system based on agreement with and through the local council organisations as that greatly helps in ensuring a just settlement.
  Mr. Murphy: Earlier, I said that we in Wales sometimes received bad things from England. One of the good factors that we could have been granted was what has taken place in the Department of the Environment—a commitment to a proper review of the general SSA system, which is overdue. The SSA system does not take into account long-term unemployment, chronic ill health and other factors. If a review of the system can take place in England, why cannot it happen in Wales?
  Mr. Redwood: I have already said that there are opportunities for change and reform in the SSA system in the Welsh way. I am proud to inherit the Welsh model. The review in England is ministerial because that is how things are done in the English system. The review will take account of all the representations made by local government in England. In Wales we can do something similar; we can, through the consultative process, review how satisfactory we find the existing calculation. I invite councils to write to the consultative council in the usual way if they wish to see changes. However, the issue will have to be debated with other colleagues from local government to try to sort out the best way forward.
  I believe that we have a good system. I hope that the House will welcome the fact that I have done the decent thing tonight by proposing a capped limit at the original budget and have not attempted to make life more difficult for Aberconwy. I do not think Aberconwy should have been put through a rebilling exercise in the middle of cleaning up after the floods. However, I make it clear to the rest of local government in Wales that it was only the flooding that led me to that conclusion because I know that many other districts and councils worked hard to live within the capping limits. I am pleased that they did that and that was the right thing to do. Without the floods, Aberconwy would have been proposed for a tighter capped limit tonight.
  I acknowledge the spirit of co-operation and partnership between my predecessors and local government associations in Wales. That is typified by the arrangements for discussion and agreement on the distribution of resources through the SSAs. I intend to sustain and foster that system because I think that it is right for Wales and right for local government.
  Question put and agreed to.
  Resolved,
  That the draft Council Tax Limitation (Wales) (Maximum Amount) Order 1993, which was laid before this House on 21st June, be approved.

  STATUTORY INSTRUMENTS, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

  TRANSPORT (FEES)
  That the draft Department of Transport (Fees) (Amendment) Order 1993, which was laid before this House on 7th June, be approved.—[Mr. Conway.]
  Question agreed to.
  Madam Deputy Speaker (Dame Janet Fookes): With permission, I shall put together the next four motions relating to statutory instruments.
  Motion made, and Question put forthwith pursuant to Standing Order No. 101(5) (Standing Committees on Statutory Instruments, &c.).

  PARALYTIC SHELLFISH POISONING
  That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) Order 1993 (S.I., 1993, No. 1338), dated 21st May 1993, a copy of which was laid before this House on 25th May, be approved.
  That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 2) Order 1993 (S.I., 1993, No. 1413), dated 4th June 1993, a copy of which was laid before this House on 8th June, be approved.
  That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 3) Order 1993 (S. 1993, No. 1476), dated 10th June 1993, a copy of which was laid before this House on 11th June, be approved.
  That the Food Protection (Emergency Prohibitions) (Paralytic Shellfish Poisoning) (No. 4) Order 1993 (SI, 1993, No. 1483), dated 10th June 1993, a copy of which was laid before this House on 14th June, be approved.—[Mr. Conway.]
  Question agreed to.

  Petition
  11.1 pm
  Mrs. Llin Golding: I wish to present a petition on behalf of a wide-ranging campaign run by students at Keele university in my constituency to combat the rising tide of racism and fascist activity:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament Assembled.
  Sheweth
  That since the establishment of the British National Party Headquarters in Welling there have been at least two racist murders in the neighbouring area and one of the highest recorded incidence of racist attacks in the country; that the report of the European Parliament on Racism found that the British National Party "is an openly Nazi Organisation" and that its leaders' "crimes range from bomb making, organising illegal paramilitary groups, possession of firearms and a series of convictions under Race Relations and Public Order Acts," and that "BNP publications are uninhibited in their racist style and report unashamedly on their members stabbing black people";
  Wherefore your petitioners pray that your honourable House do urge the Home Secretary to close the Headquarters of the British National Party at 154 Wickham Lane, Welling.
  And your petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

  Air Incident (Heathrow)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. MacKay.]
  11.2 pm
  Mr. David Wilshire: The matter that I wish to raise tonight is the Department of Transport air accident report 3/93, which is a terrible tale of human error by a ground engineer and what I can only describe as selfish attempts to avoid personal inconvenience by a pilot.
  One of the results of all that was that my constituents were exposed to the catastrophic consequence of an aircraft crashing during an emergency landing at Heathrow airport. Mercifully, that did not happen, but if one reads the report, it appears to have been a pretty close run thing.
  Although I readily accept that my constituents are not the only people living near Heathrow, they are always probably more concerned than most, because the last crash near Heathrow was at Staines in my constituency and that memory lives on in the collective consciousness of the people whom I represent.
  I raise this matter in the House tonight because the report exposes loopholes in the current safety procedures and contains recommendations for Government action to close them. If those recommendations were implemented, the risks faced by tens of thousands of people living near Heathrow would he significantly reduced. I am therefore making no apologies for using every avenue open to an hon. Member to press the Government to take immediate action.
  The facts of the matter are complex and highly technical. The report itself runs to 31 pages, plus highly technical drawings and graphs. I will try to summarise them as briefly and simply as I can, but I fear that that will not be easy.
  On 7 March 1992, while landing at Heathrow, the pilot of a Lockheed TriStar belonging to West Indian Airways found that he could not get reverse thrust on his No. I engine. The airline's duty ground engineer correctly identified the problem at Heathrow as being caused by the reverser's cowl being jammed. As is permitted by internationally approved maintenance and safety procedures, the ground engineer disconnected the cowl and manually secured it in the in-flight mode. At that time, the relevant regulations permitted that aircraft to be operated in what I can only describe as a botched-up state for up to 10 days. Needless to say, things have changed since that accident.
  Having made those temporary adjustments, the ground engineer released the aircraft to fly to Trinidad. Unfortunately, and unknown to that ground engineer, in solving the immediate problem that he faced, he had created new ones which ultimately resulted in parts falling off the aircraft while it was in flight.
  Prior to releasing the aircraft at Heathrow, the ground engineer telexed the airline's home base in Trinidad, asking it to carry out further checks on the problem. However, by the time the aircraft reached Trinidad on 8 March, the airline's maintenance staff had been diverted to a much more serious problem on another of its TriStars. As a consequence, the TriStar from Heathrow remained unrepaired and was pressed into service as the replacement aircraft for a Trinidad to New York flight.
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  The airline's maintenance staff were still distracted when the aircraft returned to Trinidad from New York; that was still on 8 March. It was therefore allowed to fly to Frankfurt without any of the inspections or repairs being carried out. The original ground engineer from Heathrow did, however, carry out further work on the TriStar at Frankfurt and then released it to fly to St. Lucia on 9 March. Shortly after take-off, parts of the cowl fell off, causing damage to the aircraft.
  That is the background. Complicated though it is, I hope that I have managed to summarise it accurately.
  I now refer to the air accident itself. The TriStar took off from Frankfurt for St. Lucia at 14.35 on 9 March 1992. The air accident report describes what happened next. It states:
  "As it"—
  the aircraft—
  "climbed through Flight Level 100 there was a thud, accompanied by what appeared to be a compressor stall, and the aircraft shuddered".
  A few moments later, as the report explains,
  "there was a slight vibration and a passenger reported having seen… 'something come off the engine'. About four minutes after the initial accident, the commander shut down the No. I engine."
  At that point, as the report makes clear, an immediate landing was not necessary. The report goes on to explain what happened next. It states:
  "As about 106,000 lb. of fuel would have to be jettisoned to reduce the aircraft's weight to the maximum permitted for landing, a procedure which he (the commander) estimated would take at least 30 minutes, the commander decided to divert to London Heathrow Airport, as this was the company's main European maintenance base."
  The commander subsequently carried out checks and concluded, correctly, that the thrust reverser translating cowl had come off and, incorrectly, that there was no other damage. However, the report reveals that the left wing suffered superficial damage while the left horizontal stabiliser suffered severe damage.
  At 15.20, the commander reported his situation to air traffic control on the Dover section and obtained clearance to dump fuel over the sea and to divert to Heathrow. The controller asked the commander whether he wished to declare an emergency. The cockpit voice recorder reveals the reply from the commander of the aircraft as
  "No, I don't think so. We'll be all right."
  The report, however, concluded that an emergency already existed despite the statement made by the commander of the aircraft and that that emergency became more severe as subsequent events unfolded. The voice recorder in the aircraft also reveals
  "that the commander's decision not to declare an emergency was largely based on the inconvenience which would consequently be experienced by him and his crew after they had landed, rather than the condition of the aircraft."
  That is a damning thing to find in such a report.
  A short time later, the commander became concerned about the way in which the fuel was being jettisoned and therefore stopped the process. Some time later, it was recommenced. A little later again, a passenger reported that there was damage to the left horizontal stabiliser. He had noticed it at the time of the initial incident but believed that it was now becoming worse. Noting this information, and the length of time being taken to jettison the fuel, at 15.51 the commander requested an immediate landing at Heathrow.

  423
  Ten minutes before touchdown, the commander was requested to divert to Stansted. The report records that episode as follows:
  "For operational reasons, BAA would have preferred the aircraft to land at Stansted."
  The air traffic controller therefore told the commander:
  "'there's a request from BAA at Heathrow that you divert to Stansted'."
  The report continues:
  "The commander replied that he would prefer to continue to Heathrow …Recorded flight deck conversation indicated that the commander thought that the reason was because the aircraft had lost part of its engine structure and BAA was concerned about it overflying a large built-up area."
  My researches suggest that the report may be covering up an even worse truth—hearing in mind the fact that the truth revealed by the report is pretty shocking anyway. I have been told that Heathrow's airfield operations department asked air traffic control to request the commander to divert to either Manston or Stansted for the following three reasons, and not just for the one quoted in the report. First, if the aircraft's controls and braking system were damaged and if it were overweight, it might need the longest possible runway to stop, and that happens to be Manston. Secondly, Heathrow landings on the day in question were to the west, involving a long approach over densely populated west London. Thirdly, if a runway at Heathrow were closed as a result of the landing, air traffic in much of western Europe could be disrupted; in that case, it would make sense to use a quieter airfield such as Stansted.
  At 16.04, when the aircraft was at 4,000 ft and 18 miles from touchdown, it appeared to develop landing gear problems. That took the crew's mind off fuel dumping, which was still going on. As a result, the aircraft reported passing a marker just 7 miles from touchdown—in other words, right over the densely populated area of west London—and at less than 2,000 ft while still dumping fuel. However, regulations prohibit the dumping of aviation fuel at less than 7,000 ft in winter or 4,000 ft in summer.
  Happily, a safe but overweight landing took place at 16.10, but not before Heathrow staff had decided to declare a full emergency, despite the commander's refusal to do so. As a result, Heathrow police called in the air accident investigation branch, which produced the report that we are considering tonight.
  The report was published on 9 June, some 15 months after the incident. It contains two formal recommendations: first, that commanders be told why requests for diversion are made; and, secondly, that those selecting emergency routes for aircraft in such circumstances should make the avoidance of densely populated areas a primary consideration. I agree wholeheartedly with both those recommendations and ask my hon. Friend the Minister to assure the House that the Government not only accept them but intend to implement them immediately. Nothing less will reassure my constituents.
  If my hon. Friend thinks that this is the point at which he can give that assurance and we all go off for a night cap, he is mistaken. Unfortunately, the matter raises other points on which I wish to press him. The first point is the shortcomings revealed in two written answers to my questions about the report. Those answers revealed that copies of such reports are sent to the Library of the House only
  "in the event of accidents and incidents likely to attract considerable public interest".—[Official Report, 22 June 1993; Vol. 227, c. 99.]
  424
  I wonder, therefore, whether my hon. Friend could tell us his definition of "considerable public interest". Does he consider a "considerable" number to be the hundreds of thousands of people who live under the flight path of this aircraft and who had highly flammable aviation fuel dumped on their houses and gardens? I certainly do. Since only three reports were issued in 1991 and only six in 1992, it is not asking much for the Government to deposit copies of all air accident reports in the Library. It would not add much to their work load.
  Copies of reports are sent only to those hon. Members who show an interest in the interim bulletin. Perhaps my hon. Friend the Minister could tell us how we are supposed to show interest if we are not told about the existence of an interim bulletin. I should be fascinated to know how we are supposed to do that. Surely it is not beyond the ability of my hon. Friend's extensive and highly paid staff to identify the local Members in such an incident and see that they are properly briefed. As the representative of 70,000 people who were put at risk by this accident, I believe that I have the absolute right to be kept informed. However, I was left to read about the report in the national press several days later.
  The second point that concerns me is the Government's failure to notify the local press. I regret having to tell my hon. Friend that, despite the enthusiasm of his publicity department to brief the national media and journalists based many miles from Heathrow, it failed to brief my local newspapers. I hope that that failure was nothing more sinister than an accidental oversight. Kim Chapman, the editor of my oldest local newspaper—the Staines and Ashford News—asked me to tell my hon. Friend that she is absolutely furious. Perhaps in time someone will apologise to her for not sending a copy of the report.
  The third point is the need to review the hours worked by and the qualifications of ground engineers. The report revealed that the ground engineer who made the temporary repairs to the aircraft worked on it for 12½hours at Heathrow on 7 March. He then worked on other planes at Heathrow for five hours on the morning of 8 March before flying to Frankfurt and spending a further nine and a half hours repairing the offending aircraft. I make that a total of 27 hours work, plus travel, in only two days. We should not, therefore, be surprised that some errors of judgment occurred.
  The report says that the ground engineer
  "allowed himself to operate beyond his own knowledge of the aircraft and, because of misunderstandings, beyond what was permitted …(he) did not recognise the structural or procedural significance of the disconnections …made in the reverser."
  The report also criticises the engineers at the airline's main base in Trinidad for failing twice to carry out the inspection requested by the ground engineer at Heathrow. Does my hon. Friend the Minister agree that those matters and the two recommendations in the report need urgent attention?
  The fourth point is the low-level dumping of aviation fuel over London. If anyone stops to think about it, the implications of that are horrendous. Large quantities of highly flammable and toxic liquid were released at very low levels over a densely built-up area. In the circumstances, does my hon. Friend agree that air traffic control should be required to insist on a diversion to

  425
  another airfield when such dumping may clearly become necessary? If so, will he issue immediately the necessary instructions to air traffic controllers?
  The fifth point is the question of taking action against pilots who wilfully endanger—I choose my words deliberately—life for their convenience or the commercial convenience of their employers. In case that sounds somewhat strong, I quote again from the report. The report says:
  "the crew decided not to declare an emergency because they believed they would have to undergo medical checks and would not be able to operate the following day."
  One needs to let that sink in.
  The report also states that the commander requested to go to Heathrow
  "as all of their facilities were there … Meanwhile the flight engineer consulted Air Canada, the handling agent, who were adamant that the aircraft should come to Heathrow."
  The House and the Minister will note the absolute and complete absence of any safety considerations whatever in those two statements. I cannot help wondering whether that constitutes grounds for legal action against the commander and/or the airline. If it does not, I believe that it should and that the law needs changing. I urge the Minister to do something about it.
  My last comment is on the misleading comments in the report about the request to divert to Stansted. The report says:
  "BAA would have preferred (the aircraft) to land at Stansted Airport; the reason was that, had it been necessary to close a runway after the aircraft had landed there would have been less disruption to traffic flow".
  As I have already explained, my research reveals that that was but one of three considerations leading to a request to divert and that two airfields were considered by BAA.
  I hope that my hon. Friend the Minister agrees that the report, as written, invites us to conclude that Heathrow airport staff—who could well have been my constituents—concerned themselves only with delay and disruption at Heathrow on this occasion. That is grossly unfair because the airport is clearly worried about passenger safety and public risk. I believe that the record should be put right. Will my hon. Friend take steps to have that erroneous impression of Heathrow staff rectified?
  Through you, Madam Deputy Speaker, may I thank Madam Speaker for allowing me the opportunity to raise all these issues. I thank my hon. Friend the Minister for giving up a little of his beauty sleep to listen to me and to reply. I hope that I have persuaded him and the House that the matters that I have raised are deeply worrying and potentially raise issues of life and death for those whom I represent.
  My constituents and I accept that eliminating all risk for those who live near Heathrow is beyond the scope of all human endeavour. However, we at Heathrow believe that we have the right to expect that everything possible should be done to reduce all the risks to the lowest possible level. The report reveals a catalogue of avoidable risks. Happily, it goes on to identify ways of getting a little closer to the perfection that we all seek. Therefore, I beg my hon. Friend the Minister to act and to act quickly.
  11.22 pm
  The Minister for Transport in London (Mr. Steve Norris): I congratulate my hon. Friend on his good fortune in having obtained this debate on an issue which I know that he takes seriously, and which the Government acknowledge is important. Air accident report AAR3/93 which led to the debate demonstrates clearly the international nature of aviation. The essence of the incident was that a part of one of the aircraft's thrust reversers became detached and damaged the tailplane before falling to the ground soon after take-off from Frankfurt. The aircraft, which was registered in Trinidad and Tobago, diverted to Heathrow, where the company had significant maintenance facilities available. Although the failure occurred over Germany, it was agreed with the German authorities that the investigation would be carried out by the UK's Air Accident Investigation Branch because the aircraft was available for inspection in London.
  Although the accident report properly deals largely with the technical problem, it also highlights two important points about air traffic control advice to, and routing of, aircraft in emergency situations. It is understandable that there is public concern to minimise the risk to people on the ground. Safety is always the first priority.
  I should make it clear that in the United Kingdom the regulation of civil aviation safety is a matter for the Civil Aviation Authority. Indeed, the Secretary of State's letter to Christopher Chataway setting out the CAA's objectives when he was appointed chairman of the CAA in 1991 makes it very clear that safety is the responsibility of the CAA and that the Government do not intend to interfere in the discharge of those duties.
  However, the United Kingdom is an active member of the International Civil Aviation Organisation, whose safety standards are accepted by virtually all countries. The United Kingdom recognises the adherence to these standards by foreign operators and in return British aircraft are accepted overseas. As a major aviation trading nation, the United Kingdom benefits greatly from this reciprocity and, of course, the communities around our airports share in the prosperity generated by international flights in and out of the United Kingdom.
  Aircraft accidents in the United Kingdom are investigated by the Air Accident Investigation Branch of the Department of Transport. This organisation is deliberately separate from the CAA so that the regulators are not put in the position of having to judge the effectiveness of their rules and regulations. The AAIB is very widely respected in the aviation community. For instance, its painstaking reconstruction and report of the Lockerbie disaster has drawn worldwide acclaim.
  In this case I can assure the House that the CAA has studied the AAIB's report carefully as it does in all such cases. In particular, I can report that the CAA has accepted the AAIB's safety recommendations and that supplementary instructions to air traffic controllers on the handling of aircraft in emergencies will be included in the manual of air traffic services within the next week.
  The CAA has given this matter detailed consideration in formulating its response to the safety recommendations. It has been careful to avoid taking away responsibility from the aircraft commander, while giving him all possible assistance in an emergency. It is important not to increase

  427
  the pilot's workload at a critical time. It is also important to avoid circumstances which might dissuade pilots from declaring emergencies when they should do so.
  In response to the AAIB recommendations in respect of this accident the following instructions and advice will be issued for handling aircraft in an emergency. When a pilot has declared an emergency and stated the aerodrome to which he wishes to proceed, controllers will acknowledge this message. IF the controller is instructed to inform the aircraft that it is required or requested to divert to another aerodrome, the reason for this change should be established. The message, including the reason, will then be passed to the captain and his intentions requested.
  It is desirable that aircraft in emergency should riot be routed over densely populated areas. If this is inconsistent with providing the most appropriate service to the aircraft, for example when any extended routing could jeopardise the safety of the aircraft, the most expeditious routing is the one that should be given. Where possible, suggestions of alternative runways or aerodromes which would avoid densely populated areas and be consistent with safety should be passed to the pilot and his intentions requested.
  These instructions to air traffic controllers emphasise that the decision on whether to comply with advice or instructions to land at an airport other than his selected diversion lies with the captain of' the aircraft. It is stressed that the captain has ultimate responsibility for the safety of his aircraft. The controller will do everything he can to assist the aircraft commander, but the latter is in the best position to judge the hazard to his aircraft. He has that ultimate responsibility. That is an internationally accepted principle and it is one from which it is difficult to resile.
  In this case, the aircraft commander's decision to proceed to London was reasonable, given that he was initially unaware that the separated part had damaged the tail. Also it provided the time to reduce the weight for landing and meant that rectification would be easier. His reluctance to declare an emergency, even when he became aware of the tail damage and asked for an immediate approach into Heathrow, is a matter which has been brought to the attention of the state registry and the international aviation community by the AAIB's comprehensive report. Fortunately, the air traffic controller took the initiative to treat the flight as an emergency, and all facilities were on standby at Heathrow, where the aircraft landed safely. The controller concerned is to be congratulated.
  The unfortunate feature of this incident was that the aircraft continued to dump fuel until a few minutes before landing. As my hon. Friend said, it is normal practice for responsible airlines, when fuel must be jettisoned to avoid an overweight landing, to do so above 5,000 ft. From such
  428
  heights the fuel dissipates and evaporates. In addition, air traffic control tries to arrange for dumping to occur over the sea, if possible. Regrettably, the aircraft in question had difficulty in jettisoning fuel. In the event. it made an overweight landing, albeit safely.
  I have no wish to suggest that this was other than a serious incident—the fact that it was the subject of a formal United Kingdom investigation emphasises this point—but I want to put matters in perspective. Since January 1988 there have been only 11 occasions on which objects falling from aircraft have been reported as causing any damage to property. There are no records of any third party having been injured or killed. This is in the context of about 1·25 million air traffic movements handled by the London air traffic control centre in 1991–92.
  My hon. Friend raised one or two other points on which I should like to comment. He correctly identified the questions that have been raised about the role of the ground engineer. He will appreciate that the report did indeed spell out a number of inconsistencies in the way in which the ground engineer operated. He was right to draw attention to the seriousness of the issues raised. These have been highlighted in the report. On the matter of the briefing provided to his local media and to himself, I should say that aircraft accident reports are specialised reports with a high technical content. They are of interest principally to the aviation community. They are preceded, soon after the event, by a bulletin that sets out the essential facts but draws no conclusions.
  On the day of publication of the final report a press notice is issued. Copies of AAIB reports are sent to the Library in the event of accidents thought likely to attract considerable public interest. These are normally fatal public transport accidents, such as those at Lockerbie and Kegworth. Our understanding is that numerous copies of this press release were sent to both national and local media. My hon. Friend was kind enough to suggest that his local radio station discovered its copy in the wastepaper basket. I can only say that my Department is clear about the fact that it issued the reports to as many people as possible. If my hon. Friend is concerned, I shall discuss with him afterwards ways in which his keen interest in affairs at Heathrow can be translated into his receiving more regular reports.
  This is an important incident, and I am grateful to my hon. Friend for giving me an opportunity to set out some of the background to it.
  The motion having been made after Ten o'clock and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-eight minutes to Twelve o'clock.

HOME DEPARTMENT

  New Age Travellers
  Mr. David Nicholson
  To ask the Secretary of State for the Home Department if he will make a statement on the preparations he has taken to ensure full and effective co-ordination by police forces in the west of England to deal with possible breaches of the law, trespass and blocking of the highway by new age travellers in the summer months.

  Mr. Charles Wardle
  These are operational matters for the police. The Association of Chief Police Officers has set up a national intelligence-gathering network on the activities of travellers with co-ordinating centres in the Wiltshire constabulary and Cumbria constabulary. Forces have also reviewed their contingency plans for dealing with the problems caused by new age travellers. These have proved effective so far this year.

  Mr. David Nicholson
  To ask the Secretary of State for the Home Department what measures he is taking to ensure, in conjunction with the police, that convoys of new age travellers do not block the public highway.

  Mr. Charles Wardle
  Enforcement of road traffic and highways legislation is an operational matter for the police.

  Racist Crimes
  Ms Primarolo
  To ask the Secretary of State for the Home Department what is his estimate of the incidence of crimes in each of the last five years in which there has been a racist element.

  Mr. Maclean
  The only information currently available relates to the number of reported racial incidences and I refer the hon. Member to the reply given to a question from the hon. Member for Walthamstow (Mr. Gerrard) on 26 April, at column 266.

  Metropolitan Police Cab Enforcement Scheme
  Dame Angela Rumbold
  To ask the Secretary of State for the Home Department to what extent the resources of the Metropolitan police cab enforcement section have been increased; and if he will make a statement.

  Mr. Charles Wardle
  The section has been maintained at the same staffing level for the past five years. The Commissioner has no plans to make any increases.

  Police (Stress-related Illness)
  Mr. Llwyd
  To ask the Secretary of State for the Home Department how many(a) custody officers, (b) custody sergeants and (c) rota sergeants have taken five or more days off work through stress-related illnesses in each police force area in England and Wales in each year since 1990.
  170
  Mr. Charles Wardle
  The information requested is not held centrally and could be collected from individual forces only at disproportionate cost.

  Prisoners (Police Cells)
  Ms Ruddock
  To ask the Secretary of State for the Home Department how many(a) remand and (b) convicted prisoners were held in police cells in each prison service region for each month in 1993.

  Mr. Peter Lloyd
  Responsibility for this matter has been delegated to the Director General of the Prison Service, who has been asked to arrange for a reply to be given.

  Letter from Derek Lewis to Ms Joan Ruddock, dated June 1993:
  The Home Secretary has asked me to reply to your recent Question about the number of prisoners held in police cells in each Prison Service region for each month in 1993.
  The following table shows the total number of prisoners held in police cells on each Friday this year up to 12 February, which is the last day prisoners were held in police cells. It is not possible to separate remand and convicted prisoners although most would have been on remand. All the prisoners concerned should have been in establishments in the Prison Service's Directorate of Inmate Programmes which covers establishments in the north of England.

  Date

  Number of prisoners in police cells

  8 January

  279

  15 January

  252

  22 January

  236

  29 January

  166

  5 February

  119

  12 February

  20

  Voting, Christchurch
  Mr. Barnes
  To ask the Secretary of State for the Home Department what were the numbers of people at the last election who used(a) proxy, (b) absent and (c) postal votes in the parliamentary constituency of Christchurch.

  Mr. Peter Lloyd
  There were 1,356 electors on the postal voters list in the Christchurch constituency at the last general election, and 1,220 postal ballot paper covering envelopes were returned. Information about the number of electors voting by proxy is not collected centrally.

  Side-handled Baton
  Mr. Michael
  To ask the Secretary of State for the Home Department if he will agree to a pilot project on the use of the expandable side-handled baton taking place in specific areas within three police forces in England and Wales.

  Mr. Charles Wardle
  I refer the hon. Member to the reply I gave to him on 21 June, at column 2.
  171

TRANSPORT

  Auto Care Europe
  Mr. Nicholls
  To ask the Secretary of State for Transport how much British Rail is investing in the new joint venture company Auto Care Europe.

  Mr. Freeman
  I have authorised BR to invest up to a maximum of £1·33 million.

  Minibuses
  Ms Hoey
  To ask the Secretary of State for Transport (1) what plans he has to introduce legislation which would require all passengers in minibuses to wear safety belts;

  (2) what measures are being taken to improve the design of minibuses in the interest of greater passenger safety.

  Mr. Key
  We are making a continuing effort to improve the safety of all road vehicles including minibuses. Seat belts are already required to be fitted to the front seats of all new minibuses. We have sought agreement within the European Community for the mandatory extension of this requirement to all seats in minibuses.

  Where seat belts are fitted, they must be worn by passengers travelling in the front seat of any minibus and by a passenger travelling in a rear seat of a smaller minibus with an unladen weight not exceeding 2,540 kg.

  Motor Insurance
  Mr. Duncan
  To ask the Secretary of State for Transport whether his Department has consulted the motor insurance industry on the feasibility of requiring evidence of insurance to be displayed on a vehicle's windscreen.

  Mr. Key
  Following wide-ranging discussions with representatives of the insurance industry, the police and the Home Office, we have decided not to require evidence of insurance to be displayed on a vehicle windscreen. Under our present driver-related insurance system, the enforcement benefit would be little more than is already provided by the check on insurance which is made when renewing vehicle excise duty. The display of an insurance disc would provide no assurance that the driver was covered by an insurance policy or complying with policy conditions, nor would it protect against the insurance being cancelled once the disc has been issued.

  The enforcement potential of a windscreen display would be greater under a vehicle-related insurance regime, where cover is taken out for a particular vehicle regardless of who drives it. However, this would require all vehicles to be insured for any driver and so remove an insurer's ability to take account of the risks associated with different drivers. Because every insured vehicle could be driven by a high-risk driver, the contribution that the present insurance system makes to road safety would be undermined. It could lead to a substantial increase in motor premiums, especially for safer drivers who would, for example, find themselves contributing to the cost of insuring all cars to be driven by novice drivers or by drivers with a poor accident record. Premium increases could in turn encourage further evasion and render the measure self-defeating.

  I deplore the irresponsible behaviour of the minority of drivers who fail to take out insurance. But I am sceptical
  172
  about imposing further regulations on all drivers, particularly when we cannot be confident that insurance evasion would be significantly reduced. The police already have wide powers to inspect insurance certificates, and there are over 200,000 convictions for uninsured driving every year. The maximum for this offence was increased to £5,000 in October 1992. We have decided as a result of our discusions that the format of insurance certificates should be reviewed and simplified where possible to assist the police in checking them. This will speed up this important aspect of enforcement. A further check on insurance certificates is made with applications for vehicle excise duty.

  The decision not require the display of windscreen insurance discs has no effect on the compensation received by those involved in road accidents. Victims of uninsured drivers will continue to be compensated by the Motor Insurers Bureau under a long-standing agreement between the bureau and the Secretary of State for Transport.

  Transport and Works Act Orders
  Mr. Streeter
  To ask the Secretary of State for Transport what further consideration he has given to the means of notifying to hon. Members his receipt of application for orders under part I of the Transport and Works Act 1992.

  Mr. Freeman
  Yes. My Department has arranged with the House of Commons Library that applicants will supply a full set of their application documents for the information of hon. Members. The House of Commons Public Information Office will note in the "Weekly Information Bulletin" the receipt of such documents, together with a contact point from which further information may be obtained.

  East London River Crossing
  Mr. Spearing
  To ask the Secretary of State for Transport what is the actual or estimated cost of the Ironbridge to Canning Town improvement schemes on or adjacent to the A13 trunk road in the boroughs of Tower Hamlets and Newham in respect of(a) East India Dock road, interim junction scheme as now completed, (b) the East India Dock tunnel link, (c) the completed Abbott road, Leamouth road and A 13 Ironbridge widening scheme, (d) the widening of the Canning Town flyover from four to six lanes and associated road works and (e) works associated with the re-aligned east-bound slip road to the A13; and what plans he has for improvements for pedestrian crossing of the A13, Newham way, between these works and the proposed Freemasons road underpass.

  Mr. Norris
  The actual or estimated construction costs for the roads schemes listed by the hon. Member are as follows:

  Schemes

  £ million (including VAT)

  (a) and (c) East India Dock Road/Leamouth Road

  2·60

  (b) East India Dock Road Link

  36·00

  (d) and (e) A13 Ironbridge/A13 Canning Town Flyover (including NE Slip Road, Canning Town)

  50·06

  173
  Schemes (a) and (c) relate to the completed works for improvement to the East India Dock road junction and widening of the A13 at Leamouth, including the Abbott road junction. The proposed widening of the Ironbridge is now an integral part of scheme (d), as is scheme (e).

  Scheme (b) is the responsibility of the London Docklands development corporation.

  Subways at Beckton road and Douglas road have been refurbished in recent years. The Department is discussing with LB Newham the possibility of improving the condition of the Rathbone subway.

  Mr. Spearing
  To ask the Secretary of State for Transport what is the expected outturn cost, or estimated cost of(a) of the Lower Lea crossing, (b) repairs and renewal to the Silvertown flyover, (c) the north Woolwich road widening and improvements, (d) the new Connaught crossing, (e) the Albert Dock spine road and associated intersections and (f) the Eastern G gateway link road in the London borough of Newham at 1993 or other specified year prices; and what is the estimated cost of the east London river crossing and its approaches on both sides of the Thames.

  Mr. Norris
  The costs for the road schemes listed by the hon. Member are as follows:

  £ million (including VAT)

  (a) Lower Lea Crossing

  37·5

  (b) Silvertown Flyover repairs

  10·5

  (c) North Woolwich Road Improvements

  13·0

  (d) Connaught Crossing

  26·0

  (e) Albert Dock Spine Road

  38·5

  (f) Eastern Gateway Access Road

  10·8

  (g) East London River Crossing

  2300·0

  1Estimates at current prices.

  2At 1989 prices; also includes land costs.

  Only scheme (g) is the responsibility of my right hon. Friend the Secretary of State for Transport. Schemes (a), (d), (e) and (f) are the responsibility of the London Docklands development corporation. Schemes (b) and (c) are the responsibility of the London borough of Newham.

  Road Schemes (Protestors)
  Mr. Simon Hughes
  To ask the Secretary of State for Transport if he will list all the occasions when his Department has sought orders for the seizure of property from those protesting against proposed new road schemes; and if he will make a statement.

  Mr. Key
  My Department has been unable to identify any such cases.

  Railway Track Maintenance
  Mr. Ainger
  To ask the Secretary of State for Transport what is the cost per mile of maintaining mainline railway track and branch line railway track(a) throughout the British Rail network and (b) in the south Wales and western regions.

  Mr. Freeman
  My Department does not hold this information. Maintenance programmes and costs are a matter for the British Railways Board.
  174

NORTHERN IRELAND

  Home Helps
  Mr. McGrady
  To ask the Secretary of State for Northern Ireland how many people are currently in receipt of home help service in the Down and Lisburn unit of management; and what was the comparable figure for the same period last year.

  Mr. Ancram
  In May 1992, the latest date for which information is available, 2,436 people were in receipt of the home help service in the Down and Lisburn unit of management. In May 1991, the number of recipients was 2,444.

  Mr. McGrady
  To ask the Secretary of State for Northern Ireland how many people who are currently in receipt of home help service in the Down and Lisburn unit of management have been subject to a reduction in hours.

  Mr. Ancram
  A total of 453 people who are currently in receipt of home help service in the Down and Lisburn unit of management have had a reduction in home help hours.

  Renewables Order
  Mr. O'Neill
  To ask the Secretary of State for Northern Ireland if he will make a statement on the progress of his Department in establishing a Renewables Order for Northern Ireland.

  Mr. Atkins
  The Department of Economic Development intends to ask NIE plc to organise a competitive tender to secure generation capacity from plant using renewable sources of energy, with a view to making a non-fossil fuel order. The necessary arrangements for the tender competition are being finalised at present and I hope to make a further statement in the near future.

  Clubs
  Mr. William O'Brien
  To ask the Secretary of State for Northern Ireland if he intends to meet representatives of the Northern Ireland Federation of Clubs and the Club and Institute Union to discuss the registration of clubs under the Industrial and Provident Societies Act (Northern Ireland) 1969; and if he will make a statement.

  Mr. Atkins
  Clubs may be registered under the Industrial and Provident Societies Act (Northern Ireland) 1969 if they satisfy certain conditions. These will be notified shortly to representatives of the Northern Ireland Federation of Clubs and the Club and Institute Union Ltd. Applications to register from clubs may then follow.

  Ballyconnell Canal
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland, pursuant to his answer of 24 May,Official Report, columns 461–62, what estimate he has made of the overall administrative costs of the Ballyconnell canal project met in (a) Northern Ireland and (b) in the Republic of Ireland; and how many persons in his Department have been engaged in such work.

  Mr. Ancram
  The construction work on the Ballyconnell canal is being managed by the Electricity
  175
  Supply Board in the Republic of Ireland, which reports to a joint steering group comprising six representatives from Northern Ireland Government Departments and six representatives from Republic of Ireland Government Departments. The joint steering group oversees the project, deals with policy issues, approves expenditure and monitors progress. It meets two or three times a year. In addition to these formal meetings, there is also ad hoc liaison between the two Governments and with the project managers, including contacts at local level to facilitate works progress. It is not possible to estimate the overall administrative costs of the project.

  Director General for Electricity Regulation
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland what is the address of the office of the new Director General for Electricity Regulation in Northern Ireland.

  Mr. Atkins
  The address is:

  Office of Electricity Regulation Northern Ireland (OFFER NI)

  Brookmount Buildings

  42 Fountain Street

  BELFAST

  BT1 5EE

  Forensic Science Laboratory, Newtownbreda
  Mr. John D. Taylor
  To ask the Secretary of State for Northern Ireland how many claims for compensation, arising from the IRA bomb at the forensic science laboratory at Newtownbreda in September 1992 are still to be concluded.

  Mr. Mates
  Responsibility for the subject in question has been delegated to the Compensation Agency under its chief executive, Mr. J. Robinson. I have asked him to arrange for a reply to be given.

  Letter from John Robinson to Mr. John D. Taylor, dated 22 June 1993:
  I refer to your recent Parliamentary Question concerning the number of compensation claims arising from the IRA bomb at Newtownbreda in September 1992 which have still to be concluded.
  The following is a summary of progress to date:

  Number

  Number of applications received

  902

  Number disallowed

  37

  Number of cases in which final compensation has been paid

  512

  Number in which formal offers of settlement have been made

  157

  Number still to be resolved and which are at various stages of completion

  196

  Number of interim payments made in cases still to be resolved

  173

  Table 2

  Number of nurses and midwives employed in special care baby units 1991 England, Regional Health Authority (RHA) and Special Health Authorities

  Qualified Nurses

  Unqualified Nurses

  Midwives

  Total

  England

  1,950

  290

  1,260

  3,500

  Northern RHA

  90

  20

  70

  180

  Yorkshire RHA

  150

  30

  80

  260

  Trent RHA

  260

  30

  80

  360

  East Anglian RHA

  90

  10

  30

  130

  North West Thames RHA

  90

  20

  90

  210

  176
  I hope this is helpful.

  Ballynahone Bog
  Mr. William Ross
  To ask the Secretary of State for Northern Ireland whether he now intends to take any action to prevent damage to Ballynahone bog.

  Mr. Atkins
  [holding answer 21 June 1993]: The Bulrush Peat Company Ltd. has permission for the extraction of peat from part of Ballynahone bog. This followed a detailed public inquiry. While the Department of the Environment, Northern Ireland has no plans to revoke the permission, I shall shortly be announcing a policy statement on how the Government intend to address the issues of peat bogs in Northern Ireland.

HEALTH

  Neonatal Care
  Ms Primarolo
  To ask the Secretary of State for Health what was the number of nurses per neo-natal cot nationally and per region at the latest available date.

  Mr. Sackville
  The information is not available in the form requested. Latest data on the number of beds on neo-natal wards and nursing staff employed in special care baby units are shown in the tables.

  Table 1: Average number of daily available beds 1990–91 England, regional health authority (RHA) and special health authorities

  Neonates

  Number

  England

  3,374

  Northern RHA

  260

  Yorkshire RHA

  282

  Trent RHA

  295

  East Anglian RHA

  121

  North West Thames RHA

  248

  North East Thames RHA

  275

  South East Thames RHA

  271

  South West Thames RHA

  189

  Wessex RHA

  182

  Oxford RHA

  180

  South Western RHA

  148

  West Midlands RHA

  371

  Mersey RHA

  172

  North Western RHA

  340

  Special Health Authorities

  41

  Note: These beds are in wards for neonates in regional designated intensive centres or non-maternity wards.

  Regional figures do not add up to England total due to rounding.

  Source: KHO3 return, lines 10, 11.
  177

  Qualified Nurses

  Unqualified Nurses

  Midwives

  Total

  North East Thames RHA

  130

  10

  80

  220

  South East Thames RHA

  160

  20

  50

  230

  South West Thames RHA

  40

  10

  70

  110

  Wessex RHA

  110

  0

  50

  170

  Oxford RHA

  130

  20

  50

  200

  South Western RHA

  150

  10

  100

  260

  West Midlands RHA

  240

  40

  130

  400

  Mersey RHA

  70

  30

  100

  190

  North Western RHA

  200

  30

  270

  510

  Special Health Authorities

  50

  10

  0

  60

  Source: Non-medical Workforce Census September 1991.

  Figures are rounded to the nearest 10 whole-time equivalent—regional figures may not therefore add up to England total.

  GPs (Advocates)
  Ms Primarolo
  To ask the Secretary of State for Health if she plans to extend the role of general practitioners as independent advocates for patients to hospital doctors.

  Dr. Mawhinney
  General practitioners already act as advocates of their patients in providing general medical services and referring patients to specialist services if required. GP fund holding builds on this principle by enabling volunteer practices to purchase directly a range of hospital and community services on behalf of their patients. This is proving a great success and our aim is to extend the benefits to as many patients as possible.

  Social Work
  Mr. Riddick
  To ask the Secretary of State for Health what steps have been taken by her Department to encourage the Central Council for Education and Training in Social Work to change its equal opportunities policies; and if she will make a statement.

  Mr. Bowls
  The Department shares the Central Council for Education and Training in Social Work's—CCETSW—commitment to ensure that individuals are not unfairly disadvantaged on the grounds of age, gender, disability, Ianguage, including sign language, race or religion.

  Various aspects of the implementation of CCETSW's equal opportunities policy were discussed at the last annual ministerial review in December 1992. It was emphasised that CCETSW should not give a misleading impression in its documentation about the emphasis it places on anti-racist and other anti-discriminatory issues in training, and this must not be at the expense of receiving a solid, practical grounding in other important professional and management skills.

  Laser Photorefractive Keratectomy
  Mr. William O'Brien
  To ask the Secretary of State for Health how many people have been treated in the NHS for(a) myopia and (b) other eyesight disorders by laser photorefractive keratectomy; and what information she has on the extent of the use of this treatment in the private sector.

  Dr. Mawhinney
  This information is not available centrally.

  Mr. William O'Brien
  To ask the Secretary of State for Health if she will make a statement on her assessment of laser photorefractive keratectomy as a treatment to correct myopia; and what plans she has to make it available free of charge to patients at NHS hospitals.
  178
  Dr. Mawhinney
  Different types of laser are now being used in the national health service for the treatment of various eye conditions, including glaucoma. The use of photorefractive keratectomy, or excimer, lasers for treating myopia—short-sightedness—is still subject to research. An evaluation study is currently under way and is not expected to report before 1994. The evaluation is important, particularly as most people who are short-sighted and seek laser treatment do not have an eye disease and wish only to avoid wearing spectacles or contact lenses.

  The form of treatment of myopia is, therefore, currently only available to NHS patients as part of ongoing research.

  Optical Appliances
  Dame Jill Knight
  To ask the Secretary of State for Health (1) what has been the total number of optical appliances vouchers redeemed in each year since 1986;

  (2) what was the total cost of the optical appliances voucher scheme in each year since 1986.

  Dr. Mawhinney
  The information for England is shown in the table.

  Numbers of vouchers paid for (millions)

  Cost of vouchers (£ million)

  1986–871

  1·46

  27·0

  1987–88

  2·52

  47·9

  1988–89

  2·26

  52·1

  1989–90

  2·27

  53·6

  1990–91

  2·43

  63·9

  1991–92

  2·84

  79·8

  1992–93

  3·18

  299·9

  1 Figures are for nine months only following introduction of the scheme on I July 1986.

  2 Provisional figures.

  Dietary Health
  Mr. Shersby
  To ask the Secretary of State for Health if she will publish in tabula form details of all grants currently approved by her Department to support projects connected with diet health and cookery including the amount of the grant, the period for which it has been approved, the name and location of the person or organisation to which it is made and the name of the person responsible for accounting to her for the expenditure of public funds in each case.

  Mr. Sackville
  The Department is currently funding one such project—"Get Cooking" managed by the National
  179
  Food Alliance which aims to improve the basic cooking skills of young people as a contribution to healthy eating. Funding amounts to £60,000 over two years—£31,000 in 1992–93 and £29,000 in 1993–94—and is subject to the normal vigorous financial management of all projects awarded funding under section 64 of the Health Service and Public Health Act 1968.

  Opticians
  Mr. Ainger
  To ask the Secretary of State for Health (1) what plans she has to establish an official complaints body to cover all dispensing opticians;

  (2) what representations she has received concerning the need for an official complaints body for customers of dispensing opticians.

  Dr. Mawhinney
  We have no plans to set up a body to investigate complaints against dispensing opticians, who are independent practitioners, nor have we received any representations to do so. The bodies representing optometrists and dispensing opticians set up an independent consumer complaints' system—the optical consumer complaints service—in January this year, and all dispensing opticians' practices have been encouraged to become members.

  NHS Drugs
  Ms Primarolo
  To ask the Secretary of State for Health what percentage of the total NHS budget in each of the last 10 years was spent on drugs; how many items were prescribed per head of population; and what corresponding information she has from other EC countries.

  Dr. Mawhinney
  The available information is shown in the tables. The total national health service drugs bill comprises expenditure by family health services—FHS—and the hospital and community health services—HCHS. Items prescribed per head of population relate to prescriptions written by general practitioners and dispensed within the FHS. Comparable data for the other countries in the European Community are not available.

  Year

  Total NHS drugs bill as a percentage of total NHS expenditure

  1982–83

  10·2

  1983–84

  10·7

  1984–85

  10·4

  1985–86

  10·5

  1986–87

  10·6

  1987–88

  10·7

  1988–89

  10·8

  1989–90

  11·2

  1990–91

  10·7

  1991–92

  10·9

  Note: 1992–93 expenditure figures are not yet available.

  Year

  Items prescribed per head of population

  1983

  7·2

  1984

  7·3

  1985

  7·3

  1986

  7·3

  180

  Year

  Items prescribed per head of population

  1987

  7·6

  1988

  7·9

  1989

  8·0

  1990

  8·3

  1991

  8·5

  1992

  8·8

  Note:Prior to 1991, prescription items were based on dispensing fees paid to contractors. From 1991, the actual numbers of items are shown.

  Hospital Patients
  Dr. Wright
  To ask the Secretary of State for Health how many patients in the Mid-Staffordshire health authority who have been referred by their general practitioner to a hospital consultant are currently not being put on an active waiting list and not being given any indication of when an appointment will be available.

  Dr. Mawhinney
  This information is not available centrally. Patients who are referred to a hospital consultant by a general medical practitioner should either be seen immediately or put on an out-patient waiting list depending on their clinical priority. No one should have to wait to be put on an out-patient waiting list after he or she has been referred by his or her GP.

  Lung Cancer, Liverpool
  Mr. Alton
  To ask the Secretary of State for Health, pursuant to her answer of 16 June,Official Report, column 619, whether she will now fund a study of the causes of lung cancer in Liverpool; what is the future of the Sefton general hospital chest clinic in Liverpool; and if she will make a statement.

  Mr. Sackville
  Research studies which are locally based are the responsibility of the regional health authority and would not normally be funded from the Department's central research budget. It would be for Mersey RHA to consider whether or not to mount a study of the causes of lung cancer in Liverpool in the light of its knowledge of local needs, resources and priorities.

  The hon. Member may wish to contact Mr. D. H. Tod, the chairman of Liverpool health authority, concerning the future of the Sefton general hospital chest clinic.

  Diabetics
  Mr. Gareth Wardell
  To ask the Secretary of State for Health what plans she has to introduce prescription charges for insulin-dependent diabetics.

  Dr. Mawhinney
  None.

  Prostate Cancer
  Ms Lynne
  To ask the Secretary of State for Health, pursuant to her answer of 11 June,Official Report, column 373, if she will list the research projects currently being undertaken into the risks from prostate cancer.

  Mr. Sackville
  This information is not routinely collected, but we are aware of several projects including studies in Newport and Bristol.
  181

  Christchurch
  Mr. Barnes
  To ask the Secretary of State for Health what are the latest available figures for(a) registered disabled, (b) registered blind people and (c) people in residential nursing homes in the parliamentary constituency of Christchurch.

  Mr. Bowis
  Information is not available in the form requested. The latest available figures for registered disabled and registered blind people are published by local authority in "Register of Physically Disabled Persons (General Classes) at 31 March 1990, England" and "Registered Blind and Partially Sighted People at 31 March 1991, England". The centrally available information on nursing homes is the number of available beds and is published in "Private Hospitals, Homes and Clinics registered under section 23 of the Registered Homes Act 1984, at 31 March 1991, England". Copies of the publications are available in the Library.

  Mr. Barnes
  To ask the Secretary of State for Health what is the latest estimate by the Registrar General of Populations of those aged 17 years and over, plus 63 per cent. of those aged 16 years, for the district council area that includes the parliamentary constituency of Christchurch, together with the equivalent year's electoral registration figures, expressed as a percentage of these population estimates.

  Mr. Sackville
  There are 72,211 parliamentary electors on the 1993 register for the Christchurch constituency. Population estimates are not available for parliamentary constituencies. The Christchurch parliamentary constituency comprises almost all—99·5 per cent.—of the parliamentary electors of Christchurch district part—56·7 per cent.—of the electors of West Dorset district and a very small part of—0·02 per cent.—of the electors of New

  £ thousands

  1986–87

  1987–88

  1988–89

  1989–90

  1990–91

  1991–92

  Table 1: Average annual cost per whole time equivalent at current prices

  Senior/General manager1

  ..

  ..

  ..

  ..

  26·0

  28·8

  Consultant

  38·8

  43·5

  46·9

  48·7

  53·3

  57·7

  Senior house officer

  20·1

  22·0

  23·8

  24·5

  27·1

  29·8

  Qualified nurse

  12·2

  14·7

  17·6

  18·5

  20·0

  22·2

  Ambulance staff2

  10·5

  11·3

  11·8

  310·9

  13·1

  15·0

  Ancillary staff4

  6·9

  7·2

  7·8

  8·3

  9·0

  10·5

  Medical laboratory scientific officer

  10·9

  10·7

  12·8

  16·2

  16·4

  17·2

  Table 2: Average annual cost per whole time equivalent at 1986–87 prices

  Senior/General manager1

  ..

  ..

  ..

  ..

  18·7

  18·9

  Consultant

  38·8

  40·1

  39·1

  38·1

  38·5

  37·8

  Senior house officer

  20·1

  20·3

  19·8

  19·2

  19·5

  19·5

  Qualified nurse

  12·2

  13·6

  14·7

  14·5

  14·4

  14·6

  Ambulance staff2

  10·5

  10·4

  9·8

  38·5

  9·4

  9·8

  Ancillary staff4

  6·9

  6·7

  6·5

  6·5

  6·5

  6·9

  Medical laboratory scientific officer

  10·9

  10·7

  10·7

  12·7

  11·9

  11·3

  1 No comparable figures are available for the period 1986–87 to 1989–90.

  2 Includes expenditure for all ambulance staff as cost for an ambulance driver not available separately.

  3 Fall in ambulance staff figure probably due to ambulancemen strike.

  4 Includes expenditure for all ancillary staff as cost for a porter and a cleaner not available separately.

  Mr. Sims
  To ask the Secretary of State for Health if she will publish details of the numbers of health service directly employed staff by main staff group each year from 1987 to 1992; and if she will give the changes between each year and over the whole period in numbers and percentages.
  182
  Forest district. The latest population estimates available relate to mid-1991. The estimates for residents aged 17 and over, plus 63 per cent. of those aged 16, at that date are 35,000 in the whole of Christchurch district, 70,800 in the whole of West Dorset district and 130,900 in the whole of New Forest district.

  Pharmaceutical Retail Outlets
  Mr. Spearing
  To ask the Secretary of State for Health if she will name the studies on which she has based her predictions as to the future patterns of pharmaceutical retail outlets subsequent to implementation of her proposals for a new pattern of payment to their proprietors.

  Dr. Mawhinney
  Community pharmacists are independent commercial businesses: it is for them to determine their development strategies. Through our proposals, the Government will ensure that patients continue to enjoy reasonable access to a local pharmacy.

  NHS Employees
  Mr. Milburn
  To ask the Secretary of State for Health what was the average annual cost of employing(a) a senior manager, (b) a consultant, (c) a senior house officer, (d) a qualified nurse, (e) an ambulance driver, (f) a porter, (g) a medical laboratory, scientific officer and (h) a cleaner in the NHS in each year since 1986–87 at (i) cash prices and (ii) 1986–87 prices.

  Dr. Mawhinney
  The information requested is not readily available. The figures shown in the tables are estimated by combining information from national health service annual accounts and from medical and non-medical censuses.

  Dr. Mawhinney
  The information available is shown in the table. More comprehensive information about national health service manpower is published in the "Statistical Bulletin on NHS hospital and community health services non-medical staff in England: 1981–1991"
  183
  and associated press release—H93/626 NHS Non-Medical Workforce Statistics—dated 12 March 1993, copies of which are available in the Library.

  National health service workforce by staff group

  Whole-time equivalents

  1988 compared with 1987

  1989 compared with 1988

  1990 compared with 1989

  1991 compared with 1990

  1991 compared with 1987

  Main staff groups

  1987

  1988

  Number

  Per cent.

  1989

  Number

  Per cent.

  1990

  Number

  Per cent.

  1991

  Number

  Per cent.

  Number

  Per cent.

  Nursing and midwifery staff

  397,910

  397,650

  -260

  -0·1

  398,050

  400

  0·1

  395,360

  -2,690

  -0–7

  392,200

  -3,160

  -0·8

  -5,710

  -1·4

  Professions allied to medicine

  34,940

  35,640

  700

  2·0

  36,710

  1,070

  3·0

  37,300

  590

  1·6

  37,960

  660

  1·8

  3,020

  8·6

  Scientific and professional

  10,860

  11,600

  740

  6·8

  12,080

  480

  4·1

  12,690

  610

  5·0

  13,530

  840

  6·6

  2,670

  24·6

  Other professional and technical

  33,170

  32,530

  -640

  -1·9

  32,370

  -160

  -0·5

  33,990

  1,620

  5·0

  35,390

  1,400

  4·1

  2,220

  6·7

  Medical and dental

  41,570

  42,840

  1,270

  3·1

  44,090

  1,250

  2·9

  45,390

  1,300

  2·9

  46,530

  1,140

  2·5

  4·960

  11·9

  Ancillary

  115,060

  107,620

  -7,440

  -6·5

  102,360

  -5,260

  -4·9

  95,690

  -6,670

  -6·5

  85,890

  -9,800

  -10·2

  -29,170

  -25·4

  Administrative and clerical

  113,900

  114,720

  820

  0·7

  116,840

  2,120

  1·8

  120,040

  3,200

  2·7

  127,370

  7,330

  6·1

  13,470

  11·8

  General and senior managers

  700

  1,240

  540

  77·1

  4,610

  3,370

  271·8

  9,680

  5,070

  110·0

  13·340

  3,660

  37·6

  12,640

  1,805·7

  Maintenance

  18,470

  17,330

  -1,140

  -6·2

  16,540

  -790

  -4·6

  16,020

  -520

  -3·1

  15,120

  -900

  -5·6

  -3·350

  -18·1

  Works

  5,710

  5,320

  -390

  -6·8

  4,640

  -680

  -12·8

  3,900

  -740

  -15·9

  3,230

  -670

  -17·2

  -2,480

  -43·4

  Ambulance (including officers)

  19,010

  18,760

  -250

  -1·3

  18,860

  100

  0·5

  18,130

  -730

  -3·9

  18,190

  60

  0·3

  -820

  -4·3

  Source: NHS Workforce in England/KM49 Census.

  Notes:

  All figures are rounded to the nearest 10.

  Information for 30 September 1992 is not yet available.

  The table reflects some redesignation between staff groups.

  Project 2000 trainees are not included in the above nursing and midwifery figures.

  Medical and dental staff figures exclude locums.

  Nursing and midwifery figures exclude agency staff.

  The increase in managers can largely be explained by a phased introduction of a general and senior manager class which includes many people previously classed under clinical, professional and administrative headings. For example, many senior nurses are now counted as senior managers. Management in the NHS still only represents 1·7 per cent. of the total NHS work force and 3 per cent. of all pay expenditure.

  Project 2000 nurse training was introduced in 1989 and will eventually become the only form of general qualified nurse training. At September 1990 there were about 3,000 Project 2000 students; at September 1991 there were 10,500. There were corresponding falls in the number of traditional student nurses. Project 2000 students are considered to be supernumerary and are not included in work force statistics.

  The general and senior managers category was introduced in phases from 1984 following the Griffiths report of 1983, which identified a severe shortage of managers in the NHS. The first phase was the appointment of a general manager in each health authority and hospital and community health service—HCHS—unit. In 1987, the first senior managers were appointed—up to seven posts at board level in each health authority. In 1989, the senior manager class was extended to staff below board level, and to those in family health services authorities and HCHS units. Virtually all general and senior management posts created up to 1989 replaced posts formerly counted within the administrative and clerical and other staff groups. In 1990 and 1991, transfers of staff into the senior manager category from other staff groups continued. New funds were provided as a planned strengthening of the personnel, information and finance functions in preparation for the NHS reforms.
  184

  Schizophrenia
  Mr. Barnes
  To ask the Secretary of State for Health if she will list all Government-funded research into the causes of schizophrenia, giving the amount of funding in each case; and if she will make a statement.

  Mr. Bowis
  In 1993–94, the Department is committed to fund projects on schizophrenia costing around £290,000. These projects concern detecting early signs of relapse, the long-term outcome of psychosis in Afro-Caribbean patients and a prospective study of psychoses in British Afro-Caribbean people.

  The Medical Research Council, which receives its grant in aid from the office of my right hon. Friend the Chancellor of the Duchy of Lancaster, has funded research directly related to schizophrenia to a value of £1·6 million in 1991–92, the latest figures available, and an additional £678,000 was for general mental illness research relevant to schizophrenia.

  Nurses and Midwives
  Mr. Sims
  To ask the Secretary of State for Health if she will publish details of the whole-time equivalent numbers of(a) agency and (b) bank nursing and midwifery staff employed in the NHS for each year from 1987 to 1992.

  Mr. Sackville
  The information is shown in the table.

  Bank

  Agency

  1987

  4,920

  6,130

  1988

  5,830

  6,240

  1989

  5,910

  7,230

  1990

  6,230

  6,710

  1991

  8,540

  3,930

  185
  Note: Figures are rounded to the nearest 10 whole-time equivalent.

  Mr. Sims
  To ask the Secretary of State for Health if she will publish details of the numbers of qualified NHS nurses and midwives, unqualified NHS nursing staff and nursing learners representing these as a percentage of the total

  National Health Service Nursing and Midwifery Staff (excluding agency) at 30 September, England (whole-time equivalents)

  1989

  1990

  1991

  Whole time equivalent

  Percentage of total

  Whole time equivalent

  Percentage of total

  Whole lime equivalent

  Percentage of total

  Total Nursing and Midwifery

  398,050

  100·0

  398,360

  100·0

  402,700

  100·0

  Qualified

  242,190

  60·8

  242,340

  60·8

  243,250

  60·4

  Unqualified

  90,880

  22·8

  90,450

  22·7

  90,550

  22·5

  Traditional Learners

  63,310

  15·9

  58,840

  14·8

  47,340

  11·8

  Project 2000

  —

  0·0

  3,000

  0·8

  10,500

  2·6

  Unknown

  1,680

  0·4

  3,730

  0·9

  11,050

  2·7

  Note:

  Figures are independently rounded to the nearest 10 whole-time equivalent.

  Occupational Therapists
  Ms Lynne
  To ask the Secretary of State for Health how many occupational therapists were employed within each district health authority in each of the last 10 years.

  Dr. Mawhinney
  [holding answer 10 June 1993]: This information will be placed in the Library. The figures show a steady increase over the 10-year period, and in some regions the number has more than doubled.

  PM 10
  Ms Short
  To ask the Secretary of State for Health, pursuant to her answer of 7 June,Official Report, columns 43–44, whether levels of PM10 particulate found in the United Kingdom are within the range of those found in United States studies demonstrating an association between PM10 levels and mortality; and what assessment she has made of whether the speciation of PM10 is comparable between the two countries.

  Mr. Yeo
  I have been asked to reply.

  Of the studies referred to in the reply to the answer of 7 June, the study in the Utah valley was the only one concerned with PM10 particulate pollution. The concentrations of PM10 measured in that study were, overall, higher than those measured to date in the United Kingdom. The mean PM10 value in the Utah valley study was 47 µg/m3 while the means in the six United Kingdom cities in 1992 for which data are available ranged from 22–31 µg/m3. The highest daily value measured in the Utah valley study was 355 µg/m3, while the corresponding United Kingdom values ranged from 72–228 µg/m3.

HOUSE OF COMMONS

  Environmental Health Inspections
  Ms Walley
  To ask the Chairman of the Catering Committee on what dates environmental health officers inspected food preparation and eating areas relating to(a) Westminster Hall Cafeteria, (b) the Strangers' Cafeteria, (c) the Members' Cafeteria, (d) the Members' Tea Room, (e) the Strangers' Dining Room, (f) the Members' Dining Room and (g) the Pugin Room in each of the last four
  186
  NHS nursing and midwifery staff, including Project 2000 Students for the years (a) 1989, (b) 1990, (c) 1991 and (d)

  Mr. Sackville: Figures for 1992 are not yet available. The latest available figures are shown in the table.

  years; what recommendations were made; what action was taken; and what is his estimate of the risk to health from mice.

  Mr. Colin Shepherd
  The health, safety and hygiene needs of the Refreshment Department's kitchens and catering outlets are major elements in the Catering Committee's current inquiry into refreshment services for the House of Commons. I shall ask the Director of Catering Services to write to the hon. Member in reply to the points of administrative detail raised in her question.

  No. 1 Parliament Street
  Mr. Cox
  To ask the Chairman of the Accommodation and Works Committee (1) what contracts are still outstanding for ongoing maintenance at No. I Parliament street with building contractors who were involved in the modernisation of this building; and to what extent they are still liable for the responsibility of repairing defects which now exist within this building;

  (2) if he will list the defects which have been reported and repaired at No. 1 Parliament street since January;

  (3)if he will make a statement on the reasons for the defects in the cooling and ventilation systems at No. 1 Parliament street; when this system will be working correctly; what action is being taken to disperse cooking smells in the building; and if he will make a statement.

  Mr. Ray Powell
  The main contractor's liability period for engineering defects expired in March 1992, but the company is still carrying out residual work on the circle lock doors and the cooling system which have failed to meet the required standards. No other major defects have been reported or identified although, of course, day-to-day maintenance is undertaken within the building to cover minor items which naturally arise.

  There have been few complaints about cooking smells in the building. The capacity and performance of the cooling system will be improved following work to balance the distribution of the output and improve water filters and valves. This work is expected to be completed in July. In addition, the Director of Works is investigating whether the ventilation system is working to full efficiency.
  187

  Parliamentary Estate
  Ms Abbott
  To ask the Chairman of the Accommodation and Works Committee what is the size of the parliamentary estate; and how many(a) rooms and (b) bars and restaurants there are in that part for which this House is responsible.

  Mr. Ray Powell
  The Parliamentary Estate of both Houses comprises some 116,000 m2 of which 87,000 m2 is occupied by this House. Within that part of the Palace and its precincts under the control of the House, there are 1,206 offices and 36 Committee or meeting rooms. It is not possible to provide any meaningful estimate of the total number of rooms; they do, however, contain 14 restaurants or cafeteria and nine bars.

OVERSEAS DEVELOPMENT

  Somalia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has as to the numbers and locations of Somalis in refugee camps; and what progress has been made in assisting them to return to their homes.

  Mr. Lennox-Boyd
  Kenya has hosted some 330,000 Somali refugees, mainly in the east of the country. There are 90,000 including some Ethiopians in Djibouti, with a further 62,000 Somalis in Yemen and 150,000 in Saudi Arabia.

  Latest information suggests that up to 150,000 out of a total of 430,000 refugees have now spontaneously returned from Ethiopia to northern Somalia. Some 30,000 Somalis have also been voluntarily repatriated from Kenya, and another 90,000 from Kenya have so far registered with UNHCR for voluntary repatriation as soon as possible.

  UNHCR is preparing a regional repatriation plan for several hundred thousand Somali refugees to return from Kenya, Ethiopia, Yemen and Djibouti.

  European Bank for Reconstruction and Development
  Mr. Nigel Jones
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to ensure that the report by the Audit Committee of the European bank for reconstruction and development on financial management is published.

  Mr. Lennox-Boyd
  The audit committee of directors of the European bank for reconstruction and development plans to report to the board of directors on July 15. We expect the committee's findings to be made public but this will be a decision for the board as a whole.

ENVIRONMENT

  Criminal Offences
  Sir Richard Body
  To ask the Secretary of State for the Environment what criminal offences have been created by his Department by way of delegated legislation in the last five years.

  Mr. Gummer
  This information can be given only at disproportionate cost.
  188

  MINIS 14 Documents
  Mr. Llew Smith
  To ask the Secretary of State for the Environment, pursuant to his answer to the hon. Member for Harlow (Mr. Hayes) of II June,Official Report, column 358, how many copies of his Department's MINIS 14 documents have been printed; at what cost; and to whom he is circulating them.

  Mr. Gummer
  MINIS 14 is printed in eight parts. The number of copies printed for each part is:

  Number

  Part 1: Local Government Group

  90

  Part 2: Housing and Urban Group

  90

  Part 3: Planning, Rural Affairs and Water Group

  90

  Part 4: Environmental Protection Group

  90

  Part 5: Principal Establishments and Finance Officer's Command

  90

  Part 6: Construction Directorate

  85

  Part 7: Regional Offices

  85

  Part 8: Legal Command; Information Directorate and Private Secretaries' Office

  90

  The cost of printing MINIS 14 was £4,496; full sets of MINIS 14 were circulated to the House of Commons Library, the House of Lords Library, the Annex Library, the Environment Select Committee, the National Audit Office, HM Treasury, the DOE trade union side, the Treasury and Civil Service Committee, the DOE libraries, DOE Ministers, the DOE permanent secretary and DOE deputy secretaries. DOE directors are given copies of their own return. Copies of MINIS 14 are available for sale.

  Waste Recycling
  Mr. Hall
  To ask the Secretary of State for the Environment what plans the Government have to increase the waste recycling target to above 25 per cent. by the year 2000.

  Mr. Yeo
  We have no such plans at present.

  Mr. Thomason
  To ask the Secretary of State for the Environment if he will include energy recovered from waste incineration in his Department's waste recycling targets.

  Mr. Yeo
  The Government consider that recovering energy from waste is a legitimate means of recycling. Our current target, to recycle half of all household waste which can be recycled, relates to materials recycling and composting. However, we have said that we will re-examine the idea of setting targets for energy recovery from waste among other ways of encouraging the greater use of this option. I am currently exploring this issue with colleagues at the Department of Trade and Industry.

  Mr. Hall
  To ask the Secretary of State for the Environment what recent assessment he has made as to the feasibility of achieving the target of recycling 25 per cent. of all domestic waste by the year 2000; what steps his Department is making to encourage the reaching of this target; and if he will make a statement.

  Mr. Yeo
  The Government have funded research on a number of the factors which affect the feasibility of recycling 25 per cent. of household waste by the year 2000, including: the costs and benefits of different collection methods; technical and market barriers; and the economic framework for recycling.
  189
  Having considered those research results which are already available, we remain committed to our target. The main measures which we are taking to encourage recycling are set out in "This Common Inheritance, The Second Year Report" (Cm 2068). In particular:

  —we have allocated £15 million in supplementary credit approvals to local authorities to encourage provision of facilities for recycling in 1993–94;

  —we have announced our intention to increase recycling credits from 1 April 1994, so that they reflect the full economic costs of disposal;

  —we are holding discussions with a range of industries, with a view to establishing how they might contribute to the achievement of the 25 per cent. target.

  Municipal Waste Disposal
  Mr. Thomason
  To ask the Secretary of State for the Environment what encouragement he is giving to alternative methods of municipal waste disposal, other than landfill.

  Mr. Yeo
  The Government's policy is to set in place the necessary regulatory and economic framework to ensure that waste disposal operations do not lead to pollution of the environment or harm to human health. Within this framework, the Government believe that the market should generally decide the disposal option for particular waste types.

  The Royal Commission on environmental pollution recently recommended the introduction of a levy on waste going to landfill to reflect the full environmental cost of this form of waste disposal. We are currently considering this recommendation, along with other proposals for changing the economic framework for waste disposal.

  The Government are keen to promote the development of schemes which derive energy from waste. The non-fossil fuel obligation provides the initial stimulus for such schemes. We also have programmes of work under way to improve composting techniques and to investigate markets for composts.

  Toxic Wastes
  Mr. Callaghan
  To ask the Secretary of State for the Environment what representations he has received in recent months concerning the import and incineration of toxic wastes.

  Mr. Yeo
  I refer the hon. Member to the answer the then Secretary of State for the Environment gave on 28 April,Official Report, columns 949–50, to the hon. Member for Newport, East (Mr. Hughes).

  Mr. Callaghan
  To ask the Secretary of State for the Environment if he will launch a comprehensive assessment on the state of toxic tips in the United Kingdom and their effect on groundwater supplies.

  Mr. Yeo
  A research study has been initiated to review the extent and type of groundwater contamination associated with the landfilling of controlled wastes. The work aims to provide information about the significance of any identified groundwater contamination, when compared with background levels and with other sources of contamination, and in relation to drinking water standards. The project is expected to be completed in 1995–96.
  190

  Redundant Farm Buildings
  Dr. Strang
  To ask the Secretary of State for the environment what grant aid is available for the purpose of restoring redundant farm houses and associated buildings in order that they may again form the basis of an active farming unit.

  Sir George Young
  There are no grants specifically for this purpose. However, under the Local Government and Housing Act 1989, renovation grants may be available in appropriate cases for repairs and improvements to farm houses and other buildings that have planning consent for conversion to residential use.

  Unleaded Petrol
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what progress his Department has made in meeting its target to provide a monthly analysis of uptake of unleaded petrol.

  Mr. Yeo
  A monthly analysis of the uptake of unleaded petrol is published by the Department of Trade and Industry in its "Advance Energy Statistics" press notice, issued on the first Wednesday of each month.

  United Nations Environment Programme
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what progress has been made in Her Majesty's Government's policy to work to improve the financial, managerial and administrative activities of the United Nations Environment Programme.

  Mr. Yeo
  Our policy remains unchanged. We are major contributors to the United Nations Environment Programme, and we support the efforts the new executive director is making to improve the programme's efficiency and effectiveness.

  Water Services
  Mr. Booth
  To ask the Secretary of State for the Environment whether he has received the report of the Director General of Water Services for 1992.

  Mr. Yeo
  I am pleased to announce that the director general has prepared his report of 1992 and copies have been placed in the Library of the House.

  Condensation
  Mr. Tipping
  To ask the Secretary of State for the Environmment what work the Building Research Establishment has carried out on the effect on people's health of condensation in the home.

  Sir George Young
  [holding answer 10 June 1993]: It is not normally suggested that condensation has a direct effect on physical health. The potential health consequences of condensation relate to its role in permitting the growth of fungi and mites. Airborne fragments of fungi and mites can give rise to respiratory or skin reactions, particularly in sensitive individuals.

  The Building Research Establishment executive agency (BRE) is and has long been involved in a range of research which will elucidate the prevalence of condensation, fungi and mites in the home, and the likely health effects of these

  191
  levels. A list of the major publications resulting from the work attached. BRE publications are available from the BRE bookshop (Tel. 0923 664444).

  Severn Estuary Special Protection Area
  Mr. Morgan
  To ask the Secretary of State for the Environment when he proposes to designate the middle Severn estuary proposed special protection area for nature conservation and register it with the European Commission.

  Mr. Yeo
  [holding answer 22 June 1993 ]: The Severn estuary is one of a programme of sites on which the Department is currently working to complete the network of special protection areas (SPAs) in the United Kingdom. SPA designation has significant long-term implications for both nature conservation and land use planning. Detailed consultations are essential to ensure that any conflicts of interest are closely examined, together with the scientific evidence, before a site is designated. I am unable to say when a decision about the Severn will be taken. The Government have designated 72 special protection areas, 23 in the past 12 months.

  Chlorofluorocarbons
  Mr. Salmond
  To ask the Secretary of State for the Environment if he will publish details of EC grants available to those required to replace CFC-dependent machinery; if the Government will facilitate the release of EC grants by matching them with United Kingdom funds; and if he will make a statement.

  Mr. McLoughlin
  I have been asked to reply.

  There are no EC grants available for those required to replace CFC-dependent machinery. Under the current EC framework governing state aid, member states are, however, permitted to provide grants, within specified limits, to support investments designed to protect the environment.

  Over the past three years, the United Kingdom has committed some £12 million of investment support to the development and demonstration of innovative environmental technologies through two schemes, the joint DTI/DOE environmental technology innovation scheme and the DTI's environmental management options scheme. International environmental research and development is also supported through the EUREKA Euroenviron programme.

  The Government are now considering how best to take forward then support for environmental technologies, but grants solely to subsidise compliance with minimum legal environmental standards would be contrary to the polluter-pays principle.

DEFENCE

  Z-berths, Swansea
  Mr. Llew Smith
  To ask the Secretary of State for Defence if he will place in the Library a copy of the nuclear safety scheme drawn up in association with the designation of Swansea as a Z-berth for nuclear submarines.

  Mr. Hanley
  The document has not yet been completed as work is continuing on the development of a suitable public safety scheme for the Swansea Z-berth.
  192

  Iraq
  Mr. Llew Smith
  To ask the Secretary of State for Defence, pursuant to his answer on 10 June,Official Report, column 340, if he will make it his policy to seek further information from the United States Administration about the CIA report on Iraq's military capabilities.

  Mr. Hanley
  Yes.

  Nuclear Tests
  Mr. Peter Shore
  To ask the Secretary of State for Defence how many nuclear tests were conducted by the United Kingdom, France, China, the United States of America and the Soviet Union/Russia in each year since 1985.

  Mr. Aitken
  The United Kingdom has carried out the following numbers of nuclear tests since 1985:

  Year

  Number

  1985

  1

  1986

  1

  1987

  1

  1988

  0

  1989

  1

  1990

  1

  1991

  1

  1992

  0

  Nuclear tests carried out by other countries in these

  Admiralty Compass Observatory
  Mr. Chris Smith
  To ask the Secretary of State for Defence what information he has about the radioactive contamination at Admiralty Compass Observatory in Slough; and if he will make a statement.

  Mr. Aitken
  Following a preliminary radiological monitoring survey carried out by Ministry of Defence staff at the Defence Research Agency site at Ditton Park, Slough, formerly known as the Admiralty Compass Observatory, very low levels of radium-226 contamination have been found within and adjacent to a former luminising workshop used in the manufacture of compasses from about 1940 to the mid 1950s. There is no access by members of the public to the building. The contamination external to the building is held within the soil structure and poses no hazard to members of the public. Further monitoring will be undertaken in the near future to establish more fully the extent of the contamination and to determine what remedial action is required.

  Her Majesty's inspectorate of pollution, Slough borough council, and the royal borough of Windsor and Maidenhead council have been kept informed of the situation.

  Courts Martial
  Mr. Cox
  To ask the Secretary of State for Defence how many service personnel were court-martialled in each of the last three years in(a) the Royal Navy, (b) the Royal Air Force and (c) the Army and the number of service personnel from each of these services discharged from the services as a result of their court martial.
  193
  Mr. Hanley
  The number of service personnel convicted by court martial, and the number consequently dismissed in the most recent years for which figures are available, are as follows:

  Royal Navy

  Army

  Royal Air Force

  1991

  Number of offenders

  38

  704

  129

  Offenders dismissed

  21

  281

  32

  1990

  Number of offenders

  31

  816

  140

  Offenders dismissed

  7

  322

  29

  1989

  Number of offenders

  52

  726

  120

  Offenders dismissed

  16

  270

  40

  Joint Forces Headquarters
  Mr. Campbell-Savours
  To ask the Secretary of State for Defence what review was carried out into the operation of the Joint Forces Headquarters in the light of Operation Granby; and what were its main conclusions.

  Mr. Hanley
  The operation of the joint forces headquarters—JFHQ—during Operation Granby was reviewed during the assessment of lessons from the operation. The concept of establishing for major operations a tri-service, in-theatre operational headquarters, and its relationship with the joint headquarters and Ministry of Defence in the United Kingdom, were endorsed. Other lessons included the importance during peacetime of the effective training and exercising of the joint forces operational staff who form the core of the JFHQ, and the need for early deployment of the JFHQ should it become apparent that an operation would require the substantial involvement of more than one of the three services.

  RAF Leuchars
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence what is the intended future use of the facilities recently vacated by 22 squadron search and rescue at RAF Leuchars.

  Mr. Hanley
  Further to the answer my right hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) gave to the hon. Member for Carlisle (Mr. Martlew) on 28 April,Official Report, column 406, I can now confirm that the Aberdeen, Dundee and St. Andrews university air squadron has now relocated within the vacated SAR facility.

  Yugoslavia
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many reservists, of what rank, and in what roles are serving in(a) the Croatia theatre and (b) the Bosnia theatre in support of the British contribution to UNPROFOR.

  Mr. Hanley
  There is one member of the reserve forces serving in Croatia, a lieutenant commander of the Royal Naval Reserve public affairs branch; there are none serving in Bosnia.

  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many men and of what rank from(a) the
  194
  Argyll and Sutherland Highlanders, (b) the Gordon Highlanders and (c) the Queen's Lancashire Regiment are currently serving with the Prince of Wales Own (Yorkshire) Regiment in Bosnia.

  Mr. Hanley
  The information is as follows:

  Rank

  Number

  (a) The Argyll and Sutherland

  Highlanders

  Lieutenant

  1

  Sergeant

  1

  Corporal

  4

  Lance

  Corporal

  11

  Private

  18

  (b) The Gordon Highlanders

  Captain

  1

  Lieutenant

  1

  Sergeant

  1

  Corporal

  2

  Lance

  Corporal

  7

  Private

  25

  (c) The Queen's Lancashire Regiment

  Lieutenant

  1

  Sergeant

  1

  Corporal

  0

  Lance

  Corporal

  10

  Private

  24

  Mr. Elletson
  To ask the Secretary of State for Defence what reports he has received from British forces of fighting between Croat and Muslim forces near the British Army base in' Vitez on 16 June; and what representations he intends to make to Croat and Muslim authorities.

  Mr. Hanley
  The security situation around the British forces base at Vitez is closely monitored by troops on the ground there. On 16 June there was fighting between the Croats and Muslims in the Lasva valley near Vitez. No representations were made to the Croat or Muslim authorities.

  Uranium Shells
  Mr. Flynn
  To ask the Secretary of State for Defence what information he has received from the United States Government as to the danger to service men posed by the inhalation or ingestion of uranium dust from uranium tipped shells used during the Gulf conflict.

  Mr. Hanley
  My Department has received no specific formal information from the United States Government regarding the dangers to service men serving in the Gulf resulting from the use of shells tipped with depleted uranium—DU. A comprehensive health evaluation was undertaken prior to the introduction into service of DU tipped shells and the possible risks arising from the inhalation or ingestion of DU dust after impact are well understood. British forces, including those deployed to the Gulf, are issued with prior advice on how to avoid any risk association with the use of DU shells.
  195

NATIONAL FINANCE

  Market Testing
  Ms Mowlam
  To ask the Chancellor of the Exchequer if he will list all the market tests that have taken place in his Departments since November 1992 and indicate, in each case, whether the result was the maintenance of in-house provision, or whether the service was contracted-out.

  Mr. Nelson
  The information requested is as follows. It covers new market testing only and does not include the retesting of services which are already contracted-out. It also excludes market tests currently in progress but not yet completed.

  Result

  Inland Revenue

  Bulk Mailing (Employers' Annual Pack)

  Contracted-out

  Catering (Telford)

  Contracted-out

  Customs and Excise

  London HQ typing services

  Retained in-house

  Southend HQ typing services

  Retained in-house

  Regional Executive Units typing services

  Retained in-house

  London HQ messenger services

  Retained in-house

  Internal Audit

  Retained in-house

  Vehicle fleet management

  Part retained in-house, part contracted-out

  Department for National Savings

  Catering Services

  The market test covered four units with a combination of in-house and contracted-out services. The service was retained in-house at one location, the existing external supplier selected at two others, and a fresh external supplier selected at the fourth

  Interest Rates
  Mr. Callaghan
  To ask the Chancellor of the Exchequer what recent representations he has received about interest rates and their effect on the economy.

  Mr. Nelson
  A number of such representations have been received.

  Mortgage Arrears
  Mr. Callaghan
  To ask the Chancellor of the Exchequer what is his latest estimate of the number of home owners with mortgage arrears.

  Mr. Nelson
  The Government do not make estimates of the number of home owners with mortgage arrears. The latest figures from the Council of Mortgage Lenders—CML—which relate to the position at the end of 1992, are as follows:

  Total

  Percentage of total mortgages

  Arrears 6–12 months

  205,010

  2·07

  Arrears over 12 months

  147,040

  1·48

  The next CM L arrears figures will be published at the end of July.
  196

  European Bank for Reconstruction and Development
  Dr. Hampson
  To ask the Chancellor of the Exchequer if he will ensure that the views of the central and eastern European shareholders in the European bank for reconstruction and development are taken fully into account alongside those of the G7 shareholders in determining how the bank should be run and in determining any future changes; and if he will make a statement.

  Mr. Nelson
  The EBRD's board of directors represents all the bank's shareholders. The central and east European shareholders can express their views about the organisation of the bank through their representatives on the board of directors.

  Waste Packaging
  Mr. Robathan
  To ask the Chancellor of the Exchequer if he will introduce economic incentives to encourage the increased reclamation and recycling of waste packaging by industry.

  Sir John Cope
  The Government recognise the importance of increased reclamation and recycling of waste packaging. They are currently considering two consultants' reports which they commissioned, "Economic Instruments and Recovery of Resources from Waste" by Environmental Resources Ltd. and "Landfill Costs and Prices: Correcting Possible Market Distortions" by Coopers and Lybrand, and responses by local government, industry and interested individuals. The reports and the responses will help to inform the Government's consideration of whether economic instruments might be used to stimulate higher recovery and recycling rates for waste, including packaging waste.

  Balance of Payments
  Mr. Spellar
  To ask the Chancellor of the Exchequer if he will make a statement on the latest position of Britain's balance of payments.

  Mr. Portillo
  I refer the hon. Member to the reply given to the hon. Member for Birmingham, Northfield (Mr. Burden) on 17 June, at columns 977–78.

  Confidential Information (Disposal)
  Dr. Liam Fox
  To ask the Chancellor of the Exchequer what monitoring has been carried out of the disposal of confidential information collected under the Financial Services Act 1986.

  Mr. Nelson
  Confidential information collected under the Financial Services Act is likely to be information the disclosure of which is restricted under the provisions of sections 179 and 180 of the Act. Each Government Department or regulator which obtains such information is responsible for meeting its confidentiality obligations in relation to the information.

  Public Ownership
  Mr. Bernie Grant
  To ask the Chancellor of the Exchequer what was the net return to the Exchequer at 1993 prices in their last full year in public ownership of British Gas, British Telecom, the British National Oil Corporation, Enterprise Oil, and each of the nationalised electricity generating and distribution undertakings.
  197
  Mr. Dorrell
  The net return to the Exchequer, defined as the negative external financing requirement in each case, at 1993–94 prices was as follows:

  £ million

  British Gas (1986–87)

  1,020

  British Telecom (1984–85)

  553

  Enterprise Oil (1984–85)

  32

  British National Oil Corporation had a positive external financing requirement of £48 million in its last year in public ownership—1985–86—in 1993–94 prices.

  Comparable figures for the individual electricity companies are not available.

NATIONAL HERITAGE

  National Lottery
  Mr. Simpson
  To ask the Secretary of State for National Heritage what part the regional arts boards and regional sports councils will play in the allocation of funds from the national lottery; and what steps are being taken to ensure an equitable distribution across the country.

  Mr. Brooke
  The role of the regional arts boards and of the regional offices of the Sports Council will be for the distributing bodies themselves to decide. In reporting on the use to which they have put lottery funds, distributors will be expected to show a reasonable and appropriate response to applications throughout the areas they cover.

  Mr. Pendry
  To ask the Secretary of State for National Heritage if he will publish the written guidance issued to the chief officers of the National Heritage Memorial Fund, the Arts Council or the Sport Council concerning the distribution of proceeds from the national lottery.

  Mr. Sproat
  No such guidance has been issued.

  Mr. Pendry
  To ask the Secretary of State for National Heritage if projects eligible for Government funding will also be eligible for funding under the proposed national lottery.

  Mr. Sproat
  My right hon. Friend will have powers under clause 24 of the National Lottery etc. Bill to direct the matters to be taken into account by the distributive bodies in exercising their functions under the Bill. My right hon. Friend is not minded to use those powers to direct that projects eligible for Government funding should not be eligible for national lottery funding. It will be for the distributive bodies to determine their own policy in this matter.

FOREIGN AND COMMONWEALTH AFFAIRS

  Yugoslavia
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what plans he has to raise the threat of military action by Croatian armed forces against the Serbs of Krajina with European Foreign Ministers with a view to planning a swift and common response in the event of such aggression;

  (2) further to his answer of 19 May to the hon. Member for Westbury (Mr. Faber), Official Report, column 165,
  198
  what diplomatic and economic measures against the republic of Croatia are under consideration in the event of continuing Croat aggression in Bosnia-Herzegovina or Krajina; and if he will make a statement;

  (3) what representations have been made to General Tudjman regarding the threat of military action by his forces against Serbs in Croatia; and if he will make a statement.

  Mr. Goodlad
  The conflict in Croatia has been discussed on several occasions by EC Foreign Ministers. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs sent a message to President Tudjman on 15 June expressing our concern that the Croatian Government should not resort to force in order to resolve the situation in the Krajinas, which the international community recognises as Croatian sovereign territory. We welcome a similar message sent on the same day by Chancellor Kohl of Germany.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what assessment he has made of whether the explosion in the Bosnian town of Sifluk on 17 June was a deliberate or targeted assault against British personnel; and if he will make a statement;

  (2) If he will make a statement on the injury of United Kingdom citizens by a remote-controlled mine in the village of Sifluk, Bosnia-Herzegovina on 17 June; and if he will make representations to the Croatian authorities.

  Mr. Goodlad
  British Forces serving under UNPROFOR auspices in central Bosnia have reported this incident to the Ministry of Defence in London. Three people in a routine patrol were injured by a mine which exploded in a tree at a Bosnian Croat checkpoint near Vitez; one of those injured was a British journalist. There is no evidence to suggest that this was a premeditated attack by Bosnian Croat HVO forces. We condemn the deliberate targeting of any UN personnel. The safety of our troops is a prime concern and we shall continue to monitor the situation closely. It was announced on 10 June that we have made reinforcements available if necessary to protect British troops already in central Bosnia. We have made it clear to the Croatian Government that we expect them to use their influence with the Bosnian Croat forces to prevent such attacks.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the United States Secretary of State on the latter's assessment of the effect of the recognition by Germany of Croatia on the situation in the former Yugoslavia; and if he will convey Her Majesty's Government's opinion on this to the Government of Germany.

  Mr. Goodlad
  There have been no specific discussions between my right hon. Friend the Secretary of State and the United States Secretary of State on this matter. The decision to recognise Croatia was taken by the EC and its member states in the light of a report submitted by the International Conference Arbitration Commission.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to oppose, in the United Nations Security Council, moves to call a meeting of the United Nations General Assembly with the purpose of rejecting the latest proposals made by Bosnian-Serbs and Bosnian-Croats for the future
  199
  Government of their country; and if a policy of self-determination by majority consensus will be applied to all former Yugoslav republics.

  Mr. Goodlad
  We are unaware of any moves in the United Nations to call such a meeting of the General Assembly. The Copenhagen European Council in its declaration of 22 June reaffirmed its conviction that a negotiated settlement in Bosnia has to be based on the principles of the London conference.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what report he has received from the co-chairman of the conference on the former Yugoslavia of progress made during talks in Geneva on 16 and 17 June; and if he will make a statement.

  Mr. Goodlad
  The right hon. and noble Lord Owen briefed European Community Foreign Ministers on 20 June on the eve of the Copenhagen European Council on 21 and 22 June. He outlined proposals on Bosnia put forward by Presidents Milosevic and Tudjman on 16 June at talks between the parties in Geneva and President Izetbegovic's reaction, and reported that a further round of talks would take place in Geneva on 23 June.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to discuss with the United States Administration issues raised during the meeting of the conference on the former Yugoslavia in Geneva on 16 and 17 June.

  Mr. Goodlad
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs spoke to United States Secretary of State, Warren Christopher, on 18 and 20 June to brief him on European Community thinking on the conflict in Bosnia following the latest round of negotiations in Geneva on 16 June. We shall continue to maintain close contact on this question with the United States Administration.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Bosnian-Muslim leader, Alija Izetbegovic in respect of fighting in Kakanj between 13 and 16 June; and what is his estimate of the numbers of civilians who have been displaced by Bosnian-Muslim forces.

  Mr. Goodlad
  During his meeting with President Izetbegovic on 14 June, my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs expressed concern about reports of Muslim atrocities against Bosnian Croats in central Bosnia. Large numbers of civilians have been displaced by military action taken by all three parties in Bosnia; we have no reliable estimates of the numbers displaced by recent fighting in the Kakanj area.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs (1) what representations Her Majesty's Government have made to President Izetbegovic regarding targeting of civilians by Muslim forces active in Bosnia-Herzegovina;

  (2) if he will make a statement following his talks with President Izetbegovic on 14 June.

  Mr. Goodlad
  I refer my hon. Friend to the reply that I gave to the hon. Member for Liverpool, West Derby (Mr. Wareing) on 16 June, at column 642.
  200
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations he has made to the Secretary-General of the United Nations about the deployment of United Nations monitors along the border between the Federal Republic of Yugoslavia and Bosnia-Herzegovina.

  Mr. Goodlad
  On 11 June, the Security Council unanimously adopted resolution 838 which calls on the Secretary-General to submit a report on options for the deployment of international observers on the borders of Bosnia-Herzegovina. My right hon. Friend the Secretary of State has made no separate representations to the Secretary-General on this subject.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make it his policy to oppose the division of Bosnia-Herzegovina into three ethnic entities; and if he will make a statement.

  Mr. Goodlad
  In its declaration of 22 June, the Copenhagen European Council stated that it would encourage the co-chairmen of the international conference for the former Yugoslavia to promote a fair and viable settlement acceptable to all three constituent people of Bosnia-Herzegovina, and that it would not accept a territorial solution dictated by the Serbs and Croats at the expense of the Bosnian Muslims.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what positive steps the Government of Serbia have taken since the beginning of June to assist the international community to find a solution to the Bosnian civil war; and if he will make a statement.

  Mr. Goodlad
  During discussions in Geneva on 16 June, President Milosevic of Serbia, together with President Tudjman of Croatia, proposed new territorial arrangements within the existing borders of Bosnia-Herzegovina. A political settlement between the parties will require Bosnian Serb withdrawal from territories seized by force and we call on the Government of Serbia to press for this. The Copenhagen European Council stated in its declaration of 22 June that we would not accept a territorial solution dictated by the Serbs and Croats at the expense of the Bosnian Muslims.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs when he last discussed the possible use of air strikes against Bosnian Serb positions with the United States Administration.

  Mr. Goodlad
  We remain in close contact with the United States on the situation in Bosnia. Recent discussions on the use of air power, notably at the North Atlantic Council in Athens on 10 June, have focused on support for UNPROFOR in the performance of its overall mandate in Bosnia. Both we and the United States have offered aircraft for this purpose.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library a copy of the note Verbale S-24900-Add.27 of 16 March from the United Nations Secretary-General to the President of the Security Council.

  Mr. Goodlad
  Yes. A copy of the document will be sent to the library shortly.
  201
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representations Her Majesty's Government have received from(a) the Secretary-General of the United Nations and (b) the President of the Security Council about another meeting of the London conference; and if he will make a statement.

  Mr. Goodlad
  The United Nations Secretary-General has on a number of occasions, including in contacts with Her Majesty's Government, suggested that the international community should consider whether to convene the international conference for the former Yugoslavia. No proposals of this kind have been received from the President of the Security Council.

  Israel (Boycott)
  Mr. Batiste
  To ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his oral answer of 16 June to the hon. and learned Member for Burton (Sir I. Lawrence),Official Report, column 850, what information he has to confirm the reports that the Kuwaiti Government have abandoned the application of the boycott of Israel to third countries.

  Mr. Heathcoat-Amory
  The Kuwaiti authorities have told us that they are no longer applying the secondary and tertiary aspects of the boycott.

  Somalia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the authority structure of the United Nations effort in Somalia; what is the relationship between the political and military wings of the United Nations effort; and if he will publish the organisational plan for civil objectives.

  Mr. Heathcoat-Amory
  Admiral Howe is the United Nations Secretary-General's special representative in Somalia. He is the head of mission and has responsibility for all aspects of the United Nations operation there, reporting directly to the Secretary-General. The head of the military component of UNOSOM II is General Bir. There is close co-operation between the military and political wings.

  Copies of all the United. Nations Secretary-General's reports relating to the structure and objectives of the operation have been placed in the House Library.

  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will place a report in the Library on the diplomatic activities and performance of the UN since the unified task force (UNITAF) was deployed in Somalia.

  Mr. Heathcoat-Amory
  Copies of all the UN Secretary-General's reports on Somalia since the deployment of UNITAF have been placed in the House of Commons Library.

  Deportees (Sexual Offences)
  Miss Lestor
  To ask the Secretary of State for Foreign and Commonwealth Affairs what information he has on the number of United Kingdom nationals deported from other countries back to the United Kingdom as a result of convictions for sexual offences against children committed overseas.
  202
  Mr. Lennox-Boyd
  In the period I January 1991 to June 1993, the Foreign and Commonwealth Office was notified of 439 deportations, one of which, in 1991, followed a conviction for sexual offences against minors.

  Kuwait (Prisoners)
  Mr. Menzies Campbell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has made to the Iraqi Government for the safe return to Kuwait of the persons taken prisoner during the occupation of Kuwait by Iraq.

  Mr. Heathcoat-Amory
  We raised this question on 24 May at the regular review by the UN Security Council on sanctions against Iraq. We will continue to raise the question at each review of sanctions until Iraq fulfils all its obligations under UN Security Council resolutions 686 and 687 to co-operate with the International Committee of the Red Cross in its attempts to gather information on Kuwaiti and other nationals missing in Iraq.

  Serbia and Montenegro (Sanctions)
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans Her Majesty's Government have to review sanctions against Serbia and Montenegro.

  Mr. Heathcoat-Amory
  We continue to review the effectiveness of the UN sanctions against Serbia and Montenegro. Any change to these sanctions would be dependent on the prevailing political situation.

SCOTLAND

  Nursery Places
  Mr. Kirkwood
  To ask the Secretary of State for Scotland (1) what steps he has taken to provide specific resources to enable local education authorities to provide most nursery places in Scotland; and if he will make a statement;

  (2) whether he will now consider making the provision of nursery places a statutory duty of local authorities in Scotland.

  Lord James Douglas-Hamilton
  The Government have no plans to impose a statutory duty on education authorities to provide nursery education. In our view, local authorities are best able to decide the most appropriate level of nursery school provision in their areas taking into account local needs and circumstances. The Government provide local authorities with resources to fund education through the aggregate external finance settlement. Under these arrangements, local authorities have the opportunity to increase nursery education spending where they view this as a priority.

  Forestry Commission
  Mr. Morley
  To ask the Secretary of State for Scotland what is his current policy in respect of the sale of Forestry Commission assets.

  Sir Hector Monro
  [holding answer 22 June 19931: I refer the hon. Member to the answer given by my right hon. and learned Friend the Member for Edinburgh,

  203
  Pentlands (Mr. Rifkind), the then Secretary of State for Scotland, on 16 June 1989, Official Report, columns 544–45. This policy has not changed.

  Mr. Chris Smith
  To ask the Secretary of State for Scotland if he will list camp sites, nature trails, cabin sites, picnic areas and other recreational facilities provided by the Forestry Commission, on a country or regional basis.

  Sir Hector Monro
  The Forestry Commission is prepairing a list of its recreation facilities and I shall arrange for the hon. Member to receive a copy as soon as possible and for further copies to be placed in the Library.

  Trees
  Mr. Chris Smith
  To ask the Secretary of State for Scotland what is the acreage of tree cover per 1,000 head of population in the United Kingdom; and what comparative information he has for other European Community countries.

  Sir Hector Monro
  The areas of woodland, in hectares, per 1,000 head of population are as follows:

  Hectares

  United Kingdom

  40

  Belgium/Luxembourg

  90

  Denmark

  100

  France

  260

  Germany

  130

  Greece

  260

  Ireland

  100

  Italy

  120

  Netherlands

  20

  Portugal

  290

  Spain

  400

  EC Average

  170

  Nursery Places
  Mr. Kirkwood
  To ask the Secretary of State for Scotland if he will list the ratio of nursery places to population in each of the regional council and local authorities for the most recent years for which figures are available.

  Lord James Douglas-Hamilton
  The information requested is as follows:

  Education authority nursery pupils as a percentage of the total population in each education authority area: September 1992.

  Education Authority

  Number of pupils as a percentage of total population1

  Scotland

  0·9

  Borders

  0·5

  Central

  1·0

  Dumfries and Galloway

  0·8

  Fife

  1·3

  Grampian

  0·9

  Highland

  0·4

  Lothian

  1·2

  Strathclyde

  0·8

  Tayside

  0·9

  Orkney

  1·0

  Shetland

  1·2

  Western Isles

  —

  Strathclyde Divisions:

  204

  Education Authority

  Number of pupils as a percentage of total population1

  Argyll and Bute

  —

  Ayr

  0·7

  Dunbarton

  0·6

  Glasgow

  1·3

  Lanark

  0·5

  Renfrew

  0·8

  1 The most recently available.

  Local Government (Mileage Rates)
  Mr. Kirkwood
  To ask the Secretary of State for Scotland if he will publish the value of the mileage rates for each engine capacity payable to local government representatives; and when the rates were originally set, together with the value these represent at current prices.

  Mr. Stewart
  The information is shown in pence per mile in the following table:

  Up to 999cc

  l000cc-1199cc

  Over 1199cc

  Rate at 6 February 1970 (last change to travel and subsistence regulations)

  4·7

  5·3

  5·9

  Rate at 6 February 1970 uprated by GDP deflator to 1 January 1993

  32·6

  40·2

  44·7

  Current rates from 1 January 1993

  22·0

  23·9

  26·6

  Hospitals (Promotion and Publicity)
  Mr. Galbraith
  To ask the Secretary of State for Scotland what plans he has to give guidance to health boards and trusts concerning the promotion and publicity of medical treatment within their hospitals.

  Mr. Stewart
  The patients charter, published in September 1991, makes it clear that patients are entitled to accurate, relevant and understandable explanations about their condition and treatment. Hospitals discharge this in a variety of ways—for example, by patient information leaflets provided to patients prior to or at the start of their treatment.

  The first survey of users of the NHS in Scotland, published on 5 April 1993, indicates that overwhelmingly people are satisfied with the amount of information and explanation they receive.

  We have therefore no plans to issue further guidance on this at present.

  Mr. Galbraith
  To ask the Secretary of State for Scotland what plans he has to give guidance to health boards and trusts concerning the duty of confidentiality when dealing with publicity and promotion related to individual patients.

  Mr. Stewart
  A code of practice setting out principles to ensure the confidentiality of personal health information was distributed throughout the NHS in Scotland in June 1990. This supplemented earlier guidance on procedure for dealing with press, radio and television inquiries about patients. The situation is being kept under review.
  205

  Renewables Order
  Mr. O'Neill
  To ask the Secretary of State for Scotland if he will make a statement on the progress of his Department in establishing a renewables order for Scotland.

  Mr. Stewart
  I have nothing to add to the answer given to the hon. Member for East Kilbride (Mr. Ingram) on 21 April 1993,Official Report, column 113.

  Consultants
  Ms Primarolo
  To ask the Secretary of State for Scotland what is the mean age at which doctors achieve consultant status in Scotland.

  Mr. Stewart
  The mean age is 36 years as at 30 September 1992, the latest date for which information is available centrally.

  Cocaine Seizures
  Mrs. Fyfe
  To ask the Secretary of State for Scotland how many seizures of cocaine by(a) police and (b) customs in Scotland were recorded in each year since 1980.

  Mr. Stewart
  Information on the number of cocaine seizures by the police and Her Majesty's Customs and Excise since 1981 is published in "Statistics of drug seizures and offenders dealt with, United Kingdom, 1991—Scotland tables", a copy of which is in the Library. Details of seizures for 1980 are given in the corresponding publication for 1990.

  Pain Relief Clinics
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what are the current waiting times for appointments at pain relief clinics in those hospitals offering this service.

  Emergency inpatient admissions to acute general hospitals with a diagnosis of poisoning by drugs or drug dependence or abuse, 1988–1992

  Year of discharge

  Principal diagnosis

  1988

  1989

  1990

  1991

  1992

  Poisoning by Antibiotics

  170

  117

  152

  157

  153

  Poisoning by Other Anti-Infectives

  49

  50

  46

  54

  53

  Poisoning by Hormones and Synthetic Substitutes

  132

  118

  133

  130

  152

  Poisoning by Primarily Systemic Agents

  87

  103

  121

  109

  120

  Poisoning by Agents Primarily Affecting Blood Constituents

  113

  92

  110

  118

  113

  Poisoning by Analgesics, Antipyretics and Antirheumatics

  4,138

  4,316

  5,094

  5,788

  6,578

  Poisoning by Anticonvulsants and Anti-Parkinsonism Drugs

  320

  299

  335

  363

  375

  Poisoning by Sedatives and Hypnotics

  486

  453

  433

  481

  465

  Poisoning by Other Central Nervous System Depressants

  14

  9

  13

  12

  20

  Poisoning by Psychotropic Agents

  3,803

  3,630

  3,746

  3,694

  4,077

  Poisoning by Central Nervous System Stimulants

  2

  2

  2

  6

  27

  Poisoning by Drugs Primarily Affecting the Autonomic Nervous System

  93

  84

  80

  111

  148

  Poisoning by Agents Primarily Affecting the Cardiovascular System

  250

  194

  231

  238

  275

  Poisoning by Agents Primarily Affecting the Gastrointestinal System

  59

  67

  63

  65

  80

  Poisoning by Water, Mineral and Uric Acid Metabolism Drugs

  109

  86

  83

  101

  64

  Poisoning by Agents Primarily Acting on Smooth/Skeletal Muscles. Respiration System

  172

  160

  192

  204

  228

  Poisoning by Agents Primarily Affecting Skin Mucous Membrane: Ophth. Otorhin. Dental Drug

  120

  125

  119

  124

  108

  Poisoning by Other and Unspecified Drugs and Medicaments

  1,684

  1,375

  1,525

  1,477

  1,664

  Poisoning by Bacterial Vaccines

  0

  1

  1

  2

  0

  Poisoning by Other Vaccines and Biological Substances

  6

  0

  2

  2

  1

  Total

  11,807

  11,281

  12,481

  13,236

  14,701

  Drug Dependence (See Note 2)

  31

  26

  31

  41

  35

  Nondependent Drug Abuse (See Note 2)

  1,161

  1,137

  1,334

  1,444

  1,555

  206
  Mr. Stewart
  The information, which relates to the average waiting time for first appointments, is set out in the table.

  New outpatient attendances at pain relief clinics—mean wait over period 1 October 1992 to 31 March 1993

  Hospital

  Mean wait (days)

  Crosshouse hospital

  53

  Ayr hospital

  48

  Inverclyde Royal hospital

  45

  Victoria hospital

  78

  Dunfermline and West Fife hospital

  93

  Glasgow Royal infirmary

  65

  Stobhill hospital

  91

  Victoria infirmary

  77

  Southern general hospital

  35

  Gartnavel general hospital

  143

  Caithness general hospital

  29

  Monklands district general hospital

  66

  Law hospital

  22

  Aberdeen Royal infirmary

  51

  Royal infirmary, Edinburgh

  95

  Dundee Royal infirmary

  127

  Falkirk and District Royal infirmary

  48

  Dumfries and Galloway Royal infirmary

  65

  All clinics

  78

  Drug Overdoses
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what information he has on the number of hospital treatments for overdoses, listed by each type of drug involved, since 1988.

  Mr. Stewart
  The number of inpatient hospital episodes in Scotland for drug overdose listed by type of drug or agent for the years 1988–1992 is shown in the table. Information on out-patient treatments is not available.
  207
  Notes:

  1. Cases included in the table were admitted to acute general hospitals as an emergency with poisoning by drugs and medicaments coming within the groups defined in the international Classification of Diseases codes 960–979.

  The figures include patients with accidental overdose and deliberate self poisoning but exclude any cases where poisoning was due to drugs in therapeutic use.

  2. Also shown are figures for patients who were admitted as an emergency with a primary diagnosis of drug dependence or nondependent drug abuse and these can include overdoses and abnormal reactions to a variety of drugs.

  Drugs Seizures
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will give the number of police seizures of(a) MDMA, (b) LSD, (c) tranquillisers, (d) cannabis and (e) solvents in Scotland in each year since 1988.

  Mr. Stewart
  Information on police seizures of MDMA, LSD, and cannabis since 1988 is published in "Statistics of drug seizures and offenders dealt with, United Kingdom, 1991—Scotland tables", a copy of which is in the Library. Tranquillisers, along with hypnotics, although not separately identified in the tables, comprise the main drugs in class C, for which the number of seizures is shown. Solvents are neither illegal substances nor subject to the kind of controls placed on pharmaceutical products; and the question of police seizures does not, therefore, arise.

  Drug Misuse
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will carry out an annual survey on the extent of drug misuse in Scotland.

  Mr. Stewart
  Because the unauthorised possession and supply of many addictive drugs is an illicit activity, there are obvious difficulties in producing accurate figures of the number of drug misusers in Scotland on a recurring basis. Among other indicators, however, the Scottish drug misuse database, which was established in 1990, is contributing increasingly to current knowledge of drug misuse prevalence, and the scope for its further development is kept under review. Research also has an important role and relevant projects are commissioned and funded as appropriate.

  Nuclear Industry
  Mr. McAllion
  To ask the Secretary of State for Scotland what discussions he has had with Scottish local authorities concerning the nuclear industry in Scotland.

  Mr. Stewart
  My right hon. Friend has had no recent discussions with local authorities about the general question of the nuclear industry in Scotland.

  Jury Trials
  Mr. George Robertson
  To ask the Secretary of State for Scotland how many(a) guilty, (b) not guilty and (c) not proven verdicts were handed down in jury trials in Scottish courts in each of the last five years.

  Lord James Douglas-Hamilton
  The available information is given in the table.
  208

  Persons called to solemn procedure courts by outcome 1987–1991 Scotland

  Year

  PNGA1 of deserted

  Acquitted not guilty

  Acquitted not proven

  Charge proved

  Total

  High Courts

  1987

  36

  147

  72

  858

  1,113

  1988

  51

  95

  77

  801

  1,024

  1989

  50

  96

  73

  746

  965

  1990

  61

  111

  70

  757

  999

  1991

  81

  94

  78

  743

  996

  Sheriff Court

  1987

  88

  426

  140

  2,789

  3,443

  1988

  149

  272

  135

  2,686

  3,242

  1989

  247

  310

  166

  2,613

  3,336

  1990

  323

  354

  172

  2,749

  3,598

  1991

  361

  281

  130

  2,619

  3,391

  1 Plea of not guilty accepted.

  Courts (Decrees and Extracts)
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland if he will institute an inquiry into the procedures to be followed and the factors to be taken into account when a change in the rate of interest in decrees and extracts of the Scottish courts takes place.

  Lord James Douglas-Hamilton
  I have no plans to bring forward amendments to the existing statutory provisions which place responsibility on the Lord President of the Court of Session for changes in the rate of interest on decrees and extract decrees of the Scottish courts.

  Act of Sederunt
  Mr. Menzies Campbell
  To ask the Secretary of State for Scotland what discussions he had with the Lord President of the Court of Session before the Act of Sederunt (Interest in Sheriff Court Decrees and Extracts) 1993 and the Act of Sederunt (Rules of the Court of Session Amendment) (Interest in Decrees and Extracts) 1993 both became law.

  Lord James Douglas-Hamilton
  None.

  Education Authorities
  Mr. Beggs
  To ask the Secretary of State for Scotland what was the annual expenditure on administration by each local education authority in each of the last three years.

  Mr. Stewart
  [holding answer 22 June 1993 ]: Based on information provided by local authorities in local financial returns, the figures set out in the table detail net expenditure—excluding loans and leasing charges and revenue contributions to capital—on administration by individual local authority education departments for the years 1990–91 and 1991–92. Information for 1992–93 is not yet available.
  209

  £000's

  1990–91

  1991–92

  Borders

  2,576

  2,958

  Central

  5,427

  5,583

  Dumfries and Galloway

  3,437

  3,844

  Fife

  6,726

  7,823

  Grampian

  7,765

  5,416

  Highland

  4,056

  3,939

  Lothian

  17,130

  18,147

  Strathclyde

  31,517

  22,803

  Tayside

  11,022

  5,562

  Orkney

  577

  445

  Shetland

  757

  1,083

  Western Isles

  1,087

  2,097

  Scotland

  92,077

  79,700

  Health Board Salaries
  Mr. Foulkes
  To ask the Secretary of State for Scotland what was the total cost of salaries for all(a) general managers and chief executives, (b) directors of finance or equivalent, (c) directors of human resources, personnel or equivalent, (d) directors of nursing services or equivalent and (e) chief medical officers or equivalent in January 1992 for all Scottish health boards prior to reorganisation of the NHS; and what is the current cost in each category for all health boards and NHS trusts in Scotland.

  Mr. Stewart
  [holding answer 22 June 1993]: The information requested is not available centrally.

  Water and Sewerage
  Mr. Welsh
  To ask the Secretary of State for Scotland if he will publish a detailed breakdown of his estimate of the costs associated with upgrading the Scottish water and sewerage system to meet EC standards; what improvements to the system were assumed; what assumptions were made of the sources from which capital would be raised; and if he will make a statement.

  Sir Hector Monro
  [holding answer 22 June 1993]: The European Community directives with the most significant financial implications for capital expenditure are the drinking water directive and the urban waste water treatment directive which are estimated at £1·2 billion and £1·3 billion respectively over the next 15 years.

  The estimates are based on improvements to water mains, water treatment works, sewerage, and sewage treatment and disposal works, and are unaffected by the source of capital.

  Scotland1 and North Territory

  Wales and Central England Territory

  Southern Territory

  National total

  1991–92

  Number of applications made

  28,328

  69,665

  34,239

  132,232

  Number of applications rejected

  5,439

  12,812

  7,288

  25,539

  1992–93

  Number of applications made

  34,657

  77,691

  56,694

  169,042

  Number of applications rejected

  5,584

  11,347

  10,566

  27,497

  210

SOCIAL SECURITY

  War Widows (Pensions)
  Mr. Butcher
  To ask the Secretary of State for Social Security if he will estimate the net cost, allowing for a reduction in income support, of topping up the pensions of British widows of New Zealand soldiers currently residing in the United Kingdom to the same level as the widows' pension received by British war widows.

  Mr. Alfred Morris
  To ask the Secretary of State for Social Security what estimate he has made of the net cost of increasing the pensions of British widows of New Zealand service men now residing in the United Kingdom to the level of the widows' pension received by British war widows.

  Mr. Hague
  The information to enable us to estimate costs accurately is not available and could be obtained only at disproportionate cost. However, on the basis that there are 38 such widows, it is estimated that the gross cost would be in the region of £200,000 per year.

  New Age Travellers
  Mr. David Nicholson
  To ask the Secretary of State for Social Security what measures he has taken to ensure that benefit payment officers will operate all relevant rules, including the genuinely seeking work rule, on new age travellers claiming benefits this summer.

  Mr. Burt
  I refer my hon. Friend to my reply to my hon. Friend the Member for Wansdyke (Mr. Aspinwall) on 18 June at column 751.

  Disability Living Allowance
  Mr. Menzies Campbell
  To ask the Secretary of State for Social Security how many people in(a) Fife and (b) North East Fife are in receipt of the mobility component of the disability living allowance.

  Mr. Scott
  I understand from Mr. Michael Bichard, the chief executive of the Benefits Agency, that the information is not readily available and could be obtained only at disproportionate cost.

  Water Charges
  Mrs. Helen Jackson
  To ask the Secretary of State for Social Security how many requests nationally, and by region, for direct payments from a recipient's income support were made last year and the year before for help paying water debt; and how many were refused.

  Mr. Burt
  Regions were replaced by territories in April 1990. The information requested in respect of each of the Benefits Agency's three territories for the years April 1991 to March 1992 and April 1992 to March 1993 is in the table.
  211
  1 Figures refer to North Territory only as different arrangements for payment of water charges apply in Scotland.

  Note: The figures used are based on Management Information Statistics collected by the Benefits Agency in the two 12, month periods ending March 1992 and March 1993. These figures are provisional and may be subject to amendment.

  Attendance Allowance
  Mr. Flynn
  To ask the Secretary of State for Social Security how many attendance allowance claims have been refused, broken down by the reasons for refusal, in each month since May 1992 at each disability benefit centre and for the country as a whole.

  Mr. Scott
  The administration of attendance allowance is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member and a copy will be placed in the Library.

  Letter from Michael Bichard to Mr. Paul Flynn, dated 22 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 the points raised in your recent Parliamentary Question to the Secretary of State for Social Security asking how many attendance allowance claims have been refused, broken down by the reasons for refusal, in each month since May 1992 at each disability benefit centre and for the country as a whole.
  The information you requested is shown in the attached appendix.
  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.

  Appendix Refusals for claims to attendance allowance by month and by disability benefit centre May 1992

  Medical

  Others

  Total

  Edinburgh

  297

  0

  297

  Newcastle

  592

  0

  592

  Leeds

  653

  0

  653

  Manchester

  648

  0

  648

  Bootle

  373

  0

  373

  Birmingham

  1,462

  0

  1,462

  Bristol

  316

  0

  316

  Cardiff

  147

  0

  147

  Wembley

  1,393

  1

  1,394

  Sutton

  584

  1

  585

  Glasgow

  —

  —

  —

  TOTALS

  6,465

  2

  6,467

  June 1992

  Medical

  Others

  Total

  Edinburgh

  1,261

  0

  1,261

  Newcastle

  423

  0

  423

  Leeds

  449

  0

  449

  Manchester

  560

  0

  560

  Bootle

  342

  0

  342

  Birmingham

  1,189

  0

  1,189

  Bristol

  311

  0

  311

  Cardiff

  590

  0

  590

  Wembley

  1,034

  1

  1,035

  Sutton

  798

  0

  798

  Glasgow

  —

  —

  —

  TOTALS

  6,957

  1

  6,958

  212

  July 1992

  Medical

  Others

  Total

  Edinburgh

  796

  0

  796

  Newcastle

  532

  1

  533

  Leeds

  526

  0

  526

  Manchester

  900

  0

  900

  Bootle

  586

  0

  586

  Birmingham

  961

  0

  961

  Bristol

  566

  0

  566

  Cardiff

  2,406

  0

  2,406

  Wembley

  801

  0

  801

  Sutton

  1,320

  0

  1,320

  Glasgow

  —

  —

  —

  TOTALS

  9,394

  1

  9,395

  August 1992

  Medical

  Others

  Total

  Edinburgh

  622

  0

  622

  Newcastle

  565

  0

  565

  Leeds

  660

  0

  660

  Manchester

  1,106

  0

  1,106

  Bootle

  468

  0

  468

  Birmingham

  1,388

  0

  1,388

  Bristol

  539

  0

  539

  Cardiff

  1,372

  0

  1,372

  Wembley

  446

  0

  446

  Sutton

  1,029

  2

  1,031

  Glasgow

  —

  —

  —

  TOTALS

  8,195

  2

  8,197

  September 1992

  Medical

  Others

  Total

  Edinburgh

  1,905

  0

  1,905

  Newcastle

  922

  0

  922

  Leeds

  1,070

  1

  1,071

  Manchester

  1,230

  1

  1,231

  Bootle

  959

  0

  959

  Birmingham

  2,674

  1

  2,675

  Bristol

  791

  0

  791

  Cardiff

  1,338

  0

  1,338

  Wembley

  1,219

  1

  1,220

  Sutton

  2,288

  0

  2,288

  Glasgow

  —

  —

  —

  TOTALS

  14,396

  4

  14,400

  October 1992

  Medical

  Others

  Total

  Edinburgh

  3,194

  0

  3,194

  Newcastle

  689

  0

  689

  Leeds

  1,163

  0

  1,163

  Manchester

  1,110

  3

  1,113

  Bootle

  912

  0

  912

  Birmingham

  3,527

  2

  3,529

  Bristol

  884

  5

  889

  Cardiff

  1,086

  0

  1,086

  Wembley

  1,544

  2

  1,546

  Sutton

  1,405

  1

  1,406

  Glasgow

  —

  —

  —

  TOTALS

  15,514

  13

  15,527

  213

  November 1992

  Medical

  Others

  Total

  Edinburgh

  1,836

  0

  1,836

  Newcastle

  666

  0

  666

  Leeds

  828

  2

  830

  Manchester

  1,018

  3

  1,021

  Bootle

  718

  0

  718

  Birmingham

  1,709

  2

  1,711

  Bristol

  423

  5

  428

  Cardiff

  554

  0

  554

  Wembley

  945

  4

  949

  Sutton

  719

  0

  719

  Glasgow

  —

  —

  —

  TOTALS

  9,416

  16

  9,432

  December 1992

  Medical

  Others

  Total

  Edinburgh

  1,175

  0

  1,175

  Newcastle

  524

  2

  526

  Leeds

  772

  0

  772

  Manchester

  557

  4

  561

  Bootle

  430

  1

  431

  Birmingham

  1,435

  1

  1,436

  Bristol

  442

  1

  443

  Cardiff

  792

  0

  792

  Wembley

  657

  1

  658

  Sutton

  760

  1

  761

  Glasgow

  —

  —

  —

  TOTALS

  7,544

  11

  7,555

  January 1993

  Medical

  Others

  Total

  Edinburgh

  1,441

  0

  1,441

  Newcastle

  464

  1

  465

  Leeds

  1,114

  0

  1,114

  Manchester

  966

  2

  968

  Bootle

  747

  0

  747

  Birmingham

  2,173

  1

  2,174

  Bristol

  583

  0

  584

  Cardiff

  1,043

  0

  1,043

  Wembley

  760

  0

  760

  Sutton

  1,584

  1

  1,585

  Glasgow

  —

  —

  —

  TOTALS

  10,875

  5

  10,880

  February 1993

  Medical

  Others

  Total

  Edinburgh

  1,279

  0

  1,279

  Newcastle

  516

  1

  517

  Leeds

  1,093

  1

  1,094

  Manchester

  1,155

  0

  1,155

  Bootle

  726

  0

  726

  Birmingham

  1,452

  0

  1,452

  Bristol

  551

  1

  552

  Cardiff

  903

  0

  903

  Wembley

  695

  1

  695

  Sutton

  1,840

  0

  1,840

  Glasgow

  —

  —

  —

  TOTALS

  10,210

  4

  10,214

  March 1993

  Medical

  Others

  Total

  Edinburgh

  758

  0

  758

  Newcastle

  643

  0

  643

  Leeds

  1,533

  7

  1,540

  214

  Medical

  Others

  Total

  Manchester

  1,612

  1

  1,613

  Bootle

  923

  0

  923

  Birmingham

  2,173

  3

  2,176

  Bristol

  863

  0

  863

  Cardiff

  1,306

  0

  1,306

  Wembley

  1,328

  3

  1,331

  Sutton

  2,274

  4

  2,278

  Glasgow

  1,101

  0

  1,101

  TOTALS

  14,514

  18

  14,532

  April 1993

  Medical

  Others

  Total

  Edinburgh

  526

  0

  526

  Newcastle

  514

  0

  514

  Leeds

  1,448

  0

  1,448

  Manchester

  1,200

  3

  1,203

  Bootle

  725

  0

  725

  Birmingham

  1,953

  7

  1,960

  Bristol

  783

  0

  783

  Cardiff

  936

  1

  937

  Wembley

  1,371

  2

  1,373

  Sutton

  1,881

  5

  1,886

  Glasgow

  1,540

  0

  1,540

  TOTALS

  12,877

  18

  12,895

  May 1993

  Medical

  Others

  Total

  Edinburgh

  472

  0

  472

  Newcastle

  515

  0

  515

  Leeds

  1,351

  5

  1,356

  Manchester

  880

  2

  882

  Bootle

  663

  0

  663

  Birmingham

  1,472

  1

  1,473

  Bristol

  764

  1

  765

  Cardiff

  591

  0

  591

  Wembley

  1,183

  4

  1,187

  Sutton

  2,548

  2

  2,550

  Glasgow

  892

  0

  892

  TOTALS

  11,331

  15

  11,346

  Cumulative 1993

  Medical

  Others

  Total

  Edinburgh

  15,562

  0

  15,562

  Newcastle

  7,565

  5

  7,560

  Leeds

  12,660

  16

  12,676

  Manchester

  12,942

  19

  12,961

  Bootle

  8,572

  1

  8,573

  Birmingham

  23,568

  18

  23,586

  Bristol

  7,816

  13

  7,829

  Cardiff

  13,064

  1

  13,065

  Wembley

  13,376

  20

  13,396

  Sutton

  19,030

  17

  19,047

  Glasgow

  3,533

  0

  3,533

  TOTALS

  137,688

  110

  137,798

  Notes:

  1. These figures exclude a small and unknown number of claims decided at the Attendance Allowance Unit.

  2. The other reasons for refusal are on the grounds of residence or presence conditions not being satisfied or because of overlapping with Constant Attendance Allowance.

  3. The term "medical" used in the table heading means rejection on the grounds of the effect of any given medical condition as opposed to rejection because of the type of condition.
  215

  Resettlement Units
  Mr. Raynsford
  To ask the Secretary of State for Social Security how many people have been accommodated in the course of the last two years in the resettlement units managed by the resettlement units executive agency.

  Mr. Hague
  The management of the Resettlement Agency is a matter for Mr. Tony Ward, the chief executive. He will write to the hon. Member and a copy will be placed in the Library.

  Letter from Tony Ward to Mr. Nick Raynsford, dated 22 June 1993:
  As the Resettlement Agency is an Executive Agency, the Secretary of State has asked me to write to you directly to respond to your Parliamentary Question to him, about the numbers of people that have been accommodated in the course of the last two years in resettlement units. This is something which falls within the responsibilities he has delegated to me as Chief Executive of the Agency.
  Before the dates of 1 June 1991–31 May 1993, 827,090 bed spaces were occupied in resettlement units managed by the Resettlement Units Executive Agency. You will appreciate that the number of beds occupied masks a complex situation. Some customers stay for one night, and others for considerably longer, whilst some customers have presented themselves for admissions at different units over the two year period. If you would like any further information, please let me know.

  Pensions (Payment)
  Mr. Steinberg
  To ask the Secretary of State for Social Security how many senior citizens in the Durham city area collect their state retirement pensions from post offices and sub-post offices.

  Mr. Hague
  The administration of retirement pension is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member and a copy will be placed in the Library.

  Letter from Michael Bichard to Mr. Gerry Steinberg, dated 22 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 senior citizens in the Durham city area collect their state retirement pensions from post offices and sub-post offices.
  As at 02/05/93, approximately 10,650 customers in the Durham city area were receiving state retirement pensions from post offices and sub-post offices.
  I hope you will find this reply helpful. A copy will appear in the Official Report and a copy will also be placed in the Library.

AGRICULTURE, FISHERIES AND FOOD

  Market Testing
  Ms Mowlam
  To ask the Minister of Agriculture, Fisheries and Food if she will list all the market tests that have taken place in her Department since November 1992 and indicate, in each case, whether the result was the maintenance of in-house provision, or whether the service was contracted out.

  Mr. Jack
  Since November 1992 the following market tests have taken place:216

  Free Advice on Farm Diversification

  Free Advice on Farm Woodlands

  Building Estates Management (Part)

  General Recruitment (Up to Grade 7)

  Library Services (Books and Journals)

  Royal Navy Surface Surveillance (Fisheries Protection Contract)

  Relocation Work (Central Science Laboratories)

  In the cases of free advice on farm diversification, and farm woodlands the provision in question is being ended as part of public expenditure decisions.

  In all the other cases the services listed in the table have been contracted out.

  Fallen Animals
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food what representations she has had on the cost and inconvenience to farmers arising from new regulations for slaughtering injured or fallen animals; and if she will make a statement.

  Mr. Soames
  The Fresh Meat (Hygiene and Inspection) Regulations 1992 require that if a "casualty" animal slaughtered outside an abattoir is to go for human consumption, it must receive an ante-mortem inspection from a veterinarian who should then observe the correct bleeding of the animal and certify the carcase.

  There has been some concern about the logistical problems of getting the slaughterman and vet together on the farm at the same time and the associated costs of a failure to do so. We are considering the problem in the context of the review of the regulatory burdens which my right hon. Friend the Prime Minister has commissioned. In the meantime, I cannot advise anyone to ignore the law.

  The welfare of the animal must be paramount. If it is necessary to prevent suffering, animals should be slaughtered on the spot even if this means that the carcase cannot be sold for human consumption.

  Lindane
  Mr. Spearing
  To ask the Minister of Agriculture, Fisheries and Food what representations she has received concerning the sale in the United Kingdom of chocolate containing traces of the pesticide Lindane; and what information she has as to which countries ban the use of Lindane.

  Mr. Soames
  I have not received any representations concerning the traces of Lindane found in samples of chocolate in the United Kingdom. Within the European Community, Lindane is authorised for use in all member states. We understand from data supplied to UNEP's international register for potentially toxic chemicals that Lindane is banned for use in Argentina, the former Soviet Union and Sweden.

  Hydrocarbons (Coastal Waters)
  Mr. Ainger
  To ask the Minister of Agriculture, Fisheries and Food what regular monitoring her Department carries out of background levels of hydrocarbons in United Kingdom coastal waters.

  Mr. Jack
  This Ministry's Directorate of Fisheries Research has monitored hydrocarbon concentrations in United Kingdom coastal waters since the 1970s. The results are published regularly in the directorate's aquatic environment monitoring report series. The latest relevant reports, numbered 26 and 30, are available in the Library.
  217

  Agriculture Council (Voting)
  Mr. Barnes
  To ask the Minister of Agriculture, Fisheries and Food, pursuant to her answer to the hon. Member for Kincardine and Deeside (Mr. Kynoch) on 15 June,Official Report, column 483, what were the voting figures for each decision taken at the European Community's Agriculture Council held on 14 June; and if she will make it her policy to include in future statements on Council meetings information on whether formal votes were taken.

  Mr. Jack
  I refer the hon. Member to the reply given to him on 21 June, at columns 70–71.

EDUCATION

  Agency Teachers
  Miss Lestor
  To ask the Secretary of State for Education (1) what action he is taking to ensure that teachers recruited through commercial teacher recruitment agencies are properly vetted by the police prior to their taking up their teaching posts; and if he will make a statement;

  (2) what steps he is taking to inform head-teachers recruiting agency teachers about the status of overseas teachers with respect to their qualifications; and if he will make a statement.

  Mr. Robin Squire
  The Department is currently consulting other Government Departments with a view to preparing a code of practice for teacher employment agencies and detailed guidelines to schools on the employment of teachers through agencies.

  School Tests
  Mr. Steinberg
  To ask the Secretary of State for Education what percentage of schools in each local education authority did not carry the recent tests for 14-year-old pupils.

  Mr. Robin Squire
  This information is not available.

  Mr. Steinberg
  To ask the Secretary of State for Education if he will estimate the number of hours per week teachers are occupied in marking test papers for pupils aged(a) seven, (b) 11 and (c) 14 years.

  Mr. Robin Squire
  The information is not available in the precise format requested. On average, teachers of seven-year-olds should be able to administer this Summer's tests in English, mathematics and science in a total of roughly 24 hours. This excludes the time taken to test pupils' ability to read aloud. Teachers have discretion to spread out these tests between half-term in the spring term and four weeks before the end of the summer term.

  Tests for 11-year-olds are not yet mandatory. One of the main purposes of this summer's pilot of prototype tests for this age group is to shed light on what is manageable for teachers including marking times.

  Based on experience in the trials, it is estimated that a subject teacher with a typical class of 27 14-year-olds, might spend roughly seven to 11 hours marking the mathematics tests; just over 11 hours marking the science papers, between 11 and 13·5 hours marking the English papers, and 7·5 hours on the technology papers.
  218

  Teacher Training
  Mr. Steinberg
  To ask the Secretary of State for Education if he will make a statement on his proposal to train primary school teachers on 12-month courses; what assessment he has made of how the quality of training will compare with conventional teacher training courses; and what salary structure he expects teachers trained by this scheme to receive.

  Mr. Robin Squire
  My right hon. Friend has recently issued for consultation proposals for new one-year courses for the training of specialist nursery and infant teachers. Entry to such courses would be restricted to mature people, with considerable experience of working with young children, who possess the qualifications for entry to higher education and are capable of attaining the required competences within one year. My right hon. Friend has invited views about the nature, organisation and content of such courses, which would complement and not replace existing routes into primary teaching. Those successfully completing the courses would receive specialised qualified teacher status which entitled them to teach pupils up to the end of key stage 1. Qualified teachers are paid in accordance with the scales and other provisions set out in the School Teachers' Pay and Conditions Document.

  Parents Charter
  Dr. Wright
  To ask the Secretary of State for Education if he will publish the independent market research among parents on their views on the parents charter referred to on page 12 of the first report on the citizens charter, column 2101.

  Mr. Robin Squire
  The market research was carried out to enable officials to prepare advice for Ministers. It is not the usual practice of my right hon. Friend to publish either officials' advice or the research underlying it.

  Further Education Colleges
  Mr. Chisholm
  To ask the Secretary of State for education how much money was given to further education colleges in 1992–93 to prepare them for incorporation; and what provision was made in the conditions of grant for bonuses to senior staff.

  Mr. Boswell
  Transitional funding of some £18·3 million was made available in 1992–93 by the Further Education Funding Council to institutions joining the further education sector in England. All colleges in England received a minimum of £35,000, which they could use for any purpose that directly assisted with their preparations for independence. The position in Scotland is a matter for my right hon. Friend the Secretary of State for Scotland.

  Bursaries
  Mr. Pawsey
  To ask the Secretary of State for Education if he will announce the postgraduate bursary and studentship rates payable by his Department for the academic year 1993–94.

  Mr. Boswell
  The main maintenance rates under the Department's own postgraduate awards scheme for certain professional and vocational courses in the academic year 1993–94 will be as follows—1992–93 rates are shown in brackets:
  219

  £

  £

  Bursaries

  London

  3,170

  (3,085)

  Elsewhere

  2,500

  (2,435)

  Parental home

  1,890

  (1,840)

  Studentships

  London

  5,340

  (5,195)

  Elsewhere

  4,245

  (4,130)

  Parental home

  3,130

  (3,045)

  These represent increases of 2·75 per cent. on the current year's rates. The relevant supplementary allowances will be increased broadly in line.

EMPLOYMENT

  Building Workers (Training Levy)
  Mrs. Anne Campbell
  To ask the Secretary of State for Employment what complaints he has received on the imposition of a training levy on building workers with 714 or SC60 certificates; and if he will make it his policy that such deductions should be halted forthwith.

  Miss Widdecombe
  We have received no complaints about the imposition of a training levy from building workers who have identified themselves as having 714 or SC60 certificates.

  Under the legislation the liability to pay Industry Training Board levy lies with the employer. If the employer attempts to pass the levy on to the employee or sub contractor, there is no legal obligation for them to pay it.

  Part-time Work
  Mr. Dobson
  To ask the Secretary of State for Employment how many(a) males and (b) females were working part-time in Great Britain in April 1992; and what proportion of these workers earned between (a) £5·20 and £5·50 per hour, (b) £5·50 and £5·60 per hour, (c) £3·90 and £4 per hour and (d) £3·20 and £3·30 per hour.

  Miss Widdecombe
  Estimates of the numbers of employees in employment at March 1992 in Great Britain were 1,048,000 part-time men and 4,709,000 part-time women.

  The corresponding information for the distributions of hourly earnings can be found in the table.

  Staff in post as at 30 September (whole-time equivalents)

  Percentage change

  1989

  1990

  1991

  19921

  1989–90

  1990–91

  1991–921

  Learner nurses:

  NA21

  Pupil nurse

  288

  176

  137

  74

  -38·3

  -22·2

  -46·0-

  NA31

  Student nurse

  2,830

  2,891

  2,774

  1,872

  2·2

  -4·1

  -32·5

  NA41

  RGN/RSCN

  —

  8

  23

  23

  n/a

  193·7

  1·3

  Project 2000 student bursaries:

  NB21

  Under 26 years

  —

  —

  —

  62

  n/a

  n/a

  n/a

  220

  Part lime employees on adult rates—pay unaffected by absence Proportion with gross hourly earnings between the following amounts April 1992

  Males Per cent.

  Females Per cent.

  £3·20 to £3·30

  3·2

  3·9

  £3·90 to £4·00

  3·7

  3·0

  £5·20 to £5·50

  2·6

  3·6

  £5·50 to £5·60

  1·0

  1·0

  Source: New Earnings Survey.

WALES

  Taf Merthyr Colliery
  Mr. Rowlands
  To ask the Secretary of State for Wales what action he and the agencies in Wales he supports financially intend to take to alleviate the problems arising from the closure of the Taf Merthyr colliery, Bedlinog.

  Mr. Redwood
  A regeneration programme for those areas affected by the coal review valued at £43 million was announced by my predecessor last October. This includes a wide range of measures for the Taff Merthyr area by my Department, the Welsh Development Agency, the relevant training and enterprise councils and the Employment Service, in addition to significant initiatives taken by British Coal Enterprise.

  Following the closure of Taff Merthyr colliery, I am relaxing eligibility conditions of the Government's adult training programmes to allow immediate entry to training, retraining and business start up for ex-colliery employees and others within the affected area. I will formally approve further training and employment measures for the areas affected by coal closure in the near future.

  NHS Staff
  Mr. leuan Wyn Jones
  To ask the Secretary of State for Wales how many NHS staff were employed as(a) general/senior managers and (b) administrators and clerical staff in Wales in each year since 1989–90.

  Mr. Gwilym Jones
  I refer the hon. Gentleman to the answer given to the hon. Member for Darlington (Mr. Milburn) on 18 January, at column 57. The validated 1992 figure for clerical and administrative staff is 8,347.

  Mr. leuan Wyn Jones
  To ask the Secretary of State for Wales if he will give details of the numbers of NHS nursing and midwifery staff by pay grades within the groups of senior nursing and midwifery staff, educational staff, clinical nursing and midwifery staff, learners and other staff; and if he will list the number of Project 2000 nursing students in 1989, 1990, 1991 and 1992, and the percentage change between each year.

  Mr. Gwilym Jones
  The requested information is given in the table.
  221

  Staff in post as at 30 September (whole-time equivalents)

  Percentage change

  1989

  1990

  1991

  19921

  1989–90

  1990–91

  1991–921

  NB31

  26 years and over

  —

  —

  —

  37

  n/a

  n/a

  n/a

  Day nursery staff:

  NM11

  Nursery assistant (19 and over)

  —

  —

  1

  —

  n/a

  n/a

  -100·0

  NM21

  Nursery nurse—NNEB

  2

  3

  6

  10

  32·2

  140·7

  53·0

  NM41

  Deputy matron

  —

  —

  1

  1

  n/a

  n/a

  0·0

  NM61

  Matron

  1

  1

  2

  2

  0·0

  100·0

  0·0

  Clinical grades:

  NP01

  Grade A (under 18)

  5

  6

  2

  5

  21·1

  -62·7

  126·4

  NP06

  Grade A (18 and over)

  5,899

  5,607

  5,530

  5,897

  -4·9

  -1·4

  6·6

  NP16

  Grade B

  1,162

  1,414

  1,476

  1,440

  21·7

  4·4

  -2·4

  NP21

  Grade C

  1,247

  986

  872

  758

  -20·9

  -11·5

  -13·0

  NP26

  Grade D (2nd level enrolled nurse)

  3,317

  3,370

  3,177

  2,924

  1·6

  -5·7

  -8·0

  NP31

  Grade D (1st level registered nurses)

  1,023

  1,201

  1,504

  1,854

  17·4

  25·2

  23·3

  NP36

  Grade E

  5,178

  5,262

  5,339

  5,511

  1·6

  1·5

  3·2

  NP41

  Grade F

  1,820

  1,860

  1,868

  1,955

  2·2

  0·5

  4·7

  NP46

  Grade G

  3,755

  3,764

  3,728

  3,611

  0·2

  -1·0

  -3·1

  NP51

  Grade H

  568

  600

  631

  670

  5·6

  5·2

  6·1

  NP56M

  Grade I

  410

  424

  383

  347

  3·3

  -9·7

  -9·4

  Education staff:

  NR01

  Grade 1

  51

  61

  50

  34

  21·1

  -17·7

  -32·6

  NR11

  Grade 2

  244

  250

  263

  237

  2·4

  5·4

  -10·2

  NR21

  Grade 3

  39

  42

  28

  10

  7·7

  -33·3

  -64·3

  NR31

  Grade 4

  18

  20

  29

  43

  11·1

  45·0

  48·3

  NR41

  Grade 5

  2

  1

  2

  6

  -50·0

  100·0

  200·0

  NR51

  Grade 6

  4

  5

  2

  1

  25·0

  -60·0

  -50·0

  NR61

  Grade 7

  —

  1

  2

  2

  n/a

  100·0

  0·0

  Senior nurses2:

  NT11

  Senior nurse 6

  36

  11

  1

  —

  -69·8

  -92·6

  -100·0

  NT16

  Senior nurse 5

  14

  15

  1

  —

  7·1

  -93·3

  -100·0

  NT21

  Senior nurse 4

  35

  30

  5

  1

  -14·3

  -83·3

  -80·0

  NT26

  Senior nurse 3

  16

  18

  4

  2

  12·5

  -77·8

  -50·0

  NT31

  Senior nurse 2

  8

  8

  3

  —

  0·0

  -60·7

  -100·0

  NT36

  Senior nurse 1

  9

  7

  4

  4

  -22·2

  -42·9

  0·0

  NT41

  Senior nurse 1 +

  1

  —

  1

  —

  -100·0

  n/a

  -100·0

  Senior nurses/midwives2:

  NX01

  District/unit

  —

  —

  59

  79

  n/a

  n/a

  33·9

  NX02

  District/unit

  —

  —

  4

  3

  n/a

  n/a

  -25·0

  NX 11

  Unit—1st level

  —

  —

  30

  34

  n/a

  n/a

  13·3

  NX 12

  Unit—1st level

  —

  —

  2

  1

  n/a

  n/a

  -50·0

  NX21

  District—1st level

  —

  —

  3

  3

  n/a

  n/a

  n/a

  NX31

  Region

  —

  —

  1

  1

  n/a

  n/a

  n/a

  Obsolete grades2:

  NW

  Senior nurse—education

  10

  6

  2

  —

  -40·0

  -66·7

  -100·0

  NC

  Nursing officer

  2

  —

  —

  —

  -100·0

  n/a

  n/a

  ND

  Director of nurse education

  39

  40

  9

  5

  2·6

  -77·5

  -44·4

  NF

  CANO

  4

  5

  2

  —

  25·0

  -60·0

  -100·0

  Project 2000 nursing students3

  —

  —

  —

  421

  n/a

  n/a

  n/a

  n/a = Not applicable.

  1 The 1992 figures exclude about 64 Wte nursing and midwifery staff employed by Pembrokeshire NHS Trust on local payscales to whom the standard pay grades do not apply. In addition to the figures shown there were about 1,000 student nurses at 30 September 1992 who had been reclassified as students following the introduction of Project 2000 nursing education reforms.

  2 Since 1 January 1991 staff on "obsolete" grades shown and senior nurse payscales have been eligible to transfer to new senior nurse payscales (NX).

  3 As at 31 March.

  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales if he will give details of the numbers of health service directly employed staff by main staff group for each year 222
  from 1987 to 1992 and he will give the changes between each year over the whole period in numbers and percentages.

  Mr. Gwilym Jones
  The reqested information is shown in the table:
  223

  Staff in post as at 30 September (whole-time equivalents)

  1987

  1988

  1989

  1990

  1991

  1992

  Medical and Dental

  2,471

  2,545

  2,602

  2,691

  2,708

  n/a

  Nursing and Midwifery

  27,764

  27,920

  28,037

  28,093

  27,962

  127,583

  Professional and Technical

  4,993

  5,111

  5,318

  5,452

  5,788

  5,877

  Administrative and Clerical4

  7,087

  7,279

  7,565

  8,069

  8,733

  9,195

  Ambulance staff

  1,589

  1,566

  1,579

  1,548

  1,565

  1,547

  Ancillary staff

  9,810

  9,117

  8,644

  8,239

  7,631

  7,312

  Works staff

  476

  447

  415

  388

  335

  362

  Maintenance staff

  1,692

  1,609

  1,576

  1,545

  1,504

  1,436

  Unknown2

  —

  —

  —

  —

  42

  237

  Change

  1987–88

  1988–89

  1989–90

  1990–91

  1991–92

  1987–92

  Number

  Per cent.

  Number

  Per cent.

  Number

  Per cent.

  Number

  Per cent.

  Number

  Per cent.

  Number

  Per cent.

  Medical and Dental

  74

  3·0

  57

  2·2

  89

  3·4

  17

  0·6

  n/a

  n/a

  237

  39–6

  Nursing and Midwifery

  156

  0·6

  117

  0·4

  56

  0·2

  -131

  -0·5

  -379

  -1·4

  -181

  -0·7

  Professional and Technical

  118

  2·4

  207

  4·1

  134

  2·5

  336

  6·2

  89

  1·5

  884

  17·7

  Administrative and Clerical4

  192

  2·7

  286

  3·9

  504

  6·7

  664

  8·2

  462

  5·3

  2,108

  29·7

  Ambulance staff

  -23

  -1·4

  13

  0·8

  -31

  -2·0

  17

  1·1

  -18

  -1·2

  -42

  -2·6

  Ancillary staff

  -693

  -7·1

  -473

  -5·2

  -405

  -4·7

  -608

  -7·4

  -319

  -4·2

  -2,498

  -25·5

  Works staff

  -29

  -6·1

  -32

  -7·2

  -27

  -6·5

  -53

  -13·7

  27

  8·1

  -114

  -23·9

  Maintenance staff

  -83

  -4·9

  -33

  -2·1

  -31

  -2·0

  -41

  -2·7

  -68

  -4·5

  -256

  -15·1

  Unknown1

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  n/a

  195

  464·3

  n/a

  n/a

  n/a = Not available.

  1 In addition there are about 1,000 student nurses who have been reclassified as students following the introduction of Project 2000 nursing education reforms.

  2 Staff paid on locally devised payscales who can no longer be allocated to a specific staff group. This affects the comparability of 1991 and 1992 figures for all staff groups.

  3 1987 to 1991

  4 Including general and senior managers.

  Nurses and Midwives
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales if he will give details of the numbers of whole-time equivalent NHS nursing and midwifery staff employed on each grade and pay point of the clinical grades, educational grades and senior nursing and midwifery pay spine in 1990, 1991 and 1992.

  Mr. Gwilym Jones
  Due to the complex nature of the data requested, I will write to the hon. Gentleman and place a copy of the information in the Library of the House.

  1989–901

  1990–911

  1991–921

  1992–9312

  Nursing qualification to which initial training leads:

  Registered General Nurse

  786

  788

  269

  —

  Bachelor of Nursing

  34

  39

  —

  —

  Enrolled Nurse (General)

  47

  74

  —

  —

  Registered Mental Nurse

  140

  142

  53

  —

  Enrolled Nurse (Mental)

  —

  —

  —

  —

  Registered Nurse Mental Handicap

  33

  41

  18

  —

  Enrolled Nurse (Mental Handicap)

  —

  —

  —

  —

  Registered Sick Children's Nurse

  —

  —

  —

  —

  Registered Midwife

  —

  —

  10

  15

  Registered Health Visitor

  —

  —

  —

  —

  Project 20003: Adult Nursing

  n/a

  n/a

  277

  699

  Mental Health

  n/a

  n/a

  53

  138

  Mental Handicap

  n/a

  n/a

  —

  35

  Children's Nursing

  n/a

  n/a

  42

  73

  Total

  1,040

  1,084

  722

  960

  n/a = Not available.

  1 1 April to 31 March.

  2 Provisional.

  3 Courses phased in from September 1991.

  Source: Welsh National Board for Nursing, Midwifery and Health Visting Annual Reports.
  224

  Nursing Education
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales if he will give details of the numbers of entrants to initial pre-registration nursing education by course of study and by the academic qualifications possessed by entrants in each year since 1989.

  Mr. Gwilym Jones
  The number of initial entrants to pre-registration nursing education is shown in the table. Information on the qualifications possessed by these students is not readily available.
  225

  Student Statistics
  Mr. Llwyd
  To ask the Secretary of State for Wales what was the total amount spent on each student in the university of Wales and university of Glamorgan respectively, in each year since 1979; and if he will make a statement.

  Sir Wyn Roberts
  The total amount spent on each student in the university of Wales, since 1979–80 is as follows. Information relating to 1991–92 is not yet available. Equivalent information for the university of Glamorgan is not available centrally.

  University of Wales: annual expenditure1 per full time equivalent student

  Expenditure1 per full time student (£per thousand)

  1979–80

  2,131·6

  1980–81

  2,807·7

  1981–82

  3,013·0

  1982–83

  3,363·0

  1983–84

  3,946·1

  1984–85

  4,058·0

  1985–86

  4,248·9

  1986–87

  4,444·1

  1987–88

  4,530·3

  1988–89

  4,891·2

  1989–90

  4,996·2

  1991–92

  5,241·3

  1 Expenditure is defined as that relating to all cost centres including departmental recurrent expenditure (specific expenditure and that from general income) and that on departmental equipment. Annual expenditure per student is derived by dividing the expenditure by the total full-time equivalent student load.

  Source:

  1979–80 "Statistics of Education; Vol. 6 Universities" published by University Grants Committee. 1980–81 onwards "University Statistics; Finance" published annually by Universities' Statistical Record.

  Consultants
  Ms Primarolo
  To ask the Secretary of State for Wales what is the mean age at which doctors achieve consultant status in Wales.

  Mr. Gwilym Jones
  The mean age at which doctors in Wales, in post at 30 September 1991, achieved consultant status was 37.

  Training and Enterprise Councils
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales if he will make it his policy to include specific references to equality of opportunity in the annual strategic and planning guidance issued by his Department to training and enterprise councils in Wales.

  Sir Wyn Roberts
  The importance of equality of opportunity is already recognised in the guidance given to Welsh training and enterprise councils by the Welsh Office, and we will ensure that it continues to be so.
  226

  Coastal Water (Pollution)
  Mr. Ainger
  To ask the Secretary of State for Wales what regular or recent monitoring his Department carries out of background levels of hydrocarbons and other pollutants in Cardigan bay and other Welsh coastal waters.

  Mr. Gwilym Jones
  The Welsh Office does not carry out such monitoring. However, monitoring for a wide range of contaminants, including hydrocarbons, is undertaken at various locations off the Welsh coastline by the Ministry of Agriculture, Fisheries and Food, the National Rivers Authority and the Countryside Council for Wales.

  Radon
  Mr. Ainger
  To ask the Secretary of State for Wales how many grants have been approved for households which have recorded radon concentrations(a) over 200 becquerels per cubic metre and (b) up to 200 becquerels per cubic metre in Wales and postal district SA since 1989.

  Mr. Gwilym Jones
  The information is not held centrally.

  Welsh Development Agency
  Mr. Richards
  To ask the Secretary of State for Wales if he is now in a position to announce the appointment of the new chairman of the Welsh Development Agency.

  Mr. Redwood
  I am pleased to announce that I am appointing Mr. David Rowe-Beddoe to be the chairman of the Welsh Development Agency with effect from 1 July.

TRADE AND INDUSTRY

  Assisted Areas
  Mr. McFall
  To ask the President of the Board of Trade when he is going to publish the revised assisted areas map.

  Mr. Sainsbury
  I hope to announce the new assisted areas map before the House rises for the summer recess.

  Mr. Morley
  To ask the President of the Board of Trade when he expects to make an announcement on the future of assisted area status for Glanford and Scunthorpe.

  Mr. Sainsbury
  [holding answer 7 June 1993]: I refer the hon. Member to the reply given by my right hon. Friend the President of the Board of Trade to my hon. Friend the Member for Stockton, South (Mr. Devlin) on 17 June, Official Report, column 715.

  Aerospace Industry
  Mr. Ronnie Campbell
  To ask the President of the Board of Trade what assessment his Department has made of the future prospects for the British aerospace industry; and if he will make a statement.

  Mr. Sainsbury
  My Department has a close and continuing dialogue with the industry on the challenges it is facing, and the most appropriate ways for the Government to help.
  227

  Pit Closures
  Mr. Mullin
  To ask the President of the Board of Trade how many of the pits originally scheduled for closure have been closed; and if he will make a statement.

  Mr. Eggar
  British Coal has decided it no longer wishes to operate 18 of these pits, and coaling has ceased at them. British Coal has given a commitment to offer all such pits to the private sector and has so far invited bids for nine of them. I understand that British Coal will be offering the remainder in the next few weeks.

  Shipbuilding Industry
  Mr. Byers
  To ask the President of the Board of Trade what plans he has to assist the shipbuilding industry.

  Mr. Sainsbury
  The shipbuilding industry continues to receive assistance from the shipbuilding intervention fund and the home credit guarantee scheme.

  Industrial Competitiveness
  Mr. Ian Taylor
  To ask the President of the Board of Trade how much the competitive position of United Kingdom industry has changed in the last 12 months.

  Mr. Sainsbury
  The competitive position of United Kingdom industry has strengthened considerably in the 12 months to April this year, during which period manufacturing productivity has increased by nearly 8 per cent.

  Lithuania
  Mr. Colvin
  To ask the President of the Board of Trade what Government-backed export credit arrangements there are for Lithuania.

  Mr. McLoughlin
  Cover for short-term credit is available from NCM Credit Insurance Ltd. under tight conditions and with 100 per cent. reinsurance by the Export Credits Guarantee Department. Cover is not available for exports on medium-term credit, although the position is currently under review.

  Northern France
  Mr. David Shaw
  To ask the President of the Board of Trade what information he has on the availability of measures taken by the French Government which encourage relocation of business in northern France in preference to east Kent.

  Mr. Sainsbury
  I understand that a range of assistance is available. It includes grants for job creation and a variety of tax concessions at both local and national levels.

  Regional Policy
  Mr. Milburn
  To ask the President of the Board of Trade what are his plans for further changes in regional policy.

  Mr. Sainsbury
  The effectiveness of regional policy is kept under continuous review.

  Mr. John Evans
  To ask the President of the Board of Trade if he will make a statement on his Department's plans for regional policy.
  228
  Mr. Sainsbury
  We are currently reviewing the assisted areas map and hope to make an announcement before the House rises for the summer recess.

  Manufacturing Industry
  Sir David Knox
  To ask the President of the Board of Trade when he expects to meet the president of the Confederation of British Industry to discuss manufacturing industry.

  Mr. Sainsbury
  My right hon. Friend the President of the Board of Trade meets the president and director-general of the CBI regularly to discuss a wide range of issues. He last visited the CBI on 17 June and met a number of CBI representatives.

  Mr. Hawkins
  To ask the President of the Board of Trade if he will make a statement on the performance of manufacturing industry in the north-west during the past year.

  Mr. Sainsbury
  Manufacturing industry in the north-west has shared in the national improvement in the economy in the last year benefiting from the fall in interest rates to the lowest level for 16 years. In the three months from January to April 1993, seasonally adjusted unemployment in the region fell by 6,500.

  Mr. Campbell-Savours
  To ask the President of the Board of Trade what representations he has received on the decline in numbers of jobs in manufacturing industry over the last five years.

  Mr. Sainsbury
  My right hon. Friend the President of the Board of Trade has received a number of representations about the decline in manufacturing jobs over the last five years. Improved competitiveness remains the key to growth in manufacturing employment.

  Mr. Turner
  To ask the President of the Board of Trade what assessment he has made of the prospects for manufacturing industry in the black country and the west midlands in the next two years.

  Mr. Sainsbury
  The prospect for manufacturing industry throughout the west midlands are constantly assessed by my Department through the work of the west midlands regional office.

  Political Parties (Donations)
  Mrs. Mahon
  To ask the President of the Board of Trade what plans he has to review the Companies Act 1985 in relation to those sections dealing with political contributions.

  Mr. Neil Hamilton
  I have no plans to review these sections.

  Government Purchases
  Mr. Barry Field
  To ask the President of the Board of Trade if he will list the measures he is taking to ensure that purchases by Government are of British manufacture.

  Mr. Sainsbury
  Government purchasing is based on value for money. The role of my Department is to ensure that competition for Government purchases from overseas is fair. The Treasury's central unit on purchasing advises Government purchasers on the best purchasing practices to ensure that the advantages of competition are secured.
  229

  Northern Cyprus
  Mr. Miller
  To ask the President of the Board of Trade what is the current trade deficit with northern Cyprus.

  Mr. Needham
  I refer the hon. Member to my reply of 19 May 1993,Official Report, column 238.

  Ms Janet Anderson
  To ask the President of the Board of Trade what plans he has to meet representatives of the Turkish republic of northern Cyprus in order to discuss the prospects for trade with the United Kingdom; and if he will make a statement.

  Mr. Needham
  None. We do not recognise the "Turkish Republic of Northern Cyprus". The timing of any possible meeting must be carefully considered in the light of the continuing inter-communal negotiations on Cyprus under United Nations auspices.

  Mr. Barnes
  To ask the President of the Board of Trade what plans he has to meet his counterpart in northern Cyprus to discuss bilateral trade arrangements.

  Mr. Needham
  None. We do not recognise northern Cyprus. The timing of any such meeting can only be carefully considered in the light of the continuing inter-communal negotiations on Cyprus under United Nations auspices.

  Norway
  Mr. Tony Banks
  To ask the President of the Board of Trade what was(a) the value of imports from Norway last year and (b) the projected value for the current year.

  Mr. Needham
  In 1992, the value of invisible imports from Norway was £3·84 billion. My Department does not make projections on United Kingdom trade with individual countries.

  Transport Equipment
  Mr. Gapes
  To ask the President of the Board of Trade what assessment his Department has made of the future prospects for the transport equipment sector; and if he will make a statement.

  Mr. Sainsbury
  My Department's sponsor divisions make continual assessments of the competitiveness and future prospects of the sectors for which they are responsible, including those sectors which fall within the generic description of transport equipment.

  Trade Statistics
  Mr. Alan W. Williams
  To ask the President of the Board of Trade what is his Department's estimate of the value of Britain's total(a) exports and (b) imports for January to May.

  Mr. Needham
  Figures for total trade over the period are not yet available. In the period January to May, the value of the United Kingdom's non-EC visible exports was £22·7 billion and the value of imports was £27·8 billion.

  Telecommunications
  Mr. Carrington
  To ask the President of the Board of Trade if he has received a report by the Director General of Telecommunications for the year 1992 as required under section 55 of the Telecommunications Act 1984.
  230
  Mr. McLoughlin
  Yes. The ninth report by the Director General of Telecommunications is being published today. It covers the period 1 January to 31 December 1992. Copies of the report have been laid before each House of Parliament.

  Inntrepreneur Scheme
  Mr. Wareing
  To ask the President of the Board of Trade when he will reply to the question tabled by the hon. Member for Liverpool, West Derby for answer on 10 June relating to investigations into the Inntrepreneur scheme.

  Mr. Neil Hamilton
  I refer the hon. Member to the answer I gave on 21 June,Official Report, column 23.

  Trade Marks
  Mr. Hoon
  To ask the President of the Board of Trade if he will make a statement on his proposed timetable for legislation relating to trade marks.

  Mr. McLoughlin
  A Bill to implement the proposals in the White Paper "Reform of Trade Marks Law"—Cm 1203—has been fully drafted, and will be introduced as soon as the parliamentary timetable permits.

  Auditing
  Mr. Austin Mitchell
  To ask the President of the Board of Trade on how many occasions auditors have acted as company secretaries in each year since 1990.

  Mr. Neil Hamilton
  This is a matter for Companies House. I have asked the chief executive to write to the hon. Member.

  Letter from David Durham to Mr. Austin Mitchell, dated 21 June 1993:
  As this is a matter which is within my responsibility as Chief Executive and Registrar of Companies, I am writing to you direct.
  I should explain that the Companies Act does not prohibit an auditor from acting as secretary to a company provided, of course, that he does not carry out the audit of that company's accounts. We, therefore, have no reason to compile figures of this nature, and it would involve disproportionate costs to identify from company records occasions where an auditor has acted as company secretary.
  We have, since 1990, received one complaint which suggests that an auditor is acting as secretary to the company whose accounts he is auditing. That complaint was received this year and we are currently investigating the matter. We have also dealt with one case where the secretary of the company carried out the audit of the company's accounts. He was formally warned that he would be liable to prosecution if he repeated the offence.
  I hope that the above information is helpful to you.

  Mr. Austin Mitchell
  To ask the President of the Board of Trade what assessment his representative on the Auditing Practices Board has made of the going concern exposure draft circulated to the One Hundred Group of Directors.

  Mr. Neil Hamilton
  My Department has sent comments on the draft guidance for directors of listed companies on going concern and financial reporting direct to the secretary of the working group on going concern, in response to an invitation from the chairman of that group.
  231

  Leyland DAF
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what action he has taken against Leyland DAF for late filing of its annual accounts at Companies House.

  Mr. Neil Hamilton
  This is a matter for Companies House. I have therefore, asked the chief executive to write to the hon. Member.

  Letter from David Durham to Mr. Austin Mitchell, dated 21 June 1993:
  As this is a matter which is my responsibility as Registrar of Companies House, I am writing to you direct.
  I have checked the register and can find only two companies within the Leyland DAF group who have failed to submit up-to-date accounts. They are Leyland DAF Limited and Leyland DAF Holdings Limited.
  I can confirm that Companies House was aware of the failure of the directors of these companies to deliver accounts for the period ended 31 December 1991. This was followed up with the companies in accordance with normal procedures.
  I was subsequently notified that an administrative receiver had been appointed for both companies on 3 February 1993. The receiver submitted the relevant receivership documents. The company will not now be pursued for statutory documents but the receiver has an obligation to send me accounts of the receipts and payments to cover the first twelve months of the receivership and 6 monthly periods thereafter.
  Should the companies survive the receivership and emerge as active and wishing to remain on the register, the directors will be obliged to deliver outstanding statutory documents including those which became outstanding prior to the appointment of the receiver.
  I hope this reply has covered the points tabled in your question.

  Reporting Accountants
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what proposals he has to ban reporting accountants from subsequently acting as receivers and liquidators for the same business.

  Mr. Neil Hamilton
  None.

  Company Investigations
  Mr. Austin Mitchell
  To ask the President of the Board of Trade for which companies he has published an interim report by his Department's inspectors since 1979 but a final report remains unpublished.

  Mr. Neil Hamilton
  Dunlop Holdings Ltd. and Ramor Investments Ltd. Substantial interim reports were published on 17 February 1981 and 22 March 1983 respectively.

  Modified Accounts
  Mr. Austin Mitchell
  To ask the President of the Board of Trade how many small and medium-sized companies have filed modified accounts at Companies House in each year since 1990; and in how many cases the filing of such accounts was found to be unwarranted.

  Mr. Neil Hamilton
  This matter is for Companies House. I have asked the chief executive to write to the hon. Member.

  Letter from David Durham to Mr. Austin Mitchell dated 21 June 1993:
  232
  As the information requested is part of my responsibility as Registrar of Companies, I have been asked to reply to you direct.
  The following modified or abbreviated accounts were accepted for filing:

  Small

  Medium

  1990–91

  252,368

  3,767

  1991–92

  270,754

  4,386

  1992–93

  303,125

  5,202

  Of these, in the years in question, in 6, 5 and 4 cases respectively the accounts were subsequently found to have been accepted in circumstances where the company did not meet the relevant criteria.

  Sellafield
  Mr. Simpson
  To ask the President of the Board of Trade what safeguards will ensure the safe transport of radioactive waste to, and reprocessed fuel from, the Sellafield site; and what security measures will be in force to prevent unauthorised access to the reprocessed fuel in transit.

  Mr. Eggar
  Radioactive materials are only transported in extremely robust containers designed and built to meet or exceed stringent internationally agreed standards laid down by the International Atomic Energy Agency. Appropriate measures are taken to ensure the security of these movements.

  THORP
  Mr. Simpson
  To ask the President of the Board of Trade what uses, other than use in power stations, are planned for the reprocessed fuel produced from the thermal. oxide reprocessing plant.

  Mr. Eggar
  The thermal oxide reprocessing plant is a civil facility and the nuclear materials arising from it must be used for peaceful purposes only. In practice, these are normally electricity generation or research.

  Mr. Simpson
  To ask the President of the Board of Trade what restrictions are envisaged on the uses of reprocessed fuel from the thermal oxide reprocessing plant; and how the restrictions on the use of reprocessed fuel will be policed and monitored.

  Mr. Eggar
  Nuclear materials arising from the thermal oxide reprocessing plant will be used for peaceful purposes only. This will be subject to verification by inspectors under international safeguards agreements.

  Patents
  Mr. Wigley
  To ask the President of the Board of Trade how many patents have been awarded by the United States of America for United Kingdom-based work in each year since 1988; and what information he has on the number of patents awarded by the United States of America to(a) France, (b) Germany and (c) Japan in the same period.

  Mr. McLoughlin
  The annual report for the fiscal year 1991 of the United States Commissioner of Patents and Trademarks shows the number of patents issued by the United States to residents of the United Kingdom, France, Germany and Japan to be as follows:
  233

  Year

  Place of residence

  United Kingdom

  France

  Germany (Fed. Rep)

  Germany (Dem. Rep)

  Japan

  1988

  2,677

  2,829

  7,587

  47

  16,704

  1989

  3,378

  3,310

  8,756

  58

  20,907

  1990

  2,946

  3,032

  7,727

  38

  20,170

  1991

  2,974

  3,094

  7,584

  0

  21,464

  The territorial base of the work leading to the patents is not recorded.

  The report for 1992 has not yet been received.

  Research and Development
  Mr. Wigley
  To ask the President of the Board of Trade if he will publish figures showing the level of business enterprise research and development as a proportion of gross domestic product for(a) the United Kingdom, (b) the United States of America (c) Italy, (d) France, (e) Germany and (f) Japan during 1991 and 1992.

  Mr. Sainsbury
  The information is available from the OECD's publication "Main Science and Technology Indicators", published in 1992, and the Central Statistical Office's bulletin "Business Enterprise Research and Development 1991", published on 25 February 1993, copies of which are available in the Library of the House.

  Renewable Energy
  Mr. Thomason
  To ask the President of the Board of Trade what plans he has to take account of the contribution of the waste-to-energy industry in his Department's renewable energy strategy review.

  Mr. Eggar
  The Government are working towards 1500 MW of new renewable energy electricity generating capacity by the year 2000 supported by a continuing research and knowledge programme. We plan to take the potential of waste to energy projects into account when developing policy for renewables.

  Warren Spring Laboratory
  Mr. Llew Smith
  To ask the President of the Board of Trade, pursuant to his answers to the hon. Member for Blaenau Gwent (Mr. Smith), of 27 May,Official Report, column 692 and to the hon. Member for Blaby (Mr. Robathan), of 10 June, Official Report, column 303, which organisation will inherit the Warren Spring Laboratory's membership of the European network of environmental research organisations.

  Mr. McLoughlin
  I refer the hon. Member to my reply to the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) on 22 June,Official Report, column 141.

  Mr. Cousins
  To ask the President of the Board of Trade what expenditure has been committed, either directly or in penalty clauses, to the construction of the replacement Warren Spring Laboratory in Welwyn Garden City.

  Mr. McLoughlin
  [holding answer 15 June 1993]: I refer the hon. Member to my reply regarding the estimated cost of a replacement laboratory on 22 June, Official Report, column 142. Around £6 million has been committed to the purchase of the site at Welwyn Garden City and preparatory work for the construction of the replacement laboratory. The site will be resold.
  234

  Consumers Association
  Mr. Callaghan
  To ask the President of the Board of Trade when he last met the Consumers Association; and what was discussed.

  Mr. McLoughlin
  My right hon. Friend the President of the Board of Trade has not met the Consumers Association. My noble Friend the Parliamentary Under-Secretary of State for Consumer Affairs and Small Firms has met them on the following occasions over the last year:

  9 June 1992: Discussion included reform of the Sale of Goods Act, EC Directive on Unfair Contract Terms, UK Presidency and the Monopolies and Mergers Commissions' report on car prices.

  17 July 1992: Visit to CA Research laboratory in Harpenden.

  15 February 1993: Discussion centred on arrangements for the provision of effective advice and enforcement of consumer protection.

  8 December 1992: To discuss proposals relating to the tying in of services to loans secured on land.

  Coal
  Mr. Tipping
  To ask the President of the Board of Trade what further discussions he has had about financial subsidy for additional coal contracts between British Coal and the generators; and if he will make a statement.

  Mr. Eggar
  I refer the hon. Member to the answer which I gave to my hon. Friend the Member for Waveney (Mr. Porter) on 16 June,Official Report, columns 603–5.

  Offshore Exploration
  Mr. Ainger
  To ask the President of the Board of Trade if he will list the blocks in the 14th round from which licence applications have been withdrawn because of the impact of proposed petroleum revenue tax changes.

  Mr. Eggar
  In any licensing round, information on blocks applied for but not awarded is regarded as commercially confidential.

  EC Technology and Industry Conference
  Mr. Llew Smith
  To ask the President of the Board of Trade what plans he has to participate in the European Commission's conference on its fourth framework programme on technology and industrial policies in London on 6 July.

  Mr. McLoughlin
  My Department has been asked to participate in the one day conference entitled "The Future of EC R&D and Industrial Policy", in London on 6 July. One of my officials, Mr. Adrian Grilli of the innovation policy division has agreed to chair this event being run by the Institute of European Trade and Technology.

  Mr. Allan Mayo will be speaking for the Office of Science and Technology which is responsible for co-ordinating all United Kingdom policy on EC research and development.

  Scott Inquiry
  Mr. Llew Smith
  To ask the President of the Board of Trade what have been the costs incurred to date by the Scott inquiry.

  Mr. Needham
  [holding answer 21 June 1993]: The DTI is responsible for meeting the direct costs incurred by the Scott inquiry which, to date, total about £150,000.
  235

  Offshore Pollution
  Mr. Ainger
  To ask the President of the Board of Trade if he will list the type and quantity in tonnes of(a) drilling chemicals and (b) production chemicals notified to him as discharged by offshore operations in each year since 1979; and what is his best estimate of the proportion this represents in each year of the total amount of each chemical discharged into United Kingdom waters.

  Chemicals used/discharged 1991

  Chemical Product

  Drilling

  Production

  Quantity (tonnes) discharged

  Antifoam

  X

  X

  5

  Asphalts/asphalt based products

  X

  32

  Biocides

  X

  X

  252

  Carrier Solvent

  X

  X

  1

  Coagulants/Deoilers

  X

  X

  119

  Corrosion inhibitors

  X

  X

  568

  Cutting wash fluids

  X

  16

  Defoamers

  X

  83

  Demulsifiers

  X

  119

  Detergents/Cleaning fluids

  X

  742

  Dispersants

  X

  268

  Drilling lubricants

  X

  163

  Dyes

  X

  32

  Emulsifiers

  X

  565

  Fluid loss control

  X

  628

  Gas Treatment

  X

  1,934

  Gels

  X

  5,361

  Inorganic chemicals

  X

  24,873

  Lignosulphonates lignites

  X

  245

  Lost circulation material

  X

  1,882

  Oxygen scavengers

  X

  116

  Polymeric viscosifiers and filtrate reducers

  X

  2,577

  Shale inhibitors

  X

  X

  3,300

  Shale inhibitors/encapsulators

  X

  1,100

  Thinners

  X

  83

  Viscosifiers

  X

  3,284

  Weighting agents and inorganic gelling agents

  X

  152,649

  Total

  200,997

  Bank Auditors
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what proposals he has for legislation under which auditors of banks would be appointed by a body similar to the Audit Commission.

  Mr. Nelson
  I have been asked to reply.

  There are no such proposals. The appointment of auditors remains a matter for individual banks.

  Timber Imports
  Mr. Gallie
  To ask the President of the Board of Trade what was the monthly cost of United Kingdom imports of timber for each month from March 1992 to March 1993.

  Mr. Needham
  [holding answer 22 June 1993]: The available information is given in the table.
  236
  Mr. Eggar
  [holding answer 10 June 1993]: Prior to 1987 the Department did not collect details of the tonnages of chemicals discharged offshore. A trial collection of data was made in 1987 and another in 1990, but there are doubts as to the completeness of the returns for those years. The first comprehensive annual return was that for 1991 which is set out in the table; the 1992 data are currently being collated. The products covered by the return are not in general discharged to the sea except from offshore installations.

  United Kingdom imports of timber1

  £ thousand

  EC2

  Non-EC

  Total

  1992

  March

  10,497

  66,466

  76,963

  April

  10,606

  75,053

  85,659

  May

  9,760

  76,383

  86,143

  June

  10,508

  86,998

  97,506

  July

  10,973

  82,644

  93,617

  August

  8,069

  75,624

  83,693

  September

  10,387

  77,335

  87,722

  October

  10,351

  77,720

  88,071

  November

  9,993

  78,090

  88,083

  December

  7,281

  61,550

  68,831

  1993

  January

  n/a

  67,742

  n/a

  February

  n/a

  62,220

  n/a

  March

  n/a

  68,775

  n/a

  Notes:

  1. Timber is defined as heading 245.01, 246, 247 and 248 of the Standard International Trade Classification (revision 3).

  2. Figures for EC trade will be available later in the year.

  Source: Business Monitor MM20, Overseas Trade Statistics of the United Kingdom.

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.
Lord De Ramsey—Sat first in Parliament after the death of his father.

Miscarriages of Justice: Sir John May Reports
Lord Hylton Lord Hylton asked Her Majesty's Government:
Whether they will publish the evidence given to, and the conclusions of, Sir John May's inquiry into miscarriages or justice, and if not, why not.
The Minister of State, Home Office (Earl Ferrers): My Lords, Sir John May's two reports on the convictions of the Maguire family were published in July 1990 and December 1992. He is currently examining the case of the Guildford Four. His report on that case will be published in due course.
Lord Hylton: My Lords, I am grateful to the Minister for his Answer, which I find helpful. Does he agree that the second stage is just as important as the first. given that Mr. Giuseppe Conlan died in custody; that the Maguire family were rehabilitated only after serving their full sentence; and that the Guildford Four have had their names blackened in a recent case in which they had no right of reply?
Earl Ferrers: My Lords, I do not want to go into the detail of whose names were blackened and whose were not, but I agree with the noble Lord that all parts of the inquiry are important.
Baroness Mallalieu: My Lords, does the Minister appreciate the urgency of this matter? I speak as someone who was involved in the initial Maguire trial and in a case in the Court of Appeal just two weeks ago in which it appears that failures to disclose relevant information to the defence, a matter which was part and parcel of Sir John May's inquiry, are continuing to occur. When those matters are published, which I hope will be rapidly, will the Minister say that steps will be taken to address any recommendations made so as to prevent the miscarriages which are clearly still continuing?
Earl Ferrers: My Lords, the Royal Commission on Criminal Justice has been set up to consider such matters. Of course, Sir John May is a member of that Royal Commission, and I have no doubt that it will take his views into account.
Lord McIntosh of Haringey: My Lords, the Minister said that the report will be published in due course. Is he aware that there have been press reports that the report will be delivered to the Home Secretary by September of this year? If that is the case, will he confirm that it will he published before the end of the
338
year at the latest? If, as we hope and understand, evidence is to be published, will he say upon what basis any evidence might be excluded from the published version of the report?
Earl Ferrers: My Lords, I understand that Sir John is currently taking oral evidence in private and hopes to report on the Guildford Four case in the autumn. The report will be published as soon as practicable after it is received by my right honourable friend the Home Secretary. Of course, it is entirely up to Sir John what he puts into his report.

Social Security Budget
2.42 p.m.
Earl Russell Earl Russell asked Her Majesty's Government:
Whether before implementing any cuts in the social security budget they will attempt to calculate their effects on the budgets of other ministries, and therefore on the total level of public spending.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, social security expenditure has increased by 67 per cent. in real terms since 1979. In the annual Public Expenditure Survey, and in the current review of social security spending, the Government will take account of the impact of policy changes in one area of public spending on other areas of public spending.
Earl Russell: My Lords, I thank my noble kinsman for that Answer by which I am encouraged. Does he accept that if people have their benefit reduced or taken away, they do not disappear? They may do something else. That might include becoming homeless, becoming ill, or committing crime. Does he agree that any of those would make them a charge on the demand-led budget of another department.? Should those costs exceed savings in social security, the Government might risk finding that they were merely rearranging the deficit on the deck of the "Titanic".
Lord Henley: My Lords, as I made clear, we take account of the effects of any changes in expenditure between one department and another in any departmental budget. When my right honourable friend sets benefit levels, in particular levels of income support and unemployment benefit, he has to take account of a number of factors. Those include the burden that benefits place on the taxpayer, the effect that those benefit levels can have on the labour market, and the increased risk of greater benefit dependency which, in the long term, imposes even greater costs upon the economy and the taxpayer.
Lord Molloy: My Lords, bearing in mind the fact that the Minister's replies have been a little encouraging and that social security covers so many families and individuals, will the Government exert extreme caution in respect of those who in future may have to put up with less?
Lord Henley: My Lords, it is the noble Lord, and noble Lords opposite, who seem to be saying that

339
people should have to put up with less. Expenditure on social security has reached £80 billion, which is a large sum. The expenditure has grown by a large amount over the past 12 years.
We are looking at expenditure on social security and we shall look at all expenditure on social security. We shall ensure that it continues to reach the most vulnerable people but we must see why it has grown at such a rate. In order to have a system which is sustainable for our children and grandchildren we must necessarily make difficult decisions in the future.
Lord Skelmersdale: My Lords, does my noble friend agree that in many areas social security schemes are over-generous and misdirected? Does he further agree that in correcting the situation it is essential to deal with new rather than existing claimants?
Lord Henley: My Lords, I should not like to comment on any specific benefit, but my noble friend has made a valid point. For various reasons expenditure on social security has grown by some 67 per cent. We cannot allow expenditure on social security to continue to grow at such a rate for the indefinite future because we shall create a system which is not affordable to ourselves, our children or our grandchildren.
Lord Ennals: My Lords, was the Minister able to attend yesterday's big rally for carers? They represented about 6 million carers who save the Government an enormous amount of expenditure by looking after disabled relatives. Is the Minister aware of the desperate anxiety felt by those people about what the Government might do to invalidity benefit—either by decreasing it, taxing it or introducing new criteria—which will reduce the ability of people who are invalids to receive it? Is the Minister aware of how much anxiety there is and can he not do something to relieve that?
Lord Henley: My Lords, as I said earlier, I shall not comment on specific benefits. I have no intention of commenting on invalidity care allowance or the benefits for carers. I should not wish to be drawn into what the noble Lord no doubt would like; that is, a degree of scaremongering about individual benefits. I am trying to make perfectly clear that expenditure on all benefits has grown by a very large amount. We in the Government must look at that growth in order to see where it occurs faster than it ought and how it can be restrained.
Lord Clark of Kempston: My Lords, does my noble friend agree that many people draw child allowance who do not need it? Is it not high time that that allowance was taxed?
Lord Henley: My Lords, my noble friend makes a valid point about child benefit but I have to say that we have a manifesto commitment to continue to make child benefit available to all. We also have a manifesto commitment to continue to increase child benefit in line with RPI.
Lord Ezra: My Lords, while the Minister's reply to my noble friend's Question was encouraging in the sense that the Government have said that they will consider the impact on the total budget of any cuts in social expenditure, does he agree that recent leaks about government intentions have created the impression of a somewhat spasmodic and arbitrary approach to the matter? When the Government finally decide what to do, will they put that in the total context of public expenditure?
Lord Henley: My Lords, I shall not comment on any particular leaks. I have been trying to make it clear that we have a review of the social security system. That is designed to ensure that the most vulnerable people in society are protected and that expenditure on social security—and for that matter in all other departments—does not outstrip the nation's ability to pay.
Lord Ewing of Kirkford: My Lords, when noble Lords opposite express the view that benefits are too generous and that families receive child allowance which they do not need, why does not the Minister tell his colleagues that during the 14 years of Conservative Government the gap between rich and poor in this country has widened enormously? Why does he not tell them that the poor are very poor, that they watch on television the examples of tax avoidance on a massive scale and that they have great difficulty understanding why they should be made to pay through cuts in their benefit as a result of the Government's mismanagement of the economy?
Lord Henley: My Lords, I do not accept the noble Lord's analysis of the figures which allege that the gap between the rich and the poor has widened during previous years. On average the incomes of all people have increased by over 30 per cent. during the 14 years since 1979.
Lord Richard: My Lords, is the Minister really endorsing the view expressed by his noble friend on the Back Benches that social security benefits in this country are over-generous and misdirected? Will the Minister take the opportunity to reject that as a criticism of our social security system? Are the Government not aware that the bottom 10 per cent. of the population of this country pay 46 per cent. of their income in tax while the top 10 per cent. pay only 32 per cent? Is that fair, misdirected and over-generous?
Lord Henley: My Lords, the noble Lord will know—if he does not I will tell him now—that we probably have the most generous safety net system for the less well-off of any country in Europe, in the form of income support and income related benefits. The noble Lord will know also that some benefits are universal and go to all classes. Therefore, it is possible to argue—I do not argue it but some of my noble friends have done so and I do not refute what they say—that some benefits are less well directed than others. That is a perfectly valid matter to consider.
Earl Russell: My Lords, when the Government consider the implications of the Question, will they consider that the best ways of reducing the social

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security budget are by reversing the trend towards wages that are below benefit levels and by generating a higher level of employment?
Lord Henley: My Lords, my noble kinsman always tries to argue that increasing expenditure on social security will in some way reduce the costs. I do not accept what he says on that matter. Increasing levels of the income related benefits in particular would have a major effect on the labour market, would increase the risk of benefit dependency and, as I said earlier, in the long run that would cost the country a great deal more than it does at present.
Lord Campbell of Alloway: My Lords, is the Minister prepared to draw a distinction, which I would draw, between the suggestion that the benefits are over-generous, which I do not accept, and the suggestion that they are misdirected in certain circumstances, which I do accept? Without dealing with specific benefits, which he quite rightly refuses to do, will he consider the general question of abuse, particularly as regards housing benefit?
Lord Henley: My Lords, I accept that there may be abuse throughout the social security system. I accept that there is an abuse of the housing and invalidity benefit systems. One could argue that some benefits are misdirected or partially misdirected as access to them has become somewhat lax. Whether some benefits are over-generous is another matter. As I said, I do not intend to be drawn as regards specific benefits. It is arguable that some elements of some benefits are over generous.
Lord Stoddart of Swindon: My Lords, will the noble Lord recall that when we discussed the abolition of wages councils during our recent debates on trade union legislation the noble Lords, Lord Campbell of Alloway and Lord Skidelsky, advocated the use of the social security system to subsidise low wages? Is that the Government's view?
Lord Henley: My Lords, that is not the Government's view, but there are various benefits which arc called in-work benefits—family credit and the disability working allowance—which are designed to assist those on low wages to have help in the labour market.

Lambeth Borough Council
2.52 p.m.
Lord Boyd-Carpenter asked Her Majesty'sLord Boyd-Carpenter asked Her Majesty's Government:
What action they are taking in the light of the reports by auditors on the operations of Lambeth borough council.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, the state of affairs revealed by the external auditors at Lambeth borough council is deplorable. Under the competitive tendering legislation my right honourable friend has issued five notices alleging financial and accounting irregularities in respect of
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Lambeth's direct labour organisation. He is currently considering whether further statutory action is justified. If appropriate, my right honourable friend can direct that the council cease carrying out certain work or put that work out to re-tender.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Will he indicate whether it is likely that the Government will take the action that he indicates is possible? Furthermore, will he tell us whether there is a case for referring some of those issues to the Director of Public Prosecutions?
Lord Strathclyde: My Lords, from the Government's point of view, we must await certain responses from Lambeth borough council so that we can take a view as to what is the appropriate action. As regards the district auditor's report, it is entirely a matter for the district auditor to decide what to do next and whether to address those issues with the Director of Public Prosecutions.
Lord Williams of Elvel: My Lords, will the noble Lord, Lord Strathclyde, accept that it is a policy of my party, and I hope that it is the policy of all your Lordships, to root out fraud and maladministration wherever it occurs whether it is at Community, government, quango, NHS trust, local authority or any other level? That is our policy and I hope that the noble Lord will recognise that.
Lord Strathclyde: Yes, my Lords.
Lord Mellish: My Lords, will the Minister understand clearly that, while we certainly do not approve of what Lambeth borough council is doing or the way in which it is doing it, we ask him to give us an assurance that as a Minister he will not regard Lambeth as the be-all and end-all of all local authority work? The vast majority of local authorities do a first-class, fine job and they should not be treated in that way.
Lord Strathclyde: My Lords, I agree entirely with the noble Lord, Lord Mellish, that most local authorities do an extremely good and effective job of running their local authorities for the benefit of local people. But clearly something has gone wrong in Lambeth.
Baroness Seear: My Lords, will the noble Lord agree that we all—and particularly those of us who live in Lambeth—owe a considerable debt of gratitude to Mr. Herman Ouseley, the former, very courageous chief executive who exposed what was going on in Lambeth in what must have been an extremely difficult situation? Will the noble Lord agree also that had Lambeth council been elected on the basis of proportional representation, that extremist group would never have been in power?
Lord Strathclyde: My Lords, we must live in the real world. Proportional representation is not with us. I agree with the noble Baroness's comments about the former chief executive.
Lord Dean of Beswick: My Lords, in accordance with what my noble friend Lord Williams of Elvel said

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from the Front Bench, I say today and I have said before that I have no time for local authority people of any party who act in an arbitrary manner and who may go outside the law. Is the Minister aware that some of the councillors deemed to be involved in Lambeth have triggered a court action against a Member of another place who made certain statements questioning their honesty? If that is the case, I believe that your Lordships should be extremely careful as regards discussing this matter at present, bearing in mind that court action.
Lord Strathclyde: My Lords, I believe that there is no harm in anybody in this House declaring that fraud is wrong wherever it occurs, and particularly where it occurs in local authorities.
Lord Dean of Beswick: My Lords, is the Minister aware that the London borough of Bromley, which is Conservative controlled, is becoming the subject of the same searchlight as Lambeth? Is it not strange that the noble Lord, Lord Boyd-Carpenter, has not included that borough in his Question?
Lord Strathclyde: My Lords, the procedures of the House allow the noble Lord to ask any question that he wants. If he wishes to table such a Question on the Order Paper, I shall be delighted to answer it.
Lord Boyd-Carpenter: My Lords, is the Minister aware that there is no duty on any Member of this House to take up every case of fraud by local authorities? If there were such a duty, would it not mean that we should be likely to exceed the ration of two Questions on the Order Paper at any one time?
Lord Strathclyde: My Lords, I always enjoy my noble friend's Questions, but in this case he is probably quite right.

Boxing: Health Risks
2.57 p.m.
Lord Taylor of Gryfe Lord Taylor of Gryfe asked Her Majesty's Government:
Whether, in the light of the British Medical Association's report The Boxing Debate, they will consider setting up an independent inquiry into the risks of brain injury associated with boxing.
Viscount Astor: No, my Lords. The Government believe that individuals should have the freedom to participate in the sport of their choice, in the full knowledge of the risks involved. Medical safeguards in Britain are among the most stringent in the world.
Lord Taylor of Gryfe: My Lords, is the Minister aware that the report is a very thorough and objective analysis of the extent of brain damage, injury to eyesight and occasional death arising from the practice of that so-called sport? Is he aware also that, while other sports incur some danger of injury, boxing is the only so-called sport in which success is measured by one man knocking another man unconscious? Does it not encourage violence at a time when violence is a major social evil in our society?
Viscount Astor: My Lords, we welcome all views on how safety may be further enhanced in sport. It is for the boxing authorities to consider whether any further improvements in medical safeguards can be made in the light of the BMA's report. I am sure that the report will be studied carefully by the boxing authorities.
I feel that I should correct the noble Lord, Lord Taylor. I am sure he will be aware that in 1867 the Marquess of Queensberry Rules were introduced with an emphasis on points awarded for solid blows struck and decisions made by judges on points. Most matches are decided in that way and not by knock-out blows.
Lord Renton: My Lords, on the assumption that Her Majesty's Government never close their mind, is my noble friend aware that brain injury caused by boxing is nearly always incurable and scarcely ever accidental? It is caused by deliberate punches at the head. In other sports nearly all the injuries—as in cricket, football, hunting and so on—are caused by accidental injury and not by deliberate action.
Viscount Astor: My Lords, assessments of long-term damage to boxers are based on relatively small samples drawn predominantly from the United States of America. That makes it difficult to draw firm conclusions. There may be need for further research into the long-term consequences of boxing, but I should stress that the safeguards in Britain are among the most rigorous in the world and that they have been significantly strengthened in the past 18 months.
Lord Mackie of Benshie: My Lords, can the Minister tell the House how many Members of the Government were boxers in their youth?
Viscount Astor: No, my Lords, not precisely. However, I can tell the noble Lord that there are a number who are sitting on the Front Bench today who indulged in the noble art.
Lord Howell: My Lords, although it is essential that the Government should take account of all such research into injuries occasioned through sport, it is important to make a balanced judgment of such matters. Is the noble Viscount aware that some years ago I commissioned research into sports injuries at school based on the percentage of youngsters taking part? The result of that research showed that boxing was at the bottom of the list and that swimming and rugby were at the top. Therefore, should we not be most careful as regards the criteria that we adopt when making such judgments?
Viscount Astor: My Lords, the noble Lord has great experience in sports and has made an important point. It is essential that risks should be kept in perspective. Statistics collated by the Office of Population Censuses and Surveys show that there have been only three instances in England and Wales since 1986 where boxing has resulted in death. That is less than in several other sports; for example, riding, mountaineering and motor sports. The figures show that there were as many deaths in cricket as there were in

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boxing. However, most of them involved not the players but umpires overcome by heat, excitement or other ailments while umpiring the match.
Lord Mellish: My Lords, is the Minister aware that his original Answer was most welcome? May I point out to him—
Noble Lords: No! Ask!
Lord Mellish: My Lords, is the Minister aware that in my old constituency we have one of the finest boys' clubs ever known? The boys are taught under the Queensberry Rules and they suffer no damage at all. If such clubs were shut down, it would simply mean that such youngsters would go out on the streets. As I said, the Minister gave a very good reply.
Viscount Astor: My Lords, I agree with the noble Lord, Lord Mellish, that to ban boxing would drive the sport underground and remove boxers from the protection of the 'very important safeguards that they now enjoy. There are 35,000 registered amateur boxers in England, 2,000 in Scotland and over 900 clubs in the country. It is a large and significant sport. I should also point out that boxing is an Olympic sport; indeed, it has been since the 7th century when it first became part of the Olympic Games. Our boxers took part in the Barcelona Olympics and will take part in the next Olympic Games.
Noble Lords: Cross Benches!
Lord Weatherill: My Lords, has the Minister heard of the Croydon Ex-Boxers' Association, of which I am proud to be an honorary member? I agree with the remarks made by the noble Lord, Lord Mellish. If such an inquiry is ever set up, I hope that that splendid body will be called upon to give evidence. Those concerned will be able to show how many boys from underprivileged backgrounds have been taught self-discipline and good sportsmanship and have gone on to become first-class citizens as a result of participation and proper training in the noble sport.
Viscount Astor: My Lords, the British Boxing Board of Control will be forwarding the views of its medical panel on the BMA's report to my department. It is important to note that the BMA's opinions seem to be based more on moral judgments about the ethics of the activity rather than on medical facts. There are a number of activities, not just of a sporting nature, which do not meet with everyone's approval. However, we should recognise that, like all sports, boxing is essentially a contest where skill and fitness are primarily the determinants of success.
Lord Jenkins of Putney: My Lords, as distinct from the other sports mentioned by the noble Viscount in the course of his answers, is it not the case that the damage done to youths as a result of boxing can develop very much later in life? Could that possibly account for the punch-drunk condition of the Government?
Viscount Astor: No, my Lords.
Baroness David: My Lords, I am really sorry that the matter is being treated in such a flippant way. Is
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the Minister aware that there have been reports for 25 years or more from very famous ophthalmologists stating what damage can be caused to the eyes and to the brain? There are many other ways for young people to learn discipline in sport. Will the Minister kindly go away, find out and then read some of the older evidence that exists as regards the dangers of the sport?
Viscount Astor: My Lords, we believe that in a free society individuals should have the right to participate in the activity of their choice, so long as it is within the law and they are fully aware of the associated risks.
Lord Donoughue: My Lords, I am sure that the Minister will agree that it is a serious matter. Does he also agree that the right and sensible approach is not the total banning of the sport, where the injuries are probably less than is the case in some others, but the use of the best possible and tightest regulations, monitoring and medical back-up? I believe that that should be the approach.
Further, on sports injuries in general, does the Minister have any information—indeed. perhaps the BMA could carry out a study—on the potential long-term damage (either psychological or brain damage) to tens of thousands of sports lovers who have suffered long and punishing hours watching the England cricket team?
Viscount Astor: My Lords, I agree with the first part of the question from the noble Lord, Lord Donoughue. He made an important point. As I have said before, we regard safety as of great importance in sport. There is now always a doctor present during tournaments, and accident and emergency services are alerted. Further, there is regular HIV testing and hepatitis B inoculations. We take the matter most seriously. Of course, in any other sport there are injuries; indeed, high-risk sports are rugger, hockey and climbing. However, if we look at the survey of injuries in the low-risk category, boxing is found to be similar to billiards and golf.
Lord Morris: My Lords, with regard to injuries to the eyes, is my noble friend aware that the British Boxing Board of Control has for some years been investigating the design of the thumbless glove? Can he say whether the board has come to any conclusions on the matter?
Viscount Astor: My Lords, I do not know about the thumbless glove. However, I can tell my noble friend that in amateur boxing compulsory headgear and gumshields must be worn.
Lord Taylor of Gryfe: My Lords, is the Minister aware that his statistical analysis is totally misleading and invalid? There are thousands of people who play rugby football, but an average boxer only boxes, at most, four times a year. Inevitably, with rugby players playing every week, and thousands of them playing throughout the country, there are more injuries in that sport than is the case with boxing. ft is totally misleading to produce such statistics.
Viscount Astor: My Lords, I used those statistics while replying in agreement to the noble Lord's noble friend Lord Howell.
Noble Lords: Order!
Lord Hesketh: My Lords, we have passed the thirtieth minute and I have no intention of giving way to the noble Lord, Lord Airedale.

Business
Lord Hesketh: My Lords, it may be for the convenience of the House to know that the Committee stage of the European Communities (Amendment) Bill will be adjourned at about 7 p.m. for about one hour and that during the adjournment the one-hour Unstarred Question in the name of the noble Lord, Lord Henderson of Brompton, will be taken. Following the recent agreement by the House to this new procedure for time-limiting dinner break Unstarred Questions, the maximum time for each speaker will be six minutes, save for the opener who is allowed 10 minutes and the Minister who is allowed 12 minutes in reply.

European Communities (Amendment) Bill
3.10 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Chalker of Wallasey.)
Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Treaty on European Union]:
Lord Tebbit Lord Tebbit moved Amendment No. 17:
Page 1, line 9, after ("II") insert ("except the following words in Article 2: "and an economic and monetary union"").
The noble Lord said: First, I am rather sorry, as I know a number of other Members of the Committee will he, that we will not have the Statement which will be made later today in the House of Commons on the outcome of the Copenhagen talks, as that would be relevant to our discussions. In particular I was struck by the Prime Minister's robust remark that there had been a lot of muddle-headed meddling in Brussels. It would be helpful to know whose heads they are, the nature of the muddle and the kind of meddling they have been performing, as I suspect that there will be rather more of that in future.
The first group of amendments with which we are dealing today, of which Amendment No. 17 is first, relates to monetary union. Yesterday's debates established in the minds of many Members of the Committee that one purpose of this treaty is to place new pegs into the Treaty of Rome upon which in future years will be hung many more directives, regulations and laws. Some Members of the Committee, not least my noble friend Lord Cockfield,
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deny that these pegs are new. My noble friend advised us to look at the treaty. He said that we would find all those pegs foreshadowed in the Treaty of Rome in 1972. Then he told us that a reference to a Union of the peoples of Europe actually meant that we were all to be conscripted as citizens of the Union some 21 years later. I felt that he had made the case for us not to take at their face value any words in this treaty, but to examine them most carefully and to consider what construction could be put upon them in future years by minds as ingenious and energetic as that of my noble friend Lord Cockfield.
Later my noble friend Lady Chalker told us that a reference to political parties in the Treaty of Union was innocent of purpose and was not a peg for future federalist advances. Finally, we were told at ten past eleven that the Minister answering the debate did not know—I do not for one moment blame him for that because obviously his officials did not know either—the meaning of paragraph 3 of Article F of Title I. I am very grateful to him for his undertaking that, when someone has found out what it means, he will write to me to let me know. I hope that he will let the Government as a whole know as there seems to be a little difficulty over that. I confidently await the speech of my noble friend Lord Cockfield, who I do not think is yet in his place.
Noble Lords: Yes, he is!
Lord Tebbit: My noble friend is assuming an uncharacteristically low profile today. My noble friend will tell us that monetary union too is, in his words, no more than a dotting of the "i"s and a crossing of the "t"s. However, it seems a little more than that to me. As the Committee will have had time to ascertain during these opening remarks, Amendment No. 17 is simple and direct. It would remove from Article 2 of Title II the commitment to economic and monetary union. I shall, subject of course to what the Minister says in reply, treat this amendment for the present as a probing amendment. I shall also discuss some of the other groups of amendments.
I begin by asking the Minister a specific, clear and unambiguous question. Is it the policy of Her Majesty's Government that there should be, first, economic union and, secondly, among those member states without "opt-outs" at least, monetary union? There must surely be a policy on this. The Committee should know that I find the public position of the Government on these matters ill-defined and confusing.
It is proposed to ratify a treaty which has at its very heart the concept of monetary union. I am sure my noble friend Lord Cockfield would agree that, without monetary union and without the concept of the single currency, this treaty would be like Hamlet without the Prince, although I have to say that the grave-digger is still present. Yet when I tabled a Question for Written Answer last November I asked Her Majesty's Government whether,
"it is their policy to create a single currency within the European union".

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I would have thought that is a relatively straightforward question to which one can answer, "yes", "no", or "don't know", or perhaps even "Maybe". However, I always think one should judge some of these answers by their length. On the whole the longer the answer, the greater the effort to obscure the meaning. My noble friend Lord Caithness replied,
"The UK is not obliged or committed to move to a single currency".
We know that. He continued:
"The Government believe that it is too soon to consider whether or not the United Kingdom should join any such move".
I did not ask that. He continued,
"That decision will be made in the light of the circumstances at the time".
We know that. He continued:
"No decision to move to a single currency would be made without the approval of Parliament in the form of an Act of Parliament".—[Official Report, 25/11/92; Cols. WA 68.]
We know that too. But what we are left not knowing, after the reply has been read, is whether it is the policy of the Government to create a single currency within the European Union. That is the heart of the treaty which the Government intend to ratify but somehow the Government seem shy of saying that it is their policy that this should be accomplished.
I believe many Members of the Committee will know from private conversations with Ministers that their great hope is that this whole section of the treaty will collapse. They may say quietly, "Look old boy, I do not know why you are making so much fuss about this single currency thing. It is not going to happen. That is why we signed up to it". I find that difficult to accept.
In May I again tabled a Question for Written Answer. I asked Her Majesty's Government whether
"it remains their policy that a single currency should be adopted by 1st January 1999 within the European Community member states not protected by opt out/opt in provisions within the Maastricht Treaty on Union".—[Official Report, 25/5/93; cols. WA 100.]
I will not read the reply as I do not wish to bore the Committee unduly, but essentially it merely recited the provisions of the treaty. It did not tell me what the policy of Her Majesty's Government was. I wonder whether, at an early stage in the reply of my noble friend—no doubt we shall have a little time before that moment comes and he can ascertain the Government's policy—he can tell us what that policy is. Is it that there should be a single currency within the Union, even accepting that that would leave us with our opt out or opt in provision?
Regardless of the particular position of the United Kingdom concerning sterling and that of Denmark on the krone, or the crown, do the Government believe that monetary union between the other 10 is desirable or not? I shall briefly express my own conviction on this matter. I would prefer that this part of the treaty collapsed. We in this kingdom have achieved monetary union. We know how it works. What we know, essentially from our own experience, is what Chancellor Kohl also knows: monetary union without political union is simply not credible.
On 4th January Chancellor Kohl wrote in the Financial Times:
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"Maastricht was an interim stage, albeit an important one, on the road to European union … An economic union will survive only if it is based on political union".
Indeed, on 11 th November last year—a significant date, one might say, for making speeches of that kind—Chancellor Kohl of Germany spoke at Oxford. I have a copy of his speech, which was published by the Conrad Adenaur Institute. On page 4, there is a heading, which I presume was approved by the Chancellor:
"No Economic and Monetary Union without Political Union".
Under that heading are his words on that subject:
"For me the part of the Treaty dealing with political union is just as important as the clauses concerning economic and monetary union. Everyone in Europe must realise that we can only preserve all our economic achievements if we secure them politically. An economic union can only survive if it is based on a political union".
I should like to ask whether it is the view of the Government that Chancellor Kohl is right or that he is wrong. Is it the Government's view that we can have an economic union and a monetary union without a political union? It is inconceivable to roe that there could be two, let alone 12, central banks for one currency. Of course the treaty provides in the light of that belief. It is inconceivable that there could be 12 Chief Finance Ministers, 12 Chancellors of the Exchequer, for one currency. We know that. Here in the United Kingdom we have but one currency, one central bank, one Chancellor and one economic policy.
I understand the degree of amusement on the Liberal Benches, but let us say that constitutionally we can have but one economic policy. It may vary a little from time to time. Let us say that we can have that "at one moment".
Is it the belief of the Government that the Community, or even ten-twelfths of it, would he better off with a single economic policy? Or is the establishment of the cohesion fund an acknowledgement that a single economy and a single policy which would be right for Germany would inevitably be immensely damaging to Greece? For how long would German and British taxpayers consent to maintain the cohesion fund at a level high enough to compensate Greece, Portugal and Ireland for the damage done to their economies if the economic and currency policies were advantageous to the developed nations such as Germany, or the United Kingdom?
I should like to turn now briefly to the British opt-out or opt-in clauses in relation to Stage 3 of monetary union. The amendments on the Marshalled List are slightly difficult to follow, but let me for the moment crave the indulgence of the Committee to deal with them generally. The treaty is complex and I hope that Members of the Committee will have their copies handy, because it is essential for following the argument to trace the matter through the treaty. I hope that I shall not lead the Committee into any error. If I do, I hope that someone will correct me along the way.
The protocol is to be found on page 114 of the command paper, which is the treaty. Perhaps I may direct the Committee at once to something which

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seems not altogether fully understood in some areas. I refer to paragraph 2 of the protocol, which is near the top of page 115. It states there:
"Paragraphs 3 to 9 shall have effect if the United Kingdom notifies the Council that it does not intend to move to the third stage".
Immediately below, paragraphs 3 to 9 set out what one could broadly call the British immunities. It is important to realise that those immunities have no effect whatever until Her Majesty's Government have notified their decision not to enter Stage 3. I do not know when that moment will come, or indeed if it will come.
We now have to take the treaty back a little and look at Articles 103, 104, 105, 107, 108, 109 etc. I am sure that they are familiar to most Members of the Committee. If the Committee would turn in particular to page 25 of the treaty —Chapter 4, Article 109e(1)—they will see the words:
"The second stage for achieving economic and monetary union shall begin on 1 January 1994".
That is in less than six months' time.
If one continues to paragraph 4 of Article 109e, one finds the interesting and perhaps not too controversial observation that:
"In the second stage, Member States shall endeavour to avoid excessive government deficits".
That is a topical matter. When he replies to the debate perhaps my noble friend will tell us whether the Government will endeavour to comply with that provision from January onwards and, in particular, whether they would regard a deficit of £50 billion or £35 billion as being excessive for the United Kingdom. If so, will he tell us how soon the Government expect the deficit to be not excessive and, in that context, what is not excessive? Those are commitments into which we have entered with no opt-out, and I am sure that the Government would want to comply fully with their commitments under the treaty.
Let me refer to paragraph 5, which reads:
"During the second stage, each Member State shall, as appropriate, start the process leading to the independence of its central bank in accordance with Article 108".
It is important to remember that Stage 2 might be as short as three years, as long as five, or, if the hopes of many of Her Majesty's Ministers are fulfilled, it may be eternal and will certainly not lead to Stage 3.
Let us assume for the moment that it is finite. Until the protections of the protocol are triggered by the notification that the Government do not intend to enter Stage 3 we are under an obligation to comply with Stage 2. That includes starting the process leading to the independence of our central bank, unless my noble friend tells me that the words "as appropriate" mean that we can breach the treaty and the other member states cannot. If that is indeed so, is it the view of the others that we can merrily proceed through Stage 2 without lifting a finger towards complying with the obligation to which we are committed under Stage 2?
I shall move on. The treaty provides that economic policies —and that must, of course, include the parity of currencies of member states—are a matter of common concern. The Committee will find the reference in Article 103(1) on page 18. It is a very
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important article. But what does it mean: that those policies are matters of "common concern"? What happens when an issue is of common concern in the Community? My understanding is that it becomes subject to the policies of the Community. One cannot behave with common concern over one's economic policy without allowing economic policy to be decided to some extent by one's colleagues in the Council of Ministers.
What is the interpretation which the Government place upon the obligations that will fall upon them under Article 103? Some people maintain—they maintain it with considerable force—that it means we shall be compelled to re-enter the exchange rate mechanism. I know that noble Lords have different opinions about the exchange rate mechanism. I know that different people have different opinions about the exchange rate mechanism at various times. I asked a Written Question recently about the speech which the Chancellor of the Exchequer made, on 10th July last year to the European Policy Forum, on Britain and the exchange rate mechanism. I know that not everyone follows Written Answers with the interest that I do. I asked Her Majesty's Government,
"Whether the speech of the Chancellor of the Exchequer to the European Policy Forum on 10th July 1992, which dealt with the exchange rate mechanism and inflation, remains the Government's policy".
That is a pretty innocent question, is it not? Again, one would imagine that it could be answered "yes", "no", or "don't know". Perhaps we shall have to devise multiple choice Written Questions for Ministers in future. I do not blame my noble friend for the reply; they are the Treasury's replies. However, he responded:
"The Government continue to believe that the control of inflation is fundamental to the long term health of the economy and that sterling's membership of the ERM helped to bring about a significant reduction in inflation".—[Official Report, 10/5/93; WA49.]
Noble Lords will notice that the reply does not state whether or not the Chancellor's speech remains government policy. I find it difficult to understand why Ministers cannot answer "yes", "no", "maybe", or "don't know" to very simple straightforward questions. Perhaps I pull my noble friend's leg just a little because I should own up at once to the most important statement that the Chancellor made in a very long speech on that day. Having made the points quite heavily earlier he stated at paragraph 64:
"But if—as I believe—it is the responsibility of Government not to debauch the currency but to ensure that money retains its value, then the question we must ask is how in practice we can best attain this objective. And I am convinced that the evidence of the last few years demonstrates that it is in the ERM that it is most likely to deliver price stability in Britain".
Is that still the Government's policy? When the Chancellor who uttered those words was fired a week or two ago, the Prime Minister said that his policies were very good, that they had been very right, that they were very successful, that they would not be changed and indeed that the Chancellor and the Prime Minister were very great friends and that was why he was being fired. Perhaps it would be better to be

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unfriendly to the Prime Minister and to have the wrong policies. It would seem to be the better way to survive.
Are we attached to the idea of the ERM? If I may interpret the Government's view for them, it seems to me that they are still attached to the concept of membership of the ERM, although not before an election. It seems to be a case of "Lord, make me bad, but not yet".
Let me return to the meaning of parity as being a matter of common concern. After all, if we are not to be in the ERM, are we required by common concern to shadow a parity against the deutschmark à la Lawson in the days of the uncontrolled boom; or are we to shadow some kind of ecu arrangement? What are we committed to? Are there any means of coercion if we do not do what the others regard as behaving in a matter showing common concern? Article 103(4) states:
"Where it is established … that the economic policies of a M:ember State are not consistent with the broad guidelines referred to in paragraph 2 or that they risk jeopardising the proper functioning of economic and monetary union, the Council may, acting by a qualified majority on a recommendation from the Commission, make the necessary recommendations to the Member State concerned. The Council may, acting by a qualified majority on a proposal from the Commission, decide to make its recommendations public".
Are those the only means of coercion, or are there other means of coercion? I find it slightly difficult to follow the treaty in this regard. I know that my noble friends in government understand the treaty backwards if not necessarily always forward. I shall be grateful if, when he replies, my noble friend will tell me whether there are any other means of coercion. In other words, I wish to know whether the United Kingdom's economic policy and exchange rate policy will be treated by the Government as a common concern. Does that mean that they will comply with policies which are formulated in accordance with Article 103(2) of the treaty? Do they accept that that may mean not only an end to "le social dumping" but also an end to "le antisocial" devaluations or floatings? I wish to be absolutely clear.
I believe that at this stage I have posed enough questions. I believe that it is now appropriate for other noble Lords to raise their questions or to express their views while the noble Lord considers his reply. I beg to move.
Lord Ezra: The noble Lord stated in his introductory remarks that it was a probing amendment. I believe that it is right to probe a little as to the significance of what he states. Amendment No. 17 is grouped with Amendment No. 45 which states:
"except the following words in Article 3a: 'the primary objective of both of which shall be to maintain price stability'".
I wish to raise the question of price stability. The problem of price stability has bedevilled us for years. We have had substantial inflation. Happily, we are at a period of low inflation and the challenge is to maintain it at that low level. The Government have repeatedly told us that that is a main issue which they face.
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Therefore, I am a little surprised that certain noble Lords should have put their names to an amendment which suggests that price stability is not of importance. Perhaps the amendment does not mean that, but that is what I read it to mean
Noble Lords may well say, "Yes, we agree with price stability but we do not agree with those means of achieving it". Let us probe that a little. We are now involved in the single market. In order to prosper in the single market, the conditions need to be conducive to our being able to trade there effectively. One of the biggest problems will be whether prices will be stable. I refer not only to sterling being stable in relation to other currencies but to other currencies being stable in relation to sterling. Surely if we wish the single market to be successful we should encourage a system in which there should be price stability. The whole concept of convergence of the economies is a British concept and the British representative prevailed upon our Community partners to adopt it. If we really wish to go ahead with the single market, then we must accept that we must have the right conditions in which to compete.
How do we achieve that? We achieve it by working towards convergence, by hoping that currencies will retain their relatives values as regards one another. I hope that sterling has now reached stability vis-à-vis the deutschmark at 2.50 at the moment, with the dollar at 1.50. If we can work towards that, it is highly desirable. But one cannot work towards it purely by chance—there must be agreement as to the ways in which one sets about it.
The position negotiated by the Government is correct; namely, that they have not ruled out the ultimate objective of a single currency and of convergence, but they have said that even if we were to reach the position of convergence, we would still have to put it through our parliamentary processes as to whether or not we agreed.
The ultimate purpose of moving into the single market—on which I believe we all agree—is that it should be a market in which we can trade effectively and fairly. One of the most important elements in that market, in my opinion, is price stability. Therefore, I query some of the amendments which have been put forward in the names of the noble Lord, Lord Tebbit, and those who support him.
3.45 p.m.
Lord Desai: Like my noble friend Lord Bruce of Donington, I have not changed my views in regard to a single currency for a long time. I am for it. Soon after I arrived in your Lordships' House we received a report following the Prime Minister's return from Maastricht. I raised the same question then as the noble Lord, Lord Ezra, has just raised. If the Government are not going to say that price stability is no longer their objective, what was the point of signing the protocol? Why was the opt-out obtained? Obviously, at that time we were still part of the ERM, so it was not as though we were not going to be part of it.
It seems to me that this set of amendments is too confusing. First, if we are to be in a single market, it

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is difficult, though not impossible, to envisage that we shall have several currencies which will fluctuate without any system at all. That I find difficult to envisage because if they fluctuate, then the costs of the currency fluctuations—especially the uncertainty caused by those fluctuations—will be a major cost on businesses which wish to compete.
Secondly, although our own ERM experience was somewhat unfortunate and we would like to blame the system rather than our own incompetence, it is quite clear that, had we joined at the correct exchange rate and had we not bid up the exchange rate before we joined by our monetary policy, if we had followed the fluctuations of the sterling-deutschmark rate six months before we joined, it would have been different. We deliberately bid up the exchange rate because it was thought at that time by people in Parliament that a high exchange rate was a good, macho thing to achieve. We wanted to inflict proper costs on the economy. Let us have discipline, of course, but Ministers thought that discipline on the economy at that time would be visited on the trade unions. Little did they think that the discipline of the ERM would be visited on businesses as well. Had they examined the experiences of France and Ireland, they would have seen that to achieve credible price stability is not easy. One may talk about it, but to achieve it involves much hard work and discipline.
Be that as it may, we did not achieve price stability, as I have often reminded the House. Twice within the past 14 years we have doubled the rate of inflation; we have doubled the rate of unemployment; and right now we pretend that we have price stability, but the Government are unwilling to state their policy. Of course, as the noble Lord, Lord Ezra, pointed out, the policy is that we are in the ERM, except that we are in its shadow. We have a policy for sterling of shadowing 2.50 for the deutschmark and 1.50 for the dollar. Everything that we observe about the Government's monetary policy follows from that.
I believe that it is quite a sound policy, but unfortunately in a world of free capital mobility, fixed exchange rate systems of the kind that we are going through are somewhat difficult to maintain. Free capital mobility causes problems in maintaining such a system. I am proud to say that in the course of my remarks on the Maastricht Treaty, I also said that I for one should like to go to a single currency now. Economists are quite agreed on this and there is plenty of good technical literature on it. The logic is that a single market such as we are about to enter, with deregulated capital markets, cannot maintain exchange rates within a certain band. If we abandon the band and go to fluctuating currencies, the costs of those fluctuations would be enormous on businesses, therefore the costs of the uncertainty would be massive.
Thus we should consider right now how quickly we should go to the single currency. I know that I am in a small minority and that logic never wins in these matters, so I am happy to wait for the single currency to come about under the timetable. I also hope that at that juncture, in 1997, when we are presented with the
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possibility of joining the single currency, we shall grasp the initiative. If we do not, it could only be because our economy will have been so badly run by the Government and we would be structurally so weak that we would not be able to sustain our currency within such a scheme. It is folly to think that being out of the ERM or out of the single currency is sovereignty. It will not be a sign of sovereignty to be out of the ERM or the single currency; it will be a sign of extreme weakness as regards the economy, a sign that we could not sustain ourselves within the single currency.
It behoves those people who champion the single market to point out to us a single historical example of a single market with many economies in which there was freedom for different countries to pursue different currency policies. The gold standard was different, it did not give any country economic sovereignty and we should not forget that. Let us not say that the gold standard was a good thing. If one liked the gold standard, one should go to the single currency—one would be better off there. If one wants fluctuating currencies plus deregulated capital markets, one should admit that we shall sacrifice price stability and economic stability, because that is the nature of modern economies.
I am somewhat surprised by the list of amendments. Turning to the details, the noble Lord, Lord Tebbit, pointed out that Article 109e paragraph 4 contained strictures about excess deficits. I am puzzled by that. I thought that all his life he had been against excess deficits. Are we to understand that he would like persistent excess deficits in the budget? I also point out to him, as I did during the Second Reading debate, that if we carefully peruse Article 104c, paragraph 3 states that government investment—that is public sector capital formation—would be taken out of the deficit. We have never had (as I have said before) a sensible approach to public sector accounts in this country. If we separated revenue budgets and capital budgets, the present PSBR would appear to be different. I do not wish to defend the Government, or give them a saving clause. Capital borrowing is perfectly all right. One borrows to generate future income, and there is no problem with that. It is borrowing for revenue purposes and not balancing the budget over the cycle which causes the problem.
Whether or not they are Keynesians, why should people be against that? It is fallacy to think that Keynes or the Keynesians are for perpetual deficit. If they are, they are stupid. But nobody should be for perpetual large deficits on a revenue account. That is irresponsible. Therefore we have to ask ourselves: what is the economic policy of the people who put down this amendment? Is it one of perpetual devaluation, as we experienced between 1973 and 1990, when sterling fell continually? Does anyone want to argue that those years were some golden age for the British economy, and that all of our problems were solved; that we achieved prosperity, balance of payments equilibrium, full employment, low inflation, as a result of devaluation? Can anybody argue that? Does anyone want to argue that maintaining large and

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continuous deficits will maintain full employment and prosperity in this country? What is the objection to those perfectly sensible strictures?
I would be the first to confess that when I was younger I was quite happy to contemplate a public sector deficit. But in those days it was possible to imagine countries in relative isolation, because capital movements were restricted. We did not have the free movement of capital. If one has free movement of capital, one cannot be Keynesian in one country. It stands to reason. Suddenly, the monetarists of old, the people who told us that deficits were bad, want to have deficits. People who said that fixed or high exchange rates were good, suddenly want to devalue. Why is that? It is because they think that there is something called economic sovereignty. Of course, we have made such splendid use of economic sovereignty for the past 20 years and are in such good shape as a result of it. I am told that we did not lose economic sovereignty until we joined the ERM in 1990. What did we do with economic sovereignty? What great show did we make of our economic performance when we had economic sovereignty?
It would be false to believe that such economic sovereignty could be maintained in the world of the single market and free capital movements. It behoves those who have put down this set of amendments to tell us very clearly whether it is their policy that price stability, full employment and economic growth no longer matter; and that some magic rule, or perhaps lack of rules, (perhaps they have given up on rules) will allow for freedom. Perhaps they want to privatise the central banks, and privatise economic policy. With no rules whatever, no objectives regarding policy, and no co-operation, they think that we can survive in a single market and achieve full employment and prosperity.
My view is that we have to examine very carefully our economic policy of the past 20 years and longer, during which time we have had a small episode of fixed exchange rates and 20 years of fluctuating exchange rates. People have to convince themselves and others that those fluctuating exchange rates were periods of superb economic management and prosperity, full employment, and so on. There is no evidence for that. Therefore they should say to themselves that perhaps there is something in this treaty—even though it has been written by foreigners. I believe it is still a good treaty. They have to be concerned with the logic of free capital movements and a single currency. I urge the Committee to think very carefully and to reject this group of amendments. They cannot be sustained by any logic compatible with the modern world.
Lord Cockfield: I intervene in this debate solely in order to assist my noble friend Lord Tebbit in understanding these matters—a thankless task, the Committee will no doubt think. Nevertheless I shall do my best.
The formation of policy in the European Community follows a very well defined path. It has nothing whatever to do with salami or sausages, or the other matters on which my noble friend extended himself in the debate yesterday. The pattern is this. The heads of government—or, in the case of France, the head of the state; Mitterrand is one leg up
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compared with everybody else—decide what the policies should be. Those policies are then given a legal status, either in a treaty or in an Act. That is then followed in due course by the detail being filled in by subordinate legislation in the form of directives, regulations or decisions. One sees this illustrated perfectly in the case of the single market programme. It started in June 1985 with the heads of government meeting at Milan, and endorsing the programme for the completion of the internal market. as we then called it. That was then followed by the Single European Act, which gave it legal status and a legal base. That in turn was followed by 300 directives which filled in all the detail.
The Maastricht Treaty that we are now discussing, and economic and monetary union, follows exactly and precisely the same path. It starts with the heads of government at Stuttgart in June 1983 deciding on European Union, including economic arid monetary union, social policy, economic and social cohesion and quite a lot of other things. That constituted the decision on the policies. That was then followed by the Single European Act, which gave economic and monetary union its legal status. At that time it was contemplated that the detail would be filled in by regulation and decision in exactly the way that it was done when the EMS was set up.
At that point a slight change occurred in the field of policy formulation (or formation). Instead of having the vast array of regulations and decisions, it was decided to put it all in a single treaty. That is the Treaty of Maastricht; and that is why the Treaty of Maastricht deals with economic and monetary union. That is why I have said in this Chamber on more than one occasion that the Treaty of Maastricht is a useful and valuable treaty. Essentially its aim is not to give economic and monetary union its legal base—that has already been done in the Single European Act—but to fill in all the detail. It does one other thing which is of particular significance to my noble friend Lord Harmar-Nicholls. It brings out into the open things which hitherto have been done in private. In other words, we are enabled to see what lies behind the arras. I have always said that he who wanted to see was always in a position to see. But that is exactly and precisely what the Treaty of Maastricht does.
Economic and monetary union is the natural consequence of the single market. One can, of course, have a single market without a single currency. But one does not garner all the benefits of it.
Perhaps we could look at the United States of America—there are people who sometimes cite the United States as an interesting example. It has had a single market ever since the present constitution was signed 200 years ago. I believe that it has had a single currency ever since 1866. When I first went to the United States in the early 1950s one would still occasionally have a dollar bill passed upon you which was denominated in silver. That goes back to the creation of the original single currency in the United States. Also, it has a single language. A great deal of the economic strength of the United Stales is founded on the fact that it has a single market, a single currency and, most of the time, a single language.

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In fact, that was the motivation behind the economic union. We wanted a start with a single market. We extended it to a single currency and beyond the single currency there are other areas in which one needs to create a level playing field for all the economic actors in the Community.
In this country we have decided that for the moment we will not go along with economic and monetary union. I believe that that is a wrong decision. Nevertheless, I respect it. One of the problems in this life—I say "problems" but perhaps that is the wrong term—is that if one joins any organisation, such as the European Community, or indeed if one is a member of any society, like the British nation, from time to time one is in a position of having to defer to other people's opinions. I know that that is an unpopular viewpoint in some circles. Nevertheless, it is one that I commend to the Committee.
It is on that basis that, while supporting economic and monetary union, nevertheless I am prepared to accept the opt-out which was negotiated for this country.
Lord Hamilton of Dalzell: Before the noble Lord sits down, I wonder whether I may ask whether he agrees with my right honourable friend Sir Edward Heath that if one has a single currency one also has to have a single government.
Lord Cockfield: It is not for me to answer for Sir Edward Heath. I do not even know whether the words quoted are entirely accurate. I have no knowledge of that at all and would not pretend to knowledge that I do not possess, in contrast with many other people. So far as I am concerned a single currency does not necessarily lead to a single government. The noble Lord will find the American dollar in use in wide areas of the world where there is no single government and indeed in some places no government at all.
4 p.m.
Lord Harris of High Cross: It is always helpful to have such magisterial pronouncements from the noble Lord, Lord Cockfield, whose experience and knowledge of these matters command attention. However, his words do not carry us much further.
I am interested in Amendment No. 17 which the noble Lord, Lord Tebbit, suggested was a probing amendment. There have been some observations from rival economists and other parties and it is difficult to know where to begin. With regard to the matter which the noble Lord, Lord Cockfield, has just mentioned, with a sleight of hand that reminds me of my early interest in conjuring, he says: "Of course, this is not carrying us any further forward. It is dotting "i"s and crossing "t"s because it is in the Stuttgart agreement that we should work towards monetary and political union. The previous documents have implied continued progress towards that end."
I recall at Second Reading an impressive speech by the noble Lord, Lord Carrington, who took my breath away by commending the treaty on the basis that it probably would not happen; circumstances have
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changed; this is a whole world away from 1989–90, and so we must not worry too much. I believe that this is one of the great difficulties with which we wrestle. It divides good men on opposite sides of the argument. There is a complete evasiveness, slipperiness and I would even say slyness, in some sense, in presenting broad statements to which everyone can agree about political union, incorporating them in declarations and so on, and saying that we have no details; and then coming back later with the details. So we find that we have a fait accompli. We now have a full-blown detailed monetary union proposal.
Despite what the noble Lord, Lord Desai, said, I honestly believe that the monetary union is a spoof. I truly believe that. Moreover, I believe that it is on the same level as the proposition put forward by George Bernard Shaw to invent a new language like Esperanto. One can argue along the lines of "Wouldn't it be nice to have a new language? Let's invent a new language. We can all speak it to one another and it will overcome so many difficulties".
We say here that we need a new currency. If we had one single currency for the area which was a stable currency and everyone joined it, would it not be helpful in promoting trade and maintaining stability? That begs all the questions. You cannot just create a currency in that way. The noble Lord mentioned the gold standard. That emerged. It was part of what Hayek would refer to as "spontaneous evolution". The Tory Party used to believe in spontaneous evolution. It now believes in planning, construction-ism and detailed intervention in the economy—all that in the wake of Citizen Delors. I am being very correct now. We are citizens and, if we are to be citizens of Europe, we are entitled to speak frankly to one another.
We admire the stability of the deutschmark and acknowledge that it is due to the Bundesbank which has a degree of independence, though it is not totally independent, in operating a stable monetary policy. The conundrum with which I am faced is that first of all there is no guarantee whatever that the future ecu will be as stable as the deutschmark has been. Indeed, part of the argument in France and Italy is that the deutschmark has been run too severely and with too little regard to unemployment and other considerations apart from price stability. The implication is that when we all share in running the currency, we shall be able to abate the obsession with price stability. I do not at all accept the blind faith of the noble Lord, Lord Ezra, that if we are to have new money, somehow it will emerge and will produce that stability.
I put this proposition to the Committee. If European countries pursue stable monetary policies on the model of Germany, an ERM or an EMU would not be needed. If stable monetary policies are not pursued, an ERM or an EMU will not work. There is no way round that. To maintain stability you must have regard to monetary and fiscal policy. It could be done outside the ERM.
As many noble Lords were at the uplifting memorial service to the late Lord Ridley, I looked up

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his last words in this House which were in February, on a Motion moved by the noble Lord, Lord Pearson. Those last words, which had a ring of defiance, were:
"Surely it is time to recognise that it is the single market which matters and that the single currency does not".—[Official Report, 17/2/93; col. 177.]
Nick, as we all called him, was not a fool. There is no inconsistency in that proposition. In a single market you can have free trade between areas without any monetary connections whatever. The North Atlantic Free Trade Area has not anticipated changing from floating currencies between America, Canada and Mexico.
I have two main anxieties to which I want the Government to attend. It may be tempting for the noble Lord, Lord Desai, to say that people who oppose monetary union are closet devaluationists; they want to keep taking the soft option and do not want the discipline of fixed exchange rates. I am saying that if you have a monetary policy, you can do it yourself. You do not need a piece of steel inserted into your backbone, which will have other painful consequences.
The point is that economists have been debating for the past 20 or 30 years—we must not enter into an economist's argument—the optimum currency unit. They have been debating what circumstances would enable various countries to join into a single monetary unit. To go back to our own experience, throughout the whole of this century we have had a single currency in the United Kingdom. One result was that monetary policies that were appropriate to the South of England left Scotland, parts of the North-East, the North-West and the Midlands behind and we had to have a development policy. The development policy was in some way to accommodate different regions to the discipline of the single currency that involved them in economic distress.
Areas are dependent upon different sorts of industry. They have different structures and there are immobilities. An alternative to a single money between England., Scotland and Wales would be to have three currencies. We did not have three currencies but we introduced a payroll tax to try to reduce labour costs in some areas because the national wage level bore harshly upon those areas with declining industries.
The 12 economies have wholly different structures with wholly different levels of development. They are progressing, in economic terms, at different rates and are affected quite differently by external shocks—for instance, oil or a new imposition from outside. Several Members of the Committee talked of convergence over two or three years. But over a period of 10 or 20 years, and a cycle or two, one has quite different circumstances. Therefore, to incorporate monetary union into the treaty is bad for Europe. If we believe that it is bad for us, why do we allow it to go forward under the treaty and the institutions of Europe and try to say that we are opting out? That is my question. If it is bad for us, is it good for Europe?
My second question is perhaps more manageable. It arises from a legal document by someone with the same name as the noble Lord, Lord Howe, but who, in my view, holds rather better, more congenial
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opinions. Martin Howe wrote a paper, Monetary policy after Maastricht: How much independence will Britain possess? To sum it up he says that even without our opt-out we are still caught up in Stages 1 and 2. We are caught up by the general expression of support for monetary union, going back to the earlier documents and proclamations. He says that there is a possibility that we will find ourselves brought up before the European Court of Justice.
Martin Howe is a lawyer. He is not as distinguished as the noble Lord, Lord Howe. However, he is a barrister and specialised in this kind of issue. In his paper he said that the European Court could find that we were failing to fulfil our obligations to bring our economy into convergence in readiness to join the ERM, although we are not going on further into the EMU. He said,
"that the ECJ would find that a policy of indefinitely remaining outside the ERM on the part of the UK is a clear breach of the Treaty. First, in such circumstances, the United Kingdom would be avowedly pursuing an exchange rate policy based on its own national interest rather than treating it as a matter of 'common interest' as required by Article 109m. Secondly, the UK would be failing to adopt a 'multiannual programme' intended to ensure 'economic and monetary convergence': moving towards and when possible adopting a fixed ERM parity is one element of 'convergence' since it forms one of the convergence criteria set out in Article 109j(1).
Thirdly, and most fundamentally, the whole structure of Stages 1 and 2 monetary union presupposes that member states are striving towards achievement of the convergence criteria, including more tightly aligned parities. Although the UK has opted out of the prime objective of `irrevocably fixed' parities in Article 3a(2), it has not opted out of the lesser objective of exchange rate convergence. It is an important aspect of the single market as envisaged by the Treaty that there should be currency stability as far as possible across the whole market, and that the UK's conduct would be considered by the ECJ as imperilling the attainment of that central Treaty objective".
Perhaps the Minister could say what view he takes. Was the opt-out to avoid trouble now at the risk of piling it up for the future? Was it to be agreeable, to be communautaire? Was it to obtain the opt-out and then shield behind it? Have we thought out what may lie ahead if we sign the treaty with those clauses included and then find ourselves faced with the European Court of Justice? How seriously does the Minister entertain that possibility?
4.15 p.m.
Lord Eatwell: I should like to sketch out the view from these Benches on the issue of monetary union and particularly to state that the Labour Party sees considerable advantages in moving towards it. That does not mean that we consider that all the elements of the treaty are perfect. Indeed, we have considerable reservations in regard to some of the institutional and transitional proposals which are present. While we do not say that they are perfect, on balance we believe that they are in the interests of this country.
Given that we do not believe the proposals to be perfect, we will be developing other proposals to be considered at the revising conference scheduled for 1996. It would be enormously helpful to the Committee if the Minister could say what revisions the

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Government are proposing in 1996 or at least on what principles they will be suggesting revisions. Or do they believe that the treaty before us is perfect?
I should like to refer in particular to the convergence criteria for economic and monetary union which are set out in the treaty. There is a certain peculiarity about the convergence criteria; that is, they are all monetary. They relate to inflation rates, deficits as a share of national product and the national debt as a share of national product. They do not refer to either the growth, employment or productivity records of individual countries.
That is striking. One can imagine a situation in which one country—let us say Britain—has an inflation rate of 2 per cent. and 3 million unemployed, and another country has inflation also at 2 per cent. but with employment much lower and growth proceeding rapidly. In those circumstances the disjuncture of the real performance of the economies creates considerable difficulties in the operation of the monetary union and measures should be taken to alleviate them. However, they are not addressed in the treaty.
The question that the issue of real convergence raises is whether it will be possible to achieve real convergence in the Community—better growth and higher levels of employment. If so, will that possibility be enhanced by the monetary stability which monetary union brings? In other words, will monetary union make the circumstances for convergence better? Or will monetary union only be conceivable once real convergence has been attained? In other words, in what order do monetary union and real convergence come?[
I suggest that monetary union would create a framework in which real convergence was easier to attain and, indeed, the absence of it would make real convergence and sustained growth in Europe extremely difficult to attain. My confidence in putting forward that proposition derives from the fact that, since the collapse of the Bretton Woods system in 1973 and its replacement by an essentially fluctuating exchange rate system, the growth rate of the OECD countries and their employment records have been dismal compared to the achievements under the old fixed rate system. Very roughly, if one looks at growth, productivity, inflation and so on, your Lordships can be assured that all the good things have been halved and all the bad things have been doubled.
One of the virtues of the creation of a monetary union is that it would remove the key factor which lies, I believe, behind the dismal performance in the 1970s and 1980s of the OECD as a whole. It would remove the enormous growth of speculative pressure on the design and performance of national economic policies. As your Lordships will be aware, the level of speculation in currencies has increased dramatically since 1973. In 1973, roughly 10 per cent. of all foreign exchange transactions were speculative. Now, roughly 95 per cent. of all foreign exchange transactions are speculative. The number has increased enormously. This speculative pressure is particularly strong in a region in which there is free capital movements, as
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there is within the single market. Having free capital movements and different currencies, Europe suffers very considerably from the strong deflationary bias which a fluctuating exchange rate system imposes upon the economy of the system as a whole. That is the first advantage we see in a monetary union.
The second advantage of a monetary union is that monetary policy would be determined on a European basis, not simply in the interests of one particular region of Europe. As we know, monetary policy has been predominantly determined over the past 10 years or so within the European Community on the basis of what monetary policy best suits the German economy. Indeed, the German monetary institutions are by their very constitutional structure not allowed to take into account the effects of their policies on countries other than Germany. It is true that this very narrow and blinkered position of the Bundesbank has been eroded considerably in the relationship which has developed between the Bundesbank and the Banque de France since the defence of the French franc last September. Nonetheless, monetary policy is still dominated by a monetary policy designed for a region of Europe and not for Europe as a whole.
I would suggest to the noble Lord, Lord Tebbit, who made this point very clearly, that the development of regional growth and regional policies would be more effective within the stable monetary framework provided by a monetary policy set in the best interests of Europe as a whole than it would be within a fluctuating exchange rate system bedevilled by speculation and which would still be dominated by the monetary policies of the Bundesbank. Let us not fool ourselves. We do not achieve any significant monetary independence in a system in which there is free capital movements, even if we decouple our exchange rate from European exchange rates, except, and only, if we are willing to allow our exchange rate to fluctuate vigorously creating such a degree of uncertainty on the foreign exchange markets that any inter-relationship between national interest rates is broken down. In other words, we can have independence only if we also have instability.
The third advantage of a monetary union is that a co-ordinated fiscal policy in Europe, a co-ordinated strategy which has been called for at the Copenhagen Summit, would be possible, and is only possible, effectively within a monetary union. If you have fluctuating exchange rates and you devalue your currency, you are essentially attracting jobs from your partners. The notion of a co-ordinated fiscal policy, a co-ordinated agreement, to expand and create the jobs which Europe so desperately needs in circumstances where one country or another will willy-nilly devalue its currency and steal jobs from its partners is just inconceivable. Therefore a monetary union is the key foundation to achieving the co-ordination which is so necessary to attack that awful figure of 17 million unemployed within the European Community.
The fourth advantage that we can identify in a monetary union is the contribution which the development of a single currency in Europe would make to international monetary stability. There would be a single currency for Europe within the G7

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structure, creating a tripartite division of world currencies between the yen zone, the dollar zone and the ecu zone—I nearly said "the D-mark zone" because that is what we have without monetary union—which would be able to create a more stable framework, or at least have the potential for creating a more stable framework, than is possible under the current confused European scene.
I would, however, in supporting monetary union and the idea of monetary union, like to address a number of questions to the Minister. I feel, with the noble Lord, Lord Tebbit, that this entire debate is considerably confused by the Government not telling us what their policy is. It would be enormously helpful if the Minister would tell us whether the Government are in favour of monetary union in principle—yes or no. It really is a very simple question. I can, however, help the noble Lord, Lord Tebbit, as to the Government's policy with respect to Stage 2, to which he referred.
If we examine the conclusions of the European Summit in Copenhagen, we find a discussion of Stage 2 which for some extraordinary reason the Prime Minister omits from his Statement in another place. In the Conclusions of the Presidency we see that the European Council,
"invited the Commission to present proposals on all the necessary implementing measures related to the second stage of economic and monetary union so that they can be adopted by the Council as soon as possible after entry into force of the treaty and before 1st January 1994".
As the Prime Minister was a signatory to the document, will the Minister confirm that the Government intend to implement the proposals of Stage 2, as the document which the Prime Minister has signed states, by 1st January 1994?
Will the Minister also enlighten us a little about the criteria which the Government would use in deciding on whether or not to implement this opt-out? Let us consider the conditions of Article 109j of the treaty. The article states that the member states will proceed towards monetary union if convergence has been achieved. Here we have the situation: convergence has been achieved and the other member states are deciding to proceed towards monetary union. As part of that convergence, the UK has achieved convergence under the terms of the treaty. If that is the case, what principles would the Government apply, in addition to convergence and in addition to the others going ahead, in recommending that Parliament exercise its opt-out? What extra principles are involved, because monetary union will go ahead only if convergence is attained? So convergence has been attained. What other principles do the Government have in mind?
In conclusion, the Labour Party sees considerable advantages in moving towards monetary union. It does not believe that the treaty is perfect. It feels that the process of transition in particular has significant flaws which should be corrected at the revising conference in 1996; but I believe that acceptance of this amendment would be severely damaging to the economic future of the country.
4.30 p.m.
Lord Harmar-Nicholls: I find my noble friend Lord Cockfield one of the most effective and plausible debaters that I have heard for a long time and certainly on these matters. He debates with such smooth assurance. If you are not careful he can convince you that he has to be right from the way he says it and not particularly from what he is saying. I hear my noble and learned friend intervening again. I shall be most grateful if I can make my point. We have listened to a number of economists and people who have not got a skin quite as thick as mine, sit and nod out of vanity, I suppose, and pretend to know what is being said and what it is all about. I suggest that very few of us do really know, but we are the jurymen and we have to make an effort to try to find out what it is all about so that it can be of some help in coming to a decision.
For me, where my noble friend was very helpful is that he explained very effectively the machinery of how we arrive at decisions. He judges what flows from it as a civil servant. I can understand him being absolutely satisfied that if he is pleased with the machine what comes out of it at the end has to be right. I have to approach these matters as an ordinary, rather small, businessman who has had to build things up to a point where one is—I do wish that my noble and learned friend would contain himself sometimes; just for two minutes.
Lord Hailsham of Saint Marylebone: I have done so for 50 minutes and an hour and 20 minutes.
Lord Harmar-Nicholls: I give my noble and learned friend permission to leave the room. When it comes to really understanding these matters, the fact that the machine is right is no guarantee that what comes out at the end is necessarily right. I found very helpful the way in which my noble friend Lord Cock field explained about Stuttgart and other places; about the Council of Ministers, which truly represents various places. They had come to a general conclusion and had said what it was what they wanted to try to achieve. That is good. Nobody can complain about that. Every nation has its representatives and they are doing their work.
He said that the decisions were passed down to the Commission or to the equivalent of our Civil Service, whose job it was to put flesh on the bones of what they thought they had generally agreed. We have to do that in business all the time. We are responsible for the overdraft at the bank. We have a better understanding of what the customer is likely to want and to achieve and of the general atmosphere surrounding our business. We come to a general conclusion. Then we call in the lawyers and the accountants to put into some form what we have decided in a general way. As my noble friend said, that is how it is done and there is nothing wrong with that.
What we find in business—I suspect that there is a great deal of similarity as regards these matters, too—is that, although we may be happy that the words that the professionals have used are the right ones, continuing with one's business one discovers to one's

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horror when going to court to meet a claim two or three years later that the words that one had thought at the outset carried out the general view are not there at all. One is left with damages and a few problems which had not been anticipated.
I believe that my noble friend Lord Tebbit is entitled to an answer to his very thoughtful speech. As I understand it, he is asking the Government to tell us: are the words which we should approve or disapprove in the treaty truly reflective of what we thought we were agreeing to at the first meeting at Stuttgart or anywhere else? My noble friend gave me the impression—he has clearly done his homework on these matters—that the actual words we are being asked to approve not only do not necessarily fit in with what we were told had been agreed at Stuttgart but also are not in accordance with what the Government have said on various occasions about their meaning.
While it is very enjoyable to listen to this battle of the economists—I confess that I wish I understood a little more of what they are saying than I do—I would like to feel that, as regards the general commonsense, feet-on-the-ground approach, the actual words which have been questioned by my noble friend Lord Tebbit are the ones which we thought carried out the general agreement arrived at at Stuttgart. If we can achieve that, then we shall know in which direction we are travelling expressed in a language which we truly understand.
Lord Stoddart of Swindon: We should be grateful to the noble Lord, Lord Cockfield, for what he said, although not necessarily agreeing with the manner in which he said it. He told the Committee: "What you see is what you get". That is most important—"What you see is what you get". There is no doubt about that in the noble Lord's mind and he is an expert in these matters. So all noble Lords who said at Second Reading and at other times: "It does not matter if we agree to it, it is not going to happen", must heed the words of the noble Lord, Lord Cockfield, because it is going to happen because it is in the treaty; that is what it says and that is what you will get.
There has been no indication from him yet, but I hope that soon the noble Earl, Lord Caithness, who I understand is to reply to this debate, will deal with the noble Lord, Lord Cockfield, and what he very fairly said—namely, "What you see is what you get".
I could go on and discuss all these matters of what we see and what we get in great detail. Some of my noble friends and others mentioned two or three of the amendments which we are discussing and other noble Lords queried the number of amendments which have been tabled. When 420 amendments were tabled, all of them were thought relevant. If noble Lords examine the amendments they will see that each is relevant in its own right and could be discussed on its own. Of course that would not have been acceptable to the Committee. I believe that we should have spent many long clays and nights discussing individual amendments. Members have been civilised and discussed among themselves the best way to proceed. Therefore, these groupings have been made to the best of our ability and in a manner which we hope will give rise to
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a reasoned discussion about the most important parts of the treaty and the Bill. That is why these matters are being dealt with in this way.
I emphasise the point to my noble friend who mentioned Amendments Nos. 43, 44 and 45. As I have said, each of those amendments stands in its own right. Amendment No. 43 deals with the introduction of a single currency. That is a debate in its own right. The Government do not agree to it, but some people on this side of the Committee do agree. Therefore, that involves a discussion in its own right. That could go on for a very long time. Amendment No. 44 includes the words:
"… conduct of a single monetary policy and exchange rate policy".
If that is not a matter for long discussion in its own right what is?
Finally, Amendment No. 45 seeks to insert the following words in Article 3a:
"the primary objective of both of which shall be to maintain price stability".
Many of us do not believe that the only criterion and the only objective of monetary policy is to maintain stable prices. We believe that at a particular time, for example, we might let prices rise a little to reduce unemployment. Again that is a discussion in its own right and I hope that I have explained to your Lordships that there has been the desire in all parts to have a proper and reasonable discussion and the amendments have been grouped in this way to try to achieve that. In case anybody did not realise that was happening, I hope that I have been able to put the matter right.
Before I sit down, I should just like to take up one or two points which were raised by my noble friend Lord Eatwell from the Front Bench. He mentioned monetary union in connection with convergence, and of course he said that monetary union will make convergence more easy to attain. That may or may not be so. He is an economist and I am not, so I am not going to argue that with him. But what must be understood, and very fully understood, by noble Lords in all parts is that convergence means an outflow of resources from the richer countries to the poorer countries. I am glad that my noble friend agrees with me and I thank him very much.
Do not imagine that those resources will be only small resources. They will be very large resources and will make the £2.5 billion which we at present contribute in net terms to the Community look like a mere flea bite. Therefore when we talk about "convergence" let us understand what it means. It means that British taxpayers will have to pay more in order that Greece, Portugal, Spain, Ireland and even Denmark shall have more money so that they will be able to "converge". Make no mistake: that means a lot of resources from the British people. So when we are discussing this let us understand the truth of the matter and do not let us use words like "convergence", believing that it will be easy.
There is an example: we have before us the example of the unification of East and West Germany. That was an issue of convergence, and we have seen what has happened to the plans for the reunification of Germany. They have run into the sands; they have

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caused great difficulties in Western Germany, where people are resentful at having to pay more taxes and having a lower standard of living. They have also caused a great deal of resentment in East Germany, because people there have been made unemployed. So when we are talking about convergence, please let us understand what it means. It is not just some little word to slip neatly off the tongue: it is a commitment and it is a commitment that will cost this country and other countries a lot of money. I do hope that this is one of the matters which the noble Earl will deal with when he speaks.
Noble Lords: Order!
4.45 p.m.
Lord Bonham-Carter: Would the noble Lord he so good, if that is his view as to how convergence occurs, as to let us know what outflow was necessary from this country to allow Italy. for example, to catch us up economically? Who had to sacrifice money in order that Italy should be enabled to catch up with us economically?
Lord Stoddart of Swindon: If I am not mistaken, Italy was once, though it is not now, a net recipient of funds from the European Community. So certainly in part it was able to catch up at the expense of other countries in the Community. But what is absolutely certain is that as regards Ireland—I was not going to mention this. but as the noble Lord has mentioned Italy let me mention Ireland and, presumably, we want it to catch up —the net contribution from the Community funds to Ireland every year is £1.5 billion. That amounts to £35 per week for every Irish family. Therefore, although Italy has not had quite so much because it did not have so much catching up to do, Ireland is receiving a huge amount of money in personal terms amounting to £35 per week for each Irish family. We will find that if we want countries and—
Baroness Seear: Would the noble Lord give way?
Lord Stoddart of Swindon: I am sorry if I am causing such a lot of dismay on the Liberal Benches.
Baroness Seear: I find it extraordinary that a good Socialist, such as I understand the noble Lord to be, should be so upset at the idea of raising the standard of living of the poor at the expense of the rich. Can he explain that in terms of his ideology?
Lord Stoddart of Swindon: The noble Baroness has not been listening. I have not given a personal opinion. It does pay to listen to what is said. It is not what I believe, in the last analysis: it is what the noble Lords over there believe. Do they believe in convergence? Are they happy that the British taxpayer, and indeed business, should have imposed upon them more taxes and more costs in order that countries not up to our standard of living may catch up to that standard of living? That is a question that has to he answered, and it has to be answered by the Government most of all. That is the question I am asking and I am surprised that anybody should be concerned that I am asking these questions. I thought that that was what a
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Committee stage debate was all about. These are just some of the questions to he answered, and all of us could go—certainly I will give way if you want to keep it going.
Lord Aldington: I should like to get my poor confused mind into slightly better order. It seems to me that the noble Lord is asking questions about convergence when he really means to ask questions about cohesion, which is what we come to later in the evening. "Convergence" is well defined in this treaty. The noble Lord, Lord Stoddart. accused some noble Lords of not having read the treaty but it seems to me that he has not read it either.
Lord Stoddart of Swindon: Yes, I have indeed. The objective is to get the economies to converge in certain ways and the cohesion funds, which we shall be discussing later, are a means of obtaining that as well as by monetary means. So I am perfectly well aware of what it means: but we could discuss every single issue under this particular heading. I do not want to do that—
Lord Hailsham of Saint Marylebone: Hear. hear!
Lord Stoddart of Swindon: But I hope that we shall have answers soon to the many questions that have been asked of the Government Front Bench, and then we can go on with the debate.
Lord Simon of Glaisdale: This has been a wide-ranging debate and a valuable debate, even though it is extraneous and irrelevant at this stage of the Bill. It is irrelevant because the signing of a treaty is a prerogative power and the Government, having signed, are bound to try to bring United. Kingdom law into line so that the treaty can he ratified. As to that, approval was given on Second Reading in this place. In accordance with the practice of this place. the Committee stage is limited to implementing what was decided on Second Reading. We can by all means improve on the detail but we cannot go counter to the decision that was made.
As I said, it has been a valuable debate, because it goes behind the treaty. It starts by asking the question: do we want stability in exchange rates? If we do, is the EMU a suitable organisation for bringing about exchange rate stability? Is there any other in sight? Finally, there is the question that has been posed: does a single currency necessarily involve single government? As to exchange rate stability, there can be no doubt. No trader can trade properly unless he knows the value of what his money on account will be at the end. If he is trading in marks, dollars or sterling he wants to know, within a small range, what is to be the value of what he has to deliver.
The question then arises: is the EMU a suitable vehicle for exchange rate stability? The noble Lord, Lord Desai, mentioned the gold standard. That was a semi-automatic instrument of exchange rate stability, but no one suggests that it can be revived. So the question is: is there any other vehicle apart from the EMU? I do not intend to go into the details of our

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entry into the EMU because the Committee is privileged to have among its Members the principal agents of our entry into the EMU.
I come to the final question that has been posed: can one have a single currency without a single government? That is answered confidently, "No". It is answered thus by those who optimistically hope to have a single government, and pessimistically by those who will not have that at any price. But in fact the question can be answered categorically, "Yes", because it has occurred in the past. It has occurred in a wide range of states in the Latin monetary union of the middle of the last century. That started, I believe, with France—the noble Lord, Lord Peston, will correct me if I am wrong—Belgium, Switzerland and Italy. It was so successful that other states joined in; for example, the Papal States and Romania. That is one example.
Another example closely concerns us. In 1826, the pound in this country and the Irish currency were put in a position of parity. Of course at that time there was a single, common government, but that parity continued after the establishment of the Irish Free State in 1922; and, indeed, it continued after the establishment of the Irish Republic during the war. It continued in fact until both countries entered the EMU. So that question can be answered categorically: a single currency does not necessarily involve a single government.
Lord Rippon of Hexham: I should like, if I may, to follow what the noble and learned Lord, Lord Simon, has just said. He described clearly the processes by which we are bound to seek to ratify the treaty that we are now considering. I express my gratitude to the noble Lord, Lord Stoddart, for what he had to say about the large number of amendments put down and the way in which an effort has been made to group them to ensure that we have a more orderly discussion than perhaps took place elsewhere. As he said, all the amendments could give rise to an interesting discussion. The one that we are having now is interesting. It is one that will in fact be repeated in many forms over many years.
What we must do here and now is to focus upon the issues which are directly relevant to the Bill and the ratification of the treaty. We shall have to return at the end of the day to the fact that we can only accept or reject the treaty; we cannot amend it. If we accept it, we will strengthen the objectives of the Single European Act, as promoted by my noble friend Lady Thatcher. It is one, I believe, of her greatest achievements. If we reject it, we shall of course become remote from the central decisions in Europe. We shall not have these interesting discussions about the contribution that we can make to the future.
So far as concerns the issues directly related to the Bill, particularly the EMU, we have the opt out. As regards the timing, I do not know. We can all hope for paradise on earth, but as for the timing, I do not know. My recollections go back; a little further even than those of my noble friend Lord Cockfield. I can remember spending a great deal of time in 1972 assuring the other place that we were not committed
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to the third stage of the Werner plan in which the Community proposed economic and monetary union by 1980. It is an objective. One may think it is a good objective or a bad objective, but we have the opt out in the treaty. We shall have the opportunity to reconsider that issue.
On the common currency, perhaps we should have a referendum. We should ask the question as to whether we should have a referendum when the time comes. It may or may not happen. We shall have another opportunity to say whether or not we want it. I believe that it is a good idea if it can be realised. After all, if I may follow up some of the examples given by the noble and learned Lord, Lord Simon of Glaisdale, we invented travellers' cheques so that our travellers could move about Italy when it was difficult to do so with 16 different currencies to carry in one's pockets.
We have more recent examples of a common currency leading to political union. There is a common currency in Belgium and Luxembourg. There is a common currency in Switzerland and Liechtenstein. There is nothing to stop a whole range of countries in Europe, if they so wish, deciding to have a common currency but still not have a political union.
Yesterday, the noble Viscount, Lord Tonypandy, to whom we always listen with affectionate regard, spoke of a sense of impatience. I should not like to think that I have been misunderstood when I said that I believe that we should get on as fast as we can. I would never have suggested that we deal with the Bill, relatively simple though it is, on one Friday, as we did with the Single European Act which had far more, far-reaching consequences than the Bill. The noble Viscount said that we should have patience—I believe that we have shown a great deal so far—and we must have responsibility, but our responsibility, above all, I would suggest to some Members of the Committee is not to mislead the British public with Euromyths and the projection of false fears which do no good to British interests.
The noble Lord, Lord Harmar-Nicholls, said that he spoke as a businessman. I should like to conclude my remarks by referring to a speech made by Sir Michael Angus at this year's CBI dinner. He said:
"It is clearly in the interests of British business that the Maastricht Treaty is ratified. We need our Government to be at the heart of negotiations, ensuring that our concerns are taken into consideration, constantly improving and updating the Single Market and making it work fairly for us. And—I would add—curbing the power of Brussels".
None of us disagrees with that. He continued:
"The progress of the Maastricht Treaty through Parliament has really been a sorry spectacle".
He was of course referring to the other place and I hope that we shall not repeat that. He then said:
"A clear majority of the House of Commons wish to ratify the Treaty. Yet we seem to have been on a knife-edge for months as a small body of people, through a mixture of contrived parliamentary procedures and convoluted logic, seek to sabotage the Bill. This unwelcome and distracting side-show must come to an end—and quickly. All credit to the Prime Minister for steadfastly sticking to his principles".
I wish that some others whom I shall not name would stick to the principles to which they subscribed in the days when they were in office.
5 p.m.
The Earl of Onslow: It is interesting to comment on what was said by the noble Lord, Lord Eatwell. When I was eight and recovering from mumps I bought a small metal submarine. I was desperately sorry because my parents said, "Oh, there has been a disaster! Stafford Cripps has had to devalue the pound". I could see the noble Lord, Lord Eatwell, in his advocacy of the Bretton Woods fixed exchange rate mechanism, as Sir Stafford Cripps incarnate or possibly even the Norman of the 1929 Government. We know perfectly well that fixed exchange rates with modern computer technology do not work. We should by now have learnt not to use them.
We have only to see the strain on the European monetary system. If the French were not in the exchange rate mechanism they could have interest rates of 5 per cent. or 6 per cent. lower and the franc would possibly be higher against the deutschmark. The noble Lord, Lord Stoddart, said that one of the causes of trouble in Germany was the reunification of the ostmark and the deutschmark. He was right but I believe that his analysis was wrong. On the free market the ostmark was worth one-sixth of one mark. Then some fool came along and gave the East Germans six times the value. In one fell swoop all East German labour and industry was bankrupt because the prices were too high. Money is only a store of value; it serves no other purpose except as a means of exchange.
There is possibly an argument for a single currency. I am not an economist but I enjoy historical things, as Members of the Committee may realise. The other day I walked down Beauchamp Place and saw in the window of the Map House a bond to the Chinese Government. It was at 3.5 per cent. for 25 years, £5 million in gold sovereigns. All the amounts were exact in imperial German marks, gold roubles, Japanese yen and the French and Belgian francs. There was no parity of 2 per cent. either way; it was rock solid. I believe that it would be possible to have a single universal store of currency throughout the world, as we did from 1815 to 1914.
However, it seems that it is impossible to get there. We cannot do so, even if we want to, except by self-control. We can get there only by putting our own houses in order. We cannot get there by having it imposed upon as by a treaty from outside. If the Italians do not want to run a sensible monetary system, or if we are silly enough to stay in an exchange rate mechanism at the wrong rate, and the wrong this, that and the other, it will end in disaster. If we can get our act together and do it voluntarily it will happen. It will not happen if it is imposed from outside.
If we produce children's clothes, for example, the French will come pottering across on the ferry and buy their children's romper suits in Dover. If we are silly enough to put a large amount of tax on French wine those of us who like French wine will go across the Channel, load up our Discoveries and there will be a dearth of wine merchants in Kent. If we run sensible financial policies which run sensible and proper monetary policies, and if we make sure that our money holds its value, things will come together. The
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difference in richness between Greece and Dusseldorf will not matter. The Greek currency can hold the same value but the bloke in Greece can be paid rather less because he is worth less than the skilled man in Dusseldorf. But the currency can be worth the same. That is what I mean by convergence. In my view it cannot be imposed from outside; it can be imposed only by self-discipline and self-control.
Lord Monson: I was interested in particular in the contribution of the noble Lord, Lord Desai. Even more than his Front Bench colleague, he clearly believes sincerely and passionately in the virtues of a single currency. Therefore, presumably the noble Lord believes that considerable sacrifices should be made in order to attain that extremely desirable objective. What would those sacrifices consist of? I suggest that the chief sacrifice would be a loss of national independence far greater than has yet been dreamed of.
The noble Lord, Lord Tebbit, reminded the Committee of Chancellor Kohl's firmly expressed opinion which is shared by many distinguished political figures on the Continent of Europe: notably those in Germany, Italy and the Benelux countries. It is that, in order for monetary union to be in any way effective, it will require positive steps, often giant steps, towards political union. They are opposed in that view by the noble Lords, Lord Cockfield and Lord Rippon, and my noble and learned friend Lord Simon of Glaisdale. Clearly, both groups of distinguished individuals cannot be right, but I should hate to judge which will be right in the end.
However, there are other distinguished political figures in this country who believe that political union will automatically result from monetary union without the need for any conscious steps to be taken in that direction. Perhaps I may give the Committee a short quotation:
"There is nothing which comes nearer to sovereignty, self-government or what politics is about than control of money. From the beginning of time it has been the attribute of sovereigns that they made or declared money. Their image and superscription was found upon it. That is what made it money. In our day, supremely the subject in politics about which we dispute, debate and vote … is about how the control of money shall he exercised … If there is to he monetary union the decision"—
—about how the British state ought to use its moneymaking power—
"is to be taken away from the British people. It is no longer to be a subject of politics in this country. It is a subject which will be decided by the general and common authorities of a monetary union. Consequently, there is nothing more directly and clearly inimical to the political process in this country than the professed intention to enter into a monetary union".—[Official Report, Commons, cols. 526–527; 10/7/86.]
Those were the words of Mr. Enoch Powell speaking almost seven years ago.
I ask the noble Earl who is to reply whether it can be seriously denied that monetary union would result in a massive transfer of power away from the elected House of Commons to an unelected body over which we should have minimal control and influence.
Lord Boardman: I oppose the amendment. I shall try to do so briefly because I believe that much of our discussion is premature. So far there has been no

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mention of how much the Prime Minister secured in the form of opt-outs with regard to the single currency in the Maastricht Treaty. As my noble friend Lord Rippon said earlier, I believe that the merits and demerits of a single currency will be the subject of much debate over the months and years ahead. I have significant reservations about some aspects of a single currency but I hope that I shall have an opportunity to raise those in the future. I suggest that, today, that issue is irrelevant. We have secured an opt-out. That is a credit to the Prime Minister and one which encourages me to oppose the amendment.
Lord Morris: At this stage I believe that it would be useful if the Minister would respond to some of the highly cogent questions that have been put to him by Members of the Committee. It would aid the debate considerably because those who will speak later can then marshal their speeches in accordance with the Minister's response.
Lord Peston: There are several of us who still wish to speak. I do not mind when the noble Earl speaks so long as it is not assumed that he is to be the last speaker.
Baroness Trumpington: I believe that yesterday there was some confusion in which I was involved. Perhaps I may clarify the matter. Anybody can speak at any time in Committee. The only point is that we must finish an amendment before we break for pleasure of any kind.
The Minister of State, Department of Transport (The Earl of Caithness): It may be helpful to the Committee if I set out the position. I welcome this opportunity to consider Stage 2 of EMU and the transition to Stage 3.
As we debate this issue, we are only a few months away from 1st January 1994, which the treaty sets as the beginning of Stage 2. In spite of the delays in ratification, not in this country alone, the Community remains committed to beginning Stage 2 on that date.
Before commenting in detail on some of the issues already raised, I should like to remind the Committee of two fundamental points. First, as my noble friend Lord Boardman said—and I emphasise in particular to the noble Lord, Lord Monson—we are not deciding in this Bill whether or not the United Kingdom should participate in a single currency or join the third stage of economic and monetary union. Both the treaty and the Bill provide watertight legal protection for that decision to be taken nearer the time and for Parliament to be fully involved.
Secondly, the principle of economic and monetary union is nothing new. It has been on the Community's agenda since before we joined it. In October 1972 the Government, under my right honourable friend Sir Edward Heath, associated themselves with a resolution of heads of state and government of existing and future member states calling for progressive realisation of economic and monetary union by 1980. While, clearly, the timetable was not followed, the commitment to the principle was picked up in the Single European Act signed by my noble
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friend Lady Thatcher in 1986. There is also a history of secondary Community legislation going back to the early 1970s building up the present level of economic and monetary co-ordination in the Community.
Some Members of the Committee have quite rightly concentrated on the transition to Stage 3. However, as I have already said, Stage 2 is much more immediate. Under Article 109e, once the treaty is ratified by all member states, it will begin on 1st January next year. Perhaps I may remind the Committee what Stage 2 entails. First, I must make clear that during Stage 2 economic and monetary policy remains firmly in national hands. The obligations to co-ordinate economic policy, contained in particular in Article 3, do not conflict with that principle and Article 3 of the European monetary institute—the EMI—protocol makes absolutely clear that the EMI must carry out its tasks:
"without prejudice to the responsibility of the competent authorities for the conduct of the monetary policy within the respective Member States".
The role of the EMI is consistent with the retention of monetary policy in national hands. That new institution will carry on the work of the present Committee of Central Bank Governors, including its role in strengthening the co-ordination of monetary policies. However, it will only have a consultative role. Governments will be interested in its views but those views will not be binding and can be made public only after a unanimous vote of the EMI's council.
The EMI will also oversee the development of the ecu and make preparations for the establishment of a single central bank and for the conduct of a single monetary policy in the third stage of EMU. The decision will be for the ECB to take when it is established.
I should say to the noble Lord, Lord Eatwell, as regards Stage 2 that of course the Government accept the European Council conclusions. My right honourable friend the Prime Minister signed them. As the noble Lord will realise, there are various articles—for example Article 104a—which call for detailed definitions to be put in place by secondary legislation and that is all that the Council's conclusions are calling for.
The provisions in the treaty concerning capital liberalisation in Stage 2 largely reflect the principles that the Government have long espoused. I hope that those will be widely welcomed throughout the Committee, because this Government have been implementing those proposals since 1979. I believe that the Committee will welcome the fact that everybody in Europe is now following the strong lead that we have given.
In Stage 2 there is also an end to the privileged access of public bodies to financial institutions but as no Member of the Committee has mentioned that, I shall not dwell on it.
I wish to take up a point made by my noble friend Lord Tebbit with regard to the ERM and the question of whether the ratification of Maastricht will require sterling to rejoin the ERM.
As we have repeatedly made clear, the treaty does not contain any such obligation. During Stage 2, and Stage 3 if we stay out, the United Kingdom will retain

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full competence for monetary policy. Nothing in the treaty takes it away from us. In fact, Article 3.1 of the Protocol contains the statutes of the European Monetary Institute, which expressly recognise that member states retain responsibility for national monetary policy in Stage 2, as I have just described.
If we decide not to participate in Stage 3, the UK protocol expressly states that:
"The United Kingdom shall retain its powers in the field of monetary policy according to national law".
Article 109m merely obliges us to treat our exchange rate policy "as a matter of common interest". But those are almost exactly the same words as in Article 107 of the Treaty of Rome, which for decades has required us to treat exchange rate policy as a matter of common concern.
My noble friend Lord Tebbit referred also to the provision in Article 103 to regard economic policies as a matter of common concern. There again, the provision follows closely a similar "common concern" provision in Article 104 of the Treaty of Rome. Therefore, I repeat to the Committee that there is nothing new here compared with the Treaty of Rome, which, as my noble friend Lord Tebbit will recall, he voted for in 1972.
My noble friend went on to questions about the independence of the Bank of England in Stage 2. Article 108 requires each member state to ensure that at the latest by the date of the establishment of the European system of central banks, its national legislation is compatible with the treaty and the statute of the ESCB. But paragraph 5 of our Protocol makes clear that. Article 108 will not apply to the UK if we choose not to move to Stage 3. Although Article 109e5 requires member states to "start the process" towards independence in Stage 2, that provision is qualified by the words "as appropriate" and "in accordance with Article 108".
Perhaps I may clarify the position. Unless we decide that we want to move to Stage 3, we shall be under no obligation to make the Bank independent. Therefore, we welcome Stage 2 of the economic and monetary union as a means of building on the present co-operation between member states in economic and monetary policy, while leaving the responsibility for setting those policies firmly in national hands.
Stage 2 of EMU is very much a transitional stage for those who wish to progress to a single monetary policy and a single currency. Therefore, perhaps I should say a few words about how the transition to Stage 3 is designed to work. Article 109j of the treaty sets out the well-known convergence conditions relating to low inflation, the avoidance of excessive budget deficits, membership of the ERM and comparable long-term interest rate levels. The criteria are explained further in a protocol to the treaty. But it is important to emphasise that they are not the only factors that the Commission and the EMI will consider when making their report to the Council on the progress towards convergence.
On the basis of those reports, the ECOFIN Council will assess whether each member state fulfils the conditions for a move to Stage 3 and then consider whether a majority of member states do so. ECOFIN
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will then recommend its findings to the European Council. On the basis of that recommendation, it is the European Council that will decide whether a majority of member states do fulfil the necessary conditions for the adoption of a single currency. It will then be decided whether it is appropriate for the Community to enter into the third stage. If it is so decided, a date will then be set for the beginning of Stage 3.
The treaty makes clear that the first consideration of the reports from the Commission arid the EMI by the Council must be no later than 31st December 1996. If no date for the beginning of Stage 3 has been set by the end of 1997, the treaty provides that the third stage should start on 1st January 1999. At that time, all member states which fulfil the convergence conditions may move to the third stage but no majority is required.
My right honourable friend the Prime Minister has made it clear that he does not believe that the economies of Europe are remotely ready for a single currency and that the idea of a monetary union in 1997—ambitious at Maastricht—is wholly unrealistic. However, others in the Community are increasingly recognising that reality. Therefore, the timing of decisions about moving to Stage 3 is very unclear. I should tell the noble Lord, Lord Harris of High Cross, that it was precisely for those reasons that the United Kingdom negotiated a protocol to the treaty to ensure that, unlike most other states, we would not be compelled to move to Stage 3 if we were held to meet the convergence conditions at the time.
I turn now to the UK protocol. Again. this was a matter raised by my noble friend Lord Tebbit. The protocol explicitly confirms:
"That the United Kingdom shall not be obliged or committed to move to the third stage or economic and monetary union without a separate decision to do so by its Government and Parliament".
We have made it absolutely clear in the Bill now before the Committee that any such decision will be taken by means of a full Act of Parliament. Therefore, if we choose to meet the convergence conditions in Article 109j and to move to Stage 3, the treaty ensures that we can do so on exactly the same conditions as any other member state. I should point out to the noble Lord, Lord Eatwell, that there will be many considerations to be taken into account at the time. No doubt the noble Lord will have questions of his own to ask on the matter. However, I cannot read his mind. Indeed, my noble friend Lord Boardman said only a moment ago that he had various concerns on his mind and questions to ask. But, as he rightly said, they are matters for another day when that Bill, if it is ever presented, comes before this place.
If we choose not to move towards a single currency, the relevant articles in the treaty and in the ESCB protocol which define Stage 3, in particular with reference to the adoption of a single currency, will not apply to us. We shall not be subject to binding limits or sanctions on the size of our budget deficits, the monetary policy of the European Central Bank, the external exchange rate policy for the single currency or the obligations to make our own central bank independent.

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In negotiating the treaty, we wanted the option to join a single currency, but we wanted to ensure that the United Kingdom will continue to have a strong influence on the development of monetary policy in the Community. The treaty does just that. We participated fully in the negotiations defining Stage 3, seeking to ensure, as the treaty now does, that the monetary union will he based on firm economic foundations through the fulfilment of the convergence criteria. It sets out sound and practical arrangements for a single monetary policy and a single currency. Similarly, we shall play a full role in the discussions on economic and monetary policy both in the Council and in the EMI.
If we were to fail to ratify Maastricht, we would have absolutely no influence on the development of monetary union among other member states, and Members of the Committee should be under no illusions that those member states will simply abandon their aspirations. On the other hand, I also reject the claim that the United Kingdom will be forced to join a move to Stage 3 if it goes ahead. There could be benefits in a successful move to Stage 3, and hence costs in staying outside, but, equally, there would be costs involved in moving prematurely or unsuccessfully to Stage 3. Britain's ability to stand aside from such a move could confer great benefits on the UK. We therefore remain in the enviable position of being party to the preparations for Stage 3 and able to influence it so that it is established in a sound and sensible way, while retaining our freedom of action.
I shall deal now with the claim that Article 5 of the existing Treaty of Rome and the protocol on the transition to Stage 3 commits the UK to working for Stage 3 Article 5 is a general requirement that member states should assist in the meeting of Community objectives and not frustrate them. Of course, Britain does not sign treaties whose objectives it intends to frustrate. The protocol on the transition makes it clear that no member states will seek to stop the Community from moving to Stage 3; nor would we. Again, that is an answer to a point made by my noble friend Lord Tebbit. I believe that that is perhaps the third or fourth time that I have answered him. I see that my noble friend wishes to intervene. I give way.
Lord Tebbit: I did not ask whether Her Majesty's Government would seek to frustrate the operation of Stage 3; indeed, that thought never came into my mind. The question I asked, and which my noble friend has not yet answered, was whether it is the policy of Her Majesty's Government that we wish to see Stage 3 in operation. Do we, or do we not?
The Earl of Caithness: I have answered that question. It is a matter to be decided at a later date with a full Act of Parliament. I hope that my noble friend will take a full and active part in those discussions.
Lord Tebbit: All my noble friend has to do is to answer either yes or no. It is simply no good trying to escape by talking about the treaty's provisions. Is it the policy of Her Majesty's Government that we
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should encourage the operation of Stage 3? Are we in favour of a single currency among the other member states? Please, I beg my noble friend to give me the answer, which can only be "yes" or "no".
The Earl of Caithness: We have taken a most active part in producing a treaty which has workable and practical conditions for a Stage 3 of economic and monetary union. The decision as to whether we go to Stage 3 is not a decision that we have to take now; it is a decision for another day. Much will depend on what the position is at that time. We are in the process of going through Stage 1 at present, but we shall have to go through Stage 2. The situation in Europe has changed quite dramatically over the past 18 months. We will need to take account of any developments within Europe before the government of the day, of whichever party, decides whether or not to put forward a proposition.
I should point out to my noble friend that it is possible that we may meet the convergence conditions and the requirements for Stage 3, but that for various reasons pertaining at the time we do not wish to elect to move to Stage 3. That is the advantage of the opt-out. That is the difference between the situation in which we find ourselves and which applies to every other country other than Denmark. If they meet the conditions of Stage 3 under the treaty, they will have to go to Stage 3. We have the benefit, because of the opt-out, of not taking that decision because we have to have an Act of Parliament. We can opt out of it.
The Earl of Onslow: My noble friend Lord Caithness has answered a question which my noble friend Lord Tebbit did not ask. Are Her Majesty's Government in favour of the French, the Belgians, the Germans, the Dutch, the Spaniards, the Portuguese, Uncle Tom Cobbleigh and all having one currency or not? That is the simple question. My noble friend can only answer "yes" or "no".
5.30 p.m.
The Earl of Caithness: I would say with respect to my noble friend that I have answered that question. I hope that my noble friend Lord Onslow will have read the treaty by now and I hope that he will read what I have said about it in the Official Report. I have set out at some length the details of the transitional period and what happens during the transition to Stage 3. There are two different stages at which Stage 3 can start. The first requires a majority of member states, the second does not. That is a decision that will be taken at the time as regards whether they meet the convergence conditions. The matter is up to those countries. What we have secured is the opt out for the benefit of Britain.
I now turn to a point raised by several Members of the Committee, including the noble and learned Lord, Lord Simon of Glaisdale. The question was: can we have economic and monetary union without political union? We do not accept that the form of economic and monetary union prescribed in the treaty requires political union. As regards monetary union, it is perfectly possible for different countries to lock their exchange rates or have a single currency without

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linking their political systems. I shall give the Committee an example of that. Germany and Austria have for some years had something very close to a common monetary policy while their political systems are clearly distinct.
The economic arrangements in the treaty fall a long way short of full economic union. They do not provide for anything like common fiscal and borrowing policies. It will be for each country to decide what its public spending priorities are and what tax levels it wishes to set, just as they do now. The excessive deficits procedures do not alter that, nor do the provisions for broad economic guidelines which have no legal force. Therefore I put it to the Committee that none of these arrangements remotely resembles a prescription for political union.
I have endeavoured to answer a great many of the points that have been made. I have taken great care to explain what happens in Stage 2 and how the transition to Stage 3 will work. I shall be happy to provide further clarification if that is needed.
Lord Monson: Before the noble Earl sits down—I apologise if he gave an answer that I missed—can he assure the Committee that there is no question of our being forced to rejoin the ERM as a condition of'Stage 2?
The Earl of Caithness: I certainly dealt with that point. Of course there is no requirement during Stage 2 for us to rejoin the ERM. I know that the noble Lord will have read the treaty. If he can find anything in it that commits us to do so, he is a better man than I.
Lord Stoddart of Swindon: Before the noble Earl sits down, there is just one little point that worries and puzzles me. The noble Earl said that we must enter Stage 2 to be able to influence what happens within Stage 2, but that we have a protocol to protect us against going into Stage 3. When Stage 2 is completed, will the Government then use the same argument; namely, that we must go into Stage 3 to be able to influence the events in Stage 3? I should like an answer to that question.
The Earl of Caithness: That will not be a matter just for the Government. It will be a matter for both Houses of Parliament because it would require a full Act of Parliament to implement. I know that the noble Lord, Lord Stoddart of Swindon, will make his views perfectly clear then.
Lord Stoddart of Swindon: That is a significant reply. For Parliament to make a decision is one matter but to have a treaty brought before us which we cannot amend is another thing. That is what we have before us today. Indeed, the noble Lord, Lord Rippon, told us that that is what we have and therefore it was not worth discussing it. If this kind of treaty is brought before us again, Parliament will not have the opportunity to agree to it without, apparently, undermining the Government's position vis-à-vis other countries because such a course would undermine their honour in making treaties.
The Earl of Caithness: I must confess that I did not follow the noble Lord completely. I shall try to put my
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reply in words that he will understand. There will be an Act of Parliament. It will be for the government of the day to decide, even if we meet the criteria for moving on to Stage 3, whether it is in the interests of the United Kingdom so to do. Even if we meet those criteria, such a move might not be in the interests of the United Kingdom and we do not have to move that way. However, if the government of the day believe that it will be in the United Kingdom's interest, they will bring a Bill before Parliament to be discussed in the usual way.
Lord Bruce of Donington: The noble Earl made some interesting observations on the eflects of the opt out. As I understand it, the opt out is, in the Government's view, a perfectly viable alternative for them to adopt and it would be a deliberate decision that would not of necessity depend on whether or not we met the convergence conditions. When the time came the Government, as a deliberate act of policy, might decide to opt out altogether from that aspect of the treaty.
If I interpreted him correctly, the noble Earl said that the Government would not have considered the opt-out provision unless they were convinced that they could opt out successfully. That seems to me to be a perfectly viable situation. The Government were really telling us that in retaining the option as a constructive and deliberate act of policy, it would not follow that we would take the slow lane; be excluded from the councils of Europe and face all kinds of political catastrophes, either real or imagined, at the hands of the remaining 11 member states.
One could, in fact, not have the treaty at all and one would still not be out of step with everyone. That is an extraordinary situation. The Government are putting forward a deliberate opt out, or exclusion, as being a viable alternative which can in their view be accomplished without all the horrific consequences with which we have been regaled over the past few days.
I would be delighted if at a later stage in the proceedings the noble Lord, Lord Cockfield, with his characteristic modesty, would pass on his expert observations as regards this constructive, deliberate act of policy of opting out. I must refer to the noble Lord, Lord Cockfield, because he let the cat out of the bag completely, as he sometimes does. He told the Committee in the course of his authoritative speech—he never speaks with anything less than absolute assurance and authority—that all Maastricht really amounted to was a continuation of matters that are already contained within the Single European Act. We in this Chamber were not acquainted with that fact at that time by Ministers on the Government Front Benches who were busily assuring us how completely innocuous it was.
The noble Lord, Lord Cockfield, set out the alternatives. He said that if we had not had the Maastricht Treaty we would have needed a whole series of regulations and legislation at European level covering individual unfinished points in the Single European Act. He said that all that we were being presented with in the treaty was a substitute for

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legislation that could have been passed under the Single European Act piecemeal over a protracted period of time.
I can understand why the other member states therefore wanted the Maastricht Treaty. If regulation after regulation was required in order to achieve the consummation of the Single European Act that would have ensured detailed parliamentary scrutiny, not only in our own country but in the other member states. The individual items required to complete the Single European Act to the satisfaction of the noble Lord, Lord Cockfield, would have been subjected to considerable scrutiny and argument. Wisely the other European states bent upon the creation of a federal Europe decided that they would short circuit the regulations and have all those matters compiled in a treaty which could then be put through all parliaments without very much trouble.
A remarkable feature of the debates, not only in the other place but also in this Chamber, is the impatience of Euro-fanatics to get the matter through without any real discussion.
Noble Lords: Oh!
Lord Bruce of Donington: There are 14 separate aspects of the treaty to be considered and that is in the interests of some people who are impatient of having any treaty at all. Had the Maastricht Treaty been a sack of potatoes with "Maastricht" written on the label the Liberal Party would have voted for it en bloc without any further discussion. No wonder they have not taken a very active part in this particular debate.
Lord Thomson of Monifieth: I am grateful to the noble Lord for allowing me to intervene. Surely the Maastricht Treaty has been before Parliament for rather more than a year since the general election. At the moment we are all listening patiently—and I hope reasonably tolerantly—to 10 days of Second Reading debates on various aspects of that treaty.
Noble Lords: Hear, hear!
Lord Bruce of Donington: I note that the noble Lord also has the support of the noble and learned Lord, Lord Hailsham.
It is not for a simple Back-Bencher to determine the timetable by which the Government put their legislation through either another place or this Chamber. That is all under the control of the Government. The Committee knows quite well why the progress of the Maastricht Treaty through the Houses of Parliament has been delayed. It has been in order to accommodate the convenience of the Prime Minister, upon which—in the interests of unity in some parts of the Chamber—I shall pass no further comment. It is certainly nothing to do with me.
The same point was made by the noble Lord, Lord Ezra. He said that if we wanted the advantages of the single market or if the single market were to come to fruition we had to have price stability. That is another condition. The single market is not even complete yet. It is only 80 per cent. complete. Here new conditions are being imposed on it. That is quite ridiculous.
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When I listened to the observations of my young noble friend on the Front Bench on the EMU argument generally and on convergence, for once I found myself, astonishingly, in agreement with my own Front Bench. Of course the conditions of convergence are unsatisfactory. Of course they may be negotiated in the 1996 conference, unless the Belgians take the bull by the horns in the meantime, over the next week or so, and try to force through a further advance under the auspices of the remaining 11 members. One does not know about that.
If my noble friend has reservations about convergence and wants to raise the matter again in 1996, surely he has a perfect opportunity to do so now. Why not amend the Bill now? Why not try to alter the Bill here and now instead of postponing it until 1996, when my noble friend knows perfectly well that we shall all be told that we agreed the whole matter in 1993 and therefore there is no further argument about it?
The frightening aspect of the matter is the way in which assessments are arrived at. My noble friend Lord Desai was kind enough to indicate his agreement with me that we entered the ERM at too high a rate. The Committee will recall that at that time I objected strongly to a rate of 2.95 deutschmarks.
My noble friend seemed to think that everything would depend on Article 104 of the treaty, which lays down the responsibilities of the Commission. I shall not weary the Committee long—
Lord Hailsham of Saint Marylebone: Hear, hear!
Lord Bruce of Donington: The noble and learned Lord will have to hear me a little longer, unless he invokes Standing Order 74. However, I remind him that it is debatable and that he would be more likely to postpone the proceedings rather than curtailing them.
Let us read Article 104c again, or some of it. It is very important. because we are going to act on the basis of Article 104c. We shall be influenced by the judgments which are arrived at under Article 104c. I refer the Committee to what that article says.
Lord Hailsham of Saint Marylebone: Sing it!
Lord Bruce of Donington: Ha, ha. Article 104c states that:
"Member States shall avoid excessive government deficits".
Tut, tut. We do not want any more anti-avoidance procedures, do we?
Paragraph 2 reads:
"The Commission shall monitor the development of the budgetary situation and of the stock of government debt in the Member States with a view to identifying gross errors. In particular it shall examine compliance with budgetary discipline on the basis of the following two criteria:
(a) whether the ratio of the planned or actual government deficit to gross domestic product exceeds a reference value, unless either the ratio has declined substantially and continuously and reached a level that comes close to the reference value; or, alternatively, the excess over the reference value is only exceptional and temporary and the ratio remains close to the reference value".
Then, Paragraph 3 states:
"If a Member State does not fulfil the requirements under one or both of these criteria, the Commission shall prepare a

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report. The report of the Commission shall also take into account whether the government deficit exceeds government investment expenditure and take into account all other relevant factors, including the medium term economic and budgetary position of the Member State".
The Commission is then required to form an opinion.
We are living in a fragile world in which human beings have as the essence of their being all the virtues and vices of being human. That is a truism which I am sure is fully appreciated. Has it ever occurred to anyone on the Government Benches—I do not know about the Liberal Benches but I shall bring them in as well—or to my own Front Bench to form any opinion as to the competence of members of the Commission to make such judgments? Is there any judgment which they are required to make that cannot be made, for example, in your Lordships' House with its variety of wisdom? We have hankers, captains of industry, barristers and other learned professions. What qualities are we vesting the Commission with?
I trust that I do not offend anyone by saying this. It is common knowledge that some—I would not dream of saying all—members of the Commission have gone to the Commission on the basis of rather less than successful political careers in their own country. Some have regarded being a member of the Commission as a demotion, and very justly so. I do not, of course, refer to any commissioners present in the Chamber who, as we put it, are all honourable men. Arc we prepared in a treaty to give a collection of people—they ought not to be entirely unskilled in the political arts, whatever their other defects may be—in a commission composed to some degree of second raters, the power to make judgments that will influence other slovernments and our affairs in this country? We are harking up the wrong tree. We are endowing people with capabilities which we should like them to have and which it may suit our political views to pretend they have. But surely when all is considered we may come to the conclusion, as in one of the Hans Andersen fairy tales, that the emperor really had no clothes.
Lord Desai: I am grateful to my noble friend for referring to my speech. Before he sits down, perhaps he will clarify this. Had he listened with the attention that he normally gives to my speeches, he would have noticed that I drew attention to paragraph 3 of Article 104c. My one purpose in drawing attention to the paragraph was to point out that, in calculating excess deficit, government investment expenditure is taken out. That is not the current practice of the UK Government. If it were so, even the present deficit would not count as excessive under the rules of the Community.
Lord Hailsham of Saint Marylebone: Now give the noble Lord another chance to make another speech.
Lord Bruce of Donington: if the noble and learned Lord would move a little closer to the microphone he would get the intervention down in Hansard tomorrow.
Lord Stoddart of Swindon: The noble and learned Lord has made enough speeches in intervention.
Lord Bruce of Donington: In reply to my noble friend Lord Desai, knowing him well, and knowing his views well, I would sooner trust his interpretation of Article 104 than I would trust the Commission to interpret it.
Lord Tebbit: As ever in these issues, we have had a most interesting afternoon. However, there are one or two matters which, as I see it, might usefully be tidied up at this stage. First, perhaps I may say to the noble Lord, Lord Ezra—
Lord Peston: Perhaps I may intervene. It is the noble Lord's amendment to which we speak. I take it that he is not about to close the debate. He will have a chance to reply.
Lord Tebbit: I was intending broadly to reply although not formally to close the debate because I know the noble Lord wishes to speak after me. Therefore let me give him the assurance that I shall not cut him off.
Lord McIntosh of Haringey: If the noble Lord will forgive my saying so, he introduced his remarks in such a tone as to imply that he is bringing his remarks to a close. It would be better if he made those remarks after other people have spoken.
Lord Tebbit: If it is for the convenience of the Committee, I am happy to listen first to what the noble Lord says and come to my conclusion after that.
Lord Monson: Will the Committee not agree with that? There are 50 more amendments in this grouping which have not yet been spoken to. There is no question of closing the debate.
Lord Peston: One of my difficulties is that I find this material so fascinating that I have no interest in bringing the debate to a close. On the other hand, there is other work we wish to do. That is why I thought it might be helpful to make a few remarks.
Perhaps I may say to the noble Lord, Lord Tebbit. that I very much agree with the way in which he set out our debate today. Perhaps I may refer to what he stated as being the rules of engagement. It seemed to me that he put the right points and asked the right questions. I must also say to the noble Earl, Lord Caithness—I hold him in the highest esteem—that I must be one of the stupid boys in class. I know that he intended to be helpful but he left me more bewildered at the end of his remarks than before he started. I realise that he or another noble Lord on the Front Bench will speak again.
I agree with the noble Lord, Lord Tebbit, that the Maastricht Treaty in this area in particular is a significant step forward. The noble Earl, Lord Caithness, is right: we have talked about monetary union for a long time but we are now at the point of action. That is why the matter is worth going into. All the other material led up to that point. Monetary union may have been referred to but this is the point of action and that is why it is important that we do not brush the issue on one side or say that we have no time

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for it. I state that from a different standpoint from that of the noble Lord, Lord Tebbit, but I am convinced that monetary union is the important issue.
With reference to the noble Earl's intervention, a straightforward set of positions can be held. There are those who are against economic and monetary union. We have heard from a number of them. The noble Lord, Lord Tebbit, and a number of my noble friends are against economic and monetary union. When asked the question, "What do you think?", they say, "no". I, my noble friend Lord Eatwell, and indeed the party from whose Front Bench I speak, answer the question, "yes". There is no doubt that one group says "no" and another group says "yes". The noble Lord, Lord Tebbit, made the point which has been made several times. My noble friend Lady Blackstone raised the issue at Second Reading; and I have raised it. The simple question is, "Do the Government believe in economic and monetary union—yes or no?". We have had the answer from the noble Lord, Lord Tebbit. The answer from the noble Earl, Lord Caithness, was, "Don't know". That was one of the possible boxes to tick. His answer was, "Don't know": he willmake up his mind one day but at present he does not know.
I reflected on that answer. The reason that he does not know is because the Prime Minister does not know; I do not blame the noble Earl. The previous Prime Minister, the noble Baroness, Lady Thatcher, who now sits with us made it abundantly clear what she thought. It was my lifetime's regret that she never seemed to say anything with which I could agree, but at least I knew with what I was disagreeing. That is her great merit. My problem with the present Prime Minister and therefore the present Government is that they will not tell me what they think. The problem is twofold: do they actually not know; or will they not say? Either way we cannot pursue the matter any further. So far as concerns ticking boxes, the Government ticked the "don't know" box.
In terms of policy that is a difficulty. I am puzzled by the noble Earl's answer. If one reads the relevant part of the treaty, one sees that Stage 2 is of enormous importance. Stage 2 is not a trivial move. Consider what will happen during Stage 2. So far as I understand, we shall take part in Stage 2 in a totally bona fide way. However, Stage 2 involves many policy interventions and movements. That is why I argue that the opt out is not worth the paper it is printed on. If the Community moves forward there would be no possibility that we could ever opt out. I say that in terms to the noble Earl. He may be horrified, but the opt-out is not there so long as the Community decides that it is going ahead.
The noble Earl states that on Stage 2 economic and monetary policy remains firmly in national hands. Economic and monetary policy at the moment is not firmly in national hands. The reason for that is the work of the noble and learned Lord, Lord Howe, when he was Chancellor of the Exchequer. He introduced free movement of capital and the moment that is introduced, monetary policy ceases to be in national hands. We saw a marvellous example of that. The moment that the new Chancellor of the
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Exchequer took his place, exchange rates started to weaken. He had done nothing but it was thought that he might not be strong about interest rates and the market immediately went into action. The notion that it is the Chancellor of the Exchequer who determines these matters is ridiculous; the free capital market determines them. What is termed economic and monetary policy remaining in our hands is again a charade.
As regards the exchange rate mechanism, the treaty says, "If you wish to go into Stage 3, you must be in the exchange rate mechanism beforehand for two years, within narrow bands". Therefore, either the Government are saying, "We are not going into the ERM", in which case they are announcing that we shall not go into Stage 3—in that case, I say, "Why bother with Stage 2?"—or the Government will, in the end, go into the ERM within narrow bands, etc. That is one of the reasons why I find it difficult to follow what the Government's position is or will be after 1st January.
I repeat that I am not saying that in order to get the noble Earl to agree with his noble friend. I want him to agree with me and to support the treaty in a forthright fashion so that we can go ahead. At least, I should like him to say something positive or negative. I do not wish to undermine it. I have two views: first, I should like to feel that the Government will go ahead; secondly, I have a sneaking suspicion that I do not want to go out on a limb and then find the Government cutting me off because they suddenly turn tail and run out on this.
I do not wish to make a long speech, although there are many economic points which we ought to discuss. I entirely agree with the noble Lord, Lord Monson. I prepared material on every one of the amendments and I shall be perfectly happy if your Lordships insist that we go through them one by one. However, I know that there are difficulties about time.
I wish to make one other point to the noble Lord, Lord Tebbit. I was taken aback with the suggestion that he would not divide the Committee on the amendment. I regard it as disappointing that I shall not have a chance to vote for economic and monetary union, but I do not seek to influence him beyond that. Although some of us have taken clear positions on this, what really matters is that the Government take a clear position.
6 p.m.
Lord Tebbit: I find myself very much in agreement with the noble Lord in all that he said in terms of understanding clearly the difference between us over whether or not we regard economic and monetary union as desirable. I know where he stands, he knows where I stand, but the leading party in the debate—and I shall come back to this in a moment—seems to be unable to tell us where it stands.
I should like to say to the noble Lord, Lord Ezra, that there are considerable difficulties in the way that the debates on the matter are constructed. That may help him to understand why my name is attached to some amendments which superficially would seem to lend my support to policies with which I do not agree.

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The amendment Bill before the House is just a tiny sliver of ice, visible above the water. It is towing behind it the enormous iceberg of the treaty. We are not allowed directly to debate the treaty on a Motion or amendment that Clause 103 or some other number stand part. That is not possible. So we have to go through the slightly artificial device of seeking to amend the Bill in a way which would remove a section of the treaty—the section that we wish to discuss. I believe that that may help the noble Lord, Lord Ezra, to understand a little the way in which we are going.
I found the remarks of the noble Lord, Lord Desai, interesting. They had a touch of Second Reading about them and I noticed that he seemed to feel that the problems of the ERM stem from joining at the wrong parity. I understand that, but it is not the problem. The problem is that if we discovered the right parity today, it would inevitably be the wrong parity tomorrow because the economies of the world are not all converging. They do not stay in step, they diverge all over the place. So inevitably, the exchange rates will pull apart. That may have at its root the difference between those who, like myself, feel that the exchange rate is the residual of economic policies and those who believe that it is the driver of economic policies.
In general, those who believe that it is the driver of economic policy want a fixed exchange rate in order to drive the economy the way they want it to go. Those of us who take a more market view of the economy believe that the economic policy should be set for other purposes. At the end of the day, the exchange rate comes out as a residual.
Lord Desai: I am grateful to the noble Lord for giving way. Will he comment on the fact that except for Italy and the UK, most other countries which have joined the ERM have stayed in it and have been able to realign?
Lord Tebbit: Yes, indeed. The noble Lord makes an enormously important point. In its original purpose, the ERM was a system rather like a mini Bretton Woods: a fixed exchange rate but one which could be adjusted periodically in response to the divergence in the economies. However, once it became used as a bridge to the single currency, that flexibility decreased more and more. In the end, as the noble Lord said, those who wished to go into the single currency must, for two years before, exist in a totally fixed exchange rate system of the ERM. Now is not perhaps the time in the evening to go deeply into those matters, but one of the principal causes of the problems of the exchange rate mechanism has been that it is being used for a purpose for which it was not originally designed. However, those are deep matters on which I know many Members of the Committee will wish to reflect at greater length at some other time, possibly when we find ourselves in Stage 2 later.
I also felt that the noble Lord, Lord Desai, neglected the experience of some of the tiger economies of the Pacific where there is no exchange rate mechanism between countries such as Thailand, Indonesia, Hong Kong and the Koreas. Yet somehow or other, there is an effective market and things seem
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to work well. No doubt it comes as a great surprise to those whose experience is solely in Europe to find that if one buys a toaster in Hong Kong, one can plug it into the wall in Indonesia. There has nor, been a single directive to achieve that, but again it is a wider matter to which we shall no doubt return at some other time.
I found the speech of my noble friend Lord Cockfield as interesting as ever. I found his speeches in the Cabinet in the old days extraordinarily interesting too, particularly on the matter of the European Community and our policies towards it. But his speech was not entirely relevant to the question of government policy which I asked and to which I still fear I have not received an adequate answer. At times. it seems to me that my noble friend Lord Cockfield takes the view that if a lady should declare herself in favour of motherhood, it is a notification of her intent and willingness to become pregnant. I do not think that that is necessarily the way in which we should interpret matters.
I thought that the speech of the noble Lord, Lord Eatwell, was also extremely interesting. There was a moment when I was not sure what the Labour Party policy was; I thought he was saying that the party was in favour of moving towards the single currency purposefully and singlemindedly but never actually getting there. However, the matter has now been cleared up and I acquit him of that equivocation.
The noble Lord also raised the most interesting questions about convergence. He may be surprised to know that I have a good deal of sympathy with what he said. The convergence which is listed in the treaty is what I might call, even more harshly perhaps than he would do, bankers' or economists' convergence. It is not about people's convergence. This adventure into a single currency will not be successful until there is reasonable convergence, not only about debt. inflation or all those "economists"' things, but in the standards of living of the people of Europe. I do not believe that in small villages in Greece they will get up and shout excitedly: "Oh, what a wonderful Community it is. We have now achieved convergence with Germany. Our public sector deficit is within the same range". No, that is not what they are concerned with—any more so than people are, if I may say so, in Chingford. They are concerned with their standards of living. Convergence has to be achieved in that area to make it economically possible to operate with a single currency. The cohesion fund is the substitute for success in convergence.
In this country, in our economic and monetary union, we have sought to contain the divergence in the living standards of those in various parts of our kingdom (our little EMU). We have done so by such means as regional policy, whether or not they have been totally successful. That is the purpose of the cohesion fund too.
My noble friend Lord Harmar-Nicholls made an entertaining speech and indeed came to the point concerning my noble friend Lord Cockfield saying, that he was attacking this problem from the position of the civil servant. I think my noble friend Lord Cockfield had some experience in the tax gathering department at one stage of his life.

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The noble Lord, Lord Stoddart, raised, interestingly, the costs of convergence in East and West Germany. But I turn to what was said by the noble and learned Lord, Lord Simon of Glaisdale. He gave some excellent examples of the operation of single currencies without single governments. They are all extinct. There, there may be a lesson for us.
My noble friend Lord Rippon confused me (I do not know whether he was confused) over travellers' cheques and currencies. I am sure that he is aware—although one could have construed that he was not—that a travellers' cheque is not a currency. It is a bill of exchange. He was quite wrong to say that a majority of the House of Commons voted for the treaty on Third Reading. It did not. It was a minority of the House of Commons that voted for the treaty—most notably because on Third Reading the Labour Party did not vote for it.
I come finally to my noble friend Lord Onslow. I find myself in some difficulties. I think that we would all agree that he is one of the most popular, well-liked and indeed, if I may say so, one of the most competent Ministers in this House—
Noble Lords: The noble Earl, Lord Caithness!
6.15 p.m.
Lord Tebbit: I am terribly sorry. My noble friend might be so described, if he ever were made a Minister—but I rather doubt it. He would have given me a direct answer to my questions.
My noble friend Lord Caithness had the great difficulty that he was speaking to a brief. It is a difficulty which I have had in my time. We all understand that. Sometimes the brief is extraordinarily unsatisfactory and one does not like it. But there it is, one has to bear it. I hope that the noble Earl will not feel that my remarks are in any way personal.
However, there is one point which the noble Earl did omit, and it is one which a number of speakers have omitted today. He failed to recollect that this country and Denmark are not the only ones with opt-outs from Stage 3. We are the only ones with opt-outs in the treaty. But the Bundestag, in the process of its consideration of the treaty, put into German law the requirement that there should be a vote before that country goes into Stage 3. It seems that there is a tendency developing in Germany to have some rather liberal interpretations of their rights under the Treaty of Rome, but there it is.
I find it difficult to believe that during Stage 2 all economic and monetary policy remains firmly in our national hands. If it does, there is no point in Articles 104c and 109m. It would appear that they are in effect but making no difference. I believe that one has to look again at the immunities in paragraphs 3 to 9 of the protocol. I refer to the question of moves towards the independence of the Bank of England.
There is no protection in the protocol against the requirement of Article 109e.5 that:
"During the second stage each Member State shall … start the process leading to the independence of its central bank".
There is no protection against that in the protocol until we have given notice that we do not intend to go
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ahead and enter Stage 3. Until we have given that notification, it seems extraordinarily clear to me that we are duty bound at some stage during Stage 2, if not on 2nd January, to do that —although, as we know the conclusion of the Copenhagen presidency, as the noble Lord, Lord Eatwell, pointed out, is that the Stage 2 provision should be adopted as soon as possible after the entry into force of the treaty, and before January 1994 I have to say that there is no provision there. I do not say that we would have to start on 2nd January, but it is quite clear that at some time before very long, unless we have an indemnity, an immunity from Article 109e.5, we must start our progress towards that end. Again, I do not say whether that is a desirable end or not. That is a subject for another debate. But I fear that my noble friend left us all rather more confused when he had finished than we were when he started.
The Deputy Chairman of Committees (Lord Alport): Is the noble Lord withdrawing his amendment?
Lord Monson: This is a Committee stage. I am sure that the noble Lord, Lord Tebbit, will wish to indicate to the Committee that he has no intention of dividing on Amendment No. 17, so that those noble Lords who are here mainly for the purposes of going into the Division Lobbies can relax and leave if they so wish. There are some 51 amendments grouped with Amendment No. 17, none of which has been spoken to and a few of which are important and require answers from the noble Earl, Lord Caithness. Perhaps if the noble Lord were to make it clear that he has no intention of dividing on Amendment No. 17, we could fairly briefly discuss one or two of the other amendments which are grouped with it.
Lord Tebbit: I am sorry I was distracted for a moment. Will the noble Lord repeat what he said?
Lord Monson: I suggested to the noble Lord that he might like to indicate to the Committee that he has no intention of dividing on Amendment No. 17 so that we could discuss briefly some of the technical amendments with which it is grouped. If he begs leave to withdraw it now, we shall have no opportunity whatever of doing that.
Lord Tebbit: Indeed, the noble Lord is quite right. It would be for the convenience of many that they could commence their pleasure and leave us to our task. I have no intention of calling a Division on this amendment.
Lord Monson: Perhaps I may explain that we cannot discuss any of the other amendments with which Amendment No. 17 is grouped if this amendment is withdrawn.
The Deputy Chairman of Committees: Is it the Committee's pleasure that this amendment be withdrawn?
Noble Lords: No!
The Deputy Chairman of Committees: The question is that this amendment be agreed to.
On Question, amendment negatived.
Lord Jay Lord Jay moved Amendment No. 18:
Page 1, line 9, after ("II") insert ("except the following words in Article 2: "and 3a"").
The noble Lord said: This amendment is grouped with Amendments Nos. 19, 42, 46, 51 and the rest of the amendments on the list. Those amendments come under the heading of Economic Policy and Deficits: Central Banks and National Banking. They lay down a number of dogmatic principles of economic policy. Amendment No. 18 seeks to omit Article 3a and Amendment No. 51 seeks to remove Article 4a. Article 3a commits members of the Community to the statement that the principle of an open market economy with free competition should be the guide to economic policy; and secondly, that it should be based on stable prices, sound public finances and monetary conditions.
There is no mention whatever in the guidelines on economic policy of either employment, output or growth. I speak now within the framework created by the speech of the noble Earl, Lord Caithness, on the previous amendment. The Committee will understand that the system of groupings inevitably means that my remarks will overlap with what has been said before.
I understand that the Government have opted out of the single currency and presumably the "irrevocably fixed exchange rates"—I quote from Article 3a. If I have correctly understood the noble Earl, over and above that. in Stage 2 the Government are committed virtually to nothing except membership of the EMI (European Monetary Institute) and I presume, though I am not absolutely certain, to the European System of Central Banking (ESCB) which is the forerunner of the European Central Bank and is due to come into operation in January 1994. I assume that we shall be members of those two organisations. I take it that we are not committed to joining the European Central Bank at that stage and we are not committed to fixed exchange rates in Stage 2. I also assume, although the noble Earl did not mention it, that we are not committed to handing over our currency reserves to any kind of central bank during that period.
My worry is that all the provisions of the treaty with regard to economic policy are based on what one might call narrow monetarist assumptions and false economic assumptions. Having been put into action, the results are now becoming clear over western Europe. At this stage of the day it might be worth taking our eyes off the maze of papers and having a look at the real world.
When we look at the real world we might remember that we were promised that 1993 would see all the joys of expanding prosperity under the single market. Indeed, there emanated from Brussels—even the noble Lord, Lord Cockfield, will agree that this is correct—the so-called Cecchini Report which predicted that an extra 5 million people would become employed as a result of the paradise of the great single market in 1993. The reality is that unemployment is now increasing rapidly throughout western Europe. It is over 3 million in this country and the total is now very near 20 million in the Community as a whole.
During our short period in the ERM this country suffered a rise of over 1 million in the unemployed. My
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noble friend Lord Desai, who admitted that our brief 24 months in the ERM was not a very happy experience, said that it was because we joined at the wrong exchange rate. I wholly agree with the noble Lord, Lord Tebbit. The trouble with exchange rates is that the right exchange rate at one point in time will almost certainly be the wrong rate two years hence. Therefore we should ask ourselves why the single market, based on those principles, has produced the present deplorable situation which every day has more unpleasant resemblances to the early 1930s when we were going steadily downhill.
The first mistake at the root of those arguments or false assumptions is the belief that runs through all the documents; namely, that if one reduces barriers to trade and at the same time abandons all control or management of demand, all will be well and prosperity will spread. I am afraid that that is not true. If one indulges, through the exchange rate, the budget and banking policy, in deflationary policies, then free trade may simply spread the unemployment. If there is full employment, free trade will lead to a higher standard of living. If there are deflationary policies, they will spread unemployment. That is what is now happening. At the next stage protectionism begins to raise its head because everyone starts to complain—as they are now doing even in Germany—that it is imports which are causing the unemployment. That is a depressing sign.
Another false assumption which runs through the treaty is what has become in recent times an obsession with inflation. Indeed, there is gross misuse of the word "inflation" which spreads confusion on all sides. Roughly, the assumption is that the value of money should be the sole object of economic policy and that employment and growth do not matter. But if one works on that assumption, one is in difficulty from the beginning.
Perhaps I may be allowed to propound the proposition that it is a simple truth that if pay rates are rising faster than production in the economy, one is in the inescapable dilemma of choosing between either higher unemployment or rising prices; that is to say, there is a choice in those circumstances—the noble Lord, Lord Eatwell, may agree with me—between policies which will lead to unemployment and policies which will lead to higher prices. Therefore, if one pursues as the sole criterion of economic policy the prevention of what is roughly (but in my opinion wrongly) called inflation, one inevitably gets unemployment. That is what is happening at the present time.
It is true also that if one goes to the other extreme and makes full employment one's sole economic policy, before long one will be left with rising price levels. The right balance must be found between those two objectives. Unfortunately, it is an extreme view which has been taken as the basis of all the policies laid down in this part of the treaty.
The other problem is that bankers, naturally and understandably, always give the highest priority to avoiding what they call inflation and imply, more or less, that growth and employment do not matter. I do not blame them for that; they are as worthy or

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unworthy as the rest of us. But their professional position inevitably leads them to believe that somehow or other, if the price level gets out of hand, they are to blame. Therefore, they will always give priority to hard money, higher interest rates and low inflation; employment must look after itself.
That is particularly true of central bankers who have been allowed to believe that somehow their absence of control has some effect on the economy and therefore they feel guilty when they see price levels rising. That is true, most of all, of German central bankers because they have never overcome their obsession with the 1920s when there really was inflation which got entirely out of hand.
The whole body of guidelines in these sections of the treaty are a specific threat to this country if we are going to be subjected to anything like full control of economic policy decisions by a central bank laying down those principles and with hard and fast rules from which we are not allowed to escape. Exactly where we shall stand in Stage 2, in the twilight between control by the British Government and control by central bankers, I do not know. But it is significant that as soon as we were released from the ERM, as soon as the exchange rate was adjusted last year to a competitive level, within three months the economy turned round. That was not due to some mysterious natural process which people are now beginning to believe in, as they did 50 years ago by which automatically after a recession one has recovery; it turned round because we were released from the ERM and the exchange rate found its level at a reasonable, economic and competitive point.
My quarrel with those sections of the treaty embodied in the amendments under discussion is that if we pursue those principles of economic policy and allow there to be high interest rates and excessively high fixed exchange rates, it will be dangerous for the UK economy. For reasons we cannot discuss at this time, it is a weak economy and there will be a danger of stagnation with high unemployment and a balance of payments deficit.
In all the actions we take between now and Stage 2, it should be an essential policy objective that we do not hand over control of interest and exchange rates to largely unaccountable central bankers, either at home or abroad. I agree with the noble Lord, Lord Peston, that we cannot wholly control all those things in the world as it is now, but we must have some measure of control, either more or less. It is wholly in the interests of the United Kingdom and, above all, the now 3 million unemployed in this country and their families that we keep the greatest extent of control that we possibly can in the hands of a government which at least at present is still accountable to Parliament. I beg to move.
6.30 p.m.
Lord Monson: I want to say a few words in regard to convergence. Convergence is not something which can or should be fostered by state activity—state activity being implicit in the article. Convergence is best fostered by state inactivity; in other words,
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steering clear of burdensome regulation; interfering as little as possible and allowing hitherto less successful countries and regions to pull themselves up by their own bootstraps.
I should like if I may, and if the noble Earl, Lord Caithness, will agree, to say something in regard to Amendment No. 191. I wanted to do so when speaking to the last amendment but was frustrated from doing so by the fact that unfortunately the Division was called. The noble Earl has no obligation to answer me today. I can raise the matter next week, but as he no doubt already has his brief it may be more convenient for him to reply now. If he does not wish to, I shall fully understand.
Amendment No. 191 refers to Article 109g, relating to the ecu. It reads,
"The currency composition of the ecu basket shall not be changed. From the start of the third stage, the value of the ecu shall be irrevocably fixed".
Surely history has taught us that attempts to fix currency parities "irrevocably" are doomed to failure.
Lord Elton: I wonder whether the noble Lord can help the Committee. Is he speaking to Amendment No. 191, which I thought was spoken to with Amendment No. 11 yesterday? In which case, its turn comes up when we reach it. Or is he speaking to an amendment that was grouped with those that we disposed of half an hour ago? In that case, again we reach it when we come to it on the Marshalled List. Or is he speaking to something in vacuo? In that case, it has to wait until we have spoken to the group under discussion.
Lord Monson: I beg the pardon of the noble Lord, Lord Elton, and indeed of the noble Earl. One has so many notes and briefings that it is difficult sometimes to follow. I am speaking to Amendment No. 128, which was grouped with Amendment No. 17 and to which I have been trying to speak for some time. As I rightly said, it refers to Article 109g. Amendment No. 128 carries the names of four noble Lords, including that of the noble Lords, Lord Bruce, Lord Vinson and Lord Hamilton of Dalzell, as well as myself. It is therefore thought to be quite an important one. Once again, I apologise to the noble Earl for having got it wrong, though the reference is perfectly correct.
Lord Elton: My objection is not resolved by what the noble Lord said. I understood that his amendment was grouped with one we dealt with some time ago. We are now speaking to a different group. If the noble Lord wishes to speak to it, the natural process is either to obtain a new grouping for it tomorrow or to speak to it when we reach it on the Marshalled List. Otherwise the whole system of grouping falls apart.
Lord Monson: I am not sure whether or not the noble Lord was present a few minutes ago. I tried to speak to it and the noble Lord, Lord Tebbit, paved the way for it to be spoken to. Unfortunately, a Division was called which should not have been called.
Baroness Trumpington: I support what my noble friend Lord Elton said. Technically, it would be better if the noble Lord, Lord Monson, waited for the amendment to be called.
Lord Monson: That is perfectly acceptable to me. I thought it would be easier for the noble Earl to respond now rather than at some unforeseen time next week. The brief is bound to be in his possession at this moment. However, if that is the wish of the noble Earl and the Committee I shall gladly defer to it and say no more.
Lord Peston: I am probably more lost than anybody. This is a large group of amendments that covers a good deal of ground. Am I to understand that none of the noble Lords whose names have been put to the subsequent amendments will speak to any of them? I would like some enlightenment on that, and then I will say what I intend to do.
Lord Hamilton of Dalzell: I will speak to the amendments in my name on the Marshalled List. I put down amendments to abolish or make impossible the development of ilhe European central bank. I found it satisfactory that it was at least in the power of the British Government to opt out of that particular phase of the treaty. In relation to subsequent amendments to which I have put my name, I am much relieved by what my noble friend Lord Caithness has said.
Baroness Trumpington: It would be helpful if my noble friend could indicate the amendments to which he has put his name.
Lord Hamilton of Dalzell: I apologise. I have put my name to Amendments Nos. 111 to 121. They refer collectively to all the articles that set up the European central bank in the ESCB. I was relieved to hear my noble friend say that he felt the opt-out would survive and we would not be forced back into the ERM. My reading of the other parts of the treaty was that we might be. If the European central bank existed, it would impose a fearful tyranny on the people of Europe. If one reflects on what has happened under the single market Act, the whole idea of a single market in Europe and a level playing field has set off in the wrong direction. As witnessed by many of the noble Lords who speak on this subject, the origins of the single market and the direction in which Europe is going are 50 years old. It is debatable whether the originator of the whole thing was Jean Monnet or Albert Speer who put together the coal and steel industry in Germany in order to help the war effort. I believe that that type of market has now reached its "sell-by" date.
I agree with one element of the treaty: the free movement of capital. The Japanese do not make goods in Japan and ship them here. It is sensible to move capital around Europe and set up industries in countries near the place of consumption. If noble Lords have tried to go anywhere in this country during the deepest recession that it has experienced, they will have found it practically impossible to do so. The idea of generating a level playing field in which prices go round and round may not even work, as the noble
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Lord, Lord Jay, said. I agree that it may not. However, if it did, one would rapidly reach the stage where one would not be able to go anywhere in this country and communications would become completely tied up.
We live in a modern world where money flies into space and goes into a bank at the push of a button. The sensible way to get Europe going is to free its money so that one can open factories in Greece or Southern Italy where labour is cheaper and sell things that people want near the place where they will be consumed. The current philosophy of how to run the vast industrial complex of Europe in my view is doomed to failure. Therefore, if one can see the hack of the central bank it would remove one of the main pillars that keeps Europe driving on like a massive steam engine invented 50 years ago. The allusion of the train is something we always have to put up with. In my view, the train one is trying to catch is pulled by an ancient steam engine whose boilers are about to burst under the electoral pressures exerted on the peoples of those countries who do not like its consequences.
If we pursue the undemocratic nature of the European central bank—that Europe at any rate will have to suffer from—very soon we will see further evidence of the kind that we saw in France in relation to the dismissal of governments. It was said by a French reporter on the wireless at the time of the French elections that nobody wished to take power. It was known that nothing much could be done about their affairs because the country was being run by the Bundesbank. One dismisses one government and then one has another that does no good. In the typical tradition of our European neighbours, before long they will all be on the streets. I believe that Europe is adopting an extremely dangerous philosophy. I hope that when it comes to the point of making a choice we do not adopt it in this country.
6.45 p.m.
Lord Stoddart of Swindon: In supporting this group of amendments, and in particular Amendment No. 19 concerning convergence (about which I spoke earlier), the idea of working towards a high degree of econornic convergence worries me considerably. My responsibility as a Member of this House—and the Government's responsibility—is to ensure the highest possible standard of living and the most secure economy for this country, not 11 other countries. That may sound narrow and nationalistic.
Lord Harris of Greenwich: Yes!
Lord Stoddart of Swindon: I would expect heckling from the Liberal Benches before they had heard what I had to say. The fact is that one cannot export one's views and policies to other countries unless one first has views and policies worth exporting. What concerns me about convergence is that decisions have to be reached among 11 different countries, all with differing kinds of political composition, constitution, background, cultural heritage and attitude to work, the settlement of disputes in industry and collective bargaining. That is a wide range of items of difference.

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How on earth within a reasonable period of time and without severe difficulties we will embark upon and reach economic convergence under those circumstances I do not know. What worries me is that in seeking to obtain economic convergence we may very well injure our economy. That is the feeling behind many of the amendments. It is not that we do not wish to co-operate. Co-operation is quite different from convergence. One may co-operate over a wide range of issues without having to converge economically or set up a central bank, to which eventually one gives complete power over monetary policy, including interest rates and reserves. One does not have to have convergence to have proper co-operation. It is in co-operation that I prefer to put my trust.
Earlier we debated the issue of exchange rates and whether we should have remained in the ERM, whether we should have gone into it, whether we went into it at the right rate and whether it was necessary to come out of it. All those questions arose because we were trying to converge as ERM was part of convergence. Therefore, almost the first significant part of convergence came apart. That is why I think we should go very carefully indeed when we are talking about economic convergence.
Let us have a look at a common economic policy, a common economic policy which involves being in a new kind of ERM. My noble friends believe that we should he in such a system of fixed exchanges. They believe that that would he good for Europe and that it would help to stave off money speculation across the exchanges. But speculation will not cease. We may very well have a single currency between the 12 but that does not mean to say that currency speculation will not go on. Of course currency speculation will go on. It will go on and at times it will go on in favour of the new European currency but perhaps at times against the new European currency. That is where the danger arises. It may very well be that Europe as a whole—the Europe of the 12 —is not in good odour with the international financial community and that it will speculate against that particular currency. But at the same time the economy of the United Kingdom may he exceptionally good and very acceptable to the international financial community. Therefore we will have the international community speculating against the United Kingdom. because it can do nothing else, even though it believes that the United Kingdom economy is sound and good. That is one of the arguments—I am sure my noble friend will accept that that is one of the arguments—against having a single economy in Europe and indeed a single currency.
I do not want to keep the Committee for very much longer but I want to say a few words about the proposal for a European central bank which will have powers of its own, which will not be subject to this Parliament and which could not he interfered with by the Government. That may be acceptable to many people. I have to say that it is not acceptable to me. I did not join the Labour Party to agree to a country which was going to be run by bankers. I believe that
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one of the reasons why the Bank of England was nationalised by the Labour Government in. I think, 1949—
Lord Jay: It was 1946.
Lord Stoddart of Swindon: —is that they believed the same. The activities of the Bank of England in the inter-war period had brought about the unemployment which was so unacceptable to the Labour Party and to a Labour Government. I have not changed my mind. I simply do not believe that it would he good for the economy or for the people of this country to have policies decided willy-nilly not by their elected representatives but by unelected central hankers from 12 countries—not from just one country but from 12. Just think of the chaos that that could cause.
I am not in favour of central bankers running the economy. Bankers, whether they he central bankers or ordinary hankers, like Barclays, have not had a very good record in running their own affairs. Look at what they have done over the past few years; look at the huge losses that they have incurred; look at the bad investments that they have made. Are we really to trust the bankers with our economic policy? I think not.
Those are some of the points which worry me about economic and monetary union, and in particular, the establishment of a European central hank outside political control. I hope that the noble Earl will be able to answer some of these questions and discuss the problems and perhaps give me some reassurance that, first, the Government have no intention of re-entering the ERM—we did not get such a reassurance in the previous debate—and, secondly, that they are not in favour of an independent central hank without proper political control.
Lord Aldington: The noble Lord, in supporting these amendments, referred several times in the debate to convergence, which he seems to dislike. I think he dislikes it because he dislikes the whole concept of the Treaty of Rome and the Common Market. The aim of convergence has been there right from the start. It has been considered as an essential to a single market. I simply do not understand how we can prosper or how anyone can prosper in a single market unless jointly together we try to converge our economic policies. That is what we have been trying to do. That is what has been laid down. It was reiterated in the Single European Act and it was in the Treaty of Rome before. It has been there all along. There is nothing new about that in the Maastricht Treaty. That which is new we discussed earlier on with regard to a single currency. We disposed of that altogether because the treaty, as we have it, does not oblige us tonight to decide about a single currency.
What perplexes me is that, as part of an attack upon the Maastricht Treaty, we constantly listen to very attractively stated and articulately pronounced attacks upon the whole concept of Britain being in the Common Market. That cannot be true of my noble friend Lord Tebbit because he has said that he is in favour of that. But what I think some others forget—in the earlier debate the noble Lord, Lord Harris of

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High Cross, obviously neglected this matter as unimportant—is that the single market is not a free trade area. It is not like the North Atlantic free trade area. It is not like EFTA, which the members wish to disband and wish to turn into the single market with their full membership. If we are to have a single market it has always been necessary to have co-ordination of economic policies. I cannot understand the force of that part of this set of amendments to exclude that from the treaty.
Then we come to the central bank. The provisions of the central bark are covered by and subject to our option. But surely if the option means anything it is desirable that we should be involved in setting up and devising the rules for and the structure of the central hank. So I should have thought that followed from the debate that we have had.
I listened with interest to what my noble friend Lord Hamilton had to say earlier. He was greatly in favour of the free movement of capital throughout Europe. Therefore, he must have been against the large batch of amendments moved by some who are supporting him on this amendment and discussed—or rather did not discuss, but included in the groups of the first amendment this afternoon—proposals to abandon the free movement of capital throughout the Community. There is something very illogical about the arguments which we are having put to us during this debate.
I strongly believe in the treaty, which came from very careful negotiation over very many months—indeed, over a year and a half—and in moving the federalists away from Federalism and the conceptionists into a pragmatic approach. I believe in every word of this treaty as being helpful to Britain.
7 p.m.
Lord Desai: We are dealing here with several amendments. I shall address myself to two batches of those amendments. Amendments Nos. 87 to 118 basically relate to economic and monetary policy. Amendments Nos. 347 to 375 mainly want to modify the provisions concerning the central bank. Since this is Committee stage I shall be fearfully detailed about it this time.
What strikes me as puzzling about the objections to the economic and monetary policy is, as I have said before, that people who do not like the provisions about excess deficits in Article 104 have not read carefully the whole of the article. As I have pointed out, paragraph 3 of Article 104c allows the deduction of government capital formation, and the protocol actually confirms that. Therefore, deficits are not deficits as we have understood them so far in the United Kingdom.
When one considers paragraphs 4 to 14 of that article, it cannot be imagined that there is going to be a strict and fast rule that as soon as one moves away from 3 per cent. to 3.01 per cent., horrible things are going to happen. The article lays down the procedure in which the Commission reports to the Council, the Council takes matters into account and the Government can argue the particular circumstances and what can he taken into account. One has only to
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read paragraphs 4, 5 and 6 and thereafter. It is not as though there is a hard rule or guillotine with 3 per cent. and nothing else. There is enough in that provision to give the impression that the measure will be interpreted as 3 per cent. over a period or through a cycle rather than for each year concerned.
As regards the central bank. I agree with my noble friend Lord Eatwell who said that basically there are certain things about it that neither he nor I fully like. In the revision of the treaty in 1996 let us address those questions, particularly how much power ECOFIN is going to have vis-à-vis the central bank. There are two matters I wish to point out which are germane to the details of the treaty. The first is in Article 105 paragraph 6. That makes quite clear that:
"The Council may, acting unanimously on a proposal from the Commission and after consulting the ECB and after receiving the assent of the European Parliament, confer upon the ECB specific tasks".
Therefore, it is not that the central bank will never take any orders from the Council. That is not being said. It is quite clearly stated that the Council can do so on advice from the Commission and also after consulting Parliament. That is a very important provision because that provides the one entry for Parliament in influencing the central bank. I hope that that will be viable in future.
Similarly, in the protocol as regards the central bank (page 92 of the document) Article 11 sets out who will appoint the president and members of the executive board of the Council. Again, it would be the heads of state and government. The Council will be appointing the board of directors of the European central bank. So it is not as though having set up an independent central bank all communications between the elected and appointed parts are completely broken off. I would like more accountability, but I am quite happy to go on to the 1996 revision and argue the case and modify the provisions. Once the treaty has been passed I do not consider that it will not be subject to change. The amendments which have been put forward can only be discussed broadly. They exaggerate the adverse aspects of the treaty and underplay the positive aspects of co-operation.
Lord Eatwell: As regards these amendments I wish to present the position of the Labour Party particularly concerning the independent central bank. I also wish to refer to some of the other items raised in the very large number of amendments which we have before us. In introducing the discussion my noble friend Lord Jay argued that creating the single market and a system with free trade and free capital movements was damaging to the pursuit of national economic policies.
I accept that argument. I believe that he is quite right. But then he has to consider the case that he is making to its full extent. I suggest to him that it can be logically argued that if capital movements were prevented—and perhaps also the movement of labour—and trade controls were introduced, then we would regain control of our national economy. But without moving towards that sort of siege economy for which, as I say, there is a coherent case to be made, I suggest to my noble friend that the prospects offered by the

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creation of the single market and of economic and monetary union are more attractive. That is the real alternative with which we are faced. In between, there exists only the instability and low growth which we have experienced for the past 20 years.
Lord Jay: I do not believe that I made myself altogether clear to my noble friend. I said that in establishing free trade and free movement, if demand is managed successfully at the same time the result will be higher employment and a higher standard of living all round. But if one establishes the free movement of goods and capital and deflates demand, which is what has happened in the past two years, then there will be no advantage and unemployment simply spreads from one country to another. I was not advocating anything like a siege economy, but giving priority to the proper management of demand.
Lord Eatwell: I am grateful to my noble friend. I believe he reinforces the case that I made earlier for the creation of a single currency because, as I argued at that time, the management of a co-ordinated policy to reflate demand throughout the Community—a policy which is desperately needed today—would only be really effective within the context of a single currency.
My noble friend Lord Jay also argued quite reasonably that the details of monetary and economic policy in general, as at present set out within the treaty, are infected with monetarist ideas. We have to accept that those outdated and erroneous doctrines were generally accepted a couple of years ago. However, to use the rather hackneyed expression, they have passed their sell-by date. People are looking at the structure of the Community's institutions through very different theoretical and policy eyes. I suggest that the proposed structures do provide a framework within which the sort of Keynesian policies to which my noble friend referred would provide a greater opportunity of having the effect that we all desire.
I should like to refer the noble Lord, Lord Jay, and other Members of your Lordships' House to Article 2 of the Treaty, which I think has been neglected in our discussion of policy in general. Article 2 states that the objective of this treaty is—and I quote—
"to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life. and economic and social cohesion and solidarity among Member States.
I would submit that those are exactly the objectives which the noble Lord, Lord Jay, suggested in his introduction of these amendments were his goals in the formulation of economic policy. I think that he should take account of the objectives stated in Article 2.
However, I wish to address my remarks primarily this evening to the question of the European central bank and I should like to emphasise, as I did in my earlier intervention, that the Labour Party does not consider the formulations or structures put forward in the treaty at the moment as being perfect by any
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means. That does not mean that we oppose the treaty: we do not. But we certainly think that there is a case for considerable revision at the proposed intergovernmental conference in 1996.
We regard the idea of an entirely independent central bank as a foolish idea. It is foolish for the following reasons. First, if monetary policy had no effect on any economic variables other than the price level it might be possible to suggest that an institution which is charged with the conduct of monetary policy alone would be a sensible structure. But nobody can believe after the experiences of the last 10 years—the roller-coaster—that the monetary policy to which this Government have subjected the British economy does not affect other variables in the economy. Of course it does. In those circumstances, if monetary policy affects the impact of fiscal policy, if it affects housing and aspects of social policy, it is a nonsense to charge the institution which has the responsibility for conducting monetary policy to look only towards monetary policy and not to take any other elements into account.
Secondly—and this is the general form of the point that I have just made—what we have learned over the past 10 years or so is that monetary policy and fiscal policy are interdependent. They cannot be considered separately. Therefore it is sensible that in deciding upon the structure of policy appropriate to any given country, or in this case to the European Community, at any one time that monetary policy and fiscal policy should be considered together and not treated separately.
In this respect there is an interesting contradiction in the treaty in Article 109. That article provides that responsibility for the exchange rate policy of the Community will be vested in the council. In effect it means it will be the responsibility of ECOFIN, the Committee of Economic and Finance Ministers. This treaty says that the external monetary policy of the Community will be the responsibility of ECOFIN and the internal monetary policy of the Community will he the responsibility of the central bank. This is a nonsense, because external and internal monetary policy cannot be separated. They have to be considered together and so the treaty creates a political responsibility, perhaps unwittingly, for ECOFIN with respect to monetary policy.
I would suggest that in the revision of 1996 we should build on this political responsibility and build the role of ECOFIN into the general political counterpart of the central bank, with the responsibility for joint and coherent decisions with respect to monetary policy and to fiscal policy. This was exactly the proposal which the Labour Party advanced in its discussion papers on the Maastricht Treaty, both before and after the treaty. ECOFIN, as the Committee of Finance Ministers, is the body which could most effectively decide upon in a collaborative manner the co-ordination of fiscal policies throughout the Community and then, in joint operation with the central bank, it could decide upon the appropriate balance of monetary and fiscal policy throughout the Community. I have always been particularly surprised that the Liberal Democrats, the party of Lord Keynes,

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would accept such a foolish idea as an independent central bank. Surely, if Lord Keynes taught us anything he taught us that monetary and fiscal policy have to be considered together and not separately.
To conclude on this issue of co-operation and co-ordination, I was very surprised that Amendment No. 91 seeks to withdraw Article 103 from the treaty, and particularly Clause 1 of that article. That clause states that member states shall regard their economic policies as a matter for common concern and that they shall co-ordinate them within the Council. I am amazed that, with the high levels of unemployment that we suffer in the European Community today, anyone should propose that the member states should not attempt to co-ordinate their policies, because it is exactly co-ordinated reflation that we so desperately need.
With respect to the position of the Bank of England, we have of course detected in the past few weeks a new form of Conservative Party policy towards the Bank of England. That policy is that any Chancellor of the Exchequer who is sacked will stand up in another place and declare that he is in favour of an independent central bank and that only the Prime Minister with whom he has worked has prevented him from bringing in this necessary reform. This was the case with the noble Lord, Lord Lawson, and it was the case with Mr. Norman Lamont. After Mr. Lamont made his statement a couple of weeks ago, the Prime Minster expressed some interest in an independent Bank of England and said that the only problem he saw was that there had to be a way in which the independent Bank would be accountable to Parliament.
When the Minister replies, could he give us some insight into the Government's thinking on the process of accountability? Are the Government planning to separate the Bank of England from the immediate control of the Treasury, which was embodied in the 1946 nationalisation Act? Are they perhaps going to move to some structure similar to that of the New Zealand Central Bank which simply has to make a report to the New Zealand Parliament every year, and that is defined as "accountability"? What do the Government mean and what did the Prime Minister mean by "accountability" of the Bank of England to the Government and how is that accountability to be related to the pleas which every Chancellor of the Exchequer apparently makes to his Prime Minister to create an independent central bank?
Finally, when the Minister replies could he provide his assessment of the possibility of the European Central Bank being located in London? Would he agree that this possibility, which would have brought enormous advantages to the City of London and to the British economy in general, has been effectively destroyed by the meaningless and empty opt-out clause?
Lord Bruce of Donington: Before my noble friend sits down, he will of course agree that, speaking from that. Dispatch Box, he is speaking not just for the Opposition here but for the Labour Party. Will he give an assurance—
The Earl of Selkirk: I wonder whether I may take up the point—
Noble Lords: Order, order!
Lord Bruce of Donington: Will my noble friend give an assurance that he will not accept the proposition that there should be an independent central bank which is completely independent and accountable to no one? As I have understood it, that has been my party's position so far. If that position is persisted in and the member states of the Community insist that the central bank should be completely independent and not accountable to anyone, will he give an assurance that he and our party will oppose that proposition?
Lord Eatwell: As I pointed out with respect to the interaction of external and internal monetary policy, that is not the position in the treaty. There is a direct role there for ECOFIN in determining the monetary policy pursued by the central bank. In considering the treaty as a whole, and the development of monetary policy within it, it will be clear that the central bank established in Europe must be independent of the political authorities of any one state. It cannot kowtow to the political authorities of any one state. That is why it is necessary to develop a collective political authority to act as a counterpart to the European central bank. That is the role which under the treaty ECOFIN partially plays and could, and should, substantially play. However, my noble friend asked me to say whether I accept the treaty as a whole. That has to be decided upon the balance of advantage and disadvantage with respect to the treaty as a whole, of which we are in favour.
The Earl of Selkirk: I find myself in agreement with much of what the noble Lord, Lord Eatwell, has said. We have discussed mostly politics and economics today, but we cannot win a war with economics or politics. We have come to a period in our history which we should all recognise compares with that of Cromwell. It is a big moment. Things cannot be small. They are big. On those occasions, personality is of tremendous importance. Perhaps I can give the example of the visit to Paris in 1903 or 1904 of Edward VII, when the entente cordiale was set going. Those were steps of considerable and lasting significance.
Perhaps I may go to the other extreme and talk about the treaty agreed in Paris in 1920. Of all the bases upon which Hitler conducted his affairs, nothing was stronger than that treaty. That treaty was brought to the attention of all Germany. It was upon the basis of that treaty that the German people supported Hitler. Many of the problems of the Second World War can be put down, in part, to the clumsiness of the peace negotiated in 1919–20. We bear our responsibility for that, as do the French.
Where do we stand now? We are joining an organisation which sets up many positions of power. It has been claimed that we have had no dictatorship. Most of us recognise that there was and is a dictatorship which to many of us has been extremely unpopular. It is important that those who fulfil their economic duties should fulfil them properly. We have

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given power to many people. That power can be used violently if it is misused. The EC is big. People who have the top positions have a great deal of power. If they misuse that power, it may bring all sorts of people into conflict. Positions of power should be examined with the utmost care. There must be a realisation that it is not just economics which are at stake: there might be other factors of far greater significance.
The Earl of Caithness: This has been a useful and interesting debate, because it has gone right to the heart of the EMU provisions of the treaty. I am delighted that we have had the time to air the issues so fully. It may help the Committee if I concentrate upon two broad themes in my reply. One is economic policy co-operation. I was going to mention the new excessive deficit procedure, but that has not been mentioned, and so I shall not do so. The second theme will be the European system of central banks, including the European central bank.
Let me start with the point raised about the convergence conditions. The convergence conditions for an eventual move to Stage 3 are set out in Article 109j. Perhaps I may just remind the Committee of those conditions. They are, essentially, low inflation, avoiding an excessive budget deficit, exchange rate stability and comparable long-term interest rate levels. The Government believe firmly that those are the right criteria for the establishment of a single monetary policy and a single currency in a sustainable economic and monetary union.
The noble Lord, Lord Jay, argued that those criteria would be deflationary. We do not share that view. Sound public finances and price stability are the vital preconditions for the development of sustainable growth. In the short term, all member states are committed to reducing inflation to promote growth. Those who argue that the treaty's provisions for economic and monetary union will damage the Community's prospects for growth seem to overlook the fact that the achievement of sustainable and non-inflationary growth is one of the central objectives of the Community, as set out in Article 2 of the Maastricht Treaty.
Let me move on therefore to the European system of central banks, about which most Members of the Committee had something to say. In the previous group of amendments, we discussed the role of the European monetary institute, which is primarily a consultative and advisory body that has been given the task of overseeing the transition to Stage 3. It will be set up in Stage 2 and the statute makes it clear that, during that stage, national authorities remain in control of the conduct of monetary policy. So, whether we choose to participate in Stage 3 or not, in Stage 2 the UK will not cede any authority over monetary policy to Europe. However, the European system of central banks, made up of one European central bank and the national central banks, is different. The ESCB and the ECB will be mandated to conduct monetary policy on behalf of those member states which fulfil the conditions for participation in Stage 3 of the EMU. The only exceptions will be
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Denmark, which has already decided not to participate, and the United Kingdom, if we decide not to move to Stage 3.
The treaty provides for the independence of those institutions. That arrangement is the best, given the circumstances. I say to my noble friend Lord Hamilton that it would be impractical for a single monetary policy to be operated by the 12 Finance Ministers of the member states with the many other pressures on them. I must stress that those provisions concerning a single monetary policy will apply to the UK only if we participate in Stage 3. The UK protocol provides for continuing UK involvement in the preparations for Stage 3, but does not commit the UK to participation.
The noble Lord, Lord Eatwell, naturally and understandably, raised the question of accountability, a matter which is of concern to him. In negotiations during the drafting of a treaty, the Government pressed hard for adequate accountability to be built into the statutes for the ECB and the ESCB, consistent with ECB independence. The provisions for ex post accountability of the ECB represent the best balance we were able to establish between the demand for accountability and the need for the bank to operate effectively. The procedure for accountability mainly involve ex post scrutiny. The ECB must submit reports to the European Council, the Council of Ministers, the European Parliament and the Commission. The Council can question the ECB president. Furthermore, the president of ECOFIN can put motions to the ECB meetings.
I turn to the fixing of the exchange rates and to a single currency, raised by the noble Lord, Lord Jay. It is an essential feature of Stage 3 that there should be a single monetary policy for those member states participating in it. It follows from this that the exchange rates of participating currencies should be irrevocably fixed. Those countries would be surrendering the right to alter the exchange rates between their currencies, and committing themselves to replace their currencies with a single currency; the ecu.
As I said in respect of the previous group of amendments, we cannot prevent them from doing so and nor can they force us to join them. Above all, the merit of the Maastricht Treaty is that it gives us the right to participate in shaping EMU while leaving wholly open our right to decide whether we should join. So in the amendments which we have discussed and which refer to Stage 3 we were discussing provisions which would apply to the United Kingdom only after a further Act of Parliament. Should we not participate in Stage 3 the United Kingdom would effectively remain in Stage 2.
In that event the situation will be that the governor of the bank will be a member of the general council of the ECB, though not on its governing council, and will participate in all decision-making processes to the degree appropriate to non-participants. I hope that I have made that clear to the noble Lord, Lord Jay. Participation in the ESCB would not be a compromise of our monetary independence. The general council would discuss and co-ordinate policy in much the same way as the Committee of Central Bank

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Governors does now and the EMI will do in Stage 2, but the competence for the exercise of policy would remain in national hands. In order that there is no scintilla of doubt, perhaps I may point out that that was reaffirmed in the UK Protocol, Article 4, which states that:
"the UK shall retain its powers in the field of monetary policy according to national law".
The noble Lord, Lord Jay, also raised the issue of employment. As he. probably knows already, that was discussed at the European Council on 21st and 22nd June. My right honourable friend the Prime Minister argued that the Community had to keep down the cost of jobs so as to help those without jobs, and that was widely supported. It was recognised that the Community members had to face the problem of the rising cost of social provisions and that in doing so it was essential to protect the elderly and the vulnerable in our countries. It has been agreed that the European Commission will be invited to present for discussion at the European Council in December a White Paper on the medium-term strategy for growth, competitiveness and employment. Member states will be submitting proposals for the White Paper. My right honourable friend the Prime Minister believes that this will enable the Community to build on the European Council's new emphasis on competitiveness. During the next six months we shall be pressing forreforms to increase flexibility in labour markets and so reduce unemployment. Therefore, action is being taken on one of the concerns of the noble Lord, Lord Jay.
I turn to an amendment on which the noble Lord, Lord Stoddart of Swindon, spoke. The point was well made by my noble friend Lord Aldington. The noble Lord, Lord Stoddart, was concerned about convergence and the fact that it might be detrimental to the United Kingdom. He preferred co-operation. As my noble friend Lord Aldington reminded us, there is nothing new about economic policy co-ordination in Europe. We already have a considerable body of Community law covering economic policy coordination both in the existing treaty—I refer Members of the Committee to Articles 102a, 103 and 105—and to the 1990 Council decision on economic convergence. The idea is nothing new. Indeed, Article 102a of the existing treaty refers to:
"convergence of economic and monetary policies which is necessary for the further development of the Community".
The noble Lord, Lord Stoddart, is being entirely consistent. He is not only against the treaty of Maastricht, he is against the Treaty of Rome as amended by the &Ingle European Act—
Lord Stoddart of Swindon: I thank the Minister for giving way. I understand perfectly that we have had convergence in many fields, including agriculture and trade. But has that really brought us the benefits which we were promised as a result of such convergence? Is further convergence likely to bring the same kind of det riments?
The Earl of Caithness: I remember telling the Chamber on Second Reading that when in 1972 I sat on the Cross Benches and listened to the debate I was convinced that the future of Britain lay in being part of the European Community because that would be of
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benefit to us. Yes, I believe that what has happened in Europe has been to the benefit of this country and that it would be wrong to go in another direction. It would be difficult to quantify that precise benefit. Equally, it is difficult to quantify the disbenefit had we not joined. The noble Lord is entitled to his opinion. The great. majority of those in industry in this country have fell. the enormous benefit as the result of being part of the European Community.
I return to the point that I was making. In Stages 2 and 3 prime responsibility for economic policy remains in national hands. The same is true of monetary policy unless we decide to participate in Stage 3. Unless we notify the Council that we wish to join a single currency no obligation is on us to join the ERM. I am sorry that the noble Lord, Lord Monson. is not in his place—
Noble Lords: He is!
The Earl of Caithness: The noble Lord has moved. I am glad to see him back in the Committee and apologise for not noticing him. Equally, there will be no legally binding budget deficit ceilings, no obligation to participate in the European Central Bank and no obligation to change the status of the Bank of England. The treaty provides for the formalisation and extension of process of multilateral surveillance and national economic policies. That is already part of Community law under the convergence decision unanimously agreed in March 1990. The noble Lord, Lord Stoddart of Swindon, advised the Government to go carefully. We have gone very carefully and that is why we have the benefit of the opt out to take into account all the future possibilities.
I wish to deal quickly with two points that were raised by the noble Lord, Lord Eatwell. He asked how ECOFIN can be responsible for external monetary policy and the ECB for internal monetary policy. I ask the noble Lord to look again carefully at Article 109. He will find that there is not the contradiction which he anticipated. Article 109 clearly and repeatedly emphasises the importance of the Council acting in consultation with the ECB in an endeavour to reach a consensus. The noble Lord inevitably asked me about our assessment of the EMI and the ECB being sited in London. I can assure the Committee that the Government will continue to argue that the UK has a good market case for being the seat of the EMI and the ECB. We do not believe that our opt-out need affect our chances since it is not possible at this stage to be sure that any single country will be in Stage 3 at a particular time.
This has been a helpful and useful debate because it goes to the heart of the EMU. On great consideration I believe that the treaty and the articles within it provide a sensible and practical framework in which Stage 3 can operate. Of course, we have the benefit of choosing whether we want to go to Stage 3 at a later date.
Lord Jay: We have had a rather calmer debate this evening which has generated more light, than heat.

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Therefore, I thank all those members of the Committee who are responsible for that by speaking and, indeed, listening.
A great deal has been said about convergence and central banks. Perhaps I may add a few words on that. I agree with my noble friend Lord Eatwell that the word "employment" occurs only once in this treaty of 150 or so pages. It appears nowhere in all the other parts of the treaty, which exhort us towards stable prices, exchange rates and so on.
I am also glad that employment was at least talked about at Copenhagen yesterday, although I am afraid that the noble Earl, Lord Caithness, will find that the measures which he detailed, which are apparently to be considered, will have only a negligible effect on the present rise of unemployment in western Europe. However, I agree that that is a matter of opinion.
On convergence, the noble Lord, Lord Aldington, said that surely convergence is desirable. I believe that there is some confusion between convergence of policies and convergence of economies. We are all in favour of convergence of policies provided that they are voluntary and not dictated to us. But convergence of economies is what the treaty and its various criteria require. Convergence of economies seldom happens. Different economies diverge more often than they converge, and they always will. They diverge for all sorts of reasons: differences in skills, changes in pay rates, changes in world demand or the discovery of oil in one's country, which has considerable effects on divergence. The idea that we can somehow converge and stay there permanently is historically largely an illusion.
A great deal has been said about central banks. In considering the possibility of having an independent or, as I should call it, an accountable central bank, people are forgetting that central banks not only take decisions on financial and economic policy but are forced to take part in and make decisions on foreign policy. One could give so many examples. There is the classic case of March 1939 when Hitler invaded Prague. He put in a requisition to the BIS at Basle for £12 million gold which was the property of the Bank of Prague. The BIS held a board meeting which was attended by Mr. Montagu Norman as governor of the Bank of England and it was decided that the gold legally belonged to Hitler. It was physically in Switzerland and it was handed over to him. I am not saying that that was right or wrong, although I have an opinion about that. I simply say that to remind members of the Committee that when the then Foreign Secretary was asked about it in Parliament two days later, he had to admit that he knew nothing about it and had to check with the Bank of England as to what was happening.
Therefore, when we talk about independent central banks, we should remember that in the nature of things they are not concerned wholly with finance. After all, the decision to join the ERM and subsequently to leave it was a question of high policy—employment, external policy and so on.
Indeed, if we look at the record of central banks on economic policy, even the Bank of England is not
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brilliant. I do not say that to attack central bankers. I say it merely to show that they are human and are fallible like the rest of us. After all, in 1925 the Bank of England took us back, on its own recommendations, to a false value of sterling which as we know caused untold disadvantages and hardships. It was only when, in 1932, it was forced by the then government to lower the bank rate to 2 per cent., which it had no intention of doing, that recovery began in this country.
Even in the post-War era, although the Bank of England had become accountable, it was not brilliantly successful. In 1946 it advised that the American loan would last for several years when in fact it lasted for only a few months. Of course in recent times it pressed for the ERM.
Some people say that the American Federal Reserve banking system is an example of a great success for a largely unaccountable bank. However, it has not been so brilliant. It was largely because the Federal Reserve failed to reduce interest rates for several months in 1929 after the original crash that that collapse turned into the greatest depression to emerge. Therefore, all those matters should be borne in mind when we are deciding whether or not to agree to an independent central bank, either at home or abroad.
Since the amendments are somewhat complicated owing to the grouping system, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington: I beg to move that the House do now resume. I suggest that the Committee stage begin again at 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Young People: Severe Hardship Payments
7.47 p.m.
Lord Henderson of Brompton Lord Henderson of Brompton rose to ask Her Majesty's Government what is their view of the report entitled Four Years' Severe Hardship published by Barnardos and Youthaid, and what is their estimate of the number of young people aged 16 or 17 who are not in full-time education, employment or training.
The noble Lord said: My Lords, this Unstarred Question brings us home from Europe and I believe that it is quite right that time should be found, if only for an hour, for the House to concentrate on the hardship endured by young people aged 16 and 17 who are not in full-time education, employment or training.
The number of such people has risen steadily in recent years and has risen all the time since the Government, in 1988, denied welfare benefits by and large to that category of unfortunate young people. I shall not detail the scheme which the Government put in place in 1988 because it is familiar to most of your Lordships. I shall only state at the outset that the new figures in this report show that their scheme, put into place in 1988, has failed and is badly in need of repair.
The report Four Years' Severe Hardship is published by Barnardos and Youthaid on behalf of the Coalition on Young People and Social Security in M arch 1993. Therefore, it is bang up to date. It is the first document on this subject which has detailed figures of severe hardship claims, especially from the severe hardship claims unit. It is packed with facts and figures and I congratulate all those responsible on the production of the report and in particular the author lanthe Maclagan.
The main findings of the report are as follows. The number of applications for severe hardship payments has increased in the first four years of the scheme's operation from only 500 to nearly 10,000 a month. It probably means that there are over 100,000 claimants in any one year. The number of successful applications has increased seven times during that period. I am afraid that means that there is a vast increase in the number of young people suffering from severe hardship and claiming the payment, despite—and I say this advisedly—only limited information as to the availability of the SHP and, when one hears about it, the complexity and length of time involved in the procedure.
The proportion of successful applicants rose from 62 per cent. in 1988 to 83 per cent. in 1992. Surely that suggests an increased acceptance by the Government of severe hardship among young people. Indeed, their ovvn department is providing that support which can only be given when evidence has been supplied of severe hardship. It means that the Government are taking note—in fact, they must take note—because their department has shown that the incidence of severe hardship among young people in this country has dramatically increased.
Another statistic in the report shows that the average length of awards has doubled from three-and-a-half weeks to seven weeks and that nearly two-thirds of the applications are from young people who have received previous awards. It also shows the increasing difficulty experienced in obtaining suitable youth training placements and the failure of the youth training guarantee in many, if not most, parts of the country. That is a severe indictment of the scheme. The youth training guarantee was central to it, and it has clearly failed with the result that applicants for severe hardship payments have dramatically increased in number. That should not be so because, as I said, the guarantee was central to the scheme. It should not have happened because the severe hardship payment was supposed to be a fall-back and not a central pillar of the scheme. However, it has now, unfortunately, become an essential part of the scheme.
The recommendations show that a number of young people who are without employment and without a training scheme do not know how to apply for severe hardship payments; indeed, they do not even know of their existence. Therefore, it is absolutely imperative that the Government institute a scheme for publicising the existence of severe hardship payments so that young people really know what they can receive when they have no guarantee of a youth placement, no income support and no employment.
The report also illustrates the complexity of the
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scheme. That aspect was pointed out in previous debates most notably by the noble Baroness, Lady Seear. The Government have made one or two improvements, but not nearly enough. The report quite clearly shows that the slight improvements need bolstering by further improvements, if the take-up of hardship payments is to he increased.
It is true, I am afraid, that there are many young people who cannot be identified and who are not, therefore, being supported. It is important that the Government should institute proceedings to find out who those young people are who are not recorded as being in employment, in receipt of hardship payments or in a youth training placement.
The report argues that there is no justification for the low benefits paid to 16 and 17 year-olds compared with older claimants. The noble Earl, Lord Russell, has made that subject his own. As I am sure that he will return to it, I shall not dwell upon it. Youth training allowances are currently quite low and have been frozen for several years. Can the noble Viscount who is to reply tell me why they have been frozen and why their value has decreased when other important payments have increased in accordance with inflation? It seems quite unjustified that they should remain behind in that respect.
I turn now to the subject of numbers. The increasing number of severe hardship applications which now run at approximately 100,000 a year shows that, although the scheme was originally intended as a back-up, it is now absolutely fundamental and that without it a large number of young people who are unable to find youth training places would, quite literally, starve. The system is simply not able to cope with becoming a mainstream provision. The situation will become even more severe as more young people learn of the scheme and how to apply.
In conclusion, will the Government agree that young people who are not in full-time education should be provided with a choice of suitable youth training or be entitled to receive income support if they are actively seeking either such work or a suitable training place. At present, the risk of severe starvation or the invitation to work illegally or immorally is, I am afraid, the only choice open to far too many young people who cannot find anything other than the severe hardship payment and, indeed, are lucky if they can find that.
7.58 p.m.
The Earl of Longford: My Lords, I rise to express strong support for the noble Lord, Lord Henderson of Brompton. I have mentioned this before, but, after the famous orator Edmund Burke had made a speech, someone got up and said, "I say ditto to Mr. Burke". In a sense, I shall save time by saying, "ditto" to the noble Lord, Lord Henderson, who is so well qualified to speak about the problems of the homeless and of young offenders. The subjects are undoubtedly linked; indeed, they overlap. I support what the noble Lord said, the contents of the report and what may be said by other speakers.
The noble Lord, Lord Henderson. referred to the large increase in the suffering of young people as a

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result of government policy. By my standards, I include in "young people" the noble Viscount who is to reply. I was about to point out that he had been left alone on the burning deck, but I see that someone has now come to his succour. Nevertheless, it is a pretty painful experience for him with all the barren Benches behind him. I can only hope that it is brief. There is really nothing he can say. He cannot suddenly announce a great improvement in government policy; he just has a rotten story to tell. However, no doubt he will deliver it most charmingly.
I had not realised that one has only six minutes in which to speak. To cover all those years of working for the homeless and the penal reforms for young offenders, and so on, that I have been involved in would take many hours. However, I shall concentrate upon one aspect of the subject and leave other speakers to make what I am sure are the more outstanding points.
As I have mentioned on previous occasions I, with others. founded the New Horizon Youth Centre which now receives some 3.000 young homeless people a year. I looked in the other day. Undoubtedly the position of the homeless there is worse than it was 12 years ago when the senior social worker joined the centre, or two years ago when someone else, who gave me information, joined the centre. The situation is getting worse the whole time. The noble Viscount may say that that is not a universal experience but that is an example of practical experience. Things are becoming consistently worse under the beneficent, or should I say, maleficent—I have to call them that—arrangements of the Government that the Minister is sworn to defend.
I shall mention just one example of homelessness in the time that is available. I asked one young man at the centre what his position was. He is not 16 or 17 and therefore he is not a member of the group that we shall deal with tonight and about whom we have heard such shocking stories. The young man in question is about 22. He has been sleeping rough for three and a half years.
When one meets someone in the streets who says he is sleeping rough and has nowhere to go, one is sometimes. if not suspicious. at least critical of such a person. One may feel he is sleeping rough because of some weakness on his part. I tell such a person that I can put him in touch with a relevant organisation. However, the young man I am talking about is right in the middle of a centre for the homeless. He is a good-looking young man and is perfectly ready to work.
One may ask why he cannot obtain any work. That is a big issue in itself. One may ask why he cannot receive income support. However, that is extremely difficult to obtain if one has no place where one is understood to be living. One may ask why he has nowhere to live. He cannot find a place to live. I shall therefore concentrate on the housing question.
The Government's housing policy has produced a situation where a young man who is assisted by the organisation I have mentioned cannot obtain income support. This young man is not someone on the streets
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whose character one might call in question; he is a respectable young man, but the centre for the homeless cannot find him a job. He cannot obtain income support and he is shunned by the Government's policy.
Never let us forget that, if people cannot find a place to live, they cannot obtain income support and they are driven in the direction of crime. I consider that the Government have betrayed the young people of this country. For the Government to talk about law and order and then produce this situation is pure humbug.
8.3 p.m.
Baroness Seear: My Lords, I want, in the six minutes that we are allowed, to concentrate entirely on the education and training aspect of this issue. Other speakers have mentioned housing and allowances. In a report of the Adult Literacy and Basic Skills Unit which was reviewed in the Financial Times on Saturday, the statement was made that 23 per cent. of 21 year-olds were unable to work out what 10 per cent. of 4,900 was. This is an extremely serious finding and it confirms what too many of us know already; namely, that education has passed by a considerable number of these youngsters.
The life chances of someone who cannot work out what 10 per cent. of 4,900 is are dim and they are becoming dimmer as the unskilled work in this country disappears. That work is now being done overseas in countries which have lower pay levels. The work is done much more cheaply in those countries. We all know that is happening and that it will continue. The life chances of the youngsters I have referred to are dim in the extreme.
I wish to strike a note of real urgency. As regards patching things up with allowances, it is better that they should receive allowances than that they should not, but we need a much more fundamental solution to the problem than that. We must think about what we can do for these people —there are far too many of them—who simply do not have the equipment to face the kind of life they must lead if they are to have any kind of life chances at all in this country.
That is one aspect of the matter. However, the burden they impose on the economy is quite another aspect which justifies putting money into dealing with the problem. The same report as I have mentioned also states that, as a result of an inquiry among 400 firms, it was estimated that the basic lack of educational skills—numeracy and literacy—is costing industry £4.83 billion a year. One can organise an awful lot of training with that money.
I urge the Minister to take my following point seriously. I have raised this suggestion before and I have tried it out on industrialists who are not averse to the idea. My suggestion is based on my own experience of many years ago in manufacturing industry. I believe companies should be persuaded to take on two school leavers for each job. In the scheme in which I was involved each youngster worked half of each day with the firm and spent the other half of the day in school receiving either training, education or a suitable blend of both.

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The scheme worked extremely well. I administered it myself and it was not difficult to administer. The scheme suited the organisations concerned because there was always someone on the job. There was one youngster on the job in the morning and another in the afternoon. The foreman did not mind whether Tim or Tom was on the job so long as someone was there.
The school where the youngsters spent half of the day was able to provide the kind of training and education which was relevant to the youngsters concerned. I cannot over-emphasise the importance of providing relevant education or training. Many of these youngsters we are discussing are perfectly capable of learning but somehow or other they did not catch onto the idea while they were at school. If the Germans have been able to train 91 per cent. of their youngsters, I absolutely refuse to believe that we should be failing our young people to the extent demonstrated in the report we are discussing.
I ask the Government seriously to consider this scheme and to ask some of the more interested TECs to think about trying out a programme of this kind. Of course it would cost money but I do not believe that it would necessarily cost a great deal of money as companies who take on these youngsters will obviously pay wages for the time they work. The Government have mentioned vouchers for training. As regards training for youngsters who are to work in the employers' organisations, it is reasonable that employers should pay for that. But under this scheme employers would be dealing with a number of people whom they would not ultimately employ. There is no reason why they should train other people's employees. However, the Government could perfectly well work out a voucher scheme and an agreed scheme as regards the cost of providing the training and the cost of running the school or tertiary college where training or education can be given. The Government could easily negotiate such arrangements if they wished to do so.
In this way the Government would double the number of youngsters being taken on in employment and thereby reduce the number in unemployment. The Government would also begin to fill that appalling gap in the youngsters' education and training which, if not filled, will land them with a most miserable and unsatisfying life. Society will also be landed with hideous problems. I have mentioned this matter previously and it has been waved aside as an airy-fairy idea. I beg the Government to understand that it is not an airy-fairy idea. It has worked and it can work. So far I have not heard anyone produce any better idea to make up for the failure of the educational system in this regard, irrespective of the reasons for that. I have not heard of any better way to remove the threat posed by so many young people who are incapable of taking the kind of jobs which will be the only jobs available in the future.
8.9 p.m.
Lord Northbourne: My Lords, I put my name down to speak this evening in the confident, but in the event foolish, belief that this debate would take place between 7.30 and 8.30 p.m. I apologise to the House
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for the fact that I must leave at 8.30 p.m. I hope that the noble Viscount who is to reply to the debate will forgive me.
I wish to congratulate the noble Lord, Lord Henderson, on raising this issue, and indeed the various bodies involved in the Coalition on Young People and Social Security for forcing on the public's attention an issue which is of the very first importance. However, I disagree with them in their proposed solution. I do not believe that this problem can he solved simply by throwing more money at it or by indifferently giving income support to all young people who wish to live away from home and who want income support.
I believe that what is needed is a coherent government policy on young people, particularly those aged 16 to 17. I want to concentrate my remarks on young people in that age group.
By way of example, as I understand it the present position is that if young people are in education they can only receive any form of support if they are estranged from their home. In that case they receive £26.45 a week. However, if they are in a Youth Training place they can receive £29 a week whether or not they are estranged from home. If they are waiting for a Youth Training place they can get only £I5 a week, whether or not they are estranged from home. What is the logic of that? I ask the Government what on earth those payments are meant to be. Are they meant to be pocket money, in which case, arguably, they are excessive? Or are they meant to be a living allowance, in which case they are patently inadequate?
I should like to refer, first, to the question of living costs. There seem to be two simple alternatives. Either the Government must be prepared to fund what is effectively a living allowance for all 16 and 17 year-olds who choose to live away from home—I believe that that is the position taken by the organisations which prepared the report—or, alternatively, there should be some form of targeting. The problem is that the present targeting is not. satisfactory. Compared with the Government's present targeting a scatter-gun would be a precision instrument. It is essential that clear criteria should be established for what constitutes a young person who is unable as opposed to unwilling to live at home. More adequate support should be targeted on those young people and little or none on the others.
At this point I should like to argue that support. given to 16 and 17 year-olds for board and lodging should be in the form of a voucher rather than in cash. The pressures of the consumer society are enormous. I know many young people who, if they have cash in their hand, would prefer to spend it on designer clothes, new trainers or boots, or whatever is fashionable, and sleep under a friend's table rather than spending it on board and lodging. Therefore, I suggest that some form of voucher encashable at foyers, hostels and other similar places would be worth consideration when the Government are examining the proper targeting of living expenses for young people of that age.
I should like now to turn briefly to training. I should like to endorse every word said by the noble

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Baroness, Lady Seear. I am sure that she is right. I draw her attention to the education in business scheme which is growing up in some areas and which I believe to be an enormously important initiative.
I believe that the problem of the TECs is not underfunding. Certainly in my county of Kent the problem is not underfunding but mismatch. I have spoken to the Kent TEC today. The problem is that in order to produce workplaces in the TEC two things have to happen. First, there has to be a young person who wants a workplace of a particular kind. Secondly, there has to be an employer who is prepared to provide a job opportunity of that kind. In a certain part of Kent there are job opportunities which require young people with a reasonable degree of numeracy and literacy, while in that particular part of Kent there are insufficient people with the requisite numeracy and literacy to take up those vacancies, and vice versa at the other end of Kent.
I do not know how that problem can be solved, but I suggest one solution. We are all being told that in the future if young people want to be employed on a lifetime basis they will need flexible skills. They will have to be retrained several times during their lifetime. I suggest that the Government and the TECs should concentrate more on offering young people flexible skills and on providing introductory courses which will give them the core skills that they will require for training and retraining during their lifetime.
I should particularly like to draw the attention of the House to the General National Vocational Qualifications (GNVQs) which have recently been introduced. Tomorrow I am going to open a function at a school which has been immensely successful with GNVQs. It has a long waiting list and the young people who have come out of the first year's training of that kind have acquired enormous self-confidence by finding that they can achieve a qualification. Therefore, I urge the Government to extend GNVQs and enhance the ability of TECs to provide that type of education.
8.15 p.m.
Baroness Jay of Paddington: My Lords, I should like to join other noble Lords in thanking the noble Lord, Lord Henderson of Brompton, for raising this extremely important issue.
I should like to refer to what the noble Lord, Lord Northbourne, said about young people who choose to live away from home. It is clear from the report which we are discussing this evening that the proportion of those who do not choose to live away from home but who have to do so is high. The report states that one third of severe hardship claimants in that age group had either been thrown out of the family home or had been living with friends who could no longer support them. It also found—and this is a significant figure—that 22 per cent. had been physically or sexually abused, either by someone in the family home or by staff at a children's home. I merely refer to that point simply to emphasise that it is an important number.
Lord Northbourne: My Lords, I certainly take that point.
Baroness Jay of Paddington: My Lords, I should also like to join other noble Lords in congratulating the authors of the report. I want to speak briefly to two underlying social issues which are referred to in the report but not given great prominence. Interestingly, those issues emerged at a meeting which I attended in another place to launch the report in March. One of those points relates to the particular problems of ethnic minority young people. That is a question which I raised with the authors of the report, who have been kind enough to supply me with further information.
Apparently one in three non-white 16 and 17 year-olds is unemployed compared with one in five white young people. The same disproportion is apparent among Youth Training leavers. The survey found that black young people were over-represented on YT waiting lists and that the YT guarantee is more likely to fail black young people than white young people. Also, rather depressingly, career service heads in schools found that black young people are more likely to stay on in education than whites but those who leave are less likely to find work or training.
That is a significant part of the report which should be given prominence when considering any action which should be taken on it, particularly in view of the potential for ethnic divisions and unrest among people who feel that they have been particularly discriminated against. I have seen that very much in my part of London.
I also want briefly to draw attention to the health problems of those 16 and 17 year-olds who are dealt with in the report. As the report mentions, 45 per cent. of people claiming severe hardship payments had slept rough. As we all know, that brings a particular vulnerability to ill health. Recently we have seen in this country a disturbing increase in what used to be called poverty diseases—TB, rickets and other such conditions. We are seeing those particularly among this group of very vulnerable young people.
There is also the question referred to by the noble Lord, Lord Henderson of Brompton, of how those young people make any kind of living at all and the way in which they are often involved in illegal activities, particularly in the area of drug peddling. I am afraid to say that there is also a growing rate of casual prostitution among those young people. That is another sad way of making a little money on the side, but it has the consequent problem of more ill health, particularly in the area of HIV and AIDS. Again one is looking at a potential problem resulting from the homelessness and poverty among this particular group of young people.
That is a problem in which Barnardos, in another of its fields of work, has been particularly involved. Through its Streets of London project, it has been trying to work with young people who are potentially at risk in that way.
Another group that I have spoken with recently—the Streetwise Youth project in Earls Court—finds

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that the vulnerability of those 16 and 17 year-olds, who are without any legal form of income support, to those health problems is very high indeed.
We now know that 20 per cent. of people in this country who are infected with HIV and AIDS are in the 15 to 25 age group and nearly half are below 29. Therefore, I am afraid that as a side issue of this significant report we are seeing anxiety about the underlying public health issues relating to this vulnerable group of young people.
I was sorry not to be here earlier this afternoon when the noble Earl. Lord Russell, asked his Question about the possibility of public expenditure cuts in social security having an impact on other public spending Ministries. I believe that that is particularly relevant to the debate. What we lose by failing to invest in income support for our young people we shall reap in public expenditure in other areas. If no other argument appeals to the Government, I hope that that one will.
Lord Butterfield: My Lords, I make one brief intervention. Perhaps I may say to the noble Baroness, Lady Jay of Paddington, that much of the tuberculosis is found among young people who have immunodeficient diseases such as AIDS. The awful thing about it is that they have tuberculosis and walk about with an unthought of and unrecognised diagnosis, giving that disease to other young people. That seems to be a point that we might build into this very sad story.
8.21 p.m.
Earl Russell: M y Lords, before turning to gloomy matters, I wish to say what a great pleasure it is to follow the speech of the noble Baroness, Lady Jay of Paddington. When the noble Baroness and I were undergraduates and attending the Oxford Union I never had that pleasure. Being a woman, the noble Baroness was barbarously confined to the gallery. It is now clear that the Oxford Union's loss was as great as I always believed it to be. In these times when everything seems to be getting worse, it is very nice to be able to spot one aspect that is getting better.
I do not merely say that I am grateful to the noble Lord, Lord Henderson of Brompton, for introducing the Question; I am very grateful to him. As noble Lords know, I am pledged to introduce this topic every year until the Government change their policy. However, I had already had my go this Session. Therefore, when the report was published I was extremely glad that the noble Lord, Lord Henderson, took it up. Our plea for reintroducing the topic is because of important fresh evidence. It seems to me that we may have to plead important fresh evidence as many times as it was necessary to do for the Birmingham Six or the Guildford Four; and the injustice is, I think, even greater.
The number of reports which have condemned the Government's policy is now getting more like the score of an Australian batsman than that of an English batsman. I have given notice to the noble Viscount who is to reply. I wish to ask whether there are any independent reports that have upheld the
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Government. I am not aware of any. In the absence of such reports it is sounding perilously as though it is a major item of Government policy that, "They are all out of step but our Johnny".
The hub of the subject was stated in the eighth report of the Social Security Advisory Committee. The YT guarantee is not being delivered in full and without such a guarantee the absence of a right to continuing entitlement to income support can leave very vulnerable young people with no visible, legal means of support. I do not believe that the use of starvation as an instrument of policy is acceptable. Still less do I believe it acceptable in the case of people who have registered for YT and have done everything which can legally be required of them.
The key important fresh evidence that we have is on the failure of the YT guarantee. We have the reports from the chairmen of the TECs in November 1991. Out of 60 TECs, 32 said that they were unable to meet the guarantee. We have the evidence of the Careers Service on which the noble Viscount, Lord Ullswater, relied as his main information on meeting the guarantee when he replied to me on 20th April. It finds that education, employment and youth training together only account for 85 per cent. of 16 and 17 year-olds. Five per cent. of them simply cannot be found.
In a Written Answer on 1st June 1992 the noble Viscount, Lord Ullswater, gave me a list of numbers involved in education, employment, youth training and so forth which fell 135,000 short of the number of 16 and 17 year-olds in the country. The noble Viscount put a health warning on those figures. I accept that he was quite right to do so. The noble Viscount's figure was actually higher than the 124,700 without visible means of support referred to in the Youthaid report. It is interesting that those figures are so close. However, I believe that, of the two, the Youthaid figure is nearer the truth.
We have had a flood of evidence of individual cases of people without visible, legal means of support. The evidence comes from such places as the citizens advice bureaux or Centrepoint. Those are reputable organisations. Such people are not figments of their imagination. When we consider the figures, the Government are simply unable to collect figures which can demonstrate that that evidence is not the case.
The guarantee is supposed to last two years. According to MORI, the average length of a youth training place is about three months. On 22nd March of this year, the noble Viscount stated that he had no precise figures for mean length and no estimate for medium length training. Therefore, how can the Government know whether they are meeting the guarantee? The have no evidence on waiting lists. They have no estimate of the waiting time. The Government state that they have no information on people with no access to training. There is no correlation of the youth training records in the Department of Employment with severe hardship records in the Department of Social Security. Therefore, we cannot tell from government records whether those who do not obtain a youth training place are receiving hardship payments. Since we

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cannot find the truth from the Government's figures, I do not understand how they can contradict the overwhelming evidence from every other source that the Government have got it wrong.
8.27 p.m.
Baroness Turner of Camden: My Lords, I too am grateful to the noble Lord, Lord Henderson, for raising yet again the problems faced by young people from disadvantaged backgrounds—problems that are highlighted so well in the report to which his Question refers. It is, of course, not the first time that we have raised the issues on this side of the House. The noble Earl, Lord Russell, has already eloquently referred to the number of times that he has pressed the Government on these questions.
I was a member of the European Communities Select Committee, which in 1991 reported on young people in the European Community. At that time we received evidence from a number of experts—including the director of Youthaid—which has been concerned in the production of the present report. We were told then that the problems of young people are interconnected and form a vicious circle. Everyone we saw stressed the importance of training but we were also told about the difficulties of sustaining a training place while looking for a home. The National Childrens' Home told us:
"It is important not to lose sight of the massive impact that economic, social and demographic changes have had on the lives of young people over the last two decades in particular".
We were told that there was a real danger that groups of young people would become trapped at or below the base of the labour market. NACRO in particular told us that those factors often resulted in young people living a nomadic, unsettled existence and sometimes becoming involved in crime. There was, it told us, what it calls a revolving door syndrome: no home; no job; no money; crime; increased isolation and alienation from society; imprisonment; no home on release; and so it goes on. That was in June 1991.
The report that we now discuss is dated March 1993. As the noble Lord, Lord Henderson, said, it is about as up to date as one can possibly get. Again, the problems not only exist but seem to have become a great deal worse. As we have heard, we were promised that there would be a guarantee of youth training places, but there has been a failure of that so-called guarantee. It was envisaged originally that only in the most exceptional cases would a 16 or 17 year-old not have access to income. In these exceptional cases, we were told when we raised the issue, severe hardship payments would be available. It has been made clear, however, and it is clear in the report that not all the young people who should have had severe hardship payments have been able to obtain them. NACAB and other organisations have reported cases where young people who were quite destitute have been deterred by the form filling and the procedures involved.
The Government appear to have made some limited improvements and to have listened to some of the criticisms. They have improved some of the administrative arrangements so that more young people are receiving SHP than formerly. However, I
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believe we were promised a total review of the system back in January. That does not seem to have happened. Perhaps the Minister will tell us this evening what is happening about the review of SHP.
As we have heard, the training provision has also contracted, as TECs have made clear to us. TECs say that they are having great difficulty in delivering the YT guarantee. In some areas, TECs have had as many as between 500 and 700 young people waiting for YT places and that was according to a survey published in 1992. If young people cannot get a YT place, they have no other source of employment, training or income.
As I said earlier, in 1991 the Select Committee had evidence of social changes which have resulted in a much higher divorce rate than ever before. One in three marriages now ends in divorce; one of the causes sometimes given for young people wanting to leave home is that they cannot get on with step-parents. Sometimes there is child abuse. For all those reasons, it is often not possible for young people to remain at home, even though so far as the Government are concerned it may be desirable for them to do so.
We have already heard in the debate of instances of homelessness among young people. One of the organisations with which I am in touch telephoned me today to say that in its area, in leafy St. Albans, 25 young people were registered as homeless and sleeping on the streets. So even in salubrious suburban areas there are young people who have no means of support and are reduced to a situation of homelessness and destitution.
We come now to the conclusions of the report. Unlike the noble Lord, Lord Northbourne, I must say that I fully support them. I believe that there must be good quality vocational training available to all young people leaving full-time education. There has to be support for young people who are waiting for a training place or a job. Income support must be restored to all unemployed young people and at a level which is adequate for them to live independently of families, since, as we have seen, it is simply not possible to assume that parents will be either willing or able to provide continuing support.
We have said all this many times before. The excellent report to which the noble Lord, Lord Henderson, has referred adds point and back-up to the case we have been making. I hope that the Minister will this evening be able to tell us that the Government are listening and will take seriously what has been said and not only listen but take action on the lines that have been recommended and supported by so much evidence.
8.33 p.m.
Viscount Goschen: My Lords, this evening we have had a debate on Her Majesty's Government's policy towards the training and economic support of 16 and 17 year-olds. I should like to reassure the House that this is a subject which has received a great deal of detailed attention and consideration from Ministers.
I should like to thank the noble Lord, Lord Henderson, of Brompton, for raising this important issue for debate. However, it is a shame that the

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vehicle for this was a well-meaning but misconceived and ill-informed report. To give a direct answer to the first half of the noble Lord's Question, we do not think particularly highly of this report. That is not because it is critical of the Government but because it is based on outdated information, wrong assumptions and inadequate analysis, the details of which I shall return to later.
Our policy remains the same as it was when introduced in 1988: to encourage young people to make the most of the positive opportunities provided and to discourage a dependence on benefits—
Earl Russell: My Lords, the noble Viscount has described this as an "ill-informed report". Would he repeat that remark when not covered by parliamentary privilege?
Viscount Goschen: My Lords, I stand by what I said and. if the noble Earl will bear with me, and have a little patience, I shall continue with my analysis in support of my contention.
As I said, our policy remains the same as it was in 1988. We intend to discourage dependence on benefits, which would be in no one's best interests. All young people under 18 who are not in full-time education or employment are guaranteed the offer of a suitable training place. Britain is the only EC country where, through the youth training guarantee, all young people can make the positive choice of employment, full-time education or quality training.
The current framework protects the most vulnerable, including those at risk, who are looking for a youth training place, while ensuring that those who enter training are given suitable opportunities to make the most of' their potential. We are convinced that this is the best approach to equip young people with the relevant type and quality of skills and training that they will need in the future.
We have heard talk here this evening that the Government's guarantee of a youth training place has failed, as mentioned by the noble Baroness, Lady Turner. That is far from the case. In May of this year only 4,004 young people had been awaiting a youth training place for eight weeks or longer in England, and 40 per cent. of them had already received an offer. The Government are fully committed to meeting the guarantee and are placing considerable pressure on training and enterprise councils to reduce further the numbers currently waiting.
I must emphasise in response to the points raised by the noble Baroness, Lady Seear, that our aim is to provide young people with positive opportunities such as youth training, to enable them to make the most of their potential. Perhaps I may assure the noble Baroness that training in numeracy and literacy is an integral and important aspect of youth training for those who need it.
The Secretary of State's strategic priorities emphasised the importance of national education and training targets. The TECs have already been asked to take the lead in setting local baselines for improving levels of training and education. We welcome all suggestions for improving the training provisions.
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We firmly believe that young people should not begin their adult life dependent on benefits—a view which I believe has wide support across the House. That is why, as the noble Lord, Lord Northbourne, mentioned, income support is not generally available to this group and why the Government are absolutely committed to ensuring that the guarantee is met. We recognise that there are some young people who are unable to take part in training and so income support is available to groups such as lone parents or people with disabilities.
Furthermore, the safely net of the severe hardship provision helps to ensure that those looking for work or training and who are at risk from hardship need not be without financial support. Income support is normally payable in these circumstances until a job or youth training place is secured. Our monitoring shows that this provision is working effectively. Over 85 per cent. of those who currently apply receive income support. Success rates for particularly vulnerable groups, such as rough sleepers and pregnant young women, are on average even higher than that. We believe that this reflects the fact that we are meeting our commitment to help those at risk.
I said to the noble Earl, Lord Russell. that I would return in more detail to the allegations made within the report by the Coalition on Young People and Social Security and particularly the errors of analysis which have led to wrong conclusions.
The noble Earl concentrated heavily on statistics. The report quotes the Labour Force Survey—a quarterly investigation into the economic circumstances of some 60,000 households—as recording for summer 1992 that there were 195,000 16 and 17 year-olds unemployed. The report fails to note that this survey makes use of the international definition of unemployment. The figures therefore include young people in full-time education who are looking for work. The summer survey represents the peak of activity for the careers service, where many young people are waiting for examination results and deciding what is best for their future.
The results from the winter labour force survey, published in the Employment Gazette on 17th June reveal a more accurate picture. This shows that of the total number of 1.3 million young people in Great Britain 913,000 were in full-time education; 284,000 were in employment or training; and 28,000 do not want or need employment or training (for whatever reason). So between September and November last year there were about 75,000 young people looking for work or training in Great Britain. Figures from the regular count of careers service registers show that the total number of young people waiting for a place dropped rapidly from this high to 26,000 in May.
This time of year sees the highest rate of entry to youth training. Figures from the regular count of the careers service registers show that the number awaiting a youth training place dropped rapidly from the high in September. In May 1993 only 4,000 young people had been waiting for eight weeks or more. One thousand five hundred of them had already been on youth training but remained within the guarantee and 1,600 had already been offered a place.

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The rest of the authors' conclusions on youth unemployment are based on their own estimated figures; as the report does not contain an explanation of the estimation procedure, I am unable to comment.
The report also criticises policy on various fronts. We have responded quickly and positively and in a number of ways to all these comments. For instance, to combat the issue of a perceived complex claiming process, as mentioned by the noble Lord, Lord Henderson, we have eased access to benefit by establishing a nominated officer in each benefit agency district office who is specifically responsible for 16 and 17 year-olds. We have improved training, making staff more aware of the specific needs of young people and how to deal with them sympathetically. We have also issued a best practice guide to staff in the benefits agency stressing the vulnerability of this group and their sensitivity. We have improved our contacts with voluntary organisations and local groups who deal with young people so that they are aware of the support that is available no matter with whom they first come into contact.
The organisations involved have welcomed the improvements that we have made. With their help there is now a much wider knowledge of the severe hardship provision. This goes some way to explain the increase in the numbers applying under it. Nevertheless, it is important to place this in context: the numbers involved are small—about 10,000 successful claims each month. This is less than 2 per cent. of the total population of 16 and 17 year-olds, the vast majority of whom are either in education, work or training.
Income support levels for young people are based on the fact that most of them live in someone else's household—usually that of their parents—and they have fewer financial responsibilities and lower earnings expectations than those who are older. As there is only a finite amount of money available, this must be targeted to those most in need.
We know, however, that some young people cannot live at home and are not able to grow up in a stable and caring environment. That is why 16 and 17 year-olds forced to live independently qualify for income support at the higher 18–24 year-old rate. Similarly, where they are liable to pay rent, 16 and 17 year-olds are assessed for housing benefit at the same rate as 18–24 year-olds. We have no plans to alter these arrangements.
To answer the direct question of the noble Earl, Lord Russell, so far as I am aware, none of the independent reports to which he refers has made use of the detailed, accurate and comprehensive information which is provided each month by the careers services. I look forward to that information, which has been made available to the House, being incorporated into future reports.
In response to the noble Baroness, Lady Turner, young people aged 16 and 17 who are registered for youth training and whose parents are having difficulty supporting them, whether they are on income support or not, may claim income support under the severe
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hardship provision. This safety net will prevent any young person from being evicted from the family home because of a lack of financial support.
The noble Earl, Lord Longford, and the noble Baronesses, Lady Jay and Lady Turner of Camden, spoke of the difficulties of homelessness. The homeless, like all 16 and 17 year-olds, are covered by the Government's guarantee of the offer of a place on youth training if they want one.
Providing YT places for the homeless means that they will receive the regular income of a training allowance—
The Earl of Longford: Perhaps I may interrupt the noble Viscount—
Viscount St. Davids: My Lords, we have only a few seconds left.
Viscount Goschen: My Lords, I shall try to cover the housing points very quickly. Nevertheless, income support is payable to those most vulnerable young people regardless of whether they have a fixed address.
I offer my apologies to the noble Baroness, Lady Jay. I do not have information available on the question of minorities which she raised but perhaps she will agree to my writing to her on the matter.
The Government's policy for training and supporting young people is working, and it is working well. Since the YTS was introduced in 1983, some 3.5 million young people have benefited from the programme. In March of this year there were 288,000 young people in training in Great Britain. Good as this record is, we are still looking for ways to improve it. To that end we have introduced training credits to put more control in the hands of young people. We have improved the terms of the guarantee to ensure that offers are made within specified timescales. We have instigated detailed monitoring of those waiting for youth training places to ensure that no young person has to waiting longer for a suitable place than is absolutely necessary.
To conclude, we shall continue to look for ways to help all young people to gain the skills, knowledge and experience that they need to enter adult working life. To that end, I thank all noble Lords who took part for their contributions to the debate and in particular the noble Lord, Lord Henderson, for raising this issue this evening.

European Communities (Amendment) Bill
8.46 p.m.
House again in Committee on Clause 1.
[Amendment No. 19 not moved.]
Lord Pearson of Rannoch Lord Pearson of Rannoch moved Amendment No. 20:
Page 1, line 9, after ("II") insert ("except the following words in Article 2: "economic and social cohesion"").
The noble Lord said: The purpose of the amendments which are grouped with Amendment No. 20 is to query the wisdom of our support for the EC's cohesion fund policy, the European Investment Bank, the Economic and Social Committee. and the Committee of the Regions. Of those, I shall leave

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other Members to deal with the Economic and Social Committee, which at the moment seems capable of continuing as a harmless, if expensive, talking shop.
I have to say, however, that the Committee of the Regions may well be one of the pegs to which my noble friend Lord Tebbit has made such perspicacious reference. If so, it is a pretty sinister peg. As always with these pegs, as my noble friend explained, the provisions laid down in Chapter 4, Articles 198a to 198c have been drafted so that they appear relatively innocuous now and are therefore likely to be accepted by the member states without demur. As my noble friend pointed out, that is how the Euro-planners work. They establish the basis for future action in 1996 or earlier by ensuring that their initial proposals cannot be objected to. They rely on the naivety of national legislatures to approve the necessary paving provisions which form the basis of the later policy that they have already conceived.
In the case of the Committee of the Regions the plan, like all good frauds, seems innocent enough. The committee seems designed to satisfy the alleged aspirations of, for instance, the German Länder, the Flemings, the Scots, the Catalans and inhabitants of other regions said to be dissatisfied with their present lot. However, the true purpose of the birth of this institution may well be to facilitate and accelerate the diversion of power over the regions from national parliaments to the European Community centre, thereby undermining the integrity of the existing nation states.
Indeed, the Foreign Office appears either to have been taken in by that strategy or anyway to support it, if its deceitful little publication Britain in Europe is anything to go by. On page 12 the Foreign Office states:
"There will be a new Committee of the Regions which will advise the Commission and the Council of Ministers on issues concerning the European regions. This will help to ensure a stronger voice for th,a regions at European level".
I ask the Committee to concentrate a little on that last sentence. Surely it amounts to a somewhat worrying suggestion that the member states are not adequately conveying the regions' voices to the Community's forums? Surely it subtly hints that the member states are failing the regions? I must ask my noble friend the Minister to give us an assurance that what I suggest is nonsense. I have no doubt that she will do so. I can but remind her that what she says will be on the record when, later this year or at the latest in 1996–97, we come to consider the cloak which will be hung on this particular Tebbit's peg (if such it is and if I may so describe it).
Whatever my noble friend replies, the importance of the Committee of the Regions is obvious from the second paragraph of Article 130a, which reads:
"In particular, the Community shall aim at reducing disparities between the levels of development of the various regions and the backwardness of the least-favoured regions, including rural areas".
The Committee of the Regions is therefore to be a key player in converging the economies of the member states so that we may all move towards the glorious goal of monetary and political union. The committee doubtless will have much influence on the distribution of cohesion funds, which are supposed to produce
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level playing fields everywhere, where only steep mountains shoot skywards. Cohesion funds and level playing fields are two essential tools in the fashioning of the great socialist state which we are now contemplating.
Perhaps I may put another very simple question to my noble friend the Minister. Do the political, bureaucratic and legal minds which have dreamt up this monstrous concept understand, or do they not understand, that a level playing field and a market are contradictions in terms? I fear it is obvious that many Members of the Committee do not understand that fundamental conflict either. Perhaps it is only obvious to those of us who have worked most of our lives in commerce and industry, where we have had to earn money in the real world to pay the taxes and salaries of the politicians and bureaucrats who have dreamt up something so far removed from a genuine common market. I hope that my noble friend can answer my question.
That leads me to the cohesion funds themselves. I should have thought that the proposed cohesion funds would be unacceptable to a Conservative Government. The principle on which they operate is essentially socialist in character, being the redistribution of wealth from richer to poorer countries. Most. people do not seem to mind doing that when the money in question consists of charitable foreign aid, but these cohesion funds are different. Under them, British taxpayers' money is going to help other European countries build factories and motorways so that they can better compete with our own industries in the so-called single market and elsewhere. Can my noble friend tell us roughly how much of the money that we could otherwise be spending here is given away in the folly of the cohesion funds?
Baroness Elles: Perhaps my noble friend will give way. Is he aware of how many millions, if not billions, of pounds go to Northern Ireland from European Community funds which have helped the Northern Irish to rebuild their economy? Does his argument totally apply; to say that Conservative Governments do not welcome payments from the Community to parts of the United Kingdom that need financial resources?
Lord Pearson of Rannoch: When my noble friend the Minister comes to reply to the question that I put to her, I feel sure that she will include Northern Ireland in the United Kingdom. Can my noble friend tell us roughly how much of the money that we could otherwise be spending here is given away in that folly? Of course she should include Northern Ireland in that calculation.
I should call it folly even if it worked in the theory in which I have described it. But in practice it is worse. The recipient countries cheat with the money that is given to them and often use it, in effect, for other purposes. For instance, Spanish steelmakers are being given back door subsidies by the Spanish Government by having their social security payments deferred. Indeed, Sub-Committee B of your Lordships' Select Committee on the European Communities is having great difficulty in establishing just how much aid is

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being given by national governments to prop up their own industries to the disadvantage of British industries.
Let me quote from a letter that I have just received from the legal department of your Lordships' Select Committee. It reads:
"Of course, if national aid is lawful. it must he notified to the Commission so that figures are available. Illegal aid, on the other hand, will not he notified to the Commission and delinquent national governments are skilled at carrying out these transactions in ways which make the grant of aid as well as its amount very difficult to detect".
Quite so. I am sure that that comes as no surprise to Members of the Committee who are familiar with the way in Which other member governments, and particularly the recipient governments, flout the Community's rules to their advantage. But why do we go on giving them these absurd cohesion funds, amounting in total to some 12 billion ecus per annum on top of that? Can my noble friend enlighten us?
In view of the hour and the large number of amendments in this group, I shall not further depress the Committee with too much information about the European Investment Bank. So far Britain has contributed a mere £1.5 billion for 19 per cent. of the European Investment Bank's capital. But Italy gets 40 per cent. of its inter-Community lending. France received 62 per cent. of the number of loans that it made to small and medium-sized enterprises in 1991, amounting to 23 per cent. of their total value. In comparison, the UK received 1 per cent. of the loans, amounting to 3 per cent. of their value.
Need one say any more? I think not. But as we are committed to subscribing an extra £7.24 billion capital by 1998 to that bank, I must ask my noble friend the Minister whether she believes that it will be wisely used in the interests of the poor old British taxpayer. I beg to move.
9 p.m.
Lord Bruce of Donington: I listened carefully to the remarks made by the noble Lord, Lord Pearson of Rannoch. Perhaps I may approach the matter from an entirely different angle altogether. It may in part differ from the approach that he saw fit to take.
I speak now as a self-confessed or proud socialist. From our point of view when the terms of the Treaty of Rome were renegotiated in 1975 one of the most desirable outcomes was the establishment of the European Regional Development Fund which provided, among other things, for a redistribution of wealth in the sense then described. It became quite clear that the operation of the free market, as always—an inevitable characteristic of the free market—tended to create pockets of prosperity at one time (the "golden triangle of Europe" was referred to) and at the same time produced the conditions in what were called the "depressed" areas or later the "development" areas which obviously required some social redress. Therefore, I am in complete agreement with the further development of the regional development fund. It serves a useful purpose aside from the aims and objectives of the Maastricht Treaty. It brings a
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greater measure of fairness and justice within our society which, if it is to remain a vibrant and living thing, must have an element of cohesion within it.
Therefore I make no objection to the development of the regional development fund. I was one of those who advocated further consideration being given to the report of the then commission chaired by Sir Robert McDougall. which indicated that, in order to have any effect on the growing polarisation of wealth and poverty, which is the characteristic of free market forces throughout the world. we should have to make substantial increases to the regional development fund. In more recent years, as the Committee is well aware, reforms were made to the structural funds in which they were regrouped, together with the agricultural guarantee and guidance fund in order to produce a greater pot out of which some correction could be made.
Unfortunately, notwithstanding the provision of aid to development areas—which always has to wear the label of the European Commission (quite inaccurately since the funds are provided by the member states)—one of the results of the development of the ordinary operation of a free enterprise society was that, despite those endeavours, year after year ever since 1972, the richer areas of the Community have become richer and the poorer areas poorer.
That brings me to a specific aspect of the Maastricht Treaty. I repeat that I have no objection whatever to the redistribution effects which ultimately, in Keynesian terms, continue to stimulate correctly the ordinary demand. Some people who advocate cuts in public expenditure in the United Kingdom at the present time often forget that the costs of social security come from somebody else's income that contributes to the continuation of the economy. Reduce some of those transferred payments and one precipitates an even greater depression than we have now.
My objection in regard to the Maastricht Treaty stems from its association with economic and monetary union. Once one has a situation in which the economic affairs of the country and of the Community as a whole are in the control of non-elected and non-accountable bankers, no account is taken of the regional disparities about which we know in the United Kingdom and which are still emerging in Europe. There is no control over the consequences upon society. Therefore, in order to remedy those disparities, if indeed they can be remedied within a society operating on completely free market principles, we are dependent not upon the Council of Ministers, not upon an elected government as in our own country, but upon the Commission.
I emphasise to the Committee once again—and I trust that if the penny has not yet dropped, it will do so—that the Council can act only on a proposal from the Commission. The determination of the way in which the European development fund, or rather the cohesion funds, can be distributed lies in the hands of the Commission. The decision is made under the treaty. The apportionment of the funds under the treaty can be determined by majority vote in Council.
Lord McIntosh of Haringey: Perhaps my noble friend will forgive me. He is asserting that the economic and social cohesion policies can be considered by the Council only on a recommendation from the Commission. Perhaps he would be good enough to refer to Article 130b. under economic and social cohesion, to a sentence which he wished to take out by his Amendment No. 161. It states:
"Member states shall conduct their economic policies and shall co-ordinate them in such a way as, in addition, to attain the objectives set out in Article 130a".
Does my noble friend agree that the sentence he wishes to take out makes it clear that the initiative in the first place is that of member states?
Lord Bruce of Donington: The initiative is in the treaty. The Commission is responsible for bringing forward the practical proposals for the implementation of the policy stated in the treaty. It is the Commission that brings forward the proposals and the Council decides whether or not it will adopt them. For that purpose it will adopt majority voting.
I have in mind what has occurred over the past two or three months in regard to the political pressure exerted quite openly by the Commission on member states to ratify the Maastricht Treaty. Expressed in loose terms—I do not mean to be offensive; I am merely giving the shorthand—the fact of the matter is that the Commission has brought pressure to bear on some member states to ratify promptly the Maastricht Treaty by holding out to them the benefits that they will receive from the cohesion fund. Nobody will deny that it applies more particularly to Ireland. I have the suspicion that the speedy ratification by Spain, Greece and other recipients of the funds provided by Germany, ourselves and (to a minor extent) France, has been profoundly influenced by the inducement offered to those other member states by the cohesion fund.
I object to that arm being retained by the Commission. I have no objection if it is taken out of the hands of the Commission altogether. I have no objection if the allocation of the new aids is made by the unanimous decision of the Council of Ministers. But that is not the case under the treaty. In my view, that goes to the very root of the treaty. It makes the ultimate economic climate and economic circumstances within which decisions are made subject to the actions of non-accountable international bankers. It then leaves distribution open to considerations that may rest upon the desirability of obtaining majority votes for this and that policy or as part of a package deal. I believe that the Committee will do well to look askance at the provisions included in the treaty.
Lord Thomson of Monifieth: For once I am moderately happy to follow the noble Lord, Lord Bruce of Donington, but first perhaps I should declare what is no longer an interest but a definite prejudice. I am a former member of the European Commission. It was my duty to set up the first regional development fund. Your Lordships will know of my bias.
When I looked at the amendments I was astonished to find the name of the noble Lord, Lord Bruce of Donington, heading Amendment No. 31 to take out Article 3(j), which concerns the strengthening of
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economic and social cohesion. I was also astonished to find the noble Lord, Lord Stoddart of Swindon, leading Amendment No. 20, which removes the phrase "economic and social cohesion". I believe I am right in saying that in Amendment No. 52 the noble Lord, Lord Stoddart, wants to take out Article 4b, which is concerned with the European Investment Bank. The Committee will be aware that the phrase "economic and social cohesion" is, as I concede to the noble Lord, Lord Bruce of Donington, a term of Brussels bureaucratic art meaning a regional development policy or assistance to poorer areas by the more just distribution of resources. I cannot believe for a moment that the noble Lords sitting just below me in the gangway, but not far away from me in general philosophy, wish to espouse that kind of philosophy. I understand that totally in the case of the noble Lord, Lord Pearson of Rannoch, who has just spoken, or in the case of the noble Lord. Lord Tebbit, who is not now with us. I am bound to say that, as is happening so often in this debate, noble Lords are not protesting about the policy of economic and social cohesion, though I fully concede their concern on these matters. They are opposed in principle to membership of a community, part of whose economic policies is the redistribution of resources to go alongside economic and monetary union and the other processes of integration.
Lord Bruce of Donington: I am most grateful to the noble Lord. He did not fully understand or perhaps was not present at the time. It has already been explained to the Committee that the purpose of putting down these amendments is in part exploratory and that the discussion will take place on groups of amendments rather than upon the merits of individual clauses.
The noble Lord cannot have it both ways. If he and others wish each amendment to be taken separately we can go on for the next month or so. If we are to discuss the amendments as a group—which I understand to be the view of the Committee and which has been agreed by the Opposition and Government—surely the Liberals may accept the same kind of view. We are seeking—it is hoped that we shall have a moderate degree of success—to put forward arguments within a group rather than be tied to an individual amendment. The noble Lord cannot have it both ways. If he wants to discuss individual amendments we can go on for years, but the arrangement that has been agreed through the unofficial usual channels has been to discuss the amendments by subject. The individual amendments are only a vehicle for getting the issue on the Marshalled List.
Lord Thomson of Monifieth: I think that the noble Lord is seeking refuge in a procedural protection. For my part, I think unusually in this debate, I am speaking to particular amendments within this group instead of making a Second Reading speech. I do not wish to delay the Committee but I want no more than to make that point.
9.15 p.m.
Lord Bruce of Donington: In point of fact, for the convenience of the Committee, I was in the process, together with the officials of the House, of removing a whole series of amendments in order to simplify the grouping process to which I have referred and which so far has resulted in a very interesting exchange of views on both sides of the Committee. If the noble Lord wishes to dissuade me from doing that, I shall leave the amendments on the Marshalled List—and, okay, we shall debate the lot.
Lord Thomson of Monifieth: The last thing in my mind is in any way to increase the length of this debate. I appreciate the noble Lord's procedural point but he has accused me of wanting to have it both ways. When the noble Lord, for whose convictions and attitudes I have the greatest respect, including his objection in principle to British membership of the Community, begins to lend his name to amendments that put him against social and economic cohesion, I think that he is trying to have it a little both ways.
I listened to the speech of the noble Lord, Lord Pearson of Rannoch, with close interest. If he is objecting to British membership of the Community, then I understand and respect that position. If in terms of the stage we are now at in British membership of the Community, associated with the treaty which we are now discussing, the noble Lord puts the points of view that he has just put to the Committee, I hope he understands that he is engaging in an exercise in Right-wing revisionism of an extraordinary character. The social and cohesion policies of the European Community, developing from the regional development fund, which I had the very great honour of helping to establish, were, when Britain joined the European Community, a major priority of the then Conservative Government led by the then Conservative Prime Minister, now Sir Edward Heath. They were totally in step with what had been the basic policies of governments of all parties in this country and a part of the temper of the times.
Whatever one's degree of enthusiasm for market economies, there need to be the mitigating forces of a positive policy of social and economic cohesion, generally represented in this country by development area policies and in the European Community by the various structural policies. I hope that the noble Lord, Lord Pearson of Rannoch, knows how deeply out of step he is with the whole tenor of government in this country over the whole of the post-war period. I profoundly hope that when we hear an answer from the Government Front Bench he will have a very thorough repudiation of the philosophy expressed in the amendment he moved a few minutes ago.
Lord Pearson of Rannoch: If I may be allowed the mildest of replies to the noble Lord, Lord Thomson, I think that he has just confirmed precisely what I said about the political and bureaucratic minds which have brought this creature that we are considering into being. I have nothing at all against the—
Lord Tordoff: When the noble Lord refers to "this creature", is he referring to the Treaty of Rome?
Lord Pearson of Rannoch: No, I am referring to what is proposed to become the European Community, that was the European Economic Community, and still is until this treaty is ratified, and before that, the Common Market. I am completely in favour of the Common Market, but as a member of your Lordships' Select Committee on Europe, I have come to see that in many aspects the Single European Act went too far. I am convinced that this Act goes much further than is necessary for the good of the countries involved.
Lord Thomson of Monifieth: If we may just complete these exchanges I shall then shut up. Does he wish to see the end of social and economic cohesion policies within the European Community?
Lord Pearson of Rannoch: The social and economic cohesion policies of the European Community are not working. They contain massive fraud and they are not working in the purposes for which they were intended. They work to the disadvantage of this country and they do not work to the health of the economies of the countries to which they are applied.
Lord Tordoff: Do I take it from that that the noble Lord is saying "Yes" to the question that my noble friend has just asked?
Lord Pearson of Rannoch: No. The noble Lord asked me whether I wished to be out of what I understood to be the Common Market. What I would like to do is to go back to the Common Market and I would like to remove from it all the abuses which have grown up and which we now see from the Single European Act. I do not want the Treaty on European Union signed at Maastricht to come into effect because I believe that it will add to the damage which we have already started with the Single European Act. It is an entirely separate question.
Lord Moran: Perhaps I may change the subject and ask a question of the noble Baroness about the Committee of the Regions which is one of the subjects about which amendments are grouped in this series. As I understand it, it would be a new body to be set up under Articles 198a to 198c of the Maastricht Treaty. It would be a purely advisory and consultative body consisting of 289 members representing the regions and the United Kingdom would furnish 24 of them.
Can the noble Baroness say, first, what the Government envisage that this committee would do? Secondly, can she say how our 24 members will be chosen? In the context of the United Kingdom, I am not sure what a region is. Are the members to be selected on the basis of local authorities or will there be special representation for Wales, Scotland and Northern Ireland? How shall we do it?
As I understand it, this proposal came originally from the German Länder which want to exercise more influence in Brussels and all of which have now established representation in Brussels. In Germany it is quite clear what the regions are. It is equally clear in Spain. But in other countries, including our own, it is less clear. As I understand it, it is left to the

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Government to decide who our representatives will be and presumably what they will do. I imagine that the main role of the committee would be to lobby for funds.
There is one aspect about which I wish to ask. Article 146 of the Maastricht Treaty refers to the meetings of the Council of Ministers being at "ministerial level" which, as has been suggested, could open the way to the participation of regional Ministers at the Council. I shall be interested to know what the noble Baroness can tell us about that because we do not have regional Ministers unless by that it is meant the Secretary of State for Scotland or the Secretary of State for Wales. It seems to me that that provision would discriminate somewhat against countries which do not have regional Ministers as such. Anything which the noble Baroness can tell us about that would be very helpful.
Lord Swinfen: I wish to speak in particular to Amendment No 418 which is one of the group and which stands in my name and that of my noble friend Lord Beloff. Unfortunately, my noble friend is not here, but he would speak far better to it than I would. This amendment would require Her Majesty's Government to,
"report annually to Parliament on the proposal, formulation and implementation of the Community's actions, objectives, aims, policies and decisions on Economic and Social Cohesion under Articles 130a to 130e, together with a statement of the policies of Her Majesty's Government in respect of the matters referred to in that report".
That requirement parallels the requirement of Article 130b for the Commission itself to report to the European Parliament. But my amendment would make that reporting on an annual basis rather than every three years, as proposed under the treaty signed at Maastricht. After all, it is our taxpayers' money which would be a major contribution to the cohesion fund. Article 130d of the Maastricht Treaty makes specific reference to the establishment of a cohesion fund in 1993; that is this year:
"to provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure".
On the assumption that the cohesion fund moneys are spent in the way envisaged by the treaty—I am sure that noble Lords appreciate that there can be no guarantee that such will be the case—the beneficiary countries will simply be able to transfer their own taxpayers' moneys to other areas and to use them for other purposes. According to Aims of Industry, backdoor subsidies to the Basque steel casting firms are already being given by the Spanish Government in the form of the deferral of social security payments, thus enabling such firms to cut their prices. I would strongly suspect that similar things are happening in other parts of the European Community.
One of the defences of the cohesion funds made by advocates of the Maastricht Treaty is that the payments made are supposed to help the poorer countries to meet the economic convergence criteria set up under Article 104c. It is spurious to argue that the receipt of cohesion fund monies will help member states to avoid excessive budget deficits. Without the monies, the factories and motorways in question
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simply would not he built. In any event there is a much wider debate concerning the feasibility of economic convergence within the timescale envisaged by the treaty.
The final act of the Maastricht Treaty contains a protocol on economic and social cohesion. This protocol, inter cilia, refers to the signatories declaring their intention of allowing a greater margin of flexibility in allocating finance from the structural funds to specific needs covered under the present structural funds regulations. In other words, as I understand it, the monies do not have to be spent on motorways, railways, factories and so on. One can only guess at the alternative uses.
In my view, it would be much better if we were to establish our own European development agency on the lines of our excellent Overseas Development Agency so that we could ensure that the money the United Kingdom puts towards the cohesion policy is properly spent and not used to the detriment of British business. It would also mean that we had much greater accountability to Parliament, but this is probably not possible within the European Community, and therefore in my view we do need regular reporting to Parliament.
Lord Eatwell: I should like to answer the question that was posed by the noble Lord, Lord Pearson of Rannoch, in introducing the amendments concerning the social and cohesion funds. He asked in what way were they in this country's best interests. It has been suggested by noble Lords that these funds are in this country's best interests as they are some form of social security—they are a transfer from rich to poor, and this is desirable. I am sure that Members of your Lordships' House would like to see the situation of poorer nations improve and so this social security function might be supported.
I want to suggest that these funds are in this nation's best economic interests, in our self-interest. The reason is that we exist within the European Community in a highly interdependent market. Whether we have monetary union or not, within that interdependent market depression or deflation in part of that market is contagious. Therefore if there are regions which are disadvantaged, either because they are industrial regions now in decline because their industries have become outdated, or whether they are regions which have not managed to develop the momentum of economic growth satisfactorily, their decline and their lack of income exert a depressive force on the overall growth of demand in the system as a whole.
That is why every federation and every nation state has developed mechanisms for transferring income within the country from richer parts to poorer parts of that country or federation, whether it be the Federal German Republic with its elaborate systems for transferring monies from rich to poor Länder, or the United States of America, which actually, through its systems, reduces income differentials between states of the Union by 40 per cent. Alternatively, as is the case primarily in the United Kingdom, the tax and benefits system may automatically transfer resources from the richer parts of the country, lived in by people who pay

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higher taxes and receive lower benefits, to the less well off parts, lived in by poorer people who receive more benefits and pay less tax. Whatever system there might be, every nation state and federation that has operated effectively and maintained high rates of economic growth has devised mechanisms for transferring resources around the system to maintain the overall level of demand.
The system we created in Europe before the implementation of this treaty, and the system that will exist after the treaty has been ratified, is peculiar in the sense that we have a single market and close, and perhaps unified, monetary systems, and we shall have virtually hermetically sealed tax and benefit systems. So the automatic processes of transfer, and the maintenance of demand which arises through the tax and benefit system, will not operate within that interdependent market (that free, open market) for which the noble Lord, Lord Pearson, expresses enthusiasm. Because it does not operate, the market will have a tendency to depression: the weaker regions will drag down those regions that have greater potential for prosperity. That is why the social and cohesion funds are so important.
Those funds are not important in taking up the entire slack of the system, so to speak, but they are important in priming the pump of development in the weaker regions or, indeed, in those regions which have been previously prosperous and which, because of the nature of industrial progress, are now suffering from restructuring problems. It is therefore important that we maintain and enhance the structural and social cohesion programme as a means of maintaining the balanced growth of the Community as a whole, because it is the achievement of that balance which will allow the Community as a whole to maintain a higher rate of growth within each member state, including the UK. That is why the development of the social and structural funds as part of the Community's overall growth strategy is in this country's best interests.
In that context, I should like to ask the Minister to tell the Committee when she replies why the British Government have consistently opposed the increase in the overall budget for social cohesion strategies. When it is in this country's best interests, why have they so persistently set their face against the growth of social and structural funds? Secondly, will the Minister say why, when structural funds have been made available to the UK, the British Government have consistently subverted their impact by not allowing EC funds to be additional to government funding, and have, instead, reduced government funding when EC funds have been applied so that there is no general net benefit to the regions of the UK?
Lord Aldington: I venture—
Lord Monson: My name is on the amendment. Noble Lords: Order, order!
Lord Aldington: The noble Lord has spoken so much that he might let me have a go.
Lord Monson: My name is on the amendment.
Lord Aldington: I venture to speak in this debate because I chaired an inquiry into the Community's regional and development policy. The report that the committee agreed received the general acclamation of this place and had the support of my noble friend Lord Pearson of Rannoch. I think that he must have forgotten that. It also attracted the interest of the noble Lord, Lord Bruce of Donington. I am amazed, as the noble Lord, Lord Thomson of Monifieth, was amazed, that Members on that side of the Chamber should lend their names to these amendments.
Lord McIntosh of Haringey: Some.
Lord Aldington: How do they think we can have a single market without having economic and social cohesion? Do they not realise that regions throughout the Community, including backward regions in our country, have gained greatly by this policy?
The noble Lord, Lord McIntosh of Haringey, intervened to remind his noble friend that the member states take the initiative in these affairs. That is so under the treaty. The regional development policy need not result in fraud, as my noble friend appeared to imply. Fraud does not arise from the fact that there is a regional development policy or a cohesion fund. It comes from the fact that some member states do not look after their public funds properly. It comes from the fact that the regulations and the procedures of the Commission are not always as they should be, as the noble Lord, Lord Bruce, and I pointed out in an inquiry. That is the fact; it is not the existence of the policy or the fund that is wrong. Therefore, I do not understand why these amendments have been proposed.
I am amazed that my noble friend Lord Pearson of Rannoch is opposing a new article in the Maastricht Treaty to extend the regional development fund policy to rural areas. That was recommended by my committee and Members of this Chamber, but it is the first time that the proposal has been made to include it in a treaty. That is another reason why I am opposed to these amendments. Frankly, I am stupefied that Members of the Committee should be proposing some of these amendments.
I turn to the point made by my noble friend Lord Swinfen about reporting to Parliament. The regional policy of the Community is reported annually to Parliament and the Select Committee looks at it every three or four years. Members are kept up to date if they read the papers in full. I do not believe that there is further need for statutory requirements.
For all those reasons I strongly recommend the Committee to reject the amendments. On top of that, I see that there is a proposal to negative the new article about the European Investment Bank. That article has been in the Treaty of Rome for some time. I cannot understand why Members of the Committee should lend their name to such a proposal. Therefore, broadly speaking, I am against it.
Lord Monson: Earlier today the noble Baroness, Lady Seear, challenged the noble Lord, Lord Stoddart of Swindon, who, en passant, had criticised the

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cohesion proposals. She asked him whether as a socialist he did not support the principle of rich countries subsidising poor countries. I hope that I have paraphrased the noble Baroness correctly. As one would expect, the noble Lord, Lord Stoddart, replied most effectively. Equally, he might have pointed out that it is one thing to compel taxpayers to give money to genuinely poor countries, whether they be in Eastern Europe, Africa, Asia, the Caribbean or elsewhere, but that it is quite another thing to compel citizens to see their hard-earned taxes diverted to countries which by any objective definition are by no means poor.
All the EC countries, even the poorest, are among the 40 wealthiest countries in the world; they are in the top quartile, as one might put it. Anyone who has recently been stuck in a traffic jam in, let us say, Portugal or the Republic of Ireland will have noticed that it consists not of battered lorries but of shiny, new, expensive cars and will have realised how relatively wealthy those countries have become.
There is another very curious feature of the cohesion proposals, particularly as they affect the United Kingdom, which many people would prefer to keep under wraps but which some of us feel must be brought into the open. One of the main professed objectives of the Maastricht Treaty, as of earlier treaties, is to foster goodwill and friendship among the peoples of Europe. The noble Lord, Lord Cockfield, has reminded us of that on many occasions. Some of us may suspect that in practice the Maastricht Treaty will have the opposite effect, particularly if the subsidiarity proposals turn out to be a damp squib. Nevertheless, the fostering of goodwill and friendship is definitely one of the professed objectives of the Treaty.
How curious it is that two of the countries to which the British taxpayers will have to contribute under the cohesion proposals make territorial claims either upon United Kingdom colonies or upon parts of the United Kingdom itself. That is hardly a sign of friendship and goodwill. I refer of course to Spain which has a claim upon Gibraltar and to the Republic of Ireland with its claim upon Northern Ireland. Notwithstanding the Anglo-Irish Agreement, Articles 2 and 3 of the Irish Constitution still claim jurisdiction over United Kingdom territory. That claim is upheld fully by the Irish courts which have declared that the constitution overrides the Anglo-Irish Treaty in that respect.
The noble Lord, Lord Stoddart of Swindon, told us this afternoon that every family in the Republic of Ireland receives £35 per week from Community funds. My research has established much the same thing, albeit set out in a slightly different way. Every man, woman and child in the Republic of Ireland receives £120 per annum from UK taxpayers. That is set to rise after the cohesion proposals come into effect.
The right way for those countries, which are already fairly well-to-do in global terms, to progress further economically, is by evolution and not convolution (those doing the convoluting being the United Kingdom and Germany, which are the only two net contributors of any significance to Community funds). The best and most honourable
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way for such countries to progress is to pull themselves up by their own unaided efforts of which I am sure, with their undoubted deep pool of talent, they are more than capable. Hong Kong, Singapore and other countries have shown how successful such a self-help policy can be.
Lord Sefton of Garston: I almost hesitate to jump into what seems to be an elite band of people who have set themselves up either as economists or well-knovvn experts on international relations. I speak from a simple point of view.
In 1946 I was engaged in an educational establishment which invited a Frenchman to come to England. The fact that he was on the Left wing of politics makes no difference. He told us about the privations which had been suffered during the war and he said that the French needed the British Labour movement to come in and help because they needed to rebuild a very firm society. That struck me as an extremely worthwhile aim.
I am always mystified by all this talk about how great Great Britain or the United Kingdom is. One would think that it is the best country in the world, that it is well managed and in complete control of its own affairs. The truth is that it is not. It is not even in control of its own energy policy. During the past 10 to 14 years we have given that away to the boardrooms of this country.
How many times have I heard it said in this exclusive Chamber that we are part of a global economy? And yet today we are arguing about whether or not we should be part of that global economy. Whether or not we decide to accept the Maastricht Treaty, we shall be part of the global economy. I have no doubt about that.
I had no hesitation in deciding for myself where our future should be: in the first place, it should be with Europe, with all the fault s that will arise from a merger of common interests; and, ultimately, it should be with the world. Perhaps I may—if I dam—use the words of Thomas Paine who, I believe, said, "I am a citizen of the world; my religion is to do good." There is nothing wrong with that statement.
However, what amazes me is that we see adult politicians on both sides starting to worry about our losing a little economic advantage by going into the Maastricht Treaty and establishing the European Union. Well, what if we do? We just heard a quotation whereby someone seemed to suggest that it was wrong to pay Southern Ireland families £35 a week out of other people's incomes. I do not see anything wrong with that, if it will stabilise the economy and the standard of life between one people and another.
I have with me an amendment that springs from my experience in Liverpool. We heard the noble Lord. Lord Tebbit, in his deliberate way, tell us this afternoon that we had a development programme of regional policy in the country and that it was a success. Well, the Common Market has just decided that the incomes of people in Merseyside are so low that we are now numbered among the worst in the European Community. If that is an example of success, I do not believe that I have ever heard of one.

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I shall return to the question of £35 per week later. But my experience in Liverpool tells me that, through all the ebbs and flows of our wealthy and poorer periods as a nation, one thing has stood out quite clearly over the past 40 to 45 years during which I have been worrying about the problem—namely, that whenever there is a recession or a slump the situation in the South East becomes a little uncomfortable because a few people lose their jobs. Then, when it is over and the economy picks up, London gets overheated and people start complaining about the fact that they cannot get on the trains, or find a bus; or, indeed, about the terrible privations of spending two-and-a-half hours commuting to work.
However, as the economy slowly builds up, what happens in Merseyside or in Northern Ireland? The answer is that the economy stays on the same level. In certain parts of Merseyside we now have 50 per cent. unemployment, while they are grumbling in the South East. I mention that point not because, as some people suggest, I have a grudge against London and the South East; I do so merely to illustrate what are the problems and to emphasise that, at the same time, in London we are starting to develop an economy that is becoming overheated.
I do not know when we shall reach the situation where we need not talk about the transfer of money from the rich to the poor; what we need is a transfer of resources. To me, resources are coupled with jobs. In my view, the sooner the debate is over the better it will be. The sooner we wholeheartedly join with Europe and look for the weaknesses, the sooner this country will be able to give a lead to the rest of the world. As I said, I cannot wait for the debate to be over.
But while we continue to talk about the movement of resources, what are we creating? We are creating a dependency culture in certain parts of the world. We know what has happened in the South East and we know all about the economic resources and what has taken place as regards the provision of jobs inside the Civil Service. No one can tell me that they have moved anything like the number of civil servants out of the South East into the other parts of the country that they claim. They have not done so. A miserable pittance has been moved from the South East; indeed, one has only to look at what is happening now on Vauxhall Bridge.
I conclude on this note because I feel I have a cheek even speaking in this exclusive company of experts who know all about these matters. If development is concentrated in one area—the noble Lord, Lord Bruce, mentioned this—to a greater extent than occurs at the moment, there will be nothing left over for the poorer parts of the Community. Jobs will be created in Brussels, Luxembourg and in the so-called golden triangle. Those jobs will be self-perpetuating for many years to come. Amendment No. 406A, standing in my name, states:
"Her Majesty's Government shall advise any person proposed under subsection (1) above that if appointed he should in exercising his duties as a member of the committee
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give due consideration to the need for the de-centralisation of Community administration as a step towards the 'harmonious and balanced development' of economic activities".
That does not mean the transfer of cash: it means the transfer of jobs created for the European Union.
If we can embark on that course, we may, instead of creating further dependency cultures, start to convince people in Scotland, Wales, Northern Ireland, the south of Italy and other peripheral areas that they are part of the Economic Community. If my little amendment even starts people thinking about that, it will have achieved a benefit for all the Community. Let us stop talking and vote on this matter as quickly as possible. Let us get on with the job of making the Community better.
Lord Sanderson of Bowden: I wish to say a few words about the European Regional Development Fund. The noble Lord, Lord Thomson of Monifieth, mentioned that. Coming from the area of the country that I do, I cannot speak highly enough of the fund. It has achieved a tremendous job of work. When my noble friend the Minister replies to this long debate, I hope she can tell us a little about the cost to Britain of the cohesion funds. As I understand it, the seven-year agreement will hopefully increase public expenditure in the United Kingdom by a very small percentage. However, I would like to have that confirmed.
I was interested to hear the noble Lord, Lord Bruce of Donington, say that commissioners do not always get things right. That is true. They certainly did not get it right when it came to deciding the geographical area for Objective Number One in the Highlands and Islands recently. It is thanks to the European Parliament that the area now may include such places as Rannoch Moor. Perhaps my noble friend Lord Pearson of Rannoch will remember that there are certain parts of this country which benefit from regional funds. I would never like to see that kind of assistance being reduced, as those areas face difficulties as regards development. I hope my noble friend the Minister will also elaborate a little on the Committee of the Regions. I particularly wish to know which people from the UK are eligible to be appointed to that committee.
Lord Jay: Perhaps I can help the Committee in the matter of the cohesion funds, which have re-emerged in the argument. I believe that so far the debate has been the victim of a certain confusion. If we are trying to help regions which are depressed for historical, geographical or demonstrable economic reasons, of course there is an overwhelming case for assisting those regions. I have advocated this policy throughout my life. While doing so I even visited Dundee on one occasion, at the invitation of the noble Lord, Lord Thomson of Monifieth, I believe with favourable results.
In that case there is an overwhelming argument for this activity. However, in the normal course of events, where there is more than one economy, and all have currencies of their own, and some of those economies are weak compared with those of their neighbours, the natural remedy—nature's remedy as Keynes would have called it—is for the exchange rates of the weaker economies to depreciate in relation to the richer

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countries. That produces the least painful solution which is possible in the real economic world since it gives an advantage to their exports and compels them to pay a rather higher price for their imports. That is the effect of their weaker position. There is a natural process by which a weaker economy will correct its difficulties in that way. That has happened with Far Eastern economies.
However, if one declares that over a large area there will be a single currency, for both weak and strong economies, one artificially cuts off the natural remedy from the weaker areas. In doing so one creates a problem which did not exist naturally and would not have existed if one had not acted in that way.
That is what the Commission and the treaty propose with the cohesion funds. Previously there were regional development funds but the cohesion fund was only invented because the EC insisted on imposing a single currency on a very large area, which was bound to tell against the weaker countries. We must recognise that fundamental distinction.
There is every reason for assisting, by such transfers, areas which are depressed for historical, geographical or natural reasons. However, it is absurd o create a new problem by creating an artificial single currency and then having to correct the hardship caused by one's action at very great expense when that would not naturally have been necessary. Those are the basic economics of the problem. I hope that we shall discuss the matter in that way in future.
Lord Willoughby de Broke: I wish to speak to Amendment No. 388 in my name which deals with the protocol on economic and social policy. My noble friend Lord Swinfen touched on that protocol. I should like to enlarge on one or two points before moving on briefly to cohesion.
The protocol covers those areas not covered in Title XIV, which simply states that the cohesion fund makes provision for the British taxpayers' money to be spent on motorways and railway infrastructure in Greece, Spain, Portugal or wherever the Committee of the Regions may decide. One of the statements of the fifteenth protocol—there are 19 protocols but the Cornmittee will be relieved to hear that I wish to touch on only one—mentions that that money is to be spent on various specific needs projects not covered by present regulations. Perhaps my noble friend the Minister will give some indication of what those special needs projects are likely to be, apart from environment and transport infrastructure. Are they perhaps one of the pegs referred to by my noble friend Lord Tebbit which are inserted in this treaty for future reference as unspecified projects?
I should like to make two further points in relation to the amendments concerning cohesion. First, vast sums are considered necessary for the cohesion and structural funds. In a speech in January 1991 my right honourable friend the Prime Minister mentioned a structural policy costing between £11 billion and £12 billion each year from 1993. The Times of Monday this week reported that save for Britain, European economies are shrinking rather than growing. How can a stagnant or retreating economy possibly support such grandiose schemes of economic subsidies? Will
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the Minister give the Committee any information on the current estimated size of the proposed cohesion fund? Is the timetable set out in the treaty still operative—that is, by December 1993? Of course, a further difficulty arises if the Community is due to be enlarged by nations from Eastern Europe, and I am thinking of Poland, Czechoslovakia and Hungary. Will all those countries qualify for cohesion funds? If so, who will pick up the tab? At present there are only three countries which contribute. I imagine that the same three will continue to contribute to a much larger Community with much larger needs than the £11 billion or £12 billion—a figure which is so airily tossed around at present.
I need to ask another question of my Front Bench. Should this Conservative Government consider approving a Bill which commits us to signing the protocol? The fifteenth protocol, with its stated aim of requiring richer countries like Britain to pay subsidies and aid to poorer countries, is discredited doctrine. It is centralised planning which is so beloved by the bureaucrats the world over but which has lamentably failed to pass the test of historical reality.
I find it hard to understand what a Conservative Government are thinking of in putting their name to a protocol which will channel large sums of money to roads, factories and infrastructure in other countries, enabling those countries' products to compete with ours on world markets. That can only have an adverse effect both on export income and on job prospects in this country. Asking the British electorate to support that would be like asking turkeys to vote for Christmas.
I wonder, too, what, let us say, car workers in Rover would think of their taxes being used to support and subsidise other countries' industries in order to enable them to compete with their members for orders and for jobs?
A few days ago my right honourable friend the Prime Minister was interviewed on the "Today" programme on his way to the most recent Euro-summit in Copenhagen. He said unequivocally then that the Community had to become competitive in world markets and he would be putting that message across loud and clear to his fellow heads of state.
But the fifteenth protocol, and with it the whole cohesion fund, runs directly counter to the idea of free trade, the single market and a competitive economy. Our economic policy should be geared towards efficiency and world competitiveness. There are huge export and investment opportunities for British companies in China, Hong Kong and the Pacific Rim, North America, and in the countries of the Commonwealth with whom we already have historic and successful trading links. That is where our economic efforts should be directed, not to supporting rival economies in Europe—economies which, as we know only too well and as we have heard today and in yesterday's debate, hive off enormous sums in Euro-bribes. I believe that the commissioners are unable to decide to the nearest £5,000 million how much fraud is committed. Structural fund moneys will

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only mean that the Mafia will smoke longer cigars, be driven around in bigger cars and have fatter bank accounts.
The whole concept of paying large sums into an outdated programme of economic and social cohesion is philosophically misguided and financially impractical. I hope that the Government will accept the amendment in the constructive spirit in which it is offered.
Lord Clinton-Davis: I wish to intervene briefly from the Front Bench although my noble friend Lord McIntosh will seek to deal with the question affecting the Committee of the Regions.
I wish to state at the outset that we are wholly in support of the concept of economic and social cohesion. I believe that the arguments were well encapsulated by my noble friend Lord Eatwell earlier in the debate. In that contribution he specifically rebutted the arguments, although he could not have anticipated the speech from the noble Lord, Lord Willoughby. There is an element of self-interest in this issue. There is an interdependency in our economies. That is an issue which the noble Lord, Lord Willoughby, failed to recognise. He would do well to read the Protocol on Economic and Social Cohesion and I shall read two declarations from it. The member states:
"DECLARE their willingness to modulate the levels of Community participation in the context of programmes and projects of the Structural Funds, with a view to avoiding excessive increases in budgetary expenditure in the less prosperous Member States:"
The further declaration states:
"their intention of taking greater account of the contributive capacity of individual Member States in the system of own resources, and examining means of correcting, for the less prosperous Member States, regressive elements existing in the present own resources system".
I do not wish to deal further with that, I was prompted to intervene largely because of two comments that were made from a different spectrum in the debate. One was at the beginning from the noble Lord, Lord Pearson, who said that member states were significantly failing their regions in relation to structural funds and that the funds worked to the disadvantage of the United Kingdom. Then the noble Lord, Lord Aldington, said that the United Kingdom had gained greatly from the structural funds. I agree with that.
However, the case I wish to develop briefly is that we could have gained far more and could in future gain far more than is the case at present. The United Kingdom is about to lose £520 million-worth of funding from the European Community which could go unclaimed in 1993 simply because the Government disregard obligations which were fulfilled in the other member states. For years, the Government have failed to recognise the principle of additionality. It is that European grants to local authorities should be available to be spent in their own areas, but government rules prevent local authorities from borrowing to match those grants and prevent them being spent.
Just before the general election, after indulging in a considerable volume of personal attack on
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Commissioner Millan, the commissioner responsible for regional policy, a number of government Ministers, and in particular Mr. Lilley, who, I think, was responsible at the time, seemed to shift their stance. However, that has been illusory. Although it was promised that Eurofunds would be treated separately from local authority spending and full additionality would operate from April this year, problems still abound. I shall just mention two: total credit approvals to councils have been reduced by 25 per cent., so matching funding cannot be found. The second is that there is a wide variation of practice between government departments so there is a great deal of confusion as to how the system should operate. What is happening is that the Treasury wishes to maintain complete control over United Kingdom spending rather than allow initiatives to assist regional development, even from some of its own departments. By their refusal to allow Community money to be spent in our regions on the scale that is possible, the Government undermine the value which the United Kingdom receives from her Community budget contributions. What the Government are about is short-changing the country. This absurd departure from common sense should stop immediately. That is a point which the Government need to take into account at once.
Lord Mackay of Ardbrecknish: I wish to look at two aspects of the group of amendments: the amendments and the debate on Clause 6 stand part, which is down in this group, on the Committee of the Regions, which is covered by Article 198. The other place inserted into the Bill Clause 6, through which the 24 members appointed by the United Kingdom to the Committee of the Regions are all to be councillors. I think I am right in that and perhaps my noble friend will confirm it when she winds up.
My understanding is that those councillors will be appointed by Her Majesty's Government and I presume that they will be selected in some balanced way—as I hope my noble friend will confirm—not only to achieve a balance politically, which would be only right and proper, but also to achieve a balance geographically. I think I am right in saying that the objective of the committee, as the British Government see it, is to concentrate on those regions which are at either a distance disadvantage or an economic disadvantage within the United Kingdom and within the Community.
I can see, because the Government have no amendments down, that the new Clause 6, put into the Bill in the other place, will stay in the Bill. I can understand that. My concern, which I hope my noble friend will take on board, is that it will mean that the 24 Members from the United Kingdom will be drawn from rather a narrow base. Councillors are perhaps no longer as good a cross-section of the community as they once were. When the Government look at the 24 councillors whom they will put on to the Committee, they will have to attempt to ensure that they represent a reasonable cross-section of the community, from the wealth creators upwards or downwards (or however one wants to describe it).

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The main points that I wish to cover are those referred to in the amendments which deal with economic and social cohesion (Articles, 130a etc.). I have been staggered almost beyond belief at some of the remarks I have heard during the last hour and 20 minutes. I must say that the idea that social cohesion is something reprehensible which ought not to be in the Treaty of Maastricht or anywhere else is a most amazing proposition. Is the proposition that there should be social disintegration? We see social disintegration on the far side of the European Community in Yugoslavia. Surely the one thing that we want, both inside our own country and inside the Community, is social and economic cohesion.
I am amazed that there are amendments down to remove this part of this particular treaty. I can understand people who are opposed to the European Community, but I would have thought that especially people like the noble Lord, Lord Bruce of Donington, would have taken the view that if we have to have a European Community, then surely to goodness it should do something about economic and social cohesion. I would even have hoped that my noble friend Lord Pearson of Rannoch—as his title tells you, he comes from a pretty disadvantaged part of these islands—would want to see some economic and social cohesion. I must tell the noble Lord, Lord Willoughby, if I heard him correctly (I shall read what he said carefully tomorrow) that he seemed to dismiss all thoughts of economic and social cohesion. If that were really the policy implemented by Her Majesty's Government, very few people would live in the peripheral areas of this country.
The Highlands and Islands, for example, where my previous constituency was situated, have much to thank the social and economic cohesion of this country's policy for, and that of the European Community. It has added to the wealth of that part of the country and has allowed it to contribute to the wealth of the whole country. I assure noble Lords who have any doubts about that that if they go to Shetland, or Orkney, or the Western Isles, they will see that over the past 20 years, thanks to the policies of United Kingdom governments and those of the economic Community, through the ERDF and FEOGA, that considerable advances in the economy of those particular parts of the country have taken place, thanks totally to the cohesion funds of the United Kingdom and the European Community. If the noble Lord doubts me:, I suggest that perhaps he should take a week off and go and have a look at those areas; he will see exactly what I mean.
But it is not only a question of the rural areas. It is a question of declining industrial areas. We have such areas in all parts of the United Kingdom. I certainly know that those parts of Scotland where we have seen industrial decline—for example, my noble friend Lord Hamilton of Dalzell takes his title from an area which was once economically very prosperous and is now, because of the decline in steel and coal, in considerable difficulty economically—look not only to the social cohesion fund of the United Kingdom Government but also to the social and economic cohesion funds of the Community for help in trying to restore their
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fragile economy. If that is not a sensible and positive thing to do, then I do not understand how we expect our country to be one nation and one country, with all parts and all people pulling together.
It is the same with the Community. It is a totally false argument that if we help the southern Irish economy, the southern Portuguese economy, the Spanish economy or the Italian economy, it will be entirely negative. Perhaps I dare say to the noble Lord—possibly in terms of an economics lecturer, putting it more bluntly in a way that I certainly understand—that if we can improve those countries' wealth and standard of living, they will want to buy goods and services. We are in the business of selling them such goods and services. Therefore it is in our economic self-interest that those parts of the Community should be encouraged to be more prosperous by funds such as the ERDF.
I do not wish to take up any more time. In conclusion, we have had a debate lasting one hour and 25 minutes. I hope that those who have spoken have the courage to put their words to the test of the Division Lobbies so that we will see on the record those who are opposed to the concept of social cohesion.
10.15 p.m.
Lord Stoddart of Swindon: I ask the noble Lord to come and join us. After that speech, come and join us! I had not intended to speak very much in this debate.
Lord Hailsham of Saint Marylebone: Yeah, yeah!
Lord Stoddart of Swindon: I can understand people saying "Yeah, yeah", particularly those who have resisted any debate on the matter at all—the people who wanted to silence debate on the matter. I am talking about the people opposite who have sat down and made jibes at other people who wish to take part in the debate. I can understand them wanting to silence debate. But I was provoked first by the noble Lord, Lord Thomson of Monifieth. and then by other noble Lords into answering some of their questions. Why, they asked, do I support some of the amendments on the Marshalled List? Why am I against the cohesion funds?
I shall tell the Committee why I am against them. It is because I simply do not believe that the Europe which is being constructed by the Maastricht Treaty, and undoubtedly by subsequent treaties, is the right way forward. I simply do not believe that the kind of Europe which is being built up will become the economic wonderworld that some people believe it will be. That is why I do not believe in cohesion funds.
Indeed, I tell the Committee once again that I believe that the best way to govern is not through supranational organisations but through national organisations. If we are to retain democracy, we need to be governed at the lowest possible level, a level which people accept and a level at which people understand and will obey. Therefore I am opposed to the use of cohesion funds for setting up a supranational organisation to which I have always been opposed. I hope that the Committee will not ask

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me to change a point of view which I have sincerely held over a very long period of time and which I believe has had some substance.
In 1972 we were told that we were joining a common market. There was an absolute denial that we were going into a European union. Time and again we were told that that was not intended. Those people who now criticise us for wanting to discuss this treaty are the very same people who told us then that we were out of our mind to be talking about a European union. But we were not out of our mind. The treaty proves that. The Treaty of European Union sets up new institutions which we shall all have to follow; new methods of redistributing wealth to which we shall all have to adhere. That is the reason I lent my name to the amendments—because I wished to be consistent. I believed that I was right in 1972 and in 1986, and I believe that I am right today. Would any Member of the Committee have me do less? Would any Member himself do less? I sincerely hope not.
I believe in what I am saying because I have seen the operation of the European Community so far. I have not yet seen any benefit to our people from our membership of it. I have seen two common policies, one on agriculture. Can any Member stand and defend the common agricultural policy, which has put thousands of our farmers out of work and which costs every single family in this country £18 extra a week? Will Her Majesty's Government defend that policy? Of course not; they oppose it—or at least that is what they tell us. The other policy is the common fisheries policy. Does anyone believe that our fishermen are happy with that? Of course not. When I say that I am opposed to the concept of European union, it is on good grounds.
That is the reason I lent my name to the amendments and why I believe that the cohesion funds should not be paid. They will not be under proper democratic control; they are needed in this country and the £2.5 billion which we pay across the exchanges in net contributions could be better used in this country—in Scotland, Liverpool and elsewhere. Perhaps I may say to my noble friend that one of the reasons why Liverpool has declined in importance is because the balance of our trade moved from the Atlantic to the Continent of Europe. That is perhaps one reason why Liverpool declined. There may be others and of course he is an expert on the matter.
Lord Sefton of Garston: I am not an expert. The real facts are that Liverpool depended for its existence upon the trade between the two greatest continents in the world, and that disappeared. My plea is that Liverpool and Merseyside be treated as an area in this country needing assistance. But I do not plead for money. I plead that the resources that are over-supplied in the South East should be moved to Liverpool. The plea in my amendment is that that same principle should be applied in Europe. It has nothing to do with the balance of trade. The balance of trade would have moved to Europe in any case. The point that my noble friend is missing is that it does not matter what we say; if we had stayed out of Europe we would have stayed out of the world economy.
Lord Stoddart of Swindon: My noble friend is not correct. I should be happy for more resources to be transferred from the South East to Liverpool and there would be more resources available if, as I have already said, we were not spending £2.5 billion every year in subsidising affairs in the European Community. But the balance of trade has certainly shifted to Europe. Whether or not that is a good thing I do not know. As we have heard, we have a £95 million trade deficit and perhaps it would have been better if our balance of trade had been more worldwide rather than being concentrated on a small section of the world.
There is much more I could say about cohesion funds but I shall not do so because time is getting on. I sincerely hope that in future when people criticise me for putting my name to amendments they will understand that I do so because I believe in what I am doing and that those amendments are necessary.
Before I sit down, I should like to refer to Amendment No. 406 which seeks to insert at page 2, line 24, at end, the words,
"and has been nominated by the appropriate local authority association and can be expected to remain such an elected member for a term of not less than three years".
That refers to the local authority members who will be appointed to the Committee of the Regions. That is a serious point. I hope that the noble Baroness will be able to give an assurance that the people to be appointed will be likely to remain members of the local authority for most if not all of the four-year period of office, and that the local authority associations will at least be consulted. If she can give me an assurance on those matters, it may well be that I can withdraw at least this amendment.
Lord Peyton of Yeovil: I should like to spend a few moments congratulating your Lordships on the part you have been privileged to play in these enthralling debates. In particular, I pay a glowing tribute to the noble Lord, Lord Stoddart of Swindon, who surely deserves to be dubbed the star performer. He has no doubt helped us to understand the issues and has done so totally without prejudice or any tendency to yield to the tiresome vice of repetition. I am sure your Lordships will be willing to echo my most earnest hope that the speeches that the noble Lord has made during the course of these debates will be the monuments by which he will be most remembered. I cannot recall that in the annals of this Chamber he has ever reached such high peaks of oratory, perception and intelligence as he has today. I hope that the noble Lord will be content with that record and will not endeavour to surpass it in subsequent proceedings.
In all the happiness and joy that the noble Lord has engendered in my heart and mind in what he has said I have one dreadful fear; that is, that my noble friend on the Front Bench—whose patience and intelligence I greatly admire—may be induced to attempt to answer it. I hope that she will resist that temptation because she may alienate some of the loyal support that she may otherwise find behind her.
I am distressed to see that the noble Lord, Lord Jay, has departed. He made a very interesting contribution. We always expect from the noble Lord great

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intelligence and perception, but this evening he delivered himself of the verdict that so far the debate had been the victim of a certain confusion. I do not believe that any of us would be so presumptuous as to seek to rival or compete with such an accurate description as that to which the noble Lord, Lord Jay, treated us. I am so deeply sorry and aggrieved that he is not here to receive my congratulations and those of other Members of the Committee.
The other star, so far as I am concerned, was the noble Lord, Lord Sefton, who sought to interrupt me just now. I am so sorry that I did not give way. He delivered in the force of his comments "the sooner this debate is over, the better". I cannot think of a sentiment more generally shared by most members of the Committee. I do not wish to delay its total fulfilment longer than I need except just to wonder what on earth is the destination that my noble friend Lord Willoughby de Broke wished to conduct us to. So far as I could understand, we were sailing off to the Pacific rim with no thought of whether we had any duties, obligations or possible gains in Europe. He dismissed it with the splendid words that we were philosophically misguided.
Perhaps I may conclude on this, I know, possibly vain hope —that those who do not find themselves in total agreement with the Maastricht Treaty, those who may have some serious misgivings about it, will not allow those misgivings to take them so far along the road of prejudice as to do serious damage to our parliamentary institutions.
10.30 p.m.
Lord McIntosh of Haringey: It is possible that I may find myself in the same Lobby as the noble Lord, Lord Peyton, as he and agree on a number of the matters that we have been discussing, so I think I ought to take the opportunity of dissociating myself from what he has just said. First, I think that he is unwise at any time of night or day to indulge in prolonged sarcasm in the way that he did. I think that it is unfair to himself more than it is unfair to my noble friend Lord Stoddart, whose patent sincerity the Committee will recognise.
I think also that the noble Lord is wrong to resent and express resentment of the time that is being taken to debate these matters in Committee. I know that the time that has been allocated for these debates has been a matter of agreement between those who are opposed to the passage of the Bill as it stands and the Government. Indeed, we on our side have been party to those agreements. And having been party to those agreements, it is right that we should give everyone who has a point of view the opportunity to express it. We ought not to interrupt any more than we have to. I gladly give way.
Lord Peyton of Yeovil: Perhaps I may say that I am deeply obliged to the noble Lord for his advice without necessarily feeling obliged to take it.
Lord McIntosh of Haringey: I cannot tell whether or not that was sarcastic so I am not sure in what sense I ought to take that intervention. It is important that Members of the Committee should have an opportunity to express themselves and it is important
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that we should not denigrate those who. out of a deep sense of concern, feel it necessary to attack various elements of the Bill and of these treaties. At the same time I do not agree with my noble friend Lord Bruce when he criticised the noble Lord, Lord Thomson of Monifieth, for referring to particular amendments. We have agreed to debate these amendments together and we are grateful to all of t hose who have taken part in that agreement. We still have the responsibility, since we will be asked to take a decision on the amendments, of looking at the amendments and looking at their implications. I propose to take a minute or two to do just that.
I must say at the beginning that, although I am temperamentally inclined to a conspiratorial view of history —I like to think that there are evil forces around which make it more difficult for those of us who are clearly in the right to achieve our objectives—some of the things that have been said this afternoon and this evening have surprised even me. I thought that the assertion of the noble Lord, Lord Hamilton of Dalzell, that the European Coal and Steel Community arose not from Jean Monnet but from the needs of Albert Speer to bolster up the German war effort, was a particularly choice example of the conspiratorial view of history.
In introducing this group of amendments I believe that the noble Lord, Lord Pearson, went a little far from time to time. He described the Committee of the Regions as being "particularly sinister". He described it as a "fraud". He described the government publication on the subject as "a deceitful little publication". He described it as "a monstrous concept". We can take different views without indulging in that kind of language. If the noble Lord is disposed to make comments of that kind he could have made a better job of showing in what way the committee was particularly sinister.
If we take the trouble to look at the clauses which are the subjects of these amendments, it is very difficult to find the sinister interpretation which a number of noble Lords have placed on them. Amendments Nos. 20 and 31 seek to take out early references in Articles 2 and 3j to economic and social cohesion. They are clearly legitimate paving amendments. Amendment No. 52 has not been debated at all. It seeks to take out references to the European Investment Bank, which is referred to in Amendments Nos. 237 and 238, which, again, have not been debated at all.
I have to say immediately that there are two amendments in the names of noble friends on the Front Bench; namely, Amendment No. 167 and the Motion that Clause 6 shall not stand part of the Bill. Both those amendments were put down before other amendments were available. The intention of those amendments was simply to see that the matters were discussed. We certainly do not think that Title XIV or Clause 6 should be taken out of the Bill.
Then we come to Amendment No. 160, etc., concerning the economic and social cohesion and the structural funds. Noble Lords who tabled these amendments seek to take out virtually all—although, interestingly, not all—the elements of the economic

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and social cohesion provision. I shall come back to that issue again because I believe that it is critical to our attitude towards that part of the treaties.
In Amendments Nos. 234 to 236, my noble friend Lord Bruce and the noble Lord, Lord Tebbit, seek to remove the provision for the Committee of the Regions. I found that very strange and I also found the argument of my noble friend Lord Jay very strange. He sought in terms of which I believe Milton Friedman would have approved to say that the geographical and economic difficulties should be dealt with by the exchange rate. I am not quite sure whether he meant that Catania and Strathclyde should devalue whereas Brabant and London should revalue. I do not think that he quite realised that the regions which are helped are not exactly the same as those which have separate currencies. The Committee of the Regions is there in an advisory capacity —I emphasise that fact—to the Council of Ministers, the European Parliament and the Commission in order to ensure that the structural funds are actually used to good effect. It has been a triumph for my right honourable and honourable friends in another place to ensure that we have in the Bill Clause 6 which secures that the membership of the Committee of the Regions from this country shall be themselves members of local authorities and shall genuinely represent those regions rather than simply being appointed by Whitehall or Westminster.
The view of the local authority associations, after considering the amendments agreed to in another place, is that no further amendment to Clause 6 is required. That is relevant to the point made with the best of intentions by my noble friend Lord Stoddart when he sought to make a further amendment to it.
Then we have the amendment of the noble Lord, Lord Willoughby, to the protocol on economic and social cohesion. My noble friend Lord Clinton-Davis has made clear what was not perhaps evident: that the protocol is an attempt to ensure that economic and social cohesion is very much more at the initiative of member states rather than being centrally directed by Brussels. If he looks again at the protocol and compares it with the text of the treaties, he will see that it has the very opposite effect to that which he was alleging.
One could speak for ever on this complicated group of amendments, but I think I have said enough. However, I should like to respond to the statement by the noble Lord, Lord Pearson, that economic and social cohesion is essentially socialist in character. For those of us to whom socialism is not a dirty word, that is something with which we agree. But of course it is broader than that. From what my noble friends Lord Eatwell and Lord Sefton and the noble Lords, Lord Aldington and Lord Mackay, have said, it is not possible to distinguish between our economic benefits, as citizens of the United Kingdom, and the social justice element of economic and social cohesion which is put forward, in comparison with British legislation, with commendable clarity and simplicity in the articles of these treaties. Economic and social cohesion is proposed because it is right in itself and because it is
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good for us as well as good for the rest of Europe. I hope that the Committee will not see fit to agree to these amendments, which would take out these valuable parts of the treaties of the European Community.
Baroness Chalker of Wallasey: This has been an interesting debate. There have been nearly 20 speakers and we have discussed the three main areas. A number of questions have been raised and I will now seek to respond to them as well as commenting on the amendment that was moved.
First, I think it behoves us all to realise that the Community's commitment to assist the less well developed regions dates back to 1975, when the European Regional Development Fund began. I want to pay tribute to the noble Lord, Lord Thomson of Monifieth, for what he did as a Commissioner. I remember going to see him as a constituency MP, and he really did seek to help the regions in a way that was most commendable. We may not always have agreed with what he said, but he certainly made regional development a reality for those who came from the less well-off regions of the country.
Economic and social cohesion has the specific objective of reducing economic disparities between the regions of the Community. That first appeared in the treaty with the 1986 Single European Act, which added the five new Articles 130a to 130e, which have been the subject of a number of debates in this group.
These specified that the main instruments of cohesion would be the structural funds, including the European Social Fund, the ERDF and of course the European Investment Bank, about which several of your Lordships have commented tonight. The new provisions in the Maastricht Treaty are the attempt to build on those articles by stating that the EC policies and actions must take cohesion into account, although this is not a sweeping provision designed to ensure that all EC actions are subordinated to the objective of cohesion because other treaty provisions must be taken in their context. I think that this is important to remember.
The second way in which the treaty seeks to build with the five new articles is by providing for the establishment by the end of this year by unanimity in the Council, by the cohesion fund for projects in the fields of the environment and trans-European networks which will benefit the Community as a whole.
The interim arrangements are already in place. There is little doubt that by the end of this year, with the ratification of the Maastricht Treaty—I hope by all 12 nations—we shall be able to proceed to help those regions of the Community that need the assistance. I shall return to the arguments put by my noble friend Lord Pearson of Rannoch and others about what they believe this is all about.
We build also upon those articles by providing the cohesion protocol which is annexed to the treaty. That assistance from the cohesion fund will be made available only to those member states which have a per capita GNP of less than 90 per cent. of the Community average and which have implemented sound macro-economic policies designed to attain

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their targets agreed in their convergence programmes with the Community. I believe that the Maastricht Treaty improves upon the existing cohesion articles in the treaty by targeting the Community's cohesion effort where it is most needed.
Some Members of the Committee have noted that the Maastricht Treaty says nothing about the level of cohesion spending. The reason is that the Edinburgh Summit took the necessary decisions to finance the economic and social cohesion objectives, as reaffirmed in the Maastricht Treaty. Although the settlement was generous, it was rather less than the Commission was demanding. For the period 1992–97, the Commission sought over £90 billion for structural actions. The final agreement was £5.7 billion less than that.
I was asked about the structural funds in the UK. One-seventh of the UK's structural funds allocations have been spent, as my noble friend Lady Elles said, in Northern Ireland. Nearly half has been spent in regions affected by industrial decline under Objective 2. More than a quarter has been spent on training for the long-term unemployed and young people. Rural areas also benefit from development grants and agricultural restructuring to the tune of about £640 million. I was asked about projects in the UK. Let me give some examples because we truly benefit: Sheffield and the lower Don Valley have benefited from an ERDF grant of £11.3 million, with a supertram project; the Belfast cross harbour rail bridge received an ERDF grant of £5 million; the Vatarsay causeway linking the Isle of Barra and the Isle of Vatarsay in Scotland has received a grant of £1.7 million from the ERDF; in Strathclyde there is the Stepps bypass; at Swansea there are the Carnathen Road improvements; and there are many other examples. This country benefits as well as other countries in the Community from the structural funds.
In moving Amendment No. 20 my noble friend Lord Pearson of Rannoch spoke in a rather strange way, I felt, about the contradiction that he perceived between an open market system and a level playing field. What he may not understand is that when countries have been so far behind they need some help to give them even a starting chance to compete in that market. That is the philosophy. It is not to prop up uneconomic areas; it is to give them a chance to earn their own living. That philosophy is one which in my lifetime the Conservative Party has always supported.
I believe too that we have to ensure that we fulfil the philosophy which is included, clearly, in Article 13Oa that
"In order to promote its overall harmonious development, the Community shall develop and pursue its actions leading to the strengthening of its economic and social cohesion".
I should have loved the word "growth" to have been included, because that is what we are after, but the word "cohesion" is the word that seems to work in other parts of Europe, so we have the word "cohesion".
I was asked why we need the cohesion fund in addition to the ERDF and other funds. It is, as I said, because of its specific aim; to aim at those problems where the four poorest member states need extra flexibility in financing the projects in the fields. That is
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because we considered that the arrangements under the existing structural funds were not adequate in that respect.
The kind of projects to be financed are expected to be of broader benefit to the Community as a whole. There is no doubt that the cohesion protocol adds an important element of conditionality into the cohesion fund which requires the recipients of the fund to follow sound economic policies as specified in Article 104c of the Maastricht Treaty. That would have been impossible, certainly difficult, to achieve in the existing, well-established funds because they would not have borne that particular amendment.
Perhaps I may move on to the issue of taking up structural funds from the Community. That was mentioned by the noble Lords, Lord Clinton-Davis and Lord Eatwell. I fully accept that there have been problems in the past with taking up structural funds entitlements. Noble Lords may recall the blocking by the Commission of EC structural funds to help the coalfields. Agreement was reached with the Commission to unblock the funds. But having worked closely with the Commission to prevent such problems recurring it seems that sensible dialogue with the Commission is the best way of solving these difficult problems.
It is not unreasonable, on the face of it, for the Commission to insist that EC structural funds do not displace equivalent national spending. It is important that the Commission is made to understand that UK arrangements demonstrate additionality. But much rests on finding an answer to the hypothetical question of whether this spending would have taken place without the EC funding. I believe that it is important that our local authorities and other bodies are left to decide for themselves whether they wish to support the projects which could receive Community funding. Every effort is being made to ensure that the UK structural fund allocation is fully taken up.
I have spoken of cohesion and the structural funds in those general terms. I turn to the points that were raised about the Committee of the Regions. The noble Lord, Lord Pearson, and others mentioned the Committee of the Regions. The noble Lord, Lord Moran, asked a number of questions. The Government welcome the establishment of this committee. A wide range of EC policies affect regional and local interests either directly or indirectly. We therefore believe that it is right that they should have the opportunity to make an input into the Community's decision-making process.
The Maastricht Treaty establishes that the committee will have advisory status, which was one of the questions I was asked. But the committee must be consulted (Article 198c) on new proposals in a number of areas such as education, vocational training, culture, public health, cohesion and trans-European networks, which are covered by separate articles. The Committee of the Regions may also be consulted in any other instance which is considered appropriate or issue an opinion on its own authority where regional interests are clearly involved.
The treaty provides that the committee will be made up of representatives of regional and local

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bodies appointed to serve for four years. The treaty makes it clear that it is for the governments of member states to nominate their national candidates to the committee, but it is left up to the member states themselves to decide how their seats should be allocated among their regions and what kind of representatives should be nominated. In the United Kingdom the Secretary of State for the Environment will take the lead in the selection of representatives in England and the Secretaries of State for Scotland, Wales and Northern Ireland will do the same for their parts of the kingdom.
Perhaps I may say to the noble Lord, Lord Stoddart, who asked about this matter towards the end of the debate, that of course Ministers will take into account the views of the local authority associations. We hope to announce the allocation of seats among the four parts of the Kingdom during the summer.
I understood the noble Lord, Lord Moran, to ask whether regional Ministers could be on the Committee of the Regions.
Lord Stoddart of Swindon: I am sorry to interrupt the noble Baroness, but I asked her about the continuation of the person as a local authority member. Will she deal with that?
Baroness Chalker of Wallasey: I hope that Members of the Committee will possess their souls in patience. An enormous number of questions were asked and I was just about to turn to that matter.
Lord Hailsham of Saint Marylebone: Hear, hear! You are doing your best.
Baroness Chalker of Wallasey: I will answer the noble Lord, Lord Stoddart, right away so that he does not lose his track, even if I then lose mine. Under Clause 6, those who are elected will remain on the Committee of the Regions for the period for which they are appointed. I hope that those nominated will not only serve in the future but will be those who have experience of the region in the past because I believe that that is important. The noble Lord asked me whether those people would be able to serve for their full period. I believe that they will serve for the period for which they are appointed under the Act.
Perhaps I may return to the question that I was seeking to answer. The noble Lord, Lord Moran, asked about regional Ministers. I give an example. My honourable friend the Minister of State for Scotland, Lord James Douglas-Hamilton, has gone to an education council as the education Minister for Scotland with the agreement of Ministers in this country. But to serve on the Committee of the Regions, any such Minister would need to be a local councillor as well and that is unlikely to be the case. I hope that that clears up that point.
Ministers who sit on the committee to advise or answer questions of the committee, which seems to be a possibility, just as Ministers have gone before the economic and social committee in the past, would have to he completely independent in the performance of their duties. In other words, they will go to give
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general information and not to lobby in the way that the noble Lord, Lord Moran, suggested. Article 198A covers that.
I believe that I have covered how members will be selected, with the help of the local authority associations, by the Secretary of State for the Environment and the Secretaries of State for Wales, Scotland and Northern Ireland.
The committee will use the common organisational structure which is provided for the Economic and Social Committee, which is a sensible, cost-reducing measure. To those who have intimated that it is yet another part of the bureaucracy, I can say that we have sought specifically to avoid a separate secretariat and to make sure that members are there not only in the way that Article 198C describes it but in order to be consulted wherever it is considered appropriate.
I was asked also about the European Investment Bank. That bank has an important role to play and this country has also benefited from it. My noble friend Lord Pearson of Rannoch asked about Italy taking 40 per cent. of EIB lending in the Community. If one looks at many of the areas of Italy, it is perhaps not surprising, having been there from the beginning, that it has benefited in such a way. Perhaps I may point out a matter which my noble friend Lord Pearson did not seem to appreciate; namely, that the United Kingdom is currently the third largest borrower from the EIB, taking last year £1,823 million of the total lending within the Community. That was some 15 per cent. We were only exceeded in borrowings by Spain which took about 19 per cent. and Italy which took some 24 per cent. The EIB has, indeed, benefited us all over the country. I am quite clear that we shall continue to benefit from this part of the support for the regions of our country.
The noble. Lord, Lord Bruce of Donington, asked about the Commission being responsible for the apportionment of the funds. Of course, the Commission is involved; but so are the member states. Because of the additionality, which some of the noble Lord's noble friends do not like very much, there is very close control on the bids for resources of a regional development nature.
I feel that the contribution of my noble friend Lord Mackay answered the comments made by my noble friend Lord Willoughby de Broke. I was deeply concerned when he described his concept of aid and regional policy as having been put to your Lordships in a constructive spirit. He suggested that there should be, as he called it, a regional development agency somewhat similar to the Overseas Development Administration. I must say that I do not believe that the role in regional development which is needed throughout the Community could be carried out by this country alone, or by those countries concerned as regards their poorer regions. In my experience, there is much to be gained from co-operation between the partners and also from the sharing of many of the development ideas, even within the Community. Therefore, I do not believe that my noble friend's concept was one that we could follow.
My noble friend Lord Willoughby de Broke asked me several further questions. He asked about the

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timetable for the fund. I can tell him that it is unchanged. He then asked about the size of the fund. The answer is £12 billion for the cohesion fund over seven years. He also asked about enlargement and made comments about the way in which central and eastern European countries would take a large proportion of the money. The only enlargement before the Community at present is that to Austria, Sweden, Finland and Norway. Each of those four countries would be new contributors to the development efforts of the Community. Certainly the central and eastern European countries will not join until their economies are much more robust.
In talking about Amendment No. 418, my noble friend Lord Swinfen asked about regular reporting to Parliament. I can tell him that there is regular reporting. I shall look into the question of time intervals, but it is nearly always carried out on an annual basis because that is the way we run our business in the country. There is no reason why it cannot be undertaken on an annual basis. I do not believe that it needs to be written into the Bill or, indeed, into the treaty.
The noble Lord, Lord Eatwell, talked of priming the pump in the weaker regions. I thought that that was a very good expression for describing what we are trying to do to encourage the weaker regions to stand on their own feet. That is the philosophy. My noble friend Lord Aldington gave some expert advice and reminded us of what some of his colleagues on the Select Committees have said and done in the past. I must say that I found myself much in agreement with him.
I understand the contributions made by other Members of the Committee. I found the comments of my noble friend Lord Sanderson of Bowden very persuasive. He has direct experience of what has taken place. Those with direct experience are those who can show that this is not a crazy policy, as some have tried to describe it. It is a policy for the growth which we wish to engender in these poorer parts of our Community.
There is one final comment that I want to make about fraud as this was mentioned a number of times. There were a number of wild comments about fraud. However, the problem with fraud is always, as my noble friend Lord Aldington said, in the member states. The big question—this is a paradox really—is: how can one bear down on member states who one believes to be acting fraudulently without increasing the Commission's powers to investigate? In this Bill and through this treaty we are increasing the powers of the Court of Auditors. We are seeking to make sure that we can bring before the court a country that does not comply with a regulation.
We are reviewing the structural funds at present and I can assure the Committee that coping with the problems of fraud is uppermost in our minds. It will be a key subject for resolution and I believe it is clear that we are intent on ensuring that all the resources are used for positive outcomes and are not used fraudulently.
The noble Lord, Lord Bruce, said that the Commission might use the funds to buy support in
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other contexts. I believe he is wrong. Article 130d makes the matter quite clear. It states that the Council will set up a cohesion fund,
"to provide a financial contribution to projects in the fields of environment and trans-European networks in the area of transport infrastructure".
That could not be clearer.
Many questions have been asked tonight that reflect real concerns. However, more than half of the speakers tonight have expressed the view that the best way for the poorer regions of the Community to catch up with the richer ones, and to increase trade as a whole—if we can strengthen the poorer regions of the Community then we can strengthen trade overall—will be to pursue sound economic policies and encourage enterprise.
Article 3a of the Maastricht Treaty reiterates the principle of an open market economy with free competition. The Community's cohesion effort has a role to play in supporting such policies because they are of benefit to the whole Community. I know that many of the amendments moved tonight were moved to probe the Government's position. I hope that my noble friend Lord Pearson of Rannoch will realise that we are intent on making cohesion, and indeed development, work in a proper way. I hope that he may see fit to withdraw his amendment. Should he not do so, I must advise the Committee to vote against Amendment No. 20.
11 p.m.
The Earl of Dudley: I hope that I may quickly ask the noble Baroness whether she can give a specific answer to the charge of the noble Lord, Lord Peston, which I found disturbing; namely, that over £500 million was available for local authorities from the Commission but was being blocked by the Treasury. I hope that that charge is untrue, but it deserves an answer.
Baroness Chalker of Wallasey: It was the noble Lord, Lord Clinton-Davis, who asked about that. When I was speaking about additionality it was that very point that I was answering.
Lord Pearson of Rannoch: In trying to sum up this debate I shall mention one or two of the points that have been put to my noble friend the Minister which I am afraid she has not answered. I know that there is an agreement that we should try to finish by 11 o'clock but I have to put it to the Committee that the 12 minutes taken by my noble friend Lord Peyton did not exactly earn the sympathy of the Committee or contribute much to the debate.
Noble Lords: Oh!
Lord Pearson of Rannoch: Could I help my noble friend by saying that in the matter of fraud in the Community there is one way of course of reducing the amount of such fraud and that is by not increasing the powers of the Commission and by not giving so much money to the people who are taking it?
I am afraid that one or two questions were asked., and, as this is the Committee stage, I have to press my noble friend for an answer, though perhaps not now,

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if that is the sense of the Committee. One point I put to her was whether she could assure us that the Committee of the Regions would not become what I and others have come to describe as a "Tebbit's peg" which will undermine and replace the authority of the national parliaments in due course. I do not think that I received an answer to that question.
In answer to my question as to whether the political, bureaucratic and legal minds which have created the proposed European Community understand that a level playing field and a market are a contradiction in terms, I understood my noble friend to say that we had to give the poor countries the chance to earn their living. Other noble Lords took that line as well. She also said that this country benefits as well as other countries. But I am not sure whether I heard her give a precise answer as to what is our net contribution to the cohesion fund. Of course this country benefits, but what is the net balance? Are we, in fact, net payers in this matter?
I have to say that I asked my noble friend whether she believed that the £7.24 billion which we are committed to subscribing to the capital for the European Investment Bank will be wisely invested in the interests of the British taxpayer. I also have to tell the Committee that the noble Lord, Lord Eatwell, who I am sure is not going to press my noble friend the Minister on this question, asked her very clearly why the United Kingdom has set its face against growth in these cohesion funds if our Government believe that they are so helpful.
One other question put to my noble friend by my noble friend Lord Willoughby de Broke concerned Protocol 15 and the money to be spent on specific needs projects which are not environment, transport or the other matters. These are very substantial figures and I hope that in due course we shall get an answer to that question.
Those are the questions on which I should like to press my noble friend the Minister. I also think it would be appropriate for me to answer some of the points which were put against our position on these amendments by other noble Lords.
My noble friend Lord Aldington mentioned your Lordships' report on regional development policy. He said that the policy need not result in as much fraud as occurs. I do not believe that anyone denies the figure of at least £5,000 million a year annually, or perhaps more, in that regard. My noble friend Lord
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Aldington went on to say that some member states do not look after their funds. Our point in this matter is that we do not really mind if they do not look after their funds: what we object to is when they steal ours.
My noble friends Lord Aldington, Lord Sanderson, Lord Mackay and others went on to praise the benefits of these funds when they reach the rural grass roots. Rannoch Moor, with which, obviously, I am associated, was mentioned as a grass root in question. I have to say two things to them. First, would we not perhaps have had more money of our own for the grass roots of Rannoch Moor and elsewhere if we were not wasting so much money in other directions and on other less honourable grass roots? I must also say that they have picked an extremely good example of the way in which the bureaucratic mind wastes these funds, when they reach the people they are supposed to help, in the sheep grant, where £30 is given per ewe annually at the moment which results in huge numbers of sheep being on the ground to the detriment of the ground. I think that they do very considerable damage in the world where I live.
I shall draw to a close, the Committee will be pleased to hear, by saying that I enjoyed very much the speeches of the noble Lord, Lord Bruce of Donington, and the noble Lord, Lord Stoddart of Swindon, from the Benches opposite. I think that they made entirely clear from those Benches—and I may say that their views are shared by others on those Benches who did not speak tonight—that they are not in the least bit against redistributing wealth. They merely wish to point out, as we have wished to point out, that the cohesion funds and the economic and social policies of the Community do not work, do not achieve the purposes for which they are spent, and are very unlikely to do so under the structure envisaged by the Treaty on European Union.
Having said that, and having gone three minutes beyond the time which my noble friend Lord Peyton so generously gave me, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at quarter past eleven o'clock.

  RUSSIAN FEDERATION: CONSTITUTIONAL REFORM
  RUSSIAN FEDERATION: CONSTITUTIONAL REFORM
  ARMS TRADE IN THE MIDDLE EAST
  ARMS TRADE IN THE MIDDLE EAST
  NUCLEAR WEAPONS: ISRAEL AND IRAN
  NUCLEAR WEAPONS: ISRAEL AND IRAN
  SOUTH KOREA: TRADE WITH BRITISH NUCLEAR FUELS PLC
  SOUTH KOREA: TRADE WITH BRITISH NUCLEAR FUELS PLC
  CROWN ESTATE COMMISSIONERS: NETTING POLICY
  CROWN ESTATE COMMISSIONERS: NETTING POLICY
  PLUTONIUM EXPORTED TO JAPAN
  PLUTONIUM EXPORTED TO JAPAN