Sitting of 11 May 1993

Preamble
The House met at half-past Two o'clock
PRAYERS
[MADAM SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    DUNHAM BRIDGE (AMENDMENT) BILL
    Read the Third time, and passed
Oral Answers to Questions
  EDUCATION

    Standard Assessment Tasks
    Mrs. Roche: To ask the Secretary of State for Education how many schools he has received representations from urging him to make this year's SATs voluntary; and what proportion this is of the total number of schools in the state system.
    Mr. Wells: To ask the Secretary of State for Education if he will direct the School Curriculum and Assessment Authority to consider simplifying tests at seven, 11 and 14 years of age on the principle of establishing tests that take minimal teacher and pupil time while being effective measures of achievement of basic skills.
    The Secretary of State for Education (Mr. John Patten): Since the beginning of the year, the Department has received about 6,500 letters about testing, making many different points. I have asked Sir Ron Dearing to review the national curriculum and assessment framework with the aim of simplifying it while retaining the key features of clear teaching objectives, regular tests and high standards. I shall, with permission, make a statement about further arrangements later today.
    Mrs. Roche: Given the widespread opinion among parents, school governors, teachers and his own advisers, why cannot the Secretary of State give a clear and unambiguous commitment to withdraw those fatally flawed tests this year?
    Mr. Patten: The tests to which the hon. Lady has referred—for example, the tests for seven-year-olds—have been proceeding satisfactorily since 1991. They were taken again in 1992. In most primary schools up and down the land, they have been successfully completed already.
    Mr. Wells: May I urge my right hon. Friend to continue and to persist with testing? Surely the original idea was that the tests should be short, sharp and easily marked, and that they would lead to a proper assessment of the place that each child had reached. There would then be
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    possibilities of remedial action and teaching could be accelerated to higher standards for those able to achieve them. Is not that the objective?
    Mr. Patten: My hon. Friend is absolutely right. In the great Education Reform Act 1988, our whole aim was to begin to catch up with our competitors who had had national curricula and assessment regimes for many decades. It is the Government's intention to continue to catch up as rapidly as possible with our international competitors, while making the national curriculum and the associated testing arrangements as slim and manageable as possible—a process which we have already started with the tests for seven-year-olds.
    Mrs. Ann Taylor: Will the Secretary of State tell us how many of those 6,500 letters were in favour of the Government's arrangements for testing? Does he recall my advice to him in Education Question Time on 17 November, when I suggested that he should consult his Scottish ministerial colleagues and listen to their explanation of how they had established a system of assessment that enjoyed the confidence of parents and teachers? Why is the Scottish system so unacceptable to English Ministers? Does the Secretary of State's arrogance stretch to his ministerial colleagues? Did he hear the Prime Minister say that Ministers should curb their arrogance? To which Cabinet Ministers does he think the Prime Minister was referring?
    Mr. Patten: Two things about that: The 6,500 letters that we have received since the beginning of the year contain a wide range of views because—[Interruption.] No—listen, listen. Would the hon. Lady be good enough to listen? The letters contain a wide range of views because anything at all concerning testing, assessment or the curriculum always attracts a wide range of strong and passionate concerns. One is always going to get that and I welcome it because I think that the country needs a great debate on education. The more the general public who are interested and concerned want to write in giving their points of view, the more I welcome it.
    I was asked a second question, which I must answer briefly, Madam Speaker. In Scotland, they do not have a Education Reform Act or a statutory national curriculum. The system in Scotland as far as education is concerned is as different as the situation in Scotland is concerned as far as law is concerned where they have a Roman law system.
    Sir Malcolm Thornton: Will my right hon. Friend confirm that a significant proportion of the letters that his Department has received about testing related to key stage 3 testing, and that much of the evidence on key stage 1 testing—which is now in force in many of our schools and which has been reformed in the light of experience over the past three years—suggests that it is now beginning to bring benefits, as recent Her Majesty's inspectorate reports have shown? Will my right hon. Friend confirm that, in this whole debate, the principle of testing is not negotiable but is an integral part of the Government's reforms?
    Mr. Patten: There is not an inch between my hon. Friend and me on the issue of testing. I can certainly confirm that a number of the 6,500 letters were about key stage 3 testing. Many more were about key stage 1 testing at age seven. I must tell my hon. Friend and the House that we are awaiting the results of a ballot held by the National Union of Teachers, which wishes to stop, not only this year

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    but next year, teaching at all levels; I am so sorry, it wishes to stop testing at all levels—at seven, 11 and 14—not only in 1993 but in 1994, including those very successful tests for seven-year-olds which Her Majesty's chief inspector of schools yesterday commended when he launched the Office for Standards in Education's five-year corporate plan.
    Mr. Steinberg: Does the Secretary of State agree that, given that the tests have proved to be flawed, that the vast majority of teachers propose to boycott them and that parents are totally against them, the tests really cannot go ahead? If the Secretary of State finds that he cannot get his own way—due to his arrogance—will he introduce legislation to force teachers to carry out the tests?
    Mr. Patten: The hon. Gentleman must wait and see what is in the Queen's speech this year, next year or the year after. The hon. Gentleman has a perfectly legitimate interest, which he has declared, in the NUT. I can tell him that I have had his friend Mr. McAvoy in for a cup of tea in my Department to discuss these issues. Mr. McAvoy—who, I can reveal, I actually quite like personally, although I disagree with him profoundly on professional matters—has told me that he is totally against regular testing of children at key stages year by year and totally against the publication of results school by school.

    English
    Mr. Brandreth: To ask the Secretary of State for Education what representations he has received from the Queen's English Society on the teaching of spoken English; and if he will make a statement.
    Mr. Patten: I have received no direct representations from the Queen's English Society, but I know that the society was one of the bodies whose evidence the National Curriculum Council took into account in framing its recent recommendations for changes to the national curriculum English, which I warmly welcome.
    We believe that the proposals that we published for consultation on 15 April will help to ensure that pupils develop confidence and competence in their use of spoken English, and, more generally, will raise expectations and standards in the subject, which is critically important.
    Mr. Brandreth: Does my right hon. Friend agree that the Queen's English has nothing to do with accent and everything to do with communication? Is he aware that recently the business community has reckoned that problems with literacy and numeracy are costing industry some £4·8 billion a year and that business is crying out for the Government to do something about literacy, numeracy and communication skills for our young people?
    Mr. Patten: I agree entirely with my hon. Friend's points, made with his characteristically clear diction, in standard English throughout. My hon. Friend is quite right. We have been told by the adult literacy and basic skills unit that the cost to industry of young people going in without adequate skills and without being able to express themselves is between £4 billion and £5 billion a year. I hope that hon. Members on both sides of the House can agree that it is critically clear that, when youngsters leave school and make job applications, they are able to make those applications in clear written English and that they are able to answer questions in interviews in the
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    clearest possible way. That is why the speaking of standard English is so important and why I welcome the views of the society.
    Mr. Tony Lloyd: Is the Secretary of State aware that those of us who were never learnt to speak English proper certainly do not lack the intellectual ability to discern that in these issues, as in many others, the Secretary of State is a complete Gombeen—that is an Irish expression—and nor do we lack the ability to communicate those issues? When we have a Secretary of State—I appreciate that he is a little nervous today—who tells the House about "a education" and "Mr. McAvoy who I met in my office", he is in no position to begin to educate young people up and down the country on the benefits of standard English or, indeed, any other way of communicating properly and adequately in the English language.
    Mr. Patten: Not for the first time in answering the hon. Gentleman's questions, I am completely confused because of his failure to put them clearly. All that I can say is that it is critically important for all of us to be able to express ourselves as clearly as possible, as the Hansard report of what I have said will make clear tomorrow and as anyone who is listening will have heard. I hope that the hon. Gentleman shares with me—I did not understand the Irish expression that he used—the necessity for anyone applying for a job, whether they are 16, 17, 18 or any age, to express themselves clearly in standard English. That is why standard English and the recommendations of the National Curriculum Council are so important.

    Universities (Tuition Fees)
    Mr. Batiste: To ask the Secretary of State for Education if he monitors the promptness of payments of tuition fees by local authorities to universities.
    The Parliamentary Under-Secretary of State for Further and Higher Education (Mr. Tim Boswell): Local education authorities have a statutory duty to pay tuition fees promptly by the dates specified in the Mandatory Awards Regulations. The Department takes action on any evidence of failure to comply.
    Mr. Batiste: Is my hon. Friend aware that last year a number of local authorities were late in passing on tuition fees, which they had received from the Government, to universities and that there is some evidence that that pattern has been repeated this year? Is it not entirely wrong that higher education should be denied funds because of late payment by local authorities? Is it not time that the Government thought about the way in which money could be transferred direct to universities without going through the post box of local government?
    Mr. Boswell: I agree with my hon. Friend that it is most unsatisfactory if payments are not made in time. It is not even in the interests of the local authorities, because they do not get interest on the money, which is lodged in a special account with the Paymaster General. It is sometimes a matter of administrative complication or failure. We most vigorously investigate those cases in which, under the existing award system, it is apparently impossible for them to pay on time, as they should.
    Mr. Rooker: Will the Minister find out why the problem does not arise in Scotland and see whether he can apply the

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    lessons learnt there to the situation in England? Will he accept from me that, the last time I checked, universities were owed almost £100 million after the date on which payment was due? One in five local authorities is a late payer, and some local authorities pay the fees for the second term before the fees for the first term. Any half-awake local authority treasurer who is handed, effectively, control of millions of pounds of central Government funds to pass on without any penalty for late payment will work that money for his or her employer or local authority. Is it not time that some sort of interest penalty was placed on the late payment of tuition fees and at the same time, while we are thinking about it, an interest penalty paid for the late payment of mandatory award grants to students, who suffer just as badly?
    Mr. Boswell: I am interested in the hon. Gentleman's comments about Scotland, have taken note of them and am aware of the situation there. We have improved the system in England. There is no advantage to local authorities, because the money lodged to their credit by the due date does not attract interest in their hands. We watch carefully for failures to pay and will tighten that up. He also mentioned the more general issue of student grants and I am concerned about any that are not paid on time. They are, or they should be, paid early in, or at the beginning of, term and that is one reason why we leave tuition fees until the end of term, to try to avoid the two becoming confused. We pursue vigorously authorities that fail to pay. There are fewer than there were, but there are still too many.
    Dame Elaine Kellett-Bowman: Is my hon. Friend aware that now that the county elections are behind us, it is rumoured that Lancashire county council is proposing to abolish the appeals procedure for students seeking discretionary grants? Is not that grossly unfair to the students and further evidence of its arrogance, which has been allowed to surface now that the elections are over?
    Mr. Boswell: My hon. Friend goes wider still—the nature of discretion is that it has to be exercised. I shall take a dim view of any local authority that removes its discretion by saying that it will not consider payment in a certain case.

    Surplus School Places
    Mr. Gapes: To ask the Secretary of State for Education how his Department determines whether a local authority has an apparent surplus of primary school and secondary school places; and if he will make a statement.
    Mr. Patten: The Department for Education conducted a survey of surplus capacity in 1991, comparing the total capacity of schools in each authority with total pupil numbers. We are consulting local education authorities on the scope for reducing that surplus, taking into account demographic and other changes since the survey.
    Mr. Gapes: Is the Secretary of State aware that if he moved to Ilford, South and had an eight-year-old son or daughter in year four, he would not be able to get a place for his child in seven of the 10 schools in my constituency, and in three schools he would get a place only for a catchment area child? Highlands school in Cranbrook ward has 36 children in two classes and Christchurch primary and infant school has 35 children in every class
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    from reception to year six. What is he going to do about it? Why is Redbridge council considering putting Portakabins on a building site to deal with the problem, yet the Government refused to allow the council to build the school that is needed in my constituency?
    Mr. Patten: I appreciate the hon. Member's strength of feeling on behalf of his constituents. A basic needs formula is applied by my Department to make new school building possible when there is an established need for extra places. His question demonstrates how critically important it is for us to get to grips with the fact that there are many hundreds of thousands of surplus school places, where money is being spent on roofs and not on educating children. I hope that the hon. Gentleman will support me in our campaign to ensure that those surplus places are wrung out of the system, so that money can be transferred from where it is being wasted to where it may be needed—it is up to the hon. Gentleman's local authority to make the case.
    Mr. Dickens: Can the Secretary of State tell the House whether he thinks that the criteria are working, in the sense that if there are places within a 2-mile radius of an overcrowded school, it is prohibited from being rebuilt on a new site? Our hon. Friend the Member for Mid-Worcestershire (Mr. Forth), the Under-Secretary of State for Schools, has been dealing with Holy Trinity county primary school in Dobcross, in the hills of Saddleworth. In winter 2 miles is a long way to bus children in Saddleworth, although 2 miles on the flat in an urban area is not far at all.
    Mr. Patten: As my hon. Friend knows, I visited Saddleworth, at his invitation, in the winter and I know what it is like. In applying any criteria for catchment areas to schools there is a dilemma. On all occasions, we must take two things into account: first, in the interests of rural communities, we must preserve small rural schools with large catchment areas; secondly, we must make it possible for popular schools to expand. My hon. Friend the Under-Secretary of State and I have been most concerned to make advances on the latter in recent months and we hope to make announcement in the not-too-distant future.

    Education Spending, Humberside
    Mr. Austin Mitchell: To ask the Secretary of State for Education what has been the standard spending assessment for education in Humberside for each of the last two years.
    Mr. Boswell: Humberside's education standard spending assessment rose by some 16 per cent. to £321 million in 1991–92 and to more than £342 million, including the additional grant for teachers' pay, in 1992–93—a rise of some 24 per cent. in two years. Its education standard spending assessment for 1993–94 is more than £305 million—an underlying increase of 1·8 per cent. allowing for the transfer of responsibility for most further education expenditure to the new funding council.
    Mr. Mitchell: I thank the Minister for those statistics. Does he accept that the increase in Humberside's education SSA has been less than the national increase, resulting in the past three years in a cumulative loss of £3·5 million to the county? Does he further accept that Humberside's spending last year of more than 8 per cent.

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    over its SSA to give kids a bit better education has had to be cut because of the threat of budget capping? As a result of cutting the improvement over SSA, every school in Grimsby is losing between one and seven teachers and faces classes that much larger. Every child in Grimsby will receive an education that much worse than it should be. Does the Minister regard that as acceptable?
    Mr. Boswell: I am sure that the hon. Gentleman is aware from his local knowledge that the number of pupils in Humberside is static. The national numbers show a 1·2 per cent. increase in the current year. The difference in funding reflects that specific fact. If the hon. Gentleman does not like the present formula, it is open to him at any stage to suggest an alternative formula to my colleagues in the Department of the Environment. If he can find a formula that commands universal acceptance, including among his colleagues, he will be a clever man indeed. The present formula seeks to balance all the factors in the fairest possible way between local education authorities.
    Mr. Michael Brown: Is not the real position that Humberside county council simply does not know how to manage its budget? In neighbouring Lincolnshire, the local authority under Conservative control—[Interruption.] at least until last Thursday, was able, and I hope will still be able, to deliver education to the people of Lincolnshire with more resources. Does my hon. Friend agree that in Lincolnshire a higher proportion of expenditure previously went on education than is likely to be the case under the new arrangements in Lincolnshire?
    Mr. Boswell: My hon. Friend is precisely right as usual. I am sure that the good work done previously by Lincolnshire county council will stand to its advantage when it is remembered in due course.

    English
    Mr. Anthony Coombs: To ask the Secretary of State for Education what measures he is taking to improve standards in the teaching of English in schools.
    Mr. Thomason: To ask the Secretary of State for Education if he will make a statement about the proposals for the revision of English in the national curriculum.
    Mr. Patten: The new proposals for English, which I published together with my right hon. Friend the Secretary of State for Wales on 15 April, aim to simplify, streamline and strengthen the present curriculum by defining more clearly the essential skills which English teaching should promote and reducing the number of requirements to be satisfied. We believe that the proposals will provide a firmer structure to ensure that pupils acquire knowledge and understanding of the English language, grammar and vocabulary, as well as the ability to speak it with confidence. They should also ensure that pupils learn about their literary heritage and study the works of our greatest writers.
    In the light of consultation on our proposals in England and Wales, my right hon. Friend the Secretary of State for Wales and I expect to publish a draft order for a revised English curriculum later in the year for further statutory consultation.
    Mr. Coombs: In view of the difficulties in reading and writing experienced by a significant minority of
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    14-year-olds and 16-year-olds according to the National Curriculum Council and given the streamlining of the English curriculum mentioned by my right hon. Friend the Secretary of State, does he agree with Sir Ron Dearing and Stewart Sutherland that it is crucial that tests for 14-year-olds in English go ahead this year? Does he further agree that it is craven almost to the extent of Pontius Pilate for the Opposition to argue in favour of tests on principle while refusing to condemn the boycott of the tests by many teachers which would damage the tests so badly in practice?
    Mr. Patten: To answer the second of my hon. Friend's two questions first, many people say that they are in favour of a national curriculum and testing but are afraid to come forward and set out exactly what they mean. That behaviour has been characteristic of the Opposition throughout the past year.
    On my hon. Friend's first point, testing is critical not just for 14-year-olds but for seven-year-olds. As Sir Ron Dearing and Professor Stewart Sutherland, Her Majesty's chief inspector of schools, said yesterday, the testing of seven-year-olds has not only led to some improvements and a greater expectation among teachers of what they can expect from their children, but demonstrated that two out of three children aged seven cannot read the simplest words. It is those children who need to be helped throughout their school careers and that is why we need the testing regime that we have introduced.
    Mr. Thomason: Will my right hon. Friend confirm that it is totally unacceptable that 30 per cent. of 16-year-olds are unable to master the basic reading skills expected of people of that age? Will he ensure that under the national curriculum, to which he referred a moment ago, the proper teaching of English is introduced?
    Mr. Patten: It is entirely right that the National Curriculum Council recommendations should concentrate to a greater extent on the basics—standard English, reading and writing. It is always right to reveal problems that have been hidden. It was only in this past year that we discovered, for the first time, that some 300,000 16-year-old school leavers going on to further education had a reading age of 14 years or less. That must be put right and that is why we need the slimmer national curriculum English orders, which are now in draft. That is why we need testing and why, and how, we must catch up with our international competitors. In France, for example, the testing of eight and 11-year-olds has gone on for decades.
    Mr. Enright: Will the Secretary of State explain how affixing captions to "Pam's Paper pictures" assists in the tests for 14-year-olds? Would he not be better advised to correct the English used by the other Departments of Her Majesty's Government, which send out to us appallingly written documents in appalling numbers?
    Mr. Patten: I remember that during our most recent debate on education the hon. Gentleman got into a muddle about the membership of his own union. He could not even remember the name of his union, to which he referred incorrectly. What I can say to the hon. Gentleman—[Interruption.] Order. I think that when the testing of 14-year-olds takes place this summer and the results have been published, some time after those tests have been

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    taken, people will wonder what on earth the fuss was about and they will see exactly what good those tests will do.
    Mr. Dafis: The Secretary of State will be aware of the views of the Curriculum Council for Wales on the rather questionable entity of standard English. It strongly disapproves of the principle that children aged six or seven should have their English corrected to bring it into line with the so-called standard form. I wonder whether the Secretary of State would care to congratulate that organisation on its good sense. As part of the process of making the proposed curriculum and assessment authority for Wales genuinely autonomous, will he ensure that the council's recommendations are accepted in Wales?
    Mr. Patten: As the hon. Gentleman knows, I am not responsible for education in Wales. My right hon. Friend the Secretary of State for Wales is consulting on the draft proposals from the Curriculum Council for Wales and I will ensure that the hon. Gentleman's views are drawn to his attention.

    Special Needs Education
    Mr. Steen: To ask the Secretary of State for Education if he will take steps to improve the process of statementing children; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Schools (Mr. Eric Forth): The Education Bill, now in another place, builds on the Education Act 1981, creating a new framework for all children with special educational needs. Pupils who need statements will benefit from many of the new arrangements, including time limits on the making of assessments and statements. We shall issue comprehensive, practical guidance to local education authorities and schools in the form of a code of practice.
    Mr. Steen: That is all very well, but is my hon. Friend aware that there are children with special needs in some of the most deprived urban areas who have to wait up to three years before they can be tested because of the philosophical and political views of the local authority, which is opposed to the testing? Will he consider enlarging the powers of the ombudsman so that parents can go direct to the ombudsman, who can then direct local authorities, mostly Labour, to get a move on?
    Mr. Forth: My hon. Friend is correct in identifying unacceptable delays in producing statements of special educational needs and also unacceptable variations between authorities. We are well aware of the problems and they are exactly what the Bill, now in another place, will address. We shall issue regulations to put time limits on the statementing process; we shall issue a code of practice to introduce a standard format for statements to ensure that all children are uniformly and properly cared for; and we shall introduce a tribunal to give genuinely independent advice and be an independent source of appeal to parents who feel that they have not been properly treated.
    If my hon. Friend looks at what is in our Bill and at the code of practice and tribunals that will follow, he will see that the problems that he has identified will be dealt with fairly and firmly.
    Mr. Win Griffiths: Does the Minister accept that, although what he said is likely to produce an improvement in the present situation, which all too often leads to heart-rending difficulties for parents and children, even today a lobby of the House is being organised by the Spastics Society in which several hundred parents will have terrible stories to tell of the stress that they have been caused by the statementing process? Those parents remain dissatisfied with the provisions of the Education Bill, particularly with regard to the resources to meet the needs of any child with a statement. Will the Minister now commit himself to making sure that all local education authorities have the resources to provide for the needs specified in any child's statement?
    Mr. Forth: I am very much aware of the views of the Spastics Society and I keep them closely under review. The society has not yet perhaps fully appreciated the advances that the Bill represents. I hope that when it realises what the code of practice and the regulations to follow mean, it will be happier than it now appears to be with that advance.
    I believe that local authorities have the right resources to provide for statements and for those children with special needs who are not covered by a statement. The fact that the proportion of children statemented by local educational authorities varies between just over 1 per cent. in some authorities to more than 4 per cent. in others demonstrates that different authorities have taken different views up to now and that parents and their children, therefore, have tended to be treated differently. The Bill will address that problem and will make uniform the content of statements and the approach to be taken. I hope that the Spastics Society and all the other special educational needs interest groups will welcome that when they have reflected on it and seen the full development of our proposals under the Bill.

    Grant-maintained Schools
    Dr. Liam Fox: To ask the Secretary of State for Education what recent surveys have been conducted into the operation of grant-maintained schools; and what are the main findings.
    Mr. Patten: The Grant Maintained Schools Centre published the results of its latest annual survey of self-governing grant maintained schools in November last year. They demonstrate how self-governing schools are benefiting from the freedom to manage their own affairs and control their own budget.
    The report by the Office for Standards in Education on 81 grant-maintained schools, published on 30 March, concluded that grant-maintained schools were adapting well to their new framework and were taking advantage of the new opportunities that grant-maintained status offered. The report also noted that grant-maintained schools were attracting increasing numbers of pupils.
    There are about 775 grant-maintained schools today, either operating, approved or awaiting approval.
    Dr. Fox: Will my right hon. Friend communicate that information to Avon education authority which has sent to parents in schools that wish to become self-governing a politically bigoted letter that amounts to emotional blackmail? Does he agree that that sort of malevolent

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    nonsense is likely to become an ever-greater feature of those councils that came under Labour or Liberal control last week?
    Mr. Patten: I understand from papers that my hon. Friend has sent me that schools in the Woodspring constituency, like St. John the Evangelist, are feeling inhibited about going for grant-maintained status because of what they regard as coercion by Labour-controlled Avon council. That is why the Education Bill, presently in another place, will make it possible for at least a substantial amount of the effort that has been put into using council tax payers' funds by councils to intimidate schools to be brought to a halt, and quite right too.
    Mrs. Mahon: Has not the Minister been embarking on crude bribery to get schools to opt out? If he denies that, will he explain why, in Calderdale, three grant-maintained schools recently received a capital improvement grant of £450,000 while the other 109 schools had to make do with £223,000? Is that not a straightforward bribe to get schools to opt out?
    Mr. Patten: I am sorry that the hon. Lady is displeased that three schools in her area have had such large capital grants. In the past, successful schools, often voluntary-aided schools, have been consistently starved of capital funds that were much needed for modernisation of buildings and expansion. One of the reasons why grant-maintained status is so important is that it allows popular, oversubscribed schools the possibility of expanding, and quite right too.
    Dame Angela Rumbold: Does my right hon. Friend agree that many of the schools that have achieved grant-maintained status would like the benefits of that status to be expressed in clear terms? Those schools not only attract more pupils, provide better education by dint of better standards and have rather better teachers, but attract a larger number of people willing to come forward as governors. All those factors should be made clear to the cantankerous Liberal and Labour-controlled authorities.
    Mr. Patten: I have two points for my right hon. Friend. First, there are queues of children waiting to go to grant-maintained schools, which are extremely popular. Secondly, although, in comparison with maintained schools, I have visited only a small number of grant-maintained schools, in every one that I have visited, teachers and governors have told me that they relish their new freedom to run their affairs and their schools to their own agenda. That is a central part of the Conservative philosophy on which we were elected at the last general election.

    Special Schools
    Mr. Eastham: To ask the Secretary of State for Education what was the number of special schools operating in Manchester local education authority (a) five years ago, (b) last year and (c) currently.
    Mr. Forth: Throughout the period in question, there have been 26 special schools and two special units in the Manchester local education authority.
    Mr. Eastham: As the Minister is aware, the Government have never met their responsibilities to disabled children under the Education Act 1981. Later this
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    year, more special schools will be closed. Will the Government give the House a firm assurance that they will make sure that there is sufficient money available for lifts, ramps, changing facilities, special toilets, furnishing and laboratory equipment, all of which will be needed for such children? It is one thing to say that we want integration in schools soon, and another to have the money to do the job.
    Mr. Forth: The hon. Gentleman should talk to his hon. Friends on the Opposition Front Bench about their attitude to the provision of special schools as opposed to those in the mainstream. It is, and rightly so, for the local education authority—in this case, Manchester—to decide how far it believes that there should be provision in special schools and units or mainstream provision. That is its responsibility and I would look to, and expect, it to discharge that responsibility properly.

    Dyslexia
    Dr. Goodson-Wickes: To ask the Secretary of State for Education what studies he has made into the treatment of dyslexic children in examinations; and if he will make a statement.
    Mr. Forth: The results of a three-year research project on special educational needs and the GCSE, commissioned by the School Examinations and Assessment Council and undertaken by the centre for assessment studies at Bristol university, is due to report to the council this summer. The research report is expected to address the position of candidates suffering from various disabilities, including dyslexia.
    Dr. Goodson-Wickes: I understand that there are wide variations in the policies and practices of examination boards in the treatment of dyslexic children. Will the Minister give the House an assurance that their special needs will be recognised, especially in relation to concessions taking into account psychologists' reports so that that untapped talented group of people can achieve its full potential?
    Mr. Forth: My hon. Friend asks an important question. At the moment, the examining groups try, wherever possible, to take the fullest possible account of children with disabilities and difficulties, in particular dyslexia. They try to strike that difficult balance between an examining and testing process that does justice to all pupils and one that takes proper account of those with particular special needs. I will certainly look again at the matter in order to satisfy myself that the examining groups are treating it properly, but I believe that, generally speaking, they have probably got the balance about right.

  PRIME MINISTER

    Engagements
    Mr. Pickthall: To ask the Prime Minister if he will list his official engagements for Tuesday 11 May.
    The Prime Minister (Mr. John Major): This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. Pickthall: I thank the Prime Minister and the many Cabinet Ministers who campaigned in Lancashire in recent weeks and helped Labour vastly to increase its vote and achieve a majority on the local council. Was it in Lancashire that the Government heard about the challenging environment that they faced, the big hole that they were in and the bloody nose they were about to get? Did they listen to the people of Lancashire on value added tax, testing in schools, unemployment and the attacks on local democracy? Can the people of Britain expect the Government's supposed listening to the people to be translated into action to rebuild the country, instead of the present policies which are dismantling it?
    The Prime Minister: The hon. Gentleman clearly deserves an A-level in smugness. Perhaps I may quote something to the hon. Gentleman from The Sunday Times that I have no doubt he will find of interest. The quote, which he may enjoy, reads as follows:
    "Conservative set-backs in Thursday's county council elections … were so severe that Labour would win the general election on the same voting breakdown."
    That was The Sunday Times in 1985. Two years later we won the election with a majority of 100.
    Mr. Conway: Is my right hon. Friend feeling cheerful, because he should? Is it not the case that we have every reason to be optimistic because, of all the countries that pulled out of the exchange rate mechanism last autumn, the United Kingdom is the only country to have pulled out of recession?
    The Prime Minister: The principal reason Britain has come out of recession is that we have achieved low inflation; because we have got inflation down, we were able to cut 5 per cent. off interest rates—[Interruption.]
    Madam Speaker: Order. Will hon. Members; on the Bench below the Gangway please desist until we get through Question Time? They can then go outside and have their own singsong.
    The Prime Minister: I think that everyone was enjoying it, Madam Speaker. It was because we cut inflation that we were able to take 5 per cent. off interest rates before last September, and because we got inflation down we are now beginning to see a recovery in retail sales and exports since the spring. It is because of that that we shall see greater growth this year and next year than any other country in the European Community.
    Mr. John Smith: Can the Prime Minister tell the House whether the Budget in November will be presented by the present Chancellor, the right hon. Member for Kingston upon Thames (Mr. Lamont)?
    The Prime Minister: That is a hoary old chestnut of a question. I have not yet even begun to contemplate Cabinet changes. But I will say this: it is because my right hon. Friend the Chancellor has taken difficult decisions that we now have inflation at a 25-year low, interest rates at a 15-year low and prospects of the fastest growth in Europe this year and next year. That is an excellent record which people will recognise long after the right hon. and learned Gentleman's undignified sniping is forgotten.
    Mr. Smith: Surely the Prime Minister heard the question quite clearly. It is a simple question: will the present Chancellor present the next Budget? Cannot the Prime Minister say either yes or no?
    The Prime Minister: I explained very clearly to the right hon. and learned Gentleman. If I wanted advice on Cabinet making, I would not seek it from the right hon. and learned Gentleman, who last week had to sack his own economic spokesman for incompetence.
    Mr. Smith: Madam Speaker—[interruption]
    Madam Speaker: Order. The House must come to order.
    Mr. Smith: The Prime Minister seems to be having some difficulty with a simple question—[Interruption.]
    Madam Speaker: Order. The House must come to order and not use up time in this way.
    Mr. Smith: May I give the Prime Minister a third shot at it? Will the present Chancellor present the Budget? If the Prime Minister cannot say yes, why cannot he say no?
    The Prime Minister: Why does not the right hon. and learned Gentleman just admit that he has got a bloody nose? It is a good deal more dignified.
    Mr. Marlow: My right hon. Friend—as a genuine, listening Prime Minister—will be aware of the alienation expressed in the constituencies last week. He will also be aware of the severe mauling given to the Maastricht treaty by the democratic process. Is he not greatly concerned about the massive alienation that would result if the ratification of this new constitution now depended on the Danes, the Whips and the courts alone?
    The Prime Minister: If, as my hon. Friend intimates, the election was really about the Maastricht treaty, it is rather surprising how well some other political parties did.
    Mr. Ashdown: After Srebrenica, just as I predicted, there has been Zepa. Does the Prime Minister still insist on doing nothing more to save the tens of thousands of innocents in Gorazde from a similar tragic fate?
    The Prime Minister: The right hon. Gentleman is being deeply unfair to the efforts by both this country and a large number of other countries which are working together. The right hon. Gentleman is aware of the difficulties and also of the intense dangers of following some of the actions that he has advocated in the past. He knows what action we are proposing to take; that remains the position and we continue to discuss that and other options with our allies.
    Mr Streeter: Is my right hon. Friend aware that on a recent visit to estate agents in Plympton in my constituency, I found that estate agents could talk of nothing else but a real and significant upturn in the housing market, with house sales increasing and house prices improving week by week? Does my right hon. Friend agree that that reflects a steady return to confidence in this country and represents good news for Plymouth, good news for the country and bad news for the Opposition?
    The Prime Minister: I am sure that that is right in every aspect. I have not myself visited estate agents, as I have no intention of moving.
    Mr. Milburn: To ask the Prime Minister if he will list his official engagements for Tuesday 11 May.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Milburn: Does the Prime Minister share his Chancellor's lack of regret about the damage done to the country by his Government? Is not it time that he learned to apologise and to listen to the millions of people who have become the victims of his policies? Has he got time today to tell them what changes in direction he has planned following last week's overwhelming public rejection not only of him and his colleagues but of his Government's policies?
    The Prime Minister: I have said before, and from the Dispatch Box, that I understand the difficulties that people have faced as a result of the recession. I have said that clearly. I have also made it clear that I appreciate that it has lasted longer than people anticipated, but it was necessary to bring inflation down, or inflation would have gone on wreaking ever-greater damage for an even longer period. We needed to bring it down; we have brought it down. That is the only secure basis for lasting growth in the future. The fact is that the Labour party would never have had the guts to take the decisions that were necessary.

    Economy
    Mr. Michael Brown: To ask the Prime Minister if he will make a statement on the state of the economy.
    The Prime Minister: It is getting better every day—exports up, manufacturing output up, retail sales up, business confidence up, new housing starts up and gross domestic product up.
    Mr. Brown: Is my right hon. Friend aware that that reply is confirmed in Brigg and Cleethorpes, where industrial recovery has resulted in unemployment falling to below the national average where once it was twice the national average? Will he acknowledge the Government support that has resulted in tremendous United States investment through companies such as Kimberly-Clark Ltd. and Paramount Packaging, where many jobs have been created in the last few months? May I advise my right hon. Friend that in Cleethorpes last week Allied Colloids announced that 90 more new jobs would be created?
    The Prime Minister: I am delighted to welcome investments such as those which represent good news for Humberside. They represent the confidence of inward investors and of British companies in the region. I know how hard my hon. Friend works for his constituents and how much he will welcome those developments.
    Ms Estelle Morris: What would the Prime Minister say to the millions of pensioners living just above income support level who thought that his pledge to start listening would mean that the proposal to charge VAT on fuel would be removed'?
    The Prime Minister: Everyone, including the Opposition Front Bench, as I understand it, agrees that the budget deficit is too high and that we need to bring it down. We have had the courage to produce our proposals, of which VAT is a part, to bring it down. I am surprised that the hon. Lady should raise that after the nonsense talked by the right hon. and learned Member for Monklands, East (Mr. Smith) about VAT last week, when it was clear from one of his economic spokesmen that the Opposition, too, would have increased VAT on a range of items.

    Engagements
    Sir Fergus Montgomery: To ask the Prime Minister if he will list his official engagements for Tuesday 11 May.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Sir Fergus Montgomery: Has my right hon. Friend seen the report today that housing starts are up 22 per cent. compared with the last quarter? Should not that news bring joy even to the hearts of the dismal Johnnies on the Opposition Benches? Is not that a sign of a return to confidence?
    The Prime Minister: I am afraid that the Opposition are unhappy at good news. They realise that good news today for us is bad news tomorrow for them. Clearly, it shows growing confidence by the building industry in the market for new houses. That is very welcome in view of the difficulties that the construction industry has had. With the measures that the Chancellor took in the autumn statement, the measures that he took in the budget and the reduction in interest rates, there is clearly a much better prospect for the housing market.
    Mr. Connarty: To ask the Prime Minister if he will list his official engagements for Tuesday 11 May.
    The Prime Minister: I refer the hon. Member to the answer I gave some moments ago.
    Mr. Connarty: Does not the Prime Minister accept that the bloody nose on Thursday was given to him personally as much as to his Government? Has it improved his listening skills area on the issue of testing children? We are to have a statement later today, but the nation is looking to the Prime Minister to see where he stands. As a Scot, I remember that we went through a period of attrition when the Government tried to force testing on to our country. Thankfully, it is now back in the hands of parents and teachers who care for children, so that test items can be used whenever they want and not compulsorily. Will the Prime Minister tell the House where he stands on the testing of children and the interference of the state in the care of parents and teachers?
    The Prime Minister: The answer to the first part of that supplementary question is that, of course, I accept my share of responsibility for the election results last week, in precisely the same way as the right hon. and learned Member for Monklands, East (Mr. Smith) will accept his share of responsibility for losing the last election. As for education and testing, I will tell the hon. Gentleman precisely where I stand: I stand four square with my right hon. Friend the Secretary of State.
    Mr. Thomason: To ask the Prime Minister if he will list his official engagements for Tuesday 1I May.
    The Prime Minister: I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Thomason: Does my right hon. Friend agree that it is never popular to increase taxes but it is necessary to balance the books? Does he further agree that the responsibility of the Government contrasts sharply with that of Labour Members, who demand more spending but do not tell us how they would pay for it?
    The Prime Minister: I agree with my hon. Friend and, as he indicated, measures are in place to bring down the size of the borrowing requirement. That has required some tough decisions, but, having concluded that that is necessary, the Government have taken those decisions knowing that they cannot be ducked. As my hon. Friend pointed out, the Labour party is in a fundamentally
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    dishonest position—[Interruption.] Opposition Members are committed to spending money, but they will not say where the money is coming from. That is very good for an Opposition but not for a Government, which is why we remain on these Benches and they remain on the Opposition Benches.

Testing (Schools)
3.31 pm
The Secretary of State for Education (Mr. John Patten): With permission, Madam Speaker, I propose to make a statement about future arrangements for national curriculum testing.
My right hon. Friend the Prime Minister and I have already confirmed the Government's commitment to this summer's tests for seven and 14-year-olds. There is abundant evidence of the importance of testing the progress of our children. Our main competitor countries do so as a matter of course. So should we. It would be a betrayal of a future generation of pupils—[interruption]
Madam Speaker: Order. The House must come to order.
Mr. Patten: Our main competitor countries do so as a matter of course. So should we. It would be a betrayal of a future generation of pupils to postpone what are acknowledged on all sides to be much needed educational reforms. It would be to set aside the tremendous efforts made by the great majority of hard-working teachers to implement the national curriculum since 1989.
Tests for seven-year-olds are in their third year. We know that they work. Tests in 1991 and 1992 have improved standards of teaching and learning. Last year's pilot tests for 14-year-olds were well received. Attendance by pupils actually went up on test days. Her Majesty's chief inspector of schools said only yesterday that the evidence provided by a good testing system was essential to assess the progress of our schools.
Children have been working towards the tests for several years. Abandoning the tests would leave conscientious teachers, concerned parents and the wider community in the dark about our schools, depriving them of vital information about the attainments of individual pupils and denying Sir Ron Dearing the information about the quality of the tests for which he himself has asked.
I come to the testing arrangements for 1994. Sir Ron Dearing has been given the widest possible remit. His task is to advise on how the curriculum and assessment framework in the round can be simplified and streamlined in response to the concerns of many teachers.
I have discussed with Sir Ron the implications for 1994. He has advised me that the tests next year should focus on the basics—exactly why I asked him to set up the review in the first instance. I agree with that advice. The Government have therefore decided on the following for 1994. First, mandatory tests in 1994 for seven and 14-year-olds should concentrate on the core subjects of English, mathematics and science, and on Welsh as a first language in Wales. We shall decide later whether to add technology at the age of 14, in the light of this summer's tests.
Secondly, the testing arrangements in these subjects will be streamlined, with some substantial changes to coverage and style. I have asked Sir Ron Dearing to advise me by July on how this can best be done, including the balance between the tests themselves and teachers' own assessments.
Thirdly, and very importantly, Sir Ron will, at my request, carefully consider the merits of external marking by external examiners of the tests of 11 and 14-year-olds.
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Fourthly, the current obligation on teachers of seven-year-olds to make assessments of class room work in technology, history and geography will be lifted in 1994 and will not be introduced in music, art and physical education, allowing those teachers to concentrate on the basics.
Fifthly, next year's tests for 11-year-olds in English, mathematics and science will take the form of a national pilot, leading to mandatory tests in 1995.
Sixthly, the introduction of mandatory tests for 14-year-olds in history and geography which had been planned for 1994 will be postponed, pending Sir Ron Dearing's review.
Seventhly, to ensure that Sir Ron Dearing's recommendations about changes to the curriculum can be rapidly implemented, which is what many of my right hon. and hon. Friends want, the Government propose to suspend for a period the consultation procedures specified in sections 20 and 21 of the Education Reform Act 1988. We shall move an appropriate amendment to the Education Bill, now in another place.
This will preserve, during the interim, the duty on me and on the Secretary of State for Wales to consult about changes, but it will be designed to enable us to proceed to make those changes after a single stage of consultation in cases such as this in which the need for change has been widely recognised and the changes themselves are the product of extensive prior debate, such as that which has been going on in the country for a number of months.
I say two things in conclusion—[HON. MEMBERS: "I resign".] That is only to be expected from the Opposition, but I am anxious to complete my statement, Madam Speaker.
These decisions will significantly reduce the work load on teachers in 1994. It is in the interests of properly taught children, informed parents, employers and the nation that the testing arrangements which I have described today should go ahead without interruption. If they do not, we will have an education system without adequate rigour. and we shall have conceded a decade's advantage to our international competitors.
Mrs. Ann Taylor: Does the Secretary of State realise that his statement illustrates the utter confusion and chaos in Government circles on this year's tests? Only yesterday, the Secretary of State was saying that there would be no further statement. No. 10 said that there would be; then it said that there would not he—little knowing, apparently, that the Lord Privy Seal and the Prime Minister had decided that the crisis of confidence in the Secretary of State was so great that he would be forced to make this statement today. Clearly, however, the reason for the statement remains puzzling, as the Secretary of State has said that there are to be no changes in the testing arrangements for this year.
The Secretary of State's statement that the tests must go ahead this year proves that he has learnt nothing and that he is still not willing to listen. Does he realise that no previous holder of his office so clearly united the independent schools with the NUT, or the Professional Association of Teachers with the National Association of Schoolmasters/Union of Women Teachers, all of which. with parents and governors of all political persuasions, are totally opposed to the Government's imposed tests?
Will the Secretary of State acknowledge that no one is opposed to the testing and assessment of children but that

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the tests that he wants to impose are high on administration and low on educational value, and that no one has confidence in them?
If so many changes are to be made next year and in subsequent years, why does the Secretary of State persist in trying to make guinea pigs of our children this year? The logic of his own position must be to withdraw the compulsion to have tests this year. Why cannot he make the tests voluntary? Does he consider himself to be tied by his own legislation?
With regard to testing arrangements for future years, does not the Secretary of State realise that he cannot get the arrangements right if he does not admit that he has been wrong so far and if he does not understand his own mistakes? Will he now admit that he has been wrong? Will he admit his mistakes and consult widely, and not in haste, about the arrangements for the future?
We welcome the 11 specific points on which the Secretary of State has climbed down in respect of testing arrangements for future years. Thus, it is all the more incredible that he is forcing tests on children this year.
Looking to the future, I urge the right hon. Gentleman to understand that appointments to and the terms of reference and time scale of the Schools Curriculum and Assessment Authority are critical, that the membership of SCAA must not be determined by the Secretary of State alone, that a majority of its members must be people responsible for educating children, and that the review must be genuinely independent of the Government.
To that end, will the Secretary of State agree that the Select Committee on Education should ratify membership of the review body? Will he acknowledge that the review must not be a hasty exercise? Will he accept that, unless parents, teachers and governors have full confidence in the independence and in the appropriateness of the timing of the review, we shall not be provided with a long-term solution to this problem?
The real issue is whether the Secretary of State has demonstrated a capacity to listen and to understand the problems that he has created. He still fails that test. His obstinate and arrogant refusal to change this year's tests is incredible. He does not enjoy the confidence of parents, teachers or governors—even of his own advisers. He should resign.
Mr. Patten: I am very confused by the hon. Lady's attitude and by that of her hon. Friends, such as the hon. Member for Bridgend (Mr. Griffiths), who is one of 100 lead signatories to early-day motion 1988, which says that there should be no national curriculum tests whatsoever for seven-year-olds. It is very difficult to understand the Labour party's attitude.
The reforms that have been introduced since 1988 have at each stage been modified in response to views from teachers and other professionals and educationists. That is exactly what happened with the 1991 tests for seven-year-olds. They were translated into new and improved tests for seven-year-olds for 1992. They are now being taken in many schools up and down the country, and I believe that they will show a critical improvement in standards.
Each reform should build on the preceding stage of the reform. It is critical that the tests should proceed this summer, in the interests of the children themselves. People in this country will be amazed when they see the published test questions and will wonder what on earth the fuss was
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about. Sir Ron Dearing, in response to my remit letter to him of several weeks ago, said—he repeated it yesterday—that he needed the evidence of this year's tests in order to inform his review.
Sometimes the Government are accused of not listening. I have been to a good number of schools up and down the land and I have talked to teachers in those schools and in my Department. They have stated their views about the national curriculum and assessment. I did listen; that is why, several weeks ago, I set up the review under Sir Ron Dearing. That was a classic case of responding, quite correctly, to professional concerns. But in the meantime, if the reforms are to succeed, they must proceed.
Mr. James Pawsey: I hope that my right hon. Friend will reject the ill-considered advice that he has just received from the hon. Member for Dewsbury (Mrs. Taylor). Does he accept that the overwhelming majority of hon. Members and certainly parents will widely welcome his statement, which clearly shows that he has listened to parents and teachers and has simplified the national curriculum and testing? I hope that my right hon. Friend's announcement will be matched by an equivalent one from the trade unions withdrawing the boycott.
Mr. Patten: I welcome what my hon. Friend has said. The response of professional teachers will be interesting. I hope that they will respond to my statement this afternoon. It will substantially reduce teachers' work load, about which they have complained, and possibly introduce external examiners for tests at 11 and 14. I hope that teachers will welcome the reforms. No teacher should ever think that the national curriculum or testing is wrong or will not produce results in the interests of our children.
Mr. Don Foster: Does the Secretary of State accept that at least two of the things that he has said today will be widely accepted in the House—first, his recognition that the current testing arrangements impose an excessive work load on teachers in our schools and, secondly, his clear admission that the current testing arrangements are wrong and desperately need to be changed?
Does he further accept that many parents, teachers and governors will be bitterly disappointed by his statement today because, although he is offering changes in the future, he offers no changes at the present time, so the problems in our schools will continue? There is no end to the strife in our schools—strife of the Government's making. Does the Secretary of State really believe that by offering jam tomorrow he can get himself out of a pickle today?
Mr. Patten: The tests taken by any child at any stage of his or her career, be it GCSE or A-level, will always be subject to lively debate. People will often say that this or that question was not put in the right way or was flawed. It is certainly not my belief that the tests for 14-year-olds this summer are fundamentally flawed. It is a matter of professional debate.
Some people think that there are problems. Others, including professional advisers, such as the noble Lord Griffiths, who was chairman of the School Examinations and Assessment Council, do not. Lord Griffiths wrote to my on 18 April delivering the tests and saying that it was

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the view of his council that the tests had been well prepared. After all, they had been piloted during the previous three years.
Why should the tests at 14 go ahead this summer? I shall tell the hon. Member for Bath (Mr. Foster) why. Children have been working for the tests for the past two to three years. Children have a right and an expectation that they will take the tests. The hon. Gentleman should listen to Sir Ron Dearing, the widely respected independent chairman of the review I have set up, who has asked that the tests should go ahead this summer.
Several hon. Members rose—
Madam Speaker: Order. I would be obliged if we could have brisk questions and brisk answers so that we can get through questions from a number of hon. Members.
Mr. David Madel: Will my right hon. Friend ask Sir Ron Dearing to ensure that arrangements are made whereby heads of department in schools, especially English and technology departments, can put their views directly to him so that, by 1994, we shall have a better system of testing in schools?
Mr. Patten: I am pleased to tell my hon. Friend that that has already happened. Sir Ron Dearing is consulting not only head teachers in a series of regional meetings, but a range of heads of department in exactly the way that my hon. Friend wishes.
Mr. Bryan Davies: Will the Secretary of State accept that his retreat into flexibility for next year is fatally compromised by his determination to press ahead this year? Is it possible in a free society—a society that is different from that of Napoleonic France or, dare I say it, of Nazi Germany—for professional educators to be forced to do something to which they are opposed because of educational principle? Does the Secretary of State accept that he cannot get the reforms through for this year unless he is prepared to put General Patten's tanks on every playground in the country?
Mr. Patten: I believe that it would be so sad if there were a boycott this summer of, for example, the tests for seven-year-olds which have been largely completed. That is why I profoundly hope that the NUT ballot, of which we shall have the result on Thursday, is not in favour of the boycotting of all tests at seven, 11 and 14. That would be a tragedy for our children.
Mrs. Angela Browning: Having met head teachers and heads of departments in my constituency, I know that they do not question at all the need to test. My right hon. Friend will be aware that it is the practical application that has gone wrong. If this were a business, the people charged with responsibility for the tests would have been sacked. I hope that my right hon. Friend will consider that point, because those people have presumably been drawing good salaries while putting the tests together.
Mr. Patten: I am Secretary of State for Education and I accept all responsibility for education in England. I know that my hon. Friend brought a deputation of heads to the Department to see my right hon. and noble Friend Baroness Blatch. I welcome the fact that they accept the
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principle of testing. I urge my hon. Friend to urge them to recognise that, if we stop the process of reform, if we stop the national curriculum being implemented, if we stop the testing regime, if we pull up the plant and examine it for two or three years, we shall set back the whole process for a decade.
Mr. Dennis Skinner: Is the Secretary of State aware that his fall from grace has been coming for a long time? Nobody has exuded more arrogance and contempt for his colleagues than he has. He has strutted round the Dispatch Box like a puffed-up peacock on heat. Today, he has come in like a bedraggled battery hen that has laid its last egg. His intellectual elitism has overwhelmed his common sense, and the people in the country know it.
Mr. Patten: That was not so much a question as a statement, from which, as the hon. Gentleman recognises, I readily dissent.
Mr. John Watts: Does my right hon. Friend agree that the target of the neanderthal trade unions that have orchestrated opposition to the tests is not the flaws in the tests, to which my hon. Friend the Member for Tiverton (Mrs. Browning) referred, but the national curriculum itself? Would not the biggest possible betrayal of our children be to allow those trade unions to feel that they were once more in charge of education? They would preside over a lowering of standards, from which the country suffered for so many decades.
Mr. Patten: I am not sure why the national curriculum and the question whether we should have one or not has suddenly been brought back as a matter for debate. It is critical that we—like the Germans, the Japanese and the French—have a well established national curriculum. We should have had one decades ago, and it is critical not to be driven off course now.
Mr. Frank Cook: May I remind the Secretary of State that we are talking about the future of our nation's young people, and inform him that, in a previous capacity, I was responsible for the formulation, standardisation and application of various forms of educational testing, both for attainment and of a diagnostic nature. One of the things that we learnt at the time was that the over-application of such tests devalued them—they interefered with the education programme and were counter-productive.
Just how many of the Secretary of State's advisers have that kind of experience and take into account that kind of result or lack of result? I simply want the Secretary of State to justify his position logically, rather than coming out with the party political rhetoric to which he seems so fond of resorting. Where is the rationale, the logic? As yet, it is not in evidence. Ask the profession—those who are responsible.
Mr. Patten: Given the chance, I will.
On both the National Curriculum Council, which is concerned with curricular activities, and the School Examinations and Assessment Council, which is concerned with examination and assessment, there are six lecturers and six teachers. Each of the subject groups that has helped to set up and design the tests for

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seven-year-olds and 14-year-olds has included a substantial number of teachers—I believe, an overwhelming majority of teachers. That is the straight answer to the hon. Gentleman's question.
Sir Malcolm Thornton: I can assure my right hon. Friend that the lively debate to which he referred will continue—certainly as regards this year's tests. He will know from the views that I have expressed of my disappointment on that score. I have listened carefully to his statement and would say firmly to him that the package of measures that has been announced goes a very substantial way towards meeting the criticisms that have legitimately been made in connection with the way in which the tests should be conducted in future and as regards the content of the national curriculum.
In those circumstances, does not my right hon. Friend agree that there can be no possible justification for any attempt to disrupt and boycott in our schools this year? Does he agree that such action will not only serve to damage the education of our children—which is the most important thing—but will cause the Ron Dearing review, upon which so much depends, to get off to such a bad start as to make Ron Dearing's task almost impossible?
Mr. Patten: I entirely agree with my hon. Friend. I warmly welcome what he has said. Like him, I believe that industrial action and boycotting have no place in the classroom. I appeal to teachers to listen to Sir Ron Dearing and to his request for their co-operation. That is something that the teaching world owes the chairman of the independent review.
Mr. Gerry Steinberg: Contrary to what the Chairman of the Select Committee on Education says, the Secretary of State has almost admitted—in the most amazing statement that I have ever heard—that the tests are flawed, because he has agreed that next year they will not take place. If the tests are to continue, the education of children in our schools will be affected. Bearing in mind the fact that the vast majority of teachers, regardless of their union, are opposed to the tests, why is the right hon. Gentleman forcing ahead with them now? And what will he do when teachers boycott the tests, as they will?
Mr. Patten: Each test each year is a preparation for a test the next year, as well as being a test in itself. There has been an occasion in the history of examinations—of A-levels and 0-levels and now GCSEs—when each year did not involve preparation for the next. That is why it is critical for the tests to proceed, and that is why Sir Ron Dearing has asked for exactly that to happen.
Mr. Harry Greenway: Does my right hon. Friend agree that nothing is more damaging to children than vacillation and uncertainty in their education, as in all areas of their lives, and therfore it is important to be consistent? Will he further agree that equality of opportunity is absolutely fundamental to the Government's aims for all children in education and everywhere else in their lives?
Therefore, would it not be wrong for some children to have tests and others not to have tests by some form of boycott? Is my right hon. Friend considering compiling a list of volunteers who might assist in the testing process when teachers or others involved are prepared to operate a boycott in a ruthless manner?
Mr. Patten: The whole purpose of the national curriculum and the associated testing regime is to deliver a minimum entitlement of education to all our children wherever they are and from whatever background they come. That is why it is so wrong, as my hon. Friend the Member for Crosby (Sir M. Thornton) said, that there should be any boycotting in the summer. Of course, we know that the tests will proceed in a number of areas—for example, the tests will be taken in London boroughs such as Wandsworth. When the results are published and when people see what the test questions are like, they will wonder what the fuss was about in the first place.
Mr. Edward O'Hara: Will the Secretary of State, as a member of a Government who know the cost of everything but the value of very little, now step back and do a simple cost-benefit analysis? It is clear to all that the testing programme is in such disarray that any diagnostic value that it might have had for Sir Ron Dearing will be absolutely worthless.
Having marshalled more opposition throughout the world of education than has ever been witnessed before, will the right hon. Gentleman consider whether there might be an enormous cost benefit to him in withdrawing his insistence on pressing ahead with the tests this year and winning back some of the good will and morale throughout the world of education without which anything that he wishes to deliver for the children of this country cannot be delivered at all?
Mr. Patten: I am sure that the 430,000 hard-working teachers in England for whom I am responsible—I am not responsible for Scotland—recognise that their efforts are warmly welcomed. Those teachers have already put in an enormous investment of time to prepare children for tests at seven and 14. It would be a tragedy if that investment were wasted.
Mr. Iain Duncan Smith: Did my right hon. Friend notice the opinion poll the other day that showed that four out of five parents want the tests to go ahead? Does he agree that that reflects the severe concern that children have been preparing for the tests for the past three years and the important point—which the Labour party has clearly missed—that the national curriculum can be improved only if the testing goes ahead? Teachers, as professionals, have a duty to ensure that they do the best they can with the tests, so that Sir Ron Dearing and others can ensure that the problems are rectified.
Mr. Patten: No one in England and Wales will ever know whether the national curriculum is workirig unless there is a testing regime and the results are published. That is the only way in which we will know whether education in this country is performing at the same level as that of our international competitors such as Germany and France.
Mr. John McFall: May I be helpful to the Secretary of State by saying that the Government got a bloody nose in Scotland a few years ago on the issue of testing not from teachers or teachers' unions but from parents? Four out of five parents kept their children away from tests.
That parental revolt made the Government see late in the day that the best way forward was to allow teacher discretion on testing in the classroom and provide a partnership among teachers, parents and education so that

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the education of young people could be fruitful and go forward. Will the Secretary of State learn that lesson which the Government learned so dearly at their expense in Scotland?
Mr. Patten: As the hon. Gentleman knows, the system in Scotland is different; there is no Education Reform Act, and no national curriculum is laid down by statute. The education north and south of the border is completely different.
Mr. Patrick Thompson: My right hon. Friend's restatement of the principle of testing and of curriculum form are welcome in the House and in the schools. Will my right hon. Friend confirm again that it is his longer-term intention to remove a great deal of the overweening bureaucracy that has crept into the tests and to concentrate on basics, which I welcome? If he can confirm that, his statement will be even more welcome in the House.
Mr. Patten: That is so. I am sure that that is what will come from the Dearing review. I know that my hon. Friend speaks with experience—if my memory serves me aright, 23 years as a classroom teacher—so I take his views very seriously.
Mr. Cynog Dafis: Has the Secretary of State considered the cost of the astonishing proposal that the tests at 11 and 14 years of age should be externally marked? Does not that constitute an admission that for seven years we have been getting the marking of external examinations done for nothing by teachers on the cheap? Would it not be better to use that money to provide better resources in schools, particularly human resources, to enhance the quality of teaching, which is the only thing that produces better standards in education?
Mr. Patten: If the hon. Gentleman casts his mind back to a survey in England—not in Wales—in March 1992, we asked 93 education authorities whether they tested regularly up to the age of 11. Only 41 said that they did so. If teachers are saying that they have been testing all along, national testing is simply a substitute for the testing that should have been taking place throughout that time in primary and secondary schools.
Dame Elaine Kellett-Bowman: Does my right hon. Friend recall that I brought a delegation of head and assistant head teachers to his Department some months ago and they were delighted with the changes that our noble Friend Baroness Blatch had already introduced? I have been ringing around my constituency trying to find our how many teachers were carrying out the tests. The majority are doing so—apart from one highly politically motivated gentleman. Children in the majority of schools have taken the tests and they are being marked. Teachers said, however, that they would like the tests to be simplified next year. They will therefore be delighted with my right hon. Friend's statement.
Mr. Patten: I am grateful for that, and I am sure that in most primary schools the tests for seven-year-olds will be taken, in Lancaster as elsewhere.
Mr. Win Griffiths: The Secretary of State, in his statement and his information to hon. Members at Question Time, has shown that he has failed the listening test; secondly, that he has failed the speech test; and in his reference to the early-day motion which I tabled last night with 104 other people, he has failed the reading and understanding test. I did not say that the tests should be abandoned. That was the opinion of parents who were polled by The Independent and NOP. My demand was a rather modest one—for this year's tests to be made voluntary.
I cannot understand why the Secretary of State made a statement about next year, implying that this year's tests must be badly flawed and damaging for children and teachers, and yet was unable to make this year's tests voluntary. In the light of the arrangements that he is making for next year, which we admit show a considerable improvement in his attitude, does he intend not to bring any pressure on local education authorities, head teachers and governors in schools where teachers decide not to carry out the tests this year?
Mr. Patten: I have only two things to say to the hon. Gentleman. First, the Government have listened to the views of teachers and others, which is why, several weeks ago, I set up the Dearing review. Secondly, I have carefully considered early-day motion 1988 standing in the name of the hon. Gentleman and some of his hon. Friends:
"that children should be assessed but not given National Curriculum tests at seven".
That shows what the Labour party is concerned about.

Points of Order
4.10 pm
Mr. Nicholas Brown: On a point of order, Madam Speaker. Can it be in order for the Ministry of Defence to make a major procurement announcement by letter and press release without informing the House of Commons first? The Minister of State for Defence Procurement has announced his decision on the landing platform helicopter carrier. He has announced that the order has gone to Kvaerner and Barrow in Furness, which has condemned Swan Hunter on Tyneside to closure with the loss of some 6,000 jobs. That is of enormous importance to the people of Tyneside and, I respectfully put it to you, Madam Speaker, it should be raised on the Floor of the House.
Mr. Stephen Byers: Further to that point of order, Madam Speaker. Shipbuilding has been carried out on the Tyne for centuries, yet we have had an announcement this afternoon that could deny shipbuilding on Tyneside a future. Is it right that a statement of such overwhelming importance to my constituents and thousands of workers on Tyneside can be slipped out without the House having the opportunity to question the Minister responsible? Is that an appropriate way for the Government to conduct their business?
Madam Speaker: I understand that the text of an answer to a question on this issue is already available to hon. Members. However, perhaps the hon. Gentleman will wish to make a submission to me in the usual way in time for tomorrow.

Water (Domestic Disconnections)
4.11 pm
Mrs. Helen Jackson: I beg to move,
That leave be given to bring in a Bill to amend the Water Industry Act 1991 so as to remove the powers of water undertakers to disconnect residential premises in cases of non-payment of charges; to constrain the installation of pre-payment devices for the supply of water; and for connected purposes.
This is a simple Bill but one which affects the lives of every one of us. Human life on this planet is made possible by the abundance of oxygen in the air and water in the atmosphere. We share that water with all other plant and animal life. It is part of a natural cycle. From our first cup of tea in the morning it passes through us and washes over us out of the tap and down the plug hole. It rains on the fields and evaporates back into the atmosphere and the clouds.
All major legal systems of ancient and modern times have adopted the principle that there can be no ownership of running water; it has to be shared as a genuinely common asset It therefore cannot be right that a water company, contracted only to clean and deliver this asset, can say, "This bit of water is ours. You have not paid for it, so we shall not let you have any."
Thankfully, in Britain many key services are still available to all, withdrawal of which is not used as a threat for non-payment. We do not say that people cannot call an ambulance or the police, send their children to school or even have their dustbins emptied if they are late paying their income tax or rates. Water should take its place alongside those core services, which are basic to our quality of life. This Bill does just that.
Action needs to be taken urgently, because the scale of water disconnections is startling. From a figure of 7,600 in 1990–91, it has leapt to 21,300 last year. Unexpectedly, Ofwat has chosen today to release this year's figures. They show a welcome reduction of 12 per cent., to 18,600. But that still means that, for every working day last year, 70 homes in this country were, in effect, rendered unfit for human habitation, according to the Housing Act 1985.
The Act is absolutely clear: section 604 says that a dwelling house is fit for habitation unless it fails to meet one or more requirements, one of which is that it has an adequate piped supply of wholesome water. Each disconnection leaves a premises unsafe as a place to work according to the Factories Act 1961 and the Offices, Shops and Railway Premises Act 1963. For 2·5 million people, however, their main place of paid work is the home, not to mention the millions more who toil away every day at the kitchen sink.
Every disconnection also renders a house an unfit place in which to care for children or for old people, according to the care regulations set out in the Children Act 1989 and the Registered Homes Act 1984. We should also remember that the most common location of accidents that require hospital treatment is the home.
I am not suggesting that the process of delivery of adequate supplies of clean, pure water should not be paid for. It should be regarded as a valuable resource to be carefully used.
My hon. Friend the Member for Birkenhead (Mr. Field) asked a question about disconnections on 8 March, and the Government made a distinction between "can't

663
payers" and "won't payers". They said that they offer safeguards against disconnection for those who cannot pay, and presented the vision of victims of water disconnection being obstinate, middle-class citizens with a couple of cars in the drive and sprinklers on the lawn, who wilfully refused to pay the water companies their reasonable dues. It is not like that.
Evidence around the country reveals that the victims of disconnection are people with other debts as well, who are often on income support. Yes, they pay up when faced with the nightmare of being without water, but they do so simply by getting further into debt with someone else.
There is no evidence that the threat of disconnection is what persuades people to pay their water rates. The number of unpaid bills was lower when disconnection was not the practice and bills were paid, along with the rates, on a property value basis. In Scotland, where it is illegal to disconnect water supplies, the courts are used as the final solution. That system works well.
The Government, through the regulator Ofwat, should give fresh consideration to introducing a simplified charging system that makes use of council tax banding. They should work with the Benefits Agency and the local authorities to produce easier payment schemes. That would be a more effective means of reducing non-payment.
It is for that reason that the Bill has received widespread help and backing from national consumer associations, the citizens advice bureaux, local authorities, the Association of Metropolitan Authorities, housing organisations including Shelter, the Institute of Housing, the House-Builders Federation and the National Federation of Housing Associations, architects, public health officers and the Institute of Environmental Health Officers.
Those health officers have offered their backing out of a real concern for public health. I welcome the fact that, today, the chief medical officer has recognised that concern and has set up a small working group to consider the potential problems that water disconnections might cause.
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I should like to quote from the environmental health officer of Canterbury city council—it is not a Labour authority, but we did very well, thank you, in the county elections on Thursday—who has written a report recommending a statutory ban on the disconnection of domestic dwellings. He states:
"The public health movement began in the last century and its major thrust at that time was to control epidemics of infectious disease … Our homes are all designed to make hygiene a matter of normal routine; we all expect an inside WC, a bath, wash hand basin … As soon as the water supply is cut off, hygiene becomes virtually impossible and the resulting 'insanitary' conditions can easily and quickly facilitate the growth of bacteria which cause disease".
We cannot take our public health for granted. At a time when the increase in notifications of water-borne diseases, such as dysentery, is causing great concern, Parliament could do one small thing to help by approving the Bill.
It is part of the Government's role to set and oversee standards relating to the quality of our lives. They must take the responsibility, along with Ofwat, to act urgently to reduce the number of water disconnections to domestic dwellings. But I say that even one disconnection is one too many and cannot be condoned. The practice must cease altogether.
I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Helen Jackson, Mr. Richard Burden, Mrs. Elizabeth Peacock, Ms Jean Corston, Mr. Chris Smith, Mr. John McFall, Mrs. Anne Campbell, Mr. Paul Tyler, Mr. Bill Michie, Mr. Brian Wilson, Mr. Rhodri Morgan and Mr. Malcolm Chisholm.

WATER (DOMESTIC DISCONNECTIONS)
Mrs. Helen Jackson accordingly presented a Bill to amend the Water Industry Act 1991 so as to remove the powers of water undertakers to disconnect residential premises in cases of non-payment of charges; to constrain the installation of pre-payment devices for the supply of water; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 14 May, and to be printed. [Bill 194.]
Orders of the Day

  Finance (No. 2) Bill
  Considered in Committee [Progress, 22 April]
  [MR. GEOFFREY LOFTHOUSE in the Chair]

  Finance (No. 2) Bill
    Clause 183

      ABOLITION OF PRT FOR OIL FIELDS WITH DEVELOPMENT CONSENTS ON OR AFTER 16TH MARCH 1993
      4.21 pm
      Mr. Alistair Darling: I beg to move amendment No. 21, page 137, line 32, at end insert—
      '(aa) for which notice has been served that this is a non taxable field under Schedule 1 to the Principal Act:
      and'.
      The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse): With this, it will be convenient also to discuss the following amendments:
      No. 22, page 137, line 32, at end insert—
      '(aaa) for which no determination under Schedule 1 to the Principal Act has been made either in whole or in part as a non taxable field and'.
      No. 45, page 137, line 34, leave out '16th March 1993' and insert
      'such day as the Secretary of State may appoint by order, which shall be made by Statutory Instrument and shall be laid before and approved by the House of Commons'.
      No. 24, page 137, line 35, leave out subsection (b).
      No. 40, page 137, line 36, at end insert
      'or—

      (c) one in which in whole or in part, a commitment to a programme of Exploration and Appraisal drilling was undertaken under the terms of a licence agreement and approved by the Secretary or State before that date, where the field participants elect to so classify the oil field and to accept a diminishing percentage of allowable expenditure on exploration and appraisal to be offset against PRT and a ceiling on the amount allowed for each company as allowable expenditure for PRT relief; the percentage, the timescale and the ceiling to be determined by the Secretary of State and approved by the affirmative resolution of each House of Parliament.'.

      No. 25, page 137, line 39, leave out subsection (2).
      No. 42, page 137, line 41, leave out '16th March 1993'
      and insert
      'the day appointed by the Secretary of State in subsection (1)(a) above'.
      No. 43, page 138, line 1, leave out '16th March 1993' and insert
      'the day appointed by the Secretary of State in subsection (1)(a) above'.
      No. 28, page 138, line 11, leave out subsection (b).
      No. 35, line 138, line 29, leave out subsection (e).
      No. 29, page 138, line 35, leave out subsection (6).
      No. 44, page 138, line 36, leave out '16th March 1993' and insert
      'the day appointed by the Secretary of State in subsection (1)(a) above'.
      No. 31, page 138, line 42, leave out subsection (7).
      No. 32, page 138, line 44, leave out 'permanent' and
      insert 'any'.
      No. 33, page 139, line 1, leave out paragraph (b).
      No. 34, page 139, leave out lines 3 to 5.
      Mr. Darling: The amendments concern the Government's proposals for the taxation of North sea oil and gas. Our amendments are designed to delay, or to provide for phasing in, the Government's proposals. We oppose the principle of the proposals for reasons that I shall set out, but the amendments would allow the Government to delay and, therefore, provide some transitional protection if the fiscal regime were to change so that petroleum revenue tax, both the tax and its allowances, was abandoned. The remaining and consequential clauses in this part of the Bill also have far-reaching effects and we will return to them later in Committee.
      However, the amendments are also designed to draw the Government on what exactly is their strategy for oil taxation and energy policy—if they have one—and what calculations were taken into account when the Chancellor made his proposals. It should be illuminating not only for the Committee and the industry but, I suspect, for the Department of Trade and Industry and the Scottish Office, as the Treasury proposals seem to have taken them completely by surprise.
      We should remind ourselves of the importance of North sea oil to the country. Without it, the country would be bankrupt. So far, 11 billion barrels have been recovered, 7 million are under production or development and a further 7·5 million are in potential developments that are known about. It is also estimated that between 4 billion and 25 billion barrels of North sea oil and gas have yet to he discovered, some of it in very difficult conditions. It is further estimated that we have between 15 and 50 years of self-sufficiency, again an important matter, and the position with regard to gas is similar, with between 20 and 50 years of self-sufficiency.
      These matters are crucial when assessing the role of taxation in our overall energy strategy so that we can maximise our exploitation of this natural resource, not least because of the United Kingdom's severe balance of payments problem. We should also remember that this issue is of national importance. United Kingdom continental shelf sales in 1992 amounted to £7·7 billion—in 1984 they had been £20 billion. In 1992, they contributed 1·2 per cent. of GNP and the annual investment of £5 billion to £6 billion represents 25 per cent. of manufacturing capacity—another formidable statistic.
      It is estimated that the Government's proposals will mean that manufacturing investment in the North sea will fall between £1 billion and £2 billion and it is further estimated that there will be a loss of tax revenue of between £2 billion and £4 billion over the next five years and possibly £6 billion over a 10-year period. There is no doubt that there will be a reduction in activity in the North sea.
      The Ernst and Young survey of the industry is illuminating. It found that all respondents expect the number of wells drilled in the United Kingdom sector to decrease. A clear majority of those surveyed said that the attractiveness of the United Kingdom for future investment had diminished, and exploration was expected to decrease as a result of the Budget. That is the majority of people involved in the North sea and other United Kingdom sectors. Virtually all respondents expected a decline in the number of personnel working in the United Kingdom offshore industry. That is something which no Government can afford to ignore, especially as we have just heard that if the Swan Hunter yard closes another 6,000 people will join the dole queue.

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      The Committee will know that there has been a mixed reaction to the Government's proposals. We oppose them for three reasons. First and most important, there is a substantial risk that companies will take their new-found profits and invest them abroad. There is no guarantee that the profits that the companies now have will be invested in the United Kingdom sector. Secondly, the traumatic disruption caused to the industry by the suddenness of the Chancellor's announcement will mean that between 10,000 and 30,000 jobs will go. Some of those jobs are of great technical and economic importance and many may be lost for ever. Thirdly, there is no evidence that the Government have any strategy for oil and gas, just as we know that they have none for the coal industry.
      We should also bear in mind that much of the future development is likely to be high risk and high cost. Some of the oil finds yet to be explored lie to the west of the Shetlands, in difficult waters. Others are in the Rockall basin, and present formidable challenges in retrieval. Some will be small and will not pay PRT, but, taken together, they could be viable provided that we get the taxation framework right.
      I want to look at the Government's position to assess their case for making the change. Their position is a simple and familiar one—the Chancellor was strapped for cash. He desperately needed every penny that he could get. The Chancellor's strategy is a short-term, some would say very short-term, one. Indeed, some unkind people say that the only Chancellorship that he will have in July is that of the Duchy of Lancaster, in charge of the citizens charter—the ultimate humiliation for any Cabinet member.
      Even on a charitable view, the Chancellor's calculations appear to have spanned three or four years, rather than the three or four-Government period that is the normal time span for the industry. The Government looked at what has happened with PRT over the recent past and their attention was drawn, not unreasonably, to the fact that they have been repaying PRT over the past two or three years. Instead, they should have looked at what has happened over the past 10 years, because the picture is rather different.
      PRT receipts peaked in 1984–85 at about £12 billion because of high production and high oil prices. However, in 1991–92, revenues plummeted to £1 billion, due to the amount of eligible cost being claimed, and a net £200 million of PRT was refunded. I understand that the Minister may be about to tell us that the figure has escalated to £900 million so as to make his proposals more acceptable. However, we know that £200 million was refunded, whereas, in that period, the Government received only £50 million in PRT receipts.
      Why did that happen? The Government have conveniently ignored the fact that between 1988 and 1992 two significant events, which must be considered, occurred. First, the Government and the industry were anxious to stimulate production, incurring high exploration appraisal costs. According to the Government's Brown Book—the annual assessment of what is happening in the North sea—a record number of wells were drilled in 1991–92. It says:
      "During 1992, a total of 131 exploration and appraisal wells were drilled. Although this was 55 fewer than in the previous year, it should be remembered that 1991 saw the third highest level of drilling activity since exploration began
      668
      in 1964. Exploration success has increased to a rate of 25 per cent., with 20 significant offshore discoveries being announced during the year, 4 more than in 1991."
      It is not surprising that the allowances claimable by the industry increased. Equally, it is not surprising that in the past two or three years the picture has not appeared as attractive as it did in the previous 10 years.
      The second factor that we have to consider is that the industry is still reeling from the Piper Alpha disaster which had virtually stopped production. Since then, substantial claims have had to be made in order to implement the Cullen recommendations.
      At a time when the PSBR is forecast to hit £50 billion, abolishing exploration and appraisal relief seems attractive at first sight. The Government's £700 million gain claimed by the Chancellor arises as a result not of increased tax revenues, but of allowances that will not be claimed. The gain is based on exploration and appraisal and that may never take place because of the Government's proposals.
      The £700 million claimed by the Government, by which the Minister will set some store, is disputed by many in the industry and outside. Wood Mackenzie, which has a formidable reputation as a commentator on the industry, suggests that the total might be nearer £115 million. Whatever it is, and even if we split the difference between the Government and Wood Mackenzie, the gain to the Government has to be set off against the cost of losing jobs in the industry. If the total is anything like 20,000, the Government have a formidable loss, not just in tax revenues forgone—most of those working in the industry are well paid—but in the cost of maintaining them on the dole.
      The Government ought to look at the PRT for the past 10 years. They must bear in mind that much of the future North sea investment will be in technically difficult areas. Production is set to rise in the middle of the decade, but many future discoveries will be in difficult areas.
      Mr. Tim Smith: Does the hon. Gentleman agree that the principal object of any tax is to raise revenue to pay for public services? What does he think the revenue would have been from the tax had the Government not proposed the changes that we are discussing this afternoon?
      Mr. Darling: It is clearly difficult to predict the future rate of PRT because we do not know what will be discovered. Clearly, even with all the allowances, if oilfields do not pay PRT because it does not fall to be paid, it will be difficult to make projections of how much will be paid.
      If the whole PRT regime is abandoned, first the scope for the Government levying a tax on large profits is gone, and, secondly, the allowances that are available under the PRT regime are no longer available which is a discouragement to companies to consider potentially large fields in difficult areas, as they will have to meet the entire cost of exploration and appraisal work, while at the moment they can claim substantial set-off.
      The PRT regime provides the taxpayer with a potential gain, depending on what is found and a number of other factors, but it also provides a useful framework to ensure that development continues.
      The hon. Gentleman raised a fundamental question which I shall address in a moment, but first I shall give way to the hon. Member for Gordon (Mr. Bruce).
      Mr. Malcolm Bruce: Is not the problem that the Government have removed their previous achievement of a stable regime in the North sea? The hon. Gentleman is making a reasonable point. Abolishing PRT removes the automatic regulator if the price goes up. No oil company in the world believes that the Government would not change the tax regime without consultation just as quickly and just as negatively as they have this time.
      Mr. Darling: The hon. Gentleman makes two important points. First, everyone to whom I have spoken in the oil industry, including those who have said publicly that they were in favour of the Government's proposals, freely admits that if the North sea sector started making large profits, in the middle of the decade for example, no Government of whatever colour would stand back and forgo the opportunity to raise money if the alternative was, for example, extending VAT to children's clothes or food or something else dear to the hearts of Conservative Members, such as raising income tax or taxation generally.
      The hon. Gentleman's second point is equally important. The PRT regime was developed during the Conservative Government of 1970–74. It was implemented by the Labour Government in 1975 and it has been maintained, by and large, with cross-party support—although certainly with many adjustments—between then and the present time. It was then suddenly changed, without warning even to the Government's main energy Department, if one can call the Department of Trade and Industry such a thing—I am pleased to note that the Minister for Energy has at last turned up to listen to the debate—which is a major departure from normal practice.
      I do not argue that the Government should consult every time they make tax changes—for obvious reasons—but when one considers the importance of the North sea and the United Kingdom continental shelf to the country's economy, it seems madness for the Government to embark on a course of action that could jeopardise the future of the North sea for this country.
      The hon. Member for Beaconsfield (Mr. Smith) raised an important matter. There is a legitimate public debate about whether the public ought to subsidise, encourage or shield companies from the risk of exploration. I t is a legitimate debate, but the Government have not yet joined it. There is an argument that companies should shoulder the whole risk themselves; equally, there is an argument that we should not throw away a tax regime that provides a subsidy—a shield, if you like—for the risks. It is important that the Government look after the United Kingdom's strategic interests in ensuring that we maximise the natural resource that we have in the United Kingdom continental shelf sector for as long as possible.
      There is no point in denying that the changes will prolong the life of some existing fields. The Government have a point on that. There is equally no doubt that some incremental development around fields is becoming more attractive—there have been announcements in the past couple of days saying just that—but when one considers the effect of abolishing cross-field allowance and the change to the tariff receipt regime, it is by no means clear that incremental development will be as attractive.
      In any event, in case the Minister is tempted to pray in aid the BP announcement yesterday and the Shell announcement about a month ago, I should mention that
      670
      both developments were planned some time ago. Oil companies cannot announce major developments the day after the Chancellor has made an announcement.
      The Financial Secretary to the Treasury (Mr. Stephen Dorrell): Is the hon. Gentleman suggesting that Dr. Gibson-Smith, the BP exploration chief executive, was telling an untruth when he said yesterday that the new BP developments were
      "made more likely as a consequence of the Budget changes to Petroleum Revenue tax"?
      Those are not my words, but the words of the man in charge of exploration at BP.
      Mr. Darling: Of course I am not suggesting that he is telling an untruth. What the gentleman said is that these developments became more likely. Is the Minister suggesting that in Shell people suddenly got up one morning and said, "Right, let's go ahead with this development"? They were considering it for some time and looked at all the sums. Then there was the fiscal change, and they said, "Yes, this is a great advantage." To say that had it not been for the Government changes nothing would have happened would be absolute nonsense. What the representatives of Shell were saying is entirely consistent.
      Mr. Dorrell: I think the hon. Gentleman said that Shell was thinking about it before the Budget, that there were fiscal changes and that, following the fiscal changes, Shell decided to go ahead with it. Is that the hon. Gentleman's position?
      Mr. Darling: It may surprise the hon. Gentleman to learn that, unlike some of his colleagues, I have no direct interests in the oil industry. I was not at the Shell board meeting when these matters were discussed, nor was I privy to its consideration; but it is entirely likely that Shell has been considering this matter for some time. These developments cannot be worked up from scratch. Of course changes are taken into account. I hope that the Minister will concede that other companies would have gone ahead with work that is now less attractive because of the petroleum revenue tax change, which will have a damaging effect.
      I may be wrong, but I think that the Minister for Energy was nodding when I made my preliminary remark that these schemes were not just dreamt up after 16 March. I do not understand the point that the Minister is making. He seems to be making a great deal out of nothing in particular.
      Mr. Alex Salmond: Human nature being what it is, would not it be reasonable to suppose that the companies that will gain large sums of money—we are talking about tens and, perhaps in some cases, hundreds of millions of pounds—from tax changes might believe that they are a good idea?
      Mr. Darling: That is self-evident. I noticed a flurry of announcements yesterday. It is hardly surprising that BP, Shell and other companies are happy about the proposals. As I shall develop shortly, the changes mean that they have the money in their pockets and they will decide where to spend it; we might want to consider the implications of that.
      Mr. Tim Smith: We should not object if they have the money in their pockets and decide where to spend it.
      Mr. Darling: From a sedentary position, the hon. Gentleman makes an interesting point. He claims that we should have no objection if companies have all this money in their pockets and decide where to spend it. He is right up to a point. From the point of view of the oil companies, that argument is overwhelming, but from the point of view of the United Kingdom, the Government and the people, surely we are entitled to ask ourselves whether we want a tax regime that runs a substantial risk of investment being exported to other parts of the world at the expense of a resource which we have in this country. Every Government, of whatever colour, have used the tax regime to maximise the resources available to them. If the hon. Gentleman thinks that that is wrong—possibly he still belongs to the rump of the Conservative party that believes in that system—that is fine, but it is not a view which we take.
      Mr. Robert Hughes: The hon. Member for Beaconsfield (Mr. Smith), who is muttering from a sedentary position, seems to forget that it was the Chancellor who said that the objective of the changes in the PRT was to raise revenue for the Government. It is the hon. Gentleman's Government who are attacking them.
      Mr. Tim Smith: We do not want to tax people.
      Mr. Hughes: He says that they do not want to tax people. The Government are caught on two hooks. On the one hand, they do not want to admit that they are applying the tax; on the other, they are trying to pretend that it is our fault that it is being done.
      Mr. Darling: I agree with my hon. Friend. The hon. Member for Beaconsfield seemed to take the view that it is best to give as much money as possible to the companies, which will decide what to do with it. That is statable case, but there is an overarching, strategic view that the Government have to take on behalf of the people.
      No doubt it would find favour in most parts of the Committee if I said that companies might be encouraged to search for large fields under the new system, whereas they might have been less enthusiastic under the old. Although they are no longer protected from exploration and appraisal costs, the risks might be high, but the gain would be immense. I dare say the Government will seek to argue that.
      The only point that must be made is that when an oil company looks for oil, it does not know what it will find. In many cases, oil companies have gone into areas where they thought the field might be small and have discovered that it was much larger than expected. The argument is that they would not have gone looking in the small field if protection had not been afforded by the PRT regime.
      In an excellent report on the impact of the changes on the Grampian economy published a few days ago, Professor Kemp of Aberdeen university said:
      "For new exploration and development activities the tax system facing investors is simply the corporation tax at 33 per cent. By world standards this is unique for a major petroleum producing province. Unfortunately there is no guarantee that this situation will be permanent and the political risk of further changes must be quite high."
      The oil companies realise that, but it is interesting that Professor Kemp considers that the low tax barrier is unique. I suggest that the reason is that many countries take the view that there must be some fiscal incentive to go into difficult areas and, therefore, keep oil companies
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      operating in a sector over which they have control, but if profits arise on a large scale, the taxpayer must be entitled to a fair share of them.
      There is every prospect that some large oil companies will pocket their windfall gain and reinvest it elsewhere. We must bear in mind that we are in competition with many parts of the world. Substantial oil reserves are known to exist in the CIS, off south America and in the far east. Even in the United States, a high-cost country where profits are equally high, there are reserves as yet unrecovered.
      4.45 pm
      Boardrooms are bound to take a broad view about where it is best to go. The North sea is a high-cost centre. If companies have the cash in hand, they will not have to invest it in the North sea; they can go elsewhere. Therefore, Britain will in effect be subsidising exploration in other parts of the world. To a large extent, the PRT system locked oil companies into the United Kingdom sector. Ultimately we will become an oil importer, but I see no reason to hasten that day.
      The Government will also no doubt argue that oil companies were engaged in a spate of drilling where prospects were poor. However, given that the North sea is a mature field and that many new prospects are in difficult areas, that argument does not hold much strength. The other point that ought to be made is that in 1992 the success rate of drilling was 1:3·6, which is high for the industry.
      I do not believe that the Government's case is proved. There is substantial doubt about the claims. I accept that over the last week, and particularly in the week following the Budget, good news was announced by companies that have prayed in aid the Government's changes, but, taken overall, there is a substantial risk that companies will be tempted to invest their profits in other parts of the world.
      The position of the oil companies has to be covered. The position of the industry rather depends on whom one speaks to. Naturally, BP is laughing all the way to the bank, if not to other parts of the world. An examination of its most recent annual report is illuminating. When it deals with potential profit centres it says, among other things:
      "In the Azerbaijani sector of the Caspian sea we are part of a consortium which has a 20 per cent. interest in the Azeri field where about 1·8 billion barrels of recoverable oil are thought to exist."
      Off Vietnam, it has started an extensive exploration drilling programme; in South Africa, it is investing in a refinery, and it is expanding in eastern Europe. There is nothing wrong with that.
      It is good to see a British company doing all that and I would not want to discourage it, but hitherto there has been an incentive for many companies to stay in the North sea and to carry on drilling in sometimes difficult areas. If a company has the money in hand and has a choice between going to a high-risk, high-cost area or to an area where costs and risks are less, it might choose the cheaper option. I would not argue that one should seek to hold oil companies in an area that they would not want to be in. I do not think that anyone would argue that in regard to the North sea, but, again, I stress my doubt about our throwing away the incentive that we have.
      It is not surprising that BP is pleased. Like the Government, it was strapped for cash last year and its tax bill has been cut by about £140 million. Nor is it surprising

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      that it has been keen to encourage its colleagues in the oil industry not to complain, and to join the Government in praising the Chancellor's announcement. Shell has also joined forces with BP in announcing developments. Those developments were not planned recently.
      While some companies say that new investment will be encouraged, others say privately that since 16 March two things have happened which we should consider. First, the fiscal and political stability which they have valued in the North sea regime—a point made by the hon. Member for Gordon—has gone. It was of great importance and should not have been lightly thrown away. Secondly, the traumatic shock caused by the Chancellor's announcement may make many people in boardrooms, often in the United States with no direct interest in this country, look long and hard at the future of the North sea and decide that future investment lies elsewhere. As I have said, we are in competition with other parts of the world and the Chancellor may have provided the jolt which will provoke some companies to go elsewhere. Equally, for some oil companies the Government's proposals are disastrous, depending on how they were placed.
      What about the supply industry? Exploration and appraisal work will decrease. In some cases, exploration will cost about four times more than in the past. Every oil company has said that exploration work will reduce. Indeed, already supply companies in the north-east of Scotland and other parts of the United Kingdom have started to indicate to their work forces that they will be laid off. More than that, many companies entered into obligations with the Government based on an existing tax regime which has been changed.
      I am glad that we have on the Treasury Bench both the Financial Secretary to the Treasury and the Minister for Energy. Perhaps they will share with us the difference of opinion that is apparent between the Treasury and the Department of Trade and Industry. Press reports suggest that the DTI regards some of the obligations that companies have entered into as being legally binding, while the Treasury does not. Which is correct? It is crucial for them to say which obligations they regard as legally binding. Oil companies may test the point, but it would be useful to know Government thinking on the subject.
      It is also worth bearing in mind that there were changes not only to the petroleum revenue tax but to the cross-field allowance regime, which has made any incremental developments attractive to the tariff receipt allowance, which discouraged the profusion of pipes across the North sea and which, as a result of its obligation, may skew the market—for example, in respect of offshore loading—in a way that is not altogether desirable.
      The position of the United Kingdom in terms of the taxpayer and the economy should be at the forefront of the Government's consideration. The Government are proposing to abandon what is essentially a profits tax. Moreover, as I have said, they are abandoning a mechanism for locking oil companies into the North sea sector, which is a high-risk and difficult area. Indeed, we may have provided an incentive for them to go elsewhere, so our fundamental concern must be about where the money will be spent.
      Will the companies keep the new profits, invest them in the North sea or take them elsewhere? We are also giving up future tax revenues—some say, on a conservative estimate, of up to £6 billion over the next 10 years. The
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      balance of payments—an issue of great concern, given the fact that it is in desperate straits at the height of a recession—will not be helped if we start importing oil or gas.
      The effect on jobs must come into our consideration of the whole issue. The Government—it is not usual for them to concede that anything they do costs jobs—have on this occasion conceded that up to 10,000 jobs will go. In his study, Professor Kemp says that between 7,000 and 11,000 jobs may go in the United Kingdom. Others have put the estimate as high as 30,000.
      Considering that it costs £9,000 to keep a person on the dole and that most of the people about whom we are speaking are well paid, the cost to the Exchequer of losing those jobs would, I believe, exceed the savings likely to occur as a result of scrapping the petroleum revenue tax regime.
      It is nonsense for the Treasury to look at the issue from one aspect. It considers that it will save perhaps £700 million by scrapping PRT. On the other hand, the Department of Social Security will have to pick up the tab, and it is clear—north American experience, where a similar state of affairs existed a few years ago, bears this out—that once those people have been lost, their valuable skills will not easily be recovered.
      We are speaking not simply of people working on North sea oil rigs. There is a great deal of onshore activity involving geologists, physicists and people in the support industries, all of whom are highly skilled and highly paid and who contribute substantially to the nation's economy. We run the risk of losing some of them from the industry, while others will go abroad and will be lost to the country for ever. There is the additional problem that some companies may be tempted not just to cut back on exploration appraisal but to cut down on safety.
      Most people accept that at some point there must be a change in the taxation regime. The North sea oil sector is mature and it has been obvious that the PRT regime must be adjusted and perhaps one day brought to an end. But this is not the time to do that, for the reasons I have given. With oil prices expected to remain low for 10 years or so, there is a limit to how much can be taken from what is essentially a windfall profits tax.
      The Government should bear five points in mind. First, the PRT system should not be scrapped now. There is scope for adjusting the rate of the tax and the rate of allowances that can be claimed. There is a case for capping the allowances. All such moves would be possible under our amendment, and we shall develop those themes when we debate later clauses. The amendment would allow the phasing in of transitional relief, and if the Government are not prepared to concede the principle, they should accept that transitional relief would be of great benefit to the industry, onshore and offshore.
      Secondly, the Government might consider abolishing the royalties that still exist for pre-1983 fields. That might provide assistance. Thirdly, the issue of speculative drilling could be dealt with through the licensing regime because it is for the Government to decide where companies go, because they grant the licences.
      Fourthly, the way in which exploration and appraisal allowances are granted could be adjusted. For example, allowances could be given on the basis of part now and part after five years or so. The Government could take all sorts of measures to make the allowances more attractive to companies, while balancing those measures with the legitimate interest of the Treasury in recovering funds.

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      Fifthly, we could examine the cross-field and tariff allowance scheme. Sixthly, as I said, if the Government are determined to abandon PRT at this stage—although they would be wrong to do so—they must look carefully at the question of transitional relief, and our amendment would provide for that.
      There is no doubt that the Government announcement has caused a major dramatic disruption to North sea activity. Transitional relief is a subject to which we shall return when we debate later clauses, perhaps after the Government have had a chance to reflect on what has been said. The Chancellor's record of forecasting and making financial judgments is appalling. There is no evidence to suggest that his knowledge of geology is any better or that his knowledge of what is happening in the North sea can be relied on.
      North sea oil and gas are among this country's few natural resources that remain to be exploited. We are in competition with the rest of the world. Other countries are desperate for industry and are willing to provide incentives to get oil companies to go there, especially for the economic gains that can accrue.
      Hon. Members in all parts of the Committee, and the Government in particular, must reflect on those issues before throwing away a regime which, by all-party consent, has served the nation well. We have an opportunity tonight to ask the Government to take stock, to coin a phrase. It would be a tragedy if North sea oil were to become another casualty of the Chancellor's poor judgment.
      Mr. Tim Smith: The changes proposed by the Government have my full support. That applies to their substance and timing. My hon. Friends should not be in the slightest surprised that Labour Members are attached to an 83 per cent. tax rate, since that was the top rate of income tax in 1979. They like high tax rates. They like taking money out of people's pockets and spending it on their behalf. That applies as much to oil companies as to individuals.
      That was the basis of the case made by the hon. Member for Edinburgh, Central (Mr. Darling), who believes that the Government are in a better position than the oil companies to make investment decisions. I take the opposite view. I believe in low business taxes because with low taxes—the standard corporation tax rate has been reduced from 52 to 33 per cent. in the last 14 years—investment is attracted to the United Kingdom. Indeed, that is why there has been an increase in inward investment. That applies as much to North sea oil as to business generally. Low business taxes are good. Not surprisingly, Opposition Members such as the hon. Member for Ashfield (Mr. Hoon) support high business taxes.
      Mr. Geoffrey Hoon: I am curious about the hon. Gentleman's introductory remarks. He criticises Opposition Members for apparently wishing to raise taxes. Is he not aware that the measure that he is defending will have the effect of raising taxes?
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      Mr. Smith: I shall come to that. It will raise more tax, but the hon. Gentleman will be aware that when the Conservatives have reduced the rate of income tax, the yield has risen. We do not find that surprising because high
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      taxes are a disincentive to people to produce more income. I shall establish during my remarks that, as a result of the changes that we propose, more income and more revenue will be generated.
      I remind the Committee that we are discussing a revenue tax and not a profits tax, although the hon. Member for Edinburgh, Central continually referred to the latter. More revenue will be generated from the North sea, with the result that the yield from petroleum revenue tax will rise. The large oil companies, which the hon. Gentleman went out of his way to attack, will invest more in existing fields.
      Not surprisingly, the oil companies hold on their shelves a number of prospective development projects whose economic viability turns on the oil price at a particular time and on the fiscal regime at that time. We were told by the hon. Member for Edinburgh, Central that the oil price is not likely to rise over the next 10 years—it is nice to have his forecast. If that is correct, these projects would have continued not to be economically viable, but because of the Budget changes they will now be viable and the revenue from existing fields in which Shell, BP and Esso have already invested heavily will rise further—as will the revenue from PRT.
      The hon. Gentleman says that the result of all this will be that the profits are invested abroad. I believe that much of the money will be invested in new production in existing fields where there is a great deal of marginal capacity yet to be exploited—rather more than there is in the prospective fields on the edge of the North sea, which are often in much deeper water and it would cost much more to extract the oil from them. I concede that they may hold reserves, but the cost of extracting those reserves would be much higher. It makes a great deal of sense, therefore, to go for the reserves in the existing fields, from which the oil can be extracted with relative ease.
      We need the change of regime to respond to changes in the North sea. The hon. Member for Edinburgh, Central says that we have had a stable regime for many years. In the next breath he claims that the North sea is now mature and concedes that changes must be made. The only issue at stake is one of timing. I think that this is the right time while he does not.
      Now is the right time, too, because there has been a large fall in the price of oil. Of course it was right, 10 years ago when the oil price was much higher in real terms, to have a high marginal rate of PRT, but times change. In respect both of the greatly reduced oil price and of what the hon. Gentleman describes as the maturity of the North sea, the change is timely—
      Mr. Salmond: Let us imagine that the oil price does not go along with the forecast given by the hon. Member for Edinburgh, Central (Mr. Darling) and sharply increases in the near future. Does the hon. Gentleman think it likely that any Government, regardless of political colour, would leave in place only corporation tax, faced with large windfall profits to be made from the North sea? Does he think it likely that any Government, regardless of political colour, would leave in place only corporation tax, faced with large windfall profits to be made from the North sea? If he thinks it likely, he will find that few people in the industry will believe it—given the circumstances of the early 1980s, when a Government headed by Baroness Thatcher increased the taxation regime left them by the right hon. Member for Chesterfield (Mr. Benn).
      Mr. Smith: The hon. Gentleman knows very well that all Governments claim to be putting in place stable tax regimes, but they all modify them according to changed circumstances, such as I am describing. The oil price has dropped, so it makes sense to change the regime in line with what the Treasury proposes.
      Perhaps the best reason of all—I think that the hon. Member for Edinburgh, Central just about conceded it—is that we raise taxes to pay for public services, even though no one likes paying them. It is nonsensical to keep a tax that involves either no yield, as it did last year, or a repayment of tax to taxpayers, as it did the year before. It is not sensible to continue with such a regime for long and it must be right to change it so that the tax is abolished or at least yields some revenue for the Treasury.
      Moreover, the higher the rate of tax and the higher the allowances, the more economic distortions result. It is good if we can bring tax rates down, because it is much better for industry and commerce generally if investment decisions are made on their merits—on the likely yield from the investment—and not purely for tax reasons. I fear that in the North sea recently exploration companies have been making investment decisions principally for tax reasons, and that cannot be right.
      What we need and will now have is a broader tax base, with lower rates and lower allowances. The ultimate example of that is the abolition of the tax altogether, which is what will happen with the new fields.
      Of course there will be a change in the balance in favour of production and against exploration, but that makes a great deal of sense in the circumstances.
      I understand the anxieties about the transitional arrangement. Such arrangement are always of critical importance as we move from one tax regime to another. The difficulty with the proposals in this respect is that a considerable cost would be involved, and it could be dealt with, as I think the amendments recognise, only by increasing the PRT rate. If one believes that a tax change is right and will benefit the United Kingdom economy and the North sea oil sector, it must be right to make this tax change straight away, which is why I support both the substance and the timing of the changes.
      Mr. Robert Hughes: The debates on this subject so far took place before the events of last Thursday—the Government debacle in the county council elections in England and the disastrous result for the Tory candidate in Newbury. Since then, we understand that the order has gone out from No. 10 Downing street that Ministers should be more caring and more listening. We wait to see whether the message has got through to the Financial Secretary.
      Since the Second Reading debate, the discussion has moved on and some inconsistencies in the Government's approach have appeared. Winding up on Second Reading, the Financial Secretary admitted that there had been no discussions with the oil industry. He defended that in the following terms:
      "I will comment on the proposition that there should be consultation with the industry. It seems to be a rather odd proposition that, before a Government consider raising tax, they must engage in consultations to give notice of their intentions so that the industry can bring forward its activity to take advantage of the tax system that we are seeking to remove."—[Official Report, 26 April 1993; Vol. 223, c. 318.]
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      He still refused to say what discussions had taken place with the DTI or the Scottish Office, or what advice he had received.
      On the face of it, that would seem a reasonable defence. However, the Minister took a different tack when giving an interview last week to Robin Chrystal for the Press and Journal (Aberdeen). If the article is incorrect, I am sure that the hon. Gentleman will tell me so:
      "In a bullish mood the Minister chided offshore companies which have complained about the change. 'They should have seen it coming,' he said."
      Later, the Minister all but ruled out any change,
      "as he revealed that civil servants had been working on reforming the PTR regime for the last three and a half years."
      In my innocence, I believed what the Financial Secretary said in the earlier debate, thinking that he had got his proposals wrong because he had not had time to think them through or to work out their effects on sections of the industry. Now we are told that the changes have been worked on for three and a half years.
      It certainly seems to be implied that the industry was party to the discussions. The Minister seems to be shaking his head, but if the industry was not party to the discussions, how could it have foreseen the changes?
      Mr. Dorrell: My point was that this is a sophisticated industry which employs a large number of sophisticated tax advisers. One does not need to be a rocket scientist to work out that a tax system costing the Exchequer money is not one that will last for much longer.
      Mr. Hughes: The Minister seems to be saying that the oil companies should have looked into their crystal ball and seen which way the wind was blowing and that it was all their fault that they were caught out, not the Government's.
      The Minister's first proposition to the House was nearer the truth—that the possibility of the changes was kept from the industry to avoid its taking advantage of the information. The hon. Gentleman cannot have it both ways. Either he kept it quiet, or the industry had a good idea what was going on. According to the article, the industry knew all about this, so it was the industry's own fault. What he still has not told us is what discussions he had with the Department of Trade and Industry over the past three and a half years. He himself has indicated that these changes were under discussion. I am sorry that the Minister for Energy has left the Chamber, as his body language, if not his verbal language, might have given a clue as to what discussions had taken place and what advice had been given to the industry. In any event, the Minister cannot claim that he acted out of ignorance, as he certainly had ample opportunity to get things right.
      All else having failed, the Financial Secretary's fall-back position is that there may be up to 10,000 job losses but that such an estimate is based on a wildly improbable scenario. Well, it is the Treasury's own scenario—and the Treasury is not given to putting forward such scenarios. I accept that we must all be careful about crying wolf. We are indebted to Grampian regional council for commissioning a study by Professor Kemp of Aberdeen university petroleum and economics consultancy. I appreciate that both Ministers took time out of a busy day to meet a deputation from the north-east of Scotland, including the convenor of Grampian regional council Dr. Middleton, the Lord Provost of the city of

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      Aberdeen James Wyness, the chairman of Aberdeen chamber of commerce Robin Pollock, and representatives of all political parties.
      Mr. Ernie Ross: Including the Tories.
      Mr. Hughes: Yes, the Conservatives were certainly there.
      In this regard, there appears to be near-unanimity in the north-east of Scotland—a very rare occurrence. I understand that the hon. Member for Kincardine and Deeside (Mr. Kynoch) made a mysterious appearance at the meeting this morning. I do not know what he said, but perhaps at some stage he and the hon. Member for Aberdeen, South (Mr. Robertson) will tell us not just what they think about the situation but also what they intend to do about it. If last night's voting is anything to go by, they will back the Government all the way.
      The Financial Secretary has seen a copy of the report to which I have referred and will know that Professor Kemp and his unit are very well respected in the oil industry. These are not people who have suddenly come out of the woodwork; they have studied the industry for years, and their conclusions must be taken very seriously. I do not have the time this evening to go into the detail or the methodology of the report. I shall say simply that it is well reasoned, well argued and well researched. It deals with the effects on each sector of the industry and does not concern itself simply with the downside. The two conclusions are very sober and are certainly not exaggerated.
      It is conceded that some parts of the industry will do well. Those with fields in production will have an incentive to prolong the active life of their reserves. Professor Kemp's guestimate—he admits that that is what it is—is that, as a result of the changes, about 1,000 jobs may be retained or created. Others in the industry argue that the incentive to prolong the life of the fields is there anyway. There is great financial advantage to be obtained from keeping the fields going. Sooner or later, when production is exhausted, the rehabilitation costs of removing structures and restoring sub-sea conditions will be massive. In any event, extraction policy will not be abandoned for the sake of minor tax changes; the real incentive is avoidance or deferral of rehabilitation costs.
      Everyone accepts that there is a downside. I refer to the prospects for the exploration and appraisal of new fields.
      Mr. Tim Smith: Is it true that Professor Kemp's analysis considers only prospects involving quantities under 50 million barrels?
      Mr. Hughes: I do not think that that is the case. Professors Kemp's report presents a study of fields of that size and smaller fields. This is precisely the area in which the major damage will be done. If there were a sudden huge oil discovery—twice or three times the size of the biggest field, larger than Forties or any other—the tax changes would have no effect in this regard except that, as we know perfectly well, such a find would result in changes in tax policy.
      5.15 pm
      I do not know whether it is fashionable or allowable to quote Aneurin Bevan. He said, "Why look in the crystal ball when you can read the book?" Anyone who reads the book can see quite clearly that there has already been a
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      downturn in exploration. Professor Kemp argues that that trend will be accelerated. Using the very modest multiplier of 1·25, a reduction of 33 in the number of wells drilled would result in 8,500 job losses—7,500, allowing for the 1,000 which might be saved—and a reduction of 50 in the number off wells drilled would result in 12,250 job losses or 11,250 net. Studies carried out by Aberdeen university over many years have shown that a multiplier as high as 1·78 could be used quite safely, without risk of exaggeration. That would result in the loss of 10,780 jobs or 9,780 net—or 17,020—16,020 net. At a conservative estimate, Grampian region would lose 4,000 to 6,000 jobs—a very serious situation on the basis of either forecast, and one that ought not to be discounted.
      The message is quite clear: if the Government are not willing to change, we must at the very least have transitional relief, with capping, so that the smaller companies derive the greatest benefit and thus avoid the prospect mentioned by, among others, the hon. Member for Beaconsfield (Mr. Smith)—that there will be some sort of distortion of activity. The hon. Gentleman's approach to business is novel. The proposition that people go into the high-risk business of North Sea oil, which involves very large capital costs, on the basis that they will make money from tax relief is preposterous.
      Mr. Tim Smith: The hon. Gentleman has again mentioned the question of economic distortion. Did not Professor Kemp say that it is difficult to defend the fact that, under the present regime, post-tax returns exceed pre-tax returns? Did he not accept that the pre-Budget position was unsatisfactory and was in need of reform?
      Mr. Hughes: If the hon. Gentleman wishes me to go through every page of Professor Kemp's report and argue every detail, we shall be here until well after midnight. The hon. Gentleman is being very selective. I do not think that there is any difference between the parties in the Committee with regard to the fact that the Government faced a need to find money. That is the Government's basic objective—it has nothing to do with the unsatisfactory nature of the system. Having made their decision, the Government naturally looked around for suitable candidates for easy pickings. They took note of the oil industry's negative tax receipts, the pay-back, and ignored the fact that most of the costs that had to be paid back arose after the Piper Alpha incident. They did not work through the way in which smaller companies—the exploration companies in particular—would be hit.
      It is not just Professor Kemp's report which presents these conclusions about the downside of the tax changes. The same message comes from many quarters, one of which is the Association of Service Sector Oil-Related Companies, which represents about 300 companies. Again, I could deal with that body's comments individually, but if I did so very few other hon. Members would be able to take part in the debate.
      Wood Mackenzie—another company which has a great deal of experience in the industry and is very concerned about the changes—says in its report:
      "If, as expected, the United Kingdom exploration and appraisal drilling levels fall sharply, the measures could be bad for the country in the long term, both in terms of balance of payments and the Government's revenue from the North sea."

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      That company has no political affiliation to the Labour party. I should not like to put a political label on Ian Wood.
      Mr. Ernie Ross: Tory.
      Mr. Hughes: My hon. Friend is entitled to his view. I do not want to put anyone off Ian Wood's sagacious comments by saying that he is a Tory. They are good comments. These are serious dangers.
      Professor Kemp points out that many companies may find it difficult to finance and develop export markets. As the downturn in the oil industry comes about—it is bound to come sooner or later—we in the north-east of Scotland do not want to be left with a ghost town. Aberdeen has benefited much from the North sea and so has Grampian, but we have not done so well in terms of cash from the Government to pay for the infrastructure. We do not want to be left with nothing once the industry has gone. We must build up indigenous companies which not only supply the North sea but are involved in the export market.
      Confidence in the North sea is important. My goodness, the Government should know about confidence—they are for ever telling us about confidence, how important it is and how vital it is for the future of Britain that everyone should have confidence in the Government. The Government seem to think that they can destroy the confidence of companies in the North sea and that, when it suits them in two or three years' time, when perhaps they will change the regime again for their own purposes, the companies will simply come back again. The fact is that companies will not come back again once they have gone. They can go elsewhere to a less hostile physical environment and a more stable, congenial or amenable tax regime—and if they go. they will not come back. The Government simply cannot play ducks and drakes with the economy of north-east Scotland or the country at large.
      The Financial Secretary and the Minister for Energy seem to have disappeared. I do not know whether they have rushed out to read the reports again and to consider whether to change their minds. I do not know whether the Chief Secretary to the Treasury has had reports of this morning's meetings, at which all said that they had a good hearing from the Financial Secretary and the Minister for Energy. Perhaps the Chief Secretary is frightened that they listened too well and has sent them packing so that he can take over the debate. We shall have to wait and see.
      I hope that the Government will seriously listen to the representations from all parties, from many sections of the industry and from the whole of commerce. The chamber of commerce is certain that unless the Government are prepared to relent, unless they are prepared to have proper transitional relief, unless they are prepared to stop thinking only of the short term, great damage will be done to the North sea oil industry, to the economy of Grampian and to the country at large.
      Mr. Roger Knapman: I am not concerned about the overall direction of the changes. If I had such doubts, I assure my hon. Friend the Financial Secretary that his excellent speech on Second Reading would have brought them to an end. I have no doubt that my hon. Friend's commitment to a low tax, low allowances regime, which is much simpler to administer and operate, is a perfectly worthy policy which I am happy to support. Nor, despite comments from the Opposition Benches a few
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      moments ago, do I doubt the need to raise extra money from time to time, the need for fiscal prudence and—I hope that this will be the reality—an extra £700 million from the oil industry.
      However, a considerable number of oil companies and—of equal importance, particularly in my constituency—a considerable number of the companies which provide the back-up to exploration, development and production, are concerned about the way in which the changes are likely to be introduced. The proposals represent one of the most fundamental changes to the North sea fiscal regime since the beginning of activity on the continental shelf and certainly the most significant shift in policy for the past decade.
      Therefore, I am sure that my hon. Friend will agree that it is not unreasonable to provide some meaningful transitional arrangements, and that is the purpose of my few brief comments. Phasing in the changes would allow the United Kingdom supplies sector to adjust to the new circumstances and provide a more stable environment for the operating companies to fulfil the commitments made to the Government in good faith when licences were granted, particularly during the 11th and 12th rounds. I cannot believe that it is not possible to come up with a solution which provides a balanced phasing between the reduction in the rate of PRT and the removal of exploration and appraisal relief—this is the crux of the matter—on a fiscally neutral basis.
      I was greatly reassured by my hon. Friend the Financial Secretary on Second Reading. In summing up the debate he recognised the need to avoid unnecessary dislocation and assured the House that the Government would seek ways of doing just that. I think that my hon. Friend will agree that it is crucial that the service sector in particular is given the chance to adapt. An abrupt removal of the ability of companies to offset the cost of exploration and appraisal against profits generated on PRT-paying fields could lead to a reduction in exploration activities.
      Much has also been said in the past few weeks about inefficient exploration by oil companies. Some people seem to believe that their attitude to drilling wells is based on a wing and a prayer, to which is added a huge cushion from the taxpayer. I do not believe that that is so. It is difficult to reconcile that with the comment of my hon. Friend the Minister for Energy that 1992 had the highest success rate ever for exploration drilling in the North sea.
      For those reasons, I urge my hon. Friend to consider seriously the representations that he has received to provide some transitional relief. The precedent is there and it can be done on a fiscally neutral basis. When the changes to the rules governing corporation tax were introduced in 1984, a major element of the Government's package was a progressive phasing out of the allowances over a period of four years. There are many parallels between those 1984 proposals and the current proposals, not least the wish to widen the tax base and reduce the level of allowances. The major difference is the lack of any meaningful transition.
      I hope that proper consideration will be given to allowing companies such as those in my constituency to take their business forward in an orderly and efficient manner, and time for them to adjust is the key. I urge my hon. Friend to propose a solution which prevents the dislocation to which he referred on Second Reading. Failing that, I hope that my hon. Friend is aware of the

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      problems that I have sought to describe and that he will be able to address them at a later stage during the passage of the Bill.
      Mr. Malcolm Bruce: At the end of last year, as a member of the Select Committee on Trade and Industry, I was heavily lobbied by oil and gas companies in the North sea who were concerned that drastic changes might be introduced to the contracts for providing gas for electricity generation. Within the Committee, I successfully resisted the idea that we should break up those contracts and so cause damage and loss of confidence within the industry.
      At that time, interestingly enough, the hon. Member for Aberdeen, South (Mr. Robertson) launched a high-profile campaign on the need to do that. Then, suddenly, the Budget introduced a potentially much more damaging measure, without any warning, consultation or opportunity for the industry to express a view.
      During the past few weeks, the industry has been in a state of confusion and disarray as it has tried to analyse who will be the winners and the losers and the implications. It is the job of the House and the Committee to look not just at the industry but also at the national interest over time. The hon. Member for Stroud (Mr. Knapman) referred to transitional arrangements for previous changes in the oil tax regime and to the reason why those arrangements were introduced.
      5.30 pm
      In 1986, when we suffered the effects of a sharp price downturn in the North sea, I was very active in trying to persuade the Government to introduce tax changes. It is worth reminding the Committee and the Chief Secretary, who showed no interest or attention at the time because it was not an area with which he had previously had contact, that the purpose of the changes was to try to ensure that there was a built-in incentive for companies to invest and to reinvest in the North sea so that there would be a kick-start to activity and to confidence. Those changes were successful. Activity has recovered, and there have been successes over the past couple of years in exploration activity.
      Unfortunately, the Minister for Energy is not here; he has put in only a brief appearance. It is worth reminding the House what he said in the Brown Book this year:
      "Activity offshore continued apace. Drilling activity fell slightly during 1992 but the success rate reached a new high with another 20 discoveries of oil and gas. For the 12th year running, the increase in known reserves has exceeded production. Not only has 1992 seen a further increase in the number of fields, but production too has been above 1991 levels. There has been a record level of investment."
      How is that likely to continue given the proposed changes?
      Exploration activity is at a level that is near the level reached before the downturn of 1986. Following the introduction of the tax measures in 1986, there was a peak of 152 exploration wells drilled in 1990. The figure dropped to 72 wells in 1992. In 1992, there were 41 appraisal wells compared with a low in 1986 of only 40. Development drilling was the one area in which activity was high; the figure was 140 compared with 85.
      The implication of the figures is that the Government are running a real risk of introducing a depression in exploration and appraisal activity when the activity is already in a downturn. The consequences are not hard to
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      see. I urge the Financial Secretary to take on board the point that no hon. Member—not even the Minister for Energy—disputes the one fundamental fact that the changes, if implemented, will lead to an immediate sharp downturn in the drilling industry and to a consequential loss of jobs. That is not a matter for debate; hon. Members on both sides accept that point. The Government must address the issue.
      I have been interested by the contrasting speeches from Back-Bench Conservative Members. The hon. Member for Beaconsfield (Mr. Smith) said that he believed in tax-cutting measures, and that was why he welcomed the changes. The hon. Member for Stroud told us that he favoured the changes because they would raise revenue. The proposals cannot do both. Over the past few weeks, there has been confusion about whether the changes will yield a net increase in revenue.
      As I said in an intervention in the speech by the hon. Member for Edinburgh, Central (Mr. Darling), the Government have done themselves considerable damage in terms of the stability and predictability of the regime operating in the North sea. The Liberal Democrats have never argued against a continual adaptation of the tax regime to meet needs, but we believe that there should be fine tuning, that the regime should be predictable and that it should be introduced by consultation and negotiation. We believe that the implications of changes should be fully understood.
      The Government have proudly boasted in past years that they have created just such a regime, but they have now torn up their credit without any real consideration of the long-term implications. That is why there is a definite case for transitional arrangements, and that is why I shall support amendment No. 21.
      The hon. Member for Banff and Buchan (Mr. Salmond) has tabled a constructive amendment, No. 40, to which I have put my name. It allows some flexibility in the application of the transitional arrangements, which seems to make sense. My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) will be a member of the Standing Committee on the Bill, and he will table amendments on our behalf. I hope that the Government will recognise that they are constructive and workable. They should be considered as a way in which to ensure that changes are introduced without a sudden and sharp downturn in activity.
      According to the report produced by Professor Alex Kemp, there is likely to be a net loss of jobs of between 7,500 and 11,250. That is a relatively cautious estimate, which accords with the Treasury's estimates. In the north-east of Scotland, the estimate is for a loss of jobs of 4,000 to 6,000, which in a relatively small economy represents a significant downturn which will have consequences on the local economy.
      I lived through the downturn of 1986, so I know that it was an experience that no one in the north-east wishes to repeat. Processions of people came to my constituency surgery who had not only lost their jobs but found that, because of the downturn in activity, the fall in price of their houses had dropped them into sharp negative equity. New houses were being sold by builders at a price lower than that for similar houses and lower than people's mortgages.
      Some of those people are still having to pay off debts that they incurred then. Interestingly, no measures of

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      assistance were forthcoming from the Government, and nothing was done to try to alleviate the hardship. We do not want to experience that again.
      When I tried to enlist the then Prime Minister's support, her argument was that the North sea accounted for only 6 per cent. of gross national product and for only 0·5 per cent. of employment. That showed a cavalier and dismissive attitude. The Government's attitude towards the North sea has been that it is more a source of revenue than an industry that needs to be given stability and momentum.
      The effects of uncertainty are far-reaching. I know of one company involved in the drilling supply sector in my constituency which was sufficiently concerned for no fewer than 350 of the employees to send a letter to me immediately after the Budget expressing their concern about the future of their jobs. Many other constituents have written to me expressing concern about the future.
      The fabrication yards in the highlands are extremely short of orders. Highland Fabricators and McDermott's have also said that they find the uncertainty extremely worrying. The Government make great play of confidence. The sudden change in direction has damaged confidence in the industry when confidence has been somewhat fragile in recent months.
      Dr. Robert Spink: Has the hon. Gentleman received any letters from the several thousand employees of BP whose jobs, according to BP, have been made more secure by the petroleum revenue tax reforms?
      Mr. Bruce: That is not necessarily true. The hon. Gentleman may know that BP has made many people redundant in the past year and has very much damaged its own internal relations by the way in which it has handled the redundancies. BP is the largest employer in my constituency, so I am very mindful of what BP has said. However, I have also gone on the record as saying that BP's financial difficulties are well known. It is not surprising, therefore, that BP is likely to welcome a windfall which will help its short-term return to profitability. The balance between the long term and the short term is part of the fundamental debate, as is the balance between individual companies and the national interest.
      The regime will hit one sector very hard. It is extremely unfortunate because, in recent years, we have begun to build a British indigenous drilling and drilling supply industry. It will be seriously damaged, without justification and without warning. The Government should take that factor on board; I urge them to recognise that that is the strongest case for a transitional arrangement which will allow the industry to adjust.
      The second point that must be taken on board concerns the success rate of exploration—precisely the matter to which the Minister for Energy referred. The danger now is that the Government are encouraging people to invest in the existing infrastructure at the expense of seeking new fields and new developments for the future. Exploration is, by definition, an uncertain business, and incentive to explore has been extremely productive in the national interest. There has been plenty of evidence of that, not least in either the fourth or fifth round in which blocks were auctioned, when Shell and Esso paid £21 million for the so-called golden block, on which they proceeded to drill three dry holes. The major discovery associated with
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      that round was the Brent field, which is on one of the blocks that Shell and Esso were forced to take in association with the one that they wished to buy. Oil does not always come out of the ground exactly where one expects it to and exploration is a risky business.
      I urge the Government to consider the point made by the hon. Member for Edinburgh, Central—that the Government are giving companies a return on their profits that they have no obligation whatever to reinvest in the United Kingdom sector of the North sea. The hon. Member for Beaconsfield said that he hoped and believed that companies would reinvest. But the existing regime ensures that they do—not by direction or force but by making it so financially attractive that, by definition, they will orient their future activity back to the United Kingdom.
      There are many bids in other parts of the world to attract activity away. There is much talk about the opportunities in places such as Kazakhstan and Vietnam. We need to ensure that we have a regime that encourages continuing investment here and takes into account the national interest, which requires us to maintain continuity of employment and expertise as well as the ability of British-based companies to develop and enhance that expertise. We need a regime that is designed to ensure that we maximise exploration and the discovery of new reserves and that the industry has a long-term stable future.
      I am not persuaded that the changes were introduced for the good of the industry. I think that they were introduced because the Government believed that they needed money and needed it fast. In introducing them, the Government have knocked the confidence of the industry. They have damaged the drilling industry and have threatened the livelihoods of thousands of people in the north-east of Scotland. I urge the Minister to take those points extremely seriously and to recognise that, at the very least, transitional arrangements should be introduced to minimise the impact of the changes.
      I am not happy when Government Departments say that they have deliberately calculated that a tax regime will cost 10,000 jobs, and when they apparently regard that as acceptable. That is destructive, and unnecessarily so. It should be possible to devise a regime that will secure the industry, the jobs and the future. The proposals as they stand do not do that, and I urge the Government to make sure that, when they have finished with them, they do.
      Mr. Raymond S. Robertson: I do not intend to detain the Committee unduly but I feel that there are some points that need to be made.
      Let me start by addressing the imbalanced view that the Committee must have of Professor Kemp's recent report. Professor Kemp has been widely but selectively quoted by Opposition Members, and it is only right that the Committee should see the other side of what Professor Kemp had to say. Given what has been said, the Committee will be surprised to learn that Professor Kemp actually accepts that the pre-Budget position was unsatisfactory and was in need of reform. He is quite clear about that. He also said that the new arrangements will substantially improve the profit margins on the larger existing fields which have until now been very low. Anyone who knows anything about the North sea will know that that is to be welcomed.
      Professor Kemp also acknowledges that the changes will considerably improve the net present value return

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      from incremental investment on mature fields. Given the circumstances pertaining in the North sea, that is vital. He further acknowledges that the changes will give significant cash flow benefits to larger new oil fields. As we have discovered in recent weeks and with recent announcements, the days of finding major strikes in the North sea are far from over.
      The hon. Member for Edinburgh, Central (Mr. Darling) was quick to quote directly from Professor Kemp's report in what was probably one of the classic selective quotations of all time. What the hon. Gentleman did not do was to read out the next two sentences, which put a wholly different complexion on the matter. Let me read out the whole paragraph, which the hon. Gentleman refused to do. Professor Kemp said:
      "The presence of only one simple fiscal instrument applied to new petroleum exploitation activities in the form of a corporate income tax at 33 per cent. is quite unique among major petroleum producing provinces. It must constitute a significant attraction."
      That last was the sentence that the hon. Member for Edinburgh, Central refused to quote. Professor Kemp continued:
      "The level of take is certainly low by international standards."
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      I concede that Professor Kemp had some criticisms to make of the Government's arrangements but they must be seen in their proper context and must not be taken in isolation—which Opposition Members were keen to do. Professor Kemp is critical in his assessment of the impact on exploration but, as my hon. Friend the Member for Beaconsfield (Mr. Smith) said, Professor Kemp's assessment only considers prospects up to 50 million barrels in size, in respect of which petroleum revenue tax is not paid anyway. He leaves out completely the benefit of the abolition of PRT for larger discoveries. That is a significant omission on his part.
      The Opposition have been quick to go to all sorts of independent analysts to find quotations to back up their case. I, too, can do that. Norman Smith of Smith Rea Energy Associates has gone on record as saying:
      "The Chancellor has provided the majors with more of the funds that they need to tackle the frontiers, while at the same time making re-investment in production in the United Kingdom more attractive relative to foreign areas."
      It is no use bandying quotations about: we can each find one to prove whatever we want to prove.
      Mr. Darling: Will the hon. Gentleman give way?
      Mr. Robertson: No. I listened to the hon. Gentleman without interrupting; perhaps he will do me the same courtesy.
      The changes should be supported. The increased cash flow that will come from them will assist funding of significant—
      Mr. Ernie RossOn a point of order, Mr. Morris. Is it in order for an hon. Member to refer to and specifically quote another hon. Member and not give way when that second hon. Member seeks to intervene?
      The Chairman of Ways and Means (Mr. Michael Morris): That is entirely a matter of judgment for the hon. Member in question.
      Mr. Robertson: The changes should be supported because the increased cash flow that will come from them will assist funding of significant additional North sea activity, and that cannot be denied. The life of the existing fields will also be extended. More oil and gas will be recovered than would have been the case; that also cannot be denied. The changes will allow for new fields and discoveries to be developed far earlier and far more quickly than would previously have been possible. The industry has up to 80 fields waiting to be developed. When jobs are being considered, the jobs that will be created from the development of those fields must be taken into consideration as well.
      It has been said that exploration will be affected. It will be affected but it will not be as adversely affected as claimed. The Budget changes leave untouched a signficant amount of exploration activity. Moreover, there is still relief for exploration wells drilled within 5 km of an existing PRT paying field, giving added incentive and added encouragement for greater exploitation of resources which we know are already there.
      The proposals—
      Mr. Robert Hughes: Will the hon. Gentleman be quite specific and answer yes or no: is he saying that he believes that no change whatever is required in the Chancellor's changes and that he will support them irrespective of the job losses in his own constituency?
      Mr. Robertson: As I have tried to point out, I think that the proposals are in the best long-term interests of the North sea. If the hon. Member for Aberdeen, North (Mr. Hughes) can wait until the end of my remarks, he will discover how I intend to vote this evening.
      The proposals have had a bad press; there is no doubt about that. Despite what has been said here and elsewhere, I believe that they have stood up quite well to the intense scrutiny to which they have been subjected. Just as I could not support moves at the beginning of the year to encourage the Government to dig for uneconomic coal, I cannot now encourage them to help companies to drill for uneconomic oil. There is no sense in subsidising oil companies to drill merely for the sake of their own tax bill. With companies representing two thirds—66 per cent.—of past and future capital expenditure in the North sea firmly behind them, the proposals are obviously in the long-term interests of the North sea oil and gas industry. The changes move us from a low-risk, low-reward North sea to a high-risk, high-reward North sea and, in reply to the hon. Member for Aberdeen, North, I have no hesitation whatever in recommending them to the House.
      Mr. Hoon: Clause 183 would reduce petroleum revenue tax on the operation of existing oilfields and abolish it on new fields. Therefore, it would abolish the tax relief that was available for the cost of exploration and appraisal on those new fields with effect from 16 March 1993. What is the Government's intention? Clearly, they want to raise revenue to fill the gap in public sector finances. Sadly, that seems to be the only consideration that they have taken into account. Unfortunately, they seem to have ignored the wider effects of their decision. It is necessary to ask whether it makes sense to abandon what all hon. Members agree is a stable tax position—which was successful in attracting investment into the North sea in the late 1980s—at a time when the country's energy policy, so soon after the closure of so many collieries, is beset by uncertainty

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      and instability. It is extremely difficult to see any signs of a longer-term energy strategy in the Government's proposal.
      If it is necessary to spell out the importance of the North sea to Britain's economy for the benefit of Conservative Members, it might be worth mentioning a number of statistics. The North sea has contributed more than £115 billion in tax revenue. We have had about 11 billion barrels of oil, and a further 7 billion barrels of oil are available. It is not surprising that estimates as to how much is still to be discovered vary, but they range from 4 billion barrels to as much as 25 billion barrels. That is a significant amount of oil, the recovery of which will help to boost the country's economy. Instead of importing oil, Britain could expect to remain self-sufficient in oil well into the next century. Those discoveries have made, and should continue to make, a crucial contribution to our balance of payments, provided the Government remain prepared to leave in place the existing tax arrangements. Will the Government put at risk that benefit to the country's economy for the sake of a short-term addition to their shaky finances?
      Comments have been made about the likely reaction of oil companies to the change in the tax position proposed by the Government. On any view, it will make oil companies reluctant to invest the substantial sums of money that are required to explore and develop new oilfields. That must be the case especially in the North sea. Reference has been made to the maturity of the North sea field. That means almost inevitably that new exploration is likely to be in the more difficult and marginal areas. Given a choice between investment decisions in more marginal North sea oilfields and investment in other parts of the world where other incentives may be available to companies, multinational oil companies, which have no loyalty to the United Kingdom, will be tempted to go elsewhere.
      Reliable estimates suggest that exploration activity might be cut by as much as a half. After all, many areas of the world—a number have already been mentioned—are competing for new oil development. Obviously, those areas will benefit from the employment implications of the changes that the Government have apparently all too readily conceded will be the result of their proposals.
      The Treasury has accepted that as many as 10,000 jobs may be lost. Perhaps not surprisingly, others have suggested that the number of job losses may be greater than 10,000. The majority of those jobs will be lost in Scotland, but many people who are employed directly and indirectly in the oil industry throughout the United Kingdom will be adversely affected. That is hardly sensible at a time when the country is suffering from the effects of high unemployment.
      I shall quote from a document that I received this morning from the Association of Service Sector Oil-Related Companies, which puts the case graphically:
      "the existing proposals"—
      in the Budget—
      "will act as a disincentive to continued North sea exploration and result in substantial job losses across the sector, weaken their ability to expand and grow into international markets, drain technological innovation from the United Kingdom, and increase smaller companies' vulnerability to hostile takeover bids. As a consequence"—
      this is the conclusion—
      "the United Kingdom economy as a whole will suffer."
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      That means that whatever oil is waiting to be discovered in the North sea will probably continue to wait until the opportunity is taken to develop new fields for the benefit of British consumers and, ultimately—this has been justified in terms of revenue raising—for the benefit of the British taxpayer.
      The Chancellor and, indeed, the Financial Secretary have made much of justifying the change in the sense that the existing petroleum revenue tax system is costing the country money and subsidising exploration by oil companies. In one sense, that is true. We cannot argue against the figures that have been made available. However, the Chancellor and the Financial Secretary overlooked the fact that, in 1984–85, the United Kingdom raised about £12 billion in tax receipts from North sea oil. Tax receipts have obviously fallen because of lower levels of production as part of the recession and the fall in world oil prices.
      By abandoning the present tax arrangements unilaterally in the way that the Government propose, they are abandoning the prospect of substantial tax relief in the future. They are effectively abandoning investment in the North sea in terms of gaining benefits today in extra tax revenue and forgoing the prospect of higher revenue later. By discouraging new investment, we will be dependent on the reduced levels of revenue that flow from fields already under development. We will be giving up for all time the revenue from new finds, which will not take place as a result of this change.
      The Labour party believes that it is necessary to continue to support investment in the North sea and encourage exploration and development of new fields. In such circumstances, it cannot make sense to make a sudden arbitrary and short-term tax change. Even if the Government are determined to go ahead with the change in principle, surely it makes sense to consider our amendments which will allow transitional relief and the phasing-in of the proposals, otherwise we risk jeopardising Britain's employment prospects and the prospect of new exploration and development. As a result, we risk severely damaging our balance of payments position for the sake of a short-term contribution to the Government's finances. This is a panic measure introduced by a panic-stricken Government.
      Mr. John Horam: I shall not detain the Committee for long. There has been general concern about the change announced in the Budget and the Committee should discuss it in the serious way that it is and in a fairly objective way. Like some of my colleagues, I want some reassurances from my hon. Friend the Financial Secretary during the debate.
      The hon. Member for Edinburgh, Central (Mr. Darling) understated the case in some respects. Perhaps it is the modern Labour way—having indulged in wild excess for many years, ultra-moderation is the way to get the message across. I welcome that as a general political principle, but on this occasion the hon. Gentleman underplayed his case. The fact is that Britain is a world leader in oil and gas exploration technology. The hon. Gentleman did not make much of that point. The United States and Britain are the two world leaders in oil and gas exploration technology.
      There are few areas of British industry in which we have the depth and extensiveness of knowledge and experience that we have in the oil industry. When we look at our

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      national advantages and our natural areas of competitiveness, we are spread rather thin—we are involved in many areas but not doing especially well in them. In the oil industry, we have an enormous depth of expertise and knowledge. We are using that expertise and knowledge not only to explore the North field but in other parts of the world—that point has already been made.
      If we change the financial basis of our technological advantage, we must think carefully. It is a mistake to make dramatic changes of this sort. It is a mistake in principle to make dramatic taxation changes; I favour gradual changes in taxation in so far as they affect our industrial competitiveness. There is no doubt that the exploration effort in the North sea and elsewhere may well be affected by these changes, to Britain's disadvantage. There has been some dispute about that. Various figures have been bandied about the Chamber. The hon. Member for Ashfield (Mr. Hoon) and other hon. Members mentioned a figure of 50 per cent.—my hon. Friend the Member for Aberdeen, South (Mr. Robertson) disputed that.
      What is my hon. Friend the Minister's estimate of the likely effects of the change in taxation? He may say that he cannot make a sensible estimate because he does not know exactly what the regime will be. However, I presume that the Treasury made an analysis before announcing the change. It must have made some assumptions about the likely effect on the industry of such a change, even before it had a chance to announce the change. What is my hon. Friend's feeling now about the likely effect on the exploration activity in the North sea as a result of the tax changes?
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      As others have said, the reason for the tax changes is that we must have general regard to the level of public expenditure and our problems with the deficit. We must consider increasing revenue. In the case of the oil industry, in the current financial year we shall make a gift to the industry of about £200 million, having taken a large amount over the years. As one of my hon. Friends said, the current position should not last long. None the less, we should not give a seismic shock to the industry to deal with a tax handback to one industry which may not be typical of what will happen every year. Is this an extraordinary year? Are the current circumstances unique? Will the £200 million handback increase every year or does it reflect the circumstances of the moment?
      I am not sure that it is sensible to deal with what may be a relatively short-term position in the way that the Government propose. I am aware that discussions are taking place between the industry and the Treasury. I welcome those discussions. It is a pity that they have had to take place post-Budget. The hon. Member for Edinburgh, Central said that he accepted that Budget purdah had to operate and that it was inevitable that such measures were not properly discussed with the energy department of the Department of Trade and Industry before they were announced.
      I would be rather more radical than the hon. Member for Edinburgh, Central. It is proper in any sensible Government that there should be discussion with the relevant Department and especially the DTI about such changes in taxation. One of the faults of our Government has been that, as a result of the nature of government, they
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      have not been able to arrange sensible, discrete discussions with the sponsoring Department before Budget changes of this character are made. That is a pity. I should like to see some changes made in that direction in future.
      I do not go along with the argument that we should make such a change for short-term, tax-raising reasons. The oil industry is too important to subject it to such considerations. I want to hear from my hon. Friend the Minister that he has considered the position seriously, seen that there is a problem in the shape of the tax take from the industry, which has now become a tax give, and that he is prepared to re-examine the position. I want to hear that he has some objective and clear-cut ideas about the nature of the tax regime that he seeks to impose and that the change has been made, despite appearances to the contrary, for serious and objective reasons.
      I want to hear from my hon. Friend the Minister that we can put in place a regime, the general character of which will last as long as the previous regime lasted. If we are dealing with a change that will help the industry and protect our acknowledged lead in the technology of oil and gas exploration, I shall support the Government because we shall be making the change for sensible tax-planning reasons. But I cannot support industrial competitiveness being damaged for short-term tax reasons.
      Mr. John McAllion: Clause 183 abolishes petroleum revenue tax on oil and gas fields which are given development consent after 14 March this year. But it is just one element in a radically new tax regime for the North sea which has already been described by many experts and analysts as being designed mainly to put money into the coffers of the Treasury. At the same time, and as a direct result of the Government's short-term obsession with boosting the Treasury take, the new tax regime is likely to destroy future exploration programmes in the North sea.
      The new tax regime will effectively shorten the economic life of the North sea. It will certainly cost thousands of exploration jobs in the North sea. It will seriously damage the oil service sector of the Scottish economy. In the long term, it is also likely to have serious implications for the new safety regime in the North sea which was introduced after the Piper Alpha tragedy some years ago.
      Clause 183 is extremely important. The amendments which have been tabled by my right hon. and hon. Friends are designed to put off the evil day when the new regime and the damaging consequences which will flow from it come to pass. The amendments will certainly be supported by Opposition Members, but they should also be supported by Conservative Members, in particular those who represent constituencies in Scotland, and especially the north-east of Scotland, as do the hon. Members for Aberdeen, South (Mr. Robertson) and for Kincardine and Deeside (Mr. Kynoch).
      I am afraid that, tragically, we are likely to come up against the phenomenon that we witnessed last night in the debate on value added tax on domestic fuel and power. Conservative Members will be whipped through the Lobbies in support of proposals which are neither in their interests nor in the interests of their constituents. They will vote for the proposal to defend a discredited and bankrupt Government and, even more questionably, to defend their squalid little careers within that Government in the years ahead.

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      The Government will present what they are doing in a different light. They will package it in glowing phrases about sweeping away outdated, anachronistic and old-fashioned tax regimes which are no longer appropriate to the North sea. They will talk about introducing major reforms which will provide the industry with a stable framework for its future development. They will even trot out their supporters among the big oil companies to give some industry credibility to what they seek to do in the North sea. Such supporters include the chief executive of BP, Mr. David Simon, who has already welcomed the changes. He has forecast that investment in the North sea will be directly stimulated as a result of the changes; indeed, he has predicted even bigger profits for his company and other companies in the North sea.
      I am sure that Mr. Simon is sincere in what he says about the changes. I can quote directly what he said in The Press and Journal immediately after the Budget proposals were announced. He said:
      "I believe these reforms will encourage development of larger discoveries like west of Shetland, where a higher rate of return is needed to balance the increased risks and costs of operating in the more demanding deep-water environment."
      That is all very fair, but Mr. Simon's company, BP', made the spectacular oil find in the west of Shetland last autumn and will develop that field. His company, BP, will pay the lower rate of petroleum revenue tax on oil produced from that field and, indeed, other fields. His company, BP, will now be able to make even greater profits than it has already made in the North sea this year.
      I have here a quote from The Press and Journal of 7 May which announced a "BP profits gush". It said:
      "BP stormed back into the black in the first quarter of the year … The oil giant saw net profits soar to £325 million compared with a loss in the corresponding period last year of £61 million."
      So it is good times for BP and probably even better times ahead with the increased profits that it is likely to accrue from the changes in the North sea tax regime in relation to the discovery that it has made west of Shetland.
      If the proposed new tax regime had been in place one or two years ago, before BP and Mr. Simon were given development consent west of Shetland, would they be so enthusiastic about it? If, before BP explored west of Shetland, it had faced the prospect of not being able to offset its exploration and appraisal costs against its existing liability for PRT, and seeing those costs quadruple at a stroke as a direct result, would it still have gone ahead with that exploration? I think that the answer is no. In fact, the full headline from The Press and Journal of 7 March reads:
      "Cost cutting helps BP profits gush"
      It is because of such cost cutting that BP has been able to get itself in the black. If it is faced with the prospect of exploration costs quadrupling overnight, the first thing it will cut will he exploration itself, because that prejudices its chances of making profits.
      Under the new tax regime there will be winners and losers, but the Opposition fear that there will be far more losers than winners. Professor Alex Kemp of Aberdeen university, who has already been quoted several times today, says that he expects there to be a "host of losers" and "some winners"—he does not expect many. Those winners are likely to be the heavyweights, the major oil companies such as BP and Shell.
      The losers will include the oil service companies, particularly those involved in drilling and exploration.
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      They will include the smaller oil companies and the 14th oil and gas round that is about to be offered by the Department of Trade and Industry. They will include the thousands of workers who will lose their jobs and their families, who are dependent on their income. They will include the taxpayers, who will be expected to fork out up to £100 million in benefit to try to keep such workers out of proper employment. The losers will also include the Scottish-based service sector that supplies equipment for the North sea, such as mud pumps and drilling bits. Among those losers will be the many people who will remain working in the North sea for companies such as BP and other large companies.
      It is important to remember how the new tax regime was established. The Chancellor was faced with a desperately bad public sector deficit and he cast about for the means either to cut Government expenditure or to boost Government revenue. At the same time, he also discovered that under the existing PRT regime, the cost to the Exchequer in 1991–92 was £200 million. The right hon. Gentleman was therefore determined to turn that situation around by scrapping all the allowances against PRT and thereby securing for the Exchequer, according to his estimation, £300 million in 1994–95 and £400 million in 1995–96. That turnaround is worth almost £1 billion. That is what the Chancellor expects to accrue from the changes. He tried to anticipate any backlash from the oil majors by buying them off with a reduction in their liabilities under PRT from 75 per cent. to 50 per cent. That must represent a saving of hundreds of millions of pounds for those companies.
      In just two years, well in excess of £1 billion will be seized from the North sea oil economy by the Government and by the oil companies as a result of the PRT changes. That money must come from somewhere. It will be saved by companies undertaking less exploration and offering fewer jobs. Not only will that have damaging economic implications, but it will have serious implications for the North sea safety regime.
      It is nearly five years since the Piper Alpha tragedy in the North sea in which 167 lives were lost. I have absolutely no doubt that the train of events that led directly to that tragedy began in 1986 with the then collapse in the oil price. That collapse cut the profits of oil companies and led directly to cuts in care and maintenance programmes and a decline in the priority that was accorded to safety. Here we are again, in 1993, discussing changes under which the Government and the big oil companies, working together, will take more than £1 billion out of the North sea economy. That may have serious, damaging implications for the current safety regime.
      I know that the new safety case regime is in place following the Cullen inquiry. Reports and legislation are never sufficient to guarantee the highest safety standards in the North sea. To guarantee those standards, we must create the financial regime that is conducive to such standards. Because of the changes to PRT, however, profits will be squeezed because exploration costs will begin to rise. The contracts for drilling will become even more fiercely competitive than they are now and the temptation will inevitably be to make savings from wherever that is possible. I suspect that some companies will now try to get away with making savings on safety.
      Blowout is the newspaper for offshore workers and the offshore industry liaison committee, the OILC. The June

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      1992 edition was published a month after the new safety regime was introduced and it provided information about one of the more recent tragedies in the North sea, the Cormorant Alpha helicopter tragedy, in which 11 men lost their lives. It provided proof that one of the victims had previously been disciplined
      "for refusing to board a helicopter in circumstances similar to those on the night of March 14 when 11 men died."
      It also noted:

      "The pilot of the ill-fated Super Puma was not told of a serious weather hazard in the area."
      6.15 pm
      When Select Committees and inquiries, such as that headed by Cullen, take evidence on safety, the oil companies and their contractors never admit that that type of thing goes on. Similarly, they never admit that men who complain about lapses in the safety regime are victimised and blacklisted. That practice goes on to this very day in the North sea oil industry and hon. Members had better believe that. It goes on because of financial pressures, because companies are forced to cut costs again and again. The new tax regime is trying to make the same thing happen.
      Someone must pay the price for all the money that will be taken from the North sea oil economy, and I suspect that it will he the workers, who will have to work in even worse, less safe conditions. That is the bottom line that we must take on board when we vote. That is why those Conservative Members who represent workers in the North sea must consider the safety of their constituents before they vote for a tax regime that will put those people's safety at even more risk in the years ahead.
      I shall certainly check the voting list in Hansard tomorrow to see whether the hon. Members for Aberdeen, South and for Kincardine and Deeside and the other Scottish Tories voted for their constituents. They let the Scottish people down last night on VAT and they had better not let down the oil workers tonight.
      Mr. George Kynoch: As has already been said, I represent the employees and staff of many of the oil companies, be they large, medium-sized or small. I also represent those who work for indigenous industries that have, over the years, become oil-related service companies and those who work for drilling and supply companies.
      After the Budget on 16 March, I obviously received many letters on the subject of the proposed changes to the PRT. The response was mixed. I spent the day after the Budget talking to representatives of a medium-sized oil company and debating with them why a move to a low-tax, low-allowance regime was infinitely superior to a high-tax, high-allowance regime. I suggested that those changes would bring those companies into line with the rest of British industry, because, by allowing them to keep more of the profits that they make from their production or finds, they can reinvest in their companies to produce further profit in the future.
      After a period of deep reflection, many of the oil companies that had expressed initial concerns about the tax change, perhaps having latched on to the allowance side, then completed their highly complex calculations—whatever any hon. Member may say, the PRT is a highly complex tax—and revised their opinion. They accepted
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      that, in the medium to long term, the tax changes were significantly beneficial to them, their employees, the United Kingdom and the North sea oil industry.
      It is important to stress that those benefits will be apparent in the medium and long term, however, because my hon. Friend the Financial Secretary is aware of my deep concern about the transition period. As the arrangements stand, many of the incentives that the tax changes offer, will not come through for 18 months or two years at the earliest. I quote from this morning's Aberdeen Press and Journal:
      "BP £2 million booster is oil jobs bonanza."
      It may well be as a result of these tax changes that that has been brought forward. It probably is. But I must emphasise that the work will not begin until early in 1995 and we are now in 1993. My hon. Friend the Financial Secretary has already said, on Second Reading, that he wishes to minimise any dislocation in the industry, and I know that he recognises that there may be dislocation. I know that the oil companies share his wish to see a fiscal situation that satisfies the Treasury and becomes tax raising rather than a tax cash curb. I am, therefore, exceedingly grateful to my hon. Friend for receiving the deputations that I have taken to him from the north-east of Scotland, representing more than 60,000 employees in the North sea, who accept the medium to long-term benefit of the change, but who see that there will be a significant dislocation to the industry in the immediate future.
      I am equally well aware of the Financial Secretary's concern that by building a transition period without controls one runs the risk of overheating the drilling and exploration side and putting up drilling costs. It is a concern shared by the industry: it is in no one's interest for that to happen So I know that the industry is very keen to assist my hon. Friend's officials to work out a satisfactory capping proposal that will be fair to the Treasury, fair to industry and fair to the future of the North sea.
      I share the concern of my hon. Friend the Member for Stroud (Mr. Knapman) that the Treasury should seriously consider this problem, but I must quote—again, I am afraid, selectively—from Professor Kemp. I will not go into the details of his acceptance of the inevitability of the tax changes and whether they affect small companies or large, but the one point that he clearly makes in his summary is this:
      "The abruptness of the implementation of the budget proposals will create disruption in the exploration sector of the industry. It will also have an adverse effect on investor confidence in this sector. Exploration companies, particularly the small ones"—
      many of those are represented in my constituency—
      "have based their E and A programmes on the basis of receiving full PRT relief for the expenditures. They can react in the short term only by sharply cutting their E and A activities. The result will be highly disruptive for the drilling contracting and supplies industry which are already suffering from trading difficulties. The medium term exploration effort of the smaller companies in the United Kingdom CS could also he put in jeopardy."
      I know that that is only one opinion, and I know that British Petroleum and Shell have put an opposite opinion —they believe that there will be minimal dislocation and that the proposals should remain intact. Bearing in mind that I have in my constituency employees represented by BP and Shell, that puts me in a rather difficult position because they take the view that, in the short term as well as in the long, there will be no dislocation, but I believe that there will he a dislocation and that if my hon. Friend

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      the Financial Secretary looks seriously at a fiscally neutral adjustment to the transitional arrangements, it may well smooth the transition to what I believe will, in the medium to long term, be a better tax regime for all concerned.
      Mr. James Wallace: The hon. Gentleman has quoted, and indicated from his own discussions with the oil companies, various views. Is he in a position to inform the House what has happened since the Budget and what companies have done with regard to plans that they may already have had for exploration and appraisal?
      Mr. Kynoch: As I am sure the hon. Gentleman is aware, what has happened depends on which company one looks at. There has been a fairly mixed response. The hon. Member for Edinburgh, Central (Mr. Darling) and I attended a conference of oil companies at the weekend where we heard a very mixed response. Some contracts have been postponed, but other projects have been brought forward. The situation is not cut and dried. I believe, however, that many of the projects that have been conveniently announced at this time as being brought forward will not have their full effect on employment until 1995. There are small to medium-sized service companies in my constituency that will be put in jeopardy by the delay in the making of decisions and in the awarding of contracts. It gives me great concern.
      However, the clause that we are discussing is not the one on which I have had representations for change. The Financial Secretary was good enough to hear the representations from my many constituents and has been good enough to allow his officials to continue discussions with representatives of the industry to try to determine whether the dislocation can be further minimised. I am sure that he knows that the appropriate clause—-either clause 184 or clause 186—is most likely to be discussed in Committee upstairs.
      I therefore conclude by urging my hon. Friend, while thanking him for having seen and considered these representations, to make sure that he understands the implications for my constituency, for the north-east of Scotland and for the United Kingdom Exchequer in the medium term.
      Mr. Robert Hughesrose—
      Mr. Kynoch: I hope very much that by the time the Bill is considered in Committee upstairs the negotiations and discussions that which have gone on—
      Mr. Robert Hughes rose—
      Mr. Kynoch: —will have brought to fruition a satisfactory result for the north-east of Scotland.
      Mr. Salmond: I could have told the hon. Member for Aberdeen, North (Mr. Hughes) that the hon. Member for Kincardine and Deeside (Mr. Kynoch) would not give way because it might have punctured the alibi that he constructed for the latter part of his speech.
      I would say to the hon. Member for Kincardine and Deeside that we are discussing the principle in clause 183. If the hon. Member really wants to see transitional relief, he need not go on pleading with his hon. Friend on the Front Bench; he just needs to join us in the Lobby to secure it.
      There was an interesting contrast between the hon. Member for Kincardine and Deeside and his hon. Friend
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      the Member for Aberdeen, South (Mr. Robertson). It is some sort of double act that we are seeing here, the nice copper and the nasty one. The hon. Member for Aberdeen, South works them up and then the hon. Member for Kincardine and Deeside is meant to soothe them down. However, with their voting behaviour in the space of 24 hours, they are running a severe risk. Yesterday, they voted to put value added tax on fuel, voting against the wishes of about 99 per cent. of their constituents; tonight, it seems, they will vote to put thousands of their constituents out of work and, later this evening, if I read the signs aright, they will vote to decimate our fishing industry. That is a triple whammie delivered by these two hon. Gentlemen which people in the north-east of Scotland will find very hard to understand and will take a long time to forget.
      We are debating clause 183 but also the principle of the tax shift, and I want to speak, in particular, about amendment No. 40 in the names of my hon. Friends and myself and supported by Liberal Democrat Members in which we are trying to make some positive suggestions as to how transitional relief may be effected. We do not want to do it by means of the fiscally neutral position that the Treasury has sought—that if one gives with one hand and takes away with the other, it will be satisfactory for the Treasury. One will never reach a consensus in the industry by selling some companies that they will lose prospective revenue in order to benefit others. That is not possible. In amendment No. 40 we propose that for a period a company should continue to be able to opt to receive exploration and appraisal relief, at a certain percentage and subject to a ceiling in the case of each individual company, to remove any possibility of an excess in the claim of any one company. I was pleased that we received from the Leader of the House last Thursday an undertaking that if any of this evening's amendments were carried he would see that the consequential amendments which might he necessary were brought forward in Committee upstairs. The hon. Member for Kincardine and Deeside need have no fear about waiting for the Committee. All that he has to do is join us in the Division Lobby tonight.
      There is a case for changing the tax regime in any oil province. The usual time to do it is when oil prices are riding high, and the industry is subject to overheating. Then, there can be a logical case for cooling down activity in the industry and at the same time getting more revenue for the Government. It is more questionable to do it when the industry, as at present, is already in a state of substantial over-capacity.
      6.30 pm
      There is a case for a low-taxation regime in the North sea. It is obvious that companies would like a reduction in their marginal rate of taxation. However, it is disingenuous for Ministers to quote major companies in the oil industry—Shell, BP and Mobil—all of which will benefit to the tune of many millions, perhaps even hundreds of millions, of pounds from the tax changes, as if that were some sort of independent assessment of the overall impact of the tax changes.
      The story in the north-east of Scotland is that John Morgan of BP receives £10 million for every press conference that he gives. It is a sort of payment by results scheme. The more that BP praises the Government's taxation changes, the more that it realises how much it will

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      benefit from them. I am not attacking senior executives in BP who say what a good thing it is that the tax change will bring the company lots of money. That is an understandable position for any company facing such a tax change. However, the Government have to understand that what is good for BP is not necessarily good for the whole of the oil industry. It is the Government's duty, sadly neglected, to take an overall view and see what overall balance of effects will result from their taxation changes.
      If drilling costs in the North sea are quadrupled—that will be the effect of the tax changes—that will have a substantial impact on the drilling sector and will cost a substantial number of jobs. Furthermore, because of the suddenness of the change, it will cause substantial dislocation, because many companies will face sudden cancellations of contracts.
      We have been talking in general terms and about big companies. I want to read briefly to the Committee a letter that I received from Steve Lee, the manager of the advanced technology centre of Core Laboratories in Aberdeen. It is a subsidiary of a major company, and it employs 100 people in Aberdeen. Mr. Lee wrote to me on 30 April saying:
      "Since I last wrote, the confidence of the oil industry has continued to decrease, which has resulted in exploration/ appraisal wells being deferred. The consequence of this to my company has been a substantial decrease/loss of orders. This in turn led to 16 members of Core Laboratories staff being made redundant on April 27th, 1993.
      A reduction of 16 per cent. of the workforce is considerable. Unless and until there is a rethink on PRT there is every likelihood of further layoffs in the coming months. I suggest consultation with the WHOLE of the oil industry would be beneficial to both the Treasury and the oil operators."
      Those are the effects on real companies and people in the north-east of Scotland.
      We are debating the overall effect, the net effect, of the changes. Clearly, some companies will benefit and some will lose. However, as has been pointed in some of the correspondence in the newspapers, it is a fairly simple matter for an oil company to adjust its activities so as to become a major gainer from the tax changes. If one wants to be a winner, all that one has to do is up sticks and start exploring in other oil provinces elsewhere. Those who do not explore in the North sea will not be subject to the quadrupling of the price of exploration and appraisal.
      We have heard from certain organisations, including Grampian region, the chamber of commerce and the offshore industry liaison committee. They represent local authorities, many of the employers in the region and many of the workers in the industry. None of the organisations has an axe to grind. All of them have workers working for winners and those working for losers. All of them have taken an overall view of what the net effect of the tax changes will be in their area and in the oil industry as a whole. All of them have come to the conclusion that the overall effect will be strongly negative and that thousands of jobs are at stake because of the tax changes that the Government are proposing.
      As has been said a number of times, we are grateful for the fact that Grampian region commissioned a report from AUDEC Consultants and Professor Kemp's team at Aberdeen university. Conservative Members have claimed that Professor Kemp has been quoted selectively. They have said that Opposition Members are only quoting the
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      adverse remarks in the report and forgetting to mention the positive things that Professor Kemp had to say about the oil tax changes.
      It is obvious that an academic, and in particular an informed academic like Professor Kemp, when he is looking at an overall tax change that involves reductions in taxation in certain sectors in certain areas, will say positive things about the effect of the reductions. However, it is also true that the basis of the report was the desire to come to a conclusion about what the overall effect would be on jobs in the oil industry. There is no doubt about that. The report summary says:
      "The Scottish level employment fall forecast ranges between 7,500 to 11,250. It should be appreciated that this does allow for the retention of some jobs as a result of incremental investment.
      At Grampian Regional level, the jobs lost could be 4,000 to 6,000. Greater jobs losses are quite possible."
      Throughout the report, Professor Kemp erred on the side of caution in every estimate. For example, those of us who have been involved in oil economics know that, for the oil industry, it is usual to use a high multiplier effect in estimating the overall consequences of job reductions. In the oil industry one usually takes a multiplier of 1·78. So as not to exaggerate the consequences of the tax changes, Professor Kemp chose the more conventional multiplier used for the rest of the industry, that of 1·25. If he and his team had wanted to exaggerate the effect of the tax changes, they could, quite defensibly, have increased the figures substantially. Wherever they had to make a choice, they erred on the side of caution.
      Hon. Members on both sides of the House should accept that we are looking at a potential impact of around 10,000 job losses if the tax changes go through unaltered. I believe—I think that many hon. Members will also believe—that 10,000 jobs is too great a number to be so casually disregarded by the Government.
      Did the Government know that that would be the impact before they made the proposal? We have to look at the now renowned quotation in The Press and Journal, appropriately enough from an article that appeared on April fool's day, immediately after the Budget, which used a briefing that was attributed to a Treasury official. The famous quotation "from a senior advisor" was:
      "For 10,000 (job losses) we are securing £400–£500 million a year in taxation."
      It seems that the Government and the Treasury engaged in a calculation and thought that they could secure hundreds and millions of pounds' worth of additional taxation and, if there was a cost of 10,000 jobs, primarily in the north-east of Scotland, that was just too bad and it was a "price well worth paying".
      I see a puzzled look on the face of the Minister for Energy. That is not unknown. Over recent weeks he has often looked puzzled and confused. As he is here and giving us the benefit of his facial expressions, even if he is not giving us the benefit of a contribution to the debate, could he answer one of the questions of the debate? Were he and his Department consulted before the Treasury put forward the taxation changes? Did he give advice that was disregarded or was he disregarded in that his advice was not even asked for?
      I am happy to allow the Minister to intervene to answer, as the oil industry would like to have that question answered. I see that he is shaking his head. Does that mean that the Department was not consulted or that he is frightened to intervene to confirm what many Opposition

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      Members believe? We believe that the oil industry and the energy sector are so disregarded by the Government that the Minister with responsibility for them is not even consulted when serious tax changes are being considered with an impact on 10,000 or more jobs, primarily in the north-east of Scotland.
      The Minister for Energy (Mr. Tim Eggar): The hon. Gentleman claims to be interested in these matters. May I refer him to the answer to a similar question that my right hon. Friend the President of the Board of Trade gave the Select Committee?
      Mr. Salmond: We should like to know what it was. Was the Minister consulted or not? We can all consult the record afterwards, but I should like an answer during the debate as many Conservative Members are wondering how to vote this evening. Surely the Minister must want to tell the Committee whether he was consulted about the tax changes in the run up to the Budget proposals. I wonder whether the silence from the Treasury Bench tells us everything. I shall not even ask whether the Scottish Office was consulted as we can safely assume that no one would bother to do that. Scottish Office Ministers are not here this evening just in case they should be asked that question.
      It is unfortunate that much of the debate outside the Chamber has been conducted in terms of the cash flow of individual oil companies—which companies would benefit and which would lose. It should not be a matter of the accounting position of individual oil companies but a flesh and blood issue affecting 10,000 or more families and the infrastructure of the oil industry in north-east Scotland.
      I have heard the Treasury Minister, in many radio interviews, deriding those who question the wisdom of the oil changes by arguing that we want to give some advantage to the international oil industry. What greater advantage could be given to some of the largest companies in the international oil industry, at the expense of jobs and the industrial infrastructure of our oil industry, than that given under the Government's proposals?
      I am concerned about the future after the taxation changes. One argument that the Government have put forward is that it will make the North sea a more attractive province, but that argument holds only if people believe that, if oil prices were to increase rapidly at some point in the future, there would be only a corporation tax regime in place.
      No one in the oil industry to whom I have spoken, whether they are for or against the changes, believes that any Government of whatever political colour would leave a taxation regime in place which meant that only corporation tax would be charged on new discoveries if, once again, there were a major escalation in oil prices. The Government have introduced instability into a tax regime having previously claimed that, above all, the United Kingdom tax regime offered stability to the industry. They have undermined their strongest argument in favour of the United Kingdom tax regime.
      It is obvious that the taxation changes will be bad for the industry. Clearly, any change that is anticipated to give substantial benefits to the Treasury in net financial terms will be detrimental for the industry.
      The hon. Member for Dundee, East (Mr. McAllion) was right to say that at the end of the day someone will have to cough up for the additional revenue that the Treasury will expect from the changes. It will not be the
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      international oil companies; some will lose and some will gain and the ones that lose will probably explore elsewhere. I suspect that there will be a cutback and a squeeze on the service companies and that many of the effects will be felt by the workers in the industry. One consequence of a financial squeeze, as we saw in the mid-1980s, is a reduction in maintenance and work force conditions.
      The exploration sector will certainly have to become more competitive, but, once again, many workers in the North sea will face a hostile environment in terms of their conditions.
      In conclusion, the changes in PRT are often described as resembling the Schleswig-Holstein question in European history in that only four people understand it: one is mad, and that certainly covers the Treasury Bench, one is dead, and in political terms that would cover the Chancellor, I have forgotten the third and the fourth is Professor Alex Kemp of Aberdeen university.
      Professor Kemp was the adviser to the former Energy Select Committee. In his much-quoted report, he put forward the strongest possible argument for introducing some form of transitional relief to provide protection and attempt to save the jobs that are now at risk in north-east Scotland and elsewhere. Amendment No. 40 encapsulates Professor Kemp's recommendation and I certainly commend it to both sides of the Committee this evening.
      6.45 pm
      Mr. Ernie Ross: Our debates last night and tonight have demonstrated to those who watch and listen to our proceedings, who read our debates and who are affected by the policies we are discussing the Government's ability to unite diverse groups across political and economic backgrounds.
      When my hon. Friend the Member for Midlothian (Mr. Clarke) catches your eye, Mr. Morris, I am sure that he will remind you that it was not long ago that the Government attempted to make the same hash of the coal industry. They consulted no one, but simply produced proposals that they considered to be in the best interests of the Government and the Coal Board. They did not worry about Britain's long-term energy needs or the impact on workers in the industry.
      My hon. Friend the Member for Dundee, East (Mr. McAllion) reminded the Committee that, had there been an Energy Select Committee, it could have considered these matters. It is significant that the Government chose to introduce these changes in taxation in the knowledge that there was no Select Committee to monitor the month-by-month impact on north-east Scotland and the rest of the United Kingdom. The changes to the PRT will impact on employment, but not only in the north-east of Scotland. It is quite likely that some 3,000 jobs in the southern sector will be lost as a direct result of those changes.
      It is also clear that those who will benefit most do not need the benefits as much as we need to continue to encourage exploration and appraisal in our oil industry. Companies such as BP and Shell do not need long-term encouragement that will accrue to them as much as the exploration and appraisal companies need it if we are to continue to benefit from the North sea.
      What are the likely effects of the decision on the PRT? Certainly the cost of drilling a well will be increased four

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      times as a result of the proposed changes, and that will affect the number of wells to be drilled during 1993–94. It will follow a reduction in drilling and exploration in 1991–92.
      As hon. Members on both sides of the House have conceded, the number of jobs that will be lost is not quite clear. It ranges between 6,000 and, depending on whose estimates we take, 20,000 to 30,000. Even the Treasury estimates that about 10,000 jobs will be lost. It will not just be jobs that are lost but, as other hon. Members have said, the expertise and knowledge will also be lost, and once it is gone, as we discovered to our cost, particularly in the manufacturing sector, it is difficult to replace.
      We have also heard the Government estimates that the net benefit to the Treasury will be about £700 million in a full year. Others have argued with that figure, and I should be interested to hear from the Financial Secretary exactly what he thinks about an estimate of £200 million or £300 million rather than the £700 million suggested by the Treasury.
      The Financial Secretary to the Treasury (Mr. Stephen Dorrell): The hon. Gentleman need not detain the Committee long on that issue, because the Treasury's estimate of the net effect of the changes to PRT is set out in the Red Book; he will find that the figures quoted there are £300 million in 1994–95 and £400 million in 1995–96.
      Mr. Ross: The Financial Secretary must admit that other financial experts disagree with those figures. Only time will tell who is right. Given the Government's record on finance, I think people are more likely to believe estimates other than those given by the Financial Secretary.
      The real impact will be felt by those directly affected. The cost to this country—if we accept the estimate of 10,000 unemployed—will be approximately £90 million to £100 million in lost revenue. My hon. Friend the Member for Aberdeen, North (Mr. Hughes) asked the Financial Secretary how, why and where the discussions that led the Financial Secretary to recommend to the Cabinet that the Chancellor should proceed had taken place. The Financial Secretary helpfully said that there had been on-going discussions over three and a half years. As my hon. Friend the Member for Aberdeen, North said, whoever the discussions took place with, they certainly never took place with the workers in the industry and the industry itself—the Financial Secretary said that he would have needed a crystal ball to decide or second guess the likely changes in the Chancellor's Budget.
      As we now know, the Department of Energy was not involved in the discussions; I am not surprised at that. Neither was the Department of Employment, which will have to find jobs for the individuals who are liable to be made redundant as a result of the changes. The hon. Member for Stirling (Mr. Forsyth), the Minister of State, Department of Employment, appeared before the Select Committee on 14 April, and I asked him whether his Department would be responsible for finding employment for those made redundant as a direct consequence of the changes in taxation and whether his Secretary of State had been involved in discussions with the Treasury. He said no, there had been no discussion whatsoever.
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      Although the Government will have to find some project or scheme which will provide training, reeducation and jobs for those 10,000 people, the Treasury did not consult the Department of Employment, even though it will be given the responsibility. There was no prior discussion with the Department of Energy, with the industry, with the workers in the industry or with the Department of Employment. The Financial Secretary should tell us exactly who these discussions took place with.
      My hon. Friends have rightly raised the spectre of the lost jobs in the north-east of Scotland, and those who will lose their jobs should be conscious that the hon. Member for Kincardine and Deeside (Mr. Kynoch) and the hon. Member for Aberdeen, South (Mr. Robertson) are likely to support these measures. They should be aware that their unemployment, according to the hon. Member for Kincardine and Deeside, will be a "positive response" to pressure from MPs for changes in the petroleum revenue tax which caused the unemployment. I hope it helps the unemployed, as they wend their way to the unemployment exchange, to know that a positive response made them unemployed. I am sure that there will be many people in those areas knocking on the doors of those two hon. Members, demanding that they find such people suitable alternative employment after the changes in petroleum revenue tax take effect.
      My union, Manufacturing Science and Finance—which is the largest union in the oil industry—has other concerns. As hon. Members have suggested, when licences were awarded, the oil companies agreed to complete a given number of exploration wells. Those commitment wells are having to be drilled without the planned tax relief, so there will clearly be a loss to those companies. The DTI is insisting that those drilling commitments are met, and this will have a further impact on the ability of those companies to maintain employment.
      It will certainly not be in the long-term interests of the country that we will have not a healthy industry, but an industry buffeted not only by economic recession—which, we are told, is not just here in this country but worldwide—but also by the impact of these changes in the exploration and appraisal tax proposals.
      The White Paper on energy relied heavily on the expectation that the oil and gas sector would continue to prosper. This decision by the Treasury destroys any belief in a long-term plan for the industry. The international players in the oil business are looking for a stable fiscal background for investment. In one simple decision, the Chancellor of the Exchequer has destroyed Britain's reputation and, more importantly, shown that the Government do not understand the long-term nature of the oil industry.
      The decision also sets a precedent for retrospective taxation. The commitment wells will be held to by the Department of Trade and Industry, and that will lead to further complications.
      One point that has come out of this short debate is that, when such huge investments are involved, any change decided by the Government should be discussed in advance with those involved. The problems should be identified and the solutions sought before the change is gradually introduced.
      I hope that other hon. Members will join the Opposition and vote for transitional arrangements which will at least offest the worst aspects of these changes.
      Mr. Eric Clarke: One of our main difficulties is the absence of an integrated energy policy. Obviously, we are a lucky nation in that we have indigenous oil, coal, gas and nuclear industries, but the taxation problem is causing unemployment.
      This is a short-term affair; I can see it in no other way. Constituents write to me, asking in particular what is happening to the exploitation of exploration. An extractive industry will die if there is no investment in exploration. It is impossible to keep pumping oil up a single hole; the industry must be continually expanded. My hon. Friend the Member for Edinburgh, Central (Mr. Darling) mentioned the threat that investors may go elsewhere: that threat is staring us in the face. Many nations have now lifted the barriers preventing multi-national companies from exploiting their resources. I am thinking especially of China. Many of the North sea companies' competitors are there already. One aspect of the industry is that those who are not there on the ground floor will lose out to a market that has potential for the future.
      Another aspect of the current threat is the knock-on effect on technology. It will be our loss if we hesitate to exploit the deep parts of the North sea, the export potential for the next generation and all the facilities, know-how and equipment available because of a taxation problem. The export potential and know-how that we can give other countries is there, staring us in the face. If there is a run-down in the companies involved, or of the high-technology institutes with which such companies work, that alone could give cause for regret in the future.
      I am adding my tuppence worth to the debate on the basis of what I consider to be common sense. Those who have written to me feel that, ultimately, they will pay the price for the Government's incompetence in organising an inquiry into the effects of their proposals; that cannot be tolerated. I know how I will vote tonight, and I appeal to other hon. Members to vote in the same Lobby to ensure that the Government reconsider their proposals.
      My appeal is based on common sense. We want to exploit the whole of the North sea and its potential. It should not be thought for a moment that only Grampian and the north-east are affected: anyone who boards a London train to Aberdeen will see many former miners and shipyard workers from the north-east of England whose skills have been adapted for work in the North sea. Many technical people throughout the United Kingdom are affected by the cut in exploitation of resources. I hope that hon. Members will use their common sense and support the amendment.
      7 pm
      Mr. Malcolm Chisholm: I too will curtail my remarks.
      I became interested in this subject because of two constituency considerations. First, I was getting many letters from men who worked in the North sea and were concerned that their jobs were at risk. Secondly, I was aware that a large factory in my constituency, United Wire at Granton, had quite a few employees making screening equipment for use in oil drilling. Even within a few weeks of the Budget, orders for that equipment had declined by 20 per cent.
      The Government may be rejoicing that at last they have hit the bottom of the big hole that they dug for themselves,
      706
      but the rest of us are still worried about unemployment. In Leith, we will not be dancing in the streets because 46 people came off the claimant count last month; we still have over 5,000 officially unemployed. My first concern is to make sure that no more people lose their jobs.
      We have heard about other parts of Scotland being worse affected. My main question is to find out the Minister's estimate of the number of jobs likely to be lost because of the tax change. Is he sticking by the much-quoted press release of 1 April, which mentioned 10,000? Another way of putting the question is to ask him whether he agrees with Professor Kemp.
      I accept that Professor Kemp says different things. There may be room for small changes in the tax regime, but the main thrust of Professor Kemp's report is that about 10,000 jobs will be lost. I intended to go into his report in more detail, but because of the shortage of time I will leave it.
      Does the Minister go along with what small businesses are saying? The Government claim to support small businesses. Those businesses want to know what will happen to the licences they have. Will they have to proceed with them? Does the Minister realise that small businesses are saying that they will go to other parts of the world where the tax regime is favourable?
      Why is it always BP which is quoted by Conservative Members? I think that BP is the only source which has been quoted more than Professor Kemp in the debate. BP, which stands to gain £150 million from the tax change, has been abandoning new exploration in the North sea for a long time. Of course a company can be a winner under the new regime if it does not want to explore. It was misleading for the Minister to quote the new BP development, because it has a contract for that, and it will still get tax relief on it. As my hon. Friend the Member for Dundee, East (Mr. McAllion) asked, would the company have initiated the development under the tax regime?
      Unemployment is our main concern, but many points about the proposal are reminiscent of problems which the Government have run into over the years. There is the short-term nature of the decision, as with so many other economic decisions. The Government seem to be saying, "Let us do something that will bring in money." It is connected with the problem of the public sector borrowing requirement. As with yesterday's debate, the tax proposal seems to he an easy way of solving the problem without regard to the long-term consequences.
      Many of the mistakes which the Government have made in their economic policy are being repeated in this measure. One quarter of United Kingdom manufacturing investment is in the North sea. The low level of manufacturing investment has been a key problem under the Government, yet they are prepared to let that decline, with the result that overseas investment by companies will increase. Encouragement of overseas investment has been a feature of the Government for the last 14 years.
      Even considering the matter in terms of revenue, if fewer new fields are developed, that will reduce revenue and exacerbate the fundamental balance of payments problem, to which the Government have not sought any solution. Many problems will be made worse by the measure. The main problem is that it will increase unemployment, which is still far too high in Scotland and throughout the United Kingdom.
      Mr. Calum Macdonald: I understand the pressure of time, but it is important to put on record that the changes will not just affect the east coast of Scotland, north-east and south-east, but will have a major impact on the west coast. The impact on the west coast may not be so great in terms of loss of income or the volume of jobs, but it may be disproportionately greater in relation to what those jobs mean for a fragile area such as the west coast.
      There are direct and indirect implications. The direct implication involves people from the west coast who are employed offshore in the North sea and companies on the west coast that service part of the North sea sector. One of the most important, if not the most important, is in my constituency. The fabrication yard at Arnish, just outside Stornoway, opened in the mid-70s and closed in the late 80s when the company, Hereema, pulled out. Subsequently there was a management buyout. Under the local managers, and with the help, support and hard work of the work force, the yard has prospered, employing up to 200 people on average. That is a large number in view of the fragile economy of the Western Isles.
      The quality of the jobs is as important as the number. In a rural economy dominated by agriculture and fishing, it is valuable to have highly skilled engineering jobs, filled 95 per cent. by local workers. Small yards such as that are likely to be the worst affected by the changes. Small yards will not pick up orders from companies like BP. They get orders from the smaller exploration companies which will be hardest hit by the changes.
      As to the indirect effect, people from the west coast work in the North sea sector but they send their earnings home. That money plays a vital part in maintaining the economic health of the west coast.
      One final factor is even more indirect—the potential impact on future exploration and development of oil and gas reserves off the west coast of Scotland, if they prove to be substantial. Some companies have expressed great interest in extending their activities to the west coast. Areas such as the Western Isles could gain greatly from that development. The companies providing services and supplies would probably not be as sophisticated as those that have sprung up on the east coast, but even if they were moderate sized they would have a beneficial effect on the fragile economy of the west coast.
      It is deeply irresponsible of the Government to threaten the exploration and development potential of the west coast of Scotland. Did the Government take account of the longer-term effect? BP is showing great interest in the western continental shelf. It will turn out to be one of the winners from the changes. But I wonder whether BP will put its winnings into exploration and development off the west coast, given the effect of the changes. Did the Government even consult BP to find out exactly what the implications of the changes would be on the company's plans for developing off the west coast?
      The jobs impact on the west coast of Scotland may seem relatively small in the context of 10,000 job losses overall, but it will have a huge and disproportionate impact on the west coast if exploration activity is seriously threatened by the changes. I join other hon. Members in asking the Government to reconsider the whole issue, especially the prospect of a transitional regime, and at least give a commitment that if things turn out badly for the industry as a result of the changes in the coming year or two, they will review the matter again.
      Mr. Dorrell: It is common ground in the Committee that we are debating important changes with important implications for the structure of the oil industry in the medium and long term.
      I begin by answering directly the hon. Members for Aberdeen, North (Mr. Hughes) and for Dundee, West (Mr. Ross) and others. I can tell them clearly and in terms that the changes are the result of a substantial programme of work that involved consultation between the Treasury, the Inland Revenue, the Department of Trade and Industry and, before that, the Department of Energy.
      The work was carefully prepared and the conclusions were reached by the Chancellor of the Exchequer on the basis of that work. The common ground, shared in all parts of the Committee, is a desire to ensure that we have in the North sea a stable fiscal regime that is attractive to the operators in the North sea and the supply industry. I agree with my hon. Friend the Member for Orpington (Mr. Horam) about the importance of ensuring that we have in this country an environment that encourages the development of competition in the oil companies and the supply sectors.
      No one can believe that the present system can properly be described as stable. The basic facts about the system are well known and on the record. In 1991–92, something that we call a tax cost the Exchequer £216 million. In 1992–93, it raised the princely sum of £54 million. So, in the last two years for which figures are available, the tax cost the Exchequer £162 million.
      The reason for that in large measure can be attributed to development of the use of the exploration and appraisal relief well beyond anything that was envisaged when the relief was originally introduced. When it was introduced in 1983, the budget estimate was that it would have a revenue cost of £40 million. The cost in the most recent year was £700 million.
      I stand absolutely by what I said in an intervention in the speech of the hon. Member for Aberdeen, North: any serious analysis of the present North sea fiscal regime must conclude that it is in need of change. That was obvious to me when I took over responsibility for the matter 12 months ago, and I think it was equally obvious to the oil companies and oil industry representatives who have been coming into my office in that 12-month period to talk about ideas for the evolution of the North sea fiscal regime.
      I do not apologise for giving my view on Second Reading that I do not believe it is right for the Treasury to engage in direct formal dicussions about the future of tax rates and tax allowances in the system. That leads to serious distortions in economic behaviour, partly through companies responding to what they perceive to be a threat to the regime and partly through financial markets seeking to discount and second-guess what tax changes are likely.
      I do not agree with my hon. Friend the Member for Orpington that it is sensible for Ministers to engage in a discussion about the detail of rates and allowances. It is clear to me that any serious analysis of the North sea fiscal regime over the past two years must conclude that it is a system in need of reform.
      Mr. Salmond: The Minister talked about a series of consultations, but I question whether many oil industry representatives were aware that they were taking part in

      709
      consultations. He also talked of departmental consultations. He did not mention the Scottish Office. Was that a deliberate omission, or did he just forget it?
      7.15 pm
      Mr. Dorrell: The sponsoring Department for the oil industry was the Department of Energy, now the Department of Trade and Industry. The purpose of the interdepartmental discussions was to ensure that the decision—which rests properly with my right hon. Friend the Chancellor of the Exchequer—was made on the basis of proper knowledge. That knowledge was available to him and his decision was based on a proper appraisal of the alternatives.
      Let us examine the substance and detail of the present position. We have a paper tax rate of 75 per cent. for the petroleum revenue tax. That is having the effect, in my view, of depressing development activity and potentially shortening field life, because it is uniquely the highest marginal rate of tax collected anywhere in our fiscal system now.
      Mr. Darling: Will the Minister explain what will be the benefit of the changes? He talked about the savings, but one must take into account the PRT that will not be collected. What calculations has he made of the cost of 10,000 people losing their jobs? Can we be given an overall picture of what the position will be from the taxpayer's point of view?
      Mr. Dorrell: I gave the figure in an intervention in the speech of the hon. Member for Dundee, West. I pointed out that the Red Book contained a projection for 1994–95 of £300 million and for 1995–96 of £400 million, being the net yield from the changes.
      The 75 per cent. PRT rate is recycled into exploration and appraisal, so in many cases the taxpayer is meeting 83 per cent., if corporation tax is included—that is, 75 per cent. PRT plus 33 per cent. corporation tax—of the cost of exploration and appraisal in the North sea. But as most of the fields currently being found will not pay PRT—because of the effect of the allowances—the taxpayer's share of the return on those fields, if they are found and developed, amounts to 33 per cent. In other words, the Treasury is signing the taxpayer up to a deal under which the taxpayer contributes 83 per cent. of the equity in return for 33 per cent. of the return.
      That fundamental distortion leads to the tax subsidies which my hon. Friend the Member for Beaconsfield (Mr. Smith) was right to deplore. I believe that if a project is uneconomic, it is no part of the job of the tax system to make that uneconomic activity appear economic. That is the result of the PRT system as it now exists.
      Another principle of the reform which I hold to be important is that if the existing system will not raise any tax, we do well to admit it. It seems nonsensical to talk about PRT in the context of a range of fields when it is common ground on the part of all who have examined the issue that it is a PRT system that will not produce any yield from most of the fields currently being explored.
      If there is to be no yield, it is better to admit it and abolish the tax. The only purpose of keeping the tax, if there is to be no yield, is to provide an excuse for paying tax allowances. It seems the ultimate absurdity, which is
      710
      the position that the amendment would provide, to maintain a tax system not with the object of collecting tax but to pay out allowances.
      If we want to pay a subsidy to a particular sector, by all means let us do so, but it should be properly justified, not brought in under the guise of a tax system.
      Mr. Malcolm Bruce: Does the Minister accept that those of us who agree that there is a case for reform and are calling for transitional arrangements are worried that the long-term disincentive to exploration will mean that the Treasury and the economy will lose out because some oil fields may not be found? It is important to ensure a viable incentive to encourage oil companies to explore in the United Kingdom rather then elsewhere.
      Mr. Dorrell: I am coming to the effect of the changes on exploration, which is an important point mentioned by several hon. Members. Before doing so, I want to draw the Committee's attention to something mentioned by my hon. Friend the Member for Kincardine and Deeside (Mr. Kynoch), who does not uncritically support every aspect of the proposals. It was he who drew attention to the fact that there is striking unanimity in the industry on the point that the principles behind the long-term changes that we want to introduce are right.
      I should like to quote not, as might be predicted, BP but a number of other companies. Mobil says:
      "We believe that the changes proposed to the North Sea fiscal regime are well-founded and in the long-term interest of the industry and of the nation."
      Amoco's view of the changes
      "is one of welcome for their general thrust."
      Marathon
      "is supportive of the direction being taken. We believe that in the long term the development of UKCS oil and gas resources will benefit from these changes."
      Shell UK believes
      "that the thrust of the changes is correct."
      The industry's association, the United Kingdom Offshore Operators Association, says:
      "There is agreement that the reduction of the PRT rate and the elimination of PRT for new fields is a welcome step which will be positive to enhancing productivity from existing large mature fields and to the development of new fields."
      There is thus widespread recognition that the long-term effect of the changes will be to make the tax and fiscal regime in the North sea much more rational than the system that it replaces.
      Several hon. Members have sought to concentrate on how we arrange the transition from the system as it is to the system that we want to create. I turn now to the transitional arrangements which the Government considered ahead of the Budget and for which we have provided in the Finance Bill. We must test proposals for transitional arrangements in two ways. First, as the new structure seems to be more rational and likely to lead to a better use of resources in the economy, it is important that the transitional regime delivers the change surely, so that there is no doubt that we will reach the end result reasonably quickly. Secondly, and equally important, we want the changes delivered with the minimum dislocation. I acknowledge that some dislocation from changes on this scale is inevitable, but we want a method of introducing them that minimises it.
      Before we engage in a sensible discussion of the precise structure of transitional arrangements, I should add that I agree with the point made by my hon. Friend the Member for Orpington and by the hon. Member for Edinburgh,

      711
      Leith (Mr. Chisholm)—we must make an assessment of the effect of the proposed changes on employment and especially on exploration. That will tell us the size of the transitional problem with which we need to deal.
      A number of factors are relevant in this context. First, four companies in the North sea together represent 40 per cent. of all exploration and appraisal activity there. They have publicly committed themselves to no reduction in E and A. The four are Shell, Esso, Mobil and BP. Secondly, 40 per cent. of current exploration and appraisal activity does not benefit at all from E and A relief from PRT. That being so, I am at a loss to understand how the withdrawal of the relief can lead to companies cutting short their E and A programmes. There is some overlap between the two categories, but as 40 per cent. of activity has been committed to being maintained and a different 40 per cent. is not benefiting from the relief that we are withdrawing, the worst case that we posited—a 50 per cent. reduction in exploration and appraisal—is, as I told an Aberdeen newspaper, improbably pessimistic.
      I am reinforced in that belief by the evidence of what is going on in the present 14th licensing round. I understand that the Department of Trade and Industry told companies that had put in bids in the 14th round after the Budget that if, in the light of the Budget changes, they wanted to withdraw or change their bids, they were free to do so. Only a minimal number of companies have taken up that opportunity. So here we have a clear market test of the likely effect on exploration; it reinforces my view that it is profoundly unlikely to be anything like as serious as most of the worst case scenarios would suggest.
      Mr. Salmond: The Minister is telling us that everything will be all right and we should not worry too much. Can he offer the Committee anything comparable to the thoroughness and academic rigour of Professor Kemp's study? If not, would we not be best advised to proceed on the conclusion of the professor's analysis?
      Mr. Dorrell: I have given the Committee the basis on which I am working. Professor Kemp came to see me this morning and I asked him for the basis on which the reduction in wells had been posited in the most recent document. He said that that had to be a matter of judgment—his words, not mine. I have provided the Committee with the evidence on which we have reached our conclusion that a 50 per cent. reduction in the level of exploration is improbable, and it is not the only factor acting on employment and total levels of activity in the economy associated with the North sea.
      I say that that is not the only factor, because it altogether omits the fact that the reduction in the PRT rate from 75 per cent. to 50 per cent. has the effect of doubling the post-tax return of all development activity and all current activity in producing fields. It was precisely that effect that led BP yesterday, in announcing its £1·5 billion development programme, to say, not that the programme was dreamt up after 16 March—of course it was not—but that, against the background of the Budget changes, its enhanced development programme was "made more likely" by those Budget changes.
      If the hon. Member for Edinburgh, Central (Mr. Darling) prefers an alternative quotation, the company said that the programme was "given a significant impetus"
      712
      by the Budget changes. I ask the Committee to recognise that, for oil companies considering development activity or the life of their existing producing fields, it is wildly improbable that the doubling of the post-tax rate of return will have no effect whatever on those two indicators of activity.
      It was against that background that we carefully considered the transitional arrangements that should apply to get us from where we are to where we want to be. Three choices were suggested to us, and I will consider them briefly in turn. First, it was suggested from some quarters that we should protect obligation wells. That case was argued by very few companies—indeed, by almost none of the companies that have been to see me—and it is easy to see why. The bids that were put in during earlier licensing rounds, as in this one, were invited on the basis of a proper economic assessment, and the companies that submitted them overwhelmingly made their judgments on the basis of such assessments.
      I was asked about obligations. Our position was made abundantly clear in a letter from my hon. Friend the Minister for Energy to UKOOA, dated 22 April, in which, speaking for the Government collectively, he said:
      "I regard the drilling obligations entered into as binding, and I expect these to be honoured …
      Of course, this does not exclude adjustments to particular wells in a drilling programme. We have always been prepared to consider, for example, the rephasing of individual wells on a case by case basis, having regard to technical or other specific arguments for change. But it was not our intention at the time of the Budget that there should be any general reinterpretation of the licensing obligations along the lines UKOOA appear to suggest."
      That is clearly the position on obligation wells.
      7.30 pm
      The second suggestion is that we should phase changes in the tax rates and the allowances. My hon. Friend the Member for Orpington saw some attraction in that approach. It seems to me that the problem is that, by delaying the PRT cut, we should be delaying precisely the incentive to which BP responded yesterday, while creating a powerful incentive for exploration companies to bring forward activity to benefit from the more generous allowances that would prevail—but prevail under notice. It would clearly be in the interests of the companies to act now rather than later, in order to benefit from a tax concession that we would have announced was being phased out.
      Some hon. Members have said that that can be dealt with by capping. It seems to me that that illustrates the unattractiveness of that course. I am reminded of the common agricultural policy. It is acknowledged that a distortion is being introduced, but we are told not to worry as another distortion can be introduced to control the first one. That is not a very attractive way of designing a tax policy.
      It is for those reasons that I prefer the third approach to transition. I refer to the Government's approach, as set out in the Finance Bill, which is based on existing contractual obligations. We have said that the changes will he phased, in the sense that, although E and A relief for new fields is being abolished from 16 March, the rate cut will take effect from 1 July. That has provided my right hon. Friend the Chancellor of the Exchequer with up to £200 million gross for transitional relief, based on the existing contractual commitments of the supply companies

      713
      operating in the North sea—precisely those most likely to be damaged by over-abrupt change in the tax system. That was the conclusion of our careful review, and it remains so.
      I started by stressing the importance of stability in the fiscal regime. We carefully considered all the choices. We believe that this structure is robust for all likely scenarios regarding oil discoveries and oil prices. No doubt the detail of the proposal can be examined in Committee. We shall have plenty of opportunity for such examination. I believe that the structure of this proposal is the result of a serious programme of work. It is one in which the Committee and the industry can have confidence, and I recommend that the amendments be rejected.
      Mr. Darling: The Committee can be in no doubt about the Government's position: there are to be no concessions on this measure. The Minister has not even disputed the fact that at least 10,000 jobs will be lost as a result of the Bill. I understand that the hon. Member for Aberdeen, South (Mr. Robertson) is a former Tory party agent. Tonight, he must choose between the interests of the Conservative party and the interests of his constituents. Last night, he voted for an increase in the taxes of his constituents. If he votes with the Government tonight, he will be supporting a measure that will result in many of them losing their jobs. The hon. Gentleman's attitude stands in stark contrast to that of his hon. Friends the Members for Orpington (Mr. Horam) and Kincardine and Deeside (Mr. Kynoch), who at least recognise that there will be transitional problems. But the Government have made it absolutely clear that they are not prepared to meet the legitimate demands of people involved in the industry and those living in communities affected by these proposals, who want some sort of relief.
      The Government have not disputed the fact that exploration will be affected. It was astounding to hear the Minister pray in aid of this proposal Shell, Esso, Mobil and BP, which, he says, are committed to having no reduction. How can any Government rely on the best intentions of a company, stated just after the announcement of a Budget measure? It is the Government's duty to take into account the interests of the United Kingdom as a whole rather than the interests of a few oil companies. The measure will undoubtedly benefit some oil companies, as we have said during this debate. However, there is a substantial risk that exploration will be exported from the United Kingdom waters to other parts of the world, with the result that the natural resource we have in the North sea and in our Atlantic waters will be lost. There is no dispute about the fact that, because of the traumatic disruption caused by the Chancellor's announcement, jobs will go. The Government have made it absolutely clear that there is to be no transitional relief.
      To those Conservative Members who have said in the Chamber today, as well as to their constituents by way of radio and television and the other media, that they are not happy with the Government's position I say that they now have a very clear choice. If they want to support the interests of the North sea oil industry and this country's long-term energy interests, they will have to vote for Labour's amendment. By voting with the Government they will shut the door on any hope for the industry. They have nowhere to hide, and I invite them to join us in the Lobby.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 253, Noes 289.

      Division No. 262]

      [7.35 pm

      AYES

      Abbott, Ms Diane

      Field, Frank (Birkenhead)

      Adams, Mrs Irene

      Fisher, Mark

      Ainger, Nick

      Flynn, Paul

      Ainsworth, Robert (Cov'try NE)

      Foster, Rt Hon Derek

      Allen, Graham

      Foster, Don (Bath)

      Alton, David

      Foulkes, George

      Anderson, Donald (Swansea E)

      Fraser, John

      Anderson, Ms Janet (Ros'dale)

      Fyfe, Maria

      Armstrong, Hilary

      Galbraith, Sam

      Ashdown, Rt Hon Paddy

      Gapes, Mike

      Ashton, Joe

      Garrett, John

      Austin-Walker, John

      Gerrard, Neil

      Barnes, Harry

      Gilbert, Rt Hon Dr John

      Barron, Kevin

      Godsiff, Roger

      Battle, John

      Golding, Mrs Llin

      Bayley, Hugh

      Gordon, Mildred

      Beggs, Roy

      Gould, Bryan

      Beith, Rt Hon A. J.

      Graham, Thomas

      Bell, Stuart

      Grant, Bernie (Tottenham)

      Benn, Rt Hon Tony

      Griffiths, Nigel (Edinburgh S)

      Bennett, Andrew F.

      Griffiths, Win (Bridgend)

      Benton, Joe

      Grocott, Bruce

      Berry, Dr. Roger

      Gunnell, John

      Betts, Clive

      Hain, Peter

      Blair, Tony

      Hall, Mike

      Blunkett, David

      Hanson, David

      Boateng, Paul

      Harman, Ms Harriet

      Boyce, Jimmy

      Harvey, Nick

      Boyes, Roland

      Henderson, Doug

      Bradley, Keith

      Heppell, John

      Brown, Gordon (Dunfermline E)

      Hill, Keith (Streatham)

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

      Hinchliffe, David

      Bruce, Malcolm (Gordon)

      Hogg, Norman (Cumbernauld)

      Burden, Richard

      Hood, Jimmy

      Byers, Stephen

      Hoon, Geoffrey

      Callaghan, Jim

      Howarth, George (Knowsley N)

      Campbell, Mrs Anne (C'bridge)

      Howells, Dr. Kim (Pontypridd)

      Campbell, Ronnie (Blyth V)

      Hughes, Kevin (Doncaster N)

      Campbell-Savours, D. N.

      Hughes, Robert (Aberdeen N)

      Canavan, Dennis

      Hughes, Simon (Southwark)

      Cann, Jamie

      Hutton, John

      Chisholm, Malcolm

      Illsley, Eric

      Clark, Dr David (South Shields)

      Jackson, Glenda (H'stead)

      Clarke, Eric (Midlothian)

      Jackson, Helen (Shef'ld, H)

      Clarke, Tom (Monklands W)

      Jamieson, David

      Clelland, David

      Janner, Greville

      Clwyd, Mrs Ann

      Jones, Barry (Alyn and D'side)

      Connarty, Michael

      Jones, leuan Wyn (Ynys Môn)

      Cook, Frank (Stockton N)

      Jones, Jon Owen (Cardiff C)

      Cook, Robin (Livingston)

      Jones, Lynne (B'ham S O)

      Corston, Ms Jean

      Jones, Martyn (Clwyd, SW)

      Cousins, Jim

      Jones, Nigel (Cheltenham)

      Cryer, Bob

      Jowell, Tessa

      Cunningham, Jim (Covy SE)

      Kaufman, Rt Hon Gerald

      Cunningham, Rt Hon Dr John

      Keen, Alan

      Dafis, Cynog

      Kennedy, Charles (Ross,C&S)

      Darling, Alistair

      Kennedy, Jane (Lpool Brdgn)

      Davidson, Ian

      Khabra, Piara S.

      Davies, Bryan (Oldham C'tral)

      Kilfoyle, Peter

      Davies, Rt Hon Denzil (Llanelli)

      Kinnock, Rt Hon Neil (Islwyn)

      Davies, Ron (Caerphilly)

      Kirkwood, Archy

      Denham, John

      Leighton, Ron

      Dewar, Donald

      Lestor, Joan (Eccles)

      Dixon, Don

      Lewis, Terry

      Dobson, Frank

      Livingstone, Ken

      Donohoe, Brian H.

      Lloyd, Tony (Stretford)

      Dowd, Jim

      Llwyd, Elfyn

      Dunnachie, Jimmy

      Loyden, Eddie

      Dunwoody, Mrs Gwyneth

      Lynne, Ms Liz

      Eagle, Ms Angela

      McAllion, John

      Eastham, Ken

      McAvoy, Thomas

      Enright, Derek

      McCartney, Ian

      Etherington, Bill

      Macdonald, Calum

      Evans, John (St Helens N)

      McFall, John

      Ewing, Mrs Margaret

      McGrady, Eddie

      Fatchett, Derek

      McKelvey, William

      Faulds, Andrew

      Mackinlay, Andrew

      715

      McLeish, Henry

      Rogers, Allan

      Maclennan, Robert

      Rooker, Jeff

      McMaster, Gordon

      Rooney, Terry

      Madden, Max

      Ross, Ernie (Dundee W)

      Mahon, Alice

      Rowlands, Ted

      Mandelson, Peter

      Ruddock, Joan

      Marek, Dr John

      Salmond, Alex

      Marshall, David (Shettleston)

      Sedgemore, Brian

      Marshall, Jim (Leicester, S)

      Sheerman, Barry

      Martin, Michael J. (Springburn)

      Sheldon, Rt Hon Robert

      Martlew, Eric

      Shore, Rt Hon Peter

      Maxton, John

      Short, Clare

      Meacher, Michael

      Simpson, Alan

      Michael, Alun

      Skinner, Dennis

      Michie, Bill (Sheffield Heeley)

      Smith, Andrew (Oxford E)

      Michie, Mrs Ray (Argyll Bute)

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

      Milburn, Alan

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

      Miller, Andrew

      Smith, Llew (Blaenau Gwent)

      Mitchell, Austin (Gt Grimsby)

      Soley, Clive

      Moonie, Dr Lewis

      Spearing, Nigel

      Morgan, Rhodri

      Steel, Rt Hon Sir David

      Morley, Elliot

      Steinberg, Gerry

      Morris, Rt Hon A. (Wy'nshawe)

      Stevenson, George

      Morris, Estelle (B'ham Yardley)

      Strang, Dr. Gavin

      Morris, Rt Hon J. (Aberavon)

      Taylor, Mrs Ann (Dewsbury)

      Mowlam, Marjorie

      Taylor, Matthew (Truro)

      Mullin, Chris

      Tipping, Paddy

      Murphy, Paul

      Turner, Dennis

      Oakes, Rt Hon Gordon

      Tyler, Paul

      O'Brien, Michael (N W'kshire)

      Vaz, Keith

      O'Hara, Edward

      Walker, Rt Hon Sir Harold

      Olner, William

      Wallace, James

      O'Neill, Martin

      Wardell, Gareth (Gower)

      Orme, Rt Hon Stanley

      Wareing, Robert N

      Parry, Robert

      Watson, Mike

      Pendry, Tom

      Welsh, Andrew

      Pickthall, Colin

      Wicks, Malcolm

      Pike, Peter L.

      Wigley, Dafydd

      Pope, Greg

      Williams, Rt Hon Alan (Sw'n W)

      Powell, Ray (Ogmore)

      Williams, Alan W (Carmarthen)

      Prentice, Ms Bridget (Lew'm E)

      Wilson, Brian

      Prentice, Gordon (Pendle)

      Winnick, David

      Prescott, John

      Wise, Audrey

      Primarolo, Dawn

      Worthington, Tony

      Purchase, Ken

      Wray, Jimmy

      Quin, Ms Joyce

      Wright, Dr Tony

      Randall, Stuart

      Young, David (Bolton SE)

      Raynsford, Nick

      Reid, Dr John

      Tellers for the Ayes

      Robertson, George (Hamilton)

      Mr. John Spellar and Mr. Alan Meale.

      Robinson, Geoffrey (Co'try NW)

      Roche, Mrs. Barbara

      NOES

      Ainsworth, Peter (East Surrey)

      Bowis, John

      Aitken, Jonathan

      Boyson, Rt Hon Sir Rhodes

      Alison, Rt Hon Michael (Selby)

      Brandreth, Gyles

      Allason, Rupert (Torbay)

      Brazier, Julian

      Amess, David

      Bright, Graham

      Ancram, Michael

      Brooke, Rt Hon Peter

      Arbuthnot, James

      Brown, M. (Brigg & Cl'thorpes)

      Arnold, Jacques (Gravesham)

      Browning, Mrs. Angela

      Arnold, Sir Thomas (Hazel Grv)

      Budgen, Nicholas

      Ashby, David

      Burns, Simon

      Aspinwall, Jack

      Burt, Alistair

      Atkinson, Peter (Hexham)

      Butler, Peter

      Baker, Rt Hon K. (Mole Valley)

      Carlisle, John (Luton North)

      Baker, Nicholas (Dorset North)

      Carlisle, Kenneth (Lincoln)

      Baldry, Tony

      Carrington, Matthew

      Banks, Matthew (Southport)

      Carttiss, Michael

      Banks, Robert (Harrogate)

      Cash, William

      Bates, Michael

      Channon, Rt Hon Paul

      Batiste, Spencer

      Churchill, Mr

      Bellingham, Henry

      Clappison, James

      Bendall, Vivian

      Clark, Dr Michael (Rochford)

      Beresford, Sir Paul

      Clarke, Rt Hon Kenneth (Ruclif)

      Blackburn, Dr John G.

      Clifton-Brown, Geoffrey

      Booth, Hartley

      Coe, Sebastian

      Boswell, Tim

      Colvin, Michael

      Bottomley, Peter (Eltham)

      Congdon, David

      716

      Conway, Derek

      Howard, Rt Hon Michael

      Coombs, Anthony (Wyre For'st)

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

      Coombs, Simon (Swindon)

      Howell, Rt Hon David (G'dford)

      Cope, Rt Hon Sir John

      Hughes Robert G. (Harrow W)

      Couchman, James

      Hunt, Rt Hon David (Wirral W)

      Cran, James

      Hunter, Andrew

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

      Hurd, Rt Hon Douglas

      Curry, David (Skipton & Ripon)

      Jack, Michael

      Davies, Quentin (Stamford)

      Jackson, Robert (Wantage)

      Davis, David (Boothferry)

      Jenkin, Bernard

      Day, Stephen

      Jessel, Toby

      Deva, Nirj Joseph

      Johnson Smith, Sir Geoffrey

      Dickens, Geoffrey

      Jones, Gwilym (Cardiff N)

      Dicks, Terry

      Jones, Robert B. (W Hertfdshr)

      Dorrell, Stephen

      Jopling, Rt Hon Michael

      Douglas-Hamilton, Lord James

      Kellett-Bowman, Dame Elaine

      Dover, Den

      Key, Robert

      Duncan, Alan

      Kilfedder, Sir James

      Duncan-Smith, Iain

      King, Rt Hon Tom

      Dunn, Bob

      Kirkhope, Timothy

      Dykes, Hugh

      Knapman, Roger

      Eggar, Tim

      Knight, Mrs Angela (Erewash)

      Elletson, Harold

      Knight, Greg (Derby N)

      Emery, Rt Hon Sir Peter

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

      Evans, David (Welwyn Hatfield)

      Knox, David

      Evans, Jonathan (Brecon)

      Kynoch, George (Kincardine)

      Evans, Nigel (Ribble Valley)

      Lait, Mrs Jacqui

      Evans, Roger (Monmouth)

      Lamont, Rt Hon Norman

      Evennett, David

      Lawrence, Sir Ivan

      Faber, David

      Legg, Barry

      Fabricant, Michael

      Lester, Jim (Broxtowe)

      Fairbairn, Sir Nicholas

      Lidington, David

      Field, Barry (Isle of Wight)

      Lightbown, David

      Fishburn, Dudley

      Lilley, Rt Hon Peter

      Forman, Nigel

      Lloyd, Peter (Fareham)

      Forsyth, Michael (Stirling)

      Lord, Michael

      Forth, Eric

      Luff, Peter

      Fowler, Rt Hon Sir Norman

      Lyell, Rt Hon Sir Nicholas

      Fox, Dr Liam (Woodspring)

      MacGregor, Rt Hon John

      Fox, Sir Marcus (Shipley)

      MacKay, Andrew

      Freeman, Roger

      Maclean, David

      French, Douglas

      McLoughlin, Patrick

      Fry, Peter

      McNair-Wilson, Sir Patrick

      Gale, Roger

      Madel, David

      Gallie, Phil

      Maitland, Lady Olga

      Gardiner, Sir George

      Malone, Gerald

      Garel-Jones, Rt Hon Tristan

      Mans, Keith

      Garnier, Edward

      Marland, Paul

      Gill, Christopher

      Marlow, Tony

      Gillan, Cheryl

      Marshall, John (Hendon S)

      Goodlad, Rt Hon Alastair

      Martin, David (Portsmouth S)

      Goodson-Wickes, Dr Charles

      Merchant, Piers

      Gorman, Mrs Teresa

      Milligan, Stephen

      Gorst, John

      Mitchell, Andrew (Gedling)

      Greenway, Harry (Ealing N)

      Moate, Sir Roger

      Greenway, John (Ryedale)

      Monro, Sir Hector

      Griffiths, Peter (Portsmouth, N)

      Montgomery, Sir Fergus

      Grylls, Sir Michael

      Moss, Malcolm

      Gummer, Rt Hon John Selwyn

      Needham, Richard

      Hague, William

      Nelson, Anthony

      Hamilton, Rt Hon Archie (Epsom)

      Neubert, Sir Michael

      Hamilton, Neil (Tatton)

      Newton, Rt Hon Tony

      Hanley, Jeremy

      Nicholls, Patrick

      Hannam, Sir John

      Nicholson, David (Taunton)

      Hargreaves, Andrew

      Nicholson, Emma (Devon West)

      Harris, David

      Norris, Steve

      Haselhurst, Alan

      Onslow, Rt Hon Sir Cranley

      Hawkins, Nick

      Oppenheim, Phillip

      Hawksley, Warren

      Ottaway, Richard

      Hayes, Jerry

      Page, Richard

      Heald, Oliver

      Paice, James

      Heath, Rt Hon Sir Edward

      Patnick, Irvine

      Heathcoat-Amory, David

      Patten, Rt Hon John

      Hendry, Charles

      Pattie, Rt Hon Sir Geoffrey

      Heseltine, Rt Hon Michael

      Pawsey, James

      Hicks, Robert

      Peacock, Mrs Elizabeth

      Higgins, Rt Hon Sir Terence L.

      Pickles, Eric

      Hill, James (Southampton Test)

      Porter, David (Waveney)

      Horam, John

      Portillo, Rt Hon Michael

      Hordern, Rt Hon Sir Peter

      Powell, William (Corby)

      717

      Redwood, John

      Tapsell, Sir Peter

      Rendel, David

      Taylor, Ian (Esher)

      Renton, Rt Hon Tim

      Taylor, John M. (Solihull)

      Richards, Rod

      Taylor, Sir Teddy (Southend, E)

      Riddick, Graham

      Temple-Morris, Peter

      Rifkind, Rt Hon. Malcolm

      Thomason, Roy

      Robathan, Andrew

      Thompson, Patrick (Norwich N)

      Roberts, Rt Hon Sir Wyn

      Thornton, Sir Malcolm

      Robertson, Raymond (Ab'd'n S)

      Thurnham, Peter

      Robinson, Mark (Somerton)

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

      Roe, Mrs Marion (Broxbourne)

      Tracey, Richard

      Rowe, Andrew (Mid Kent)

      Tredinnick, David

      Rumbold, Rt Hon Dame Angela

      Trend, Michael

      Ryder, Rt Hon Richard

      Trotter, Neville

      Sackville, Tom

      Twinn, Dr Ian

      Sainsbury, Rt Hon Tim

      Viggers, Peter

      Scott, Rt Hon Nicholas

      Waldegrave, Rt Hon William

      Shaw, David (Dover)

      Walden, George

      Shaw, Sir Giles (Pudsey)

      Walker, Bill (N Tayside)

      Shephard, Rt Hon Gillian

      Waller, Gary

      Shepherd, Richard (Aldridge)

      Wardle, Charles (Bexhill)

      Shersby, Michael

      Waterson, Nigel

      Sims, Roger

      Watts, John

      Skeet, Sir Trevor

      Wells, Bowen

      Smith, Tim (Beaconsfield)

      Wheeler, Rt Hon Sir John

      Soames, Nicholas

      Whitney, Ray

      Spencer, Sir Derek

      Whittingdale, John

      Spicer, Sir James (W Dorset)

      Widdecombe, Ann

      Spicer, Michael (S Worcs)

      Wiggin, Sir Jerry

      Spink, Dr Robert

      Wilkinson, John

      Spring, Richard

      Willetts, David

      Sproat, Iain

      Wilshire, David

      Squire, Robin (Hornchurch)

      Winterton, Mrs Ann (Congleton)

      Stanley, Rt Hon Sir John

      Winterton, Nicholas (Macc'f'ld)

      Steen, Anthony

      Wolfson, Mark

      Stephen, Michael

      Yeo, Tim

      Stern, Michael

      Young, Sir George (Acton)

      Stewart, Allan

      Streeter, Gary

      Tellers for the Noes:

      Sumberg, David

      Mr. Sydney Chapman and Mr. Timothy Wood.

      Sweeney, Walter

      Sykes, John

      Question accordingly negatived.
      Amendment proposed: No. 40, in page 137, line 36, at end insert 'or—
      (c) one in which in whole or in part, a commitment to a programme of Exploration and Appraisal drilling was undertaken under the terms of a licence agreement and approved by the Secretary of State before that date, where the field participants elect to so classify the oil field and to accept a diminishing percentage of allowable expenditure on exploration and appraisal to be offset against PRT and a ceiling on the amount allowed for each company as allowable expenditure for PRT relief; the percentage, the timescale and the ceiling to be determined by the Secretary of State and approved by the affirmative resolution of each House of Parliament.'. —[Mr. Salmond.]
      Question put, That the amendment be made:—
      The Committee divided: Ayes 250, Noes 287.

      Division No. 263]

      [7.49 pm

      AYES

      Abbott, Ms Diane

      Bayley, Hugh

      Adams, Mrs Irene

      Beggs, Roy

      Ainger, Nick

      Beith, Rt Hon A. J.

      Ainsworth, Robert (Cov'try NE)

      Bell, Stuart

      Allen, Graham

      Benn, Rt Hon Tony

      Alton, David

      Bennett, Andrew F.

      Anderson, Donald (Swansea E)

      Benton, Joe

      Anderson, Ms Janet (Ros'dale)

      Berry, Dr. Roger

      Armstrong, Hilary

      Betts, Clive

      Ashton, Joe

      Blair, Tony

      Austin-Walker, John

      Blunkett, David

      Barnes, Harry

      Boateng, Paul

      Barron, Kevin

      Boyce, Jimmy

      Battle, John

      Boyes, Roland

      718

      Bradley, Keith

      Hogg, Norman (Cumbernauld)

      Brown, Gordon (Dunfermline E)

      Hood, Jimmy

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

      Hoon, Geoffrey

      Bruce, Malcolm (Gordon)

      Howarth, George (Knowsley N)

      Burden, Richard

      Howells, Dr. Kim (Pontypridd)

      Byers, Stephen

      Hoyle, Doug

      Callaghan, Jim

      Hughes, Kevin (Doncaster N)

      Campbell, Mrs Anne (C'bridge)

      Hughes, Robert (Aberdeen N)

      Campbell, Ronnie (Blyth V)

      Hutton, John

      Campbell-Savours, D. N.

      Illsley, Eric

      Canavan, Dennis

      Jackson, Glenda (H'stead)

      Cann, Jamie

      Jackson, Helen (Shef'ld, H)

      Chisholm, Malcolm

      Jamieson, David

      Clark, Dr David (South Shields)

      Janner, Greville

      Clarke, Eric (Midlothian)

      Jones, Barry (Alyn and D'side)

      Clarke, Tom (Monklands W)

      Jones, Ieuan Wyn (Ynys Môn)

      Clelland, David

      Jones, Jon Owen (Cardiff C)

      Clwyd, Mrs Ann

      Jones, Lynne (B'ham S O)

      Connarty, Michael

      Jones, Martyn (Clwyd, SW)

      Cook, Frank (Stockton N)

      Jones, Nigel (Cheltenham)

      Cook, Robin (Livingston)

      Jowell, Tessa

      Corston, Ms Jean

      Kaufman, Rt Hon Gerald

      Cousins, Jim

      Keen, Alan

      Cryer, Bob

      Kennedy, Charles (Ross, C&S)

      Cunningham, Jim (Covy SE)

      Kennedy, Jane (Lpool Brdgn)

      Cunningham, Rt Hon Dr John

      Khabra, Piara S.

      Dafis, Cynog

      Kilfoyle, Peter

      Darling, Alistair

      Kinnock, Rt Hon Neil (Islwyn)

      Davidson, Ian

      Kirkwood, Archy

      Davies. Bryan (Oldham C'tral)

      Leighton, Ron

      Davies, Rt Hon Denzil (Llanelli)

      Lestor, Joan (Eccles)

      Davies, Ron (Caerphilly)

      Lewis, Terry

      Denham, John

      Livingstone, Ken

      Dewar, Donald

      Lloyd, Tony (Stretford)

      Dixon, Don

      Llwyd, Elfyn

      Dobson, Frank

      Loyden, Eddie

      Donohoe, Brian H.

      Lynne, Ms Liz

      Dowd, Jim

      McAllion, John

      Dunnachie, Jimmy

      McAvoy, Thomas

      Dunwoody, Mrs Gwyneth

      McCartney, Ian

      Eagle, Ms Angela

      Macdonald, Calum

      Eastham, Ken

      McFall, John

      Enright, Derek

      McGrady, Eddie

      Etherington, Bill

      McKelvey, William

      Evans, John (St Helens N)

      Mackinlay, Andrew

      Ewing, Mrs Margaret

      McLeish, Henry

      Fatchett, Derek

      Maclennan, Robert

      Faulds, Andrew

      McMaster, Gordon

      Field, Frank (Birkenhead)

      Madden, Max

      Fisher, Mark

      Mahon, Alice

      Flynn, Paul

      Mandelson, Peter

      Foster, Rt Hon Derek

      Marek, Dr John

      Foster, Don (Bath)

      Marshall, David (Shettleston)

      Foulkes, George

      Marshall, Jim (Leicester, S)

      Fraser, John

      Martin, Michael J. (Springburn)

      Fyfe, Maria

      Martlew, Eric

      Galbraith, Sam

      Maxton, John

      Gapes, Mike

      Meacher, Michael

      Garrett, John

      Meale, Alan

      Gerrard, Neil

      Michael, Alun

      Gilbert, Rt Hon Dr John

      Michie, Bill (Sheffield Heeley)

      Godsiff, Roger

      Michie, Mrs Ray (Argyll Bute)

      Golding, Mrs Llin

      Milburn, Alan

      Gordon, Mildred

      Miller, Andrew

      Gould, Bryan

      Mitchell, Austin (Gt Grimsby)

      Graham, Thomas

      Moonie, Dr Lewis

      Grant, Bernie (Tottenham)

      Morgan, Rhodri

      Griffiths, Nigel (Edinburgh S)

      Morley, Elliot

      Griffiths, Win (Bridgend)

      Morris, Rt Hon A. (Wy'nshawe)

      Grocott, Bruce

      Morris, Estelle (B'ham Yardley)

      Gunnell, John

      Morris, Rt Hon J. (Aberavon)

      Hain, Peter

      Mullin, Chris

      Hall, Mike

      Murphy, Paul

      Hanson, David

      Oakes, Rt Hon Gordon

      Harman, Ms Harriet

      O'Brien, Michael (N W'kshire)

      Harvey, Nick

      O'Hara, Edward

      Henderson, Doug

      Olner, William

      Heppell, John

      O'Neill, Martin

      Hill, Keith (Streatham)

      Orme, Rt Hon Stanley

      Hinchliffe, David

      Parry, Robert

      719

      Pendry, Tom

      Smith, Llew (Blaenau Gwent)

      Pickthall, Colin

      Soley, Clive

      Pike, Peter L.

      Spearing, Nigel

      Pope, Greg

      Spellar, John

      Powell, Ray (Ogmore)

      Steel, Rt Hon Sir David

      Prentice, Ms Bridget (Lew'm E)

      Steinberg, Gerry

      Prentice, Gordon (Pendle)

      Stevenson, George

      Prescott, John

      Strang, Dr. Gavin

      Primarolo, Dawn

      Taylor, Matthew (Truro)

      Purchase, Ken

      Tipping, Paddy

      Quin, Ms Joyce

      Turner, Dennis

      Randall, Stuart

      Tyler, Paul

      Reid, Dr John

      Vaz, Keith

      Robertson, George (Hamilton)

      Walker, Rt Hon Sir Harold

      Robinson, Geoffrey (Co'try NW)

      Wallace, James

      Roche, Mrs. Barbara

      Wardell, Gareth (Gower)

      Rogers, Allan

      Wareing, Robert N

      Rooker, Jeff

      Watson, Mike

      Rooney, Terry

      Wicks, Malcolm

      Ross, Ernie (Dundee W)

      Wigley, Dafydd

      Rowlands, Ted

      Williams, Rt Hon Alan (Sw'n W)

      Ruddock, Joan

      Williams, Alan W (Carmarthen)

      Salmond, Alex

      Wilson, Brian

      Sedgemore, Brian

      Winnick, David

      Sheerman, Barry

      Wise, Audrey

      Sheldon, Rt Hon Robert

      Worthington, Tony

      Shore, Rt Hon Peter

      Wray, Jimmy

      Short, Clare

      Wright, Dr Tony

      Simpson, Alan

      Young, David (Bolton SE)

      Skinner, Dennis

      Smith, Andrew (Oxford E)

      Tellers for the Ayes:

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

      Mr. Simon Hughes and Mr. Andrew Welsh.

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

      NOES

      Ainsworth, Peter (East Surrey)

      Clarke, Rt Hon Kenneth (Ruclif)

      Aitken, Jonathan

      Clifton-Brown, Geoffrey

      Alison, Rt Hon Michael (Selby)

      Coe, Sebastian

      Allason, Rupert (Torbay)

      Colvin, Michael

      Amess, David

      Congdon, David

      Ancram, Michael

      Conway, Derek

      Arbuthnot, James

      Coombs, Anthony (Wyre For'st)

      Arnold, Jacques (Gravesham)

      Coombs, Simon (Swindon)

      Arnold, Sir Thomas (Hazel Grv)

      Cope, Rt Hon Sir John

      Ashby, David

      Couchman, James

      Aspinwall, Jack

      Cran, James

      Atkinson, Peter (Hexham)

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

      Baker, Rt Hon K. (Mole Valley)

      Curry, David (Skipton & Ripon)

      Baker, Nicholas (Dorset North)

      Davies, Quentin (Stamford)

      Baldry, Tony

      Davis, David (Boothferry)

      Banks, Matthew (Southport)

      Day, Stephen

      Banks, Robert (Harrogate)

      Deva, Nirj Joseph

      Bates, Michael

      Dickens, Geoffrey

      Batiste, Spencer

      Dicks, Terry

      Bellingham, Henry

      Dorrell, Stephen

      Bendall, Vivian

      Douglas-Hamilton, Lord James

      Beresford, Sir Paul

      Dover, Den

      Blackburn, Dr John G.

      Duncan, Alan

      Booth, Hartley

      Duncan-Smith, Iain

      Boswell, Tim

      Dunn, Bob

      Bottomley, Peter (Eltham)

      Dykes, Hugh

      Bowis, John

      Eggar, Tim

      Boyson, Rt Hon Sir Rhodes

      Elletson, Harold

      Brandreth, Gyles

      Emery, Rt Hon Sir Peter

      Brazier, Julian

      Evans, David (Welwyn Hatfield)

      Bright, Graham

      Evans, Jonathan (Brecon)

      Brooke, Rt Hon Peter

      Evans, Nigel (Ribble Valley)

      Brown, M. (Brigg & Cl'thorpes)

      Evans, Roger (Monmouth)

      Browning, Mrs. Angela

      Evennett, David

      Budgen, Nicholas

      Faber, David

      Burns, Simon

      Fabricant, Michael

      Burt, Alistair

      Fairbairn, Sir Nicholas

      Butler, Peter

      Field, Barry (Isle of Wight)

      Carlisle, John (Luton North)

      Fishburn, Dudley

      Carlisle, Kenneth (Lincoln)

      Forman, Nigel

      Carrington, Matthew

      Forsyth, Michael (Stirling)

      Channon, Rt Hon Paul

      Forth, Eric

      Churchill, Mr

      Fowler, Rt Hon Sir Norman

      Clappison, James

      Fox, Dr Liam (Woodspring)

      Clark, Dr Michael (Rochford)

      Fox, Sir Marcus (Shipley)

      720

      Freeman, Roger

      McNair-Wilson, Sir Patrick

      French, Douglas

      Madel, David

      Fry, Peter

      Maitland, Lady Olga

      Gale, Roger

      Malone, Gerald

      Gallie, Phil

      Mans, Keith

      Gardiner, Sir George

      Marland, Paul

      Garel-Jones, Rt Hon Tristan

      Marlow, Tony

      Garnier, Edward

      Marshall, John (Hendon S)

      Gill, Christopher

      Martin, David (Portsmouth S)

      Gillan, Cheryl

      Merchant, Piers

      Goodlad, Rt Hon Alastair

      Milligan, Stephen

      Goodson-Wickes, Dr Charles

      Mitchell, Andrew (Gedling)

      Gorman, Mrs Teresa

      Moate, Sir Roger

      Gorst, John

      Monro, Sir Hector

      Greenway, Harry (Ealing N)

      Montgomery, Sir Fergus

      Greenway, John (Ryedale)

      Moss, Malcolm

      Griffiths, Peter (Portsmouth, N)

      Needham, Richard

      Grylls, Sir Michael

      Nelson, Anthony

      Gummer, Rt Hon John Selwyn

      Neubert, Sir Michael

      Hague, William

      Newton, Rt Hon Tony

      Hamilton, Rt Hon Archie (Epsom)

      Nicholls, Patrick

      Hamilton, Neil (Tatton)

      Nicholson, David (Taunton)

      Hanley, Jeremy

      Nicholson, Emma (Devon West)

      Hannam, Sir John

      Norris, Steve

      Hargreaves, Andrew

      Onslow, Rt Hon Sir Cranley

      Harris, David

      Oppenheim, Phillip

      Haselhurst, Alan

      Ottaway, Richard

      Hawkins, Nick

      Page, Richard

      Hawksley, Warren

      Paice, James

      Hayes, Jerry

      Patnick, Irvine

      Heald, Oliver

      Patten, Rt Hon John

      Heath, Rt Hon Sir Edward

      Pattie, Rt Hon Sir Geoffrey

      Heathcoat-Amory, David

      Pawsey, James

      Hendry, Charles

      Peacock, Mrs Elizabeth

      Heseltine, Rt Hon Michael

      Pickles, Eric

      Hicks, Robert

      Porter, David (Waveney)

      Higgins, Rt Hon Sir Terence L.

      Portillo, Rt Hon Michael

      Hill, James (Southampton Test)

      Powell, William (Corby)

      Horam, John

      Redwood, John

      Hordern, Rt Hon Sir Peter

      Renton, Rt Hon Tim

      Howard, Rt Hon Michael

      Richards, Rod

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

      Riddick, Graham

      Howell, Rt Hon David (G'dford)

      Rifkind, Rt Hon. Malcolm

      Hughes Robert G. (Harrow W)

      Robathan, Andrew

      Hunt, Rt Hon David (Wirral W)

      Roberts, Rt Hon Sir Wyn

      Hunter, Andrew

      Robertson, Raymond (Ab'd'n S)

      Hurd, Rt Hon Douglas

      Robinson, Mark (Somerton)

      Jack, Michael

      Roe, Mrs Marion (Broxbourne)

      Jackson, Robert (Wantage)

      Rowe, Andrew (Mid Kent)

      Jenkin, Bernard

      Rumbold, Rt Hon Dame Angela

      Jessel, Toby

      Ryder, Rt Hon Richard

      Johnson Smith, Sir Geoffrey

      Sackville, Tom

      Jones, Gwilym (Cardiff N)

      Sainsbury, Rt Hon Tim

      Jones, Robert B. (W Hertfdshr)

      Scott, Rt Hon Nicholas

      Jopling, Rt Hon Michael

      Shaw, David (Dover)

      Kellett-Bowman, Dame Elaine

      Shaw, Sir Giles (Pudsey)

      Key, Robert

      Shephard, Rt Hon Gillian

      Kilfedder, Sir James

      Shepherd, Richard (Aldridge)

      King, Rt Hon Tom

      Shersby, Michael

      Knapman, Roger

      Sims, Roger

      Knight, Mrs Angela (Erewash)

      Skeet, Sir Trevor

      Knight, Greg (Derby N)

      Smith, Tim (Beaconsfield)

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

      Soames, Nicholas

      Knox, David

      Spencer, Sir Derek

      Kynoch, George (Kincardine)

      Spicer, Sir James (W Dorset)

      Lait, Mrs Jacqui

      Spicer, Michael (S Worcs)

      Lamont, Rt Hon Norman

      Spink, Dr Robert

      Lawrence, Sir Ivan

      Spring, Richard

      Legg, Barry

      Sproat, Iain

      Lidington, David

      Squire, Robin (Hornchurch)

      Lightbown, David

      Stanley, Rt Hon Sir John

      Lilley, Rt Hon Peter

      Steen, Anthony

      Lloyd, Peter (Fareham)

      Stephen, Michael

      Lord, Michael

      Stern, Michael

      Luff, Peter

      Stewart, Allan

      Lyell, Rt Hon Sir Nicholas

      Streeter, Gary

      MacGregor, Rt Hon John

      Sumberg, David

      MacKay, Andrew

      Sweeney, Walter

      Maclean, David

      Sykes, John

      McLoughlin, Patrick

      Tapsell, Sir Peter

      721

      Taylor, Ian (Esher)

      Watts, John

      Taylor, John M. (Solihull)

      Wells, Bowen

      Taylor, Sir Teddy (Southend, E)

      Wheeler, Rt Hon Sir John

      Temple-Morris, Peter

      Whitney, Ray

      Thomason, Roy

      Whittingdale, John

      Thompson, Patrick (Norwich N)

      Widdecombe, Ann

      Thornton, Sir Malcolm

      Wiggin, Sir Jerry

      Thurnham, Peter

      Wilkinson, John

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

      Willetts, David

      Tracey, Richard

      Wilshire, David

      Tredinnick, David

      Winterton, Mrs Ann (Congleton)

      Trend, Michael

      Winterton, Nicholas (Macc'f'ld)

      Trotter, Neville

      Wolfson, Mark

      Twinn, Dr Ian

      Wood, Timothy

      Viggers, Peter

      Yeo, Tim

      Waldegrave, Rt Hon William

      Young, Sir George (Acton)

      Walden, George

      Walker, Bill (N Tayside)

      Tellers for the Noes:

      Waller, Gary

      Mr. Sydney Chapman and Mr. Timothy Kirkhope.

      Wardle, Charles (Bexhill)

      Waterson, Nigel

      Question accordingly negatived.
      Clause 183 ordered to stand part of the Bill.

    Clause 48

      BAD DEBTS
      8 pm
      Mr. Andrew Smith: I beg to move amendment No. 41, in page 29, line 32, leave out 'six' and insert 'three'.
      The purpose of the amendment is to allow businesses to recover more quickly the output VAT that they accounted for when making supply to a customer where the debt proves to be bad. It provides the opportunity for us to discuss more generally the extent of bad debt and its serious consequences for small businesses in particular, which make the measure all the more necessary.
      Let me make it clear at the outset that we welcome the fact that the clause proposes to reduce the waiting period from one year to six months, which will be of benefit to businesses large and small. As firms that are not in the cash accounting scheme for VAT—I shall return to that scheme in due course—become liable for VAT when they send out invoices, but only get the money back when their customers pay them, which in some cases is never, the provisions have serious consequences for business cash flows.
      We believe that, given the comment before the Budget —for example, in the Financial Times of 8 March speculating on the benefit of immediate relief on bad debt, given that the CBI was calling for relief on bad debt to be immediately available when provision is made in the traders' account—we feel that the Government may be being unnecessarily cautious in moving only to six months and we should like to press the case for three months instead. That would give a cash flow benefit to small businesses in addition to that estimated by the Chancellor in the Budget.
      Such a measure is especially important at a time when bankruptcies are running at such a high level. Dun and Bradstreet reports that in the first quarter of this year there were no fewer than 15,443 businesses collapsing—a 3·8 per cent. increase on the same period last year. In those circumstances, bad debts themselves become a principal cause of business failure. There is a vicious circle. Firms that do not receive payment find it increasingly difficult to meet their own debts. That compounds the problem and if
      722
      such firms are not themselves pitched into bankruptcy or liquidation—as, sadly, many are—they are at the very least more likely to join the legions of late payers, stoking up the overall burden of corporate debt overhang, itself aggravated by high real interest rates, which make forced inter-company credit the borrowing of first resort. That exerts financial stress throughout the business network to the point where those unlucky or adventurous enough to be the weakest links in the chain then break, with knock-on consequences all round.
      I think that it is now generally acknowledged that that is an extremely serious problem, not only in the United Kingdom but, as Michael Cassell reported in the Financial Times of 23 February, throughout the European Community, where the problem has become steadily worse as the recession has deepened. Michael Cassel reported the Association of British Factors and Discounters estimate of the time taken for European companies to pay as having increased by on average no less than one third in 1992. That is borne out by a disturbing report in today's Financial Times. Apparently, a survey by NCM Credit Insurance shows that
      "One in five UK companies lost money as a result of non-payment by an EC customer in the year ended March 1993, compared with one in eight in the year to March 1989."
      Clearly, that augurs badly for British companies looking to the EC for business which Britain so desperately needs given the yawning balance of payments deficit.
      All of that places a very real premium on the help that the Government can give as regards domestic late payments and VAT on bad debts. After all, in both cases, firms are merely trying to get back more quickly the money that is due to them.
      We welcome the CBI prompt payers' code and hope that the CBI is successful in getting a much larger proportion of its membership to sign up to it. We believe, too, that the Government should be setting an example both in public sector payments and through their readiness to legislate where that would be of benefit.
      It is an absolute disgrace that the Property Services Agency, being fattened up for privatisation, was revealed by the Public Accounts Committee to be making contractors wait months for payment because of delays by the Ministry of Defence in paying it. The Guardian obtained an internal PSA newsletter called "Paid when Paid", which revealed that the Minister for Local Government and Inner Cities, no less, was expecting companies to wait 44 days for payment in connection with defence, prison, courts and royal palace contracts, in contravention of the 30-day maximum target that the Chancellor of the Exchequer set in his Budget last year.
      It is not enough for the Government simply to require Departments to publish details of their payments performance in their departmental reports. Although that is all well and good in itself, it does not give any immediate incentive to recalcitrant Departments, nor does it offer redress to contractors waiting for bills to be paid by those Departments. As the Government operate a system of penalties for businesses that are late in paying their VAT, why not apply a system of penalties—perhaps precisely the same penalties—to Government Departments that are late in paying their bills to businesses?
      If that were brought in as an automatic supplement to which the trader would have a legal right, it would not only be seen to be fair but would offer some automatic compensation to the trader, would set a good example and

      723
      would concentrate minds wonderfully in the Department concerned. It would show that the Government were prepared to match their words, which are cheap, with actions which might not be so cheap. I am sure that it would be welcomed by the business community.
      The other important question to which the debate gives rise is why more small businesses do not take advantage of the cash accounting scheme which enables smaller businesses to account for VAT on the basis of payments received and made rather than the usual liability on the basis of invoices issued and received.
      The Customs and Excise press notice issued on 16 March estimated that only about 40 per cent. of those traders who could benefit from the scheme were doing so. So although the announcement in the Budget that the threshold for eligibility for the scheme is to be raised from £300,000 to £350,000 and entry is to be made easier is to be welcomed, if small businesses are to derive the full benefit of the scheme and thereby escape the perils of late payment, we need to be assured that early action is in prospect on the outcome of the consultation exercise that is under way. I should be grateful if the Minister could tell us how soon the Government expect to be able to implement measures to improve take-up and ease of entry to the scheme.
      I should be grateful if the Paymaster General could tell us whether any specific effort has been made to survey the 60 per cent. of eligible businesses to find out why they are not using the system. That is an obvious step to take. It may well be that the answer to that question—why businesses are not using the scheme—which does not appear on the Customs and Excise consultation paper on the operation of the scheme, is pertinent and the right route to finding a way towards higher take-up and thereby more benefits to small businesses in Britain.
      Small businesses have been going through a difficult time. The VAT regime is often experienced as a real headache, making things harder for business rather than easier. We do not dispute that there are a number of measures in the Finance Bill that will help small businesses. We advocated those measures, and they are to be welcomed.
      The Government need to accept that there is a long way to go as far as small businesses are concerned. That was underlined in a timely fashion by the publication today of a report by Grant Thornton which surveyed the opinions on economic prospects of small and medium-sized enterprises across the European Community. The report makes sorry reading. When such reports are published, it is important to underline that they do not tell the whole story about Britain's small businesses—many of them are thriving against all the odds. Labour Members certainly have no interest in talking down prospects for our small firms—we acknowledge that many are doing well.
      The survey shows that many small businesses are gloomy about their prospects. The Press Association report on the survey says:
      "Britain's small and medium-sized businesses are among the gloomiest in the EC about future prospects … there is pessimism about turnover, employment and investment—and Britain is the only country where research and development spending is expected to fall. It also has the weakest forecast for spending on training".
      724
      The survey, which covered 5,000 businesses throughout the Community, underlines the severity of the problems which firms in Britain and elsewhere in the Community face with late payments. There seemed to be vulnerability to pressures on finance arising from the problem of late payers.
      The widening skills gap is underlined in the report. That is one area where the United Kingdom comes out badly. It is bad news at a time when small businesses in Britain need help with upskilling their employees and with the advice available to the management of small firms. Another relevant outcome of the survey is that the size of management teams in small firms in Britain is, on average, much greater than that of their European competitors. That inevitably means that a higher proportion of costs is spent on management, with a consequent undermining of competitiveness.
      The findings of the survey bear out everything that the Labour party has been saying about the need for the British economy to have more investment in infrastructure and skills and more support for our small businesses. The Paymaster General should tell the Committee what action the Government will take on the findings of the survey. He should also respond to the question which he did not have an opportunity to answer in the turmoil and somewhat torrid time that he was having at the end of yesterday's debate: what will be the effect of the increase in VAT on small firms—those businesses that people have started from home which are not paying any VAT on their fuel at present because they do not use more than 40 per cent. of their fuel consumption for business purposes? The imposition of VAT on fuel will hit those small businesses. The Paymaster General owes the Committee an explanation as to how the Government can possibly impose that measure on those businesses. He also owes the firms involved an apology.
      8.15 pm
      If the Government want small businesses to thrive, they must take action. As I suggested, they need to act to improve the overall economic position and climate that small businesses face. They also need to act specifically with regard to the consequences of bad debts for creditor firms. There are other provisions in the Bill with regard to small businesses, and we shall have a good deal to say about them—notably, the provisions relating to the VAT penalty regime and the right of recourse to VAT tribunals.
      The Government need to take action to tackle the underlying causes which are giving rise to escalating bad debts. Those causes are fundamentally to be found in the consequences of recession and the fragility of recovery which still sees 1,200 businesses going under every week. Unemployment still casts an unacceptably long shadow over prospects for business recovery because of the greatly depressed purchasing power of the unemployed and because the fear of unemployment continues to corrode general confidence. Labour Members must stress the importance of tackling the causes of business failure and bad debt as well as the symptoms.
      Small businesses add up to big business and they deserve every support. Labour's policies to that end are being developed further in consultation with small businesses. The key elements on which the construction of a supportive framework for small businesses need to focus

      725
      were spelt out by my hon. Friend the Member for Leeds, Central (Mr. Fatchett) in a speech to the Small Business Development conference in April.
      Those elements are, first, finance—the need to free small businesses from dependency on short-term and expensive finance and from excessive exposure to personal risk by encouraging longer-term financial support and an equity share on the part of banks. Secondly, there must be improved advice and encouragement for the development of managerial skills. I have already referred to that matter in the context of the Grant Thornton survey. Thirdly, there must be better support for technology transfer, technological innovation and bringing new ideas to the market place. We believe that, with a supportive fiscal framework and a proper overall strategy for economic growth, infrastructure, investment and training, small businesses will have an even more important role to play in securing Britain's economic recovery and sustainable prosperity.
      With regard to the specific provisions in clause 48, a further reduction, to three months, in the elapsed time for eligibility for VAT bad debt relief would give more help to the cash flow of many businesses, thereby staunching job losses and boosting confidence and recovery. I commend the amendment to the Committee.
      The Paymaster General (Sir John Cope): It might be helpful to the Committee if I intervene at this point to talk specifically about clause 48 and the amendment. The hon. Member for Oxford, East (Mr. Smith) ranged a good deal wider than that to other subjects relating to small businesses. I may refer to some of those wider aspects at the end of the debate if I have a further opportunity.
      The Committee will appreciate that the Government have given a good deal of attention to the problems of VAT and small businesses, especially in relation to bad debts, over the past year that I have been doing this job and, indeed, under my predecessor. I have long been involved in the support of small businesses. I am anxious to ensure that VAT is fairly operated and takes account of the difficulties of businesses, especially cash flow difficulties.
      Customs and Excise has experienced increased bad debts in the form of VAT arrears. That is not surprising in a time of recession. The House may have seen from the Customs and Excise annual report covering the last fiscal year, which was published not long ago, that arrears increased, in spite of some special measures, from 4·2 to 4·4 per cent. The Public Accounts Committee has rightly and fairly criticised those arrears.
      It is essential, if we are to be fair to those who pay their VAT on time, that we collect the VAT due from their competitors as promptly as possible. It is not fair to the majority for us to allow a minority to postpone their obligations, particularly in cases where the trader has collected the VAT from his own customers—I am thinking especially of retail businesses—and then fails to hand it over to the Customs and Excise when it is due.
      Conversely, we also recognise the problems of some traders, especially when they have not been paid by their customers. That is the problem to which the clause is directed. As the hon. Member for Oxford, East correctly said, my right hon. Friend the Chancellor of the Exchequer has taken two specific measures in the Budget
      726
      to help people in that position. First, he has widened and improved the cash accounting scheme. Secondly, he has made bad debts easier to write off for VAT purposes.
      The promised improvements in the cash accounting scheme can be put in place by order and administrative action. They do not require clauses in the Finance Bill. So there will not be an opportunity to mention them at another stage. The threshold has been raised to a turnover of £350,000 per annum. Traders whose turnover rises up to 25 per cent. above that can remain in the scheme until they come out of the top end. All that takes place under the VAT (Cash Accounting) (Amendment) Regulations 1993, which took effect on 1 April 1993.
      Not only that statistical change has occurred. We have also made changes to the arrangements for the scheme so that any trader whose turnover is below the new threshold can automatically use the cash accounting system without having to apply for and receive approval, as he previously did. Clearly, if it turns out that he was not eligible, he has to put the matter right later. We have tried to get rid of the bureaucracy involved in signing up to the cash accounting scheme.
      The hon. Member for Oxford, East asked me about the consultation with the trade organisations, which is now in progress. We have asked for responses to the consultation by 31 May. We shall consider carefully the responses that we receive as soon as possible thereafter.
      We have done a certain amount to publicise the cash accounting scheme especially to new traders. The packs for new traders include advertisements explaining the scheme and the other schemes available to traders. Further details are offered to anyone who is interested to know more. We have drawn the scheme to the attention of practitioners, banks and so on, so that they can advise clients about the scheme and tell them to take advantage of it, if it is desirable and if they wish to do so. We have conducted various exercises to publicise the scheme among traders who might wish to benefit from it.
      The hon. Member for Oxford, East mulled over why more traders who, on paper, are eligible for the scheme do not take it up. When one ponders the matter one sees that there are some fairly obvious reasons why some do not choose to take up the scheme. First, the retail schemes and other related schemes for retailers are better for some small businesses. It is not necessary for them to take up the cash accounting scheme to obtain similar benefits or benefits that they consider more desirable in making their arrangements for VAT. For some traders who take cash over the counter, there is no advantage in the cash accounting scheme in dealing with bad debts.
      If one does business for cash, by definition one does not have any bad debts—unless one takes some dud notes—so some people do not become involved in the cash accounting scheme. It may be better for some traders from the input point of view not to be in the cash accounting scheme, depending how promptly they pay their suppliers and whether supplies are provided on credit.
      Some traders find that the Inland Revenue cash accounting scheme does not blend as easily as it might with the VAT cash accounting scheme. They prefer not to be involved in the VAT scheme for that reason. Some additional accounting is required to keep the accounts on the basis that we require—necessarily, I believe—so that we can operate the scheme with due regard to the revenue.
      Apart from the cash accounting scheme, which is highly desirable and which we have improved and extended in the

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      Budget, my right hon. Friend and I were also anxious to improve the position of those who have bad debts and are VAT traders. That is the reason for clause 48 and the provisions that we are considering.
      The present scheme was introduced by section 11 of the Finance Act 1990. Before then, there was a scheme of VAT relief for bad debts. It depended on the formal insolvency of the debtor. That led to difficulties. Apart from anything else, it provided a VAT incentive to traders to go through the formal insolvency procedures to get back the VAT, and for no other reason. That was correctly regarded as an unnecessary incentive to go through the formal insolvency procedures. That was partly why the new scheme was introduced in the Finance Act 1990.
      Initially, the cash accounting scheme provided eligibility for relief on all debts in respect of supplies that were made after 1 April 1989 which were two years old and were written off in the trader's accounts.
      A clawback provision still exists in respect of belated payments received by claimants. A debt may be regarded as bad at a certain time, but the trader may still chase it and he may succeed in getting some of the money back. We would obviously need to recover the VAT in that case.
      The waiting period was reduced from two years to one year before the scheme came into full effect under section 15 of the Finance Act 1991. The new scheme has been generally welcomed and it has been discussed in the House and in Committee on a number of occasions. Representations have been made, however, from professional and business organisations and individuals about the fact that the waiting period is too long. Given the recession, those representations have had greater validity because of the cash flow problems that have thus been caused. We have responded to those representations with the proposal in the Bill to reduce the waiting period from one year to six months.
      8.30 pm
      The decision to halve the waiting period is a reflection of the attention paid to the representations made and significantly enhances a scheme that has already led to a major improvement for businesses chasing bad debts. The one-year cost of the scheme—it is only one year because the scheme brings forward the time at which bad debts are written off—is estimated at £150 million. In other words, the cash flow of those businesses affected by bad debt has been improved by £150 million as a result of the Government's efforts in the current financial year.
      The hon. Member for Oxford, East has suggested that we should reduce the waiting period from six months to three months, but I do not believe that it would be wise to pursue that proposal. If it is possible to write off a bad debt too soon after that debt is incurred, the necessary provisions will become unduly bureaucratic and difficult. The necessary clawback of debts paid after the end of the proposed 90-day period would increase considerably.
      We must remember that different types of businesses use different credit arrangements. Credit of 90 days is not unusual in some lines of business. If the amendment of the hon. Member for Oxford, East were accepted, it would mean that every debt that was more than one day or a week outstanding after 90 days could be written off for VAT. That VAT would then need to be clawed back at a later date.
      728
      I should make it clear that any waiting period, be it six months or, were we to accept the amendment, which I do not recommend, three months, runs from the day of supply. It runs from when the goods are delivered and the invoice arrives. The period does not run from when the credit allowed by the supplier has expired. I do not believe that VAT should be written off as early as three months after the date of supply, because that would add to the control problems of Customs and Excise when managing write-offs. It is necessary to establish that a debt is genuinely bad. Just because someone has been a bit dilatory in coming up with the money does not make for a bad debt. That is why the waiting period of six months is appropriate.
      Mr. Andrew Smith: Why is it more difficult to validate that the debt is a genuine bad debt when it is reclaimed after three months rather than after six? Surely the same evidence will be available for the VAT inspectors.
      The right hon. Gentleman referred to the increased bureaucracy that that shorter period would impose on a business. I certainly do not see why the VAT inspectors or businesses should be subject to any more bureaucracy. If a business wanted to operate a 90-day or an even longer credit system, it would have that choice under our proposals. It would be up to businesses to decide whether to reclaim VAT after three months, six months or longer. Although our amendment would enable businesses to make a claim after three months, it would not preclude them, from choice, from deciding to wait longer, if they operate an extended system of credit. Surely our amendment gives business more choice than the right hon. Gentleman has tried to suggest.
      Sir John Cope: Yes, in some senses it does, but a business will have to decide whether to place itself at a disadvantage in comparison with some of its competitors by not reclaiming the VAT as soon as it could, as proposed under the hon. Gentleman's amendment. At the same time, a business would have to be sure that it got its clawback right. From our point of view and that of Customs and Excise, we would also need to try to be sure that no bad debt that had been written off at the end of three months had not been paid afterwards. From a technical point of view, that is quite a difficult thing to do. I speak as a former auditor who had to go over transactions and find out what happened. Sometimes it is difficult to be certain that a debt has not been paid belatedly.
      The hon. Member for Oxford, East picked up my phrase about validating a debt as genuinely bad. There is no validation of the kind to which he referred, for example through the production of some documents to demonstrate that a debt is bad. The only validation that is required under the scheme is the length of time during which the debt has been in existence; in other words, from the date of supply until the six months period has expired. Providing that the debt has been outstanding for six months, no further validation in terms of documents is required.
      For the scheme to be simple and easy to operate from the point of view of the trader and Customs and Excise, it is wise that a simple period of time should elapse. That provides reasonable protection and it is not necessary to

      729
      provide further validation. That is why I believe that the period should be set at six months as opposed to three months.
      At the time of the review of bad debt relief in 1988, when the scheme was introduced, an extensive consultation exercise was undertaken. Most of those who replied accepted the need for a waiting period and their views on the length of that period ranged from a maximum of two years, which is what the Government then introduced, to a minimum of six months. At that stage, no one requested a waiting period of three months and there has been no pressure for it since.
      The expressed wish of those who were consulted is met by clause 48. To guard against the danger of fraudulent abuse, particularly by associated companies and connected persons—we must always think about those who would try to use, for fraudulent reasons, provisions in the tax law that were introduced for genuine reasons—six months is the right waiting period for the scheme.
      The hon. Member for Oxford, East referred to quite a number of other, wider matters. I may respond to them more fully later, if time allows. In connection with the late payment of debt and the Government's own position, Government accounting now requires Departments to pay bills promptly in accordance with the terms of the contract or within 30 days of the receipt of goods and services or presentation of a valid invoice, whichever is the later, if no other terms are specified.
      The Chancellor announced in his 1992 Budget that prime contractors to Government Departments would in future be required to include in their contracts with sub-contractors a clause committing them to pay promptly. The hon. Member for Oxford, East referred to some of the difficulties encountered in introducing and enforcing that provision across the public sector. New arrangements are being introduced by, for example, the Property Services Agency Building Management businesses to ensure that sub-contractors are paid promptly, within 30 days of the validation of the invoice.
      A recent survey, to which the hon. Gentleman may have referred indirectly, by the Heating and Ventilating Contractors Association suggested a poor performance by the PSA. It predated the new arrangements and does not reflect their effect. There have been reports in answer to parliamentary questions on the performance of individual Departments, and they show that in 80 to 90 per cent. of cases the majority of Departments are already within the new arrangements, but it is only 12 months since their introduction and we are trying to improve the performance of individual Departments. As the hon. Gentleman himself mentioned, we are giving information on payment performance in departmental reports as well as in comprehensive parliamentary answers.
      The hon. Gentleman also referred to an interesting report in this morning's Financial Times about a Grant Thornton survey of small and medium enterprises and their prospects in the European Community. I also noticed that report and have asked to see particulars of the survey. We will consider it carefully and see what lessons it has for us and what we should do, if anything, to address the problems that it throws up, on my side at least, as far as VAT is concerned. There may be wider lessons for other parts of Government.
      In the early stages of what I had to say I referred to the problems of bad debt for both traders and Customs and Excise in a time of cash flow difficulties for us both, and the
      730
      necessity of addressing those difficulties, particularly where small firms are concerned. The hon. Member for Oxford, East expressed a strong belief in small businesses and in the bigger part that they will play—bigger even than in recent years—in the recovery from recession to future economic prosperity.
      I am glad to have been associated with the small business lobby in the House since before I even became an hon. Member, and I am very glad that small businesses have been able to contribute so much to the economy in the past decade. I am particularly pleased that the Labour party has come round so strongly to the support of small businesses and that it is promoting ideas such as the hon. Gentleman has put forward today to encourage them to build up. Although not earth-shattering, the clause is an important step in that direction, as are the changes in the cash accounting scheme introduced in the Budget by my right hon. Friend the Chancellor. I commend the clause to the Committee, but, for the reasons that I have given, I do not recommend that the Committee goes as far as to insert "three months" into the Bill.
      8.45 pm
      Mr. Peter Mandelson: The importance of the amendment that Opposition Members are putting forward is that it allows us to focus on the problems of late payment and bad debt facing many of Britain's 5 million small businesses and to consider the proposed changes to the VAT regime designed to ameliorate the problems that small businesses experience, especially when firms have already paid VAT on moneys owing to them that have become bad debts. No hon. Member will have been left unaware of the problems and demands of small businesses. I certainly have not, since I was elected last year. Many feel as if they are running not only their own businesses but a separate business dealing with the VAT inspectors, the paperwork, the bureaucracy and the appeals that are involved.
      Many experience and complain about the often punitive fines which they incur and which equal the earnings in a given week. No doubt VAT men and women are badly misunderstood people, but it must be recognised that many are viewed as tyrants by the small business people who have to deal with the VAT authorities, and it behoves us hon. Members to try to do all that we can to build a bridge between the oppressed and the oppressors. Clause 48 represents the latest attempt to help small businesses by changing the VAT bad debt regulations by making VAT relief on bad debts more readily available. Although it is to be welcomed, it is only part of what is necessary to give greater support to the small business sector. The importance of the small business sector for the British economy has already been stressed. Ninety-five per cent. of all businesses in the United Kingdom employ fewer than 20 people. About half the work force—11 million people—work in small firms. Small firms contribute more than a quarter of the nation's gross domestic product. Small firms have rightly been called the engine room of Britain's economy, and since the war it is small businesses that have provided the fastest growth, the greatest job creation and the most dynamic technological innovation. Their needs are, therefore, a priority for our attention, and recognition of their needs crosses party boundaries and makes absolutely futile the argument that some like to have about whether their party is more

      731
      pro-small firm than the other. I was grateful for the Paymaster General's commendation of the strong support that the modern Labour party gives to small businesses.
      In the light, however, of what the Paymaster General said, I was amazed to read, prior to this debate, a debate on 13 November 1992 on small and medium-sized enterprises, initiated by the hon. Member for Colchester, North (Mr. Jenkin), during which his fellow bright spark the hon. Member for Chingford (Mr. Duncan Smith) tried to claim that small business
      "drives to the heart of Conservative philosophy"
      because
      "small businesses are really about individuals, about dreams and aspirations"
      and therefore
      "solid Conservative principles are at the heart of the matter."
      For sheer lack of logic—some would say claptrap—his comments are difficult to beat, especially as he failed to go on and point out how many small firms' dreams have been smashed and aspirations broken on the back of the Tories' recession.
      A more accurate summing up of the position regarding small firms was offered by the hon. Member for Colchester,North—obviously a shrewd judge with a brilliant future behind him—when he said:
      "it is small firms that feel most under pressure in the recession, most put upon by the banks, most burdened by regulation and most neglected by Government policy."—[Official Report, 13 November 1992; Vol. 213, c. 1084–143.]
      I could not have put it better myself. Our task this evening,
      across the party divide, is to do what we can to unburden small businesses while observing the standards of employment practice shown in the best small firms. That is the aim of clause 48 and amendment No. 41.
      Since that debate last November, the pressure of the recession seems to have eased somewhat—thank goodness for that—although it will take many years to undo the damage caused to small firms by it. There is still a long way to go to unburden small firms fully. It is worth pointing out that, as recovery picks up, some small firms will be experiencing fresh and different financial demans on them, exacerbating the existing problem of bad debt.
      The Financial Times headlined a story on 4 May,
      saying:
      "Upturn that can spell business ruin."
      It explained that the increase in orders that may come
      about as recovery picks up could mean the final strain on the recession-stretched finances of firms that have high borrowing levels and many late payments outstanding. That point was expanded in a speech made the next day by the director general of the CBI, Howard Davies, who observed:
      "small firms' cashflow is so finely balanced that sales growth can put some of them out of business through cash shortages."
      A similar comment was made by the chairman of the CBI's
      small firms council who said:
      "over the last year, record numbers of small firms have had difficulties in raising external finance. If these difficulties continue, they will seriously limit their performance and hamper plans for investment and expansion."
      It is important to note those concerns, to start preparing
      for that eventuality and to identify ways to assist small firms in such circumstances.
      Bad debts represent a relatively small proportion of firms' finances, but they are an additional and, for many,
      732
      a critical burden. They are why, in the overall context of small firms' financial needs, it is necessary to make renewed efforts to solve the problem of late payments of debts and why it is important to reduce the waiting period for eligibility for VAT bad debt relief, as both the clause and the amendment would.
      VAT payers should have to wait the minimum time possible before they are able to recover VAT payments that they have made on accounts that go bad. That is the aim of the amendment. That action needs to go hand in hand with wider support for small firms at a local level. There is little point in making the changes concerning bad debt and creating the easier conditions for small firms that we are discussing tonight if so much else is not going right, or not right enough, for small firms. I shall give a few examples of what I mean.
      Small firms rely on local advice about bad debt and other help to assist their growth. The Government have wisely launched their one-stop shop initiative. Never mind that the scheme introduced by the President of the Board of Trade mirrors almost precisely the ideas that were set out by the Labour party and were originally described by my hon. Friend the Member for Dunfermline, East (Mr. Brown) in an article in The Independent on 24 April 1990.
      Why has the Government's initiative made so little progress? I am glad that the DTI hopes, as it said this week, that the first of the 23 shops, which will give much needed advice on bad debt as well as on other matters relating to VAT, will be set up by July. However, as the Financial Times remarked yesterday:
      "On present plans, the government's proposals will take years to implement."
      It is hard to believe that we cannot move faster. After all, the original announcement was made in the House on 3 December.
      The problem of late payments—a close cousin of bad debt—is still acute. Small companies have little muscle to ensure that they are paid on time and are often particularly vulnerable to a single large debt. Recent surveys have shown that the United Kingdom's bill payment record is noticeably worse than that of the rest of Europe. That was confirmed in the survey to which my hon. Friend the Member for Oxford, East (Mr. Smith) referred. Despite trade initiatives such as the CBI prompt payer code, there is a need to have a statutory right to interest on unpaid bills. I urge the Government to re-examine that option. I hope that the Paymaster General, if he speaks again in the debate, will offer the Government's views on that matter.
      Underpinning any VAT regime that accommodates the problems of small businesses must be a fair and open appeals procedure in the event of disputes about reclaiming VAT on business expenses. Clause 48 needs to be seen alongside another provision in the Bill. Another clause places on appellants the new burden of having to prove not only that they are right in the eyes of the law but that Customs and Excise acted "unreasonably". That seems unreasonable. Such is the difficulty of proving "unreasonable" in law that the clause has been called "outrageous" by Coopers and Lybrand. I think that it tilts the appeals procedure against the taxpayer, contravening the spirit of the Government's taxpayers charter. It should be reconsidered and I hope that the Paymaster General will tell us, either tonight or when we return to the matter in Committee, whether the Government are prepared to do that.

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      At the time of the Budget, there was some press criticism of the Chancellor for introducing a mixed package of VAT reforms, some helpful and some that did not go far enough in the view of small business organisations. Our amendment shows how the bad debt change could be taken a step further. I would also urge a close examination of the cash accounting scheme under which businesses with a turnover of below £300,000 are eligible to pay no VAT until they receive payment from their customers. That is extremely relevant to the issue that we are debating. That would be the best indemnity against bad debt, because the businesses taking advantage of the scheme account for VAT on the basis of payment received and made rather than on the tax invoices issued and money received, or not. In that way, the problem of reclaiming VAT on bad debts need not arise in the first place, which is why it is such a useful scheme and one that is so important for many small businesses.
      I welcome the raising of the eligibility ceiling to £350,000; none the less, conditions for entry to the scheme remain restrictive. Quite often, that is because of the bad debt trouble that small firms already experience. I hope that the Government will examine further the administration of the scheme and look closely at ways to draw more businesses to it, including raising the ceiling further. At present, Customs and Excise estimate that only 40 per cent. of eligible traders are in the scheme.
      The lesson of the past decade is that, even in the most enterprising business sector, Government support and action are vital for success. The Government concentrated their attention on that matter and their help to small businesses during the 1980s—I do not gainsay the assistance that they offered during that time—concentrated largely on start-up advice. That now needs to embrace greater help not simply to nurture the start-up of small firms but to promote their growth.
      Without doubt, the greatest blow to small businesses has been the recession, which has been a disaster, a hurricane which has wiped out vast stretches of the small business sector and the enterprise culture. In Hartlepool, more than 130 small businesses have gone under in the past three years, 30 of them in vital industrial sectors. In the past 12 months, 55 companies have closed, although my recent meetings with the town's business people give some cause for cautious optimism that things are starting to improve. I certainly hope that they will.
      If business confidence and order books are growing, as I hope that they are, and if they are to be sustained, now is the time to do everything possible to assist the growth of small businesses. The high street banks have a considerable responsibility in that.
      9 pm
      Greater long-term attention must be paid to the way in which small businesses are financed. That is an old and much debated issue which is familiar to Opposition Members who are concerned about small businesses; none the less, it has been insufficiently acted on by the banks and has been given insufficient encouragement by the Government.
      The banks are often cast as villains, but recently I met representatives of NatWest and my impression was that some banks at least are more open to ideas on different ways of working, including increased debt-for-equity swaps, than they have been in the past. Those and other options desperately need to be driven forward if we are to
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      nurture and sustain the small business sector that we so desperately need for the success of our economy in future. I hope that the proposals and ideas will be put forward on the back of the Finance Bill and its proposals on bad debt relief and other changes.
      I hope that the Government will see fit—if not tonight, then on future occasions—to give rather more positive consideration to the amendment.
      Mr. Geoffrey Dickens: I am delighted that my right hon. Friend the Paymaster General has the pleasure of supporting the clause because, like many people, I know only too well of all the care, consideration and help that he has given small businesses throughout his parliamentary career. My right hon. Friend is on much safer ground than he was last night, when he was faced with a volatile and noisy Committee, and he has great experience in these matters.
      I remind the Committee that we are discussing clause 48 which reduces the waiting period for eligibility for VAT bad debt relief from one year to six months. That is achieved in two ways. Clause 48(1) amends section 11(1)(c) of the Finance Act 1990 by reducing the elapsed time required for eligibility from one year to six months. What is also important, and has not yet been mentioned, is the alteration under subsection (2) which allows the reduced waiting period to have effect from 1 April 1993 in relation to supplies made on or after 1 April 1992.
      I have often heard it said that large companies dine out on the overdrafts of small companies and I am sure that that is right. When companies have cash flow problems they make every possible excuse for not meeting their payments. Those excuses range from the mildest, such as that the cheque is in the post, to much stronger excuses. But cheques arrive unsigned and have to be sent back, thereby giving the company another week, or the totals are not written in, so the cheques go back.
      People may phone up the accounts department of another company that owes them money, only to be told, "We cannot pay your £6,000 invoice until we get paid." I should like to think that many companies then ask, "How much can you afford to pay?". If the reply is, "We can only pay £3,000 until we get paid", smaller firms in particular should reply, "Well, pay us the £3,000." If everyone did that, money would begin to circulate and cash flow problems would be eased throughout the business sector, wages would be paid and banks would take the pressure off companies. It is one thing to suffer debt; it is another to lock up bad debt for a whole year. That is a long time for a company to wait, especially one experiencing cash flow problems.
      Earlier, Opposition Members levelled accusations at the Government, blaming them for the fact that companies were struggling. The world recession is common knowledge, but we should remember that companies are robbed of jobs by such developments as mechanisation and automation. For instance, there was a time when every bus had a conductor; now the driver takes the money, and thousands of jobs have been lost. Similarly, railway booking offices used to contain any number of ticket sellers; now there may be one such employee, and travellers must buy their tickets from machines. There used to be a man at the barrier in the underground station; now passengers feed their tickets into the machine. Even

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      when passengers want to leave the station that is their destination, a machine must swallow their tickets before they can do so.
      Years ago, people did all those jobs, but we must not struggle against change. The small businesses of today are the big businesses of tomorrow. When the railways were built, the farriers, those who made tack for the horses, the wheelwrights and people who made carriages threw up their hands in horror, saying, "We will be out of business." Many of them were, but at every railway station W. H. Smith put up a newspaper stand.
      The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse): Order. I always hesitate to interrupt the hon. Gentleman, but he is straying very wide of the subject of debt. I hope that he will relate his remarks to the amendment.
      Mr. Dickens: May I finish my little story? It is relevant.
      Suddenly, small companies began to mushroom following the setting up of those bookstalls—companies producing newspapers, magazines and books, which are now sold by the thousand at railway stations. They created many more jobs than had been lost to those connected with horses and carriages. That is an example of the way in which mighty companies can grow from little acorns.
      The hon. Member for Oxford, East (Mr. Smith) made a good point. He said that there might be difficult days ahead for small businesses with debts. That is true. Unfortunately, until recently, the banks were pulling the plug rather quickly on small companies with cash flow problems, because their overdrafts were secured on assets such as buildings and land. As the property market began to slip and such assets became less valuable—especially in the south—they ceased to match those small companies' overdrafts. The banks began to fidget and to look for more security in other areas, driving the small companies into the ground.
      As the hon. Gentleman pointed out, a greater danger lies ahead—a danger closely connected with debt. Small companies will want to buy more materials as the recession draws to a close and the market grows—we hope that we are now emerging completely from recession—in order to add value, to produce goods to sell and to increase their profits. Will the banks allow those companies to extend their overdrafts, which are running at the upper limits, so that they can buy the material that they need?
      In the early days, the banks were pulling the plug because they felt that they could sell buildings and land more easily than small companies that were struggling. In the event, they found that they could not. What will happen when the assets grow in value to match the overdraft facility? Will the banks run for cover and pull the plug? In Germany, banks take equity in companies and run with them. Here, the banking mentality is different.
      The First Deputy Chairman: Order. That is all very interesting, but what has it to do with debt in small companies? The hon. Gentleman should confine his remarks to the amendment.
      Mr. Dickens: I am obliged to you, Mr. Lofthouse. I thought that I was dealing with debt and the problems of small businesses. Before you resumed the Chair, we had a
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      much wider debate, and I was endeavouring to answer points which were raised. I will accede to your request, since I have the greatest respect for you and the Chair.
      Small businesses have already welcomed the proposal on bad debt in the Budget. The period of three months suggested by the Opposition is much too short. It cannot be said that a debt becomes a bad debt in such a short time. Companies like a sporting chance. When two companies have been dealing with each other for many years, one understands that the other is trying to keep its promise to pay and it would not want to regard a debt as a bad debt after only three months.
      In some contracts, 90 days is the normal period for settling an account. It is going too far to suggest that an outstanding bill becomes a bad debt after three months. A period of six months is ideal.
      Dame Elaine Kellett-Bowman: Can my hon. Friend explain why accountants often recommend that their clients should include in contracts a clause giving 10 per cent. off if a bill is paid in a certain period, but the accountants themselves and other professional people never knock 10 per cent. off their bills? Would that not be a good idea?
      Mr. Dickens: Hon. Members will correct me if I am wrong, but I always thought that accountants made assumptions. People are going down a slippery slope when they start to give discounts. If a small business gave 10 per cent. discount, it would begin to work at distress rates and it would get into real difficulty.
      Mrs. Angela Browning: I must come to the defence of accountants. I express an interest because my husband is an accountant. He gives the most generous discounts.
      Mr. Dickens: I will not be tempted into an argument by saying that sometimes people must overcharge to be able to give large discounts. I am too generous of disposition to go down that road in a debate which must concentrate on clause 48.
      I have made a sensible contribution. I always gain favour by leaving time for other hon. Members to make their contributions. I hope that theirs will be as sensible as mine.
      Mr. Matthew Taylor: I hope that the hon. Member for Littleborough and Saddleworth (Mr. Dickens) will get a gold star in the Whips' book to follow the black mark that he got yesterday. His turn round could scarcely be equalled for speed, if not necessarily for the quality of his contribution—[HON. MEMBERS: "Shame."] —although it was entertaining.
      Mr. Mandelson: Withdraw.
      Mr. Taylor: I do not think that it is necessary to withdraw. Opposition Members are supportive of the hon. Member for Littleborough and Saddleworth, but I do not want to go too wide of the amendment and be called to order by the Chair.
      The debate is important to small businesses, a subject in which I am particularly interested. There are many small businesses and self-employed people in my constituency. Indeed, the Liberal Democrats currently represent many areas, such as Cornwall and Bath, containing a high proportion of small businesses. My hon. Friends and I

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      have over the years raised the concerns of small businesses and have argued the case on their behalf in respect of bad debt and VAT payments.
      9.15 pm
      Clause 48 is a welcome pro-small business move and is designed to help cash flow. Businesses will have to wait less time to get back from Customs and Excise the VAT paid in respect of goods and services already sold but not paid for. As I have said, it is a welcome move which will be supported in all parts of the Committee. It will be particularly welcome to small businesses which have witnessed the stern and unbending hand of the penalties for late payment of VAT. They will be pleased to see matters turning more in their favour.
      I have recently been dealing with the case of a small business in my constituency. The firm posted a VAT return in time but it was not received by the VAT office because of a dispute there. That meant that the post had not been processed. Even so, the firm is being asked to pay a fine and has been told, in effect, "Had you posted it earlier, it would have arrived before the industrial dispute." That seems harsh, and I shall be contacting the Minister once the small business in question has had time to digest that reply and got over the shock.
      The measure now proposed by the Government is more generous. There is a connection between the VAT relief for bad debt and the VAT cash accounting scheme. Whereas the VAT relief applies to most companies, for the smallest companies which elect for VAT cash accounting there is no waiting period because they pay the VAT only when they get paid.
      If the VAT cash accounting scheme applied to more businesses, VAT relief would be needed only for larger companies, which are generally more able to cope with cash flow problems. The Government brought the scheme into existence in 1987 and have increased the threshold in this Budget. That is welcome. The threshold for eligibility to the scheme will now be£350,000.
      Liberal Democrats argue in our alternative budget that the threshold would be more appropriately increased to £1 million, so achieving a clear difference between companies which find it difficult to meet cash flow problems arising from bad debt and larger companies which are more able to absorb relatively small-scale problems as they proceed through their normal course of business.
      Has the Minister explored the possibility of increasing further the threshold on the VAT cash accounting scheme, thus giving more help to more small companies? That would give more help than the Labour amendment would achieve. The only cost to the Exchequer would be a cash flow cost. Although it might under EC rules require a derogation, the Minister should explore that area because it would make a real difference to a large number of companies which, by any normal definition, remain small, albeit they are outside the limits of the scheme.
      While the clause deals with one Government-related problem of bad debt, there is a much larger private sector problem concerned with the late payment of debt. Indeed, the day-to-day problem that most businesses in Cornwall have mentioned to me is late payment of commercial debt. When a firm's business customers do not pay their bills on time, the cash flow problems can have so many other effects in terms of higher costs and pressure from the bank that the firm can end up closing down, with knock-on effects for its suppliers.
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      I recall leaning against a gate by the travelling surgery that I conduct in villages around my constituency talking to a builder who had been put out of business precisely because of the problem that I have described. He simply could not understand the attitude that had been taken not just by the Government but by various bodies with which he had had to deal. He felt that there was so little understanding of the problem that he had been put out of business through no fault of his own. He had indeed done the job well; it was merely the payment that had not come through.
      Some might ask what the late payment of commercial debt has to do with the Government. Is it not, they ask, up to the firms involved to sort themselves out? The evidence goes against this purist, non-interventionist view, however. Despite years of exhortation to firms to pay their bills promptly, on the part of the Government and of business organisations such as the CBI, a recent survey by the Association of British Factors and Discounters showed that the average repayment period was now 80 days. A similar survey conducted last December by Trade Indemnity, the credit insurer, found that only 3 per cent. of nearly 600 firms contacted were being paid on time. In 1991, the Forum for Private Business estimated that small companies were owed more than £100 million in overdue debt.
      The recovery may reduce the scale of the problem, and the latest quarterley review of the Association of British Factors and Discounters suggests that that is happening. If so, it is certainly welcome, but the problem will not go away. A report by the National Westminster bank in yesterday's Financial Times found the picture as bad as ever; and today's Financial Times quotes a study by the Manchester business school showing that, because of the recession in some European countries, some United Kingdom firms are finding it difficult to get continental customers to pay their bills on time, suggesting moreover that there may need to be action at European level to prevent unfair practices from taking hold in the single market. I hope that the Minister will make representations about the problem in Europe. This is a good example of a problem that will need to be tackled in future at that level.
      However one considers the payment of commercial debt, there is clearly a problem. Although we welcome the provisions of clause 48, it shows that the Government are missing the larger picture in relation to late and bad debts.
      There are some simple measures which firms can take themselves and which the Government can help to facilitate. First, many firms need to manage credit lines better. Often, companies can do more themselves, and the Government could encourage training and enterprise councils, and local enterprise companies in Scotland, to run courses in credit management for business people and their employees. If the one-stop shops develop as I hope that they will—we have long called for their development —I trust that they will take a lead in this area.
      The Government could also make good their long-standing pledge to simplify the cumbersome and costly commercial debt recovery procedures so as to make legal redress for companies a realistic option. If they do so, the costs of this measure may fall as a result. A little money spent now may save the Government money in the longer term.
      Even with such developments, however, I believe that late payment will remain a serious problem for small and medium-sized companies. The commercial fact of life is

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      that larger firms can and do use their market power to scare their smaller suppliers into putting up with late payment. That abuse of market power suggests a role for competition policy and hence for some sort of Government intervention.
      The Chancellor half acknowledged this problem when he announced in the pre-election Budget that new legislation would require larger companies to state in the notes to their accounts the average time taken to pay their bills. But the lack of understanding in the DTI of the seriousness of the problem was shown by the fact that it took almost a year for the Government to follow up that announcement with a consultation paper. In any case, shaming companies into paying their debts on time in this way is likely to prove ineffective. It might even prove counter-productive; those thinking of investing might inquire why payment was being made so quickly instead of pressing companies to pay more speedily.

      So why not legislate for a statutory right to interest on debts outstanding after a certain period? The idea has received support in all parts of the House in the past, and it has been implemented in every European country bar the United Kingdom and Ireland. It is one measure that gets over the free-rider problem, ensuring that every firm has an incentive to comply. This measure would change the current awful culture of waiting until the very last minute before making payment. If the measure were in place, business men could devote their time to being business men instead of debt collectors.
      Mr. Spencer Batiste: Surely the hon. Gentleman knows that the reason for that idea not having been carried through and being treated with considerable reserve by many business organisations is that it is likely that if there were a compulsory right to interest, it would be enforced by the big companies against the small ones while the small companies would not dare to alienate their customers by acting similarly.
      Mr. Taylor: That argument has been put forward before. My experience is that it is the big companies which resist the principle while the small ones argue for it. What I am suggesting for the United Kingdom is done in other European countries. I am sure that the hon. Member for Elmet (Mr. Batiste) will acknowledge that this debate takes place across parties as well as between them. However, I believe that he is wrong and that a great many small businesses agree with me.
      Mrs. Browning: The hon. Gentleman is probably aware that the Federation of Small Businesses—the biggest organisation for small businesses in this country, I believe —has declined to adopt the policy that he is putting forward. That body has identified the problem as being that, whether or not interest is charged, small companies ultimately have to go through the civil procedures of the British courts. That is what gives rise to most of the problems that small companies experience. They have to secure a judgment, but more often than not they also have to go back to have the judgment enforced. In the meantime, very often the bird has flown. That problem, too, must be addressed.
      Mr. Taylor: I strongly agree with the hon. Lady. Indeed, I referred a few moments ago to the need to sort out a system of securing payment. I am sure that the hon. Lady, like me, receives many letters from small businesses
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      that have obtained an order to secure payment but find that they have to go back to court. In many cases they are advised that it would simply be too costly to pursue the matter. Perhaps the Government could alter the title of the Criminal Justice (Amendment) Bill and introduce into it a provision to tackle this problem. Why wait?
      The problems caused by bad debt are to only a very small degree solved by this clause. None the less, I welcome the fact that the Government are moving in the direction of change. Although there are some signs that we are coming out of recession, small businesses still have to face extremely harsh problems. Indeed, many people are still likely to lose their businesses. We have heard expressions of worry that it may take some years to recover properly from the recession. I am afraid that many people who have lost their businesses will never recover. We must consider all possible means of tackling this problem.
      For many businesses in the south-west, the problems created by rising electricity, gas and water prices represent a more urgent and fundamental priority. None the less, this is an important measure, which is welcomed by my party.
      Mrs. Browning: Payment on time and bad debt have been identified by hon. Members on both sides of the Committee as very important and serious, especially in relation to the cash flow of small businesses. My hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) began by outlining the way in which many companies, particularly large companies, try to avoid payment when it becomes due, and he identified three or four of the most common excuses for non-payment.
      I must declare an interest. Before becoming a Member of Parliament, I was a management consultant, and one of the areas in which I specialised was advice for companies in the United Kingdom and abroad on collection and credit control. It may be of assistance to my hon. Friend the Minister—as I am in a generous mood, perhaps I should say that it may be of interest to hon. Members on both sides of the Committee—if I say that I have a list of the 20 most common excuses used for non-payment, and I can tell hon. Members the response that one should make immediately to ensure that one is not floored by one of these excuses.
      This is a serious matter. There are many reasons for the failure of companies to get their money on time. We have heard about the difficulties involved in dealing with large corporations. In many sectors, one sees the big stick being waved. This applies not least in the retail food chain, where small businesses supply the large supermarkets.
      Such chains will often arbitrarily change the terms of a contract in mid-contract. An egg producer in my constituency was told by a large supermarket that the payment term that had previously been 30 days was to be changed to 60 without any question of renegotiation.
      9.30 pm
      We understand the difficulties and, ultimately, the cash flow problems that that means for small businesses, and I welcome the measure that my right hon. Friend the Chancellor has introduced on the treatment of debt and VAT. My right hon. Friend has already mentioned that it will mean an estimated £150 million benefit to the cash flow of businesses.
      As the hon. Member for Hartlepool (Mr. Mandelson) and others have mentioned, the cash accounting scheme

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      means that small businesses—previously those with a turnover of £300,000, now £350,000—will not have the problem, because they will be dealing on a cash accounting basis, and that is most welcome. I am aware, as I am sure is my right hon. Friend, that many small business organisations, in their representations to the Treasury before the Budget, particularly asked for this measure to be introduced.
      I also know from consultations with Treasury Ministers before the Budget that, realising that it would be a difficult Budget with not a lot to give away, Conservative Members urged my right hon. Friend that anything that he could give should be given to the small business sector. This will be extremely welcome.
      The hon. Member for Truro (Mr. Taylor) mentioned debts and the ability to add interest to them. That can be negotiated, as long as it is done at the point of contract and not added retrospectively. I am sure that all hon. Members are aware that other members of the EC operate the scheme.
      The hon. Member mentioned the difficulties that those countries are having. Again, I am prepared to share an experience with the Committee. In Italy, a letter to the local chamber of commerce resulted in the payment of a debt by return. Again, that suggests that other European countries are now suffering from the recession, and the payment of debts may become a more common problem.
      In my own business experience of dealing with public limited companies and large corporations, right down to small businesses and sole proprietors, they are still reluctant, when they agree to do business with other businesses, to carry out the necessary credit controls and checks to ensure the creditworthiness of those with whom they are about to do business.
      There are many examples of what can only be described as sloppy procedure on the part of companies. Sometimes it is not deliberate. The smaller the company, the busier are the people who run it. The sole proprietor of a small business has to sell and buy goods and deal with the documentation, and I can understand it if chasing up debts is put on the back burner. However, the longer a debt is left, the more likely it is that ultimately it will be written off, and that includes the VAT element as well. Many companies have been forced to do that: it is not a case of good business practice. That is a salutary lesson for any company to learn.
      One has to be vigilant and efficient in getting money in on time. As someone who has, or had, a reputation to keep in this area—I occasionally write on the subject in periodicals—my terms were 30 days; on day 31, the person who owed me money received a telephone call from me before 10 am. I thoroughly commend that procedure to businesses, particularly small ones.
      The measure reducing from one year to six months the waiting period for bad debt relief will be welcome. lion. Members have identified areas associated with bad debt and business write-offs which are a burden on businesses. One of the difficulties that businesses have to face concerns the banks. The reduction of interest rates will help with the cash flow of businesses.
      We are pleased that interest rates are coming down. However, one must sometimes question the banks' judgment when lending to small businesses, because they should realise that businesses may sink.
      The hon. Member for Hartlepool gave examples of the difficulties that businesses face when they are expanding.
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      Businesses get into debt because they do not have orders; they also get into debt because they are doing well. The hon. Gentleman outlined what we all recognise as over-trading. We shall have to address that problem as the economy picks up, and as businesses receive more orders and begin to grow again.
      Mr. Alan Milburn: The clause is obviously very welcome; the problem is that it does not go far enough. It has taken the Government five years to reduce the deadline for bad debt recovery from two years to six months. They should have gone rather further rather more quickly.
      The amendment is designed to assist small businesses in particular. I was especially taken with the contribution by the hon. Member for Littleborough and Saddleworth (Mr. Dickens), who spoke a lot of sense—I hasten to add the caveat, "on this one occasion"; I cannot say that I always agree with everything he says. The problems of small businesses that he outlined, such as access to finance and difficulties with bad debts, were pertinent. Before I came to the House, I worked in north Tyneside with small companies, both fledgling and expanding, and I know that the hon. Gentleman identified the problems accurately.
      The problems that most often arose for small businesses were simple. They were lack of access to finance for expansion, especially in the range £250,000 to £1 million, in which venture capital is not available. That problem is especially acute in the peripheral regions, including my own, because venture capital is overwhelmingly concentrated in the south-east. Companies also encountered problems with late payment and bad debts. Those were the problems that the companies most often identified.
      For small companies, especially companies that seek to grow rapidly, bad debts and late payments can quickly become a death sentence. My hon. Friend the Member for Hartlepool (Mr. Mandelson) has already pointed out the ways in which the problems can become more acute at the beginning of a recovery. Small businesses cannot rely on retained surpluses or on profits. They probably have to rely on borrowing for investment, and on cash flow to support risk business.
      We have heard about the positive steps that have been taken in expanding the limit to £350,000, which is welcome. However, I hope that the Paymaster General will take the opportunity to address the remarks made by my hon. Friend the Member for Oxford, East (Mr. Smith) about the fact that many firms that qualify under the cash accounting scheme do not take advantage of its provisions. Approximately 200,000 small companies fall into that category. Hundreds of thousands of other small firms fall outside the £350,000 exemption which face similar difficulties.
      There are 3 million small firms in this country, and there are 3 million self-employed people. They play a vital and expanding role in the nation's economy. Between 1987 and 1989, for example, firms with fewer than 10 employees were responsible for nearly half the jobs created. Small firms are often the most innovative and entrepreneurial, and they are often the most prone to take the biggest risks. They therefore need the most assistance. They have been badly treated in the recent years of recession. Between 1989 and 1992, there were almost 187,000 new VAT registrations, which was extremely good news. However, 240,000 VAT-registered businesses were deregulated, amounting to a net loss of about 53,000 companies.

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      As my hon. Friends have made clear, smaller companies are especially prone to bad debt problems. The finances of small companies suffer disproportionately from late payment.
      The reasoning behind the amendment is simple: if the Government's claims about economic recovery and about the key role that small businesses will play in it are true, it is important that Ministers act to ensure that real stimuli are given to help that recovery. As the Financial Times article of a day or so ago suggested, there is a late payment culture in Britain. The problems that small businesses face as a result of late payments and bad debts are much more acute than those faced by their cousins on the continent. It is incumbent on the Government to play a positive role in intervening to overcome those problems
      I am reminded of the famous and oft-quoted remarks of the President of the Board of Trade about intervening before each and every meal. The amendment gives the Government a real opportunity to do just that. I hope that the Minister will take it seriously. I hope that he will show his empathy with small businesses and his sympathy for those who have given their lives to create job opportunities and wealth by helping them to overcome some of the problems that beset them, through no fault of their own.
      Mr. Richard Page: I apologise to the Committee for the fact that I was not here for the start of the debate. A constituent came to see me about difficulties in connection with the statementing of a child. Faced with such difficult situations, I put my constituents first, but I again apologise for not being here earlier.
      As someone who has taken a great interest in small business for 16 or 17 years now, I can, I think with modesty, suggest that this is ground that has been galloped upon quite a few times. Although I do not recognise the amendment as a sensible proposal and will not support it if there is a Division, I welcome the opportunity it gives us to draw to the attention of the Committee and the nation the problems of small business debt.
      Small businesses are the acorns from which oaks can grow. They are the employment generators of the future. In future, employment will come not from big businesses, which, as a result of robotics and information technology, will shed rather than generate jobs, but from smaller business with more labour-intensive requirements. It is small businesses that we should be encouraging at this stage.
      I want to disabuse the Committee of the popular view that running a small business is easy. In fact, it is harder than running a big business. Someone running a small business must be able to understand VAT, health and safety legislation, the pay-as-you-earn system, national insurance and employment law. One has five minutes left at the end of the day in which to run the business itself and perhaps make a few shillings to pay VAT, the uniform business rate, national insurance and so on.
      In small business, debt control is not easy and it is not good. During the past six months or so, I have been going around the regional centres of our banks. I have been unhappy with the banks' support for business over the past year or so. To my amazement, although I would not say that they have been fighting back—they are too delicate and too gentle for that—more than one bank has told me
      744
      that, of its commercial clients who have turnovers of up to £.1·2 million a year—I do not know why that is the figure used—only 10 per cent. produce a profit and loss account for every month's trading.
      That is staggering. How anyone can go into small business and try to run a business without a monthly profit and loss account, I simply do not know; I find it incredible. If that is the case, every figure goes out the window when one starts talking about cash flow. It is small wonder that small businesses run into trouble on debt control, not because of malevolence or trying to fiddle things, but because they simply do not have the proper managerial tools.
      I welcome the change from one year to six months. I welcome the Labour party's amendment as a method of opportunity to debate the matter. If Labour Members know anything at all about small business, they will not press the amendment to a vote tonight. If they do, that will show that they are completely ignorant of small business and are simply using it as a tool to debate a specific issue and make a specific point. The small business sector will be back safely in Conservative hands, because Labour Members do not understand it one iota.
      The hon. Member for Hartlepool (Mr. Mandelson), who has obviously popped out to have some dinner or something, said that bad debt is a small proportion of the small business sector and its debts. That exposes an innocence of the small business world, because there is a real difficulty in distinguishing between the slow payer and the long payer in small business. My hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) made a point about all the excuses that can be used to delay debt.
      At the end of the day, one never knows whether a person will pay. One gets into the catch 22 position—does one want to lose customers or hope to get the money and then retain them and do more business?
      Mr. Dickens: Will my hon. Friend give way?
      Mr. Page: With respect to my hon. Friend, who made a powerful speech earlier, I am getting messages from afar that mean that I have literally one minute to go.
      The pressure on small businesses to do business in recessison is almost irresistible. The measure introduced by the Government is exceptionally helpful, especially the provision that it will come into force on 1 April 1993 and apply to supplies that come in on or after 1 April 1992. That will give a valuable cash flow boost to those companies that accumulated debts during that period and help to go forward into the recovery that is now taking place.
      I sincerely hope that Labour Members will not press their amendment tonight, but congratulate the Government on reducing the provision from one year to six months.
      Mr. Clive Betts: Labour Members are not fundamentally disagreeing with the Government's proposal on bad debts or, indeed, the other proposals in the Budget to assist small businesses. In our amendment, we are saying that the Government have not gone far enough. We do not believe that their proposals are unacceptable; they are unexceptional. They have missed so many opportunities to assist small firms, especially at a time when they have great problems with debt.

      745
      We are not simply dealing with small firms that tick on daily and yearly. We should be looking at the growing firms that can add to and create the industrial base for the future at a time when, even by the Government's forecast, investment in manufacturing in the United Kingdom at the end of this year will still be 10 per cent. lower than it was in 1989. We can see the scale of the problem that we want to address.
      Clearly, there is a debt crisis in the United Kingdom. It is almost as though small firms are playing a bizarre game of pass the parcel. The problem is that, when the music stops and the firm ends up with the parcel, it ends up with a debt problem that cannot be resolved because of cash flow difficulties. The small firm then goes out of business. It passes on the parcel—it owes money to other firms, but cannot pay because it has gone out of business, so the next firm with the parcel is also overwhelmed by debt and goes out of business.
      Time and again in my constituency I have seen how the failure of one firm spirals down to the failure of other firms. The game is a handicap. As Conservative Members said, small firms are handicapped as large firms take advantage of them and squeeze them harder on the supply of goods and payment times, to the advantage of larger organisations.
      All too often in this debt crisis, we see not merely industrial failure. So often the borrowing of small firms is backed, because the banks put on pressure, by the only asset that owners have—their house. So often as constituency Members we see not merely the failure of small firms, but, as a result of the problems of negative equity, repossession of the property of the owner. That is a problem in this recession. But let us think what will happen in the next recession. Let us see what will happen in the recovery which we hope is starting. Who will go to the bank to borrow money when the requirement is to put up his house as the asset backing? Who will do that knowing that thousands of people have lost not merely their business but their home in this recession?
      Where are the Government's proposals? I should like the Paymaster General to consider promoting an initiative to introduce equity lending and venture capital on a real scale into the funding of small enterprises in Britain. I have seen nothing in the Budget and heard nothing from the Government on that. Have they not listened to Howard Davies, who has said that just as the banks over-lent during the 1980s, there is a real danger that they will over-react and over-restrict their lending in the 1990s? If the banks do that, where else is the capital for small firms to come from?
      Why have not the Government expanded the loan guarantee scheme on a massive scale or launched a Government initiative to release the resources of pension schemes for direct investment? Why do not the Government respond to the Confederation of British Industry, which has made proposals recently to address the issue of debt? The Government could create an independent debt tribunal to address the problems of debt recovery for small firms, to which the hon. Member for Tiverton (Mrs. Browning) referred.
      On the issue of swifter payments, why have not the Government considered the German scheme and introduced a national initiative to reduce payment times to protect small firms from pressure from larger firms? Why have not the Government introduced initiatives to swap debt for equity? Why have they not produced a
      746
      replacement for the business expansion scheme operating through local investment vehicles, which the CBI has promoted? We do not want the sort of scheme that resulted in fake housing enterprises which were simply a vehicle for tax avoidance for so many people. But why have not the Government introduced a scheme to channel money into small enterprises?
      Why do not the Government address the problem that 64 per cent. of venture capital goes into management buy-outs rather than start-ups or early stage funding? The Paymaster General said that so much had been achieved by small firms in Britain. So much more could be achieved if only the Government and the financial institutions got together and assisted the development of our future industrial base.
      Mr. Batiste: I am grateful for the opportunity to speak, albeit briefly, in the debate on a subject on which I made my maiden speech some 10 years ago. The matter has by no means diminished in importance in those years. The common feature of virtually all the speeches by both Conservative and Opposition Members was the importance of small businesses to the economy. There has been a surprising increase in the number of jobs in the past couple of months. That reduction in unemployment was unexpected at this stage of an economic recovery. I suggest that it was largely created by small businesses, which are operating close to the optimum level of efficiency. They can therefore respond to growth quickly.
      As small businesses respond to growth, they will be in danger of overtrading and their cash flow will come under severe pressure. That is why the Government's measure is welcome. It injects an extra £150 million into the cash flow of small businesses at a time when they need it. The backdating to 1 April will also be welcome because it will give companies the opportunity to plan from now with considerable security.
      I am aware of the time and I know that my right hon. Friend the Paymaster General wants to reply to the debate. I make one plea with all the force at my command. While the measures to improve cash flow are important, the one thing above all that the Treasury can do to help small businesses in the next year is to show a measure of forebearance to companies that are a little late in paying their VAT, national insurance or income tax. That lateness often does not happen because companies have mispriced their products or are running their businesses badly, but because they are having to wait for money from their customers. I hope that my right hon. Friend will be able to say that the Treasury understands that problem and will be reasonably sympathetic to companies that say that they need a little understanding to see them through until they are paid.
      I commend the clause and I ask the Opposition not to press the amendment to a Division, because there is a difference between late payment and bad debt. Bad debt occurs much later than after three months. If we adopted the three-month waiting period, the VAT clawback would inevitably impose a regulatory burden. We need deregulation, not more regulation, and imposing a three-month limit instead of a six-month one would be bound to produce a regulatory nightmare. I look forward to hearing what my right hon. Friend says.
      Sir John Cope: With the leave of the House, I shall respond briefly to the debate, which has been an interesting one and has ranged a good deal wider than the clause under consideration. It was none the worse for that.
      My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) echoed an important point that I used to emphasise when I was the Minister responsible for small firms—that running a small business is more difficult than running a large one simply because of the range of expertise that one must have and the number of different matters with which one must keep up. That is why it behoves those of us in government, with responsibility for the different bits of bureaucracy that impinge on small businesses, to ensure that we do our best to make sure that that bureaucracy is as user-friendly as possible. That applies as much to VAT as to any part of Government bureaucracy.
      My hon. Friend the Member for Elmet (Mr. Batiste) called for forebearance. Although Customs and Excise has been pursuing its proper duties in claiming revenue, my hon. Friend may be interested to know that the number of time-to-pay agreements has increased by 52 per cent. in the latest financial year for which figures are available, 1991–92. The value of those agreements has increased by 70 per cent. That demonstrates how debt management, the phrase now used by Customs and Excise, has responded to the needs of small business in the manner requested by my hon. Friend.
      My hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) made an interesting and even more wide-ranging speech than other hon. Members and referred to the commencement date. The new provision applies to a debt resulting from goods supplied in the previous year. If a firm has not been paid for something supplied on 30 June last year, under the old system it would not have been able to write off that payment for VAT purposes as a bad debt because 12 months had not elapsed. It will now be able to do so and could have done as soon as the new scheme started on 1 April.
      My hon. Friend the Member for Tiverton (Mrs. Browning) gave us the advantage of her expertise and gave us some shrewd advice for which, before she became a Member, we would have had to pay and, as she made clear, paid promptly. Even if we had got a discount from her husband, it was not clear that we would have done from my hon. Friend, for reasons that my hon. Friend the Member for Littleborough and Saddleworth made clearer than most.
      The hon. Member for Truro (Mr. Taylor) raised a number of points about the cash accounting scheme. The consultation document states that the aim is
      "to make Cash Accounting as attractive and simple to use as possible."
      In other words, it will be user-friendly, as I said earlier.
      On that subject, the hon. Member for Hartlepool (Mr. Mandelson) said that the conditions of entry to the cash accounting scheme should not be too restrictive. He seems to have gone back to Hartlepool or somewhere; at any rate, he is not here now. I tried to make it clear in my opening remarks that we had made it a lot easier to enter the cash accounting scheme. One need no longer fill in a form and seek permission in advance. Only two restrictions remain: the person concerned must not have committed a VAT offence in the past three years and must
      748
      not have a debt to the Customs of more than £5,000 at the time. Those are very small restrictions on entry to the scheme.
      10 pm
      As a past member of the Deputy Chief Whips' society or union, I must not run over my time tonight. I just want to emphasise, in concluding, that this is not the only thing that we are doing for small business in the Finance Bill. There is a range of help for small businesses and quite properly so, as the debate has emphasised, as regards rates, VAT penalties, capital gains tax relief for entrepreneurs, improvements to the loan guarantee scheme as called for by the hon. Member for Sheffield, Attercliffe (Mr. Betts), reduced premiums for the loan guarantee scheme, expansion of the business start-up scheme and various deregulation measures.
      All these are extremely desirable and I thoroughly recommend them and clause 48 to the Committee, but I do not recommend that the Committee votes for amendment No. 41.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 252, Noes 292.

      Division No. 264]

      [10.00 pm

      AYES

      Abbott, Ms Diane

      Cousins, Jim

      Adams, Mrs Irene

      Cryer, Bob

      Ainger, Nick

      Cunningham, Jim (Covy SE)

      Ainsworth, Robert (Cov'try NE)

      Cunningham, Rt Hon Dr John

      Allen, Graham

      Dafis, Cynog

      Anderson, Donald (Swansea E)

      Darling, Alistair

      Anderson, Ms Janet (Ros'dale)

      Davidson, Ian

      Armstrong, Hilary

      Davies, Bryan (Oldham C'tral)

      Ashdown, Rt Hon Paddy

      Davies, Rt Hon Denzil (Llanelli)

      Austin-Walker, John

      Davies, Ron (Caerphilly)

      Barnes, Harry

      Denham, John

      Barron, Kevin

      Dewar, Donald

      Battle, John

      Dixon, Don

      Bayley, Hugh

      Dobson, Frank

      Beith, Rt Hon A. J.

      Donohoe, Brian H.

      Bell, Stuart

      Dowd, Jim

      Benn, Rt Hon Tony

      Dunnachie, Jimmy

      Bennett, Andrew F.

      Dunwoody, Mrs Gwyneth

      Benton, Joe

      Eagle, Ms Angela

      Berry, Dr. Roger

      Eastham, Ken

      Betts, Clive

      Enright, Derek

      Blunkett, David

      Etherington, Bill

      Boateng, Paul

      Evans, John (St Helens N)

      Boyce, Jimmy

      Ewing, Mrs Margaret

      Boyes, Roland

      Fatchett, Derek

      Bradley, Keith

      Faulds, Andrew

      Brown, Gordon (Dunfermline E)

      Field, Frank (Birkenhead)

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

      Fisher, Mark

      Bruce, Malcolm (Gordon)

      Flynn, Paul

      Burden, Richard

      Foster, Rt Hon Derek

      Byers, Stephen

      Foster, Don (Bath)

      Callaghan, Jim

      Foulkes, George

      Campbell, Mrs Anne (C'bridge)

      Fraser, John

      Campbell, Menzies (Fife NE)

      Fyfe, Maria

      Campbell, Ronnie (Blyth V)

      Galbraith, Sam

      Campbell-Savours, D. N.

      Gapes, Mike

      Cann, Jamie

      Garrett, John

      Carlile, Alexander (Montgomry)

      George, Bruce

      Chisholm, Malcolm

      Gerrard, Neil

      Clark, Dr David (South Shields)

      Gilbert, Rt Hon Dr John

      Clarke, Eric (Midlothian)

      Godsiff, Roger

      Clarke, Tom (Monklands W)

      Golding, Mrs Llin

      Clelland, David

      Gould, Bryan

      Clwyd, Mrs Ann

      Graham, Thomas

      Cohen, Harry

      Grant, Bernie (Tottenham)

      Connarty, Michael

      Griffiths, Nigel (Edinburgh S)

      Cook, Frank (Stockton N)

      Griffiths, Win (Bridgend)

      Cook, Robin (Livingston)

      Grocott, Bruce

      Corston, Ms Jean

      Gunnell, John

      749

      Hain, Peter

      Murphy, Paul

      Hall, Mike

      Oakes, Rt Hon Gordon

      Hanson, David

      O'Brien, Michael (N W'kshire)

      Harman, Ms Harriet

      O'Hara, Edward

      Heppell, John

      Olner, William

      Hill, Keith (Streatham)

      O'Neill, Martin

      Hinchliffe, David

      Orme, Rt Hon Stanley

      Hoey, Kate

      Paisley, Rev Ian

      Hogg, Norman (Cumbernauld)

      Parry, Robert

      Hood, Jimmy

      Pendry, Tom

      Hoon, Geoffrey

      Pickthall, Colin

      Howarth, George (Knowsley N)

      Pike, Peter L.

      Hoyle, Doug

      Pope, Greg

      Hughes, Kevin (Doncaster N)

      Powell, Ray (Ogmore)

      Hughes, Robert (Aberdeen N)

      Prentice, Ms Bridget (Lew'm E)

      Hutton, John

      Prentice, Gordon (Pendle)

      Illsley, Eric

      Prescott, John

      Jackson, Glenda (H'stead)

      Primarolo, Dawn

      Jackson, Helen (Shef'ld, H)

      Purchase, Ken

      Jamieson, David

      Quin, Ms Joyce

      Janner, Greville

      Randall, Stuart

      Jones, Barry (Alyn and D'side)

      Raynsford, Nick

      Jones, Ieuan Wyn (Ynys Môn)

      Reid, Dr John

      Jones, Lynne (B'ham S O)

      Rendel, David

      Jones, Martyn (Clwyd, SW)

      Robertson, George (Hamilton)

      Jones, Nigel (Cheltenham)

      Robinson, Geoffrey (Co'try NW)

      Jowell, Tessa

      Roche, Mrs. Barbara

      Kaufman, Rt Hon Gerald

      Rogers, Allan

      Keen, Alan

      Rooker, Jeff

      Kennedy, Charles (Ross, C&S)

      Rooney, Terry

      Kennedy, Jane (Lpool Brdgn)

      Ross, Ernie (Dundee W)

      Khabra, Piara S.

      Rowlands, Ted

      Kinnock, Rt Hon Neil (Islwyn)

      Ruddock, Joan

      Kirkwood, Archy

      Salmond, Alex

      Leighton, Ron

      Sedgemore, Brian

      Lestor, Joan (Eccles)

      Sheerman, Barry

      Lewis, Terry

      Sheldon, Rt Hon Robert

      Livingstone, Ken

      Shore, Rt Hon Peter

      Lloyd, Tony (Stretford)

      Short, Clare

      Llwyd, Elfyn

      Simpson, Alan

      Loyden, Eddie

      Skinner, Dennis

      Lynne, Ms Liz

      Smith, Andrew (Oxford E)

      McAllion, John

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

      McAvoy, Thomas

      Smith, Llew (Blaenau Gwent)

      McCartney, Ian

      Soley, Clive

      Macdonald, Calum

      Spearing, Nigel

      McFall, John

      Spellar, John

      McGrady, Eddie

      Steel, Rt Hon Sir David

      McKelvey, William

      Steinberg, Gerry

      Mackinlay, Andrew

      Stevenson, George

      McLeish, Henry

      Strang, Dr. Gavin

      Maclennan, Robert

      Taylor, Mrs Ann (Dewsbury)

      McMaster, Gordon

      Taylor, Matthew (Truro)

      Madden, Max

      Tipping, Paddy

      Mahon, Alice

      Turner, Dennis

      Mandelson, Peter

      Tyler, Paul

      Marek, Dr John

      Vaz, Keith

      Marshall, David (Shettleston)

      Walker, Rt Hon Sir Harold

      Marshall, Jim (Leicester, S)

      Wallace, James

      Martin, Michael J. (Springburn)

      Walley, Joan

      Martlew, Eric

      Wardell, Gareth (Gower)

      Maxton, John

      Wareing, Robert N

      Meacher, Michael

      Watson, Mike

      Meale, Alan

      Welsh, Andrew

      Michael, Alun

      Wicks, Malcolm

      Michie, Bill (Sheffield Heeley)

      Wigley, Dafydd

      Michie, Mrs Ray (Argyll Bute)

      Williams, Rt Hon Alan (Sw'n W)

      Milburn, Alan

      Williams, Alan W (Carmarthen)

      Miller, Andrew

      Wilson, Brian

      Mitchell, Austin (Gt Grimsby)

      Winnick, David

      Moonie, Dr Lewis

      Wise, Audrey

      Morgan, Rhodri

      Worthington, Tony

      Morley, Elliot

      Wray, Jimmy

      Morris, Rt Hon A. (Wy'nshawe)

      Wright, Dr Tony

      Morris, Estelle (B'ham Yardley)

      Young, David (Bolton SE)

      Morris, Rt Hon J. (Aberavon)

      Mowlam, Marjorie

      Tellers for the Ayes:

      Mudie, George

      Mr. Peter Kilfoyle and Mr. Jon Owen Jones.

      Mullin, Chris

      750

      NOES

      Ainsworth, Peter (East Surrey)

      Evans, Jonathan (Brecon)

      Aitken, Jonathan

      Evans, Nigel (Ribble Valley)

      Alison, Rt Hon Michael (Selby)

      Evans, Roger (Monmouth)

      Allason, Rupert (Torbay)

      Evennett, David

      Amess, David

      Faber, David

      Ancram, Michael

      Fabricant, Michael

      Arbuthnot, James

      Fairbairn, Sir Nicholas

      Arnold, Jacques (Gravesham)

      Field, Barry (Isle of Wight)

      Arnold, Sir Thomas (Hazel Grv)

      Fishburn, Dudley

      Ashby, David

      Forman, Nigel

      Aspinwall, Jack

      Forsyth, Michael (Stirling)

      Atkinson, Peter (Hexham)

      Forth, Eric

      Baker, Rt Hon K. (Mole Valley)

      Fowler, Rt Hon Sir Norman

      Baker, Nicholas (Dorset North)

      Fox, Dr Liam (Woodspring)

      Baldry, Tony

      Fox, Sir Marcus (Shipley)

      Banks, Matthew (Southport)

      Freeman, Roger

      Banks, Robert (Harrogate)

      French, Douglas

      Bates, Michael

      Fry, Peter

      Batiste, Spencer

      Gale, Roger

      Beggs, Roy

      Gallie, Phil

      Bellingham, Henry

      Gardiner, Sir George

      Bendall, Vivian

      Garel-Jones, Rt Hon Tristan

      Beresford, Sir Paul

      Garnier, Edward

      Blackburn, Dr John G.

      Gill, Christopher

      Bonsor, Sir Nicholas

      Gillan, Cheryl

      Booth, Hartley

      Goodlad, Rt Hon Alastair

      Boswell, Tim

      Goodson-Wickes, Dr Charles

      Bottomley, Peter (Eltham)

      Gorman, Mrs Teresa

      Bottomley, Rt Hon Virginia

      Gorst, John

      Bowis, John

      Greenway, Harry (Ealing N)

      Boyson, Rt Hon Sir Rhodes

      Greenway, John (Ryedale)

      Brandreth, Gyles

      Griffiths, Peter (Portsmouth, N)

      Brazier, Julian

      Grylls, Sir Michael

      Brooke, Rt Hon Peter

      Gummer, Rt Hon John Selwyn

      Brown, M. (Brigg & Cl'thorpes)

      Hague, William

      Browning, Mrs. Angela

      Hamilton, Rt Hon Archie (Epsom)

      Budgen, Nicholas

      Hamilton, Neil (Tatton)

      Burns, Simon

      Hanley, Jeremy

      Burt, Alistair

      Hannam, Sir John

      Butcher, John

      Hargreaves, Andrew

      Butler, Peter

      Harris, David

      Carlisle, John (Luton North)

      Haselhurst, Alan

      Carlisle, Kenneth (Lincoln)

      Hawkins, Nick

      Carrington, Matthew

      Hawksley, Warren

      Carttiss, Michael

      Hayes, Jerry

      Cash, William

      Heald, Oliver

      Channon, Rt Hon Paul

      Heath, Rt Hon Sir Edward

      Churchill, Mr

      Heathcoat-Amory, David

      Clappison, James

      Hendry, Charles

      Clark, Dr Michael (Rochford)

      Heseltine, Rt Hon Michael

      Clarke, Rt Hon Kenneth (Ruclif)

      Hicks, Robert

      Clifton-Brown, Geoffrey

      Higgins, Rt Hon Sir Terence L.

      Coe, Sebastian

      Hill, James (Southampton Test)

      Colvin, Michael

      Hogg, Rt Hon Douglas (G'tham)

      Congdon, David

      Horam, John

      Conway, Derek

      Hordern, Rt Hon Sir Peter

      Coombs, Anthony (Wyre For'st)

      Howard, Rt Hon Michael

      Coombs, Simon (Swindon)

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

      Cope, Rt Hon Sir John

      Hughes Robert G. (Harrow W)

      Couchman, James

      Hunt, Rt Hon David (Wirral W)

      Cran, James

      Hunter, Andrew

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

      Hurd, Rt Hon Douglas

      Curry, David (Skipton & Ripon)

      Jack, Michael

      Davies, Quentin (Stamford)

      Jackson, Robert (Wantage)

      Davis, David (Boothferry)

      Jenkin, Bernard

      Day, Stephen

      Jessel, Toby

      Deva, Nirj Joseph

      Johnson Smith, Sir Geoffrey

      Dickens, Geoffrey

      Jones, Gwilym (Cardiff N)

      Dicks, Terry

      Jones, Robert B. (W Hertfdshr)

      Dorrell, Stephen

      Jopling, Rt Hon Michael

      Douglas-Hamilton, Lord James

      Kellett-Bowman, Dame Elaine

      Dover, Den

      Key, Robert

      Duncan, Alan

      Kilfedder, Sir James

      Duncan-Smith, Iain

      King, Rt Hon Tom

      Dunn, Bob

      Kirkhope, Timothy

      Dykes, Hugh

      Knapman, Roger

      Eggar, Tim

      Knight, Mrs Angela (Erewash)

      Elletson, Harold

      Knight, Greg (Derby N)

      Evans, David (Welwyn Hatfield)

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

      751

      Knox, David

      Nicholls, Patrick

      Kynoch, George (Kincardine)

      Nicholson, David (Taunton)

      Lait, Mrs Jacqui

      Nicholson, Emma (Devon West)

      Lamont, Rt Hon Norman

      Norris, Steve

      Lawrence, Sir Ivan

      Onslow, Rt Hon Sir Cranley

      Legg, Barry

      Oppenheim, Phillip

      Lester, Jim (Broxtowe)

      Ottaway, Richard

      Lidington, David

      Page, Richard

      Lightbown, David

      Paice, James

      Lilley, Rt Hon Peter

      Patnick, Irvine

      Lloyd, Peter (Fareham)

      Patten, Rt Hon John

      Lord, Michael

      Pattie, Rt Hon Sir Geoffrey

      Luff, Peter

      Pawsey, James

      Lyell, Rt Hon Sir Nicholas

      Peacock, Mrs Elizabeth

      MacKay, Andrew

      Pickles, Eric

      Maclean, David

      Porter, David (Waveney)

      McLoughlin, Patrick

      Portillo, Rt Hon Michael

      McNair-Wilson, Sir Patrick

      Powell, William (Corby)

      Madel, David

      Redwood, John

      Maitland, Lady Olga

      Renton, Rt Hon Tim

      Malone, Gerald

      Richards, Rod

      Mans, Keith

      Riddick, Graham

      Marland, Paul

      Rifkind, Rt Hon. Malcolm

      Marlow, Tony

      Robathan, Andrew

      Marshall, John (Hendon S)

      Roberts, Rt Hon Sir Wyn

      Marshall, Sir Michael (Arundel)

      Robertson, Raymond (Ab'd'n S)

      Martin, David (Portsmouth S)

      Robinson, Mark (Somerton)

      Merchant, Piers

      Roe, Mrs Marion (Broxbourne)

      Milligan, Stephen

      Rowe, Andrew (Mid Kent)

      Moate, Sir Roger

      Rumbold, Rt Hon Dame Angela

      Monro, Sir Hector

      Ryder, Rt Hon Richard

      Montgomery, Sir Fergus

      Sackville, Tom

      Moss, Malcolm

      Sainsbury, Rt Hon Tim

      Needham, Richard

      Scott, Rt Hon Nicholas

      Nelson, Anthony

      Shaw, David (Dover)

      Neubert, Sir Michael

      Shaw, Sir Giles (Pudsey)

      Newton, Rt Hon Tony

      Shephard, Rt Hon Gillian

      752

      Shepherd, Richard (Aldridge)

      Tracey, Richard

      Shersby, Michael

      Tredinnick, David

      Sims, Roger

      Trend, Michael

      Skeet, Sir Trevor

      Twinn, Dr Ian

      Smith, Tim (Beaconsfield)

      Vaughan, Sir Gerard

      Soames, Nicholas

      Viggers, Peter

      Spencer, Sir Derek

      Waldegrave, Rt Hon William

      Spicer, Sir James (W Dorset)

      Walden, George

      Spicer, Michael (S Worcs)

      Walker, Bill (N Tayside)

      Spink, Dr Robert

      Waller, Gary

      Spring, Richard

      Wardle, Charles (Bexhill)

      Sproat, Iain

      Waterson, Nigel

      Squire, Robin (Hornchurch)

      Watts, John

      Steen, Anthony

      Wells, Bowen

      Stephen, Michael

      Wheeler, Rt Hon Sir John

      Stern, Michael

      Whitney, Ray

      Stewart, Allan

      Whittingdale, John

      Streeter, Gary

      Widdecombe, Ann

      Sumberg, David

      Wiggin, Sir Jerry

      Sweeney, Walter

      Wilkinson, John

      Sykes, John

      Willetts, David

      Tapsell, Sir Peter

      Wilshire, David

      Taylor, Ian (Esher)

      Winterton, Mrs Ann (Congleton)

      Taylor, Rt Hon John D. (Strgfd)

      Winterton, Nicholas (Macc'f'ld)

      Taylor, John M. (Solihull)

      Wolfson, Mark

      Taylor, Sir Teddy (Southend, E)

      Wood, Timothy

      Temple-Morris, Peter

      Yeo, Tim

      Thomason, Roy

      Young, Sir George (Acton)

      Thompson, Patrick (Norwich N)

      Thornton, Sir Malcolm

      Tellers for the Noes:

      Thurnham, Peter

      Mr. Sydney Chapman and Mr. Andrew Mitchell.

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

      Question accordingly negatived.
      Clause 48 ordered to stand part of the Bill.
      Committee report progress.—[Mr. Arbuthnot.]
      To sit again tomorrow.

  Fishing (Time at Sea)
  Mr. Deputy Speaker (Mr. Michael Morris): We now come to the motion on sea fish licensing.
  Mr. Bob Cryer: On a point of order, Mr. Deputy Speaker. According to the Order Paper,
  "The Instrument has not yet been considered by the Joint
  Committee on Statutory Instruments."
  The Standing Orders place a duty on that Committee to report to the House. I must register a strong protest that the instrument is being rushed through and that the Committee's report is not available. The Committee is asking the Ministry a number of questions; according to the terms of our operation, we must allow it to reply to those questions, and we cannot do that until next week. I wrote to the Leader of the House asking him to defer the debate in view of the circumstances, but that has not been done.
  I should add that the Ministry presented the order in time for it to be submitted to the Joint Committee, but for some reason deliberately delayed its submission.
  Mr. Deputy Speaker: I am grateful to the hon. Gentleman for the way in which he has put his point. He will know, however, that the Chair is not responsible for what the House debates.
  Mr. James Wallace: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: I hope that it is a new point of order.
  Mr. Wallace: Yes, Mr. Deputy Speaker. As you will know only too well, as the statutory instrument is subject to the negative procedure, you will be obliged to put the Question at 11.30 pm. I am sure, however, that you are also aware that under Standing Order No. 15(2) you can
  "interrupt the business and the debate shall stand adjourned till the next sitting"
  owing either to the "lateness of the hour" or the
  "importance of the subject matter".
  The Division on an amendment to the Finance Bill has already eaten into the time allowed for this debate. Moreover, this is a complex provision that will affect the livelihood of fishermen around our coast—
  Mr. Deputy Speaker: Order. The hon. Gentleman seems to be taking precedence over others who wish to speak. We have well over an hour for the debate.
  Mr. Andrew F. Bennett: Further to the point of order raised by my hon Friend the Member for Bradford, South (Mr. Cryer), Mr. Deputy Speaker. May I ask you—
  Mr. Deputy Speaker: Order. I ruled very fairly on the point raised by the hon. Member for Bradford, South (Mr. Cryer).
  Mr. Bennett: Further to that point of order, Mr. Deputy Speaker. You do not have the power to decide what is debated, but you have the power to deprecate the procedure of a Department that does not give the House adequate time to debate the issues involved in Committee. It would be helpful if the Chair were to indicate that it disapproves strongly of a Department trying to short-circuit the work of the Joint Committee on Statutory Instruments.
  Mr. Deputy Speaker: I ruled that the Chair had no responsibility for what the House debates.
  10.19 pm
  Dr. Gavin Strang: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Sea Fish Licensing (Time at Sea) (Principles) Order 1993 (S.I., 1993, No. 1196), dated 30th April 1993, a copy of which was laid before this House on 4th May, be annulled.
  My hon. Friends have a legitimate point. The way the order has been rushed before the House is unsatisfactory.
  I should make it clear at the outset that the House has before it probably the most controversial fishing measure ever to be debated here. Certainly no policy has ever provoked such united opposition from our fishing communities. Everyone who reads the fishing press and, indeed, newspapers generally must be aware that relations between the Government and the fishing industry are at an all-time low. The Government's tie-up policy is the most important factor provoking such strenuous opposition from our fishermen. As an Opposition, we support the complete resistance of the fishermen to the compulsory tie-up policy.
  If a conservation measure is to be effective, it has to be implemented with the co-operation of the industry. There is no way this policy will achieve the co-operation of the industry or will prove to be an effective fish conservation measure. That is the first reason why the Government should abandon their policy.
  Hon. Members who have taken the trouble to read the order will be forced to conclude that we are being asked to implement a bureaucratic nightmare. In order to fish legally, a fishing vessel has to have a licence. If the order is passed, each licence will stipulate the number of half days which a fishing boat will be allowed to spend at sea. That number will be based on the number of days the vessel spent at sea in 1991. Of course, no fisherman knew in 1991 that the number of days spent at sea would determine how many days he could spend at sea in the future and would become a condition of his licence to fish in our waters.
  Many fishermen filled in log books and can document to some extent the number of days spent at sea in 1991, but many cannot. Many did not have to fill in EC log books. For example, fishermen fishing species for which there are no national quotas did not have to provide evidence or complete log books. For many of them, there is no documentary evidence on which to base the number of days which they will be allowed to spend at sea in future. That is acknowledged in paragraph 7 of the order, which is entitled
  "Time spent fishing under the authority of a licence but not covered by written returns".
  When we study that, we find that there is no evidence to be taken into account in some instances. It will be a purely arbitrary decision.
  If we read the order further, we see a reference to "Exceptional circumstances". Of course there are exceptional circumstances. If we read through the list, it brings out how unworkable the order will be. I quote one example of exceptional circumstances:
  "other factors leading to prolonged or repeated absence from work on the part of the master or any member of the crew of the vessel."
  Let us be clear about it. Fishermen are like the rest of us. Some are more honest than others or, should I say,

  755
  some are more economical with the truth. Harsh decisions will be taken. Clearly, it is intended that if the order is to bite, it has to be restrictive. That means that many fishermen will be treated unfairly in relation to the number of days on which they will be allowed to fish. It is unworkable and unfair.
  In the limited time available to me—many hon. Members wish to take part in this very short debate—I shall confine myself to a few questions. Why has the minimum allocation been fixed at 160 days? There must be some basis for that figure—[Interruption.] It is not an EC figure. Indeed, there is a quite different EC figure applying to decommissioning, which is 200 half days, representing 100 full days on which one must fish to be eligible for the EC decommissioning scheme.
  I ask for a rough guide, so my question is reasonable. What will be the average number of days at sea for each licence? The minimum, as I said, will be 160, although the maximum, especially in circumstances in which there are two crews, could be higher than 330 days. The fishing industry is entitled to an indication of the average number of days-at-sea allowed under the proposals.
  I urge the Minister to give an important undertaking about the application of the regime. Will he undertake that the days-at-sea restrictions will never prevent British fishermen from fulfilling their quotas? In other words, may we be assured that no fisherman will be denied the opportunity to exhaust his national quota as a consequence of the days at sea restrictions?
  The fishing industry has for years campaigned for a decommissioning scheme. In those campaigns it has had the support of the Labour party and hon. Members on both sides of the House, including some Conservative Members who represent fishing communities. Over the years, however, the Conservative Government have consistently refused to introduce a decommissioning scheme.
  I am glad to see the Minister of Agriculture, Fisheries and Food in his place. In 1990, he said:
  "I emphasise that decommissioning is not the way to reduce the pressure on fish stocks".
  —[Official Report, 13 December 1990; Vol. 182, c. 1171].
  Various versions of that statement have been repeated by Ministers in one debate after another. The Government have belatedly introduced what we would describe as a totally inadequate decommissioning scheme. The Select Committee on the European Communities in another place produced a valuable report nearly a year ago describing that scheme as too little, too late.
  As a result of an amendment introduced during its passage, the parent legislation to the instrument that we are debating, the Sea Fish (Conservation) Act 1992, states that, before considering what action to take,
  "Ministers shall first give due consideration to a scheme of decommissioning in order to achieve a significant reduction in the capacity of the fishing fleet."
  The Government's miserable decommissioning scheme was announced in February 1992. The Sea Fish (Conservation) Act received Royal Assent in December 1992. What consideration did the Government give to introducing an effective decommissioning scheme before the order now before the House was introduced? Where is the evidence that they gave the matter such consideration? Will their half-hearted decommissioning scheme, as we
  756
  term it, achieve a reduction in fishing capacity? That, too, was challenged in the Select Committee report in another place.
  Opposition Members are not against just this compulsory tie-up regime. We are against compulsory tie-up as a general proposition. We are against it because it is unfair. Many young skippers have borrowed large sums of money to buy vessels. How can it be right to force them, by such restrictions, into a situation in which they will not be able to earn enough money to make the loan repayments and cover their costs? Compulsory tie-up is economic nonsense. It inherently forces up fishing costs, so it cannot make sense as a long-term policy.
  Compulsory tie-up threatens the safety of our fishermen. If a fisherman is fishing on the high seas and the weather suddenly deteriorates, he will go home, knowing that he can go out and fish again the next day. Once this scheme is in operation, however, and fishermen are out in adverse conditions, they will remember that they are only allowed to fish for so many days a year: they may not be able to return the next day. They will therefore try to catch as many fish as possible while they can. It is surely reasonable to argue that this will happen sometimes, so it is also reasonable to say that the regime will put our fishermen's lives at risk.
  As anyone who knows the industry will confirm, the very possibility of the scheme coming into operation has led to boats cutting their crew members. Anyone who knows anything about fishing vessels knows that vessels with fewer crew members are not so safe as boats with full crews aboard. On safety grounds alone, therefore, the scheme is wrong.
  We have a common fisheries policy, but compulsory tie-up will not apply to French or Spanish fishermen. What chance, then, of the scheme being acceptable to our fishermen when, for historical reasons, they find themselves competing against French, Irish and Spanish fishermen in the seas around this country? It is difficult for them to understand how that can be right under a common fisheries policy.
  Conservation can work only if it has the support of the industry. Compulsory tie-up is unworkable. That is why the policy should be stopped in its tracks. The House can do that tonight, so I urge all hon. Members to join the Opposition in the Lobbies to vote down the order.
  10.32 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. David Curry): It is, I think, a matter of agreement that there is a crisis in the fish stocks. We know why. It is because fishermen are hunting a common resource, because there is no entry fee to that resource, because they hunt it competitively, and because, all the time, increased killing power is being brought in by new technology. One has only to look at Fishing News to see advertisements such as "Now fish can't hide"—because of the sheer weight of the technology deployed in the hunt for them.
  The technology is improving all the time, and that has led to a crisis in the stocks. It is a worldwide, not just a European, crisis. The House will know that the Newfoundland cod fishery has been halted for two years because of the crisis in the cod stocks there. The Icelanders have cut their quotas radically because of the crisis in the

  757
  cod stocks. Ten years ago we pulled about 540,000 tonnes of cod from the Baltic; that quota is now down to 40,000 tonnes.
  The crisis in the North sea is equally grave. The purpose of these measures is to protect our fish, by our means, for our fishermen. Even if there were no such thing as a common fisheries policy, even if we had a national 200-mile limit, I would still be here today defending measures to protect British fish. That is the reason for the order. It is not here because it was imposed by Brussels. It is certainly not a case of waiting until the stocks are utterly depleted just because others might not take the same action. We are introducing the measure because our stocks are threatened, and we have a duty to save them.
  Mr. Brian Wilson: The Minister has a difficult job, but how can he make global statements about the intensity of the fishing effort in the light of the fact that, until recently, the Government were giving grants in order to intensify the fishing effort? Why, throughout a debate that has now lasted for several years around the Bellwin scheme and related measures, has there been no movement at all towards recognising and supporting low-intensity fishing regimes which apply in certain parts of the country through a regional fishing policy?
  The Minister talks about a national fishing policy and declaims against high-intensity fishing, but people with conservation-conscious fishing regimes get no local protection and support against such high intensity fishery regimes. If the hon. Gentleman moved towards a regional fishing policy, what he has just said would have more credibility.
  Mr. Curry: The hon. Gentleman raises a point of genuine debate. One could look at fisheries in regional terms, but some in the United Kingdom fish all round the coast and others are regional. There will always be some conflict between them. There is no such thing as a fishing industry in Britain: there are half a dozen fishing industries. One of the problems facing any Fisheries Minister is to try to reconcile the competing claims of the elements of the industry. I recognise that there are difficult choices to be made. It is my job to stand here and defend the one that we have made.
  Everywhere, Governments are struggling to find an answer to conservation. That is why they have been. forced to intervene in an industry which is traditionally unregulated, fragmented and individual. We have to consider how to achieve conservation. It could partly be done by telling the industry to depend on self-discipline and self-regulation. That would be an easy solution—it would certainly be more convenient for Ministers—but it does not always work.
  The industry is competitive. The producer organisations are not always willing to exercise a discipline over their members that would be helpful. There is a history of evasion. I do not wish to labour the point, but all of us know that that exists. Because fish are a common resource, not a property right, fishermen who act with restraint tend to lose out to those who do not act with restraint.
  Mr. Michael Stephen: Does my hon. Friend accept that there is a history of evasion on the French side of the English channel as well, and that it is particularly important for fishermen such as those who operate out of the port of Shoreham and in the English
  758
  channel, that the British Government keep a close eye on what is going on in the French ports and ensure that French and other fishermen are not evading the rules while our fishermen are obeying them?
  Mr. Curry: I totally agree with my hon. Friend. That is why the first meeting between the new French Minister and my right hon. Friend the Minister of Agriculture, Fisheries and Food and myself was about fisheries. I do not wish to draw up a league table of comparative sin and virtue in the fishing industry, but I recognise clearly that fishermen across the world tend to be a breed; that is why Governments fact similar problems whether in Guinea-Bissau or the west coast of Scotland.
  There are various ways of going about conservation. There is self-discipline and technical conservation. But we know that there is no single measure that will do the trick, because of the different ways in which stocks behave. We know that what would be necessary if we were to achieve all our objectives by technical conservation might well be further than the industry would be prepared to go.
  We know also that the industry tends to be divided in its reponse to challenges. For example, we are consulting at the moment on whether we should ban the landing of small ungutted rounders—the basic white fish stocks. I need not be a prophet to forecast that we are unlikely to have a favourable response to that from all the different parts of the United Kingdom, although I can see the argument in favour of taking that particular measure.
  We have set up a forum with the industry. It has had its first meeting. It has gone into working groups, and we hope to find concrete measures of technical conservation acceptable to everybody. We are willing to commit research money to doing work that might reveal how we can go forward with the industry.
  Mr. Alex Salmond rose—
  Mr. Curry: The hon. Member for Edinburgh, East (Mr. Strang) said that many hon. Members wish to speak, and if I give way constantly, it will mop up the entire debate. As the House knows, I usually give way, but in these circumstances of a narrow debate I shall be rather more disciplined.
  There is a buy-out. If one goes for a buy-out, one only buys time, because the technology is galloping along behind all the time. Countries with a long history of decommissioning have found that they still need to make further reductions. Decommissioning by itself simply has not delivered the trick. One has to do a lot of decommissioning before one starts cutting into the efficient catches. One tends to catch those who are committing the least attack on the stock. However, we believe that decommissioning has a role. We have accepted that it must form part of the package; that is why £25 million is available for decommissioning.
  The order is only part of a package of measures. Days at sea will go back to back with decommissioning to make decommissioning into an effective conservation measure.
  Mr. Michael Jopling: Has there been a change in recent years from the position that I remember so well? Every year, when the scientists made their recommendations about stocks, total allowable catches and quotas, the fishermen's lobbies, of which the British was not the least, came to all Ministers in the Council and pleaded for the TACs and quotas to be far

  759
  higher than the scientists had recommended. Because of the power of that lobby, Ministers often agreed TACs and quotas at a level higher than they felt was prudent.
  Is it not fair to say that, as a result of that pressure and those decisions, the crisis that now confronts the industry is partly due to Ministers over the years and partly due to the irresponsible pressure of fishermen who would not face the crisis in years gone by and who now face a far bigger crisis?
  Mr. Curry: My right hon. Friend makes a valid point. It has been the case that Ministers have succumbed to pressures in the past. They have been willing to edge up the TACs and the quotas to meet certain political pressures on them. That is one of the reasons why we have the crisis now. That option is no longer available to us.
  The important point about the scheme is that it is a minimal scheme. It will come into operation in September or October. We want to issue the provisional allocations which will then give rise to the definitive allocations. The scheme will not come into force until September or October. It will then stand still until we are satisfied that other member states are fulfilling their obligations to reduce capacity. I emphasise this point. I do not have the slightest intention—the House would not permit me in any case—of inviting the House to take further measures unless it is clear that our Community partners are also taking measures to meet their targets. I have emphasised that from the beginning.
  The position is well summed up in a newspaper from which I do not normally quote, and which does not normally mention me with great favour. The editorial in this week's Fishing News says:
  "More money for decommissioning, much as the industry calls for it, is simply a political non-starter in the current climate."
  It then states why there is no chance of getting more money for it. The editorial continues:
  "On technical measures, again the Government is lukewarm. A major difficulty is the enforcement. The Government knows that fishermen are up to all the tricks in avoiding the impact of technical measures and hence have no faith in them as conservation measures. One reason why technical measures fail is that they are invariably imposed against the advice of the industry which then immediately sets about side-stepping them. The reason they are so often imposed is that fishermen cannot agree on what measures are required."
  The editorial points out that a new federation has been formed in the north-east of England which may reflect certain disagreements with the national federation.
  The editorial then points out, as the hon. Member for Cunninghame, North (Mr. Wilson) mentioned, the possibility of considering a regional fisheries policy. It concludes:
  "If the industry is to fight tie-ups effectively and convincingly, it must have a realistic alternative. So far the alternatives put forward do not recognise the political realities and the complexities of fisheries management or the fragmentation and diversity of the industry."
  That is the view of the industry's own house magazine.
  Mr. Anthony Steen: As a Conservative Member whose understanding of such matter is limited, I wonder whether the Minister could explain something to me. Am I right in thinking that the arrangements that he is announcing tonight will peg the 1993 quota at the 1991
  760
  days-at-sea level? Secondly—and more important—is he saying that he will not introduce any new resolution, as he said on 14 July 1992,
  "unless we are satisfied that member states which share our fishery stocks are taking effective steps to meet their multi-annual guidance programme targets."
  —[Official Report, 14 July 1992; Vol. 211, c. 1027.]?
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. We have already had three interventions, all of them lengthy. We have a very limited time for the debate, and a number of hon. Members are seeking to catch my eye. Long interventions do not help.
  Mr. Curry: I can confirm to my hon. Friend that the promises that we gave during the passage of the Sea Fish (Conservation) Act are all being fulfilled. This measure represents a standstill on effort expressed in days at sea based on the 1991 figure. I shall explain what "based" means in a minute. We will not move from that position, and I will not invite the House to tighten that restriction until we are satisfied that other member states are meeting their own targets, set in the EC consultative group. I am delivering on that promise in precise terms.
  The Government have a package of measures, including licensing under 10 m, the decommissioning scheme—using which we have to remove 55 per cent. of the target—and days at sea. As I said, it is minimal. We will also reintroduce grants for vessel safety equipment—for fitting radio beacons, for life rafts, for hand-held radios, flares and rockets.
  The hon. Member for Edinburgh, East (Dr. Strang) mentioned safety. Let me say to him very seriously that, this year, where there have been no restrictions in fishing, we have already seen a significant loss of life in the fisheries industry. A couple of weeks ago I was in Northern Ireland, where two lives were lost in the constituency of the right hon. Member for Strangford (Mr. Taylor). That happens even when there are no restrictions. Fishing is a hazardous business; there is loss of life in the fishery.
  I shall not draw comparisons in respect of lives lost from one year to another, but I do not seriously believe that the present measure will tempt fishermen to risk their lives. I simply do not think that that is the case, and I hope that nobody will blame on this measure every single loss of life that occurs in the fishing industry. That would not be an intellectually honest thing to do.
  What will happen now is as follows. The principles order clears the way to send forward the traditional allocations, based on 1991 figures, so that we can make up allocations for people who have been caught by exceptional circumstances in 1991. There will then be a period for informal representations, so that we may be informed of the adjustments that are necessary—for example, for the non-fishing effort.
  I have received many representations in respect of boats that do oil rig work or white weeding in the Thames estuary, as well as those engaged in tourist activity and fishing for salmon and migratory trout. We have listened to those representations and will make allowance for such activities. We have also received representations concerning those areas where the data is not complete.
  Sir Roger Moate: In reiterating those assurances, which are most helpful, will my hon. Friend confirm that there will be no change whatever with regard to boats under 10 m? While he is collecting information,

  761
  can he assure the House that he has no plans, as far ahead as one can see, to apply the days-at-sea restrictions to the very large fleet of boats under 10 m?
  Mr. Curry: We have of course completed the licensing of the fleet of boats under 10 m, and we will not introduce days-at-sea restrictions during the lifespan of the current multi-annual guidance programme target. Within that lifespan, we shall be able to review all our conservation measures, so I can give my hon. Friend the assurance that he seeks.
  After the fishermen have had a month in which to make their representations, we will analyse those representations over two or three months, and then the full statutory instrument tribunal will be available.
  The House will want to know that the Ministry of Agriculture, Fisheries and Food, together with the Secretaries of State for Scotland, for Wales and for Northern Ireland will be appointing Sir Michael Ogden QC as president of the Sea Fish Licence Tribunal. Sir Michael will commence work immediately on a part-time basis to assist us in finalising the arrangements for the tribunal's work and will then preside over its operation later in the year.
  He has a great wealth of experience on which to draw, including 13 years as chairman of the Criminal Injuries Compensation Board, acting as the assessor of compensation for miscarriages of justice for the Home Secretary and the Minister of Defence, and sitting as deputy High Court judge in the Queen's bench division in addition to his practice as Queen's counsel. I am confident that he will ensure that fishermen who wish to appeal will receive open, fair and impartial treatment. At the same time, I pay tribute to Judge Michael Coulson for his preliminary work in setting up the tribunal and pending the appointment of the tribunal.
  We expect the allocations to operate from early September or October, and the days at sea will not be conterminous with the quota year. That will introduce an additional element of flexibility into the scheme. We have sought to have a flexible, effective and enforceable scheme. All the time spent at sea in 1991 will be counted. We will make an allowance for exceptional circumstances such as a breakdown or family bereavement, and will calculate in half days to permit flexibility to the fisherman. There will be the de minimis allocation. There will be allowances for vessels that are caught by the eight-day tie-up. I have observed the representations that I received on that matter.
  We will go no further than this order unless we are satisfied that we are getting effective action from our partners. We will differentiate between sector and stock in deciding how to take the system forward in the circumstances that I have outlined—when our partners are moving forward and we have received from the House and another place the affirmative resolution that we have written into the rules.
  The measure will be of practical benefit, because it gives well-defined quantity entitlements to fishermen. It can be targeted by a fishing area and method of fishing, and it is enforceable. It will give an economic benefit by curbing the race to fish and the simultaneous landings than can glut the market and help profitability when the stocks recover and the catch rates increase. It can provide the basis for rationalisation without increasing the exploitation rate.
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  The measure will be of conservation benefit, because it is essential for decommissioning to be effective. It will be a method of combating black fish landings and discarding when quotas have been exhausted. It will limit the exploitation of vulnerable non-quota fish. I must emphasis that all stocks around the United Kingdom are vulnerable —some are in grave crises. The case for the freeze on effort is absolutely open and shut for all the stocks around the United Kingdom.
  The measure is for conversation and the future of the industry. Neither the Labour party nor the industry has offered us an effective alternative. The measure is a British method, devised with the British industry in view to preserve British stocks for British fishermen and carried through by the British Government. It is for the long-term future of the industry, and I urge the House to reject the Labour party's plea to reject it.
  10.53 pm
  Mr. Austin Mitchell: The measure is an abomination, which should not have been proposed to the House in the first place. We should have had a decommissioning scheme four or five years ago, when Labour Members were asking for it, to tackle the problem of conservation directly. The Government will spend a massive amount on this order—the National Federation of Fishermen's Organisations has estimated about £8 million. That could be the kernel for a much bigger decommissioning which could be used more effectively and directly.
  The Minister has approached the problems of fishing in an authoritarian way to conceal the consequences of his failure to introduce a decommissioning scheme years ago. Most consequences will be imposed on a fishing industry that will be driven into bankruptcy by having the days at sea limited in this way. I do not want the Minister to get away with the sort of salami tactics that he has adopted tonight, saying that it will be done bit by bit, with more proposals to come later. That is salami-ism.
  When the Minister has such powers, they will be implemented. The days at sea will be gradually reduced in the same way as the total allowable catch was reduced, although the Minister told us that total allowable catches were an effective means of conservation. Once he has the powers, it follows automatically that the days at sea will be limited.
  We are being asked to sign a blank cheque for a Minister who has demonstrated that he will not listen to the fishing industry. He is using an economically inefficient method of approaching the problems of the industry. It will result in huge sums of capital being tied up for days every year. The order will not be paralleled by European measures.
  The Minister said that if the EC did not achieve multi-annual guidance programmes the Government would reconsider. Of course it will achieve them. It is because we are so far behind in ours that he is having to introduce this panic measure now. That is the problem. Will the Minister say that he will not implement the measure until similar measures and the same sort of limitations on days at sea are imposed on our continental competitors? If such limitations are not imposed on our competitors, what kind of spectacle will it be when our

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  fishing boats are tied up in port and our fishermen watch the fish being caught by French, Dutch and Danish fishermen?
  Our fish are caught none the less. The conservation damage is caused none the less. The fish are caught in French, Dutch and Danish nets. They will simply not be caught by British fishermen, to be landed on the British market for the British industry. That is all that the Minister will achieve. He will give a bonanza to the Europeans, who are effectively uncontrolled because policing at their ports is not so strong, effective or clear-cut as in Britain. Can the Minister tell us that the fish that are not caught by our industry and are caught by our competitors will be effectively controlled at the port of landing? Of course he cannot. The Spanish will have a bonanza thanks to the order. The fish will die none the less.
  Limiting days at sea is a wrong approach to the problems of the industry and it will bankrupt large swathes of it. The far more effective approach that the Minister should take is to consult the industry and work with it to impose conservation measures by selective gear—by increasing mesh sizes, using square mesh panels and implementing all the measures that the fishermen have proposed over the years.
  Mr. Curry: Will the hon. Gentleman give way?
  Mr. Mitchell: The Minister did not give way to me, so I shall not give way to him: I am sorry.
  Only selective measures can achieve proper and effective conservation. The crude measure that the Government have introduced cannot do so. It will simply drive fishermen, when they are allowed to put to sea, to catch as much as they possibly can of everything they possibly can. That is the inevitable consequence of the measure.
  Having obtained the powers, the Minister should consult the industry so that proper and effective conservation can be achieved. He should work out a joint approach with the industry. That is the only way to do it. The Minister is going in for a Ceausescu approach to the problems in the fishing industry.
  There is a problem with the vessels that have caught non-pressure stocks and, therefore, have not been required to keep records. Some allowance has to be made for such vessels. The only way to do so is to give them a notional allowance. They cannot be asked to develop records that do not exist.
  The Grimsby fishing industry fishes by passive fishing with large mesh sizes of more than 110 mm. It is conservation conscious. It is a conservation-effective industry. When the Minister comes to exercise discretion —as he will, because at some stage he will have to discriminate—he should advance the claims of those sections of the fishing industry that are the most conservation conscious and conservation efficient.
  I make a plea to the Minister. The measure came before the spirit of the Newbury noes. It is the sort of authoritarian measure that the Prime Minister has told us, having heard the voice of the people, the Government will avoid. They will consult and work with people. They will not be authoritarian. They will not impose their wishes on the people any more. Why does not the Minister join in that process in dealing with the fishing industry? I give the
  764
  assurance that, if he does not, the fishing industry will be sour, intractable and unco-operative and there will be enormous difficulty in implementing the measure.
  The order will require massive bureaucracy. It will require much extra spending that would not be necessary if conservation were achieved with the co-operation of the industry. That is my plea to the Minister. He has the powers. He should hold off and co-operate with the industry to get a better deal.
  I also make a plea to Conservative Members from fishing ports. There is an enormous weight of responsibility on their shoulders. There are not many Members of Parliament from fishing constituencies. Fishing is a beleaguered industry. Conservative Members would not do this to any other section of the communities that they represent. Those Members would not require pubs, banks or shops to close three or four days a week. They would not dare to do that. Why do that to the fishing industry? Why do they treat the industry in that fashion? The industry does not have many people to speak for it and those Members should have the guts to speak for it tonight.
  10.59 pm
  Mr. David Harris: I do not know why the hon. Member for Great Grimsby (Mr. Mitchell) pointed at me in particular as he concluded his speech, because my opposition to the Sea Fish (Conservation) Act 1992 and to the order is well known and recognised.
  I do not record my opposition to the Act in a boastful spirit, but with great sadness. I agreed wholeheartedly with the hon. Member for Edinburgh, East (Dr. Strang) and I also agreed with some of the remarks of the hon. Member for Great Grimsby, although he was far too emotional about the subject.
  When the Act was passed, I had hoped that the relevant orders, of which this is the first, would not be introduced to implement the powers under it. I had hoped for a response from my hon. Friend the Minister and from the industry so that we could avoid implementation of the restrictions on days at sea through the imposition of a compulsory tie-up. I honestly do not believe that the orders and the Act represent the right way in which to achieve conservation. If I thought that they would work, I would join my hon. Friend the Minister in the Lobby. I do not believe that they represent the right approach. [Interruption.] I ask Opposition Members to be quiet, please. This is a serious matter and they are not helping the fishing industry.
  The need for conservation is beyond doubt. My hon. Friend the Minister is right about that and the industry also acknowledges it. If I am critical of my hon. Friend the Minister—I believe that he has been treated unfairly in this business and that a lot of unnecessary blame has been put on him—I am also disappointed that that industry has not responded with counter-proposals to the tie-up.
  When the fishermen held a large rally in Westminster Hall in July, I was greeted with fairly cheap applause, because I had done that popular thing by opposing the then Sea Fish (Conservation) Bill. I said to those fishermen that they should not applaud me because their industry not only had to oppose the Bill but produce counterproposals. It is a source of great sadness to me that it has not done that with a united voice.
  Mr. Robert Hughes: Yes, it has.
  Mr. Harris: My good friend from Scotland says that it has. I accept that that is true of certain areas and I pay tribute to the leaders of the fishing industry in the south-west, who have produce alternatives, at least tentatively, to solve this difficult subject. They have suggested closed areas in which no fishing should take place in spawning seasons. That is eminently sensible. I also agreed with their suggested technical measures.
  The industry, unfortunately, has not spoken with one voice and that is why, over the years, it has done itself a great disservice. The lack of unity has been apparent on many issues apart from conservation. I realise that there are as many different views about fishing as there are fishermen in any port, but the industry must get together, particularly in the light of what the Government are imposing tonight.
  If the industry produced viable proposals and if my hon. Friend the Minister and the Government were prepared to listen, we could develop a better means of conserving fish than that proposed.
  I welcome the setting up of the conservation forum. I agree that it will not be easy to get agreement in i t, but I again echo what was said by the hon. Member for Great Grimsby—we really must try, even at this late hour, to secure agreement on other ways of approaching conservation.
  In commending the order, my hon. Friend the Minister said that its objective was to protect our fish by our means for our fishermen. The difficulty, particularly in a n area like area 7, the south-west, is with the last bit of that objective, "for our fishermen". In area 7, for the most important species, we have in some cases only 12 per cent. of the total allowable catch and the rest belongs, in quota terms, to the boats of other member states. If our fishermen are prevented from fishing to the full, others will go on fishing and fish will not be conserved.
  My hon. Friend the Minister is going to get up and I will certainly give way to him. I pay tribute to him because he has said that he will recognise these regional differences, and that is a very important point. I come back to a point made by the hon. Member for Cunninghame, North (Mr. Wilson). We cannot impose a national system of control here. We need to approach the problem in a regional fashion. The situation in my part of the world is completely different from the situation in Scotland. We must therefore have regional flexibility. I know that my hon. Friend is working on that, and I think that he wants to intervene.
  Mr. Curry: I am grateful to my hon. Friend. I have no wish to take up his time. On the share of stocks in the south-west, I recognise that it is a different fishery from the fishery around the north-east coast, areas 4 and 6, where the stocks are the most vulnerable, but the 12 per cent. figure must be treated with some care. The United Kingdom's share is as follows: sole in the western channel, 59 per cent.; sole in the Bristol channel, 28 per cent.; plaice in the English channel, 29 per cent.; nephrops in area 7, 33 per cent.; and mackerel in the western area, 56 per cent. Boats in the south-west catch much higher-value species than do those fishing off most of the coasts.
  Mr. Harris: I accept that, and my hon. Friend will note that I picked my words with some care and used the phrase "for the most important species". But the point has been made.
  766
  After dealing with the general point, I turn to some detailed criticisms of the order. The first point has already been made fairly by the hon. Member for Edinburgh, East: how on earth we are to give days at sea to those people who have no track record through log books? That difficulty will cause enormous friction because to some extent the decision will be arbitrary.
  There is also the cost of implementation. The Ministry has used a figure of £1·5 million a year, but I believe that the cost will be much higher than that given in the explanatory memorandum.
  Then there is the biggest issue of all for me when it comes to unfairness—the wretched flag of convenience quota-hoppers. How on earth are we to impose days at sea restrictions on boats that come out of Corunna or Vigo? We cannot put those restrictions on them, and my hon. Friend and his officials know that. Therefore, I am not prepared, on that ground alone, to support a measure in which we agree that, although the quota-hoppers are covered, there is not yet a means of controlling them but in which we are going to impose restrictions on my fishermen from Newlyn and fishermen from other ports around Cornwall. For that reason alone, I could not, in all conscience, vote with my hon. Friend the Minister, although I have the greatest admiration for him.
  I beg my hon. Friend just to think again on this matter. There is still time. I beg the industry to give up the protests, put them on one side and start serious talks with the Ministry so that at last we can find a sensible solution to what is undoubtedly a difficult and complex problem.
  11.9 pm
  Mr. James Wallace: The hon. Member for St. Ives (Mr. Harris) is right to say that there should be serious talks. However, for the talks ever to take place, the Government must show a willingness to retreat from the hard-line attitude that they have taken, with their claims that effort limitation is the only way that they will achieve the necessary targets. They know that effort limitation will do precious little for conservation. The Minister talked about discards. I challenge him to show me one paragraph in the order that will make the least difference to the number of discards that are going back into the sea.
  The Liberal Democrats believe that the route that the Government have taken is an inefficient way to pursue conservation ends. It ties up the capital of business men for days in a way that would be unacceptable in any other industry. The people employed on vessels will be unemployed for those days, and we know of the difficulties that many have experienced when they have tried to draw unemployment benefit for those days.
  The Government's route is also an inflexible way to pursue conservation objectives. The hon. Member for St. Ives spoke of the western approaches. My understanding is that although, a year to 18 months ago, there was a view that boats should be tied up 30 per cent. of the days to meet conservation ends, that has now been reduced to 8 per cent. There is no way that the order can take any account of those changes.
  The Minister said that, when the Sea Fish (Conservation) Act 1992 was being drawn up, the quota for haddock in the North sea was small. That quota has now gone up from 55,000 tonnes to 133,000 tonnes, but we still have an inflexible system. The Minister said that he

  767
  would not wish to see quota uncaught because boats were obliged to stay in port. I hope that, when he answers, he will tell us where that promise is implemented in the orders. Having a calendar year for days-at-sea restrictions that differs from the one for quotas will lead to confusion rather than to the flexibility that the Minister claimed that he wants.
  Furthermore, the situation facing the pelagic sector shows how ludicrous the order is. We are told that the sector will be affected by days-at-sea restrictions as well, but why? The Scottish Pelagic Fishermen's Association has sent to some hon. Members a letter that it recently received, dated 11 May, from the Sea Fish Industry Authority, which says:
  "on the basis of the information to hand, it seems as though the Pelagic segment has already reduced capacity since 1.1.92 sufficiently to meet the MAGP requirements."
  Why, in heaven's name, is that sector having restrictions imposed on it when it has met multi-annual guidance programme requirements and when, on the evidence of last year's figures, it was not able to catch all the herring and mackerel in the quota when it had no restrictions? How will it be able to do that when it does have restrictions? The Minister must answer that fundamental question.
  I entirely endorse the opening remarks of the hon. Member for Edinburgh, East. He asked what was the logic of 160 half days. The Minister did not tell us. I suspect that it is a period that would not allow any boat to be viable if that were all the time that it was allowed to go out. However, there will be a number of add-ons.
  The Minister reaffirmed his commitment that there will be no order to reduce the number of days agreed for 1993 unless there is clear evidence that other countries are effectively implementing their MAGP targets as well. While our fishermen are restricted, it does not matter that other European countries are not effectively pursuing their MAGP targets, so while our fishermen are tied up, the fishermen of other EC states—Spain, France and Denmark—will be able to carry on fishing. Just because the Minister says that he will not bring in anything more restrictive, that does not hide the fact that there is no way in which our boats can increase the number of days when they can go to sea.
  We shall have fixed and rigid restrictions which will mean the opposite of conservation for those who have relatively few days at sea. Those who in 1991 were running double crews and were at sea all the time will benefit, whereas the Clyde fishermen who tie up over the weekends will lose out. The boats with fewer days at sea will find that the monetary value of their licences will be devalued.
  When the Bill was passed in the other place, their Lordships insisted that the order could not be introduced until the Government had given due consideration to the contribution of decommissioning in promoting conservation. The Government believe that a few words in the preamble to the order represent a magic incantation which will get around the statutory hurdle. The Minister has a duty to tell the House what consideration the Government gave to decommissioning.
  Given the feelings in the industry, it is inevitable that someone will take the decision to judicial review. Following the decision in the House of Lords in the case
  768
  of Pepper v. Hart that proceedings in the House can be used in evidence, the Minister should tell us what consideration was given to decommissioning.
  The hon. Member for St. Ives highlighted the fact that it will be difficult to control foreign vessels or those flying flags of convenience coming out of other ports. They are getting a bonus from the orders as they are getting 1988 as their base year; they are having their cake and eating it and the Government have not explained why.
  There has been no explanation of whether oral evidence will be acceptable in the absence of written documentation. We believe that it should be and we hope that when regulations on the sea fish tribunals are introduced, it will be made perfectly clear that oral evidence will be acceptable.
  What will we be saying that our fishermen should have been doing? The scheme envisages that British fishermen are a race apart, and in a sense they are, but they will need a practising lawyer on board to decipher some aspects of the order. In 1991, they needed to be fortune tellers to know that what they had to keep then would apply to them in 1993, and they will have to be the most brilliant businessmen to squeeze enough out of 160 half days a year to remain commercially viable.
  The order is no way to approach fisheries conservation. The industry has called year after year for decommissioning. It has been supported by right hon. and hon. Members on both sides of the House. The fact that for years the Government were deaf to their calls means that the industry is now being lumbered with a most inflexible and inefficient method of conservation which I believe will sour relationships between the Government and industry when what is needed is constructive dialogue.
  11.17 pm
  Rev. Ian Paisley: Hon. Members have mentioned the recent tragedy in Northern Ireland. I salute the memory of those two young men, one of whom was my constituent from Bushmills in County Antrim. He was a young man who wanted to fish from his earliest days. He went straight from school into a Government training scheme and for the seven years of his working life was engaged in fishing. He met with a tragic freak wave which swept him and his companion to their deaths.
  The fishermen of Northern Ireland and their federation have stated that if the order is passed it will increase tragedies among fishermen by requiring them to fish in adverse weather conditions as there will be times when the only days when fishermen are permitted to fish will be those when the weather is bad. We have enough problems in the fishing industry without sending men out in adverse conditions.
  The order will cause widespread unemployment among fishermen and the fish processing industry. It will also disadvantage British fishermen. I cannot accept the Minister's argument that he is preserving British fish; he is preserving British fish for other European countries to fish them. The Minister's argument strikes me as very preverse.
  The order will introduce an unjust system, forcing our fishermen to fish in bad weather at a time when United Kingdom fishermen must comply rigidly with the quotas —far more rigidly than any other EC fishing nation. It is no use the Minister talking to the French ambassador; French fishermen will continue to fish in our waters while our boats are tied up. The Minister should withdraw the

  769
  order and ensure that it is not introduced until all EC countries submit to the same rules. He should tell those countries that they would not have a common fisheries industry without our waters; the British waters made that industry. The money to be spent on civil servants to operate the scheme should be transferred to the decommissioning scheme.
  If we introduce conservation in the way suggested by the order, our fishing industry will have a sad future. The fishermen of Northern Ireland are totally opposed to the order.
  11.21 pm
  Mr. Elliot Morley: It is a great shame that there has been so little time for this important debate, in which many hon. Members wanted to speak. Even after tonight, the issue will not go away; it has already been debated for a long time.
  The Opposition cannot support the order, for reasons given by hon. Members on both sides of both Houses. It is both bureaucratic and expensive. Will the Government provide financial help for the many fishermen who will have to appeal against it? Will they note rulings made in the European Court about similar measures relating to allocation of days at sea for those who have no track records? The measure will not necessarily meet conservation objectives; it will discriminate against fishermen who have put less pressure on fish stocks, while rewarding those who have done the opposite. As has already been said, it has implications for crewing and safety, and it is not supported by any section of the industry.
  The decommissioning element is grossly inadequate, amounting to £25 million over three years. The French fleet was given that much in a single year. There is also the issue of complying with assurances given during the passage of the Sea Fish (Conservation) Act 1992. Under new section (6D)—the Act amends an earlier 1967 Act —before considering the measure relating to days at sea,
  "Ministers shall first give due consideration to a scheme of decommissioning in order to acheive a significant reduction in the capacity of the fishing fleet."
  Where is that consideration? Where is the "significant reduction" in the fleet? A paltry £25 million goes nowhere near such an objective.
  What about the Minister's assurance that there would be a level playing field between our fishing fleet and those of other European member states—an assurance that he gave the House on 14 July last year? While our fishermen face being tied up in port, their competitors are free to fish as widely as they wish.
  Mr. Eddie McGrady: Will the hon. Gentleman give way?
  Mr. Morley: I am sorry; there is not enough time.
  Because foreign fleets receive more generous funding, they are in a position to move into our fleets—to buy up British licences and expand their quota-hopping operations.
  We believe that there is an alternative to this measure: working with the industry to introduce technical conservation measures, gear types, selectivity, and bans on industrial fishing. The hon. Member for St. Ives (Mr. Harris) pointed out that fishermen themselves have suggested sensible measures, advocating retention lengths,
  770
  minimum landing sizes and a ban on twin rigs. I believe that it is possible, by co-operating with the fishermen, to introduce measures that will work.
  The measure is a marine set-aside without compensation. It is institutionalised bankruptcy for our fishing fleet. Many people have debts, having taken out loans to increase their capacity, supported by the very Government who are taking away the possibility for them to earn a decent living.
  I urge all hon. Members to vote against the order. Let us reject it, not in a negative way but in a positive way to bring back to the House a decent measure which meets conservation objectives, which has the co-operation of all fishermen, which has the support of all sides of the House and which will meet the objects of a substainable fishing industry, which the order fails to do.
  Mr. Salmond: On a point of order, Mr. Deputy Speaker. Feelings are running very high on this issue. Many hon. Members from fishing constituences have been unable to speak. Clearly the debate has not been extensive enough, given the importance of the issue. May I ask you to exercise your powers under Standing Order 15(2) and adjourn the debate to the next sitting day?
  Mr. Deputy Speaker: I am not prepared to exercise those powers.
  11.25 pm
  The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): I should say to the hon. Member for Glanford and Scunthorpe (Mr. Morley) that the only way to bankrupt the fishing industry is to ensure that there are no fish. That is what is so sad about the debate. As one who has been involved in conservation legislation, both private Members' Bills and Government legislation, in the House over 20 years or more, I find it sad to hear Opposition Members bandying the word "conservation" about while not being prepared to put forward any scheme that will work.
  If we are to maintain a sound fishing industry, it is essential that we conserve fish. On legislation dealing with livestock, we have always taken scientific advice. The scientific advice in the fishing world shows that our stocks are vulnerable and that we have to conserve them very carefully. We must accept that neither total allowable catches nor the quota can do the job alone, and that the methods in the order are the best way forward.
  Mr. Phil Gallie: My hon. Friend talks of conservation. In the Clyde, the fishermen took heed of that. They imposed their own weekend ban over a number of years. Now that means that they have not got days at sea recorded in 1991. Will my hon. Friend confirm that consideration will be given to that point and that he will take positive account of the days when they could have been at sea which were not recorded because of that self-imposed ban for conservation purposes?
  Sir Hector Monro: The fishermen in the Clyde will be able to have the same fishing pattern as they did in 1991 but, as they have a statutory ban, which is an exceptional circumstance, we can consider it under paragraph 9(2)(d). We shall certainly consider it carefully under the special exception clause.
  Mr. McGrady rose—
  Sir Hector Monro: The main message that Opposition Members do not seem to appreciate is that there will not be a reduction in fishing effort; there will merely be a standstill on where we were in 1991. We would not reduce the amount of fishing effort without bringing forward an affirmative resolution. There is no possibility of a reduction in fishing effort taking place without further debate in the House.
  Mr. McGrady rose—
  Sir Hector Monro: I hope, too, that Opposition Members will appreciate the exceptional care and trouble that will be taken in reaching the days at sea arrangement. The Department will be writing too all licence holders, who will have time to respond to the details on the computer printout and subsequently have discussions with the Department before the number of days at sea on the licence is fixed. Subsequent to that, they will have a right of appeal to the tribunal.
  We had demonstrations last winter about running out of quota. The worst way to react now would be to have a free-for-all, with no check on fishing around our coast. We are putting forward a practical conservation package. It would be foolhardy to throw that out tonight. I hope that the House will support the order, in the interests of conservation.
  Question put:—
  The House divided: Ayes 258, Noes 283.

  Division No. 265]

  [11.30 pm

  AYES

  Abbott, Ms Diane

  Carlile, Alexander (Montgomry)

  Adams, Mrs Irene

  Chisholm, Malcolm

  Ainger, Nick

  Clark, Dr David (South Shields)

  Ainsworth, Robert (Cov'try NE)

  Clarke, Eric (Midlothian)

  Allen, Graham

  Clarke, Tom (Monklands W)

  Alton, David

  Clelland, David

  Anderson, Donald (Swansea E)

  Clwyd, Mrs Ann

  Anderson, Ms Janet (Ros'dale)

  Coe, Sebastian

  Armstrong, Hilary

  Cohen, Harry

  Ashdown, Rt Hon Paddy

  Connarty, Michael

  Ashton, Joe

  Cook, Frank (Stockton N)

  Austin-Walker, John

  Cook, Robin (Livingston)

  Barnes, Harry

  Corston, Ms Jean

  Barron, Kevin

  Cousins, Jim

  Battle, John

  Cryer, Bob

  Bayley, Hugh

  Cunningham, Jim (Covy SE)

  Beggs, Roy

  Cunningham, Rt Hon Dr John

  Beith, Rt Hon A. J.

  Dafis, Cynog

  Bell, Stuart

  Darling, Alistair

  Benn, Rt Hon Tony

  Davidson, Ian

  Bennett, Andrew F.

  Davies, Bryan (Oldham C'tral)

  Benton, Joe

  Davies, Rt Hon Denzil (Llanelli)

  Berry, Dr. Roger

  Davies, Ron (Caerphilly)

  Betts, Clive

  Denham, John

  Blunkett, David

  Dewar, Donald

  Boateng, Paul

  Dixon, Don

  Boyce, Jimmy

  Dobson, Frank

  Boyes, Roland

  Donohoe, Brian H.

  Bradley, Keith

  Dowd, Jim

  Bray, Dr Jeremy

  Dunnachie, Jimmy

  Brown, Gordon (Dunfermline E)

  Dunwoody, Mrs Gwyneth

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

  Eagle, Ms Angela

  Bruce, Malcolm (Gordon)

  Eastham, Ken

  Burden, Richard

  Enright, Derek

  Byers, Stephen

  Etherington, Bill

  Callaghan, Jim

  Evans, John (St Helens N)

  Campbell, Mrs Anne (C'bridge)

  Ewing, Mrs Margaret

  Campbell, Menzies (Fife NE)

  Fatchett, Derek

  Campbell, Ronnie (Blyth V)

  Field, Frank (Birkenhead)

  Campbell-Savours, D. N.

  Fisher, Mark

  Canavan, Dennis

  Flynn, Paul

  Cann, Jamie

  Foster, Rt Hon Derek

  772

  Foster, Don (Bath)

  Marshall, Jim (Leicester, S)

  Foulkes, George

  Martin, Michael J. (Springburn)

  Fraser, John

  Martlew, Eric

  Fyfe, Maria

  Maxton, John

  Galbraith, Sam

  Meacher, Michael

  Gapes, Mike

  Michael, Alun

  Garrett, John

  Michie, Bill (Sheffield Heeley)

  George, Bruce

  Michie, Mrs Ray (Argyll Bute)

  Gerrard, Neil

  Milburn, Alan

  Gilbert, Rt Hon Dr John

  Miller, Andrew

  Godsiff, Roger

  Mitchell, Austin (Gt Grimsby)

  Golding, Mrs Llin

  Moonie, Dr Lewis

  Gould, Bryan

  Morgan, Rhodri

  Graham, Thomas

  Morley, Elliot

  Grant, Bernie (Tottenham)

  Morris, Estelle (B'ham Yardley)

  Griffiths, Nigel (Edinburgh S)

  Morris, Rt Hon J. (Aberavon)

  Griffiths, Win (Bridgend)

  Mowlam, Marjorie

  Grocott, Bruce

  Mudie, George

  Gunnell, John

  Mullin, Chris

  Hain, Peter

  Murphy, Paul

  Hall, Mike

  O'Brien, Michael (N W'kshire)

  Hanson, David

  O'Hara, Edward

  Harman, Ms Harriet

  Olner, William

  Harris, David

  O'Neill, Martin

  Harvey, Nick

  Paisley, Rev Ian

  Heppell, John

  Parry, Robert

  Hicks, Robert

  Pendry, Tom

  Hill, Keith (Streatham)

  Pickthall, Colin

  Hinchliffe, David

  Pike, Peter L.

  Hoey, Kate

  Pope, Greg

  Hogg, Norman (Cumbernauld)

  Porter, David (Waveney)

  Hood, Jimmy

  Powell, Ray (Ogmore)

  Hoon, Geoffrey

  Prentice, Ms Bridget (Lew'm E)

  Howarth, George (Knowsley N)

  Prentice, Gordon (Pendle)

  Howells, Dr. Kim (Pontypridd)

  Prescott, John

  Hoyle, Doug

  Primarolo, Dawn

  Hughes, Kevin (Doncaster N)

  Purchase, Ken

  Hughes, Robert (Aberdeen N)

  Quin, Ms Joyce

  Hughes, Simon (Southwark)

  Randall, Stuart

  Hutton, John

  Raynsford, Nick

  Jackson, Glenda (H'stead)

  Reid, Dr John

  Jackson, Helen (Shef'ld, H)

  Rendel, David

  Jamieson, David

  Robertson, George (Hamilton)

  Jones, Barry (Alyn and D'side)

  Robinson, Geoffrey (Co'try NW)

  Jones, Ieuan Wyn (Ynys Môn)

  Roche, Mrs. Barbara

  Jones, Jon Owen (Cardiff C)

  Rogers, Allan

  Jones, Lynne (B'ham S O)

  Rooker, Jeff

  Jones, Martyn (Clwyd, SW)

  Rooney, Terry

  Jones, Nigel (Cheltenham)

  Ross, Ernie (Dundee W)

  Jowell, Tessa

  Rowlands, Ted

  Kaufman, Rt Hon Gerald

  Ruddock, Joan

  Keen, Alan

  Salmond, Alex

  Kennedy, Charles (Ross,C&S)

  Sheerman, Barry

  Kennedy, Jane (Lpool Brdgn)

  Sheldon, Rt Hon Robert

  Khabra, Piara S.

  Shore, Rt Hon Peter

  Kilfoyle, Peter

  Short, Clare

  Kinnock, Rt Hon Neil (Islwyn)

  Simpson, Alan

  Kirkwood, Archy

  Skinner, Dennis

  Leighton, Ron

  Smith, Andrew (Oxford E)

  Lewis, Terry

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

  Livingstone, Ken

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

  Lloyd, Tony (Stretford)

  Smith, Llew (Blaenau Gwent)

  Llwyd, Elfyn

  Soley, Clive

  Loyden, Eddie

  Spearing, Nigel

  Lynne, Ms Liz

  Spellar, John

  McAllion, John

  Steel, Rt Hon Sir David

  McAvoy, Thomas

  Steinberg, Gerry

  McCartney, Ian

  Stevenson, George

  Macdonald, Calum

  Strang, Dr. Gavin

  McFall, John

  Taylor, Mrs Ann (Dewsbury)

  McGrady, Eddie

  Taylor, Rt Hon John D. (Strgfd)

  McKelvey, William

  Taylor, Matthew (Truro)

  Mackinlay, Andrew

  Taylor, Sir Teddy (Southend, E)

  Maclennan, Robert

  Tipping, Paddy

  McMaster, Gordon

  Turner, Dennis

  Madden, Max

  Tyler, Paul

  Mahon, Alice

  Vaz, Keith

  Mandelson, Peter

  Walker, Rt Hon Sir Harold

  Marek, Dr John

  Wallace, James

  Marshall, David (Shettleston)

  Walley, Joan

  773

  Wardell, Gareth (Gower)

  Wise, Audrey

  Wareing, Robert N

  Worthington, Tony

  Watson, Mike

  Wray, Jimmy

  Welsh, Andrew

  Wright, Dr Tony

  Wicks, Malcolm

  Young, David (Bolton SE)

  Williams, Rt Hon Alan (Sw'n W)

  Williams, Alan W (Carmarthen)

  Tellers for the Ayes:

  Wilson, Brian

  Mr. Eric Illsley and Mr. Alan Meale.

  Winnick, David

  NOES

  Ainsworth, Peter (East Surrey)

  Douglas-Hamilton, Lord James

  Aitken, Jonathan

  Dover, Den

  Alison, Rt Hon Michael (Selby)

  Duncan, Alan

  Allason, Rupert (Torbay)

  Duncan-Smith, Iain

  Amess, David

  Dunn, Bob

  Ancram, Michael

  Dykes, Hugh

  Arnold, Jacques (Gravesham)

  Eggar, Tim

  Arnold, Sir Thomas (Hazel Grv)

  Elletson, Harold

  Ashby, David

  Emery, Rt Hon Sir Peter

  Aspinwall, Jack

  Evans, David (Welwyn Hatfield)

  Atkinson, Peter (Hexham)

  Evans, Jonathan (Brecon)

  Baker, Rt Hon K. (Mole Valley)

  Evans, Nigel (Ribble Valley)

  Baker, Nicholas (Dorset North)

  Evans, Roger (Monmouth)

  Baldry, Tony

  Evennett, David

  Banks, Matthew (Southport)

  Faber, David

  Banks, Robert (Harrogate)

  Fabricant, Michael

  Bates, Michael

  Fairbairn, Sir Nicholas

  Batiste, Spencer

  Field, Barry (Isle of Wight)

  Bellingham, Henry

  Fishburn, Dudley

  Bendall, Vivian

  Forman, Nigel

  Beresford, Sir Paul

  Forsyth, Michael (Stirling)

  Blackburn, Dr John G.

  Forth, Eric

  Bonsor, Sir Nicholas

  Fowler, Rt Hon Sir Norman

  Booth, Hartley

  Fox, Dr Liam (Woodspring)

  Boswell, Tim

  Fox, Sir Marcus (Shipley)

  Bottomley, Peter (Eltham)

  Freeman, Roger

  Bottomley, Rt Hon Virginia

  French, Douglas

  Bowis, John

  Fry, Peter

  Boyson, Rt Hon Sir Rhodes

  Gale, Roger

  Brandreth, Gyles

  Gallie, Phil

  Brazier, Julian

  Garel-Jones, Rt Hon Tristan

  Bright, Graham

  Garnier, Edward

  Brooke, Rt Hon Peter

  Gillan, Cheryl

  Brown, M. (Brigg & Cl'thorpes)

  Goodlad, Rt Hon Alastair

  Browning, Mrs. Angela

  Goodson-Wickes, Dr Charles

  Budgen, Nicholas

  Gorst, John

  Burns, Simon

  Greenway, Harry (Ealing N)

  Burt, Alistair

  Greenway, John (Ryedale)

  Butcher, John

  Griffiths, Peter (Portsmouth, N)

  Butler, Peter

  Grylls, Sir Michael

  Carlisle, John (Luton North)

  Gummer, Rt Hon John Selwyn

  Carlisle, Kenneth (Lincoln)

  Hague, William

  Carrington, Matthew

  Hamilton, Rt Hon Archie (Epsom)

  Carttiss, Michael

  Hamilton, Neil (Tatton)

  Channon, Rt Hon Paul

  Hanley, Jeremy

  Chapman, Sydney

  Hannam, Sir John

  Churchill, Mr

  Hargreaves, Andrew

  Clappison, James

  Haselhurst, Alan

  Clark, Dr Michael (Rochford)

  Hawkins, Nick

  Clarke, Rt Hon Kenneth (Ruclif)

  Hayes, Jerry

  Clifton-Brown, Geoffrey

  Heald, Oliver

  Colvin, Michael

  Heath, Rt Hon Sir Edward

  Congdon, David

  Heathcoat-Amory, David

  Conway, Derek

  Hendry, Charles

  Coombs, Anthony (Wyre For'st)

  Heseltine, Rt Hon Michael

  Coombs, Simon (Swindon)

  Higgins, Rt Hon Sir Terence L.

  Cope, Rt Hon Sir John

  Hill, James (Southampton Test)

  Couchman, James

  Hogg, Rt Hon Douglas (G'tham)

  Cran, James

  Horam, John

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

  Hordern, Rt Hon Sir Peter

  Curry, David (Skipton & Ripon)

  Howard, Rt Hon Michael

  Davies, Quentin (Stamford)

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

  Davis, David (Boothferry)

  Howell, Rt Hon David (G'dford)

  Day, Stephen

  Hughes Robert G. (Harrow W)

  Deva, Nirj Joseph

  Hunt, Rt Hon David (Wirral W)

  Devlin, Tim

  Hunter, Andrew

  Dickens, Geoffrey

  Hurd, Rt Hon Douglas

  Dicks, Terry

  Jack, Michael

  Dorrell, Stephen

  Jackson, Robert (Wantage)

  774

  Jenkin, Bernard

  Rifkind, Rt Hon. Malcolm

  Johnson Smith, Sir Geoffrey

  Robathan, Andrew

  Jones, Gwilym (Cardiff N)

  Roberts, Rt Hon Sir Wyn

  Jones, Robert B. (W Hertfdshr)

  Robertson, Raymond (Ab'd'n S)

  Jopling, Rt Hon Michael

  Robinson, Mark (Somerton)

  Kellett-Bowman, Dame Elaine

  Roe, Mrs Marion (Broxbourne)

  Key, Robert

  Rowe, Andrew (Mid Kent)

  Kilfedder, Sir James

  Rumbold, Rt Hon Dame Angela

  King, Rt Hon Tom

  Ryder, Rt Hon Richard

  Kirkhope, Timothy

  Sackville, Tom

  Knapman, Roger

  Sainsbury, Rt Hon Tim

  Knight, Mrs Angela (Erewash)

  Scott, Rt Hon Nicholas

  Knight, Greg (Derby N)

  Shaw, David (Dover)

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

  Shaw, Sir Giles (Pudsey)

  Knox, David

  Shephard, Rt Hon Gillian

  Kynoch, George (Kincardine)

  Shersby, Michael

  Lait, Mrs Jacqui

  Sims, Roger

  Lamont, Rt Hon Norman

  Skeet, Sir Trevor

  Lawrence, Sir Ivan

  Smith, Tim (Beaconsfield)

  Legg, Barry

  Soames, Nicholas

  Lennox-Boyd, Mark

  Spencer, Sir Derek

  Lester, Jim (Broxtowe)

  Spicer, Sir James (W Dorset)

  Lidington, David

  Spicer, Michael (S Worcs)

  Lightbown, David

  Spink, Dr Robert

  Lilley, Rt Hon Peter

  Spring, Richard

  Lloyd, Peter (Fareham)

  Sproat, Iain

  Lord, Michael

  Squire, Robin (Hornchurch)

  Luff, Peter

  Stanley, Rt Hon Sir John

  Lyell, Rt Hon Sir Nicholas

  Steen, Anthony

  MacGregor, Rt Hon John

  Stephen, Michael

  Maclean, David

  Stern, Michael

  McLoughlin, Patrick

  Stewart, Allan

  McNair-Wilson, Sir Patrick

  Streeter, Gary

  Madel, David

  Sumberg, David

  Maitland, Lady Olga

  Sweeney, Walter

  Major, Rt Hon John

  Sykes, John

  Malone, Gerald

  Tapsell, Sir Peter

  Mans, Keith

  Taylor, Ian (Esher)

  Marland, Paul

  Taylor, John M. (Solihull)

  Marshall, John (Hendon S)

  Temple-Morris, Peter

  Marshall, Sir Michael (Arundel)

  Thomason, Roy

  Martin, David (Portsmouth S)

  Thompson, Patrick (Norwich N)

  Mawhinney, Dr Brian

  Thornton, Sir Malcolm

  Mellor, Rt Hon David

  Thurnham, Peter

  Merchant, Piers

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

  Milligan, Stephen

  Tracey, Richard

  Mitchell, Andrew (Gedling)

  Tredinnick, David

  Monro, Sir Hector

  Trend, Michael

  Montgomery, Sir Fergus

  Twinn, Dr Ian

  Moss, Malcolm

  Vaughan, Sir Gerard

  Needham, Richard

  Viggers, Peter

  Nelson, Anthony

  Waldegrave, Rt Hon William

  Neubert, Sir Michael

  Walden, George

  Newton, Rt Hon Tony

  Walker, Bill (N Tayside)

  Nicholls, Patrick

  Waller, Gary

  Nicholson, David (Taunton)

  Wardle, Charles (Bexhill)

  Nicholson, Emma (Devon West)

  Waterson, Nigel

  Norris, Steve

  Watts, John

  Onslow, Rt Hon Sir Cranley

  Wells, Bowen

  Oppenheim, Phillip

  Wheeler, Rt Hon Sir John

  Ottaway, Richard

  Whitney, Ray

  Page, Richard

  Whittingdale, John

  Paice, James

  Widdecombe, Ann

  Patnick, Irvine

  Wiggin, Sir Jerry

  Patten, Rt Hon John

  Willetts, David

  Pattie, Rt Hon Sir Geoffrey

  Wilshire, David

  Pawsey, James

  Wolfson, Mark

  Peacock, Mrs Elizabeth

  Wood, Timothy

  Pickles, Eric

  Yeo, Tim

  Portillo, Rt Hon Michael

  Young, Sir George (Acton)

  Powell, William (Corby)

  Redwood, John

  Tellers for the Noes:

  Renton, Rt Hon Tim

  Mr. James Arbuthnot and Mr. Andrew Mackay.

  Richards, Rod

  Riddick, Graham

  Question accordingly negatived.

  CARDIFF BAY BARRAGE BILL
  Motion made, and Question put,
  That, at the sitting on Monday 17th May, the Speaker shall put the Question necessary to dispose of proceedings on the Motion moved by Mr James Arbuthnot on 2nd April relating to Cardiff Bay Barrage Bill not later than half-past Eleven o'clock or one and a half hours after the resumption of those proceedings, whichever is the earlier; and the said proceedings may continue after the expiry of the time for opposed business.— [Mr. Robert G. Hughes.]
  Hon. Members: Object.

  Co-operatives (European Community)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Robert G. Hughes.]
  11.43 pm
  Mr. Dennis Turner: The importance attached by the British co-operative movement to a European co-operative statute is shown tonight by the presence of the co-operative parliamentary group, with the exception of one member, from the House of Commons. We have 14 members from this House and four members from the other place.
  Our task in this debate is to ascertain the Government's attitude to a European statute and to persuade the Minister to say that the Government have no serious objections to a European legal framework for cooperatives and will ultimately support the approval of the statute in the Council of Ministers.
  I hope that it will be helpful if I briefly set out the background to the creation of the European co-operative statute. In 1989, the European commission became aware of a potential problem in the Community for co-operatives wishing to enter cross-border trading under existing and future regulations. It was also anxious to ensure that co-operatives were aware of their eligibility for finance under the co-operative regional and social fund. The Commission stated:
  "the question may therefore arise at Community level of harmonising certain national provisions in order to improve the conditions of access to European markets for mutual societies, co-operatives and similar enterprises."
  For that reason, it was willing to consider whether a special statute should be set up for the co-operative and mutual sector
  "which would facilitate grouping operations, in conditions similar to those available to public limited companies under the European company proposal."
  In other words, to use last year's buzz phrase, it would create a level playing field within the single market.
  The statute would allow the creation of a supranational co-operative society by two or more existing national co-operative societies as long as each had its headquarters in a different member state and had a minimum of 1,000 ecu. The statute passed through the European Parliament on 22 January, but it still has to go through the Council of Ministers.
  Mr. Gordon McMaster: I congratulate my hon. Friend on his excellent speech. Is he aware that the Co-operative Insurance Society represents 14 per cent. of the total insurance market in Europe and that an astonishing 4 million people are represented by it?
  Mr. Turner: I thank my hon. Friend for that comment. I am sure that the importance of co-operation in insurance is recognised, as my hon. Friend said.
  Mr. Alan Keen: Is my hon. Friend aware that there are 45,000 worker and producer co-operatives in the EC, which employ almost 750,000 people?
  Mr. Turner: That information speaks for itself and, again, shows the importance of the co-operative sector in our economy.
  Mr. Barry Sheerman: Is my hon. Friend aware that there is a fund under the statute that allows for

  777
  the development of co-operatives across Europe? Surely the Government would be in favour of that. It would be a fund similar to the Co-operative Development Agency over which the Government presided and to which they gave funds. We want diversity, choice and competition in our economy.
  Mr. Turner: I am sure that the Minister has taken note of those comments which, again, show the importance of the co-operative system.
  Mr. Thomas McAvoy: Will my hon. Friend press the Minister to ensure that the Government are aware of the innovative proposals in the statute that would allow European co-operatives to issue investors' shares and non-users' shares in addition to the traditional redeemable and transferable power value shares?
  Mr. Turner: That is an important aspect of the recommendations in the statute.
  Mr. John McFall: Is my hon. Friend aware that co-operative banks have a 17 per cent. share of the market in the EC and that our own, dear Co-operative bank has more than 1·5 million customers?
  Mr. Turner: That speaks for itself. I hope that the Minister has taken note of that important fact.
  Mr. Alun Michael: I am sure that my hon. Friend will want to draw to the Minister's attention the importance and weight of the co-operative sector, which has been illustrated by several comments. Is it not of the greatest importance that the European co-operative statute would run parallel to the European companies statute? It will therefore create a level playing field between the co-operative and private sector of the economy, which is surely consistent with what we all seek within Europe and the United Kingdom. Will my hon. Friend invite the Minister to mention that aspect?
  Mr. Turner: I will most definitely take the opportunity to invite the Minister to comment positively on that aspect in his speech.
  Mr. Ken Purchase: I thank my hon. Friend for giving way yet again—in the middle of his speech, I hope. May I remind him that there are no fewer than 15 million members of co-operatives in the European Community, owning no fewer than 16,000 shops with an annual turnover—this shows our European credentials of about 25 billion ecu? Some 8 million of those members are in the United Kingdom, and they own 4,650 shops, 90 of which are super-stores. Will my hon. Friend respond?
  Mr. Turner rose—
  Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I hope that hon. Members will now act in a more dignified and serious way.
  Mr. Turner: I hope that we are treating the matter in a serious and dignified way, Mr. Deputy Speaker. I am sure that that is what all my hon. Friends who are here to represent the co-operative movement are doing. The reason why we are taking the matter so seriously is that, as my hon. Friend the Member for Wolverhampton, North-East (Mr. Purchase) has just said, we speak for 8 million consumers—8 million subscribing members of
  778
  co-operatives who are looking forward to a new development that will extend co-operation across frontiers and enable our co-operatives to meet up with many more millions of co-operatives over in Europe.
  Mr. George Foulkes: As my hon. Friend knows, I represent a rural constituency. I am sure that he will be aware that, in the common market, more than half the agricultural production is harvested and processed by co-operatives —indeed, the Co-operative Wholesale Society is the biggest farmer in the United Kingdom. Does my hon. Friend accept that we are talking not just about retail and banking activity but about agricultural production?
  Mr. Turner: I am grateful to my hon. Friend for those comments, which again explain how important it is that the co-operative statue is granted and that it becomes a reality.
  Mr. Mike Gapes: Is my hon. Friend aware that large numbers of people work in the co-operative retail sector? I understand that there are about 200,000 in the European Community as a whole and that some 81,000 of them work in retail co-operatives in this country.
  Unlike my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I do not represent a rural constituency. We have had a large number of problems in the co-operative movement in recent years, but, despite the recession and the economic problems faced by the whole retail sector, the retail side of the co-operative movement is still there. It is to be hoped that, over the next few years, under a Labour Government, it will be able to rebuild and re-establish itself as it should, not just in Britain but in co-operation with other co-operative retail societies and their equivalents in other European countries.
  Mr. Turner: I thank my hon. Friend for those comments. With 81,000 employees in Great Britain, the co-operative movement is a very significant employer. It has a great responsibility in terms of employment—not just for those 81,000 jobs but for the many thousands of other jobs throughout the country which are linked to co-operative purchasing or which rely on co-operatives.
  Mr. Ian Davidson: Unlike my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I do not represent a rural constituency. I represent a shipbuilding constituency, which will remain a shipbuilding constituency, thanks to the co-operation and help of many of my colleagues. Is my hon. Friend aware that 31 per cent. of the food market in Denmark and about 8 per cent. in Great Britain is supplied by consumer co-operatives? We do not agree that those figures are admirable—they should be increased.
  Mr. Turner: I thank my hon. Friend for his comments. I hope that the Minister has taken note of that significant information, because it has a great bearing on the campaign that we are waging in co-operatives in the United Kingdom to become part of the wider co-operatives movement in Europe.
  I hope that the powerful case that has been made by my colleagues from the co-operative parliamentary group has convinced the Minister of the fairness in creating a level playing field between co-operative and mutual businesses

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  and private European companies in the single market. On behalf of all my colleagues in the co-operative parliamentary group and the wider co-operative movement, I sincerely hope that the Minister can support—
  Mr. Sheerman: I shall comment on not only the content of my hon. Friend's speech but the serious and dignified way in which he delivered it. This Adjournment debate has been used probably in a better humoured and more informed way than most Adjournment debates—it gives credit to the Adjournment debate rather than anything else and I congratulate him on so using it.
  Mr. Turner: I am grateful to my hon. Friend for his comments.
  In all our deliberations in the co-operative movement, I hope that we will approach these matters in a dignified and businesslike way, yet, at the same time, recognise the human side of the way in which our co-operative movement operates. We are about people—we put people first. I hope that the Government will recognise that in their consideration of our needs and that the Minister will support the case that we have made.
  11.56 pm
  The Economic Secretary to the Treasury (Mr. Anthony Nelson): I congratulate the hon. Member for Wolverhampton, South-East (Mr. Turner) on securing this Adjournment debate on the regulation of cooperatives in the European Community. In doing so, I shall add a word of congratulations to the phalanx of supporters who surround him on this occasion. The performance of Labour Members in this Adjournment debate would have done credit to a champion team of tag wrestlers. Although the Labour Benches are more populated than the Conservative Benches, I am sure that the sentiments expressed by hon. Members about the importance and extent of the co-operative movement, the community contribution that it makes in a variety of ways and its size will be echoed and shared by many Conservative Members.
  I know about the long interest of the hon. Member for Wolverhampton, South-East in this subject, his life time involvement in the co-operative movement and his continuing strong interest in co-operatives, both in the House and outside. He is still chairman of the parliamentary co-operatives group. In that capacity, he and other hon. Members—it is an all-party group—make an important contribution in making the Government and Parliament aware of the important contribution of co-operatives. I share the hon. Gentleman's view of the importance of the co-operative sector in the United Kingdom and take note of his arguments in favour of the European co-operative statute, which is currently under negotiation.
  I am well aware of the success enjoyed by many types of mutual organisations, including co-operatives. As the hon. Gentleman knows, most organisations in Great Britain that conduct their business according to the co-operative principles choose to register under the Industrial and Provident Societies Act 1965. There are more than 11,000 such societies, with a total membership of more than 10 million and total assets well in excess of £30 billion. Retail societies provide services to almost 7
  780
  million members. They range from corner shops to supermarkets and department stores, as well as public houses and hotels. Other societies cover an enormous diversity of activities.
  The traditional values on which co-operatives are based, including the promotion of mutual self-help, may seem to some to be rather out of step with the current highly competitive markets in which many of them operate. But the large number of people who continue to enjoy the benefits of membership clearly demonstrate that co-operatives still have a useful role to play. The Government believe that co-operative values are worth protecting and fostering. Co-operation and competition go hand in hand and history has shown that the movement has faced many challenges and has demonstrated the flexibility, willingness and ability to adapt to those changes.
  The hon. Member for Wolverhampton, South-East highlighted the EC proposals, particularly those for a European co-operative statute and the advantages that it may offer to co-operative organisations which operate in more than one member state, or which are contemplating doing so. The statute is one of three related proposals made by the Commission on organisations in the co-operative, mutual, voluntary and charitable sectors—the so-called economie sociale.
  The stated aim of the Commission is, as the hon. Member for Wolverhampton, South-East said, to create a level playing field for those organisations by allowing them to take advantage of the single market on an equal footing with companies, without having to convert and so lose their current status and character. The Commission has also made it clear that it believes that the statutes form a coherent package and that it expects them to be implemented simultaneously.
  The content of the economie sociale statutes and the speed with which discussions on them proceed will depend heavily on developments on the company statute. However, several working group meetings have already taken place in Brussels and officials have embarked on the first article-by-article reading of the co-operative statute.
  A year ago, the Government submitted an explanatory memorandum to Parliament, which set out our preliminary views on the Commission's proposals. We agreed that organisations in the economie sociale should be free to take advantage of the single market, but we expressed some doubts that national bodies wishing to operate in more than one member state experienced difficulties in doing so and that there was a useful role for the new legislation proposed by the Commission to play.
  To determine the extent to which there was a need, or demand, for EC legislation on the economic sociale, the Government undertook a consultation exercise last year. A wide range of organisations in the co-operative, mutual and charitable sectors was consulted. About 1,200 consultation documents went out to those involved. Views were sought on a variety of issues including the extent of problems under the existing legal framework, the advantages and disadvantages of the statutes and the likelihood that organisations would make use of them. Comments were also invited on the detailed provisions of the statutes and on their interaction with the current EC and national laws.
  The Government are now analysing carefully the responses to the consultative document. Officials in the

  781
  relevant Departments are considering the policy implications of the comments that we have received. Several detailed responses were received and a few meetings have already been held between officials and respondents, including a particularly helpful exchange of views with the United Kingdom Co-operative Council, which represented the views of the co-operative movement in its submissions.
  It is clear from the speech and the interventions that have been made tonight that the consultation document and the future of the co-operative movement have attraccted close attention from Members of Parliament. Judging by the importance which they attached to the size and influence of the movement, I hope that they will continue to take part in the consultation process as the Government work on the policy implications of the statute.
  I noted in particular and welcomed the important contributions made to tonight's debate by the hon. Members for Feltham and Heston (Mr. Keen), for Paisley, South (Mr. McMaster), for Huddersfield (Mr. Sheerman), for Glasgow, Rutherglen (Mr. McAvoy), for Dumbarton (Mr. McFall), for Cardiff, South and Penarth (Mr. Michael), for Wolverhampton, North-East (Mr. Purchase), for Carrick, Cumnock and Doon Valley (Mr. Foulkes), for Ilford, South (Mr. Gapes) and for Glasgow, Govan (Mr. Davidson). What a roll of honour. I hope that I have not missed anyone out.
  I hope that we shall shortly be in a position to present a further explanatory memorandum to Parliament, reporting the results of the consultation exercise. I am sure that the hon. Member for Wolverhampton, South-East will understand that it would not be appropriate for me to comment in detail on this, or the implications of the exercise for the United Kingdom's negotiating position. I should like to respond, however, to the points that he has raised by making some general remarks about the Government's policy.
  Our view remains that co-operatives and other organisations in the economie sociale should be able to take full advantage of the single market. I believe that the hon. Gentleman shares that view. But we need to gauge carefully, by examining the results of the consultation exercise and from our other contacts with the relevant national organisations, whether they are keen to operate throughout the Community, whether they already do so and, if so, what problems, if any, they are facing.
  To the extent that difficulties exist in carrying on cross-border activities, we then need to assess whether the Commission's proposals offer the best way of dealing with them. Among other things, we will have to weigh up carefully the perceived advantages of the new legal framework that the statutes offer, against the cost to member states of having to set up and administer separate regulatory systems or tax regimes for European entities.
  It is also essential that the legislation does not compromise the checks and controls provided by the present framework of national legislation, nor contain loopholes which could be exploited by the unscrupulous. We need to make sure that the statutes provide adequate protection for members of the new entities, as well as for those who have dealings with them.
  I would not want to pretend that the negotiations on the statutes is a straightforward task, but in that connection, we will be looking closely at the responses we have received to questions in the consultative document on
  782
  transfer of registered office from one member state to another, on arrangements for supervising the new bodies, on accounting and auditing provisions and on insolvency proceedings. We shall also, of course, want to ensure that those organisations that choose not to operate as a European entity do not suffer any unfair disadvantage compared with those that do.
  I have already cited the examples of possible drawbacks and dangers. We must try, at all cost, to avoid some of them. The proposals raise many complex issues which need to be discussed and satisfactory solutions found. Moreover, national legislation in this area varies considerably between member states and opinions tend to differ on even the most apparently basic concepts—such as defining the activities and constitution of a co-operative society.
  In our negotiations we will need to bear in mind this background of very different national legislation, varying levels of regulation and different types of organisation across the Community. We must be sure that whatever is to be agreed will work well both in the United Kingdom and in other member states.
  It might be suggested that the Government are adopting an unduly cautious approach to the Commission's proposals for legislation on co-operatives and other organisations in the economie sociale. But I think that it is vital to establish at an early stage what difficulties the proposals are designed to address, what opportunities they seek to offer to national entities and whether those entities are likely to take advantage of the opportunities made available to them. Having done that, it is only right to try to anticipate the potential dangers and problems which the proposals raise, alongside the obvious advantages, and to provide constructive criticism.
  Let me stress, however, that in all our deliberations, the Government are driven first and foremost by a keen interest in the welfare of co-operatives and of other organisations in the economie sociale sector.
  Mr. Jon Owen Jones: Can I persuade the Minister to explain to the House some of the dangers that he foresees when co-operatives work across national boundaries, as the Commission has suggested? He has referred to those dangers several times, but I am unaware of them, as, I suspect, are many of my colleagues. It would help the House if the Minister could tell us.
  Mr. Nelson: I am grateful to the hon. Member for Cardiff, Central (Mr. Jones) for intervening. I have tried to identify some of them during my remarks. There are certain problems associated with the rights of organisations to come into this country under the banner of being a European co-operative organisation under this statute, and we would have to be satisfied that they met the same stringent standards as are subscribed to by the co-operative movement already established in this country. That is one thing on which we would need to be satisfied.
  Perhaps more controversially, there are the difficulties that we still envisage within the accompanying directive on worker participation which would go with the statute in this area. Perhaps I could just say a brief word about that in particular, because the experience of the company statute, which has been under discussion for many years now, shows how difficult it can be to reach agreement in this area. The rationale behind the co-operative statute

  783
  and the two related proposals is to give organisations in the co-operative, mutual and voluntary sectors the same competitive opportunities as companies. Unless agreement is reached on the European company statute, the case for pushing ahead with the economic sociale proposals will be seriously weakened. However, a number of problems remain unresolved on the European statute, including, in particular, important political differences between member states on the provisions for compulsory worker participation in any European company formed under the statute.
  The Commission's proposals for co-operatives and other economic social organisations also contain provisions for compulsory worker participation which are likely to cause similar problems for the United Kingdom. These are contained in directives which form part of the three statutes.
  The involvement of employees is a vital component in the business plan of all forward-looking companies and organisations wishing to compete effectively in the expanding European market of the 1990s. The United Kingdom is firmly committed to the principle of employers informing and, where appropriate, consulting their employees about matters which affect them. The traditional voluntary approach, which has worked so well for us here, gives employers and employees the flexibility to agree, at local level, the employee involvement arrangements that suit them best.
  784
  We will take careful note of all the comments that we have received here tonight and also outside the House. As far as possible, and where they are consistent with wider Government concerns, we will try to reflect respondents' views in the stance that we adopt towards the Commission's proposals. In the final analysis, our decisions will be influenced by the desire to avoid adding to the administrative burden on co-operatives and other organisations that come under the economie sociale banner.
  Above all, we must avoid falling into the trap of letting a desire for a level playing field overwhelm the need for a practical and workable approach to the regulation of co-operatives and others, both in the United Kingdom and throughout the European Community. In finding a way forward, we will continue to rely on the helpful and thoughtful contribution, as well as the extensive experience, of the hon. Member for Wolverhampton, South-East and his Friends.
  Mr. Turner: With the leave of the House, Mr. Deputy Speaker, may I, on behalf of all my parliamentary colleagues, express sincere thanks to the Minister for his positive and encouraging speech tonight? We just hope that he will use his good offices to seek to bring to a speedy and successful conclusion the implementation of the statute. I thank him sincerely for his thoughtful and helpful contribution.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes past Twelve midnight.

LORD CHANCELLOR'S DEPARTMENT

  Bailiffs
  Mr. Llwyd
  To ask the Parliamentary Secretary, Lord Chancellor's Department if he will make it his policy to impose restrictions on the current powers granted to bailiffs to sell off stock cheaply in order to meet debts.

  Mr. John M. Taylor
  The Lord Chancellor is presently reviewing the organisation and management of those empowered to remove and sell goods to meet the payment of debts. A consultation paper was issued on 4 August 1992, which canvassed, inter alia, whether changes are necessary to the law governing the sale of goods seized in payment of debt. Following the consultation, officials are preparing advice on the subject for the Lord Chancellor to consider.

  Small Claims Courts
  Mr. Cousins
  To ask the Parliamentary Secretary, Lord Chancellor's Department what consideration he is giving to altering the upper limit of claims in the small claims court; and if he will make a statement.

  Mr. John M. Taylor
  We are keeping the small claims limit under review and plan to raise it as soon as practicable. However, we have not at this stage finalised the level to which it will he raised, nor the date on which this will take place.

  The level was last increased to £1,000 in 1991. Any further increase may capture cases of greater complexity than those for which the procedure was designed. We are concerned to have appropriate procedures in place to deal with such cases before raising the small claims limit further.

HOME DEPARTMENT

  Prison Education Staff
  Mr. Harry Greenway
  To ask the Secretary of State for the Home Department, pursuant to his answer of 30 March to the hon. Member for Lewisham, Deptford (Ms Ruddock),Official Report, column 113, what further consideration he has given to the consequences for the tendering out of the prison education service of the acquired rights directive.

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

  Letter from Derek Lewis to Mr. Harry Green way, dated 8 May 1993:
  360
  The Home Secretary has asked me to reply to your recent Question asking what further consideration has been given to the consequences for the competitive tendering of prison education of the Acquired Rights Directive.
  At those establishments where final decisions have not already been taken about who is to be the future provider of education services, the Prison Service will invite all the tenderers originally invited to bid to submit further bids on the basis that the European Community Acquired Rights Directive and the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply. This is without prejudice to whether or not an appeal is lodged against the High Court judgment in the case of Kenny and Woodroff v. South Manchester College.

  European Parliament Elections
  Mr. Keith Hill
  To ask the Secretary of State for the Home Department, pursuant to his answer of 22 April,Official Report, columns 181–82, if he expects that EC nationals resident in the United Kingdom will generally have the right to vote in the 1994 European Parliament elections.

  Mr. Peter Lloyd
  Yes.

  Hosni E. Farhat
  Mr. Bennett
  To ask the Secretary of State for the Home Department what information he has regarding the resignation or early retirement of any of the police officers involved in the conviction of Hosni E. Farhat.

  Mr. Charles Wardle
  None. This is a matter for the chief constable of Hampshire constabulary.

  Immigration (Police Questioning)
  Mr. Fraser
  To ask the Secretary of State for the Home Department how many people were stopped and questioned by the Metropolitan police for immigration matters during the last 12 months for which figures are available.

  Mr. Jack
  This information is not available.

  Violence (Mobile Telephones)
  Mr. Madden
  To ask the Secretary of State for the Home Department if he will list the police forces which are experimenting with the use of mobile telephones to deter domestic and racial violence; when the trial in West Yorkshire is to be evaluated; and if he will make a statement.

  Mr. Charles Wardle
  This information is not collected centrally, but those conducting experiments with mobile phones and alarms include: Leicester, Bradford, Islington and Wandsworth safer cities projects and the Merseyside, South Yorkshire, West Yorkshire and the Metropolitan police forces.

  The experiment in Leeds was evaluated internally in October 1992 and has now been extended across the West Yorkshire force.

  Police Manpower
  Mr. Mills
  To ask the Secretary of State for the Home Department what was the level of police personnel in 1963 and 1993, in the United Kingdom, the west midlands and Solihull including the level of civilian posts; how many uniformed police were on the beat; and if he will make a statement.
  361
  Mr. Charles Wardle
  In 1963 there were 80,251 police officers and 13,579 civilian staff in England and Wales. Information for 1963 in respect of the West Midlands and Solihull is not available.

  Current figures are given in the table. As data on deployment are collected annually, the figures are for December 1992.

  England and Wales

  West Midlands Police

  1Solihull

  Police strength

  128,045

  6,952

  2125

  Beat/patrol

  53,994

  3,496

  321–25

  Civilian staff

  49,162

  2,471

  22

  1 Figures are for the Solihull Sub-division, provided by the West Midlands Police.

  2 Total number of officers available to the sub-division.

  3 Officers available at any one time for beat and patrol. Number of officers varies depending upon shift arrangements.

  Wolds and Lindholme Prisons
  Mr. Clapham
  To ask the Secretary of State for the Home Department how many incidents and disturbances took place between April 1992 and April 1993 at(a) HM prison Wolds and (b) HM prison Lindholme.

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

  Letter from Derek Lewis to Mr. Michael Clapham, dated 10 May 1993:

  HM PRISONS WOLDS AND LINDHOLME

  The Home Secretary has asked me to reply to your recent Question about the number of incidents and disturbances which have taken place between April 1992 and April 1993 at (a) HM Prison Wolds and (b) HM Prison Lindholme.

  There have been a total of 95 reported incidents at Wolds Remand Prison and 463 at HMP Lindholme in the period 1 April 1992 to 31 March 1993.

  Notifiable offences recorded by the police by offence group

  England and Wales 1992

  Offence group

  1st quarter

  2nd quarter

  3rd quarter

  4th quarter

  Total

  Number of offences

  Violence against the person

  45,520

  53,408

  53,093

  49,758

  201,779

  Sexual offences

  7,190

  7,396

  7,795

  7,147

  29,528

  Robbery

  12,007

  12,448

  13,598

  14,841

  52,894

  Burglary

  345,866

  312,277

  314,756

  382,375

  1,355,274

  Theft and handling stolen goods

  701,678

  713,588

  704,551

  724,731

  2,844,548

  Fraud and forgery

  42,425

  42,859

  42,662

  40,654

  168,600

  Criminal damage

  223,759

  220,469

  212,087

  246,195

  902,510

  Other offences

  9,856

  9,670

  10,264

  9,593

  39,383

  Total

  1,388,301

  1,372,115

  1,358,806

  1,475,294

  5,594,516

  Percentage change from corresponding period of previous year

  Violence against the person

  9

  11

  2

  3

  6

  Sexual offences

  8

  -3

  -4

  1

  —

  Robbery

  25

  16

  15

  13

  17

  Burglary

  16

  7

  9

  13

  11

  Theft and handling stolen goods

  8

  2

  —

  3

  3

  Fraud and forgery

  3

  -3

  -5

  -8

  -4

  Criminal damage

  14

  3

  8

  14

  10

  Other offences

  21

  13

  15

  7

  14

  Total

  11

  3

  3

  7

  6

  362
  During this period, the average daily population of Wolds, a secure modern prison building, was 190. Lindholme, a medium secure prison, (formerly RAF accommodation), with an open prison facility had an average daily population of 644. The figures given include failure to return from home leave, absconding, surrender by a prisoner and recapture of a prisoner. These will be much higher for Lindholme, since Wolds prisoners are remand prisoners who are not granted home leave, and because Wolds does not have an open prison facility.

  Mr. Clapham
  To ask the Secretary of State for the Home Department what is the ratio of staff to prisoners at(a) HM prison Wolds and (b) HM prison Lindholme.

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

  Letter from Derek Lewis to Mr. Michael Clapham, dated 8 May 1993:

  HM PRISONS WOLDS AND LINDHOLME

  The Home Secretary has asked me to reply to your recent Question about the ratio of staff to prisoners at (a) HM Prison Wolds and (b) HM Prison Lindholme

  The ratio of staff to prisoners at Wolds Remand Prison on 31 March 1993 was 1:1·520. For HM Prison Lindholme the figure for the same day was 1:1·518.

  Crime Statistics
  Mr. Michael
  To ask the Secretary of State for the Home Department if he will publish a table showing(a) the total number of recorded crimes in 1992, (b) the number of crimes committed in each category in England and Wales for each quarter of 1992 and (c) the percentage increase that each figure represents over the equivalent quarter in 1991.

  Mr. Jack
  The required information is given in the table.

  Fire Services
  Mr. Tipping
  To ask the Secretary of State for the Home Department if he will list by each fire service the standard spending assessment for 1993–94.

  Mr. Peter Lloyd
  The table sets out the fire and civil defence element of each English fire authority's standard spending assessment for 1993–94. There is no separately identifiable fire and civil defence element of Welsh fire authorities' standard spending assessments.

  Fire and civil defence elements of English fire authorities' standard spending assessments for 1993–94

  £ million

  Avon

  20·473

  Bedfordshire

  11·073

  Berkshire

  16·601

  Buckinghamshire

  12·360

  Cambridgeshire

  12·039

  Cheshire

  20·103

  Cleveland

  19·464

  Cornwall

  7·181

  Cumbria

  8·753

  Derbyshire

  17·067

  Devon

  19·557

  Dorset

  12·063

  Durham

  12·973

  East Sussex

  14·891

  Essex

  31·445

  Gloucestershire

  9·605

  Hampshire

  31·585

  Hereford and Worcester

  12·116

  Hertfordshire

  20·328

  Humberside

  21·322

  Isle of Wight

  2·229

  Kent

  30·998

  Lancashire

  32·276

  Leicestershire

  16·924

  Lincolnshire

  9·583

  Norfolk

  13·010

  Northamptonshire

  11·260

  Northumberland

  5·823

  North Yorkshire

  12·001

  Nottinghamshire

  21·087

  Oxfordshire

  11·284

  Shropshire

  7·839

  Somerset

  7·693

  Staffordshire

  19·345

  Suffolk

  11·023

  Surrey

  22·133

  Warwickshire

  8·993

  West Sussex

  14·836

  Wiltshire

  10·054

  London

  242·568

  Greater Manchester

  70·787

  Merseyside

  47·118

  South Yorkshire

  28·117

  Tyne and Wear

  34·449

  West Midlands

  67·514

  West Yorkshire

  49·002

  Isles of Scilly

  0·053

  River Safety
  Mr. Illsley
  To ask the Secretary of State for the Home Department what steps his Department is taking to publish an account of progress in the implementation of recommendations made after major disasters as recommended in the Hayes report on river safety.
  364
  Mr. Peter Lloyd
  There are no plans to publish such an account. Efforts are concentrated on disseminating lessons learnt from disasters through incorporation into suitable guidance.

  Mr. A. Ali
  Mr. Kaufman
  To ask the Secretary of State for the Home Department when he intends to reply to the letters to him of 14 January, 19 February and 6 April with regard to Mr. A. Ali, of 39 Brynton road, sent to him by the right hon. Member for Manchester, Gorton.

  Mr. Charles Wardle
  My right hon. and learned Friend replied to the right hon. Member on 10 May 1993.

  Bail
  Mr. Madden
  To ask the Secretary of State for the Home Department by what mechanism courts enforce conditions attaching to the grant of bail; which body holds the passport of an accused person where this has been required to be surrendered under bail conditions; and if he will make a statement.

  Mr. Jack
  The courts have wide discretion over the conditions which they may impose on a defendant to whom they have granted bail. Enforcement of any such conditions will depend upon the nature of the condition, but in the case of conditions requiring the person concerned to report to a police station, enforcement is for the police.

  A person who has been granted bail may be arrested by the police without warrant if they have reasonable grounds for believing that he has broken, or is likely to break, bail conditions. Where the court has ordered the surrender of a passport as a condition of bail, the passport is obtained and kept by the police.

  Uranium
  Mr. Redmond
  To ask the Secretary of State for the Home Department under what current legislation in the United Kingdom a person can be prosecuted for allegedly trafficking in uranium; and if he will make a statement.

  Mr. Needham
  I have been asked to reply.

  Export of uranium in various forms from the United Kingdom without a licence is prohibited under the Export of Goods (Control) Order 1992 as amended. Import into the United Kingdom of various forms of uranium from non-EC sources without a licence is prohibited under the Import of Goods (Control) Order 1954 as amended. In addition there are controls in the legislation implementing sanctions resolutions of the United Nations. Full details of the controlled items and exceptions to the controls are given in the respective orders. Her Majesty's Customs and Excise enforce import and export restrictions and prosecute breaches under the provisions of the Customs and Excise Management Act 1979. Any information about possible breaches of the controls should be reported to them.

ENVIRONMENT

  Sellafield
  Mr. Cohen
  To ask the Secretary of State for the Environment which stacks at BNFL Sellafield are included in emissions. authorisations as(a) schedule 1 stacks and (b) schedule 2 stacks.

  Mr. Maclean
  The schedule 1 stacks are the B204, B6 Vessel Vent and B230 stacks. The schedule 2 stacks are the B6 Cell Vent, B38 third extension, B355 and B389 stacks.

  All figures in Mbq.

  Alpha

  Beta

  Sr90

  Ru106

  II29

  II37

  Cs137

  Pu Alpha

  Pu24

  Am241-Cm242

  R3

  C14

  Kr35

  B204

  1988

  376

  969

  25

  415

  16,233

  1,312

  52

  260

  2,154

  65

  1·3E + 06

  1989

  263

  1,781

  35

  691

  19,131

  1,171

  70

  230

  1,464

  54

  2·7E + 06

  1990

  193

  1,525

  28

  359

  2,395

  373

  55

  134

  874

  30

  5·9E + 08

  3·7E + 06

  3·8E + 10

  1991

  159

  1,433

  32

  264

  6,099

  975

  62

  127

  659

  28

  6·2E + 08

  5·5E + 06

  4·5E + 10

  1992

  113

  1,127

  17

  263

  8,721

  1,163

  34

  89

  390

  19

  3·2E + 08

  2·2E + 06

  2·7E + 10

  B6 Vessel Vent

  1988

  30

  269

  11

  1,854

  18

  31

  2

  20

  2

  1·8E + 08

  2·0E + 06

  3·9E + 10

  1989

  6

  48

  2

  117

  2

  4

  1

  8

  0

  1·8E + 08

  1·1E + 06

  5·2E + 10

  1990

  1991

  1992

  B230

  1988

  53

  986

  24

  61

  33

  229

  13

  1989

  70

  1,709

  30

  66

  38

  222

  22

  1990

  70

  1,944

  31

  78

  42

  374

  21

  1991

  115

  1,953

  30

  70

  62

  648

  35

  1992

  56

  1,832

  24

  32

  39

  282

  14

  1 Discharges from the B6 vessel vent were diverted to B204 from April 1989 onwards, to allow decommissioning work to proceed on the B6 Stacks.

  Mr. Cohen
  To ask the Secretary of State for the Environment what are the annual authorised limits for radioactive emissions from(a) schedule 1 stacks and (b) schedule 2 stacks at BNFL Sellafield.

  Mr. Maclean
  The annual authorised limits for schedule 1 and schedule 2 stacks at BNFL Sellafield are listed in the table:

  Nuclide

  Schedule 1

  Schedule 2

  (gigabecquerels)

  (gigabecquerels)

  Alpha

  4·3

  5

  Beta

  58

  62

  Am-241 & Cm-242

  0·9

  3·5

  Cs 137

  4

  22

  C-14

  30,000

  —

  I-129

  47

  41

  I-131

  140

  64

  Kr-85

  1 × 108

  —

  Pu-alpha

  3·1

  0·19

  Pu-241

  36·6

  7·4

  Ru-106

  9

  60

  Sr-90

  3·5

  5·4

  H-3

  1.1 × 106

  —

  Water
  Mr. Harvey
  To ask the Secretary of State for the Environment what assessment he has made of(a) social and economic factors, (b) the proportion of the nation's designated bathing waters located and (c) recent and projected rises in average water bills in the different regions
  366
  Mr. Cohen
  To ask the Secretary of State for the Environment if he will list the emissions from each schedule 1 stack at BNFL Sellafield for each year since records are available.

  Mr. Maclean
  The emissions for each schedule 1 stack are given in the table. Where there are no entries for particular radionuclides this reflects the fact that there was no potential for these radionuclides to be released from these stacks.

  in determining policy over the funding of implementation of the EC's bathing waters, urban waste waters and shellfish waters directives.

  Mr. Maclean
  The arrangements for the funding of the water industry under the legislation of 1989 took into account the varying purposes of capital expenditure in different areas. Water charges are controlled under statute by the Director General of Water Services and inter alia allow for the cost of meeting obligations under EC directives.

  Landfill Sites (Methane Gas)
  Mr. Fraser
  To ask the Secretary of State for the Environment if he will make an assessment of the current emissions of methyl gas from landfill sites and its implications for global warming.

  Mr. Maclean
  Only a very rough estimate of methane emissions from landfill sites has been possible in the past because of considerable uncertainties in the basic information used to calculate a national figure. My Department has accordingly commissioned research by the energy technology support unit of DTI. Based on this research, our best estimate for methane emissions from landfill in the United Kingdom is approximately 2 million tonnes per annum, but with a possible range between 0·6 and 5 million tonnes per annum. These estimates will be revised and updated as more information on the factors affecting methane generation from landfill is obtained.

  Methane is the second most significant anthropogenic greenhouse gas after carbon dioxide. The Government are

  367
  aiming to publish a national programme to meet the United Nations climate change convention commitment to return emissions of all greenhouse gases to their 1980 levels by the year 2000.

  National Parks
  Mr. Chris Smith
  To ask the Secretary of State for the Environment when he now intends to bring forward legislation to provide for all national parks to be administered by independent boards.

  Mr. Maclean
  Our policy statement on the national parks, published in January 1992, promised legislation to create independent authorities for the eight national parks in England and Wales currently run as county council committees. We fully recognise the importance of this legislation and we intend to bring it forward at the earliest opportunity.

  Toxic Waste
  Mr. Chris Smith
  To ask the Secretary of State for the Environment. pursuant to his oral answer of 28 April,Official Report, column 950, which developed countries currently cannot economically make provision for their own recycling of toxic waste.

  Mr. Maclean
  This information is not available. However, during negotiations on the EC waste shipments regulation not all member states welcomed as much as the United Kingdom the provisions relating to national self-sufficiency. The final text therefore enables member states to ban imports for disposal from other member states and EFTA countries unless the state of origin produces such a small quantity of hazardous waste that it would be unecononic to provide new specialised disposal facilities.

  Coastal Protection
  Mr. Barry Field
  To ask the Secretary of State For the Environment what plans he has to create a coastal protection and planning unit as recommended by the Environment Select Committee in its second report of 1991–92, (HC 17).

  Mr. Maclean
  The Government in their response of July 1992 to the report of the Environment Select Committee on coastal zone protection and planning explained that coastal policy in the United Kingdom has, since 1991, been co-ordinated at official level through an interdepartmental group. The secretariat for this group is within the Department of the Environment. It would not be appropriate for the group to take on major executive functions.

  Mr. Barry Field
  To ask the Secretary of State for the Environment what plans he has to review current legislation for coastal zone activities.

  Mr. Maclean
  The Government in their response of July 1992 to the report of the Environment Select Committee on coastal zone protection and planning undertook to review legislation controlling development below the low water mark; management of activities such as recreation in coastal waters; and the regulation of marine aggregates dredging. The results of these reviews will be available later this year.
  368
  Mr. Barry Field
  To ask the Secretary of State for the Environment what plans he has for a national coastal strategy and for consolidating legislation and regulations to give effect to coastal zone management.

  Mr. Maclean
  The Government in their response of July 1992 to the report of the Environment Select Committee on coastal zone protection and planning stated its commitment to further the management of the coastal zone within a clear framework of national policy. Recent initiatives include planning guidance for the coast, support for heritage coasts, and a substantial programme of investment to improve the quality of coastal waters. Further work is under way on a national strategy for flood and coastal defence, reviews of the control of development below the low water mark and of marine aggregates extraction, and implementation of the EC habitats directive.

  Mr. Barry Field
  To ask the Secretary of State for the Environment what plans he has for the Environmental Protection Agency to be given responsibility and powers to integrate and monitor coastal activities to ensure prudent coastal management.

  Mr. Maclean
  The Government have no such plans.

  Mr. Barry Field
  To ask the Secretary of State for the Environment if he will list those powers and functions which are under consideration for local authorities' jurisdiction to extend below the low water mark.

  Mr. Maclean
  The Government stated in their response of July 1992 to the report of the Environment Select Committee on coastal zone protection and planning that they are not persuaded that extension of local authority planning powers is necessarily the most effective approach to the control of development below the low water mark. The Government are currently reviewing controls over development in this area, including construction projects, oil and gas exploitation, marine aggregates extraction and disposal at sea.

  Social Services, Greenwich
  Mr. Peter Bottomley
  To ask the Secretary of State for the Environment if he will name the parliamentary under secretaries and the Ministers of State responsible for advising the successive Secretaries of State for the Environment since 1981 on the social service standard spending assessment for Greenwich.

  Mr. Robin Squire
  Standard spending assessments were introduced for the first time in the financial year 1990–91. The current and previous Parliamentary Under-Secretaries and Ministers of State responsible for advising on these assessments are:

  Parliamentary Under Secretary of State

  Mr. Christopher Chope

  Rt. Hon. Virginia Bottomley

  Mr. Patrick Nicholls

  Rt. Hon. Baroness Blatch

  Mr. Robert Key

  Mr. Robin Squire

  Minister of State

  Rt. Hon. Michael Howard

  Rt. Hon. John Gummer

  Rt. Hon. David Hunt

  Rt. Hon. Michael Portillo

  Mr. John Redwood

  Housing, Solihull
  Mr. Mills
  To ask the Secretary of State for the Environment if he will publish the criteria used to calculate the land requirement for housing up to the year 2011 in the unitary development plan for Solihull.

  Mr. Baldry
  The Solihull unitary development plan incorporates a housing land requirement to 2001 as approved in "Strategic Guidance for the West Midlands", Planning Policy Guidance Note 10. Provision for the period beyond 2001 is for the local authority to determine in the light of the inspector's recommendations on its unitary development plan and national policy set down in Planning Policy Guidance Note 2 (Green Belts).

  Green Housekeeping
  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will indicate the reasons why his Department's policy statement on green housekeeping implies that(a) some use of hardwoods and (b) some use of peat, may continue.

  Mr. Maclean
  Our policy is to specify only the use of hardwoods which come from sustainably managed sources. We do not in practice envisage making exceptions for such hardwoods, or for peat substitutes. In principle, however, they might need to be allowed for, in some possible circumstances and situations, if there were no practicable alternatives.

  Mr. Chris Smith
  To ask the Secretary of State for the Environment if he will indicate the reasons why his Department's policy statement on green housekeeping regards a ceiling of 70 to 75 per cent. as the current practicable limit for the purchase of recycled paper.

  Mr. Maclean
  Our policy is to keep the use of non-recycled paper to a minimum but some printing processes require its use to operate effectively. The target figure of 70 to 75 per cent. use of recycled paper will be revised as appropriate to take account of developments in printing and paper technologies.

  OFWAT
  Mr. Chris Smith
  To ask the Secretary of State for the Environment what, for each of the last two years and for the current year, is the total operational cost of the Office of Water Services.

  Mr. Maclean
  Details of OFWAT's costs for 1991–92 and its budget for 1992–93 are contained in the director general's "Annual Report 1991", a copy of which is in the Library. The report records that in 1991–92 OFWAT's budget was £6·29 million, and for 1992–93 £7·52 million. £9·7 million has been voted in estimates—class VII, vote 9—to cover the expenditure of OFWAT for 1993–94.

  Spending Assessment, Greenwich
  Mr. Peter Bottomley
  To ask the Secretary of State for the Environment, pursuant to the answer from the Secretary of State for Health on 4 May, how much more money would be received by Greenwich council from taxpayers through central Government grant if the standard spending assessment for 1993–94 were increased by the figure indicated by the social factor information now available from the 1991 census.
  370
  Mr. Robin Squire
  My hon. Friend the Parliamentary Under-Secretary of State for Health,Official Report, 4 May 1993, col 45, indicated that the percentage increase in the standard spending assessment for personal social services for Greenwich, if information on social factors from the 1991 census information were to be included, would be 9·8 per cent. The equivalent increase for the total standard spending assessment would be 4·7 per cent, amounting to some £9 million. This is also broadly the amount by which the level of revenue support grant would increase. The current review of standard spending assessments will involve a number of further changes and may result in a different outcome for 1994–95 when it is completed later this year.

  Environment Week
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what support his Department plans to give to Environment Week, sponsored by the Civic Trust, 22 to 31 May.

  Mr. Maclean
  BT environment week aims to encourage local initiatives in the voluntary sector. My Department funds a number of organisations which will participate in events during the week. I plan to open an exhibition on 21 May by the Penrith Civic Society, which will run throughout the week and to visit a rural action scheme project on 25 May.

  Mobile Homes
  Ms Estelle Morris
  To ask the Secretary of State for the Environment what consultations have taken place between officials of his Department and selected interested organisations in respect of a mobile park home owner's charter; and if he will take steps to ensure that any such charter reflects the interests of residents of mobile park homes as well as site owners.

  Mr. Baldry
  A charter was issued by the Confederation of Park Homes Industry last December. A copy of the draft charter was also sent by my Department to the chairmen of the Association of Park Home Owners and the National Association of Park Home Residents. My officials will meet both of these organisations later this month. Later they will meet COPHI. My Department has monitored the responses from residents and their associations throughout the consultation exercise and will seek to ensure that all reasonable points are met as far as possible.

  British Waterways Board
  Mr. David Atkinson
  To ask the Secretary of State for the Environment what plans he has to privatise the British Waterways Board; what estimate of asset proceeds he has made; and if he will make a statement.

  Mr. Maclean
  There are no plans to privatise the British Waterways Board.

  Urban Development Corporations
  Mr. Cousins
  To ask the Secretary of State for the Environment what is the present salary and the value of other emoluments expenses and awards, including pension contributions, of the chairs of each of the urban development corporations.
  371
  Mr. Robin Squire
  The present salaries of the UDC chairmen are as follows:—

  UDC

  Salary (£)

  Birmingham Heartlands

  25,315

  Black Country

  25,315

  Bristol

  18,990

  Central Manchester

  18,990

  Leeds

  18,990

  London Docklands

  37,795

  Merseyside

  18,990

  Plymouth

  25,315

  Sheffield

  18,990

  Teesside

  25,315

  Trafford Park

  37,975

  Tyne & Wear

  18,990

  There are no other emoluments, awards, or pension contributions. Chairmen entitled to pensions are required to contribute at the appropriate rate.

  Travel and subsistence expenses are payable in accordance with rates agreed by the Department.

  Homelessness
  Mr. Kirkwood
  To ask the Secretary of State for the Environment what figures he has for the average length of stay per homeless household living in temporary accommodation before being offered permanent housing by the responsible local authority.

  Mr. Baldry
  The information is not available centrally and my Department has no estimates.

  Halons
  Mr. John Marshall
  To ask the Secretary of State for the Environment what proposals he has to nominate candidates for essential use of halons under the Montreal protocol on substances that deplete the ozone layer for continued production in 1994.

  Mr. Maclean
  The Government are committed to keeping extra production for "essential uses" to a minimum. In order to be considered for extra production after phaseout, applications must meet a number of strict criteria agreed by parties to the Montreal protocol at their meeting in Copenhagen last year. These criteria include that the use is essential to protect health, safety or critical to the functioning of society; that there are no technically or economically feasible alternatives; and that there is insufficient supply of banked or recycled material available.

  The Government have scrutinised all nominations made to them for continued production of halons in 1994 and consider that six uses meet all the criteria at this time. These are:

  (i) the use of halon 1211 in civil aircraft cockpits and passenger cabins;

  (ii) the use of halon 1301 in the cargo compartments of civil aircraft;

  (iii) the use of halon 1301 in civil aircraft engine nacelles;

  (iv) the use of halon 1211 on civil airport rescue arid fire fighting vehicles;

  (v) the use of halon 1301 in the engine compartments of the class 92 and 373 locomotives;

  (vi) the use of halon 1301 in various applications in existing installations in the offshore oil and gas industry including control rooms, diver support areas and radio rooms.

  We shall be proposing that the parties to the Montreal protocol agree that production should be allowed in 1994
  372
  for these six uses. This is likely to involve new production of some 30 tonnes of halons for United Kingdom uses in 1994 compared with a total estimated United Kingdom consumption of some 1,500 tonnes in 1990.

  There are a few other uses which might fulfil some but not all of the criteria—because of the efforts of those concerned to bank and recycle halons they do not need new production in 1994. I hope that the efforts of the Halon Users' National Consortium will soon show that sufficient quantities of recycled material are available to meet all continuing needs.

  We shall be considering what nominations, if any, we put forward for continued production in 1995 later this year.

  Ozone Levels
  Lady Olga Maitland
  To ask the Secretary of State for the Environment what is the latest information he has on levels of stratospheric ozone over the United Kingdom.

  Mr. Maclean
  Measurements of stratospheric ozone made at Camborne and Lerwick during April 1993 show levels of total column ozone between 8 per cent. and 11 per cent. below the long-term April average. Although the ozone levels reman lower than the long-term average, the April values can be compared with decreases of 10 per cent. to 13 per cent. observed in March and over 20 per cent. seen in February. Individual daily measurements during April were consistently low, but were within the range of previously measured values.

  The Department's stratospheric ozone review group will include the latest interpretation of the ozone measurements made during 1992–93 in their next report which is due to be published in the autumn.

  Street Lighting
  Mr. Burden
  To ask the Secretary of State for the Environment what plans he has for increasing the resources available to council authorities for the improvement of street lighting.

  Mr. Kenneth Carlisle
  I have been asked to reply.

  It is for local authorities to decide the appropriate level of expenditure on street lighting according to their own priorities. There are no plans to specify particular amounts for this type of expenditure.

TRANSPORT

  Consultants
  Ms Walley
  To ask the Secretary of State for Transport if he will make it his policy to ensure that the relevant local highway authorities are invited to submit proposals to undertake the work carried out by consultants on the maintenance and management of trunk roads and motorways in a form which can be compared with bids from the private sector.

  Mr. Kenneth Carlisle
  It is our policy in selecting maintenance agents to ensure that we secure maximum value for money in terms of the quality and efficiency of the services provided. In making arrangements for the replacement in due course of existing consultants' commissions we are committed to evaluating the quality
  373
  and cost of the services available from local authorities and private sector consultants. The form and timing of this evaluation is still being considered.

  Ms Walley
  To ask the Secretary of State for Transport if he will carry out an assessment of the performance of consultants carrying out agency responsibilities for the maintenance and management of trunk roads and motorways in comparison with local authority agents; if he will consult the local authority associations on the basis of the comparison; and if he will publish the results.

  Mr. Kenneth Carlisle
  All consultants employed by the Department as maintenance agents are subject to performance assessment. My officials have agreed performance indicators with representatives of the local authority associations, which will facilitate comparisons of performance by different agents, and. these are now being used on a trial basis to assess the 1992–93 performance of a number of agents throughout the country. Any decision on publication of the results of comparisons will be taken in consultation with the local authority associations when the results are available.

  Transport Supplementary Grant
  Ms Walley
  To ask the Secretary of State for Transport if he will list for each local highway authority in England the percentage of its total bid for transport supplementary grant for 1993–94 included in its 1992 transport policy and programme which was accepted by the Government for grant.

  Mr. Kenneth Carlisle
  The information is given in the table.

  Transport supplementary grant for local highway authorities in England Percentage of total bid for transport supplementary grant for 1993–94 made in 1992 T P P submission accepted for grant

  Per cent.

  London boroughs

  City of London

  51·1

  Barking and Dagenham

  47·4

  Barnet

  70·4

  Bexley

  86·9

  Brent

  42·3

  Bromley

  87·2

  Camden

  58·1

  Croydon

  82·1

  Ealing

  56·1

  Enfield

  58·0

  Greenwich

  52·7

  Hackney

  49·4

  Hammersmith and Fulham

  37·8

  Haringey

  52·2

  Harrow

  93·0

  Havering

  80·1

  Hillingdon

  81·7

  Hounslow

  59·9

  Islington

  40·3

  Kensington and Chelsea

  75·2

  Kingston upon Thames

  43·1

  Lambeth

  29·5

  Lewisham

  90·1

  Merton

  69·0

  Newham

  78·8

  Redbridge

  54·2

  Richmond upon Thames

  66·2

  Southwark

  92·9

  Sutton

  39·7

  Tower Hamlets

  70·0

  Waltham Forest

  74·4

  374

  Per cent.

  Wandsworth

  60·5

  Westminster

  63·2

  Metropolitan Boroughs

  Bolton

  61·3

  Bury

  59·0

  Manchester

  72·6

  Oldham

  62·5

  Rochdale

  70·1

  Salford

  21·5

  Stockport

  71·7

  Tameside

  57·5

  Trafford

  73·9

  Wigan

  39·4

  Knowsley

  95·1

  Liverpool

  66·0

  St. Helens

  57·8

  Sefton

  54·4

  Wirral

  78·0

  Barnsley

  76·7

  Doncaster

  64·8

  Rotherham

  68·7

  Sheffield

  85·8

  Gateshead

  54·7

  Newcastle upon Tyne

  67·5

  North Tyneside

  40·9

  South Tyneside

  69·7

  Sunderland

  50·7

  Birmingham

  83·3

  Coventry

  90·6

  Dudley

  65·9

  Sandwell

  40·6

  Solihull

  88·4

  Walsall

  90·0

  Wolverhampton

  76·4

  Bradford

  56·7

  Calderdale

  38·8

  Kirklees

  78·6

  Leeds

  61·4

  Wakefield

  58·7

  Shire Counties

  Avon

  71·6

  Bedfordshire

  46·9

  Berkshire

  41·5

  Buckinghamshire

  65·6

  Cambridgeshire

  39·7

  Cheshire

  76·9

  Cleveland

  79·3

  Cornwall

  68·6

  Cumbria

  56·5

  Derbyshire

  82·1

  Devon

  52·4

  Dorset

  58·0

  Durham

  78·4

  East Sussex

  43·6

  Essex

  65·0

  Gloucestershire

  65·7

  Hampshire

  82·9

  Hereford and Worcester

  46·6

  Hertfordshire

  82·6

  Humberside

  84·5

  Isle of Wight

  71·6

  Kent

  72·9

  Lancashire

  53·1

  Leicestershire

  51·0

  Lincolnshire

  53·8

  Norfolk

  42·1

  Northamptonshire

  52·0

  Northumberland

  81·0

  North Yorkshire

  76·4

  Nottinghamshire

  68·9

  Oxfordshire

  67·5

  Shropshire

  41·1

  Somerset

  84·6

  Staffordshire

  57·7

  Suffolk

  36·3

  Surrey

  64·6

  375

  Per cent.

  Warwickshire

  49·2

  West Sussex

  58·5

  Wiltshire

  51·8

  Ms Walley
  To ask the Secretary of State for Transport if he will list for each local highway authority in England the percentage of its bids for 1993–94 made in its 1992 transport policy and programme submission accepted for transport supplementary grant for(a) major road

  Percentage of 1992 TPP bids accepted for transport supplementary grant for 1993–94

  Authority

  Major road schemes

  Minor works on local safety schemes

  Structural maintenance on principal roads

  Assessment, strengthening and other structural maintenance of bridges

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  City of London

  0·0

  48·1

  No bid

  88·8

  Barking and Dagenham

  22·7

  80·6

  80·9

  82·3

  Barnet

  No bid

  56·3

  70·0

  96·3

  Bexley

  91·6

  72·1

  68·0

  90·0

  Brent

  0·0

  42·4

  70·0

  62·3

  Bromley

  94·6

  91·8

  70·0

  69·0

  Camden

  No bid

  51·6

  73·7

  62·4

  Croydon

  100·0

  58·3

  69·9

  69·8

  Ealing

  100·0

  54·7

  70·0

  99·2

  Enfield

  53·8

  90·5

  69·9

  62·4

  Greenwich

  0·0

  59·5

  69·8

  87·7

  Hackney

  100·0

  44·9

  20·2

  90·2

  Hammersmith and Fulham

  No bid

  18·7

  70·0

  69·2

  Haringey

  28·5

  73·0

  89·6

  86·3

  Harrow

  93·3

  92·0

  No bid

  90·0

  Havering

  No bid

  46·5

  69·8

  84·4

  Hillingdon

  99·5

  41·8

  70·8

  69·2

  Hounslow

  84·7

  17·4

  69·6

  87·1

  Islington

  No bid

  20·0

  69·5

  88·4

  Kensington and Chelsea

  100·0

  57·1

  No bid

  90·0

  Kingston upon Thames

  56·5

  51·6

  60·9

  70·2

  Lambeth

  No bid

  50·8

  23·7

  18·4

  Lewisham

  100·0

  77·5

  23·8

  61·3

  Merton

  64·1

  84·8

  70·0

  62·5

  Newham

  79·9

  37·2

  70·0

  97·9

  Redbridge

  No bid

  51·4

  70·1

  62·5

  Richmond upon Thames

  No bid

  55·0

  51·9

  96·6

  Southwark

  100·0

  41·4

  No bid

  71·4

  Sutton

  26·3

  54·2

  43·1

  80·0

  Tower Hamlets

  0·0

  13·3

  93·5

  63·7

  Waltham Forest

  95·0

  39·6

  70·3

  66·7

  Wandsworth

  31·1

  62·0

  50·3

  88·1

  Westminster

  49·3

  78·4

  70·1

  63·5

  Bolton

  83·4

  51·4

  88·3

  50·8

  Bury

  0·0

  83·6

  70·0

  95·0

  Manchester

  71·4

  70·5

  70·0

  87·1

  Oldham

  76·3

  57·2

  77·9

  80·3

  Rochdale

  No bid

  88·0

  63·0

  92·3

  Salford

  0·6

  64·7

  70·5

  93·9

  Stockport

  100·0

  56·4

  63·6

  91·0

  Tameside

  58·8

  81·3

  69·6

  62·3

  Trafford

  81·5

  63·1

  69·2

  96·3

  Wigan

  25·6

  31·3

  63·9

  76·8

  Knowsley

  99·3

  62·8

  90·5

  83·2

  Liverpool

  69·4

  32·0

  100·0

  85·4

  St. Helens

  56·4

  100·0

  70·5

  76·8

  Sefton

  0·0

  83·5

  70·5

  77·2

  Wirral

  100·0

  81·4

  70·6

  90·3

  Barnsley

  87·9

  56·5

  70·6

  83·0

  Doncaster

  56·1

  56·8

  79·3

  94·9

  Rotherham

  76·8

  18·5

  84·6

  77·3

  Sheffield

  100·0

  57·1

  83·2

  90·7

  Gateshead

  78·7

  62·9

  100·0

  75·2

  Newcastle upon Tyne

  91·3

  52·0

  41·1

  68·3

  North Tyneside

  0·0

  11·1

  70·0

  55·9

  376
  schemes, (b) minor works on local safety schemes, (c) structural maintenance on roads, (d) bus priority measures and (e) structural maintenance on bridges.

  Mr. Kenneth Carlisle
  All available information on transport supplementary grant for the categories listed is given in the table. It is not possible to give figures for bus priority measures. Most bids for such schemes under the transport supplementary grant system are included as part of "other minor works". Allocations under that category are not given for specific types of scheme. The answer to the related question on bus priority measures indicates total credit approvals issued to local authorities for that purpose.
  377

  Authority

  Major road schemes

  Minor works on local safely schemes

  Structural maintenance on principal roads

  Assessment, strengthening and other structural maintenance of bridges

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  South Tyneside

  96·5

  61·8

  70·1

  55·4

  Sunderland

  50·7

  31·5

  77·2

  64·0

  Birmingham

  90·4

  66·3

  73·2

  70·6

  Coventry

  97·1

  64·2

  69·9

  85·2

  Dudley

  70·0

  49·2

  70·0

  50·1

  Sandwell

  0·0

  27·4

  69·7

  77·2

  Solihull

  97·4

  71·0

  75·0

  71·9

  Walsall

  98·0

  57·1

  70·0

  58·2

  Wolverhampton

  89·2

  62·3

  70·4

  59·4

  Bradford

  51·9

  39·4

  70·0

  63·0

  Calderdale

  0·0

  65·3

  74·4

  69·9

  Kirklees

  95·3

  69·9

  86·9

  62·4

  Leeds

  68·2

  42·9

  73·1

  89·8

  Wakefield

  0·0

  46·5

  66·6

  88·8

  Avon

  77·5

  36·7

  66·0

  87·5

  Bedfordshire

  10·8

  27·8

  100·0

  94·2

  Berkshire

  37·7

  30·6

  64·7

  77·7

  Buckinghamshire

  38·4

  88·5

  79·8

  79·5

  Cambridgeshire

  19·4

  38·0

  72·7

  69·0

  Cheshire

  79·1

  82·7

  70·9

  93·0

  Cleveland

  92·2

  55·8

  78·1

  88·8

  Cornwall

  75·6

  49·0

  70·0

  75·3

  Cumbria

  64·6

  91·1

  70·0

  60·9

  Derbyshire

  100·0

  30·0

  69·9

  83·4

  Devon

  43·7

  60·9

  62·1

  71·5

  Dorset

  53·9

  54·6

  64·8

  77·3

  Durham

  97·6

  54·0

  55·2

  75·0

  East Sussex

  36·0

  68·2

  61·8

  91·5

  Essex

  62·3

  56·3

  71·8

  66·7

  Gloucestershire

  72·3

  28·2

  74·9

  87·2

  Hampshire

  88·8

  65·6

  65·4

  57·4

  Hereford and Worcester

  32·7

  29·0

  70·0

  66·4

  Hertfordshire

  91·8

  52·0

  70·0

  82·1

  Humberside

  95·5

  69·4

  73·9

  81·7

  Isle of Wight

  No bid

  88·0

  80·0

  62·3

  Kent

  84·0

  15·7

  64·5

  77·3

  Lancashire

  47·7

  64·8

  67·6

  69·4

  Leicestershire

  57·7

  45·3

  78·0

  73·2

  Lincolnshire

  38·8

  16·1

  87·6

  76·1

  Norfolk

  22·6

  26·8

  65·1

  85·1

  Northamptonshire

  40·6

  40·0

  68·2

  73·6

  Northumberland

  88·8

  61·3

  73·7

  87·0

  North Yorkshire

  79·4

  54·9

  70·0

  78·0

  Nottinghamshire

  71·2

  73·7

  66·1

  72·9

  Oxfordshire

  100·0

  10·1

  84·4

  85·1

  Shropshire

  17·2

  56·7

  70·0

  76·8

  Somerset

  94·1

  54·5

  66·2

  80·6

  Staffordshire

  54·1

  68·5

  75·8

  87·6

  Suffolk

  3·8

  70·4

  64·0

  72·4

  Surrey

  74·5

  27·0

  54·5

  76·0

  Warwickshire

  29·5

  32·2

  70·0

  71·2

  West Sussex

  83·1

  26·5

  61·8

  95·9

  Wiltshire

  46·8

  51·7

  58·5

  86·0

  Bus Priority Measures
  Ms Walley
  To ask the Secretary of State for Transport if he will list for each local highway authority in England the bids for 1993–94 made in its 1992 transport policy and programme for grant or credit approval for bus priority measures and the grant or borrowing consent awarded in each of those areas.

  Mr. Freeman
  The information requested is shown in the table. Details of the proportion of their transport supplementary grant allocation that local authorities allocate to bus priority measures are not available.
  378

  Bus Priority Measures 1993–94

  £ thousands

  TPP bids

  Supplementary Credit Approvals allocated

  Shire counties

  Avon

  2,207

  1,525

  Bedfordshire

  200

  0

  Berkshire

  2,305

  200

  Cambridgeshire

  195

  120

  Cheshire

  650

  1625

  Cleveland

  1,875

  600

  Cumbria

  25

  0

  Derbyshire

  123

  0

  Devon

  445

  250

  Durham

  300

  50

  379

  TPP bids

  Supplementary Credit Approvals allocated

  East Sussex

  1,100

  125

  Essex

  226

  130

  Gloucestershire

  448

  70

  Hampshire

  300

  170

  Humberside

  130

  0

  Isle of Wight

  50

  0

  Kent

  1,577

  500

  Lancashire

  807

  580

  Leicestershire

  775

  0

  Norfolk

  3,152

  3,000

  North Yorkshire

  20

  0

  Northamptonshire

  250

  100

  Nottinghamshire

  1,634

  175

  Oxfordshire

  675

  50

  Shropshire

  343

  50

  Staffordshire

  100

  0

  Suffolk

  2,438

  100

  Surrey

  1,029

  240

  West Sussex

  1,000

  0

  Wiltshire

  664

  140

  Total Shires

  25,043

  8,800

  Metropolitan districts

  Barnsley

  115

  0

  Birmingham

  500

  400

  Bolton

  100

  0

  Bradford

  1,668

  0

  Bury

  50

  40

  Coventry

  353

  250

  Doncaster

  60

  50

  Dudley

  200

  75

  Gateshead

  773

  75

  Kirklees

  140

  0

  Knowsley

  450

  250

  Leeds

  1,199

  450

  Liverpool

  400

  300

  Manchester

  1,330

  750

  Newcastle

  100

  100

  Oldham

  62

  40

  Rochdale

  15

  0

  St. Helens

  40

  0

  Salford

  125

  75

  Sheffield

  1,675

  200

  Solihull

  50

  50

  Stockport

  130

  30

  Sunderland

  10

  0

  Tameside

  57

  0

  Trafford

  20

  10

  Wakefield

  86

  0

  Walsall

  100

  0

  Wigan

  25

  0

  Wirral

  380

  30

  Total Districts

  10,213

  3,175

  London boroughs

  Camden

  100

  50

  Ealing

  1,294

  548

  Hammersmith

  1,474

  600

  Haringey

  825

  75

  Hillingdon

  777

  752

  Hounslow

  1,192

  250

  Kensington

  175

  50

  Lambeth

  401

  124

  Lewisham

  100

  0

  Newham

  106

  106

  Richmond

  45

  45

  Sutton

  200

  0

  Tower Hamlets

  600

  600

  Waltham Forest

  150

  0

  Wandsworth

  100

  100

  Total London

  7,539

  3,300

  380

  TPP bids

  Supplementary Credit Approvals allocated

  Totals

  42,795

  15,275

  1 Part SCA and part Transport Supplementary Grant. Authorities which did not bid are not listed.

  Cycles (Warning Devices)
  Mr. Roger Evans
  To ask the Secretary of State for Transport what are the requirements for pedal cycles to carry audible warning devices such as bells; if he will review the present requirements; and if he will make a statement.

  Mr. Kenneth Carlisle
  Pedal cycles are not required at present to be fitted with audible warning devices such as bells. We are currently considering updating the Pedal Bicycles (Safety) Regulations and the Pedal Cycles (Construction and Use) Regulations with a view to incorporating into them the latest British standard on the construction of pedal cycles. We shall be taking the opportunity at the same time to review the position on the compulsory fitting and use of bells.

  London Regional Transport
  Mr. David Atkinson
  To ask the Secretary of State for Transport what plans he has to privatise London Regional Transport; what estimate of asset proceeds he has made; and if he will make a statement.

  Mr. Norris
  Plans for the privatisation of the London Buses Ltd. subsidiaries are well under way. However, I have no plans at present to privatise the remaining parts of London Regional Transport and have therefore made no estimate of the potential sale proceeds.

  River Safety
  Mr. Illsley
  To ask the Secretary of State for Transport what research his Department has undertaken since July 1992 into improving safety and rescue standards on rivers and inland waters; and what methods were used in such research as recommended by the Hayes report on river safety.

  Mr. Norris
  Research carried out since July 1992 includes projects dealing with the safety of control systems on high speed craft, damage and impact stability of high-speed passenger craft, and the applicability of safety assessment techniques to passenger vessels.

  Mr. Illsley
  To ask the Secretary of State for Transport what steps his Department is taking to publish an account of progress in the implementation of recommendations made after major disasters recommended in the Hayes report on river safety.

  Mr. Norris
  A summary of progress on the implementation of the Hayes report recommendations will be published next month.

  Progress on the recommendations of the Hidden report was described in the answer of my hon. Friend the Minister for Public Transport on 12 November 1992, column 964.
  381
  I reported progress on the Fennel report on 7 December, column 464.

  Marine Safety Committees
  Mr. Illsley
  To ask the Secretary of State for Transport, pursuant to his answer of 7 July 1992,Official Report, column 102, if he will list the titles of all the district marine safety committees and their sub-committees that have been established; and if he would further state for each such committee and sub-committee (a) its composition, (b) its terms of reference and (c) the dates on which it has met.

  Mr. Norris
  I will write to the hon. Member with this information.

  Private Aircraft
  Mr. Madden
  To ask the Secretary of State for Transport what records are kept of flights made by private aircraft from United Kingdom airports and airfields; what requirements exist on pilots to register proposed flight paths and names and numbers of passengers; and in what respects these requirements and records are different for flights going overseas from internal flights.

  Mr. Norris
  Civil aviation legislation does not formally require official records of flights made by private aircraft to be kept by airports. However, most airports or airfields do maintain logbooks. In addition, under the terms of article 23 of the Air Navigation Order 1989 any member of the flight crew of an aircraft is required to maintain personal flying logbooks, in which they are required to record a variety of information, including the date and the places at which the crew member embarked on and disembarked from the aircraft at the end of each flight.

  Under the rules of the air the commander of an aircraft arriving at or departing from an aerodrome in the United Kingdom shall take all reasonable steps to ensure upon landing or prior to departure, as the case may be, that notice of that event is given to the person in charge of the aerodrome, or to the air traffic control unit or aerodrome flight information unit at the aerodrome. This is known as booking-in or out, but names of passengers are not included. He is also required to file a flight plan for air traffic control purposes when the aircraft is expected to fly in controlled airspace under instrument flight rules.

  When intending to cross an international flight information region boundary all aircraft pilots are required to file a flight plan and provide information identifying the type of the aircraft, the destination and the number of individuals on board the aircraft. A flight plan is also required if the total weight of the aircraft exceeds 5,700 kg and its intended destination is more than 40 km from the point of departure. This information is required primarily for potential search and rescue purposes and again the names of the passengers are not included.

  Twyford Down (Private Detectives)
  Mr. Denham
  To ask the Secretary of State for Transport, (1) pursuant to his answer of 25 February,Official Report, columns 699–700, what is the total sum of moneys paid to Brays Detective Agency (Southampton) Ltd. by his Department since February 1992;
  382
  (2) pursuant to his answer of 12 March, Official Report, column 772 on how many people papers have been served by Brays Detective Agency in connection with Twyford Down.

  Mr. Kenneth Carlisle
  [holding answers 10 May 1993]: As at end April, Bray's Detective Agency (Southampton) had been paid approximately £35,000. Following my answer of 12 March, Official Report, column 772, the agency had served papers on an additional three individuals.

  A30
  Mr. Tyler
  To ask the Secretary of State for Transport when he expects to be able to publish the detailed design and construction timetable for the new separated junction at Kennards house on the A30 near Launceston.

  Mr. Kenneth Carlisle
  [holding answer 10 May 1993]: We are making good progress with the initial preparation of this scheme and aim to consult the public on our proposals during the summer.

  Progress thereafter will depend on public reaction to our consultation proposals and to the subsequent statutory orders.

  Marine Accident Investigation Branch
  Mr. Jamieson
  To ask the Secretary of State for Transport in what circumstances he is able to order an MAIB inquiry under section 33(7) of the Merchant Shipping Act 1988.

  Mr. Norris
  [holding answer 10 May 1993]: The Merchant Shipping Act 1988 does not provide any limitation on the functions that may be conferred on the chief inspector of marine accidents, or other inspectors, in addition to the basic functions of investigating casualties to ships, or other incidents involving ships. However, such action would be taken only where it is considered appropriate and after careful consideration had been given to all the prevailing circumstances. Such consideration would include taking into account investigations either planned or in progress by other competent authorities or administrations.

DUCHY OF LANCASTER

  EC Research Ministers
  Mr. Patrick Thompson
  To ask the Chancellor of the Duchy of Lancaster if he will make a statement on the meeting of European research Ministers on 29 April.

  Mr. Waldegrave
  A policy debate was held on the fourth EC research and development framework programme, on the basis of the Commission's new working document. There was broad agreement on the structure of the framework and on the need to ensure proper dissemination and exploitation of EC research: further discussion will take place on content and financing before the next Council of Ministers on 30 June. Conclusions were also agreed on space, which underlined the need for closer links between the EC and the European Space Agency.

FOREIGN AND COMMONWEALTH AFFAIRS

  Mr. A. Nadir
  Mr. Madden
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps have been taken to apply to the Turkish authorities for Mr. A. Nadir to be placed under British jurisdiction; and if he will make a statement.

  Mr. Garel-Jones
  We have an extradition treaty with the Republic of Cyprus, but the writ of the Government does not run in the north of the island.

  Immediately after Nadir's abscondment, our High Commissioner in Nicosia met Turkish Cypriot leader Mr. Denktash on 5 May to demand that Nadir be handed over to the British authorities.

  On 7 May I summoned the Turkish ambassador to explain the anger felt in this country and ask for Turkish assistance in ensuring Nadir's return.

  The Turkish Cypriots should appreciate the damage it could do to their interests if they were to acquire a reputation as a refuge for fugitives from justice.

OVERSEAS DEVELOPMENT

  Aid Projects
  Mr. Cox
  To ask the Secretary of State for Foreign and Commonwealth Affairs what current United Kingdom Government financial aid projects for Kenya are due for renewal funding during this year; and if a decision will be made on this issue.

  Mr. Lennox-Boyd
  Decisions on a number of development projects will be required during the course of the year; these will be reached at the appropriate time taking account of all relevant factors.

  Sub-Saharan Africa
  Mr. Khabra
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans the United Kingdom Government have to increase the aid to sub-Saharan Africa; and if he will make a statement.

  Mr. Lennox-Boyd
  I refer the hon. Member to the reply I gave the hon. Member for Oldham, West (Mr. Meacher) on 10 February, at column 665.

  Narmada Dam, India
  Mr. Meacher
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is Her Majesty's Government's policy on future funding of the Narmada dam project in India(a) bilaterally and (b) through the World bank.

  Mr. Lennox-Boyd
  The Government of India asked the World bank to cancel the outstanding balance, some $170 million, of the bank's loan for the Sardar Sarovar dam project in the Narmada valley, India. Various studies agreed between the Government of India and the World bank, initiated prior to the cancellation of the loan and financed with United Kingdom grants, will be completed.

  Africa
  Mr. Khabra
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the World bank to redesign the operation of its structural adjustment programmes in Africa; and if he will make a statement.

  Mr. Lennox-Boyd
  We and other aid donors are involved in a continuing dialogue with World bank staff, both in the board and informally, and with representatives of developing countries, about the approach to be taken to structural adjustment. All parties agree that the essential aim is sustainable, broad-based development. The approach taken continues to evolve in the light of experience.

HEALTH

  Extra-contractual Referrals
  Mr. Redmond
  To ask the Secretary of State for Health if she will consider holding centrally information on health authorities which place limitations on extra-contractual referrals.

  Dr. Mawhinney
  No. The management of the extra-contractual referral process is the responsibility of district health authorities as agreed with regional health authorities. The majority of ECR requests are approved, as the grounds on which an ECR can be refused are very limited and purchasers are expected to respect the referring clinician's judgment. It would not be appropriate to collect this information centrally.

  NHS (Equal Opportunities)
  Ms Primarolo
  To ask the Secretary of State for Health if she will require national health service trusts and health authorities to carry out equal opportunities monitoring of job applications and to publish the results.

  Dr. Mawhinney
  National health service trusts and health authorities are expected to have an equal opportunities policy, together with mechanisms for monitoring its implementation. They are specifically expected, by the end of 1994, to monitor applicants for medical interviews on the basis of race, gender and speciality. They are also expected to monitor the selection and interview processes for nurse managers as part of "Opportunity 2000".

  In addition, we have set up a working group on ethnic minority employment in the NHS which will consider, among other issues, advice on good practice in recruitment and selection.

  AZT
  Mr. Galloway
  To ask the Secretary of State for Health how many yellow card reports of adverse reactions to AZT have been made by doctors dispensing and prescribing the drug.

  Dr. Mawhinney
  Eighty-three. A report of a suspected reaction in association with a drug does not necessarily mean that the drug caused the effect reported.

  Mr. Galloway
  To ask the Secretary of State for Health if she will place in the Library all the research data and
  385
  compiled statistics on adverse reactions and side effects of AZT; if she will list these adverse reactions and side effects; and if she will make a statement.

  Dr. Mawhinney
  Research data on the adverse effects of AZT submitted to the Medicines Control Agency in support of the product licence applications is confidential under section 118 of the Medicines Act, 1968. Information on the adverse effects of AZT is available in standard reference books and medical and scientific publications in the public domain. Information is also given in the data sheet for the product, produced by the manufacturer and authorised by the licensing authority, a copy of which will be placed in the Library.

  The most serious adverse reactions associated with AZT are disorders affecting the blood including anaemia and neutropenia. Other adverse effects reported include nausea, anorexia, abdominal pain, headache, rash, fever, muscle pain, insomnia and malaise.

  Mr. Galloway
  To ask the Secretary of State for Health what was the cost to the national health service, including the salaries of doctors, the use of other ancillary drug treatments, beds and administration, of the Concorde trials.

  Dr. Mawhinney
  The costs of the Concorde trial were met by 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.

  Mr. Galloway
  To ask the Secretary of State for Health (1) if she will place in the Library the research data which compares mortality rates between those AIDS patients given AZT and those AIDS patients not given AZT; and if she will publish full details of mortality rates for both the AZT group and the placebo control group during the Concorde trials;

  (2) what assessment she has made of the development of cancers in the trial subjects who took AZT for the duration of the Concorde trial;

  (3) what assessment her Department has made of the numbers and characteristics of patients who (a) suffered adverse reactions to AZT during the Concorde trial and (b) had to cease taking the drug because of the severity of the adverse reactions.

  Dr. Mawhinney
  Preliminary results of the Concorde trial involving AZT were published in a letter in the Lancet on 3 April. We are still awaiting the full report of the trial which has not yet been analysed by the investigators. As soon as the full report and raw data are received, these will be carefully analysed by the Department and the Medicines Control Agency. Advice on the licensing implications will be sought from the Committee on Safety of Medicines.

  Mr. Galloway
  To ask the Secretary of State for Health how much time was spent in deliberations by the Committee on the Safety of Medicines to decide whether to license AZT; if she will list the names of members of the particular committee who were to present at specific hearings on the licensing of AZT; and if she will place in the Library the minutes of these meetings.

  Dr. Mawhinney
  AZT was licensed in 1987 by the Licensing Authority following full consideration by the Committee on Safety of Medicines and its sub-committees.386
  The advice of the CSM has also been sought for subsequent variations to the original licence. The deliberations of the CSM are confidential and records are not kept of how much time the CSM or its sub-committees spend on any particular item on their agendas.

  A list of members of the CSM and its sub-committees for 1987 is published in the CSM's annual report, copies of which are available in the Library.

  Mr. Galloway
  To ask the Secretary of State for Health if she will publish details of the ongoing studies in Britain using AZT on asymptomatic subjects, and of research studies into AZT conducted since 1988, which have been notified to her Department.

  Dr. Mawhinney
  Three trials organised by 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, have involved asymptomatic patients using AZT:Concorde—comparing immediate treatment with AZT to deferred treatment once symptoms have developed.
  Delta—comparing AZT monotherapy with combination therapy using AZT and dideoxyinosine (ddl) or dideoxycytidine (ddC) in patients with CD4 counts between 350 and 50 per cumm. A minority of the patients in this trial will be asymptomatic. This trial is ongoing.
  Pental—evaluating the early use of AZT in asymptomatic children with HIV infection born to HIV antibody-positive mothers. This trial is ongoing.

  All three are international multicentre trials.

  There is no requirement to notify the Department centrally of ongoing clinical trials funded from other sources.

  Mr. Galloway
  To ask the Secretary of State for Health how many prescriptions of AZT were issued to asymptomatic individuals in each month since April 1988.

  Dr. Mawhinney
  This information is not available centrally.

  Mr. Galloway
  To ask the Secretary of State for Health (1) if she will review the complaint made in 1992 by the film company Meditel to the Medicines Control Agency, relating to advertising claims by the Wellcome Foundation in relation to AZT;

  (2) what action was taken by the Medicines Control Agency and her Department in respect of the complaint made by Meditel in 1992 against the Wellcome Foundation; and if she will make a statement.

  Dr. Mawhinney
  The Medicines Control Agency examined the complaint and reviewed promotional material for AZT at the time. Action was not taken against the Wellcome Foundation. There is no reason to review the complaint now.

  Cannabis
  Mr. Austin Mitchell
  To ask the Secretary of State for Health whether she will commission research into the effects, consequences and benefits of the medical use of cannabis as a muscle relaxant and treatment for nausea.

  Mr. Sackville
  We have no plans to commission such research.

  HIV and AIDS
  Mr. Galloway
  To ask the Secretary of State for Health if she will publish a list and description, together with the source, of all the non-pharmaceutical forms of treatment for HIV and AIDS upon which there has been correspondence with her Department since 1987; what encouragement she has given to the testing of non-pharmaceutical regimes in the cases of asymptomatic antibody positive subjects; and if she will make a statement.

  Mr. Sackville
  This information is not available.

  The clinical trials supported as part of the Government's commitment to HIV and AIDS research are organised by 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. The M RC has convened an AIDS therapeutic trials committee, which includes patient representatives, to formulate a strategy for clinical trials.

  Mr. Galloway
  To ask the Secretary of State for Health how much her Department has spent since 1987 on treatments for HIV management, AIDS and AIDS management, manufactured by companies other than the Wellcome Foundation; and if she will list those companies and the products used.

  Dr. Mawhinney
  This information is not available. The Department allocates money to health authorities to purchase services for people with HIV/AIDS. These allocations cover the costs of prescribing a range of drug treatments, but it is for individual clinicians to determine what treatment is appropriate for each patient.

  Vaccines
  Mr. Tony Lloyd
  To ask the Secretary of State for Health what assessment she has made of the adequacy of levels of supply to the Greater Manchester area of the MMR and meningitis vaccines; and if she will make a statement.

  Dr. Mawhinney
  The Department of Health is aware that there is presently some shortfall in the availability of measles, mumps and rubella vaccine due to an interruption to supply between 19 April and 7 May, caused by a change from the company which packages the vaccine for distribution in the United Kingdom. The Department wrote to all district immunisation co-ordinators early in April advising them of this interruption and advising that further substantial quantities would become available immediately after 7 May. This vaccine is now being made available to health authorities and any shortfalls will be made good.

  There is no shortage of the haemophilus influenzae b (Hib) vaccine; all orders for the vaccine placed this year have been met in full and large stocks are available for requisition.

  Suicides
  Mr. Vaz
  To ask the Secretary of State for Health how many suicides recorded in England and Wales in the past five years have been attributed to causes related to suffering from low frequency tinnitus and hum; and how many patients are currently receiving therapy for the conditions through the NHS.
  388
  Mr. Sackville
  The Department of Health has no information on the reasons for individual people's suicides. A diagnosis of tinnitus was recorded against an estimated 500 patient episodes of treatment in the hospital episode system in England during 1989–90, the latest year for which figures are available. The ninth edition of the international classification of diseases, on which the 1989–90 data are coded, does not distinguish between low frequency and other varieties of tinnitus.

  Children in Care
  Lady Olga Maitland
  To ask the Secretary of State for Health how many children have run away while in care in children's homes in the last year for which figures are available; and if she will list the relevant local authorities.

  Mr. Yeo
  The latest available information is shown in the table.

  Children in care who had absconded from residential accommodation for more than one week at 31 March 1991

  Local authority

  Number of children

  Avon

  4

  Barnsley

  4

  Berkshire

  5

  Birmingham

  14

  Bolton

  1

  Bradford

  1

  Brent

  3

  Coventry

  2

  Croydon

  1

  Devon

  2

  Doncaster

  1

  Dorset

  1

  Dudley*

  1

  Durham

  6

  Ealing

  1

  Essex

  8

  Greenwich

  1

  Hackney

  1

  Hammersmith

  1

  Hampshire

  5

  Haringey

  1

  Hertfordshire

  1

  Hounslow

  3

  Islington*

  7

  Kensington

  2

  Kent*

  2

  Knowsley

  4

  Lambeth

  5

  Lancashire

  5

  Leicestershire

  1

  Lewisham

  5

  Liverpool

  2

  Manchester

  2

  Newcastle upon Tyne

  1

  Newham

  1

  Northamptonshire

  5

  Nottinghamshire

  3

  Redbridge

  2

  Salford

  4

  Shropshire

  1

  Southwark*

  4

  St. Helens

  1

  Sunderland

  3

  Surrey

  1

  Tameside

  2

  Trafford

  10

  Walsall

  2

  Wandsworth

  2

  Westminster

  1

  Wigan

  3

  Wiltshire

  1

  Wolverhampton

  2

  389

  Local authority

  Number of children

  Total

  152

  Note: For authorities not making a return for 1991, data from the most recent return have been quoted. (These authorities have been indicated with an asterisk *.)

  Secure Units
  Lady Olga Maitland
  To ask the Secretary of State for Health what studies she is undertaking into the provision of secure units by the private sector.

  Full-time

  Three-quarter time

  Half-time

  Job-share

  Total

  Male

  18,694

  235

  173

  134

  19,236

  Female

  5,112

  904

  395

  321

  6,732

  Total

  23,806

  1,139

  568

  455

  25,968

  Figures refer to general practitioners in England at 1 October 1992.

  Mr. John Marshall
  To ask the Secretary of State for Health how many general practitioners there were in Greater London in(a) October 1978, (b) October 1983, (c) October 1988 and (d) at the latest convenient date.

  Dr. Mawhinney
  At 1 October 1978 there were 3,509 general medical practitioners in Greater London. The corresponding figures at 1 October 1983, 1 October 1988 and I October 1992, the latest date for which figures are available, were 3,659, 3,843 and 3,810.

  Eye Tests
  Mr. Jon Owen Jones
  To ask the Secretary of State for Health if she will make it her policy to provide free NHS eye tests to all deaf and hard of hearing people; and if she will make it her policy to subsidise the cost of glasses for this group of people.

  Dr. Mawhinney
  There are no plans to extend the rules of entitlement to free national health service sight tests and to vouchers to cover the costs of glasses to this group.

  Nursing and Midwifery
  Mr. Blunkett
  To ask the Secretary of State for Health what account she took, in her decision to relocate the English National Board of Nursing and Midwifery from Sheffield to London, of the 1989 review by Peat Marwick McLintock, particularly the recommendations contained in pages 91 and 95; if she will re-examine her decision; and if she will make a statement.

  Mr. Sackville
  The English National Board for Nursing Midwifery and Health Visiting has not made a decision on relocation from Sheffield to London.
  390
  Mr. Yeo
  My right hon. Friend the Secretary of State announced on 2 March that she planned to amend regulations to enable the private and voluntary sectors to provide secure accommodation. We propose to issue a consultation document shortly setting out options for taking this work forward.

  General Practitioners
  Mr. Roger Evans
  To ask the Secretary of State for Health if she will give a breakdown for the most recently available year of the numbers of general practitioners distinguishing between(a) female and male and (b) part-time and full-time general practitioners; and if he will make a statement.

  Dr. Mawhinney
  The information is shown in the table.

  Junior Doctors and Dentists
  Mr. Sumberg
  To ask the Secretary of State for Health what progress has been made in reducing the hours of junior hospital doctors and dentists; and if she will make a statement.

  Dr. Mawhinney
  Preliminary analysis of regional task force returns indicates that, at 1 April, the number of junior doctors and dentists contracted for more than 83 hours a week had fallen very substantially since September 1990. I hope to announce detailed results shortly.

  Mr. Mohammed Saeed
  Mr. Madden
  To ask the Secretary of State for Health if she will place in the Library a copy of her Departmental inquiry, into the case of Mohammed Saeed, or the main recommendations thereof.

  Mr. Sackville
  I shall be writing to the hon. Member shortly about the circumstances of the case in response to his letter of 5 May to my right hon. Friend the Secretary of State. A copy of my reply will be placed in the Library.

  Pharmacies
  Mr. Ainger
  To ask the Secretary of State for Health how many pharmacies dispensed less than(a) 1,000 prescriptions per month and (b) 2,000 prescriptions per month in each of the family health services authority areas in England and Wales in the latest period for which figures are available; and how many of these were classified as essential pharmacies.

  Dr. Mawhinney
  This information is shown in the table and was derived from the Chemists Particulars 1991–92 provided by the Prescription Pricing Authority.
  391

  Code

  FHSAs

  Number of pharmacies less than 2,000 per month

  Number of pharmacies less than 1,000 per month

  Number of essential small pharmacy schemes in 31 March 1992

  321

  Cleveland

  12

  2

  2

  322

  Cumbria

  30

  5

  6

  323

  Durham

  19

  4

  3

  324

  Northumberland

  30

  0

  3

  325

  Gateshead

  10

  1

  0

  326

  Newcastle

  14

  1

  1

  327

  North Tyneside

  13

  2

  0

  328

  South Tyneside

  8

  0

  1

  329

  Sunderland

  9

  0

  0

  341

  Humberside

  33

  1

  2

  342

  North Yorkshire

  29

  1

  3

  343

  Bradford

  23

  6

  3

  344

  Calderdale

  14

  1

  0

  345

  Kirklees

  17

  1

  0

  346

  Leeds

  36

  5

  1

  347

  Wakefield

  5

  0

  1

  361

  Derbyshire

  41

  3

  3

  362

  Leicestershire

  69

  10

  7

  363

  Lincolnshire

  11

  1

  1

  364

  Nottinghamshire

  44

  8

  4

  365

  Barnsley

  6

  1

  0

  366

  Doncaster

  2

  0

  0

  367

  Rotherham

  10

  2

  1

  368

  Sheffield

  21

  1

  0

  381

  Cambridgeshire

  25

  2

  1

  382

  Norfolk

  19

  4

  2

  383

  Suffolk

  25

  5

  7

  401

  Bedfordshire

  18

  4

  1

  402

  Hertfordshire

  96

  19

  10

  403

  Barnet

  45

  6

  1

  404

  Brent and Harrow

  85

  17

  0

  405

  Ealing, Hammersmith and Hounslow

  106

  23

  0

  406

  Hillingdon

  32

  8

  2

  407

  Kensington, Chelsea and Westminster

  139

  88

  0

  421

  Essex

  72

  10

  11

  422

  Barking and Havering

  24

  4

  0

  423

  Camden and Islington

  76

  33

  0

  424

  City and East London

  66

  18

  0

  425

  Enfield and Haringey

  47

  5

  0

  426

  Redbridge and Waltham Forest

  33

  5

  0

  441

  East Sussex

  43

  5

  4

  442

  Kent

  54

  6

  7

  443

  Greenwich and Bexley

  37

  6

  0

  444

  Bromley

  18

  1

  0

  445

  Lambeth, Southwark and Lewisham

  79

  19

  0

  461

  Surrey

  69

  8

  2

  462

  West Sussex

  27

  4

  1

  463

  Croydon

  37

  5

  0

  464

  Kingston and Richmond

  44

  7

  0

  465

  Merton, Sutton and Wandsworth

  71

  11

  0

  481

  Dorset

  28

  6

  4

  482

  Hampshire

  63

  9

  0

  483

  Wiltshire

  21

  1

  2

  484

  Isle of Wight

  6

  1

  0

  301

  Berkshire

  31

  2

  0

  502

  Buckinghamshire

  28

  3

  4

  503

  Northamptonshire

  29

  7

  3

  504

  Oxfordshire

  33

  6

  6

  521

  Avon

  52

  6

  3

  522

  Cornwall and Isles of Scilly

  29

  7

  4

  523

  Devon

  43

  8

  6

  524

  Gloucestershire

  30

  5

  3

  525

  Somerset

  18

  1

  3

  541

  Hereford and Worcester

  29

  5

  3

  542

  Shropshire

  20

  2

  1

  543

  Staffordshire

  41

  8

  3

  544

  Warwickshire

  20

  4

  3

  545

  Birmingham

  53

  4

  0

  546

  Coventry

  22

  4

  0

  547

  Dudley

  6

  1

  0

  548

  Sandwell

  8

  1

  1

  549

  Solihull

  9

  1

  2

  551

  Walsall

  10

  0

  0

  552

  Wolverhampton

  9

  2

  0

  392 393

  Code

  FHSAs

  Number of pharmacies less than 2,000 per month

  Number of pharmacies less than 1,000 per month

  Number of essential small pharmacy schemes in 31 March 1992

  561

  Cheshire

  35

  6

  0

  562

  Liverpool

  18

  2

  0

  563

  St. Helens and Knowsley

  3

  0

  0

  564

  Sefton

  7

  0

  0

  565

  Wirral

  16

  0

  0

  581

  Lancashire

  69

  8

  5

  582

  Bolton

  5

  1

  0

  583

  Bury

  6

  3

  0

  584

  Manchester

  17

  3

  0

  585

  Oldham

  7

  0

  1

  586

  Rochdale

  3

  0

  0

  587

  Salford

  6

  0

  0

  588

  Stockport

  14

  1

  0

  589

  Tameside

  10

  2

  2

  591

  Trafford

  14

  0

  0

  592

  Wigan

  6

  0

  0

  ENGLAND TOTAL

  2,767

  499

  150

  To qualify for payment under the Essential Small Pharmacy Scheme a pharmacy must dispense between 6,000 and 17,200 prescriptions per year and be more than two kilometres from the next pharmacy.

  Code

  FHSAs

  No. of Pharmacies Less than 2,000 per month

  No. of Pharmacies Less than 1,000 per month

  No. of Essential Small Pharmacy Schemes in 31 March 1992

  601

  Clwyd

  14

  4

  4

  602

  Dyfed

  29

  10

  9

  603

  Gwent

  13

  1

  0

  604

  Gwynedd

  17

  4

  0

  605

  Mid Glamorgan

  23

  0

  0

  606

  Powys

  6

  1

  3

  607

  South Glamorgan

  20

  0

  1

  608

  West Glamorgan

  23

  8

  1

  WALES TOTAL

  145

  28

  18

  To qualify for payment under the Essential Small Pharmacy Scheme a pharmacy must dispense between 6,000 and 17,200 prescriptions per year and be more than two kilometres from the next pharmacy.

  Imigran
  Mr. Ainger
  To ask the Secretary of State for Health what was the total amount spent by the NHS on prescription of the drug Imigran in(a) 1991 and (b) 1992; and what was the average cost of a single prescription.

  Dr. Mawhinney
  Information on individual national health service prescribed drugs is not provided for reasons of confidentiality.

  NHS Salaries
  Mr. Hinchliffe
  To ask the Secretary of State for Health what percentage the wages of(a) nurses and midwives, (b) ancillary staff and (c) administration and management staff in the national health service were as a portion of total revenue spending for the years 1979 to 1992 inclusive.
  394
  Dr. Mawhinney
  [holding answer 26 April 1993]: Percentage figures for hospital and community health services in England for the years requested are shown in table 1. Those for 1991–92 are provisional.

  While total HCHS salaries and wages costs for 1991–92 increased on 1990–91, they represent a reduced proportion of the total HCHS revenue expenditure incurred by health authorities in that year. Table 2 shows the cost of the staff groups requested as percentages of the total annual HCHS salaries and wages costs. The figures for 1991–92 are provisional.
  395

  Table 1

  HCHS: Salaries and Wages costs as a proportion of total revenue expenditure—percentage figures

  Nursing and Midwifery staff per cent

  Ancillary staff per cent

  Administrative and Clerical staff per cent

  General and Senior managers per cent

  All other staff per cent

  Total Salaries and Wages per cent

  1979–80

  30·92

  13·48

  9·13

  0·00

  21·34

  74·87

  1980–31

  33·32

  12·47

  8·77

  0·00

  21·59

  76·14

  1981–82

  32·91

  12·04

  8·69

  0·00

  21·40

  75·03

  1982–83

  33·19

  11·56

  8·29

  0·00

  21·63

  74·67

  1983–84

  32·79

  11·26

  8·23

  0·00

  22·08

  74·36

  1984–85

  33·22

  10·26

  8·32

  0·00

  22·41

  74·20

  1985–86

  33·41

  9·39

  7·93

  0·11

  23·21

  74·05

  1986–87

  33·88

  8·30

  7·90

  0·25

  24·16

  74·49

  1987–88

  34·77

  7·38

  7·85

  0·26

  24·83

  75·09

  1988–89

  36·92

  6·69

  7·80

  0·24

  24·50

  76·16

  1989–90

  36·05

  6·26

  7·65

  1·17

  24·42

  75·55

  1990–91

  35·75

  5·88

  8·07

  1·71

  24·81

  76·22

  1991–92

  30·72

  4·80

  7·36

  2·04

  22·01

  66·92

  Table 2

  HCHS: Analysis of total salaries and wages costs—percentage figures

  Nursing and midwiferv staff

  Ancillary staff

  Administrative and clerical staff

  General and senior managers

  All other staff

  Total salaries and wages

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  Per cent.

  1979–80

  41·30

  18·01

  12·19

  0·00

  28·50

  100·00

  1980–81

  43·75

  16·38

  11·51

  0·00

  28·36

  100·00

  1981–82

  43·86

  16·04

  11·58

  0·00

  28·52

  100·00

  1982–83

  44·45

  15·48

  11·10

  0·00

  28·96

  100·00

  1983–84

  44·10

  15·15

  11·07

  0·00

  29·69

  100·00

  1984–85

  44·76

  13·83

  11·21

  0·00

  30·20

  100·00

  1985–86

  45·12

  12·68

  10·70

  0·15

  31·35

  100·00

  1986–87

  45·48

  11·14

  10·61

  0·33

  32·43

  100·00

  1987–88

  46·30

  9·83

  10·45

  0·35

  33·07

  100·00

  1988–89

  48·48

  8·79

  10·24

  0·32

  32·17

  100·00

  1989–90

  47·72

  8·29

  10·13

  1·55

  32·32

  100·00

  1990–91

  46·90

  7·71

  10·59

  2·24

  32·55

  100·00

  1991–92

  45·90

  7·17

  11·00

  3·05

  32·88

  100·00

  Source:

  Annual accounts (1982–83 to 1990–91) and financial returns (1991–92) of regional and district health authorities in England and those of the special health authorities for the London postgraduate teaching hospitals. Annual accounts of area health and other predecessor authorities (1979–80 to 1981–82). Annual fiscal returns of the first wave NHS trusts (1991–92).

  Notes to the tables

  1. HCHS salaries and wages costs cover those incurred within the total expenditure of the health authorities (and the NHS trusts) including the management and provision of hospital, community health, patient transport (ie ambulance), blood transfusion and other services.

  2. The figure for total: HCHS revenue expenditure used for 1991–92 is not comparable with earlier years as it shows health authorities primarily as purchasers rather than providers of health care and includes charges for the use of capital assets. The total expenditure of NHS trusts was excluded as this is reflected in the health authorities total expenditure through health care and related services purchased.

  3. General and senior managers comprises a separate pay category which was established until 1986. Its adoption throughout the NHS occurred over a period of some years and its numbers include many employees re-classified from other pay groups including senior nursing staff.

  4. The figures for "all other staff" included medical, dental, ambulance, maintenance and professional and technical staff together with the total costs of all categories of non-NHS (agency, etc) staff. The figures for some financial years may not add across exactly because of roundings.

  5. The tables exclude salaries and wages costs incurred by family health services authorities and special health authorities providing central services to the NHS. However, the figures for administrative and clerical staff for the years prior to 1985–86 cover those staff employed by family practitioners committees whose costs were included with those of area health authorities and were not separately identified.

TRADE AND INDUSTRY

  Citylink (Takeover)
  Mr. Wilson
  To ask the President of the Board of Trade (1) what consideration is being given to the competition implications of the takeover of Citylink by National Express;

  (2) if he will refer the takeover of Citylink by National Express to the Monopolies and Mergers Commission.
  396
  Mr. Neil Hamilton
  The Director General of Fair Trading is currently making inquiries into this merger. If he considers that it may qualify for investigation under section 64 of the Fair Trading Act 1973, he will advise my right hon. Friend the President of the Board of Trade accordingly. My right hon. Friend shall decide whether or not to make a reference to the Monopolies and Mergers Commission once he has received the Director General's advice.

  Textiles
  Sir David Steel
  To ask the President of the Board of Trade what representations he has made to the South Korean Government concerning import tariffs on British textiles.

  Mr. Needham
  I expressed the Government's strong concern about proposed increases in import tariffs on textiles when I met Korean Ministers during my recent visit to Korea.

  Serb-based Holiday Companies
  Mr. Nigel Griffiths
  To ask the President of the Board of Trade how many Serb-based holiday companies trading in London are being investigated by his Department.

  Mr. Needham
  There are 36 companies in the United Kingdom which are "persons connected with Serbia and Montenegro" for the purposes of United Kingdom sanctions legislation; one of these is a holiday company. My officials have been in touch with them a number of times to ensure they are aware of the impact United Kingdom sanctions may have on them.

  Indonesia
  Mr. Anthony Coombs
  To ask the President of the Board of Trade what are the current levels of exports to Indonesia; what they have been over the last five years; what are the current levels of imports from Indonesia; and what have they been over the last five years.

  Mr. Needham
  Information on the topic is regularly published in Business Monitors MM20 and MA20, "Overseas Trade Statistics of the United Kingdom", copies of which are available in the Library.

  Pensions and Benefits
  Ms Estelle Morris
  To ask the President of the Board of Trade what action he has taken to assess the effect on sub-post offices of the plans to encourage payment of pensions and benefits through banks and building societies; and if he will make a statement.

  Mr. Leigh
  The option to have pensions and child benefit paid into a suitable bank or building society account has been available for a number of years, and will be extended to a range of other benefits in line with the commitment in the citizens charter. My Department considered with Post Office Counters Ltd. last autumn the likely impact that encouragement of this method of payment might have on the sub-office network and concluded that it would not have a significant effect on total business.

  Coal Privatisation
  Mr. David Atkinson
  To ask the President of the Board of Trade what estimate he has made of asset proceeds from the privatisation of British Coal; and if he will make a statement.

  Mr. Eggar
  My Department is currently considering the possible option for the privatisation of British Coal. It would be premature to estimate the proceeds of privatisation at this stage.

  "The Prospects for Coal"
  Mr. Tipping
  To ask the President of the Board of Trade when he intends to publish his first annual energy report as outlined in "The Prospects for Coal."

  Mr. Eggar
  The first report will be published as soon as possible after the end of the year.

  Mr. Tipping
  To ask the President of the Board of Trade when the energy advisory panel of independent experts as outlined in "The Prospects for Coal" will meet; if he will name the members of the panel and outline the panel's terms of reference; and if he will make a statement.

  Mr. Eggar
  I shall make an announcement in due course.

  Terrorism Damage (Reinsurance)
  Mr. Lidington
  To ask the President of the Board of Trade if he will make available details of the arrangements under which the Government will undertake the reinsurance of risks relating to damage caused by terrorism.

  Mr. Neil Hamilton
  Yes. An explanatory summary of the arrangements envisaged, describing the essential features of the agreement to be entered into, was placed in the Library of the House and copies made available in the Vote Office this morning.

  Offshore Oil and Gas
  Mr. Darling
  To ask the President of the Board of Trade how many bids were received in respect of the 14th round of oil and gas licences applications; and of these how many are subject to contracts between the operator and his Department.

  Mr. Eggar
  [holding answer 10 May 1993]: A total of 97 applications were received in respect of blocks offered in the 14th offshore oil and gas licensing round. Licences have been awarded for three of these applications. Work obligations were attached to all of these licences. Other awards under the 14th round are expected to be announced at the end of this month.

  Post Office Review
  Mr. Cousins
  To ask the President of the Board of Trade (1) whether the continuation of the period of advice by his appointed advisers on the Post Office review into the 1993–94 financial year required the extension or renewal of their contracts;

  (2) whether his advisers on the Post Office review were appointed after a process of' competitive tendering.

  Mr. Leigh
  [holding answer 10 May 1993]: Yes.

NATIONAL FINANCE

  VAT
  Mr. Roger Evans
  To ask the Chancellor of the Exchequer if he will make a statement concerning irrecoverable VAT paid by charities for goods and services.

  Sir John Cope
  There are already a number of VAT reliefs on specific goods and services which are worth some
  399
  £150 million a year to charities. The Government believe that the best way to help charities through the tax system is by measures to encourage charitable giving rather than by refunding VAT on general goods and services. The amount individuals and companies donate is a better measure of the worth of charities than what they spend on standard rated goods and services.

  Ms Harman
  To ask the Chancellor of the Exchequer what discussions he has held with charities on the effect of charging VAT on domestic fuel and power on charities.

  Sir John Cope
  [holding answer 7 May 1993]: I have received a number of representations from charities on this issue and met the Charities Tax Reform Group on 6 May 1993.

  British Telecom
  Mr. Cousins
  To ask the Chancellor of the Exchequer what provision will be made in the prospectus for the British Telecom share sale for a statement(a) as to BT foreign investment strategy and (b) on how redundancies will be funded.

  Mr. Dorrell
  The prospectus for the Government's BT3 share sale will contain all material information about BT's business and its financial position at the time of publication.

  Petroleum Revenue Tax
  Mr. Darling
  To ask the Chancellor of the Exchequer what was the revenue from(a) corporation tax and (b) petroleum revenue tax from oil and gas fields in each year from 1983 to 1992–93.

  Mr. Dorrell
  [holding answer 10 May 1993]: Revenues raised from United Kingdom oil and gas production by corporation tax and petroleum revenue tax are as follows:

  £ million

  Year

  1Corporation tax

  Petroleum revenue tax

  1983–84

  877

  6,017

  1984–85

  2,432

  7,177

  1985–86

  2,916

  6,375

  1986–87

  2,676

  1,188

  1987–88

  1,318

  2,296

  1988–89

  1,230

  1,371

  1989–90

  743

  1,050

  1990–91

  971

  860

  1991–92

  647

  -216

  1992–93

  670

  54

  1Before ACT set-off.

  Mr. Darling
  To ask the Chancellor of the Exchequer if he will list the number of oil fields which were subject to the payment of petroleum revenue tax in each year from 1983 to 1992–93 as compared to the total number of oil fields in production during the same period.

  Mr. Dorrell
  [holding answer 10 May 1993]: The numbers of oil and gas fields with a liability to petroleum revenue tax and the total number of fields in production since 1984 have been as follows:

  Number of fields with PRT liability

  Number of fields in production

  1984

  15

  35

  1985

  16

  42

  1986

  17

  49

  400

  Number of fields with PRT liability

  Number of fields in production

  1987

  17

  55

  1988

  15

  62

  1989

  16

  72

  1990

  20

  81

  1991

  20

  82

  1992

  17

  94

  The information on fields with liabilities is not available for 1983, when 32 fields were in production.

  Mr. Darling
  To ask the Chancellor of the Exchequer what is his estimate of the number of oil fields that would be subject to the payment of petroleum revenue tax in each year between 1993–94 and 1997–98.

  Mr. Dorrell
  [holding answer 10 May 1993]: The number of oil and gas fields with a liability to petroleum revenue tax in 1993 is estimated to be approximately 20. Forecasts are not made for future years.

  Alcohol
  Mr. John Townend
  To ask the Chancellor of the Exchequer what action has been taken against the individuals discovered abusing the indicative levels for alcohol by trying to commercialise their purchases.

  Sir John Cope
  During the quarter ending 31 March, there were 230 detections of tobacco and alcohol illegally offered or intended for sale in the United Kingdom. The following action has been taken:

  Action

  Number of Cases

  Arrest and charge

  11

  Reported for prosecution or compounding

  116

  Seizures of goods only

  103

  Thirty-four vehicles were also seized. All detections have been included even where the quantities involved were less than the indicative levels, which are only a guide. Separate figures to exclude those cases involving tobacco goods only are not readily available.

  Ring-fenced Revenue Accounts
  Mr. Dafis
  To ask the Chancellor of the Exchequer if he will make it his policy to treat investment from ring-fenced revenue accounts financed from local resources as outside the remit of the public sector borrowing requirement.

  Mr. Portillo
  No. By definition the public sector borrowing requirement measures borrowing by the whole of the public sector, including local authorities.

  Balance of Trade
  Mr. Harry Greenway
  To ask the Chancellor of the Exchequer what action he is taking to improve Britain's balance of trade; and if he will make a statement.

  Mr. Portillo
  [holding answer 6 May 1993]: The Government can best assist traders by keeping inflation low. Inflation rates this year are the lowest for over 25 years. Interest rates are the lowest in the European Community.
  401
  In his Budget my right hon. Friend the Chancellor further improved the assistance available to exporters from the ECGD by cutting premiums for 1993–94 by 71 per cent. on 1992–93 levels; increasing cover in high exposure markets by £1,300 million over the next three years; and by relaxing restrictions for export credits on some high growth markets.

PRIME MINISTER

  Policy Unit
  Mr. Chris Smith
  To ask the Prime Minister if he will list the committees and review groups on which members of his policy unit currently sit, or have sat since he took office, giving in each case the purpose of the committee or group and the name of the policy unit member.

  The Prime Minister
  Members of the policy unit attend a wide range of committees as required.

  Mr. Chris Smith
  To ask the Prime Minister if he will list the names of, and posts held by, members of his policy unit; and if he will give their biographical details.

  The Prime Minister
  The members of my policy unit are as follows:

  Head of Unit

  Sarah Hogg

  Deputy Head of Unit

  Nick True

  Damian Green

  Dominic Morris

  Lucy Neville-Rolfe

  David Poole

  Katharine Ramsay

  Alan Rosling

  Jill Rutter

  It is not my practice to provide biographical details.

  Russia (Nuclear Safety)
  Mr. Dalyell
  To ask the Prime Minister if he will discuss British-Russian co-operation on nuclear safety with President Yeltsin; and if he will make a statement.

  The Prime Minister
  I have no plans to meet with President Yeltsin specifically to discuss nuclear safety issues. However, if the opportunity arises, I will emphasise our concern about nuclear safety in Russia and our wish for continuing co-operation in this area.

  Mr. Cousins
  To ask the Prime Minister if he will list the projects, and the funding committed thereto, by the European Community and the United Kingdom to assist Russia, Belarus, Ukraine and Kazakhstan in respect of the storage and disarmament of nuclear material and facilities.

  The Prime Minister
  The Government have made a commitment to supply Russia with nuclear weapons transport vehicles and special containers to help with the dismantlement of that country's surplus nuclear warheads; the total programme is expected to cost over £30 million. We have no such programmes of assistance for Belarussia,402
  Ukraine or Kazakhstan. The European Community has not committed funding to any of these states for this purpose.

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

  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Tuesday 11 May.

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

  Unitary Taxation
  Mr. Turner
  To ask the Prime Minister what response he has received from President Clinton to his letter about unitary taxation and the Barclays bank litigation; and if he will place a copy in the Library.

  The Prime Minister
  [holding answer 10 May 1993]: President Clinton and his colleagues have made it clear to us that the United States Administration fully recognise the importance that the Government attach to this issue, the strength of feeling in the United Kingdom and the risk of retaliatory action by the United Kingdom if a satisfactory solution is not forthcoming. My right hon. Friend the Chancellor reinforced these points in recent discussions with Secretary Bentsen and others in the United States Administration. They have assured us that they are very keen to find a solution to this problem that is acceptable.

EDUCATION

  Nursery Education
  Mr. Redmond
  To ask the Secretary of State for Education what plans he has to increase the account taken in standard spending assessments of nursery education.

  Mr. Forth
  At national level, local authority grant settlements have reflected the general increase over the years in the number of under-fives in school. The under-fives element of each authority's SSA is based on the number of three and four-year-olds resident in the authority. It is for each authority to decide how to allocate resources between its various services, including under-fives education which authorities provide under discretionary powers.

  Grant-maintained Schools
  Mr. Dunn
  To ask the Secretary of State for Education how many children are currently being educated in local education authority or grant-maintained selective schools in England; and if he will make a statement.

  Mr. Forth
  Approximately 105,000 children are currently being educated in local authority grammar schools or grant-maintained grammar schools in England.

  School Buildings, Liverpool
  Mr. Loyden
  To ask the Secretary of State for Education what assistance he has given to local authorities to meet the cost of refurbishment of the older school buildings in Liverpool.

  Mr. Boswell
  Capital support for maintained schools in the area of Liverpool local education authority, including voluntary aided and special agreement schools, amounts to over £8 million in 1993–94.

  Teaching (European Dimension)
  Sir Teddy Taylor
  To ask the Secretary of State for Education if he will make a statement on the procedures to be followed in adjusting secondary school teaching to have a more European dimension.

  Mr. Boswell
  There are no specific procedures. The content of teaching and the organisation of education systems are and will remain the responsibility of the individual member states within the European Community.

  Education Quality
  Mr. Denham
  To ask the Secretary of State for Education when he next plans to meet organisations representing parents to discuss improving the quality of education.

  Mr. Forth
  My right hon. Friend met the National Confederation of Parent Teacher Associations, which is said to represent the views of some 7·5 million parents, on Monday 26 April. At that meeting, I am pleased to say, the NCPTA confirmed their support in principle for the national curriculum together with its associated testing arrangements. He also met a delegation from Parents' initiative a few weeks ago and gave a speech at the annual conference of the Campaign for Real Education on April 17. All these occasions allowed him to speak with parents and to seek their views on issues.

  Parental Choice
  Mrs. Gorman
  To ask the Secretary of State for Education what steps he is taking to make parental choice in education easier to exercise.

  Mr. Forth
  The policy of more open enrolment has increased parental choice by requiring maintained schools to admit up to their physical capacity. All parents now have the right to say which school they prefer their children to attend. The Government are continuing their drive to make more information about schools publicly available. This will enhance choice by helping parents to make wise decisions about their children's education.

  Testing
  Mr. Jim Marshall
  To ask the Secretary of State for Education when he next plans to meet organisations representing teachers to discuss testing.

  Mr. Forth
  On the subject of testing, teachers have been invited to make their views known to Sir Ron Dearing, the chairman-designate of the School Curriculum and Assessment Authority, who is conducting a review of the national curriculum and assessment.
  404
  Mr. Bryan Davies
  To ask the Secretary of State for Education what representations he has received recently on the implementation of testing in schools; and if he will make a statement.

  Mr. Forth
  Since the beginning of the year the Department has received around 6,500 letters from teachers, parents, governors and others about testing in schools. In addition, my right hon. Friend has met parents, teachers in staff-rooms, governors and organisations at conferences. He has met national representatives of the teachers' associations on 19 occasions and delegations from all six teacher unions. He has also visited 37 schools since he took office in April 1992.

  Mr. David Shaw
  To ask the Secretary of State for Education what steps he is taking to overcome problems in the testing of school pupils; and what assessment he has made of the relative effectiveness of United Kingdom testing and methods existing in other countries.

  Mr. Forth
  My right hon. Friend has asked Sir Ron Dearing to conduct a wide-ranging review of the manageability of the national curriculum and the associated testing and assessment framework. A great deal of information is already available about testing in other countries, including a recent report from the National Institute for Economic and Social Research which found that the higher standards achieved by pupils in the middle to lower ability range in France, Germany and Japan was attributable to the existence in these countries of long-standing national curricula reinforced by regular assessment and reporting.

  Mr. Jim Cunningham
  To ask the Secretary of State for Education what plans he has to use the power to surcharge under the Local Government Finance Act 1982 to ensure that governors and teachers implement testing in schools.

  Mr. Forth
  Sections 19 and 20 of the Local Government Finance Act 1982 set out the power to seek restitution from those concerned where public funds have been spent improperly or have not been properly accounted for. Action under these sections falls to the auditor appointed under the Act.

  Mr. Dalyell
  To ask the Secretary of State for Education what study he has made of testing of pupils in other countries.

  Mr. Forth
  A great deal of information is available, from Ofsted and other sources, about testing arrangements in other countries. It shows that tests are well-established in most of our main competitor countries. For example:—The findings of the HMI report on "Aspects of Primary Education in France" in 1991 indicated that the French National Curriculum has long stressed the importance of basic literacy and numeracy for primary schools and that pupils' attainments in reading, writing and mathematics were assesed at the ages of 8 and 11 entirely through paper and pencil tests;
  —a report published earlier this year by the National Institute of Economic and Social Research found that the higher standards achieved by pupils in the middle to lower ability range in France, Germany and Japan were mainly attributable to the existence of long-standing national curricula in these countries, "reinforced through regular assessment and reporting".

  Illiteracy
  Sir Thomas Arnold
  To ask the Secretary of State for Education what is his current estimate of the number of adults in England and Wales who may be defined as functionally illiterate.

  Mr. Boswell
  The Adult Literacy and Basic Skills Unit, which advises the Government, estimates that 4 million adults in England and Wales have real difficulty with everyday tasks involving reading, writing and spelling and that a further 1·5 million have difficulty with numerical skills. Such people are often described as being "functionally illiterate".

  National Curriculum
  Mr. Purchase
  To ask the Secretary of State for Education what further plans he has to meet organisations representing teachers to discuss the implementation of the national curriculum.

  Mr. Forth
  None. Teacher associations should make their views known to Sir Ron Dearing, the chairman-designate of the School Curriculum and Assessment Authority, who is conducting a review of the national curriculum and assessment.

  Mr. Lidington
  To ask the Secretary of State for Education when he next expects to meet representatives of the Professional Association of Teachers to discuss the national curriculum.

  Mr. Forth
  My right hon. Friend has no plans for such a meeting. The Professional Association of Teachers has been invited to make its views known to Sir Ron Dearing, the chairman designate of the School Curriculum and Assessment Authority, who is conducting a review of the national curriculum and assessment.

  Mr. Jim Cunningham
  To ask the Secretary of State for Education what plans he has to hold further discussions with parent governors and teachers on the national curriculum.

  Mr. Forth
  All interested parties should make their views known to Sir Ron Dearing, the chairman-designate of the School Curriculum and Assessment Authority, who is conducting a review of the national curriculum and assessment.

  Vocational Education
  Mr. Jacques Arnold
  To ask the Secretary of State for Education if he will make a statement on vocational education.

  Mr. Boswell
  Vocational education is of key importance to achieving the national education and training targets, and hence ensuring a proficient and competitive work force. From next September the new general national vocational qualifications will be widely available and will provide a third pathway to qualification, alongside NVQs and A-levels. We want GNVQs in at least two subjects to be available in more than 1,500 schools and colleages and one in four 16-year-olds starting GNVQ courses by 1996. In the longer term I hope that around half our 16 and 17-year-olds will take these important new qualifications.

  Teachers (Workload)
  Mr. Etherington
  To ask the Secretary of State for Education what plans he has to reduce the workload of middle-school teachers in the current year.

  Mr. Forth
  My right hon. Friend has frequently placed on record his appreciation of the commitment shown by teachers in implementing the Government's reforms. It is in response to the concern of some teachers that the incremental growth of the national curriculum over several years has led to over-elaboration that my right hon. Friend has asked Sir Ron Dearing to review the curriculum and assessment framework.

  English
  Mr. Fabricant
  To ask the Secretary of State for Education what discussions he has had with employers regarding the need for 16-year-olds with a competent command of English.

  Mr. Boswell
  My right hon. Friend has had no formal discussions recently, but he has noted the concerns of employers about basic literacy and numeracy standards identified in recent reports by the Adult Literacy and Basic Skills Unit. He is well aware how important it is to employers—and to our ability to compete as a nation—that school and college leavers joining the work force should be fully competent in their use of the English language.

  This Government are determined to ensure that all school pupils learn to communicate effectively in spoken and written English. That is why our proposals to revise the requirements for national curriculum English were announced last month. The aim is to streamline and strengthen the present curriculum by defining clearly the essential skills which English teaching should promote.

  The National Curriculum Council is now conducting the statutory consultation on those proposals, which will give all parties the opportunity to offer their views. Copies of the proposals will be sent by the NCC to the CBI and other employers' organisations.

  Grant-maintained Schools
  Mr. John Marshall
  To ask the Secretary of State for Education if he will visit Hendon grant-maintained school to discuss grant-maintained schools.

  Mr. Forth
  My right hon. Friend has not received an invitation to visit Hendon school. If he receives such an invitation, he would be very happy to consider it.

  Disruptive Pupils
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what proposals he has to provide additional resources for schools to enable them to provide for disruptive pupils who may otherwise be expelled.

  Mr. Forth
  Under the "Reducing Truancy" category of the Government's grants for education support and training scheme for 1993–1994, local education authorities could bid for support to enhance the provision made for their most difficult pupils. A number of the approved projects include such a component.

  Teacher Morale
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what plans he has to improve teacher morale.

  Mr. Boswell
  The Government recognise the need to maintain teacher morale and are committed to ensuring that teaching is viewed as an attractive profession. Current recruitment is buoyant; vacancies are low; fewer than 1 per cent. leave the profession each year for paid employment outside education. The restructuring of teachers' pay in the coming September will give classroom teachers the prospect of earning up to £30,441 a year.

  Teachers (Administration)
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what proposals he has to reduce the administrative burden on teachers to enable them to spend more time teaching.

  Mr. Boswell
  While the Department wishes teachers to use their time effectively, the division of teachers' directed time between teaching and other duties is a matter for determination at school level.

  School Hours
  Mr. Jim Cunningham
  To ask the Secretary of State for Education what representations he has received from(a) parent governors and (b) teachers regarding the length of the school day or week.

  Mr. Forth
  My right hon. Friend has received written representations about the length of the school day from 14 parents, two governors and three teachers in the past 12 months. Letters received from governors and teachers have generally been concerned with the procedures required to change the length of the school day; and letters from parents with the desirability of a longer school day.

  Education Reform
  Mr. Harry Greenway
  To ask the Secretary of State for Education if he will make a statement on the national curriculum, testing in schools and the workload of teachers.

  Mr. Forth
  My right hon. Friend has asked Sir Ron Dearing to conduct a wide-ranging review of the manageability of the national curriculum and the associated testing and assessment framework. The review will consider the need for slimming down the curriculum and for simplifying the testing arrangements. The aim is that early results from the review will inform the testing arrangements in 1994.

  Mandatory Awards
  Mrs. Angela Knight
  To ask the Secretary of State for Education what support will be given in mandatory awards to students in the academic year 1993–94.

  Mr. Boswell
  We propose the following increases in support for mandatory award holders from England and Wales, subject to parliamentary approval of the regulations to be laid in due course. Taken together with the increased rates of student loans which I announced on Friday 7 May,Official Report, col. 254–55, they will enable
  408
  the average student support to rise by 2·75 per cent. in the academic year 1993–94, thereby maintaining its value in real terms. We will increase the supplementary allowances payable as part of the mandatory award by 2·75 per cent. We will also adjust the parental and spouse contribution scales so that the assessed contribution from a parent or spouse whose residual income rises in line with average earnings will continue to fall in real terms. The main rates of maintenance grant will be held at 1992–93 levels.

  I am placing in the Library details of the rates of grant, the supplementary allowances and the parental and spouse contribution rules.

SCOTLAND

  GP Fund Holders
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will describe the financial policies by which non-fund-holding practices obtain or employ(a) drugs, medicines and listed appliances, (b) goods and services, (c) services carried out by a member of the practice such as those listed in schedule 3 to S.I. 1993 No. 488 (S.53), (d) employees of members of the practice employed to provide treatment or manage/administer the practice and (e) purchase of materials, equipment, or improvement of the premises.

  Mr. Stewart
  The costs incurred by non-fund-holding practices under these headings are met by the health board either from within their financial allocations or in the case of drugs, medicines and listed appliances by drawing on NHS resources held centrally.

  Those services listed in schedule 3 to S.I. No. 488 (S.53) cannot be carried out by a member of a non-fund-holding practice, but instead may be obtained by referral to a provider unit with the costs being met by the health board.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will make it his policy to ensure that non-fund-holding practices will be able to offer services in every respect equal to those that become fund-holding practices.

  Mr. Stewart
  All the patient care services currently included within the scope of the GP fund-holding scheme are also available to non-fund-holding practices. GP fund holders have the flexibility to use their fund to provide these services or purchase them from other providers for the benefit of their patients. The Government's framework for the GP fund-holding scheme seeks to maintain a proper balance between providing GP fund holders with an appropriate degree of flexibility in the use of their fund and preserving the principle of equity of access to health care for all NHS patients. GP fund holders, in providing care themselves or in setting contracts with other providers, will be able to develop improved standards in the quality of care for their patients provided as a consequence they do not directly disadvantage NHS patients from other practices.

  Mrs. Fyfe
  To ask the Secretary of State for Scotland what estimate he has made of the average outturn surplus at the end of the first year of operation of fund-holding practices.

  Mr. Stewart
  During 1991–92, their first operational year, GP fund holders in Scotland by careful management of their funds achieved average savings, following audit, of
  409
  around 4 per cent. A proportion of these savings was returned to the health boards, leaving fund-holder practices with total savings of £190,000. These savings may only be applied in accordance with regulations, and with health board agreement, for the benefit of the fund-holders' patients and do not represent income for the GPs and practices involved.

  Nicotine Replacement Patches
  Mrs. Fyfe
  To ask the Secretary of State for Scotland when nicotine replacement patches will be available on NHS prescriptions in Scotland; and for what reasons they are not yet available on prescription through the NHS.

  Mr. Stewart
  Only one nicotine patch has been prohibited from NHS prescription on the expert advice of the Advisory Committee on Borderline Substances. The committee advised that the manufacturer had failed to demonstrate to it that nicotine patches had a significant therapeutic use in general medical practice in helping patients to stop smoking. Other, more recently introduced patches which have yet to be considered by the committee remain prescribable meantime but doctors who do so may have their prescribing challenged by their health board.

  Nursing
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will set out the reasons for inclusion of paragraph (e) of the schedule to S.I. 1993 No. 637 (S.83); and if he will take account of reasons for dismissal other than redundancy which are no reflection on the suitability of a candidate for membership of the National Board for Nursing, Midwifery and Health Visiting for Scotland.

  Mr. Stewart
  The power of the Secretary of State to appoint and dismiss members of the board in accordance with the National Board for Nursing, Midwifery and Health Visiting for Scotland Order 1993 (S.I. 1993 No. 637) is an important safeguard in relation to the proper conduct of the National Board for Nursing, Midwifery and Health Visiting for Scotland. The schedule to the order sets out the various circumstances, including dismissal from paid employment other than by reason of redundancy, which disqualifies persons from appointment as members of the board. The Secretary of State does, however, have the power under article 9(3) of the order to waive the disqualification: his exercise of such a power will depend on the facts and circumstances of each individual case.

  National Panel of Specialists
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if the National Panel of Specialists, and the advisory appointments committee drawn from its membership, will be required to include a proportion of suitably qualified women.

  Mr. Stewart
  The National Panel of Specialists constituted under the National Health Service (Appointment of Consultants) (Scotland) Regulations 410
  1993 contains a proportion of women consultants which is roughly comparable to the national ratio of female to male consultants in Scotland; the figures are 15·7 per cent. and 16·5 per cent. respectively. All members of the panel must be suitably qualified consultants. The membership of advisory appointments committees appointed by local NHS-employing authorities to consider candidates for consultant appointments in the NHS is also governed by the 1993 regulations. Each committee must include two members of the national panel from the relevant specialty or sub-specialty in which the consultant vacancy has occurred. The appointment of members to individual AACs is a matter for NHS-employing authorities who should ensure that the membership of these committees meets the statutory requirements.

  Tenants
  Mrs. Fyfe
  To ask the Secretary of State for Scotland if he will take steps in the case of any landlords who have collected poll tax from tenants, and who now should collect a lesser sum as council tax, ensure that such tenants are made aware of the reduction they are due.

  Mr. Stewart
  The Secretary of State has no powers to direct landlords in this way and has no plans to take such powers. There will be very few situations where landlords paid the community charge in respect of a property and where they are now liable to pay council tax. Landlords can decide to recoup the council tax where they are liable, but tenants with assured or short assured tenancies who pay rent weekly are entitled to have details of the council tax element given in their rent book.

  Council Tax
  Sir David Steel
  To ask the Secretary of State for Scotland what percentage of persons in Scotland he estimates is paying higher levels of council tax than the previous community charge.

  Mr. Lang
  Using information from the family expenditure survey, it is estimated that about 40 per cent. of households in Scotland face higher bills for council tax in 1993–94 than their combined household community charge bills in 1992–93. This estimate is based on a 0·1 per cent. sample of Scottish households and is therefore subject to sampling error. The estimate takes into account the effects of the community charge reduction scheme in reducing personal community charge bills but makes no allowance for the effect of community charge or council tax benefit.

  Maternity Services
  Ms Primarolo
  To ask the Secretary of State for Scotland if he will list the hospitals in Scotland which had consultant obstetric and/or general practitioner maternity beds in 1991–92 and 1992–93, with the numbers of beds of each type in each hospital in each year.

  Mr. Stewart
  The information requested is shown in the table.
  411

  National health service hospitals in Scotland Average available staffed beds in obstetricsspecialties: By specialty and hospital

  Years ending 31 March 1992 and 31 December 1992

  31 March 1992

  31 December 1992

  Specialist obstetrics

  GP obstetrics

  Specialist obstetrics

  GP obstetrics

  All hospitals

  1,746

  178

  1,695

  162

  Aberdeen Maternity Hospital

  121

  —

  146

  —

  Arbroath Infirmary

  —

  9

  —

  9

  Ayshire Central and Maternity Hospital

  142

  —

  141

  —

  Balfour Hospital

  —

  8

  —

  8

  Belford Hospital

  —

  6

  —

  6

  Bellshill Maternity Hospital

  114

  —

  104

  —

  Borders General Hospital

  28

  —

  28

  —

  Caithness General Hospital

  15

  —

  15

  —

  Calton Hospital

  —

  7

  —

  6

  Chalmers Hospital

  —

  10

  —

  10

  Cresswell Maternity Hospital

  43

  —

  44

  —

  Daliburgh Hospital

  —

  3

  —

  4

  Dalrymple Hospital

  —

  8

  —

  8

  Davidson Cottage Hospital

  —

  2

  —

  2

  Dunfermline Maternity Hospital

  38

  —

  38

  —

  Dunoon and District General Hospital

  —

  8

  —

  8

  Eastern General Hospital

  50

  —

  50

  —

  Falkirk and District Royal Infirmary

  50

  —

  50

  —

  Forth Park Hospital

  88

  —

  88

  —

  Fraserburgh Hospital

  —

  8

  —

  8

  Fyfe Jamieson Maternity Home

  —

  8

  —

  8

  Gilbert Bain Hospital

  —

  10

  —

  10

  Glasgow Royal Maternity Hospital

  96

  —

  98

  —

  Insch and District War Memorial Hospital

  —

  4

  —

  4

  Islay Hospital

  —

  3

  —

  2

  Isle of Arran War Memorial Hospital

  —

  4

  —

  3

  Jubilee Hospital

  —

  7

  —

  7

  Kincardine O'Neil War Memorial Hospital

  —

  6

  —

  5

  Lady Margaret Hospital

  —

  —

  —

  —

  Law Hospital

  —

  —

  3

  —

  Leanchoil Hospital

  —

  6

  —

  5

  Lewis Hospital

  13

  —

  10

  —

  Mackinnon Memorial Hospital

  —

  1

  —

  1

  Maryhill Maternity Ward

  —

  13

  —

  13

  Mid Argyll Hospital

  —

  3

  —

  2

  Montrose Royal Infirmary

  —

  7

  —

  7

  Ninewells Hospital

  104

  —

  100

  —

  Oban Maternity Hospital

  —

  6

  —

  6

  Perth Royal Infirmary

  35

  —

  35

  —

  Peterhead Cottage Hospital

  —

  10

  —

  7

  Portree Hospital

  —

  1

  —

  1

  Queen Mother's Hospital

  93

  —

  89

  —

  Raigmore Hospital

  72

  —

  72

  —

  Rankin Memorial Hospital

  38

  —

  36

  —

  Royal Alexandra Hospital

  75

  —

  76

  —

  Rutherglen Maternity Hospital

  82

  —

  82

  —

  Seafield Hospital

  —

  6

  —

  6

  Simpson Memorial Maternity Pavilion

  141

  —

  135

  —

  Southern General Hospital

  56

  —

  60

  —

  St. John's Hospital at Howden

  46

  —

  44

  —

  Stirling Royal Infirmary

  52

  —

  50

  —

  Stobhill Hospital

  43

  —

  17

  —

  Summerfield Maternity Hospital

  22

  —

  —

  —

  Thornyflat Maternity Hospital

  —

  9

  —

  —

  Town and County Hospital Nairn

  4

  —

  —

  —

  Turner Memorial Hospital

  —

  3

  —

  3

  Vale of Leven District General Hospital

  36

  —

  36

  —

  Victoria Hospital

  —

  3

  —

  3

  412 413

  31 March 1992

  31 December 1992

  Specialist obstetrics

  GP obstetrics

  Specialist obstetrics

  GP obstetrics

  Western Isles Hospital

  —

  —

  4

  —

  William Smellie Maternity Hospital

  50

  —

  47

  —

  Prisons Inspectorate
  Mr. Gallie
  To ask the Secretary of State for Scotland if he will make a statement on the role of Her Majesty's prisons inspectorate for Scotland.

  Mr. Lang
  The prisons inspectorate was established in its present form following the publication in 1979 of the report by the committee of inquiry into the United Kingdom prison services which recommended that there should be a systtem of inspection of the prison service distanced as far as might be practicable from the prison departments. Subsequently, the post of Her Majesty's chief inspector of prisons for Scotland was approved and the inspectorate commenced operations on 1 January 1981.

  HMCIP's main statutory responsibility is the regular inspection of individual establishments. In carrying out this function matters which are inspected and reported on include physical conditions, quality of prisoner regimes, morale of staff and prisoners, facilities and amenities available to staff and prisoners, questions of humanity and propriety and the general efficiency and effectiveness of the establishment. Within the Scottish prison service there are 19 separate penal establishments, two of which contain special units, and it is the aim of the inspectorate to carry out a full inspection of each of these establishments once every three and a half years. Each inspection lasts for up to two weeks, depending on the size and complexity of the establishment, following which a detailed report is prepared. In addition, a one-day inspection, which may be unannounced, is undertaken annually at each establishment not being formally inspected.

  Other areas of responsibility of HMCIP include the triennial inspection of legalised police cells, which are in locations distant from prisons proper, the undertaking of periodic thematic studies which focus attention on specific areas or aspects of the prison service and the production of an annual report.

  The Government's White Paper on the citizens charter set out the role which inspectorates should play and I am satisfied that the prisons inspectorate are applying the key principles of that role.

  Independence

  HMCIP is appointed by the Crown under section 7 of the Prisons (Scotland) Act 1989 and since the establishment of the present inspectorate in 1981 all three post-holders have been lay appointments, that is, individuals who have had no previous connection with the prison service. I intend to continue to make lay appointments to the post. In undertaking the duties of the post, HMCIP is supported by two senior prison governors who provide professional advice and guidance during the conduct of inspections and the preparation of reports. Although these officers may have future career enhancement within the service which they are inspecting, they will continue to be formally seconded to the inspectorate for
  414
  the duration of their posting there. The inspectorate team is completed by an administrative civil servant who acts as staff officer.

  The inspectorate determines its own programme for the inspection year and submits it to me for approval. During any inspection the inspectors have free access to any part of the establishment or to any individual therein. Reports are prepared without consultation with, or direct contribution from, the Scottish prison service and are submitted directly to me. HMCIP has no direct input to the policy or management of the Scottish prison service although recommendations in reports may have implications for either or both. Whether invited or not, HMCIP may from time to time offer comment on actual or potential developments.

  Lay involvement

  Lay involvement in the oversight of prisons has been separately provided for, since the last century, by the statutory appointment of visiting committees for each establishment, members of which are statutorily nominated in the case of young offenders institutions by the Secretary of State and in the case of adult prisons by local authorities. These committees act as independent observers on my behalf and have the absolute right to visit the appropriate prison whenever they wish. Their main functions are to pay frequent visits to the prison, to hear any complaints which may be made by the prisoners and to report to me any matter which they consider it expedient to report. As part of every full inspection HMCIP invariably seeks a meeting with representatives of the local visiting committee and records their views on the establishment in the final report.

  HMCIP may co-opt additional lay members on to the inspection team to deal with specific issues relating to individual establishments, if necessary.

  Openness

  The inspectorate has published its annual inspection programme for 1993–94 and will continue to do so for future years. Arrangements are always made to meet groups of prisoners and staff during each full inspection and arrangements are now also being made to give prisoners' visitors an opportunity to meet the inspectors and, alternatively or additionally, to submit comments orally or in writing.

  All the inspectorate's reports are submitted directly to me and are published in full, save occasionally as regards parts of reports which HMCIP has indicated should not be published as touching on confidential matters involving security. When published, they are invariably accompanied by my formal response. These arrangements cover not only the reports of the regular inspections of individual establishments but any thematic study reports and in particular HMCIP's annual report, publication of which is statutorily required. It is for HMCIP to decide whether to hold a press conference on the publication of reports and no restrictions are placed on discussions with the media on

  415
  matters relating to inspections. All the inspectorate's reports are available publicly—a charge now being made only in the case of the annual report.

  Resources

  HMCIP has no role in the allocation of resources to the Scottish prison service or among individual establishments, except insofar as recommendations may lead to a re-assessment of priorities. While the inspectorate's overriding statutory commitment is to comment on the acceptability of conditions, all reports take into account the need for cost efficiency and effectiveness.

  Health (Private Services)
  Mrs. Fyfe
  To ask the Secretary of State for Scotland (I) what plans he has to permit private health care companies or private hospitals to run national health service wards or specialist units; and if he will make a statement;

  (2) what is his policy on partnership deals with the private sector to run either hospital units or departments within units.

  Mr. Stewart
  [holding answer 4 May 1993]: Following my right hon. Friend the Chancellor of the Exchequer's statement to the House on 12 November, the Government have been encouraging the participation of private sector interests in the provision of public services. I welcome the utilisation of private finance in the national health service where this would provide improved standards of health
  416
  care for patients or an opportunity for cost savings to be allocated to other health care projects. It is for individual health bodies to consider specific projects.

  Opencast Mining
  Mr. Dalyell
  To ask the Secretary of State for Scotland if he will place in the Library the letter of 2 April on Scottish Office guidance on opencast coal production from M. T. Affolter of Scottish Office Environment Department to David Jarman of West Lothian district council.

  Mr. Stewart
  [holding answer 10 May 1993]: Arrangements will be made for a copy of the Department's letter to Mr. Jarman to be placed in the Library as soon as possible.

  School Transport
  Mr. Kirkwood
  To ask the Secretary of State for Scotland if he will increase resources available to education authorities in Scotland to enable more flexible school transport in rural areas.

  Mr. Stewart
  [holding answer 10 May 1993]: It is for local authorities themselves to determine the level of expenditure on school transport in the light of their overall spending priorities and taking into account local needs. In distributing Government support to local authorities through aggregate external finance, account is taken of the differing population settlement patterns in rural areas.

  Manufacturing Jobs
  Mr. McLeish
  To ask the Secretary of State for Scotland how many manufacturing jobs there were in Scotland in December 1979 and December 1992; what was the proportion of manufacturing jobs as a percentage of the total number of jobs in each of those years; and if he will make a statement about the future of manufacturing industry.

  Mr. Stewart
  [holding answer 10 May 19931: The figures showing the number of manufacturing jobs in Scotland in December 1979 and December 1992, and the proportion of manufacturing jobs as a percentage of the total number of jobs in these years are set out in the table. These are taken from the "Civilian Workforce in Employment Estimates" compiled by the Employment Department.

  December

  1979

  1992

  Total employees in employment (thousands)

  2,094

  1,967

  Employees in manufacturing (thousands)

  596

  348

  Manufacturing as a percentage of total employers

  28·5 per cent.

  17·7 per cent.

  Scottish Enterprise

  Members

  Occupation

  Salary from 1 April 1993

  (£)

  Chairman (part-time)

  Professor Donald Iain MacKay, MA, FRSE

  Chairman, PIEDA plc

  47,552

  Deputy Chairman

  Ronald Garrick, CBE

  Managing Director and Chief Executive, the Weir Group

  10,545

  Members

  Professor Andrew Bain

  Visiting Professor in Economics, Glasgow University

  7,030

  Tom Farmer, CBE

  Chairman and Chief Executive, Kwik-Fit

  7,030

  Charles Gray, JP

  President, COSLA

  7,030

  Sir Graham Hills

  Former Principal and Vice-Chancellor of the University of Strathclyde; Scottish Governor of the BBC

  7,030

  Glenda Hogarth-Coull, MBE

  Managing Director, Hogarth Safety Wear

  7,030

  Barbara Kelly, CBE

  Member, Equal Opportunities Commission; Chair, Training 2000

  7,030

  Cameron McLatchie OBE

  Chairman and Chief Executive British Polythene Industries plc

  7,030

  Professor John Caiman Shaw, CBE

  Deputy Governor, Bank of Scotland; Chairman, Scottish Higher Education Funding Council

  7,030

  Yvonne Strachan

  Chairwoman, Scottish Convention of Women; Scottish Women's Organiser, TGWU

  7,030

  Chief Executive (ex-officio member)

  Crawford Beveridge

  93,732

  418
  Despite reductions in Scottish manufacturing employment since 1979, output in this sector has increased. This has been achieved by substantial productivity increases. Future manufacturing success will be determined by the ability of Scotland's producers to compete in domestic and overseas markets.

  The Government's objective is to provide an overall economic framework in which Scottish manufacturers can flourish. This strategy is succeeding. The latest business survey evidence reveals that Scottish manufacturing firms expect an increase in total new orders, the volume of output and exported goods in forthcoming months.

  Appointments
  Mr. McLeish
  To ask the Secretary of State for Scotland if he will give for Highlands and Islands Enterprise and Scottish Enterprise and for each of the local enterprise companies the names of the chairman and board members, their occupations or professions and their allowances, salaries or other remuneration payable.

  Mr. Stewart
  [holding answer 10 May 19931: The names, occupations and current salaries of the chairmen and board members of Scottish Enterprise and of Highlands and Islands Enterprise are as follows:
  419

  Highlands and Islands Enterprise

  Members

  Occupation

  Salary from 1 April 1993

  (£)

  Chairman (part-time)

  A. Fraser Morrison, CBE

  Chairman and Managing Director, Morrison Construction Group

  26,762

  Members (part-time)

  John A. D. Harrison, OBE

  Chairman, Johnston's of Elgin

  7,030

  Dr. James Hunter

  Journalist;

  7,030

  Adviser to the Crofters Union;

  Member, Board of Trustees, John Muir Trust

  Angus S. MacDonald, CBE

  Farmer;

  7,030

  Director, Grampian Television

  Valerie MacIver

  Chair, Highland Regional Council Education Committee;

  7,030

  Member, Ross and Cromarty District Council;

  Member, Cromarty Firth Port Authority

  John D. M. Robertson, CBE

  Chairman, Robertson Group of Companies;

  7,030

  Chairman, Orkney Health Board;

  Chairman, Highland Health Board

  Peter Timms, MBE

  Managing Director, Flexible Technology, Bute

  7,030

  John Angus Mackay

  Director, Gaelic Television Committee;

  7,030

  Member, Scottish Arts Council

  Chief Executive (ex-officio member)

  Iain A. Robertson

  58,580

  Chairmen and board members of the local enterprise companies are not appointed by my right hon. Friend. Their names are listed in their respective annual reports and accounts which are available from the local enterprise companies themselves. The contracts between Scottish Enterprise and Highlands and Islands Enterprise and the local enterprise companies in their respective areas prohibit the payment to local enterprise companies chairmen or board members of any remuneration from

  Occupation/ Profession

  Annual remuneration

  (£)

  ABERDEEN ROYAL HOSPITALS NHS TRUST

  Chairman:

  Mr. A. Bryan Broomfield

  Managing Director

  19,285

  Non-executive directors:

  Professor Graeme Catto

  University Professor

  5,000

  Professor Michael Meston

  University Professor

  5,000

  Mr. Harold Tocher

  Retired Banker

  5,000

  Dr. Fiona Lyle

  Retired General Practitioner

  5,000

  Mrs. Ann D. Scott

  Tax Partner

  5,000

  AYRSHIRE AND ARRAN COMMUNITY HEALTH CARE NHS TRUST

  Chairman:

  Mrs. Aileen K. Bates

  Former Nurse Teacher

  17,145

  Non-executive directors:

  Mr. Ian Allison

  Chartered Accountant

  5,000

  Mr. David Gall

  Retired Policeman

  5,000

  Mr. Robert Johnston

  Solicitor

  5,000

  Dr. Susan Kinnaird

  Auditor

  5,000

  Mr. W. Scott McConnell

  Retail Pharmacist

  5,000

  CAITHNESS AND SUTHERLAND NHS TRUST

  Chairman:

  Mr. George Bruce

  Former Company Manager

  15,125

  Non-executive directors:

  Mr. John Gunn

  Chartered Accountant

  5,000

  420
  payments made by Scottish Enterprise or Highlands and Islands Enterprise; however, out-of-pocket expenses may be reimbursed.

  Mr. McLeish
  To ask the Secretary of State for Scotland if he will give for each of the hospital trusts the names of the board members, their occupations or professions and any allowances or remuneration payable.

  Mr. Stewart
  [holding answer 10 May 1993]: The information requested is as follows:
  421

  Occupation/ Profession

  Annual remuneration

  (£)

  Rev. Alexander Murray

  Minister

  5,000

  Dr. Elizabeth MacKenzie

  Retired General Practitioner

  5,000

  Mr. John Rosie

  Technical Assistant

  5,000

  Ms Wilma Taylor

  Retired Nurse

  5,000

  DUNDEE TEACHING HOSPITALS NHS TRUST

  Chairman:

  Mr. J. Stuart Fair

  Solicitor

  19,285

  Non-executive directors:

  Mrs. Maureen Cane

  Retired University Lecturer

  5,000

  Mr. Gordon Lowden

  Chartered Accountant

  5,000

  Mr. Robert Lyon

  University Senior Lecturer

  5,000

  Mrs. Jacqueline Wood

  Housewife

  5,000

  Professor Heather Dick

  University Professor

  5,000

  GRAMPIAN HEALTH CARE NHS TRUST

  Chairman:

  Dr. Alexander J. Taylor

  Retired General Practitioner

  19,285

  Non-executive directors:

  Mr. Marcus Humphrey

  Farmer

  5,000

  Mr. Thomas Murison

  Managing Director

  5,000

  Mr. George Robb

  Company Director

  5,000

  Mrs. Joan Catto

  Solicitor

  5,000

  Mr. Hance Fullerton

  Chief Executive

  5,000

  MONKLANDS AND BELLSHILL NHS TRUST

  Chairman:

  Dr. George Bell

  Retired General Practitioner

  19,285

  Non-executive directors:

  Mrs. Ann Irvine

  Sales Consultant

  5,000

  Mr. Donald MacDonald

  Executive Director

  5,000

  Dr. Michael Moore

  University Reader

  5,000

  Mrs. Alison Morrison

  Veterinary Surgeon

  5,000

  Mr. William Huggins

  Retired Finance Director

  5,000

  MORAY HEALTH SERVICES NHS TRUST

  Chairman:

  Mr. James Snedden

  Retired Banker

  17,145

  Non-executive directors:

  Mrs. Marjory Adams

  Teacher

  5,000

  Mr. Russell Anderson

  Fanner

  5,000

  Mrs. Lydia King

  Retired Teacher

  5,000

  Mr. William Phillips

  Chartered Accountant

  5,000

  Mr. James Royan

  Master Butcher

  5,000

  NORTH AYRSHIRE AND ARRAN NHS TRUST

  Chairman:

  Mr. William Ritchie

  Retired Civil Engineer

  19,285

  Non-executive directors:

  Mrs. Angela Dunbar

  School Attendance Officer

  5,000

  Mrs. Kim Donald

  Company Secretary

  5,000

  Mr. James Grier

  Retired Banker

  5,000

  Mr. Alan Stewart

  Solicitor

  5,000

  Mr. Keith Tulloch

  Chartered Accountant

  5,000

  RAIGMORE HOSPITAL NHS TRUST

  Chairman:

  Mr. James Kyle

  Retired Surgeon

  17,145

  Non-executive directors:

  Mr. James Gray

  Retired Health Board Treasurer

  5,000

  Mrs. Flora Hunt

  Solicitor

  5,000

  Mr. Alexander Morrison

  Master Baker

  5,000

  Professor George McNicol

  Retired University Vice-Chancellor

  5,000

  Mrs. Judith Robertson

  Housewife

  5,000

  ROYAL ALEXANDRA HOSPITAL NHS TRUST

  Chairman:

  Mr. Tom Gibson

  former Hospice Director

  17,145

  422 423

  Occupation/Profession

  Annual remuneration

  (£)

  Non-executive directors:

  Mrs. Audrey Burns

  Housewife

  5,000

  Mr. Allan Durward

  Retired Chief Executive

  5,000

  Mrs. Marion Ford

  Housewife

  5,000

  Mr. Alec Macdonald Gaunt

  Retired Commandant, Erskine Hospital

  5,000

  Mr. George Murray

  Retired Locomotive Driver

  5,000

  ROYAL SCOTTISH NATIONAL HOSPITAL AND COMMUNITY NHS TRUST

  Chairman:

  Mr. Adrian D. Ward

  Solicitor

  17,145

  Non-executive directors:

  Mr. William Hughes

  Company Chairman

  5,000

  Ms Valerie Smart

  Chartered Accountant

  5,000

  Professor Averil Stewart

  College Professor

  5,000

  Mr. David Tarr

  Chief Scientific Engineer

  5,000

  Dr. Peter Williams

  Senior Engineer

  5,000

  SOUTH AYRSHIRE HOSPITALS NHS TRUST

  Chairman:

  Mr. J. Douglas Brown

  Retired Surgeon

  17,145

  Non-executive directors:

  Mr. William M. Mowatt

  Chartered Accountant

  5,000

  Mr. Harold J. Currie

  Business Consultant

  5,000

  Mr. Graeme McKinstry

  Solicitor

  5,000

  Mrs. Anne Wilson

  Housewife

  5,000

  Mrs. Dorothy McLellan

  Housewife

  5,000

  SOUTHERN GENERAL HOSPITAL NHS TRUST

  Chairman:

  Mr. Andrew Garland

  Partner, Construction Company

  19,285

  Non-executive directors:

  Mr. Robert McEwan

  Retired Director, Scottish Development Agency

  5,000

  Mrs. Ann Moore

  Solicitor

  5,000

  Mrs. Agnes Stewart

  Tax Adviser

  5,000

  Mr. Henry Tankel

  Retired Surgeon

  5,000

  Mrs. Susan Bell

  Company Director

  5,000

  STIRLING ROYAL INFIRMARY NHS TRUST

  Chairman:

  Mr. George B. McKelvie

  Retired Surgeon

  17,145

  Non-executive directors:

  Mrs. Agnes Bowie

  Company Director

  5,000

  Mr. Graham Houston

  Head of Industrial Society

  5,000

  Mrs. Doris Littlejohn

  President, Industrial Tribunals

  5,000

  Mr. Graeme Simmers

  Retired Company Chairman

  5,000

  Mrs. Anne Walker

  University Research Fellow

  5,000

  VICTORIA INFIRMAR NHS TRUST

  Chairman:

  Dr. John L. C. Dall

  Retired Physician

  19,285

  Non-executive directors:

  Dr. Robert Colville

  Retired General Practitioner

  5,000

  Mrs. Danielle Glasser

  Solicitor

  5,000

  Mrs. Lorna Howieson

  Pharmacist

  5,000

  Mrs. Alison Gilchrist

  Company Director

  5,000

  Mr. Desmond O'Brien

  Chartered Accountant

  5,000

  WEST LOTHIAN NHS TRUST

  Chairman:

  Mr. Robert S. Watt

  Chairman of Livingston Development Corporation

  19,285

  Non-executive directors:

  Mr. Thomas Bennie

  Retired Banker

  5,000

  Mr. Jack Cunningham

  Retired Trade Union Secretary

  5,000

  Mrs. Irene Douglas

  Company Accountant

  5,000

  Mr. Peter Johnston

  School Teacher

  5,000

  Mrs. Carole Stevenson

  Housewife

  5,000

  424 425

  Occupation/Profession

  Annual remuneration

  (£)

  YORKHILL NHS TRUST

  Chairman:

  Mrs. Joan Cameron

  Housewife

  19,285

  Non-executive directors:

  Dr. John Davidson

  Retired Consultant Radiologist

  5,000

  Mrs. Margaret Hall

  Solicitor

  5,000

  Mr. Ronald Cleland

  Partner, Recruitment Consultancy

  5,000

  Mrs. Gwendoline Garner

  Field Worker, Action for Sick Children

  5,000

  Mrs. Sally Kuenssberg

  Children's Panel Training Organiser

  5,000

  Executive directors are appointed directly by trust boards, which also determine their salaries.

  In addition to the remuneration payable, the chairmen and non-executive directors are entitled to claim travelling and subsistence allowances at rates set for members of public bodies.

  Occupation/ profession

  Annual remuneration

  (£)

  ARGYLL AND CLYDE HEALTH BOARD

  Chairman:

  Mr. R. R. Reid

  Farmer

  17,700

  Non-executive members:

  Mr. M. D. Jones

  Company Director

  5,000

  Mrs. E. S. Lander

  Company Director

  5,000

  Mrs. J. C. Le Roux

  Housewife

  5,000

  Dr. J. Moffat

  Retired Consultant Psychiatrist

  5,000

  Mrs. S. Nelson

  Primary School Teacher

  5,000

  Mr. C. H. Parker

  Company Director

  5,000

  Executive members:

  Mr. I. C. Smith

  General Manager

  —

  Dr. A. A. Reid

  Director of Public Health

  —

  AYRSHIRE AND ARRAN HEALTH BOARD

  Chairman:

  Mr. J. W. G. Donaldson

  Electrical Engineer

  14,835

  Non-executive members:

  Dr. K. G. Fegan

  General Medical Practitioner

  5,000

  Mr. J. H. Greene

  Solicitor

  5,000

  Miss M. W. Grosset

  Company Secretary

  5,000

  Miss K. A Paterson

  Retired Nurse

  5,000

  Mrs. E. Reid

  Health Carer

  5,000

  Mr. W. Young

  Company Director

  5,000

  Executive members:

  Mr. J. M. Eckford

  General Manager

  —

  Mr. N. R. Lammie

  Director of Finance

  —

  Mrs. M. Durie

  Director of Quality and Service Development/Chief Area Nursing Officer

  —

  Dr. A. D. W. Walker

  Director of Health Planning and Public Health

  —

  BORDERS HEALTH BOARD

  Chairman:

  Mr. D. A. G. Kilshaw

  Solicitor

  11,960

  Non-executive members:

  Rev. A. Bennett

  Minister

  5,000

  Miss M. Marshall

  Chartered Secretary

  5,000

  Mr. J. P. Metcalfe

  Retired Company Chairman

  5,000

  Dr. A. G. Paton

  Retired General Practitioner

  5,000

  Lady Sanderson

  Business Consultant

  5,000

  Mr. H. S. U. Steven

  NFU Secretary

  5,000

  426
  Mr. McLeish
  To ask the Secretary of State for Scotland if he will give for each of the health boards the names of the chairman and board members, their occupations or professions and their level of allowances or remuneration payable.

  Mr. Stewart
  [holding answer 10 May 1993]: The information requested is as follows:
  427

  Occupation/profession

  Annual remuneration

  (£)

  Executive members:

  Mr. D. A. Peters

  General Manager

  —

  Dr. I. A. McDonald

  Director of Public Health

  —

  Mr. J. S. Wilson

  Director of Finance

  —

  Mrs. A. Weston

  Director of Quality Assurance/Chief Area Nursing Officer

  —

  DUMFRIES AND GALLOWAY HEALTH BOARD

  Chairman:

  Mr. J. A. McIntyre

  Farmer

  11,960

  Non-executive members:

  Mrs. V. M. I. Jardine, Paterson

  Housewife

  5,000

  Mr. H. S. McFadzean

  Farmer

  5,000

  Dr. J. R. C. Stubbs

  Retired Anaesthetist

  5,000

  Mrs. M. J. Thomson

  Former Member, South of Scotland Electricity Board

  5,000

  Mrs. J. D. Tulloch

  Company Director

  5,000

  Dr. A. P. D. Wilkinson

  General Practitioner

  5,000

  Executive members:

  Mr. D. J. Banks

  General Manager

  —

  Mr. D. McEachran

  Director of Finance

  —

  Mr. P. J. Kelly

  Director of Quality/Chief Area Nursing Officer

  —

  Mr. P. Milligan

  Director of Contracts and Planning

  —

  Dr. I. MacLean

  Director of Public Health

  —

  FIFE HEALTH BOARD

  Chairman:

  Mr. R. Baker

  Company Director

  14,835

  Non-executive members:

  Mrs. S. L. Aitken

  Housewife

  5,000

  Dr. A. C. A. Alexander

  General Practitioner

  5,000

  Mr. F. J. R. Craig

  Company Director

  5,000

  Mrs. M. Steedman

  Retired Headmistress

  5,000

  Mrs. C. Stenhouse

  Housewife

  5,000

  Mr. G. M. Thomson

  Chartered Accountant

  5,000

  Executive members:

  Dr. I. S. Jones

  Director of Public Health

  —

  Mr. M. D. Murray

  Director of Finance

  —

  Mrs. J. Edey

  Director of Strategic Planning and Contracts

  —

  FORTH VALLEY HEALTH BOARD

  Chairman:

  Mrs. J. I. D. Isbister

  Mental Welfare Commissioner

  14,835

  Non-executive members:

  Mr. E. T. M. Bell-Scott

  Solicitor

  5,000

  Mr. K. Harding

  Newsagent

  5,000

  Dr. G. B. Hastings

  Unit Director, Strathclyde University

  5,000

  Mr. P. A. Joynson

  Chartered Surveyor

  5,000

  Mrs. K. A. Smith

  Emergency Services Organiser, WRVS

  5,000

  Mr. C. S. R. Stroyan

  Solicitor

  5,000

  Executive members:

  Dr. D. C. Moir

  Director of Public Health

  —

  Mr. D. F. Hird

  Director of Finance

  —

  GRAMPIAN HEALTH BOARD

  Chairman:

  Dr. C. A. MacLeod

  Company Chairman

  20,180

  Non-executive members:

  Mr. J. K. O. Arbuthnott

  Estate Owner/Manager

  5,000

  Mrs. C. A. Ferguson

  Housewife/Farmer

  5,000

  Mr. G. McLellan

  Senior Executive

  5,000

  Professor D. Ogston

  University Professor

  5,000

  Mrs. M. E. L. Park

  Solicitor

  5,000

  Mrs. J. G. A. Wisely

  Housewife

  5,000

  Executive members:

  Mr. F. Hartnett

  General Manager

  —

  428 429

  Occupation/profession

  Annual remuneration

  (£)

  Mr. A. J. Cumming

  Director of Finance

  —

  Dr. H. R. M. Wilson

  Director of Contracts

  —

  Ms H. Blumer

  Director of Planning

  —

  Dr. G. Paterson

  Director of Public Health

  —

  GREATER GLASGOW HEALTH BOARD

  Chairman:

  Mr. W. S. Fyfe

  Company Chairman

  25,140

  Non-executive members:

  Rev. R. D. M. Campbell

  Minister

  5,000

  Mr. P. W. Hoist

  Company Director

  5,000

  Professor R. M. Mackie

  University Professor

  5,000

  Mr. W. C. McCreath

  Solicitor

  5,000

  Mrs. J. Mackenzie

  Housewife

  5,000

  Mr. P. H. L. I. Runciman

  Retired Company Chairman

  5,000

  Mr. A. Scobbie

  Managing Director

  5,000

  Executive members:

  Mr. L. E. Peterken

  General Manager

  —

  Dr. G. D. Forwell

  Director of Public Health

  —

  Mr. C. M. Gordon

  Director of Finance

  —

  Mr. T. A. Divers

  Director of Planning and Contracts

  —

  HIGHLAND HEALTH BOARD

  Chairman:

  Mr. J. D. M. Robertson

  Company Chairman

  14,835

  Non-executive members:

  Mr. J. G. Ligertwood

  Retired Bank Manager

  5,000

  Dr. D. J. MacDonald

  Retired General Practitioner

  5,000

  Mr. D. J. Mackay

  Chief Executive

  5,000

  Mrs. A. MacPherson

  Farm Business Partner

  5,000

  Mr. C. Neilson

  Retail Businessman

  5,000

  Mrs. C. Thomson

  Company Director

  5,000

  Executive members:

  Mr. R. R. W. Stewart

  General Manager

  —

  Dr. G. V. Stone

  Director of Public Health

  —

  Mr. M. Iredale

  Director of Finance

  —

  Mr. D. T. Wright

  Director of Quality Assurance/Chief Area Nursing Officer

  —

  LANARKSHIRE HEALTH BOARD

  Chairman:

  Mr. I. L. Livingstone

  Solicitor

  17,700

  Non-executive members:

  Dr. W. Criggie

  General Practitioner

  5,000

  Mrs. A. S. Hinshalwood

  Housewife

  5,000

  Mrs. M. Melvin

  Teacher

  5,000

  Mr. D. A. Millar

  Business Consultant

  5,000

  Mr. J. P. Robinson

  Retired Colliery Official

  5,000

  Mr. J. Thomson

  Director, Voluntary Organisation

  5,000

  Executive members:

  Mr. F. Clark

  General Manager

  —

  Dr. J. B. P. Ferguson

  Director of Public Health

  —

  Mr. M. Docherty

  Director of Finance

  —

  Mr. B. Gill

  Director of Corporate Planning and Estates

  —

  Miss E. Hastings

  Director of Quality Assurance/Chief Area Nursing Officer

  —

  LOTHIAN HEALTH BOARD

  Chairman:

  Dr. J. W. Baynham

  Company Director

  22,660

  Non-executive members:

  Professor R. C. B. Aitken

  University Professor

  5,000

  Mrs. G. Barton

  Housewife

  5,000

  Mr. J. A. Campbell

  Chartered Surveyor

  5,000

  Mr. R. Findlay

  Chief Executive, Radio Forth

  5,000

  Mrs. M. B. M. Knox

  Housewife

  5,000

  Mr. G. S. Millar

  Community Pharmacist

  5,000

  430 431

  Occupation/profession

  Annual remuneration

  (£)

  Executive members:

  Mr. J. Lusby

  General Manager

  —

  Dr. H. Zealley

  Director of Public Health

  —

  Mr. P. Wilson

  Director of Operations

  —

  Dr. L. Burley

  Director of Planning and Development

  —

  ORKNEY HEALTH BOARD

  Chairman:

  Mr. J. Leslie

  Pharmacist

  7,200

  Non-executive members:

  Mr. J. Flett

  Solicitor

  2,000

  Mr. E. M. Gibson

  Retired Assistant Headteacher

  2,000

  Captain M. Gunn

  Ships Master

  2,000

  Mrs. E. B. Kerr

  Housewife

  2,000

  Mr. J. Rendall

  Sub-Postmaster/Postman

  2,000

  Dr. J. S. Walker

  General Practitioner

  2,000

  Executive members:

  Mr. R. Allan

  Director of Finance

  —

  SHETLAND HEALTH BOARD

  Chairman:

  Mrs. F. B. Grains

  Housewife

  7,200

  Non-executive members:

  Mrs. M. U. Colligan

  Retired Teacher

  2,000

  Squadron Leader B. P. Gregson

  Local Government Officer

  2,000

  Dr. M. D. Hunter

  General Practitioner

  2,000

  Mr. R. L. Johnson

  Retired Businessman

  2,000

  Mrs. T. A. Leslie

  Teaching Auxiliary

  2,000

  Mr. J. Telford

  Chartered Accountant

  2,000

  Executive members:

  Mr. B. Atherton

  General Manager

  —

  Dr. D. Cox

  Director of Public Health

  —

  Mr. D. P. P. Eva

  Director of Finance

  —

  Mrs. M. Henderson

  Director of Contracts and Standards/ Chief Area Nursing Officer

  —

  TAYSIDE HEALTH BOARD

  Chairman:

  Mr. J. C. MacFarlane

  Retired Company Director

  20,180

  Non-executive members:

  Rev. K. Campbell

  Minister

  5,000

  Mr. D. W. M. Davidson

  Pharmacist

  5,000

  Mrs. V. Joiner

  Company Director

  5,000

  Mr. H. C. Nicoll

  Retired Local Government Officer

  5,000

  Professor R. E. Olver

  University Professor

  5,000

  Mr. I. Sandison

  Retired Company Director

  5,000

  Executive members:

  Dr. R. C. Graham

  General Manager

  —

  Dr. L. Cameron

  Director of Public Health

  —

  Mr. J. R. Hudson

  Director of Finance

  —

  Miss E. Edwards

  Chief Area Nursing officer/Director of Quality

  —

  WESTERN ISLES HEALTH BOARD

  Chairman:

  Mr. A. Matheson

  Pharmacist

  7,200

  Non-executive members:

  Dr. S. M. Brydon

  General Practitioner

  2,000

  Mr. J. A. Harrison

  Deputy Head Teacher

  2,000

  Mr. A. W. Hay

  Retired Sales Director

  2,000

  Mrs. C. R. MacAskill

  Housewife

  2,000

  Mrs. F. M. T. MacDonald

  Solicitor

  2,000

  Mr. M. MacLennan

  Building Society Manager

  2,000

  Executive members:

  Mr. G. Stobbs

  Director of Finance and Contracts

  —

  432 433
  Executive members are employees of health boards and receive no additional remuneration for board membership. In addition to the remuneration indicated above, non-executive members are entitled to claim travelling and subsistence allowances at rates set for members of public bodies.

  Mr. McLeish
  To ask the Secretary of State for Scotland if he will list(a) the public bodies for which he is responsible, (b) their overall expenditure in 1992–93 for the most recent year for which figures are available, (c) the total number of people appointed to these bodies, (d) the number of males and females and (e) the total sum paid in allowances or salaries or other types of remuneration.

  Mr. Lang
  [holding answer 10 May 1993]: I refer the hon. Member to the Cabinet Office publication "Public Bodies 1992" which was published on 29 January 1993 and a copy of which is available in the Library. This publication includes information on expenditure, membership and remuneration for the bodies for which I am responsible.

  NHS Funding
  Mrs. Fyfe
  To ask the Secretary of State for Scotland what are the criteria used to assess whether or not a service should receive NHS funding.

  Mr. Stewart
  [holding answer 10 May 1993]: Section 1 of the National Health Service (Scotland) Act 1978 provides that it shall continue to be the duty of the Secretary of State to promote in Scotland a comprehensive and integrated health service designed to secure improvement in the physical and mental health of the people of Scotland, and the prevention, diagnosis and treatment of illness. Within that framework health boards are responsible for assessing the health needs of the population in their areas and for determining their own priorities for purchasing or providing services to meet these needs from the general resources allocated to them. Central funding is now authorised only where it is necessary to facilitate the introduction and orderly provision and development of new high-cost, low-throughput priority services with good success rates, such as heart or liver transplantation.

AGRICULTURE, FISHERIES AND FOOD

  Whaling
  Mr. Llew Smith
  To ask the Minister of Agriculture, Fisheries and Food what proposals are being put forward by Her Majesty's Government to the 45th meeting of the International Whaling Commission in Kyoto, Japan from 10 to 14 May; and what are his objectives for the meeting.

  Mr. Curry
  The Government's primary objective is to secure a continuation of the present international moratorium on commercial whaling. We have made it very clear that we cannot even contemplate the lifting of the present moratorium until we are satisfied about the state of stocks; have full agreement on effective measures for their management, including a transparent and rigorous means for enforcement and inspection; and have humane methods of killing whales.

  At the IWC meeting, we shall be looking for positive responses to the United Kingdom resolutions, adopted at
  434
  last year's meeting. on an 11-point action plan for future work on humane killing and on the concerns we highlighted relating to the Faroese pilot whaling drive fishery. We will be pressing for progress on considering the French proposal for an Antarctic whale sanctuary and on pursuing the United Kingdom resolution, adopted last year, on environmental threats to whales in the Antarctic and elsewhere. We shall continue to oppose "scientific" whaling that fails to meet two important pre-conditions: the IWC must be satisfied that the stocks of whales involved are in good condition and that the research is essential in providing information which cannot be obtained by non-lethal means. We aim to pursue improved protection, under IWC auspices, for small cetaceans. And we are producing a paper for discussion at the meeting that seeks IWC support for our proposals to encourage the growth and proper regulation of whale watching as a non-lethal and non-damaging means of exploiting whale resources.

  Minimum Sugar Requirement
  Mr. Faber
  To ask the Minister of Agriculture, Fisheries and Food when the Government intend to abolish the minimum sugar requirement; and whether they intend to introduce a maximum caffeine limit in soft drinks.

  Mr. Soames
  The Government have today laid before Parliament regulations revoking the requirement in the Soft Drinks Regulations 1964 and the parallel regulations in Scotland, for a minimum amount of sugar to be added during the manufacture of soft drinks. Given current dietary advice on reducing sugar intake, it is clearly sensible to remove this statutory limit. It is also a step in the direction of deregulation, in that it would leave manufacturers free to decide themselves whether or not sugar should be added during the manufacture of soft drinks. We are looking at the remainder of the regulations as part of the Government's deregulation exercise.

  We have decided, at this stage, not to introduce a maximum caffeine limit for soft drinks. I have asked the Food Advisory Committee to review its 1988 recommendation about the need for such a limit, as there appears to have been no reported adverse affects on young children following the introduction of high-caffeine soft drinks. Also, any restriction would have only a limited effect as it could not apply to soft drinks manufactured and imported from other EC member states. I want to be sure that there is a real need for any limit before proceeding in this direction.

WALES

  Tourism
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish figures showing the percentage of British domestic non-business visitors to Wales staying in(a) licensed hotels, (b) unlicensed hotels/guest houses/bed and breakfast, (c) holiday camps, (d) camping, (e) touring caravan, (f) static caravan, (g) rented property, (h) second home and (i) other in each year from 1985 onwards.

  Sir Wyn Roberts
  The information requested is given in the following table:
  435
  Second home3244224

  Other 202930262629

  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish figures showing the percentage of British domestic non-business visitors to Wales staying in(a) licensed hotels, (b) unlicensed hotels/guest houses/bed and breakfast, (c) holiday camps, (d) camping, accommodation,(e) touring caravan, (f) static caravan, (g) rented property, (h) second home and (i) other in each year from 1985 onwards; and if he will break the figures down to include (i) all overseas visitors, (ii) European visitors and (iii) visitors from the rest of the world.

  Sir Wyn Roberts
  The information requested that is available is given in the following table:

  Overseas visitors to Wales

  19911

  Percentage

  Licensed hotels

  21

  Unlicensed hotels/ guest houses/ bed and breakfast

  29

  Camping

  5

  Location of holidays by domestic (United Kingdom) visitors to Wales1

  Percentage

  1985

  1986

  1987

  1988

  1990

  1991

  Seaside

  49

  48

  34

  47

  54

  61

  Small town

  6

  9

  8

  7

  16

  13

  Large city/large town

  4

  5

  10

  12

  8

  9

  Countryside/village

  33

  31

  43

  27

  26

  21

  Not specified

  8

  8

  6

  9

  —

  —

  1 Information is not available for 1989.

  Source:

  1985 British Home Tourism Survey

  1986–88 British Tourism Survey (monthly)

  1990–91 United Kingdom Tourism Survey

  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish figures showing the mode of transport used by British domestic tourists visiting Wales, showing the

  Mode of transport used by British domestic tourists visiting Wales

  percentage

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  Car

  78

  72

  80

  83

  81

  83

  85

  Scheduled bus/coach

  4

  4

  4

  3

  5

  4

  3

  Coach tour

  3

  6

  5

  2

  4

  3

  3

  Train

  6

  6

  5

  6

  6

  5

  4

  Other

  9

  12

  6

  6

  4

  5

  5

  Source:

  1985 British Home Tourism Survey

  1986–88 British Tourism Survey (Monthly)

  1990–91 United Kingdom Tourism Survey
  436

  Percentage

  Touring caravan

  1

  Static caravan

  1

  Rented property

  2

  Other

  41

  1 Information is not available for previous years.

  Source; Overseas Visitor Survey.

  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish figures showing the location of holidays undertaken by British domestic tourists in Wales in each year from 1985 onwards indicating the percentage staying(a) at the seaside, (b) in a small town, (c) in a large town, (d) in the countryside and (e) unspecified.

  Sir Wyn Roberts
  The information requested is given in the following table:

  percentage travelling (a) by car, (b) by scheduled bus/coach (c) by coach tour, (d) by train and (e) other in each year since 1985.

  Sir Wyn Roberts
  The information requested is given in the following table:
  437
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will publish figures showing the distribution of British domestic tourists in Wales in each year since 1985 indicating(a) the number of trips, (b) the number of nights stayed and (c) the amount spent in (i) north Wales, (ii) mid-Wales, (iii) south Wales and (iv) Wales, unspecified.

  Sir Wyn Roberts
  The information requested is in the following table:

  Domestic tourists in Wales

  Millions

  Trips

  Nights

  Amount spent

  (£)

  1985

  North Wales

  4·3

  21·0

  194

  Mid Wales

  2·0

  9·0

  96

  South Wales

  4·7

  20·0

  210

  1986

  North Wales

  4·4

  24·0

  177

  Mid Wales

  2·4

  12·0

  121

  South Wales

  5·2

  24·0

  202

  1987

  North Wales

  4·0

  18·0

  216

  Mid Wales

  1·7

  9·5

  123

  South Wales

  5·6

  22·5

  246

  1988

  North Wales

  3·5

  19·0

  256

  Mid Wales

  1·9

  8·0

  100

  Accommodation used by British domestic tourists in Wales—All tourism trips

  Percentage

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  Hotels/guest houses/bed and breakfasts

  18

  20

  15

  23

  16

  21

  17

  Self catering

  12

  9

  7

  7

  7

  13

  11

  Holiday camps

  4

  3

  2

  4

  3

  3

  4

  Other

  66

  68

  76

  66

  74

  63

  68

  Source:

  1985 British Home Tourism Survey

  1986–88 British Tourism Survey (monthly)

  1989–91 United Kingdom Tourism Survey

  Athrawon Bro Teachers
  Mr. Dafis
  To ask the Secretary of State for Wales if he will make a statement outlining the effect of the proposed unitary authorities in Wales upon the deployment of Athrawon Bro teachers.

  Mr. David Hunt
  Responsibility for the development of teams of mobile teachers or expert advisers concerned with teaching Welsh as a second language in junior schools would be a matter for the new authorities. It would thus be for the shadow authorities to consider and set out their proposals for such teachers in their service delivery plans.

  Maternity Services
  Ms Primarolo
  To ask the Secretary of State for Wales if he will list the hospitals in Wales which had consultant obstetric and/or general practitioner maternity beds in 1991–92 and 1992–93, with the numbers of beds of each type in each hospital in each year.
  438

  Trips

  Nights

  Amount spent

  (£)

  South Wales

  5·6

  23·0

  269

  1989

  North Wales

  3·3

  16·5

  433

  Mid Wales

  1·3

  6·1

  123

  South Wales

  4·9

  20·5

  430

  1990

  North Wales

  3·0

  15·0

  364

  Mid Wales

  1·6

  7·2

  157

  South Wales

  3·8

  14·7

  377

  1991

  North Wales

  3·2

  15·9

  425

  Mid Wales

  1·4

  6·7

  145

  South Wales

  4·2

  17·7

  430

  Source:

  1985 British Home Tourism Survey.

  1986–1988 British Tourism Survey (Monthly).

  1989–1991 United Kingdom Tourism Survey.

  Mr. Llwyd
  To ask the Secretary of State for Wales what percentage of British domestic tourists in Wales in each year since 1985 used(a) hotels/guest houses/bed and breakfast, (b) self-catering, (c) holiday camp and (d) other accommodation.

  Sir Wyn Roberts
  The information requested is given in the following table:

  Mr. Gwilym Jones
  The information for 1991–92 is given in the following table. Information for 1992–93 is not yet available.

  Average daily available beds

  Hospital

  Obstetric

  General practioner maternity

  Clwyd:

  H M Stanley

  51·0

  —

  Ysbyty Maelor

  49·5

  —

  Llangollen

  —

  4·5

  Catherine Gladstone

  —

  8·0

  Chirk Community

  —

  3·0

  East Dyfed:

  West Wales General

  32·0

  —

  Bronglais

  16·0

  —

  Gwent:

  Nevill Hall

  46·0

  10·0

  Royal Gwent

  80·8

  9·0

  Gwynedd

  St. Davids

  61·0

  —

  Bryn Beryl

  —

  5·0

  Dollgellau and Barmouth

  —

  7·0

  Tywyn and District

  —

  2·3

  439

  Average daily available beds

  Hospital

  Obstetric

  General practioner maternity

  Mid Glamorgan:

  Prince Charles

  29·9

  —

  Aberdare

  15·2

  3·8

  Merthyr General

  12·5

  —

  Princess of Wales

  38·0

  —

  Caerphilly District Miners

  41·0

  —

  East Glamorgan

  52·9

  —

  Pembrokeshire:

  Withybush

  31·5

  8·4

  Powys:

  Llandrindod Wells

  —

  4·0

  Llanidloes

  —

  4·2

  Montgomery County Infirmary

  —

  4·0

  Victoria Memorial

  —

  8·0

  Bro Ddyfi

  —

  2·0

  Knighton

  —

  2·0

  Breconshire War Memorial

  —

  6·0

  Builth Cottage

  —

  3·0

  South Glamorgan:

  University Hospital of Wales

  71·0

  —

  Llandough

  65·5

  —

  West Glamorgan:

  Singleton

  74·0

  —

  Morriston

  10·1

  —

  Gorseinon

  6·0

  —

  Neath General

  38·5

  —

  Wales Council for the Disabled
  Mr. Llew Smith
  To ask the Secretary of State for Wales when he last met officials from the Wales Council for the Disabled; what was discussed; and when he next expects to meet the council.

  Mr. Gwilym Jones
  I have not yet met Wales Council for the Disabled, but my officials have very close contact with the organisation, which receives substantial support from the Welsh Office—for example, grant aid of £315,000 in 1992–93.

  NHS Trusts
  Mr. Llew Smith
  To ask the Secretary of State for Wales when the Parliamentary Under-Secretary was invited to meet the staff side officers of the Joint Staff Consultative Council for the Welsh health service to discuss industrial relations in some NHS trusts; what was his response; and if he will make a statement.

  Mr. Gwilym Jones
  A meeting was proposed in a letter dated 6 April. NHS trusts have operational freedom to manage their own affairs, including the conduct of industrial relations with staff interests. The matters raised should be discussed with the NHS trusts concerned and a meeting with me would not be helpful. My private secretary replied accordingly on 28 April.

  Agriculture
  Mr. Jonathan Evans
  To ask the Secretary of State for Wales what proportion of Welsh gross domestic product is currently provided by Welsh agriculture.
  440
  Mr. David Hunt
  Provisional figures for 1991 show that agriculture, forestry and fishing accounted for 2·1 per cent. of Welsh gross domestic product.

  Doctors' Hours of Work
  Mr. Morgan
  To ask the Secretary of State for Wales, pursuant to his answer of 28 April,Official Report, column 413, over what period of time the maximum average of 83 hours of work per week by junior doctors is calculated; and what consultations he has had with health authorities and NHS trusts as to whether any junior doctor is working, on average, above 83 hours per week in breach of contract.

  Mr. Gwilym Jones
  The average weekly hours of duty for junior doctors is calculated over their normal rostered duty period. Health authorities and NHS trusts have recently been asked to report on the hours of duty of all for junior doctors

  Welsh Language
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will list the forms and publications that have been produced by his Department for General publication within the last six months indicating which of these have been produced in the Welsh language or bilingually in Welsh and English.

  Sir Wyn Roberts
  Comprehensive information in the form requested is not held centrally and could be obtained only at disproportionate cost.

  Aggregates Industry
  Mr. Llew Smith
  To ask the Secretary of State for Wales what recent representations he has received regarding plans by the aggregates industry in Wales to expand their activities.

  Mr. David Hunt
  In response to my Department's recent public consultation on the draft revision of minerals planning guidance note 6 "Guidelines for Aggregates Provision in England and Wales", comments were received from 20 bodies, including local authority, conservation and industry interests.

  Prince of Wales Orthopaedic Hospital
  Mr. Morgan
  To ask the Secretary of State for Wales what consultations he has had with the chairman of the south Glamorgan health authority in relation to the closure of St. Fagan's ward at the Prince of Wales orphopaedic hospital, Rhydlafar.

  Mr. Gwilym Jones
  This is a matter for the health authority. I am not aware of any plans to decommission St. Fagan's ward.

  Dentists
  Mr. Jonathan Evans
  To ask the Secretary of State for Wales (1) whether Powys family health services authority has applied to his Department for authority to employ salaried dentists in the Builth Wells area;

  (2) what action he is taking to secure the availability of national health service dental treatment for patients in areas of South Powys not covered by dentists in Brecon and Hay-on-Wye.
  441
  Mr. Gwilym Jones
  The responsibility for administering NHS general dental services in South Powys rests with the Powys family health services authority. The authority applied to the Department on 5 May for permission to employ a salaried dentist in Builth Wells and the application is being given urgent and careful consideration. In the meantime, the authority is able to help any patient in its area experiencing difficulty in obtaining NHS dental treatment.

  Mr. Ainger
  To ask the Secretary of State for Wales if he will list the number of dentists in Wales who have informed their local family health services authority that they will no longer treat NHS patients in each of the eight FHSAs since April 1992.

  Mr. Gwilym Jones
  This information is not available centrally in the form requested. Fortnightly returns from family health services authorities in Wales indicate that, as a direct result of the new fee scale introduced on 8 July 1992, 29 general dental practitioners gave written notice to have their names removed from FHSA dental lists from 1 August 1992 to 23 April 1993. The figures are as follows, alongside the number of dentists joining the lists in the same period.

  FHSA

  Number of dentists leaving dental lists as a direct result of new fee scale

  Number of dentists joining dental lists

  Clwyd

  10

  11

  Dyfed

  1

  6

  Gwent

  10

  17

  Gwynedd

  1

  5

  Mid Glamorgan

  7

  8

  Powys

  0

  2

  South Glamorgan

  0

  10

  West Glamorgan

  0

  0

  Total

  29

  59

  The information given in these fortnightly returns was intended for general managerial purposes and is not statistically validated.

  Mr. Ainger
  To ask the Secretary of State for Wales (1) how many salaried dentists posts are currently vacant in Wales;

  (2) how many salaried dentists posts he has approved since April 1992.

  Mr. Gwilym Jones
  Approval has been given for Dyfed and Gwynedd family health services authorities to employ a total of six whole-time-equivalent salaried dentists. Both authorities are in the process of identifying suitable applicants and premises.

  Mr. Ainger
  To ask the Secretary of State for Wales what was the number of independent dentists carrying out NHS work in Wales in April 1992 and April 1993 in each of the eight FHSAs.

  Mr. Gwilym Jones
  The information as at 31 March 1992 is given in the following table. Information as at 31 March 1993 is not yet available.

  General dental practitioners carrying out NHS work as at 31 March 1992

  Number

  Clwyd

  116

  Dyfed

  101

  Gwent

  134

  442

  Number

  Gwynedd

  65

  Mid Glamorgan

  140

  Powys

  34

  South Glamorgan

  131

  West Glamorgan

  132

  I will write to the hon. Member as soon as figures for 1993 become available.

  Cancer Services
  Mr. Roger Evans
  To ask the Secretary of State for Wales what are the numbers of cancer registrations in Wales for each of the last five years available; and if he will make a statement.

  Mr. Gwilym Jones
  The latest registration figures for all malignant neoplasms from the Welsh cancer registry are published by the Welsh Office in "Health and Personal Social Services for Wales, No. 19, 1992", available in the Library of the House. These data represent the most reliable published information on cancer registrations.

  The following table shows the number of such registrations and the year-on-year percentage difference.

  Year

  Registration of all malignant neoplasms

  Change of previous year per cent.

  1984

  14,480

  +3·2

  1985

  14,899

  +2·9

  1986

  14,635

  -1·8

  1987

  15,345

  +4·9

  1988

  16,217

  +5·7

  These statistics make no allowance for changes in the age and sex composition of the population. Cancers are more naturally prevalent among the elderly, who form an increasing proportion in the population. Aside from such demographic considerations, increases in the numbers of cancer registrations may be due to earlier diagnosis, more complete reporting of diagnosed cases to the cancer registry, or a real increase in the incidence of cancer.

  Figures are also published by OPCS in its document "Cancer Statistics—Registrations". These differ from those shown in the table. For example, OPCS figures under-record Welsh registrations for 1986 and slightly over-record those for 1987. Differences in the two published sources arise because it has not been possible for OPCS to take on all revisions to the Welsh cancer registry data in time for inclusion in their annual publications. These revisions arise from routine validation and from several substantial data quality improvements made by the Welsh cancer registry staff.

  Part-time Workers
  Mr. Hain
  To ask the Secretary of State for Wales how many(a) women and (b) men are in part-time work in Wales; and what proportion of part-time workers are aged between 50 and 65 years.

  Mr. David Hunt
  Estimates from the labour force survey in autumn 1992 show that the numbers of part-time women and men in employment are 258,000 and 48,000 respectively. Of these, 21 per cent. of women and 25 per cent. of men are aged between 50 and 65 years.
  443
  Part-time work is defined to be that in which staff are contracted to work basic usual hours of up to 30 hours per week.

  Disability Living Allowance
  Mr. Hain
  To ask the Secretary of State for Wales how many(a) men and (b) women in Wales receive disability living allowance; how many in each case are aged between 50 and 65 years; and what percentage of the total Welsh population receives disability living allowance.

  Mr. David Hunt
  This information is not yet available separately for Wales.

  Economically Inactive People
  Mr. Hain
  To ask the Secretary of State for Wales how many people in each(a) district and (b) county in Wales are economically inactive; and what is the total number of people in Wales who are economically inactive.

  Mr. David Hunt
  In the 1991 census the definition of economically inactive includes all those retired, permanently sick, students without a job in the week before the census and other inactive.

  The information requested is given in the following table:

  Residents aged 16 or over economically inactive

  Alyn and Deeside

  21,547

  Colwyn

  22,437

  Delyn

  21,450

  Glyndwr

  14,539

  Rhuddlan

  21,874

  Wrexham Maelor

  38,075

  CLWYD

  139,922

  Carmarthen

  19,821

  Ceredigion

  23,709

  Dinefwr

  15,188

  Llanelli

  30,082

  Preseli Pembrokeshire

  24,482

  South Pembrokeshire

  15,489

  DYFED

  128,771

  Blaenau Gwent

  29,014

  Islwyn

  23,159

  Monmouth

  24,694

  Newport

  43,991

  Torfaen

  30,684

  GWENT

  151,542

  Aberconwy

  20,497

  Arfon

  18,598

  Dwyfor

  10,774

  Meirionnydd

  12,218

  Ynys Mon—Isle of Anglesey

  25,079

  GWYNEDD

  87,166

  Cynon Valley

  24,882

  Merthyr Tydfil

  22,448

  Ogwr

  46,664

  Rhondda

  31,673

  Rhymney Valley

  36,131

  Taff-Ely

  30,084

  MID GLAMORGAN

  191,882

  Brecknock

  14,572

  Montgomeryshire

  16,950

  Radnor

  8,158

  POWYS

  39,680

  444

  Residents aged 16 or over economically inactive

  Cardiff

  91,533

  Vale of Glamorgan

  36,785

  SOUTH GLAMORGAN

  128,318

  Lliw Valley

  22,645

  Neath

  24,865

  Port Talbot

  20,278

  Swansea

  67,136

  WEST GLAMORGAN

  134,924

  TOTAL WALES

  1,002,205

  Training Schemes
  Mr. Hain
  To ask the Secretary of State for Wales how many(a) male and (b) female 16 to 19-year-olds in Wales are on (i) employment training schemes or (ii) youth training schemes; and what is the proportion of 16 to 19-year-olds on those schemes as a percentage of the total Welsh population.

  Sir Wyn Roberts
  The information is not available in the form requested. A breakdown by male and female participation can be drawn from the 1991 census, which recorded residents who were on Government schemes but did not identify type of scheme. Based upon individual household members' assessments of their employment position there were 7,413 males and 4,250 females aged 16 to 19 on a Government scheme. The total of 11,663 represented 7·7 per cent. of the population of that age.

SOCIAL SECURITY

  Disability Allowances
  Mrs. Beckett
  To ask the Secretary of State for Social Security how many residents of Derbyshire are claimants of(a) attendance allowance (i) at higher rate and (ii) at lower rate, (b) disability living allowance (Mobility) (i) at higher rate and (ii) at lower rate, (c) disability living allowance (care) (i) at higher rate, (ii) at middle rate and (iii) at lower rate, (d) disability working allowance and (e) family credit.

  Mr. Scott
  The information is not readily available and could be obtained only at disproportionate cost.

  Benefits (Automatic Credit Transfer)
  Ms Janet Anderson
  To ask the Secretary of State for Social Security (1) if he will list, by parliamentary constituency, the number of recipients of pensions and benefits paid through a(a) sub-post offices, (b) main post offices and (c) automatic credit transfer;

  (2) what discussions he has had with representatives of banks and building societies about the transfer of benefits and pensions payments to automatic credit transfer; and if he will make a statement;

  (3) how much his Department has budgeted during 1993–94 for research, piloting, changes to form design and to leaflets, and to other information available from the

  445
  Benefits Agency seeking to persuade recipients of pensions and benefits to switch to payment by automatic credit transfer; and if he will make a statement;

  (4) what discussions he has had with (a) Post Office Counters Ltd. and (b) trade unions representing post office workers about the transfer of benefits and pensions payments to automtic credit transfer; and if he will make a statement;

  (5) pursuant to his answer of 26 April, Official Report, column 313, on payment of benefits by automated credit transfer, whether he has estimated how many of the pension and benefit recipients currently paid through sub and main post offices hold bank or building society accounts; and if he will make a statement.

  Mr. Burt
  My right hon. Friend the Secretary of State announced in the uprating statement on 12 November proposals to extend the payment of benefits by automated credit transfer (ACT). Budgets for 1993–94 include £3·5 million to encourage existing customers to select payment by ACT. In 1991 it was estimated that of those paid through the Post Office, 65 per cent. held bank or building society accounts. Details, by parliamentary constituency, of the number of recipients of pensions and benefits paid through sub-post offices, main post offices and ACT are not available.

  Officials have held discussions with representatives of banks and building societies regarding technical matters arising from the extension of ACT to other benefits, as announced in the citizens charter. Post Office Counters Ltd. was aware of our proposals to encourage the use of ACT. My right hon. Friend the Secretary of State for Social Security has not met representatives of POCL or of post office workers, but he would consider positively any request for such a meeting.

  Disabled People
  Mr. Llew Smith
  To ask the Secretary of State for Social Security what recent representations he has received from the National Federation of Housing Associations regarding plans by the Housing Agency to increase rents for disabled people living in housing association homes.

  Mr. Burt
  So far as I am aware, the Department has received no representations on this subject.

  Regulations
  Mr. Sproat
  To ask the Secretary of State for Social Security if he will place in the Library a list of all the regulations for which his Department is currently responsible, with a descriptive title for each individual regulation.

  Miss Widdecombe
  [pursuant to her reply, 8 February 1993, c. 499–500]: "The Law Relating to Child Support" is available in the Library.

EMPLOYMENT

  Training
  Ms Short
  To ask the Secretary of State for Employment in what circumstances European Community nationals may count periods of unemployment in which they were in receipt of benefit in another EC country towards the qualifying period of unemployment 446
  for eligibility for training for work, learning for work and the community action programme; and if she will make a statement.

  Mr. McLoughlin
  A person must register with the employment service in this country as unemployed for at least 26 weeks in order to qualify for training for work. Detailed eligibility rules for learning for work and community action have yet to be finalised.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people were on the employment training scheme in each month since April 1992.

  Mr. McLoughlin
  The information requested is given in the following table:

  Employment training number in training (Great Britain) April 1992 to March 1993

  Month

  Number

  April

  140,000

  May

  130,000

  June

  127,000

  July

  120,000

  August

  113,000

  September

  113,000

  October

  122,000

  November

  129,000

  December

  129,000

  January

  129,000

  February

  134,000

  March

  135,000

  Source: Employment Service.

  Footnote: Includes those with employed status.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people(a) entered and (b) left youth training in each month since April 1992.

  Mr. McLoughlin
  The information requested is given in the following table:

  Youth training (including youth credits) starts and leavers (Great Britain) April 1992 to February 1993

  Month

  Starts

  Leavers

  April

  12,000

  16,000

  May

  12,000

  16,000

  June

  28,000

  27,000

  July

  37,000

  35,000

  August

  28,000

  30,000

  September

  34,000

  38,000

  October

  35,000

  26,000

  November

  22,000

  18,000

  December

  18,000

  17,000

  January

  11,000

  12,000

  February

  19,000

  17,000

  Source:

  OSMOSIS, Scottish and Welsh Management Information Systems

  Footnotes:

  Figures are provisional

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people(a) entered and (b) left employment training in each month since 1992.

  Mr. McLoughlin
  The information requested is given in the following table:
  447

  Employment Training Starts and leavers (Great Britain)

  April 1992 to February 1993

  Month

  Starts

  Leavers

  April

  18,000

  24,000

  May

  21,000

  22,000

  June

  19,000

  24,000

  July

  21,000

  26,000

  August

  19,000

  22,000

  September

  22,000

  23,000

  October

  33,000

  24,000

  November

  26,000

  21,000

  December

  24,000

  21,000

  January

  12,000

  15,000

  February

  27,000

  23,000

  Source: OSMOSIS, Scottish and Welsh Management Information Systems.

  Note: Figures are provisional.

  European Social Affairs Council
  Mr. Llew Smith
  To ask the Secretary of State for Employment what proposals were put forward by Her Majesty's Government, and what decisions taken, at the European Social Affairs Council meeting on unemployment, held in Nyborg on 3 and 4 May.

  Mr. Michael Forsyth
  The European meeting held in Nyborg on 3 and 4 May was an informal meeting of EC Employment Ministers, not a Council meeting; I represented the United Kingdom. No decisions are taken at informal meetings of EC Ministers.

  There were discussions about employment in the Community and the social dialogue between employers and trades unions at European level; in addition, the Commission presented its plans for preparing a Green Paper on social policy.

  During the discussion on employment and the social dialogue, I stresed that Community action in the social affairs area needed to improve the working of the labour market and encourage the creation of jobs, and must not inhibit the competitiveness and flexibility of Community businesses. I also stated the Government's belief that Community resources, in particular the European social fund, should continue to be concentrated on programmes to help those at the greatest disadvantage in the labour market, especially the long-term unemployed.

  In this discussion, UNICE—the main European employers' association—made it clear that its priority, too, was the restoration of Community competitiveness, given recent indications that the EC is falling behind in world markets, and called for the abandonment of EC measures which it considered would damage jobs, including a number in the field of employment and industrial relations law.

  In accordance with the resolution adopted by the Council during the United Kingdom presidency, I expect that there will be a further discussion on employment and unemployment in the Community at the next Council meeting on 1 June. The Commission is likely to bring forward suggestions for the Council to consider then.

  Unemployment Register
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people claiming unemployment benefit came off the register as a result of adjudication decisions and disallowances by type in each month from 1 April 1992 to 31 March 1993.

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

  Letter from M. E. G. Fogden to Mr. Tony Lloyd, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about how many people came off the register as a result of adjudication decisions and disallowances by type in each month from 1 April 1992 to 31 March 1993. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  Unfortunately, I am not able to provide the information you have requested as not all clients notify my local offices of the reasons for stopping their claim. An adverse adjudication decision does not remove a person from the unemployed register. In certain circumstances, people whose claim for unemployment benefit is disallowed, continue to register as unemployed in order to receive other benefits such as Income Support and National Insurance contributions credits. If a person disagrees with an adjudication decision, they are advised to continue to register as unemployed to avoid the possibility of losing entitlement to benefit should their appeal to a Social Security Appeal Tribunal succeed.

  Although information is not available in the format you requested, statistics on the volumes and types of adjudication decisions, nationally and by originating region, are collated and published quarterly. The reports, entitled "Analysis of Adjudication Officers' Decisions", have recently been revised to include the percentage of adverse decisions. At the time of writing, reports for the period up to and including September 1992 have been published and are available in the Library.

  I am sorry I cannot be more helpful on this occasion.

  As decided by the Administrative Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Fraudulent Claims
  Mr. Worthington
  To ask the Secretary of State for Employment how many claimants have been deemed to have made fraudulent unemployment benefits claims in each month since May 1991.

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

  Letter from M. E. G. Fogden to Mr. Tony Worthington, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about the number of fraudulently made claims to unemployment benefits. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  Unfortunately, the information you requested is not available in the required format. However, I have provided below the quarterly figures of the number of people who have

  449
  voluntarily withdrawn their claims to benefit, or have started to declare part-time earnings not previously disclosed, as a direct result of an investigation by an Employment Service Inspector.

  Quarterly periods

  Withdrawn/modified claims

  1 April 1991 to 30 June 1991

  12,451

  1 July 1991 to 31 September 1991

  13,351

  1 October 1991 to 31 December 1991

  12,528

  1 January 1992 to 31 March 1992

  14,691

  1 April 1992 to 30 June 1992

  17,747

  1 July 1992 to 31 September 1992

  18,555

  1 October 1992 to 31 December 1992

  15,150

  1 January 1993 to 31 March 1993

  12,259

  I hope this is helpful.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Redundancies
  Mr. Worthington
  To ask the Secretary of State for Employment how many redundancies were declared in each month since May 1991.

  Mr. McLoughlin
  The available information is given in the following table. Estimates from the labour force survey give the numbers of redundancies in the three months prior to each survey. The LFS moved from an annual to a quarterly survey in spring 1992.

  Redundancies

  Spring 1991

  388,000

  Spring 1992

  322,000

  Summer 1992

  278,000

  Autumn 1992

  310,000

  Claimants (Job Offers)
  Mr. Worthington
  To ask the Secretary of State for Employment how many unemployment benefit claimants have been deemed to have unreasonably turned down job offers in each month since May 1991.

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

  Letter from M.E.G. Fogden to Mr. Tony Worthington, dated 11 May 1993.

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about the number of unemployment benefit claimants deemed to have unreasonably turned down job offers in each month since May 1991. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  The information is not available on a monthly basis as requested but statistics are compiled quarterly. This information is available in a published document, the "Analysis of Adjudication Officers' Decisions", under the heading Refusal of Employment. Copies of this document can be obtained from the House of Commons Library.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written
  450
  Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Employment Service
  Ms Short
  To ask the Secretary of State for Employment what progress the employment service has made in each quarter in meeting the targets outlined in the 1992–93 agency agreement; and what were the(a) total unemployed job placings against profiled target, (b) long-term unemployed job placings, (c) people with disabilities job placings, (d) inner-city job placings, (e) employment training referral to start ratio, (f) actual number and proportion of new claims not pursued following initial contact and (g) number of people who withdrew their claim to benefit after contact with fraud investigators, for each quarter.

  Mr. McLoughlin
  I am informed by the chief executive of the employment service that in the last quarter of 1992–93, ES placed a total of 324,400 unemployed people into jobs, bringing the total to 1,420,400 against an annual target of 1·425 million. Twenty-five per cent. of this quarter's placings were long-term claimants, 2·9 per cent. were people with disabilities and 35 per cent. were unemployed people in inner cities bringing the annual totals to 24 per cent., 2·8 per cent. and 34 per cent. against annual targets of 19 per cent., 2·5 per cent. and 36 per cent. respectively. The Employment Training/Employment Action referral to start ratio was 2·5: 1, resulting in a total of 2·6:1 against an annual target of 2·5: 1. New claims not pursued following initial contact in the final quarter were 107,798, 9 per cent. of initial inquiries, resulting in a total of 481,722 at the annual target level of 10 per cent. A total of 11,900 pepole withdrew their claim to benefit after contact with fraud investigators in the final quarter, bringing the total to 61,000 against an annual target of 58,000. For information on the employment service's performance for each of the first three quarters of 1992–93 I refer the hon. Member to the replies I gave her on 28 October 1992,Official Report, columns 725–26, and on 9 December 1992, Official Report, columns 733–34, and the reply given by my right hon. Friend the Secretary of State to the hon. Member for Dorset, South (Mr. Bruce) on 16 February 1993, Official Report, column 185.

  Employment Action
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many people were participating in employment action in each month since April 1992.

  Mr. McLoughlin
  The information requested is given in the following table:

  Employment action Participants receiving allowances (Great Britain)

  April 1992 to March 1993

  Month

  Number

  April

  17,576

  May

  19,772

  June

  21,446

  July

  23,296

  August

  24,602

  September

  25,787

  October

  28,116

  November

  29,703

  December

  30,614

  January

  31,450

  451

  Month

  Number

  February

  33,157

  March

  33,386

  Source: Employment Service.

  Restart
  Mr. Worthington
  To ask the Secretary of State for Employment how many unemployment benefit claimants have been placed on restart courses in each month since May 1991.

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

  Letter from M.E.G. Fogden to Mr. Tony Worthington, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about Restart Courses. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  Restart Courses are short courses normally lasting for one week. They aim to help those people who have been unemployed for a long time and are having the most difficulty in getting back to work. They are not an alternative to regular job search or other employment or training programmes. Essentially, they provide people with the opportunity to explore all the options open to them and give them confidence to take the next step back to work.

  Since 1990, people who have been unemployed for two years or more who refuse to take up a place on an Employment Department employment or training programme at their Restart interview, are asked to attend a Restart Course.

  I have set out the information you have asked for in the table attached. You will see that we collect information about starters on Restart Courses on a quarterly basis. All those that attend Restart Courses are unemployed and claiming state benefit.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Starters and completers on restart courses April 1991 to March 1993

  1991–92 starters

  1992–93 starters

  April to June

  38,651

  26,440

  July to September

  36,805

  28,577

  October to December

  29,229

  32,300

  January to March

  29,155

  37,388

  Total

  133,840

  124,705

  Labour Statistics
  Mr. Worthington
  To ask the Secretary of State for Employment what was the number of people in work in each month since May 1991.

  Mr. McLoughlin
  The work force in employment is published on a quarterly basis only. The available information is as follows:
  452

  Workforce in employment in the United Kingdom seasonally adjusted

  (000's)

  1991

  March

  26,336

  June

  26,044

  September

  25,845

  December

  25,681

  1992

  March

  25,625

  June

  25,450

  September

  25,052

  December

  24,960

  Mr. Milburn
  To ask the Secretary of State for Employment how many young people have been unemployed in Darlington in March, June, September and December in each of the last four years.

  Mr. McLoughlin
  Claimant unemployment figures by age are produced quarterly for the months of January, April, July and October, and can be obtained from the NOMIS database in the Library. These figures are not adjusted for seasonality.

  Mr. Hinchliffe
  To ask the Secretary of State for Employment what levels of(a) total, (b) male, (c) female and (d) 16 to 25 years, unemployment was identified by the 1991 census.

  Mr. McLoughlin
  The definition of unemployment used in the 1991 census of population differs from the claimant court definition and the internationally recognised ILO definition used in the labour force survey. It does not include an "actively seeking work" criterion. The information requested is as follows and relates to Great Britain:

  Number

  (a) total:

  2,484,509

  (b) male:

  1,710,891

  (c) female:

  773,618

  (d) 16–24 years:

  762,597

  Unemployment Benefit
  Mr. Tony Lloyd
  To ask the Secretary of State for Employment (1) how many initial claimants of unemployment benefit were advised to claim other benefits instead in each month since April 1992; and what percentage of new claims this figure represents;

  (2) how many initial claims for unemployment benefit there were in each month since April 1992; and how many were successful.

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

  Letter from M. E. G. Fogden to Mr. Tony Lloyd, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Questions about how many

  453
  initial claims for Unemployment Benefit there were in each month since April 1992 and how many were successful; and how many initial claimants were advised to claim other benefits instead and what percentage of new claims this figure represents. These are matters which fall within the responsibilities delegated to me as Chief Executive of the Agency. As the questions you have asked are related, I have provided a table which incorporates both replies for ease of reference and clarity. I hope that this is acceptable.

  The attached table shows, at Column 1, the total number of people who contacted my local offices in each calendar month since April 1992 with a view to making a new claim to Unemployment Benefit. Column 2 shows the actual number of new claims taken. The difference between the two figures represents claims which were not pursued. A claim not pursued occurs when a client decides, as a direct result of discussion with my local office people, not to pursue their claim for benefit. This may be for any of a wide variety of reasons; for example, my people may advise the clients that they do not appear to meet eligibility conditions. I should emphasise, however, our instructions are quite clear in stating that clients must never be told they cannot claim. A non

  Month

  1.

  2.

  3.

  4.

  All possible claims (including claims not pursued)

  Number of new claims taken

  Starts on other benefits

  Starts as per cent, of all possible claims

  April 1992

  356,514

  321,634

  744

  0·2

  May 1992

  396,732

  358,263

  878

  0·2

  June 1992

  370,878

  329,123

  909

  0·3

  July 1992

  567,830

  513,225

  1,030

  0·2

  August 1992

  400,250

  359,541

  869

  0·2

  September 1992

  417,249

  375,308

  879

  0·2

  October 1992

  526,380

  477,277

  1,067

  0·2

  November 1992

  420,699

  381,278

  1,066

  0·3

  December 1992

  353,733

  320,750

  705

  0·2

  January 1993

  496,192

  450,316

  1,223

  0·3

  February 1993

  359,232

  325,712

  833

  0·2

  March 1993

  335,962

  307,560

  742

  0·2

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many initial claims for unemployment benefit were refused under the actively seeking work provisions in each month since April 1992; and what percentage of new claims this represents.

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

  Letter from M. E. G. Fogden to Mr. Tony Lloyd, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about the number of initial claims for unemployment benefit that were refused under the actively seeking work provision in each month since April 1992 and what percentage of new claims this represents. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  This information is not available in the precise form requested. The information we collect in respect of adjudication activity refers to the total number of decisions given under each question and does not distinguish between initial claims and subsequent claims. These statistics are not available on a monthly basis, but are compiled quarterly. The information is available in a published document, the "Analysis of Adjudication Officers' Decisions", under the
  454
  pursuit case can only result from the client's own voluntary decision after the benefit conditions have been explained to them.

  One of the reasons why a claim may not be pursued is that an adviser may identify that clients should be claiming a more appropriate benefit and advise them accordingly. Where appropriate, the adviser will contact other agencies, such as DSS, or help the client complete the necessary forms. Information on cases where the adviser has been actively involved in getting a client on to another benefit is collected centrally and is shown in column 3. This column only shows starts on other benefits. We do not hold information on how many clients are referred to an alternative benefit, but do not actually claim it.

  The statistical months shown in the table can be either four or five weeks, which accounts for some of the fluctuations in them.

  I hope this is helpful.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  heading of Actively Seeking Employment. Copies of this document can be obtained from the House of Commons Library.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Mr. Tony Lloyd
  To ask the Secretary of State for Employment how many initial claims for unemployment benefit were refused because of adjudication decisions and disallowances in each month since April 1992; if she will break down the figures by type of refusal; and if she will give the figures as a percentage of new claims.

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

  Letter from M. E. G. Fogden to Mr. Tony Lloyd, dated 11 May 1993:

  As the Employment Service is an Executive Agency, the Parliamentary Under Secretary of State has asked me to write to you direct to respond to your Parliamentary Question about the number of initial unemployment benefit claims disallowed monthly since April 1992. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  This information is not available in the form you have requested. The information we collect in respect of adjudication activity does not distinguish between decisions

  455
  given in respect of initial claims and those relating to subsequent claims. Adjudication statistics are not available on a monthly basis, as requested, but statistics are compiled quarterly. Information on the total number of decisions given, and the proportion disallowed, under each question is available in a published document, the "Analysis of Adjudication Officers' Decisions". Copies of this document can be obtained from the House of Commons Library.

  As decided by the Administration Committee of the House of Commons, Chief Executive replies to written Parliamentary Questions will now be published in the Official Report. I will also place a copy of this letter in the Library of the House.

  Employment, Durham
  Mr. Steinberg
  To ask the Secretary of State for Employment what are the latest figures for the Durham area for(a) average earnings, (b) average gross hourly earnings and (c) average weekly hours total for (i) all women, (ii) women part-time workers, (iii) women manual workers and (iv) women non-manual workers; and what are the comparable figures for men.

  Mr. McLoughlin
  The available information for employees in the county of Durham is contained in the following table:

  Average gross earnings and hours of employees on adult rates of pay whose pay was not affected by absence for the survey pay period: April 1992

  Average weekly earnings

  Average hourly earnings

  Average total hours

  £

  £

  £

  All employees

  Women

  158·2

  4·96

  30·1

  Manual women

  117·3

  4·04

  29·9

  Non-manual women

  181·9

  5·58

  30·2

  Men

  293·7

  6·99

  41·4

  Manual men

  247·0

  5·81

  43·2

  Non-manual men

  347·4

  8·90

  38·8

  Part-time employees

  Women

  79·3

  4·12

  18·4

  Men

  ..

  ..

  ..

  Source: New Earnings Survey: April 1992.

  Note: ".." denotes sample number too low or standard error too large for reliable estimate.

  Mr. Steinberg
  To ask the Secretary of State for Employment how many 16 or 17-year-olds living in the Durham area are not in full-time education and(a) are on a youth training scheme or (b) are on a waiting list for a youth training scheme.

  Mr. McLoughlin
  There are currently 791 young people from Durham city area on youth training, including a small number of 18-year-olds. Four 16 or 17-year-olds are presently on a waiting list for YT.

  Mr. Steinberg
  To ask the Secretary of State for Employment what steps are being taken to ensure high standards of off-the-job education for youth training trainees.

  Mr. McLoughlin
  All youth training trainees have the opportunity to receive training which leads to an approved qualification at, or above, national vocational qualification level II—or, for young people who are endorsed as having special training needs, other appropriate outcomes.456
  Each training and enterprise council is required to operate an effective quality assurance system for providers of off-the-job or on-the-job training.

  Mr. Steinberg
  To ask the Secretary of State for Employment how many 16 and 17-year-olds living in the Durham area have applied for youth training but not succeeded since 1990.

  Mr. McLoughlin
  Figures show that since January 1990, 133 16 and l7-year-olds were submitted but did not start on youth training schemes in the Durham city area. Of these, 129 went into other training or education or found jobs. The destination of the remaining four young people is not known.

  Private Residential Care
  Mr. Hinchliffe
  To ask the Secretary of State for Employment what information she has concerning levels of pay in the private residential care industry; and if she will make a statement.

  Mr. Michael Forsyth
  None; pay in the private sector is a matter for employers and employees.

  Health and Safety Representatives
  Mr. Hinchliffe
  To ask the Secretary of State for Employment what plans she has to ensure that health and safety representatives are elected for each workplace; and if she will require employers to recognise such persons' rights and duties.

  Mr. McLoughlin
  The Safety Representatives and Safety Committees Regulations 1977 allow recognised trade unions to appoint safety representatives, although in some cases the representatives are, in fact, elected. The regulations also give these safety representatives certain rights and duties. The Trade Union Reform and Employment Rights Bill, which is currently before the House, contains a provision to further strengthen these rights by protecting safety representatives against being dismissed for carrying out their health and safety duties. I have no other plans to change the current arrangements.

  Low Pay
  Mr. Hinchliffe
  To ask the Secretary of State for Employment what definition of low pay is in use by her Department.

  Mr. Michael Forsyth
  There is no official definition of what constitutes low pay.

  River Safety
  Mr. Illsley
  To ask the Secretary of State for Employment what steps her Department is taking to publish an account of progress in the implementation of recommendations made after major disasters as recommended in the Hayes report on river safety.

  Mr. McLoughlin
  The Health and Safety Commission and the Health and Safety Executive publish information about the implementation of such recommendations in various ways, including the Commission's annual report, other HSC/E publications and policy statements, and public conferences. In addition, progress is regularly reviewed, where appropriate, with the commission's industry advisory committees.

DEFENCE

  Sandown Class Vessels
  Mr. Whittingdale
  To ask the Secretary of State for Defence when he expects to invite tenders for a further batch of Sandown class mine counter-measure vessels.

  Mr. Aitken
  We hope to be in a position to issue invitations to tender for a further batch of Sandown class single role minehunters before the summer recess.

  United States (Aircraft Purchases)
  Mr. Colvin
  To ask the Secretary of State for Defence if he will publish the value to the United Kingdom, in pounds sterling, of the offset arrangements linked to the purchase from the United States of the E-3D AWACS Sentry aircraft.

  Mr. Aitken
  Boeing's performance against the AWACS offset requirement has been measured in United States dollars. Using an average exchange rate for the period in question, the value of contracts placed under the terms of the agreement is approximately £950 million.

  Service hospital

  County

  Region

  Number of beds1

  19912

  19922

  19932

  Cambridge military hospital, Aldershot

  Hampshire

  Wessex

  47

  38

  38

  Princess Alexandra RAF hospital, Wroughton

  Wiltshire

  Wessex

  16

  25

  —3

  Princess Mary's RAF hospital, Halton

  Bucks

  Oxford

  10

  18

  14

  1Only obstetric maternity beds are to be found in service hospitals.

  2As at 31 March of the year in question.

  2Obstetric services ceased on 1 May 1992.

  Empty Properties, Biggin Hill
  Mr. Soley
  To ask the Secretary of State for Defence how many residential properties are empty at Biggin Hill; and for how long they have been empty.

  Mr. Archie Hamilton
  As at 31 March 1993, the latest date for which figures are available, 81 service married quarters at Biggin Hill were empty as follows:

  Number

  Under one year

  54

  Over one year

  18

  Over two years

  9

  Eight of these properties were allocated to service families who were due to move in shortly and the remaining 73 were in the process of being sold.

  Air-to-surface Missiles
  Mr. Matthew Banks
  To ask the Secretary of State for Defence when he expects to make an announcement about the development of medium air-to-surface missiles; and if he will make a statement.

  Mr. Aitken
  I refer my hon. Friend to the reply that I gave to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) on 20 April,Official Report, column 168.

  Arms Exports
  Mr. Llwyd
  To ask the Secretary of State for Defence if he will publish figures showing the total value of the United Kingdom's arms exports for each year since 1986; and what was the value of arms export sales to third-world countries in those years.

  Mr. Aitken
  I refer the hon. Member to the reply that I gave to the hon. Member for Montgomery (Mr. Carlile) on 23 February,Official Report, columns 577–78.

  MOD Hospitals
  Ms Primarolo
  To ask the Secretary of State for Defence if he will list by country and region the Ministry of Defence hospitals in the United Kingdom which had consultant obstetric and/or general practitioner maternity beds in 1991–92 and 1992–93, with the numbers of beds of each type in each hospital in each year.

  Mr. Archie Hamilton
  The information requested is as follows:

  Weapon Development Programmes
  Mr. Cousins
  To ask the Secretary of State for Defence if he will list all the international co-operative weapon development programmes the United Kingdom Government are engaged in, together with, in each case, the partner nation and the expenditure committed in 1992–93 and 1993–94.

  Mr. Aitken
  I refer the hon. Member to the information contained in chapter 3, table 2 of the Statement on the Defence Estimates 1992 (Cm 1981). The information on expenditure committed is not held centrally and could be obtained only at disproportionate time and cost.

  Military Nuclear Sites
  Mr. Cousins
  To ask the Secretary of State for Defence if he will list the programmes, and the expenditure for them in 1992–93 and 1993–94, for(a) the clear-up of British military nuclear sites and materials and (b) participation in nuclear proliferation control efforts.

  Mr. Archie Hamilton
  My Department attaches great importance to any clear-up programmes necessary, and deals with each situation as it arises. Details of each case are classified.

  The Government attach a high priority to pursuing effective measures to prevent the proliferation of nuclear weapons. My Department is actively supporting the Foreign and Commonwealth Office in its efforts to seek an indefinite extension to the nuclear non-proliferation treaty and is working to promote effective international controls on nuclear exports to help prevent proliferation. In order

  459
  to assist with the safe and secure dismantlement of nuclear weapons in Russia, we are providing the Russian Federation with nuclear weapons transport vehicles, and special containers. Expenditure on this programme for 1992–93 was some £1,500,000; we estimate that expenditure for 1993–94 will be around £15,000,000. A number of personnel within my Department work on nuclear non-proliferation related matters; their costs are not separately identifiable.

  Helicopter Carrier
  Mr. Foulkes
  To ask the Secretary of State for Defence, pursuant to his answer to the hon. Member for Tynemouth (Mr. Trotter), 29 March,Official Report column 16, whether he has now received full clarification from the tenderers of their bids for the amphibious helicopter carrier; when he expects his Department to complete the evaluation of bids; and if he will make a statement.
  460
  Mr. Aitken
  [pursuant to his answer, 23 April 1993, col. 241]: I can now announce the results of the competition for the new helicopter carrier for the Royal Navy. Vickers Shipbuilding and Engineering Ltd has won the competition by a very substantial margin of over £50 million. It will build the ship in conjunction with Kvaerner Govan on the Clyde. In reaching this decision, we took full account of wider factors such as the future of Swan Hunter Shipbuilders. The final judgment was made on our normal technical and value for money criteria.

  This order demonstrates the Government's commitment to improving our amphibious capability and will provide our forces with a vessel suitable for a variety of operations. The ship will provide accommodation for helicopters, men, guns, land vehicles and other equipment and a platform from which to mount a helicopter assault. The ship will also significantly improve our ability to provide humanitarian assistance around the world.

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

Rail Services: Wales
Lord Geraint Lord Geraint asked Her Majesty's Government:
What are their plans to ensure the future of regional railway services in Wales.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, our policy is for all BR's existing services to be franchised to private sector operators. We recognise the value of rail services in rural areas and have given a commitment to provide subsidy to support the provision of socially necessary services where necessary.
Lord Geraint: My Lords, I am grateful to the Minister for that Answer but I am sure that he is aware that there is still a great deal of anxiety in Wales about the future of our railways. Is it possible for the Minister to persuade his honourable friend the Minister responsible for public transport to visit Aberystwth in West Wales, to meet representatives of the local authorities to discuss the Government's strategy for the railways in Wales?
The Earl of Caithness: My Lords, I cannot give that commitment on behalf of my honourable friend in another place, but what I can say to the noble Lord is that I know that my honourable friend is going to Wales later this year to look at the railways. I am sure that he will take the opportunity, if possible, to go to Aberystwth.
Baroness White: My Lords, is the noble Earl aware of the most ambitious development programme, Wales 2010, published today by the Institute of Welsh Affairs? Has his attention been drawn to the study just completed by the Council for National Parks on the benefits to our Welsh national parks and coastline of rail rather than road transport? If he is not fully briefed on such matters, how can he reply adequately to the noble Lord, Lord Geraint?
The Earl of Caithness: Because I am adequately briefed, my Lords.
Viscount Tonypandy: My Lords, will the noble Earl tell the Minister that if he goes to Aberystwth, he should go by road because it is much quicker?
The Earl of Caithness: My Lords, my honourable friend might miss seeing some of the joys of the Welsh countryside if he did not go by train.
Lord Aberdare: My Lords, when my noble friend's honourable friend visits Wales, will he go to the heart of Wales line, which is extremely important as a link between Swansea, mid-Wales and North Wales? It is an important rail link to keep going. Is he also aware
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that many years ago the railway station at Aberdare was closed? Is he further aware that it has now been reopened and is an important link from the Cynon valley to Cardiff, with great implications for employment in the Cynon valley area? There is a lesson here that it is better to keep the lines open rather than to close them.
The Earl of Caithness: My Lords, I can assure my noble friend that my honourable friend the Minister with responsibility for railways will be visiting the heart of Wales line. My noble friend may rest assured on that. With regard to keeping stations open, of course similar procedures will apply under the franchising arrangements that we propose as exist under the present statutory duty.
Lord Morris of Castle Morris: My Lords, is the noble Earl aware that on the heart of Wales line which has just been mentioned, the rolling stock is to be cut by half in October, the timetable no longer allows connections to be made with main line trains from Swansea and that no one living north of Llandovery can go to Cardiff for the day? The new limited maintenance rules mean that if something goes wrong it can only be investigated during office hours. So if something breaks down on a Friday, it cannot even be investigated until the following Monday. In the light of those facts, would the Minister care to comment on the widely held belief in Wales that British Rail is intent on closing the heart of Wales line?
The Earl of Caithness: My Lords, in view of what the noble Lord said, I am sure that he will support us on our proposals for franchising the railways.
Lord Marlesford: My Lords, is my noble friend aware that a number of well informed people outside the railways believe in the context of the need for better regional rail services in England, as much as in Wales, that the proposal to split the responsibility for the track from the responsibility for running trains is a poisoned pill against privatisation, devised by British Rail management, and that by swallowing it the Government will have done their own health no good? Legislation on that proposal will be as wasteful of parliamentary time as it will be commercially unsuccessful.
The Earl of Caithness: My Lords, my noble friend is extremely adept at turning a Question about the future of regional railway services in Wales into a question on rail track. However, I look forward to discussing that with him on another occasion.
Lord Taylor of Gryfe: My Lords, while the Question refers to regional services in Wales, is the Minister aware that similar anxiety was expressed on regional services in general, including Scotland? The assurance which he has given is that the regional services, while they will be uneconomic and unattractive to a private investor, will be made attractive by Government subsidy so that they will be maintained. Is that a general assurance affecting regional railways?
The Earl of Caithness: My Lords, I am sure that the noble Lord listened very carefully to my Answer in which I spoke in general about the question of support for rural areas.
Baroness Strange: My Lords, is my noble friend aware that my great grandfather built the Wrexham, Connah's Quay and Mold railway in North Wales? Is he aware of my hope that the railways in North Wales will also be kept open?
The Earl of Caithness: My Lords, my noble friend's ancestry has done her proud and done Wales proud too.
Lord Clinton-Davis: My Lords, is the Minister aware that the concerns that have been expressed about this matter in the House today reflect the deep disquiet that was expressed by the electors in the county council elections only the other day, which led to that debacle for the Conservative Party? Does he agree that the cuts currently taking place, which are designed to make the railways more profitable before privatisation, and the lessons learned from bus privatisation, augur badly for regional and rural services and the railways?
The Earl of Caithness: My Lords, what cuts is the noble Lord talking about?
Lord Clinton-Davis: My Lords, if the Minister is not aware of the cuts that are already taking place on the railways, should he not learn his brief better?
The Earl of Caithness: My Lords, clearly the noble Lord cannot substantiate his question.
Lord Cochrane of Cults: My Lords, can my noble friend say what consultations have taken place between the Welsh Office and the regional railways, three divisions of which cover Wales, as to their future and present policy and development?
The Earl of Caithness: My Lords, the ultimate responsibility for the railways in Great Britain rests with the Secretary of State for Transport. However, I can assure my noble friend that the Welsh Office is consulted. It provides credit approvals and supplementary credits under projects of regional and national importance.
Lord Stoddart of Swindon: My Lords, in the light of the short, abrupt and entirely unsatisfactory answer given to my noble friend Lord Morris of Castle Morris, in which the Minister hoped he would support the Government's franchising proposals, will the Minister give an absolute guarantee that all the problems outlined in my noble friend's question will be solved by franchising and how soon that will happen?
The Earl of Caithness: My Lords, clearly the noble Lord and I will have an interesting discussion on this matter when the Railways Bill comes before the House. It is quite clear that British Rail needs the private sector to bring benefits to the traveller.

UN Relief Operations: Support
2.45 p.m.
Lord Judd Lord Judd asked Her Majesty's Government:
What is their assessment of the degree to which the United Nations is equipped to meet the growing demands for humanitarian relief in different regions of the world.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, the establishment of the Department of Humanitarian Affairs headed by Jan Eliasson means that the United Nations is better equipped to provide relief than in the past. But demands for humanitarian relief grow, particularly in areas of civil strife, and it is vital that member states provide the resources necessary to enable the United Nations to meet those demands.
Lord Judd: My Lords, does the Minister agree that recent events such as those in Bosnia, Cambodia, the Horn, Mozambique and Angola have well demonstrated that, despite the dedicated service of military and civilians, the UN is overstretched, underresourced and repeatedly asked too late by member governments to intervene on an improvised basis? What lead will the Government now give to seek to strengthen the Department of Humanitarian Affairs, improve the task-oriented work of the specialised agencies, ensure proper resources both of cash and kind and, above all, enhance the role of the Security Council in early warning, conflict resolution and pre-emptive diplomacy?
Lord Henley: My Lords, we are very anxious that full support should be given to the United Nations and the Department of Humanitarian Affairs. Certainly, we shall do our bit, as we already have done, in helping the new department. I can confirm that it was under UK guidance, with our EC partners, that the Department of Humanitarian Affairs was established last April. We were the first to contribute to that department. We are certainly keen to see that Mr. Eliasson is given all the tangible support that he needs. We have made clear our willingness to help him in every possible way, even seconding a senior British diplomat to help the DHA with advice. We will continue to give support and offer appropriate advice.
Lord Bonham-Carter: My Lords, will the noble Lord be so good as to tell the House how many members of the United Nations have not yet paid their dues and whether the United States of America has yet paid its dues, since that is very relevant to the Answer to the Question?
Lord Henley: My Lords, I do not know how many have not yet paid their full dues in terms of what they pay directly to the United Nations. The DHA is funded separately from donations. I repeat that we were the first country to make any payments to it.
Lord Bonham-Carter: My Lords, will the Minister be so good as to let me know the situation by letter?
Lord Henley: My Lords, I shall certainly write to the noble Lord.
Lord Archer of Weston-super-Mare: My Lords, taking up a point made by the noble Lord, Lord Judd, can the Minister confirm that we are among those countries that have responded yet again to the appeal for help in Kurdistan? If we talk about the role played by this country, can he give any idea of the role that other countries have played compared with Britain?
Lord Henley: My Lords, I do not want to go into the detail of all the varied programmes of humanitarian aid that the United Nations and the DHA support. Sadly, last year bilaterally we spent £163 million. As regards Northern Iraq, since 1989 we have donated in the order of £56 million. With regard to the new funds made available to the United Nations plan of action for Iraq, so far only 1.5 million dollars have come forward, but of that sum 1.4 million dollars were contributed by this country.
Lord Ennals: My Lords, I am sure that the Minister will agree that there is enormous respect in this country for the way in which Her Majesty's forces serving in Bosnia have fulfilled their humanitarian task and will fulfil the future task in regard to protected areas. Have the Government yet given an answer to the Secretary General's proposals that the UK and other countries should earmark specific troops to be available on call when there is an urgent need, as now in Bosnia?
Lord Henley: My Lords, I cannot answer the noble Lord's specific question. We will certainly make troops available where we see a need so long as resources are available. I join the noble Lord in paying tribute to our own forces for everything that they have done and to the non-government organisations and the United Nations for all that they have done in the valuable work of saving hundreds of thousands of lives in the most appalling circumstances.
Lord Molloy: My Lords, does not the Minister agree that the Bosnian situation is only one example and that the United Nations must now concentrate on preventing or limiting those situations that result in humanitarian suffering if action is not taken swiftly enough?
Lord Henley: My Lords, we must certainly act as quickly as we can. In response to the question from the noble Lord on the Front Bench I said that we must respond to any reports of emergencies as they arise. Obviously, by the nature of the term "emergency", it is difficult to be able to predict exactly when an emergency is likely to arise. We should like to be in a position to respond as and when we can.
Lord Jenkins of Putney: My Lords, the noble Lord said that forces will be made available so long as they are available. That was not quite the point being made by my noble friend. He was asking about the reply to the Secretary General, who was requesting that forces should be earmarked and therefore made available by
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a large number of countries. I do not believe the Minister replied to that point. Will he do so, or perhaps write?
Lord Henley: My Lords, if the noble Lord listened to me, I did respond and said that I did not know the answer. However, I will write to the noble Lord. I said that we could only respond according to the availability of resources. There is always a maximum beyond which one cannot go. Her Majesty's Government will do all they can, as far as is possible.
Lord Rea: My Lords, will the Government follow the example of the United States and France and establish a moratorium on the transfer of antipersonnel land mines which are causing such havoc in the wake of disasters from conflicts in many parts of the world? As a first step, will the Government agree to ratify the 1980 United Nations Convention on Inhumane Weapons and land mines protocol?
Lord Henley: My Lords, with respect, that goes very wide of the Question on the Order Paper.
Lord Judd: My Lords, does the Minister not agree that this exchange has demonstrated that the real issue is that, while dedicated service is being undertaken in response to needs which have overtaken the international community, there is a desperate need to develop a strategic role of the UN in pre-empting crises of this kind? As members of the Security Council, what are we to do about leading in that respect?
Lord Henley: My Lords, we were the ones, together with our European partners, who helped put together the Department of Humanitarian Affairs. We believe it can do a valuable job. There is much more it can do and more reforms that can take place. However, we believe it plays a vital role in co-ordinating all activities in relation to responses to disasters of the kind that we are discussing.

DSS Benefits: The Self-Employed
2.53 p.m.
Lord Campbell Lord Campbell of Croy asked Her Majesty's Government:
Whether self-employed people and owners of small businesses are fully aware of the availability of social security benefits in times of adversity and, if not, whether they will take the necessary steps to make them aware.
Lord Henley: My Lords, a variety of social security benefits are available to the self-employed. The Government are committed to encouraging small businesses, and publicise benefits widely. We are investigating ways in which information for the self-employed might be better targeted.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. However, do the Government agree with the National Audit Office that money would have been saved by the Exchequer overall if self-employed people had applied for the

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help which could have saved their businesses from failure? Is the benefits agency now taking action on that?
Lord Henley: My Lords, I should perhaps be careful about commenting on the findings of the NAO report before any future PAC hearing. It largely concentrated on income support. There is a danger of exaggerating the kind of help that income support can provide for a failing business or the self-employed, particularly because of the entitlement conditions relating to income support and its availability. I should stress that the main in-work benefit is family credit. We have seen a dramatic growth in family credit among the self-employed and would like to see a great deal more. We shall therefore be advertising to that effect.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that the most effective way of saving private businesses from failure is to ensure that the interest rate is as low as possible and that we have less bureaucratic interference in the way that they run their businesses?
Lord Henley: My Lords, again, that is wide of the Question on the Order Paper. However, I note what my noble friend says.
Baroness Hollis of Heigham: My Lords, the Minister will know that 1,300 small businesses fail every week. But is he aware that 75 per cent. of them did not know that under certain circumstances they were entitled to claim income support? Also, 60 per cent. of those failed businesses say that, had they known and claimed income support, they would have kept their businesses alive, even part time.
When the Minister focuses on fraud in his current campaign —on those who claim benefit to which they are not entitled —will he remember that there is an infinitely greater problem of people not claiming the benefits to which they are entitled, as the report from the National Audit Office on the self-employed clearly shows?
Lord Henley: My Lords, again I must repeat the Answer I gave to my noble friend Lord Campbell of Croy. There is a danger of exaggerating the extent to which income support can help the self-employed. I am not sure that a high number of self-employed people would be prepared to comply with the conditions for receipt of income support to help them through difficult stages in their business. We believe that family credit can help a great deal and are doing as much as we can to help people to take it up.
We have seen the case load grow from 50 per cent. to 64 per cent. In terms of expenditure that is a growth up to 71 per cent. In other words, those not claiming tend to be those whose claims are at the margin. We would like to see more people claiming if they have some entitlement. With regard to the level of take-up of income support, my understanding is that 90 per cent. of money available to people on income support is actually taken up.

St. Bartholomew's Hospital
2.57 p.m.
Lord Molloy Lord Molloy asked Her Majesty's Government:
What are their current plans for St. Bartholomew's Hospital.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, we outlined the three options for the future of St. Bartholomew's Hospital in the policy document, Making London Better. Those options are either to close the Smithfield site; to rationalise services between Smithfield, the Royal London and the London Chest hospitals; or to retain Bart's as a much smaller specialist hospital.
Lord Molloy: My Lords, I thank the Minister for that reply, but does she not agree that Bart's has proved itself as the most famous casualty department in the country? During the recent bomb incident the staff at St. Bartholomew's were magnificent. Is it right that they should be apprehensive in regard to their future?
In addition, St. Bartholemew's has the most up-to-date operating complex in Europe which could suffer a great deal if it is not given government support. I believe that St. Bartholomew's Hospital has shown beyond peradventure that it is a magnificent hospital with magnificent staff. It would be a tragedy if in any way it was damaged or done away with.
Baroness Cumberlege: My Lords, everybody in your Lordships' House would agree that the National Health Service is superb in a crisis. It always rises to the challenge and the Government would agree that in this situation it was magnificent. I refer not only to the staff who were at St. Bartholomew's Hospital, but also to those at the Royal London Hospital who also treated patients.
Lord Braine of Wheatley: My Lords, in view of the fact that advice was given before the IRA bomb disaster by the City of London police that there should be no closing down of the casualty services provided by that famous hospital, can my noble friend say what regard will now be given to that advice? Does not my noble friend agree that if the proposal to remove Bart's Hospital had taken effect before the disaster, there would be great sadness and in many cases great anger?
Baroness Cumberlege: My Lords, no accident and emergency department will close in London unless the Government are satisfied, after full consultation, that alternative care is available.
Lord Ennals: My Lords, when the Government come to take their decision about St. Bartholomew's Hospital, will they bear in mind the very grave concern that exists about waiting lists, which are longer than they have ever been in our history, and, secondly, the fact that waiting times for seeing a consultant are also going up? Will these issues be taken into consideration when a final decision is taken about St. Bart's?
Baroness Cumberlege: My Lords, I am sure it is one of the factors that those who will be considering this decision will want to take into account. I remind the noble Lord that never before have we had shorter waiting lists. We have more people on the waiting list, but the important point is that they are waiting for a shorter period of time. More people are being treated. Half of all admissions to hospital are immediate. Of those admissions from waiting lists, half are admitted within five weeks; nearly three-quarters within three months; and 98 per cent. within a year. That is a tremendous achievement.
Baroness Masham of Ilton: My Lords, what is the present position on the treatment of AIDS patients? Is it not a fact that because of the insecurity concerning what is going to happen to Bart's the ward for AIDS patients is now in a limbo situation?
Baroness Cumberlege: My Lords, only three weeks ago I visited this unit. I was, as always, very impressed by the commitment of the staff and the work that is going on there. The Government recognise the important work but they have to await the results of the specialty reviews which the London Implementation Group is undertaking. However, it is clear that the local and specialised services for HIV and AIDS will be a high priority for health authority purchasers in East London.
Lord Strabolgi: My Lords, when reviewing the whole question of the London hospitals will the Government take into account traffic problems? These were brushed aside by the members of the Tomlinson Committee, hardly any of whom were London based. They had no idea of how slow it is to move about in London traffic. They seemed to think that one could get across London in 10 minutes.
Baroness Cumberlege: My Lords, accessibility is one of the priority areas when one considers the future of the National Health Service.
Lord Auckland: My Lords, is my noble friend aware that I paid a very confidential visit to Bart's Hospital recently and that I have a younger daughter who trained at the Royal London Hospital? Can she give an assurance that there will be a very effective casualty department, particularly during daylight hours, either run by Bart's or the Royal London? Will she also bear in mind that the distance between the two hospitals is fairly considerable?
Baroness Cumberlege: My Lords, at this moment consultation is being undertaken by the North-East Thames Regional Health Authority on the accident and emergency services at Bart's. I am sure that the authority will take into account all that has been said this afternoon in your Lordships' Chamber as it will other factors.
Lord Bruce of Donington: My Lords, will the Minister give an undertaking that the findings and plans of the London Implementation Group will be made public before they are acted upon?
Baroness Cumberlege: My Lords, these proposals are out for consultation.
Baroness Jay of Paddington: My Lords, is the Minister aware that those people concerned about the fate of St. Bartholomew's Hospital in the context of the general level of health services in London are alarmed by reports that the £170 million which was promised in the statement Making London Better to upgrade primary services as a compensation possibly for the loss of hospital beds seems to have disappeared? There are reports that this money is not to be new money but is to be taken from the already hard-pressed budgets of London health authorities.
Baroness Cumberlege: My Lords, the National Health Service received £1 billion growth this current year. Clearly, that is new money. It was very false of those who made the allegation that is was not. There is greater investment going into primary care in London, and we know that that issue has long needed to be addressed.
Baroness Jay of Paddington: My Lords, may I press the Minister on the specific point about the new money, so described in the 14th February statement, for London primary care?
Baroness Cumberlege: My Lords, it is part of the £1 billion that was allocated to the National Health Service as growth for the current year.
Lord Molloy: My Lords, does the noble Baroness not agree that St. Bartholomew's Hospital is part of our great history? It is respected throughout Europe and indeed throughout the Commonwealth. Created in the days of King Henry VIII, its name has been famous ever since and therefore it deserves the support of all parties in our Parliament.
Baroness Cumberlege: My Lords, we all share the admiration for the National Health Service, particularly for the London hospitals.

Business
3.6 p.m.
Lord Hesketh: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lady Blatch will, with the leave of the House, repeat a Statement that is to be made in another place on School Tests.
It may be for the convenience of the House to know that the Report stage of the Housing and Urban Development Bill will be adjourned at about 7.30 p.m. for around one hour and that during this adjournment the Committee stage of the Disabled Persons (Services) (No. 2) Bill will be taken.

Pension Schemes Bill
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, I beg to introduce a Bill to consolidate certain enactments relating to pension schemes with amendments to give effect to recommendations of the Law Commission and the Scottish Law Commission. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)

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On Question, Bill read a first time, and to be printed.

Pension Schemes (Northern Ireland) Bill
The Lord Chancellor: My Lords, I beg to introduce a Bill to consolidate for Northern Ireland certain enactments relating to pension schemes, with corrections and minor improvements under the Consolidation of Enactments (Procedure) Act 1949. I beg to moved that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question, Bill read a first time, and to be printed.

Statute Law (Repeals) Bill [H.L.]
The Lord Chancellor: My Lords, I beg to move that this Bill be now read a second time. As your Lordships will be aware, one of the functions of the Law Commission and of the Scottish Law Commission is to promote:
"the repeal of obsolete and unnecessary enactments, the reduction of the number of separate enactments and generally the simplification and modernisation of the law".
The Law Commissions have, over the past 24 years, presented to Parliament 14 reports on statute law revision with draft Bills attached. The 13 previous reports have resulted in the repeal of over 2,600 enactments, including 1,414 whole Acts. The present Bill proposes the repeal of 159 whole Acts or orders and the removal of redundant provisions from 462 others. The Bill also secures the reinstatement of a statute dating back to the time of George III which was inadvertently repealed by statute law repeals legislation in 1978.
The repeals set out in Schedule I to the Bill are in 16 parts. They cover such areas as the administration of justice, agriculture, allotments, company law, ecclesiastical law, family law, local government, property law and transport. The oldest statute to be repealed draws vintage from the reign of Henry VII and is the Ordinances of Corporations Act 1503. Other candidates for repeal include provisions in the Fraudulent Mediums Act 1951 and the entirety of the Piracy Act 1698, which was drafted, in part at least, as a deterrent to those captains and crew who were tempted to turn pirate—the most famous example being Captain Kidd who turned pirate with a well-armed vessel put under his command by the Government with instructions to destroy pirates.
Bills such as these play an invaluable role in the work of modernising and improving the statute book. I am sure that your Lordships would wish to join me in thanking the two Law Commissions for the thorough and painstaking way in which they have set about their task. In this context, I would also seek to record appreciation for the efforts of the principal draftsman of the Bill, Frank Streeten, who will shortly be retiring from his work at the Law Commission.
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If your Lordships are content to give the Bill a Second Reading, it will be referred to the Joint Committee on Consolidation Bills in the usual way. I beg to move.
Moved, That the Bill be now read a second time. —(The Lord Chancellor.)
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Protection of Animals (Scotland) Bill
Baroness Carnegy of Lour: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Baroness Carnegy of Lour.)
On Question, Motion agreed to.

Housing and Urban Development Bill
3.10 p.m.
Lord Williams of Elvel: My Lords, before we consider this Bill on Report, perhaps I may draw your Lordships' attention to the suggested groupings which I received at 11.30 this morning, apart from the government groupings which the Minister was kind enough to send me earlier on. I am not making any particular complaint, but inevitably, because many noble Lords have tabled amendments, as the groupings stand they appear defective.
Perhaps I may give one example. Amendments No. 10 and 175, in the name of the noble Earl, Lord Kinnoull, deal with quite different matters. I would like to separate those two amendments. I gave notice to the Whips' Office this morning that I would like to separate them. It is not for me to do so because I am not involved with them. Nevertheless, I hope that noble Lords will pay attention to the note at the top of the Marshalled List which states:
"Although every effort is made to secure agreement to these groupings, they remain informal and not binding".
Since we are on Report and we are only allowed, as it were, one shot, apart from the mover of the amendment and the noble Lord who winds up, I believe that is something to which we should pay attention.
Lord Boardman: My Lords, as most of the amendments in the first group are in my name and those of other noble Lords, I understand the point made by the noble Lord, Lord Williams. I believe that Amendments Nos. 1 and 5 are the original amendments and the subsequent starred amendments were put down yesterday evening. I apologise to the noble Lord that there was not a longer opportunity for him to consider them. If it is of assistance, I would not object to those amendments which are starred—namely, Amendment No. 14 onwards on the Marshalled List—being separated from Amendments Nos. 1 and 5 which come first.
Report received.

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Clause 1 [The right to collective enfranchisement]:
Lord Boardman Lord Boardman moved Amendment No. 1:
Page 2, line 7, leave out ("or") and insert ("who occupy as their principal residence").
The noble Lord said: My Lords, in moving this amendment, I am speaking also to Amendment No. 5 and not to the other amendments in the group on the Marshalled List. Amendments Nos. 1 and 5 are of very considerable importance which spreads far beyond the context of the Bill itself. The Bill challenges two important principles. The first is the role of the manifesto commitments in subsequent legislation. Secondly, and perhaps even more important, it raises a challenge to the sanctity of contract.
At a previous stage of this Bill comment was made on the interests of various Members. I have no personal interest in the matters covered by this Bill. Perhaps I may also make it clear that, although the amendments to which I have spoken and will be speaking have a major effect on the large London estates, my amendments are certainly not limited or confined to their interests. There are many thousands of blocks of flats outside London which will be severely affected by the provisions in this Bill. I referred to some of those in my Second Reading speech and I shall not do so again today.
Among many other things, the matter which offends me is that under the Bill non-residential leaseholders are given rights to enfranchise. I and other noble Lords who support me on these amendments find that offensive. Our Amendments Nos. 1 and 5 (Amendment No. 5 primarily) seek to remove the right for non-leaseholders to enfranchise. Perhaps I may deal with the principles which are at issue.
The manifesto commitment to which I referred was perfectly straightforward. In a whole section relating to home ownership and the desirability of increasing it —which I am sure noble Lords will support—the manifesto referred to introducing commonhold legislation. We know that that has been delayed. It was to give residential leaseholders living in blocks of flats the right to acquire the freehold of their block at the market rate. The manifesto went on to say that leaseholders who live in a block but who do not qualify, would have the right to an extended lease. That was the commitment, but the Bill does not carry out that manifesto promise. Non-residents are given the right to enfranchise.
The second principle to which I referred is that of the sanctity of contract. That again is something which I believe all noble Lords would wish to uphold. Contracts between private individuals should not be tampered with or changed by government unless there is some overriding public interest which requires them so to do. That was recognised by the then Labour Government in 1967 in the Act of that year. It was declared that the contract between leaseholders and freeholders applied only where there were resident leaseholders. It was held that that residence gave them sufficient public interest to justify the Bill becoming an Act. That was tested in the European Court of Human
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Rights. I believe that it was fairly clear from the judgment that it was that resident qualification which made the Act just about acceptable to that court.
On the same point, I very much welcomed what my noble and learned friend the Lord Chancellor stated in a recent reply on 31st March. He was replying to a Parliamentary Question arising from the Law Commission's recommendation for reforming the law on commercial property leases, landlord and tenant law, privity of contract and estate. My noble and learned friend the Lord Chancellor said,
"The Government have decided to implement these recommendations for future leases, but not for existing leases".—[Official Report, 31/3/93; WA 54.]
As one would expect of him, he was strictly observing the sanctity of contract which would not be broached as regards past leases and how it would affect them. He did what I believe we would all expect him to do in such circumstances.
The Bill itself offends that principle. It allows one party to a leasehold contract (the leaseholder) to force the other party (the freeholder) to sell the property. The compensation may be most unfair, but that is irrelevant. I am not dealing with the question of compensation. By Act of Parliament a contract is going to be authorised to be broken without any public interest. I recognise that the Government have a problem in enfranchising the leaseholders of blocks of flats. That situation is somewhat different from that affecting houses. It is a pity that the Government did not work it out before they entered into a commitment as regards this matter. In their manifesto they said that they would endeavour to enfranchise blocks of flats where residents were living for the benefit of those resident leaseholders.
However, they then found that, unless they widened the provisions to allow non-residents to enfranchise, there was a danger that they would be unable to get enough qualified tenants to make effective enfranchisement. I have tried to meet those difficulties. First, there is in Clause 36 of the Bill a provision that any resident leaseholder with a long lease and low rent, and who is unable to acquire the freehold to enfranchise because there is not enough of them, can nevertheless acquire the long lease (I believe that it is 99 years recurring) so that in many cases he will be in a better position than if he were the freeholder. Certainly he will have the right to get a long lease notwithstanding that the exclusion of non-residents means that there is not enough of them to enfranchise the block.
The other point made was that, unless they could enfranchise and get the freehold, there was a very real danger of not being able to unfranchise and not, therefore, being able to obtain the management of the premises, so that they would be stuck with unfortunate or bad managers. I have tried to meet that argument by tabling Amendment No. 160 with which we shall deal later. It is a proposed new clause concerned with how the majority of the qualified people who wish to have their own managers can do so. I have tried to meet my noble friend's understandable objection about the problems of management.
Throughout that part of the Bill both my noble friends and I have tried, by way of tabling various amendments, to meet the difficulties that would arise by carrying out the essential terms which we understood were to be implemented —that is, in respect of resident leaseholders only.
It is worth saying that leaseholders are getting more than they ever expected from the Bill. Clearly no leaseholder who bought his or her flat ever thought that a kindly government a year or two afterwards would come along and say, "Although you have only x number of years to run, we are going to give you the right to extend or to buy the freehold". They did not expect that to happen. However, that point is by the way.
It is also worth saying that non-resident leaseholders should not be entitled to franchise. That would not be the sole exception. The Bill provides that where commercial premises comprise more than 10 per cent. of a block of flats, that excludes the whole of the block, and all the residents and non-residents living above it, from enfranchisement. Moreover, Crown lands have special provisions and are exempt from the Bill, but I believe that certain undertakings have been given. National Trust land is also exempt from the Bill. Therefore, there are, quite rightly, a number of exceptions.
I turn for a moment to the attitude of noble Lords opposite both on the Labour Benches and on the Liberal Democrat Benches. They will recall that it was their votes in Committee when the point was being discussed that supported what I would call the inequity under the Bill. Their votes made it possible for companies, including foreign companies, and foreign individuals who are never resident in blocks of flats to acquire, if the transaction goes through, those flats and to make very substantial profit by so doing. The amendments which I, my noble friends and other noble Lords have tabled sought to make that impossible.
It should be noted that 50 per cent. of all property transactions in the West End over the past 10 years have been on the part of foreign companies and foreign individuals. I make no point about that; I am not really concerned whether it is a foreigner or a UK citizen who enfranchises. However, we should bear in mind that the people who are going to be the main beneficiaries of the Bill as it now stands will come into one or another of those categories. Therefore, I wait with interest to hear what noble Lords and noble Baronesses on the Labour Benches and on the Liberal Benches have to say on the amendment now that they have had time to reflect upon it.
As the noble Lord, Lord Williams of Elvel, said, a further amendment was tabled last night in my name and that of the noble Lord, Lord Palmer, in which we have put forward something which is not nearly as satisfactory as Amendments Nos. 1 to 5 that we are now debating. In what I hope is the unlikely event of my amendments not being accepted by the House, I trust that we shall have the opportunity to debate and consider the alternative amendments which appear on the Marshalled List. That would not be as
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satisfactory, but it would certainly go part of the way towards meeting the problems to which I referred. I am grateful for the understanding that I have received in my efforts to try to bring that about.
The amendment that I have now moved is one that I hope will be carried and one which, if carried, will eliminate the necessity for those less adequate provisions to be considered by the House. Having had time to reflect on the amendment since it was last before us, I hope that the House will agree to accept it. Its purpose is to exclude non-residents from having the right to enfranchise, the right to acquire the freehold of a block of flats where they own a lease but are not residents, never have been and, to all intents and purposes and so far as we know, never will be. I beg to move.
Lord Harris of High Cross: My Lords, from the Cross Benches I should like to support the amendment moved by the noble Lord, Lord Boardman. I particularly regret that I was prevented from taking part in the Second Reading debate in order to stake out the ground. Dwelling on the chaos, the fraud and the corruption that I have witnessed on many recent visits to Russia, I have concluded that a major obstacle to progress is that private property rights there lack the secure legal guarantees that we in the West have taken too easily for granted. Accordingly, I regard this kind of measure, irrespective of motive, as an assault on a principal foundation of civilised values.
I have to declare an interest as I am a leaseholder both as regards my main residence and my small seaside flat. But, unlike some of the disgruntled Tories, I have been grateful for the choice offered by the leasehold system and I am well content to abide by my bargains.
To understand the reason behind the amendment, which, in my view, is simply a matter of damage limitation, we must ask: what is the reason for the Conservatives' zeal for enfranchisement? I presume that it is not to pursue the Lloyd George Liberal vendetta against "landlordism"; nor, I hope, is it to pander to socialist redistribution of wealth. As the noble Viscount, Lord Dilhorne, pointed out on Second Reading, the serious purpose—although, in my view, not necessarily a sufficient justification—of all previous statutes of the kind going back to 1915 was to give security of occupation to residential tenants. It was never to enrich investors, speculators and property developers; it was to secure tenants in occupation against dispossession at the end of a lease. That was the declared and legitimate purpose.
I understand that the 1954 Landlord and Tenant Act gave the right to a tenant at the end of a long lease to extend his occupation at an economic rent fixed by agreement or under the Rent Acts. But the Bill before us not only carries that expropriation of a freeholder's property much further; it also extends the benefit beyond residential tenants. Indeed, where the occupier holds a lease from a non-resident head tenant, the Bill confers no benefit whatever upon the occupier. Instead of granting the tenant security, in many cases its effects will simply be arbitrarily to transfer value

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from the present freeholder to the head lessee. The tenant will enjoy no benefit but will simply be confronted with a newly enfranchised landlord.
As the noble Lord, Lord Boardman, said, the Bill goes further than the election pledge that the Tory Party judged necessary to scoop up some votes in Kensington and Westminster. I hope that, on this occasion, a larger majority of Peers on the Government Benches will now take courage and join the majority of Cross-Benchers who supported the amendment in Committee. On that occasion, the statistics were very revealing and rather saddening. The Government's victory by 39 votes was entirely supplied by the opposition parties. Indeed, without the Labour and Liberal Democrat support, the Government would have lost on the amendment by 40 votes.
Lord Peyton of Yeovil: My Lords, perhaps the noble Lord will forgive me if I intervene for a moment. I think that he is slightly wrong. I believe that I am right in saying that the majority of noble Lords on this side of the House, from the Conservative Party, voted for the amendment.
Lord Harris of High Cross: My Lords, that is true. I think that there were 101 Tory votes for the amendment and, I believe, 91 on the side of the Government. I am saying that the Government would not have prevailed in the Lobby without Labour and Liberal Democrat support which was given for quite different reasons from those which concern us. I conclude by saying that, after Newbury, this amendment might provide a good opportunity to redirect Her Majesty's Government a little closer to the principles that stood them in good stead during better times.
3.30 p.m.
Lord Campbell of Alloway: My Lords, I support Amendments Nos. 1 and 5. It is my intention to speak only to the fundamental principle, to which my noble friend Lord Boardman referred, which is reflected in those amendments. It is not my intention to refer to the manifesto. We have heard quite enough about that and it is of no interest to the majority of noble Lords who sit in this House—and it is to the House that I am seeking to address an argument. It is a matter for the House whether it thinks that it is right or wrong.
This is rather a complex Bill and I may have got it wrong, but I think that Amendments Nos. I and 5 are, in effect, part of a package to ensure that if some leaseholders whose property is their main residence are left without a right of enfranchisement, first, there will be a right to a lease extension under Clause 36 and, secondly, there will be a right to management under a new clause which is to be introduced, one hopes, by Amendment No. 160. If Amendments Nos. 1 and 5 were to fall on a division, or to be withdrawn for some reason, I would support the Boardman-Palmer amendments (if, with respect, I may so describe them) which run from Amendment No. 14 to Amendment No. 42 not sequentially on the Marshalled List, and to reserve my position on the other amendments, in particular as regards
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Amendment No. 160 upon which there was a large measure of consensus between the noble Baroness, Lady Hollis, the noble Earl, Lord Lytton, and myself at Committee stage.
However, I adhere wholly to the views that I expressed in Committee on Amendments Nos. 7 and 28—the Peyton-Boardman amendments—which strongly support the residence qualification proposed by Amendments Nos. 1 and 5. It is the intention to seek—as I sought, with respect, to suggest to your Lordships—a reasoned argument in support of Amendments Nos. 1 and 5 as part of the package, for it is wholly apparent from the voting list at Committee stage that it is well possible that a sufficient number of your Lordships from all sides of the House may be open to persuasion, so that Amendments Nos. 1 and 5 may be carried, albeit against the Library vote (of noble Lords who do not wish to hear the argument) and the Payroll vote (of noble Lords who, unfortunately, may not interest themselves in the argument). I am addressing the House in those circumstances.
The case in support of these amendments has already been put and need not be restated. Noble Lords may, however, wish to subject the countervailing observations of my noble friend the Minister as they were advanced at Committee stage to objective analysis—I hope and truly intend that it should be objective—and to most rigorous scrutiny. I suggest with respect to your Lordships that, on such an analysis, there are no countervailing arguments based on logic—only bare assertions unsupported by any discernible process of reasoning. In this, there is no hint of criticism of my noble friend the Minister—none at all. He has stood manfully by his brief. That is his job, and with respect to my noble friend, if I may say so he has done it very well.
At the outset it has to be said—and it will be readily accepted, I know, by noble Lords on all sides of the House —that any extension of the right to buy beyond those living in those blocks of flats as their main residence may only be justified on ground of overriding public interest—an interest which justifies derogation from the fundamental principle which has always been accepted by your Lordships and which I hope always will be, and which has always been accepted in another place, that a private contract may never be set aside by legislation having retrospective effect. The only justification for that would be overriding public interest.
In this context—as regards houses—the European Court of Human Rights endorsed this principle when holding that the right to buy by those occupying houses as their main residence fell within the public interest which warranted a derogation from the principle, but it went no further. As is apparent from the speeches of my noble friend the Minister at Committee stage, the Government have not as yet sought to justify the proposed derogation from that fundamental principle on the grounds of overriding public interest. I say with deference and respect to your Lordships that there is no other ground on which

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it would be proper for your Lordships' House to reject the amendment, to extend the right to buy and to justify an unjustifiable extension.
The justification made by my noble friend the Minister on behalf of the Government (I shall deal with it in a moment) either assumes the rectitude of the premise which begs the whole question or points to objectives and results which may easily be resolved by wholly other means. In the first category (which begs the question) it is said that if all qualifying tenants cannot participate in the right to buy, the number of blocks in which collective enfranchisement could take place would be substantially reduced. That is an argument which, so to speak, eats its own tail. It is said that individual blocks could move in and out of eligibility. So be it. It is said that the declared policy of government could not be delivered. That is not the point. The point is, ought it to be delivered? That is the question before your Lordships' House.
On the second category (questions that could properly be resolved by other means) I shall not go into the question of commonhold, which strikes one straightaway, but what do the Government say? They say—I am paraphrasing what my noble friend the Minister said in Committee—that all long leaseholders are entitled to value for money and a say in how their money is spent; and that non-residents who have sub-let have a duty to ensure that their property is well managed. That could easily be achieved by a Bill directed to such a purpose.
In conclusion, my noble friend the Minister fairly accepted (col. 954) that there was logic in the residence restriction as proposed by the amendments then before him, and as is now proposed by this amendment. I say this with respect to my noble friend the Minister: one looks in vain for any logical objection to Amendments Nos. 1 and 5. The hope must be that on the merits of fair argument, if it seems right to your Lordships—as I say, it is entirely a matter for the House—the amendment may commend itself to you.
Lord Clark of Kempston: My Lords, my noble friend Lord Boardman rightly drew attention to the commitment that the Conservative Party gave in its manifesto at the last election. That manifesto proposed that home ownership should be extended to all who wanted to own their own home; that is, flats. Houses had already been dealt with. One of the points I find difficult to understand is that the Bill goes far wider than did that manifesto at the last election.
We seem to have jettisoned Tory principles because if a measure such as this had been introduced by a Labour Administration, I am convinced that the Conservative Opposition would have been diametrically opposed to it, and we should have been saying that we did not like it. My noble friend Lord Boardman spoke about the sanctity of contract. That seems to have gone out of the window so far as concerns this Bill. I have sat through many Committee stages and Report stages in another place, and I am astounded that with this Bill the Government have been so inflexible. I echo the sentiments expressed by my noble friend Lord Campbell of Alloway when he
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congratulated the Minister on defending a brief which in my view is indefensible, but which he did extremely well.
If one is a flat owner and one wants some advice on how to enfranchise but does not have recourse to legal advice, my honourable friend the Minister for Housing in another place is setting up a fund whereby one can obtain free legal advice. To do that at the same time as curtailing legal aid, is ridiculous. My right honourable friend the Prime Minister of course rightly says that he will listen to people. I hope that he will listen to those people who wish to own their own homes. That brings me to the point made so effectively by my noble friend Lord Boardman about one's principal residence. The principal residence formula is suggested in the amendment. The freeholder is an investor. An absentee lessee is in the same position. He or she is an investor. Why should any Administration, Conservative or otherwise, say to one investor, "You must sell. You will be forced to enfranchise another investor"? That again is wrong. Let us help, yes. If the flat is one's main residence, that is excellent, but to extend the provision so that one investor is forced to help another investor goes against all the principles of the capitalist system. It is against the principles of the Conservative Party.
The lessee of a flat might have two or three other flats, whether or not he is a foreigner. Why should the freeholder, who may be a British citizen, be forced to give some of his assets to someone who does not live here, wherever he may live? I support the amendments tabled by my noble friend Lord Boardman. Despite the fact that my noble friend the Minister will probably have "resist" at the top of his paper, the Government must think again about this matter. We must help those who want to buy their flats. They may not be able to obtain the consent of two-thirds of the tenants in the block, for whatever reason. Some of the tenants in the block may not wish to buy and some may be absentee lessees. The other amendment tabled by my noble friend gives those tenants the right to extend their leases on a recurring basis, and that is fair.
I am at a loss to understand why we should say to one person, "You have an asset, and you must give part of that asset to someone else who may be a lessee who does not live there". I hope that my noble friend the Minister will accept the amendments because it is against Tory philosophy to jettison our principles. It would be more shameful if we were to allow the Bill to go through in its present state.
3.45 p.m.
Lord Monson: My Lords, many of your Lordships will have received a detailed analysis based upon figures supplied by Savills, a highly respected firm of estate agents, showing the enormous profits that in many cases will be made on enfranchisement under the terms of the Bill where the lease has fewer than 75 years, or thereabouts, to run. In Belgravia, it is expected that in many cases profits will exceed £250,000.
If the Bill remains unamended, many of those enormous capital gains will accrue not just to permanent or semi-permanent residential tenants—

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those mentioned, as has been said, in the Conservative manifesto at the last election—but to those who own properties as holiday homes or to those who have never set foot in the properties in question, but have bought them as an investment. Huge profits will also accrue to companies who specialise in buying the tail-end of long leases and letting such properties out on a rack rent basis, achieving in the process an extremely high rate of return, even under the law as it stands.
How much greater will the profit of such people be if the amendment is not agreed to. That will be at the expense, in many cases, of the beneficiaries of charitable trusts. Moreover, if Amendment No. 174, which I have tabled, or something very like it, is not accepted, which provides for taxation to be levied in all cases upon such unearned gains, those purchasers who are not domiciled in the UK will in most cases not pay one penny in income tax, higher rate tax, corporation tax or capital gains tax. I cannot think that that would be welcome.
I see, much to my surprise, that. Amendment No. 174 has been grouped with Amendment No. 1. I drafted Amendment No. 174 quickly so as to put down a marker, as it were, without having had time to take advice from lawyers or accountants specialising in tax law. It is therefore more than probable that it is defective in one or more respects. If I have been too pessimistic, and the Minister can assure me that the amendment is technically perfect, I am happy for it to be grouped with Amendment No. I; otherwise I should like to take it away, work on it and come back with it next Tuesday, when I hope that I shall have massive support from the Labour Party and the Liberal Democrats, none of whom I am sure wishes anyone to receive large untaxed, unearned capital gains. For the moment, I urge your Lordships to support Amendment No. 1.
Lord Harmar-Nicholls: My Lords, before the noble Lord sits down I wish to ask him whether he is as surprised as I am by the silence from the socialist opposition Benches, in particular when we heard that their vote enabled the provision to be passed in Committee. Is there not a parliamentary principle that the vote should follow the voice? Should not their voices be heard before they cast their effective votes?
Lord Monson: My Lords, I am not in a position to speak for the Labour Party.
Lord Peyton of Yeovil: My Lords, I wish to begin my remarks by saying that I look as eagerly as anyone in your Lordships' House for opportunities to congratulate the Government on their legislative programme. Unfortunately, I have found such opportunities to be rather few. On this occasion, however, I believe that the Government are to be congratulated on their discretion, or on their good fortune, in having my noble friend Lord Strathclyde on the Front Bench to argue the case for the Bill. I know that I can speak for those who are uneasy about its content and say that his courtesy and humour and the attention which he has paid to the arguments which he felt obliged to reject have been such as to
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make our task difficult where it should have been easy. I hope that I have not embarrassed my noble friend by making those comments.
I wish to make my own position absolutely clear. I am in no way speaking on behalf of landlords, except that I am concerned about charities which are landlords. Apart from that I do not speak for landlords. Indeed, I venture to say that I do not believe that they have helped their case during our debates. Your Lordships are concerned with the extent to which government are justified in taking what belongs to one person and giving it to another, albeit at a price, there being no particular virtue in the tenant nor vice in the landlord. I wish to make it clear that a bad, rapacious, oppressive or negligent landlord will present no problem for me. I believe that such people could well have visited upon them the most fierce penalties. However, I have the gravest doubts about the comprehensive measure which is proposed.
I have never been an avid reader of party manifestos and I do not intend to repeat verbatim what appeared in the Conservative manifesto at the previous election. However, I am anxious about what Ministers have said on behalf of the Bill. Some weeks ago the Spectator produced an article which was hostile to the Bill. It drew forth from no other person than the Minister for Housing, who rightly or wrongly I regard as the parent of the Bill, the following comment in a letter to that publication:
"A huge number of perfectly ordinary people living in flats throughout England will indeed benefit from this legislation and have a real say in how their homes are run".
In saying that, the Minister conveyed the impression that that was the total objective of the Bill. However, the Bill has gone much further and it is that to which some of my noble friends and I object.
It seems to me that the Government's behaviour indicates their belief that it is important to please the many without being too worried about how unfair or oppressive they are to the few. Landlords are not particularly popular people and I do not speak for them. However, I am saying that it is always dangerous for governments to take that path, which disregards the basic questions of fairness to the few. For governments to substitute their judgment for that which has been reached between two parties to a contract on the grounds that they have a greater awareness of what is right and just is a dangerous and arrogant step. Those who take it might well find themselves rewarded not with the popularity and applause which they seek but with something very different.
I do not need to repeat the detailed arguments for the amendments which were adduced with such cogency by my noble friend Lord Boardman. I simply wish to say with all the emphasis that I can command that I believe he was right in moving the amendment and right in the reasons that he gave for doing so. I hope that your Lordships will take the long view and will realise that there is a point—not a small parochial point which does not matter but a point of deep principle—which one should not ignore.
Lord Williams of Elvel: My Lords, as the noble Lord, Lord Harmar-Nicholls, will know, it is

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customary to allow those noble Lords who put their names to an amendment to speak and to make their case before other noble Lords rise to do so. I have done that—
Lord Harmar-Nicholls: My Lords, that certainly is not a convention and I do not believe that it is a custom that people who put their names to an amendment have priority in speaking. The working of the House is clear; it operates so that all may speak from the various quarters. The custom does not exist.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord, Lord Harmar-Nicholls. If I said "custom" I really meant "courtesy" because I believe that it is a matter of courtesy. If four noble Lords put their names to an amendment it is a matter of courtesy to allow them to explain why they have done so.
Noble Lords: Hear, Hear!
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord, Lord Boardman, for the way in which he moved the amendment and to other noble Lords who have spoken to it. There is a certain cogency in their arguments. The problem as we see it is that Amendments Nos. 1 and 5, to which I am speaking, go too far.
In Committee I mentioned a study which had been carried out by the Consumers' Association. It showed that there was no uniform profile of leaseholder. The study showed that 90 per cent. of leaseholders had bought their flats within the past 10 years. Indeed, three-quarters of those surveyed had purchased their flats within the past five years. Therefore, if the amendment is accepted, at a stroke the new clause would effectively render the majority of long leasehold flat owners ineligible to take part in a bid for enfranchisement. While I have sympathy with the idea that there should be a residence test which would exclude foreign companies or other residence tests, I believe that the two amendments as they stand go too far.
The other issue raised by the noble Lords, Lord Boardman and Lord Campbell of Alloway, was the law of contract. We have had a great deal of discussion during the passage of the Bill about the sanctity of contract. I shall reiterate the point which I made on Second Reading—I do not like reiterating points which I made on Second Reading—that governments of both and all parties have sought and achieved the principle of overriding contract when, in their view, it was in the interests of the public to do so.
I accept the point made by the noble Lord, Lord Campbell of Alloway. It may be that the Government must take that on board. The abolition of the closed shop was a clear case of overriding the law of contract for which noble Lords opposite voted almost to a man. I do not believe that that principle is so entrenched that it cannot be overridden by governments when they feel it to be in the interests of the public at large.
I say again to noble Lords who have sponsored the amendment and who have spoken in favour of it so eloquently and persuasively that although we have
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sympathy with the idea that corporations in strange parts of the world may, by virtue of the Bill, become absentee landlords, nevertheless, we cannot accept the amendments as they stand and that is what we must deal with. Therefore, we shall vote with the Government should the matter be tested in a Division.
4 p.m.
Lord Coleraine: My Lords, in asking the House to reject the amendments, I do not propose to cover again the arguments which other noble Lords, the Minister and I advanced at an earlier stage. I merely pick up two points made by my noble friend Lord Boardman in moving the amendment. The first has been referred to on several occasions; it is concerned with the manifesto commitment. On two occasions during the year leading up to the general election, well publicised pamphlets issued by the Department of the Environment and the Welsh Office made it clear that no such residency qualification was to be imposed upon the right either to enfranchise or the right to have an extended lease. For reasons which no doubt seemed good to them, the Government have taken away that right from non-residents in connection with extended leases. However, it would be a great shame if this House were to take away in any shape or form, whether by this amendment or any other, the right of non-residents to protect their investments. I say quite frankly that people who are owners of flats should have the same rights as those who reside in them. It would be a great shame if that right were taken away by this Government in any shape or form.
The second point is the question of sanctity of contract, referred to by my noble friend Lord Boardman and stressed again by my noble friend Lord Campbell of Alloway. My noble friends referred to Amendment No. 160—the right to manage—which will be discussed shortly. At some point my noble friend will have to explain where the question of sanctity of contract comes into the picture as regards lessees of a building having the right, in breach of the sanctity of contract, to take away the right of management from their freeholders. That is an argument to which we shall come later. In the meantime, I hope that the House will reject the amendment.
Viscount Mountgarret: My Lords, I must take issue with my noble friend Lord Coleraine. He seems to have overlooked totally the fact that some people own property which they do not wish to dispose of. This clause will permit a person living in a flat, or for whom the flat is a principal residence, to turn round to his landlord and say, "Whether you like it or not, we are going to buy it from you". That seems to me grossly wrong. If the matter is thought through to its logical end —my noble friend Lord Middleton is sitting in front of me and I do not wish to take the steam out of what he might say —it could extend even further than that. The arguments were well rehearsed in Committee and it would be fruitless to go over them again.
I believe that people fall into three categories. First, there are some who are not affected because they neither lease nor own their flats. They do not perceive

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perhaps the difficulties which we shall create if we allow the Bill to go through unamended. Secondly, there are those who occupy their flats. They perceive that it might be a very good idea to be permitted to buy at all costs. They have probably not realised what is entailed in running and administering their own properties. I imagine that at present the properties are looked after very well indeed by the landlords of those properties, whether they be in London or the provinces.
The third category of people own the properties. There are many people in this country—including many of your Lordships—who may feel that they have a vested and pecuniary interest in retaining those properties. Those people have an absolute right to do so. Many landlords have looked after their properties following a tradition that has lasted for perhaps hundreds of years. We should be grateful to them that properties in our cities and towns, not only in London but also the provinces, are looked after so well. Those landlords have looked after those properties at great expense to themselves. I realise that they are at the same time making a profit, but that is business. There is nothing wrong in that.
Last week saw some rather dramatic events for my noble friends on the Front Bench and colleagues in another place. I say quite seriously to my noble friend on the Front Bench, because it is relevant to a number of matters, that the perception that disquiet exists only because of the recession is not quite true. The reason for the disquiet is the unacceptable policies which, for some reason, Members on this side of the House have tried to promote regardless of the feelings of supporters at the roots of our party in the country. This is one example. Will the Government listen or will they not? I am not speaking to noble Lords opposite. They are delighted about, and are revelling in, this legislation. I should be the same were I sitting on that side of the House. However, I urge the Government to take the point on board. They should listen to what people really want. They should listen to what makes sense. If it means making a U-turn, they should make it. They should listen. This is retrospective legislation. It is the breaking of the sanctity of contract. There are further spin-offs for the future which some people can perceive. I urge my noble friend to listen to the arguments of my noble friend Lord Boardman in moving the amendment. I urge the Government to accept the amendment.
Baroness Hamwee: My Lords, there is one point on which one must agree with the noble Lord, Lord Mountgarret; namely, that the Government should listen. Surely it does not escape noble Lords that those of us on these Benches, and also on the Labour Benches, listen to what people want. If we were going blindly ahead ignoring what people wanted, then it would be so much the worse for us. It is because we have listened to the argument and have made our own assessment of where the balance lies that we oppose this amendment and support the thrust of the Bill, as I made clear at earlier stages.
Like other noble Lords, I must declare an interest. My interest is merely that of a leaseholder in a
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building which consists of two flats with a resident landlord. It is not much of an interest and it certainly does not apply now.
There has been no pretence among many who have spoken in support of the amendment. They have no wish to see the Bill go through. The noble Lord, Lord Mountgarret, spoke about the debt that the country owes to freeholders who have preserved properties for hundreds of years. Like many other people who have never been able to aspire to such nice properties, I have lived in a very ordinary block which could not even be called a mansion block. This Bill is largely designed for people like that. It is not simply about the great estates in London.
To suggest that the amendment is not designed to wreck this part of the Bill is not to deal with the matter entirely directly. The more individuals are excluded, the more tenants who would qualify in their own right are also excluded from enfranchisement. Because of the way the Bill works—namely, that a certain number in any property need to qualify to allow others to take advantage of the qualification—for this amendment to apply would create a very arbitrary position. As the Minister pointed out at Committee stage, it would mean that tenants and properties would move in and out of eligibility in a way that would be very difficult to keep track of.
The question of intervention in contract and the sanctity of contract is a very important issue. I do not believe that many noble Lords would lightly ignore that, or take a view that it should simply be over-ruled. But there are other interests. Those have been very fully dealt with at Second Reading and in Committee and I sense that we are covering a great deal of old ground and not making a lot of headway. But I wonder whether we are talking, in the case of some noble Lords, about sanctity of contract or sanctity of property. I wish that perhaps some of the energy of noble Lords opposite had been brought to bear at the time of discussions about the right to buy properties in local authority ownership.
Leaseholds are a wasting asset. Often—as we have discussed at previous stages—those who own the leaseholds had no option as to the tenure of property. There was not a freehold for their particular circumstances in their geographical area that was available to be bought. The whole issue of management has also been addressed. We cannot support the amendments. Perhaps the most interesting point to come out this afternoon is the suggestion that somehow Members on these Benches are disqualified from voting and that this is somehow an internal matter. I found the arguments of the noble Lord, Lord Harris of High Cross, quite fascinating. The one point that has particularly struck me since I came to this House not so very long ago is the equality and the respect for other opinions that is so very evident. I hope that noble Lords will make up their minds on what is clearly a difficult issue. But we shall not support the amendment.
Lord Annan: My Lords, I will be very brief. Is it not possible that large numbers of the leaseholders who have waited for this Bill, as a result of which they hope their properties will he enfranchised, are sound

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supporters of the Conservative Party and that the noble Lord, Lord Strathclyde, will naturally be listening to them?
Baroness Gardner of Parkes: My Lords, I think it very important that we hear a few voices of noble Lords on this side of the House who support the Government and oppose the amendments. The appearance of the amendments is rather innocuous. They seem to address a provision that we would all like to see; namely, protection of residents over other people. But of course, that is not their purpose at all. When we look at them carefully, and when we listen to the speech of the noble Lord, Lord Boardman, who mentioned that 60 per cent. of all properties are now sold to people other than residents, we see that if the amendments were carried we might as well throw the Bill out altogether. No one will be able to enfranchise anything —certainly not in the London area. Outside London the position may be different, but if these amendments were carried I believe that in the London area pretty well all blocks would be ruled out of enfranchisement. I know that the noble Lord, Lord Boardman would be delighted with that result. But it would be very unfair to the many residents in those blocks who, unless there is an opportunity to enfranchise, will not have their right to do so. I therefore view the amendments most seriously and think it very important that noble Lords think clearly of the total implications in this matter. I oppose the amendment.
4.15 p.m.
The Earl of Onslow: My Lords, the noble Baroness, Lady Hamwee, said that leasehold flats are a wasting asset because they are going down in value. Of course that is true if one buys a short-term lease. But equally, today's lunch is not resaleable either. There are an awful lot of items which, once one has bought them, one cannot resell.
I am afraid to say that unless we pass this amendment the Bill will go down as a continuation of the "tack" and general tackiness on which the Government have been attacked quite recently. Questions such as Matrix-Churchill have left a bad taste in the mouth. There have been several other matters which have left a bad taste in the mouths of the Government's supporters. Unless the Government take that on board they will continue to have worse times than they did on Thursday of last week. It is unfortunate that the parties opposite, who claim to hold the high moral ground, seem to be trying to get in on this same act.
It has been interesting to note that those noble Lords on this side of the House who have supported the amendments have all been occupiers of leasehold flats. I am afraid to say that I find that another example of "tack", and I believe that we should be ashamed of ourselves.
The noble Baroness, Lady Gardner, said at Committee stage that she did not want to hear any more about a rich Californian who had been about to buy the pensioner's flat from the BP pension fund.
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Well she is going to hear a bit more about him. I saw him last week. He has a grin on his face the size of Mount Isa. He is as happy as a sandboy because he is getting something from the BP pension fund at very much less than he paid for it.
Baroness Gardner of Parkes: My Lords, it is not true. The formula will give him—
The Earl of Onslow: My Lords, the noble Baroness says that it is not true. The formula will not. He is quite happy. He is a very experienced businessman and he is delighted that the Conservative Government have given him a trough into which he can place his snout.
Perhaps noble Lords may think that I am getting rather cross over this issue. I am getting rather cross. It is unfortunate to see a Conservative Government behaving in this way. I shall support my noble friend Lord Boardman.
Viscount Torrington: My Lords, I should like to be clear about what my noble friend Lord Campbell of Alloway called "the Library". This debate makes strange bedfellows. I believe that this is a wrecking amendment for precisely the reasons set forth by the noble Lord, Lord Williams of Elvel. It is a wrecking amendment simply because the mathematics of it do not work. I take the point made by the noble Lord, Lord Harris of High Cross, and by numerous other noble Lords. Perhaps some modest residence qualification would make sense. Indeed, I would personally commend to the Government some elements of Amendment No. 14. But I stand rigidly against it, and I hope that other thinking Members on these Benches and on the Benches opposite will vote against the amendment and perhaps consider Amendment No. 14 in some modified form.
Lord Cavendish of Furness: My Lords, I wish to intervene briefly to speak in support of my noble friend's amendment on a matter of principle. Like all principles I believe this matter should transcend political parties and should concern every Member of the House. On Second Reading I believe it was the noble Lord, Lord Williams of Elvel, who cautioned noble Lords against failing to declare an interest. I believe the burden of his message was that we should pursue this matter as though our interests did not apply.
I declared an interest then, and I declare it again now. Recently, through inheritance, I acquired a small flat in London which, if this Bill were to pass into law, would be enfranchiseable. I would be the gainer. I do not reside in the flat and I have no intention of doing so. My noble friend Lord Coleraine was wrong in thinking that he was speaking for me when he made his remarks about owners. In my judgment I will gain substantially from the inheritance. I have never sought that privilege and none would say I deserve it. I do not think I will get any thanks from my neighbours for supporting my noble friend's amendments and I do not think I will get any thanks from my trustees for supporting this amendment. Perhaps I will not get any thanks for supporting the amendment from certain noble Lords. However, I support my noble friend's

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amendment on the grounds that I believe it to be profoundly wrong that I and thousands like myself should gain from the measures of this Bill.
Lord Gisborough: My Lords, I support the amendment and I wish to ask some questions. Mention has been made of free legal advice to leaseholders. That presumably will become a precedent and it will be a dangerous precedent. If one party is gratuitously allowed access to free legal advice, why should not the other party be allowed that free legal advice too? Noble Lords have made innuendos against landlords and foreign companies. I think it is wrong to denigrate certain parties unless for some reason they have committed a crime or done something which is wrong. It is wrong that we should denigrate parties who have done nothing wrong. No evidence at all has been provided to show they have committed any offence.
It has been said that we should listen to the people. Of course people who are going to get something for nothing will somewhat naturally be vociferous in saying they want that thing. Those people bought their leaseholds in the full knowledge of the number of years that were left on the lease. The price they paid was that much less. Clearly, when one buys a leasehold flat with two or three years to run, or whatever the term may be, one is effectively paying just two or three years' rent. If the sales are to be forced, it is only fair that they should seek the full value of the investment.
Lord Harmar-Nicholls: My Lords, I believe the most important speech on this amendment was made by the noble Lord, Lord Williams of Elvel.
Noble Lords: You have spoken already.
Lord Harmar-Nicholls: I have not spoken already. I asked a question. That is a very different matter as regards the rules of debate. We are not debating the Bill at this stage; we are debating an amendment. Amendments Nos. 1 and 5 have the support of the noble Lord, Lord Williams of Elvel. He said he had a great deal of sympathy with the principle of not allowing people who had never occupied premises to make a profit out of the Bill. That interferes with the sanctity of contract and it is retrospective legislation. However, he added that the amendments would not fit in with his sympathetic acceptance of that proposition.
I would suggest, particularly to my noble friend who is to reply, that if he can say that the amendments injure the Bill as a whole and that there is no way at all of producing an amendment to the Bill which would confine itself to dealing with the point that people who have never occupied the premises in question will not make a profit, noble Lords are right to resist the amendments. However, I cannot believe that if we have the sympathy which has been expressed and which, I believe, many of my noble friends feel, this House is not capable of producing a form of words which will separate from the Bill that particular item. If the House is not capable of that, I should be surprised almost to the verge of being disgusted. The only alternative for dealing with this vital matter would be a vote against the Third Reading of the Bill
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when that time comes. No one would wish to oppose the decision of another place to the point of voting against a Third Reading.
However, before one can say that one will not vote against Third Reading, the House must have a clear explanation as to why one particular point embodied in the amendments and supported by the noble Lord, Lord Williams, and certainly mentioned in the speeches from the Cross Benches, cannot be accepted. If my noble friend can say that it would be dangerous to the Bill as a whole and that he cannot find an answer to the problem, then we shall have to vote against the measure. If he can say that he accepts the principle of sympathy expressed by the noble Lord, Lord Williams, and that he will table a manuscript amendment, or even an amendment on Third Reading —that is possible in this House —to achieve this one narrow point, he will get his Bill and we will not need to press the matter to a vote on this occasion.
Lord Renfrew of Kaimsthorn: My Lords, I had not intended to intervene in the debate today. I thought that the proposer of the amendment made some fine and appropriate distinctions, some of which I could see the point of. Hearing the speeches which have followed from this side of the House and other sides of the House, I have come to feel with much greater clarity that the Government are in the right and that this amendment is not acceptable. I must tell your Lordships that many of the speeches could have been addressed as effectively against the principles underlying the Bill as a whole as to the principles underlying this amendment. Indeed they could have been addressed against the Leasehold Reform Act 1967 or a whole series of other pieces of legislation, many of which are generally accepted in retrospect as wise.
I do not feel it appropriate to support the amendment. The purpose behind the Bill is clear. It is to enable a great number of individuals to secure the freehold of the premises which they occupy, or at any rate which they rent. It is clear that if this amendment is carried, that objective will not be fulfilled. That will be the outcome. Interesting points of principle have been raised with which I do not entirely disagree. However, when it comes down to it, the outcome of the amendment would be to thwart the general purpose of the Bill. I cannot support the amendment.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, I feel that we have had plenty of time to discuss this issue. The noble Baroness, Lady Hamwee, was right when she made two points. She said that this is an important issue and that we have heard many of the arguments before. That point was echoed by my noble friend Lord Renfrew. The issue is important and we have heard many noble Lords speak on it before, particularly in Committee, when the amendment was rejected by a vote.
My noble friend Lord Boardman has yet again proposed an amendment to deal with the test of residency. He prayed in aid of his case two particular aspects. First, he said that the manifesto at the previous election promised enfranchisement for those

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people living in flats. Secondly, he said that this matter concerned sanctity of contract unless there were overriding public interests to be taken into account. The Government have supported leasehold enfranchisement, not just in this Bill, but also in 1974 and in 1967. We have supported it in the past where there has been a residency test. We supported it in 1967 and in 1974. We included it in this Bill as regards leasehold extension. Therefore, I can understand why many of my noble friends should ask why we cannot have a residency test for this aspect of the Bill dealing with the enfranchisement of leases for flat owners. There is an easy answer, but I am not sure that it is one my noble friends will find palatable. We are not opposed in principle. I have demonstrated that that is the case because the Government have supported the residency test many times in the past. We are opposed to the amendment because it will stop the enfranchisement of flats dead in its tracks.
My noble friend Lord Boardman and many of my noble friends who spoke are not against the enfranchisement of houses. My noble friend Lord Boardman accepts the manifesto commitment, but he is proposing an amendment which will make sure that people who live in flats will be unable to enfranchise. It is that contradiction which the Government have tried to address by not putting forward a residency test for flats.
Many of my noble friends have asked: if we cannot have a full residency test for flats, what can we do? Where can we find a point of agreement between the whole House and the Government? The noble Lord, Lord Williams, recognised that point when he said that there was some cogency in the arguments which he had heard. I agree with him. A persuasive case has been put forward by my noble friend. But there is the fundamental difficulty that we wish to allow the enfranchisement of flats.
Lord Clark of Kempston: My Lords, if that is the case, why is Crown property excluded from the Bill?
Lord Strathclyde: My Lords, Crown properties are an entirely different issue. My noble friend knows perfectly well that it has been agreed that the vast majority of Crown properties, although not written into the Bill, will come under those provisions.
At the beginning of this Report stage the noble Lord, Lord Williams, said that he had not had time to analyse the groupings list because it had arrived a little late. I am sorry to hear that that was the case. The noble Lord referred to Amendment No. 14 in this grouping, which was also mentioned by my noble friends Lord Boardman, Lord Campbell and Lord Torrington. That was the point which my noble friend Lord Harmar-Nicholls mentioned. In the Bill it will be possible for a block of flats to be enfranchised by people who are entirely non-resident. They may be corporations and some may be foreign. I understand the very real anxieties of my noble friends. Amendment No. 14 has not been moved, so I am not entirely sure what is at the back of my noble friend's mind, but I see that there is some merit in a reading of that amendment.
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I should like to conclude by telling my noble friend Lord Boardman that I cannot accept the amendments that he has proposed, for the reasons which I set out in Committee and have repeated again today, and which have been echoed by many noble Lords today. I feel that it would be wrong for the House to pass this particular amendment because it does so much damage to the principle of enfranchising flats. However, perhaps when we come to Amendment No. 14 we can consider it far more positively to see whether there is a way forward to deal with the problem.
4.30 p.m.
Lord Boardman: My Lords, I am grateful to my noble friend for those remarks, which are extremely helpful. First, however, perhaps I may correct three matters which arose during the course of the debate. The noble Lord, Lord Williams of Elvel, mentioned a period of 10 years. If he looks at the amendment which we are debating, he will see that residents of three years' standing would qualify as the principal leaseholder. Perhaps that was an oversight on his part.
My noble friend Lord Coleraine said that the leaflets which were issued during the election campaign were valid and should be noted rather than the manifesto. I really cannot agree. A great deal of information goes out during an election campaign but the one document which really means something should he, and is, the manifesto.
Lord Coleraine: My Lords, I am grateful to my noble friend for giving way. The pamphlets were issued nine months before the election. They were well known and well circulated.
Lord Boardman: My Lords, I do not see that that in any way alters the credibility of the manifesto. My noble friend on the Front Bench referred to the 1967 Act. I remind him that during the debate on that Bill the Conservatives voted solidly—by 191 votes—against the provision. I should not like it to be recorded that we were supportive of it at that time.
Having said that, I was interested to hear my noble friend give a warm welcome to Amendment No. 14. Many noble Lords on both sides of the House feel as I do that the Bill is wrong and that we should seek to disallow non-residents who should not be able to enfranchise. It may be a case that half a cake will be better than none at all.
Amendment No. 14, which I have put down with the noble Lord, Lord Palmer, and which we shall come to in due course, is something of a fall-back amendment in case this amendment does not receive the universal support which it deserves. The noble Lord, Lord Williams of Elvel, and the noble Baroness, Lady Hamwee, have made it clear that their Benches will not support the amendment. I am surprised and disappointed that they should he supporting the Government in what I believe are clearly breaches of both a commitment —about which noble Lords opposite are obviously not too concerned—and the sanctity of contract.
Bearing in mind that my noble friend has indicated that he will view with favour the amendment in my

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name and that of the noble Lord, Lord Palmer, which will be debated later, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

School Tests
4.36 p.m.
The Minister of State, Department for Education (Baroness Blatch): My Lords, with the leave of the House, I shall now repeat a Statement which is being made in another place by my right honourable friend the Secretary of State for Education. The Statement is as follows:
"My right honourable friend the Prime Minister and I have already confirmed the Government's commitment to this summer's tests for 7 and 14 year-olds. There is abundant evidence of the importance of testing the progress of our children. Our main competitor countries do so as a matter of course. So should we.
"It would be a betrayal of a further generation of pupils to postpone what is acknowledged on all sides to be a much needed educational reform. It would be to set aside the tremendous efforts made by the great majority of hard-working teachers to implement the National Curriculum since 1989. Tests for 7 year-olds are in their third year. We know that they work. Tests in 1991 and 1992 have improved standards of teaching and learning. Last year's pilot tests for 14 year-olds were well-received: attendance went up on test days. Her Majesty's Chief Inspector said only yesterday that the evidence provided by a good testing system was essential in order to assess the progress of our schools.
"Children have been working towards the tests for several years. Abandoning the tests would leave conscientious teachers, concerned parents and the wider community in the dark about our schools, depriving them of vital information about the attainments of individual pupils and denying Sir Ron Dearing information about the quality of the tests themselves which he himself has asked for.
"I turn now to the testing arrangements in 1994. Sir Ron Dearing has been given the widest possible remit. His task is to advise on how the curriculum and assessment framework in the round can be simplified and streamlined in response to the concerns of many teachers.
"I have discussed with Sir Ron the implications for 1994. He has advised me that the tests next year should focus on the basics. I agree. The Government have therefore decided that mandatory tests for 1994 for 7 and 14 year-olds should concentrate on the core subjects of English, mathematics and science and on Welsh as a first language in Wales. We shall decide later whether to add technology at age 14 in the light of this summer's tests.
"The testing arrangements in these subjects will he streamlined, with some substantial changes to coverage and style. I have asked Sir Ron to advise
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by July on how this can best be done, including what the balance should be between tests and teachers' own assessments.
"Sir Ron will, at my request, consider carefully the merits of external marking of the tests of 11 and 14 year-olds.
"The current obligation on teachers of 7 year-olds to make assessments of classroom work in technology, history and geography will be lifted in 1994 and will not be introduced in music, art and P.E., allowing these teachers to concentrate on the basics.
"Next year's tests for 11 year-olds in English, mathematics and science will take the form of a national pilot, leading to mandatory tests in 1995.
"The introduction of mandatory tests for 14 year-olds in history and geography which had been planned for 1994 will be postponed pending Sir Ron Dearing's review.
"Finally, to ensure that Sir Ron Dearing's recommendations about changes to the curriculum itself can be rapidly implemented, the Government propose to suspend for a period the consultation procedures specified in Sections 20 and 21 of the Education Reform Act. We shall move an appropriate amendment to the current Education Bill. This will preserve during the interim the duty on me and the Secretary of State for Wales to consult about changes, but will be designed to enable us to proceed to make changes after a single stage of consultation in cases, like this, where the need for change is widely recognised and the changes themselves are the product of extensive prior debate. These decisions will significantly reduce the work load on teachers in 1994.
"It is in the interests of properly taught children, informed parents, employers and the nation as a whole for the testing arrangements I have described today to go ahead without interruption. If not, we will have an education system without adequate rigour, and will have conceded a decade's advantage to our international competitors".
My Lords, that concludes the Statement.
4.42 p.m.
Lord Judd: My Lords, I am sure that the entire House is grateful to the Minister, particularly after such a late night, for repeating the Statement here this afternoon.
What an upheaval! Another 11th hour conversion, all too characteristic, I fear, of the indecisiveness and dithering of the present Administration. Over and over again, we are confronted by intransigent, insensitive, blinkered government, plodding relentlessly ahead until, at the 11th hour-plus, with maximum damage done, the Government do an inelegant U-turn, usually involving a kick for touch, a delay till next year, with Sir Ron Dearing wheeled into the firing line on their behalf.
In this House we have to face the fact that the crisis is right now; it is an immediate crisis. It is now, in May 1993, that there is a total lack of public confidence about what is happening in our schools. It is a sad emblem of this Administration that they are not only

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incompetent but have had the obstinacy to carry on for so long with a completely moribund system. Perhaps the noble Baroness opposite will care to comment later on the reasons that the Government have been so determined to carry on with a system which parents, teachers, the Government's own advisers and even some politicians from Conservative ranks have so roundly condemned.
It is typical of the modern management of the party opposite that they have considered that continuing with a system which is universally unpopular is a sign of strength. Does the noble Baroness really believe that a glossy advertising campaign could have sold such a rotten product? Such an attitude has been patronising to parents and teachers alike. It has also wasted still more of the money which the country's education system so desperately needs.
Support for the Government's education policies is at an all-time low. Parents have already clearly made their choice—a choice to disagree with the Government's educational policies. Sixty-two per cent. of the public said in a Gallup poll last weekend that they sympathise with the teachers' boycott of this year's tests; only 50 per cent. of the public were in favour of testing at the ages of 7, 11 and 14. A large majority is against testing at the age of 7. A poll in the Independent newspaper found that 52 per cent. of parents were in favour of abandoning the tests this year, not next year.
What choice do parents have, if the Government are still determined to grind on this year with testing, in opposition to the clearly expressed wishes so frequently put forward by the parents themselves?
What will the Government do to parents if they withdraw their children this year from tests with which they profoundly disagree? Does the noble Baroness really come to this House agreeing with her colleague Mr. Clarke, who contemptuously put down the opposition of parents to tests to teacher agitation? Does the noble Baroness really believe that parents are not intelligent and caring enough to know what is bad and good for their own children?
We on these Benches trust parents; no one is opposed to testing and assessment per se, but the tests for this year are high on administration and low on education value. That is why parents do not have confidence in them.
Why, if there are to be changes next year because present arrangements are seen to be untenable, must children this year be subjected to a continuing disaster? Where is the justice in that? What about the damage to the children this year?
We must, of course, welcome the Government's long overdue decision to concentrate, from next year at least, on core subjects and to recognise the case for greater flexibility. But can the Minister tell the House more specifically about the future of English testing and of published league tables, about whose inadequacies the public has convincingly registered its anxieties?
Meanwhile, will the Minister also explain to the House why the Government have refused even to consider the Scottish assessment system in which
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teachers and parents appear to have more confidence? We on these Benches believe that the Scottish system could well have been used, at least until the review is completed.
We are determined that the children of this country should get the education they deserve. Our children are not guinea-pigs; they are in the firing line of any dispute between this Government and teachers. They are the ones who suffer most and, by implication, so does the country's future. It is surely a sorry pass when the Prime Minister has to persuade the Secretary of State for Education to take action. Does the noble Baroness not agree that those in charge of education for the Government should take responsibility for the problems which they have created and not push the problems on to the Prime Minister and a Cabinet committee?
Of course, we are glad that the Government are acting at last. We hope that the review of the curriculum and of testing generally will be thorough, independent and that it will take into account the views of teachers and parents. However, it is far from reassuring that the Government have decided to cut out even the existing consultation procedures, and I hope that the Minister will be able to clarify exactly what that entails.
For the future, we are convinced that the membership of the School Curriculum and Assessment Authority must include a majority of those responsible for educating children rather than ideological placemen. As we argued last night, the authority must be ratified not by the Secretary of State for Education but by the all-party Select Committee on Education in the other House.
The way forward in education is through creating consensus. The crisis of confidence is because it has been made a partisan totem pole around which Right wing ideologues have frenziedly danced. We hope that the noble Baroness and her colleagues in the other place will, above all, now learn to listen. Insensitive arrogance has, I fear, so far been their hallmark—arrogance, which stems from anything but strong government.
Baroness Hamwee: My Lords, I join with the noble Lord, Lord Judd, in thanking the Minister for so clearly repeating the Statement, particularly after her late night last night. Indeed, she may have to endure other late nights later this week.
The Statement says that there is abundant evidence about the importance of testing the progress of our children. There is abundant evidence of concern about the tests this year, 1993, which the Statement does nothing to allay. In support of the success of last year's pilot test, comment was made that attendance went up on test days. If that is the extent of the evidence of support, it is poor evidence. I am appalled—I have to use strong language—that the Government propose, in order to go ahead with their programme, to suspend the consultation period provided by the Education Reform Act enacted only in 1988. To override consultation, or even to be thought to override consultation, can do no more than confirm the despair of teachers, parents and indeed pupils.

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I mentioned parents. The confidence that parents in this country have in the teachers who are teaching their children has become abundantly clear over the past few days. The noble Lord, Lord Judd, referred to the recent opinion polls and other reports of the support of parents. I do not believe that as a body parents by and large are against testing. I believe that they would like to see the programme work but not the programme as it is now. In fact, I suspect that they find it quite difficult to follow the current rows that are going on. It is an indicator of their confidence in the teachers of their children that they believe the expressions of concern voiced by those teachers and are prepared to say so.
I believe that parents would like to see a good and appropriate system. It is a tragedy that the Government have messed that up. The Government do not even seem to recognise the need to stop digging the hole that they are in or even to feel the pain when they shoot themselves in the foot.
Baroness Blatch: My Lords, first of all I thank the noble Lord, Lord Judd, and the noble Baroness, Lady Hamwee, for responding so fully to the Statement at very short notice.
The noble Lord, Lord Judd, started by referring to another eleventh hour conversion. I ought to make clear at this point that what was announced today was confirmation of the testing arrangements for 1993. But quite rightly, while there is a review pending, it is important to turn our sights on arrangements for 1994. It would be wrong further to delay those arrangements. September will be the start of the 1993-94 academic year and it is important that the framework for 1994 is made known to the schools in particular, the teachers and the parents. That is the reason that we have come forward today with those arrangements. I welcome what the noble Lord had to say about the 1994 proposals—namely, that children shall be tested on the basic subjects and that there will be some suspension of the other subjects that were planned to come on stream in 1994.
As for the 1993 tests, which the noble Lord believes should not take place, where children have been studying for three years now for those tests it is important that they should sit them. The children have worked hard for three years. Interestingly, the noble Lord, Lord Judd, and his colleagues did not make such comments last year. However, there was some very successful piloting last year of the science and mathematics tests. Indeed a very high percentage of schools took part in that pilot test. There were concerns but they were addressed and the information gained from that very large-scale pilot test informed this year's science test. We believe that the tests will continue to improve as we work with teachers to make sure that their concerns are met. The tests were received well and it is absolutely true to say that there was a record attendance of 14 year-olds in the days when those tests took place.
We responded and have continued to respond to suggestions for improvements. We listened and continue to listen to teachers and to respond to their concerns. We responded, for example, to the very first year tests for seven year-olds. They were better in the
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second year and even better in the third year. We extended the period over which the testing takes place and it is now possible to test seven year-olds from the middle of the spring term to one month before the end of the summer term, thereby making it much more manageable for schools and teachers. We also know that many of the tests for seven year-olds are now well under way in a large number of schools. The tests are not entirely completed, but there are some schools that are very close to completing them.
It is also important to keep the whole debate in perspective. We know that teachers have been concerned and we have already responded to some of them. We will continue to respond to those concerns —hence the Sir Ron Dearing review. But those concerns do not amount to a reason for pupils not taking the test. I have to say to the noble Lord and to the noble Baroness, Lady Hamwee, that when those tests have been taken this year we shall be showing those test papers to the world. Many parents who have been led to believe that somehow the tests are harming their children, when they see the test papers will wonder what all the fuss was about.
I was asked specifically about the future for testing English. I am not sure at what the noble Lord's question is aimed. English is a cornerstone subject in the national curriculum and it is absolutely fundamental that it should be tested rigorously. But the nature of the testing is part of the review. The noble Lord, Lord Judd, along with the rest of us, must await the outcome of that review.
The noble Lord also asked about the future of league tables. My department does not produce league tables. We produce information about the results of tests of children in our schools. We believe that that is important information for the child, the parent, the teacher, the school and the area in which the school is located. It also happens to be very important for us as a nation to know how well our children are achieving.
We can no longer stand by and wring our hands over our competitor nations doing better than we do —France, Germany, America or Japan doing better —if we are not even able to know how well our children are performing. We can only know when information is publicly available and measured against a national standard.
I understand the concern expressed by the noble Baroness, Lady Hamwee. She said that it was wrong to override consultation. I understand that she was referring to the possibility of suspending Sections 20 (and 21 as it pertains to Wales) in order to allow for speedier implementation of the reforms. I understand that. But it is important to remember that consultation is already under way with parents, teachers and all interested organisations.
I should like to put on record that Sir Ron Dearing has written to 1,400 schools inviting comments. He has met all the teacher unions and plans to meet them again. He has already held the first of a series of regional conferences with heads and teachers covering the full range of his remit. He has invited comments from every single school through The Times Educational Supplement. So there is a serious consultation process taking place.

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I make an appeal for understanding to all noble Lords. When that consultation period stops—it can be as extensive as is necessary for Sir Ron Dearing to come to a view about his advice to my right honourable friend the Secretary of State —and my right honourable friend has properly considered that advice and decided on a way forward for the medium and long term, I believe that it is in the interests of children and teachers that it should be implemented as quickly as possible. We simply ask for the forbearance of the House. We must speed up the legal process that follows the process of consultation to enable us to effect those changes as speedily as possible so that we have a long-term framework of national curriculum and an effective system of assessment and testing.
5 p.m.
Lord Glenamara: My Lords, I am utterly astounded at how insensitive and stupid the Government can be. They completely ignored last week's election results; they completely ignored the public opinion polls at the weekend; they completely ignore the fact that every teachers' union in the country, including that of the head teachers and the most moderate union of all, are opposed to the tests. They still push forward with them.
The tests will not take place. The Government want confrontation with the teachers and that is what they will get. I have been involved in teacher politics all my life. In persisting with this ludicrously complicated 14 year-old test this year the Government will cause a great deal of bad feeling which will persist in the education system for years to come. If they had an ounce of statesmanship in them, they would do this year what they propose to do next year and limit the tests to the basic subjects. If they did that, there is half a chance—I put it no higher—that the teachers would co-operate. I do not know, but it is worth trying.
Why do the Government push forward this crazy 14 year-old test system? They have taken leave of their senses. The seven year-old tests are cruel nonsense. At least one-third of children do not learn to read until they are seven. Also, I wonder whether noble Lords realise that half the children who take the so-called "seven year-old" tests are only six years of age. Yet they are solemnly tested and the results recorded and published. It is utter cruel nonsense and the results published are not worth the paper on which they are written. The tests are cruel to the children and to the parents. They give a completely misleading impression. I am shocked and disgusted by the Government.
Baroness Blatch: My Lords, I know that the noble Lord's experience in education is much more extensive than mine. But I wonder whether he has physically been in a school when the seven year-old tests have been carried out. What happens in practice when children are tested in reading is that one day they are heard to read by a teacher, but this is not called testing; another day, when they are sitting reading one to one with a teacher, it happens to be called testing.
In most cases, in the hands of a good teacher, the child hardly knows that testing is going on. Testing the
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reading of a child at seven is fundamental to the progress of that child. If one goes into many of our secondary schools, as I do, one often finds large remedial departments. When one inquires why some children are in the remedial department, one frequently finds that it is because they did not acquire and consolidate the basic skills early in their lives in primary and infant schools. It is therefore fundamental to their progress that they learn and that the effectiveness of that learning is properly tested.
The noble Lord, Lord Glenamara, said that one-third of children do not learn to read until they are seven. That is precisely the rationale for introducing a national curriculum—so that we do not wait until they are seven before they learn to read; in fact, that they learn to read from the moment that they go into school and by the ages of six or seven they are making some progress—progress that matches their potential to learn.
Baroness Young: My Lords, is my noble friend aware that unlike other noble Lords who have spoken, I welcome the Statement? It is a positive response to public anxiety, and all of us who are interested in the important subject of education are aware of some of the difficulties that have been encountered.
I support standing by the testing arrangements this summer. I am glad to hear that we are going to look to 1994 for focusing on the basics, if I understood it correctly, of English, maths and science at 7 and 14. However, there is no doubt that we shall learn from the 14 year-old tests carried out this summer and they will be helpful in identifying the way forward.
It is worth remembering that when we introduced the Education Reform Act 1988—I will be corrected if I am wrong—many teachers did not want a simple test. They said it would be unfair. The Government therefore went into this much more complicated system of testing and assessment which now everybody complains is too complicated. There must be a way through all this and I am glad that Sir Ron Dearing is looking at it. I hope that he will find a way through.
If there is one positive success story that comes out of this, it is the seven year-old tests. It cannot be said too often that they have already raised standards—something for which we should all be grateful. The noble Lord, Lord Glenamara, may laugh and say that they are "cruel nonsense", but I too have taught for primary school teachers. I have looked at the test papers to see their content. Nobody will say that they are perfect but they have raised standards. I do not believe for one moment that seven year-olds are hurt by them. On the contrary, there is a broad measure of support for the testing.
I know what the polls said at the weekend because I read the results. But the fact is that when one looks at our education system as a whole, the brightest children have always been tested. They take A-levels because that is a qualification for higher education. The children that have suffered are the average and less average children because they are not being tested. That is where we are failing them. It is no use continuing to complain without bringing forward something positive. The Statement is a good way

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forward. I accept that the tests need amendment and I am sure that my noble friend would agree with that. But when the consultation period is over, we should be able to look to what should happen in 1994 and beyond.
Baroness Blatch: My Lords, I thank my noble friend for her welcome for the proposals. My noble friend makes the point well and it is true that evidence from this year's testing will be most helpful to Sir Ron Dearing in his work with teachers to effect and develop the tests in the future.
My noble friend is right when she refers to the importance of what is happening to seven year-olds. I wish to put on record that our infant and junior school teachers have risen magnificently to the challenge of the national curriculum. It has meant great changes for them. They have acted in an extremely sensitive way when testing seven year-old children. I have witnessed it at first hand.
But the most important point made by my noble friend, which I want to emphasise, is that it is as important to recognise and record progression for a child that starts at the bottom of the ability stream as it is for a child at the top of that stream. That is the rationale for both the national curriculum and for systematic assessment and testing.
Viscount Tonypandy: My Lords, I speak with some reluctance because I do not like to disagree with the noble Baroness, to whom I have listened often with agreement. Today I am disappointed. The noble Lord, Lord Glenamara, was a headmaster of a school in the North of England. He later became Secretary of State for Education and Science and through his life, like myself, he has kept in touch with the teaching profession.
In the 60 years that I have been linked with the teaching profession I have never known such overwhelming feeling from differing and rival unions. I believe it is unwise for Her Majesty's Government to say, as the noble and learned Lord, Lord Shawcross, said in 1946, that Whitehall knows best. He was proved wrong then. I believe that the Government are making a profound mistake in not doing this year what they propose to do next year. The noble Minister said that it would reduce the work of teachers. Why not do it now? I realise that in politics face-saving is very important—I like to save my own face from time to time—but there is an undoubted movement in the country, of which the Government are obviously aware (otherwise we would not have had this Statement today), to the effect that the will of the people is to take the advice of the teaching profession and to say that on this matter teachers know best.
Baroness Blatch: My Lords, I say to the noble Viscount, Lord Tonypandy, that I hope I have not detracted from the great experience and expertise of the noble Lord, Lord Glenamara. I said at the outset that his expertise outmatched my everyday experience. This House and indeed the country have benefited enormously from his enormous experience in government.
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The Government understand the widespread concern but cannot ignore Thursday and what teachers and parents are saying. I believe I have made the case that the Government have not ignored it. That is why the tests for seven year-olds are better this year than they were last year and were better last year than the year before. It is only by working with teachers in the classroom and listening to their concerns that we can respond.
The problem arose because of the enthusiasm and perhaps zealousness of the professionals in drawing up the subject orders. It was when the national curriculum started to come together that an unmanageable package was produced, particularly for primary schools. Sir Ron Dearing and his review team will be looking at manageability, the issue of overload —which we have admitted is particularly an issue for primary schools—and the formulation of a less complex assessment system. My noble friend Lady Young talked about trying to satisfy teachers who did not want straightforward tests that simply tested achievement but wanted diagnostic and summative testing all in one form, which led to a system that was too complex. We are looking at that too.
We have been asked why we do not change the system this year. We are only about four weeks from the tests that are to be sat. These children are being tested on a very small number of subjects. Many of the seven year-olds are more than half-way through their tests at the moment. We believe that primary school teachers will welcome the fact that we are to take a more fundamental look at the whole of the national curriculum and assessment and testing system. I do not believe that it will do the children any harm to sit the tests this year, but they will provide very important evidence for Sir Ron Dearing and his team to use in working with teachers to develop better and more effective tests next year and for years to come.
Lord Stoddart of Swindon: My Lords, is the noble Baroness aware that the Statement this afternoon has merely compounded the confusion that already exists and creates more chaos in the education system than has ever appertained before? Is she also aware that the examination system has now been reduced to farce and the education department is the laughing stock of the country, if not the world? Can we expect the Secretary of State for Education to resign?
Baroness Blatch: My Lords, I certainly take issue with what the noble Lord has just said. We have not yet heard a response from other people to the Statement today. The Statement has put two things before the House. The review that is taking place at the moment will look at the national curriculum and the assessment and testing system and take into account the concerns of teachers, head teachers, governors and parents. It is important for us to let the schools, teachers and parents know what we plan to do for 1994. Far from confusing people, we have said that we will strip away those subjects which were planned to come on stream next year and test only on those basic subjects. We will look at how in the interregnum we can simplify and streamline the testing

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in 1994. I believe that that makes the position clearer and there is much less confusion, which is the opposite of what the noble Lord has just said.
Lady Carnegy of Lour: My Lords, I too welcome the Statement, particularly the last part of it which speaks of the speedy implementation of decisions once finally made.
The noble Lord, Lord Judd, has said that he admires the Scottish testing system. I also admire it. But I would draw to his attention the fact that my predecessor in office, the chairman of the education committee in Tayside (who is a member of the Labour administration in Tayside at the present time), has for some months been stirring up a boycott to try to prevent testing in Tayside, using very much the same language as the noble Lord has used. I sometimes wonder whether or not the Labour Party is in favour of testing as part of the education process.
Perhaps I may refer to a speedy conclusion of the results of the current consultation and the final arrangements to be implemented in schools. I hope that my noble friend can assure us that the procedure she has suggested will result in quick implementation. Children are only 7, 11 and 14 once and they desperately need these tests. Teachers need them and parents want them. It is extremely important that Parliament, through its enjoyment of intruding into the education system by way of political discussion, does not hold up the implementation of those tests.
Baroness Blatch: My Lords, perhaps I may thank my noble friend Lady Carnegy of Lour for her welcome of this proposal. As to the point about speedy implementation, I can give her the assurance that, as pointed out to the noble Baroness, Lady Hamwee, the Government want to carry out a thorough exploration of this issue and then go for the speediest possible implementation in the interests of children and teachers. As to the Scottish system, because there is no national curriculum in Scotland, the testing system is basically different. I also make the comment made by my noble friend. I do not believe that noble Lords opposite support testing, and I know that they do not support public information and public accountability for that testing.
Lord Dormand of Easington: My Lords, I have seldom seen so many red herrings swim past the Government Front Bench. In the first place, we must get absolutely clear that teachers are not against testing. They are as keen, enthusiastic and dedicated about testing as the Government profess to be. What they are against is the present form of testing. I remind your Lordships that the objections that have been voiced are two-fold: first, that the tests are fundamentally flawed, which is a matter of professional judgment, and, secondly, concern about bureaucracy and the time that is being taken up in the classroom itself. Last week, following the Government's humiliating defeat in the elections the first thing that the Prime Minister said, very properly, was that he would listen to people. By an overwhelming majority all of the unions, except for
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the NUT—and there is no question what the declaration of that union will be on Thursday—have expressed their view. If the Government will not listen to that, heaven help the education system. I end by putting a practical question to the Minister. Who will administer the tests this year? That matter has not been touched upon. If the Government do not get proper co-operation after a proper ballot, which they are obviously not getting, who on earth will do the testing this year?
Baroness Blatch: My Lords, pre-1988 it is not possible to say that all children were tested in schools. For many children going through schools the first public testing they had—or the first testing against any kind of standard—was the GCSE at the age of 16, which for many children was much too late. The noble Lord mentioned the National Union of Teachers. It is worth recording prior to the result of the ballot, which I think is fairly predictable, that the National Union of Teachers is opposed to all national curriculum testing in all subjects at all levels for all children. I do not believe that is constructive in this debate.
The noble Lord's final question was about obligation. There is a statutory obligation on head teachers and governors to see that the tests are administered. We would expect them to make all reasonable efforts to see that the tests were administered.

Housing and Urban Development Bill
5.21 p.m.
Consideration of Amendments on Report resumed on Clause 1.
Lord Coleraine Lord Coleraine moved Amendment No. 2:
Page 2, line 29, leave out ("qualifying tenant of a flat") and insert ("tenant of a flat or other unit").
The noble Lord said: My Lords, in moving this amendment I speak also to Amendment No. 3. These are technical amendments. Under Clause 1, flat owners are entitled but not obliged to enfranchise in respect of appurtenant property demised by the leases of qualifying tenants. Appurtenant property is property outside those premises which are the primary subject of the enfranchisement, and is defined as any garage, outhouse, garden, yard and appurtenances belonging to or usually enjoyed with the flat. In addition, enfranchising flat owners are entitled to ask to acquire land outside the relevant premises which qualifying tenants are entitled under their leases to use in common with the occupiers of other premises.
The amendments would allow the enfranchising qualifying tenants to have exactly the same options to acquire appurtenances and rights of user in respect of commercial properties and other flats in the building; that is to say, flats held on short leases and flats held on long leases but not at low rents.
There may be a case for not extending the provision to short leases, but as regards long leases there seems to me to be no reason why commercial properties and flats should not be sold with their appurtenances and rights, which is what would happen in the property market in the normal way. The appurtenances and

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rights would have to be paid for in the usual way together with any severance payment, injurious affection payment, under paragraph 5 of Schedule 5.
I should like to give examples which illustrate my point. It may be that the garages built with a block of flats are in a separate block, or it may be that the storage facilities associated with a shop are similarly in a detached building. It would be curious if all the garages and the storage space could not be acquired in one go with the freehold reversions to the flats and shop. Another situation would he where a ground floor flat with an adjoining garden would be detached from the garden at the coming to an end of the lease.
In all these cases the rights which I would extend to flat owners can be overreached by the freeholder exercising the right of leaseback. I put it to my noble and learned friend the Minister that an amendment along the lines of this group would give a better and more realistic balance to this part of the legislation.
The Lord Advocate (Lord Rodger of Earlsferry): My Lords, I have listened with interest to what my noble friend has said. I noticed that in his concluding words he talked about a balance. It seems to me that in saying that he hit upon what is correct. In this matter one has to have regard to balance. Built into the Bill there is a certain balance. While the policy in the Bill is to extend enfranchisement to as many tenants as possible, nonetheless we have tried to do that at the same time as restricting to the minimum the amount of property which qualifying tenants can acquire. Accordingly, under Clause 1, as it is drafted, they may acquire only property demised in their own leases including, if it is demised in their own leases, appurtenant property such as a garage, a garden or whatever it may be. They may also get any property which they are entitled to use in common with others. Given that the property is being acquired against the freeholder's will, that seems to us to be the correct principle to apply.
On the other hand, my noble friend's amendment seeks to extend the right of acquisition to appurtenant property demised in leases held by tenants, other than the qualifying tenants, of any flats and units contained in the relevant premises and also to property which any of the tenants of flats—and not just the qualifying tenants—is entitled to use in common with others. Given the basic approach, which is to minimise the amount of property being taken, we did not want to allow the enfranchising leaseholders to acquire appurtenant property let to non-qualifying tenants or property over which non-qualifying tenants have rights of use in common with others, although I can see that in certain circumstances that might at least be convenient.
Our policy is to allow the qualifying tenants to be entitled to acquire the minimum property necessary in order to give them control of the property demised to them or over which they have rights. I recognise that this may result in a division of the reversionary interests in some non-qualifying properties, but there is no reason why that should adversely affect the tenant of the property because the terms of the lease will remain unaltered.
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My noble friend Lord Coleraine drew attention to the provisions of Clause 19(4). Under those provisions, the existing reversioner may in the counter notice require the enfranchising leaseholders—the nominee purchaser—to acquire any interest in the premises that would for all practical purposes cease to be of use and benefit to the freeholder or any of the other landlords or would cease to be capable of being reasonably managed or maintained by him. I believe that this power is likely to be used in many cases where isolated units would remain outside the enfranchisement.
Where the existing freeholder or any intermediate leaseholder is prepared to retain those interests, and is willing to remain as landlord to the non-qualifying tenants in respect of those interests, it is consistent with what I have outlined as the fundamental approach of the Bill that he should be entitled to do so. I do not see that this should lead to any insurmountable problems. For those reasons I would ask my noble friend to withdraw the amendment.
Lord Coleraine: My Lords, I am grateful to my noble and learned friend for his detailed reply. It is, as he said, a matter of balance. When the Bill is in operation we shall see how it works out. I would anticipate amending legislation fairly shortly after the Bill has been in operation. That would be the time to press this amendment further if it seemed to be needed. In the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Viscount Goschen Viscount Goschen moved Amendment No. 4:
Page 3, line 17, leave out ("and") and insert ("or").
The noble Viscount said: My Lords, in moving Amendment No. 4, I should also like to speak to the other amendments that have been grouped with it. This large group consists of technical amendments which are needed to clarify certain provisions, to correct cross references and amend minor defects. They have been drafted in response to comments and also on further consideration of the Bill. They are needed to ensure that the provisions of the Bill will work effectively. I am sure that the House will not wish to waste its very valuable time by requiring a detailed explanation of each amendment, although I am willing to provide an explanation if there is any uncertainty about the effect of any of the amendments. I beg to move.
5.30 p.m.
Lord Williams of Elvel: My Lords, I am grateful to the noble Viscount for speaking to this very large group of amendments. I record my gratitude to the Government for giving me early warning of these amendments, first, that they would be tabled and, secondly, that they were to be grouped in the way that they have been. I have no objection to that procedure.
The noble Viscount very kindly offered to say something more about any of the amendments if there was any difficulty. There are three amendments in the group which I would like to ask the noble Viscount about. The first is Amendment No. 60. As I

1219
understand it, it deals with compulsory purchase. Where an acquiring authority serves notice to treat, then the vesting order which is referred to in Schedule 4 ceases to have effect.
The questions that I ask of the noble Viscount as regards that amendment are these. At what stage does notice to treat become effective in the sense of ceasing the activity of the vesting order? Is it the mere fact that the compulsory purchasing authority lodges a notice to treat with some appropriate body and makes a press announcement? How are we to be certain that it is genuine? A certain number of questions arise from this amendment and I shall be grateful if the noble Viscount can spell out in a little more detail what Amendment No. 60 means.
The second amendment about which I wish to ask questions is Amendment No. 112 to Clause 53. I ask these questions because I find it very difficult to understand the language used in the amendment. I am sure that it is technically correct, but can the noble Viscount explain in words of one, or possibly two, syllables, what that amendment achieves? As regards subsection (6) it is apparently a declaratory amendment. I am quite surprised to see such an amendment with the words,
"It is hereby declared that",
in the middle of a clause. I understand that there are declaratory clauses at the beginning of a Bill. I hope that the noble Viscount can help me on that matter.
The last amendment on which I have questions is Amendment No. 115. What does the expression "for the time being" mean? I am not quite sure how that is meant to operate. Having looked through the amendment, in principle we have no particular objection. I am taking up the offer of the noble Viscount to explain in more detail the three amendments to which I have drawn your Lordships' attention.
Viscount Goschen: My Lords, Amendment No. 60 adds an express provision as to the effect that compulsory purchase proceedings will have on an order for the vesting of a landlord's interest. As originally drafted, paragraph 5 was intended to make provision to this effect by stating that Clause 28(5) would apply as if any references to a binding contract being entered into were references to a vesting order being made.
However, Clause 28(5) not only refers to a contract being entered into but also to the completion of the acquisition and to the discharge of the contract. Therefore, it is not enough simply to treat references to a binding contract as references to an order for vesting. So Amendment No. 60 and the consequential Amendment No. 59 provide an express provision for vesting orders in place of the cross-reference to Clause 28(5). The notice to treat is a formal step when the acquiring authority serves a statutory notice on the owner of the property.
Amendment No. 112 ensures that the grant of a renewed lease by the local authority, housing association, housing action trust or an approved landlord who has acquired a public sector landlord's interest is not treated as disposal requiring consent
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under any of the provisions described in paragraph 9(2) of Schedule 9. Without a declaration to that effect there may be doubts as to whether consent is required.
Amendment No. 115 is a clarification of the valuation provisions for the granting of new leases. It concerns the valuation of intermediate interests and clarifies that these are to be valued subject to any intermediate leases between them and the tenant's lease and subject to that lease. It is important to ensure that proper valuation is made, taking into account all existing contracts. This is a necessary drafting amendment and I commend it to the House.
On Question, amendment agreed to.
[Amendment No. 5 not moved.]
Clause 3 [Premises to which this Chapter applies]:
Lord Carnock Lord Carnock moved Amendment No. 6:
Page 4, line 46, at end insert ("provided that, where such building or such part contains not less than five flats and where such two-thirds is a whole number and a fraction of a number, then, for the purposes of this paragraph, the fraction shall be ignored.").
The noble Lord said: My Lords, in moving this amendment I shall be speaking also to Amendments Nos. 17, 22, 24 and 32, all of which stand in my name. Amendment No. 6 is the same as an amendment which I moved in Committee and which, in the case of blocks containing five flats or more, provides for the elimination of fractions when applying the two-thirds, low-rent test; in other words, any resulting fractions will always be rounded down. Under the Bill the fractions are always rounded up.
A rounding down process will help tenants in the smaller blocks of flats to become qualified for enfranchisement. The amendment will be of particular help in the case of blocks containing seven, eight, 10, 11, 13 and 14 flats. Amendment No. 32 provides that an initial notice must be signed by at least four-ninths of the tenants in the block in order to preserve the present position under the Bill as now drawn. Amendment No. 17 provides that all flats at a rent of £300 or less in London and £75 or less elsewhere would be considered to comply with the low-rent test without more ado.
My vision is clearly fixed on the moderate flats and my gaze is averted from those who occupy luxurious flats in fashionable parts of the West End of London. It is in this area of the modestly-priced flats that the burden of leasehold tenure presses the most heavily. It is in this area that tenants will have the greatest difficulty in obtaining advice. It is in this area that there is the greatest exploitation; the greatest number of uncaring landlords; the greatest amount of unemployment; the greatest amount of social deprivation. It is in this area that the inequalities, anomalies and injustices of the present law will be at their most apparent and most abrasive. It is in this area that the relief given by this amendment will be the most welcome and have the most widespread effect.
Amendment No. 22 is similar to an amendment which I moved in Committee. It will assist tenants in establishing that their flats qualify for enfranchisement by enabling rateable values to be increased to take account of improvements. Amendment No. 24 provides for the indexation of rateable values. During

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the period 1st April 1973 to 31st March 1990, the two-thirds low-rent test became progressively more perverse. During that period rents were escalating with inflation while rateable values remained fixed, the policy of quinquennial valuations having been abandoned. Capital gains tax has been indexed for years. The formula that I have used in this amendment has been taken from the Taxation of Chargeable Gains Act 1992. I shall be listening carefully to your Lordships' views. I beg to move.
Viscount Bridgeman: My Lords, I should like to support my noble friend Lord Carnock and to speak particularly to Amendment No. 17. The Bill as it stands would fail to achieve one of the basic intentions of this Government, which is td enfranchise a substantial number of leaseholders of flats who are paying low rents. Those paying less than £300 per year represent probably 90 per cent. of long leaseholders of flats. The low-rent test as it stands is based on a system of valuation, the rateable value, which is now obsolete, to which my noble friend referred. He referred also to the absence of quinquennial assessments, which were part of the old rating system. The effect has been quite simply an arithmetical anomaly. In Committee my noble friend gave an example of a lease on a flat taken out in 1973 for which the ground rent was £50 and the rateable value £270. Clearly, that satisfied the low-rent test. Fifteen years later, an identical flat might have attracted a rent of £300 but, as we have seen, the rateable value would have remained £270, and the low-rent test would have failed.
The test has become perverse. To apply the low-rent test, as currently drafted, produces a throughly flawed result, and, almost by default, a large number of leaseholders, particularly in the middle and lower rent groups, will remain disenfranchised. Of those, there will, regrettably, be a significant number of tenants of bad landlords who in many cases exact exorbitant service charges and neglect to maintain properties.
I should also like your Lordships to bear in mind that many leaseholders in the low-rent category will be unfamiliar with property law and will not be able to afford expensive legal advice. When the time comes for a collective decision to be taken on whether to apply for enfranchisement, they may well (through ignorance or for whatever cause) have disadvantaged themselves.
A further serious problem is likely to occur where entire blocks of flats are disenfranchised. That situation has come under discussion from many quarters and from many sides in this debate. In this case, the Government must realise that by the unjustifiable exclusion of, say, a couple of flats, they risk the possible disenfranchisement of all the flats in that block—in other words, a compounding of the injustice brought about by the anomaly.
The Bill as it stands is flawed by a legislative accident quite outside the Bill—the freezing of the rateable value. The provision that flat leases with rents of less than £300 are treated as low-rent flats with no further low-rent test has the merit of simplicity. It brings into the enfranchisement the vast majority of
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long leaseholders of flats and, it must be said, frees many of them from the abuses of bad landlords. I very much hope that the Minister will take note of the amendment.
Lord Harding of Petherton: My Lords, I should like to add my voice to those supporting the amendments, especially Amendment No. 17. It seems ridiculous that flats with obsolete rateable values should be excluded from the terms of the Bill. The only way to include them would be to provide a rent threshold, as laid down in the amendment.
Lord St. John of Bletso: My Lords, I, too, wish to join in supporting Amendment No. 17. Clearly, there is an anomaly in the low-rent test. As the noble Viscount, Lord Bridgeman, has already pointed out, in the 1970s properties had rents that were in reasonable proportion to their rateable value. However, as your Lordships know, rateable valuations have not changed since 1973. Clearly, the threshold provided in the amendment will provide, not necessarily for those at the top end of the bracket, but particularly for the property owners at the lower to middle end of the market. Clearly, therefore, I support the amendment.
5.45 p.m.
Lord Williams of Elvel: My Lords, there is some difficulty in this grouping. I am sorry that the noble Lord, Lord Carnock, accepted it because it groups a relatively "mild" amendment—if I may put it like that —Amendment No. 6, which deals with fractions (which we support, although we would not die in the trenches for it) with a very important series of amendments on the low-rent test. I am referring to Amendment No. 17 and the subsequent amendments to which we now have to speak. I should very much have preferred to have been able to discuss Amendment No. 6 now and for Amendment No. 17 then to be taken in its place. If the noble Lord, Lord Carnock, would agree to ungroup the amendments, I should like to talk only about Amendment No. 6 now.
As we are on Report, I have only one chance to speak to this grouping, which as I have said, the noble Lord, Lord Carnock, has accepted. Let us suppose that the House were to accept Amendment No. 6. It is by no means clear that Amendment No. 17 would be consequential on Amendment No. 6 and it therefore could not be accepted on the nod, as it were, if Amendment No. 6 were accepted. It is a great pity that we have got ourselves into this confusion, and this is one of the reasons why I mentioned this thought earlier.
Lord Carnock: My Lords, with the leave of the House, I should be prepared to accept the degrouping that has been suggested.
Lord Williams of Elvel: My Lords, I am most grateful. Again, with the leave of the House, I should prefer to speak to Amendment No. 6 now and to have a further debate on Amendment No. 17 in its place. As the note on groupings, to which I drew the House's attention, states:

1223
"It is … open to any Peer to speak to an amendment in its place in the Marshalled List".
I should very much prefer to speak to Amendment No. 17 when it comes in its place, but I shall yield if the noble Lord, Lord Renton, wishes—
Lord Renton: My Lords, I wonder whether I may seek guidance without being considered to have made a speech. I do not intend to comment on the amendments moved by the noble Lord, Lord Carnock, but to point out that he very wisely did not refer to Amendments Nos. 29 and 30, which are my amendments and which are grouped very strangely, if I may say so, with this group of amendments. My amendments have a completely different purpose from all the other amendments in this group. Therefore, unless my noble friend Lord Strathclyde, who is always so considerate in these matters, is prepared to give me an undertaking that either or both of my amendments are accepted, I shall have to. move them separately when we reach them and to have a separate debate when No. 29 is reached. As I understand it, one is entitled to ask for that.
Lord Monson: My Lords, I agree with the noble Lord, Lord Williams of Elvel. The noble Lord, Lord Carnock, spoke to a great many amendments, covering a wide range of issues, by no means all of which are interconnected. I can see that, from the Government business managers' point of view, they want to rush things through as quickly as possible, but I do not think that it is a good idea from the point of view of the House because we do not then have a chance to fulfil our scrutinising role properly.
I wish to speak only to Amendment No. 6. If Amendment No. 1 had been agreed to, I might have had some slight sympathy for Amendment No. 6 since it would have helped to counterbalance the inadvertent side-effects of Amendment No. 1. As far as I am concerned, they would have been inadvertent since my support for Amendment No. 1 and consequential amendments was not based on any Machiavellian desire to sabotage the Bill as a whole, as some people seem to think; it was based on a desire to prevent large capital gains being made by people who, on any reckoning, are totally undeserving of such gains.
However, Amendment No. 1 was not pressed and I am therefore opposed to Amendment No. 6 because the main people who will be hit by it will be small landlords. Where a building contains 20 or 25 flats it will not make a great deal of difference because that will mean a difference between 13 and 14 in the first instance and 16 and 17 in the other. Therefore, percentagewise, the difference will not be very much. However, where the building contains only five flats it will make a very great difference, which will be at the expense of the small landlord. The small landlord is unlike some of the other groups of landlords who have powerful, well-financed and influential people to fight on their behalf. Hence, I am afraid that I must oppose Amendment No. 6.
Lord Williams of Elvel: My Lords, I hope that I am justified by regarding the intervention of the noble
1224
Lord, Lord Monson, as a comment made during my speech. My speech began by stating that we should ungroup—if I may use that unpleasant expression—Amendment No. 6 to which I wish to speak, and about which the noble Lord, Lord Monson, intervened, from the low rent provisions which are contained in Amendment No. 17 and subsequent amendments; and, indeed, from the amendments of the noble Lord, Lord Renton, which, as the noble Lord quite rightly indicated during another intervention in my speech, have nothing to do with either Amendments Nos. 6 or 17. I wish, therefore, to address my remarks to Amendment No. 6.
It seems to me that it is a minor but sensible amendment that the noble Lord, Lord Carnock, moved and it is one which we support. It would extend, even by a slight margin, the ability of people to enfranchise. Anything which has that effect has our support. Therefore, I simply conclude by saying that this is a debate about Amendment No. 6, which we support. I very much hope that the noble Lord, Lord Carnock, will speak to and move Amendment No. 17 when we reach it. I also very much hope that the noble Lord, Lord Renton, will move his amendments; that is, unless we receive an assurance from the Minister that he need not bother to do so because the amendments are already accepted.
Baroness Hamwee: My Lords, I should like to put on record our support for Amendment No. 6. I do not think that it is necessary to rehearse the arguments, save to say to the noble Lord, Lord Monson, that I do not think that a landlord who is the freeholder of a small building is necessarily a small landlord; indeed, there must be many property companies and individuals that have a range of properties within their portfolios. One cannot put forward arguments based on the size of the buildings as to the holdings or wealth of the landlord in question.
The Earl of Kinnoull: My Lords, I should like to add my voice to the comments made about the grouping issue. I have tabled two amendments—Amendment Nos. 10 and 175. They deal with totally different issues and I should like them to be taken separately. I do not blame my noble friend on the Front Bench for the situation because, in any event, the grouping is informal.
Lord Coleraine: My Lords, I should like to express my support for the amendment. I also hope that my noble friend Lord Carnock, will take the advice of the noble Lord, Lord Williams, and speak to the amendment when we reach its normal place on the Marshalled List so that we can discuss it in more detail.
Lord Strathclyde: My Lords, we discussed in Committee the issue of the number of qualifying tenants needed for a block to be enfranchiseable. I said then that I would consider the matter further, and that I have done. But I have to tell noble Lords that my position has not changed. We intend to retain the two-thirds thresholds. I agree that there are situations where the two-thirds by two-thirds rule means that the actual number of tenants needed exceeds 67 per cent.

1225
because of the way that the arithmetic works. But the distortion is not very great in blocks containing more than 10 flats.
We have considered carefully whether provision should be made to bring the effective thresholds nearer to 67 per cent. But to round down the number to the nearest whole number would merely distort the figures in the other direction. Enfranchisement would be possible by fewer than four-ninths of all the tenants in the block, which is of course the minimum allowed by the general two-thirds by two-thirds rule. As my noble friend Lord Renton said, his amendments deal with that aspect and we shall debate them later.
I note that to prevent that happening noble Lords have tabled an amendment to the effect that the initial notice cannot be given by less than four-ninths of the total number of tenants in the block. But such complicated amendments would have very little impact. It is true that more blocks would become enfranchiseable, but the proposal to round down the two-thirds fraction with a floor of four-ninths of the total number of tenants in the block does not actually make any difference to the minimum number of tenants who must participate.
Perhaps I can explain that by way of an example. In a block of seven flats, under the provisions of the Bill the minimum number of qualifying tenants is five and the minimum number of participating tenants is four. If Amendments Nos. 6 and 32 were accepted, in a block of seven flats the minimum number of qualifying tenants would be four—that is, 4.6 rounded down to 4—but the minimum number of participating tenants would still be four, because it must not be less than four-ninths of the total number of tenants in the block, which in this example is 3.1.
The whole point is that wherever the line is drawn it is inevitable that some blocks will fall just outside. To make adjustments for particular types of blocks would make the Bill unnecessarily completed. We are not disposed to move away from the broad principle of the two-thirds rule, which ensures that the block is occupied by a majority of qualifying tenants and that a majority of those qualifying tenants are in favour.
I believe that our two-thirds threshold is fair. As I said earlier, we shall discuss later the separate issue that at least half the tenants in the block must participate in giving the initial notice—a matter to be dealt with in the amendments of my noble friend Lord Renton. As for the low rent test, I am happy for that to be dealt with when we reach that stage on the Marshalled List. I hope that I have not disappointed my noble friend in not being able to accept his amendment. However, I hope that he understands why that is the case and on that basis will feel able to withdraw the amendment.
Lord Carnock: My Lords, I thank my noble friend the Minister for that reply. In the circumstances, I propose, with the leave of the House, to withdraw the amendment.
Noble Lords: No.
The Deputy Speaker (Lord Alport): My Lords, is it your Lordships' pleasure that this amendment be withdrawn?
Noble Lords: No.
5.56 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 156.

Division No. 1

CONTENTS

Addington, L.

Jenkins of Hillhead, L.

Airedale, L.

Jenkins of Putney, L.

Amherst of Hackney, L.

Judd, L.

Ardwick, L.

Kagan, L.

Attlee, E.

Kilbracken, L.

Belhaven and Stenton, L.

Killearn, L.

Birk, B.

Lindsey and Abingdon, E.

Bonham-Carter, L.

Listowel, E.

Boston of Faversham, L.

Macaulay of Bragar, L.

Bridgeman, V.

McIntosh of Haringey, L.

Brooks of Tremorfa, L.

McNair, L.

Carmichael of Kelvingrove, L.

Mason of Barnsley, L.

Carnock, L.

Mayhew, L.

Clewyn of Penrhos, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Meston, L.

Cocks of Hartcliffe, L.

Molloy, L.

Coeraine, L.

Monk Bretton, L.

Dean of Beswick, L.

Morris of Castle Morris, L.

Desai, L.

Mulley, L.

Dormand of Easington, L.

Nicol, B.

Ewing of Kirkford, L.

Northbourne, L.

Fitt, L.

Ogmore, L.

Foot, L.

Pitt of Hampstead, L.

Galpern, L.

Prys-Davies, L.

Gardner of Parkes, B.

Renfrew of Kaimsthorn, L.

Geraint, L.

Richard, L.

Gladwyn, L.

Robson of Kiddington, B.

Glenamara, L.

Rochester, L.

Graham of Edmonton, L.[Teller.]

Seear, B.

Sefton of Garston, L.

Grantchester, L.

Stoddart of Swindon, L.

Grey, E.

Strabolgi, L.

Hampton, L.

Taylor of Blackburn, L.

Hamwee, B.

Taylor of Gryfe, L.

Hanworth, V.

Thomson of Monifieth, L.

Harding of Petherton, L.

Tordoff, L.[Teller.]

Harris of Greenwich, L.

Varley, L.

Hilton of Eggardon, B.

Warnock, B.

Hollis of Heigham, B.

Whaddon, L.

Holme of Cheltenham, L.

White, B.

Hughes, L.

Wigoder, L.

Hutchinson of Lullington, L.

Williams of Elvel, L.

Jay, L.

Winchilsea and Nottingham, E.

NOT-CONTENTS

Abercorn, D.

Brentford, V.

Ailesbury, M.

Brougham and Vaux, L.

Aldenham, L.

Bruntisfield, L.

Aldington, L.

Cadman, L.

Allenby of Megiddo, V.

Caithness, E.

Alport, L.

Campbell of Alloway, L.

Annaly, L.

Carnegy of Lour, B.

Arran, E.

Carr of Hadley, L.

Astor, V.

Cavendish of Furness, L.

Astor of Hever, L.

Cawley, L.

Belstead, L.

Chalker of Wallasey, B.

Birdwood, L.

Charteris of Amisfield, L.

Blatch, B.

Chelmsford, Bp.

Bledisloe, V.

Clark of Kempston, L

Boardman, L.

Clinton, L.

Bolton, L.

Cochrane of Cults, L.

Boyd-Carpenter, L.

Colwyn, L.

Brabazon of Tara, L.

Constantine of Stanmore, L.

Braine of Wheatley, L.

Cranborne, V.

1227

Crawshaw, L.

Monson, L.

Crickhowell, L.

Mottistone, L.

Cumberlege, B.

Mountgarret, V.

Daventry, V.

Mowbray and Stourton, L.

Davidson, V.

Moyne, L.

Denham, L.

Murton of Lindisfarne, L.

Denton of Wakefield, B.

Norrie, L.

Dilhorne, V.

Onslow, E.

Dundonald, E.

Orkney, E.

Elibank, L.

Orr-Ewing, L.

Ellenborough, L.

Oxfuird, V.

Elles, B.

Palmer, L.

Elliot of Harwood, B.

Park of Monmouth, B.

Elliott of Morpeth, L.

Pender, L.

Elton, L.

Peyton of Yeovil, L.

Faithfull, B.

Portsmouth, E.

Ferrers, E.

Prentice, L.

Fraser of Carmyllie, L.

Radnor, E.

Fraser of Kilmorack, L.

Rawlinson of Ewell, L.

Geddes, L.

Reading, M.

Gisborough, L.

Rees, L.

Goschen, V.

Renton, L.

Gray of Contin, L.

Rodger of Earlsferry, L.

Grimston of Westbury, L.

Romney, E.

Haddington, E.

Roxburghe, D.

Hamilton of Dalzell, L.

St. Davids, V.

Hardinge of Penshurst, L.

Shannon, E.

Harmsworth, L.

Shrewsbury, E.

Harrowby, E.

Skelmersdale, L.

Harvington, L.

Stewartby, L.

Hayhoe, L.

Stockton, E.

Henley, L.

Stodart of Leaston, L.

Hertford, M.

Strafford, E.

Hesketh, L. [Teller.]

Strange, B.

Holderness, L.

Strathcarron, L.

HolmPatrick, L.

Strathclyde, L.

Hood, V.

Strathmore and Kinghorne, E. [Teller.]

Howe, E.

Hylton-Foster, B.

Sudeley, L.

Iddesleigh, E.

Suffolk and Berkshire, E.

Jeffreys, L.

Swansea, L.

Jenkin of Roding, L.

Swinfen, L.

Johnston of Rockport, L.

Swinton, E.

Kimball, L.

Terrington, L.

Kindersley, L.

Teviot, L.

Kintore, E.

Teynham, L.

Knutsford, V.

Thomas of Gwydir, L.

Lauderdale, E.

Torrington, V.

Layton, L.

Trumpington, B.

Lindsay, E.

Ullswater, V.

Long, V.

Verulam, E.

Lucas of Chilworth, L.

Vivian, L.

McColl of Dulwich, L.

Wakeham, L.

Mackay of Clashfern, L.[Lord Chancellor.]

[Lord Privy Seal.]

Westbury, L.

Mancroft, L.

Wilberforce, L.

Marlesford, L.

Wise, L.

Merrivale, L.

Wolfson, L.

Mersey, V.

Wyatt of Weeford, L.

Middleton, L.

Wynford, L.

Milverton, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.7 p.m.
Lord Strathclyde Lord Strathclyde moved Amendment No. 7:
Page 5, line 18, leave out from ("are") to ("and") in line 19 and insert ("neither—

(i) occupied, or intended to be occupied, for residential purposes, nor

(ii) comprised in any common parts of the premises;").

The noble Lord said: My Lords, I beg to move.
Lord Williams of Elvel: My Lords, am I right in thinking that the Minister has not spoken to this
1228
amendment? On the grouping that I have he is due to make a speech explaining what Amendments Nos. 7 and 8 are about.
Lord Strathclyde: My Lords, the noble Lord is entirely correct. The noble and learned Lord the Lord Chancellor caught me out when he asked me to move my amendment. I believed that I was moving one of the consequential amendments to Amendment No. 4. In fact we are on Amendment No. 7 which is grouped with Amendment No. 8. Perhaps with the leave of the House I may explain the amendments. I am grateful to the noble Lord, Lord Williams, for his intervention.
In Committee, I agreed to reconsider the definition of internal floor area to ensure that parts of a block of flats let with flats and used for car parking and storage should be included in the residential space. I have given the matter further thought and believe that clarification of our intention would be helpful.
I am pleased to bring forward on amendment to achieve that. It replaces Clause 4(1) (a) while Amendment No. 8 adds a new subparagraph to the same subsection. Their effect is to treat all garages, parking spaces and storage areas which are within the building positively as part of the residential floor area of that building provided that they are occupied, or intended to be occupied, for residential purposes or used in conjunction with any parts so occupied. They will not therefore be included in the calculation of the non-residential area. The amendments will thus differentiate between such areas intended for use in conjunction with residential property and those not allocated to tenants of flats under their leases which are let by the landlord for commercial use by third parties. It is right that such parts of the building should be included in the non-residential use calculation.
If the House accepts the amendment there should be no possibility of disputes about how such space within the building should be allocated. The provision is fair to all parties and it improves the Bill. I beg to move.
Lord Williams of Elvel: My Lords, the Question having been put, perhaps I may reply to the Minister's explanation of the amendments, which clarifies our discussion in Committee. The proposal preserves the balance in the Bill for which both sides of the House are looking. We shall not oppose the amendments. We are grateful to the Minister for them.
Baroness Gardner of Parkes: My Lords, I thank the Minister for bringing forward both amendments, in particular Amendment No. 8. It relates to an issue that I raised about garages. He said that it was designed to avoid any disputes. I suppose that "intended for use" may be helpful but I am not sure whether it covers the situation which I described. Many blocks of flats have underground parking, which was intended for the residents. However, many residents now living in central London no longer feel the need to own cars and they, the head lessee or the owner rent out a certain number of garages. The number may vary. Is it the case that if all the garage space in a block were let out it would become totally non-residential? I refer

1229
to garages being let to outsiders. The Minister said that it would be made clear that space let to outsiders was different. On the other hand, does the provision refer to a garage being let with a dwelling? In many blocks the garages are not let with the dwelling because there may be 50 flats but only 10 garage spaces. In the past the residents had to be put on a waiting list, but now that fewer people want to pay the high rents which are demanded for garages it may be that only five are occupied.
I can understand that the situation is complicated. I hope that the Minister will be able to assure me that the phrase "intended for use" means that whether or not a garage is occupied by business users, if it had been built with the intention of being part of a residential block it will qualify.
Will my noble friend also comment on the phrase "in conjunction with a particular dwelling?" In the situation that I have described the dwelling can change from time to time. Flat 1 may first have a garage but two years later flat 5 may have the same garage or car parking space. Although the amendment is helpful and I am grateful to my noble friend for moving it I believe that his idea that there will be no argument or discussion is optimistic. I support the amendment and I thank my noble friend for bringing it forward.
Baroness Hamwee: My Lords, the noble Baroness has raised an important issue. It is a mini-example of the issue that we discussed in conjunction with qualification; that premises could move in and out of the definition. That would be difficult to deal with. The point would not apply if a leaseholder sublet the garage space because the space would be used or there would be the intention that it should be used in conjunction with the leaseholder's own dwelling.
The noble Baroness was right to draw your Lordships' attention to the situation in which the garage space might be let independently by the owner of the building. I have experience of that. My firm is about to move into a new office block and the owners of the building have been talking to us about the use of garage spaces which were built at the behest of the local planning authority for use in conjunction with a neighbouring residential block.
Perhaps we could look at how the phrase "particular dwelling" relates to the premises. Some work might be done on that which could narrow the issue. Perhaps we could use the phrase "in conjunction with a dwelling" rather than "a particular dwelling".
The Earl of Lytton: My Lords, I welcome Amendments Nos. 7 and 8. I can relate to the point made by the noble Baroness, Lady Gardner of Parkes. One of the unfortunate products of the Bill is that as one looks more closely one sees endless circumstances in which subdivision is possible. The amendments are not comprehensive and conclusive in terms of allowing no further questions to be asked as subsidiary questions, having answered the main question. Nevertheless, on balance they are welcome because they clarify serious omissions from the Bill. I welcome them, although my welcome is qualified for the reasons that I have given.
6.15 p.m.
Lord Strathclyde: My Lords, I am grateful for the general welcome given to the amendments. Following our discussion in Committee we realised that we needed further clarification. It was useful to hear the comments of noble Lords and perhaps I can do something further to tighten the definition. I shall reflect on the matter between now and Third Reading.
I turn to the point made by my noble friend Lady Gardner of Parkes. At the end of the day the way in which the clause operates will depend on the particular circumstances of the premises; for example, how many flats and garage spaces there are and so forth. My noble friend's example of 10 garage spaces and 50 flats is unlikely to be a problem because I suspect that 10 garage spaces will be less than 10 per cent. of commercial premises. The main point is that garage spaces which are essentially private will not be part of the commercial space. However, where, for instance, the basement has been let to NCP on a regular basis for third parties to park their cars, that will fall under commercial use.
I hope that I have explained the intention behind the amendments and I hope that the House will accept them. I accept that we may have to do some further thinking to see whether the provision can be tightened up.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 8:
Page 5, line 22, at end insert:
("( ) Where in the case of any such premises any part of the premises (such as, for example, a garage, parking space or storage area) is used, or intended for use, in conjunction with a particular dwelling contained in the premises (and accordingly is not comprised in any common parts of the premises), it shall be taken to be occupied, or intended to be occupied, for residential purposes.").
On Question, amendment agreed to.
Lord Monson Lord Monson moved Amendment No. 9:
Page 5, line 30, leave out ("four") and insert ("six").
The noble Lord said: My Lords, once again I wish to speak up for the small landlord affected by the Bill because, if I do not, it does not look as though anyone else will. However, I hasten to say that I do not fall into that category. By "small" landlord I mean the genuinely small landlord and not the large landlord who happens to own a number of small properties. I say that in response to the noble Baroness, Lady Hamwee, although I accept that her point was perfectly valid.
Specifically, I wish to speak up for the former owner occupier of a house, not a purpose-built block of flats, who has run into serious financial difficulties. That may be because of the machinations of certain Lloyds syndicates or for a variety of other reasons. In the circumstances he has had to convert the substantial house in London or in the country, in which he and perhaps his family have lived for generations, into five or six flats which are sold on long leases.
As the Bill stands the limit is a mere four. That is a totally unrealistic limit because many single houses, whether in London or in the country, can easily he

1231
converted into five or six flats or even more. Why should a resident landlord, who in all probability has a great sentimental affection for the house and grounds in which he has grown up, become a second-class citizen in his own property? By "property" I mean the fabric of the house and the grounds and not each individual flat. I believe that that is wrong and that the fixed limit is arbitrary. I am not asking for a great change but for a small change which will make the Bill fairer. I beg to move.
Baroness Hamwee: My Lords, I wonder whether the noble Lord has seen that my Amendment No. 25 seeks to deal in part with the issue which he raises; namely, the freeholder, his parents Or grandparents. Perhaps in responding, the noble Lord may wish to refer to that amendment.
Lord Coleraine: My Lords, I should like to indicate that I still have the sympathy that I expressed in Committee for the thinking behind the noble Lord's amendment. I would refer to Amendment No. 25 in a slightly different way. Before Amendment No. 9 is acceptable, the noble Baroness's amendment should be brought into the Bill because at present the right to claim the resident landlord's exemption is much too widely drawn. It enables someone who might happen to buy the last flat in a block of flats which is being converted, and with it the freehold, to be in the position of a resident landlord. As I understand it, Amendment No. 25 would go some way towards preventing that.
As regards the amendment before us, as I see it, there will be cases where a resident landlord situation would involve more than four flats. I understand from the Marshalled List that the Henry VIII clause is likely to be excluded from the Bill, and that is all to the good. Difficulties arise as regards the resident landlord's test. First, as I understand it, unless the block includes more than four flats, it is much more likely that the situation will be entirely reversed so that the lessees of one moment finish up as the landlords of the previous landlord. That is another reason why I have sympathy for the amendment.
It seems to me that the clause is also rather unfortunate in that it does not give the rights of a resident landlord to a long lessee who may have converted his home; but that is another matter.
Lord Campbell of Alloway: My Lords, I should like to ask my noble friend on behalf of whom he speaks. He once informed the House, in answer to a question by my noble friend Lord Peyton, that he was representing amendments proposed by the Law Society. I have seen a letter which says that that is not the case. I ask on behalf of whom the noble Lord speaks. I have always spoken only on behalf of myself.
Lord Coleraine: My Lords, with the leave of the House, I speak on behalf of myself. I did not say that I was speaking on behalf of the Law Society. At another stage I moved amendments recommended to me by the Law Society but in this case I speak on my own behalf. As I see it, I am speaking in a way that I hope will preserve a proper balance in the Bill between
1232
the interests of both flat owners and freeholders. It will not have escaped the notice of my noble friend that on this occasion my sympathies are with the freeholder.
Lord Strathclyde: My Lords, these amendments affect the resident landlord's exclusion provisions in Chapter I of the Bill. Your Lordships have heard that the amendment tabled by the noble Lord, Lord Monson, widens exclusion for resident landlords by applying it to premises containing not more than six units instead of not more than four units.
The amendment would widen the resident landlord exemption and deny more tenants the right to enfranchise. Later we shall consider amendments to Clause 9 tabled by the noble Baroness, Lady Hamwee, which do exactly the opposite; namely, they narrow the resident landlord exemptions in an attempt to make more leases enfranchiseable. Perhaps, given our discussions, we should have grouped the amendments together so that we could see the opposing arguments on either side.
I can see why those on the side of the landlord would want to widen or extend the resident landlord's exemption and as a result exclude even more flats from the right to enfranchise. I can also see why those on the side of the tenant would want to narrow or restrict the resident landlord's exemption and as a result extend enfranchisement to even more leaseholders.
We have deliberately restricted the resident landlord exemption to small blocks—and by that I mean blocks containing only four units or less. As I said in Committee, our purpose in limiting the resident landlord exclusion was to exclude smaller blocks that are the landlord's home. We can see no justification for excluding blocks with resident landlords that were purpose built as flats or for excluding larger premises that now contain a large number of units.
I appreciate that some large homes may have been converted into premises containing more than four units, but we have had to draw the line somewhere and we do not think the exemption should be extended. If we did, there are likely to be houses elsewhere converted into seven or eight flats, that have resident landlords, with equal claims to exemption.
We think we have got the balance about right. We do not want to alter or change the resident landlord's exemption and I would urge the noble Lord to withdraw the amendment.
Lord Monson: My Lords, I am grateful to the noble Lord, Lord Coleraine, for his support, slightly qualified though it is. I should like to pick up one point which he made. Like the Minister, the noble Lord referred to a block of flats. We are not talking about blocks of flats but about ordinary two or three-storey houses which have been converted into flats. We are not talking about blocks. That is what the argument is about.
I am grateful to the noble Baroness, Lady Hamwee, for her intervention. I had not spotted Amendment No. 25. At a quick glance, it looks interesting.
In the absence of widespread support for my amendment, I shall see how we get on when we reach Amendment No. 25. I believe that the Government are being unreasonable in this regard. It is true that

1233
some, but not many, houses have been converted into seven or eight flats. There are many more which have been converted into five or six flats, probably as many as have been converted into four flats. I believe that the line has been drawn in the wrong place. Let us see how we get on when we reach Amendment No. 25. I reserve the right to return to this matter but, at present, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Kinnoull The Earl of Kinnoull moved Amendment No. 10:
Page 5, line 30, at end insert:
("( ) This Chapter does not apply to premises falling within section 3(1) if the premises are premises which have been held by or in trust for a charity within the meaning of the Charities Act 1993 for 100 years or more from the date of the passing of this Act.").
The noble Earl said: My Lords, in moving this amendment I shall speak also to Amendment No. 175. In Committee my noble friend Lord Kindersley moved an amendment to exempt charities from the provisions of the Bill. My noble friend spoke with feeling and persuasiveness and with considerable experience in that field. I am glad to say that my noble friend drew support from all sides of the Committee in a general defence of charities.
Although my noble friend Lord Strathclyde was sympathetic, he had an obdurate and unhelpful brief. However, I am sure that my noble friend will agree that charities are a unique and precious institution in this country, quite unlike anything in Europe, either in scale or social achievement. Charities are enshrined in our heritage and the present generation has a clear duty to protect, preserve and increase the good which charities achieve for generations to come. For that reason alone, it is disappointing that so far the Government have taken the view that charities will not be added to the list of exemptions, except in a very small area; that is, registered charitable housing trusts. Not even the Church has any redress.
The amendment does not seek to renew the debate about the exemption of charities. That was fully discussed in Committee when we were reminded that the House took a supportive view in 1967 of that very same issue as a staunch guardian of charities, but later the issue was lost in another place. The Minister's arguments for rejecting the exemption of charities from the Bill relied principally on the new fair compensation formula which he suggested would cause no loss to charities. Secondly, many charities use property simply as a form of investment alongside equities in their portfolio.
It is not my purpose to argue the financial loss that many charities will suffer in their property portfolios as a result of this Bill. It is a sad fact. The facts have already been estimated and announced on how much charities will lose. I propose to move this small amendment on exemption. It refers to a very small and rare area for charities; namely, those which are over 100 years old, with original endowment lands still held as property endowment, undisturbed for 100 years and now happily part of the community. Why do they have to suffer when they represent a very small fraction of the charity properties generally? In my view, they deserve exemption. It is because these
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unique charities of over 100 years with endowment lands are a very ancient social heritage that I suggest this amendment to my noble friend. I hope that he can show some support for charities in this Bill, albeit in this minuscule way. I hope that he will accept the principle of the amendment even if he is not happy with the present words. I beg to move.
6.30 p.m.
Lord Monson: My Lords, the noble Earl, Lord Kinnoull, has argued the case so well that there is little for me to say, save that, as I understand it, it is part of Conservative philosophy to preserve institutions which have served the country well over the years. I believe that for that reason alone the Government should consider agreeing to the amendment.
Lord Kindersley: My Lords, I am grateful to the noble Earl, Lord Kinnoull, for raising once again an amendment to exempt charities with the important qualification that they should have been in existence for more than 100 years. As I tried to make clear on Second Reading and at Committee stage, Smith's Charity—in which I should again declare an interest as chairman—qualifies easily for this exemption. We are an exceptionally long-term investor. Our Kensington estate has been, and still is, the cornerstone of our investment policy, allowing us to distribute funds this year amounting to £12 million, most of which will go to causes which are suffering from the withdrawal or reduction of government support. It is rather curious that the Government should, on the one hand, encourage charities to raise money from the private sector so that there is less public money going into them and at the same time penalise charities such as this one and make it more difficult for them to give support to these very same causes. I fully support the amendment.
Lord Peyton of Yeovil: My Lords, I too should like briefly to support my noble friend's very modest amendment. I am bound to say that I do so more with hope than with confidence, though I am sure that we can rely on my noble friend's sympathy. Perhaps he may translate that into action one of these days. The Government have given the impression throughout the Bill that it is merely a pity that charitable activities should have got in the way£"Too bad. We shall not change course. We shall just go on, and the charities can get bruised". So far as I know, the Government have not even expressed regret that the decision has been taken out of the hands of charities.
The Minister for Housing has declared himself on one or two occasions to be of the opinion that charities will be able to take the money and go on as before. That view does not fit with the experience that has been voiced, for instance, by my noble friend Lord Kindersley. It is high time that the Government at least gave the impression that they look upon charitable activities with some favour and are not totally disregarding of their value in a community which very badly needs them. If I may say so, well-intentioned activities on the part of the

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Government are no substitute. Governments often do not recognise in time the weaknesses and needs which charities exist to remedy and where they offer help.
I hope that my noble friend the Minister will accept my noble friend's very modest amendment. But if he cannot do that, I hope that he will at least take the opportunity of saying that he is slightly sorry that charities should be bruised in this manner and that it was not the Government's's intention.
Lord Williams of Elvel: My Lords, I hope that the Minister will accept the invitation of the noble Lord, Lord Peyton, and express his admiration for the work performed by charities. Having expressed that admiration—as I am sure he will, and we shall join him in expressing it—I hope that he will see no particular reason why properties held in trust for charities should be excluded from the legislation in the way that the amendment of the noble Earl, Lord Kinnoull, implies.
As I understand it, trustees of charities are legally bound to manage properties on a fully commercial basis. We on our side have no evidence at all to show that charities, as commercial landlords (as they are bound to be), are any more benevolent in performing that function than any other category of freeholder. There are those who argue that they are somewhat tougher than other freeholders.
The problem with the noble Earl's amendment is not only that a certain group of freeholders would be exempt if the amendment were accepted. The leaseholders involved, whose homes are at stake, would be excluded from the legislation and they would fairly soon see a fall in the value of their leases as they became "second-class citizens" unable to enfranchise under the legislation. As the noble Earl pointed out, in the end the previous legislation has not drawn the distinction that the noble Earl, Lord Kinnoull, tries to draw in his amendment. We believe that it would be anomalous and undesirable if the amendment were accepted by the House.
The Earl of Onslow: My Lords, it was interesting that the noble Lord, Lord Williams, said that it was a very good thing for the Government to say that they supported charities, and then went on to say that the Government should enable some of our assets to be "nicked". I find that rather an odd attitude. Am I right in saying that the noble Lord declared an interest in living in a house in Thurloe Square which I believe belongs to Smith's charities? I am sure that the noble Lord will clarify the point.
Lord Williams of Elvel: My Lords, I declared an interest as a leaseholder in Thurloe Square. The freehold does not belong to Smith's charities.
The Earl of Onslow: My Lords, I stand corrected. However, it seems to me wrong that the Government should allow the assets of charities to be taken by the beneficiaries of the flat owners. The flat owners would not be keen on the proposals if it would not give them value. That means by its very nature that the assets of the landlords will be reduced and the assets of the charity will be reduced. It is a great pity that the
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Government are taking this line. We cannot make them change their mind completely. But at least the noble Earl, Lord Kinnoull, is trying to mitigate a small disease.
Lord Campbell of Alloway: My Lords, having listened to the arguments so far on this amendment, having opposed the Government previously on Amendments Nos. 1 and 5 and being about to do so on Amendment No. 12, I must say in all fairness that I cannot see why, on the basis of the argument adduced, the Government should accept this amendment.
Baroness Gardner of Parkes: My Lords, we debated this matter fairly thoroughly at Committee stage, so I do not intend to go into the arguments again. I was surprised afterwards to find how many noble Lords were not aware of the Peabody Trust and the Guinness Trust and that those bodies provided subsidised housing. I wish to emphasise that I am delighted that bodies of that kind which provide social housing are exempt. We are talking here only about those charities that run their property interests as a commercial business. The amendment refers to premises which have been held for 100 years. As I read the amendment, if a house was acquired 99 years ago it will not be exempt from the measure but one that was acquired over 100 years ago would be exempt. Therefore I find the amendment slightly strange in that respect.
When he replies, I hope that the Minister will clarify whether charities have to pay capital gains tax. I know they have a favourable tax status. If they pay no capital gains tax or corporation tax, they would be much better off than any commercial landlord in the realisation of whatever price they obtained for their property. Recently I have met tenants of charities who have told me they are only too pleased that the charities concerned are offering them longer leases. The tenants are pleased to accept those longer leases. I believe that those charities who treat their tenants well will find that those tenants will accept longer leases and will not particularly wish to enfranchise.
Lord Hamilton of Dalzell: My Lords, I wish first to take issue with a point made by the noble Lord, Lord Williams of Elvel. He said he thought that those left with long leases would have them devalued. However, in economic terms it will be the freeholders who have their assets devalued because, with the advent of the enfranchisements, the supply of property will rocket. Enormous quantities of new money will have to come into London to enable those freeholders to retain their prices at current levels.
As regards whether charities should be released from this provision, I find that the Government applaud the work of charities. However, it is difficult to support the Government on this issue because it contains many contradictions. As chairman of the executive committee of the Queen Elizabeth's Foundation for the Disabled I took issue with my right honourable friend the Chancellor of the Exchequer about increasing the amount of VAT charities have to pay. I know that has nothing to do

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with this debate and it had nothing to do with the Chancellor of the Exchequer because the matter of who pays VAT is settled in Europe. However, he consoled me by saying that the fundamental basis of government policy was to encourage people to give to charities. He said that the Government were concentrating on that matter. I find it hard to see how this Bill helps charities in that respect. Perhaps the only thing one can say to my noble friend is to consider the point that charity starts at home.
Baroness Hamwee: My Lords, I had not intended to speak. I apologise to your Lordships because I do not normally like to start speeches with that phrase as it simply takes up time. Nevertheless, I had not intended to speak because I have already made the points that were made by the noble Baroness, Lady Gardner of Parkes. However, I wish to refer to a point which I made, as it were, in passing at the previous stage of the Bill. I hope that in responding the Minister will indicate support for all charities and not merely those which have been going for so long they have been able to accumulate the portfolio which is referred to in the amendment.
6.45 p.m.
Lord Strathclyde: My Lords, it is useful to have this opportunity to discuss charities again, particularly as we had a relatively full debate on this matter in Committee.
The amendment referring to charities as landlords disapplies enfranchisement rights where the premises have been held by or in trust for a charity for 100 years or more. I am not sure what proportion of property held by charities, or held in trust on their behalf, has been held for 100 years or more, but I suspect that this is certainly a significant, if not substantial, proportion of their holdings. I am also not sure why any exemption from or disapplication of enfranchisement rights in Chapter I of this Bill should apply to those particular properties and not those who have held property for less than 100 years.
I have listened very carefully to what my noble friend Lord Kinnoull and others who supported him have had to say in speaking to these amendments. I know that my noble friend recently met my honourable friend the Minister for Housing in the hope that the Government would accept the amendment but, as he knows, we intend to resist it.
I should make it perfectly clear that I am fully aware that a number of your Lordships are very concerned about the implications of this Bill for charities. During Committee I said that I admire the work which many charities do and confirmed that it would obviously be most unfortunate if this Bill were to impede the work of any charity. That includes the more recently established charities that the noble Baroness, Lady Hamwee, mentioned. I would say to my noble friend Lord Peyton that I am full of praise for the work that charities do. This Bill will have no effect whatsoever on property which is owned by charities and which is let for charitable purposes. However, where that property is run as a commercial
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proposition and is used as an investment, why is it right that charities should be excluded from the provisions of the Bill?
The Leasehold Reform Act, which was debated in this Chamber in 1967, did not exempt charities from the provisions of that Act. We maintain that, although all charitable bodies spend their income in pursuit of charitable ends, most raise it in a strictly commercial manner. Most charities are bound to maximise their capital assets and revenue. In fact the trustees of charities are under a duty to use their assets to the maximum effect. As far as the tenants are concerned, it makes little difference who their landlords may be.
I can see no reason for treating charities any differently from any other landlord, such as the great estates, where they have already disposed of property on a long leasehold basis for a market premium. Their tenants, like any other long leaseholder, will consider themselves owner occupiers and will usually have the greater financial interest in the property. They will, like all such leaseholders, also have the expectation of being able to enfranchise.
I wish to correct a point that was made by my noble friend Lord Onslow. There is no question of assets being nicked, as he put it. I hope he will join us in our discussions when we reach the amendments that deal with valuation. I can confirm to my noble friend Lady Gardner of Parkes that there is roll over relief for capital gains tax purposes when charities realise their assets under this Bill. I hope that the House will agree, as was the case in Committee, that the case made for charities is of no greater value now than it was then. I hope this amendment will not be accepted.
The Earl of Kinnoull: My Lords, I am grateful to all noble Lords who have spoken in support of this amendment. I realise we had a long and important debate on this issue in Committee. I did not intend to resurrect that debate through this amendment. This amendment was a genuine attempt to find some way for the Government to show more concern about charities.
The principle behind this amendment is that charities are special. They are not just ordinary landlords. Charities are not exempt from this provision at the moment although the Crown Estate and the National Trust are exempt. If there are exemptions, I believe there are other bodies which are worthy of exemption too. I have never accepted the argument that a tenant of a charity should automatically be treated differently to tenants of other landlords. I do not accept the argument that a charity which has lasted for over 100 years and which has endowment land that has been in existence for 100 years and has never dabbled in property should suffer the swingeing provisions of this Bill. This is a sad day. My noble friend has given a charming but negative reply. I do not intend to seek the opinion of the House on this issue as that occurred at the previous stage. With regret, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Rodger of Earlsferry Lord Rodger of Earlsferry moved Amendment No. 11:
Page 5, line 31, leave out subsection (4).
The noble and learned Lord said: My Lords, I am moving this amendment in response to the reservations your Lordships expressed during the Committee stage about subsection (4) of Clause 4. During debate then the power for the Secretary of State to vary by order both the percentage of non-residential accommodation in blocks qualifying for collective enfranchisement and the number of flats in blocks with resident landlords exempted from collective enfranchisement was described by a number of noble Lords as a Henry VIII provision. Traditionally Parliament, and particularly this House, is suspicious of such powers.
The provision was included in the' Bill for the best of motives. We wanted to build in a degree of flexibility so that changes could be made to the various threshold figures if fine-tuning seemed necessary in future to allow the Act to continue to meet its objectives, for example, on the matter raised by the noble Lord, Lord Monson.
Nevertheless, having considered the matter again in the light of the debates on the definition of qualifying premises, we believe that the criteria in Clause 4 are right as they stand. Therefore, the case for a power to vary either of them is not overwhelming. In the light of the views expressed in Committee, I am content that the provision in Clause 4(4) can be deleted. I beg to move.
Lord Williams of Elvel: My Lords, the noble and learned Lord has responded to the discussion which we had in Committee on this subsection, when I found myself, in the unlikely company of the noble Lord, Lord Peyton of Yeovil, moving an amendment that the subsection be deleted. The reasons were precisely those which the noble and learned Lord has given. The Bill as drafted provides the Secretary of State with Henry VIII powers to amend primary legislation simply by order.
I accept the noble and learned Lord's assurance that the subsection was included for the best of motives. Indeed, I can see reasons why an arrangement of that nature might be useful and why some adjustment might be necessary to the Act, as the Bill will become when enacted, in the light of experience. Unfortunately, the clause as drafted put the Government in a hole. If in drafting Clause 4 the Government had said that they did not know what the percentage would be but would find out, there could have been an open debate. We could have had an affirmative resolution procedure, which would have solved the problem. However, by drafting Clause 4 to state the percentage and in saying in subsection (4) that the Secretary of State could change the percentage to any figure that he liked the Government raised a number of hackles in your Lordships' House. That was apparent when we discussed the matter in Committee.
While we are grateful to the noble and learned Lord for removing subsection (4), and will not oppose the amendment, I have some sympathy for the Government in that they have now placed themselves
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in a position in which they cannot amend the primary legislation—which may eventually have to be amended—without coming back to this House.
Lord Peyton of Yeovil: My Lords, it would be churlish on my part if I did not take the opportunity to thank my noble and learned friend for this act of repentance. It is very nice of him to remove this unsightly object from the pages of the Bill. It is nice to know that it will not form an ugly blot on the face of the statute book in the future.
I warmly welcome this evidence of some dawning modesty on the part of Secretaries of State. That is very much to be welcomed. I wonder what process the Government went through between Committee stage and now which led them to this wonderful conclusion, but I shall not be so intrusive as to ask them to answer that question in public.
Lord Renton: My Lords, there has been a tremendous increase in the insertion of Henry VIII clauses into our voluminous legislation of recent years. We should rejoice that this is another sign that the Government are thinking better of that. I hope that it may be an indication that we shall be burdened less with these clauses in future.
Lord Campbell of Alloway: My Lords, this unsightly object—as it was so pertinently described by my noble friend Lord Peyton—was retrieved by some draftsman from a pigeon-hole in a department. Do the Government not believe that it is time that the contents of that pigeon-hole were destroyed by fire so that we do not need to have this type of discussion again?
Lord Coleraine: My Lords, since it was I who moved the amendment which brought about this amendment I should like to thank my noble and learned friend for acting with complete constitutional propriety over the amendment. I should like to express my gratitude, together with the noble Lord, Lord Williams of Elvel, and my noble friend Lord Peyton of Yeovil.
Lord Rodger of Earlsferry: My Lords, there is biblical authority for the amount of rejoicing which occurs when a sinner repents. The House has done a great deal of rejoicing over this act of repentance on the part of the Government.
In response to the remarks of my noble friend Lord Campbell of Alloway concerning the contents of the pigeon-hole, by which he meant Henry VIII clauses, I remind him that such clauses have a use within their proper sphere. It has been decided that this is not a necessary use of such a clause in the Bill. In the circumstances, including those alluded to by the noble Lord, Lord Williams, it is thought appropriate to withdraw the subsection. In the light of all the rejoicing over our repentance I commend the amendment to the House.
On Question, amendment agreed to.
Lord Cavendish of Furness Lord Cavendish of Furness moved Amendment No. 12:
After Clause 4, insert the following new clause:
("Exclusion for property transferred for public benefit
.—(1) Nothing in this Part of this Act shall apply to property which—

(a) belongs to a body not established or conducted for profit and in relation to which the Treasury has for the time being given a direction under section 26 of the Inheritance Tax Act 1984; or

(b) is for the time being designated by the Treasury under section 31(1) (b), (c) or (d) of the Inheritance Tax Act 1984.

(2) Where an application to the Treasury for a direction under section 26 of the Inheritance Tax Act 1984 in relation to a property or designation of a property under section 31(1) (b), (c) or (d) of that Act is or has been made at any time before the expiry of one year from the coming into force of this section then subject to subsection (3) below if (before or after the making of the application) a notice is given by a tenant of a house of his desire to have the freehold under Part I of the Leasehold Reform Act 1967 ("the tenant's notice") or a notice is given under section 11 ("the initial notice")—

(a) no further proceedings need be taken towards the determination of the terms of the proposed acquisition to which the notice relates beyond those Which appear to the landlord in the case of the tenant's notice or the reversioner in the case of the initial notice, to be reasonable; but

(b) the tenant in the case of the tenant's notice or the nominee purchaser in the case of the initial notice may at any time withdraw the notice by a further notice in writing given to the landlord in the case of the tenant's notice or the reversioner in the case of the initial notice and he shall not be required to make payment to the landlord, reversioner or any other relevant landlord in respect of costs incurred by reason of the notice withdrawn.

(3) Subsection (2) above shall cease to apply—

(a) if within a period of two years from the date of the application it is withdrawn or the designation is refused or not given or no direction is given; or

(b) if the applicant has not, by advertisement or by other appropriate means given adequate notice to person interested informing them of the application for designation.

(4) In the case where an application is withdrawn or refused subsection (2) does not apply at any time falling after—

(a) the date of withdrawal of the application, or

(b) the date when the decision of the Treasury refusing the application becomes final,

as the case may be.").
The noble Lord said: My Lords, it may be remembered that I tabled this amendment in Committee with a view to ensuring that our national heritage does not suffer as a consequence of inheritance tax liability by the forced sale and break-up of important estates. At the time my noble friend Lord Strathclyde recognised the anxieties which many of us felt about the implications of the Bill in that respect and agreed to consider the matter further.
Since then the Government have stated in another place that there will be no review of designation of the whole property following a part disposal resulting solely from leasehold enfranchisement under this Bill or under the Leasehold Reform Act 1967, provided there is no breach of undertakings in respect of the retained property. I know that that assurance will bring comfort to those who feared the financial consequences which might have followed from the Bill. Thus far the statement is to be welcomed, and I should like to record my thanks to my noble friend.
However, the statement brings no comfort whatever to English Heritage because the effects of the Bill persist in contradicting a principle now embodied in legislation for more than 20 years: that it is
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desirable to keep outstanding historic entities—usually a country house, its contents and historic setting—intact under common control when fiscal pressures might otherwise encourage break-down.
To be accepted for conditional exemption such entities must be of outstanding importance in the national context. Keeping them intact has long been accepted as being in the public interest, the loss of tax being outweighed by the public benefit, enforced through conditions requiring, among other things, an acceptable amount of public access.
It is possible to imagine a stable block attached to a great house being converted into flats. The same might apply to a dower house. Indeed, it might apply to the main house itself where former servants' quarters and offices could be counted for the purposes of this Bill as a block of flats. The removal of those parts from the ownership of the remainder would, without question, damage the coherence of the historic entity.
The argument has been put both in your Lordships' House and outside that adequate common management and compliance with conditions can be achieved under a scheme of estate management, supported by something known as "estate rentcharges". That is an obscure device which some have suggested might provide a means of circumventing the bar on positive covenants running with the title.
However, the Law Commission report of 1984 cast considerable doubt on that, and until legislation is brought forward to implement the recommendations of the commissioners, I am advised that there is no effective means of creating positive covenants or obligations that run with the title. Such provisions would be helpful in protecting heritage interests, including, for example, ensuring the proper care of historic buildings, restored and sold on by charitable building preservation trusts, as well as properties enfranchised under the Bill. I hope that the Government will act on the Law Commission's recommendations, perhaps to mark the tenth anniversary of its report.
The key point is that schemes of management, with or without estate rentcharges, would not, in my view, provide an effective tool to retain visual unity, indeed personality, which comes through common control, often by generations of the same family. Nor would they provide the financial safety net in enforcement which is generally available to a landlord under a lease, where the lessee's interest could ultimately be forfeited for serious breaches of covenant. Whether or not such tools could retain a reasonable level of visual unity and compliance with conditions of exemption over enfranchised property would be irrelevant if the Bill is passed in its present form, together with the new clause promised by the Government in the Finance (No. 2) Bill regarding review of designation. That is because it is proposed that the review of designation of retained property will not follow from a part disposal under the provisions of the Bill, provided—and I emphasise this—that there is no breach of undertakings in respect of the retained property.
So there is no attempt whatever to provide for the safeguarding of the heritage value and quality of the

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designated entity as a whole. Indeed, the situation could be even worse, for the proposal creates a potential loophole which leaves open to owners a means of disposing of parts of the designated entity through the creation of enfranchiseable leases, without any risk of bringing down the designation as a whole.
Such ill-considered and ad hoc proposals merely serve to emphasise the necessity of a simple and effective means of ensuring that the Bill does not frustrate the intentions and benefit of existing legislation which enjoys such wide support, not least from all sides of your Lordships' House.
My amendment seeks only to put certain properties, comparable in quality, importance and degree of public access, on an equal footing with those held inalienably by the National Trust, and which are specifically exempted under Clause 86 of the Bill. I must ask the Minister, as I have asked him twice before, why cannot those very few properties enjoy similar protection in heritage terms?
Those then are the reasons that I commend the amendment to the House. It excludes designated properties from the application of Part I of the Bill. It also provides a limited time period of one year during which designation may be sought for potentially eligible properties. During that period, and until the Treasury has reached a decision, any application to enfranchise would be frozen. As I have said, the number of properties which would be affected by the provision would be small. Of the 160 that have been recommended on the grounds of outstanding importance, only 60 have so far been designated. Furthermore, the proportion of the properties which are subject to potentially enfranchiseable leases is itself very small indeed.
To accept the amendment would not, in my view, compromise the Bill, which we do not seek to challenge, but would recognise a long established policy of protecting heritage interests of acknowledged importance. I beg to move.
7 p.m.
Lord Renton: My Lords, I support the amendment for the reasons that my noble friend Lord Cavendish has so clearly expounded. I hope that it will be considered relevant—it is relevant —and I hope that it will not be embarrassing to any member of the Government to mention that two of the most famous stately homes in the country, Grade I listed buildings which contain flats of the kind mentioned by my noble friend, happen to be in the constituency of the Prime Minister.
Lord Palmer: My Lords, I too wish to add my congratulations on the superb way in which the noble Lord, Lord Cavendish, introduced the amendment. It is important to remember that the main point of the amendment is to maintain the status quo which had all-party support. That is to preserve England's heritage in the private sector. It is a great shame that the amendment has had to be tabled and one must ask whether or not Her Majesty's Government are
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interested in the heritage. From their reluctance to accept the amendment, coupled with Sir George Young's passion for enfranchising, the answer would appear that they do not.
All heritage bodies throughout the country have acknowledged that the private sector is the much preferred guardian of our national heritage. That is why noble Lords on my right introduced designation in the first place. Its main objective was to keep the heritage property entire and to relieve the state and the National Trust of having to take on such properties. As the noble Lord, Lord Cavendish, said, it seems idiotic that the National Trust has been specifically exempted from the Bill whereas the private heritage sector has not. If the Government do not accept the amendment, the catastrophic effects of the Bill will cascade through the private sector, causing irreparable damage to our national heritage. I support the amendment.
Lord Peyton of Yeovil: My Lords, I warmly support the amendment so eloquently moved by my noble friend Lord Cavendish. I wish particularly to draw the Minister's attention to what my noble friend Lord Cavendish said about the need for a simple and effective means of ensuring that the Bill does not frustrate the intentions and benefits of existing legislation which is widely supported.
It would completely satisfy me if my noble friend would say that it is not the Government's intention or wish that this legislation should touch in an injurious way the heritage properties to which my noble friend referred. I hope that the Minister can do that and in doing so he will bear in mind that the Government's intentions, often so pious and pure, do not always find themselves fulfilled in fact; nor do they yield what I would describe as general satisfaction in the event. I hope that my noble friend will be able to give us the unqualified assurance that the Bill will not and could not have the effect of frustrating the heritage policy.
Baroness Hollis of Heigham: My Lords, we on this side also believe that this is a serious issue which we hope that the Government can address more fully, either by adopting the amendment or by giving an undertaking that they will come back at Third Reading with an amendment along the lines mentioned by the noble Lord, Lord Peyton. We are referring to a small number of properties, about 160 designated properties in all, which are free from inheritance tax in return for public access.
At the Committee stage we were apprehensive that the enfranchisement proposals would jeopardise the tax-free status where public access was to be ensured. In overcoming that problem by government announcement, the Government have had the perverse effect of worsening the other consideration in your Lordships' minds; namely, to avoid the fragmentation of estates which in the national interest should be held together.
As I understand the position, there could now be nothing to stop parts of the estate from being fragmented by individual leaseholders who take advantage of the enfranchisement and thus the heritage quality which we are all anxious to protect is

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lost. So in remedying the tax position, to which we do not object, the Government have increased the risk of fragmentation, to which we certainly do object.
We cannot believe that that is the Government's intention. It is clearly perverse and against the interest of such designation as originally established by law. Therefore, like other Members of the House we very much hope that the Government can give some indication of their views on this matter. We are not willing to oppose the amendment and we are hesitant about supporting it. We shall judge our response in the light of the Government's response in their turn.
Lord Montagu of Beaulieu: My Lords, I must tell noble Lords that I was abroad during the Second Reading and therefore this is the first" time that I have spoken on the Bill. If I had spoken, I should certainly have expressed my dismay and dislike of it. Nevertheless, it is too late for Second Reading comments. I should therefore like to reserve my comments to support my noble friend Lord Cavendish. It is well known that I have been involved in the conservation of historic houses for over 30 years, initially as the first chairman of the Historic Houses Association and latterly as chairman of English Heritage. During that time there have been many crises. However, a system has now evolved which is the envy of the world.
I suppose that the best treatment of historic houses is for them to remain in private hands and be open to the public. Some are open to the public and have flats or apartments made out of the building. Some, because of their geographic position, consist entirely of flats. They are under strict control. Sensible leases were drawn up. They were often long leases because the owners felt that a long lease was best for continuity of management. Scarce capital was often invested by the owner and the tenants were carefully chosen. The system works well. It has also been used by the National Trust.
But despite those arrangements, in recent years one of the greatest threats to houses has been death duties and inheritance duties. We were all delighted when we won the argument, with the support of all parties in this House, to establish designation and exemption of the house, contents, grounds, and the historic buildings associated with it. Those exemptions were on conditions laid down by the Treasury and on the advice of English Heritage. The whole object was to ensure continuity of ownership and management, not only of the house but also the grounds.
There is now the extraordinary situation which penalises the owner for having in the past shared his house in order to minimise costs and contribute to the upkeep, thus saving state money. After all, it is much better to see every room in the house used because rooms which are uninhabited are bound to deteriorate.
Under the Bill some of the great houses and outbuildings, after hundreds of years, will be split up irredeemably. There will never be that same entity again. Today's tenants may be all right, but what about tomorrow's freeholders? How does one value a flat in a historic building which has at no cost the privilege of all the amenities of the grounds? Who
1246
pays for the roof, clears the drains, mows the lawns and ensures security? Owners of historic properties will now lose their inheritance, which they have fought so hard to retain over so many centuries, because they trusted in the leasehold system; a system which has served this country so well for so many years. They never dreamt that any government, let alone this one, would cause its destruction.
This legislation will affect historic properties and designated properties very seriously in the future. If the Government thought it would not do so, why has the National Trust, with its vast resources and special legal position, been exempted? Perhaps I can tell the House why. It is because the Government do not dare take on such a highly respected and authoritative body. I am delighted that it has obtained the exemptions. But it is also a charity. It is run on commercial lines, but obviously some charities are more equal than others.
I end by informing the House that I have absolutely no property, nor has my family, which could possibly be enfranchised, so I speak entirely objectively. I urge fellow Peers to support the amendment. In doing so they will ensure that our historic properties are conserved in their entity for future generations to derive from them enjoyment and enlightenment.
Baroness Hamwee: My Lords, my noble friends on these Benches tell me that they are in something of a dilemma. They have no wish to detain your Lordships longer than is necessary but they want me to put on record their and my support for the amendment.
7.15 p.m.
Lord Campbell of Alloway: My Lords, after such a magnificent and authoritative speech, perhaps I may make a very brief speech in support of the amendment. My interest consists in having been a member of the Georgian Group since its pioneer days under Angus Acworth. It has always been much interested in English Heritage. Otherwise I hold no brief and I am not part of any lobby.
What has been said by my noble friend Lord Cavendish is wholly true. The Law Commission's recommendations may not be ignored. It is idle to pretend that schemes of management could provide any satisfactory safeguard. The disparity of treatment with that of the National Trust is simply not understood and not acceptable. The designated properties are indeed few and those that qualify are not great.
For the reasons given by other noble Lords, this is a case for the Government to make a clear and decisive exception and make it now.
Lord Renfrew of Kaimsthorn: My Lords, I speak as one who supports the aims of the Bill and who in general is not in favour of amendments which restrict the opportunities of leaseholders to obtain the freeholds. In that respect I realise that I am not at one with all my noble friends on this occasion. However in this amendment—so ably moved by my noble friend Lord Cavendish of Furness and spoken to most effectively by my noble friend Lord Montagu—they have a very important point.

1247
We are speaking about some of the finest historic properties in this country. I would not be in favour of any amendment that sought to broaden the application to historic areas in general—that has been suggested and there have been amendments proposed to that effect—because that would have the effect of depriving many leaseholders of the opportunity of obtaining the freehold of the property. But in this case the historic houses in question and the designated properties are of such heritage importance that I urge my noble friend the Minister to take the amendment very seriously.
Lord Strathclyde: My Lords, I listened to what my noble friend said in Committee and again to what he and others have said today. I appreciate that there is a general concern that the enfranchisement provisions of the Bill will lead to the break-up of some historic estates and the continued maintenance and conservation will be at risk because coherent management will be lost.
However, I do not accept that that is necessarily the case. The landlords will already have transferred ownership by granting long leases, presumably to raise funds by way of a premium, in the hope that they will continue to control maintenance and conservation under the terms of the lease. The leaseholders will have just as much of an interest in maintaining the property, which in turn affects the value of their interests. As they may have the greater financial interest in the property, one could argue that they have a greater interest in maintaining and conserving it.
The landlord may be able to continue to exercise control over the overall appearance and maintenance of the estate by promoting estate management schemes. At this stage I do not want to argue the merits of those schemes because we shall be coming to them later this evening. However, I should like to point out that we have gone some way to improving the provisions on estate management schemes and have tabled an amendment that would give English Heritage and local planning authorities the power to promote estate management schemes in conservation areas.
The other anxiety of my noble friend Lord Cavendish concerns the inheritance tax consequences of enfranchisement and the fact that a disposal of part of a property could trigger a review by the Inland Revenue of the conditional exemption of the whole of the property. If the enfranchisement materially affects the heritage entity, the review could lead to a tax charge on the whole property.
During the Committee stage I recognised that there was some anxiety and agreed to take the matter away. In answer to a question in another place last Friday, my honourable friend the Financial Secretary made a statement. Without repeating it in full I can say that my honourable friend announced that the Government propose that where a part disposal of a conditionally exempt property results solely from leasehold enfranchisement under the provisions of this Bill or under the Leasehold Reform Act 1967, and
1248
there is no breach of the undertakings in respect of the retained property, then there will be no review of the designation of the retained property.
Having obtained that concession from my honourable friend the Financial Secretary, I understand that, as my noble friend Lord Cavendish and the noble Baroness explained, English Heritage now considers that while that will satisfy the financial concerns of most landlords, it could run counter to heritage interests. They argue that there is no provision for the maintenance of conditions over enfranchised land but recognise that an estate management scheme could provide for that. I am reluctant to make the creation of estate management schemes a condition of inheritance tax exemption not being reviewed. I have already agreed to give English Heritage the power to promote estate management schemes in conservation areas.
English Heritage also argues that the landlords it sought to protect in Committee may now create leases that could be enfranchised, severing property from an estate without triggering a review of the inheritance tax exemption and freeing the enfranchised property from the conditions attached to conditional inheritance tax exemption. Continuation of those conditions could be provided by an estate management scheme. The existing owners might not be willing to promote one but English Heritage will have those powers.
I understand that the loophole already exists in a wider form. The Inland Revenue already accepts that the granting of a lease for a premium in respect of a conditionally exempt property may not be a chargeable event. Therefore owners could grant a number of long leases for a substantial premium without incurring a tax charge. Those are matters of tax law which the Inland Revenue is keeping under review. If my honourable friends at the Treasury thought the granting of leases was being exploited to bring tax savings or to avoid the conditions of inheritance tax exemption, then they would consider remedial legislation.
The object of the amendment of my noble friend Lord Cavendish is to keep properties and estates that are currently conditionally exempt from inheritance tax intact and to exempt them from the leasehold enfranchisement provisions in the Bill. But the sale of a freehold need not result in the break-up of an estate in the same way that the sale of the contents of a house can separate paintings or sculpture, for example, from their context. The buildings will still be there, in the same relationship to each other, whoever owns the freehold.
Conditional exemption from inheritance tax does not prevent the freeholder from selling long leases for a premium as long as the terms of those leases are in keeping with the conditional exemption. If they are there should be no reason why the leaseholders should not enfranchise.
Lord Campbell of Alloway: My Lords, perhaps my noble friend will give way. He is not addressing the point of our speeches. He is replying from a brief but he is not answering the points raised.
Lord Strathclyde: My Lords, I am sure that my noble friend made a good speech and made good sense in his speech. But perhaps he will listen to what I have to say and when I have completed my remarks he can then make a decision as to whether or not I have responded to his points and take whatever course of action he feels is necessary. I am only half-way through my comments. It is an extremely important issue. That is illustrated by the substantial number of noble Lords who have come to speak and to support my noble friend Lord Cavendish. Because it is such a complicated issue I have done my noble friend the courtesy of giving him a very full answer. I hope that he, in any case, will listen closely to what I have to say and perhaps then will be able to decide what to do with the amendment.
As I said earlier, the estate management schemes that we have included in the Bill will help. They will allow for the freeholder to retain control and exercise some influence over the use, maintenance and redevelopment of a property, even though the leaseholder has enfranchised. There is no reason why freeholders should not apply for such schemes to cover their estates.
Estate management schemes are intended to allow the landlord to retain powers of management over houses or flats which became enfranchised. The terms of a scheme can deal with the redevelopment, use or appearance of property; they can empower the landlord to carry out work to maintain or repair properties and can impose obligations in respect of property used in common.
Leasehold valuation tribunals will, in considering applications for estate management schemes, have regard to the past development and present character of an area and, following acceptance of an amendment during Committee, to architectural or historical considerations as well as to the circumstances generally.
I have already said that I do not believe that it is right to frame exemption from enfranchisement in terms of the application of tax law. If historic buildings or estates are to be exempted, then they should be exempted in their own right. However, I believe that leaseholders are fully capable of caring for the buildings in which they live and that the system of estate management schemes, coupled with legislation relating to listed buildings and conservation areas, provides adequate safeguards where in the general interest there needs to be coherent management of an area as a whole.
I have attempted to explain that enfranchisement does not affect the heritage properties of the areas with which we are dealing. But I recognise the deep concern of many of my noble friends. I should like to suggest to my noble friend that, rather than pressing his amendment at this stage, we can perhaps continue our discussions on what is clearly a complicated issue to see whether we can come together to reach a compromise on dealing with the whole problem.
Lord Cavendish of Furness: My Lords, I thank all noble Lords who have spoken—I believe all spoke in favour of my amendment. I am grateful also to the Minister for his reply. I should like to place on record
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my gratitude for the trouble that my noble friend has taken in discussions outside this Chamber. He is nothing if not patient and courteous, and I am certainly grateful to him.
I do not accept anything that he says in the line of estate management schemes. I do not believe that it begins to approach the problems referred to by myself and other noble Lords. I am grateful for his offer to take the discussions further. However, we are at an advanced stage of the proceedings on the Bill and it remains my view that there is an irreconcilable divide between heritage interests and the effects of the intentions of the Bill. There is no available alternative to the amendment until the Government belatedly act on the Royal Commission's report—now 10 years old. With a heavy heart therefore I must seek the opinion of the House.
7.30 p.m.
On Question, Whether the said amendment (No. 12) shall be agreed to?
Their Lordships divided: Contents, 114; Not. Contents, 57.

Division No. 2

CONTENTS

Addington, L.

Harrowby, E.

Airedale, L.

Hertford, M.

Aldenham, L.

Holme of Cheltenham, L.

Amherst of Hackney, L.

Hood, V.

Ardwick, L.

Howie of Troon, L.

Bledisloe, V.

Hylton-Foster, B.

Boardman, L.

Iddesleigh, E.

Bonham-Carter, L.

Jeffreys, L.

Bridgeman, V.

Jeger, B.

Broadbridge, L.

Jenkins of Hillhead, L.

Campbell of Alloway, L.[Teller.]

Johnston of Rockport, L.

Kilbracken, L.

Carnock, L.

Kilmarnock, L.

Cavendish of Furness, L.[Teller.]

Kindersley, L.

Kinloss, Ly.

Charteris of Amisfield, L.

Kintore, E.

Clanwilliam, E.

Lindsay, E.

Clark of Kempston, L

Lyell, L.

Clinton, L.

Lytton, E.

Cochrane of Cults, L.

Macaulay of Bragar, L.

Cocks of Hartcliffe, L.

McNair, L.

Craigavon, V.

Mancroft, L.

Darcy (de Knayth), B.

Masham of Ilton, B.

Daventry, V.

Middleton, L.

Dean of Beswick, L.

Monk Bretton, L.

Devonport, V.

Monson, L.

Dilhorne, V.

Montagu of Beaulieu, L.

Donoughue, L.

Mountgarret, V.

Dormand of Easington, L.

Mowbray and Stourton, L.

Ellenborough, L.

Napier and Ettrick, L.

Elliot of Harwood, B.

Nicol, B.

Ewing of Kirkford, L.

Ogmore, L.

Faithfull, B.

Onslow, E.

Falkland, V.

Palmer, L.

Gainsborough, E.

Peyton of Yeovil, L.

Galpern, L.

Portsmouth, E.

Gisborough, L.

Radnor, E.

Gladwyn, L.

Reading, M.

Glenarthur, L.

Renfrew of Kaimsthorn, L.

Greenway, L.

Rennell, L.

Grey, E.

Renton, L.

Grimston of Westbury, L.

Robson of Kiddington, B.

Haddington, E.

Rochester, L.

Halsbury, E.

Romney, E.

Hamilton of Dalzell, L.

Roxburghe, D.

Hampton, L.

St. John of Bletso, L.

Hamwee, B.

Sefton of Garston, L.

Harding of Petherton, L.

Shrewsbury, E.

Harmsworth, L.

Skelmersdale, L.

1251

Stedman, B.

Taylor of Blackburn, L.

Stodart of Leaston, L.

Taylor of Gryfe, L.

Stoddart of Swindon, L.

Thurlow, L.

Strafford, E.

Tordoff, L.

Strange, B.

Whaddon, L.

Strathcarron, L.

Wharton, B.

Suffolk and Berkshire, E.

White, B.

Swinfen, L.

Wilberforce, L.

Swinton, E.

Wyatt of Weeford, L.

NOT-CONTENTS

Arran, E.

Knutsford, V.

Astor, V.

Lauderdale, E.

Blatch, B.

Long, V.

Braine of Wheatley, L.

Mackay of Clashfern, L.[Lord Chancellor.]

Brougham and Vaux, L.

Bruntisfield, L.

Merrivale, L.

Cadman, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Chalker of Wallasey, B.

Moyne, L.

Chelmsford, V.

Park of Monmouth, B.

Cranborne, V.

Pender, L.

Cumberlege, B.

Prentice, L.

Denton of Wakefield, B.

Rodger of Earlsferry, L.

Dundonald, E.

St. Davids, V.

Eden of Winton, L.

Seccombe, B.

Elles, B.

Sharples, B.

Elton, L.

Stewartby, L.

Ferrers, E.

Strathclyde, L.

Fraser of Carmyllie, L.

Strathmore and Kinghorne, E[Teller.]

Gardner of Parkes, B.

Goschen, V.

Teviot, L.

Gray of Contin, L.

Thomas of Gwydir, L.

Harvington, L.

Trumpington, B.

Hayhoe, L.

Ullswater, V.

Henley, L.

Vivian, L.

Hesketh, L. [Teller.]

Westbury, L.

HolmPatrick, L.

Wise, L.

Howe, E.

Wolfson, L.

Jenkin of Roding, L.

Wynford, L.

Killearn, L.

Resolved in the affirmative, and amendment agreed to accordingly.
7.38 p.m.
Viscount Goschen: My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion perhaps I may suggest that the Report stage begin again at 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Bail (Amendment) Bill
Brought from the Commons; read a first time, and to be printed.

Disabled Persons (Services) (No. 2) Bill [H.L.]
Lord McColl of Dulwich: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord McColl of Dulwich.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE DEPUTY CHAIRMAN OF COMMITTEES (Lord Cocks of Hartcliffe) in the Chair.]
Clauses 1 and 2 agreed to.
In the Title:
Lord McColl of Dulwich Lord McColl of Dulwich moved Amendment No. 1:
Line 1, leave out ("empower") and insert ("enable").
The noble Lord said: In moving Amendment No. 1 I should like to deal also with Amendments Nos. 2 and 3. I am advised that these amendments would make the Title reflect the contents of the Bill more accurately. They in no way alter the substance of the Bill. I beg to move.
Baroness Cumberlege: I should like to thank my noble friend for clarifying the Title of the Bill. I regret though that the Government's position has not changed since the Second Reading of the Bill and, sadly, we still feel unable to support it despite its greater clarity in the Long Title.
On Question, amendment agreed to.
Lord McColl of Dulwich Lord McColl of Dulwich moved Amendments Nos. 2 and 3:
Line 1, leave out ("make") and insert ("pay allowances to").
Line 2, leave out from ("persons") to end of line 3.
On Question, amendments agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with amendments.
Baroness Trumpington: My Lords, I beg to move that the House do now adjourn during pleasure until 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.42 to 8.35 p.m.]

Housing and Urban Development Bill
Consideration of amendments on Report resumed. Clause 5 [Qualifying tenants]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 13:
Page 6, line 7, at end insert:
("(2A) Subsection (I) does not apply where the immediate landlord under the lease is a registered housing association and all the flats in the premises are—

(a) particularly suitable, having regard to their location, size, design, heating systems and other features, for occupation by persons of pensionable age, and

(b) are occupied by persons of pensionable age or physically disabled persons, and

(c) have special facilities which include the services of either a resident warden or a non-resident warden and a means for calling them.").

The noble Baroness said: My Lords, this is the opposite of moving an amendment immediately after Question Time in the early afternoon, when one struggles to make oneself heard against the noise of departing Peers. I hope that there will be the noise of Peers coming into the Chamber, but I dare say that they are otherwise engaged.
Amendment No. 13 is very similar to one which I moved at Committee stage. It is to exclude from the enfranchisement provisions the properties described in the amendment. That is where the immediate landlord is a registered housing association and all the flats in the premises—that is a change because the amendment refers to all the flats—are particularly suitable as regards location, size, design, heating systems and other features for people of pensionable age and are occupied by people of that age or by those

1253
who are physically disabled, and have special warden facilities, as described. I have stressed the word "and" between each of those three criteria because they are additional and not alternative.
The provision is designed to exclude sheltered housing schemes from the Bill. As I said in Committee, it would, as I understand it, affect schemes only where a housing association had not received housing association grant, as HAG-funded schemes require an association to retain 20 per cent. of the equity.
It was a proposal which received widespread support at Committee stage: that leasehold enfranchisement should not apply to warden services and other special provisions which fall within sheltered housing in order not to lose from housing stock this type of provision. The wording of the clause is close to that of the Housing Act 1985 which excluded sheltered housing from the right-to-buy provisions. At Committee stage the Minister said that it was unclear, as the matter was then drafted, of which lease the registered housing association must be the immediate landlord. I hope that, with a slight change of wording, the amendment has helped, as was the intention.
His other argument was based on the use of restrictive covenants in a lease. He said that he understood the concern that, after enfranchisement, new freeholders might sell the properties to other people who were not elderly or disabled, but that the matter could he dealt with by way of a restrictive covenant. I disagreed with him then and, if he repeats the argument, I shall do so again, because a restrictive covenant can be altered by agreement between those who are concerned. It is precisely in order to avoid that agreement, which would override the provisions, that I seek to include the new provision in the Bill. I beg to move.
Lord Monson: My Lords, I gladly support this amendment. It seems the height of folly to upset the smooth-running existing arrangements of sheltered housing. I fully concur with the noble Baroness when she says that restrictive covenants are not the answer because they can so easily be altered or got round.
Baroness Hollis of Heigham: My Lords, we on this side very much support the amendment which is straightforward. It seeks to ensure that leaseholders, like tenants of local authority sheltered housing provided by a housing association, should not see that property pass from its primary usage—that is, supporting the elderly in the community—to some other use. It means, for example, that if the current leaseholder dies, having enfranchised, there is nothing to stop his or her heirs selling that property on for some other use totally independent of that for which it was designed, thus subverting the viability of the entire sheltered housing scheme. It is a very limited amendment, but it will ensure that sheltered housing remains for its primary purpose, which is to enable the elderly to stay within the community. We very much support it.
Lord Monk Bretton: My Lords, I should like briefly to support the amendment. The conclusion that one must reach is that the Government's position is, "It may never happen", but I think that we risk a muddle. There is a risk that parts of such homes for the elderly will be enfranchised. There will then be difficulties with the warden service because mixed occupation is bound to jeopardise that. Although it may never happen, it most certainly could, and I hope that my noble friend will take a further look at this matter.
As far as I can see at the moment, registered charitable housing trusts are exempted from the provisions, but charitable housing associations, which have provided this type of housing on long leases, are not. The question relating to those housing associations is whether there was a charitable element to their work. I believe that there was because they got the schemes together originally, ensuring that the housing was built. Although the property was sold off on long leases to those people whom they wished to help but who had more means than some of the others, there remains the fact that they got the schemes off the ground and provided warden services to those people on the same basis as they provided warden services to everybody else. Therefore, there is a definite charitable element to their work.
I hope that my noble friend will give some thought to ensuring that charitable housing associations which provide such houses for the elderly will be treated in the same way as registered charitable housing trusts.
8.45 p.m.
Lord Strathclyde: My Lords, I am grateful to the noble Baroness, Lady Hamwee, for the way in which she moved her amendment. As she rightly said, we discussed this issue in Committee and I promised then that I would consider it further. I am sorry to say that our position has not changed, but perhaps we can now consider why.
I do not believe that there is any justification for denying long leaseholders in sheltered housing the right to enfranchise. As I said in Committee I understand the concerns which have led to this amendment being tabled: that once the freehold has been bought the flats may be sold to people who are not already elderly or disabled and they will therefore move out of the sheltered housing market. I said that that is not a valid concern because any restrictive covenants in the leases, which might specify, for example, that the flats were only to be let to the elderly, would remain. The noble Baroness said that if I produced that argument she would not agree with it, but I do not know why she would not agree because such covenants could not be changed unless both parties to the lease agreed. Is it not fair enough that where a landlord and a leaseholder have agreed to change the covenant those tenants should be able to decide whether or not they want to enfranchise, just like any other class of leaseholder?
We have also heard the view expressed that people who live in sheltered housing do not really want to enfranchise and so we need not bother to give them the opportunity, but it is wrong to discriminate in that way. Why should a long leaseholder be denied the

1255
collective right-to buy the freehold simply because he or she lives in a sheltered housing block owned by a housing association? To deny people this right simply because of the type of accommodation in which they live would be tantamount to suggesting that such people are incapable of making an informed decision about the accommodation in which they live. The whole of this legislation is about giving people that ability and that choice.
Of course, there will be residents who, for whatever reason, do not wish to participate in buying the freehold. That is their choice. The important point is that they are able to make that choice. Those who choose not to join in would not be disadvantaged, as the terms of their leases would remain after enfranchisement. Any services, such as a resident warden, would be maintained.
As for tenants who do not qualify for enfranchisement, the terms of their tenancies would also be unaffected. In fact, such tenants may not even have a change of landlord, because a lease superior to the interest of a non-qualifying tenant is not liable to acquisition. If the tenant on a short tenancy rents direct from the freeholder, the freeholder will have the option of taking a leaseback of that flat if he so wishes.
What the noble Baroness had to demonstrate was that there is a real reason for stopping tenants of sheltered housing from being able to enfranchise, and I am not at all convinced that the noble Baroness has come up with compelling arguments.
I turn now to the point raised by my noble friend Lord Monk Bretton. Where such bodies are involved in charitable works, they would be excluded because "housing associations" may include housing trusts. Therefore, registered housing associations can, under certain circumstances, be charitable housing trusts and therefore would not be covered by the legislation. It is important to get the practical aspects of this right. All that I am saying is that where tenants have the ability to change their tenure and are not constricted by leases, they should have the opportunity to seek enfranchisement.
Baroness Hamwee: My Lords, we do not seem to have advanced a great deal. The Minister has invited me to expand on certain points underlying this amendment, and I shall gladly do so. He said that this would be a denial of a right to a particular group of tenants. I must make it clear for the record that I am not suggesting—and I do not believe that any of your Lordships who have supported the amendment would suggest—that those tenants are incapable of making an informed decision, which is what the Minister said.
The balance must be between the rights of an individual tenant and the interests of the preservation of a particular and specialised type of housing stock. From the way in which I and other noble Lords have dealt with the general thrust of the Bill and the. rights of tenants to enfranchise I think that the Minister must take seriously support for this exclusion when it comes from those of us who have supported tenants' rights.
We are not talking about a private landlord; we are talking about housing associations. They are quite
1256
different animals. The Minister asked why restrictive covenants would not do; the answer is that it is precisely because they would allow the overriding of the provisions of the Bill. Where there are restrictive covenants between two parties, they can, of course, agree to vary those covenants or to lift them altogether. It would need the provision of legislation to prevent that agreement. It perhaps takes us back somewhat to the arguments that we had at the beginning of the afternoon. But the very fact that restrictive covenants can be altered by agreement is why I seek to insert the provision in the Bill, rather than leaving it to the lease or other arrangements between the tenant and the housing association.
The Minister mentioned the charitable housing trusts. As I understand it there are very few of them. Registered housing associations do not generally fall within that category. That is why the additional separate amendment has been put forward. Sheltered housing was excluded from the right-to-buy provisions of the 1985 Housing Act. Given the support for the proposal from all sides of the House both today and on previous occasions, and given the fact that the Minister has not given me any hope that we may return to the matter again, I should like to test the opinion of the House.
8.51 p.m.
The Deputy Speaker (Lord Airedale): My Lords, the Question is, That Amendment No. 13 be agreed to? As many as are of that opinion will say, "Content". To the contrary, "Not-Content".
Noble Lords: Not Content!
The Deputy Speaker: My Lords, I think the "Not-Contents" have it. Clear the Bar.
Division called.
8.55 p.m.
The Lord Chancellor: My Lords, Tellers for the Not-Contents have not been appointed pursuant to Standing Order No. 51. A Division therefore cannot take place, and in accordance with Standing Order No. 54, which provides that no proposal to reject a Bill should be agreed to unless there is a majority in favour of such a rejection, I declare the amendment agreed to.
The Lord Chancellor: My Lords, I call Amendment No. 14: the Lord Boardman.
[Amendment No. 14 not moved.]
The Lord Chancellor: My Lords, I call Amendment No. 15: the Lord Strathclyde.
Noble Lords: It should be 14!
Viscount Goschen: My Lords, I have already spoken to Amendments Nos. 15 and 16 when I moved Amendment No. 4.—
Lord Williams of Elvel: My Lords, I was not aware that Amendment No. 14 had been called by the noble and learned Lord.
The Lord Chancellor: My Lords, I called Amendment No. 14 and it was not moved.
Lord Williams of Elvel: My Lords, I am sorry and I apologise to the noble and learned Lord. In the confusion, I was not aware that the noble and learned Lord had called the amendment. Therefore, if he will permit me, I should like to speak to the amendment.
Baroness Gardner of Parkes: My Lords, no!
Lord Williams of Elvel: My Lords, I am afraid that I did not hear the noble and learned Lord call Amendment No. 14. It was simply that, in the confusion—
Lord Boardman: My Lords, I have only just come back to the Chamber having responded to the call for a Division. I am now told that Amendment No. 14 standing in my name has been called. I should like the opportunity to move it.
The Lord Chancellor: My Lords, I called Amendment No. 14 after I announced the result of the non-Division in respect of Amendment No. 13. I do not think that I called it particularly silently, at least I certainly did not intend to do so. But, on the other hand, it appears that my call was not universally heard. I think, therefore, that the justice of the case requires that I call the amendment again.
I call Amendment No. 14 standing in the name of the noble Lord, Lord Boardman.
Lord Williams of Elvel: My Lords, I am most grateful to the noble and learned Lord. I was in the Chamber throughout but I did not hear—perhaps because my hearing is defective—the noble and learned Lord call Amendment No. 14. Therefore, I am very happy to move that amendment formally in the expectation that the noble Lord, Lord Boardman, will make a speech upon it. I think that the amendment needs to be discussed.
Lord Coleraine: My Lords, before the matter goes any further, I should like to point out that I was also present in the Chamber when my noble and learned friend called the amendment. I heard that it was not moved and then my noble and learned friend called Amendment No. 15.
Baroness Gardner of Parkes: My Lords, that is true.
The Lord Chancellor: My Lords, I certainly called Amendment No. 14 to the best of my ability. I waited for a while but nothing happened, so I declared it not moved and went on to call Amendment No. 15. On the other hand, we are all rather fallible—myself particularly—and I think, therefore, that in all the circumstances it is only just that I should re-call Amendment No. 14. I shall do so now.
9 p.m.
Lord Boardman Lord Boardman moved Amendment No. 14:
After Clause 5, insert the following new clause:
("Qualifying tenants satisfying residence conditiun
,—(1) For the purposes of this Chapter a qualifying tenant of a flat satisfies the residence condition at any time when the condition specified in subsection (2) is satisfied with respect to him.
(2) That condition is that the tenant has occupied the flat as his only or principal home—

(a) for the last twelve months, or

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(b) for periods amounting to three years in the last ten years,

whether or not he has used it also for other purposes.
(3) For the purposes of subsection (2)—

(a) any reference to the tenant's flat includes a reference to part of it; and

(b) it is immaterial whether at any particular time the tenant's occupation was in right of the lease by virtue of which he is a qualifying tenant or in right of some other lease or otherwise;

but any occupation by a company or other artificial person, or (where the tenant is a corporation sole) by the corporator, shall not be regarded as occupation for the purposes of that subsection.
(4) In the case of a lease held by joint tenants—

(a) the condition specified in subsection (2) need only be satisfied with respect to one of the joint tenants; and

(b) subsection (3) shall apply accordingly (the reference to the lease by virtue of which the tenant is a qualifying tenant being read for this purpose as a reference to the lease by virtue of which the joint tenants are a qualifying tenant).").

The noble Lord said: My Lords, I shall speak also to Amendments Nos. 34, 35, 38, 40 and 42. Under the Bill two-thirds of the long leaseholders of the block must participate in the application to enfranchise, and unfortunately none of them need be resident, as your Lordships will know from a previous amendment. There are amendments down, which may well commend themselves to my noble friend the Minister, allowing that figure to be stepped up to three-quarters.
Amendment No. 14 improves the situation in that it requires half of the participating leaseholders—I remind your Lordships that two-thirds of the leaseholders must qualify, and that two thirds must then participate—to be residents. So there will be a significant residents' entity in the participating leaseholders.
Secondly, the amendment excludes companies from being residents. As the Bill stands, the whole block could be acquired by company leaseholders. The amendment—I believe in all fairness—excludes companies and corporations from qualifying as residents. Thirdly, the amendment relates to the definition of resident. Throughout the Bill resident is defined as someone who has occupied the flat as his only or principal home for the last three years or for periods amounting to three years in the last 10 years. That definition was used also in the 1967 Act.
The amendment extends that definition by qualifying as a resident one who occupied the flat as his only or principal home for the last 12 months or for periods amounting to three years in the last 10 years. That overcomes the problem, which has been referred to, of residents who have only recently taken up residence. It was a point referred to by the noble Lord, Lord Williams. Limiting the period to three years might exclude a number of people. The amendment widens the definition to 12 months. Although I am less happy with that than I am with the exclusion of non-residents, the amendment goes a long way towards solving the problem of enabling residents to enfranchise, to which my noble friend the Minister referred, and towards meeting some of the principles in respect of which the Bill, without the amendment, would be offensive. I beg to move.
Lord Williams of Elvel: My Lords, I am glad that we have the opportunity to discuss the amendment. We had this debate earlier, and I believe that the noble Lord, Lord Boardman, was right to ungroup—if I may use that inelegant expression—Amendment No. 14 from the previous amendments. We support entirely the position in subsection (3) of the amendment. We do not believe that there should be companies and absentee landlords who can do what they like and create what I believe are called "artificial persons". We support that principle. I promise the noble Lord our support on that part of the amendment.
We have some difficulty, however, with subsection (2) which imposes a restraint on enfranchisement. It is not to our liking. I and my colleagues should like to think about it. But if the Government were prepared to look seriously at the provision and possibly include it in the Bill, that is something that we might have to live with. It is something that I and my colleagues in the other place might well object to. Nevertheless, it is probably better than nothing.
Perhaps I may return to what I said earlier. We recognise that there is a problem over residence. We recognise that "residence" is difficult to define. One of the things that we can define quite easily, and which would exclude enfranchisement, is leases owned by corporations, or those standing in for corporations, which are not themselves real people, but which are leaseholders. We are anxious to encourage the enfranchisement of real people who are leaseholders. I say to the noble Lord, Lord Boardman, that our reaction to the amendment is that we agree with anything which is against absentee landlords and artificial persons but as regards residents, we have had our doubts about "the last twelve months". We shall see.
Lord Peyton of Yeovil: My Lords, I look forward with unusual eagerness to reading the Official Report of what the noble Lord, Lord Williams, has just said so that I can understand on which side of the argument he intended to descend. He appeared to be saying not much more than that this is a curate's egg amendment; there are bits which are bad and there are bits which are good. He left me very confused and muddled. The reason for my speaking is to give my noble friend on the Front Bench a chance to get his wit together more powerfully than mine so that he can understand exactly what the noble Lord, Lord Williams, said and meant to say and, moreover, so that my noble friend might understand what his right honourable and honourable friends down the passage might say when the amendment, if it is passed, reaches them.
I wish to make a personal comment about the amendment. I cannot help but feel some deep regret that my noble friend Lord Boardman did not decide to vote on the earlier amendment. At least that 'would have had the advantage of making the views of some of us on this side of the House very clear without necessarily impeding the progress of this compromise. It goes some of the way to pleasing the noble Lord, Lord Williams, but not all the way.
The debate is becoming confused. This little
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amendment, which is now before us, is welcome because it goes some way towards acknowledging that the Government have not been wholly right in the argument. At the same time I take the opportunity to express my considerable regret that earlier today we were unable to express a clear opinion on the mistaken course which the Government have adopted.
Lord Palmer: My Lords, I would first like to pay great tribute to the noble and learned Lord the Lord Chancellor for his sense of fair play in this matter. I too have put my name to the amendment. Unlike the mover of the amendment, Lord Boardman, I did not leave the Chamber and I certainly failed to hear. I am the third youngest person in the Chamber tonight and I reckon that my hearing is quite good. We owe a great gratitude to the noble and learned Lord for showing an amazing sense of fair play.
It also gives me enormous pleasure to support the noble Lord, Lord Boardman, as it appears that there is no logical reason at all why a non-resident should benefit from the Bill. I sincerely hope that your Lordships will give the amendment full support. I support the amendment.
Baroness Gardner of Parkes: My Lords, I would like to bring before the House the matter of—
Noble Lords: Order!
Lord Strathclyde: My Lords, my noble friend Lady Gardner is out of order in speaking from the Bishops' Bench.
The Earl of Onslow: My Lords, we have not as yet allowed women priests in the Church of England. However, I am sure that my noble friend Lady Gardner will make an excellent successor to Archbishop Cranmer.
My noble friend Lord Boardman withdrew Amendment No. 5 on the undertaking of my noble friend on the Front Bench to accept the amendment, to all intents and purposes. I suggest that that was the case because it was within the bounds of possibility that he would have lost. If my noble friend on the Front Bench does accept the amendment I sincerely hope that he will be careful not to say, "I accept the amendment in principle", after which one's old chum "drafting errors" will come into play. Off the Minister will go and say, "I think that I will accept the amendment", and the Government will introduce an amendment along the same lines at Third Reading. If that is to be the case I sincerely hope that my noble friend on the Front Bench will not be tempted to water down the amendment just a little on the grounds of legislative clarity. I sincerely hope that he will not attempt a fast one like that. I do not believe that he will, but I hope that he is warned that some of us will be on the look-out if he does.
Baroness Gardner of Parkes: My Lords, I am concerned about a principal and only resident. What will be the situation of someone with a large family occupying two flats? Will that person be able to enfranchise only one of the flats and not the second in which the other half of the family lives? I should be

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sorry to rule out such people. There are people with big families who cannot fit into one flat in certain blocks. I know of a number of such cases.
I am also sorry that we are debating Amendment No. 14 because we had passed on and Amendment No. 15 had been called. However, the main reason for my objection to returning to the amendment is that it was tabled so late that we have not had time to consider in careful detail how it and Amendment No. 31 mesh together. It may be that it is quite a good compromise but I feel that the amendment has not been tabled long enough for noble Lords to consider its full ramifications. That is why I feel a degree of anxiety about the amendment.
9.15 p.m.
Baroness Hamwee: My Lords, the noble Lord, Lord Peyton, was less than generous in claiming not to understand the points made by the noble Lord, Lord Williams. I take a similar view to that of the noble Lord, Lord Williams. I support the exclusion from qualification of a "company" or "artificial person". However, those of us who do not wish to see a residence test would prefer it not to be included. If it is to be included, then the shorter the period of residence the less objectionable that would be. I hope that that makes the position quite clear.
I am not sure whether Amendment No. 31 is being spoken to with this amendment. The noble Lord, Lord Boardman, has not referred to it but the amendments seem to go together. I am rather mystified as to what is intended by Amendment No. 31. It requires explanation.
Lord Boardman: My Lords, Amendment No. 31 provides that half the participant tenants must be resident. Two-thirds must be qualifying tenants; at present two-thirds of those must participate without any residential qualification. Amendment No. 31 says that half of those two-thirds must be residents in order that they can participate.
Baroness Hamwee: My Lords, that explanation is rather difficult to follow without an algebraic calculation before me but, nevertheless, I thank the noble Lord for that intervention.
Lord Coleraine: My Lords, like the noble Baroness, Lady Hamwee, and unlike my noble friend Lord Peyton of Yeovil, I read the lips of the noble Lord, Lord Williams of Elvel, and I understood all that he said. One must be particularly wary and respectful of such a skilfully drafted amendment as that brought forward about eight weeks after the matter was last discussed and immediately before it is to be discussed on Report.
Other noble Lords will be as grateful as I am for the occasions on which my noble friend sitting behind me reminds us of our interests. On this occasion I declare once again my interest in that I am a lessee of a flat which has been my home for 17 years. During the whole of that period it has not been my sole residence. Therefore, I wish to address a few remarks on the question of residence.
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I must tell the House and my noble friend Lord Boardman that this proposed clause and the way in which it deals with residence—sole or principal residence—is clearly in breach of the Conservative Party manifesto where residence alone is referred to. It is also clearly in breach of the two pamphlets issued by the Department of the Environment and the Welsh Office, to which I referred earlier. It makes no difference that Section 36 was amended at an earlier stage in these proceedings to introduce a sole and principal residence amendment to lease extensions. That also was in breach of the manifesto and the documents. I hope that my noble friend will resist the amendments.
Lord Strathclyde: My Lords, this is the third time that I rise to address the House on the residency test. We are now dealing with this amendment separately from Amendment No. 1.
The Government have always resisted a residency test. They do not do that on the basis of principle because, as I explained earlier this afternoon, we have included residency tests in all other aspects of leasehold enfranchisement and extension. However, we object to it on the basis of practicality. The noble Baroness, Lady Hamwee, the noble Lord, Lord Williams, and I have given many examples of how a residency test would prevent leasehold enfranchisement. Some of my noble friends have also given examples of that.
However, I have always maintained that there may well be a way through which would deal with my problems as regards a residency test. I believe with the introduction of this new clause that I have been outmanoeuvred by my noble friend.
The amendment allows qualifying tenants to choose between occupation of the flat or part of it as an only or principal home for either the preceding 12 months or for periods amounting to three years out of the last 10. The second year of the test means that people who have recently let out their flats because, for example, they have gone abroad for a period, would not be denied the opportunity to join in collective enfranchisement. In the case of joint tenancies, only one of the tenants need satisfy the condition. Occupation does not have to have been under the qualifying lease. So, for example, someone who has lived in a flat owned by his or her parents and has recently inherited a long lease, or a former secure tenant who has exercised the right to buy, will be able to participate.
The test contained in the new clause is intended to prevent a majority of non-resident long leaseholders purchasing the landlord's interest. Our declared policy, on which I have pronounced many times, is that flat owners should be able to gain ownership and control of their blocks. That point was echoed by the noble Lord, Lord Williams. The test that has been proposed by my noble friend Lord Boardman does not seriously interfere with that objective. Therefore, with the noble Lord, Lord Williams, I understand that my noble friend has come forward with something that could work. It clearly signals that flat owners cannot take over if only a minority of the participants lives or has lived for significant periods in the flats.

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The noble Lord, Lord Williams, said that this Bill was about encouraging "real people" to enfranchise. That is the Government's position. I feel that my noble friend has produced something that does encourage "real people" to enfranchise.
My noble friend Lord Onslow suggested to me that I should not take back this amendment and promise a redrafting. Having listened to the debate earlier this afternoon, and indeed to the short debate that we have had this evening, and seeing the strength of the presence of my noble friends on the Back Benches, I should like to propose to my noble friend Lord Boardman that he should move his amendment. The Government will accept it, and if there are any drafting errors we can sort them out at Third Reading.
Lord Boardman: My Lords, I thank my noble friend for that somewhat surprising concession, following the events of the past few weeks. I welcome it. I much appreciate the great support that noble Lords have given by being here and speaking not only on this amendment but in particular on the earlier amendments, which made it clear that we on this side of the House felt that residential occupation by an element of the leaseholders was an important part I am delighted that my noble friend has been happy to accept the amendment.
On Question, amendment agreed to.
Clause 6 [Meaning of "long lease"]:
Viscount Goschen Viscount Goschen moved Amendments Nos. 15 and 16:
Page 7, line 41, leave out from ("Where") to ("then") in line 43 and insert ("in the case of a flat there are at any time two or more separate leases, with the same landlord and the same tenant, and—
( ) the property comprised in one of those leases consists of either the flat or a part of it (in either case with or without any appurtenant property), and
( ) the property comprised in every other lease consists of either a part of the flat (with or without any appurtenant property) or appurtenant property only,").
Page 8, line 1, at end insert:
(""appurtenant property" has the same meaning as in section 1;").
The noble Lord said: My Lords, I have already spoken to Amendments Nos. 15 and 16 with Amendment No. 4. I beg to move them en bloc.
On Question, amendments agreed to.
The Deputy Speaker: My Lords, in calling Amendment No. 17, I have to say that if it were to be agreed to I could not call the next one.
Clause 7 [Leases at a low rent]:
Lord Carnock Lord Carnock moved Amendment No. 17:
Page 8, leave out lines 13 to 16 and insert:
("(1) For the purposes of this Chapter a lease of a flat is a lease at a low rent if either no rent was payable under it in respect of the flat during the initial year or the aggregate amount of rent so payable during the period of twelve months immediately preceding the relevant date did not exceed £300 if the flat is in Greater London, or £75 if elsewhere, or the aggregate amount of rent so payable during the initial year did not exceed the following amount, namely—").
The noble Lord said: My Lords, I have already spoken to this amendment with Amendment No. 6 in
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accordance with the grouping as it then was, since when the noble Lord, Lord Williams of Elvel, has indicated that he wishes to speak to Amendment No. 17 in its place in the Marshalled List. He inquired whether I would agree to the de-grouping of the amendment, which I gladly did. In the circumstances, I could speak further to this amendment but I do not think that the business of the House would be in any way furthered if I did so. Accordingly, I beg to move.
Lord Williams of Elvel: My Lords, I am grateful to the noble Lord, Lord Carnock, for his introduction to this amendment. It is one of the important points in the Bill, at least in Part I of the Bill which concerns the low rent test. The noble Lord, Lord Carnock, allied with the noble Viscount, Lord Bridgeman, and the noble Lord, Lord Annan, introduced a series of amendments which go some way, in our view, to mitigating the damage which the Government are doing to the Bill, as drafted, as regards the low rent test. Our view on the low rent test was clearly stated in Committee. We believe that there is no case for including it. After all, it disenfranchises on a more or less random basis many leaseholders who would otherwise be in a position of enfranchising. It goes against the general thrust of not only this Bill but also the 1967 Act.
Nevertheless, I have to accept that in Committee your Lordships decided against the abolition of the low rent test. We were advocating its abolition and we shall continue to do so. Therefore, we have to go to certain fall-back positions. One of the fall-back positions that is available is that advocated by the noble Lord, Lord Carnock.
There are certain disadvantages to the noble Lord's amendment. One of them is that, as regards the position in London, the amendment does not quite achieve what the noble Lord hopes it will achieve. But the main advantage, in our view, is that the amendment achieves at least a mitigation of the damage that the Bill as drafted will cause to leaseholders outside London. As I have pointed out on I do not know how many occasions, 75 per cent. of leaseholders who are affected by this Bill live outside London. Even in London, as far as I am concerned, we are not talking about the great estates. We are talking about those leaseholders who live in areas of northern London who would benefit from the noble Lord's amendment.
I have said all along that we will support any amendment, provided it is reasonable, that mitigates the damage which is done by the low rent test as presently incorporated in the Bill. I stick to that position. Therefore, although I have certain quarrels with the noble Lord, Lord Carnock, on the details of what we are discussing, nevertheless I believe this is a good amendment in the context of the day. The question is: what will the Government do about it? Alas, I suspect the Government will do nothing. I suspect that the noble Lord, Lord Carnock, in moving this amendment will meet a total brick wall from the Minister on the Benches opposite. I think that would be a pity; not because, philosophically, the Minister or the Government in general are opposed to what the noble Lord, Lord Carnock, is suggesting, but it would

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be a pity if there were no consideration of Amendment No. 24. That amendment seems to add a new dimension to the rateable value equation which is at present in the Bill. Even if the Government are wholly opposed—like a brick wall—to any adaptation of the low rent test, I believe that, as in capital gains tax, indexation of rateable value should be considered very seriously.
I say all that in the reasonable expectation that the noble Lord, Lord Carnock, will not receive any help or comfort from the Government. Nevertheless, I wish to place on record that we support the noble Lord in his Amendments No. 17 and, in particular, No. 24. I hope that the Government may in the course of time have second thoughts, as they have on other occasions.
9.30 p.m.
Lord Wolfson: My Lords, I too should like to support my noble friend Lord Carnock's amendment. I should have liked it to have gone further. I supported a complete repeal of the low rent qualification at Committee stage. I agree with the views of the noble Lord, Lord Williams, on the subject. I hope that my noble friend the Minister will not find the bricks behind him too hard and will be able to offer this concession. It is not only very much within the spirit of the Bill but also of the manifesto before the general election.
Lord St. John of Bletso: My Lords, I wish to restate my support for the amendment. As the noble Lord, Lord Williams, mentioned, the proposed rent threshold is aimed particularly at the lower to middle end of the property market. Without the amendment many leaseholders will be unjustifiably disfranchised, which is against the objectives of the Bill.
Baroness Hamwee: My Lords, this seems to be a time of the evening for modified rapture. Like other noble Lords I should have preferred to see a more far-reaching amendment. However, we covered the ground of whether or not there should be a low rent test at all on a previous occasion. Given the outcome of that debate, I too should like to say for the record that I support the amendments in the name of the noble Lord, Lord Carnock.
One of the points that I made when we discussed the low rent test at the previous stage was the manipulation of the provisions of legislation by solicitors in drafting leases. Leases state, for instance, that the rent would be such and such an amount or £1 more than the amount which was required in order to take the lease out of the provisions of the Leasehold Reform Act. Shortly after the Committee stage I took the wrapper off a legal professional journal and out fell a flyer for a seminar entitled "Residential Leases -The New Law (and how to use it)". The document began with a quote from a member of the profession:
"These new leasehold rules should bring in lots of work for solicitors—if they can get their act together in time".
Continuing with the promotion of a seminar on how to make the best use of the clients of the proposed legislation the document quite bluntly said:
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"The Bill could have been called 'The Conveyancing and Practice Development Bill'. This seminar will tell you how to take full advantage".
I recognise that I am speaking against members of my own profession in mentioning that, but it is a point which should be made in arguing for simple and not manipulable legislation.
Lord Coleraine: My Lords, as it was I who moved the amendment which was defeated in Committee, I should merely like the record to show that I warmly commend both the amendments to the House.
Lord Monk Bretton: My Lords, I also wish to say a word in support of the amendment of my noble friend Lord Carnock. I feel that without it there will be far fewer enfranchisements of flats in areas mostly outside London. Not only will there be fewer enfranchisements, but there will also be many anomalies, together with many disappointments. I wish to emphasise that I think it would lead in the end, only too quickly, to demands for further legislation which would probably be more radical.
Lord Strathclyde: My Lords, this is, of course, yet another issue which we debated at some length in Committee, the issue of the low rent test. At that time the Committee voted decisively in favour of retaining the test. The amendments before us seek to amend the structure of that test. I am not convinced that the amendments are of much benefit, but I generally feel that the low rent test should not be amended. The test marks the extent of the transfer of ownership from the landlord to the lessee. This is crucial in determining whether enfranchisement should be allowed to take place at all. The low rent test has been recognised and accepted for many years by the property market as the threshold indicating that equity has been transferred and effective owner occupation commenced. A landlord knows that his interest in a property let on a low rent is effectively lost to the lessee.
The low rent test appears in roughly the same form in several important pieces of landlord and tenant legislation, and I listed them in Committee. I would therefore not be willing to amend the current form of the test. However, perhaps that is an argument against what the noble Baroness, Lady Hamwee, said. The fact is that this is a test which has been well precedented and well used in the courts and by professionals both in property and in the legal profession, and that is another reason why it should not be changed. To change the rules at this stage would upset the property market and affect the basis on which quite proper transactions were entered into.
It is for those reasons that it is difficult for me to accept Amendment No. 17. Adding a new limit to the test would unnecessarily complicate it and would disturb the workings of the well-established and accepted rules. Perhaps my noble friend Lord Carnock, who moved the amendment most eloquently, could reflect on that to see whether he could propose something better.
I also have reservations about Amendments Nos. 22 and 24. At this stage I am not certain whether my noble friend spoke to Amendment No. 22. He indicates that he did not. I have trouble in supporting

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Amendment No. 24 which introduces the suggestion that the rateable value should be increased in line with the retail prices index. As I explained, the low rent test is well established and has worked since both the last rating revaluation and the abolition of domestic rating. The RPI is notional. It is in no manner fixed to capital or property rental prices, nor does it take account of regional variation, which is marked in property. I suspect that any link between increases in ground rents and retail prices is likely to be tenuous.
I know that my reply is disappointing to my noble friends but I cannot accept the amendments which would upset the long-term operation of the property market where leases are based on a long established and understood test.
Lord Carnock: My Lords, I have a heavy heart at hearing that reply. Not a single Member of the House has spoken against my amendment. In relation to indexation, my noble friend on the Front Bench indicated that the two-thirds test was proven and had been working satisfactorily. I have to say that that is really not the case. The reason that it is not is that during the period from 1st April 1973 to 31st March 1990 the retail prices index rose by 421 per cent. Throughout that period ground rents were rising at a rate not appreciably different. Throughout that period the rateable value remained fixed because the policy of the Government which existed when the low rent test relating to rateable values was introduced envisaged that there should be quinquennial valuations. The principle of quinquennial valuations was abandoned.
The result is that if one considers two identical flats, one let on, say, 1st April 1973 and the other let in March 1990, there will be very different results upon the application of the low rent test. The low rent test has been rendered perverse, giving false results, because the rateable value has remained fixed and the ground rent or rents have been escalating.
It is a fundamental rule of arithmetic that when making comparisons one compares like with like. At the inception of the low rent test, like was being compared with like but toward its termination like was not being compared with like. The test therefore gave perverse results.
In the circumstances and at this hour of the night, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 18:
Page 8, line 13, after ("flat") insert ("entered into on or before the date of the passing of this Act (or after that date but in pursuance of a contract entered into before that date)").
The noble Lord said: I shall speak to this amendment, which is a paving amendment for Amendment No. 20, and also to Amendment No. 21, which is consequential. Amendment No. 20 provides that a lease entered into after the passing of the Act, otherwise in pursuance of an earlier contract, is a lease at a low rent. Paragraph (a) reads:
"either no rent was payable under the lease in respect of the flat during the initial year or the aggregate amount so payable during that year did not exceed two-thirds of the rent at which the flat might on the date the lease was entered into reasonably have been expected to be let from year to year if the tenant undertook to pay the Council Tax and all other
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usual tenant's taxes and to bear the cost of repairs and insurance and the other expenses, if any, necessary to maintain the flat in a state to command that rent".
The Government have made clear that there is general dissatisfaction with the residential long leasehold system as it exists in England and Wales, particularly with regard to flats. They propose that rights of either enfranchisement or lease extension should attach to flat leases where, at the time the lease was granted, the property in the flat substantially passed to the tenant.
As your Lordships know, in Committee I moved an amendment which would have removed the low rent test altogether but it did not satisfy the requirement that in every case property must be shown to have passed when the lease was granted. The amendment was rejected by the Committee.
It is fair to say that the Government's sincerity in their whole attitude to the low rent test and the long leasehold system as it applies to residences will be most clearly tested by the response to this amendment. I tabled and spoke to a similar but much less satisfactory amendment in Committee, Amendment No. 155A, which was related to houses. The debate can be read in the Official Report of 22nd March at col. 113 to 117. The Minister's reply is there to be read.
As I said, this is the better amendment. I should like to draw the attention of the House to what at present is happening in the market to the kind of long leases where the Government are saying that the property is not passing to the lessee. I have with me particulars of a block of four flats recently for sale in Mount Street, Mayfair. The lower two flats of the four are for sale at £475,000 each on new 83-year leases. I must be careful what I refer to as "ground" rent; the Minister would feel constrained to call it a "rack" rent. The ground rent is to be one quarter of I per cent. of the premium. At a ground rent—or a rack rent, call it what you will —of £1,187.50, the property and the flat, under the Bill and in accordance with the Government's reading of the situation, is to be deemed to have remained with the freeholder. The two upper flats are for sale at £400,000 and £350,000 respectively on the same rent terms, and they just scrape through. Their leases are seen by the Government to be true ground rent leases.
It is sheer hallucinating madness. My amendment is drafted to replicate a rates revaluation as of the date of the grant of the lease. The precedent is in Section 19 of the General Rate Act 1967. In my view, the amendment provides the safeguards which the Government claim are required for the protection of freeholders in the case of leases granted after the passing of the Act.
In case it should occur to my noble friend when replying to my amendment that it will involve complicated valuations, let me say straight away that it will not do so. If the amendment were in place, either proper rack rents would be granted on short leases, or landlords would grant leases for proper ground rents in order to maximise their capital considerations; there would be no cases where any lease was granted for 21 years or more at a rent anything like the rent limits which the amendment imposes. I beg to move.
9.45 p.m.
Lord Boardman: My Lords, I find the amendment extremely confusing. There seems to run through so much of the debate a philosophy that anyone who enters into a contract to take a flat is somehow entitled to read into it that he is entitled to enfranchise it. My noble friend referred to flats which are advertised for sale. One wonders whether one should put a footnote at the bottom, saying that the flat will qualify for a kindly government to make them a present of the flat or that the ground rent is fixed at a rate which will not entitle a kindly government to do that.
I find the conception that they can enter into a perfectly ordinary agreement—they know what they are buying, what the ground rent is and what they have to pay—and then people like my noble friend turn round and say, "They should have the right to enfranchise. The Government should allow it". I find it to be cloud cuckoo land and I hope my noble friend on the Front Bench will not support the amendment.
Lord Strathclyde: My Lords, these amendments would affect the future determination of a low rent by disapplying the current test and introducing a new test with an anti-avoidance device for leases granted after the enactment of the Bill.
We have discussed the provisions of the low rent test at some length. Its purpose is clear. The current test has been in existence for many years and all landlords and tenants will be aware of its provisions. It cannot be altered lightly.
My noble friend argues that a lease may be deliberately set to fail the test and be unenfranchisable. That is true, but it may be with the agreement of both parties. The point is that where that has happened, the tenant will know before purchase, because of the certainty of the test, that his lease will not be able to be enfranchised and he will therefore pay less for the lease. Equally, a developer will have the benefit of the long established test to ensure that leases are enfranchisable and he can therefore charge a higher premium for such leases.
Landlords and tenants are free to enter into future leases which will or will not pass the existing test, both parties being aware of whether or not the lease will pass. There would therefore be no point in complicating matters by tinkering with the established test and introducing a different test with an anti-avoidance device for leases granted after enactment of the Bill. Again, I suspect that my reply will disappoint my noble friend, but I do not believe that he has made a case for me to accept the amendment.
Lord Coleraine: My Lords, I believe that the proposition put forward by my noble friend—that there will be a differential market between new leases granted with the right to enfranchise and those granted without the right to enfranchise—is a very suspect one given the fact that anyone enfranchising has to pay the full price, and certainly more than the freeholder will get if he puts it on the market elsewhere. I am sorry, but not surprised, that my noble friend has been able to say only a little about the question of property passing. I believe that everything
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he has said shows what the Government's attitude is to low rents and what they really feel about the question of property passing. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carnock Lord Carnock moved Amendment No. 19:
Page 8, leave out lines 20 to 25 and insert:
("(b) where—

(i) the lease was entered into either on or after 1st April 1963 but before 1st April 1990, or on or after 1st April 1990 in pursuance of a contract made before that date, and

(ii) the flat had a rateable value at the date of the commencement of the lease or else at any time before 1st April 1990,").

The noble Lord said: My Lords, in moving this amendment I also wish to speak to Amendment No.129 in Clause 62 which is grouped therewith. The purpose of the amendment is to make clear that subsection (1) (b) of Clause 7 applies only to a flat the lease of which was entered into on or after 1st April 1963 and before 1st April 1990 and where the flat actually had a rateable value at the date of the commencement of the lease or at any time before 1st April 1990. Under the Bill as drawn the paragraph could have purported to apply to a flat which had no rateable value at any relevant time, so that the provision at the end of paragraph (b) relating to two-thirds of the rateable value could not operate. Therefore, there appears to be an omission in the Bill which will be supplied by the amendment. Where such a flat has no rateable value it will be covered by the provisions of paragraph (c), which is of a sweeping-up character. The£ 1,000 threshold will apply if the flat is in Greater London and the £250 threshold will apply if it is situated elsewhere. Amendment No. 129 to Clause 62 corrects a similar omission in relation to the provisions affecting long leasehold houses. I beg to move.
Lord Strathclyde: My Lords, I have listened with great care to the arguments advanced by my noble friend in relation to the case where a property has no rateable value. I accept that this could have happened because when the lease of a property was entered into the property was not habitable or because the property was simply not registered in time before rates ceased to exist, perhaps because it was part of a new development. There is a special case here as it will not be possible to apply the low rent test to these properties.
On that basis, and if it is the wish of the House, I consider Amendments Nos. 19 and 129 to be reasonable and am happy to accept them.
Lord Carnock: My Lords, I am grateful to the Minister for his reply.
On Question, amendment agreed to.
[Amendments Nos. 20 and 21 not moved.]
Lord Carnock Lord Carnock had given notice of his intention to move Amendment No. 22:
Page 9, line 5, at end insert ("and
(f) for the purpose of determining the proportion that the rent payable in respect of the flat during the initial year hears to the rateable value of the flat, the rateable value shall be adjusted to take into account any improvements (whether made before the appropriate date or within five years thereafter; but, if made

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thereafter, made only with the consent of the landlord, or, if such consent is not given, approved by the court for this purpose).").
The noble Lord said: My Lords, I have already spoken to this amendment. I do not propose to move it.
[Amendment No. 22 not moved.]
Lord Rodger of Earlsferry Lord Rodger of Earlsferry moved Amendment No. 23:
Page 9, line 28, at end insert:
("(7) In this section any reference to a flat let under a lease includes a reference to any appurtenant property (within the meaning of section 1) which on the relevant date is let with the flat to the tenant under the lease.").
The noble and learned Lord said: My Lords, in moving this amendment I shall speak also to the amendments which are grouped with it. These amendments deal with a technical and drafting matter. They have been drafted to ensure that in certain cases where there is a reference to "flat", the reference has the precise meaning which is designed for the particular context.
It may be convenient if I deal, first, with Amendments Nos. 23 and 28. Your Lordships will recall that the definition of a flat which applies in Chapter I is the general definition for that chapter which is found in Clause 91(1). But for the purposes of Chapter II there is a drafting gloss on that general definition in Clause 59(2). Your Lordships will see that "appurtenant property" is included within this definition of a flat for Chapter II but is defined separately in Clause 1(7) for the purposes of Chapter I.
The drafting in that way is deliberate. The effect of this difference in treatment is that a group of enfranchising tenants, each with a single lease of a flat and garage, will have the right to acquire the building in which the flats are located, but also, if they wish, they may acquire the appurtenant property demised by their leases. I have already explained that the policy reasons for this were to keep to a minimum the amount of property that has to be acquired while leaving the extent of enfranchisement flexible.
However, on this approach a potential difficulty arises because of the rent test in Clause 7. Clause 7(1) applies the rent test only to the rent and rateable or letting value which applies to the flat itself, even where, for example, the tenant has one lease of the flat together with a garage. On the current drafting it is a suggestion at least that in such a case the rent would need to be apportioned between the flat and the garage before the rent test could be applied. It also follows that the rateable value might also have in such cases to be apportioned where there is no separate rating on the garage. The effect of all this would be cumbersome.
To avoid these complications it has been decided that the low rent test should apply to the flat, together with any appurtenant property enjoyed with it. That is the effect of Amendment No. 23. Amendment No. 28 is simply consequential on Amendment No. 23 in that it directs that, for the purposes of the low rent test and its application under Chapter II, the meaning of "flat"
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shall be construed in accordance with Clause 59(2) rather than Clause 7(7). Amendment No. 128 does the same, in effect, for Chapter II.
The remaining amendments, Amendments Nos. 57, 119, 120, 123, 126 and 127, provide a gloss on the meaning of flat in cases where the landlord denies tenants the rights of collective enfranchisement or lease renewal on the ground that he proposes to redevelop. The current drafting requires only that the landlord must show that he has a reasonable need to obtain possession of the premises, which, as it stands, may mean that he would need only to show that he intended to obtain possession of appurtenant property demised with the flats. That is not thought to be satisfactory. The effect of the amendments is that the landlord, before he can invoke this exception, must show that he could not redevelop the premises without obtaining possession of the flats. These are technical amendments. I beg to move.
Lord Williams of Elvel: My Lords, I too shall speak to the amendments which the noble and learned Lord has spoken to. I have one question for him. This Bill has been through another place. It has also been in Standing Committee in another place. It has been through this House in Committee and here, on Report, we still have technical amendments moved by the Government which may be justified. But for goodness sake, cannot the Government get the drafting right before they go through all the procedures of Parliament? That is the job of the noble and learned Lord, the parliamentary draftsmen, the Bill team and the rest. Why are we at this time of night not debating the real issues of the Bill but technical amendments which the Government recognise are deficiencies in the Bill?
Lord Rodger of Earlsferry: My Lords, one of the purposes of going through the procedures both in Committee and on Report is that matters of technical detail, where necessary, can be put right. It would surely be a far worse situation if the Government were not to put right, and not take the opportunity of putting right, defects which emerge. As everybody recognises, this is a complex Bill. Everyone recognises that it is difficult. A highly technical area of the law involving conveyancing is concerned.
In that situation it is very difficult to get matters right at the very first instance. It is much to be preferred that as these wrinkles emerge—which is what they are—the machinery goes through and one examines the Bill in accordance with parliamentary procedures, it is proper that these wrinkles are put right. I do not apologise for bringing this amendment before the House.
On Question, amendment agreed to.
[Amendment No. 24 not moved.]

Dunham Bridge (Amendment) Bill
Brought from the Commons; read a first time and referred to the Examiners.
House adjourned at two minutes past ten o'clock.

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