Sitting of 25 May 1993

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

    School Leavers (Schemes)
    Matthew Banks: To ask the Secretary of State for Employment how many people entered a scheme on leaving school in 1992; what was the equivalent figure in 1979; and if she will make a statement.
    The Secretary of State for Employment (Mrs. Gillian Shephard): The 270,000 young people starting youth training in 1992–93 all received training. Fewer than a quarter of the 162,000 starting on the youth opportunities programme in 1978–79 received training.
    Mr. Banks: I am grateful to my right hon. Friend for that answer. Will she assure me that she will continue to develop training policy to benefit the individual, rather than follow the advice of the Labour party, which is based on the social chapter and a national minimum wage but which would have a devastating consequence for our job prospects?
    Mrs. Shephard: No doubt hon. Friend has noted that the number of unemployed young people in Britain is far below the EC average and that the opportunities that we offer under youth training, and in particular under youth credits, which we are extending into his constituency, give young people a very good start.
    Mr. Grocott: Does the Secretary of State acknowledge that, in the long history of silly, planted questions, that one must take the prize with additional awards? What matters to school leavers is not the number of training places, so many of which are of dubious value and do not lead to jobs, but the number of jobs and of proper apprenticeships. Will she confirm that they were much more abundant under the Labour Government of the 1970s than now? If she can cast her mind back further to the heady days of the Labour Government of the 1960s, will she confirm that the problem for school leavers was the abundant choice of jobs?
    Mrs. Shephard: Young people and others certainly want jobs and want their training to lead to jobs, but it is extraordinary for the hon. Gentleman to assert that Conservative Members do not understand that point when Labour Members, with their support for a national minimum wage and for the provisions of the social chapter and their hostility to employers, never cease to show that they do not understand the point.
    Lady Olgaaitland: I congratulate my right hon. Friend on the fact that more than 300,000 young people are now on youth training schemes, and only just over 5,000 youngsters are waiting barely eight weeks to get on to a scheme.
    Mrs. Shephard: In the past year, we experienced some problems with young people waiting longer than that. The Department therefore waged an intensive campaign to reduce that waiting time. Thanks to some full and frank discussions that I had with certain training and enterprise councils, we have now reached the figure that my hon. Friend gave, which is a great improvement on earlier figures. I will not rest until we have improved it still further.

    Wages
    Mrs. Fyfe: To ask the Secretary of State for Employment what representations she has received about companies planning to lower wages when the wages council for their industry has been abolished.
    The Minister of State, Department of Employment (Mr. Michael Forsyth): One person has written to me.
    Mrs. Fyfe: Is the Minister aware that a considerable number of employers have already cut pay below wages council rates? A laundry worker in my constituency is paid £2·98p an hour and has been threatened with a reduction in his pay. Will the Minister advise the Prime Minister to advise foreign laundry firms to come to Britain and to take British laundry workers to the cleaners?
    Mr. Forsyth: The hon. Lady's constituent wrote to my right hon. Friend the Prime Minister and me some time ago about this matter. From memory, I think that he did so in December, when he was advised, if he had a complaint, to approach the wages inspectorate. He has not done so, but I should have thought that that was the proper avenue to pursue the matter.
    Mr. John Marshall: Does my hon. Friend agree that the abolition of wages councils will create jobs—[Interruption.]—and is that not better than destroying jobs, which is what a national minimum wage will do?
    Mr. Forsyth: My hon. Friend is absolutely right. The Spanish socialists are presiding over twice the level of unemployment that we have because they embraced the minimum wage policy. I do not know what Labour Members are jeering about, because their party will not commit itself to bringing back wages councils after the House has abolished them. When pressed on the matter, it does not know, just as it does not know about a range of other issues—from British Rail, to Maastricht and one member, one vote. It is a party which is making a virtue out of agnosticism.
    Mr. Galbraith: Why, in order to retain their jobs, must the low paid take cuts in wages, whereas, in order to retain their jobs, ex-con company directors must take huge salary increases, pension rights and share options?
    Mr. Forsyth: We have never argued that the abolition of wages councils would necessarily result in a reduction in wage levels. When the Labour Government abolished 11 wages councils, wages did not go up. When the Conservative Government took people under the age of 21

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    out of the scope of wages councils, wages went up by two fifths and employment increased considerably among young people.
    Labour Members must come to terms with the fact that the European Governments who have embraced their policies are presiding over higher levels of unemployment and fewer jobs in their economies as a result.

    Off-the-job Training
    Mr. Gerrard: To ask the Secretary of State for Employment what information she has on the extent of off-the-job training in the south-east.
    Mr. Michael Forsyth: More than 700,000 employees in London and the south-east have received off-the-job training since last autumn.
    Mr. Gerrard: Is it not the case that only three quarters of firms in the south-east are providing off-the-job training for their employees, and that in 1992 it averaged about two days per employee? Is that not a very poor record compared with that of many other European countries? Is it not also the case that the voluntary provision of training is failing, and that we need to require employers to provide appropriate training for their employees?
    Mr. Forsyth: The hon. Gentleman is quite wrong. One of the interesting things that have happened is that training has held up despite the difficulties facing firms as a result of the recession. We shall not take any lectures on the importance of training from a party that has consistently opposed employment training and youth training, no doubt at the behest of its trade union paymasters.
    Mr. Evennett: May I congratulate my hon. Friend on his determination to increase the number of people taking job-related training? Will he confirm that, in the south-east in particular, manufacturing firms expect to increase their training budgets, or at least to keep them at the same level? Surely that is the way to proceed. Does he agree that we must have more training, and that manufacturing firms in the south-east are proving that they believe in training and are determined to invest in the future?
    Mr. Forsyth: I entirely agree with everything that my hon. Friend has said. He is right to emphasise the importance of raising the skill levels in the work force if we are to compete with countries from the Pacific rim, Japan and others, which are the key to prosperity. That is why it is so important that the private sector itself takes the initiative, why we are promoting Investors in People and why we reject the state-imposed regimes which Labour Members favour but which would add to industry's lack of competitiveness in Europe.
    Mr. Tony Lloyd: The Minister mentioned the Investors in People programme. Has not it been a dismal failure, although it gives us no satisfaction to say it? Is it not the case that less than a third of the 10,000 whom it was hoped would sign up have done so? Is it not the truth that, despite what the Minister said, during the recession training decreased in the private sector? Have not the Government cut their training budget? Now that we know there is to be a round of public expenditure cuts, will the Minister stand at the Dispatch Box and tell us whether the Department of
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    Employment will once again sacrifice its training budget and the nation's needs when the Chief Secretary to the Treasury does his work?
    Mr. Michael Forsyth: Could we just for once hear an Opposition Front-Bench spokesman welcoming good news for Britain? The Investors In People programme covers 250,000 employees, and many organisations are committing themselves to it. Instead of running down Investors In People, why does not the hon. Gentleman join the Government and everyone else who wishes this country well, and encourage people to take advantage of that excellent scheme?

    Job Placement Targets
    Mr. Clappison: To ask the Secretary of State for Employment what was the target for job placements by the Employment Service during the most recent three months available; and what was the actual performance.
    Mrs. Gillian Shephard: The Employment Service placed 1·42 million unemployed people into work in 1992–93.
    Mr. Clappison: Will my right hon. Friend join me in welcoming the fact that the Employment Service has been especially successful in placing the long-term unemployed in work, and the fact that the restart interview scheme has played an important part in that assistance, and also in eliminating benefit fraud?
    Mrs. Shephard: The record of the Employment Service at this difficult time has certainly been excellent. Not only has it met its target, but in some cases has exceeded it. The target for the coming year is for the service to place some 1·47 million unemployed people back in work, and I am confident that it will do so. Last year, the Employment Service also placed some one third of a million long-term unemployed people back into work, and that, too, was an excellent achievement.
    It is a great shame that Opposition Members sneer at the achievements of the Employment Service and at the excellent staff in our jobcentres. If they, like me, spent more time in our jobcentres seeing what our excellent staff actually do, they might sneer a little less and cheer a little more.
    Mr. McAllion: Can the Secretary of State tell the House whether any of those job placements included the recruitment of long-term unemployed people to cross picket lines at Timex in Dundee? Rather than setting the unemployed and the employed at one another's throats, surely the Government's time would be better spent in legislating to provide the same legal protection for workers taking industrial action in this country as is available for workers everywhere else in Europe?
    Mrs. Shephard: The hon. Gentleman must know that employees who choose to go on strike have always risked dismissal. I hope that he will join my hon. Friends and myself in condemning the unacceptable violence demon-strated on the picket lines in Dundee.
    Mr. David Shaw: Can my right hon. Friend confirm that the success that the Employment Service is delivering is such that virtually every, or even every, unemployed person has the opportunity to attend a restart interview? Is not the Employment Service getting record numbers back into work?
    Mrs. Shephard: Certainly the Employment Service has never done a better job in reaching its targets. We also have more opportunities in training, in reskilling and in employment measures—1·6 million in all—than we have ever had to help unemployed people back into jobs.

    Employer-provided Training
    Mr. Hall: To ask the Secretary of State for Employment what representations she has received on employer-provided training in the north-west.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick McLoughlin): None.
    Mr. Hall: May I draw the Minister's attention to the fact that Normidtec training and enterprise council, which covers my constituency, recently held a special needs awareness week, to try to promote training opportunities for the disabled members of our community? Will he tell the House what steps the Government are taking to ensure that disabled members of the community have access to high-level training and to good jobs?
    Mr. McLoughlin: I know about the scheme to which the hon. Gentleman refers. As I understand it, he, too, supports it, and I congratulate him on that. We are encouraging the TECs to identify what is needed locally, and we are giving vast assistance and support, through financial arrangements, to the TEC movement across the country.
    Mr. Hawkins: Will my hon. Friend join me in welcoming the fact that 250 organisations, including many household names employing more than 250,000 people, are already recognised as having achieved the standards specified in Investors In People, and the fact that about 3,000 organisations, including many more national and international companies, and many companies in the north-west, are working closely with their local training and enterprise councils on the programme?
    Mr. McLoughlin: I can confirm those figures, and I am rather sorry that the Opposition seem to talk them down. Investors In People is important, and a number of household names have now signed up to committing themselves to the programme. As my hon. Friend says, more than 250 organisations have already achieved the target, and more than 3,000 have made a formal commitment to do so.

    Youth Employment Initiatives
    Mr. Michael: To ask the Secretary of State for Employment what fresh initiatives she plans to take to increase employment opportunities for young people.
    Mr. Michael Forsyth: Youth credits are helping increasing numbers of school leavers to acquire the skills businesses need.
    Mr. Michael: As one who worked with young people for many years before entering this place, may I ask the Minister whether he accepts that a job and the hope of a job are crucial not only to young people themselves, but to the health of the whole community? Does not the Minister understand that the Government's complacency, reflected in his complacent answer to the question, leads to communities paying a heavy price? Will he give an
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    undertaking to review the Government's failure in this area and really to tackle the scandal of youth unemployment?
    Mr. Forsyth: The hon. Gentleman asked me what new initiatives the Government had taken, and I told him that youth credits were an example of a successful scheme that the Government had introduced. There are no new ideas among Opposition Members, which is why I thought that the hon. Gentleman had asked this question.
    I agree, of course, with everything that the hon. Gentleman said about the importance of a job for a young person. Again, I tell him that we shall not take lectures from the party that destroyed the apprenticeship system at the behest of the trade unions. It is the party of the closed shop and of the closed mind, which closed off opportunities for young people.
    Mr. Nicholas Winterton: Does my hon. Friend accept that the continuing initiatives being taken through the training and enterprise councils and the fact that employers can have a major input into the TECs are a good way in which to create jobs? Will he pay tribute to the South and East Cheshire TEC which covers my constituency? It has introduced many initiatives and in Macclesfield and the surrounding area, we have among the lowest levels of unemployment among young people.
    Mr. Forsyth: I entirely agree with my hon. Friend, and I endorse everything that he says about his local training and enterprise council, which is one of those involved in pushing forward our training credit initiative, which was a manifesto commitment. It enables young people to choose the training that suits their needs, rather than forcing them to take what they are offered. I entirely endorse what my hon. Friend said. I am sure that his close co-operation with the TEC bodes well for youngsters in that part of Great Britain. What a pity that Opposition Members do not take the same constructive approach.
    Ms Lynne: Given that unemployment among young disabled people leaving youth training is between 35 and 50 per cent., does the Minister agree that training for young disabled people is woefully inadequate? What initiatives do the Government intend to bring forward?
    Mr. Forsyth: I agree with the hon. Lady that we need to do everything possible to help disabled people, young and old alike. The Government have taken a number of initiatives to help to improve the position. I agree with the hon. Lady that it is important to be conscious of that issue, especially when jobs have been thin on the ground as a result of recession. That is very much part of the policy and direction that we have given to TECs and which my right hon. Friend the Secretary of State bears in mind when contracts are decided and the programme is determined for the subsequent year.
    Mr. Anthony Coombs: Does my hon. Friend agree that what is crucial, indeed heartening, for the long-term employment prospects of young people is the huge increase in training that has come about over the past eight years? Will he confirm that, over those eight years, the proportion of people leaving school and going into education and training has risen to nearly 75 per cent. against 50 per cent. eight years ago?
    The proportion of young people able to go to university is now no less than a third of young people, compared to

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    only a seventh under the previous Labour Government. Does my hon. Friend agree that both those trends underpin the skills base enormously, which will make the country competitive?
    Mr. Forsyth: I entirely agree with my hon. Friend. The Government have done more than any other to create opportunities for youngsters in training, in schools and in further education. Although there are record numbers participating, we are by no means complacent. We want to build on that success, because we want to build a successful country; it is high time that Labour Members stopped simply carping and began helping us to achieve that.

    Redundancies, Barnsley
    Mr. Illsley: To ask the Secretary of State for Employment how many redundancies have been declared in the Barnsley travel-to-work area from October 1992 to date.
    Mr. McLoughlin: Figures for redundancies are not available below those at regional level.
    Mr. Illsley: Is the Minister aware that, since 1990, unemployment in my constituency has increased by 44 per cent. and the level of vacancies has decreased by 60 per cent? Since October 1992, when we had the announcement of pit closures, we are likely to see 6,000 further redundancies in mining and related industries—the Houghton and Grimethorpe collieries closed in the past fortnight. It is not time that the Government started creating jobs, instead of throwing money at training and enterprise councils to train people for jobs that are not there? Could we not start by reversing some of the pit closure programme?
    Mr. McLoughlin: I draw a number of points from the three questions asked by the hon. Gentleman. He used the base of 1990. If one uses the base of July 1986 for this constituency, unemployment was 6,217. In April 1993, unemployment was 4,329, which is a reduction of more than 30 per cent. I thought that even the hon. Gentleman would have recognised that. We will take no lectures from Labour Members about pit closures—[Interruption.] They may not like it, but they will hear it. Between 1964 and 1970, 277 coal mines closed.
    Mr. Dobson: Does the Minister recognise that most of the people in Barnsley who have lost their jobs and been made redundant have benefited under the statutory redundancy scheme? Can he confirm that the Government are considering abolishing that scheme because they regard it as a burden on business?
    Mr. McLoughlin: Here we go again—here is another scare story. We will have quite a few of them over the coming weeks. If the hon. Gentleman starts to believe everything that he reads, he will be confused when my right hon. Friend the Chancellor of the Exchequer makes the statement that he intends to make.

    Youth Unemployment
    Mr. Barry Jones: To ask the Secretary of State for Employment what is her estimate of the number of people aged 25 years and under who are unemployed.
    Mrs. Gillian Shephard: 814,742.
    Mr. Jones: That is over 800,000, and 41,000 of them are in Wales. They are appalling figures. They represent the ruin of youthful hopes and great unhappiness in families. Will the right hon. Lady admit that it would be wrong for the Government to plan to strip many parts of the north of Wales of development area status, which represents the hope of more work, and give it to south coast towns? That would represent the complacency of her Department.
    Mrs. Shephard: The assisted area map is a matter for some of my right hon. Friends and not necessarily for me. But I am sure that the hon. Gentleman would expect me to have input into the drawing up of that map, especially as far as the levels of unemployment are concerned.
    In that regard, I am amazed that the hon. Gentleman, who takes a close interest in these matters, has not remarked on the fact that unemployment in Wales has fallen for the past three months, that it is below the national average, that the latest CBI trends survey shows that Wales is leading the country in terms of reported output and orders, and that that survey represents the best possible future for people in Wales, including young people.
    Mr. Milligan: Has my right hon. Friend seen the extraordinary figures for youth unemployment in Hampshire, which show that youth unemployment has been steadily falling and is now at its lowest level for three years, which is remarkable in view of the recession? Does she agree that it reflects the good work not only of her Department but of the Hampshire TEC, the Hampshire education department and especially the schools in achieving a higher staying-on rate?
    The Weston Park girls school, which I visited last week, has an intake from one of the most deprived parts of the constituency, yet it has increased its staying-on rate from 35 to 80 per cent.
    Mrs. Shephard: It is possible that the words of my hon. Friend would have given some comfort to the hon. Member for Alyn and Deeside (Mr. Jones) if he had been listening—which, of course, he was not. There is no question but that a well-trained, well-prepared cohort of young people, as we have in Hampshire, has the best possible chance of finding good jobs.
    Ms Eagle: Does the Secretary of State realise that a figure of more than 800,000 youth unemployed is horrific to behold and that many of the young unemployed listening in Wallesey will not recognise the rosy picture that is being painted by the Conservative Government of the reality out there and their chances of getting work? What hope can she offer to the many people under the age of 25 whom I have met since I was elected a year ago who have never worked since they left school and see no prospect of work ahead of them?
    Mrs. Shephard: The hon. Lady will know, because I have repeated it often in the House and elsewhere, that I have the utmost sympathy for anyone who faces unemployment. That, of course, includes young people. I hope that she is giving her support to the first-class work of the Employment Service and Merseyside TEC, which is doing sterling work with young people in her area, as well as the other TECs in the north-west. I also hope that she understands that if her party continues to espouse the extraordinary policies that it does, there will be no chance

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    and no hope whatever for young people or anyone else to look for better prospects in employment under a Labour Government.

    Labour Statistics.
    Mr. Kynoch: To ask the Secretary of State for Employment what percentage of people in Britain is currently in work, measured as a percentage of the population of working age; and what are the figures for other EC countries.
    Mrs. Gillian Shephard: The British percentage in 1992 was 71 per cent. The figures for the other EC countries are in the form of a statistical table. With permission, I shall arrange for it to be printed in the Official Report.
    Mr. Kynoch: Does my right hon. Friend agree that we are probably No. 2 in the EC in that table and that that is positive news which should be welcomed—something which the Labour party is incapable of doing? Does she further agree that if the Labour party national policy on a minimum wage were implemented, it would be likely to cost up to 2 million jobs in Britain?
    Mrs. Shephard: Britain has the second-highest participation rate in the EC, second only to Denmark. The rate in France, for example, is about 60 per cent. That is directly attributable to the national minimum wage. In Italy, the rate is about 52 per cent.
    Mr. Skinner: Is it any wonder that other Common Market countries have marginally better figures of employment than Britain—[HON. MEMBERS: "They have not."]—when one takes into account the fact that the Government import German coal at £110 a tonne and shut British pits which could produce it at £40 a tonne? Is it any wonder that the people out there do not believe a word that the Government say? The only growth industry in Britain is fiddling dole figures and the cost of living figures. It is time that we got rid of them.
    Mrs. Shephard: Given that the hon. Gentleman's premise was incorrect, he stands the risk of not being believed. But I am amazed that he has transparently sought yet again, by raising spurious points about the figures, like the rest of his party, to obscure the good news about unemployment coming down for the third month running. Not one Opposition Member has drawn attention to the fact that, for the third month running, we have seen unemployment come down.
    Dame Jill Knight: I appreciate that it will be off the cuff, but can my right hon. Friend tell the House how much money the Government are spending in the current year on youth training and youth credits?
    Mrs. Shephard: I think that I can manage that off the cuff—about £850 million.
    Ms Quin: Will the Secretary of State deal with the fact that No. 1 in the table to which she referred was Denmark and, therefore, the figure cannot possibly have anything to do with levels of employment protection because Denmark has much better employment protection than Britain? Will she also reflect that at a time when the British Government are advertising in Swiss newspapers the low level of British employment protection, unemployment in Switzerland is only 4 per cent?
    Mrs. Shephard: I can say to the hon. Gentleman—[Interruption.] I apologise for confusing the hon. Lady with the hon. Member for Holborn and St. Pancras (Mr. Dobson), which is clearly a terrible insult. It is not normally the hon. Lady's practice to talk Britain down, but I am afraid that even she has now fallen prey to this disease which attacks the Labour party. Employers do not need to come here, and they certainly would not if she and her hon. Friends were in power. They come here because we have the lowest business taxation in the industrialised world, sensible labour laws, a flexible job market and a well-trained work force. Regulation does not create jobs.
    Sir Donald Thompson: Does my right hon. Friend agree that to keep a high percentage of people in work we need the most flexible possible job market—part time, full time, self-employed, shift workers and the lot? We should not be taking lessons from people who are not as adept at finding work for their citizens as we are.
    Mrs. Shephard: We must maintain the upmost flexibility in our labour market. Indeed, the example that we are setting is being looked at with great interest by employers in both France and Germany.
    Following is the information:
    The latest comparable figures across all EC countries are for spring 1991 and are shown in the following table.

    EC country

    Persons in employment (of working age1) 1000s

    Population of working age1 1000s

    Percentage

    Denmark

    2,601

    3,382

    76·9

    United Kingdom

    25,431

    36,206

    70·2

    Germany

    28,951

    42,205

    68·6

    Portugal

    4,542

    6,672

    68·1

    Netherlands

    6,363

    10,070

    63·2

    Luxembourg

    161

    258

    62·4

    France

    21,593

    35,473

    60·9

    Belgium

    3,703

    6,455

    57·4

    Greece

    3,471

    6,444

    53·9

    Italy

    20,044

    38,205

    52·5

    Ireland

    1,102

    2,151

    51·2

    Spain

    12,483

    24,872

    50·2

    Source: Eurostat Labour Force Survey Results 1991.
    1Working Age is taken to mean up to state pension age which varies between countries.

    Training
    Mr. Ieuan Wyn Jones: To ask the Secretary of State for Employment what representations she has received on the provision of training for 16 to 19-year-olds.
    Mr. Michael Forsyth: The representations I receive from employers and others note the considerable progress made in increasing young people's participation in education and training.
    Mr. Jones: Does the Minister accept that we are in danger of failing a whole generation of young people if we do not have a well-planned and well-resourced training programme? Is not it the case that, even today, academic qualifications are valued more highly than vocational qualifications, at a time when the economy needs young people with excellent skills in industry, business, commerce

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    and science? As general national vocational qualifications in schools have failed, how do the Government intend to tackle this problem?
    Mr. Forsyth: I was agreeing with the hon. Gentleman until he made his criticism of GNVQs. I agree with him about the importance of training. I also think that it is important that we get across what these national vocational qualifications are about. They are not well enough understood in the country and it is important that they should be, so that we may deal with the kind of prejudice against vocational training that the hon. Gentleman identifies. So little known are NVQs that they were referred to in The Independent the other day as envy queues—which we tend to associate with Opposition Members. That is why the Government have a major campaign to get across what NVQs are and the importance of vocational training.
    Mr. Marlow: The hon. Member for Ynys Môn (Mr. Jones) seemed to be asking my hon. Friend whether he would find some more resources and find some more money. This is often the case from the Opposition parties and it may, in certain circumstances, be justified. But if my hon. Friend is to do that—and even if he is not to do it —can he tell the House where he proposes to make savings in his Department so that we can help to deal with the Government deficit?
    Mr. Forsyth: I am surprised at my hon. Friend. He must not fall into the trap of confusing inputs with outputs. My right hon. Friend has been able this year to increase the number of opportunities by nearly 600,000 to 1·6 million for unemployed people by looking at how the resources are used and ensuring that they are used effectively. It is outputs that matter, not inputs.
    Mr. Leighton: Was not it the case that the unit price on a year's trading was predicated on the assumption that employers would be fighting each other for young people because of the demographic time bomb and therefore would be making an employers' contribution? He will know that this has not happened and that in many areas of the country there is an acute shortage of employer placements. They are not making their contribution and therefore the unit price in many cases is totally inadequate for quality training.
    Mr. Forsyth: I agree with what the hon. Gentleman said about the difficulties of obtaining places, which in part has been a consequence of recession. However, I must give him the same advice as I gave to my hon. Friend the Member for Northampton, North (Mr. Marlow): he must not confuse inputs with outputs. We have seen in the variation of costs of providing trading places around the country that some TECs have been able to do considerably more with given resources than have others. We need to ensure that the practice of the best becomes the practice of them all.

    Voluntary Work
    Mr. Colin Shepherd: To ask the Secretary of State for Employment what measures she is introducing to encourage voluntary work among the long-term unemployed in the west midlands.
    Mr. McLoughlin: My right hon. Friend the Chancellor announced in his Budget the introduction of 60,000 voluntary work opportunities through community action. Of these, 6,570 will be available in the west midlands.
    Mr. Shepherd: I thank my hon. Friend for that reply. May I remind him of the significant success of the old community programme, not least in Herefordshire, where a number of people gained employment in secure jobs as a consequence of participating in the scheme and many additional projects were completed? Does he agree that the revised community action, as announced in the Budget, will once again provide the opportunity for long-term unemployed people to become involved in voluntary work and for important projects to be carried out? However, it is important that people are aware that the scheme exists. What measures is my hon. Friend taking to make certain that its existence and benefits are fully understood by the public?
    Mr. McLoughlin: I am sure that my hon. Friend is absolutely right. Community action provides a valuable service to the community by those who have been long-term unemployed. It is a scheme which will be administered by the Employment Service and the training enterprise councils, which will do a sufficient amount to ensure that the scheme becomes known.
    Mr. Robert Ainsworth: Will the 6,000 people in the west midlands who are allowed to participate in the scheme continue to be registered as unemployed, or will they join the 77,000 people who have appeared on the sickness register in the past three months? Is not it a fact that the 221,000 unemployed people in the west midlands look to the Department to create jobs and training opportunities and not simply opportunities to participate in voluntary work?
    Mr. McLoughlin: Again, we see the Opposition decrying any scheme to help unemployed people. Why do the Opposition always complain when unemployment rises and when it falls, too?
    Mr. David Evans: Is my hon. Friend aware that not only do we have 500,000 layabouts, but 1 million people who draw benefit are working on the black economy? Has he heard the first cuckoo this year? We cannot ask that lot opposite because they spend every year in cuckoo land.
    Mr. McLoughlin: I am grateful to my hon. Friend. I may have heard the first cuckoo the first month that unemployment fell and we have seen that happen on two subsequent months. That is widely welcomed by all Conservative Members and, as usual, widely condemned by the Opposition.

    Training Credits
    Mr. Graham: To ask the Secretary of State for Employment how many people have taken up training credits.
    Mr. Michael Forsyth: A total of 49,000 young people have taken up training credits and every 16 and 17-year-old will have the opportunity to do so in the course of this Parliament, in line with our manifesto commitment.
    Mr. Graham: Does the Secretary of State remember when the House was told that every 16 and 17-year-old would be guaranteed a YTS place? Can the Secretary of State reassure the House that the 8,000 young Scots who cannot get a good training place will get one and restore some hope, some income and some future to the young people whom the Conservative party has totally abandoned?
    Mr. Forsyth: I should have thought that the hon. Gentleman would welcome the fact that his constituency has been one of the first to benefit from training credits. If he thinks that nothing is being done in his constituency, I will gladly have the pilot carried out in my constituency instead of his. The hon. Gentleman has a real cheek coming to the House and quoting figures that he knows to be wrong when he and his constituency are benefiting from the Government's ideas.
    Mr. Bill Walker: Does my hon. Friend agree that training credits will help young people gain the necessary training and experience for the real world? Their problems can be resolved only in that way and certainly not by loud shouting, which seems to be the only answer that the Opposition have.
    Mr. Forsyth: I entirely agree with my hon. Friend. Training credits are a way of increasing choxe for youngsters who are seeking training, help and support. The Government have been the party of choice and have continued to extend choice into every area. Choice should be available for the unemployed and it is a great pity that Opposition Members are not prepared to endorse a programme which will be of great benefit to youngsters the length and breadth of Britain.

    Unemployment, Merseyside
    Mr. Parry: To ask the Secretary of State for Employment what plans she has to reduce the level of unemployment on Merseyside; and if she will make a statement.
    Mr. McLoughlin: The overall policy of the Department is to promote a free and flexible labour market that is designed to help to encourage employment in Merseyside, as in all other areas.
    Mr. Parry: The Secretary of State will be visiting Liverpool next month. Will she take the opportunity of her visit to meet representatives of the building trade unions and construction employers to see what she can do to help get the industry back to work again, not only in Liverpool but throughout the United Kingdom? Such action is badly needed.
    Mr. McLoughlin: I am sure that, if there is time in the Secretary of State's diary, she will consider such a meeting, although I understand that a packed day is already planned. The hon. Gentleman will welcome the fact that the Chancellor went a long way in his autumn statement last year to protect capital projects, an action which vastly helped the building industry.

  PRIME MINISTER

    Engagements
    Mr. Mandelson: To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.
    The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton): I have been asked to reply.
    My right hon. Friend the Prime Minister is attending the unveiling of a memorial statue to Field Marshal Viscount Alanbrooke by Her Majesty the Queen, as is, I understand, the Leader of Her Majesty's Opposition.
    Mr. Mandelson: Given that a system of charging for hospital beds would be a tax under which the longer one was ill the more one would have to pay, and given that it would destroy at a stroke the principle of a national health service free at the time of need and point of use, will the right hon. Gentleman give a categorical assurance today that the Government will never force NHS patients to pay charges for NHS beds?
    Mr. Newton: I can best point the hon. Gentleman to what was said in our manifesto: that need, not ability to pay, is and will remain the basis on which care is offered to all in the NHS. As my right hon. Friend the Prime Ministers said in an interview in one of this morning's newspapers, we shall honour our pledges both in the spirit and the letter.
    Madam SpeakerMr. Patrick Nicholls.
    Mr. Newton: While I am at it, may I just say—[In terruption.]
    Madam Speaker: Order. I apologise. I had not appreciated that the Leader of the House had not completed his reply.
    Mr. Newton: That is entirely understandable, Madam Speaker. I simply wanted to add that it was good to see the hon. Member for Hartlepool (Mr. Mandelson) back from his triumph in masterminding the loss of Labour's deposit in Newbury.
    Mr. Nicholls: To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Nicholls: Now that the Maastricht Bill has received its Third Reading, will my right hon. Friend take this opportunity, and indeed every opportunity, to tell the people of Britain that the Maastricht treaty is a move away from federalism, not a move towards it? It is the Liberal and Labour parties which are self-confessedly federalist and the Conservative party which is not. Is not this a treaty which gives us the opportunity to co-operate with other nation states, to the benefit of this country, which has always been the policy of the Conservative party?
    Mr. Newton: My hon. Friend is absolutely right. By enshrining subsidiarity and co-operation between states, the Maastricht treaty will move us to a much less centralised Europe. That is a major achievement and a great gain from the British point of view. As for the Labour party, it has, to my recollection, had seven

    749
    different policies on Europe in the time that I have been in the House and the Opposition appeared to be changing their minds again even last week.
    Mrs. Beckett: The Lord President quoted the Prime Minister on the manifesto pledges of the Conservative party. Does he recall the pledge not to increase national insurance contributions—broken? Does he recall the pledge to maintain mortgage interest relief—broken? How does he square all that with what the Prime Minister said yesterday?
    Mr. Newton: My right hon. Friend made the position absolutely clear in his answer last week, in setting out the Government's intentions to review public expenditure against the background of the pledges that we have made and the need to protect the most vulnerable. If the right hon. Lady disagrees with that, perhaps she would care to tell us whether she is disowning, in his absence, her right hon. and learned Friend's statement that we should be prepared to re-examine everything and that he has not ruled anything out.
    Mrs. Beckett: The Leader of the House and his party kept talking about taking tough decisions. When will the Government take the tough decision to admit even the smallest share of the blame for the state to which this country has been reduced—never mind the price the Government are asking the British people to pay?
    Mr. Newton: When it comes to talking about the price that the British people must pay, the hon. Lady must count as some kind of expert. I have been looking back at something said by her hon. Friend the Member for Eccles (Miss Lestor) some time ago:
    "I will not take lessons in Left wing unity from Margaret Beckett. She was the person who went into the 1976 Labour government to implement the cuts over which I had resigned."
    [Interruption.]
    Madam Speaker: Order. Hon. Members must resume their seats.
    Mrs. Beckett: The Lord President knows full well that the Government went into the general election campaign promising tax cuts and public expenditure increases. Is not the most fundamental problem that Britain faces today the fact that it has a Government whose dishonesty is exceeded only by their incompetence?
    Mr. Newton: What I know is that the Government are approaching their difficult task in a responsible and considered way and that they are not going to get into the position that led the right hon. Lady into the problem that I have just quoted—the IMF coming here telling the Government what to do.
    Mr. Butterfill: Will my right hon. Friend confirm that the Government's priorities in the European Community will, in the foreseeable future, be to secure the entry to the Community of our former partners in the European Free Trade Association, notably the Scandinavian countries and Austria, and to facilitate the arrangements that the Community makes with the countries of eastern and central Europe?
    Mr. Newton: My hon. Friend makes a good point. We have a number of important tasks in the Community, including carrying forward the concept of subsidiarity. Among the most important tasks and among those on
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    which we have made the most gains in recent months is that of enlargement, to embrace exactly the countries to which my hon. Friend refers.
    Mr. Ashdown: Can the right hon. Gentleman categorically assure the House that no Government agency was involved in any way in coaching witnesses from Walter Somers before they appeared before the Select Committee looking into the Iraqi gun affair?
    Mr. Newton: The right hon. Gentleman well knows that all these matters are the subject of an inquiry by Lord Justice Scott. The most appropriate course for Ministers and other hon. Members is to allow that inquiry to conduct its proceedings properly.
    Mr. Duncan Smith: Does my right hon. Friend agree that last week's Audit Commission report on the chronic mismanagement, waste and incompetence of Lambeth council painted a grim picture of Labour in control of councils? Does he further agree that it is a bit rich when the deputy Leader of the Opposition talks about the Government displaying incompetence and dishonesty when Labour has a record like that?
    Mr. Newton: I was indeed pretty horrified to hear details of that Audit Commission report on Lambeth council, although not entirely surprised in view of its socialist record of incompetence and waste, which is well known on both sides of the House. It reminded me, once again, of that immortal quote from Tribune last May:
    "Ineffectual or rotten Labour councils … have been a feature of political life for as long as anyone can remember."
    Mr. Gordon Prentice: To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.
    Mr. Newton: I have been asked to reply.
    I refer the hon. Member to the answer I gave some moments ago.
    Mr. Prentice: Is the Lord President aware that the first passenger train that ran in England between Liverpool and Manchester achieved a top speed of 29 mph? That was in 1829. Is not it disgraceful that 164 years ago a train could achieve a higher speed than the train currently running between Nelson and Colne in my constituency? Is the Lord President further aware that I have a letter from the chairman of British Rail which says that the 20 mph speed restriction will be permanent because of cuts in Government funding?
    Mr. Newton: Somewhat to my surprise—I had not anticipated that the hon. Gentleman would seek to be so helpful—that seems to be the best argument I have heard for some time for the rapid passage of the Railways Bill, which is before the House today.
    Mr. Fabricant: To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.
    Mr. Newton: I have been asked to reply.
    I refer my hon. Friend to the answer I gave some moments ago.
    Mr. Fabricant: Will my right hon. Friend confirm that subsidiarity can be applied retrospectively as well as prospectively and that that means that any European legislation which has been laid before the House and which we have had to rubber stamp since 1986 can—if it meets the subsidiarity test—be either amended or swept aside?
    Mr. Newton: My hon. Friend is right. The Commission is reviewing existing European Community law. At the Edinburgh Council it presented some 32 examples of legislation which should be either withdrawn, amended or re-examined, or further proposals that should not be pursued. That review is continuing and a full report is scheduled for the European Council in December this year. It is our intention that those items to which subisidiarity applies should be amended or repealed.
    Mr. Sheldon: In regard to the Government's intention to reduce the budget deficit, we have heard from Minister after Minister that nothing is ruled out, yet we have heard nothing about increasing the higher rate of tax. Should not that be ruled in?
    Mr. Newton: It is not only from Ministers that we have heard that. As I reminded the right hon. Member for Derby, South (Mrs. Beckett), that is what the Leader of the Opposition is saying, too. That is the sensible way in which to approach these matters and that is the way in which the Government are approaching them.

    Overseas Aid
    Mr. Luff: To ask the Prime Minister if he will make a statement on the Government's policy on the relative importance of trade and aid in assisting the economic development of the poorest nations.
    Mr. Newton: I have been asked to reply.
    Worldwide trade liberalisation and measures to encourage the private sector are critical for developing countries, but many countries, particularly the poorest and most vulnerable, will continue to need concessional finance for the foreseeable future. Further debt reduction along the lines of the proposals that my right hon. Friend the Prime Minister made in Trinidad in 1990 will also be required for the poorest, most heavily indebted countries.
    Mr. Luff: I thank my right hon. Friend warmly for what he has just said. Does he agree that the major objective of our aid policy should be to encourage the promotion of private sector enterprises in the developing world? In that context, will he pay tribute to the work of the Commonwealth Development Corporation? Does he further agree that we have a fine record as a Government for fighting for free trade, which brings advantages to the developed and the developing world? Can he give an assurance that that fine record will be enhanced at the G7 summit in Tokyo in July this year?
    Mr. Newton: Certainly I acknowledge, as I think the whole House would, the leading role that my right hon. Friend and other colleagues have played in advancing the cause of free trade and the successful outcome to the GATT round. My hon. Friend is also right about the part played by the Commonwealth Development Corporation which is the main instrument in our aid programme for the direct promotion of private investment in developing countries. As it happens, United Kingdom direct private investment in developing countries was estimated to be some £3 billion in 1991. That is half the overall total for the whole European Community. It is a record of which we can be proud.
    Mr. Worthington: If the Minister is in favour of free trade, when will we abandon the practice of demanding that developing countries drop their import tariffs and when will we stop dumping subsidised CAP food on them?
    Mr. Newton: The hon. Gentleman will be aware that the Government have always taken the view that trade is as important as aid in advancing the circumstances of developing countries. I think he will agree that we have a better record than many in promoting those objectives.

Points of Order
3.30 pm
Mr. John Morris: On a point of order, Madam Speaker. May I ask whether the Secretary of State for Northern Ireland, in view of the fact that he has made a statement to the press rebutting Sir Hal Miller's evidence to the Scott inquiry, has given any indication that he would wish to make a statement to the House?
Madam Speaker: No. I have not received any indication from any Minister about seeking to make a statement to the House.
The Secretary of State for Northern Ireland (Sir Patrick Mayhew): Further to that point of order, Madam Speaker. It may be of interest to the House to know that I have been invited to take the opportunity to gave oral evidence to Lord Justice Scott's inquiry on Thursday—I believe, on Thursday morning—and I shall gladly avail myself of that opportunity.
Miss Joan Lestor: On a point of order, Madam Speaker. Flattered though I am that the Leader of the House should mention me in dispatches, and that he should remember an incident of 17 years ago when in seven years' time no one will remember him at all, is it in order for the Minister to make reference to another hon. Member without giving notice that he intends to do so? With your indulgence, Madam Speaker, may I reflect that if a few more hon. Gentlemen on the Conservative side resigned because of policies on which they have reneged, the country politically would be much better off?
Madam Speaker: I am sure the hon. Lady is aware that during Question Time it is not necessary to give notice, although it is necessary during a debate. It is a courtesy if the reference is planned.
Mrs. Alice Mahon: On a point of order, Madam Speaker. I wonder if you could help me. Tomorrow Tory-controlled Calderdale intends to support a decision to tag electronically elderly people in elderly persons' homes in Halifax, as the homes are short-staffed and cannot supervise residents properly because of their under-funded budget. It is an unethical and undignified proposal. Has the Secretary of State for Health indicated that she intends to make a statement on Government policy on electronically tagging elderly people and NHS patients because of shortage of staff? In the past that procedure has been reserved for prisoners and people on parole.
Madam Speaker: I have had no indication that the right hon. Lady intends to make any such statement. The hon. Member for Halifax (Mrs. Mahon) will have to seek some other method of raising the matter, in which she is obviously interested.
Sir David Steel: Further to the point of order raised by the right hon. and learned Member for Aberavon (Mr. Morris), Madam Speaker. While it is welcome that the former Attorney-General is to give evidence to the Scott inquiry, it will not have escaped your notice that that coincides with the start of the Whitsun recess. The question is, when will we have answers about the matter in the House?
Madam Speaker: It is for the Government to determine the order of business and not for the Speaker, as the right hon. Gentleman is aware.
Mr. Bruce Grocott: Further to the point of order raised by my hon. Friend the Member for Eccles (Miss Lestor), Madam Speaker. You are quite right to say that, during exchanges, matters arise spontaneously, and hon. Members cannot normally be warned when their names are to be mentioned. However, it was clear during today's exchanges with the Leader of the House—as is common in the case of the Prime Minister—that the right hon. Gentleman did not say anything remotely spontaneous. It was all carefully rehearsed and read out. Given that there was no element of spontaneity, should not the rule that applies to normal debate—that Members ought to be warned when they are to be referred to in a premeditated way—have been applied in this case?
Madam Speaker: I dealt with that matter in my original ruling. It is necessary to give notice when a Member is to be mentioned in the course of a debate. However, as hon. Members know, that is not usually possible at Question Time.
Mr. Jim Cousins: On a point of order, Madam Speaker. Yesterday I raised with your office and with yourself matters relating to Sir Hal Miller's evidence to the Scott inquiry, which seemed to me to be matters for the House.
Madam Speaker: Order. As I have quite a few things to do, I hope that the hon. Gentleman will give me a little time. I have drafted a letter to him. If he gives me a moment, I shall leave the Chair and sign it. I trust that that satisfies him.

Full Employment (Commission)
3.35 pm
Mr. Frank Field: I beg to move,
That leave be given to bring in a Bill to make provision for a permanent Commission to assist and advise Parliament on matters relating to the achievement of full employment in Great Britain and Northern Ireland and related matters.
I should like to begin by contrasting the attitude and objectives of the current Prime Minister with those of his predecessor. During the old regime, not only was full employment taken off the agenda for political debate, but the frontier was policed by withering scorn being poured upon people who wished to raise the topic. They were told that they were being cruel to people in the dole queues even to refer to the possibility of full employment. That attitude could not contrast more starkly with the attitude of the current Prime Minister, who has made it clear to the House that he regards full employment as one of the Government's major objectives. This Bill seeks to introduce a means of allowing him to achieve that objective.
Given the horror that unemployment visits on so many of our constituents, I wish to ask why so little of the time of the House of Commons should be spent on this issue. It is a key issue not only to the constituents of Opposition Members but also to those of many Conservative right hon. and hon. Members: Part of the answer must be that thinking about full employment is now such an enormous task that it is easier not to do so.
During the first world war Barbara Wootton noticed that when the telegram arrived to inform her mother that her—Barbara's mother's—son had died, her mother worked herself up into a great state because the telegram got the designation of his office wrong. Each time War Office correspondence arrived, Barbara's mother was similarly upset about the mistake in rank.
When, after six weeks of marriage, Barbara received a telegram saying that her husband had died, she was similarly worked up into a rage because the corner of her telegram was torn. From this experience, Barbara drew the conclusion that when human beings face problems too large for them to cope with, they tend to concentrate on minor matters rather than on the major subject at hand.
Many of our constituents will ask why, having spent so many hours, weeks and months on the Maastricht Bill, we cannot spend time debating ways back to full employment. While I welcome without reservation the figures of the past three months, which denote a fall in the number of registered unemployed, as well as an increase in manufacturing output and an increase in the number of people employed in manufacturing, I have to ask whether this trend, by itself, can take the country back to full employment. I know the answer to that question, as does every right hon. and hon. Member and those of our constituents who are unemployed, for there are identifiable long-term trends in the British economy working against full employment.
From the mid-1960s, with each boom, the number unemployed was higher than at the previous boom. Also, we not only have today a record public sector borrowing requirement, but one that interacts with a record trade deficit. There is an urgent need to reduce the PSBR, but the danger of achieving that by reflating is so to increase the trade deficit that there is a run on our currency. The third force that will prevent the natural establishment of full
756
employment is that the Maastricht treaty contains convergence terms that, if met, will ensure that our economy is further deflated.
The Bill's aim is to focus attention and political debate on the importance now of achieving full employment. It modestly defines that goal as 3 per cent. unemployment. It acknowledges that, if that goal is to be achieved, thoughts have to be thought that have yet to be thought of, let alone implemented. It would establish a machinery to allow the House and the country to do that.
The Bill's primary aim is to establish a full employment commission that would regularly report to Parliament on trends in this country and world wide that affect this country's chances of moving back to full employment. Also, how do we evaluate the transfer of school to work, and how does that compare with the most effective of our competitors? What can we learn from elsewhere so that best practice in achieving full employment can be implemented? Again, the commission would have a duty to evaluate Government policy.
Why that action? Why the Bill? We know that unemployment is not a warm overcoat that our constituents willingly put on and shuffle around in; it is the greatest evil facing them. That is something to which we must turn our minds if we are to tackle it effectively.
If we cannot be concerned about those of our constituents who are unemployed, I pose another question. Today's newspapers, rightly, pay some attention to the number of children growing up in lone parent households. Many of our constituents, in an attempt not to be driven mad by the thought of not being able to find work, have written off from their daily lives the prospect of ever finding work.
A whole generation of children are now growing up in households in which full-time work has been written out of their lives. If we are concerned about the effect on children whose two parents do not live together, should we not be equally concerned about the devastating effect on children growing up in a household in which no adult member regularly earns enough to look after all or part of the family?
In seeking approval to introduce the Bill, I draw attention to a change of opinion about the need to move towards ways of achieving full employment. Earlier I referred to Barbara Wootton's observations during the first world war. I refer now to the second world war poster that showed a young son or grandson sitting on the knee of his father or grandfather, asking that person what he did when the country was at war. Today, this country is trying to register a need to put full employment back at the top of the political agenda. We will be asked how we reacted to that change in the political debate. I hope that the House will answer not only by passing the motion without opposition but will seek ways of effectively ensuring that the Bill reaches the statute book.
Question put and agreed to.
Bill ordered to be brought in by Mr. Frank Field, Ms Angela Eagle, Mrs. Jane Kennedy, Mr. Malcolm Wicks, Mr. Calum Macdonald and Mr. Charles Kennedy.

FULL EMPLOYMENT (COMMISSION)
Mr. Frank Field accordingly presented a Bill to make provision for a permanent Commission to assist and advise Parliament on matters relating to the achievement of full employment in Great Britain and Northern Ireland

757
and related matters: And the same was read the First time; and ordered to be read a Second time upon Friday 2 July, and to be printed. [Bill 200.]

Orders of the Day

  Railways Bill
  As amended (in the Standing Committee), further considered.
  [MADAM SPEAKER in the Chair]
  [Relevant documents: The First Report from the Transport Committee, The Future of the Railways in the light of the Government's White Paper Proposals: Interim Report: HC (1992–93) 375, and the Second Report from the Transport Committee, The Future of the Railways in the Light of the Government's White Paper Proposals, HC (1992–93) 246, together with Government Observations thereon (Second Special Report, HC (1992–93) 685).]

New clause 12

  CONCESSIONARY FARES: RAIL CARDS
  '(1) Each franchise agreement shall include such provision as the Franchising Director considers appropriate for the purpose of securing that the franchised services are available at concessionary rates to passengers holding a document obtained from the Board (or such other person as may be specified in the franchise agreement) as a person who—

  (a) has attained the age of 60;

  (b) has not attained the age of 26 or is undergoing full-time education or training;

  (c) is handicapped or disabled; or

  (d) is of such other description as may be specified in the franchise agreement.

  (2) In subsection (1) above "handicapped" and "disabled" have the same meanings as in Group 14 of Schedule 5 to the Value Added Tax Act 1983.
  (3) A franchise agreement shall also include such provision as the Franchising Director considers appropriate for the purpose of enabling persons who wish to be able to travel within the locality where the franchised services are provided using railway and other passenger transport services—

  (a) to travel by the franchised services and other such services on the purchase of a single document; or

  (b) to travel on all those services at a concessionary fare by means of the purchase of a single document entitling them to a concession on designated services.'. —[Sir Keith Speed.]

  Brought up, and read the First time.
  3.45 pm
  Sir Keith Speed: I beg to move, That the clause be read a Second time.
  I start be declaring an interest as, for a number of years, I have, through my company, been a consultant to I nterCity.
  I add my tribute to our late friend and colleague, Robert Adley, On the morning of 22 April, a couple of days before his fatal illness, we spent several hours in his room in the House thinking about the Bill in the light of the report of the Select Committee and the Bill's Committee stage. If there is any credit to be given for the proposals that I am making, he is entitled to 100 per cent. of it.
  The new clause seeks to enshrine in legislation the railcards and discount cards that are available to various groups of our fellow citizens. Whatever the rights or wrongs of the rest of the Bill, there is no question but that this part of it has caused considerable concern. I have received letters from organisations such as Saga Holidays, Age Concern, women's institutes and others who fear that

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  our senior citizens will lose the opportunities offered by their senior citizens railcards, which enable them to travel at reasonable fares all over the country.
  Others could express similar concerns: disabled people in particular, young people and those who use the intermodal railcard in London and many other metropolitan cities, which conveniently allows people to travel by rail, bus or tube.
  I have had fruitful and positive discussions with my right hon. Friend the Secretary of State, for which I pay tribute to him. He has made it clear from the outset that our aims are identical: we want to ensure that such cards are preserved. The Bill does not propose that. It is argued that, because such cards are so lucrative, the franchise companies would be stupid to withdraw them. The commercial argument is that those facilities are mainly available at off-peak times and that it is better to get passengers on seats, even if their fare is discounted, because it helps the cash flow and profitability of the railway company or line.
  The social advantages, which I have mentioned briefly, are substantial. Britain has much to learn about leisure travel for senior citizens. SNCF in France identified the old-age pension market and has done much to encourage travel around France at discounted rates, to the benefit of its finances. British Rail, in recent years, offered away-days at £1, and the senior citizens' railcard, which entitles pensioners to substantial discounts, and other discount cards are cherished by many hundreds of thousands of older people, disabled people and young people.
  Mr. Andrew Bowden: Before my hon. Friend leaves the issue of the needs of pensioners and pensioners railcards, may I ask whether he is aware that less than 10 per cent. of single pensioners who depend mainly on the state pension have a car? If they were deprived of their railcards, that would make it extraordinarily difficult for many of them to visit relations or to travel on trains at all.
  Sir Keith Speed: My hon. Friend is right. In a few years' time, I shall be a state retirement pensioner. It is very important for us to consider pensioners' quality of life. Travel enables people to visit their grandchildren or children and visit other parts of the country when they have the available time and leisure and can do so at a reasonable price. A rail journey in itself can be a pleasurable activity for many older or disabled people. My colleagues and I therefore believe that it is vital that the safeguard is incorporated in the Bill so that, beyond peradventure, there is no question of people losing their concessions.
  My right hon. Friend the Secretary of State and my hon. Friend the Minister have argued that they will issue directives or instructions to the effect that the cards should remain, but that is not the same as the House expressing a view. If the safeguard is incorporated in legislation, it will mean that, if anyone seeks to withdraw the cards or any concessions, the matter will have to be brought back to the House so that the legislation can be amended; we or future Members of Parliament will then have to vote and be answerable to the electorate.
  My right hon. Friend the Secretary of State said earlier —I appreciate the point he makes—that it would be extremely unlikely that any of the franchise operators would withdraw the cards because there would be an
  760
  outcry if they did. However, if, for example, the franchisee running trains on the line from Exeter to Paddington decided to withdraw the card—perhaps for cash-flow reasons or merely because of hard-nosed management—half a dozen colleagues representing constituencies up and down the line would cause a fuss, furore and storm. However, if British Rail decided overnight to abolish senior citizens railcards, 650 hon. Members would write to my right hon. Friend—not 651, because my right hon. Friend would not write to himself as he would know what the problems were. Therefore, it is vital to enshrine the safeguard in legislation, and this is perhaps the only opportunity that we shall have for a very long time.
  If my right hon. Friend accepts the new clause, not only would it be good to have enshrined the proposal in legislation for the future but the Bill would provide something that does not exist at present. Elderly, disabled or young people or even intermodal card users currently have no statutory right to this concession. People will value such a right in the future, and I hope that more young people and old-age pensioners will use the cards and enjoy them even more.
  I trust that the debate will be brief—because my case is so strong, I hope that my right hon. Friend will accept it. The new clause would give fresh opportunities to young, old and disabled people and would ensure that people travelling into towns and cities across the country can use the intermodal cards which are so effective and useful. I commend the new clause to the House.
  The Secretary of State for Transport (Mr. John MacGregor): As my hon. Friend the Member for Ashford (Sir K. Speed) said, we entirely agree on the objective. That was clear from our discussions. I fully understand the importance of railcards to senior citizens and other groups. Indeed, my hon. Friend has explained their importance so well that I do not need to repeat what he said. I can only add that many thousands of my constituents benefit from the senior citizens railcard, as do members of my family. I do not think that is a declaration of interest but, if it has to be, then it is. I know of people who are very clear about the benefits of railcards, and I have seen those benefits many times. In due course, I shall join my hon. Friend in becoming a senior citizen, so I have absolutely no wish to see cards disappear, as I have made clear throughout the proceedings on the Bill. Indeed, I believe that under our proposals their scope and scale will be enhanced.
  The question is how we can best achieve our objectives. My hon. Friend was right to say that British Rail has no statutory obligations at present, nor has it ever had. There is a feeling among many people that British Rail has a statutory obligation, but it does not. I recognise the social benefits of many of the cards, especially the senior citizens card, but they are also—indeed, in some ways, primarily —marketing incentives, to attract more passengers on to the railway during off-peak periods. That means, as it was somewhat inelegantly put during our discussions, "more bums on seats."
  That is obviously a clear incentive for British Rail, and I believe that it would be an even greater incentive for franchisees. The basis of our case has been that franchisees will make their returns and, if they are successful, benefit both themselves and their employees more, in two ways: first, by seeking effective cost savings and by running a cost-effective franchise; and, secondly, by increasing

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  revenue. Increased revenue will be achieved by attracting more passengers. So the franchisees will have an even greater incentive than British Rail has ever had to seek to exploit in every possible way, through more extensive and imaginative discount schemes, the possibility of filling up the trains, and that is why—
  Mr. David Martin: Will my right hon. Friend give way?
  Mr. MacGregor: May I finish my sentence first?
  That is why I believe profoundly that under our reforms there will be more use of such schemes.
  Mr. Martin: Will my right hon. Friend confirm that it is profitable for British Rail to offer senior citizens and young persons railcards, but that the disabled persons initiative, which under his plan will be enshrined in the legislation, is not profitable?
  Mr. MacGregor: That is correct, although it is not enshrined in legislation—I shall deal with that later. It is correct to say that in so far as cards attract more passengers there is an obvious revenue benefit. That is why I believe that there is no doubt that franchisees will wish to continue, extend and expand the schemes.
  Mr. Bob Cryer: The Secretary of State is completely ignoring the reality that there is a doubt. He says that there is no doubt in his mind that the franchisees will want to use those facilities, but surely the problem is that, with the break-up of a national rail network and the break-up of InterCity, there is a real doubt. If the Secretary of State is so convinced, why does he oppose legislating to assuage the doubt and to give pensioners and future pensioners confidence that there is no possibility of the cards being withdrawn?
  Mr. MacGregor: I hope that the hon. Gentleman will allow me to develop my case; I shall come to that question at the logical point in my argument.
  There is a reason why the British Rail schemes have not been statutory, and that is the danger of inflexibility. As the House will know, British Rail changes the range and types of schemes over time, and wishes to develop them, as I believe that the franchisees will. There is an obvious risk that, if the conditions of any scheme—the people to whom it should apply, and so on—are made statutory, as British Rail or the franchisees wish to develop their schemes they will have to seek primary legislation every time the original conditions are found to be constricting.
  There have been good commercial, marketing and—as one of my hon. Friends remarked from a sedentary position—"businesslike" reasons for wishing to operate more and more schemes. That is why we have said that we have every reason to believe that railcards will expand and prosper under the new reforms, on a non-statutory basis, as now, with co-ordination between operators being achieved by joint industry arrangements.
  There has been some outside comment on that point, so I must explain that there is no technical difficulty in such arrangements. British Rail currently operates under 19 profit centres, on which, as I made clear yesterday, the franchise units that we expect will be based. The profit centres now within British Rail have to have a clearing
  762
  house to arrange for the allocation of the relevant parts of the revenue to each centre, so there will be no technical difficulty about such arrangements under our reforms.
  I now come to the point raised by my hon. Friend the Member for Portsmouth, South (Mr. Martin). We had accepted that the disabled persons railcard was different. It is provided voluntarily by British Rail and it does not make a profit; so there is not so much a marketing advantage or a marketing scheme here as a social benefit. Moreover, it is available for use in peak hours as well as in off-peak hours and is offered in recognition of the special needs of disabled people. We have, therefore, said that the franchising director will require franchisees to provide common discounts for disabled people on broadly similar lines to the present arrangements. We saw no need for that provision to be in the Bill because we had given an undertaking that we would direct the franchising director in his objectives to require such a provision.
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  In our discussions, my hon. Friends took the force of the point that under our reforms there is a greater incentive for operators to seek to use railcard and discount schemes and that there is a need to retain flexibility. My hon. Friends made two points in response. The first point—which my hon. Friend the Member for Ashford especially pressed and which he has also raised this afternoon—is that, under the voluntary arrangements, we could not guarantee that there would be a national network. One could not absolutely guarantee that there would be no gaps. My hon. Friend has made the point that there may be one or two franchisees who do not share my view and who may not—this is hypothetical—operate a scheme. In that particular franchise, there would be a gap not only for those who travel there but for those who travel through that franchise.
  My hon. Friend the Member for Ashford also made the point that he would prefer the provision to be in the Bill to ensure the continuance of these schemes. I made it clear that one possibility was to require, through directions to the franchising director, that he should do the same in the contracts with franchises for senior citizen railcards, for example, as we have instructed him to do for the disabled. My hon. Friend replied that he had no doubt that I would wish to do that for the entire period that I was Secretary of State for Transport. I can assure him that that is the case. However, he pointed out, and I agree, that these reforms will last for a long time; they may last longer than I will be Secretary of State—one cannot be absolutely sure of any future Secretary of State.
  My hon. Friends fully accepted the need to maintain flexibility and saw a positive advantage in that. In return, I accept the force of their two points. I take on board what my hon. Friend the Member for Ashford has said and therefore propose to move as follows. I take on board the points, as we have throughout the course of the Bill. In Committee, my hon. Friend the Minister for Public Transport listened carefully to all the arguments, and where we believe that the case has been made, provided that they are in line with or further our objectives, we are prepared to make changes. The size of the amendment paper reflects that position and that attitude in Committee.
  I must tell my hon. Friend the Member for Ashford that I fear that new clause 12 is defective for a number of reasons, through which I have briefly taken him. However, I accept the force of my hon. Friend's arguments.

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  Therefore, I now give an undertaking to bring forward in another place an amendment to impose a duty on the franchising director to require, through franchise agreements, participation in discount schemes for senior citizens, disabled people and young people. I thank my hon. Friend for the courteous and constructive way in which we have carried out our discussions. He has convinced me that we just needed to go that little bit further to ensure the continuance of such schemes and I gladly confirm that we will do so.
  Mr. Brian Wilson: My modest experience has taught me one thing. Tory rebellions are a bit like tooth fairies—"Believe in them when you see them". There is little in the statement by the Secretary of State that should dissuade the Tory Members who tabled the new clause from pursuing it to the vote. I shall explain why. First, let us be clear that we are seeking not to create new rights or benefits, but to defend existing ones which are threatened—an unnecessary by-product of this unwanted Bill. The only people responsible for putting them at risk are the Secretary of State and his colleagues.
  We are seeking to safeguard benefits that are appreciated and enjoyed by millions of our constituents, especially the young and the old. The outcome of the debate does not matter, because the Government have distinguised themselves by creating confusion and uncertainty about a feature of daily life that is valued by so many people. Why have they created that uncertainty? It is not an end in itself but a facilitator for the ideological aim of fragmenting and privatising railway services. It is another example of the fact that mean-mindedness is the essential handmaiden of right-wing dogma.
  Mr. Patrick Cormack: Will the hon. Gentleman give way?
  Mr. Wilson: I shall give way in a moment. I want to deal with the people who will be affected by this and explain to Conservative Members why the Secretary of State's offer is inadequate.
  In a sense, I am trying to be helpful. I am dealing with the short-term aim of trying to build genuine safeguards into the legislation. Conservative Members will be affected by the long-term consequences of what is being done, but that is not my responsibility or concern.
  Mr. Cormack rose—
  Mr. Wilson: I shall give way in a moment. Let us consider the number of people involved in the various schemes, including those schemes to which the Secretary of State made no reference this afternoon. There are 700,000 holders of the senior railcard, 700,000 holders of the young person's railcard and 250,000 holders—the Secretary of State did not mention this—of the family railcard.
  Mr. MacGregor: There is a distinction. The family railcard—obviously this can be discussed—is a clear example of a marketing initiative without the same social connotations as the senior citizens railcard or the young persons railcard. The marketing initiative is frequently changed to meet new marketing conditions. Therefore, there is a distinction.
  Mr. Wilson: The family railcard is a social device to get people who cannot necessarily afford to travel otherwise out of the cities and into the country during off-peak periods. It may have an economic benefit for the railways,
  764
  but it also has a social benefit. It falls into exactly the same category because, if it were taken away, it would not be a significant financial loss to the railways, but it would be a massive social loss to those who enjoy its benefits. The Secretary of State will be on his feet a few more times if he responds to each of my points.
  Mr. Cormack rose—
  Mr. Wilson: I shall give way in due course.
  There are 740,000 holders of the London travelcard. Specifically on the railways—because the travelcard also covers other forms of transport—there are 300,000 holders of the network card and an additional 300,000 holders who benefit. That is 600,000 people with a network card. There are 55,000 holders of the gold partners card. In total, 2·33 million people benefit from the existing railcard system. All of those people have security in the knowledge that such benefits exist, and will continue to exist, throughout the network. In the legislation, the Government are removing that certainty and replacing it with the lottery that the Secretary of State has been dealing with today.
  Mr. Cormack: The hon. Gentleman is making the speech that perhaps he should have made if my right hon. Friend the Secretary of State had been intransigent. He is paying no regard whatever to the fact that there is no statutory safeguard at present—he is simply spreading unease and anxiety among people throughout the country when he should know better.
  Mr. Wilson: The hon. Gentleman may think that he is off the hook with those remarks, but he is not. Frankly, the question whether he accepts what has been said or listens to the facts is a matter between him and his conscience, and his constituents. One of the facts is that many hundreds of thousands of people who hold railcards at present were not covered by the Secretary of State's announcement. We will refer to other deficiencies in the statement later.
  I see that the hon. Member for Aberdeen, South (Mr. Robertson) is trying to get to his feet. He was a member of the Standing Committee that considered the Bill. He voted for every dot and comma of it and against every effort by Labour Members to build in safeguards. The idea that he has turned up now to express concern is not a runner.
  Mr. Raymond Robertson: Will the hon. Gentleman take the time to tell the House what guarantees present railcard holders have that British Rail will not withdraw them tomorrow?
  Mr. Wilson: That is an idiotic question. They have the same guarantees as they had yesterday that British Rail would not guarantee them today. But a secure system is in place, based on the social as well as the economic remit of British Rail. It introduced railcards and it has not withdrawn them for years. Why? That is precisely the point that I am coming to.
  The fallacy on which many comments made by Conservative Members are based is that railcards are an economically profitable spec for British Rail. They are not. That is made clear in a document that is crucial to the debate. If Conservative Members have not read the document, they should have. It is a discussion document on network benefits drawn up by the Secretary of State's

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  Department. The document contains the figures on the disabled persons railcard, which I shall deal with in a moment, and on other railcards.
  The document states that, while those railcards are profitable overall, they are not moneyspinners. In 1991–92, the senior citizens railcard went into deficit, and the discount rate had to be changed to restore profitability the following year. So the senior citizens railcard is not profitable; it exists because of British Rail's decision to have it as a social benefit. That is the reality. That is why there is a distinction between British Rail operating the benefits and a plethora of private operators with different motivations being asked to operate them.
  Let us examine some of the other conclusions of the document:
  "Private operators, whose profitability will depend on filling seats, can be expected to exploit modern yield management techniques fully. We believe it would be wrong to tie their hands by requiring the perpetuation of the current range of Railcards."
  That is the basis on which the Secretary of State has hitherto proceeded.
  Of course, the Secretary of State has climbed down today by bringing the young persons railcard and the senior citizens railcard into the same category as the disabled persons railcard. But it is instructive to examine why the disabled persons railcard was provided for in the first place. Again, shamefully, it has nothing to do with social concern. It has nothing to do with the idea that disabled people have rights and that it is a good social ethos that they should be given reduced cost travel to liberate them and enhance their lives.
  In one of the most cynical sections of the document, the case of disabled persons railcards was discussed:
  "There would undoubtedly be strong criticism of a policy of allowing the market to decide the future of Railcards. This would be particularly intense in the case of the Disabled Persons Railcard…Ministers will want to consider whether there is a case for making an exception for this Card. Financially, the Card is not very significant one way or the other—around 40,000 Cards were sold in 1991–92 with a revenue of around £0·5 million from Card sales, and £2·5 million from fares…Many operators might decide"—
  I hope that Conservative Members will listen to this, because it is a lesson for the future—
  "that the public relations benefits of continuing to offer discounts to disabled people are well worth any small cost. But this is by no means certain and would be an insufficient counter to those who would seek to argue that the Government was being callous in not guaranteeing the continuation of these Cards. On the other hand, a decision to offer such a guarantee would be unwelcome to operators; it would amount to direct intervention in their decisions about ticket pricing and would limit their commercial freedom."
  So there we have the reality. Private operators will not want to operate the railcards and it is acknowledged that they would not even accept the disabled persons railcard if it was not imposed on them. The Government recognise that, for public relations benefits, they must maintain an obligation to operate the disabled persons railcard. Therefore, it is presented as a virtue in the Bill.
  On exactly the same basis, they have decided that the public relations benefits of including the senior citizens railcard and young persons railcard in the same category is overwhelming. That is the decision which has been taken now. But exactly the same doubts exist that pressures will come to bear on the franchising director not to impose
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  those conditions because of the economic consequences and because the operators do not want them in the first place.
  4.15 pm
  By not writing into the Bill the continuation of these schemes, the Government are putting them, in any recognisable form, in jeopardy. If any Government Member wishes to support the view expressed in this document as to the only reason why it was necessary to continue the disabled persons rail scheme, this is the time to do so. That is the logic of it.
  Of course, what is announced today is an advance, a step forward; at least these two other cards have been brought into the same category. It is a step forward that was bitterly resisted throughout Committee, not by the Secretary of State, because he was not present, but by the Minister and all the little echoes behind him, who voted quite specifically on the instructions of the Whips to deny any further concessions on railcards.
  We now have these concessions, but they still leave out many categories, and must still be seen against the background of the operators not wanting them and working from day one, if these operators ever come into being, to get rid of them; and of the political decision not lying with the Government, but resting at arm's length with the franchising director, who will be able to interpret how these matters should be applied.
  That, I am afraid, is the message. It is an advance; it is better than what was there before; at least some lip service is paid to the idea that there will be senior citizens and young persons railcards, although the network benefits in the south-east for families are apparently to be cast aside. But these are not guarantees, and they will not be seen as guarantees.
  The only way to safeguard the benefits of the network is to safeguard the network itself. The fragmentation of and the risks to those benefits are an inevitable consequence of the fundamental decision to break up the railways.
  Mr. Nicholas Winterton: I am a signatory to this new clause and I fully endorse everything that my hon. Friend the Member for Ashford (Sir K. Speed) has said. Like him, I welcome very much indeed the concessions, the announcement, the statement, the assurance, given by our right hon. Friend the Secretary of State for Transport.
  I am sure that the hon. Member for Cunninghame, North (Mr. Wilson) will concede that I am not one of those Back-Bench Tory Members who are easily bought off. Certainly, I do not have a history of that, and for as long as I am in the House I do not intend to establish a history of being easily bought off.
  I hope that the hon. Gentleman will also concede that those of us who expressed grave concern about the omissions from the initial legislation were particularly concerned about the position of the elderly, the retired, the old-age pensioners. We were also particularly concerned about young people and, of course, as the Government showed that they were in the legislation, about the disabled.
  Certainly I, and I believe my hon. Friends, wanted to see written into the Bill assurances that travelcards in respect of the elderly, the young and the disabled would be included in the legislation.

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  I have been in the House for a few years, and. I believe that the assurance that has been given by my right hon. Friend the Secretary of State for Transport is as close as anyone can get to having what we want written on to the face of the Bill. My right hon. Friend has stated that he will be giving a very clear directive to the franchising director that, in considering allocating and awarding the franchises, these railcards must be included. That assurance is good enough for me.
  I represent an area in which railways are particularly important and in which the elderly and the young frequently use railways, both local services and inter-city, to go north and south, from Macclesfield to Manchester, from Macclesfield south to Congleton, and through to Stoke. I have had numerous letters from constituents asking me to ensure, as far as is possible, that in this legislation we get a commitment from the Government that the position of the elderly, the young and the disabled will be taken fully into account.
  I say again to the hon. Member for Cunninghame, North, who spoke with some passion from the Opposition Front Bench, that Conservative Members have obtained sufficient assurance not to push the new clause to a Division, but to accept in the spirit that it has been given the very firm assurance by my right hon. Friend the Secretary of State.
  I hope that the Opposition accept the distance which the Government have gone in seeking to meet the concerns that have rightly been expressed by the elderly and the young. I give credit to the Government, the Secretary of State and the Minister of State that the disabled had already been taken into account. I believe that the directive is the assurance that the elderly and the young wanted, and I am happy to accept it.
  Mr. Peter Snape: I would not say that the hon. Member for Macclesfield (Mr. Winterton) is easily fobbed off, but I urge him not to accept at face value everything his right hon. Friend has said.
  The Secretary of State has moved some way, and obviously we are delighted, although the cynics amongst us would say it takes an impending defeat for such a gush of social concern to flow from the Government Front Bench. The right hon. Gentleman has not yet said specifically that all franchisees will accept a national scheme for all cards. If he has said that, that is fine and we have made some progress, but he did not cover every scheme. One card that has not been mentioned so far in the debate is of great benefit to one of the few flourishing industries we have left—there are not many after 14 years of Tory government.
  We sell tourism by promising people the use of a BritRail card which enables incoming tourists to use the entire British Rail network. Given that this barmy piece of legislation envisages some 20 franchisees, I wonder whether the Secretary of State has considered the BritRail card. I hope he will think carefully about it and give us some assurances.
  I urge the hon. Member for Macclesfield and his hon. Friends to look closely at any legislation that the Government introduce on the lines of the Secretary of State's speech this afternoon.
  The argument is continually waged that railcards are non-statutory. They were first introduced by the then much-maligned British Rail. Senior citizens railcards were
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  issued on a national basis during the stewardship of Sir Peter Parker and the Conservative Administration took the first opportunity not to reappoint him.
  As my hon. Friend the Member for Cunninghame, North (Mr. Wilson) pointed out, since they were first introduced there have been misgivings amongst successor administrations of British Rail about their efficacy and their profitability. However, to withdraw them would have caused an enormous row and we have been reminded today that 650 hon. Members have written to the Secretary of State in protest.
  The other myth is that it is in the commercial interests of operators to accept them. It is no such thing. One of the early batch of franchises is to be the former London-Tilbury-Southend line, a self-contained stretch of railway from Fenchurch Street to Southend shortly to have its own self-contained signalling system, at public expense, of course. It would not be in the commercial interests of any franchisee of the London-Tilbury-Southend line to accept travelcards. Future franchisees would want to keep their revenue to themselves. I shall explain in a moment why it is not in their commercial interests to do so.
  I do not know whether Conservative Members are aware of the way in which revenues are allocated to different commercial concerns through the use of cards. In the bus industry, they are allocated on the basis of an annual census in which a percentage figure is arrived at and allocated to different bus operators in an area. I think I see the Minister for Transport in London nodding in assent to that. Many larger operators in various parts of the country are desperate to get out of the schemes because they feel that their revenues are being diluted unfairly by their participation in them.
  Many larger operators in the bus industry are not promoting regional schemes—I appreciate that we do not have a national bus scheme—available on every company's buses in a region but are promoting heavily their own schemes which are available on only their own services. I advise the hon. Member for Macclesfield and others to look carefully at any assurances given by the Secretary of State not only on pensioners railcards—although I appreciate that that is the main concern of the hon. Member for Macclesfield—but on the other railcards to which I referred to ensure that a genuinely national scheme is forced on franchisees, because forced on them it will have to be.
  I remind the Secretary of State, who has been dragged kicking and screaming into the Chamber to make this afternoon's concession, that when some municipal bus undertakings were privatised it was a condition of their privatisation that they accepted regional bus passes. It was widely felt among the managements that such acceptance would dilute their revenues.
  I hope that Conservative Members who have indicated their voting intentions will go further and ensure that we are talking about a national scheme for pensioners and others and will not allow any doubt to creep in. Nor should they leave franchise directors with any leeway to decide, depending on the profitability of views of individual franchisees, that only a local or regional scheme will be acceptable.
  I urge Conservative Members not to listen to the Secretary of State but to examine what is happening. The hon. Member for Macclesfield referred to what is taking place in his part of the country, and I am not exactly a

  769
  stranger to his constituency. I spent the early part of 1971 trying to ensure that he never made it to Parliament. Alas, I was unsuccessful and he has been here ever since.
  If the hon. Gentleman catches the train north to Manchester, he will find in place the Manchester metrolink service. It is in place only because of the insistence of the passenger transport executive that through travel ticketing arrangements be accepted. Manchester metrolink was extremely reluctant to accept that. It wanted to run its own self-contained strategy of a modern tramway and did not want its revenues diluted by a regional scheme—regional in that case, but national in the context of our debate.
  I hope that the hon. Member for Ashford (Sir. K. Speed), among others, will press the matter to a Division and will clearly show the Secretary of State that there is no scope for wriggling on the issue. Let us insist on a national scheme.
  Mr. Cormack: The House will be delighted that the hon. Member for West Bromwich, East (Mr. Snape) failed in 1971 to prevent my hon. Friend the Member for Macclesfield (Mr. Winterton) from being elected. Think what we would have been deprived of had he succeeded. It was interesting to hear the speech of the hon. Member for West Bromwich, East. I had hoped that he would be making it from the Opposition Front Bench.
  Mr. Snape: I have made too many from there.
  Mr. Cormack: Not too many for some of us. I hope that he makes many more from the Opposition Front Bench. After all, the hon. Gentleman who spoke from that position, the hon. Member for Cunninghame, North (Mr. Wilson), was, to put it mildly, rather churlish. He had obviously carefully prepared a speech and arrived here thinking that the Secretary of State would not meet us on the issue.
  Mr. Wilson: I assure the hon. Gentleman that I do live in the real world. I read the newspapers, and I came here today knowing that a deal would have been stitched up, that the rebels could go quietly away and that there would be a major climbdown, as there has been. I appreciate that, but I reserve the right to point out to Conservative Members the inadequacies of the climbdown.
  Mr. Cormack: The tone of that intervention was better for the hon. Gentleman's blood pressure than was his speech. I was afraid that he might do himself an injury while he was fulminating at the Dispatch Box.
  This afternoon has been a classic example of a well orchestrated campaign, to which our listening Secretary of State has responded. I promised our friend, the late Robert Adley, that I would support any new clause along the lines of this one; indeed, I talked to him about it just a day or two before his heart attack. I renewed that promise to my hon. Friend the Member for Ashford (Sir K. Speed), to whom I pay tribute for his organisation of the campaign and the forceful moderation with which he has pursued it.
  4.30 pm
  We were concerned about two categories of people. The disabled had already been catered for, but we were worried about the elderly and the young. Perhaps, like my right hon. Friend the Secretary of State, I should declare an interest: I have a mother who is 83 today, who enjoys using
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  her railcard from time to time. I have a son who has the good sense to be at university in Scotland and who regularly uses his railcard. Both of them were apprehensive at the suggestion that the facility might not continue.
  We all have a number of duties in this place. One of them is to speak up for those least able to articulate for themselves. Another is not to spread alarm and despondency when there is no need to do so. Until my right hon. Friend's speech there was a degree of anxiety throughout the country that, in the wake of sweeping changes—do not welcome all of them—certain facilities which were not statutorily guaranteed but which were much valued would be withdrawn.
  Because of this, the late Robert Adley and my hon. Friend the Member for Ashford decided, on the eve of these momentous changes to our rail system, that we must include this provision in the legislation. My right hon. Friend has always, in every post, had the reputation of being a listening Minister. I know from school teachers in my constituency that he was much appreciated as Secretary of State for Education and Science. He has listened carefully and he has conceded that we have a real point. He has promised that in another place the legislation will be suitably amended.
  In so doing, my right hon. Friend has not only met the widespread apprehension and responded sensibly to Members on both sides of the House; he has also, in the process, shot the fox of the hon. Member for Cunninghame, North. I do think that the hon. Gentleman should be a little more welcoming, a little less churlish. We should all be united in our concern for the elderly, the disabled and the young, and in our desire to achieve as good a rail system as we can for the 21st century.
  The Bill has already been improved in some particulars; I hope that it will be further improved in others. Without seeking to disguise the fact, we should all be thankful to the Secretary of State for listening and responding so positively. I am delighted that he has done so.
  Mr. Nick Harvey: I warmly welcome the Government's announcement—all the more so because of the length of time that it has taken to come. We remember the vociferous way in which the Government have resisted anything of this sort hitherto, so it is all the more remarkable that they have conceded it now.
  Powerful and elegant though the speeches by the hon. Members for Ashford (Sir K. Speed) and for Macclesfield (Mr. Winterton) were, nothing that they said today was new or had not been said on Second Reading, in an Opposition supply day debate, in Committee—frequently—and again in these debates.
  I suspect that at some point in their private discussions they must have said something even more powerful, if slightly less elegant, to the Secretary of State. I think that this says something about the benefits to the House of the Government having a small majority. It may have been the anticipation of a slightly smaller majority in the future that brought pensioners to the forefront of Government thinking.
  I echo the points made about other types of network card that have not been referred to, particularly the London card. Yesterday's announcement about the Government's future intentions in terms of franchises suggests that the commuter services around London—which are currently all operated by one operator, Network SouthEast—may in future be operated by seven or eight

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  franchisees. Bus deregulation is coming to London and I do not think it is unduly fanciful to expect that the London underground network may be run on a line-by-line basis at some point in the future. We are looking at a multiplicity of operators in the area of Greater London, instead of the two or three that we have at the moment.
  Although it is fair and right for the Government to say that none of these operators currently has a statutory obligation to participate in the London travelcard scheme, consumer groups and others seeking to persuade the operators of the benefits of the scheme currently have to persuade only two or three operators; in future they may have to persuade 12, 15, 20—goodness knows how many—to participate in a scheme of this sort.
  It is worth noting that the new clause does not try to set particular percentages of reductions that should be given, or set in stone the character of any card or benefit that should be available. It simply seeks to enshrine the principle that operators should participate in some network benefit. I think that the argument should continue that the other benefits—not only in London, but the BritRail card and others—are worth including in the legislation. I think that future operators should be required to participate in a network scheme, without trying to set in stone what the benefits or characteristics of such network arrangements should be.
  Sir Keith Speed: My right hon. Friend has given a very positive reply and I am sure that it includes the inter-modal card. I see that my right hon. Friend wishes to intervene, so I will give way.
  Mr. MacGregor: May I say something? It will take a little time, but it is important that I say it because my hon. Friend and others have raised it in the debate. May I make another intervention, by leave of the House?
  Madam Deputy Speaker (Dame Janet Fookes): I do not think that the Secretary of State needs the leave of the House to intervene; but, by tradition, interventions are short and I hope that the right hon. Gentleman will comply with that principle as far as possible.
  Mr. MacGregor: I will try to do so, Madam Deputy Speaker. However, my hon. Friend wanted me to comment on the travelcard and I would like to explain the position because it is important that everyone understands where we are.
  Travelcard is rightly popular and has brought the benefits of simplicity and value for money to the public. It has been highly beneficial to the operators because it is a powerful marketing tool that has increased patronage. It is in the interests of both passengers and the new railway operators that it should continue.
  There is a problem, however. Subsection (3) of the new clause was intended to cover that problem. I mentioned that the clause was defective: it is defective in this case, for example. It would not be possible for the Railways Bill to impose any requirement on the providers of other kinds of public transport service to accept multi-modal ticketing arrangements. The powers of the franchising director relate only to the provision of railway services.
  Under the Bill as already drafted, the franchising director will have the power to require franchisees to participate in the travelcard scheme. I propose to give guidance on the exercise of that power. Franchisees will then be required to participate in accordance with their
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  franchise agreement. I think that the same mechanism could be used to secure participation in the travelcard-type systems that exist outside London, but that would have to be done in conjunction with the passenger transport executives.
  Sir Keith Speed: I thank my right hon. Friend for that intervention, which reinforces my desire to seek the leave of the House to withdraw the motion.
  Madam Deputy Speaker: Is it the wish of the House that leave be given? [HON. MEMBERS: "Aye".]
  Mr. Wilson: On a point of order, Madam Deputy Speaker. I hope that Conservative Members will not regard it as churlish, but we have just had a fresh announcement in the form of an intervention in a speech about withdrawing the new clause. I do not think that one has to be a devotee of "Erskine May" to regard that as an odd way to proceed. I would have hoped that it would have been possible to have further clarification from the Minister on his statement on the London travelcard, which was thrown in as an intervention.
  Madam Deputy Speaker: Order. It is simple. Any hon. Member may disagree with the proposal that the motion be withdrawn. Then we proceed with the debate.
  Mr. Wilson: I wish to object to the motion being withdrawn until we have had a modest discussion on the London travelcard and the implication of the Secretary of State's announcement.
  Mr. Peter Bottomley: My hon. Friend the Member for Ashford (Sir K. Speed) has helped to clarify the position. My right hon. Friend the Secretary of State said that under the Bill'he will meet what my hon. Friend has asked for. It seems unreasonable to prolong the debate by asking my right hon. Friend to say that what cannot go in the Bill should be covered by it.
  Dr. John Marek: I apologise for not agreeing with the hon. Member for Ashford (Sir K. Speed) that we should make progress. The Government have moved on the point and perhaps we should make progress, but I want to make one point.
  No doubt the Secretary of State's guarantee will be as good as his word and he will ensure that appropriate amendments are made in another place. However, it is possible that the cards will become disused by attrition. For example, a high joining fee might be sought; instead of the normal £10 or £15, perhaps £35 will have to be paid. If so, many pensioners could not put that amount up in front to have the benefits of a card.
  Alternatively, the percentage discount might come down. Because of the impoverished state of British Rail, discounts have come down recently. The half-price discount might be reduced to 33 per cent. It is not inconceivable that a franchisee who was not enamoured by having to obey the legislation would give discounts of only 10 per cent. or 15 per cent. and thereby make the cards unattractive to pensioners. I hope that there is no unwritten agenda and that travelcards will be protected by the legislation and will generally cost the same and give the same benefits as at present.
  Mr. Tim Rathbone: May I add my endorsement of the point made by my hon. Friend the Member for Ashford (Sir K. Speed) in moving the amendment and

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  make an addendum to what he said? In my hon. Friend's speech and in the speeches of other hon. Members on both sides of the House the accent has been on the pleasure aspect of concessionary travelcards, in other words, their use by old people to go on holiday or by young people to travel wherever they wish.
  There is a need imperative. In my constituency old people use trains to go to the nearest town to do their weekly shopping. That is important. Students use trains to get to where they are studying. There is more to the point than the pleasure motive and I am glad that my right hon. Friend the Secretary" of State has responded to the pressure.
  I join other hon. Members in asking for further clarification about the London travelcard. That, too, is important to my constituents. The principle is important to people in constituencies near large metropolitan areas. Like the hon. Member for Cunninghame, North (Mr. Wilson), I would welcome more elucidation from the Secretary of State. What he announced briefly is a step in the right direction, as was his reaction to other amendments. I welcome that and thank him for it.
  Ms Glenda Jackson: While I, too, would welcome further clarification of the Secretary of State's announcement about the London travelcard, may I say to the hon. Member for Ashford (Sir K. Speed) and his hon. Friends that the concerns for the elderly, the young and the disabled which were so eloquently expressed by the hon. Member for Macclesfield (Mr. Winterton) were equally eloquently expressed in Committee by Opposition Members? On that occasion those concerns, which still remain, fell on deaf ears.
  4.45 pm
  I hope that hon. Members will not consider it churlish on my part to say that what has occasioned the Secretary of State's change of heart is a response not to the cries of his hon. Friends or, indeed, the travel needs of the elderly, the young and the disabled, but possibly to the report from the Save Our Railways campaign in which a poll of more than 5,500 Conservative voters in 58 Tory marginal seats showed that if the Bill went through Parliament unaltered at least 38 Tory Members might lose their seats.
  Mr. Wilson: With the leave of the House, Madam Speaker. It is essential to place on record our astonishment at the way in which the Government continue to handle the Bill. We have had months of debate. We had 36 sittings in Committee, many of them devoted to issues of network benefit. Railcards and travelcards were raised repeatedly and discussed at great length. With the exception of the railcard for disabled persons, the Government said repeatedly that nothing would be done. Specifically on the London travelcard, the answer was the same.
  We were waiting today for a clear-cut statement of intent. We got something for pensioners and young people and we welcome it unreservedly, but even then the Minister could not make a clear statement on what would be done about travelcards. We had a shambolic announcement in the form of an intervention which still does not tell us whether the London travelcard will live or die, because not only the franchising director but someone else will have to be consulted.
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  If the campaign to save the London travelcard has been successful, it will be a tremendous victory which will be widely appreciated in London. If we have forced that out of the Government at this late stage, it is a great success, but what a humiliation for Tory Members who served on the Standing Committee and who did not even ask for it, far less receive it. By the same token, what a humiliation it is for Tory Members who accepted meekly in Committee that there was to be no movement on railcards for senior citizens or young people. Now apparently the threat of rebellion by a dozen Tories has achieved what the 14 on the Standing Committee did not dare ask for.
  Let us have, perhaps at another time and in better order, a detailed statement from the Secretary of State on the prospects of the London travelcard so that they can be studied and discussed. While railcards for senior citizens and young people have been hard fought for by my hon. Friends, by some Tory Members and by the public, today's announcement will not end all the uncertainty. It covers only 700,000 of the 2·3 million people who have railcards.
  Mr. MacGregor: The reason why I made the remarks about the travelcard was that my hon. Friend the Member for Ashford (Sir K. Speed), perhaps sensing the mood of the House better than I had, wanted to bring the debate to a close. I had requests for a statement on the position of the travelcard. That is why I intervened.
  Since the hon. Member for Cunninghame, North (Mr. Wilson) did not allow the debate to finish, let me point out to him that there was nothing strange about my statement. I am beginning to think that the hon. Gentleman would wax indignant about what he had for breakfast. He seems to go over the top on every occasion.
  With regard to travelcards, the position is very simple and has been stated very clearly. It is not possible to go beyond the Bill's provisions and require the franchising director to impose conditions in respect of transport other than railways. Such a provision cannot be included in the Railways Bill and that is why I have suggested another way forward. It is the right way to proceed, as I hope my statement has made quite clear.
  Sir Keith Speed: As I am totally content with my right hon. Friend's statement, I wish, with the leave of the House, to withdraw the motion.
  Madam Deputy Speaker: I am afraid that that is impossible. An hon. Member may not ask twice for the same thing. I shall therefore put the new clause to the House—a procedure which will not necessarily force a Division.
  Question put and negatived.

  New clause 24

    EXISTING PASSENGER SERVICE OPERATORS AND ASSOCIATES TO BE ELIGIBLE AS FRANCHISEES
    '(1) Notwithstanding anything in section 22 of this Act, a public sector operator shall be eligible to be a franchisee if at the date on which this Act was passed—

    (a) that operator, or

    (b) any other body of which that operator was at that date, or is at the time when the franchise agreement is made, the subsidiary or holding company, was providing or operating services for the carriage of passengers by railway in the exercise of a function conferred by or under any enactment.

    (2) For the purposes of this section "subsidiary" and "holding company" shall be construed in accordance with section 736 of the Companies Act 1985.'.—[Mr. Prescott.]
    Brought up, and read the First time.
    Mr. John Prescott: I beg to move, That the clause he read a Second time.
    Madam Deputy Speaker: With this, it will be convenient to discuss also the following amendments: No. 29, in clause 22, page 23, leave out from beginning of line 41 to end of line 19 on page 24.
    No. 43, in page 23, line 41, after `(1)', insert 'Subject to subsection (1A) below,'.
    No. 44, in page 24,. line 16, at end insert—
    '(1A) The provisions of subsection (1) above shall not apply to any public sector operator who at the date on which this Act received Royal Assent had a statutory power, duty or obligation to provide or operate any public railway passenger service.'.
    No. 57, in page 24, line 16, at end insert—
    '(1A) Nothing in subsection (1) shall prevent—

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

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

    No. 32, in page 24, in clause 23, line 34, at end add—
    '(4) The Board shall always be invited to tender by the Franchising Director.'.
    No. 56, in clause 27, page 28, line 17, leave out from 'the' to end of line 18 and insert 'Board'.
    No. 47, in clause 72, page 80, leave out line 38 and insert—
    ' "Public sector operator" means—

    (a) any Minister of the Crown, Government department or other emanation of the Crown;

    (b) any local authority;

    (c)any metropolitan county passenger transport authority;

    (d) any body corporate whose members are appointed by a Minister of the Crown, a Government department, a local authority or a metropolitan county passenger transport authority or by a body corporate whose members are so appointed;

    (e) a company—

    (i) a majority of whose issued shares are held by or on behalf of any of the bodies or persons falling within paragraphs (a) to (d) above;

    (ii) in which the majority of the voting rights arc held by or on behalf of any of those bodies or persons;

    (iii) a majority of whose board of directors can be appointed or removed by any of those bodies or persons; or

    (iv) in which the majority of the voting rights are controlled by any of those bodies or persons, pursuant to an agreement with other persons (and expressions used in sub-paragraphs (i) to (iv) above in section 736 of the Companies Act 1985 have the same meaning in those subparagraphs as they have in that section);

    (f) a subidiary of a company falling within paragraph (e)
    above;'.

    Mr. Prescott: The debate on new clause 12 characterised the attitude that the Government have adopted throughout the debates on the Bill—immediate changes, a few minutes' consideration without any proper assessment. As usual, the Government are making up policy as they go along. That has been pointed out in a very powerful way. The new clause raises another principle that was endorsed by Robert Adley: if the House is disposed to support an hon. Member's argument on one
    776
    occasion, it should do so subsequently. Robert Adley felt very strongly about British Rail's right to bid for franchises. The change of mind shown by the Secretary of State's immediate decision was brought about by pressure on the Floor of the House. The Government were totally indifferent to similar pressure in the Standing Committee.
    I cannot help feeling that we have here something of a north-south division. It is accepted that there should be a statutory requirement to provide a pensioners pass in London, but not in areas outside London. Action is being taken because of the sensitivities in the southern area. I hope that the Secretary of State recognises that we are dealing here with a national matter. Decisions should not be influenced by geographical or political considerations. I hope that northern Members will fight as hard for their constituents as southern Members clearly have done.
    British Rail's right to bid for franchises reflects an ideological position taken by the Government rather than common sense. This is a matter of common sense, and I hope that it will be considered in that light. New clause 24 would give British Rail the right to bid for franchises, of which the House was notified in a statement yesterday. BR should have the same bidding rights as any other operator. It certainly has all the necessary experience.
    As drafted, the Bill will not permit public sector operators to bid for franchises. Evidence about the effectiveness of privately owned or privately operated railways is to be found in Sweden. The Swedish counterpart of British Rail was allowed to bid. I understand that of the 21 franchises that have been granted, 17 have been won by the state operation. It appears that the Swedish Government regarded the bid from the most experienced operator as the best one. Unless it is felt that the British public sector is not as good as the Swedish public sector, BR's management should be allowed to bid.
    The Secretary of State will probably say that the management may bid if they do so by way of a buy-out procedure. Apparently, managers bidding for franchises will be those who currently run the public sector operation. The essential difference will arise from their introduction to the disciplines and philosophy of the market. As private owners, they will be intent on satisfying their own greed rather than meeting public need.
    There is far too much ideology here. It is assumed that private must be good and public must be bad. That is not borne out by the evidence in this country or abroad. The Government seem to think that privatisation encourages a commercial ethos and enterprise which will result in a better service for the public. I concede that there is probably as much bad management in the public sector as in the private sector, but there is little to be gained from point-scoring about the failures of management. The skills of managers, like those of the work force, are much less well developed in this country than they are abroad. That is a sad reflection on our training and on our priorities in management and worker skills.
    The Government have taken the view that this is all about competition, but they have not proved that case, either. In fact, competition is not being allowed. In this regard, the practicalities are extremely difficult. What is proposed is the transformation of a public monopoly into a private monopoly. Where franchises are granted, it is unlikely that the operators will have their own rolling stock. The Government have proposed that the rolling stock should be owned by leasing companies. The reason

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    is that the contract time envisaged for franchising is about seven years—considerably less than one would expect for rolling stock leasing. This, the concept of private ownership and competition, is watered down.
    This is not competition; it is the granting of an exclusive right to an operator. An undertaking that does not even own its assets will be expected to contribute the essential private managerial flair which, it is argued, will be available in the private sector. It is contended that when public managers go private, they will be much better at managing. Again, that has not been proved.
    We have been told that franchising is not now to be limited to the seven services that were announced in 1993. There are to be a further 18, making a total of 25. The additions account for most of the remaining two thirds of the system. The Secretary of State has not yet made up his mind about what should happen to the cross-country systems. He said yesterday that certain services would be exempt from the provisions of the Bill. A very important exemption is the British end of the European railway system through the channel tunnel. I assume that, for reasons connected with joint contracts and complicated European affairs, those services will not be offered for franchise. Presumably, they will remain under the control of British Rail. In other words, British Rail will continue to be an entity in this field. With the exception of the rolling stock on lines connecting with Europe, it may well have to lease back its own stock. That will create problems. In any case, BR will continue to be an important operator for at least the remainder of the century, irrespective of what happens in elections.
    British Rail will continue to play an important part in respect of freight, too. Nevertheless, it will almost be the operator of last resort. If an operator does not provide the service, someone will ring up British Rail, almost as though it were the Automobile Association, and say, "Come and operate this system because the private sector operator has gone bust." As distinct from the public sector, if a private sector operator finds that it can no longer meet its financial commitments and is bankrupt, it will be obliged to cease trading and the service may stop. The Secretary of State may argue that the franchising director would take over the service and run it. Presumably, he would become the operator in those circumstances and then readvertise them.
    5 pm
    A transport system must operate 24 hours a day. The public rely on it because it is a crucial part of any industrial operation. Franchise operation 19, covering south London and the Sussex coast, has been identified by the Secretary of State as one for which private sector operators can bid. It is also the operation in which Mr. Sherwood of Sea Containers was very interested. What happens if most potential operators take Mr. Sherwood's view that the coast run from Southampton to Hastings is not very profitable?
    Although it is true that many people travel on that line and that it uses clapped-out stock, Mr. Sherwood still does not want to run it. He offered to bid for the rest of the system, with the exception of the Reigate-Tonbridge line. If other operators are of the same view, either the network will have to be changed or someone will have to come in and pick up the bits that Mr. Sherwood or others judge are
    778
    not profitable—and that someone will be British Rail. That is not an effective way to run a railway system, because it would break up the whole basis of the network in what would be one of the most congested parts of any railway system. There will be increasing concern about that—particularly among Conservative Members, when they realise the consequences for the rail services in their constituencies.
    As the Bill progresses, Conservative Members will not necessarily have the luxury enjoyed by the hon. Member for Ashford (Sir K. Speed) in negotiating with the Secretary of State to save particular travelcards and concessions. They will have to queue up at the door of the franchising operator—not spend time in a smoke-filled room pressurising the Secretary of State, knowing that the right hon. Gentleman has to come to the House and vote for or against a particular proposal. The luxury of accountability will be lost to right hon. and hon. Members, because the House will have delegated to the franchising director the right to make such decisions.
    Anyone who complains to the franchising director will be reminded of the objectives that he has been set in the name of competition. He will say, "You placed those obligations on me, and if I do not observe them, I can be sued by another operator." Any chance to make decisions about the transport system and to put pressure on the Secretary of State as an essential part of public accountability will be sacrificed. Although the right hon. Gentleman may hope that there can be bids for the network definition contained in his document, he has already made it clear that much will depend on operators picking and choosing. We must wait and see.
    In Committee, the Secretary of State reserved the right to control the franchising director's actions until July 1996—an interesting political period, just before the next general election. The right hon. Gentleman is retaining certain powers so that he can oversee any difficulties with Network SouthEast, with all the political implications that that has, as we have seen recently. The services will not be franchised in the way that the Secretary of State suggests; instead, the network will be broken up, and British Rail will be expected to intervene as the operator of last resort to provide certain services.
    Mr. Sherwood made it clear that, apart from not wanting to run certain lines, he expected freedom to charge what he liked. I do not know what decision the Secretary of State has made in regard to the amendment debated yesterday and any capping of fares. I look forward to hearing his remarks later, when the House will have an opportunity to vote on that amendment. Mr. Sherwood asked also for tax relief on season tickets. He clearly knows what he wants by way of a profitable deal—but it would cost taxpayers a lot more, they would get a lot less for their money and fares would be considerably higher. Grave doubts remain about bids being left in the hands of private operators, with no services being provided by British Rail.
    In the past few weeks, we have seen how much public opinion is swinging in favour of retaining British Rail, whatever criticisms might be made of it—and despite the fact that everyone knows that it is under-invested compared with European railways. Its financial support is only some 20 per cent. of that in Europe, which puts a great deal more into its railway systems, however one measures that. Europe has the common sense to acknowledge that if one places a rail network in the hands of entrepreneurs, they will be interested only in making a

    779
    profit. Their whole rationale is to make money, and their profits will have to be financed by a raft of subsidies that would increase the public sector obligation.
    Mr. Rathbone: The hon. Gentleman referred to a part of British Rail's network that affects my constituency. Many people have been deeply worried by scaremongering of the type in which the hon. Gentleman has indulged this afternoon—saying that this line will be closed down, that service will be stopped and fares will be increased. The truth is that Mr. Sherwood made an awful blunder when he made those statements, because he ruled himself out as a franchisee. The people in his company know that. His public relations adviser leapt down Mr. Sherwood's throat the day after he made that announcement on television, because he knew that it wiped Mr. Sherwood out of consideration as a franchisee on those terms.
    Mr. Prescott: I have often been told by Conservative Members not to lecture business men because they know what is in their own interest. I assume that Mr. Sherwood knew what he was talking about. After all, he took the Government to the cleaners when all the ports were privatised and he bought Sealink for about £40 million, and then sold the Isle of Wight services alone for £100 million. Mr. Sherwood made an awful lot of money out of the Government. If I were asked to judge whether the Government or Mr. Sherwood has the best commercial judgment, my money would be on Mr. Sherwood. I quoted him because he was to make one of the bids. Most of the other potential operators that the Secretary of State tells us about dare not raise their heads.
    As to Mr. Branson of the Virgin Group, since it was announced that he could not cherry-pick and enjoy open access, he is no longer interested. Stagecoach was also supposed to be interested. The service that it ran from Scotland lasted only four months. A change from public to private ownership brought collapse in four months, and then good old British Rail had to take over and restore the service. The public appreciate that where British Rail does not maintain a service, the private sector will look after its own interests.
    The argument is made that public management of British Rail is bad—but according to the White Paper, the Select Committee, and The Economist survey, British Rail's labour productivity is far in advance of any European system. That did not start with the present Government but has been true for 20 years, as studies made in the early 1970s show. As an innovator, British Rail introduced fast trains on conventional tracks and developed container ships ahead of anyone else. It has introduced innovation and techniques of which we can be proud.
    The problem is that the Government took £3 billion from British Rail's public subsidy, and it shows. There has been some attempt to regain that ground but—under, I admit, a number of Governments—British Rail has never received enough money to replace clapped-out rolling stock, most of which was ordered in the mid-1950s. That is the reason for its financial problems.
    It is argued that privatisation is better, and British Airways is often quoted in that context—but it had a massive writing-off of its debts. There was a change in Treasury rules, and British Airways made most of its profits at a time when it was a private company in public ownership. In many cases, the same management were
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    involved. To that extent, we cannot draw comfort from the suggestion that a change in ownership leads to an improvement. We must change the rules and some of the Treasury's attitudes to the public sector—we have been somewhat stupid about that—and we must recognise that simply changing the ownership is not sufficient to guarantee that the consumer is better off.
    Anyone who doubts that should ask Mr. Branson of Virgin whether British Airways is better under private ownership. Under public ownership, we could have sacked the board and chairman of British Airways for some of their deplorable practices and made it clear that such practices are not acceptable. As it is a private company, we cannot do so. The Secretary of State says that we cannot interfere and, despite my protests, the Civil Aviation Authority takes a similar view.
    The assumption that privatisation leads to improvements is not borne out by the examples of Tiger Rail and Charterail, which collapsed shortly after opening. Circumstances were difficult for them and their failure might not have resulted from poor management: other factors caused difficulties whether companies are publicly or privately owned.
    Can anybody say that bus privatisation has improved the bus industry? Five-year studies show that buses are older and that fares are twice as high. Services are poorer and the network is smaller. A privatised bus company has not met the requirements of a public network service.
    Mr. David Martin: Will the hon. Gentleman give way?
    Mr. Prescott: No, I do not have time.
    Interestingly, the Government did not deny the publicly owned bus service the right to bid for franchises. Much evidence tends to show that it is possible to allow public or private management to operate such services.
    We have a good opportunity to measure public management against private management. If the Secretary of State wants to go ahead with the privatisation of the east coast line, which may be more attractive to an entrepreneur, why not inject the £1 billion into the west coast line, where it is desperately needed, in the way that I have suggested—through a combination of leasing and different financing arrangements—and let the public sector run it? Let us have a competition between the strategic east and west coast lines to see which management performs best. I could readily accept that spur of competition, but it is not proposed under the Bill.
    One of the great difficulties is that British Rail may feel that it has no further role and that there is no need to improve because it will eventually be completely eliminated. That is wrong and the absurdity of it is emphasised by the fact that under European regulations French and other European rail companies will be exempt from franchise agreements and will be able to take over franchises on the east or west coast line. French rail companies can run our railways, but British Rail cannot. If that is not ideological nonsense from the Government, I do not know what is.
    The Government will not be able to prevent such takeovers because they are at the heart of decision making in Europe. They believe in a free market and competition and believe that French or German rail companies should be allowed to bid, yet they will not extend that right to British Rail, which is absurd.
    Mr. Nigel Spearing: Will my hon. Friend give way?
    Mr. Prescott: No, I cannot; other hon. Members wish to speak.
    Mr. Spearing: What about Union Rail?
    Mr. Prescott: I am sure that my hon. Friend will have an opportunity to deal with that. As my hon. Friend suggests, Union Rail could make a bid because it, too, is exempt.
    The new clause is a measure of good sense and I hope that the Secretary of State will consider it. It was well supported by Robert Adley, who constantly asked why British Rail cannot be allowed to bid for the franchise. If the Secretary of State wants to improve the Bill, the new clause is a useful and simple propositon. It would allow British Rail—which has the expertise, management skill and ability—the opportunity to show that, given the chance, it can operate services as well as anyone else. That is a fair opportunity for it, and without it British Rail will eventually become a second-class operation, offering only the services that other companies do not want. That is not a fair way to treat it. It would not be good for passengers and it certainly would not be good for British Rail. If the Secretary of State believes in competition, the least he can do is give British Rail an opportunity to compete.
    5.15 pm
    Mr. MacGregor: We know what the Labour party is seeking under the new clause—no change. It wants to continue with British Rail as it is. [HON. MEMBERS: "Hear, hear."] I am glad that some of them acknowledge that.
    Labour wants to continue with a monolithic, large state industry, with all the constraints and bureaucracies that that imposes, without the sharp incentives constantly to seek more customers—passenger and freight—that the private sector, through market pressures and disciplines, offers. That is what it hopes to achieve under the new clause.
    The hon. Member for Kingston upon Hull, East (Mr. Prescott) gives the impression that Labour would spend much more taxpayers' money on British Rail, but we all know that it would not.
    I am the first to acknowledge the considerable improvements that have been made in British Rail in recent years and the organising for quality initiative and the move to profit centres have helped. A new group of senior managers have benefited from those changes and are keen to take advantage of the opportunities that privatisation offers and to take up franchises under management buy-outs. [Interruption.] I acknowledge that that has to happen. I have said that throughout, but most people acknowledge that there is a need for further change and for further improvement. A monolithic nationalised industry imposes restraints on thrusting managers, and most people recognise that change is needed.
    But for the Labour party, the status quo is all very well, and that is what it aims to achieve under the new clause.
    Mr. Prescott: What status quo?
    Mr. MacGregor: The status quo of British Rail remaining entirely in the public sector and operating all the franchise areas.
    I have discovered from discussions with my hon. Friends that their position is different, and I should like to
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    deal with their concerns. Their first concern was about what would happen if no bid was made for a franchise or if no acceptable bid was made. I believe that the question of there being no bid is hypothetical, but the franchising director may conclude that a bid is not acceptable.
    Their argument is: do we not need British Rail to ensure that services in a franchise area continue to operate? The system that we have designed ensures that there will be no problem, because if the franchising director does not grant a franchise in response to the invitation to tender British Rail will continue to operate that service. That is the fail-safe.
    Mr. Stephen Day: I am grateful to my right hon. Friend for giving way, although I suspect that I will be less than helpful, for which I apologise. It is bizarre that apparently the Government do not think that British Rail is fit to tender, yet we shall rely on it if the franchise system breaks down. Surely there is some contradiction in that. Should not BR at least be given the option of bidding for services?
    Mr. MacGregor: I shall deal with those concerns later.
    If no bid is made for a franchise, there is not only the fail-safe; the position is better than that. We propose to set up shadow franchises. I announced yesterday what we think will be the remaining 18, but I made it clear that the figure is not set in stone. That fulfils our commitment to franchise the whole operation, but that will take place gradually with seven shadow franchises initially.
    The purpose is to ensure that the franchise area makes good operational sense and to establish a financial track record. After the shadow franchise has been set up, it will have to operate for a period before the franchise director issues invitations to tender. That is fairly obvious. People need the financial track record and information before marshalling their bids. It means that the bids can be measured against British Rail's existing operations and financial track record.
    If, in a particular case, the franchising director concludes that the bids do not give sufficient value for money compared with the existing British Rail operation, he will not grant the franchise. It will be a matter for the franchising director, and I do not want to interfere. Whether bids offer good value for money will be one of the conditions that the franchising director will have to bear in mind in granting franchises.
    It could be argued, therefore, that the British Rail operation—what it is already achieving—is effectively a bid. If British Rail is allowed to bid separately, there will be other consequences, with which I shall deal in a moment. However, that is how the scheme will operate, and that is where there is a difference between this country and Sweden.
    Sweden did not split the operation, thereby establishing a financial track record, so the basis for the bids was not the same. We have made it clear from the beginning that we are trying to inject private attitudes, discipline, marketing expertise and capital into the system. The existing Swedish railway had a huge advantage in making bids, with the result that only 3 per cent. of the bids went to the private sector.
    Secondly—
    Mr. Andrew Rowe (Mid-Kent): If one of the people showing interest in one of the shadow franchises is involved in an alternative form of transport, he will have

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    access to all the information—that is the purpose of setting up a shadow franchise. However, our experience of the channel tunnel rail link negotiations has been that, whenever the public have asked for any information of the slightest use in working out how much money is available for amelioration or other purposes, they were told that such information was commercially sensitive.
    What is sauce for the goose is sauce for the gander and, if potential franchisees are allowed access to the information, so should the unfortunate people who are trying to defend themselves against the worse excesses of the channel tunnel rail link.
    r. MacGregorWe are talking about two different things. In relation to the British Rail reforms, we want competition for the franchises, so we must provide the information to ensure a fair competitive basis on which bids can be made. That will be one of the franchising director's responsibilities.
    The second issue raised by my hon. Friend is very reasonable. The people who have over the years acquired the experience and skills to run the railways and who have delivered many of the recent improvements should have the opportunity to bid. In fact, they will have that opportunity and, I believe, to do so in a more attractive way than if they were operating simply as part of the monolithic British Rail structure. The opportunity will arise through management-employee buy-outs. In addition, we want to encourage such buy-outs and, as the House will know, we have arranged for financial assistance up to a limit of £100,000 to be provided to facilitate them.
    Therefore, those who have been operating the railways will have opportunities. It is not surprising that we have received 30 expressions of interest; we cannot have bids at the moment, because there is nothing for which to bid. However, I assure the House that, as I have moved around the country, I have met a considerable number of British Rail senior managers—as have my hon. Friend the Minister for Public Transport and the franchising director—who are keen to bid on the basis of a management-employee buy-out. I want them to have the suppprt and backing of British Rail, which will come through the financial assistance, and not have British Rail as a competitor.
    Mr. Prescott: I have received notice of a management buy-out seminar, which encourages managements to believe that the moneys available for the buy-outs or for the redundancies that could come with privatisation would be financed from the British Rail pension fund. Will the Secretary of State assure us that that will not be the case?
    Mr. MacGregor: The money that would be used for financial assistance for the buy-outs would come from the British Rail pension fund?
    Mr. Prescott: Or be used for the redundancies that may occur.
    Mr. MacGregor: Yes, I can give that assurance.
    I was saying, that I believed that management-employee buy-outs are a more attractive proposition with added benefits, because they enable those who were formerly or are currently working for British Rail to make their bids. Many will form consortia with the private sector, which will bring real advantages.
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    I have dealt with two of the issues which my hon. Friends have raised with me. I hope that what I have said makes it clear that their fears about both can easily be met and that, in fact, there is a real advantage in turning the experience of those in British Rail into a management-employment buy-out.
    There are several key points to the new clause. The purpose of our reforms is to get better passenger services by removing the constraints and bureaucracy of a huge nationalised industry, by adding private sector attitudes, approaches, disciplines, skills and experience to the commitment, skills and experience, of which there is an abundance among many British Rail staff.
    It will be achieved by going into the private sector and restructuring passenger services into smaller units. Briefly, they are the ways in which we seek to get better passenger services. We shall not achieve that aim merely by allowing British Rail to bid knowing that it will have huge advantages in framing its bid. I shall deal with that point in a moment.
    In relation to private sector involvement, invitations to tender are not only about getting more cost-effective services. Some people have referred to competitive tenders in local authorities as a parallel and said that people working in local authorities have been able to tender for services that they are already running. That was designed to achieve, and has achieved, considerable savings in local authorities by producing more cost-effective services.
    We certainly seek savings in the competitive tenders for the franchise—I am confident that we shall get more cost-effective services—but there is another purpose, which is to develop new opportunities and create new markets for passenger services, an opportunity that does not exist in the tendering for local authority services. Those new opportunities are better achieved by going to the private sector.
    In our debates I have frequently referred to the important issue of culture change. I continue to be struck by the fact that, when I meet managers who were formerly in nationalised industries and who now operate in the private sector in the same businesses, they frequently say that one of the most striking benefits of the privatisation process has been the culture change of having to operate in the marketplace and not within the public sector. That is why we seek to encourage management-employee buy-outs involving the private sector and to encourage competition with the private sector—management-employee buy-outs mean breaking the habits of a lifetime locked into a nationalised industry, public sector culture.
    If the nationalised industry bids against management-employee buy-outs on terms that inevitably favour the nationalised industry, one jeopardises the change of culture.
    Mr. Prescott: What about the French railways?
    Mr. MacGregor: The hon. Gentleman keeps talking about French railways, but that is not a model that we wish to follow. The TGVs are very effective, but I have two points to put to him. First, many people draw attention to the inadequacies of the French railways, apart from the TGVs, and many pay tribute to our InterCity services. It is not a case of French railways being so much better than ours right across the board.
    Secondly, the French taxpayer currently pays £1·3 billion a year to service the colossal debts carried by

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    SNCF. The equivalent latest figure for British Rail is £81 million, so it is not surprising that France's new Minister for Transport said that the French would have to tackle that problem. It is a heavy burden, and it is questionable whether that is the best use of scarce public expenditure.
    Mr. Peter Bottomley: I wonder whether my right hon. Friend would recap so that I could try again to understand why managers who want to make a bid or to propose an even more efficient way of running a service should not be allowed to do so from within British Rail.
    My right hon. Friend has convinced the House that it is reasonable to allow managers help to enable them to make a bid from outside BR, but we have not yet fully understood—at least, I have not fully understood—why they should not be able to make a competitive bid from within BR if they think that, within the organisation, they can make a better fist of it than they are allowed to do at present.
    Mr. MacGregor: I am not sure whether my hon. Friend means that such people should be allowed to bid while they are still part of BR but as part of an independent management-employee buy-out, or that they should be allowed to bid because they are BR.
    5.30 pm
    Mr. Bottomley: It seems to me that there are three options. The first is that people can leave BR completely and bid from outside. The second is that they can get some kind of help—my right hon. Friend said that up to £100,000 per bid would be available—to enable them to bid as if in future they would not be within BR. The third option would be for managers to be able to say, from within BR, that that is the way in which they would like to run the service within the organisation. I have not yet been able to understand why that third option is excluded, and why such bids cannot be tested against the others.
    Mr. MacGregor: Certainly the first two options are clear. People can leave BR; and people can be outside BR once the system is in operation. Managers will be allowed to remain within BR while they make their management-employee buy-out bid, but if the bid is successful, obviously they will have to move to a franchise outside BR.
    The real distinction is between those options and the third option. My hon. Friend suggests that BR itself should be allowed to bid for the franchise, as the Opposition want—
    Mr. Prescott: He has got it right.
    Mr. MacGregor: Of course I have got it right; of course I understand it.
    Mr. Prescott: Brilliant.
    Mr. MacGregor: Thank you very much.
    The third option would mean that people would bid not as a management buy-out or as a separate management, but as part of BR. [HON. MEMBERS: "Hear, hear."] That is precisely why the Opposition want that third option. That is what I have been saying all the way through.
    The Opposition want no change. They want BR to be able to manipulate the bids for the individual franchises
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    —they will not all come at once—so that it will always be able to undercut the competition. The interesting question is how BR can justify the claim that it will carry on as it is under the system, yet will be able to make a bid at a much lower level than it is currently achieving in its financial track record. That is the interesting question.
    Mr. Prescott: Yes.
    Mr. MacGregor: I am glad that the hon. Gentleman is following me, because we are now coming to the crunch.
    The answer to that question is that private sector bidders, including management—employee buy-outs, will make a realistic assessment of the business prospects for each franchise. They will have to, because that will be in the nature of the bid. They will know how much subsidy they will get for the next five years if they are successful, and they will know the risk that they are taking.
    They will know that they have to deliver what they believe they can achieve, and run a more cost-effective service according to all the terms of the contract, providing all the services, but at the same time increasing revenue. That is how the benefits will come. If BR were to bid against them—
    Mr. Snape: Will the right hon. Gentleman give way?
    Mr. MacGregor: Let me finish my sentence.
    If BR were to bid against such a bid, it would always tend to make the most optimistic assumptions, believing that, if its forecasts proved unrealistic, somehow or other the taxpayer would be there in the background to bail it out. That is not the way to achieve either the cultural changes or the improvements. That is the fundamental difference, and that is why I cannot accept the amendments.
    Furthermore, if it were felt that BR as a whole could bid for each franchise, that would undoubtedly undermine City interest. If BR were allowed to bid on every occasion, there would be a fear that it would be able to undercut every bid by one means or another. That is a crucial difference, and it is the reason why I cannot accept the amendment.
    Mr. Nicholas Winterton: My right hon. Friend has talked about the reasons why BR should not be able to bid for a franchise. Will he answer a specific question which he has been asked before in private meetings but to which, so far as I know, he has not yet given a full reply—he has certainly not given me a full reply? Is it not technically possible for the French railways to bid for a franchise within the United Kingdom? My right hon. Friend may say that that is unlikely, or that the French railways has suggested that it does not intend to make a bid, but is it technically possible?
    Mr. MacGregor: That is technically possible, but I should stress that the purpose of our policy, as we have made clear, is to introduce private sector management and expertise into the operation of the railways.
    Mrs. Gwyneth Dunwoody rose—
    Mr. MacGregor: Will the hon. Lady let me finish?
    At this stage, the draft guidance to the franchising director—there will be further drafts, but there will eventually be guidance and instructions to the franchising director—makes it clear that his principal objective will be

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    "to secure as soon as reasonably practicable … that the function of providing passenger railway services in Great Britain is performed by private sector operators".
    The franchising director will therefore want to examine most carefully any proposed bid involving a foreign public sector railway operator in order to find out whether that bid will assist him in meeting his primary objective.
    Several hon. Members rose—
    Mr. MacGregor: It is for all of those reasons that I believe that the Labour party—
    Mr. Hugh Dykes rose—
    Mr. MacGregor: I can answer questions later in the debate. I believe that the Labour party—
    Several hon. Members rose—
    Mr. MacGregor: There will be plenty of opportunitiy for my hon. Friends and other hon. Members to make their contributions, and I shall reply later.
    The Labour party seeks to perpetuate British Rail exactly as it is now. That is a fundamental difference, and that is why I cannot accept the amendments.
    Several hon. Members rose—
    Mr. Dykes: Will my right hon. Friend give way?
    Mr. MacGregor: Yes.
    Mr. Snape: There are Opposition Members who want to speak.
    Mr. Dykes: Does my right hon. Friend agree that the difficulty in his argument is that, both under our national laws and under European Community rules and regulations, SNCF could perfectly legally establish a genuinely private public limited company in Britain—10 per cent. of which would be owned by SNCF, or whatever —which would be able to bid on that basis? Theoretically, could not such a company win all the franchises?
    Mr. MacGregor: If SNCF decided to take a 10 per cent. stake in a company that made a bid, it would have to be clear that no state aid was involved in its contribution. Then the company would be able to bid. Presumably such a consortium would involve many United Kingdom participants, including some managers and employees attempting a buy-out. It would be for the franchising director to decide whether such a bid produced the best value for money.
    Mr. Snape rose—
    Several hon. Members rose—
    Mr. Snape: I am grateful to the Secretary of State; I presume that he is giving way to me.
    Madam Deputy Speaker: Order. May we be clear? Has the right hon. Gentleman concluded his speech, or is he giving way?
    Mr. MacGregor: I have finished.
    Mr. Snape: We are all left thoroughly confused, Madam Deputy Speaker. I wanted to ask the right hon. Gentleman a question, having watched him bog himself down in that way—it had nothing to do with the French, although I appreciate the dilemma in which questions from his hon. Friends place him.
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    It seems a strange proposition to say that when it comes to buy-outs managers still within BR will not be allowed to make a bid because their bid would be lower than it would be if those same managers were to mortgage their homes and attempt a management buy-out. I realise that I am no great intellectual in such matters, but I find the Secretary of State's proposition hard to accept intellectually. I should be grateful if he would enlarge on it when he sums up. He does not have a reputation as one of the great ideologues in the Government; he is known more as a number cruncher. I do not know whether he regards that as a compliment or an insult, but when he gives us all that stuff about a monolithic nationalised industry, and talks about the public sector in a derogatory way—
    Mr. MacGregor Indicated dissent
    Mr. Snape: That is what the right hon. Gentleman said. Those were the reasons behind his refusal to allow British Rail to bid for any franchises. It is a disgraceful insult to hundreds of thousands of people—managers as well as rank-and-file railway workers—who have spent many years working in the public sector for fairly low pay. Many of the managers have earned lower rates of pay then they might have been able to earn in the private sector. They did so because they felt that there was some public service ethos in running the railway system. For them to be written off and to be described as being part of a monolithic, nationalised industry does the right hon. Gentleman no credit. It is a totally inaccurate way in which to describe the diligent efforts of many thousands of people, including my own father who spent most of his working life on the railway system under both private and public ownership. He did not notice any dramatic change to a monolithic industry. It seems that Conservative central office may be writing the right hon. Gentleman's briefs in this debate because he has trotted out philosophical nonsense as a justification of a policy that. I find incredible.
    I do not know whether Conservative Members understand the basis on which railway franchises are to he allocated. I noticed some puzzled looks. The fact that the hon. Member for Harrow, East (Mr. Dykes), among others, had a few things to say and thoroughly confused the Secretary of State suggests that the right hon. Gentleman should go back to the drawing board.
    Surely it is a fundamental tenet of Conservative faith that the public sector should bid against the private sector. After all, as we have heard from the Secretary of State, Conservatives believe that the private sector is inherently more efficient. What are they so frightened of? The fact that those with the greatest experience of running the railway industry will be excluded on the spurious ground that they will undercut the private sector will not benefit the consumer, the passenger or the freight user in the long term, even if it were true. There is not a shred of evidence that it is true. To exclude the very people with the experience of running the railway industry goes to show how daft the whole Bill is.
    Mr. Nick Hawkins: Surely the whole point of my right hon. Friend's remarks is that the people with experience will not be excluded. They will be encouraged to participate in management-employee buy-outs. What will be excluded will be the monolithic structure. I am glad that the hon. Member for West Bromwich, East (Mr. Snape) has just mentioned the most

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    important people—the passengers. What we are trying to do in the Bill is to improve customer service. The people who most matter on the railways are the passengers. The railways are not run for the benefit of the employees. To listen to most Opposition Members, one would think that it was only the employees who mattered.
    Mr. Snape: The future of a once-great industry should not be decided on the basis of the personal ambitions of a callow youth from Blackpool. We are talking about the dismemberment of a railway industry. Let the hon. Member for Blackpool, South (Mr. Hawkins) think of this. We shall deal with the passengers and the benefits in a moment. Who exactly among the managers who run the railway now will run the railway while all this bureaucratic claptrap is being put together? Does the hon. Gentleman know, as he rushes to defend his own silly piece of legislation, no doubt in the hope of preferment in the future?
    The hon. Gentleman is the secretary of the all-party railways group. For him to defend this legislation suggests that at the group's annual general meeting we should have a serious look at his qualifications for the job. My goodness, the sooner he is an Under-Secretary of State at the Department of Health and therefore gagged and prevented from taking part in these debates, the sooner we shall have a bit of common sense brought into them.
    Mrs. Dunwoody: Come on. That is a bit much.
    Mr. Snape: Perhaps I over-promote the hon. Member for Blackpool, South.
    Mrs. Dunwoody: Northern Ireland?
    Mr. Snape: My hon. Friend says Northern Ireland—
    Madam Deputy Speaker: Order. What has this got to do with the new clause and the amendments under consideration?
    Mr. Snape: It has a great deal to do with the fact that those of us who know something about the railway object to the claptrap to which we have had to listen this afternoon, Madam Deputy Speaker. However, if you can contain the hon. Member for Blackpool, South and prevent him from making long interventions, I shall do my best to confine my remarks to the new clause—
    Madame Deputy Speaker: Order. I do not enter into bargaining propositions with hon. Members.
    Mr. Snape: That is very wise, if I may say so, Madam Deputy Speaker.
    Another fallacy peddled by the Secretary of State is that British Rail is the monopoly provider of public services. Where is the monopoly in the railway system? What is the monopoly against internal air services? We have privatised long-distance coach services. We in the United Kingdom are addicted to the company car. Where is the monopoly? This monopoly exists only in the minds of some of the sillier Conservative Members—
    Mr. MacGregor: Will the hon. Gentleman give way?
    Mr. Snape: I realise that I may have provoked the right hon. Gentleman into rising to his feet by saying that. I hope that this will be a very short intervention.
    Mr. MacGregor: The hon. Gentleman has pointed to other methods of transport in which there is competition within and competition between them. There is competition between all of them and within them in the private sector. Why does the hon. Gentleman think that the railways should be the main area of transport that can be run only by a single organisation and in the public sector?
    5.45 pm
    Mr. Snape: I do not think that. That is not what the Bill is about. The Opposition have acknowledged that there is a place for the private sector in the provision of transport. Of course, we have admitted that the state cannot possibly provide everything. The new clause and associated amendments are about giving British Rail under its current structure the opportunity to demonstrate that it can compete against the private sector on, to use an overworked phrase, a level playing field. There is nothing ideological about that. If the right hon. Gentleman is so sure of his facts, he has nothing to worry about because the private sector will win hands down anyway. To avoid facing the fact that there may be managers within the public sector who are every bit as well qualified, if not more so, than their private sector counterparts to make these bids, the right hon. Gentleman has to invent stories about them deliberately undercutting the private sector to preserve their own empires. There is not a shred of evidence for that.
    The right hon. Gentleman referred to 30 managers who had already expressed—
    Mr. MacGregor: Thirty-five.
    Mr. Snape: Thirty five? The figure has gone up already. A note has obviously come from the Box. One of the 35 managers who have expressed an interest wrote to me recently. He told me that he wrote to the Secretary of State saying that he thought that his plans to dismember the railway industry were extremely damaging and that they would have grave long-term consequences for the economy. He said that he received a letter back thanking him for his interest and enclosing all the documents necessary for him to make an application for one of the franchises. If the other 34 managers are like that, the right hon. Gentleman's case becomes even more questionable. From listening to him, I believe that it is pretty questionable already.
    Where are the parameters against which the bids are to be measured? There is none if British Rail management are to be excluded from the whole process. The right hon. Gentleman said that the regulator will, of course, look at how much the service costs under the existing British Rail network and will measure the quality of the bids against that cost. That presupposes that one can break up a national railway industry financially into 25 nice little compartments and that one can say that if running trains within one twenty fifth of the railway costs £X million, the franchise should be around £X million. I am not sure how well qualified the right hon. Gentleman is in accountancy. Again, it will be, to say the least, a fairly elastic process if that is how it will be done.
    We all know that the franchising director will accept the lowest bid for a particular group of services. I hope that the right hon. Gentleman and the Minister for Public Transport, the faithful Sancho, will agree at least on that.

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    Let us suppose that there was a bid of £20 million for a hypothetical group of services in the west midlands. Let us suppose that the existing BR managers, whether they had mortgaged their homes or not and whether they had decided to be capitalists rather than railway workers or not, said that instead of a £20 million bid for a half-hour service, they would bid £22 million for a 20-minute service. With their knowledge of the railway industry, they could perhaps do that with one extra unit and with two extra crews. Such a bid would be disqualified under the Bill.
    Mr. MacGregor indicated dissent.
    Mr. Snape: The Secretary of State shakes his head. He has already said that if the bid came from within the public sector, it would be disqualified. To throw away all that expertise purely for ideological purposes is nonsense.
    I appeal to Conservative Members, many of whom are here today, who have taken an interest in railway matters over the years to tell the Secretary of State that once again he has got it wrong. Not everyone—managers, employees or people in the salaried or wages grades—in the railway industry believes in what the Secretary of State calls an inefficient monolithic organisation. Many believe in the future of the industry to which they have given their lives. It is totally nonsensical and unfair to exclude those railway men and women from the whole tendering process. For that reason, Conservative Members—at least, those who care—should support this group of amendments.
    Mr. Hawkins: The concern of those whom I represent, who care about the railways as deeply as I do, is to ensure that the legislation works in practice. The importance of the new clause, and the reason why the Government are right to maintain their position that management and employee buy-out bids should be allowed but British Rail should not be allowed to bid, is that the railways should benefit from the skill and expertise of the people who understand the running of them and who can be encouraged to be involved in management-employee buy-outs. However, there should be every opportunity for customer service to be improved without the danger of the whole purpose of the Bill—to bring in private sector management and skills—being undermined. It will be undermined if, as my right hon. Friend the Secretary of State rightly said, the monolithic British Rail, as it has been for so many years, is allowed to bid in its own right.
    Labour Members seek to undermine the whole basis of the bid by allowing British Rail to undercut private competition. That change is unacceptable because it would ensure that all the customer complaints up and down the country about the unacceptable quality of British Rail services continue in the years ahead. We want to see an improved railway service. It is no good hon. Members such as the hon. Member for West Bromwich, East (Mr. Snape) talking about ideology. We are interested in serving the public. It is not possible for Labour Members to ignore the voluble and voluminous complaints that they get, as I get, about the appallingly low quality of many British Rail services. It is simply not acceptable for them to ignore the volume of customer and passenger complaints about so many lines, which have resulted from the mismanagement of so much of British Rail over so many years.
    I welcome the fact that, for the first time in a debate on rail —I have been a regular attender of such debates—the hon. Member for Kingston upon Hull, East (Mr. Prescott) said that he accepted that there had been both
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    management and employee failures in British Rail. One welcomes a sinner who repenteth and a conversion on the road to Damascus, however late it is. It is to be welcomed that at long last there is some acceptance on the part of Labour Members that there have been many things wrong with British Rail in the past. That is why it is so extraordinary that they are still arguing that British Rail should be allowed to bid. That would undermine the whole purpose of what the Government are doing, which is to bring in the fresh air of private sector management to improve customer service. Labour Members will be taken seriously on this issue only when they start talking about the volume of customer and passenger complaints.
    I shall refer to a point made by the hon. Member for Hampstead and Highgate (Ms Jackson). She suggested that the Government's response to new clauses tabled this afternoon was the result of pressure from an organisation called Save Our Railways. I have examined carefully the heavily hyped media launch of a Save Our Railways press release issued yesterday, which talks about a number of Conservative Members, including me, and the reaction of the public—in the view of Save Our Railways—in those Conservative seats. When one looks carefully at the press release—clearly, those members of the media who concentrated on it heavily in the past 24 hours did not look at it carefully enough—it makes it clear that 5,300 people in 53 seats were surveyed. The briefest acquaintance with statistics would show that that means that precisely 100 people in each seat were surveyed. That is hardly a statistically significant sample.
    The Save Our Railways survey referred to the feelings of a percentage of the people in each Conservative seat. The figures of 79 per cent. and 6 per cent. suggest that a large number of people were surveyed. However, if only 100 people in each seat were surveyed on their views of the various clauses, the figures of 6 per cent. and 9 per cent. show that only six people and nine people respectively were surveyed.
    Before the hon. Member for Hampstead and Highgate readily adopts a rail union-funded campaign, which claims to be all-party on the basis only that a single former Conservative Member, however distinguished, was involved in the launch of that campaign, she should examine the survey more carefully. When I look at the figures relating to my seat, I have the endorsement of 79 per cent.—79 of the 100 people surveyed agreed with my views on rail privatisation. That is a ringing endorsement and it is one of the reasons why, at the local elections last week, a rail union councillor was defeated and we won a seat from Labour.
    Madam Deputy Speaker: Order. Passing reference is one thing, but to expand it to an entire speech is another. The hon. Gentleman must return more closely to the new clause being debated.
    Mr. Hawkins: I am grateful for your guidance, Madam Deputy Speaker. I simply wanted to make the point that, despite the remarks of the hon. Member for West Bromwich, East, 79 per cent. of the people in my constituency who were surveyed by Save Our Railways agreed with me. That is a ringing endorsement of the Government's opposition to clauses such as new clause 24. It is one of the reasons why I support so readily my right hon. Friend's opposition to these suggestions.
    Dr. Marek: It is always a tell-tale sign that, when the Secretary of State is on a weak footing, he attacks Labour Members, and he did so on this occasion. He is shaking his head—he should look at the Official Report. During debates on other amendments, perhaps when he was about to give way or he was sure of his ground, he did not attack Labour Members.
    The Secretary of State said that the Labour party wants no change. I do not think that any Labour Member holds that view, because we all know that there are problems with the railway system in the United Kingdom—it is grossly underfunded, the rolling stock is old, the capacity to build rolling stock is in doubt unless action is taken and the system is understaffed. Frankly, one wonders how the industry ever gets a train to leave and arrive on time as it does. The staff manage to do that, despite all the handicaps under which they must work.
    The Secretary of State said that Labour Members want a large monolithic organisation to continue. I cannot subscribe to that. But I subscribe to the proposition that the railway system is a network, a system and a unity of its own. Wilfully dismembering the system without producing the slightest shred of evidence that the way in which the Government intend to do it is right is not in the interests of the country or of the passengers and customers.
    The Secretary of State did not mention the customers or the passengers. I agree that the hon. Member for Blackpool, South (Mr. Hawkins) eventually mentioned them, but the Government Front Benchers certainly did not. The Secretary of State should look at the Official Report tomorrow—and I shall do the same.
    Labour Members are worried that, if the changes come about—we can make general speeches on Third Reading —customers and passengers will not be able to undertake journeys from one station to another. Will passengers and customers have the security of knowing that, if they know that they must get up early tomorrow morning to catch the 7 o'clock train to somewhere, the train will run? I admit that trains do not always run on time now, but why add the extra danger that a franchising company that has bid too much or has not produced the figures that it expected when it was first given the franchise will go bankrupt or walk away from the operation at a moment's notice?
    If British Rail could bid for franchises, that would keep other franchise operators on their toes. Under the present circumstances, that would not happen. I would go a little further: I believe that there is a certain amount of dogmatic malice on the part of the Government against a nationalised industry such as British Rail and against the people who have run the service. The service has been understaffed and underfinanced. Employees have been attacked by the Government during the 10 years that I have been a Member of Parliament. The Government want to see the end of the nationalised industry and it does not matter to them how that is done. If the country has to suffer, so be it. I am afraid that that is how I look at it. That is why the Government are so keen to ensure that the new clause and amendments in this group are defeated.
    6 pm
    My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has tabled a new clause. I have tabled five amendments in this group. I suggest two ways in which British Rail could be brought into the operation to keep the private operators on their toes. The hon. Member for Ashford (Sir K. Speed) has tabled some amendments in
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    the group. I hope that the new clause or one of the amendments will be accepted today. Of course, we shall support the new clause tabled by my hon. Friend the Member for Kingston upon Hull, East, if he decides to press it to a vote. I should also be happy to support the amendment tabled by the hon. Member for Ashford.
    I am amazed at the lack of information that is sometimes given in the press. The leader in The Independent today is entitled "A concession to speed BR's sale." It talks about two questions and says:
    "The second of these questions is easier to answer. Far from being the leap into the dark its critics allege, private railways have yielded impressive dividends in Japan, Sweden and elsewhere."
    The leader makes no further reference to Japan, Sweden or anywhere else, but it is held up as an answer that the reader of The Independent can accept as the editors's judgment of whether the privatisation proposals are worth anything.
    We all know that in Sweden any success that has been achieved has depended crucially on Swedish railways being able to bid. It has been successful in about 79 per cent. of the bids. In many cases, it has turned loss into profit. What is wrong with that? If a national operator that is kept on its toes by private competition can turn lines from loss making into profit making in another country, why does the Secretary of State for Transport intend to prohibit that in the United Kingdom? There is only one answer to that question: it is because of dogma, malice and hatred of public service and public industry.
    I wrote down a few comments that the Secretary of State made. He said that he wanted to encourage management buy-outs. There is no difficulty in understanding why he wants to do that: it is because no one else can run the railway industries. So railway managers who have been slated by the Secretary of State in the past few years will suddenly be lauded by him because they will buy out the industry. Suddenly, they have a private entrepreneurial ethos. They will be completely different creatures. It is beyond me to understand why that should be the case and why, if there are constraints on British Rail, the Secretary of State cannot remove them.
    I admit that the Secretary of State is removing some constraints—for example, in freight operations. However, he could remove many of the constraints on British Rail without this dreadful Bill. If there were a referendum, I am sure that 90 per cent. of people would vote against the Bill. The Secretary of State also said that he wanted to restructure the industry into small units. If that happens, it will be more difficult for passengers to take a train from one station to another. The smaller the number of units, the more difficulty for the passenger and the customer.
    The Secretary of State also said that he wanted a culture change. My thoughts immediately went to the water companies, which are now charging outrageous amounts and cutting off the supply of water from more desperate people and families than ever before. That is the culture that the Secretary of State wants to introduce. He wants to sweep away the idea of public service. That may be possible in other circumstances, but it is not possible for the major, necessary utilities or for transport systems. An integrated national railway service is certainly one of those. Therefore, it should be kept together.
    If the Secretary of State were prepared to move some way, I would be prepared to accept that private capital and private interests should be brought in to keep the major provider of the network on its toes, as has happened in

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    Sweden. Sadly, that will not happen here. It is a great pity. The Secretary of State shows his dogmatic malice by refusing to accept any argument. For the sake of the country—and for the sake of his party, which will reap the rewards if the clause is accepted; but that is not a matter for me—I hope that there are enough Conservative Members who have not clone a deal. I hope that they have not done deals. I have not been party to the negotiations and talks which have been held. I hope that Conservative Members will have sufficient integrity to vote for the new clause or one of the amendments. If they do, it is just conceivable that they can rescue an awful Bill and turn it into one that might work.
    Sir David Mitchell: The new clause and amendments would allow British Rail to tender for franchises. I am glad that my right hon. Friend the Secretary of State intends to resist them. At first sight, the case for allowing British Rail to tender is superficially attractive. British Rail has all the resources needed to be a successful operator. It has a world of experience and expertise. It will be a continuing operator in other spheres of the railway service.
    However, the new clause and amendments would wreck the Government's purpose. They would fight off most private franchise operators for fear of unfair competition. British Rail would have disproportionate resources and much bigger muscle than any new franchise proposed operator. There is no way in which one could avoid cross-subsidisation between one set of contracts and another in a giant organisation such as British Rail.
    I remind my hon. Friends who may be considering supporting the new clause or amendments that one could not persuade potential private franchisers that there would not be artificial competition in a particular bid which it was preparing and spending money on. I am well aware that assurances would be given that the system could be policed, but it could not. I wish to give the House a read-across which illustrates that it would not be possible to iron out and prevent cross-subsidisation.
    I ask my hon. Friends to consider what has happened in local government. We all know that there are many examples where in-house bids have been made by local authority departments for contracts which have been put out to competitive tender. In many of those cases there have been artificially cross-subsidised bids. The Department of the Environment has issued 45 notices where it has suspected anti-competitive behaviour in the bidding. So far, it has had to issue 21 directions for either anti-competitive behaviour or failure to achieve financial targets set for the department concerned.
    In other words, we have a direct read-across where, in local government, insider bids, so to speak, have resulted in artificial competition. Everybody knows that, if British Rail were allowed to bid in similar circumstances, the same artificial competition would result.
    Mr. John Spellar: To me, 21 does not seem to be a bad average when one considers that in this country there are tens, if not hundreds, of thousands of contracts let every day under competitive tendering. To find only 21 with which something is wrong seems very good odds to me.
    Sir David Mitchell: I said that, so far, there had been 21. The hon. Gentleman must recognise that it takes quite a
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    long time for these things to work through the machinery of assessment as to whether, as suspected, an artificial bid has been put in.
    Quite apart from the possibility of a deliberate intention to have cross-subsidisation, one has to consider whether British Rail would know whether there were cross-subsidisation. There are a huge number of areas in which there would be opportunity for judgment on the allocation of central overheads and servicing costs; judgment on the period of write-off and how long rolling stock will last. All these matters of judgment will have a considerable impact on the level of the bid put in by British Rail in competition with a private operator.
    Mr. Dykes: Why could that not all he handled adequately by the franchising director? Why does my hon. Friend have so little confidence in that operation?
    Sir David Mitchell: Simply because, in a vast organisation such as British Rail, it would be possible to hide those costs. Let me give my hon. Friend an example.
    When I had the honour of serving as a Minister in the Department of Transport, British Rail came forward with a proposal to close the Settle-Carlisle railway line. We asked British Rail to give us its costs and takings. It was a monumental task to try to unravel the facts and get to basic figures upon which to form a judgment. At one point, British Rail said that it was very sorry, but it could not read the till rolls, so it could not tell us what the takings were.
    Against that background, I have to say to my hon. Friend that anybody from outside who seeks to investigate whether cross-subsidisation is going on will not have a snowflake's chance in hell of getting to the bottom of it.
    Mr. Harvey rose—
    Dame Elaine Kellett-Bowman rose—
    Madam Deputy Speaker: Mr. Nick Harvey—or is the hon. Gentleman giving way?
    Sir David Mitchell: Yes, Madam Deputy Speaker. My hon. Friend wishes to intervene.
    Madam Deputy Speaker: I am sorry. I thought that the hon. Gentleman had concluded.
    Dame Elaine Kellett-Bowman: We were very delighted that the Minister did not allow the wool to be pulled over his eyes, and the Settle-Carlisle railway survived.
    Sir David Mitchell: I will close by saying that this is a very powerful argument, which I hope will be found persuasive by my hon. Friends, for supporting the Secretary of State by resisting this amendment; it would frighten away prospective franchisees from bidding, thus defeating the Secretary of State's purpose.
    6.15 pm
    Mr. Harvey: From time to time, I am asked to explain to people what rail privatisation is all about and how it will work. When I inform them that the only operator in the country with any experience of running the railways is the one body that is explicitly barred from taking part in the franchise competition, they move from concern and doubt to complete astonishment and incredulity. Anyone—a butcher, a baker or a candlestick maker—with no

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    experience of running a railway, can bid; the only people who are specifically barred are the only people with any experience of running the railway.
    The hon. Member for Southend, East (Sir T. Taylor), who is not present, managed, ingeniously as ever, to get the European dimension into this argument, as did the hon. Member for Harrow, East (Mr. Dykes), from a rather different perspective, perhaps. But the fact is that an operator from anywhere in Europe can bid to run these franchises, while our own national railways are debarred from doing so.
    What will happen when there is only one bidder? Are the taxpayers not entitled to know that the cost of the franchise or the revenue from it will be preferable from their point of view to what British Rail could have achieved? British Rail, for all its faults, is a success story of a kind. In terms of train kilometres per staff member, it is half as good again as the European average. The Treasury support for it, at 0·14 per cent. of gross domestic product, is less than one quarter of the European average. It has more 100 mph-plus train services than virtually any other European country. The bidding process could improve this further, if the Swedish experience is anything to go by. In Sweden, the acceptance of the national railways' bids has improved the costs by 30 per cent.
    The whole idea that management buy-outs are the shape of things to come is nonsense. The picture that we were originally painted by the Secretary of State was that hordes of would-be private operators were being held back at the gates, such was their enthusiasm. But, as this debate has gone on over the months and we have smoked them out and distilled a little more clearly who the people are who have expressed this interest, upon which the hon. Member for West Bromwich, East (Mr. Snape) has already commented, it has emerged that the Government are pinning their hopes at this stage on management buy-outs.
    If these teams of managers have to take out second mortgages on their homes and stretch themselves to the limit to pay for the franchise, and then have to lease the rolling stock, where on earth will they find the money to make the investment that everybody realises the railways need to take us into the new century? They will be hamstrung in capital terms, in just the same way as management buy-outs in any other industry have been. They will not have the capital to make the investment that is needed, and they will not have any assets against which to borrow that capital.
    The hon. Member for Eltham (Mr. Bottomley) would want to see that the current British Rail operation could be beaten. He wanted them, as the amendment proposes, to put forward a formal tender. I have another amendment, which will come up presently, that looks at similar matters to these. In that, I call for the bidders to have to show that they can beat the projected British Rail operating costs. Supposing operators from abroad—SNCF, or whoever it might be—undercut the bids made by the private sector here: will the Government, for ideological reasons, insist on accepting an inferior bid from a British private sector bidder?
    The taxpayer and the National Audit Office have the right to ask serious questions if the bids coming in cannot beat the existing British Rail operating costs, or any bids
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    that come from a public sector, whichever public sector that might be. At a time when the Chief Secretary to the Treasury is canvassing the possibility of pensioners having to pay for prescriptions, or people having to pay for hospital beds, any suggestion that these franchises should be awarded on the basis of bids that cannot undercut the current British Rail operating costs is completely unacceptable.
    Why should the taxpayer have to pay for the ideology of a Government hellbent on pushing these things into the private sector? There may be a market there for the private sector to come in and run railway operations, and there may be not. It will evolve at its own speed. Surely keeping British Rail in the picture as an alternative in each and every case would enable the process to develop at its natural pace. It may be that the market will be able to take on the network over the next 20 or 30 years, but the Government are hellbent on doing it much more quickly.
    Keeping British Rail in the picture, making it quote for running the service and insisting on behalf of the taxpayer that anyone else must beat that would be the best way of running the system.
    Sir Keith Speed: This is an interesting debate, which goes to the heart of the Bill. When my right hon. Friend responded, he described some of my fears and those of some of my hon. Friends, but he did not deal with them all.
    I have a worry, which has been echoed on both sides of the House, that management buy-outs, excellent though they are—and I entirely support them—may run into financial problems. I am sure that there will be corporate plans and very good people. As hon. Members on both sides of the House have said, British Rail managers are very good, and I am sure that they would make a good fist of a management buy-out. However, if there is not the finance, and we are talking about seven-figure financing at least for most of these franchises, there could be real problems.
    I heard the powerful argument by my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell), but perhaps I could take it a stage further. If British Rail is not allowed to bid up front at the start, his fears about frightening off management buy-outs and the private sector will have been addressed.
    Let us take the London-Tilbury-Southend line, where, as I understand it—my hon. Friend the Minister for Public Transport will correct me if I am wrong—from 1 April next year there will be a form of shadow franchise by British Rail which will provide a yardstick against which the director of franchises will be able to judge the bids. Let us also assume that either one or two bids come in that are nothing like as good as British Rail, or no bids come in at all.
    My hon. Friend the Minister referred to such a possibility in reply to the hon. Member for North Devon (Mr. Harvey) in Standing Committee on 2 March, when he said:
    "I agree with the hon. Gentleman for North Devon in what was clearly a useful debate, which helped my understanding of what might happen in 1994. The franchising director should take into account the prospective results of the lines to be franchised. At the end of the day, the franchising director will be accountable to the NAO and the PAC for achieving value for money. The bid that he accepts will have to be compared with what the public sector British Rail would have cost the taxpayer to provide a comparable

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    service. That is a reasonable point which I have accepted." —[Official Report, Standing Committee B, 2 March 1993; c. 506.]
    So far so good; if we have either unsuitable bids or no bids, the service goes back to British Rail.
    However, what is there to give the management and staff the motivation to say, "Now we have this faute de mieux, we have to make a really good fist of it, because we have seen off the private sector or they are not interested"? We also have to consider the stability of the line and the services, so that services are not cut and fares do not go rocketing up.
    It is important that we at least devise a formula so that, without a shadow franchise or open bidding, where the private sector is unable or unwilling to take on a line, rather more motivation should be given to the people who made it possible—the managers and staff of that region.
    If my hon. Friend could address that point in a way that will make sense, presumably through the franchise director, some of us might be more easy. Otherwise it appears to me that, whatever happens, we are being ideological, and, at the end of the day, like many hon. Members who have spoken, I want a better rail system, particularly for the passengers, and the right motivation for the staff so that they can improve still further where they have the opportunity.
    In that spirit, when my hon. Friend winds up, I hope that he will be able to address not only those fears, but the real opportunities that exist for British Rail.
    Mr. Hugh Bayley: I start by declaring an interest: I am sponsored by the RMT union, but I speak on behalf of my constituency and all its rail employees. York is above all else a railway town. Until some four years ago when the BREL carriageworks were privatised, British Rail was the city's biggest employer by a considerable margin. Even now, one in 12 of the work force in my constituency work in the rail industry. either for British Rail of for ABB Transportation Ltd.
    The proposals in the Bill are likely to affect my constituency, my constituents and the prosperity of the city I represent as much as any other city in the country. At the moment, York is the headquarters location of two of British Rail's 10 zones. Within York itself, Regional Railways North-East employs 630 people; 400 of them are employed in the headquarters operation, so their jobs quite literally are on the line. If they are unable to make a bid to preserve their own jobs, they will have to take their luck with whoever it is, private sector operator or managment buy-out, that wins the franchise.
    The other zonal headquarters is the InterCity east coast main line headquarters which employs 1,400 people. It is a highly successful railway, something I wish those on the Conservative Front Bench would acknowledge without equivocation. The Government's franchising consultation and information document pointed out that the east coast main line made a profit of £220 million in the last year for which we have figures, a major achievement for any railway, public or private, and one which should not be just written off as a public sector incompetence that needs to be replaced by private sector initiative, if one is to believe the Conservative rhetoric, at the earliest opportunity.
    Despite building up the east coast main line into a highly successful and profitable service, the employees who have achieved that will not be allowed to bid for the business that they have built. The question, "Why not?"
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    has been asked by a number of Conservative Members. The only reason that the Secretary of State can give is that he does not believe that within the public sector there is the right attitude or culture to allow for the running of a successful rail service, despite one which is a showpiece for the whole of Europe having come about under British Rail's public sector management.
    If the Secretary of State believes, as I am sure he does because he would not have proposed the Bill and taken it this far if he did not, that competition will improve the performance, the quality and the cost of rail services in Britain, he should go for competition. He should let British Rail compete with allcomers. He has hardly been knocked over in the rush by private sector operators desperate to run rail services. If he does not allow British Rail to compete, in many cases he will have only one single bidder, one insider management buy-out bid. They will know that they are the only people running after the franchise, they will know that they are in a monopoly position and they will not have to put in a competitive bid. Who will have to pay the additional costs of running a service which has been won on franchise without there being any competition?
    One need look only at the ITV franchise bids to see that television companies which knew that they were up against competition had to make multi-million pound bids to win the franchise, whereas one, Central Television, discovered that it was the only competitor, bid —2,000 and got the franchise. That is not in the public interest in television terms, and it will not be in the travelling public's interest in railway terms.
    The staff working for British Rail, my constituents, do not want a silver spoon in their mouths. They simply want a chance to bid so that they can continue doing the jobs that they are now doing. They believe that they can provide a better service more cheaply for the passengers than can anyone else. I urge the Government to put that to the test.
    6.30 pm
    The Secretary of State says that British Rail cannot be allowed to bid because it might undercut the competition. In whose interest could it possibly be for a lower price not to go in for the same service? British Rail is not, as is suggested, a huge, bureaucratic, monolithic whole. It has already, with its organising for quality initiative, split itself into separate businesses that account financially for their activities in a businesslike way.
    If BR puts in a bid that is too low and it loses money, it will be under the same financial pressures as any private sector bidder. It would be absurd for BR, having won a bid, to come cap in hand to the Government and expect them to respond in any way different from the way that the Government would respond to Stagecoach, Sea Containers or any other company that underbid. The company in question would have to live with the financial consquences of a bad business decision. That is what the framework of the Bill is intended to achieve, and there is no reason why it should not apply equally to private and public sector entrepreneurs.
    Why allow, on the east coast main line, Richard Branson, Stagecoach, National Express Coaches or any other company to bid but not BR? The only answer seems to be that given by the Secretary of State this afternoon

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    —that he is afraid of public sector competition. The right hon. Gentleman shakes his head in dissent. Let him test his theory in practice and allow BR to bid.
    The same should apply to Regional Railways North-East. It is not a profit-making railway, but it provides a good public service at low cost. It is possible that another company could provide a better public service railway at lower cost. The Bill says that that must be tested by a competitive franchise bid. If there is to be competition, let BR put in a bid in its own right. If the Secretary of State does not allow that to happen, he will never know whether he has been sold a pup by the private sector franchise bidder which wins the franchise, because he will not have seen that bidder operate against the full range of competition.
    York city council recently commissioned a firm of transport consultants, a company which has become a household name during the consideration of the Government's privatisation proposals, to undertake some work. It commissioned Steer Davies Gleave to examine the employment implications of the Government's proposals on York. It concluded that, of the present 4,700 railway employees in York, privatisation would put 2,400 BR and ABB jobs at risk and would put 1,400 additional jobs locationally at risk.
    In other words, if, for example, the winner of the Regional Railways North-East franchise were to decide to locate its headquarters in the constituency of my hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell), those other jobs would not be lost to the country but would be lost to the city of York. We are speaking not simply of British Rail jobs that would be going. Netted off against the figures are the private sector jobs in York.
    The proposals would have a devastating effect on the economy of York. What does the Secretary of State think that that is doing for the morale of railway employees in my constituency? The result of debarring BR from bidding to continue running railway services against the competition will, I suspect, be that the best staff will progressively leave BR and go through management buy-outs or be head-hunted by private companies. They will leave and the expertise in running rail services that resides in those people will be lost to BR.
    The rump of British Rail will be left with a lower quality of leadership, management and perhaps even a lesser quality of engineering expertise. Yet the rump of British Rail will be expected to step in and save the railways when the franchise-winning private sector companies fail. British Rail will be expected to retain the expertise to save the Secretary of State's face if and when there is a private sector franchise failure. That is a possibility which the right hon. Gentleman must face.
    I meet regularly senior railway managers in my constituency. I assure the Secretary of State that there is no great enthusiasm for management and employee buy-outs. If it must happen, it will happen, but it will happen with a heavy heart because the people who have built up and managed the railway services, with their headquarters in York, want to carry on running them. If they have no other option, they will take the plunge, but they feel loyal to their present company. Why should that loyalty be chucked aside? Why should the staff and the team not continue to run the railway that they have built up into the excellent east coast main line?
    On the international front, the Secretary of State said that there was nothing in practice to stop SNCF or the
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    Belgian or German railways from bidding for a British railway franchise. Perhaps when local government refuse services were privatised people did not expect French companies to come in and scoop up the business. But they did, and while the Secretary of State says that he does not expect public sector railway companies from other EC states to come in and scoop up franchises, he acknowledges that that could happen because they have the right to do so.
    Where is the sense in allowing some less efficient European public sector railway operators to bid for franchises when highly efficient British Rail managers who have built up showpiece services are denied that opportunity? Indeed, if what is proposed is approved, I would expect it to be challenged in the courts under the rules of the single European market. I hope that judgment would go in favour of creating a real single market with a level playing field in which British Rail could compete against the competition on equal terms.
    On that basis, if British Rail could provide a better deal for the travelling public it would win, and if it provided a poorer deal, it would lose. That is provided for in the Bill, so it is a right that should go to British public sector railway companies in the same way as it will be going to foreign public sector railway companies.
    The position in Sweden bears examination because it is the only other country that has done what the British Government are proposing, namely, splitting the operation of track and infrastructure from the operation of trains. Track and infrastructure in Sweden remain in public hands, as is proposed for Britain under Railtrack, with independent operators bidding to run services. Nine out of 10 franchises have gone to Swedish state railways, but with cost savings to the public purse of about 30 per cent.
    The Government have said that the whole point of privatisation is to inject competition so that there is no monopoly—one set of rail managers will have to bid against another. Whoever puts together the best deal, in terms of quality and the cost to the travelling public, will get the work. That is all we are arguing for. Let us forget the rhetoric about trying to leave British Rail unchanged. We may have differing opinions on that, but we recognise that the Bill will go through. For goodness sake, let us give the BR managers who have built the east coast main line and competitive regional services such as Regional Railways NorthEast the opportunity to carry on doing the job that they have been doing.
    Mr. Dykes: I shall be brief, partly because I was not a member of the Standing Committee—a fact that I know will be greeted with enthusiasm in Scotland. Nevertheless, I have some important points to make.
    My hon. Friend the Member for Ashford (Sir K. Speed) should be credited with our gratitude for making some helpful suggestions and with the skill with which he has tabled amendments which we enthusiastically support. I also congratulate him on the dignified and intelligent way in which he has handled the campaign in the media.
    There has been a lot of interest in this subject, in part due to both a sentimental and an objective feeling about our late lamented colleague, Robert Adley, who knew so much about the railways. He was both a lover of the railways and a great expert in the nitty-gritty of the railways. The Government would be right to think meticulously about the importance of making concessions,

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    partly for this reason. It is not enough on its own, however, despite the eminence and skill of our former colleague, who was widely respected inside and outside the House.
    The Select Committee recommendations which our late lamented colleague produced with others amounted to a masterly series of suggestions for the Department of Transport. I am sorry if I sound naive—I probably always do—but it is quite wrong that Governments should always feel obliged to regard Select Committees as pestilential nuisances to be resisted at all costs. To think in that way is absurd and immature.
    My right hon. Friend the Secretary of State has often been credited not only with being courteous to the House but with other qualities. We sympathise with him, because we suspect that he is taking this legislation through with limited enthusiasm—particularly for the part of the Bill that excludes British Rail. I and many others fear that we are still living with the tail end of the Thatcherite Centre for Policy Studies era, which has given us so many of these bizarre ideas.
    However, in my Adjournment debate on 14 May I urged on the Government second thoughts about privatisation and deregulation—I was not referring to a bonfire of controls either. My fears in this respect were allayed by the excellent response that I received from my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh); who replied to the debate on behalf of the DTI by saying that the Government were not run by the Centre for Policy Studies. I was so moved by that truthful admission that I immediately realised that the Secretary of State for Transport was the ideal man to accept intelligent amendments to the legislation, including our amendment No. 57.
    My right hon. Friend is entitled to be irritated, as we are, by the fact that the lead amendment in this group takes the form of an Opposition new clause. I hope, however, that that will not rule out intelligent consideration of these matters and that he will be persuaded seriously to consider accepting amendment No. 57. I believe that my hon. Friend the Member for Ashford has not gone far enough with his appealing arguments that try to meet some of the Government's objections to British Rail being given an equal role in bidding for franchises.
    I must declare a general interest at this point, although it is wholly different from that declared by the hon. Member for York (Mr. Bayley). I am a founder shareholder of a City financial and communications company which, over the years, has been involved in most of the privatisations, together with other City institutions, the Treasury and Departments of State. Although this country has effected more privatisations than any other, I believe that enough can be enough. There is no shame for a Government in saying that we have come to the end of the privatisation period and that they will think twice before making any more such proposals.
    6.45 pm
    These days I am only a passive shareholder in the company—I have no executive role in it—although my wife is an executive employee. The company may be involved in giving advice to the Treasury, the Government and the Department of Transport on this proposal. It is not a privatisation in the conventional sense, and for that we are grateful. It aims to bring in franchising and to grant certain companies the franchises in question. That being
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    so, I find it illogical and offensive that British Rail should be excluded. The illogicality of the situation has emerged in our debate, and I believe that BR must be reincluded.
    Perhaps we could go for a compromise mechanism. My hon. Friend the Member for Ashford mentioned the problem of the motivation of BR management and employees if they are left in charge of some lines, areas or routes. British Rail would not necessarily bid on the same basis as management/employee buy-outs, and such employee buy-outs too must also be considered, and as private applicants. We would welcome them. There is general agreement about that. British Rail, however, should be allowed to be a bidder on the same basis as everyone else, bearing in mind the tremendous improvements that it has made in its operations and management, despite having been underfunded for years by a malevolent and mean Treasury. [Interruption.] I have said that often enough in the past; it is hardly a new utterance. If British Rail were permitted to bid as part of a segmented approach—its regions or local departments, as representing BR, might be entitled to bid—that might be one way around the difficulty.
    In a recent article in "The House Magazine" I mentioned the late lamented Member for Christchurch, and what I had to say bears repetition. I said that Robert Adley and his Committee colleagues
    "had already begun in the form of sensible advice to the Government on BR legislation. How nice it would be if just for once a Government could be seen to be really listening to the sagacious counsel that can come from select committees, instead of always resisting them".
    Members of the Select Committee and Opposition Members, if they were all obliged, however reluctantly, to accept this legislation, as amended in Committee and on Report, would probably agree that the single most important area in which the Government's mind had to be changed was this one: the exclusion of British Rail. I hope that my right hon. Friend can bring himself to reverse that tonight, perhaps by allowing localised components of British Rail, not British Rail as a whole, to bid. If he can, he will generate enormous gratitude on both sides of the House. He will not lose face; this is the new era of moderate conservatism, and a change of mind would fit in well with the return to Cabinet government and a listening Government. I hope that he will meet some of the legitimate objections that have been expressed by Conservative Members.
    Mr. MacGregor: I will reply briefly to some of the points, because I know that we have a great deal more to do tonight.
    The hon. Member for West Bromwich, East (Mr. Snape)—who is not in the Chamber—accused me of basing my opinion of culture changes on some ideological material from Conservative central office. That is not the case. It is based on talking to a great many business men and people who have been through the process of changing from the nationalised industries to the disciplines of the marketplace in the private sector. Time after time, I have met representatives of companies and organizations—PowerGen, National Power, British Airways, BAA and Eastern Electricity, to name but a few, and many representatives from the transport world such as long-distance coach companies—and they have told me that they have seen the benefits very clearly. It is one of the crucial reasons why we believe that the structure that we are proposing for British Rail will secure better services for

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    passengers and freight customers. My hon. Friend the Member for Ashford (Sir K. Speed) and I have talked through these matters and he has a very good understanding of them. Like my hon. Friend, I am not taking an ideological approach, in a political sense. What I am seeking is a system that will provide better services and better opportunities for staff.
    Taking my hon. Friend's example of the LondonTilbury-Southend line, he is right that the starting point will be that a shadow franchise will demonstrate the track record and financial results of British Rail's current operations. Many Opposition Members tend to think that the only way to improve the railways is to pour in huge amounts of taxpayers' money. The London-Tilbury-Southend line is a good example of where better management is already yielding better services. With the extra investment that has recently been agreed, it will be able to build on that. My hon. Friend is right: it is on the basis of an operating record under the shadow franchise that bids can be judged. That will be the yardstick.
    Let us take a hypothetical example and assume that the franchising director concludes—this may well not be the case—that the bids that he has received from the private sector do not give good value for money compared with the operating performance of London-Tilbury-Southend. He may decide not to grant a contract to any franchisee. It may also be that the management have decided not to bid for a management-employee buy-out at that time, for a number of reasons, but would like to do so in the future when they think that they might be able to make a better bid. My hon. Friend is right in identifying as one of the difficulties the possible demotivation of the existing management if they felt that another bid from someone else could come through within three months. I think that we are in a dynamic situation and that there will be all sorts of different circumstances in the franchises as we gradually move them around the country.
    There has been some misinterpretation in the press of my announcement yesterday. I want to make it clear, yet again, that, although we have announced all 25 potential franchises, we have also said that these will be gradually undertaken. This is a gradual process of franchising, as I made clear in the debate yesterday.
    I certainly do not wish to set a condition meaning that, for some time in the future, management and employees in, say, the London-Tilbury-Southend line could not bid for a management-employee buy-out, which might well be what they really wanted to do. I do not think that a clause or amendment could be constructed to deal specifically with my hon. Friend's point, but I accept it nevertheless: motivation for existing management and the stability of the operation are both very important in circumstances such as those that he described.
    My hon. Friend has raised the point in discussions with me and I have discussed it with my special adviser on franchising, who I hope will become the franchising director. He entirely agrees with my hon. Friend that this is an important point for him to take into account. I suggest that I give the franchising director guidance and instructions under clause 5, placing weight on the need to ensure motivation for existing management and the stability of the operation. I do not want to be stuck with the specific wording; obviously, we shall have to consider
    806
    the wording very carefully. I assure my hon. Friend, however, that we shall produce a second draft of the guidance and instructions before the end of our parliamentary debates.
    Let me tell my hon. Friend the Member for Harrow, East (Mr. Dykes) that, in my experience, the findings of Select Committees are not always resisted. If I am convinced that someone else has had a good idea, I will certainly take it on board. If my hon. Friend looks at the many recommendations in the Select Committee report, he will see that about four fifths of them have been accepted by the Government or, indeed, were met before final publication of the report. Of course, we disagree with some of them: the crucial one relates to vertical integration. I cannot go into it now, but there are good arguments on both sides.
    We have accepted many of the Select Committee's recommendations. Yesterday, for instance, I based my remarks about the remaining franchises on exactly the approach that it had recommended. In paragraph 419, the Committee expressed the following view on the issue that we are now debating:
    "There is a case for allowing BR, as well as individual groups of managers, to bid for franchises."
    I have explained why I cannot accept that case. However, the report continues:
    "At the least we recommend that the level of subsidy required by BR to operate a particular service should be weighed against any other franchise bids received."
    We have made it clear that that will be—in the words of my hon. Friend—a yardstick.
    My hon. Friends the Members for Blackpool, South (Mr. Hawkins) and for Hampshire, North-West (Sir D. Mitchell) made telling and powerful speeches. I know that my hon. Friend the Member for Saffron Walden (Mr. Haselhurst), who was a member of the Select Committee and was very much involved in our discussions, wanted to be present. I am sure that he would have made similar points about, for example, unfair competition, the disproportionate resources that British Rail would have and the huge disincentive for other bidders.
    Mr. Dykes: I would be grateful—as, I am sure, would others—if my right hon. Friend would answer the point about British Rail being allowed to bid, not as a single national organisation but on a localised structural basis.
    Mr. MacGregor: I have explained why I cannot accept bids from British Rail as a single national organisation and my hon. Friend the Member for Hampshire, North-West explained tellingly how difficult it would be to accept them on any other basis. I prefer to follow the points raised by my hon. Friend the Member for Ashford.
    We are talking about encouraging existing employees —management and staff—to participate in the bidding process. We are encouraging them to take the opportunity to continue to do the job. Of course, the new franchisees, having been selected, would want to employ and give new opportunities to many employees and of course the provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981 will apply. We are encouraging existing management-employee buy-outs. We want British Rail to establish an operating record against which bids should be judged: that means putting it to the test. We want to improve passenger services through a new structure—and that is what the Opposition are trying to prevent.
    Mr. Wilson: In the previous debate the Secretary of State gave something. We might disagree about how much he gave and whether it justified the withdrawal of the Tory new clause, but I do not quibble about what Tory Members did. In this case it is much more clear-cut because the Secretary of State has given nothing. Therefore, the position is clear for those who put their names to the new clause and, I should have thought, also for those who signed the report of the Select Committee, chaired by our late lamented colleague.
    In answer to the point made by the hon. Member for Harrow, East (Mr. Dykes) about the irritation of voting on a new clause tabled by the Opposition rather than an amendment tabled by Tory Members, we would have been happy if the vote had been on a Government new clause, but to ensure that there was a debate and that the issue was voted on, we tabled a new clause which in substance, content and spirit is no different from amendments tabled by Tory Members.
    7 pm
    As to the point about other state railways being allowed to bid, the Secretary of State blustered over it but essentially could not deny it. He is legislating for circumstances in which the French state railway, the Belgian state railway and the Irish state railway will be able to operate services in Britain. The only European state railway which will not be able to tender for the services is the British state railway. I find it very odd that a Secretary of State in a United Kingdom Government should legislate in that way.
    If the French state railway starts to run services into the heart of rural England, I am sure that the hon. Member for Harrow, East at least will join me in the hope that points such as Stafford and Southend will be included in the network. What an extraordinary thing for a British Government to legislate for. They cannot legislate against other state railways, but they are prepared to do so against their own, out of prejudice and spite.
    We went to the heart of the debate when the hon. Member for Eltham (Mr. Bottomley) stood up in genuine puzzlement and said that he could not understand why it should be possible for private companies to bid or for management buy-outs to take place, yet British Rail is not to be allowed to bid as an entity. The classic exercise in prevarication from the Secretary of State, as he shuffled around for his notes to find out how that was to be explained, told us more than anything he said.
    Eventually the right hon. Gentleman came up with two explanations: in summary, first, British Rail would be the lowest bidder and, secondly, the City would be deterred. Those are not convincing explanations. The Government want competition. Having gone through the exercise, if British Rail was the lowest bidder, would not that be a plus? Having regard to what the Government want to do, would not it be an advantage? British Rail would have to compete. It would have to prove itself the most competent and cheapest operator. The disciplines of competition would be imposed upon it and passengers would get the best possible service from among the bidders. What is wrong with that in the opinion of the Tory party, never mind the Opposition? Yet that option is to be closed, specifically because it would result in the terrible evil of British Rail winning by being the cheapest and most efficient.
    808
    The second reason was that the City would be deterred from investing in potential buy-outs because it would be constrained by the fact that there would be a cheaper bidder. In other words, the calculations of investors will not be based on the market or on competition, but on what they can get away with bidding for franchises in the absence of the most competitive alternative bidder. What a set of criteria on which to dispose of national assets.
    As to the alibi on management buy-outs, every Opposition Member agrees that if privatisation is to go ahead there should be attempts at management buy-outs. There is very little enthusiasm for them, but in many places the second last thing that people who have given their lives to the service of the railway want to see is the legislation going ahead. The last thing they want is that people with no previous connection with the railway and no experience of it should walk past them to take over what they have built up and their jobs.
    Inevitably, management buy-outs will be prepared and expressions of interest will be screwed out of managers in every area. The idea that there is a positive will for management buy-outs throughout the BR network is a fallacy. The Conservative party brief to its members told them to say that 30 management buy-outs bids were in course of preparation. They have had to retreat from that because it is untrue. The figure of 30 applies not to bids in preparation, for which the figure is zero, but to expressions of interest, which includes even that of Brian Scott in Great Western, who said specifically that he would not be interested unless there was vertical franchising. Having scraped together all the expressions of interest, the Conservative party misrepresented them as bids in course of preparation.
    There are three essential reasons why the management buy-out argument fails. The first is out of a sense of duty which should be felt on the Tory side to people who have worked within the public sector industry. Why, in order to participate in the brave new future, should managers, perhaps with young families and many responsibilities, have to mortgage their homes and get into debt? Why cannot they continue to act through the public service provided by British Rail?
    The second argument is that buy-outs are not for ever. Indeed, they can last for only a short time before being bought out again, so that we end up with straightforward privatisation. Many analogies have been drawn with the bus industry. I can quote a recent one in Scotland where Citylink bus company, the main arterial operator, which was the product of a management buy-out two and a half years ago for a bargain basement price, has been sold to a private operator to produce a monopoly. So in many cases management buy-outs do not last. They are bought out and become part of the private sector, with the result that many people who were involved originally and who gave their lives to the service are no longer involved. That is another argument against the management buy-out alibi.
    Thirdly, management buy-outs would lead to fragmentation of railways. While privatisation is a daft policy, fragmentation is a dangerous and potentially destructive one. The Government's determination to break up an integrated network into dozens of companies, to separate track from operators and then to separate those who are operating on the track, is the truly destructive aspect of the legislation. It is not addressed through the so-called solution of management buy-outs.

    809
    If French and Belgian railways can bid, let us speak for Britain. British Rail should be allowed to bid because it is likely to be the lowest bidder and the most experienced and efficient operator. If anything in Tory philosophy runs counter to that, it will be expressed in the Division Lobby. Let us put Britain first and let us support the right of British Rail to bid. Let us prevent the fragmentation of the railways on the basis of political dogma, with services being run by people who have no experience or qualifications to do the job.
    My hon. Friends and I, as well as some Tory Members, are fighting for the railways. If the legislation is passed and things go wrong, it is not to the Opposition alone that Tory Members will have to answer but to their constituents who, in overwhelming numbers, are opposed to and concerned about the destruction of British Rail for ideological reasons. Let the Government give us investment in the railways rather than ideology. That is the message from the country which should be listened to now and reflected in the Division Lobby.
    question put,That the clause be read a Second time:—
    The House divided:Ayes 290, Noes 309.

    Division No. 281]

    [7.8 pm

    AYES

    Abbott, Ms Diane

    Clwyd, Mrs Ann

    Adams, Mrs Irene

    Coffey, Ann

    Ainger, Nick

    Cohen, Harry

    Ainsworth, Robert (Cov'try NE)

    Connarty, Michael

    Allen, Graham

    Cook, Robin (Livingston)

    Alton, David

    Corbett, Robin

    Anderson, Donald (Swansea E)

    Corbyn, Jeremy

    Anderson, Ms Janet (Ros'dale)

    Cousins, Jim

    Armstrong, Hilary

    Cox, Tom

    Ashton, Joe

    Cryer, Bob

    Austin-Walker, John

    Cummings, John

    Banks, Tony (Newham NW)

    Cunliffe, Lawrence

    Barnes, Harry

    Cunningham, Jim (Covy SE)

    Barron, Kevin

    Cunningham, Rt Hon Dr John

    Battle, John

    Dafis, Cynog

    Bayley, Hugh

    Dalyell, Tam

    Beckett, Rt Hon Margaret

    Darling, Alistair

    Beggs, Roy

    Davidson, Ian

    Beith, Rt Hon A. J.

    Davies, Bryan (Oldham C'tral)

    Bell, Stuart

    Davies, Rt Hon Denzil (Llanelli)

    Benn, Rt Hon Tony

    Davies, Ron (Caerphilly)

    Bennett, Andrew F.

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

    Benton, Joe

    Day, Stephen

    Bermingham, Gerald

    Denham, John

    Berry, Dr. Roger

    Dewar, Donald

    Betts, Clive

    Dixon, Don

    Blair, Tony

    Dobson, Frank

    Boateng, Paul

    Donohoe, Brian H.

    Boyce, Jimmy

    Dowd, Jim

    Boyes, Roland

    Dunnachie, Jimmy

    Bradley, Keith

    Dunwoody, Mrs Gwyneth

    Bray, Dr Jeremy

    Dykes, Hugh

    Brown, Gordon (Dunfermline E)

    Eagle, Ms Angela

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

    Eastham, Ken

    Bruce, Malcolm (Gordon)

    Enright, Derek

    Burden, Richard

    Etherington, Bill

    Byers, Stephen

    Evans, John (St Helens N)

    Callaghan, Jim

    Ewing, Mrs Margaret

    Campbell, Mrs Anne (C'bridge)

    Fatchett, Derek

    Campbell, Menzies (Fife NE)

    Field, Frank (Birkenhead)

    Campbell, Ronnie (Blyth V)

    Fisher, Mark

    Campbell-Savours, D. N.

    Flynn, Paul

    Canavan, Dennis

    Forsythe, Clifford (Antrim S)

    Cann, Jamie

    Foster, Rt Hon Derek

    Chisholm, Malcolm

    Foster, Don (Bath)

    Clapham, Michael

    Foulkes, George

    Clark, Dr David (South Shields)

    Fraser, John

    Clarke, Eric (Midlothian)

    Fyfe, Maria

    Clarke, Tom (Monklands W)

    Galbraith, Sam

    Clelland, David

    Galloway, George

    810

    Gapes, Mike

    Mallon, Seamus

    Garrett, John

    Mandelson, Peter

    George, Bruce

    Marek, Dr John

    Gerrard, Neil

    Marshall, David (Shettleston)

    Gilbert, Rt Hon Dr John

    Marshall, Jim (Leicester, S)

    Godman, Dr Norman A.

    Martlew, Eric

    Godsiff, Roger

    Maxton, John

    Golding, Mrs Llin

    Meacher, Michael

    Gordon, Mildred

    Meale, Alan

    Gould, Bryan

    Michael, Alun

    Graham, Thomas

    Michie, Bill (Sheffield Heeley)

    Grant, Bernie (Tottenham)

    Michie, Mrs Ray (Argyll Bute)

    Griffiths, Nigel (Edinburgh S)

    Milburn, Alan

    Griffiths, Win (Bridgend)

    Miller, Andrew

    Grocott, Bruce

    Mitchell, Austin (Gf Grimsby)

    Gunnell, John

    Molyneaux, Rt Hon James

    Hain, Peter

    Moonie, Dr Lewis

    Hall, Mike

    Morgan, Rhodri

    Hanson, David

    Morley, Elliot

    Hardy, Peter

    Morris, Rt Hon A. (Wy'nshawe)

    Harman, Ms Harriet

    Morris, Estelle (B'ham Yardley)

    Harvey, Nick

    Morris, Rt Hon J. (Aberavon)

    Hattersley, Rt Hon Roy

    Mowlam, Marjorie

    Henderson, Doug

    Mudie, George

    Heppell, John

    Murphy, Paul

    Hill, Keith (Streatham)

    Oakes, Rt Hon Gordon

    Hinchliffe, David

    O'Brien, Michael (N W'kshire)

    Hoey, Kate

    O'Brien, William (Normanton)

    Hogg, Norman (Cumbernauld)

    O'Hara, Edward

    Hood, Jimmy

    Olner, William

    Hoon, Geoffrey

    O'Neill, Martin

    Howarth, George (Knowsley N)

    Orme, Rt Hon Stanley

    Howells, Dr. Kim (Pontypridd)

    Parry, Robert

    Hoyle, Doug

    Patchett, Terry

    Hughes, Kevin (Doncaster N)

    Pendry, Tom

    Hughes, Robert (Aberdeen N)

    Pickthall, Colin

    Hughes, Roy (Newport E)

    Pike, Peter L.

    Hughes, Simon (Southwark)

    Pope, Greg

    Hutton, John

    Powell, Ray (Ogmore)

    Illsley, Eric

    Prentice, Ms Bridget (Lew'm E)

    Ingram, Adam

    Prentice, Gordon (Pendle)

    Jackson, Glenda (H'stead)

    Prescott, John

    Jackson, Helen (Shef'ld, H)

    Primarolo, Dawn

    Jamieson, David

    Purchase, Ken

    Janner, Greville

    Quin, Ms Joyce

    Johnston, Sir Russell

    Radice, Giles

    Jones, Barry (Alyn and D'side)

    Randall, Stuart

    Jones, Ieuan Wyn (Ynys Môn)

    Raynsford, Nick

    Jones, Lynne (B'ham S O)

    Redmond, Martin

    Jones, Nigel (Cheltenham)

    Reid, Dr John

    Jowell, Tessa

    Rendel, David

    Kaufman, Rt Hon Gerald

    Richardson, Jo

    Keen, Alan

    Robertson, George (Hamilton)

    Kennedy, Charles (Ross, C&S)

    Robinson, Geoffrey (Co'try NW)

    Kennedy, Jane (Lpool Brdgn)

    Robinson, Peter (Belfast E)

    Khabra, Piara S.

    Roche, Mrs. Barbara

    Kinnock, Rt Hon Neil (Islwyn)

    Rogers, Allan

    Kirkwood, Archy

    Rooker, Jeff

    Leighton, Ron

    Rooney, Terry

    Lestor, Joan (Eccles)

    Ross, Ernie (Dundee W)

    Litherland, Robert

    Ross, William (E Londonderry)

    Livingstone, Ken

    Rowlands, Ted

    Lloyd, Tony (Stretford)

    Ruddock, Joan

    Llwyd, Elfyn

    Salmond, Alex

    Loyden, Eddie

    Sedgemore, Brian

    Lynne, Ms Liz

    Sheerman, Barry

    McAllion, John

    Sheldon, Rt Hon Robert

    McAvoy, Thomas

    Shore, Rt Hon Peter

    McCartney, Ian

    Short, Clare

    Macdonald, Calum

    Simpson, Alan

    McFall, John

    Skinner, Dennis

    McGrady, Eddie

    Smith, Andrew (Oxford E)

    McKelvey, William

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

    Mackinlay, Andrew

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

    McLeish, Henry

    Smith, Llew (Blaenau Gwent)

    Maclennan, Robert

    Smyth, Rev Martin (Belfast S)

    McMaster, Gordon

    Snape, Peter

    McNamara, Kevin

    Soley, Clive

    Madden, Max

    Spearing, Nigel

    Mahon, Alice

    Spellar, John

    811

    Steel, Rt Hon Sir David

    Wareing, Robert N

    Steinberg, Gerry

    Watson, Mike

    Stevenson, George

    Wicks, Malcolm

    Stott, Roger

    Wigley, Dafydd

    Strang, Dr. Gavin

    Williams, Rt Hon Alan (Sw'n W)

    Straw, Jack

    Williams, Alan W (Carmarthen)

    Taylor, Mrs Ann (Dewsbury)

    Wilson, Brian

    Taylor, Rt Hon John D. (Strgfd)

    Winnick, David

    Taylor, Matthew (Truro)

    Wise, Audrey

    Thompson, Jack (Wansbeck)

    Worthington, Tony

    Tipping, Paddy

    Wray, Jimmy

    Turner, Dennis

    Wright, Dr Tony

    Tyler, Paul

    Young, David (Bolton SE)

    Walker, Rt Hon Sir Harold

    Wallace, James

    Tellers for the Ayes:

    Walley, Joan

    Mr. Peter Kilfoyle and Mr. Jon Owen Jones.

    Wardell, Gareth (Gower)

    NOES

    Ainsworth, Peter (East Surrey)

    Coombs, Simon (Swindon)

    Aitken, Jonathan

    Cope, Rt Hon Sir John

    Alexander, Richard

    Cormack, Patrick

    Alison, Rt Hon Michael (Selby)

    Couchman, James

    Amess, David

    Cran, James

    Ancram, Michael

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

    Arbuthnot, James

    Curry, David (Skipton & Ripon)

    Arnold, Jacques (Gravesham)

    Davies, Quentin (Stamford)

    Arnold, Sir Thomas (Hazel Grv)

    Davis, David (Boothferry)

    Ashby, David

    Deva, Nirj Joseph

    Aspinwall, Jack

    Devlin, Tim

    Atkins, Robert

    Dickens, Geoffrey

    Atkinson, David (Bour'mouth E)

    Dicks, Terry

    Atkinson, Peter (Hexham)

    Dorrell, Stephen

    Baker, Rt Hon K. (Mole Valley)

    Douglas-Hamilton, Lord James

    Baker, Nicholas (Dorset North)

    Dover, Den

    Baldry, Tony

    Duncan, Alan

    Banks, Matthew (Southport)

    Duncan-Smith, Iain

    Banks, Robert (Harrogate)

    Dunn, Bob

    Bates, Michael

    Durant, Sir Anthony

    Batiste, Spencer

    Eggar, Tim

    Bellingham, Henry

    Elletson, Harold

    Bendall, Vivian

    Emery, Rt Hon Sir Peter

    Beresford, Sir Paul

    Evans, David (Welwyn Hatfield)

    Biffen, Rt Hon John

    Evans, Jonathan (Brecon)

    Blackburn, Dr John G.

    Evans, Roger (Monmouth)

    Body, Sir Richard

    Evennett, David

    Booth, Hartley

    Faber, David

    Boswell, Tim

    Fabricant, Michael

    Bottomley, Peter (Eltham)

    Fenner, Dame Peggy

    Bottomley, Rt Hon Virginia

    Field, Barry (Isle of Wight)

    Bowden, Andrew

    Fishburn, Dudley

    Bowis, John

    Forman, Nigel

    Boyson, Rt Hon Sir Rhodes

    Forsyth, Michael (Stirling)

    Brandreth, Gyles

    Forth, Eric

    Brazier, Julian

    Fowler, Rt Hon Sir Norman

    Bright, Graham

    Fox, Dr Liam (Woodspring)

    Brooke, Rt Hon Peter

    Fox, Sir Marcus (Shipley)

    Brown, M. (Brigg & Cl'thorpes)

    Freeman, Roger

    Bruce, Ian (S Dorset)

    French, Douglas

    Budgen, Nicholas

    Fry, Peter

    Burns, Simon

    Gale, Roger

    Burt, Alistair

    Gallie, Phil

    Butcher, John

    Gardiner, Sir George

    Butler, Peter

    Garel-Jones, Rt Hon Tristan

    Butterfill, John

    Garnier, Edward

    Carlisle, John (Luton North)

    Gill, Christopher

    Carlisle, Kenneth (Lincoln)

    Gillan, Cheryl

    Carrington, Matthew

    Goodlad, Rt Hon Alastair

    Carttiss, Michael

    Goodson-Wickes, Dr Charles

    Cash, William

    Gorman, Mrs Teresa

    Channon, Rt Hon Paul

    Gorst, John

    Churchill, Mr

    Grant, Sir Anthony (Cambs SW)

    Clappison, James

    Greenway, Harry (Ealing N)

    Clark, Dr Michael (Rochford)

    Greenway, John (Ryedale)

    Clarke, Rt Hon Kenneth (Ruclif)

    Griffiths, Peter (Portsmouth, N)

    Clifton-Brown, Geoffrey

    Grylls, Sir Michael

    Coe, Sebastian

    Hague, William

    Congdon, David

    Hamilton, Rt Hon Archie (Epsom)

    Conway, Derek

    Hamilton, Neil (Tatton)

    Coombs, Anthony (Wyre For'st)

    Hampson, Dr Keith

    812

    Hanley, Jeremy

    Mills, Iain

    Hannam, Sir John

    Mitchell, Andrew (Gedling)

    Hargreaves, Andrew

    Mitchell, Sir David (Hants NW)

    Harris, David

    Moate, Sir Roger

    Haselhurst, Alan

    Monro, Sir Hector

    Hawkins, Nick

    Montgomery, Sir Fergus

    Hawksley, Warren

    Moss, Malcolm

    Hayes, Jerry

    Needham, Richard

    Heald, Oliver

    Nelson, Anthony

    Heath, Rt Hon Sir Edward

    Neubert, Sir Michael

    Heathcoat-Amory, David

    Newton, Rt Hon Tony

    Hendry, Charles.

    Nicholls, Patrick

    Hicks, Robert

    Nicholson, David (Taunton)

    Higgins, Rt Hon Sir Terence L.

    Nicholson, Emma (Devon West)

    Hill, James (Southampton Test)

    Norris, Steve

    Hogg, Rt Hon Douglas (G'tham)

    Onslow, Rt Hon Sir Cranley

    Horam, John

    Oppenheim, Phillip

    Hordern, Rt Hon Sir Peter

    Ottaway, Richard

    Howard, Rt Hon Michael

    Page, Richard

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

    Paice, James

    Howell, Rt Hon David (G'dford)

    Patnick, Irvine

    Howell, Ralph (North Norfolk)

    Patten, Rt Hon John

    Hughes Robert G. (Harrow W)

    Pattie, Rt Hon Sir Geoffrey

    Hunt, Rt Hon David (Wirral W)

    Pawsey, James

    Hunt, Sir John (Ravensbourne)

    Peacock, Mrs Elizabeth

    Hunter, Andrew

    Pickles, Eric

    Hurd, Rt Hon Douglas

    Porter, Barry (Wirral S)

    Jack, Michael

    Porter, David (Waveney)

    Jackson, Robert (Wantage)

    Portillo, Rt Hon Michael

    Jenkin, Bernard

    Powell, William (Corby)

    Jessel, Toby

    Rathbone, Tim

    Johnson Smith, Sir Geoffrey

    Redwood, John

    Jones, Gwilym (Cardiff N)

    Renton, Rt Hon Tim

    Jones, Robert B. (W Hertfdshr)

    Richards, Rod

    Jopling, Rt Hon Michael

    Riddick, Graham

    Kellett-Bowman, Dame Elaine

    Rifkind, Rt Hon. Malcolm

    Key, Robert

    Robathan, Andrew

    Kilfedder, Sir James

    Roberts, Rt Hon Sir Wyn

    King, Rt Hon Tom

    Robertson, Raymond (Ab'd'n S)

    Knapman, Roger

    Robinson, Mark (Somerton)

    Knight, Mrs Angela (Erewash)

    Roe, Mrs Marion (Broxbourne)

    Knight, Greg (Derby N)

    Rowe, Andrew (Mid Kent)

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

    Rumbold, Rt Hon Dame Angela

    Knox, David

    Ryder, Rt Hon Richard

    Kynoch, George (Kincardine)

    Sackville, Tom

    Lait, Mrs Jacqui

    Sainsbury, Rt Hon Tim

    Lamont, Rt Hon Norman

    Scott, Rt Hon Nicholas

    Lang, Rt Hon Ian

    Shaw, David (Dover)

    Lawrence, Sir Ivan

    Shaw, Sir Giles (Pudsey)

    Legg, Barry

    Shephard, Rt Hon Gillian

    Leigh, Edward

    Shersby, Michael

    Lennox-Boyd, Mark

    Skeet, Sir Trevor

    Lester, Jim (Broxtowe)

    Smith, Sir Dudley (Warwick)

    Lidington, David

    Smith, Tim (Beaconsfield)

    Lightbown, David

    Soames, Nicholas

    Lilley, Rt Hon Peter

    Speed, Sir Keith

    Lloyd, Peter (Fareham)

    Spencer, Sir Derek

    Lord, Michael

    Spicer, Sir James (W Dorset)

    Luff, Peter

    Spicer, Michael (S Worcs)

    Lyell, Rt Hon Sir Nicholas

    Spink, Dr Robert

    MacGregor, Rt Hon John

    Spring, Richard

    MacKay, Andrew

    Sproat, Iain

    Maclean, David

    Squire, Robin (Hornchurch)

    McLoughlin, Patrick

    Stanley, Rt Hon Sir John

    McNair-Wilson, Sir Patrick

    Steen, Anthony

    Madel, David

    Stephen, Michael

    Maitland, Lady Olga

    Stern, Michael

    Malone, Gerald

    Stewart, Allan

    Mans, Keith

    Streeter, Gary

    Marland, Paul

    Sumberg, David

    Marlow, Tony

    Sweeney, Walter

    Marshall, John (Hendon S)

    Sykes, John

    Marshall, Sir Michael (Arundel)

    Tapsell, Sir Peter

    Martin, David (Portsmouth S)

    Taylor, Ian (Esher)

    Mates, Michael

    Taylor, John M. (Solihull)

    Mawhinney, Dr Brian

    Taylor, Sir Teddy (Southend, E)

    Mayhew, Rt Hon Sir Patrick

    Temple-Morris, Peter

    Mellor, Rt Hon David

    Thomason, Roy

    Merchant, Piers

    Thompson, Sir Donald (C'er V)

    Milligan, Stephen

    Thompson, Patrick (Norwich N)

    813

    Thornton, Sir Malcolm

    Wells, Bowen

    Thurnham, Peter

    Wheeler, Rt Hon Sir John

    Townend, John (Bridlington)

    Whitney, Ray

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

    Whittingdale, John

    Tracey, Richard

    Widdecombe, Ann

    Tredinnick, David

    Wilkinson, John

    Trend, Michael

    Willetts, David

    Trotter, Neville

    Wolfson, Mark

    Twinn, Dr Ian

    Wood, Timothy

    Vaughan, Sir Gerard

    Yeo, Tim

    Waldegrave, Rt Hon William

    Young, Sir George (Acton)

    Walker, Bill (N Tayside)

    Waller, Gary

    Tellers for the Noes:

    Ward, John

    Mr. Sydney Chapman am Mr. Timothy Kirkhope.

    Wardle, Charles (Bexhill)

    Watts, John

    Question accordingly negatived.
    Sir John Stanley: On a point of order, Mr. Deputy Speaker. Yesterday, the House had an extended debate on fares in relation to amendment No. 237. Winding up, my hon. Friend the Minister said:
    "The amendment was selected relatively late. I assure him that, before we come to amendments Nos. 239 and 244, which relate to much the same issues, my right hon. Friend the Secretary of State and I will reflect on the debate. We look forward to answering the points and, I hope, satisfying our right hon. and hon. Friends tomorrow with appropriate assurances."—[Official Report, 24 May 1993; Vol. 225, c. 678.]
    I should be grateful if you, Mr. Deputy Speaker, would confirm that it will be open to my hon. Friend the Minister of State, in the context of the debate on amendment No. 109, to fulfil the assurance that he gave yesterday and to respond with the outcome of the considerations that he and my right hon. Friend the Secretary of State gave to amendment No. 237.
    Mr. Deputy Speaker (Mr. Michael Morris): The Minister can certainly address the broad issues involved.

  Clause 2

    RAIL USERS' CONSULTATIVE COMMITTEES
    The Minister for Public Transport (Mr. Roger Freeman): I beg to move amendment No. 109, in page 2, line 28, leave out
    'for the purposes of this Part'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss also the following amendments: No. 239, in clause 64, page 69, leave out lines 33 to 41.
    No. 240, in page 69, line 41, at end insert 'or—
    (iii) the differential between the rates at which different classes of fare are charged for comparable services operated by the franchisee or franchise operator, and the Board;'.
    No. 241, in page 69, line 41, at end insert 'or—
    (iii) the differential between the average level of fares charged by the Board or any subsidiary of the Board for any class or description of passenger or in respect of any class or description of passenger service and the average level of equivalent fares charged under franchise agreements'.
    No. 242, in clause 65, page 71, leave out lines 12 to 20.
    No. 243, in page 71, line 20, at end insert 'or-
    (iii) the differential between the rates at which different classes of fare are charged for comparable services operated by the franchisee or franchise operator, and the Board';'.
    No. 244, in page 71. line 20, at end insert 'or-
    814
    (iii) the different between the average level of fares charged by the Board or any subsidiary of the Board for any class or description of passenger or in respect of any class or description of passenger service and the average level of equivalent fares charged under franchise agreements'.
    Mr. Freeman: This is a technical amendment, but grouped with it are others relating to important issues to which, with the leave of the House, I hope to respond later.
    Amendment No. 109 is the only Government amendment in the group, and it is required to extend the role of the consultative committees beyond part I. The need for it is predicated on amendments made in Committee, to widen and emphasise the committees' important role.
    The amendment will permit committees to discharge duties—for example, under section 56 of the Transport Act 1962 in respect of local railways such as the Tyne and Wear metro and the Manchester metro link. I am sure that the amendment has the broad agreement of both sides of the House, but I shall seek to say more later in response to points that I anticipate from my right hon. and hon. Friends.
    I will first respond specifically to issues that were raised in relation to amendment No. 237. You said, Mr. Deputy Speaker, that broad comments would be in order. My right hon. Friend the Secretary of State and I considered that amendment, which was selected for debate but not for a vote. We assure the House, and specifically my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) and others of our right hon. and hon. Friends who associated themselves with his remarks, that we accept their arguments.
    We undertake to reflect further on them and to bring forward an appropriate amendment in another place, which can be debated there and then return to this Chamber as a Lords amendment.
    That amendment should embody four principles. First, a duty should be imposed on the franchise director in respect of fares, and clause 5 is probably the most appropriate point for that to be introduced.
    Secondly, there should also be a duty in relation to fares exercised through the franchising agreement. My right hon. Friend understands that some services will run outwith the franchising arrangements, but, as my right hon. Friend the Secretary of State has already announced, it is the intention that existing railway services throughout Great Britain will be subject to franchises. Therefore, the agreements into which the franchising director will enter will cover all services.
    Thirdly, that duty should cover not just services where there is a monopoly but also cases in which it is not possible to identify services as purely monopolistic. My right hon. Friend and I understand concerns that, even with those services subject to full competitive pressures, such as some InterCity services, the operator—perhaps unwisely and incorrectly—will seek to increase fares, and that would cause concern to passengers. In a competitive market, the operator would undoubtedly lose passengers. However, I confirm that third principle.
    Finally, as to the criteria that the franchising director should use in including in agreements provisions relating to fares, we accept that the director himself should be under an obligation to care for the interests of passengers, using his own judgment of what is a reasonable level of fares.

    815
    I may be able to respond later in the debate particularly to amendments that are not in the Government's name but to which I anticipate I will be able to respond positively and favourably.
    I repeat the assurance that we will return to the point with an amendment in another place that I hope will meet the four criteria to which reference was made in the debate. Although the amendment is not actually for debate, I hope that that will satisfy my right hon. and hon. Friends.
    7.30 pm
    Mr. Wilson: We have listened with interest to the Minister's comments. This is the third debate today in which Ministers have responded to amendments moved not only by Labour Members but by Conservative Members.
    Although the Bill's structures are being left intact—Labour believes that the Bill is fundamentally flawed and that it will come to grief in the end—the statements that the Minister of State and the Secretary of State have made today, if acted on, will have a major effect.
    The franchising director is being given extraordinary powers. We heard earlier that the franchising director will impose conditions for concessionary fares. That enormous responsibility is being transferred to the franchising director. We now hear—I make no complaint about it, but welcome it—that the franchising director will have the power to regulate fares on both franchised and non-franchised services.
    That is all very well if it is loosely in line with what the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) was saying last night or with the objections of other Conservative Members, including the hon. Member for Southend, East (Sir T. Taylor), but it leaves the question of where the money will come from. That is the next stage of the debate. The debate does not end when the legislation is enacted.
    If we can take at face value the assurances that are being given—that fares will be controlled by the franchising director and that the existing structure of concessions for at least the three named categories will be imposed by the franchising director—we are certainly not talking about a free market in railways or market forces. We are talking about a substantially more regulated railway than we have at present. I do not complain about that, but it strikes me as odd logic in Tory policy, as constrained by the understandable objections of Conservative Members.
    Whether it will work out like that is another question. The crunch will come—perhaps in 1995—when a franchisee says, "It's impossible. We entered this with good will, but the subsidy is not high enough. We need to raise fares by 25 per cent. to get a reasonable return." According to the Minister—I was pleased to hear it—the franchising director's duty will be to say, "No, you're not. You will increase fares by what I allow." Presumably he will take account of what the Government tell him, some of the political pressures prevailing at the time and a range of other circumstances.
    I assure Ministers that every Opposition Member will ensure that the franchising director is known to the public as a creature of Government and not an independent spirit. The franchising director will have to take tough decisions. He will have to tell franchisees, "Yes, you can increase fares by 25 per cent.", in which case the
    816
    opprobrium will fall on Ministers; or, "The rate of inflation is 5 per cent. so you are getting only 7·5 or 10 per cent."
    At that point, the franchisee will say, "If I am getting only 10 per cent., I still cannot make ends meet, so I shall withdraw X number of services, and what are you going to do about that, Mr. Franchising Director?" Such situations will arise sooner rather than later.
    It has been explained to the Minister time and again, primarily in the context of the Department of Transport's own document on bus privatisation in the mid-1980s, that the Government cannot create monopolies under a franchise system and have any realistic hope of controlling them. What the Government set out to do was to create private monopolies under the guise of franchises, and not control them.
    For months in Committee and throughout our debates, we have heard that there will be no need to control franchisees because the invisible hand of the market will work wondrously for the Government. It has been argued that concessionary schemes or fares and a control mechanism for fares are not necessary, because the market will sort it all out.
    Today, we have witnessed a spectacular reversal in Government policy, because such matters will now be controlled not by the market but by the franchising director. That is the beginning of the Government's troubles rather than the end of them. They have had to yield to the proper concerns of Conservative Members, which Opposition Members have been expressing for months.
    The important point is that the Government have yielded. We now have it in black and white, and it will be written into the regulations and the record of our debates, that the franchising director will be responsible for functions and for setting fares.
    The franchising director is the creature of Government. When the inevitable conflict arises between franchisee and franchising director, and the franchising director is faced either with the possibility of losing the franchisee or yielding to his demands, we shall return to this debate and say, "It is not the market's fault; it is not the franchising director's fault; it is not the franchisees' fault; it is the fault of the people who put all this in place to start with."
    Sir John Stanley: I begin by warmly welcoming the significant policy statement that my hon. Friend the Minister of State made at the beginning of the debate. He said for the first time in our proceedings on the Bill that the Government have accepted the principle of reasonableness in relation to fares and franchised routes and that it should be written into the legislation.
    Secondly, the Government have accepted—again, for the first time in our proceedings—that the franchising director should be responsible for fares. Thirdly, they have accepted the important point that the franchising director's duty on fares should apply not merely to the so-called monopoly routes but to routes generally—in other words, right across the country.
    That represents three very significant policy shifts, which I welcome, but all three points were embodied in amendment No. 237, which my hon. Friends and I tabled and which was debated yesterday. The slightly niggling, gnawing question at the back of my mind is the revised wording of amendment No. 237 that my hon. Friend the Minister will propose. I have much faith in my hon. Friend

    817
    and I wait with interest to see what he proposes. I earnestly hope that the amendment will not water down the clear impression that he has given the House today about the important policy points that he has now accepted.
    Mr. Prescott: It was indeed a significant statement by the Minister of State because it finally did away with the pretence that the market will apply. Previously, supply and demand determined price, but now the franchising will do so. The hon. Member is concerned about reasonableness, so does he believe that, if the franchise operator is not prepared to work at a price because he believes that he cannot make the required profit, it is reasonable to expect good old British Rail to operate at the same price?
    Sir John Stanley: I am speaking to the amendment in relation to fares, but my answer to the hon. Gentleman is that British Rail is working on a different financial basis. Routes that remain in British Rail's hands will have access to Government subsidy, which may not be the case for franchised routes.
    I deal now with this group of amendments, in particular the four tabled by my colleagues and I—Nos. 239, 241, 242 and 244. It may be helpful if I explain that the four amendments have a single common purpose and then why we have tabled four. The common purpose is to ensure that the new statutory bodies created under the legislation to look after the interests of the consumer have the ability to deal with the central issue of fares.
    The four amendments should be regarded as two pairs —Nos. 239 and 242 should be taken together. Amendment No. 239 deals with the central committee and No. 242 with the regional committee. They would remove any inhibition or limitation on the ability of the consultative committees to consider fares. The second pair of amendments—Nos. 241 and 244—are slightly more narrowly drawn and would enable the consultative committees, both central and regional, to consider the differential between the level of fares on franchised and non-franchised routes.
    The second pair was tabled against the possibility that the first pair was not selected because the first pair was debated in Committee and therefore risked not being selected. As both pairs have been selected, I shall speak to amendments Nos. 239 and 242, the first pair, which would provide much the best arrangements for consumers and ensure that nothing in the Bill could in any way constrain the ability of the consultative committees to consider fares.
    We are debating this policy from what I regard as an eccentric start in the initial print of the Bill. The Bill sweeps away all existing consultative committees and replaces them with major new committees—the national body with the singularly grandiloquent title of the Central Rail Users Consultative Committee, and its nine satellites, the regional consultative committees. They are the bodies, above all others, to which the consumers will have to look to safeguard their interests in all aspects of rail travel.
    I find it extraordinary that, the new bodies having been created, they are debarred from involvement in the issue that is possibly of most concern to consumers or the rail travelling public—the level of fares. On Second Reading I drew attention to clause 65(2) which achieves that. It states:
    818
    "Nothing in subsection (1) above shall entitle a consultative committee to investigate any matter relating to…arges made for any service or for the use of any railway facility".
    We are left in the extraordinary position of creating new bodies to look after consumers' interests, but debarring them by law from having any involvement in the scrutiny of fares.
    To their credit, my right hon. Friend the Secretary of State and my hon. Friend the Minister of State have gone some way to modify the situation. They did so in Committee and have now conceded that the consultative bodies should have some involvement in fares. However, although the principle is conceded in the Bill, it has not been conceded in relation to all fares. The consultative bodies can examine special and discounted fares, but not the generality of fares. We are faced with the absurd situation in which it is possible for the committees to examine fares for the disabled but not the able bodied, and fares for the very old or the very young but not the middle aged, and here I declare an interest. The types of fares that can be considered are divided into fish and fowl—ome can be considered and some cannot.
    The purpose of amendments No. 239 and 242 is simple. They would sweep away the remaining prohibition and enable the important consumer protection bodies to consider the generality of fares. I urge my right hon. Friend and the Minister of State to accept them. My right hon. Friend has conceded the principle and I hope that he will now be bold and brave, accept the logic of what happened in Committee and allow the consultative bodies to examine all fares without limitation.
    7.45pm
    . David RendelIt is pleasant on what is only my second speech in the House to be able to agree with much of what has been said by Conservative Members. I believe that this group of amendments goes to the heart of privatisation. To my mind, whether or not one agrees with it, privatisation passes power from the community to the shareholder. Some of us will support that and some will not but, whatever we think, when power is passed from the community to the shareholder, it is crucial that the watchdogs that look after community interests should be strengthened, not weakened. I believe that that is why the amendments have been tabled.
    There are two main failings in the suggestions about the way in which the consultative committees will work. As I understand it, the consultative committees can comment on such vital issues as whether the snow in winter is or is not of the right sort for the rail service, but they cannot comment on issues that most users might think rather more important. I am thinking in particular of fares, which have already been mentioned, and the possible cutting of services.
    I shall deal first with the cutting of services and wish to comment in particular on the fact that one of the main worries in my community is that the fast, long-distance trains running between London and the west country, some of which currently stop in our community, may not do so in the future. The franchisees may decide that it is more profitable to run such trains straight through to the west country without stopping at stations such as Reading, Thatcham and Newbury. Clearly, that would be to the disadvantage of the people whom I have come here to represent, and I have no doubt that the same problems

    819
    face other communities. It is therefore important that the consultative committee that will look after the interests of my constituents and others has the opportunity to comment and to ensure, if possible, that such cuts do not happen.
    The second issue of prime importance is the level of fares. If there is no train at all, one cannot use the rail service, but, if the train is too expensive, one may also not be able to use the rail service. Therefore, the question of fares is crucial to all rail users. Clearly, the user representatives should be able to comment on the comparisons between charges made by various franchisees and British Rail for the same service. That is why my colleagues have tabled amendments Nos. 240 and 243, and I shall speak to them on their behalf.
    If we cannot make such comparisons between the levels of charges in different parts of the country, we will lose a significant right in terms of the representations that can be made to the powers that be.
    The right of committees to comment is also being circumscribed, and I believe that it should be strengthened. In particular, their reports must not be restricted in any way; they should be published openly and be as widely available as possible. That is what gives the committees the powers that they need. If the amendments are not accepted, the watchdogs that we now have are in danger of being emasculated. They should be strengthened; they should not be turned into the Government's poodle.
    Mr. John Horam: I welcome what my hon. Friend the Minister for Public Transport said about fares, and I hope that he will elaborate further in his concluding remarks. I also welcome what my right hon. Friend the Secretary of State said about concessionary fares and travelcards. We all know how important those are in London, and I am very pleased with the concessions the Government have made today.
    My question arises from my hon. Friend the Minister's introductory remarks, in which he referred to yesterday's debate and elaborated three new principles that he wanted the franchising director to take into account. My question is simple: what is the standing of the franchise agreement? I presume that all the details of any particular franchise agreement will be fully in the public domain and the public will know exactly what it will contain. The logic of the Government's position, as I understand it, is that any franchise agreement will initially be based on the existing services, schedules and performance targets for an area. Therefore, surely there can be no commercial secrecy about exactly what is involved in the agreement. It will be a matter of open record, against which the performance of the franchisee will be judged. That is an important consideration, and I should like my hon. Friend to comment on it and to tell me, for the record, whether I have understood it correctly.
    Dr. Marek: Amendment No. 237 was tabled by the right hon. Member for Tonbridge and Mailing (Sir J. Stanley). It is important that when the Government table an appropriate amendment in another place—as they said they would—the phrase "reasonable to consumers" is always borne in mind. It is vital that the word "passengers" or "consumers" should accompany the word "reasonable", because we can use that word in all sorts of other senses.
    820
    If the Government now accept that principle—I welcome that prospect—it cuts the ground from under their feet regarding their argument in Committee, when they refused to let the consultative committees talk about fares, except in a restricted sense. It is true that the Government moved a little, but they should now think again. Fares will no longer be left to the open market and, therefore, be outside the vires of any consultative committee, because the franchising director will now decide an upper limit for what is reasonable. Therefore, it should be within the powers of the consultative committees to pronounce on the subject.
    I hope that the Government do not resist the amendments. If they do, they will have to explain carefully why, having resisted them in Committee on the ground that the market rather than any consultative committee would decide such matters, they have now accepted the amendment tabled by the right hon. Member for Tonbridge and Mailing which says that the franchising director rather than the unfettered market will decide. The Government will have either to accept the amendments or use a completely new and different argument as to why they should not be accepted.
    Mr. Mark Wolfson: I warmly welcome the commitment by my hon. Friend the Minister to give the franchising director the clear additional powers over fares, and I look forward to the amendment that will return to the House following the debate in the House of Lords on the issue. Yesterday when we debated the issue I said in an intervention that in rail privatisation we lacked an individual who was comparable with regulators in other privatisations, in his role concerning price control. I hoped that Ministers would respond to what was said yesterday and increase the opportunity for the franchising director to play a full part in the setting of fares, and I entirely welcome the movement from Ministers today.
    I also wish to support the other two amendments tabled by my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley), which deal with the involvement of the national and regional consultative committees and their ability to comment on and to have an input into fare levels. My right hon. Friend was right to say, especially in view of the amendments made in Committee to allow the consultative committees to have a say on special fares of various kinds, that it was illogical that they were not allowed to comment—indeed, they were positively disbarred by law from commenting—on the fares that most people would pay. I therefore support the amendments and I look to my right hon. and hon. Friends to respond positively to the pleas of the House.
    Mr. Peter Bottomley: We are discussing Government amendment No. 109, which would leave out the words
    "for the purposes of this Part"
    from subsection (2). Yet subsection (4)(a) states that
    "subsections (2) and (3) above and subsections (6) to (8) below"
    do not apply. I do not ask my hon. Friend the Minister to answer my question now, but will he consider whether that really means what the Government want it to mean? Subsection (3) seems to refer to the fact that there
    "shall be one consultative committee for Scotland and one for Wales",
    whereas subsection (4) says that
    "the London Regional Passengers' Committee shall be treated as the consultative committee for…London',

    821
    and will not therefore be appointed by the regulator. That is a slightly technical point, and maybe the Government have got it right, but I should like them to check before the provision goes to another place.
    I have tried to avoid making this point too often in the House, but as the representative of people in my constituency who use the trains in London, I must emphasise that the rail service into London is one of the most vital services for people in Eltham, as for many others, especially in south London. My constituents are interested in their existing services being, maintained, and preferably not deteriorating, as is happening on Sundays. They also hope that there is a reasonable prospect of services improving. Better rolling stock—that is coming. More reliability—that may come. More capacity—that will come if the Thameslink 2000 improvements outside London Bridge and Borough market take place. Those prospects may not fall entirely within the amendments, but my constituents are keenly interested in them.
    I have a slight worry on the fares issue. I appreciate that one does not want to constrain franchise holders too much, but I ask myself why, if they will be able to go in for market pricing, I bothered to help write into Bills governing fares at the Elizabeth bridge at Dartford on the M25 provisions to stop exploitation there. Why did we devise a complicated system for approving fare increases on the Severn bridge, for example, where market pricing would have allowed scalping? I do not believe that the franchise holders will want to go in for scalping on rail services, and my right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) has done well to bring the issue directly to the attention of my right hon. and hon. Friends. I hope that the assurances given will be satisfactory to him. They will be greatly reassuring to my constituents. We look forward to seeing how far amendments Nos. 239 and 242 are duplicated by the Government's proposals in another place.
    8 pm
    Mr. Freeman: I shall seek further advice on the point made by my hon. Friend the Member for Eltham (Mr. Bottomley). I hope to communicate information to my hon. Friend during the evening. If he is not satisfied with the response, he will doubtless have an opportunity to raise the matter a little later in our proceedings. If he is satisfied, I shall write to him on the point.
    Mr. Peter Bottomley indicated assent.
    Mr. Freeman: I am grateful to my hon. Friend.
    My hon. Friend the Member for Orpington (Mr. Horam) spoke of the status of the franchise agreement. I have given a commitment on behalf of my right hon. Friend the Secretary of State that we shall publish a further draft of the objectives of the franchising director while the Bill is still before Parliament. My right hon. Friend gave that commitment again earlier today. We have also said that a further draft of the model franchise agreement, an earlier draft of which was tabled in Committee, will be available to Parliament. Certain amendments to that model franchise agreement were suggested in Committee. The hon. Member for Cunninghame, North (Mr. Wilson) suggested that that might be appropriate before the ScotRail franchise was
    822
    proceeded with. I accepted in Committee that it would be helpful to look at the headings in a typical franchise agreement, although the specific franchise agreement for a particular route will contain commercially confidential information. Undoubtedly, much of that information will become available because the agreement will deal with punctuality, reliability, the safety of services and the cleanliness of trains. That information will be in the public domain.
    I know that my hon. Friend the Member for Orpington is a member of the Public Accounts Committee. It will not be surprising if the Public Accounts Committee takes a great deal of interest in the early franchises. I look forward to supplying information from the Department of Transport on the subject of franchising which is appropriate and needed by Parliament.
    My right hon. Friend the Member for Tonbridge and Mailing (Sir J. Stanley) spoke to amendments Nos. 239 and 242. He understands that they are important amendments because they would permit the consultative committees to comment on any aspect of fares. Under the Bill at present, the ability of the consultative committees to comment is related to the structure and relativity of fares, but not to specific fares on specific lines. The thrust of the amendments is to give the consultative committees that right. The committees are, of course, very interested in fare levels and proposed fare increases, and they have not hidden their views under a bushel. They have obviously expressed their views.
    We are happy to accept the text of amendments Nos. 239 and 242. They do not cover the London regional passengers committee. I understand that my right hon. Friend the Member for Tonbridge and Mailing may not have been able to pick up the fact that we have dealt with the LRPC at a different point in the Bill. The reason for that is that the appointments and the size and responsibilities of that committee are different. I give my right hon. Friend a clear assurance that, because we have accepted the text of the two amendments, we shall re-table them in another place with the appropriate extension to cover the LRPC, which will make the amendments effective. I cannot be clearer in the assurance that I give my right hon. Friend and my other hon. Friends—
    Hon. Members indicated assent.
    Mr. Freeman: I am grateful for hon. Members' assent. My understanding is that because amendments Nos. 239 and 242 provide a wide power, amendments Nos. 240, 241, 243 and 244 are not so necessary.
    Sir John Stanley indicated assent.
    Mr. Freeman: I am grateful to my right hon. Friend for indicating that he will not seek to press those amendments to a Division.
    I hope that, with those assurances, the House will be content. We welcome the role of the consultative committees. This is the first occasion on which I have had a chance to debate with the hon. Member for Newbury (Mr. Rendel). The hon. Member for Cunninghame, North (Mr. Wilson) will assure the House that in Committee we repeatedly gave assurances about the role of the consultative committees. Indeed, we reached agreement with the chairman of the Central Rail Users Consultative Committee about its appropriate powers. I am sure that the chairman and the members will welcome this further

    823
    extension. We satisfied them on all other counts that they would have a vital role to play under the general aegis of the regulator. They have a role to play in the closure procedure, and they will now have an important role to play in fares. That is to be welcomed.
    I hope that, with those comments, the House will accept Government amendment No. 109 and that in due course, when we come to consider the other amendments to which my right hon. Friend the Member for Tonbridge and Mailing spoke, my assurances will be accepted. I hope that the House will accept Government amendment No. 109.
    Sir John Stanley: With the leave of the House, Mr. Deputy Speaker. I am most grateful to my hon. Friend the Minister for accepting the important amendments Nos. 239 and 242, which substantially enhance the consumer protection afforded by the Bill. I also accept that I failed to spot the fact that buried away in schedule 11 were the special arrangements for London. To that extent, the amendments were defective and we need to add equivalent amendments for London. I know that my hon. Friend will put that right in another place. I speak for all my hon. Friends in expressing our appreciation to him for wisely accepting the amendments. I am grateful.
    Mr. Wilson: By leave of the House, Mr. Deputy Speaker. I welcome what the Minister has said on the issue. It is perfectly true that considerable progress was made in Committee on the consultative committees. it is logical that, among the other matters that the consultative committees consider, they should also be able to speak on fares. The matter goes further than that. The job now is to encourage them to speak on fares and to take a lively interest in them, especially in the light of what has been said about the role of the franchising director, arid about his ability to control fares and to ensure that the market does not operate.
    It is strange that, now that the hubbub has died down and less attention is being paid to what is going on here than was the case earlier, what the Minister has told us tonight about the controls on fares and about the role of the franchising director is probably the most important announcement made today.
    Amendment agreed to.

  Clause 4

    GENERAL DUTIES OF THE SECRETARY OF STATE AND THE REGULATOR
    Mr. Cynog Dafis: I beg to move amendment No. 227, in page 4, line 19, at end insert—
    "(h) to protect the interests of rail users living in rural areas or on the route of predominantly rural railway lines.'.
    The fact that the Bill is driven at least partly by the need to modify the United Kingdom's current economic difficulties by raising ready cash for current spending emphasises the need for a commitment to protect predominantly rural lines to be included on the face of the Bill. Hon. Members will be aware of the findings of the Transport 2000 report, which concludes that any savings resulting from privatisation will be heavily outweighed by extra costs of various kinds, leading among other things to
    "the closure of most rural train services."
    Any proposal to close any line in Wales will be met by public fury. Such a response would be wholly justified.
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    Let me give an example. The Cambrian main line from Shrewsbury to Aberystwyth is classed as a rural line. In the Transport 2000 scenario, it would be a candidate for closure. The effect of such a closure would be disastrous. At Aberystwyth we have a centre of higher education and research of international significance. The education and research activity is not only important in itself; it is fundamental to the economy of the western seaboard of Wales.
    The institutions that constitute the core of the economy of Aberystwyth and its hinterland—the University of Wales in the town, the Welsh agricultural college, the national library of Wales, the Institute of Grassland and Environmental Research and others—deservedly attract substantial public and private funding. For example, the University of Wales in Aberystwyth will receive £13,600,000 this year from the Welsh Higher Education Funding Council. The railway line linking all those institutions to the rest of Britain, including London and the south-east—which is the immediate source of a considerable amount of their funding—is literally vital. It is essential for journeys to conferences, seminars and committee meetings, to attend and deliver lectures and so on. It is essential for the rapidly expanding student body which patronises it extensively and economic development of other sorts through the Development Board for Rural Wales. Public funding is made available to provide factory space and so on and funding is provided through the Wales tourist board to enhance the area's attractiveness for tourism.
    The money that is made available to the Aberystwyth-Shrewsbury line from the public service obligation grant —it is about £2·5 million per annum—and bodies such as the DBRW and local authorities is well spent. It needs to be seen not as a subsidy to prop up an unprofitable line but as essential investment. Without that funding, other public and private sector money would be money down the drain.
    Not all rural lines are able to make such ambitious claims as the Aberystwyth to Shrewsbury line, but they have a highly significant role in their various ways. The closure of the Cambrian coast line from Meirionnydd to Pwllheli would be a bitter blow to the economy and communities of Meirionnydd, Dvyfor and Arfon.
    Mr. Dafydd Wigley: Does my hon. Friend accept that the line to Pwllheli is absolutely vital not only for the local community but for the tourist industry, which is one of the main industries in the area? The area has high unemployment and is threatened with losing intermediate development status.
    Mr. Dafis: My hon. Friend's point underlines the theme that I am pursuing—that is, that grants of this sort must be seen as part of public investment and part of the economic prosperity of the areas in which they operate. At the same time, the loss of the glorious heart of Wales line would be a serious deprivation to extensive rural communities and would eliminate the link between the Cambrian and Great Western lines. Those lines are important. But if they are important today, they will be more important in the future.
    Tomorrow, European Standing Committee B will consider, among other things, a draft directive from the European Community introducing a tax on carbon dioxide emissions and energy. That is a straw in the wind indicating the way in which that wind is blowing. We are

    825
    witnessing no less than the hesitant setting out on the difficult journey towards environmental sustainability. As to where that journey will take us, one can only theorise at this stage. But no one should underestimate the enormous implications of the need to achieve environmental sustainability. What is certain is that it must involve a massive shift in emphasis from private to public transport and from road to rail. In turn, that means that any area that lacks a railway in the future will be more severely disadvantaged than it is at present. We must not allow the difficulties and inefficiencies created by privatisation to undermine the key component in the economy of the future. That is why we need this amendment on the face of the Bill.
    Finally, and perhaps most importantly, the Government's proposals for franchising announced yesterday—they were praised in some areas—are totally unacceptable to the people of Wales. What logic on earth can justify a structure that puts Fishguard with Penzance, Pwllhelli with Lowestoft, Barmouth with Yarmouth and Blaenau Ffestiniog and Holyhead with Carlisle? The proposals will fragment the Welsh railway service, leaving most Welsh routes peripheralised. It is no less than an attack on the national integrity of Wales.
    Even at this late stage we demand that the Government adopt the imaginative and practical proposal of the Select Committee on Welsh Affairs that a Wales and the Marches railway be established and franchising—if, alas, it must come—be based on that structure. It is a well researched and firm proposal. It was studied and is supported by the Select Committee. That is the only way in which we can hope for an expanding rail service that is relevant to Welsh needs and—this is equally important and perfectly possible—an integrated transport policy for Wales. The Welsh Office is responsible for Welsh highways. It should also be made responsible for funding the rural railways of Wales. If we do not receive an undertaking from the Government to provide such a structure, we shall force a Division on the amendment.
    8.15 pm
    Mr. Malcolm Bruce: I am grateful to the hon. Gentleman for tabling the amendment because the issue is extremely important. The amendment draws attention to the importance of the rural rail network and the need to secure it. The hon. Gentleman understandably—because he comes from a Welsh constituency—talked especially about Wales. I apologise for not being here at the beginning of his speech.
    I am sure that the Minister is well aware that there is considerable concern in the rural areas of Scotland about the future of the network. At the beginning of May, there was an event in Inverness that involved Liberal Democrat Members and people from all over the north of Scotland. More than 200 people were in the town house in Inverness demonstrating their support for the railway network in the north of Scotland and their concern for its future.
    One of the people who spoke in support of the campaign that we were launching at that juncture was a member of the Conservative party and a councillor for Caithness and Sutherland. He expressed his extreme disquiet as to how on earth the fragile rail network in the north of Scotland could survive franchising, let alone full
    826
    privatisation. There were representatives from the Scottish National party, the Green party and the railway development society at the event, as well as many representatives from the Liberal Democrat party.
    All the lines that serve the north of Scotland lose money. It is difficult to see how on earth they can make money in a straightforward business sense for the simple reason that they cover long distances over sparsely populated areas where, although tourism is a major attraction and source of revenue, they are a permanent year-round link for people who live in the area. That is the real concern of the local community.
    If one goes to the west highlands, there is no doubt whatever that the number of people travelling on the Kyle line—it is one of the most attractive and scenic routes in Britain and perhaps in Europe—bring an enormous amount of business to the communities of Kyle of Lochalsh and Skye which would not otherwise arrive if there were no railway. Many people simply would not go if they had to go by road. It is the attraction of the rail service that takes them there.
    Obviously, the same argument applies to the West Highland line that goes from Fort William to Mallaig and across to Skye. Such services are absolutely vital. ScotRail recently announced that it will no longer take tanker freight on the west coast line and freight will now have to travel on a wholly inadequate road. A decision was made last year to change the basis on which freight would be accepted on the railway line that most directly affects my constituency—the one running between Aberdeen and Inverness. At one point, we were faced with the possibility of a substantial amount of timber traffic, whisky industry traffic and paper industry traffic being diverted from the railway line on to the A96. Ministers have acknowledged that the A96 is one of the busiest and most dangerous roads in the north of Scotland. A £100 million upgrade programme has been launched for it.
    Yet the road is wholly inadequate for the extra traffic that would have to travel on it if the railway line was even run down—never mind closed—and freight could not be handled on it. The amendment is important. I shall be interested to hear from the Minister how a ScotRail franchise will fundamentally change the nature of the service in ways that will reassure the community in the north of Scotland. I can tell him that the community is not assured by the present state of the service or its future development.
    The Minister will be well aware of the changes in the fare structure that were introduced last week. As a consequence, some regular travellers on the line between Inverness and Aberdeen in the constituency of the hon. Member for Moray (Mrs. Ewing) and in my constituency face fare increases of up to 60 per cent. If people cannot absorb such an increase, they will travel by car on a road which is already congested and, of course, deprive the railways of the revenue. One is left with the suspicion—I put it no higher than that—that ScotRail is about discouraging people from using the railways to the point at which it can justify cutting the service and perhaps ultimately phase out the lines which lose the most money.
    The House will be interested to hear how the Minister believes that his proposals will not merely protect the lines but ensure that the service is developed and used in the way that local communities want. That requires several things. It requires a competitive fare structure that will attract people on to the network, services that connect with the

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    main line inter-city services to the south, rolling stock that meets the needs of passengers, and reliability of service. None of those things is available now.
    If the Minister's argument is that, by definition, franchising or privatisation must be an improvement, he must tell the House how and why. As far as I understand it, the main applicants for the franchises are likely to be the existing management of ScotRail. If the managers are not managing now, it is difficult to see how they will do so in the same basic scenario. They need investment, a proper transport policy and a commitment to a future for rural lines. Rural lines must be not only protected but developed and invested in. We must have a proper transport policy to secure their future and use them in the interests of the whole community.
    I welcome the amendment tabled by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis). If I do not receive assurances, I shall certainly join him in the Lobby.
    Dr. Marek: The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) has tabled a useful amendment. In Committee many amendments were tabled to clause 4, which deals with the duties of the regulator. Although amendments were tabled which encompassed amendment No. 227, a specific amendment to that effect was not tabled. As the topic is new, it has been chosen for debate. I welcome that. The hon. Gentleman has my support principally because the subsections of clause 4 will be many and varied.
    Clause 4 will create a conflict of duty for the regulator. He will have to decide whether he should place more weight on one duty under clause 4 or on another. If amendment No. 227 is accepted, the Bill will say explicitly that an important part of the railway network must be considered by the regulator. It is even more important that the clause should include such a requirement in view of the map which the Government have produced for the franchise networks.
    I shall not deal with all the networks. Let us examine one franchise network. The one called Central is a huge amorphous mass which stretched from East Anglia to the west coast of Wales. It is clear from the map that the lines in Wales will be peripheral to the organisation that will run the Central franchise. Such lines will not make a profit because the lines are a service to the people. They are part of the social railway, so they will depend for their existence on grant or subsidy from the Government. Subsidy is not a dirty word; it is there for good social reasons.
    The lines in Wales will demand more subsidy than the lines in the west midlands or east midlands. As he will have to satisfy the shareholders, the franchisee will look for where he can make savings to increase profits. That will always be at the expense of the lines in Wales.
    Mr. Elfyn Liwyd: Does the hon. Gentleman accept that a subsidy for socially necessary lines will be guaranteed for only three years under current Treasury rules? Does he share my anxiety about the future after that initial honeymoon period?
    Dr. Marek: The hon. Gentleman makes a good point. It was put well by the late Lord Ridley—perhaps it was a deathbed repentance. What he said was right. Once the franchise has been granted, after three, four or five years the franchisee will say that the subsidy is not high enough. He may say that a recession or something else has occurred
    828
    and that he needs more subsidy. But the Treasury will say —certainly with the Government's handling of the economy, bringing it to the brink of ruin—that there is a £50 billion public sector borrowing requirement and that it must cut the subsidy. What will happen after that?
    Rural lines in Wales will be threatened with closure as a result of the Government's proposals. I have no doubt about that. It will happen because the lines in Wales will be peripheral to the franchise.
    It will be worse than that. The inter-city lines will probably be truncated. I doubt whether we shall have any inter-city lines to Holyhead after the three-year period comes to an end or after four or five years. It is far more likely that the west coast main line inter-city service will operate along the main line proper, going to Liverpool, Manchester and perhaps Preston, but that feeder services will be run from Crewe to Holyhead. The same thing will happen on the Great Western main line from London to Cardiff. Perhaps services in Swansea will not be up to the present frequency. There will certainly be no inter-city services to Carmarthen or Fishguard.
    I am depressed by what is happening and by the large franchises that the Government propose. They will not do Wales any good whatever. The centre of operations will be Birmingham. Wales will be an encumbrance to the franchisee. It will be something that the shareholders can do without. It will lose money. Evening services will be cut.
    The Railtrack authority will not have so much incentive to keep the track bed in good condition, so the services will be slower. There is one thing that we can do. Opposition Members do not have the powers that Conservative Members such as the right hon. Member for Tonbridge and Mailing (Sir J. Stanley) and the hon. Member for Ashford (Sir K. Speed) have; those powers are welcome and they use them well. They have achieved a few concessions. It is all very well the Minister saying that the Central Rail Users Consultative Committee should be able to consider fares. He did not say that to me in Committee two months ago.
    Mr. Alan Williams: Does my hon. Friend recognise that the concessions may have been won at our expense? In the past 48 hours we have had talk of capping to assuage the fears of some Conservative Members. The concept of socially necessary railways may be replaced by politically necessary railways.
    8.30 pm
    Dr. Marek: That is very likely, but I do not want to be rude to the Minister at this stage because there is a possibility that he will accept this amendment. He has been very good off and on this afternoon. I shall try to catch your eye later on, Mr. Deputy Speaker, if he proves not be as helpful as he has been.
    Wales suffers from this peripherality problem in the north, the centre and the south. He should do something about it, and one of the things he could do is to accept the amendment of the hon. Member for Ceredigion and Pembroke, North.
    Mrs. Margaret Ewing: I am a co-signatory of this amendment and I believe that many hon. Members are grateful that it has been called so that we can discuss the issue of rural railways.
    I wish first, on behalf of all my colleagues on the nationalist Bench, to place on record our great respect for

    829
    Robert Adley, who was the Chairman of the Transport Select Committee. Those of us who were here in the 1970s remember him well. We will very much miss his independent spirit, his approach and his kindness to all hon. Members, as well as the respect in which he held every point of view. I speak very personally, since Bob was a neighbour of mine in London, living directly opposite me in Pimlico. I shall miss him as a very kind personal friend.
    Turning now to amendment No. 227, as I have said, many of us welcome the fact that there is an opportunity to discuss at Report stage our great concerns about the future of railways in rural areas. Many of us can speak about aspects in our own constituencies and I, of course, will do that. But I hope that the Minister will bear in mind that those of us who speak on behalf of our rural areas are also taking on board the importance and significance for all other rural areas of the United Kingdom.
    I wish to refer in particular to the Inverness to Aberdeen railway, which has already been mentioned by the hon. Member for Gordon (Mr. Bruce). Inverness is, of course, the capital of the highlands of Scotland and Aberdeen is the oil capital of Europe. There are 109 track miles between those two centres and they are a very vital 109 miles. The stations along that line—not only in my constituency, but in the constituencies of the hon. Members for Inverness, Nairn and Lochaber (Sir R. Johnston) and for Gordon—Nairn, Forres, Elgin, Keith, Huntly, Insch and Dyce, are all extremely significant to the economy of our communities.
    Two of the stations within my constituency, Forres and Elgin, may have particular memories for the Minister in his previous capacity in the Ministry of Defence, because they are vital to the two RAF bases of Kinloss and Lossiemouth, serving not only the personnel on those bases, but their families and friends. They are vital to the whole life of our communities. There are the commuters who travel daily, perhaps westward to Inverness or eastward to Aberdeen, for their jobs. Many people are attracted to our area because of its beautiful environment, the hospitality of our people and the fact that it is a very pleasant area to visit. It is vital that our tourist industry is sustained if we are to compete with other areas.
    This is also an extremely important line for students in my constituency who travel to Inverness college or to Aberdeen, to one of the two universities there, or to some of the other colleges.
    I refer particularly to something that has happened recently. From Keith, in my constituency, a student who formerly paid a fare of £7·25 daily is now expected to pay £11·50 daily—an increase of 60 per cent. Many of these people are mature students and perhaps single parents, who may be turned away from training and education opportunities.
    I therefore argue strongly that we should think carefully about those who use the line and ensure that they are asked to pay only economic fares, making it possible for them to promote their careers and their future.
    The same applies to our pensioners, who are now expected to pay an increase of 50 per cent. Yet, for pensioners, the opportunity to visit Inverness or Aberdeen is vital to their social lives.
    Mr. Alex Salmond: It is worth emphasising to the Minister, in case he is not aware of it,
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    that, because of the accommodation crisis for the two universities in Aberdeen, students live in a very large area served by the railway line in my hon. Friend's constituency, and also live in my constituency, where there is no railway at all. They are forced to travel each day as they cannot be offered accommodation by the unversities because of the exceptional pressure on rents and properties in Aberdeen.
    Mrs. Ewing: I certainly agree with my hon. Friend. That is a point that should be emphasised, because all the stations along this line serve a very substantial rural hinterland. They do not serve the town or village alone; they serve a large number of people who travel by bus or car to the stations to travel on to Aberdeen or Inverness.
    We should not forget the businesses in our community. I never cease to remind the House that my constituency contains 43 whisky distilleries—some of the biggest money-spinners that the Exchequer has in the United Kingdom. It is very important to that business that we have good communications, not least because the whisky industry attracts many tourists who want to follow the whisky trail and spend money in our communities.
    We have agriculture, fishing and timber and their associated processing industries. They need to be able to compete on a level playing field with the rest of the European Community. If there is any threat to the Inverness-Aberdeen line, a substantial part of the economy, not only of the north-east and the highlands of Scotland, but of the United Kingdom, will be threatened.
    At the moment ScotRail appears to have decided to de-man our stations in the rural communities. It seems that in Forres and Keith there will be no cover in the evenings for people either boarding or alighting from the trains. This is particularly important for women and students, young people who are perhaps afraid to get off the train because of the surrounding conditions.
    I ask the Minister seriously to look carefully at assuring the future of this line, the safety, and the level of fares that will make it an economic line, and at guaranteeing that there will be no rundown of the service.
    The current fears in my constituency are perhaps epitomised by an article in the Banffshire Herald, under the headline:
    "ScotRail fares shock for Keith young people",
    in which ScotRail says that, having always thought that it was an independent organisation, it now has to folllow national rulings on fares and manning levels.
    These fears are now being exacerbated by the prospect of a franchising system which would make this line one of those threatened, and I make a strong plea that it be given special consideration.
    Mr. Wilson: This is an important debate and it is noticeable that rural Wales and rural Scotland are well represented here, while the voice of rural England is largely notable by its absence. I would think that there are large parts of England where rural services are threatened and it might have been prudent, from a sense of self-preservation, at least to listen to what is being said, even if not supporting the amendment in the Division.
    There is no doubt that, if the Bill goes ahead in its present form, a substantial number of rural services will disappear within a relatively short time. That is because there will not be the money in the system to sustain them. It will not be in the system that is at present run by Regional Railways and, as my hon. Friend the Member

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    for Wrexham (Dr. Marek) said, there will be particuarly serious implications for InterCity services to the peripheries, for reasons which we discussed last night.
    I was interested in the point made by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) about the Welsh franchises. He is absolutely right; it is an extraordinary dog's breakfast and the Welsh are right to take such an attitude towards it. I was also interested in his point that the Welsh Select Committee had made a powerful and well-considered argument in favour of a Welsh railway entity similar to that which exists in Scotland. Scottish regional services have been categorised as a franchise.
    It is worth drawing attention to the contrast between what happened in Scotland and what happened in. Wales. In Scotland there was no argument from the Select Committee or anyone else in favour of franchising the entire Scottish service. That is confirmed by the fact that, whereas the ludicrous approach which characterises the Bill has been applied in Wales, in Scotland the rationale for turning ScotRail into a private railway is not because there is any intrinsic merit in it but because that approach has been built round an expression of interest. The Government are so desperate to get interest in management buy-outs that when one emerged in Scotland it was seized on and used as a justification for their approach.
    I have no doubt that if the legislation takes its logical course, there will be rural closures. Some of the reasons have been mentioned already and I shall not repeat them. It is clear that there will not be enough money in the system. I shall briefly dwell on two additional reasons that have not been mentioned in the debate.
    One of the buzz words of the legislation has been transparency. I would not wish to misquote the Minister, but I think that he said in Committee in a very grand manner that transparency was an important principle of Conservatism. I remarked that transparency is something that one can see through. When applied to the legislation, transparency is an immensely dangerous concept for rural rail services.
    The opposite of transparency is cross-subsidy. At present, we have a sensible arrangement whereby we have loss-making lines and profit-making lines and a balance between them because we are operating a social railway and the social ethos and commitment is accepted. However, in the brave new world that the Minister is trying to create there will be transparency. There, for all to see, will be the costs and the revenue attached to each line. As soon as the figures emerge, the threat to the existence of the heavily loss-making lines will be multiplied overnight by many factors.
    The Government will be able to say from day one, "Is not it absurd that we are paying this level of subsidy per passenger when there is a bus service? Why not substitute the bus service for the railway?" That argument will be advanced from an early stage. Because the operators will have a vested interest in getting rid of the services, every trick in the book will be deployed to create a level of usage and therefore a ratio between a usage and a subsidy that will appear so absurd that they will be able to withdraw the service. Transparency is an important factor and a serious threat, particularly to rural services.
    Another reason of which I have become aware when travelling around Scotland, England and Wales is the fact that in rural areas and remoter parts of the country
    832
    geographical conditions often produce particularly difficult and expensive problems in maintaining the railway. That is quite logical when one thinks about it. I pay tribute to the engineers and the genuine entrepreneurs —as opposed to the chancers who rip off public assets today—who built the railways, the viaducts and the infrastructure in rural areas. However, that infrastructure is difficult to maintain.
    When the Bill becomes law, the costs that attach to each line will be set against that line and not against the system. I have discussed the effect of that in a local context in the south-west of England, the north of Wales, the Lake District and, of course, Scotland.
    The classic example was the floods in Scotland in January when two bridges were washed away. From the day after the incident happened, ScotRail and British Rail were on the scene. There were no questions asked about whether the work should go ahead on the two bridges in Perthshire and the line brought back into operation as quickly as possible. British Rail was bringing back into operation lines which had and always would be loss making but on which rural services were dependent. To do that, without any doubt or delay, it spent £1 million.
    8.45 pm
    What would happen in future is very much open to question. It will not be British Rail that will be charged with the responsibility or the decision about what to do with the loss-making routes and the reopening of the bridges; it will be Railtrack, which will be under commercial instruction to get an 8 per cent. return on profits. Where that £1 million would come from to restore the bridges is in itself questionable. If it were found, it would be set against the costs of that particular line and no other. However, Railtrack could decide not to spend £1 million and to close the line.
    I am sure that hon. Members representing all rural parts of Britain can identify similar problems in their own areas where viaducts, embankments and bridges are extremely expensive to maintain and where, without exceptional expenditure, the lines will close.
    There are two additional reasons why rural railways will be very much under threat. No assurance that the Minister can offer tonight will change the picture as they are intrinsic factors which will create grave doubts for many of the lines. The Minister cannot tell me tonight that in the same circumstances Railtrack would have spent £1 million to bring a loss-making railway back into use as Railtrack will have a commercial imperative laid upon it by the Government.
    It is an important issue. Everything running through the Bill concerns rural areas, but I am happy to discuss them in a specific context, as we did in Committee, and to emphasise what is obviously a concern to me in Scotland, but also applies throughout Britain—that rural rail services are endangered and the Bill presents the gravest threat to them since the existing network was established and settled more than 20 years ago.
    Mr. Freeman: The hon. Member for Cunninghame, North (Mr. Wilson) says that he is at least one of the voices that speaks for rural Scotland. I speak for rural England and, frankly, many of my right hon. and hon. Friends have been infuriated by the fact that the hon. Gentleman believes that if he repeats often enough the false assertion that rural railway lines will close, it will happen. It will not

    833
    happen and I want to explain concisely but clearly to the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) why his rural railway services are not under threat.
    First, we have given a commitment that subsidies for our socially necessary services will continue. The level of support from central Government and from local authorities will vary depending upon the profitability of the railway services. That subsidy is now running at the rate of about £1,000 million per annum. It fell in the middle of the 1980s when fare revenues were rising. Broadly speaking, at the beginning of the 1980s, they were at the same level as they are today. We have given a clear commitment that central Government—the taxpayer—will support socially necessary services.
    I have been debating that point with the hon. Member for Cunninghame, North for four months, week in, week out, and he is still not convinced that the change in the public service obligation grant this year compared with last year does not represent a threat to rural railway services or to Network SouthEast services.
    The railways must adjust the frequency of their services in response to demand. The change in the public service obligation provision for this year compared with last year—it is the only year for which we have made a proper forecast; there are indications of how the external financing limit for British Rail might be split in future years, but we will not fix the PSO grant until just before the beginning of the financial year—has occurred for the good reasons of an increase in fare revenue, a diminution in costs and a change in the level of investment in rolling stock.
    Mr. Salmond: The Minister is making the obvious point that railway revenue is cyclical—that in time of recession the revenue goes down and that during better economic circumstances it goes up. That is one of our fears. The Minister is saying that, in time of recession, the railways need more support than they require in different economic circumstances. Yet the Government are not engaged in a process of making radical cuts and reassessments of whole areas of public spending. Is he now saying that the railways will be immune from the assessment that is currently being made?
    Mr. Freeman: The hon. Gentleman is misinformed because if he casts his mind back a couple of years he will see, if he studies the figures fairly, that the PSO grant was increased in mid-year for two years running as a result of the recession—[interruption.] Yes, it was increased by upwards of £500 million.
    Mr. Alan Williams: How can the Minister give such assurances when the axe-wielding Chief Secretary is wandering around saying that absolutely nothing is sacred?
    Mr. Freeman: If the economy is running at such a level that fare revenues are up—and obviously every extra pound that BR can attract from fare revenues largely goes straight down to the bottom line, because once one runs a train, most of one's costs are already sunk—less public support is needed to run an existing level of service. We have given a commitment to support socially necessary
    834
    services. Next, we have said that we intend to franchise all railway services in Great Britain, including all the rural railway lines to which reference was made.
    The hon. Member for Ceredigion and Pembroke, North referred to the franchise map. That map is based on the existing route structures of British Rail. Ministers did not decide how to arrange the provision of railway services in Great Britain. BR did that. We have simply said that we think it is sensible to build on the existing management structure of BR to franchise the services. So the hon. Gentleman should be directing his concerns to BR, not to Ministers, because we have said that we believe it to be sensible to proceed with the minimum reorganisation of BR's management structures.
    Under the closure procedure, in the circumstance of a franchisee—or, indeed, BR—finding that there is not sufficient patronage, even with subsidy and the franchisee running services that were in the timetable immediately before the franchise, and there is need to close a station or a particular railway service, we have the toughest closure provisions in western Europe in terms of the procedures that must be followed, involving the rail users consultative committees and ultimately an appeal to the Secretary of State.
    Mr. Ieuan Wyn Jones (Ynys Môn): The possible closure issue is of particular concern. Does the Minister appreciate the valid point made by the hon. Member for Wrexham (Dr. Marek) about instances of a reduction in service, for example, a change from InterCity to regional use? That danger exists in north Wales. We fear that in three or four years from now, the InterCity service might be reduced or removed along the north Wales coastline and we shall be left with Regional Railways. What assurances can the Minister give that that will not happen?
    Mr. Freeman: There are many complaints about the prospect of reductions in service. The InterCity service to Holyhead is part of the InterCity network and is part of the west coast main line railway services. When we come to franchise the west coast main line, it will be done on the basis of the services that then prevail. I am certain that that will include Holyhead, so the Holyhead services will be included in that franchise.
    I accept the point made by several hon. Members about the potential for the development of lines, particularly for tourism, not only in rural Wales but in Scotland. We expect franchisees to take risks and decisions to expand railway services, particularly in the summer, because BR as a state monopolist is not a risk-taker. It has a precise overdraft and is therefore somewhat constrained. I am not criticising BR because that is the nature of a public sector body. But the private sector franchisee will take risks and will exploit the market where additional services can be provided. On the basis of discussions with potential franchisees operating in Wales and Scotland, I am certain that that will happen.
    Mr. William Cash: Can I take it from what my hon. Friend said that the west coast rail link will go through? He suggested in a recent letter to me that the matter was open to certain tenders, options and the rest. I am delighted to hear that the west coast rail link will go through. Does he agree that many people who are now coming from Shrewsbury and other rural areas will make great use of that west coast link? It will be a highly

    835
    cost-effective arrangement which will ensure that people get the kind of treatment that the Bill is designed to provide.
    Mr. Freeman: I am grateful for my hon. Friend's support. I confirm that the west coast main line service will be franchised.
    The argument of the hon. Member for Wrexham that he needs the amendment does not stand up. He will see that clause 4(1) says that both
    "the Secretary of State and the Regulator shall each have a duty … to protect the interests of users of railway services".
    That applies to all railway services—rural, suburban and InterCity. Why should one write into the Bill a provision just for rural railway services?
    Mrs. Ewing: Why not?
    Mr. Freeman: Because once we started doing that, we should have to add every category of railway service that is comprised of BR's services. I hope that, on that logical basis alone, the amendment will not be pressed to a Division, and I suspect that it will not be.
    Mr. Salmond: I had a feeling of déjà vu as the Minister was speaking. My mind went back to the debates of about five years ago when we were discussing the privatisation of the steel industry. Ministers were then assuring us that privatisation would make no difference to the future of the Ravenscraig steel plant. We were accused of scaremongering. Indeed, Ministers adduced a host of reasons to suggest that privatisation would assist the future of Ravenscraig.
    We found what we suspected: that privatisation was used as an excuse for the Government to wash their hands of responsibility for the future of the steel industry. The privatisation process was used—[Interruption.] Perhaps the voices of rural England behind the Minister are finally entering the debate. Conservative Members may like to enter the debate rather than mutter from a sedentary position. That particularly applies to the hon. Member for Harlow (Mr. Hayes).
    Mr. Jerry Hayes: What on earth has that got to do with the amendment?
    Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. Mr. Salmond.
    Mr. Salmond: I know that the hon. Gentleman gets a little sleepy because of his commitments to late night television, but even he should be able to grasp the significance of a comparison between the two privatisations.
    My point was that Ministers subsequently used the steel privatisation as an excuse or pretext for washing their hands of the future of the industry. I suspect that the same will apply in the case of the railways. The Minister tells the House that there is no need to write protection for rural railways into the Bill, but that argument carries little credibility. He argues, weakly, that we should respect his assurance that the Government will subsidise the railways by way of a counter-cyclical effect on the privatised railways lines. These are times of economic stringency when everything else is up for grabs. The Treasury is threatening to introduce highly unpopular charges in the NHS and even mortgage tax relief has been targeted—
    Mr. Deputy Speaker: Order. The Chair has now decided that the hon. Gentleman is straying too far from the amendment.
    Mr. Salmond: The Minister argued that the railways would be immune from the process of cost-cutting—a difficult argument to sustain, and it carries no conviction and swayed no sentiment. We believe that the privatisation process will be used as a pretext for the Government to wash their hands of the future of the railway system, and that system will be most at risk on the rural lines of Scotland, Wales and England.
    9 pm
    Mr. Dafis: The justification for the amendment is clear. It is generally recognised that rural lines are especially vulnerable because of their infrastructure costs—viaducts, and so on—and because they serve scattered populations. But they are certainly crucial to people who live in areas remote from population centres.
    This vulnerability is explicity recognised in the recent report, "Transport 2000". The amendment would certainly be useful and it is necessary, we think, to mention in the Bill the responsibilities of the franchising authority for rural lines. The Minister is not prepared to accept the amendment, so I am afraid that I will have to ask the House to divide on it.
    Question put, That the amendment be made:—
    The House divided: Ayes 172, Noes 299.

    Division No. 282]

    [9.1 pm

    AYES

    Adams, Mrs Irene

    Eastham, Ken

    Ainger, Nick

    Ewing, Mrs Margaret

    Ainsworth, Robert (Cov'try NE)

    Faulds, Andrew

    Ashdown, Rt Hon Paddy

    Foster, Don (Bath)

    Ashton, Joe

    Foulkes, George

    Austin-Walker, John

    Fraser, John

    Banks, Tony (Newham NW)

    Gapes, Mike

    Barnes, Harry

    George, Bruce

    Barron, Kevin

    Godman, Dr Norman A.

    Bayley, Hugh

    Godsiff, Roger

    Beith, Rt Hon A. J.

    Golding, Mrs Llin

    Benn, Rt Hon Tony

    Graham, Thomas

    Bennett, Andrew F.

    Griffiths, Win (Bridgend)

    Benton, Joe

    Grocott, Bruce

    Betts, Clive

    Gunnell, John

    Boyce, Jimmy

    Hain, Peter

    Boyes, Roland

    Hanson, David

    Brown, Gordon (Dunfermline E)

    Hardy, Peter

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

    Harvey, Nick

    Bruce, Malcolm (Gordon)

    Heppell, John

    Burden, Richard

    Hinchliffe, David

    Caborn, Richard

    Hogg, Norman (Cumbernauld)

    Callaghan, Jim

    Hood, Jimmy

    Campbell, Mrs Anne (C'bridge)

    Hoon, Geoffrey

    Campbell, Menzies (Fife NE)

    Howarth, George (Knowsley N)

    Campbell, Ronnie (Blyth V)

    Hughes, Kevin (Doncaster N)

    Campbell-Savours, D. N.

    Hughes, Roy (Newport E)

    Canavan, Dennis

    Hughes, Simon (Southwark)

    Cann, Jamie

    Illsley, Eric

    Chisholm, Malcolm

    Ingram, Adam

    Clapham, Michael

    Jackson, Glenda (H'stead)

    Clarke, Eric (Midlothian)

    Jackson, Helen (Shef'ld, H)

    Coffey, Ann

    Jamieson, David

    Connarty, Michael

    Janner, Greville

    Cook, Robin (Livingston)

    Johnston, Sir Russell

    Cox, Tom

    Jones, Barry (Alyn and D'side)

    Cryer, Bob

    Jones, Jon Owen (Cardiff C)

    Cunningham, Jim (Covy SE)

    Jones, Lynne (B'ham S 0)

    Cunningham, Rt Hon Dr John

    Jones, Nigel (Cheltenham)

    Dafis, Cynog

    Jowell, Tessa

    Dalyell, Tarn

    Kaufman, Rt Hon Gerald

    Darling, Alistair

    Kennedy, Charles (Ross, C&S)

    Dewar, Donald

    Khabra, Piara S.

    Dixon, Don

    Kirkwood, Archy

    Dunnachie, Jimmy

    Leighton, Ron

    Dunwoody, Mrs Gwyneth

    Litherland, Robert

    837

    Livingstone, Ken

    Purchase, Ken

    Lloyd, Tony (Stretford)

    Redmond, Martin

    Llwyd, Elfyn

    Reid, Dr John

    Loyden, Eddie

    Rendel, David

    Lynne, Ms Liz

    Robinson, Geoffrey (Co'try NW)

    McAllion, John

    Robinson, Peter (Belfast E)

    Macdonald, Calum

    Rogers, Allan

    McLeish, Henry

    Rooney, Terry

    McMaster, Gordon

    Ross, Ernie (Dundee W)

    Madden, Max

    Ross, William (E Londonderry)

    Maginnis, Ken

    Sedgemore, Brian

    Mahon, Alice

    Sheldon, Rt Hon Robert

    Mandelson, Peter

    Shore, Rt Hon Peter

    Marek, Dr John

    Simpson, Alan

    Marshall, David (Shettleston)

    Skinner, Dennis

    Marshall, Jim (Leicester, S)

    Smith, Andrew (Oxford E)

    Maxton, John

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

    Michael, Alun

    Smyth, Rev Martin (Belfast S)

    Michie, Bill (Sheffield Heeley)

    Spearing, Nigel

    Michie, Mrs Ray (Argyll Bute)

    Spellar, John

    Milburn Alan

    Steel, Rt Hon Sir David

    Miller, Andrew

    Stevenson, George

    Mitchell, Austin (Gt Grimsby)

    Stott, Roger

    Molyneaux, Rt Hon James

    Taylor, Matthew (Truro)

    Morris, Rt Hon A. (Wy'nshawe)

    Thompson, Jack (Wansbeck)

    Morris, Estelle (B'ham Yardley)

    Trimble, David

    Mudie, George

    Tyler, Paul

    Oakes, Rt Hon Gordon

    Vaz, Keith

    O'Brien, Michael (N W'kshire)

    Walker, Rt Hon Sir Harold

    O'Brien, William (Normanton)

    Wallace, James

    O'Hara, Edward

    Wareing, Robert N

    Olner, William

    Wigley, Dafydd

    Parry, Robert

    Williams, Rt Hon Alan (Sw'n W)

    Patchett, Terry

    Wilson, Brian

    Pendry, Tom

    Winnick, David

    Pickthall, Colin

    Wise, Audrey

    Pike, Peter L.

    Wray, Jimmy

    Powell, Ray (Ogmore)

    Young, David (Bolton SE)

    Prentice, Ms Bridget (Lew'm E)

    Prentice, Gordon (Pendle)

    Tellers for the Ayes:

    Prescott, John

    Mr. Alex Salmond and Mr. Ieuan Wyn Jones.

    Primarolo, Dawn

    NOES

    Ainsworth, Peter (East Surrey)

    Bright, Graham

    Aitken, Jonathan

    Brooke, Rt Hon Peter

    Alexander, Richard

    Brown, M. (Brigg & Cl'thorpes)

    Alison, Rt Hon Michael (Selby)

    Bruce, Ian (S Dorset)

    Amess, David

    Budgen, Nicholas

    Ancram, Michael

    Burns, Simon

    Arbuthnot, James

    Burt, Alistair

    Arnold, Jacques (Gravesham)

    Butcher, John

    Arnold, Sir Thomas (Hazel Grv)

    Butler, Peter

    Ashby, David

    Butterfill, John

    Aspinwall, Jack

    Carlisle, John (Luton North)

    Atkins, Robert

    Carlisle, Kenneth (Lincoln)

    Atkinson, David (Bour'mouth E)

    Carrington, Matthew

    Atkinson, Peter (Hexham)

    Carttiss, Michael

    Baker, Rt Hon K. (Mole Valley)

    Cash, William

    Baker, Nicholas (Dorset North)

    Chapman, Sydney

    Baldry, Tony

    Churchill, Mr

    Banks, Matthew (Southport)

    Clark, Dr Michael (Rochford)

    Banks, Robert (Harrogate)

    Clifton-Brown, Geoffrey

    Bates, Michael

    Coe, Sebastian

    Batiste, Spencer

    Congdon, David

    Bellingham, Henry

    Conway, Derek

    Bendall, Vivian

    Coombs, Anthony (Wyre For'st)

    Beresford, Sir Paul

    Coombs, Simon (Swindon)

    Biffen, Rt Hon John

    Cope, Rt Hon Sir John

    Blackburn, Dr John G.

    Cormack, Patrick

    Body, Sir Richard

    Couchman, James

    Booth, Hartley

    Cran, James

    Boswell, Tim

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

    Bottomley, Peter (Eltham)

    Curry, David (Skipton & Ripon)

    Bottomley, Rt Hon Virginia

    Davies, Quentin (Stamford)

    Bowden, Andrew

    Davis, David (Boothferry)

    Bowis, John

    Day, Stephen

    Boyson, Rt Hon Sir Rhodes

    Deva, Nirj Joseph

    Brandreth, Gyles

    Devlin, Tim

    Brazier, Julian

    Dickens, Geoffrey

    838

    Dicks, Terry

    Kellett-Bowman, Dame Elaine

    Dorrell, Stephen

    Key, Robert

    Douglas-Hamilton, Lord James

    Kilfedder, Sir James

    Dover, Den

    King, Rt Hon Tom

    Duncan, Alan

    Knapman, Roger

    Duncan-Smith, Iain

    Knight, Mrs Angela (Erewash)

    Dunn, Bob

    Knight, Greg (Derby N)

    Durant, Sir Anthony

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

    Dykes, Hugh

    Knox, David

    Eggar, Tim

    Kynoch, George (Kincardine)

    Elletson, Harold

    Lait, Mrs Jacqui

    Emery, Rt Hon Sir Peter

    Lang, Rt Hon Ian

    Evans, David (Welwyn Hatfield)

    Lawrence, Sir Ivan

    Evans, Jonathan (Brecon)

    Legg, Barry

    Evans, Roger (Monmouth)

    Leigh, Edward

    Evennett, David

    Lennox-Boyd, Mark

    Faber, David

    Lester, Jim (Broxtowe)

    Fabricant, Michael

    Lidington, David

    Fenner, Dame Peggy

    Lightbown, David

    Field, Barry (Isle of Wight)

    Lloyd, Peter (Fareham)

    Forman, Nigel

    Lord, Michael

    Forsyth, Michael (Stirling)

    Luff, Peter

    Forth, Eric

    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

    Madel, David

    Gale, Roger

    Maitland, Lady Olga

    Gallie Phil

    Major, Rt Hon John

    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

    Marshall, Sir Michael (Arundel)

    Goodson-Wickes, Dr Charles

    Martin, David (Portsmouth S)

    Gorman, Mrs Teresa

    Mawhinney, Dr Brian

    Gorst, John

    Mayhew, Rt Hon Sir Patrick

    Grant, Sir Anthony (Cambs SW)

    Mellor, Rt Hon David

    Green way, Harry (Ealing N)

    Merchant, Piers

    Green way, John (Ryedale)

    Milligan, Stephen

    Griffiths, Peter (Portsmouth, N)

    Mills, Iain

    Grylls, Sir Michael

    Mitchell, Andrew (Gedling)

    Hague, William

    Mitchell, Sir David (Hants NW)

    Hamilton, Rt Hon Archie (Epsom)

    Moate, Sir Roger

    Hamilton, Neil (Tatton)

    Monro, Sir Hector

    Hampson, Dr Keith

    Montgomery, Sir Fergus

    Hanley, Jeremy

    Moss, Malcolm

    Hannam, Sir John

    Needham, Richard

    Hargreaves, Andrew

    Nelson, Anthony

    Harris, David

    Neubert, Sir Michael

    Haselhurst, Alan

    Newton, Rt Hon Tony

    Hawkins, Nick

    Nicholls, Patrick

    Hawksley, Warren

    Nicholson, David (Taunton)

    Hayes, Jerry

    Nicholson, Emma (Devon West)

    Heald, Oliver

    Norris, Steve

    Heathcoat-Amory, David

    Onslow, Rt Hon Sir Cranley

    Hendry, Charles

    Oppenheim, Phillip

    Higgins, Rt Hon Sir Terence L.

    Ottaway, Richard

    Hill, James (Southampton Test)

    Page, Richard

    Hogg, Rt Hon Douglas (G'tham)

    Paice, James

    Horam, John

    Patnick, Irvine

    Hordern, Rt Hon Sir Peter

    Patten, Rt Hon John

    Howard, Rt Hon Michael

    Pattie, Rt Hon Sir Geoffrey

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

    Pawsey, James

    Howell, Rt Hon David (G'dford)

    Peacock, Mrs Elizabeth

    Howell, Ralph (North Norfolk)

    Pickles, Eric

    Hunt, Rt Hon David (Wirral W)

    Porter, Barry (Wirral S)

    Hunt, Sir John (Ravensbourne)

    Porter, David (Waveney)

    Hunter, Andrew

    Portillo, Rt Hon Michael

    Hurd, Rt Hon Douglas

    Powell, William (Corby)

    Jack, Michael

    Rathbone, Tim

    Jackson, Robert (Wantage)

    Redwood, John

    Jenkin, Bernard

    Richards, Rod

    Jessel, Toby

    Riddick, Graham

    Johnson Smith, Sir Geoffrey

    Rifkind, Rt Hon. Malcolm

    Jones, Gwilym (Cardiff N)

    Robathan, Andrew

    Jones, Robert B. (W Hertfdshr)

    Roberts, Rt Hon Sir Wyn

    Jopling, Rt Hon Michael

    Robertson, Raymond (Ab'd'n S)

    839

    Robinson, Mark (Somerton)

    Temple-Morris, Peter

    Roe, Mrs Marion (Broxbourne)

    Thomason, Roy

    Rowe, Andrew (Mid Kent)

    Thompson, Sir Donald (C'er V)

    Ryder, Rt Hon Richard

    Thompson, Patrick (Norwich N)

    Sackville, Tom

    Thornton, Sir Malcolm

    Sainsbury, Rt Hon Tim

    Thurnham, Peter

    Scott, Rt Hon Nicholas

    Townend, John (Bridlington)

    Shaw, David (Dover)

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

    Shaw, Sir Giles (Pudsey)

    Tracey, Richard

    Shephard, Rt Hon Gillian

    Tredinnick, David

    Shepherd, Colin (Hereford)

    Trend, Michael

    Shersby, Michael

    Trotter, Neville

    Skeet, Sir Trevor

    Twinn, Dr Ian

    Smith, Sir Dudley (Warwick)

    Vaughan, Sir Gerard

    Soames, Nicholas

    Walker, Bill (N Tayside)

    Speed, Sir Keith

    Waller, Gary

    Spencer, Sir Derek

    Ward, John

    Spicer, Sir James (W Dorset)

    Wardle, Charles (Bexhill)

    Spicer, Michael (S Worcs)

    Waterson, Nigel

    Spink, Dr Robert

    Watts, John

    Spring, Richard

    Wells, Bowen

    Sproat, Iain

    Wheeler, Rt Hon Sir John

    Squire, Robin (Hornchurch)

    Whitney, Ray

    Stanley, Rt Hon Sir John

    Whittingdale, John

    Steen, Anthony

    Widdecombe, Ann

    Stephen, Michael

    Wilkinson, John

    Stern, Michael

    Willetts, David

    Stewart, Allan

    Wolfson, Mark

    Streeter, Gary

    Wood, Timothy

    Sumberg, David

    Yeo, Tim

    Sweeney, Walter

    Young, Sir George (Acton)

    Sykes, John

    Tapsell, Sir Peter

    Tellers for the Noes:

    Taylor, Ian (Esher)

    Mr. Timothy Kirkhope and Mr. Robert G. Hushes

    Taylor, John M. (Solihull)

    Taylor, Sir Teddy (Southend, E)

    Question accordingly negatived.
    Mr. Gary Waller: I beg to move amendment No. 248, in page 5, line 2, after '1996', insert
    ', or such later date as may be appointed by order made by the Secretary of State,'.
    The amendment would enable the period during which the regulator is obliged to take account of advice issued by the Secretary of State to be extended by order. It would create some additional flexibility in the process of introducing competitition. I suppose that the Secretary of State's advice cannot be predicted, but it could cover the factors that the regulator will have to take into account in determining his policy on access to the rail network. My hon. Friend the Minister for Public Transport will recall that the Bill, as originally published, did not make provision for the Secretary of State to issue any advice to the regulators.
    Clause 4(4)(a), which requires the regulator to take such advice into account until 31 December 1996, was introduced by the Government in Committee. Ministers justified their amendment on the ground that the success of the first round of franchising would depend on franchisees being offered some degree of exclusivity. I presume that the Secretary of State's advice to the regulator will require him to take that objective into account when he considers access agreements between the franchising director and Railtrack. That advice will counterbalance the requirement for the regulator to promote competition, in the light of the Government's acceptance that, at least initially, competition will need to be qualified.
    9.15 pm
    The amendment is needed if certain eventualities are to be met. First, there is the possibility that the first round of franchises will not have been let by 31 December 1996. It appears that the Bill, as drafted, would not enable the
    840
    Secretary of State to require the regulator to accept that, beyond that date, competition must be qualified. I wonder whether the Government are confident that potential conflicts between franchising and open access services will have been overcome by that date. Secondly, there is the possibility that, in the light of developments, the Government will come to the same conclusion as the Select Committee—that open access and franchising are not compatible. The Bill does not seem to provide any mechanism to deal with that eventuality.
    The amendment would not require the regulator to have regard to advice issued by the Secretary of State beyond 1996; rather, it would provide a degree of additional flexibility for safeguards to be brought into effect if the Secretary of State considered them necessary. Until the franchises are working, it will not be possible to be certain whether, and to what extent, it will be necessary to regulate competition. Clearly, my hon. Friend the Minister believes that some constraints will be needed in the first round of franchises to encourage franchisees to go into the market. That can certainly be achieved through guidance. To set, at this stage, a date governing the regulator's duty to take guidance into account offers an unnecessary hostage to fortune. That is why I move the amendment.
    Mr. Freeman: I should like to respond concisely to my hon. Friend, for whose comments I am grateful. He is certainly a doughty supporter of rail interests, not only as a constituency representative but as someone speaking on behalf of the Association of Metropolitan Authorities.
    My hon. Friend was quite right in saying that the purpose of the amendment which was accepted in the Standing Committee was to empower the Secretary of State to give guidance t6 the regulator for a limited period—up to the end of December 1996. The aim was to make sure that the first franchises were let satisfactorily. That will probably mean what we call moderation of competition, which is the denial of certain open access rights.
    I cannot recommend that the amendment be accepted, as it is inevitably a compromise between fettering the independence of the regulator and ensuring that the initial franchising is a success. I think that we have got the balance right.
    Mr. John Gunnell: The system will operate for only 32 months before the clause, as drafted, takes effect. Does the Minister believe that the franchising process will be completed in that time? Everything said so far suggests that the matter will be proceeded with gradually. Although the publication of the franchise maps has taken the process forward a little, it is unlikely that 32 months will be sufficient. Given the Minister's arguments in Committee, increasing flexibility would seem to be entirely sensible.
    Mr. Freeman: I appreciate that two and a half years is a relatively short time, but we expect to let a significant number of franchises by then. Completing the pattern for the whole of Great Britain will clearly take considerably longer.
    As to the franchises that are let subject to the views of the regulator acting on guidance from the Secretary of State, one is looking at a period of anything up to 10 years after the given date, during which time the franchisee will have some degree of exclusivity. That will almost certainly

    841
    apply in the case of Network SouthEast services, for operational reasons—because additional services cannot be run into London stations during peak hours. I suspect that it would not be possible at peak hours to thread in open access services.
    I cannot commend my hon. Friend's amendment to the House because if we are to encourage the development of open access services that are not under the franchise regime, at some stage they must be given the right to compete for train paths and to challenge for the right to provide rail passenger services.
    I probably have not convinced my hon. Friend, but when we drafted the amendment for the Committee stage, we faced a difficult choice as to where the cut-off point would be. If we had extended it to 10 years, that would have stifled independent railway operation. If we had limited it to six or 12 months, that would not have been effective in launching the first round of franchises in this Parliament.
    Mr. Gunnell: Does not the Minister accept the Transport Select Committee's view that open access will mean paying a higher subsidy to secure franchisees in the first place?
    Mr. Freeman: It is extremely important to get the first franchises off the ground properly. We will learn from experience and, because it will be a gradual, market-led initiative, the franchising director, from his own experience, will undoubtedly modify or amend some of his policies.
    We are determined that the first group of franchises will operate successfully and that the quality of services available to the travelling public will improve. The cut-off point is a matter of judgment, but I believe that the Government have got it right and I ask my hon. Friend not to press his amendment to a Division.
    We will certainly take on board my hon. Friend's comments on behalf of the AMA about non-statutory guidance to the franchising director and discussions with the regulator. However, the regulator must be independent, and it is most important that after December 1996 he will be able to operate entirely unfettered. Notwithstanding that, I know that my right hon. Friend the Secretary of State will maintain close contact with the franchising director.
    Mr. Waller: I find it difficult to understand why my hon. Friend feels that the regulator would be compromised by the option, in the light of possible future uncertainties, to extend the period during which he can be given advice on a statutory basis and heed that advice. Nevertheless, I listened carefully to my hon. Friend's remarks about non-statutory guidance to the regulator. Given his other assurances, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 5

    GENERAL DUTIES OF THE FRANCHISING DIRECTOR
    Amendment made: No. 160, in page 6, line 13, leave out 'and'and insert—
    '(aa) any payments which the Franchising Director may make with a view to securing—

    (i) the provision of any services, or

    842

    (ii) the operation of any network, station or light maintenance depot, or any part of a network, station or light maintenance depot,

    in pursuance of any provision of sections (Failure to secure subsequent franchise agreement), 32 to 35 and (Contracts between the Franchising Director and the Board for the provision of non franchised railway passenger services) below; and'.—[Mr. Freeman.]
    Mr. Freeman: I beg to move amendment No. 3, in page 6, line 16, at end insert—
    '(3) Where the Secretary of State gives the Franchising Director any objectives under subsection (1)(a) above, the Secretary of State shall—

    (a) lay a copy of a statement of those objectives before each House of Parliament; and

    (b) arrange for copies of that statement to be published in such manner as he may consider appropriate.'.

    Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 1, in clause 19, page 21, line 5, leave out
    'send a copy of the approval'
    and insert—
    'publish the approval and shall send a copy of it'.
    Mr. Freeman: Amendments Nos. 1 and 3 result from a commitment that I gave in Committee. Amendment No. 3 requires the publication of objectives given by the Secretary of State to the franchising director and a commitment to lay before each House a copy of the document. I gave the hon. Members for Kingston upon Hull, East (Mr. Prescott) and for Wrexham (Dr. Marek) that assurance in Committee.
    We intend to recommend that the House accepts amendment No. 1. We shall publish a second draft of the objectives to be given to the franchising director while the Bill is still in Parliament. The first draft was tabled in Committee and we have given a commitment that the House will have an opportunity before the Bill completes all its stages to comment again.
    Dr. Marek: I am pleased with the result of our debate in Committee. The Government have tabled amendment No. 3 and the Minister said that they will accept amendment No. 1. I urge my hon. Friends not to vote against amendment No. 3, although it might be their predilection to vote against anything that the Government propose in this Bill, and to support amendment No. 1.
    Amendment agreed to.

  Clause 7

    EXEMPTIONS FROM SECTION 6
    Mr. Rathbone: I beg to move amendment No. 68, in page 7, line 19, after 'granting'insert 'or refusing'.
    Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 69, in page 7, line 21, after 'grant', insert
    'or, as the case may be, refuse'.
    No. 66, in page 7, line 21, at end insert
    'and, if he proposes to grant the licence exemption subject to compliance with any conditions, specifying those conditions.'.
    No. 67, in page 7, line 22, after 'grant', insert
    'or, as the case may be, refuse'.
    No. 64, in page 7, line 23, after
    'exemption', insert 'and, if he proposes to grant the licence exemption subject to compliance with any conditions, the reasons why he proposes to impose those conditions.'.

    843
    No. 65, in page 7, line 32, after 'grant', insert
    'or, as the case may be, refusal'.
    No. 62, in clause 8, page 8, line 41, after 'granting', insert 'or refusing'.
    No. 63, in page 8, line 43, after 'grant', insert
    'or, as the case may be, refuse'.
    No. 60, in page 8, line 43, at end insert
    'and, if he proposes to grant the licence subject to compliance with any conditions, specifying those conditions'.
    No. 61, in page 8, line 44, after 'grant', insert
    'or, as the case may be, refuse'.
    No. 58, in page 8, line 44, after 'licence', insert
    'and, if he proposes to grant the licence subject to compliance with any conditions, the reasons why he proposes to impose those conditions".
    No. 59, in page 9, line 9, after 'grant', insert
    'or, as the case may be, refusal'.
    Government amendment No. 183.
    Mr. Rathbone: Earlier we debated the fact that the regulator's role is to promote competition, to prevent abuse of market power and to protect the interests of the consumer, so there seems to be no reason why the amendments to clauses 7 and 8 should not be acceptable in the interests of transparency in the decision-making process.
    It is clearly not reasonable that an operator who may have made a significant capital investment in a franchise should be denied the right to know why the regulator has granted, exempted or refused a licence-and therefore the grounds on which to challenge a decision should he wish to do so. In the interests of more open government and more openness generally, I hope that the amendments will be accepted.
    Mr. Freeman: Yesterday, in a written answer and a press notice, we announced our policy on exemptions from the regime of licensing and franchising. I hope that the House will welcome the restatement of all the commitments that I gave in Committee in relation to preserved railways, light rapid transit systems and some municipal railways. I say to the hon. Member for Kingston upon Hull, East (Mr. Prescott) that nothing differs in the statement that we made available yesterday from the commitments that I gave in Committee.
    I ask my hon. Friend the Member for Lewes (Mr. Rathbone) not to press the amendments, which might add a little unnecessary paperwork because only the applicant for a licence exemption or a licence application will be interested in the outcome of the regulator's deliberations. If the regulator gets it wrong, his actions will be open to judicial review.
    May I give my hon. Friend one assurance, because in moving the amendments he has helped the House? Before the regulator makes a decision about an application for an exemption, or indeed in granting a licence, informal guidance will be given. We want a user-friendly system to encourage those who will be affected by a licence excemption and those applying for a licence, for example, a preserved railway that wishes to run on the railway system and take paying passengers. I hope that the words which I put on the record in response to the amendment will be helpful to those who might be affected.
    9.30 pm
    Moreover, where the regulator is minded to refuse a licence exemption, or to refuse a licence applicaton in the first place, I am sure that the regulator will take every
    844
    trouble to inform those most directly affected. In view of those assurances, I hope that my hon. Friend the Member for Lewes will not feel it necessary to press the amendment.
    Mr. Rathbone: In view of those assurances and the Minister's previous statement, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 8

    LICENCES
    Amendment made: No. 183, in page 9, line 29, leave out 'the carrying on of different activities'and insert
    "a person to be the operator of railway assets of different classes or descriptions.".— [Mr. Freeman]

  Clause 19

    AMENDMENT OF ACCESS AGREEMENTS
    Amendment made: No. 1, in page 21, line 5, leave out
    'send a copy of the approval'
    and insert
    'publish the approval and shall send a copy of it'.— [Dr. Marek.]

  Clause 23

    INVITATIONS TO TENDER FOR FRANCHISES
    Mr. Harvey: I beg to move amendment No. 185, in page 24, line 28, at end insert—
    '(2A) Before preparing such invitation to tender, the Franchising Director shall obtain from the Board, or the body or person already providing services for the carriage of passengers at the time that such services are designated as eligible for provision under franchise agreements—

    (i) the historic costs and revenue, the nature and frequency of the service provided, the prices charged for travel by means of those services for the carriage of passengers by railway; and such other incidental and supplementary information as is in the opinion of the Franchising Director necessary to form a true and fair view of the balance between historic costs and revenue;

    (ii) the projected costs and revenue, the nature and frequency of the service to be provided, the prices to be charged for travel by means of those services, for the carriage of passengers by railway if they were to be provided, or to continue to be provided otherwise than under the proposed franchise agreement; and such other incidental and supplementary information as is in the opinion of the Franchising Director necessary to form a true and fair view of the balance between the projected costs and revenue (in this part referred to as the "projected balance")

    (2B) When issuing an invitation to tender, the Franchising Director shall include in the invitation all the information referred to in paragraph (i) above, but not the information referred to in paragraph (ii) above.'.
    Mr. Deputy Speaker: With this, it will be convenient to discuss also the following amendments:
    No. 186, in clause 25, page 26, line 18, after '(1)', insert 'Subject to subsection (1A) below:'.
    No. 187, in page 26, line 28, at end insert—
    '(1A) No franchise agreement shall be entered into if—
    (a) in any case where the agreement would be subject to conditions requiring payments to the Franchising Director under paragraph (a) above, any payment to be rendered to the Franchising Director under the agreement would be less than the projected balance; or

    845
    (b) in any case where the agreement would be subject to conditions requiring payments by the Franchising Director under paragraph (b) above, any payment to be rendered to the franchisee under the agreement would be greater than the projected balance.'.
    No. 238, in page 26, line 32 at end insert—
    '(2A) A franchise agreement shall include provision requiring the franchisee or franchise operator to provide the Franchising Director with such information as he may reasonably require under subsection (2A) of section 23 above.'.
    Mr. Harvey: I respect the fact that the late hour means that I must be brief, but it is a pity that we have reached the amendment at this late stage because my colleagues and I believe that it is important.
    Earlier today we debated the circumstances in which the Government might sanction the possibility of the franchising director not granting a franchise and, indeed, allowing British Rail to continue to operate the services. I think that it was the late Lord Macmillan who, with reference to privatisation, coined the expression "selling off the family silver". During earlier privatisations, some people felt that the services being sold were undervalued and there were remarks to the effect that if one put a £10 note up for sale at a flyer, it would find some buyers. However, I think that this is the first privatisation in which there has been any suggestion that the Government might pay people to take the family silver away. The amendment would prevent that.
    The amendment builds on what I would call not commitments but agreements in principle, accepted by the Minister in Committee. On 2 March we discussed what information British Rail might make available to the franchising director when he was considering how franchises should be awarded. The Minister said:
    "The hon. Member for North Devon says that we are talking of achieved and prospective business plans. When the franchising director comes to consider what British Rail would need to operate the service for the next 12 months or, indeed, for the next 10 years, that is a perfectly reasonable point. I accept the logic of what the hon. Gentleman says—that the franchising director should be able to extrapolate and, indeed, in discussion with British Rail, look at what the costs will be as well as what they have been during the previous six months. I have no difficulty in accepting that".—[Official Report, Standing Committee B, 2 March 1993; c. 503.]
    On 4 March, he said:
    "On the … issue of franchises, we propose that the franchising director should compare the offers received from the private sector with the cost of providing a British Railways Board operated service. I have already agreed with the hon. Member for North Devon that prospective bids should be compared with prospective costs. That was a valuable debate. The franchising director will have to make a judgment based on value-for-money tests."—[Official Report, Standing Committee B, 4 March 1993; c. 553.]
    I deal briefly with the theme of value for money.
    The Secretary of State repeated today that if bids were not lower than British Rail operating costs, the possibility of British Rail continuing to operate services could be considered. At a time when the Chief Secretary to the Treasury is floating various grisly possibilities about how to attack the budget deficit, it is unacceptable that any franchise should be awarded at a cost to the taxpayer which exceeds the cost of British Rail continuing to operate a service.
    846
    The amendment would codify and formalise the circumstances in which the British Rail cost or, as suggested in the amendment, the projected balance between anticipated costs and revenue should be the benchmark against which private sector bidders would have to make their tenders. I hope very much that the Government will be able to accept that notion, given that they have already accepted the component parts.
    Mr. Freeman: Perhaps I may bracket amendment No. 238 with amendment No. 185 and say that I find myself in broad agreement with the hon. Member for North Devon (Mr. Harvey). The House needs to endorse a policy whereby the franchising director can collect a good deal of information from British Rail and, in due course, from franchisees, not only about their historic costs but about their prospective costs. I am happy to give the hon. Gentleman an assurance that we shall incorporate the substance of the amendments into the objectives to be given to the franchising director.
    The amendments are perfectly sensible, but I caution that there are certain instances in which it is appropriate to disclose prospective costs to private sector bidders. For example, if a line has been electrified British Rail, or a franchisee, will have information about what I hope would be the declining costs of running railway trains along it. It is important that such information be shared in the invitation to tender process. I stand by the commitment that I gave on 2 March. The point made by the hon. Member for North Devon was sensible, because the franchising director must consider prospective costs and extrapolate them in comparing the bids received.
    With regard to value for money, I should not like to accept amendment No. 187, or No. 186 which is related to it, because although the point of principle is clear, the franchising director will know what costs British Rail incurs in running a particular service. BR will run a shadow franchise and the costs will be clear. Therefore, when the director considers other offers from the private sector, including management-employee buy-out bids, he must be careful that against the benchmark of British Rail costs he makes a proper judgment of value for money. If he does not, he will be accountable to the Public Accounts Committee through the Comptroller and Auditor General.
    There may be some circumstances in which, because of the timing of expenditure, the franchising director needs to take a view, and I would not want to impose on him too inflexible and rigid a system. If the hon. Gentleman is prepared to accept my assurances that I shall take amendments Nos. 185 and 238 on board, perhaps he will respond by not pressing amendments Nos. 186 and 187.
    Mr. Harvey: I accept what the Minister says about amendments Nos. 186 and 187 being perhaps too inflexible, and I am grateful to him for his undertaking on amendments Nos. 185 and 238. I accept the need to give some information to bidders, but I ask that it should not be an automatic matter of course that all potential costs are made known to them—only those that the franchising director considers necessary for the purpose of developing the services in question. If we can reach an understanding on that point, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

  Clause 24
    TRANSFER OF FRANCHISE ASSETS OR SHARES TO FRANCHISE OPERATORS, FRANCHISEES ETC
    Amendment made: No. 110, in page 24, line 35, leave out from beginning to end of line 17 on page 26.—[Mr. Freeman.]
  Clause 25

    OTHER TERMS AND CONDITIONS OF FRANCHISE GREEMENTS
    Amendment made: No. 111, in page 26, line 33, leave out subsection (3) and insert—
    '(3) Without prejudice to the generality of the provisions relating to property, rights and liabilities that may be included in a franchise agreement, a franchise agreement may include provision requiring the franchise operator—

    (a) to acquire from such person as may be specified in the franchise agreement, and to use, such property or rights as may be so specified; or

    (b) to undertake such liabilities as may be so specified.

    (3A) A franchise agreement may include provisions with respect to the fares to be charged to persons wing the franchised services.
    (3B) Subject to any requirements imposed by or under this Act, a franchise agreement may contain any such provisions as the Franchising Director may think fit.'.
    No. 112, in page 26, line 41, leave out
    'in consequence of any such conditions'
    and insert
    ', or for the making of any other payment, in consequence of any condition or other provision of a franchise agreement'. [Mr. Freeman.]

  Clause 26
    FAILURE TO AWARD FRANCHISE AGREEMENT
    Amendment made: No. 113, in page 26, line 43, leave out from beginning to end of line 40 on page 27.— [Mr. Freeman.]
  Clause 29

    PASSENGER TRANSPORT AUTHORITIES AND EXECUTIVES: FRANCHISING
    Amendment made: No. 114, in page 33, line 22, leave out '26'and insert
    '(Failure to secure subsequent franchise agreement),.—[Mr. Freeman.]

  Clause 32

    PROPOSALS TO DISCONTINUE NON-FRANCHISED ETC. PASSENGER SERVICES
    Amendment made: No. 115, in page 36, line 31, leave out 'by or'.—[Mr. Freeman.]
    Mrs. Ewing: I beg to move amendment No. 232, in page 36, line 39, leave out 'three'and insert 'six'.
    I assure hon. Members that in speaking to the amendment in the names of my hon. Friend the Member for Ynys Môn (Mr. Jones) and myself, I do not intend to detain the House nor to press the amendment to a Division.
    Clause 32 defines
    "Proposals to discontinue non-franchised … passenger services"
    848
    and gives a clear signal that
    "the service operator shall give notice of the proposal"
    of a closure
    "to the Franchising Director not less than three months before the date specified".
    The amendment is not ideological; it relates to the practicalities of life, so I hope that the Government will be able to exercise some flexibility in responding to me. Three months may seem a substantial time in terms of giving notice and allowing a consultation period. However, decisions often coincide with holiday periods. In Scotland, for example, an announcement may be made in June; July and August tend to be our holiday period so it is difficult for organisations to get together to discuss the decision and to reach any formalised conclusion. The same would happen if an announcement were made in November because December and January are months when people may not be on holiday but when they are very much involved with their families over Christmas, new year and Burns night.
    I seek an element of flexibility. The three-month period should not be adhered to rigidly. I hope that the Government will give special consideration to a demand clearly expressed by the local community that the three-month period should be extended.
    The Minister for Transport in London (Mr. Steve Norris): The hon. Member for Moray (Mrs. Ewing) was kind enough to say that she did not intend to press the amendment. I understand the importance of the issue she has raised. Amendment No. 232 would require operators of the non-franchised passenger services to give, as she said, six months'notice rather than three months'notice. It is the franchising director who is under a duty to secure the continued provision of the service until the regulator decides on the merits of the closure proposal.
    There are two issues here. The first is whether three months or six months is the appropriate period in which to give notice to the franchising director so that he can consider whether he should secure a replacement service. Our view has been that three months is an adequate time for that process to take place because it is not subject to the holiday considerations that the hon. Member for Moray mentioned.
    If we were to rely only on the three months—if that were the sole determinant of the time available between notice of closure and closure being effected—the hon. Lady would have a perfectly fair point when she says that the time is inadequate. I emphasise that the point at issue is that the required period of notice being three months or six months has no bearing on whether a service continues to be available to passengers. The operator may not discontinue the service until the expiry of the notice period. From that expiry, the franchising director is under a duty to secure the continued provision of the service until the regulator has come to a decision on the closure proposal.
    If we extended the amount of notice that the franchising director has from the operator, it would merely eat into the time that the regulator took to consider the closure proposal. How reasonable it was to make the period three, four, five, six or more months would be a matter of commercial judgment. It is fair to say that to keep the figure of three months is not to erect an unreasonable barrier to entry into franchised services. However, I reassure the hon. Lady that the important point is that the period of three months is not a truncated period after which the regulator will give his decision. He will take

    849
    whatever time he needs. The franchising director is under an obligation to procure the continuance of the service if the operator, having given notice, then terminates the service. I hope that, with that assurance, the hon. Lady will withdraw the amendment.
    Mrs. Ewing: As the Minister has said that the three-month limit will not be applied rigidly, especially as it relates to the regulator, I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.
    Amendments made: No. 116, in page 37, line 21, leave out 'provide, or'.
    No. 117, in page 37, line 42, leave out 'provide, or'.
    No. 121, in page 38, line 5, leave out 'continue to provide or'.
    No. 119, in page 38, line 36, leave out `by or'.
    No. 120, in page 38, line 39, leave out paragraph (a) and insert—
    '(a) section (Failure to secure subsequent franchise agreement) above,'.
    No. 118, in page 38, leave out line 42 and insert—'to secure the provision of the service.'.—[Mr. Norris.]

  Clause 33

    PROPOSALS TO DISCONTINUE FRANCHISED ETC. PASSENGER SERVICES
    Amendments made: No. 122, in page 39, line 4, leave out 'by or'.
    No. 125. in page 40, line 6, leave out 'provide, or'.
    No. 123, in page 40, line 12, leave out 'continue to provide or'
    No. 124, in page 40, line 40, leave out 'by or'.—[Mr. Norris.]

  Clause 34

    NOTIFICATION OF PROPOSALS TO CLOSE OPERATIONAL PASSENGER NETWORKS
    Amendment made: No. 126, in page 41, line 48, at end insert—
    'and shall be under a duty during the interim period to secure the operation of the network or, as the case may be, the part of the network to which the proposed closure relates.'.—[Mr. Norris.]
    Mr. Norris: I beg to move amendment No. 127, in page 42, line 4, at end insert—
    '(6A) Without prejudice to any subsequent application of this section in relation to the network or the part of the network in question—

    (a) if the final decision on the closure question is that the proposed closure will not be allowed to take effect, the Franchising Director shall be under a duty to secure the operation of the network or, as the case may be, the part of the network after the interim period; and

    (b) if the final decision on the closure question is that the proposed closure will be allowed to take effect subject to compliance with conditions, the Franchising Director shall be under a duty to comply with those conditions or to secure that they are complied with.'.

    Madam Speaker: With this it will be convenient to discuss also Government amendments Nos. 129, 128, 131 to 138, 144, 139 to 143, 145, 152, 146, 147, 149 to 151, 159, 154 to 158, 161 and 163.
    Mr. Norris: This is a miscellany of amendments to clauses 32 to 41, which provide for the new closure procedures. They either fulfil commitments that were given in Standing Committee or are drafting inconsequentials.
    To deal with the amendments that fulfil the commitments given in Committee, it was suggested that the requirement in clause 36 that the consultative committees must act in accordance with any directions given by the regulator was inappropriate. The House knows that it was never our intention that the regulator should be able to prevent a consultative committee from holding a public hearing when investigating a proposed closure. However, I can understand how clause 36(4)(b) might be interpreted in that way. To rectify that concern, amendment No. 134 deals with that requirement.
    Amendment No. 138, which amends clause 39, ensures that any revocation or variation of a condition to a closure consent is published. It is sensible that any decision to vary or revoke conditions attached to a closure should be communicated to all those who received notification of the original decision and it should be displayed in all the stations in the area affected.
    The other amendments deal with the experimental services provided for in clause 41. The House is aware that they are, effectively, technical and consequential. The key amendments are amendments Nos. 151 and 155. In the interests of time, I will not go into detail on those unless the House wishes me to do so. I hope that I have assured the House that the amendments are consequential and technical.
    Amendment agreed to.
    Amendment made: No. 129, in page 42, line 7, at end insert—
    "the final decision on the closure question" means—

    (a) in a case where the decision of the Regulator under section 36(7) below with respect to the proposed closure is not referred to the Secretary of State under section 37 below, that decision; or

    (b) in a case where that decision is referred to the Secretary of State under section 37 below, the disposal of that reference by the Secretary of State;

    "the interim period" means the period beginning with the date mentioned in subsection (5)(b) above and ending four weeks after the date of the final decision on the closure question;'.—[Mr. Norris.]

  Clause 35

    NOTIFICATION OF PROPOSALS TO CLOSE RAILWAY FACILITIES USED IN CONNECTION WITH PASSENGER SERVICES
    Amendments made: No. 128, in page 42, line 42, leave out 'person'and insert'operator'.
    No. 130, in page 43, line 25, at end insert—
    'and shall be under a duty during the interim period to secure the operation of the relevant facility or, as the case may be, the part of the relevant facility to which the proposed closure relates.'.
    No. 131, in page 43, line 29, at end insert—
    '(6A) Without prejudice to any subsequent application of this section in relation to the relevant facility or the part of the relevant facility in question—

    (a) if the final decision on the closure question is that the proposed closure will not be allowed to take effect, the Franchising Director shall be under a duty to secure the operation of the relevant facility or, as the case may be, the part of the relevant facility after the interim period; and

    851

    (b) if the final decision on the closure question is that the proposed closure will be allowed to take effect subject to compliance with conditions, the Franchising Director shall be under a duty to comply with those conditions or to secure that they are complied with.'.

    No. 132, in page 43, line 36, at end insert—
    "the final decision on the closure question" means—

    (a) in a case where the decision of the Regulator under section 36(7) below with respect to the proposed closure is not referred to the Secretary of State under section 37 below, that decision; or

    (b) in a case where "that decision is referred to the Secretary of State under section 37 below, the disposal of that reference by the Secretary of State;

    "the interim period" means the period beginning with the date mentioned in subsection (5)(b) above and ending four weeks after the date of the final decision on the closure question;'.—[Mr. Arbuthnot.]

  Clause 36

    NOTIFICATION TO, AND FUNCTIONS OF, THE REGULATOR AND THE RELEVANT CONSULTATIVE COMMITTEES
    Amendments made: No. 133, in page 44, line 24, after 'opinion'insert
    ', on the basis of the information available to it,'.
    No. 134, in page 44, line 33, leave out from 'Regulator'to end of line 34.—[Mr. Arbuthnot.]

  Clause 37

    REFERENCE TO THE SECRETARY OF STATE OF DECISIONS OF THE REGULATOR CONCERNING PROPOSED CLOSURES
    Amendments made: No. 135, in page 46, line 10, at end insert—
    'but this subsection is without prejudice to any subsequent proposal for closure.'.
    No. 136, in page 46, line 18, leave out first 'the'and insert 'any'.— [Mr. Arbuthnot.]

  Clause 39

    VARIATION OF CLOSURE CONDITIONS
    Amendments made: No. 137, in page 46, line 39. after 'closure'insert
    ', other than a condition requiring the Franchising Director to secure the provision of a bus substitution service (within the meaning of sections 119 to 124 of the Transport Act 1985),'.
    No. 138, in page 46, line 42, at end insert—
    '(1A) Where, in exercise of his power under subsection (1) above, the Regulator decides to vary or revoke any closure condition, he shall send a copy of his decision to—

    (a) the Secretary of State,

    (b) the Franchising Director,

    (c) every consultative committee whose area consists of or includes the whole or any part of the area affected by the closure to which the condition relates, and

    (d) either—

    (i) if the closure in question is one falling within section 32 above, the service operator, within the meaning of that section, or

    (ii) if the closure in question is one falling within section 34 or 35 above, the operator of the network, station or light maintenance depot in question who gave the notice required by subsection (1) of the section in question,

    and shall publish notice of the decision at every station within the area affected by the closure to which the condition relates.'.
    No. 144, in page 47, line 4, after 'section'insert—
    852
    '"the area affected", in relation to any closure, shall be construed in accordance with the section under or by virtue of which the Franchising Director was required to publish in connection with that closure the notice referred to in section 36(1) above;'.—[Mr. Arbuthnot.]

  Clause 40

    BUS SUBSTITUTION SERVICES, ETC.
    Amendments made: No. 139, in page 47, line 15, leave out from 'discontinued'to end of line 16.
    No. 140, in page 47, line 21, leave out paragraph (b) and insert—
    '(b) as if any reference to the imposition of a condition by the Secretary of State were a reference to the imposition of a closure condition under this Part by the Secretary of State or the Regulator;'.
    No. 141, in page 47, line 29, after 'State'insert
    '(other than a reference to the imposition of a condition by him)'.
    No. 142, in page 47, line 32, leave out '35 or 36 above; and'and insert
    '36(7) or 37(2) above;
    (bb) in subsection (1)(a) of section 119, the words "by the Board" shall be treated as omitted; and'.
    No. 143, in page 47, line 40, after 'committee'insert
    'established under subsection (2) of section 2 of the Railways Act 1993 or, in relation to the Greater London area, within the meaning of that section, the London Regional Passengers'Committee;'.
    No. 145, in page 47, line 43, at end insert—
    '(bb) subsection (3) shall be disregarded;'.
    No. 152, in page 48, line 5, leave out '35 or 36'and insert '32 or 33'.
    No. 153, in page 48, line 6, after '27'insert
    '(Transfers of franchise assets and shares) and (Failure to secure subsequent franchise agreement)'.—[Mr. Arbuthnot.]

  Clause 41

    EXPERIMENTAL RAILWAY PASSENGER SERVICES
    Amendments made: No. 146, in page 48, line 19, at end insert
    'on any line or from any station'.
    No. 147, in page 48, line 21, after 'service'insert
    'on any line or from any station'.
    No. 148, in page 48, line 25, leave out 'neither to
    provide that service nor'and insert 'not'.
    No. 149, in page 48, line 28, after 'service'insert
    'on any line or from any station'.
    No. 150, in page 48, line 35, after 'weeks'insert
    'in a local newspaper circulating in the area affected and'.
    No. 151, page 48, line 38, leave out subsection (5) and insert—
    '(5) In this section "experimental passenger service", in relation to any line or station, means a railway passenger service on that line or from that station which is designated by the Franchising Director as experimental and which either—

    (a) was so designated before its introduction; or

    (b) before being designated under this section as experimental, was at some time provided on an experimental basis, within the meaning of section 56A of the Transport Act 1962.'.

    No. 159, in page 49, line 2, after 'weeks'insert
    'in a local newspaper circulating in the area affected and'.
    No. 154, in page 49, line 11, after 'experimental'insert
    '(a)'.
    No. 155, in page 49, line 14, at end insert
    'but
    (b) if the service is one which has been provided on an experimental basis, within the meaning of section 56A

    853
    of the Transport Act 1962, every period during which it was so provided, or during which the provisions of that section had effect in relation to it by virtue of subsection (9A)(b) below, shall be counted as a period during which the service was designated as experimental.
    (9A) Where, immediately before the coming into force of section 42(1) below so far as relating to section 56A of the Transport Act 1962 (proposals to discontinue services provided on an experimental basis), a railway passenger service is being provided on an experimental basis within the meaning of the said section 56A—

    (a) none of the following provisions, that is to say, sections 32 and 33 above, section 42(2) and (3) below and Schedule 4 to this Act, shall have effect in relation to that service until such time as a franchise agreement is entered into in respect of that service or in respect of some or all of the other railway passenger services provided in the area in which, or on the line on which, that service is provided; and

    (b) the provisions of the said section 56A shall continue to have effect with respect to that service—

    (i) until the time mentioned in paragraph (a) above, or

    (ii) until the service becomes an experimental passenger service under this section,

    whichever first occurs.'.
    No. 156, in page 49, line 15, after 'section'insert—
    "'the area affected", in relation to an experimental service on any line or from any station, means the area in which is situated the line or, as the case may be, the station in question.'.
    No. 157, in page 49, line 16, leave out 'under'and insert
    'in satisfaction of requirements imposed by'.
    No. 158, in page 49, line 18, leave out 'under'and insert 'in satisfaction of requirements imposed by'.—[Mr. Arbuthnot.]

  Clause 56

    RESPECTIVE FUNCTIONS OF THE REGULATOR AND THE DIRECTOR GENERAL OF FAIR TRADING, AND FUNCTIONS OF THE MONOPOLIES COMMISSION
    Amendments made: No. 4, in page 62, line 31, leave out 'commercial activities connected with'and insert 'the supply of'.
    No. 5, in page 64, line I, leave out subsection (10).—[Mr. Norris.]

  Clause 60
    KEEPING OF REGISTER BY THE REGULATOR
    Amendment made: No. 161, in page 66, line 34, leave out '41(1)'and insert '41(2) or (3)'.—[Mr. Arbuthnot.]
  Clause 61

    KEEPING OF REGISTER BY THE FRANCHISING DIRECTOR
    Amendments made: No. 162, in page 67, line 28, at end insert—
    'and, without prejudice to the generality of paragraph (c) above, "amendment" in that paragraph includes any variation of the property, rights and liabilities which from time to time constitute the franchise assets in relation to the franchise agreement in question, whether the variation is effected in accordance with the terms of, or by an amendment made to, the franchise agreement.'.
    No. 6, in page 67, line 31, leave out 'section 59(2)(a) and (b) above'and insert
    'paragraphs (a) and (b) of section 59(2) above, for this purpose taking references in those paragraphs to the Regulator as references to the Franchising Director.'.—[Mr. Norris.]

  Clause 62

    ANNUAL AND OTHER REPORTS OF THE REGULATOR
    Amendment proposed: No. 7, in page 68, line 9, after 'shall'insert 'include'.—[Mr. Norris.]
    Mr. Harvey: In the Standing Committee, I moved an amendment standing in my name and that of members of the all-party disablement group. At that time the Minister agreed to accept the amendment in principle and come back with a reworking of it. As yet, I have not seen any sign of any such amendment. The Minister specifically said that he would reflect on how to give effect to the meaning of the amendment. It may be that he is still reflecting on it. Is it his intention to table an amendment in another place? I shall be pleased to hear about that.
    Mr. Freeman: Amendment No. 7 fulfils the commitment that I gave to my hon. Friend the Member for Exeter (Sir J. Hannam) but, more specifically, the hon. Member for North Devon (Mr. Harvey).
    If the hon. Member is not satisfied that we have fulfilled our commitment in connection with the disabled, perhaps he will communicate with me. I give an undertaking that then we shall consider the matter in another place. The matter should not be controversial. Clear commitments were given that in the annual report of the regulator reference would be made to not only the employment of disabled people but facilities for them.
    Mr. Harvey: The Minister may be confused about the subject matter. The amendment to which I referred dealt with a code of practice governing facilities for passengers on the railways. It did not cover employment. It dealt with how the Disabled Persons Transport Advisory Committee was to be involved in communication with the regulator. Welcome as the string of amendments are, they do not deal with that subject.
    Mr. Freeman: I certainly recollect that commitment. The hon. Gentleman is right: it is not covered by amendment Nos. 7 to 11. I assure him that we shall return to the subject in another place. We have not yet reached the right conclusion. I shall write to the hon. Gentleman tomorrow.
    Mr. Peter Bottomley: I do not seek a commitment from my hon. Friend the Minister, but will he consider asking the chairman of the advisory committee to provide an open letter to the Secretary of State giving the views of the committee on the position in the Bill as it appears to the committee?
    Mr. Freeman: We have already received an opinion from the previous chairman. I shall write to the present chairman and ask him to write to my right hon. Friend the Secretary of State on that point.
    Amendment agreed to.
    Amendments made: No. 8, in page 68, line 10, leave out 'include'.
    No. 9, in page 68, line 12, at end insert—
    (aa) general surveys of any developments during that year which relate to—

    (i) the provision of railway passenger services or station services for, or the use of such services by, persons who are disabled; or

    (ii) the employment by licence holders of persons who are disabled;'.

    No. 10, in page 68, line 13, leave out 'set'and insert 'a statement setting'.
    No. 11, in page 68, line 15, leave out 'include'.—[Mr. Arbuthnot.]

  Clause 63

    ANNUAL REPORTS OF THE FRANCHISING DIRECTOR
    Amendment made: No. 12, in page 69, line 7, leave out 'section 59(2)(a) and (b) above'and insert
    'paragraphs (a) and (b) of section 59(2) above, for this purpose taking references in those paragraphs to the Regulator as references to the Franchising Director.'.—[Mr. Arbuthnot.]

  Clause 65

    GENERAL. DUTIES OF CONSULTATIVE COMMITTEES
    Amendment made: No. 163, in page 71, line 28, leave out '35 to 41 above'and insert
    '32 to 41 above or Schedule 4 to this Act.'.—[Mr. Arbuthnot.]

  Clause 68
    POWER OF THE FRANCHISING DIRECTOR TO REQUIRE INFORMATION FROM THE BOARD AND ITS WHOLLY OWNED SUBSIDIARIES
    Amendment made: No. 13, in page 74, leave out lines 22 to 37.—[Mr. Arbuthnot.]
  Clause 71

    MEANING OF "RAILWAY SERVICES" ETC
    Amendment proposed: No. 14, in page 77, line 44, at end insert
    'and references to carrying, or to the carriage of, passengers by railway shall be construed accordingly.'.—[Mr. Norris.]
    Madam Speaker: With this it will be convenient to take Government amendments Nos. 15, 16, 167, 17, 18, 19, 20, 21, 83 and 108.
    Dr. Marek: Will the Minister say something about amendment No. 14? I have been looking out for the implementation of the car parking provisions. I wonder whether this group of amendments contains an amendment on that subject. That may be the case. If so, I apologise to the Minister.
    There is a problem with car parking, certainly in the London area. It is feared that franchisees will use railway car parks for purposes other than car parking. Can the Minister help me on that matter?
    Mr. Norris: I remember well the debates that we had in Committee on that point. The amendments make it clear that the term "station services" includes car parking. That means, for example, that where the clause 4 powers impose a duty on the regulator to protect the interests of users of railway services, that includes station services. That duty would include protecting the interests of the users of the car parks at stations.
    To that extent, the amendment provides the hon. Gentleman with the reassurance that he seeks. He and I debated on a previous occasion the effect of planning law on surplus assets. That is perhaps more relevant to the point that the hon. Gentleman wanted to make. I have been advised that amendment No. 14 addresses the point that he made in Committee.
    Amendment agreed to.
    Amendment made: No. 15, in page 77, line 46, at end insert—
    'and, for the purposes of the above definitions of "network services" and "station services", where a person permits another to use any land or other property comprised in a network or station he shall be regarded as providing a service which falls within the meaning of "network services" or "station services", as the case may be.'.—[Mr. Arbuthnot.]

  Clause 72

    INTERPRETATION OF PART I
    Amendments made: No. 166, in page 79, line 17, leave out '24(4)'and insert—
    (Transfers of franchise assets and shares) (8)'.
    No. 164, in page 79, leave out lines 20 and 21.
    No. 165, in page 79, leave out lines 31 and 32.
    No. 16, in page 80, leave out lines 1 and 2 and insert—
    '"locomotive" means any railway vehicle which has the capacity. for self-propulsion (whether or not the power by which it operates is derived from a source external to the vehicle);'.
    No. 167, in page 80, leave out lines 3 and 4.
    No. 17, in page 80, line 8, after 'with' insert
    'any of the track comprised in'.
    No. 18, in page 80, leave out lines 10 to 12 and insert—
    '"together constituting a system of track and other installations which is used for and in connection with the support, guidance and operation of trains carrying passengers or goods.'.
    No. 19, in page 80, line 45, at end insert—
    '"railway vehicle" includes anything which, whether or not it is constructed or adapted to carry any person or load. is constructed or adapted to run on flanged wheels over or along track;'.
    No. 20, in page 81, leave out lines 25 to 27 and insert—
    '"train" means—

    (a) two or more items of rolling stock coupled together, at least one of which is a locomotive; or

    (b) a locomotive not coupled to any other rolling stock; "vehicle" includes railway vehicle.'.—[Mr. Arbuthnot.]

  Clause 73

    POWERS OF THE BOARD TO FORM COMPANIES
    Amendment made: No. 168, in page 81, line 47, after '31'insert
    '(Transfers of franchise assets and shares) and (Failure to secure subsequent franchise agreement)'.—[Mr. Arbuthnot.]

  Clause 74

    POWERS OF THE BOARD TO MAKE TRANSFER SCHEMES
    Amendments made: No. 169, in page 82, leave out lines 28 and 29 and insert—

    '(d) the Franchising Director, or

    (e) any company which is wholly owned by the Franchising Director,'.

    No. 170, in page 82, line 30, at end insert 'or to a franchise company.'.
    No. 171, in page 83, leave out lines 1 to 3 and insert—
    '(c) for the purpose of effecting any transfer contemplated by section '(Transfers of franchise assets and shares) above,'.
    No. 172, in page 83, line 26, leave out subsection (7).
    No. 174, in page 83, line 39, leave out from beginning to end of line 6 on page 84 and insert—
    '(9) In this Part, "franchise company" means any body corporate which is, or is to be, the franchisee or the franchise operator under a franchise agreement.'.

  Clause 75

    TRANSFER TO THE SECRETARY OF STATE OR THE FRANCHISING DIRECTOR OF THE BOARD'S FUNCTION OF MAKING TRANSFER SCHEMES
    Amendment made: No. 21, in page 84, line 20, leave out
    'a franchise company or the Regulator;'
    and insert
    'or a franchise company;'.

  Clause 76

    TRANSFERS OF SHARES OF CERTAIN COMPANIES: PROVISIONS SUPPLEMENTAL TO SECTIONS 73 TO 75
    Amendments made: No. 179, in page 85, line 9, leave out 'or a franchise company'.
    No. 177, in page 85, line 10, leave out 'or franchise company'.
    No. 178, in page 85, line 13, leave out
    'neither the Board nor any nominee of the Board'
    and insert
    'none of the following persons, that is to say, the Board, any wholly owned subsidiary of the Board or any person acting on behalf of the Board or its wholly owned subsidiaries,'.
    No. 176, in page 85, leave out lines 20 and 21 and insert—
    '(5) None of the following persons, that is to say, the Franchising Director, any company which is wholly owned by the Franchising Director or any person acting on behalf of the Franchising Director or any such company, shall dispose of any shares of a company which is wholly owned by the Franchising Director except—'.
    No. 175, in page 85, leave out line 37 and insert
    'by the Franchising Director, any company which is wholly owned by the Franchising Director or any person acting on behalf of the Franchising Director or any such company.'.—[Mr. Arbuthnot.]

  Clause 83

    POWER OF THE SECRETARY OF STATE OR THE FRANCHISING DIRECTOR TO REQUIRE PROVISION OF INFORMATION IN CONNECTION WITH TRANSFER SCHEMES
    Amendments made: No. 180, in page 90, line 22, after 'functions', insert
    'conferred on him by section (Powers of the Franchising Director to make transfer schemes) above or'.
    No. 181, in page 90, line 33, leave out 'and any franchise company'and insert
    'any franchise company and any company which is wholly owned by the Franchising Director.'.—[Mr. Arbuthnot.]

  Clause 84

    FUNCTIONS OF SECRETARY OF STATE IN RELATION TO TRANSFER SCHEMES
    Amendment made: No. 182, in page 91, line 34, leave out from 'scheme'to 'unless'in line 37 and insert
    'made by the Board or the Franchising Director, otherwise than under section (Powers of the Franchising Director to make transfer schemes) above, shall not come into force'.—[Mr. Arbuthnot.]

  Clause 85

    SUPPLEMENTARY PROVISIONS AS TO TRANSFERS BY TRANSFER SCHEME
    Amendment made: No. 184, in page 92, line 6, leave out 'section 74(6)'and insert
    858
    'sections 74(6) and (Powers of the Franchising Director to make transfer schemes) (4)'.—[Mr. Arbuthnot.]

  Clause 97

    GRANTS TO THE BOARD
    Amendments made: No. 39, in page 99, line 33, at beginning insert '(a)'.
    No 40, in page 99, line 33, at end inset 'or
    (b) without prejudice to paragraph (a) of this subsection, for the purpose of enabling that Board to make any payment (whether by way of repayment of principal or payment of interest or of any other description) in respect of any loan made to them under section twenty of this Act.'.—[Mr. Arbuthnot.]

  Clause 99
    EXTINGUISHMENT OF CERTAIN LIABILITIES OF THE BOARD
    Amendment made: No. 41, in page 100, leave out lines 14 to 19.—[Mr. Arbuthnot.]
  Clause 101

    TAXATION PROVISIONS
    Amendment made: No. 70, in page 100, line 31, leave out 'taxation'and insert
    'stamp duty and stamp duty reserve tax'.—[Mr. Arbuthnot.]

  Clause 103

    THE SECRETARY OF STATE, THE FRANCHISING DIRECTOR AND THE BOARD NOT TO BE REGARDED AS SHADOW DIRECTORS OF CERTAIN RAILWAY COMPANIES ETC.
    Amendments made: No. 71, in page 101, line 35, at end insert—
    '(aa) any company which is wholly owned by the Franchising Director;'.
    No. 72, in page 102, line 11, after '74(6)'insert
    'or, as the case may be, (Powers of the Franchising Director to make transfer schemes)(5)(b)'.—[Mr. Arbuthnot.]

  Clause 109

    RAILWAY HERITAGE
    Mr. Bayley: I beg to move amendment No. 48, in page 106, line 14, after 'Board', insert 'or any franchise operator'.
    Madam Speaker: With this it will be convenient to discuss the following amendments: Government amendment No. 22.
    No. 49, in page 106, line 17, after 'subsidiary', insert 'or the franchise operator'.
    No. 50, in page 106, line 24, after 'Board', insert 'or any franchise operator'.
    No. 51, in page 106, line 26, after first 'Board', insert 'or any franchise operator'.
    No. 52, in page 106, line 29, after 'subsidiary', insert 'or franchise operator'.
    No. 53, in page 106, line 34, after first 'Board', insert 'or any franchise operator'.
    No. 54, in page 106, line 36, after 'subsidiary', insert 'or franchise operator'.

    859
    No. 55, in page 106, line 37, at end insert—
    '—provided that

    (i) the Public Record Offices and the National Railway Museum shall be given priority of claim on records and artefacts originating in or presently held by the public sector and that the National Railway Museum shall be given priority of claim on records and artefacts created by franchise operators; and

    (ii) Transfers of records and artefacts'to the Public Record Offices and the National Railway Museum shall be without consideration.'.

    Mr. Bayley: One day. everything set in place by this Bill will be history. All the privatised trains and rolling stock will have reached the end of their useful life and will be scrapped. Under section 144 of the Transport Act 1968, the National Railway museum has the right to claim, at no cost, redundant railway equipment, and although the Bill brings in a similar provision for public sector railway companies, it makes no similar provision for the equipment of private sector railway companies. This group of amendments seeks to do that.
    The Government say that they intend to move as quickly as they can from a regime of publicly owned railways to one of privately owned railways. If the National Railway museum is to remain a major excellent repository for our country's railway heritage, there must be provision for it to claim redundant railway equipment from private sector operators. We are talking about redundant equipment that has reached the end of its useful life and has only a scrap value. I urge the Government to think again on this point.
    Mr. Freeman: I will not commend this group of amendments to the House, but I can give the hon. Gentleman the assurance that the Government want the National Railway museum in York, in the hon. Gentleman's constituency, to thrive and prosper.
    It is quite right that there should be controls over British Rail and public sector assets, but I believe that assets acquired by the private sector should be negotiated for acquisition by the museum, and there should be no compulsion.
    However, I give the hon. Gentleman and all those interested in the National Railway museum—who included, of course, the late Robert Adley-the assurance that the Department will work closely with the trustees and the director of that museum to make sure that it is a proper and fitting tribute to the railway system.
    I hope that, with those assurances, the hon. Gentleman will not press the amendment.
    Mr. Bayley: I will not press the amendment, in view of the Minister's statement.
    Madam Speaker: Is the hon. Gentleman withdrawing the amendment? Will he make it quite clear?
    Mr. Bayley: I am, Madam Speaker.
    Amendment, by leave, withdrawn
    Amendment made: No. 22, in page 106, line 15, after 'artefact'insert
    'which it owns and which is'.—[Mr. Arbuthnot.]

  Clause 118

    GRANTS AND SUBSIDIES
    Amendments made: No. 73, in page 112, line 45, at end insert—
    860
    '(1A) The Secretary of State shall be the competent authority of Great Britain, in relation to persons who operate services for the carriage of goods by railway, for the purposes of the public service obligations regulations.'.
    No. 77, in page 113, line 3, leave out 'and'.
    No. 79, in page 113, line 5, at end insert
    'and
    (d) to the extent specified in subsection (3A) below

    (i)every non-metropolitan county or district council in England or in Wales and every regional or islands council in Scotland, and

    (ii) every London borough council and the Common Council of the City of London,'.

    No. 74, in page 113, leave out line II and insert 'railway passenger services'.
    No. 75, in page 113, line 17, at end insert—
    '(3A) For the purposes of subsection (2) above—

    (a) a council falling within paragraph (d)(i) of that subsection shall only be the competent authority in relation to those railway passenger services whose Provision the council secures under section 63 of the Transport Act 1985 (passenger transport in areas other than passenger transport areas); and

    (b) a council falling within paragraph (d)(ii) of that subsection shall only be the competent authority in relation to those railway passenger services in respect of which the council enters into and carries out agreements under section 59 of the London Regional Transport Act 1984 (provision of extra transport services in London).'.

    No. 76, in page 113, line 21, leave out `services for the carriage of passengers by railway'and insert 'railway passenger services'.
    No. 78, in page 113, line 36, leave out subsection (7) and insert—
    '(7) A statutory instrument containing an order under subsection (6) above shall not be made unless a draft of the instrument has been laid before and approved by a resolution of the House of Commons.'.—[Mr. Norris.]

  Clause 130

    GENERAL INTERPRETATION
    Amendments made: No. 83, in page 120, line 8, at end insert—
    '"the Monopolies Commission" means the Monopolies and Mergers Commission;'.
    No. 80, in page 120, line 24, after '74'insert
    'or (Powers of the Franchising Director to make transfer schemes)'.
    No. 81, in page 120, line 28, leave out from `when'to end of line 32 and insert
    'it has no members other than—

    (a) the Secretary of State, the Franchising Director or a Government department,

    (b) a company which is itself wholly owned by the Crown, or

    (c) a person acting on behalf of the Secretary of State, the Franchising Director, a Government department or such a company.'

    No. 82, in page 120, line 32, at end insert—
    '(2A) For the purposes of this Act, a company shall be regarded as "wholly owned by the Franchising Director" at any time when it has no members other than—

    (a) the Franchising Director,

    (b) a company which is itself wholly owned by the Franchising Director, or

    (c) a person acting on behalf of the Franchising Director or such a company.'.—[Mr. Norris.]

  Clause 132

    SHORT TITLE, COMMENCEMENT AND EXTENT
    Amendments made: No. 23, in page 121, line 23, after '129,'insert '(Crown application)'.
    No. 84, in page 121, line 24, at end insert—
    '() section (power to make consequential modifications in other Acts etc.);'.[Mr. Norris.]

  Schedule 1

    THE REGULATOR AND THE FRANCHISE DIRECTOR
    Amendments made: No. 85, in page 122, line 38, after '(b)'insert
    'except as otherwise provided by this Act,'.
    No. 86, in page 122, line 40, after `(c)'insert
    'expect as otherwise provided by this Act,'.—[Mr. Norris.]

  Schedule 7

    TRANSFERS BY TRANSFER SCHEME
    Amendments made: No. 87, in page 141, line 6, after `where'insert '(a)'
    No. 88, in page 141, line 8, at end insert 'and
    (b) the transfer scheme in question is made otherwise than under section (Powers of the Franchising Director to make transfer schemes) of this Act.'.
    No. 24, in page 142, line 47, leave out 'it'and insert 'he'.
    No. 25, in page 144, line 6, leave out 'itself'and insert 'himself.
    No. 26, in page 146, line 17, leave out 'it'and insert 'he'.
    No. 27, in page 146, line 19, leave out first 'it'and insert 'him'.
    No. 28, in page 146, line 19, leave out second 'it'and insert 'he'.—[Mr. Norris.]

  Schedule 8

    TAXATION PROVISIONS
    Amendments made: No. 89, in page 146, line 27, leave out from beginning to end of line 27 on page 155.
    No. 90, in page 155, line 29, leave out 'this Part of'.
    No. 91, in page 155, line 31, leave out 'has the same meaning as in Part I of this Schedule'and insert
    'means a transfer scheme, if and to the extent that it provides for the transfer of property, rights or liabilities from a body or person falling within any of paragraphs (a) to (e) of section 74(1) of this Act to another such body or person.'.
    No. 92, in page 155, line 32, leave out 'this Part of.
    No. 93, in page 155, line 42, leave out '(a)'.
    No. 94, in page 155, line 44, leave out 'or'.
    No. 95, in page 155, line 45, leave out `(b)'and insert—
    '(2A) Stamp duty shall not be chargeable on any instrument or agreement which is certified to the Inland Revenue by the Secretary of State-—
    (a) as made'.
    No. 105, in page 156, line 3, at end insert 'and
    (b) as operating in favour of no person who does not fall within paragraphs (a) to (e) of section 74(1) of this Act.'.
    No. 97, in page 156, line 10, leave out sub-paragraph (4).
    No. 98, in page 156, line 17, leave out `to (4)'and insert '(2), (2A) and (3)'.
    No. 99, in page 156, line 23, at end insert—
    '(6) Section 12 of the Finance Act 1895 (collection of stamp duty in cases of property vested by Act or purchased under statutory power) shall not operate to require—
    862

    (a) the delivery to the Inland Revenue of a copy of this Act, or

    (b) the payment of stamp duty under that section on any copy of this Act,

    and shall not apply in relation to any instrument on which, by virtue of the preceding provisions of this paragraph, stamp duty is not chargeable.'.
    No. 100, in page 156, line 25, leave out `No agreement'and insert
    'An agreement to transfer chargeable securities, as defined in section 99 of the Finance Act 1986, to a person falling within paragraphs (a) to (e) of section 74(1) of this Act shall not give rise to a charge to stamp duty reserve tax if the agreement is'.
    No. 101, in page 156, line 26, leave out `by'.
    No. 102, in page 156, line 27, after '(a)'insert `by'.
    No. 103, in page 156, line 28, after `(b)'insert 'by'.
    No. 104, in page 156, line 30, after `(c)'insert `by'.
    No. 96, in page 156, leave out lines 31 to 39 and insert—
    '(2) An agreement shall not give rise to a charge to stamp duty reserve tax if the agreement is made in pursuance of Schedule 7 to this Act in connection with a restructuring scheme made as mentioned in paragraph (a), (b) or (c) of sub-paragraph (1) above.'.—[Mr. Norris.]

  Schedule 13

    REPEALS
    Amendment made: No. 108, in page 175, line 26, column 3, at end insert 'Sections 69, 70 and 71.'.—[Mr. Norris.]
    Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified.]
    9.59 pm
    Mr. MacGregor: I beg to move, That the Bill be now read the Third time.
    There is widespread agreement in the country that we should make better use of our railways. That is reflected in the report of the Select Committee on Transport to which we made a positive response last week. The Bill provides us with the opportunity to take forward our reforms which will ensure that the improvements in British Rail in recent years-I have constantly paid tribute to the management, the staff and the board for those improvements-are advanced further. I am confident that the new structure contained in the Bill will be very much to the benefit of passenger services, passengers, freight and employees on the railway.
    The Government's policy was first set out in a White Paper last July. The detail of that policy has since been developed in a series of consultative documents and policy statements issued during the passage of the Bill. In addition, a long series of debates took place in Standing Committee and, as a result of points of view expressed there, a considerable number of amendments have been made on Report. That demonstrates that we have been listening and have been determined to ensure that, concomitant—
    It being Ten o'clock, further proceedings stood adjourned.
    Motion made, and Question put forthwith, pursuant to Standing Order No. 14 (Exempted business),
    That, at this day's sitting, the Railways Bill may be proceeded with, though opposed, until any hour.—[Mr. Robert G. Hughes.]
    Question agreed to.
    Question again proposed, That the Bill be now read the Third time.
    Mr. MacGregor: Concomitant with our policy and objectives, we are prepared to make changes where we think that the case has been made out. I should like to pay a particular tribute to my hon. Friend the Minister for Public Transport for all that he has done on the Bill and to my hon. Friends who have supported him.
    Throughout the process, our policy and the principles underlying it have remained clear and consistent. We believe that the best future for the railways lies in involving the private sector in their operation and management to the maximum possible extent.
    There is no reason why railways should be denied the benefits that the injection of private sector initiative and discipline and the approaches of the private sector have brought other industries. However, the railways are special and the involvement of the private sector in the railways requires new and imaginative solutions.
    Our proposals for franchising passenger services are an example of that. Yesterday, I announced our plans for restructuring the remainder of British Rail's passenger services. We had already announced the first seven franchises and yesterday I announced a further 18; the services will be organised into 25 separate groups to provide the basis for transferring the provision of all British Rail's passenger railway services to the private sector. The groups are based on the need to reflect operational common sense, to produce packages that will be attractive to bidders and to bring back a sense of local and regional identity, and, I hope, a sense of pride in the railways.
    I repeat what I said earlier today, in view of some of the slightly misleading comments that were made this morning on those 25 franchises. They are not all happening at once or in the near future. It is a gradual process of development of the franchises to make sure that we proceed in a way that makes the policy work properly operationally and does not cause any problems in the process.
    Mr. Dykes: That presumably means that my right hon. Friend categorically accepts the principles in paragraph 537 of the report of the Select Committee on Transport which makes similar suggestions.
    Mr. MacGregor: I do not have paragraph 537 in front of me, but it is another way in which we have worked with the Select Committee. We have based the division of the franchises very much along the lines that the Select Committee requires.
    Our proposals are also pragmatic. The Government are fully aware of the importance of the industry to our country and to the economy. We cannot and will not take risks with the railways; hence our firm commitments to maintaining the network and to continuing public subsidy for socially necessary services and our commitments to rigorous closure procedures and safeguards to ensure continuity of services.
    The Opposition have tried to misrepresent our policies, stirring up unjustified concerns among passengers, employees in the industry and pensioners. There is no better example than pensioners. The proposals we announced last week demonstrate just how unfounded those concerns were.
    Our policy for the railways is also realistic. There is no magical solution to the structural decline that the railways have suffered since the 1930s, but the Government are
    864
    firmly committed to ensuring that the railways get the best possible opportunity to make the most of their advantages. That is clear in respect of freight.
    We all know that there is a big challenge if the railways are to increase the amount of freight they carry and to halt the decline from rail to road. I elaborated some of the problems yesterday, but I believe that the establishment of the three new geographically based companies out of British Rail's existing trainload freight and contract services offers the prospect of an innovative, competitive freight railway in the private sector, combined with the other policies of open access and the various subsidy arrangements that I announced on Second Reading. In the last two days, we have not had much time to dwell on the issue of freight, but I believe that our policies undoubtedly offer the best way forward in that respect for the railways.
    The Bill will enable us to deliver all those policies. It is now ready to go to another place. It has been carefully examined and extensively debated in more than 100 hours of consideration in Standing Committee, and I commend it to the House.
    10.5 pm
    Mr. Prescott: The Bill has absolutely nothing to do with improving facilities for passengers. It has nothing to do with reintroducing pride into the railway system. It certainly has nothing to do with common sense. It has everything to do with the ideological obsession of the Government to change the ownership of British Rail from a publicly owned facility meeting public needs to a privately owned company concerned with private greed.
    The Government have made it clear during the 100 hours of discussion, and in our last two days of debate, that they do not see the Bill as having anything to do with competition. The idea that changing ownership will bring about competition and introduce an entrepreneurial climate through a privatised culture has been exploded in all our debates. It has nothing to do with competition. It has only to do with the replacement of a public monopoly with a private monopoly.
    Nor has the Bill anything to do with the market deciding fares, taking account of what the market can provide—the principle of the market philosophy—because the Secretary of State made it clear today that all fares will be controlled by a regulator. Clearly, the market philosophy cannot apply in those circumstances.
    The changes that have taken place—there have been many—have come about because the Government have realised that the Bill is impractical in the running of a railway system. So much is that the case that one of the first and major changes to be made by the Secretary of State was to ensure that, up to December 1996, the powers of the regulator and the franchise operators and directors shall be subjected to the right hon. Gentleman's control.
    In other words, the right hon. Gentleman is imposing political control over and above the bodies that he is setting up to see that competitive forces play a part in the railways. They will not play such a part and he knows it. Indeed, if the regulator took action to defend his position in relation to his powers in the Bill, the Secretary of State could overrule him. So the right hon. Gentleman has taken out a form of insurance. I assume that that will not be the present Secretary of State, who will be in his current job for only a short time longer. If he moves to the Treasury

    865
    and does the job as well there as he has done at the Department of Transport, heaven help us. The mess will continue.
    I have not witnessed in my 20 years in the House a Bill that has been so unanimously opposed by so many bodies, which have made their views known in many articles. Passenger boards and consumer groups have made clear their unhappiness with the Bill. Potential bidders for the operation, freight and passenger services, have moved away from offering their services and have said that it is not a good Bill from their point of view.
    The employees have shown that the conditions that will apply to them and the redundancies that will affect them are unacceptable. Although the right hon. Gentleman has spoken of improved pensions, many of my hon. Friends and others believe that it is still one of the main intentions of the Bill to secure the possibility of pinching the £4 billion of assets remaining in the pension funds.
    Consumer bodies have sent copies of their views to hon. Members in all parts of the House explaining the ways in which they are not happy with the Bill. Members of the Select Committee on Transport, representative of both sides, under the distinguished chairmanship of the late Mr. Robert Adley, expressed their view that the Bill will not achieve its declared aim of producing a better railway system.
    The final absurdity must be hearing the Secretary of State confirm his ideological prejudice which will not allow him to permit British Rail to bid for franchises, even though it has the expertise to do so. He accepts that British Rail will still be the operator if private operators do not take up the services—good old BR will have to step in and do that. But, unlike the nationally owned Swedish system, BR will not be able to bid for franchise operations.
    It is absurd to agree to the French rail system bidding for the franchise operations here, but that is what the Secretary of State has done. It is a publicly owned body with all the characteristics that the right hon. Gentleman dislikes. This is quite unacceptable and I should have expected the Secretary of State to think so, too.
    I have no doubt that the right hon. Gentleman was happy about the French buying into our water and power systems; now the same will happen to the railways. Why is he so prejudiced against British operations and British ownership? The only possible advantage is that Britain might now obtain the French TGV—it is a far better train than the ones that we have, because BR has been starved of the funds necessary to maintain an adequate system.
    This Bill and its effects were best summed up by Sir Peter Parker, the former chairman of British Rail, in The Guardian. Having read the Bill and our debates, he said, describing the kind of railway system that we are now to inherit:
    "Potential operators will not 'own'the service but have a short-term franchise. Their timetable will be specified by the franchise director, track charges and train paths will be determined by Railtrack; their trains will be owned by a leasing company while fares will be controlled. The driver, signalman and platelayer will work for separate companies. I used to talk of the age of the train, but we are moving into the age of the origami railway."
    We are talking about running a rail system in bits and pieces. It cannot produce the integrated service which will
    866
    be essential for the 21st century. Such a service is also essential to reduce congestion and minimise environmental damage.
    The one saving grace of this major change and splitting up of assets is that it will be easier for us to return the railway system to a publicly owned, publicly accountable system. Polls have shown that 71 per cent. of the public would prefer that to the ideas of the Secretary of State. We shall return the railways system to that state and I tell all potential bidders to bear that possibility in mind when they bid for their short-term franchises.
    10.12 pm
    Mr. Alan Haselhurst: I suppose that there are two main reasons why the Government have found it difficult to achieve unanimity on this issue. First, although it is complicated and detailed, this is an enabling Bill, and many issues remain to be resolved outside the framework of the legislation.
    Secondly, moving into a new era for the railways, we have to ask ourselves a great many questions about how the future will turn out. People seek guarantees; they want to know whether things will stay the same as they have known them. It is difficult to answer such questions.
    Inevitably, the Select Committee report was sceptical about whether the new system will work. Not everyone will be satisfied until it has been seen to work. The test ultimately is whether the system will fit together more coherently than the hon. Member for Kingston upon Hull, East (Mr. Prescott) is prepared to admit.
    One of the great arguments has been about whether the relationship between the franchisees and Railtrack is the right one. That is still to be determined by the contractual arrangements and the exact terms of the franchises. It remains to be seen whether many people will want to run the railways. I believe, on the evidence, that they will. That will be the test; if no one comes forward, the Government will have been shown to be wrong and British Rail will still exist. But I believe it likely that bidders will present themselves and offer us a better prospect for the railways.
    I believe that the competition that the Government want will be secured by the obtaining of franchises rather than by on-rail competition. I have learnt from the Select Committee investigation that on-rail competition offers few opportunities. I think that the Government would do better to banish the idea that there will be much on-rail competition in the new era, thus putting in place the very best franchise arrangements—arrangements that will instil the greatest confidence in the continued successful operation of the railways.
    Much will depend on the extent of investment in the railways. The Government have been frank: they have made it clear that they recognise the need for the public sector to provide investment for major capital infrastructure. That is indeed important. The question is, to what extent will the new arrangements enable extra cash to be advanced? I believe that there is room for manoeuvre, and that the railways will receive more money and become more efficient.
    The Opposition have accused us of dogmatism. I hope that many Conservatives believe in private enterprise: I hope that they believe that private management produces better ideas, leading to more efficient running of the

    867
    railways. I also hope that these proposals will show that belief to be true, as other Government proposals have done.
    10.15 pm
    Mr. Cryer: The Secretary of State described the Bill as a measure whose aim was to achieve a better use of British Rail. That is ironic: if there is one measure designed to undermine British Rail and, in so doing, undermine a national network of passenger services, it is this appalling legislation, which is a recipe for bureaucracy. There will be a franchising director, a regulator and hundreds of people engaged in producing the thousands of contracts which even the Department of Transport acknowledges will be necessary to implement the Bill. Energy will be devoted not to the production of a better railway system, but to the production of a crazy system of franchising and contracting. When companies go into liquidation, passengers will know what has happened, because the trains will cease to run: that, at least, can be guaranteed.
    A national network, built up over the years by a dedicated work force, is being eroded. InterCity will be broken up into franchises. The Bill is a kick in the teeth for the thousands of men and women who have striven to provide a decent public service, despite Government cuts and the deep, inbuilt prejudices of Ministers—including those in the Cabinet—against publicly owned services.
    The Secretary of State talked of a sense of local or regional identity. The passenger transport authorities, working with British Rail, are already dealing with that. In west Yorkshire, the PTA—which has some sort of democratic accountability—already provides an excellent supplement to services and an excellent sense of local identity. The only difficulties experienced there result from the Government's hamfisted approach.
    The Secretary of State talked of freight haemorrhaging away from British Rail and pouring on to the roads. It is hardly surprising that that should be happening, with the present Secretary of State and the present Minister of State in charge of road transport. The Bill will increase the flow of traffic away from rail and on to the road, at the very time when most sensible people recognise that the transport of both people and freight should be moving in the opposite direction.
    One clear message emerges from the Bill: everyone who votes for it will be voting to sabotage our national railway network.
    10.19 pm
    Mr. Rathbone: The House, those listening to the debate at this late hour and those who will read about it tomorrow will be struck by the disgraceful, backward-looking, depressing speeches that we have just heard on Third Reading from Opposition Members. It is tragic that after all the debate that has taken place and all the actions of the Government, particularly their decisions and promises over the last two days, the Opposition cannot even pay lip service to what my right hon. Friend the Secretary of State and my hon. Friend the Minister have done.
    I put on record the thanks of my hon. Friends to the Secretary of State and to the Minister for their hours of listening, their positive reactions and their guarantees so that the Bill goes from this House to the other place in a much better state than at the beginning of the debate yesterday.
    868
    I wish to raise three minor points. First, may I ask for reassurance from my right hon. Friend that where it is appropriate vertical integration of rolling stock and infrastructure will be allowed under the franchise system? Secondly, can he please give us some indication of the Government's attitude towards the future funding of British Rail, since British Rail itself will remain responsible for quite a large proportion—[Interruption.]
    Madam Speaker: Order. The House must come to order and listen to the hon. Gentleman who has the floor. Conversation may take place, but quietly, so that the hon. Gentleman may be heard. That includes hon. Ladies.
    Mr. Rathbone: Opposition Members do not wish to hear. They did not want to listen to any of the debate over the last two days, so their behaviour now is not reprehensible.
    I was asking for reassurance on the Government's intentions as to finance being available for British Rail in the interim until all the franchises have been let because a considerable amount of the rail network will remain the responsibility of British Rail in the meantime.
    Thirdly, in deference to our late colleague, Robert Adley, I ask once again for reassurance from the Secretary of State or the Minister that British Rail's heritage, particularly the museum in York, will be looked after as part of the new responsibilities of the Heritage Department.
    With those three points, I commend the Bill to the House and to the country.
    10.22 pm
    Mr. Peter Bottomley: The real issue is how the railways can be competitive with the roads. I think that the House understands that that will be determined by the level of capital investment available to the railways this year, next year and the year after. With the legislation there is little prospect of the private sector bringing in substantial extra funds for three years. I hope that the Government will continue to be flexible in their approach. We have seen in the report of the Select Committee the drop in capital investment over the past two or three years. That needs to be put right fast. The same flexibility as my right hon. Friend the Secretary of State and my hon. Friend the Minister have shown during the passage of the Bill needs to be applied by the Treasury so that the Government can achieve the real aim of a lower subsidy and higher capital investment.
    I echo what my hon. Friend the Member for Lewes (Mr. Rathbone) said about Robert Adley. When the Secretary of State said that the Government agreed with four fifths of the report of the Select Committee, that was a tribute to Robert Adley for drawing together the range of opinion within the Select Committee.
    The House expects to see further improvements to the Bill in another place, including the incorporation of some of the commitments given to my hon. Friends who have properly raised important issues. Hon. Members who are keen to get the Third Reading over so that they can drive home should realise that the Bill is dedicated to those who use the railways.
    10.24 pm
    Mr. Wilson: I am sure that, even at this late hour, we have all enjoyed the hustings for the chairmanship of the Select Committee on Transport. The legislation with which the Bill is most commonly compared is the Act that introduced the poll tax. There are two reasons for that: first, the intellectual absurdity of the whole exercise, which no serious commentator is prepared to support; secondly, the particularly pertinent fact, of which I give Conservative Members notice, that the legislation will not be the end of the process after which they can keep their heads down and hope that nobody will notice who was responsible for it. We are at the start of a debate that will go on in the country until the general election, as the effects of the legislation become known. That is the reality and that is the similarity. The more that is known of the legislation, the more it will be opposed.
    From this day, and especially from the day on which the Bill becomes law—if it does become law—there will be one piece of good news for British Rail. BR will cease to be the whipping-boy for everything that happens on the railways, as it will no longer be responsible. The people who will be responsible for every cut, every fare increase, every breakdown and every loss of service are those who are putting this reckless legislation in place. Every community that depends on the railways understands that.
    Notwithstanding the retreats in response to views expressed by hon. Members on both sides of the House, what we have heard today and what we heard in Committee will guarantee a regime of higher fares, fewer Services, an intrinsically less safe railway and massive job losses. All this will have been brought about by a piece of legislation that the public have not asked for and already deeply oppose.
    The battle to save our railways will continue. The people who will be held responsible for their fate are Conservative Members, who are putting the Whip before the railway communities.
    10.26 pm
    Mr. Freeman: This Bill will certainly improve the quality and quantity of railway services. By the time of the next election, we shall be happy to stand on our record of improvement. The attitude of the hon. Members for Kingston upon Hull, East (Mr. Prescott) and for Cunninghame, North (Mr. Wilson) throughout the proceedings has been entirely negative. We are happy to stand on our record and I commend the Bill to the House.
    Question put, That the Bill be now read the Third time:—
    The House divided: Ayes 307, Noes 292.

    Division No. 283]

    [10.27 pm

    AYES

    Ainsworth, Peter (East Surrey)

    Baker, Rt Hon K. (Mole Valley)

    Aitken, Jonathan

    Baker, Nicholas (Dorset North)

    Alexander, Richard

    Baldry, Tony

    Alison, Rt Hon Michael (Selby)

    Banks, Matthew (Southport)

    Amess, David

    Banks, Robert (Harrogate)

    Ancram, Michael

    Bates, Michael

    Arbuthnot, James

    Batiste, Spencer

    Arnold, Jacques (Gravesham)

    Bellingham, Henry

    Arnold, Sir Thomas (Hazel Grv)

    Bendall, Vivian

    Ashby, David

    Beresford, Sir Paul

    Aspinwall, Jack

    Biffen, Rt Hon John

    Atkins, Robert

    Blackburn, Dr John G.

    Atkinson, David (Bour'mouth E)

    Body, Sir Richard

    Atkinson, Peter (Hexham)

    Booth, Hartley

    870

    Boswell, Tim

    Garnier, Edward

    Bottomley, Peter (Eltham)

    Gill, Christopher

    Bottomley, Rt Hon Virginia

    Gillan, Cheryl

    Bowden, Andrew

    Goodlad, Rt Hon Alastair

    Bowis, John

    Goodson-Wickes, Dr Charles

    Boyson, Rt Hon Sir Rhodes

    Gorman, Mrs Teresa

    Brandreth, Gyles

    Gorst, John

    Brazier, Julian

    Grant, Sir Anthony (Cambs SW)

    Bright, Graham

    Greenway, Harry (Ealing N)

    Brooke, Rt Hon Peter

    Greenway, John (Ryedale)

    Brown, M. (Brigg & Cl'thorpes)

    Griffiths, Peter (Portsmouth, N)

    Bruce, Ian (S Dorset)

    Grylls, Sir Michael

    Budgen, Nicholas

    Hague, William

    Burns, Simon

    Hamilton, Rt Hon Archie (Epsom)

    Burt, Alistair

    Hamilton, Neil (Tatton)

    Butcher, John

    Hampson, Dr Keith

    Butler, Peter

    Hanley, Jeremy

    Butterfill, John

    Hannam, Sir John

    Carlisle, John (Luton North)

    Hargreaves, Andrew

    Carlisle, Kenneth (Lincoln)

    Harris, David

    Carrington, Matthew

    Haselhurst, Alan

    Carttiss, Michael

    Hawkins, Nick

    Cash, William

    Hawksley, Warren

    Channon, Rt Hon Paul

    Heald, Oliver

    Chapman, Sydney

    Heath, Rt Hon Sir Edward

    Churchill, Mr

    Heathcoat-Amory, David

    Clappison, James

    Hendry, Charles

    Clark, Dr Michael (Rochford)

    Higgins, Rt Hon Sir Terence L.

    Clarke, Rt Hon Kenneth (Ruclif)

    Hill, James (Southampton Test)

    Clifton-Brown, Geoffrey

    Hogg, Rt Hon Douglas (G'tham)

    Coe, Sebastian

    Horam, John

    Congdon, David

    Hordern, Rt Hon Sir Peter

    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

    Howell, Ralph (North Norfolk)

    Cormack, Patrick

    Hughes Robert G. (Harrow W)

    Couchman, James

    Hunt, Rt Hon David (Wirral W)

    Cran, James

    Hunt, Sir John (Ravensbourne)

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

    Hunter, Andrew

    Curry, David (Skipton & Ripon)

    Hurd, Rt Hon Douglas

    Davies, Quentin (Stamford)

    Jack, Michael

    Davis, David (Boothferry)

    Jackson, Robert (Wantage)

    Deva, Nirj Joseph

    Jenkin, Bernard

    Devlin, Tim

    Jessel, Toby

    Dickens, Geoffrey

    Johnson Smith, Sir Geoffrey

    Dicks, Terry

    Jones, Gwilym (Cardiff N)

    Dorrell, Stephen

    Jones, Robert B. (W Hertfdshr)

    Douglas-Hamilton, Lord James

    Jopling, Rt Hon Michael

    Dover, Den

    Kellett-Bowman, Dame Elaine

    Duncan, Alan

    Key, Robert

    Duncan-Smith, Iain

    Kilfedder, Sir James

    Dunn, Bob

    King, Rt Hon Tom

    Durant, Sir Anthony

    Kirkhope, Timothy

    Eggar, Tim

    Knapman, Roger

    Elletson, Harold

    Knight, Mrs Angela (Erewash)

    Emery, Rt Hon Sir Peter

    Knight, Greg (Derby N)

    Evans, David (Welwyn Hatfield)

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

    Evans, Jonathan (Brecon)

    Knox, David

    Evans, Nigel (Ribble Valley)

    Kynoch, George (Kincardine)

    Evans, Roger (Monmouth)

    Lait, Mrs Jacqui

    Evennett, David

    Lang, Rt Hon Ian

    Faber, David

    Lawrence, Sir Ivan

    Fabricant, Michael

    Legg, Barry

    Fenner, Dame Peggy

    Leigh, Edward

    Field, Barry (Isle of Wight)

    Lennox-Boyd, Mark

    Fishburn, Dudley

    Lester, Jim (Broxtowe)

    Forman, Nigel

    Lidington, David

    Forsyth, Michael (Stirling)

    Lloyd, Peter (Fareham)

    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)

    Maclean, David

    Freeman, Roger

    McLoughlin, Patrick

    French, Douglas

    McNair-Wilson, Sir Patrick

    Fry, Peter

    Madel, David

    Gale, Roger

    Maitland, Lady Olga

    Gallie, Phil

    Major, Rt Hon John

    Gardiner, Sir George

    Malone, Gerald

    Garel-Jones, Rt Hon Tristan

    Mans, Keith

    871

    Marland, Paul

    Shersby, Michael

    Marlow, Tony

    Skeet, Sir Trevor

    Marshall, John (Hendon S)

    Smith, Sir Dudley (Warwick)

    Marshall, Sir Michael (Arundel)

    Smith, Tim (Beaconsfield)

    Martin, David (Portsmouth S)

    Soames, Nicholas

    Mates, Michael

    Speed, Sir Keith

    Mawhinney, Dr Brian

    Spencer, Sir Derek

    Mayhew, Rt Hon Sir Patrick

    Spicer, Sir James (W Dorset)

    Mellor, Rt Hon David

    Spicer, Michael (S Worcs)

    Merchant, Piers

    Spink, Dr Robert

    Milligan, Stephen

    Spring, Richard

    Mills, Iain

    Sproat, Iain

    Mitchell, Andrew (Gedling)

    Squire, Robin (Hornchurch)

    Mitchell, Sir David (Hants NW)

    Steen, Anthony

    Moate, Sir Roger

    Stephen, Michael

    Monro, Sir Hector

    Stern, Michael

    Montgomery, Sir Fergus

    Stewart, Allan

    Moss, Malcolm

    Streeter, Gary

    Needham, Richard

    Sumberg, David

    Nelson, Anthony

    Sweeney, Walter

    Neubert, Sir Michael

    Sykes, John

    Newton, Rt Hon Tony

    Tapsell, Sir Peter

    Nicholls, Patrick

    Taylor, Ian (Esher)

    Nicholson, David (Taunton)

    Taylor, John M. (Solihull)

    Nicholson, Emma (Devon West)

    Taylor, Sir Teddy (Southend, E)

    Norris, Steve

    Temple-Morris, Peter

    Onslow, Rt Hon Sir Cranley

    Thomason, Roy

    Oppenheim, Phillip

    Thompson, Sir Donald (C'er V)

    Ottaway, Richard

    Thompson, Patrick (Norwich N)

    Page, Richard

    Thornton, Sir Malcolm

    Paice, James

    Thurnham, Peter

    Patnick, Irvine

    Townend, John (Bridlington)

    Patten, Rt Hon John

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

    Pattie, Rt Hon Sir Geoffrey

    Tracey, Richard

    Pawsey, James

    Tredinnick, David

    Peacock, Mrs Elizabeth

    Trend, Michael

    Pickles, Eric

    Trotter, Neville

    Porter, Barry (Wirral S)

    Twinn, Dr Ian

    Porter, David (Waveney)

    Vaughan, Sir Gerard

    Portillo, Rt Hon Michael

    Waldegrave, Rt Hon William

    Powell, William (Corby)

    Walker, Bill (N Tayside)

    Rathbone, Tim

    Waller, Gary

    Redwood, John

    Ward, John

    Renton, Rt Hon Tim

    Wardle, Charles (Bexhill)

    Richards, Rod

    Waterson, Nigel

    Riddick, Graham

    Watts, John

    Rifkind, Rt Hon. Malcolm

    Wells, Bowen

    Robathan, Andrew

    Wheeler, Rt Hon Sir John

    Roberts, Rt Hon Sir Wyn

    Whitney, Ray

    Robertson, Raymond (Ab'd'n S)

    Whittingdale, John

    Robinson, Mark (Somerton)

    Widdecombe, Ann

    Roe, Mrs Marion (Broxbourne)

    Wilkinson, John

    Rowe, Andrew (Mid Kent)

    Willetts, David

    Rumbold, Rt Hon Dame Angela

    Woltson, Mark

    Ryder, Rt Hon Richard

    Wood, Timothy

    Sackville, Tom

    Yeo, Tim

    Sainsbury, Rt Hon Tim

    Young, Sir George (Acton)

    Scott, Rt Hon Nicholas

    Shaw, David (Dover)

    Tellers for the Ayes:

    Shaw, Sir Giles (Pudsey)

    Mr. David Lightbown and Mr. Andrew Mai-Kay.

    Shephard, Rt Hon Gillian

    Shepherd, Colin (Hereford)

    NOES

    Abbott, Ms Diane

    Bayley, Hugh

    Adams, Mrs Irene

    Beckett, Rt Hon Margaret

    Ainger, Nick

    Beggs, Roy

    Ainsworth, Robert (Cov'try NE)

    Beith, Rt Hon A. J.

    Allen, Graham

    Bell, Stuart

    Alton, David

    Benn, Rt Hon Tony

    Anderson, Donald (Swansea E)

    Bennett, Andrew F.

    Anderson, Ms Janet (Ros'dale)

    Benton, Joe

    Armstrong, Hilary

    Bermingham, Gerald

    Ashdown, Rt Hon Paddy

    Berry, Dr. Roger

    Ashton, Joe

    Betts, Clive

    Austin-Walker, John

    Blair, Tony

    Banks, Tony (Newham NW)

    Boateng, Paul

    Barnes, Harry

    Boyce, Jimmy

    Barron, Kevin

    Boyes, Roland

    Battle, John

    Bradley, Keith

    872

    Bray, Dr Jeremy

    Grant, Bernie (Tottenham)

    Brown, Gordon (Dunfermline E)

    Griffiths, Peter (Portsmouth, N)

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

    Griffiths, Win (Bridgend)

    Bruce, Malcolm (Gordon)

    Grocott, Bruce

    Burden, Richard

    Gunnell, John

    Byers, Stephen

    Hain, Peter

    Caborn, Richard

    Hall, Mike

    Callaghan, Jim

    Hanson, David

    Campbell, Mrs Anne (C'bridge)

    Hardy, Peter

    Campbell, Menzies (Fife NE)

    Harman, Ms Harriet

    Campbell, Ronnie (Blyth V)

    Harvey, Nick

    Campbell-Savours, D. N.

    Hattersley, Rt Hon Roy

    Canavan, Dennis

    Henderson, Doug

    Cann, Jamie

    Heppell, John

    Chisholm, Malcolm

    Hill, Keith (Streatham)

    Clapham, Michael

    Hinchliffe, David

    Clark, Dr David (South Shields)

    Hoey, Kate

    Clarke, Eric (Midlothian)

    Hogg, Norman (Cumbernauld)

    Clarke, Tom (Monklands W)

    Hood, Jimmy

    Clelland, David

    Hoon, Geoffrey

    Clwyd, Mrs Ann

    Howarth, George (Knowsley N)

    Coffey, Ann

    Howells, Dr. Kim (Pontypridd)

    Cohen, Harry

    Hoyle, Doug

    Connarty, Michael

    Hughes, Kevin (Doncaster N)

    Cook, Robin (Livingston)

    Hughes, Robert (Aberdeen N)

    Corbett, Robin

    Hughes, Roy (Newport E)

    Corbyn, Jeremy

    Hughes, Simon (Southwark)

    Cousins, Jim

    Hutton, John

    Cox, Tom

    Illsley, Eric

    Cryer, Bob

    Ingram, Adam

    Cummings, John

    Jackson, Glenda (H'stead)

    Cunliffe, Lawrence

    Jackson, Helen (Shef'ld, H)

    Cunningham, Jim (Covy SE)

    Jamieson, David

    Cunningham, Rt Hon Dr John

    Janner, Greville

    Dafis, Cynog

    Johnston, Sir Russell

    Dalyell, Tarn

    Jones, Barry (Alyn and D'side)

    Darling, Alistair

    Jones, Ieuan Wyn (Ynys Môn)

    Davidson, Ian

    Jones, Lynne (B'ham S O)

    Davies, Bryan (Oldham C'tral)

    Jones, Martyn (Clwyd, SW)

    Davies, Rt Hon Denzil (Llanelli)

    Jowell, Tessa

    Davies, Ron (Caerphilly)

    Kaufman, Rt Hon Gerald

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

    Keen, Alan

    Denham, John

    Kennedy, Charles (Ross.C&S)

    Dewar, Donald

    Kennedy, Jane (Lpool Brdgn)

    Dixon, Don

    Khabra, Piara S.

    Dobson, Frank

    Kilfoyle, Peter

    Donohoe, Brian H.

    Kirkwood, Archy

    Dowd, Jim

    Leighton, Ron

    Dunnachie, Jimmy

    Lestor, Joan (Eccles)

    Dunwoody, Mrs Gwyneth

    Lewis, Terry

    Eagle, Ms Angela

    Litherland, Robert

    Eastham, Ken

    Livingstone, Ken

    Enright, Derek

    Lloyd, Tony (Stretford)

    Etherington, Bill

    Llwyd, Elfyn

    Evans, John (St Helens N)

    Loyden, Eddie

    Ewing, Mrs Margaret

    Lynne, Ms Liz

    Fatchett, Derek

    McAllion, John

    Faulds, Andrew

    McAvoy, Thomas

    Field, Frank (Birkenhead)

    McCartney, Ian

    Fisher, Mark

    Macdonald, Calum

    Flynn, Paul

    McFall, John

    Forsythe, Clifford (Antrim S)

    Mackinlay, Andrew

    Foster, Rt Hon Derek

    McLeish, Henry

    Foster, Don (Bath)

    Maclennan, Robert

    Foulkes, George

    McMaster, Gordon

    Fraser, John

    McNamara, Kevin

    Fyfe, Maria

    Madden, Max

    Galbraith, Sam

    Maginnis, Ken

    Galloway, George

    Mahon, Alice

    Gapes, Mike

    Mallon, Seamus

    Garrett, John

    Mandelson, Peter

    George, Bruce

    Marek, Dr John

    Gerrard, Neil

    Marshall, David (Shettleston)

    Gilbert, Rt Hon Dr John

    Marshall, Jim (Leicester, S)

    Godman, Dr Norman A.

    Martlew, Eric

    Godsiff, Roger

    Maxton, John

    Golding, Mrs Llin

    Meacher, Michael

    Gordon, Mildred

    Meale, Alan

    Gould, Bryan

    Michael, Alun

    Graham, Thomas

    Michie, Bill (Sheffield Heeley)

    873

    Michie, Mrs Ray (Argyll Bute)

    Raynstord, Nick

    Milburn. Alan

    Redmond, Martin

    Miller, Andrew

    Reid, Dr John

    Mitchell, Austin (Gt Grimsby)

    Rendel, David

    Molyneaux, Rt Hon James

    Richardson, Jo

    Moonie, Dr Lewis

    Robertson, George (Hamilton)

    Morgan, Rhodri

    Robinson, Geoffrey (Co'try NW)

    Morley, Elliot

    Robinson, Peter (Belfast E)

    Morris, Rt Hon A. (Wy'nshawe)

    Roche, Mrs. Barbara

    Morris, Estelle (B'ham Yardley)

    Rogers, Allan

    Morris, Rt Hon J. (Aberavon)

    Rooker, Jeff

    Mowlam, Marjorie

    Rooney, Terry

    Mudie, George

    Ross, Ernie (Dundee W)

    Murphy, Paul

    Ross, William (E Londonderry)

    Oakes, Rt Hon Gordon

    Rowlands, Ted

    O'Brien, Michael (N W'kshire)

    Ruddock, Joan

    O'Brien, William (Normanton)

    Salmond, Alex

    O'Hara, Edward

    Sedgemore, Brian

    Olner, William

    Sheerman, Barry

    O'Neill, Martin

    Sheldon, Rt Hon Robert

    Orme, Rt Hon Stanley

    Shore, Rt Hon Peter

    Parry, Robert

    Short, Clare

    Patchett, Terry

    Simpson, Alan

    Pendry, Tom

    Skinner, Dennis

    Pickthall, Colin

    Smith, Andrew (Oxford E)

    Pike, Peter L.

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

    Pope, Greg

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

    Powell, Ray (Ogmore)

    Smith, Llew (Blaenau Gwent)

    Prentice, Ms Bridget (Lew'm E)

    Smyth, Rev Martin (Belfast S)

    Prentice, Gordon (Pendle)

    Snape, Peter

    Prescott, John

    Soley, Clive

    Primarolo, Dawn

    Spearing, Nigel

    Purchase, Ken

    Spellar, John

    Quin, Ms Joyce

    Steel, Rt Hon Sir David

    Radice, Giles

    Steinberg, Gerry

    Randall, Stuart

    Stevenson, George

    874

    Stott, Roger

    Watson, Mike

    Strang, Dr. Gavin

    Wicks, Malcolm

    Straw, Jack

    Wigley, Dafydd

    Taylor, Mrs Ann (Dewsbury)

    Williams, Rt Hon Alan (Sw'n W)

    Taylor, Rt Hon John D. (Strgfd)

    Williams, Alan W (Carmarthen)

    Taylor, Matthew (Truro)

    Wilson, Brian

    Thompson, Jack (Wansbeck)

    Winnick, David

    Tipping, Paddy

    Wise, Audrey

    Trimble, David

    Worthington, Tony

    Tyler, Paul

    Wray, Jimmy

    Vaz, Keith

    Wright, Dr Tony

    Walker, Rt Hon Sir Harold

    Young, David (Bolton SE)

    Wallace, James

    Walley, Joan

    Tellers for the Noes:

    Wardell, Gareth (Gower)

    Mr. Jon Owen Jones and Mr. Dennis Turner.

    Wareing, Robert N

    Question accordingly agreed to.
    Bill read the Third time, and passed.
    Mr. George Foulkes: On a point of order, Mr. Deputy Speaker. Has Madam Speaker received a request for a statement from the Minister of Agriculture, Fisheries and Food or the Secretary of State for Scotland, both of whom are represented here tonight, following the blockade of the fisheries protection vessel Morven in Girvan harbour by Girvan fishermen who are understandably frustrated by the effect of the tie-up scheme and want the Government to reconsider it urgently? Can we have a statement tomorrow, if not tonight, on this very important matter?
    Mr. Deputy Speaker (Mr. Michael Morris): I can report that Madam Speaker has received no such request.

    Wool Prices
    10.42 pm
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. David Curry): I beg to move,
    That the British Wool (Guaranteed Prices) (Revocation) Order 1993 (S.I., 1993, No. 1184), dated 29th April 1993, a copy of which was laid before this House on 30th April, be approved.
    I shall deal briefly with the five issues that arise from the statutory instrument: the need for the statutory instrument, the impact on farm incomes, farm welfare, the wool textile industry and the role of the British wool marketing board. They will encompass most of the worries that are likely to be expressed in the House.
    The statutory instrument itself is necessary because of the relatively late passage of the Agriculture Bill. The Bill provides for the abolition of the financial guarantee. We had hoped that it would be given Royal Assent by the end of April, before the start of the new clip year. As the House will know, the Bill was "Maastruck" or "Maastricken", whichever is the past participle of Maastricht. The Bill now provides for the end of the guarantee at Royal Assent, whenever that is given.
    The statutory instrument revokes the requirement for Ministers to fix annually a guaranteed price for wool. It does not pre-empt the Bill where the substantive issue of the legislative existence of the guarantee is considered. It merely ensures that there will be no rate fixed for this year. That is the constitutional position.
    As for farm incomes, it was never the aim of the wool guarantee to offer long-term support to farmers. It was designed to achieve price stabilisation. In the 1960s and 1970s the guarantee provided 10 to 15 per cent. of a sheep farmer's income, but the figure now is less than 5 per cent. The reason for that, of course, is the development of European Community schemes that have pushed money to all producers of sheep, via the ewe premium, and especially to upland producers, via the combination of the ewe premium, the special supplement for upland sheep and the hill livestock compensatory allowances. This year, the support through the ewe premium has been amplified by the currency changes and the depreciation of the pound. The sheep annual premium, plus the HLCAs, is worth £495 million to sheep producers in the United Kingdom—and that is against a background of much healthier prices for the commodity itself. One must not forget that getting a price from the marketplace is as important as receiving a subsidy.
    The ending of the guarantee will therefore have a minimal effect on farm incomes. The welfare argument is that farmers will not shear their sheep, but the fact is that in the United Kingdom sheep are reared for meat. The farmer will get his ewe premium, plus his HLCA—farmers in the uplands receive more than £30—and the value of the quota, which is the value of the right to keep the sheep. The few sales that have taken place suggest that that represents a substantial capital value. The farmer will also get the value of the crop of lambs produced by the ewes. In order to qualify for that support and that benefit from the market, a sheep has to be both alive and healthy. If it is not, the farmer will not receive the benefits, so it is not in his economic interest to allow the welfare of the sheep to deteriorate.
    Mr. Michael Jopling: Has my hon. Friend examined the problem in the very high hills? I have received a letter on that subject from an extremely prominent farmer in the Lake District—he is a good farmer, too. As my hon. Friend will know, the only sheep that will survive on the very high hills are the Herdwick and the Swaledale, especially the Herdwick. The farmer tells me that, without the guarantee, the value of the wool would pay only 50 per cent. of the cost of shearing and handling the wool. There is a real danger that some farmers on the very high hills—not the good farmers, but those who are in serious difficulties—may be tempted not to incur the expense of shearing the sheep and handling the wool.
    Will my hon. Friend give some thought to the possibility of introducing a further order allowing the present system for the Herdwick and the high hill Swaledale sheep to continue for a further year, because of the severe difficulties that the order will cause farmers on the very high hills? Perhaps he would be kind enough to write to me.
    Mr. Curry: I hear what, my right hon. Friend says, but he would be the first to recognise that farmers on the very high hills—albeit that they farm Herdwicks—receive significant sums in support. If those sheep are not kept alive and healthy, the support will diminish. It is true, and I acknowledge the fact, that shearing and the other forms of wool production, taken separately from the production of meat and the other purposes of rearing, are non-remunerative activities, because of what has happened on the world market. However, the substance of my case is that that should be set against the value that the farmer receives both from direct support and from the value of the product. Herdwicks now command quite good prices in some continental marketplaces, because of the excellence of their meat, and the wool has become a more marginal factor in the overall value of the commodity to the farmer. Of course I shall write to my right hon. Friend, but he will understand that in promising to do so I cannot make a commitment at the Dispatch Box.
    I do not believe that it will be in any farmer's interests not to shear his sheep, even leaving aside any consideration of his preoccupation with welfare. In the worst circumstances—I accept that this would be in the worst circumstances for some maverick farmers—under the Agriculture (Miscellaneous Provisions) Act 1968, it is an offence to cause unnecessary pain or unnecessary distress to livestock and a schedule of penalties is set out.
    Dame Elaine Kellett-Bowman: Is this perhaps not the most ideal time at which to introduce the order when there is a huge overhang of wool on the world market?
    Mr. Curry: There is a huge overhang of wool on the world market. It would take a sage or a very unwise prophet to forecast when that overhang will disappear. If I were looking for an argument for saying that it was a propitious time, I should argue, first, that there has been a significant increase in Community-directed support to farmers and, secondly, that the depreciation of the pound has added an unlooked-for supplement to that, which has been a bonus—[Interruption.] Let us say the truth. It has been a bonus to farmers. They have benefited directly from it. Market prices have been far more buoyant after a long period in which they were very depressed. In those

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    circumstances, recognising that wool is a marginal part of the income of sheep farmers, it is not a bad time at which to be doing this.
    Mr. Alex Salmond: The Minister seems to be saying that if there had not been the devaluation of sterling he would not be introducing the measure. Is that the case?
    Has the Minister any conception of the resentment that his policies are provoking in the interest groups and industries that he is meant to promote? As we have heard, fishermen are being pushed into blockading because of the Minister's policies. Why does he think that he is causing so much resentment among the people who work in the industries for which he is responsible? What is it about his policies or his attitude that is causing so much chaos in farming and in fishing?
    Mr. Curry: That is a pretty pathetic intervention. If I am causing resentment among sheep farmers by directing £30·55 in ewe premium, its supplements and the HLCAs to farmers in the most difficult conditions in Britain, I have yet to hear about it. If I have caused resentment even by this measure, I have yet to hear comments from my constituents. I have not had a single letter from my constituency, which is one of the main sheep-producing areas in the country, telling me that this measure is not sensible. The wool marketing board may have thought that there was something fundamentally wrong, but Mr. Alun Evans has not arrived on my doorstep to make representations to me. The hon. Gentleman should have one small star for trying hard, but he needs to try a great deal harder before he gets off early from class.
    I am extremely alive to the concerns of the wool textile industry. The industry says that if the farmer shears the sheep, he will either chuck the fleece over the fence or he will sell it away from the board. I recognise that that is a concern. First, let me make it clear that the board keeps its statutory powers as a buyer. Many people have not recognised the fact that we have decided to keep those statutory powers. The board buys and grades the wool, which is an essential job. It does that before selling to the textile industry. That is the difference between it and a body such as the milk marketing board, which buys a raw material and sells it on as lightly transformed, if transformed at all, raw material.
    Producers are required to sell to the board. Any farmer selling to anyone other than the board is selling illegally and is subject to action against him by the board, which is enforceable through civil law. The penalty is the fine of the recovery of half the value of the wool sold. The only wool that is not covered by the board is wool that comes from animals that have been slaughtered in slaughterhouses. That remains the case.
    The order merely removes the fixing of the guarantee. The only thing that the Agriculture Bill will do, when it eventually becomes law, will be to remove the existence of a guarantee. The statutory power, the obligation to sell through the board and the board's functions remain in place. There is clearly a need for rationalisation and for restructuring if there are gains in efficiency. The board has had management consultancy studies and it has made certain proposals as a consequence. We should have liked to able in the Bill to give the board some assistance by
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    allowing it to appoint non-executive directors and to widen the scope of its directors. However, those measures were ruled to be outside the scope of the Bill.
    We are still ready to give the board all the assistance that we can to address its new situation. I have constant contact with Mr. Alun Evans—we have a strong and sensible working relationship. He recognises that the board is able to face the new challenges and the new situation and that we gave a warning four years ago that this would happen. This has not been sprung on the industry. It has not jumped fully armed from the councils of Government. Four years ago, we gave a warning about it and it has been accepted by the industry.
    The position of the industry has changed. The essential support for farmers comes not from wool but from the European Community and the marketplace. That is especially true of the hills, which are strongly represented in my constituency. From the point of view of the farmers and customers, the decision that we have taken should be implemented so that people know where they stand. It is right and necessary and I commend the order to the House.
    10.55 pm
    Mr. D. N. Campbell-Savours: We have heard a most unconvincing speech from the Minister. His responses to Conservative Members were less than satisfactory. This is a shabby and sad little order which arises out of a grubby little deal that was done between Treasury Ministers and Agriculture Ministers. Agriculture Ministers needed money to fund the further development and expansion of environmentally sensitive areas and have taken money away from the wool guarantee.
    At no stage was the effect of this order properly measured on, first, domestic wool production and exports from the United Kingdom; secondly, employment in the wool processing industry in the United Kingdom; thirdly, the balance of payments; fourthly, the maintenance of quality standards of wool in the United Kingdom; and fifthly, and most importantly, the whole question of animal welfare. I shall go into animal welfare in detail this evening.
    The wool industry is to be Gummered or, as they say in the slaughtering industry, effectively knackered because that is what will happen to it in the coming years. Let me explain what the problem is, in case the Minister does not understand. At present, the guaranteed price for wool is 117p per kilo. The farmers' share of that is 90p per kilo and the rest goes to the wool board to cover marketing, handling and storage costs. For nearly 40 years, the price of wool has rarely been below the guaranteed price. Until 1989, the overall cost to the taxpayer was almost nothing. Indeed, in 1988, the industry felt so confident about its future that it was prepared to accept the phasing out of the guarantee. In 1990, the international wool market totally collapsed. The effect of the collapse was to trigger the Government's guarantee with a taxpayer contribution and the price paid to the farmer was maintained at 96p per kilo in the 1989–90 year. Let there be no doubt in the minds of hon. Members that, if the guarantee is abolished tonight, the price to the farmer will drop from more than 90p per kilo to only 40p per kilo. That is the difference to the farmer.
    Mr. Tony Marlow: If the hon. Gentleman is right, it is a difference of 50p per kilo. How many kilos are there in an average fleece? What is the price of lamb this year compared with the price last year?
    Mr. Campbell-Savours: There are 2 kilos in an average fleece and the price of lamb this year is higher than last year. The critical question is: will low-paid sheep farmers continue to shear their sheep? What are the consequences of failing to shear? The answer is that some sheep farmers will no longer shear because they will say that it is no longer profitable. Indeed, it will be unprofitable. What is the evidence for that?
    Average shearing costs are 27·5p per kilo. The British wool marketing board's calculations show that for certain breeds—the right hon. Member for Westmorland and Lonsdale (Mr. Jopling) referred to this—the costs incurred in shearing sheep will exceed the price received for the wool when it is sold to the board. In the case of Swaledales and dark and light Herdwicks, farmers will lose money if they shear. In the case of Herdwicks, they will lose 50p per animal. Several other breeds are on the margin of profitability.
    So what are the consequences of a reduction in the wool clip? I have here a letter from a company called D. B. Holdsworth Ltd., which will be known to Ministers as one of the most important wool merchants in the United Kingdom. What it says about the consequences on jobs of the reduction in the clip is interesting:
    "In the scouring and combing sectors, there are some 2,500 jobs which are directly at risk. Approximately 50 to 55 per cent. of the British wool clip is exported direct—largely in this form. There are a further 21,000 jobs in wool textiles, which would also be directly affected, mainly in carpet spinning … Any reduction in the British wool clip would undoubtedly result in the increase, by importation, of wools from overseas—mainly New Zealand. Value added at present to British wool which is in the form of yarn and cloth would be lost."
    On marketing the company says:
    "Prior to the advent of the British Wool Marketing Board, there were 270 merchants collecting wool. The clip was badly graded,"—
    a function of the British wool marketing board, as the Minister said—
    "or not graded at all. Contamination and damage was prevalent and wool left on the farm (in some cases for years)."
    Are Ministers prepared to accept that we should go back to the bad old days before the introduction of the wool guarantee?
    Mr. Curry: The hon. Gentleman persists in debating as if farmers produced sheep for wool and nothing else. But he knows that that is not true. Farmers produce sheep for meat and the wool is a by-product of that. Therefore, even though the shearing of the wool might not be economic in present circumstances, it is still in the farmer's interest to keep his animals healthy and alive because he receives a large degree of support for them. What is more, he receives a good market price for them. It is entirely counter-productive and self-destructive for the farmer not to shear his sheep. It is not an isolated sector. It is part of the production of that animal.
    Mr. Campbell-Savours: The Minister is right. Yes, the farmer will get his price on the market. But the point is that the incentive to shear is lost. If he believes that he can still get the price on the market without shearing, he will proceed to do so.
    Mr. Marlow: Has the hon. Gentleman ever kept sheep? If he kept sheep, would he shear them or not?
    Mr. Campbell-Savours: Of course I would shear them. But I remember a Conservative Member of Parliament who could not even look after his sheep and was taken to court and prosecuted. He paid £1,000 in court costs and £1,500 in fines. So let us not talk about constituency of approach by people in the United Kingdom on such matters.
    The issue of jobs was referred to by D. B. Holdsworth Ltd. Let us consider the position in the Minister's constituency. In Skipton and Ripon two large companies are involved in wool processing. One is Hayfield Textiles, which has 235 full-time employees. It is a large user of British wool in its spinning processes. It has several thousand customers in the United Kingdom and it exports British wool products all over the world. It has markets for British wool in the United States of America, Scandinavia, the far east, Australia and Japan. Their export markets are threatened by any reduction in the clip. Indeed, the introduction of a new product line using naturally coloured wool from hardy varieties—the very varieties to which the hon. Gentleman was referring—is directly threatened as the clip will no longer be profitable to shear.
    Dame Elaine Kellett-Bowman: The hon. Gentleman is doing farmers a grave injustice. I do not know a single farmer who would allow his sheep to suffer by not being sheared. None of the ones round my way would allow that.
    Mr. Campbell-Savours: I hope that the hon. Lady is right, as indeed does the whole House. But the reality is that some farmers will not shear. We will wait and see what happens and when it happens I will be able to draw it to the attention of the hon. Lady.
    Another company, Gaskell Carpets, in the Minister's contituency employs 50 full-time staff to make a 100 per cent. British wool product, a very fine product indeed. It produces only from British wool and I argue that its supplies are at risk if there is any reduction in the clip.
    Does the Minister wish to contest what I am saying?
    Mr. Curry: Yes, absolutely; I contest it totally. The hon. Gentleman has not taken into consideration the fact that sheep numbers in the United Kingdom are a great deal higher than they were four or five years ago. Even if what he forecasts were to happen, we have still got more sheep and would still get a bigger clip than we did four or five years ago. But it will not happen.
    Mr. Campbell-Savours: Has the Minister consulted firms in his constituency? If so, what was the result of the consultation? What did they say when he asked them what their views were about the ending of this arrangement? Did they express concern? Does he want me to give way again?
    Mr. Curry: If they have such concerns, they see me in my surgery or write to me.
    Mr. Campbell-Savours: A £700 million export business in the United Kingdom is threatened as a result of the withdrawal. I am not saying that it will be destroyed, but it will be undermined. The continuity of supply of British wool, particularly certain varieties, to British wool processors will be affected.
    Mr. Jopling: I am extremely grateful to the hon. Gentleman, who is my neighbour in the Lake District, but

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    he is getting on to a rather bad point. I would guess that the firms that he is mentioning will be laughing all the way to the bank as a result of this order, because it will mean that the wool clip will remain much the same as it has been. All farmers will do as he said that they would do—as did my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman). They will continue to clip their sheep whether or not it is profitable. That will mean that the firms to which he referred will have a bonanza, because they will get nearly the same amount of wool, but much cheaper. So they will make big profits.
    I wish that the hon. Gentleman would confine his remarks to the farmers, because they are the ones who will lose out on this.
    Mr. Campbell-Savours: The hon. Gentleman would do well to consult the National Farmers Union in Cumbria, because it agrees with what I am saying. His constituency is covered by that branch of the NFU.
    If the trade implications are damaging, the animal welfare implications are appalling. I have a very interesting letter here from an organisation called the National Office of Animal Health Ltd. I understand that this organisation is the trade association of the animal medicines industry. This is what it has to say on the whole question of shearing:
    "We are extremely concerned about press speculation that, due to the low price of wool, farmers will be tempted not to shear their sheep this summer. This prospect offers a considerable threat to the welfare of individual sheep and the health of the nation's flock."
    Ministers gasp when I read this. It is not me speaking, it is not the Labour party speaking, it is the National Office of Animal Health which specialises in these matters and is dealing with medicines in this area.
    The letter continues:
    "failure to remove the wool creates a number of serious problems. Sheep, particularly in rough terrain, can be 'cast', falling and unable to rise, because of the weight of the fleece eventually resulting in starvation and death. The presence of a heavy … fleece in hot summers can cause direct stress to the sheep. The fleece as it becomes old, dirty and matted, forms an ideal habitat for a wide range of external parasites which can infest the fleece and burrow into the animals flesh. Blow fly, lice and keds can all flourish. Apart from regular dipping, shearing offers the best protection against summer parasite attack. Parasite attack can damage the hide as well as the fleece … Sheep scab, sadly no longer a notifiable disease in Great Britain, has exploded throughout the British sheep population. The British Leather Confederation report 10 per cent. of hides showing evidence of scab attack … Not only does shearing remove the cover under which scab and other parasites can operate, but the act of gathering in flocks and shearing means that every sheep has a thorough inspection every year. Furthermore, the presence of an old, matted fleece prevents proper penetration of dip".
    Ministers and Government Back Benchers may laugh, but that is the view expressed.
    Mr. Geoffrey Clifton-Brown: Will the hon. Gentleman give way?
    Mr. Campbell-Savours: No. The hon. Gentleman is a potato producer and does not rear sheep.
    That is the view of the animal welfare lobby, the trade association to the animal medicines industry, the British Wool Federation and a number of other bodies which regard themselves as experts. The only people who do not agree with the argument are Ministers, who do not want to
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    fork out taxpayers' money to maintain the guarantee into the future. [Interruption.] It may well be a good enough position for Ministers, but we are concerned about the implications for jobs, for exports and for animal welfare.
    Mr. Clifton-Brown: Will the hon. Gentleman give way?
    Mr. Campbell-Savours: I promise that I will give way on the amendment to the Agriculture Bill, if it is selected, in three weeks' time when we are discussing the wool guarantee.
    Finally, let me say a few words about the wool marketing board. It recognised that the writing was on the wall in 1988 when it accepted the principle of the guarantee being phased out. It undertook a major rationalisation pre-empting what is about to happen. It cut its marketing, grading, advertising and promotion costs. It reduced its work force by 30 per cent. and the number of depots from 29 to 22 over a three-year period. It generated a capital reserve of £10 million which, unfortunately, was not sufficient to see it through a very difficult period with a huge overhang in the international wool market, a major overhang certainly in Australia where 4 million bales of wool which cannot be sold are gathering dust. It pleaded with the Government for a phased period for the withdrawal of the guarantee, first over a three-year period, then over a two-year period. Next week I shall plead on behalf of the wool marketing board for a one-year period on the back of a particular amendment, if it is selected.
    When the board failed in all those areas, it came back to ask for Government support with marketing costs for wool because there are problems bringing wool in from marginal producers in parts of Scotland and Wales, and smaller producers are worried because in the new circumstances it will be difficult to fund the collection of wool. It has received no response or help from the Government. It has made every effort in the matter and it is clear, from what the Minister said and from the comments of the hon. Member for Lancaster (Dame E. Kellett-Bowman) and others, that there is concern in the north of England about the way in which it has been treated.
    The industry should be helped, not punished. I invite hon. Members in all parts of the House to vote against the measure in protection of the British wool industry.
    11.15 pm
    Mrs. Elizabeth Peacock: We may have somewhat differing views about the order. As chairman of the all-party wool textile group, it would be remiss of me not to put forward some views.
    The Minister will recall that when I spoke about the guaranteed wool price and other issues on Second Reading of the Agriculture Bill [Lords] on 23 March last I made certain statements. I make no apology for reiterating them tonight. As I recall, he was not listening too well when I adduced them originally, although he assured me that he read the Official Report of my speech later.
    I said that one aspect of the Bill would have a serious effect on the wool industry and producers and would, in turn, affect our textile industry. The main purpose of the guaranteed price has been to give stability to wool producers and, as we have heard, it has done that for over 40 years. The cost to Government has been very small and that stability continued until world wool prices collapsed in 1990. As I said on Second Reading:

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    "The stability created by the guaranteed price has allowed the British wool clip to improve in quality and image, and turn itself into an internationally recognised fibre. There are licensees all over the world, and there is representation in Japan, which is now one of the biggest consumers of British wool. The existence of the guranteed price has helped to develop an efficient structure for the collection, distribution and promotion of British wool. That structure is the envy of many European countries and it was the basis of the system now operating in South Africa. The guaranteed price has served producers in the less-favoured and remote areas of this country particularly well".
    There is concern in the board about collecting small parcels of clip in remote areas. It is thought that it will not be profitable for collection under the new system. I said:
    "The existence of the guaranteed price has been of great value in preserving the environment and countryside".—[Official Report, 23 March 1993; Vol. 221, c. 830.]
    So we are not talking about the industry.
    I listened carefully to the Minister saying how well off sheep farmers were. Undoubtedly, those on hill farms, particularly in his constituency, which I know well, are receiving lots of money. But a sheep farmer who I know in Bedfordshire tells me that he receives less for a whole lamb, plus its fleece, than I pay for a leg of lamb at the butchers. That is a difficult argument to defend.
    Mr. Curry: I do not want to quarrel with my hon. Friend. I did not say that sheep farmers were very well off. I said that there was a significant flow of Community support to them, that the quota was bringing a capital value and that the value of cropping the lambs was significantly better than it had been for a number of years. I accept that it is from a low base. I simply say that the trend has been positive and we are grateful that that is the case because it needed to be positive after what happened in previous years.
    Mrs. Peacock: I accept that the trend is more positive than it has been, but my hon. Friend will recall that I asked him for an assurance on Second Reading that the issue would be examined thoroughly in Committee. When I read the Official Report of the Committee proceedings for the morning of 11 May, when the matter was discussed, I was sorry to note that only the hon. Members for North Cornwall (Mr. Tyler) and for Workington (Mr. Campbell-Savours) and the Minster took part. That was not much of a discussion
    At about the time when that discussion was taking place, hon. Members were receiving letters from Donald Holdsworth of D. B. Holdsworth. He is the chairman of the British Wool Federation and he wrote to several hon. Members as follows:
    "We agreed to the ending of the guaranteed price in 1988 but since then the picture has changed dramatically (which could not possibly have been envisaged …) We are convinced that it is in the interests of both producers and the Wool Textile Industry to have the guaranteed price phased out over three years rather than ended so abruptly in these difficult circumstances."
    So it was agreed, in better times, that the guaranteed price should be phased out; the chairman merely asks for a reconsideration now.
    The situation—the world glut, the marketing of wool, and the circumstances facing those who depend on their wool cheque—has changed dramatically. I insist that some farmers need their wool cheque, just as they need the money from milk and meat. I ask the Minister carefully to consider the changes that have occurred. To say that a
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    handful of farmers may be producing wool, but most are producing meat, and wool is a by-product of that industry I suggest is insulting to many of our wool farmers—
    Mr. Curry: It was a pure statement of fact. How can my hon. Friend possibly deny it? Most production, in hills and lowland, is of meat. Wool is a by-product. Good luck to farmers: I hope that they make as much money as they can from this, but it is not their main source of income.
    Mrs. Peacock: I hear what the Minister says, but to suggest that only a handful of farmers have an interest in wool is an insult to those who do have such an interest. They have supported much of our wool textile industry. Their wool may not go into our fine cloth, because we import the wool for that, but it certainly goes into our carpet yarn. The Minister may know more about sheep than I do, but I certainly know a little more than he does about carpet yarn. He might allow hon. Members some knowledge of industries. I may not chase sheep around the hills, but I do know a little about this subject.
    I hope that the Minister will tell us how he sees the future not just of sheep on, the hills, but of our wool textile industry, which is very important to many areas of the country.
    11.22 pm
    Mr. Paul Tyler: I am delighted to follow the hon. Member for Batley and Spen (Mrs. Peacock), but I should like to take her argument a stage further.
    There is no immediate pressure to remove this guarantee. We do not have to do it because of the European Community. We are not forced into it by the GATT negotiations. It is entirely down to the Minister's timetable and the Minister's motives.
    Still less is there any pressure from the industry. The British Wool Federation and the board agreed that in due course it might be desirable to remove the guarantee. That was agreed in 1988 when, as the hon. Member for Workington (Mr. Campbell-Savours) said, there was a rough equilibrium in the world market—hence, the transition would have been easy. Not so today, when the amount paid to producers would be halved. The Minister says that his farmers are cheerful at the prospect, but I notice that a large number of Conservative Members look far from cheerful. I suspect that that has as much to do with the timing as with the order itself.
    The question that the board and the federation are asking is: why now? Why no transition? Why no two or three-year transitional period? What is the hurry? Clause 50 of the Agriculture Bill provides for the Minister to take the necessary steps to abolish the guaranteed price. Why do we have to jump ahead of that? Why, on the eve of the clip season, should we push ahead with this proposal? The world market, as we know, means that, if we go straight into it, the price per kilo for the farmer will be reduced from 90p to 40p. Many hon. Members may be surprised to hear that, when added up, that is quite a large sum: £26 million will be taken out of the income of the agricultural community. According to the Minister's own figures, the very modest increases that have taken place among the hill livestock farms have not extended to all those in the sheep farming sector; in Scotland in particular, those incomes have fallen for the second year running.

    885
    I spent some time with my sheep farmers in the Hallworthy market in Cornwall on Friday. Of course, it is true that the proportion of their farm income is less than it was five or 10 years ago, but that does not mean that it is totally worthless; I suspect that some hon. Members, if they suddenly found that 10 per cent. of their income were removed, would still feel that that was an appreciable sum. [Interruption.] Hon. Members may not realise that the average figure, which is about 5 per cent., is not the figure that I am quoting. For a hill farm, it is often a larger percentage of the total income. That is why last year—as we saw from the Minister's own figures—particularly in the less favoured areas, many sheep farmers' figures showed a larger percentage.
    Mr. Curry: It must be a lesser proportion in the hills. In the hills, a farmer in a particularly disadvantaged area with a hardy breed receives £30·55; a farmer in another area, who does not receive the same benefit, receives £17·48. By definition, as the price of wool is constant, the amount must be less in the hills than in the lowlands.
    Mr. Tyler: Using the Minister's own figures for last year, there was a reduction in Scotland for the second year running among hill livestock farmers, whereas in England and Wales there was only a modest increase. In those circumstances, it must surely be clear that removing part of the income will mean a substantial figure which will affect those concerned.
    The right hon. Member for Westmorland and Lonsdale (Mr. Jopling)—who has now left the Chamber—made it clear in an intervention that it is the farmers who will lose out disproportionately. Some farmers, in some parts of the country, are clearly benefiting from the devaluation of the green currency. It may well be that in some areas—where Conservative Members represent comparatively large farms—this will not be a major problem; but for Liberal Democrat Members who represent a large number of smaller sheep farmers, it will represent a substantial cut in their incomes. Whether it is 5 or 10 per cent. is neither here nor there for those who are already making very small profits, or none at all. [Interruption.] The Minister says the average is 5 per cent., and I take his word for it. I am going by the average figure. I believe that many of those farming in marginal areas with marginal returns cannot yet take any more knocks than they have taken already.
    Only a few months ago, many hon. Members who were present for the debate represented those affected by the cuts in the HLCAs. Surely the argument then was that, when a marginally profitable level already operates, every cut will be damaging. That surely is why this is the wrong time and the target is wrong.
    I believe that the Minister should be listening to the views of the British Wool Federation and the National Farmers Union. Their view is clear: they believe that the order improperly anticipates Royal Assent of the Agriculture Bill. Indeed, it improperly anticipates our discussion of clause 50. The National Farmers Union said:
    "In view of these extraordinary factors, the NFU, together with the British Wool Marketing Board, believe clause 50 of the Agriculture Bill should be amended to provide for the wool guarantee to be continued until 1995 (by which time the wool market is expected to be in better balance), or phased out over two years as was discussed with MAFF officials in early 1992."
    886
    The Minister said that there had been no such discussions or representations. The NFU also said:
    "At minimum, the wool guarantee should continue for a further full clip year, that is until 30 April 1994, in order to avoid disruption to marketing and possible differential treatment between farmers."
    The Minister has told us that all is sweetness and light, that everybody has agreed, that it is simple and that we can move quickly to the new circumstances. That is not the burden of the representations that have been made by all sectors of the industry. If the order is approved, the Minister owes it to the House and to the industry to guarantee that the shortfall in income, particularly for those at marginal levels of profitability—
    Mr. Marlow rose
    Mr. Tyler: I am about to conclude. The hon. Gentleman can make his own speech in a moment.
    If the Minister wants to ensure that his assurances are not just paper assurances, he must guarantee that all the other forms of support to which he has referred, including HLCAs, are increased to compensate for the removal of this important element in the total income of hill and other sheep farmers.
    11.31 pm
    Mr. Dafydd Wigley: I want to say a word on behalf of the poor, benighted sheep farmers. My county of Gwynedd has more than 2 million sheep, and it has had a rough time in recent years. In addition to the other economic problems that hon. Members from sheep-raising areas will be aware of, we have had the acute experience of Chernobyl, which continues to affect 350 farms and 250,000 sheep in my part of Wales. Sheep farmers can well do without any further knock. This knock is unnecessary and could have been avoided, at least for this year. The Minister should take to heart the representations of the NFU, the Farmers Union of Wales and others for phasing. There is no need to move with such speed. I appeal to him, even at this late stage, to consider the matter again.
    The most recent figures which I have for farm incomes for hill and upland livestock farms are for 1991. They show that in Wales no fewer than 65 per cent. of hill and upland livestock farms had a net income of less than £5,000. That compares with 30 per cent. in Scotland. Those people are working on the margins and they can ill afford any reduction. The reduction in the wool guarantee will make a difference. I do not pretend that it will make a massive difference, taking the industry as a whole, but for those on the margins it could make the difference between surviving and not doing so. I calculate that in my county we would lose about £1 million.
    In 1991, the year which I quoted for net farm incomes, the guarantee was 130p per kg and the average price for wool at auction was 61p. Now it is well below that. A difference of 50p could have an enormous effect on the farmers. Therefore, in Wales, with 11 million sheep, compared to 20 million in England and about 10 million in Scotland, it will make a difference to those who are most vulnerable. Even at this late stage I appeal to the Minister to heed the voice of the industry and at the very least to give a 12-month period of grace.
    11.34 pm
    Sir Giles Shaw: I venture with some unease into this debate amongst professionals who are well aware of what happens on upland sheep farms. First, I support my hon. Friend the Member for Batley and Spen (Mrs. Peacock) as a member of the all-party wool textile group. Indeed, I still have some textile interests in my constituency. I know some scourers as well, and I know a little about the importance of the English clip. I accept the main thrust of my hon. Friend's argument, which is that farmers rear sheep primarily for meat and that that is their main source of income. Not long ago the price of lamb in particular was at rock bottom. The industry—particularly the hill farmers—was in real difficulty. It is not a stable industry: there is much ebb and flow, due partly to consumer demand and partly to price.
    Those of us who have the blessing of visiting uplands fairly often recognise the real need to maintain the upland farmer. The valleys and dales of Yorkshire must be properly farmed—worked in a way that is suitable only for the terrain over which the farmers have to earn their living. It is a pretty fragile industry. It is all very well to look at other sectors of agriculture that have a real prospect of generating income in most conditions. The upland sheep farmer operates between fragile margins of success and failure. I beg my hon. Friend to recognise that fact. If, in due course, there is to be a significant difference in the incomes of hill sheep farmers, the scheme might be reconstituted. For many years, it has been of extreme value to these people.
    My second point relates to rare breeds. There has been a major effort to sustain the Herdwick, which at one point was in grave danger of running out. We have the Swaledale as well, but the Herdwick is a particular breed from the high Yorkshire dales and the lakeland fells, and it would be a real tragedy if it were lost as a result of this measure.
    The hon. Member for Workington (Mr. Campbell-Savours), who has a robust interest in this matter, spoke with his usual tremendous grasp. I do not intend to enter into the debate about what happens if sheep are not clipped. I accept that there is many a tick between the fleece and the clip. I do not expect an answer from my hon. Friend at this stage, but I ask him to bear in mind the fact that, with regard to protection of the upland environment and of the upland breeds—quite apart from the importance of maintaining this fragile industry—what is being done is not necessarily very welcome or of huge significance in terms of agricultural support. However, it represents a very present help in trouble. And the troubles could well return.
    11.38 pm
    Mr. Campbell-Savours: I should like to say a few words before the Minister replies. Perhaps he would care to listen to the questions that I am about to put.
    Is he prepared to monitor what happens over the next 12 months so that it may be established whether there has been a decline in the British clip? At this stage, Ministers are not prepared to accept that my proposition has any merit, and there is not much sympathy among Conservative Members for the case that I have made. However, there is a view—and it is held not just by my hon. Friends and myself—that there will be a decline in the British clip, and that this will have implications for the wool textile industry in the United Kingdom. Hon.
    888
    Members may shake their heads, but I can assure them that this view is held. I ask merely that Ministers keep an eye on the situation to ensure that if there is a clip reduction consideration will be given to the introduction of some arrangement to prevent long-term consequences for British industry.
    We shall divide the House on this matter. We shall wish to win, but if we are defeated Ministers should monitor the situation and consider what measures might be taken to deal with any damage.
    11.39 pm
    The Parliamentary Under-Secretary of State for Scotland (Sir Hector Monro): I am pleased to respond to some of the points raised tonight. We heard an astonishing speech from the hon. Member for Workington (Mr. Campbell-Savours). The one good point that he made was so obvious that it hardly needed to be made—that the situation should be monitored. Agriculture Ministers monitor all the time everything that is happening. Effective organisations participated in the hill farming review, and our close relationship with the farmers' unions of all countries enables us to know what is happening.
    We are not in any way winding up the British wool marketing board—certainly not. We are dealing only with the scheme. I give warm thanks to the board's chairman and members, who have done exceptionally well. I particularly want to mention Joe Raine, who will be well known to my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), and who has done so much in the north of England over such a long time.
    The board has done outstandingly good work in its 40 year's existence. I declare an interest: I have been a customer of the board for all those 40 years. There have been five years to plan for the Government's decision, and in that time the board had an opportunity to prepare its financial situation, build up its reserves, which now stand at some £10 million, and cushion the effect of the price drop that will occur this year, being the difference between last year's guaranteed price and this year's market price.
    The price schedule issued last week shows that the difference between the market and guaranteed price will be in the region of 50 per cent. This year, farmers will receive the 50 per cent. that was held back last year, so there will not be the dramatic price drop that the hon. Member for Workington and others suggested.
    Over the past five years, the board has worked on minimising the effect of the change on farmers and on customers. It has certainly taken its duties very seriously.
    The hon. Member for Workington devoted most of his speech to animal welfare. Any right hon. or hon. Member who has, like myself, been involved in sheep farming for many years will know that the hon. Gentleman's fears and criticisms are wholly unfounded. If he really believes that the average farmer will allow his flock to go unclippped in the year, he is miles from reality.
    The hon. Gentleman might equally have said last year, when we stopped compulsory dipping, that farmers would not dip to save money—but they all dipped. Dipping is important in respect of not only scab but fly, and clipping and dipping—as hill and lowland farmers well know—are an essential part of sheep husbandry.
    Mr. Elliot Morley: Is the Minister aware that, sadly, prosecutions for cruelty to

    889
    farm animals increased last year? Although we would not claim that such farmers are in the majority, unfortunately a minority mistreat farm animals. Given marginal incomes, the pressure on that minority will increase. Does not the Minister accept that that real risk ought to be taken seriously?
    Sir Hector Monro: Everything is taken seriously, but one must look at risks at face value. The hon. Gentleman and the hon. Member for Workington totally exaggerate the order's likely repercussions. It is part of normal sheep husbandry to clip and to dip. Those operations will continue as before.
    Having been a member of the all-party wool textile group, I appreciate how much my hon. Friend the Member for Batley and Spen (Mrs. Peacock) and her colleagues have done to promote the textile industry. I live in a textile area, so I appreciate the importance of the wool clip to the textile industry. Mills or brokers in my part of the world have not complained that our proposals will have a detrimental effect on the wool and textile industry.
    Nor, indeed, have I received complaints from fellmongers, who are an important part of the industry. I believe, as my hon. Friend the Minister of State said in opening, that there will be ample wool supplies—and possibly at a lower cost than in the past—and that the industry will not be harmed by the order.
    Mr. Campbell-Savours: The Minister said that he has received no complaints from people in the wool processing industry. That is my understanding of what he said. Did he consult them? Were the Government's proposals circularised? Have not they protested to the Ministry? Have not they written letters and sought meetings with Ministers to object? Is he saying that this is a figment of our imagination? Is he saying that people in the industry have misled Labour Members by suggesting that they have been making representations on these issues? Is it all a figment of our imagination?
    Sir Hector Monro: Yes, it must be. I check my daily correspondence very carefully. I have had no letters from the textile or fellmongering industries.
    Mrs. Peacock: I have listened carefully to my hon. Friend the Under-Secretary. All I can say is that everybody in the industry wrote to the chairman of the all-party wool textile group instead. I assure my hon. Friend that I have received plenty of letters and I took deputations to see my hon. Friend the Minister of State. They obviously sent their letters to me rather than to my hon. Friend the Under-Secretary.
    Sir Hector Monro: If my hon. Friend has had voluminous correspondence, it would be nice if she were to pass it on to me so that I can deal with it. We are most concerned for the wool and textile industry, especially the hosiery industry, which has had such a struggle in recent years. I am not criticising. I am saying that the order will not make the situation any worse. Indeed, it may help because prices may be lower.
    The hon. Member for North Cornwall (Mr. Tyler) was concerned about timing. His forecast of farm incomes is, frankly, not true. For the past two years, hill farm incomes in Scotland have increased by 40 per cent. That is agreed by the hill farming review and there is no doubt about it.
    890
    We have been over the figures umpteen times. The figures have been produced by academics throughout the United Kingdom, and the statement of fact is reflected in the sheep annual premium, the hill livestock commensatory allowance, the suckler cow subsidy and all the other assets that have been devoted to helping hill farming.
    The hon. Member for Caernarfon (Mr. Wigley) saw the position sensibly and he wished it to be kept in proportion. We shall monitor the situation.
    My hon. Friend the Member for Pudsey (Sir G. Shaw) said that it is important to maintain upland farms, and I could not agree more. That is exactly why we have increased subsidies for hill farmers in recent years. Under the sheep annual premium, the HLCAs, the suckler cow subsidy and environmentally sensitive areas assistance will be given to environmentally friendly ways of farming.
    We are certainly looking after the hill farming sector, especially where wool is involved. There is no reason to feel that the change under the order will have a serious impact on farming incomes. We are convinced that it will be as low as 5 per cent. or less. We can get it right in conjunction with the British wool marketing board. I know that there are difficulties because of world wool prices, but it is possible that they will improve. It is the board's leadership on quality and its determination constantly to raise standards which will provide the likely route to success. I commend the motion to the House.
    Question put:—
    The House divided: Ayes 189, Noes 150.

    Division No. 284]

    [11.49 pm

    AYES

    Aitken, Jonathan

    Cope, Rt Hon Sir John

    Alexander, Richard

    Couchman, James

    Alison, Rt Hon Michael (Selby)

    Cran, James

    Amess, David

    Curry, David (Skipton & Ripon)

    Arbuthnot, James

    Davies, Quentin (Stamford)

    Arnold, Jacques (Gravesham)

    Davis, David (Boothferry)

    Arnold, Sir Thomas (Hazel Grv)

    Day, Stephen

    Aspinwall, Jack

    Dorrell, Stephen

    Atkinson, David (Bour'mouth E)

    Douglas-Hamilton, Lord James

    Atkinson, Peter (Hexham)

    Dover, Den

    Baker, Rt Hon K. (Mole Valley)

    Duncan, Alan

    Baker, Nicholas (Dorset North)

    Durant, Sir Anthony

    Banks, Matthew (Southport)

    Eggar, Tim

    Banks, Robert (Harrogate)

    Elletson, Harold

    Bates, Michael

    Emery, Rt Hon Sir Peter

    Batiste, Spencer

    Evans, Jonathan (Brecon)

    Bellingham, Henry

    Evans, Roger (Monmouth)

    Beresford, Sir Paul

    Faber, David

    Bitten, Rt Hon John

    Fabricant, Michael

    Boswell, Tim

    Forman, Nigel

    Bottomley, Peter (Eltham)

    Forsyth, Michael (Stirling)

    Bowden, Andrew

    Fox, Dr Liam (Woodspring)

    Bowis, John

    Freeman, Roger

    Brandreth, Gyles

    French, Douglas

    Brazier, Julian

    Gallie, Phil

    Bright, Graham

    Gardiner, Sir George

    Brooke, Rt Hon Peter

    Gill, Christopher

    Brown, M. (Brigg & Cl'thorpes)

    Gillan, Cheryl

    Budgen, Nicholas

    Greenway, Harry (Ealing N)

    Burt, Alistair

    Griffiths, Peter (Portsmouth, N)

    Butler, Peter

    Grylls, Sir Michael

    Carlisle, Kenneth (Lincoln)

    Hague, William

    Carrington, Matthew

    Hamilton, Neil (Tatton)

    Carttiss, Michael

    Hampson, Dr Keith

    Channon, Rt Hon Paul

    Hargreaves, Andrew

    Clappison, James

    Harris, David

    Clark, Dr Michael (Rochford)

    Hawksley, Warren

    Clifton-Brown, Geoffrey

    Hayes, Jerry

    Congdon, David

    Heald, Oliver

    Coombs, Anthony (Wyre For'st)

    Heathcoat-Amory, David

    Coombs, Simon (Swindon)

    Hendry, Charles

    891

    Hicks, Robert

    Portillo, Rt Hon Michael

    Horam, John

    Powell, William (Corby)

    Hordern, Rt Hon Sir Peter

    Rathbone, Tim

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

    Redwood, John

    Howell, Rt Hon David (G'dford)

    Richards, Rod

    Hunt, Rt Hon David (Wirral W)

    Riddick, Graham

    Hunt, Sir John (Ravensbourne)

    Robertson, Raymond (Ab'd'n S)

    Hurd, Rt Hon Douglas

    Rowe, Andrew (Mid Kent)

    Jack, Michael

    Ryder, Rt Hon Richard

    Jenkin, Bernard

    Shaw, David (Dover)

    Jones, Gwilym (Cardiff N)

    Shaw, Sir Giles (Pudsey)

    Jones, Robert B. (W Hertfdshr)

    Shepherd, Colin (Hereford)

    Kellett-Bowman, Dame Elaine

    Sims, Roger

    King, Rt Hon Tom

    Smith, Sir Dudley (Warwick)

    Kirkhope, Timothy

    Soames, Nicholas

    Knapman, Roger

    Spencer, Sir Derek

    Knight, Mrs Angela (Erewash)

    Spicer, Sir James (W Dorset)

    Knight, Greg (Derby N)

    Spink, Dr Robert

    Kynoch, George (Kincardine)

    Spring, Richard

    Lait, Mrs Jacqui

    Sproat, Iain

    Legg, Barry

    Squire, Robin (Hornchurch)

    Leigh, Edward

    Stanley, Rt Hon Sir John

    Lidington, David

    Stephen, Michael

    Lightbown, David

    Stern, Michael

    Lloyd, Peter (Fareham)

    Sweeney, Walter

    Lord, Michael

    Sykes, John

    Luff, Peter

    Taylor, Ian (Esher)

    Lyell, Rt Hon Sir Nicholas

    Temple-Morris, Peter

    MacKay, Andrew

    Thomason, Roy

    Maitland, Lady Olga

    Thompson, Sir Donald (C'er V)

    Malone, Gerald

    Thompson, Patrick (Norwich N)

    Mans, Keith

    Thornton, Sir Malcolm

    Marland, Paul

    Thurnham, Peter

    Marlow, Tony

    Townend, John (Bridlington)

    Martin, David (Portsmouth S)

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

    Mawhinney, Dr Brian

    Tredinnick, David

    Merchant, Piers

    Trend, Michael

    Mills, Iain

    Trotter, Neville

    Mitchell, Andrew (Gedling)

    Twinn, Dr Ian

    Mitchell, Sir David (Hants NW)

    Walden, George

    Monro, Sir Hector

    Waller, Gary

    Montgomery, Sir Fergus

    Ward, John

    Moss, Malcolm

    Wardle, Charles (Bexhill)

    Nelson, Anthony

    Watts, John

    Neubert, Sir Michael

    Wells, Bowen

    Nicholson, David (Taunton)

    Wheeler, Rt Hon Sir John

    Nicholson, Emma (Devon West)

    Whitney, Ray

    Norris, Steve

    Widdecombe, Ann

    Onslow, Rt Hon Sir Cranley

    Wilkinson, John

    Oppenheim, Phillip

    Willetts, David

    Ottaway, Richard

    Wood, Timothy

    Page, Richard

    Paice, James

    Tellers for the Ayes:

    Patnick, Irvine

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

    Pickles, Eric

    Porter, David (Waveney)

    NOES

    Abbott, Ms Diane

    Boyce, Jimmy

    Adams, Mrs Irene

    Bradley, Keith

    Ainger, Nick

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

    Ainsworth, Robert (Cov'try NE)

    Bruce, Malcolm (Gordon)

    Alton, David

    Burden, Richard

    Barnes, Harry

    Byers, Stephen

    Battle, John

    Callaghan, Jim

    Bayley, Hugh

    Campbell, Mrs Anne (C'bridge)

    Beckett, Rt Hon Margaret

    Campbell, Menzies (Fife NE)

    Beggs, Roy

    Campbell-Savours, D. N.

    Beith, Rt Hon A. J.

    Carlile, Alexander (Montgomry)

    Benton, Joe

    Chisholm, Malcolm

    Betts, Clive

    Clarke, Eric (Midlothian)

    892

    Clelland, David

    Macdonald, Calum

    Clwyd, Mrs Ann

    McLeish, Henry

    Connarty, Michael

    Maclennan, Robert

    Cryer, Bob

    McMaster, Gordon

    Cunliffe, Lawrence

    Mahon, Alice

    Cunningham, Jim (Covy SE)

    Marshall, David (Shettleston)

    Cunningham, Rt Hon Dr John

    Martin, Michael J. (Springburn)

    Dafis, Cynog

    Martlew, Eric

    Dalyell, Tam

    Meale, Alan

    Darling, Alistair

    Michael, Alun

    Davidson, Ian

    Michie, Bill (Sheffield Heeley)

    Davies, Ron (Caerphilly)

    Michie, Mrs Ray (Argyll Bute)

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

    Milburn, Alan

    Dewar, Donald

    Moonie, Dr Lewis

    Dixon, Don

    Morgan, Rhodri

    Dowd, Jim

    Morley, Elliot

    Eagle, Ms Angela

    Morris, Estelle (B'ham Yardley)

    Eastham, Ken

    Mowlam, Marjorie

    Enright, Derek

    Murphy, Paul

    Etherington, Bill

    O'Brien, William (Normanton)

    Evans, John (St Helens N)

    Olner, William

    Ewing, Mrs Margaret

    Patchett, Terry

    Flynn, Paul

    Pickthall, Colin

    Foster, Rt Hon Derek

    Pike, Peter L.

    Foster, Don (Bath)

    Pope, Greg

    Foulkes, George

    Powell, Ray (Ogmore)

    Fyfe, Maria

    Prentice, Gordon (Pendle)

    Galloway, George

    Primarolo, Dawn

    Godman, Dr Norman A.

    Purchase, Ken

    Golding, Mrs Llin

    Raynsford, Nick

    Grant, Bernie (Tottenham)

    Reid, Dr John

    Griffiths, Win (Bridgend)

    Rendel, David

    Hall, Mike

    Robertson, George (Hamilton)

    Hanson, David

    Rooney, Terry

    Hardy, Peter

    Ross, William (E Londonderry)

    Harman, Ms Harriet

    Ruddock, Joan

    Harvey, Nick

    Salmond, Alex

    Henderson, Doug

    Simpson, Alan

    Heppell, John

    Skinner, Dennis

    Hinchliffe, David

    Smith, Andrew (Oxford E)

    Hoon, Geoffrey

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

    Howarth, George (Knowsley N)

    Spearing, Nigel

    Hughes, Kevin (Doncaster N)

    Steel, Rt Hon Sir David

    Hughes, Simon (Southwark)

    Steinberg, Gerry

    Ingram, Adam

    Stevenson, George

    Jackson, Helen (Shef'ld, H)

    Strang, Dr. Gavin

    Jones, Barry (Alyn and D'side)

    Taylor, Matthew (Truro)

    Jones, Ieuan Wyn (Ynys Môn)

    Turner, Dennis

    Jones, Jon Owen (Cardiff C)

    Tyler, Paul

    Jones, Lynne (B'ham S O)

    Wallace, James

    Jones, Nigel (Cheltenham)

    Warden, Gareth (Gower)

    Jowell, Tessa

    Wareing, Robert N

    Keen, Alan

    Wicks, Malcolm

    Kennedy, Charles (Ross, C&S)

    Wigley, Dafydd

    Kilfoyle, Peter

    Williams, Alan W (Carmarthen)

    Kinnock, Rt Hon Neil (Islwyn)

    Wilson, Brian

    Kirkwood, Archy

    Wise, Audrey

    Lewis, Terry

    Worthington, Tony

    Livingstone, Ken

    Wray, Jimmy

    Lloyd, Tony (Stretford)

    Young, David (Bolton SE)

    Llwyd, Elfyn

    Loyden, Eddie

    Tellers for the Noes:

    McAvoy, Thomas

    Mr. Eric Illsley and Mr. Jack Thompson.

    McCartney, Ian

    Question accordingly agreed to.
    Resolved,
    That the British Wool (Guaranteed Prices) (Revocation) Order 1993 (S.I., 1993, No. 1184), dated 29th April 1993, a copy of which was laid before this House on 30th April, be approved.

  PETITIONS

    Section 11 Funding
    12 midnight
    Mr. Tony Lloyd: It gives me considerable pleasure to present this petition to the House on behalf of my constituents in Stretford, especially those associated with primary and secondary schools who face the withdrawal of section 11 funding and who are concerned about the impact of that withdrawal on the quality and quantity of education in those hard-pressed parts of the borough of Trafford.
    The petition says:
    the withdrawal of section 11 funding will have a serious impact on the quality of education and opportunities for young people. Wherefore your petitioners pray that your honourable house reconsider this decision.
    I make it clear that I fully support the petition.
    To lie upon the Table.

    Sub-Post Offices
    12.1 am
    Mr. Elliot Morley: I present a petition on behalf of the people of Glanford and Scunthorpe in relation to-the threat to sub-post offices and to the right of people to choose how they receive their benefits, whether through a bank account, a building society account or, as many of my constituents want, across the counter of their local post offices.
    The petition has been raised in sub-post offices all over my constituency: in villages such as Broughton and Bottesford and in urban areas such as Lincoln gardens, Henderson avenue and Ashby. A whole range of sub-post offices shares this concern.
    The petition says:
    To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland assembled. The Humble Petition of the people of Glanford and Scunthorpe sheweth that the government is proposing to change the method of paying pensions and other benefits to Automated Credit Transfer without adequate choice, and we the undersigned vigorously protest against this proposal.
    Wherefore your Petitioners pray that your honourable House will urge the Secretary of State for Social Security to ensure that people will retain the clear right to cash their benefits at Post Offices.
    And your Petitioners, as in duty bound, will ever pray.
    Assurances have been given, but assurances were given in the election and were broken. I hope that the Government take note of the petition.
    To lie upon the Table.

    Wakefield (Assisted Area Status)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lightbown.]
    12.3 am
    Mr. David Hinchliffe: I have lost count of the number of occasions on which my three hon. Friends and I who represent the four Wakefield district constituencies have secured Adjournment debates to express our concern about the impact of Government economic and industrial policy on employment in our area. Our constituents in the Wakefield, Dewsbury, Castleford and Pontefract travel-to-work areas have seen during the 1980s and the early 1990s the systematic destruction of what has for generations been the economic base of the area—the coal industry. In our localities, we have experienced the wiping out of traditional male employment on an unprecedented scale. One needs to live in the area, as I and my three hon. Friends do, fully to understand the human implications of the changes.
    My purpose in securing tonight's debate is further to press the Government to face their responsibilities in ensuring that our constituents in Wakefield can look forward to much better employment prospects than is, frankly, the case at present. It is to argue that the same Government who led the way in destroying the prospects of so many in our area have a duty to recognise the difficulties that the Wakefield district faces and ensure that the two travel-to-work areas involved are accorded assisted area status as a matter of urgency.
    The Minister will say that our area, like many others, has been a victim of a wide recession, whether it be the last recession or the previous one over which the Government presided. I have spent considerable time in my constituency speaking to businesses involved in a wide range of activities. I am consistently told that the lack of any sort of economic or industrial strategy causes them the most difficulty. I have lost track of the number of times that managers in what is left of the mining engineering sector—people who are often politically sympathetic to the Government—have decried the complete absence of any form of energy policy.
    Less than a fortnight ago, I was told by one local company with an interest in rail freight that it knew that the Government intended to privatise the railways. But what was their wider strategy for transport? People who are intimately involved in the industry simply could not detect one. The lack of any overall industrial strategy has meant that local companies producing for the export market have felt undermined by the Government. I have pressed this point on several occasions at Trade and Industry questions.
    Producers of leading edge mining engineering technology with huge export potential find that the process of marketing their products is hampered by a British Government destroying the main marketing point—British pits—while the wider economic consequences are obvious from the balance of trade. In Wakefield, we pick up the pieces at the local level in terms of the impact on jobs and family prosperity.
    The Minister is fully aware of the job losses that have occurred in the Wakefield district recently because of the coal closure programme. My constituency has no pits left and the decline of coal has had a huge impact on related industries such as engineering. We have seen major

    895
    closures such as British Ropes, Wooltex and Gullick Pitcraft, and companies such as British Jeffery Diamond have dramatically reduced their work forces. Numerous smaller producers for the coal industry have also shed jobs.
    There must be serious doubts about the prospects of the remaining companies in the light of the implications of the DTI White Paper on the coal industry. The proposed closure shortly of Sharlston colliery, with a direct loss of nearly 700 more mining jobs, will add further to this spiral of decline. Undoubtedly, my hon. Friend the Member for Normanton (Mr. O'Brien) will refer to that closure if he catches your eye, Mr. Deputy Speaker, and my hon. Friend the Member for Hemsworth (Mr. Enright) will probably detail the impact of the closure of Grimethorpe colliery on the Wakefield area if he gets an opportunity to speak in this debate.
    Their comments will reinforce representations made by Wakefield metropolitan district council to the Department of Trade and Industry about the changes that have occurred in Wakefield since the local authority made its original submissions for consideration during the review of assisted area status. In a letter dated 7 April 1992 to the Department, the leader of the local authority estimated that, with the closure of Sharlston and Grimethorpe, together with job losses at Kellingley, Prince of Wales and Frickley collieries, no fewer than 1,250 miners resident in Wakefield have subsequently lost their jobs.
    It will be fairly obvious to the Minister that the marked decline in traditionally male employment, such as mining and engineering, has meant that women have increasingly become the breadwinners in many local families. But particularly alarming in recent weeks has been the announcement of proposals to close two major companies in Wakefield which employ many women in their work forces.
    The announcement of the closure of Lofthouse Foods in the constituency of my hon. Friend the Member for Normanton was made on 23 April with a loss of about 1,300 jobs. A fortnight later, on 7 May, it was announced that the Lyons Bakeries plant in my constituency was to close, with the loss of about 500 jobs. Such closures would have a devastating effect on any area, but against a background of thousands of recent job losses in the coal and engineering industries, there is now extreme concern in Wakefield about the economic and social implications of the employment situation.
    The local authority is to be commended on its efforts to attract industry to the district. It has had some notable successes with Coca-Cola, Schweppes, Pioneer and others, but it recognises that, despite the arrival in Wakefield of several new companies, we are continuing to experience an alarming decline in employment opportunities.
    The Wakefield Europort project has been seen by the Wakefield metropolitan district council as a basis for the generation of about 6,500 new jobs in the district. As the Minister will be aware, public funding is being sought from both EC and United Kingdom sources as a catalyst for the development of the project. The project site is in the constituency of my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse), who has worked long and hard to secure its completion.
    The proposed Europort consists of a terminal, one of nine Euroterminals in the United Kingdom, and a one-stop European freight centre for businesses in the Yorkshire and Humberside region. The promoters of the
    896
    scheme believe that better transport links to the continent will help to encourage foreign investment. The proximity of the site to the motorway network will ensure minimal transhipment problems and easy access by road to other parts of the region. The Europort will enhance export opportunities for regional firms by providing greater speed and efficiency of distribution. It will encourage locally based firms to reinvest in the region in the knowledge that European markets are easily accessible.
    Port Wakefield is a public-private sector development which would clearly bring significant benefit to the whole region, as well as to the immediate Wakefield district. However, in view of the current economic climate, there is serious anxiety that this vital project may not proceed. Several grant sources—European regional development fund and derelict land grant—have been explored jointly with the Department of the Environment to assist in the implementation of the project. It is hoped that the grants will be forthcoming.
    However, the factor that would be of most benefit would be the awarding of assisted areas status to the Castleford and Pontefract travel-to-work area. As well as offering incentives to inward investors, designation as an intermediate development area would assist with infrastructure elements of the scheme.
    My hon. Friends and I who represent the Wakefield constituencies have felt aggrieved for several years that the district's problems have not received proper Government recognition. The unemployment statistics have consistently shown Wakefield to have levels of unemployment well above that in areas which receive assistance.
    I mentioned at the beginning of my speech the human implications of Wakefield's employment problems. As my hon. Friends and I come from and live in the Wakefield district, many of the statistics relate to people known to us personally—neighbours, friends and sometimes relatives. I cannot emphasise too strongly the profound anger that I feel meeting every day when I am at home men of my age and younger whose jobs have disappeared and who believe, perhaps rightly, that they have little prospect of getting back into regular employment. The Government have a duty to assist such men to regain their self-respect and return to regular work.
    I am grateful for the opportunity to raise these points tonight. I hope that the Minister will recognise the strength of Wakefield's case.
    12.15 am
    Mr. William O'Brien: I join my hon. Friend the Member for Wakefield (Mr. Hinchliffe) in emphasising the need for assistance to be given to the Wakefield area in total. That assistance is made more necessary because in the past four weeks it has become clear that 2,000 jobs will be lost in my constituency. The Sharlston colliery will close with the loss of 700 jobs, and Lofthouse Foods will close shortly, with the loss of 1,300 jobs. These are just two examples of the devastation that my constituency is suffering. In addition to those 2,000 jobs, there are a further 2,000 jobs in the location of the two major factories I have mentioned that will be lost.
    That is the significance of this appeal tonight for some assistance to be given to the Wakefield area.
    I am disappointed that the Minister for Industry is not present. It was important that he be here, because it was he who, on 30 October last year, sent a letter to the

    897
    Opposition Front-Bench spokesman on industry saying that RECHAR money would not be available to mining areas. RECHAR money would have meant that £140 million could have been available for the development of mining areas. It is therefore disappointing that the Minister is not here to say why we have not had that money over the past three years.
    The allocation was for the three years up to 1993. We feel that we have been betrayed, because money that should have been available to help the development of the mining areas, in particular the Wakefield and district area, has been denied to us. If the Minister were here, he would have to explain why we were not allowed to have our money.
    I want to re-emphasise the need for some assistance to the area. We have been pleading for assisted area status. A deputation to meet the Minister, including members of the local authority and the four Members for the Wakefield area, made clear in November last year the need for assisted area status to help us over the unemployment problem that was looming then and has since become worse because of the closure of Lofthouse Foods, which was unannounced and a surprise to everyone in the area.
    I put it to the Minister that it is important that some assistance be given by way of assisted area status to the Wakefield area. I join my colleagues in asking that there be no further delay. The information is now available; the 1991 census figures are there. The question of assisted area status was first brought forward in June 1990, and the time has come for decisions to be made. I hope that Wakefield will be included in those decisions and will rejoin the map of areas enjoying assisted area status.
    12.18 am
    Mr. Derek Enright: My hon. Friends have put the case admirably for assisted area status, and I will point out briefly some of the reasons why, in Hemsworth constituency particularly, we need that.
    I will start by detailing the unemployment levels in the various wards: ward 11, 14 per cent.; ward 12, 15·1 per cent.; ward 18, 11·5 per cent.—that is in Ackworth, where it is principally professional people now going out of employment; ward 19, 17 per cent.; and ward 20, 20·3 per cent.
    Those are appalling figures, but they existed before the closure of Sharlston and Grimethorpe. In the villages of Havercroft, South Heindley and Ryhill now, male unemployment is above 40 per cent. There are no official statistics, but unofficially, that is the best practical estimate we can make. Hemsworth is a microcosm of what has happened in the Wakefield area.
    A mere 10 years ago, Hemsworth had more pits than any other constituency in the entire United Kingdom, including Scotland and Wales. Today it has one, Frickley, which is being rapidly run down and currently under threat in spite of the promises of the President of the Board of Trade.
    As the Minister knows, these figures underestimate the real unemployment figure. I am not trying to make a political point; the Minister knows that some of the miners who are out of work, although they want to work, are not included in the statistics. That creates a serious social situation, particularly since the few jobs that exist in my
    898
    constituency are extremely poorly paid. More than 50 per cent. of the jobs that were available were paying under £3 per hour.
    No one can envisage living on £120 a week. It is appalling. We are being left with more cheap jobs because firms such as Thyssen and Felkirk Engineers, which are dependent on supplying the mining industry, are having to run down.
    British Coal Enterprise Ltd. is our great hope, but, in our experience, it comes in, stays for six weeks and quietly folds up its tent and goes out into the night. It has remarkably little impact upon employment.
    The number of free school meals in the primary schools in my constituency is going up rapidly, and in more than five of them the figure is over 50 per cent. That is an alarming statistic.
    The derelict land is totally unsuitable for new industry. We are left with dereliction and the threat of opencast mining in our only piece of open countryside, Wintersett. As the local authority, quite understandably, has not been able to keep up with repairs, the housing conditions are appalling.
    I invite the Minister to Come to the Scotch estate, which is an example of a dilapidated estate which has basically good housing but which would be improved enormously by assisted area status. It would give us the opportunity to uplift socially and allow people to live in good conditions.
    In conclusion, assisted area status would stop the downward spiral, and I beseech the Minister to see to it that we get it.
    12.23 am
    The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton): I congratulate the hon. Member for Wakefield (Mr. Hinchliffe) on initiating the debate, and the hon. Members for Normanton (Mr. O'Brien) and for Hemsworth (Mr. Enright) on their contributions. I am sorry that the hon. Member for Normanton feels that I am an inadequate substitute for my right hon. Friend the Minister for Industry, but I am a northern Member of Parliament, and as a Minister in the Department I am collectively responsible for the decisions we take, so I hope that my answers to the points that have been made in the debate will have equal authority.
    I am also grateful to the hon. Member for Makerfield (Mr. McCartney) for being here this evening to give me moral support as a Member for the other side of the Pennines where my constituency is situated. He came to see me before Christmas with a delegation from his own local authority to plead the case for assisted area status, and he did it extremely eloquently.
    I am fully aware of the strength of feeling that exists in Wakefield and the importance that is attached to the application for assisted area status. The case has been made forcibly tonight and in written submissions, and at a meeting with my noble Friend Baroness Denton of Wakefield on 4 November last, when a delegation from Wakefield, including the local Members, made a clear presentation of all the key issues.
    As hon. Members know, the current review of the assisted areas map was announced last June, and the criteria on which the review is based were set out in a consultation document. We invited interested parties to submit their views. During the consultation period, over 1,500 written representations have been received. My

    899
    ministerial colleagues and I at the Department of Trade and Industry have met more than 50 delegations, in addition to delegations that have been seen by Ministers at the Scottish Office and Welsh Office. So the needs and circumstances of all areas have been carefully considered in the review.
    As part of that process, we have continued to monitor the economic situation in Wakefield, and the results of the review will be announced as soon as possible, following the necessary clearance by the European Commission. As the House will understand, I cannot anticipate those decisions tonight, so I am afraid that I am not in a position to give any advance indication about whether Wakefield will succeed in obtaining assisted area status.
    I fully appreciate the difficulties encountered by businesses in Wakefield, as the hon. Gentleman pointed out, in the last two to three years. No region or sub-region—indeed, no industrialised nation—has been insulated from recessionary pressures, regardless of the political complexion of the Governments concerned. These have led to some painful rationalisations and restructuring across all business sectors.
    The recession has lasted longer than expected, but I believe that all the ingredients for recovery are now in place—low inflation, lower interest rates, a competitive exchange rate, rising productivity and slower wage growth. So although we have undoubtedly been through a bruising period, I believe that the economic prospects, for Wakefield in particular, are better. They cannot be viewed in isolation from the prospects of the United Kingdom economy as a whole, and there are clear signs of a resumption in economic growth suggesting a sustainable recovery this year.
    For example, total output has been rising for nearly a year and non-oil output rose by 0·5 per cent. in the first quarter of 1993; manufacturing output is 2 per cent. higher in the first quarter than in 1992; retail sales are at a record level in the three months to April, up 3·25 per cent. on a year earlier; productivity and exports are at record levels and are growing strongly; seasonally adjusted unemploy-ment is down for the third consecutive month in April; and consumers and business men are now much more optimistic about the prospects for the economy. So, although I would not seek to disguise the scale of the problem, there are causes for optimism.
    The final point I cited—about the growth in economic optimism—is very much supported by the latest business surveys conducted in West Yorkshire. The regional CBI, the Leeds chamber and the mid-Yorkshire chamber all report strengthening business confidence and increased expectations of gradual and sustainable growth.
    The speed and impact will inevitably vary across sectors and between areas, but it is encouraging that there are definite signs of increasing investment, particularly in the manufacturing sector. Investment intentions among Yorkshire and Humberside companies are among the strongest in the United Kingdom, according to the most recent CBI survey.
    The recent decrease in regional unemployment is particularly welcome, but it is probably too soon to be absolutely sure of a clear downward trend, and there are distressing cases such as those raised by, in particular, the hon. Member for Normanton, of closures that have been announced recently.
    But the Yorkshire and Humberside seasonally adjusted rate of unemployment of 10·5 per cent. in April is down
    900
    0·2 per cent. on January 1993 and is now only 0·1 per cent. above the national average compared with 0·3 per cent. a year ago. I agree that unemployment is still too high, and we look forward to a sustained fall. In Wakefield, the unemployment rate in April fell for the third consecutive month, and that is a welcome sign.
    Mr. William O'Brien rose—
    Mr. Hamilton: I will not give way. I have only a few minutes in which to reply—
    Mr. O'Brien rose—
    Mr. Hamilton: No, I will not give way. There were three speeches in the debate and only a few minutes remain, and I am anxious to give as full a response as I can.
    The hon. Gentleman has referred to recent job losses in Wakefield, including the British Coal redundancies at Kellingley and Sharlston and the closures at Northern Foods and Lyons Bakeries. I can assure him that these have been taken into consideration as part of the assisted area map review process.
    I recognise that AA status is important to Wakefield, but it would be misleading to suggest that its benefits would be the only source of Government assistance. That is plainly not the case. In response to British Coal redundancies at Sharlston and Kellingley we have already introduced the following local package of measures as part of an overall national regeneration programme totalling £200 million. First, the DTI will extend the regional investment grants to 12 wards in Wakefield and Castleford. This was announced on 13 May and will encourage small firms employing fewer than 25 people to invest in new plant and equipment.
    This represents an important boost to the small business sector in Wakefield and complements support for new product development under the related regional innovation grant scheme which was extended to Wakefield in May 1992.
    English Estates has prepared a £4 million programme of industrial and commercial development for Wakefield. The Wakefield TEC and the Employment Service will receive an additional £1·87 million in respect of Sharlston and £1·3 million for Kellingley, shared with the North Yorkshire TEC, for a combination of training and business support. In addition, Wakefield council has been invited to bid to the Department of the Environment-administered coalfield areas fund for projects designed to alleviate problems caused by the Sharlston closure.
    The hon. Gentleman referred also to the Port Wakefield project, involving AMEC and a potential 7,000 new jobs as part of a rail freight terminal development. Government Departments are currently in discussion with AMEC over the details of the scheme and the possibilities for public financial sector support.
    These measures are additional to the significant amount of public investment being made in Wakefield through both United Kingdom Government and European mechanisms. For example, since 1990–91 Wakefield council has reclaimed almost 200 acres of derelict land, largely former colliery sites, as part of a 1,500 acre programme, and has received £3·5 million in grant from the Department of the Environment. Over £6 million business support funding under existing European programmes, including RECHAR, has been offered, largely utilising effective local partnerships of regeneration

    901
    agencies. Examples include a small business equity fund through British Coal Enterprise, the Ferrybridge resource centre and the Wakefield business and technical information centre. There has also been over £10 million infrastructure support under the mid-Yorkshire opera-tional programme in the last two financial years. Wakefield TEC annual training and enterprise budgets are in excess of £12 million a year.
    I believe that these measures will provide a significant contribution to the future prosperity of Wakefield, whether or not the district is successful in obtaining assisted area status. That alone cannot be a panacea for all the district's problems, which will need to be tackled on a wider front through a continuing and extended partnership of all the relevant regeneration agencies, including the DTI, other Government Departments, the local authority, the TEC, and the private sector.
    902
    We do not underestimate the current difficulties facing coalfield areas like Wakefield. That is why the £200 million regeneration package was devised and the assisted area map review has been delayed to take account of the coal review. I know that hon. Members would like a decision as soon as possible, and as soon as the EC aspects of the decision have been cleared, we will announce it at the earliest possible opportunity.
    We must be careful not to over-emphasise these current economic problems, to the detriment of the area. Wakefield has a number of significant strengths which will be crucial to its continuing diversification and regeneration and, in particular, it enjoys an excellent location alongside the M62/M1 motorway network, first class communications and a loyal and industrious work force. That is why it has already been successful in attracting several significant inward investment projects, including Pioneer and Coca-Cola, and a host of other smaller projects.
    Question put and agreed to.
    Adjourned accordingly at twenty-seven minutes to One o'clock.

ATTORNEY-GENERAL

  Racial Attacks
  Mr. Gerrard
  To ask the Attorney-General in how many cases referred by the police to the Crown Prosecution Service during the last year, an element or allegation of racial motivation has been identified by the police; and how many of these cases were brought to court.

  The Attorney-General
  The code for crown prosecutors requires that racial motivation be regarded by crown prosecutors as an aggravating feature when considering in particular cases where the public interest requires a prosecution. Such motivation can be found in a wide range of offences. The Crown Prosecution Service does not maintain records in a form which enables the information sought by the hon. Member to be obtained other than at disproportionate cost.

HOME DEPARTMENT

  Select Committee Recommendations
  Mr. Llwyd
  To ask the Secretary of State for the Home Department how many Select Committee recommendations have been made about, and how many accepted by, his Department since April 1989.

  Mr. Kenneth Clarke
  The Home Affairs Select Committee has published 30 reports since April 1989. The Government responses are contained in the following Command Papers, copies of which are available in the Library of the House.

  Title of Home Affairs Select Committee Report

  Government reply

  Session 1988–89

  Second Report: The Financing of Channel 4

  HC 434

  Third Report: Higher Police Training and the Police Staff College

  Cm 926

  Fourth Report: Home Office Expenditure

  Cm 838

  Fifth Report: Annual Report of the Police Complaints Authority for 1988

  Cm 928

  Sixth Report: Crack: the threat of hard drugs in the next decade (Interim report)

  Cm 1164

  Seventh Report: Drug Trafficking and Related Serious Crime

  Cm 1164

  First Special Report: Government Reply to the Second Report, Session 1988–89

  n.a.

  Session 1989–90

  First Report: Racial Attacks and Harassment

  Cm 1058

  Second Report: Compensating Victims Quickly:

  The Administration of the Criminal Injuries Compensation Board

  Cm 1153

  Third Report: Criminal Records

  Cm 1163

  Fourth Report: Crown Prosecution Service

  Cm 1145

  Fifth Report: Administrative Delays in the Immigration and Nationality Department

  Cm 1368

  474

  Title of Home Affairs Select Committee Report

  Government reply

  Sixth Report: Form and Content of Home Office Annual Report

  Cm 1381

  Seventh Report: Practical Police Co-operation in the European Community

  Cm 1367

  Session 1990–91

  First Report: The Annual Report of the Data Protection Registrar

  Cm 1485

  Second Report: Policing Football Hooliganism

  Cm 1539

  Third Report: Next Steps Agencies

  Cm 1549

  Fourth Report: Levy on Horserace Betting

  Cm 1583

  Fifth Report: Police Sickness

  Cm 1692

  Sixth Report: Financing of Greyhound Racing

  Cm 1757

  Seventh Report: The Tote

  Cm 1792

  Eighth Report: Home Office Annual Report

  Cm 1799

  Session 1991–92

  First Report: Fire Safety and Policing of the Channel Tunnel

  Cm 1853

  Second Report: HM Chief Inspector of Fire's Annual Report

  Cm 2005

  Third Report: Electoral Counting Methods

  Cm 2017

  Fourth Report: Police Complaints Procedures

  Cm 1996

  Session 1992–93

  First Report: Accountability of the Security

  Reply

  Service

  Pending

  Second Report: Delays in the Immigration and Nationality Department

  Cm 2185

  Reply

  Third Report: Domestic Violence

  Pending

  Letter

  Fourth Report: Immigration Advice Post-UKIAS

  20 May 1993

  Unit Fines
  Mr. Gapes
  To ask the Secretary of State for the Home Department what assessment was made of the result of the pilot schemes for unit fines under the Criminal Justice Act 1991; and whether he will publish the results.

  Mr. Jack
  Such an assessment was made and published in Home Office Research paper 59: "Unit Fines: Experiments in Four Courts", a copy of which is in the Library.

  Arrests (Soccer Matches)
  Mr. Nigel Evans
  To ask the Secretary of State for the Home Department how many people were arrested at soccer matches in each season from 1989–90.

  Mr. Charles Wardle
  The information for matches in England and Wales is contained in the following table:

  Arrests

  1991–92

  1990–91

  1989–90

  Football League

  5,006

  4,122

  5,945

  FA Cup

  862

  760

  1—

  Rumbelows Cup

  439

  512

  1—

  ZDS Cup

  109

  60

  1—

  Auto Glass Cup

  71

  135

  1—

  Total

  6,487

  5,589

  1—

  1 Information not available.

  Information on the 1992–93 season is not yet available.

  Fire Brigades
  Mr. Madel
  To ask the Secretary of State for the Home Department what plans he has to meet leaders of the Fire Brigades Union to discuss wage negotiating procedures; and if he will make a statement.

  Mr. Peter Lloyd
  My right hon. and learned Friend met representatives of the Fire Brigades Union, at their request, on 17 March to discuss the Government's policy on public sector pay this year. The negotiation of firefighters' pay is not a matter for my right hon. and learned Friend. Firefighters' pay and conditions of service are matters for the local authorities which employ firefighters, and are negotiated in the National Joint Council for Local Authorities' Fire Brigades.

  Competitive Tendering
  Mr. Michael
  To ask the Secretary of State for the Home Department what steps will be taken to discourage the recruitment of Home Office personnel by firms tendering for Home Office businesses.

  £ million

  1984–85 Outturn

  1985–86 Outturn

  1986–87 Outturn

  1987–88 Outturn

  1988–89 Outturn

  1989–90 Outturn

  1990–91 Outturn

  1991–92 Outturn

  1992–93 Estimate

  England

  Police

  Current

  2,645·5

  2,586·0

  2,814·0

  3,074·9

  3,415·5

  3,867·5

  4,326·7

  4,828·3

  5,230·9

  Capital

  89·0

  96·4

  101·9

  125·3

  149·3

  218·3

  166·1

  200·1

  204·8

  Fire

  Current

  566·8

  611·5

  653·0

  718·1

  769·8

  867·6

  960·2

  1,053·6

  1,126·7

  Capital

  34·0

  31·3

  27·0

  53·9

  55·6

  70·1

  48·2

  50·8

  59·5

  Other Services1

  Current

  205·5

  221·4

  241·2

  262·8

  304·5

  343·4

  384·8

  433·5

  469·1

  Capital

  4·3

  4·8

  10·6

  10·7

  14·0

  14·9

  14·6

  16·7

  17·2

  South East England2 (excluding Greater London)

  Police

  Current

  406·2

  418·0

  463·9

  509·2

  567·8

  628·1

  707·6

  790·4

  863·3

  Capital

  9·7

  17·9

  15·6

  19·1

  28·0

  42·6

  22·0

  27·2

  27·8

  Fire

  Current

  102·5

  109·4

  118·2

  128·9

  142·5

  162·2

  180·4

  198·8

  212·6

  Capital

  8·0

  8·0

  6·6

  13·3

  13·3

  14·1

  8·2

  8·5

  9·9

  Other Services1

  Current

  34·6

  40·3

  40·5

  45·3

  50·4

  56·4

  33·3

  74·1

  84·9

  Capital

  0·8

  1·0

  1·5

  2·5

  5·4

  8·2

  7·8

  7·8

  8·0

  Greater London

  Police3

  Current

  717·1

  733·2

  817·9

  878·9

  960·8

  1,085·0

  1,241·3

  1,384·4

  1,496·3

  Capital

  32·2

  37·1

  38·5

  41·7

  44·8

  47·6

  58·0

  68·1

  69·7

  Fire

  Current

  126·9

  143·0

  145·6

  160·8

  171·4

  194·8

  206·2

  219·5

  234·7

  Capital

  6·6

  2·6

  3·5

  8·5

  7·9

  16·0

  13·7

  9·6

  11·2

  Other Services1

  Current

  36·7

  39·6

  48·5

  48·9

  51·5

  58·5

  71·6

  81·2

  86·6

  Capital

  0·2

  0·1

  1·2

  1·7

  1·0

  1·1

  1·1

  1·4

  1·2

  1 Probation, emergency planning, other courts, registration of electors and school crossing patrols.

  2Taken as comprising Bedfordshire, Berkshire, Buckinghamshire, East Sussex, Essex, Hampshire, Hertfordshire, Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex.

  3Expenditure on the Metropolitan Police: the Metropolitan Police District includes parts of Essex, Hertfordshire and Surrey.

  Fire Service, Marchington
  Mr. Tipping
  To ask the Secretary of State for the Home Department who maintains the vehicles of the emergency fire service based at Marchington near Uttoxeter, Staffordshire; when any such contract was granted; and when it is due to expire.
  476
  Mr. Charles Wardle
  My right hon. and learned Friend would not wish to discourage such moves provided there is no impropriety involved.

  Police and Fire Services
  Sir Rhodes Boyson
  To ask the Secretary of State for the Home Department what was the total amount of expenditure on(a) police, (b) fire and (c) other services within the responsibility of his Department in (i) England, (ii) Greater London and (iii) the south-east, excluding Greater London, for each year since 1982–83, including estimates for 1992–93, distinguishing between current and capital expenditure, excluding local authority credit approvals/capital allocations.

  Mr. Kenneth Clarke
  Details of expenditure on these services from 1984–85 to 1992–93 are given in the table. Information in respect of the first two years is not readily available. The figures given for capital represent total expenditure; authorities have to decide the sources of finance only in aggregate. So it is not possible to identify the use of credit approvals for particular services.

  Mr. Peter Lloyd
  A contract with TNT Express (UK) Ltd. to store and maintain the emergency fire service stockpile for a period of five years commenced on I July 1991. The Home Office has an option to extend the period of the contract to a maximum of 10 years.

  Secure Accommodation
  Mr. Tipping
  To ask the Secretary of State for the Home Department if he will list the establishments providing secure accommodation for juvenile offenders that he has visited since taking his present office.

  Mr. Jack
  My right hon. and learned Friend visited Feltham young offenders institution on 25 September 1992 and has plans to visit a secure intensive support unit run by a local authority social services department next month. On his behalf, and since the beginning of this year, I have myself visited secure facilities at Orchard lodge in Southwark, the St. Charles centre in Essex, the Nightingale unit at Feltham young offenders institution and Lisnevin training school in Northern Ireland.

  Drugs
  Mr. Michael
  To ask the Secretary of State for the Home Department on what date he received the research report from Sheffield university, prepared for his Department, on the prevalence of drug use among young people.

  Mr. Jack
  The research report from Sheffield university was received in draft form in January. It is being prepared for publication later this year.

  South Manchester College
  Sir John Wheeler
  To ask the Secretary of State for the Home Department if he will make a statement on the implications for his Department of the judgment in the case of Kenny and Woodroffe v. South Manchester college.

  Mr. Kenneth Clarke
  On 24 March 1993, Sir Michael Ogden held in the case of Kenny and Woodroffe v. South Manchester college that the European Community acquired rights directive applied to the transfer from one undertaking to another of education provision at Thorn Cross young offender institution.

  The Prison Service has a clear, significant and legitimate interest in the judgment. Counsel was instructed by the Treasury Solicitor to attend the hearing and to maintain a watching brief for the Prison Service. If the judgment is upheld on appeal, it will affect the amount of public money which the Prison Service will need to pay contractors for the future provision of education services in prison establishments. A protective notice of appeal has now been lodged by South Manchester college. The Prison Service is meeting the college's legal costs in relation to the appeal.

  A note will be added in due course to the 1993–94 appropriation account in accordance with the principles set out in "Government Accounting", section 12.6.12.

  Data Protection
  Mr. Cohen
  To ask the Secretary of State for the Home Department on how many occasions the Metropolitan police have been subject to an investigation by the Data Protection Registrar in relation to a suspected breach of a data protection principle; if he will summarise the nature of each complaint; when the complaint was made; and what remedial action was taken by the police to ensure future compliance with the principle.
  478
  Mr. Peter Lloyd
  [holding answer 21 May 1993]: The Data Protection Registrar has recorded eight complaints against the Metropolitan police. They are as follows:

  (1) 6 April 1987

  Alleged contravention of Principle 5:

  Personal data shall be accurate and, where necessary, kept up to date.

  (2) 18 January 1988

  Alleged contravention of Principle 3:

  Personal data held for any purpose or purposes shall not be used or disclosed in a manner incompatible with the purpose.

  (3) 8 January 1988

  (4) 8 January 1992

  (5) 19 October 1992

  Alleged contravention of Principle 7:

  An individual shall be entitled (a) at reasonable intervals and without undue delay or expense —(i) to be informed by any data user whether he holds personal data of which that individual is the subject; and (ii) to access to any such data held by a user; and (b) where appropriate, to have such data corrected or erased.

  (6) 13 May 1991

  Alleged cases of unauthorised disclosure

  (7) 4 August 1992

  (8) 27 February 1991

  Alleged breach of Section 5(2)

  In no case has the registrar considered it necessary to serve an enforcement notice on the commissioner. The commissioner keeps compliance with the law under review and ensures that policy, practice and training reflect statutory requirements.

NATIONAL HERITAGE

  Stratford-on-Avon
  Mr. Elletson
  To ask the Secretary of State for National Heritage what information he has on(a) how many people visit Stratford-on-Avon every year and (b) what proportion of those visitors attend performances by the Royal Shakespeare Company.

  Mr. Key
  According to the leisure day visits survey, there were 4 million day visits by United Kingdom residents to Stratford-on-Avon in 1988–89. It is not known how many United Kingdom residents stayed overnight in Stratford-on-Avon, but according to the 1991 United Kingdom tourism survey, there were 800,000 trips to Warwickshire involving an overnight stay.

  In addition, according to the international passenger survey, there were 133,000 visits of one night or more by overseas residents to Stratford-on-Avon in 1991. It is not known how many overseas residents visited Stratford while staying elsewhere.

  The sources for the foregoing data do not identify what proportion of visits involved attendance at a performance by the Royal Shakespeare Company, but the latest available data show that in 1991–92 553,000 tickets were sold at the Royal Shakespeare Company's three theatres in Stratford-on-Avon.

  Digital Television Technology
  Mr. Randall
  To ask the Secretary of State for National Heritage what discussions he has had with the television industry on the development of a strategy for the introduction of digital television technology; and if he will make a statement.
  479
  Mr. Brooke
  None, but preliminary discussions are taking place with officials, both in my Department and the Department of Trade and Industry.

  Museums and Galleries
  Mr. Callaghan
  To ask the Secretary of State for National Heritage what consideration he is giving to increasing the purchase grants of the national museums and galleries and the National Heritage Memorial Fund; and if he will make a statement.

  Mr. Key
  We review all public expenditure programmes each year in the light of what we can afford. My right hon. Friend the Chancellor of the Exchequer will announce the results in the autumn Budget.

  Royal Parks
  Mr. Raynsford
  To ask the Secretary of State for National Heritage (1) how many nurseries are currently being operated for the royal parks; and what was the position three years ago;

  (2) for how long the nursery at Greenwich park has been disused; and what are his proposals for the area of the park formerly occupied by the nursery;

  (3) if he will estimate the proportion of plants for use in the royal parks which are currently being imported from overseas suppliers; and what was the comparable figure three years ago;

  (4) if he will provide an estimate of the amount of time being allocated by the contractor in each of the royal parks to the supervision of apprentices; and what were the figures three years ago.

  Mr. Key
  Responsibility for the subject of the question has been delegated to the Royal Parks Agency under its chief executive, Mr. David Welch. I have asked him to arrange for a reply to be given.

  Letter from David Welch to Mr. Nick Raynsford, dated 24 May 1993

  The Parliamentary Under Secretary of State for National Heritage has asked me to reply to your Written Parliamentary Questions asking:

  (i) how many nurseries are currently being operated for the Royal Parks; and what was the position three years ago;

  (ii) for how long the nursery at Greenwich Park has been disused;, and what are his proposals for the area of the park formerly occupied by the nursery;

  (iii) if he will estimate the proportion of plants for use in the Royal Parks which are currently being imported from overseas suppliers; and what was the comparable figure three years ago; and

  (iv) if he will provide an estimate of the amount of time being allocated by the contractor in each of the Royal Parks to the supervision of apprentices; and what were the figures three years ago.

  Three years ago there were nurseries in Hyde, Regent's, Greenwich and Richmond Parks. Following the contracting out of the Royal Parks nursery production work in 1992 only the Hyde Park nursery remains in use by the contractors who also make use of their own premises.

  The Greenwich Park nursery was de-commissioned in June 1992 and I am currently considering a proposal by our landscape architects to combine the site with the deer enclosure, to create an historic animal enclosure. In the short term, we are looking at the possible use of part of the nursery area by a local charity dealing with the rehabilitation of disabled people.

  Less than 2 per cent. of all plants supplied to the Royal Parks each year are imported. Imports represent a very small
  480
  proportion of the cuttings propagated by our nursery contractor. Before June 1992, all plants were propagated within the Royal Parks.

  Under the terms of the nursery and grounds maintenance contracts all apprentices are required to be supervised by a member of the contractors' own staff. Before 1992 apprentices were directly employed by the Department and supervised by Royal Parks staff. Information is not available on the time allocated. We have employed the former Director of Studies at the Royal Botanical Gardens, Kew, to advise us on apprentice training. He will be speaking to each apprentice to ensure that the training they receive is appropriate and suitable. In addition we are talking to the Royal Horticultural society to negotiate some practical training at their gardens in Wisley.

  As a former apprentice myself, I am very keen that our scheme should be managed in the best tradition.

  Television Reception
  Mr. Gordon Prentice
  To ask the Secretary of State for National Heritage what percentage of the land area of England is not served by broadcasts by(a) independent television and (b) BBC television.

  Mr. Brooke
  Broadcasters determine transmitter coverage to serve resident populations rather than areas of land. About 99·4 per cent. of the United Kingdom population is able to receive both BBC and independent television services.

  Items in Lieu of Tax
  Mr. Spring
  To ask the Secretary of State for National Heritage what offers in lieu of tax have been accepted or allocated since his announcement of 23 April,Official Report, column 227.

  Mr. Brooke
  Since my last announcement on 23 April,Official Report, column 227, I am pleased to inform the House of the acceptance of two surrealist hats by Eileen Agar in lieu of taxation, which will satisfy £3,500 tax. I am also pleased to announce the allocation of an offer comprising a collection of silver and nine sporting paintings. The collection of silver will go to the Victoria and Albert museum, except for two candlesticks which will be allocated to the Museum of London. The sporting paintings will be allocated to the British Sporting Art trust, for display at the National Horseracing museum, Newmarket, except for one painting, "Sittingbourne with S. Rogers 2nd, West Australian with F. Butler winner of the Derby 1853" by Henry Aiken, which will go to the Doncaster museum. The surrealist hats will go to the Victoria and Albert museum in accordance with the condition on which the offer was made.

  Royal Palaces
  Mr. Alan Williams
  To ask the Secretary of State for National Heritage what was the breakdown of departmental expenditure between the occupied royal palaces in the latest available year.

  Mr. Key
  [holding answer 21 May 1993]: The figures for property services in 1992–93 are as follows:

  £ million

  Buckingham Palace

  3·138

  Windsor Castle

  9·698

  St. James's Palace and Clarence House

  1·650

  Kensington Palace

  0·513

  Utilities, wages and other costs not broken down by palace

  8·137

  481

  £ million

  Total

  23·136

  The figures for Windsor castle includes the costs of a major refurbishment programme and of initial clearance and stabilisation work in the fire damaged area.

OVERSEAS DEVELOPMENT

  South Africa
  Mr. Kirkwood
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the ODA budget for the Republic of South Africa in the current financial year; and what proportion he plans to disburse on higher education.

  Mr. Lennox-Boyd
  We spent over £10 million on development assistance for black South Africans in 1992–93, and aim to increase spending in 1993–94. About 64 per cent. of 1992–93 expenditure was on higher education, including training awards in a variety of different sectors.

TRANSPORT

  A550
  Mr. Miller
  To ask the Secretary of State for Transport when the photographs accompanying the publication of formal proposals for phases 1 and 2 of the A550 improvements was taken.

  Mr. Kenneth Carlisle
  Friday 24 August 1990.

  Mr. Miller
  To ask the Secretary of State for Transport if he will quantify traffic on(a) the A550 during the recent signposted diversion during roadworks at Queensferry and (b) for the same area prior to the diversion.

  Mr. Kenneth Carlisle
  Average daily traffic flows:

  (i) During recent diversion—

  Hooton—11,000 vehicles per day

  Deeside Park—35,000 vehicles per day

  (ii) Prior to diversion—

  Hooton—11,300 vehicles per day

  Deeside Park—39,500 vehicles per day

  Mr. Miller
  To ask the Secretary of State for Transport if he will make a statement detailing the conclusions drawn after the public consultation exercise into phase 3 of proposals for improvements to the A550.

  Mr. Kenneth Carlisle
  That there was substantial support for major improvements to the A550 and for the adoption of the blue route. That, after considering carefully the question of alternatives via the M53 and M56, the best option was to proceed with the modified blue route.

  Mr. Miller
  To ask the Secretary of State for Transport what factors were considered when the decision was taken to develop the A550.

  Mr. Kenneth Carlisle
  The objectives underlying all trunk road schemes are:482

  To assist economic growth by reducing transport costs

  To improve the environment by removing through traffic from unsuitable roads in towns and villages, and

  To enhance road safety.

  Mr. Miller
  To ask the Secretary of State for Transport what consideration was given to traffic-calming measures as a solution to current problems on the A550; and if he will make a statement on the investigation and its conclusions.

  Mr. Kenneth Carlisle
  The A550 forms an integral part of the trunk road system which we wish to maintain and develop. Traffic calming is not relevant in these circumstances.

  Mr. Miller
  To ask the Secretary of State for Transport if he will quantify annual accidents(a) on the A550 Ledsham bridge section prior to the improvements made in the 1980s and (b) for the same route since the improvements were completed.

  Mr. Kenneth Carlisle
  There were nine accidents in four years prior to the improvements completed in early 1989. There have been three accidents in four years since then.

  Mr. Miner
  To ask the Secretary of State for Transport whether the terms of reference for improving the A550 will include an examination of the justification of the principle of the entire scheme.

  Mr. Kenneth Carlisle
  Each stage of the improvement stands alone as a separate scheme, the need and justification for which is likely to be tested at public inquiry.

  Mr. Miller
  To ask the Secretary of State for Transport on what date the original proposals for the A550 improvement were received; and whether they formed a co-ordinated scheme with proposals for the Dee barrage.

  Mr. Kenneth Carlisle
  The 1987 White Paper "Policy for Roads" introduced a scheme to improve the A550 between Woodbank and Ledsham. In 1989, the complementary scheme for the improvement between Ledsham and the M53 was added. Account was taken of all planned road schemes in the area.

  Mr. Miller
  To ask the Secretary of State for Transport on what date the principle of the current scheme for major improvements to the A550 was last evaluated; and if he will make a statement detailing the alternative schemes with which it was compared at that time.

  Mr. Kenneth Carlisle
  The justification for a scheme is continually assessed as design progresses. Alternative schemes assessed were an on-line improvement and an off-line route to the east of Two Mills.

  Mr. Miller
  To ask the Secretary of State for Transport when the possible rail alternatives to the current proposals for improvements to the A550 were last evaluated.

  Mr. Kenneth Carlisle
  Recent and planned improvements to the rail network in the area are being taken into account in the scheme assessment. They are unlikely to have a major impact on the need for the improvements to the A550.

  Mr. Miller
  To ask the Secretary of State for Transport if he will make a statement on the criteria used to reach the decision for the proposed Ledsham to Deeside Park and M53 to Ledsham phases of the A550 improvements.
  483
  Mr. Kenneth Carlisle
  The A550 is a key element in the trunk road network for journeys between the Merseyside conurbation and north Wales. The present narrow single carriageway has a poor vertical alignment in places and is substandard for the amount of traffic using it. Poor visibility at junctions and accesses makes conditions hazardous for all road users and accidents are above the national average. Traffic is subject to congestion and queuing at peak hours and summer weekends. The degree and frequency of the congestion will increase with forecast higher flows.

  Mr. Miller
  To ask the Secretary of State for Transport if he will quantify traffic annually using(a) the A550 prior to the M53/A55 link around Chester into north Wales and (b) the same route since completion of the M53/A55 link.

  Mr. Kenneth Carlisle
  The following is the information:

  (a) Prior to completion of M53/A55 link—

  Hooton—12,450 vehicles per day

  Deeside Park—46,500 vehicles per day

  (b) Since completion of M53/A55 link—

  Hooton—12,450 vehicles per day

  Deeside Park—45,500 vehicles per day

  Mr. Miller
  To ask the Secretary of State for Transport if he will make a statement detailing the forecast traffic growth on the A550; and what are the criteria on which this forecast is based.

  Mr. Kenneth Carlisle
  Traffic flow forecasts for 2011 are:

  Vehicles per day

  Hoolon

  Low growth

  30,500

  High growth

  37,500

  Deeside Park

  Low growth

  71,700

  High growth

  87,500

  The Department used its standard methodologies to produce growth factors for private vehicles which reflect local circumstances. For commercial vehicles growth was assumed to be in line with national road traffic forecasts.

  The growth factors were then applied to current traffic flows to produce forecasts for the year 2011 which were assigned to the road network containing the Department's proposals.

  Bypass Definition
  Mr. Miller
  To ask the Secretary of State for Transport what definition of a highway bypass is used by his Department.

  Mr. Kenneth Carlisle
  There is no statutory definition of a bypass. Trunk road bypass schemes remove through traffic from towns and villages on all-purpose trunk roads. Other schemes in the national road programme may have a similar effect.

  Lorry Drivers
  Mr. Matthew Banks
  To ask the Secretary of State for Transport what proposals he has for dealing with abuse of the requirements on lorry drivers' hours and rest periods, and the use of tachographs; and if he will make a statement.
  484
  Mr. Kenneth Carlisle
  Breaches of the rules for drivers' hours, rest periods and the proper fitting and use of tachographs have serious implications for road safety. We take a grave view of those who seek to circumvent these rules and in the interests of safety the vehicle inspectorate is to increase the enforcement resources it devotes to this work by nearly 70 per cent. from June this year. This will be organised through special task forces to target specific areas of concern. We aim to achieve this result within the present resources of the vehicle inspectorate both through a number of efficiency gains and by switching some effort from weight enforcement.

  Motorways
  Mr. Dunn
  To ask the Secretary of State for Transport when he will publish a Green Paper on motorway charging.

  Mr. MacGregor
  Together with my right hon. Friends the Secretaries of State for Scotland and for Wales, I intend to publish tomorrow a Green Paper on the basis of charging for motorways in Great Britain entitled "Paying for Better Motorways: Issues for Discussion". Copies will be available in the Vote Office from 11 am in the usual way.

  The Green Paper will be very much a consultation document to stimulate informed and vigorous debate. The Government have taken no decision to introduce direct charging.

HOUSE OF COMMONS

  House Committees
  Mr. McMaster
  To ask the right hon. Member for Berwick-upon-Tweed, as representing the House of Commons Commission if he will make a statement outlining the relationship between the Commission and the domestic House Committees, indicating how their reports are considered; and if he will make a statement.

  Mr. Beith
  Under the House of Commons (Administration) Act 1978, the Commission is responsible for the appointment of staff of the House and for laying before the House the Estimates for House of Commons: Administration and House of Commons: Works Services. The work of the Commission in carrying out its responsibilities is described in its annual reports presented to the House, most recently on 16 July 1992 (HC 155).

  The Finance and Services Committee has responsibility for detailed consideration of financial matters, including questions of priority for expenditure. It prepares draft estimates with the assistance of the board of management for submission to the Commission. The main role of the domestic committees, apart from their consumer role in advising on the delivery of services by House Departments, is to make policy recommendations to the Speaker and the Commission as appropriate. The recommendations are then considered as necessary by the Finance and Services Committee in advance of final decisions being taken by the Commission.

  The Commission operates a long-standing policy of requiring the introduction of a major new service to be approved by the House before provision is made for it in the estimates. The occasion for such a debate would normally be the consideration of a report from the relevant domestic committee.

TRADE AND INDUSTRY

  Regional Preferential Assistance
  Mr. Wigley
  To ask the President of the Board of Trade if he will publish figures showing Government expenditure on regional preferential assistance to industry for each standard United Kingdom region(a) at current prices and (b) at 1989–90 prices for the years 1991–92 and 1992–93.

  Mr. Sainsbury
  Details of regional preferential assistance at current prices for 1991–92 and 1992–93 can be found in my answer to the hon. Member for Darlington (Mr. Milburn) on 18 May,Official Report, columns 121–22.

  A regional breakdown of regional preferential assistance at 1989–90 prices, covering the period 1991–92 and 1992–93, is as follows:

  £ million

  Region

  1991–92

  1992–93

  Northern1

  55·3

  40·5

  Yorkshire and Humberside

  15·8

  11·5

  East Midlands

  2·3

  1·0

  South West

  7·2

  6·9

  West Midlands

  7·5

  9·1

  North West2

  42·9

  30·9

  England

  131·0

  99·8

  Wales

  133·5

  3118·2

  Scotland

  111·8

  386·7

  Great Britain

  376·3

  3304·8

  Northern Ireland

  121·8

  391·0

  United Kingdom

  498·1

  3395·8

  All figures are gross and include payments to Nationalised Industries.

  1 Includes expenditure in Cumbria.

  2Excludes expenditure in Cumbria.

  3 Provisional.

  The items included in the expenditure are regional development grants, regional selective assistance and regional enterprise grants; expenditure on land and factories by the English Industrial Estates Corporation, the Scottish and Welsh development agencies, the Development Board for Rural Wales and the Highlands and Islands development board.

  Northern Ireland has a different range of financial incentives available and the items included are Industrial Development Board grants and loans, expenditure on land and factories, share capital standard capital grants and local enterprise development unit grants and loans.

  Mr. Wigley
  To ask the President of the Board of Trade what were the numbers and value of offers of(a) regional selective assistance and (b) regional enterprise grants within each standard United Kingdom region in 1991–92 and 1992–93; what is the forecast outturn for 1993–94; and if he will list (i) the number of applications, (ii) the associated project costs and (iii) the amount of grant paid.

  Mr. Sainsbury
  The regional selective assistance (RSA) and regional enterprise grants (REG) schemes are applicable only in Great Britain.

  For 1991–92 all the information requested about RSA and REG can be found in the annual report of the Industrial Development Act 1982 at appendices 7 and 5
  486
  respectively. Copies are available in the Library of the House. Apart from the amount of grant paid, information for 1992–93 is presently being prepared and will be published in the annual report in September 1993.

  The amount of grant paid in each standard region in 1992–93 was:

  £ million

  1992–93

  RSA

  REG

  Northern

  28·1

  1·5

  North West

  18·2

  1·3

  Yorkshire and Humberside

  8·4

  1·8

  South West

  5·1

  0·8

  East Midlands

  0·6

  0·3

  West Midlands

  10·7

  0·1

  England

  71·1

  5·8

  Scotland

  59·2

  2·8

  Wales

  158·8

  11·1

  Great Britain

  1189·1

  19·7

  1 Provisional.

  The latest forecast outturns for RSA and REG for 1993–94 are contained in the 1993–94 Supply estimates.

  Sellafield
  Sir Thomas Arnold
  To ask the President of the Board of Trade if he will make a statement on the current timing of the decision in respect of the commissioning of the thermal oxide reprocessing plant at Sellafield.

  Mr. Eggar
  Before commissioning its thermal oxide reprocessing plant, British Nuclear Fuels plc will need such consents and authorisations as may be required by law. The company's application for revised discharge authori-sations for the Sellafield site is a matter for my right hon. and learned Friend the Secretary of State for the Environment and my right hon. Friend the Minister of Agriculture, Fisheries and Food.

  Nuclear Safety
  Mr. Ainger
  To ask the President of the Board of Trade what is the revised timetable for the long-term safety review of nuclear reactors by the nuclear installations inspectorate.

  Mr. Eggar
  The Health and Safety Executive's nuclear installations inspectorate has so far published reports of its findings on six power stations. It intends to publish a report on the generic issues arising out of the long-term safety reviews (LTSRs) of Magnox stations later this year. Important modifications to plant at all the Magnox stations have been or are being implemented. The NII has requested the licensees to give priority to these generic safety concerns so that action is taken without waiting for completion of individual station's LTSRs. Brief reports on the remaining five stations should then be available before the end of 1994.

  Mr. Llew Smith
  To ask the President of the Board of Trade (1) when he received the 1991–92 report of his advisory committee on the safety of nuclear installations; and what action he plans to take in response to its recommendations;

  (2) when he received a copy of the third report of the advisory committee on the safety of nuclear installations study group on human factors.
  487
  Mr. Eggar
  I received copies of the biennial report of the Health and Safety Commission's Advisory Committee on the Safety of Nuclear Installations (ACSNI), and of a report from its study group on human factors, on Monday 17 May, the day of their publication. The biennial report contains no recommendations as such, but I have noted the areas of work which ACSNI has undertaken in 1991–1992 and have also been informed about the committee's forward programme for 1993.

  Mr. Bowden
  To ask the President of the Board of Trade if he will make it his policy to seek an international convention to harmonise the safety standards of nuclear reactors.

  Mr. Eggar
  The Government welcome the discussions taking place at the International Atomic Energy Agency in Vienna on a proposed international nuclear safety convention, and hopes these can be concluded as soon as possible. The convention should be based on general principles of nuclear safety and should be aimed at improving the safety of civil nuclear power reactors world wide.

  Mr. Bowden
  To ask the President of the Board of Trade what plans he has to increase the resources of the International Atomic Energy Agency for the implementa-tion of programmes for improving safety in the nuclear industries of the countries of central and eastern Europe.

  Mr. Eggar
  Major funding for projects to improve nuclear safety in the countries of central and eastern Europe is being provided through bilateral assistance programmes co-ordinated by G24, and through the multilateral fund, established as an initiative of the G7 July 1992 Munich summit. The Government are playing a full part in these programmes and recently made a contribution of £8·25 million to the fund. The Government consider that the resources currently available to the International Atomic Energy Agency are broadly consistent with the distinctive contribution the agency is able to make in the area, both through its own specific programmes and the quality of its technical advice to others.

  Plutonium
  Mr. Llew Smith
  To ask the President of the Board of Trade how many shipments of safeguarded plutonium from the United Kingdom to Japan have taken place to date.

  Mr. Eggar
  For the period from May 1979, shipments of plutonium from the United Kingdom to Japan were made in financial years 1979–80, 1980–81 and 1981–82. The shipments were made under safeguards for use in civil nuclear power research and development. The specific details are a matter for the operator concerned and its customers.

  Abu Dhabi
  Mr. Llew Smith
  To ask the President of the Board of Trade what matters in regard to the prospects for a carbon tax were raised by the Minister for Energy during his recent visit to Abu Dhabi.

  Mr. Eggar
  During my recent visit to the Gulf, considerable concern was expressed in Abu Dhabi and 488
  elsewhere about the European Commission's proposals for a carbon/energy tax. I explained that the United Kingdom was not convinced that a Community-wide tax along the lines proposed by the Commission was either a necessary or appropriate response to the problem of global warming. I also took the opportunity to explain the outcome of the joint session of the Energy and Environment Councils on 23 April outlined in my reply to my hon. Friend the hon. Member for Norfolk, North-West (Mr. Bellingham), Official Report, columns 109–10, on 5 May 1993.

  Coal Industry
  Mr. Hinchliffe
  To ask the President of the Board of Trade to what extent British Coal may take into account commercial concerns over potential competitors in assessing disposal and future sale of pits; and if he will make a statement.

  Mr. Eggar
  Offering to the private sector pits which British Coal does not wish to keep in production is a matter for British Coal. As the White Paper explains, the Government believe that it is right that where a private sector operator is prepared to take on a pit for the long term that operator should have the opportunity to succeed or fail in the market. In considering bids, British Coal will, of course, have to have due regard to its statutory duties.

  Newly licensed mines will have to find new outlets for their production and will not have access to British Coal's contracts with the electricity supply industry.

  Croatia
  Mr. Elletson
  To ask the President of the Board of Trade what advice his Department gives to British businesses considering investment in the Republic of Croatia.

  Mr. Needham
  Because of Croatia's serious economic and political difficulties, my Department urges a cautious approach on British companies considering investing there.

  Manufactured Goods
  Mr. Austin Mitchell
  To ask the President of the Board of Trade what has been the increase in import penetration of manufactured goods each year since 1972, distinguish-ing between imports from(a) the EEC and (b) the rest of the world.

  Mr. Needham
  Information on import penetration from 1970 to 1979 was published in the June 1980 edition of "Economic Trends". Subsequent data up to the year ended June 1989 were published in "Business Monitor MQ12"; annual summaries are published in table 12.2 of the "Annual Abstract of Statistics". These publications are available in the Library of the House. The figures do not separate the EC from the rest of the world.

  Tariffs
  Mr. Austin Mitchell
  To ask the President of the Board of Trade if he will publish a table showing the average incidence of tariffs on imports and exports of manufactures in(a) 1972 and (b) 1992 in (i) the United Kingdom and (ii) the original EEC Six, and indicating the

  489
  average loss of tariff preference between the United
  Kingdom and (x) Denmark, (y) the Irish Republic and (z) Commonwealth countries since 1972.

  Mr. Needham
  No. The provision of this detailed information would incur disproportionate costs in terms of resources and time.

  Coal Review
  Mr. Llwyd
  To ask the President of the Board of Trade what plans he has to visit representatives of(a) employers and (b) employees of those coal mines in Wales which were included in the British Coal review to discuss the future of their pits.

  Mr. Eggar
  Neither my right hon. Friend nor I have any plans to do so at present.

  Gas Interconnector
  Mr. Stephen
  To ask the President of the Board of Trade what progress has been made by the group of companies studying the feasibility of building a gas interconnector between the United Kingdom and the continent.

  Mr. Eggar
  I understand that the group will shortly be inviting potential users to participate in an interconnector linking the United Kingdom and Belgian gas grids. I welcome this initiative by the industry. It is an important step towards realising the gas trade opportunities this link will provide. It will be for the Government to negotiate with the Belgian Government the necessary treaty for a pipeline crossing our continental shelf boundary, and I am writing to the chairman of the group to assure him of our readiness to do so.

  Companies House
  Mrs. Angela Knight
  To ask the President of the Board of Trade what targets he has set Companies House executive agency for 1993–94.

  Mr. Heseltine
  I have set Companies House executive agency the following targets for 1993–94:

  to make all statutory documents available for public inspection within five working days of receipt;

  to satisfy all requests for searches within two hours;

  to achieve a compliance rate of 86 per cent. by end June 1993, increasing to 90 per cent. by end June 1994 for companies filing accounts and annual returns; and

  to reduce real unit costs by an average of 2 per cent. a year.

  Companies House is also required to achieve a 6 per
  cent. average annual rate of return based on its operating surplus expressed as a percentage of average net assets employed at current values.

  In addition, I have set the chief executive of the agency the target of replying within 10 working days to letters from MPs delegated to him for reply.

  Telecommunications Council
  Mrs. Angela Knight
  To ask the President of the Board of Trade if he will make a statement on the outcome of the Telecommunications Council held on 10 May.

  Mr. Leigh
  The main item of business was the proposal for a Council decision on an action plan far the introduction of advanced television services in Europe.490
  Some progress was made towards achieving an agreement, but several key points on the content of the action plan, including the overall amount of any Community expenditure have yet to be agreed. Negotiations will continue at a further Council meeting, scheduled for 16 June.

  A common position was agreed in principle on the directive applying open network provision to voice telephony. Council conclusions on the Commission's communication on the European telecommunications equipment industry were adopted without discussion. These invite the Commission to strengthen Community action already under way in four areas: establishment of an internal market, support for research and development, development of the terminal equipment market, and improving competitive conditions in the world market. There was also a short debate on a recent Commission communication on the review of the telecommunications services market, which proposed full liberalisation of telecom services by 1998. On the postal Green Paper the Commission gave a brief oral report on the results of the consultation period. There will be more substantive discussions on both these points at the Telecommunications Council on 16 June.

  UKAEA
  Mr. Dunn
  To ask the President of the Board of Trade whether he will make a statement on the chairmanship of the United Kingdom Atomic Energy Authority.

  Mr. Heseltine
  The current chairman's appointment expires on 30 June 1993. I have appointed Sir Anthony Cleaver to succeed him, initially for three years, from 1 July 1993.

  Advertisements (Germany)
  Mr. Wareing
  To ask the President of the Board of Trade how many advertisements his Department has placed in German newspapers and periodicals; into which ones they were placed; what the cost has been; what was the purpose of the advertisements; what the response has been; and if he will place copies of these advertisements in the Library.

  Mr. Sainsbury
  [holding answer 24 May, 1993]: During the 1992–93 financial year a total of 74 advertisements costing some £160,000 were placed in Handelsblatt, Wirtschaftswoche and TopBusiness, together with chamber of commerce magazines in Freiburg, Stuttgart, Mannheim, Karlsruhe and Reutlingen. The advertising campaign was aimed at stimulating the interest of German companies in the advantages the United Kingdom offers as a profitable investment location. So far, some 40 companies have responded. Copies of the advertisement have been placed in the Library.

  Gas Prices
  Mr. Peter Atkinson
  To ask the President of the Board of Trade if he will list the standing charges per quarter and the unit charge in pence/kWh for gas prices for each year since 1991–92; what is each figure as a percentage increase or decrease on the previous year's figure; what were the changes in the retail prices index over the same period; and if he will make a statement.
  491
  Mr. Eggar
  [holding answer 24 May 1993]: The information requested is as follows:

  Domestic Gas: Standard Credit Tariff

  Standing charge Pence per day

  Unit cost Pence per kWh

  1 April 1991

  10·3

  1·566

  1 April 1992

  10·3

  1·566

  1 July 1992

  10·3

  1·507

  1 October 1992

  10·1

  1·477

  1 April 1993

  10·1

  1·477

  Percentage changes

  Gas

  Standing charge

  Unit cost

  RPI (all items)

  April 1991 to April 1992

  nil

  nil

  +4·3

  April 1992 to April 1993

  -1·9

  -5·7

  +1·3

  Retail Prices Index (all items) 13 January 1987 = 100

  RPI

  April 1991

  133·1

  April 1992

  138·8

  April 1993

  140·6

  Over the two-year period 1990–92 in real terms standing charges have decreased by 8·2 per cent. and unit cost by 4·1 per cent.

EDUCATION

  Discretionary Grants
  Mr. Llwyd
  To ask the Secretary of State for Education how many representations he has received on the subject of discretionary grants over the past 18 months; and if he will make a statement.

  Mr. Boswell
  My right hon. Friend has received a considerable number of representations on this subject from members of the public, interested groups and hon. Members.

  Testing
  Mr. Steinberg
  To ask the Secretary of State for Education what representations he has had from, and what meetings he has had with, parent-teacher associations on the subject of testing in schools; and what consideration he is giving to their views.

  Mr. Forth
  My right hon. Friend has received a number of letters from parent-teacher associations in recent months. He last met the National Confederation of Parent Teacher Associations (NCPTA) on 26 April. He has also met a delegation from Parents' Initiative, and gave a speech at the annual conference of the Campaign for Real Education on 17 April.

  All these occasions allowed my right hon. Friend to speak to parents, and to seek their views on the subject of testing. We recognise that parents have an essential role to play in the education process: we want actively to engage them in it.
  492
  My right hon. Friend has asked Sir Ron Dearing, the chairman designate of the School Curriculum and Assessment Authority, to conduct a wide-ranging review of the manageability of the national curriculum and the associated testing and assessment framework. Parent-teacher associations should make their views known to him.

  Student Loans
  Mr. Llwyd
  To ask the Secretary of State for Education what proportion of students have taken up a student loan within the first year of study, in each year since the initiation of the student loan scheme.

  Mr. Boswell
  This is a matter for the Student Loans Company. I will ask the chief executive to write to the hon. Member.

  Multiple Disabilities
  Mr. Alfred Morris
  To ask the Secretary of State for Education if he will introduce legislation to extend the statutory entitlement to education for people with multiple disabilities to at least the age of 25 years; and if he will meet the campaign for people with multiple disabilities to discuss the need for statutory change.

  Mr. Boswell
  The Further Education Act 1992 requires the Further Education Funding Council and local education authorities to ensure that adequate further education provision is available for adults without age limit, including those with multiple disabilities. These are substantial statutory duties; the Government have no plans to extend them.

  Teacher Education
  Mrs. Ann Taylor
  To ask the Secretary of State for Education (1) what advice he has received from the Office for Standards in Education on the experience of partnership between higher education institutions and schools in the education and training of teachers; and if he will make a statement;

  (2) what advice he has received from the Office for Standards in Education arising from its surveys of teachers education courses; and if he will make a statement.

  Mr. Patten
  Ofsted is engaged in a four year cycle of inspections of higher education institutions offering initial teacher training and it or the institutions publish these reports. From time to time, Ofsted also publish reports on surveys conducted on various aspects of initial or in-service training for teachers.

  Mrs. Ann Taylor
  To ask the Secretary of State for Education how his plans for the future of teacher education differ from the statement in circular 9/92 concerning the shared responsibility of higher education institutions and schools for planning and management of courses; and if he will make a statement.

  Mr. Patten
  I welcome the move towards greater partnership between higher education institutions and schools which circular 9/92 has brought about, and look forward to similar developments in primary teacher training. I am also pleased that we are now able to offer some schools the chance to design and run their own courses, allowing them to decide on an appropriate role
  493
  for higher education institutions. I shall be announcing the names of the first schools chosen to run such courses shortly.

  Mrs. Ann Taylor
  To ask the Secretary of State for Education when he will publish a circular about the future of teacher education for primary school teachers; what advice he has received from the Council for the Accreditation of Teacher Education on this matter this year; and if he will make a statement.

  Mr. Patten
  Proposals for the reform of primary initial teacher training will be announced soon and will take account of advice received from the Council for the Accreditation of Teacher Education.

  Mrs. Ann Taylor
  To ask the Secretary of State for Education how he intends to alter the present arrangements for teacher education; on what basis qualifications will be awarded to students; who will validate such qualifications; and if he will make it his policy that those qualifications will be no lower in quality and status than existing teacher qualifications.

  Mr. Boswell
  The Government have already introduced new requirements for secondary teacher training. M y right hon. Friend recently announced a pioneer scheme for school-led training courses. We will shortly be issuing for consultation proposals for the reform of primary teacher training. Arrangements for validation are for the institutions concerned; my right hon. Friend will continue to use his powers to approve courses leading to qualified teacher status so as to improve the quality and standing of the teaching profession.

  Mrs. Ann Taylor
  To ask the Secretary of State for Education what are the current arrangements for teacher education; which types of qualification are available to those who wish to practise as teachers; who validates such qualifications; and if he will make a statement.

  Mr. Boswell
  Current arrangements for initial teacher training, and other ways of achieving qualified teacher status, are summarised in the publication "Routes into Teaching" issued by the Teaching as a Career unit. Copies are available from the Library.

  Head Teachers and Deputies
  Ms Harman
  To ask the Secretary of State for Education if he will publish a table showing the earnings of head teachers and deputy head teachers in each group from one to six in real terms at January 1993 prices for each year since 1990–91; and if he will provide estimates for 1993–94 and 1994–95.

  Mr. Boswell
  The current pay spine for heads and deputies was introduced on 1 January 1991. Table A shows the values of the points on the spine at that date and on subsequent dates when they have been increased, converted to January 1993 prices by use of the retail prices index. The spine was extended by two points in April 1991.

  Table B shows the points ranges applying to the salaries of heads and deputies in the six school groups. The School Teachers' Review Body has not yet been asked to report on teachers' pay in 1994–95.
  494

  Table A

  Movements in values of heads and deputies' pay spine

  Point

  1 January 1991

  1 April 1991

  1 December 1991

  1 April 1992

  1 April 1993

  1

  19,391

  20,387

  20,965

  22,046

  21,981

  2

  19,708

  20,720

  21,309

  22,407

  22,340

  3

  20,026

  21,056

  21,654

  22,770

  22,702

  4

  20,344

  21,388

  21,995

  23,128

  23,061

  5

  20,662

  21,724

  22,339

  23,492

  23,423

  6

  20,980

  22,057

  22,684

  23,853

  23,782

  7

  21,298

  22,392

  23,028

  24,217

  24,144

  8

  21,616

  22,725

  23,370

  24,574

  24,500

  9

  21,934

  23,061

  23,714

  24,938

  24,865

  10

  22,251

  23,393

  24,059

  25,299

  25,224

  11

  22,569

  23,729

  24,403

  25,660

  25,583

  12

  22,887

  24,062

  24,744

  26,020

  25,943

  13

  23,205

  24,397

  25,089

  26,381

  26,302

  14

  23,523

  24,730

  25,433

  26,745

  26,667

  15

  23,841

  25,066

  25,778

  27,106

  27,026

  16

  24,159

  25,398

  26,119

  27,466

  27,385

  17

  24,477

  25,734

  26,463

  27,827

  27,744

  18

  24,794

  26,067

  26,808

  28,191

  28,109

  19

  25,112

  26,403

  27,152

  28,552

  28,468

  20

  25,430

  26,735

  27,493

  28,913

  28,827

  21

  25,856

  27,183

  27,954

  29,396

  29,310

  22

  26,279

  27,627

  28,411

  29,876

  29,787

  23

  26,702

  28,072

  28,868

  30,356

  30,266

  24

  27,128

  28,520

  29,329

  30,842

  30,749

  25

  27,550

  28,964

  29,786

  31,322

  31,229

  26

  27,973

  29,409

  30,243

  31,802

  31,709

  27

  28,399

  29,856

  30,703

  32,285

  32,188

  28

  28,822

  30,301

  31,161

  32,768

  32,671

  29

  29,245

  30,745

  31,618

  33,248

  33,151

  30

  29,776

  31,305

  32,194

  33,853

  33,754

  31

  30,306

  31,861

  32.767

  34,455

  34,355

  32

  30,834

  32,418

  33,337

  35,055

  34,952

  33

  31,365

  32,974

  33,910

  35,657

  35,553

  34

  31,896

  33,534

  34,486

  36,265

  36,159

  35

  32,424

  34,090

  35,056

  36,864

  36,756

  36

  32,954

  34,647

  35,629

  37,467

  37,357

  37

  33,485

  35,203

  36,202

  38,069

  37,957

  38

  34,226

  35,984

  37,004

  38,913

  38,799

  39

  34,967

  36,764

  37,805

  39,754

  39,635

  40

  35,710

  37,544

  38,610

  40,600

  40,480

  41

  36,451

  38,321

  39,409

  41,441

  41,318

  42

  37,192

  39,102

  40,210

  42,282

  42,157

  43

  37,936

  39,882

  41,015

  43,129

  43,002

  44

  38,676

  40,662

  41,817

  43,973

  43,841

  45

  39,417

  41,443

  42,615

  44,813

  44,680

  46

  40,161

  42,223

  43,420

  45,657

  45,522

  47

  40,901

  43,000

  44,222

  46,501

  46,363

  48

  41,642

  43,780

  45,023

  47,345

  47,205

  49

  42,386

  44,561

  45,825

  48,189

  48,047

  50

  —

  45,341

  46,627

  49,029

  48,883

  51

  —

  46,118

  47,428

  49,873

  49,725

  Table B

  Heads' and deputies' pay ranges

  School Group

  Head teachers Spine Point

  Deputy head teachers Spine Point

  1

  3–15

  1–8

  2

  8–22

  2–10

  3

  15–29

  4–13

  4

  23–37

  8–20

  5

  31–44

  15–26

  6

  38–51

  22–34

  Key Stage Tests
  Mrs. Ann Taylor
  To ask the Secretary of State for Education what arrangements have been made to produce the large print version of the key stage tests.
  495
  Mr. Forth
  Brailled, enlarged and modified print versions of test papers for 14-year-olds are available for pupils with a statement of special needs for visual impairment. It is for teachers to decide which type of question paper is most suitable for their pupils. The School Examinations and Assessment Council (SEAC) asked schools to place orders for such papers by January 1993. Pupil packs are made up individually according to schools' orders.

  Large print versions of the tests for seven-year-olds have not been prepared. Given the way the tests are administered, teachers are able to explain the nature of the tasks to pupils with visual impairment. However, schools may enlarge pupil work sheets in preparing the tests for pupils with special needs.

  SEAC has also advised schools of a telephone helpline which has been established at the Royal National Institute for the Blind to deal with inquiries and any problems arising over the delivery of test papers.

  Gang Rape Poem
  Dr. Spink
  To ask the Secretary of State for Education if he will make a statement on the inclusion of a poem on gang rape used in the London Examination Board GCSE syllabus.

  Mr. Forth
  This poem was not prescribed for study as part of any syllabus published by the University of London Examinations and Assessment Council. I understand that it was selected by one school as one of the poems to be studied and written about under a syllabus which left the choice to the school. The selection by schools of material for study is a matter for the school concerned, but having read the poem I believe that it was unsuitable and regrettable.

  Testing
  Mr. Pendry
  To ask the Secretary of State for Education what is the estimated cost of the national key stage testing for all school children in England and Wales in each subject and at each key stage for this year; and if he will make a statement.

  Mr. Forth
  The estimated costs of producing and distributing the statutory tests for 1993 in English, mathematics, science and Welsh at key stage 1— seven-year-olds—is £1,230,000. The estimated cost of the non-mandatory tests at this key stage is £1,470,000.

  The cost of the statutory tests in English, mathematics, science, technology and Welsh at key stage 3–14-year-olds—is £4,090,000. This includes support materials.

  At key stage 2 there are no statutory assessments this year.

  Teachers (Earnings)
  Ms Harman
  To ask the Secretary of State for Education if he will publish a table showing the earnings of qualified teachers on each scale point from one to 10 in real terms at January 1993 prices for each year since 1990–91; and if he will provide estimates for 1993–94 and 1994–95.

  Mr. Boswell
  The following table shows the values of the points on the standard scale for qualified teachers other than heads and deputies at 1 April 1990, 1991, 1992 496
  and 1993. These have been converted to January 1993 prices by use of the retail prices index. Teachers paid on the standard scale may also be paid incentive allowances at one of five rates—currently £1,302, £2,109, £4,218, £5,625, and £7,734—and other discretionary payments. The salaries listed exclude London weighting. Teachers in service on 1 May 1993 will receive a lump sum of £90. The standard scale will cease to exist in September 1993 when a new pay spine for classroom teachers will be introduced.

  Standard scale for qualified teachers

  at 1 April 1990

  1 April 1991

  1 April 1992

  1 April 1993

  Point

  Salary

  £

  £

  £

  £

  11

  9,918

  10,582

  1

  10,295

  10,582

  11,115

  11,032

  2

  10,685

  11,142

  11,703

  11,614

  3

  11,072

  11,701

  12,290

  12,197

  4

  11,991

  12,261

  12,875

  12,780

  5

  12,953

  13,097

  13,754

  13,651

  6

  13,780

  13,933

  14,631

  14,522

  7

  14,606

  14,770

  15,510

  15,394

  8

  15,433

  15,606

  16,387

  16,265

  9

  16,418

  16,719

  17,556

  17,425

  10

  17,327

  17,832

  18,721

  18,584

  1 The 11-point scale was shortened by one point on 1 December 1991 and the old point 1 disappeared.

SCOTLAND

  Inspectorate of Constabulary
  Mr. Gallie
  To ask the Secretary of State for Scotland if he will publish a statement on the role of Her Majesty's inspectorate of constabulary in Scotland.

  Mr. Lang
  The citizens charter highlighted the importance of the role of the main public service inspectorates in checking that the service providers meet the needs of the public which they serve, and the "Justice Charter for Scotland" which I published in November 1991 provided undertakings as to the manner in which Her Majesty's inspectorate of constabulary for Scotland would perform this role. Further information about the inspectorate is provided in a leaflet under the title "The Role of HM Inspectorate of Constabulary, Scotland" which I have published today.

  The leaflet incorporates a statement of principles for the inspectorate which focuses on the key principles of independence, openness, lay involvement and objectivity. It also explains the role and organisation of the inspectorate, and describes the process of annual inspection of police forces in Scotland. Particular attention is drawn to the arrangements which are made by the inspectorate to obtain the view of members of the public and to ensure that the public have access to the reports of their inspections. The leaflet will be available in police stations and in public libraries throughout Scotland.

  I have placed copies of the leaflet in the Library.

  General Practitioners
  Mr. McMaster
  To ask the Secretary of State for Scotland what limitations are imposed on the reimbursement of general practitioners performing minor surgery;
  497
  on what grounds these limitations are imposed; when he plans to review the arrangements; and if he will make a statement.

  Mr. Stewart
  [holding answer 20 May 1993]: Under the statement of fees and allowances for general medical practitioners in Scotland which are determined by the Secretary of State after consultation with representatives of the medical profession, a general medical practitioner on the local health board's minor surgery list is entitled to a fee for undertaking a minor surgery session—comprising five procedures. Payment is limited to a maximum of three sessions per quarter.

  There are no plans to review these arrangements.

  Kerr Little
  Mr. David Marshall
  To ask the Secretary of State for Scotland what was the total amount of public money given to the meat processing and butchering company, Kerr Little, not in receivership, in the past two years; and if he will make a statement.

  Sir Hector Monro
  [holding answer 21 May 1993]: Kerr Little was awarded an EC grant in 1992 worth £173,574 and had earlier been made an offer of regional selective assistance worth £145,000 by Scottish Office Industry Department. The Scottish Office is in contact with the receiver in the interest of safeguarding public money already paid to the company, which totals £186,142.

  Labour Statistics
  Mr. Hain
  To ask the Secretary of State for Scotland how many(a) people and (b) males aged 16 years or over were recorded by the 1991 census in Scotland as economically inactive; and what percentage these figures represent of the population in each case.

  Mr. Stewart
  [holding answer 21 May 1993]: In the 1991 census of population there were 1,581,059 persons in Scotland who were aged 16 and over and economically inactive. This figure is 39·6 per cent. of all persons aged 16 and over. The corresponding figures for males are 510,718 and 27·2.

  Farmers and Fishermen
  Mr. David Porter
  To ask the Secretary of State for Scotland how many officials are employed by his Department to administer, inspect, regulate and advise the farming and fishing industries either directly, in agencies or on special contracts(a) in 1992 and (b) at the latest available date; how many (i) farmers and (ii) fishermen there are in Scotland, full or part time; and if he will make a statement.

  Sir Hector Monro
  [holding answer 24 May 1993]: The total numbers of staff employed by the Scottish Office Agriculture and Fisheries Department, the Scottish Agricultural Science Agency and the Scottish Fisheries Protection Agency at 1 April 1992 and 1 April 1993 are shown in the following table, together with the most recent figures available on the numbers of farmers and fishermen in Scotland.
  498

  Staff numbers (full-time equivalent1)

  1 April 1992 Number

  Number

  1 April 1993 Number

  SOAFD

  1,033·5

  1,071·5

  SASA

  138·5

  142·0

  SFPA

  215·5

  225·5

  Farmers2

  Full-time

  12,700

  Part-time

  10,200

  Fishermen3

  Full-time

  7,181

  Part-time

  955

  1 Figures are calculated as full-time equivalents (i.e., part-time staff are counted as half units) and include administrative, professional, technical, industrial and support grades. Casual staff are excluded.

  2 Includes partners and directors as at 1992 June agricultural census.

  3 SOAFD figures as at December 1992.

  Nurse Regrading
  Dr. Godman
  To ask the Secretary of State for Scotland what is the total number of outstanding regrading appeals by nurses on each of the health board areas.

  Mr. Stewart
  [holding answer 24 May 1993]: I understand that virtually no nurse clinical grading appeals submitted under section 32 of the General Whitley Council conditions of service are oustanding at health board level. On 1 May 1993, 478 appeals to the Scottish Appeals Committee were outstanding. On the same date 482 appeals at national level remitted by the Nursing and Midwifery Staffs Negotiating Council to the Scottish Appeal Team secretariat were outstanding; the breakdown of these by health board is given in the table.

  Health Board

  Scottish Appeals Committee Outstanding

  National Level Appeals Outstanding

  Total

  Argyll and Clyde

  18

  29

  47

  Ayrshire and Arran

  13

  40

  53

  Borders

  6

  11

  17

  Dumfries and Galloway

  16

  9

  25

  Fife

  48

  25

  73

  Forth Valley

  94

  74

  168

  Grampian

  14

  6

  20

  Greater Glasgow

  74

  59

  133

  Highland

  9

  23

  32

  Lanarkshire

  56

  54

  110

  Lothian

  21

  54

  75

  Orkney

  2

  —

  2

  Shetland

  1

  3

  4

  Tayside

  106

  75

  181

  Western Isles

  —

  8

  8

  CSA

  —

  12

  12

  State Hospital

  —

  —

  —

  Total

  478

  482

  960

  Multiple Births
  Mr. Wigley
  To ask the Secretary of State for Scotland what were the total numbers of sets of (i) twins, (ii) triplets, (iii) quadruplets, (iv) quintuplets and (v) sextuplets born in Scotland in each year since 1980 and the total number of maternities in Scotland in each year; and how many
  499
  multiple births of each type in each year were conceived as a result of (a) in-vitro fertilisation, (b) gamete intra-fallopian transfer and (c) other forms of assisted conception.

  Twin

  Triplet

  Type of birth Quadruplet

  Quintuplet

  Sextuplet

  Total maternities

  1980

  658

  4

  —

  —

  —

  68,689

  1981

  611

  7

  —

  —

  —

  68,865

  1982

  607

  6

  —

  —

  —

  65,963

  1983

  677

  2

  —

  —

  —

  64,776

  1984

  665

  10

  —

  —

  —

  64,800

  1985

  681

  9

  —

  —

  —

  66,342

  1986

  721

  10

  —

  —

  —

  65,456

  1987

  721

  10

  —

  —

  —

  65,839

  1988

  706

  9

  1

  —

  —

  65,842

  1989

  677

  13

  2

  —

  —

  63,090

  1990

  731

  16

  1

  —

  —

  65,556

  1991

  709

  24

  2

  —

  —

  66,630

  19921

  808

  15

  —

  —

  —

  65,307

  1 Provisional.

  Information on the number of multiple births in Scotland attributed to assisted reproduction is not available. Some information on these matters is published in the first annual report of the Human Fertilisation and Embryology Authority, and in earlier annual reports of the interim licensing authority, copies of which are available in the Library.

  Court Cases
  Dr. Godman
  To ask the Secretary of State for Scotland how many cases heard by(a) district courts, (b) sheriff courts and (c) the High Court resulted in (i) convictions, (ii) a verdict of not proven and (iii) dismissals, for the last seven years.

  Lord James Douglas-Hamilton
  [holding answer 24 May 1993]: The available information is given in the table:

  Persons called to court by outcome

  1985–91 Scotland

  Year

  PNGS1 or Deserted

  Acquitted Not Guilty

  Acquitted Not Proven

  Charge Proved

  Total

  High Court

  1985

  31

  134

  66

  805

  1,036

  1986

  32

  156

  75

  793

  1,056

  1987

  36

  147

  72

  858

  1,113

  1988

  51

  95

  77

  801

  1,024

  1989

  50

  96

  73

  746

  965

  1990

  61

  111

  70

  757

  999

  1991

  81

  94

  78

  743

  996

  Sheriff Court

  1985

  4,187

  6,521

  1,224

  100,110

  112,042

  1986

  4,701

  6,515

  1,226

  96,119

  108,561

  1987

  4,632

  6,412

  1,200

  91,955

  104,199

  1988

  5,592

  4,703

  1,224

  91,164

  102,683

  1989

  6,538

  4,739

  1,366

  90,721

  103,364

  1990

  7,922

  4,281

  1,313

  88,202

  101,718

  1991

  7,554

  3,682

  1,137

  82,723

  95,096

  District Court

  1985

  2,857

  3,193

  625

  72,006

  78,681

  1986

  2,874

  2,871

  556

  71,427

  77,728

  1987

  2,865

  3,044

  532

  72,150

  78,591

  1988

  2,958

  2,768

  502

  74,839

  81,067

  1989

  3,012

  2,449

  553

  74,123

  80,137

  500
  Mr. Stewart
  [holding answer 24 May 1993]: The information is as follows:

  Year

  PNGS1 or Deserted

  Acquitted Not Guilty

  Acquitted Not Proven

  Charge Proved

  Total

  1990

  3,623

  2,347

  578

  76,904

  83,452

  1991

  3,295

  2,270

  496

  77,725

  83,786

  1 Plea of ont guilty accepted.

NORTHERN IRELAND

  Hostel Accommodation
  Mr. Beggs
  To ask the Secretary of State for Northern Ireland what is the average weekly cost to the DHSS in Northern Ireland for providing a place for a single person in hostel accommodation.

  Mr. Hanley
  The average weekly accommodation cost met by DHSS through the housing benefit scheme for a single resident in a hostel is £98.72.

  Terrorism
  Rev. Martin Smyth
  To ask the Secretary of State for Northern Ireland how many people have been killed or injured as a result of fire and explosion during terrorist incidents in the past three years.

  Mr. Mates
  The available information is set out in the table. Information on persons injured in fires is not readily available and could be obtained only at disproportionate cost.

  Terrorist incidents in Northern Ireland

  Deaths as a result of:

  Injuries as a result of:

  Explosions

  Fires

  Explosions

  1990

  22

  —

  115

  1991

  18

  2

  234

  1992

  11

  —

  200

  Myalgic Encephalomyelitis
  Mr. McMaster
  To ask the Secretary of State for Northern Ireland how many people are receiving benefits in respect of myalgic encephalomyelitis.
  501
  Mr. Hanley
  Responsibility for the subject in question has been delegated to the Social Security Agency under its chief executive, Mr. Alec Wylie. However, I have been advised that the information requested is not available and could be obtained only at disproportionate cost.

  Multiple Births
  Mr. Wigley
  To ask the Secretary of State for Northern Ireland what were the total numbers of sets of (i) twins, (ii) triplets, (iii) quadruplets, (iv) quintuplets and

  Type

  1980

  1981

  1982

  1983

  1984

  1985

  1986

  1987

  1988

  1989

  1990

  1991

  11992

  Sets of:

  (i) Twins

  298

  305

  306

  263

  304

  272

  281

  322

  287

  281

  267

  315

  258

  (ii) Triplets

  4

  3

  2

  4

  3

  3

  2

  7

  1

  2

  5

  6

  8

  (iii) Quadruplets

  —

  1

  —

  —

  —

  —

  1

  —

  1

  —

  —

  —

  —

  (iv) Quintuplets

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  1

  —

  (v) Sextuplets

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  —

  Maternities

  28,542

  27,229

  26,905

  27,188

  27,547

  27,529

  27,989

  27,694

  27,614

  25,928

  25,338

  26,058

  25,425

  (a) IVF2 3

  (i) Twins

  —

  7

  5

  12

  11

  N/K

  (ii) Triplets

  —

  —

  1

  2

  1

  N/K

  (b) GIFT3

  —

  —

  1 Provisional.

  2 These figures are the results of IVF by year of conception.

  3 IVF has been available in Northern Ireland only since 1987.

  GIFT was available in Northern Ireland in only 1986 and 1987.

  Ministerial Visits
  Mr. Trimble
  To ask the Secretary of State for Northern Ireland, pursuant to his answer of 13 May,Official Report, column 554, what was the nature of the Minister responsible for health and agriculture's visit to the constituency of Upper Bann on 24 February; and with regard to that visit and his visits of 17 February and 20 April, when and how he endeavoured to inform the hon. Member for that constituency.

  Mr. Hanley
  [holding answer 24 May 1993]: My noble friend the Lord Arran visited Avondale Foods (Craigavon) Ltd., Lurgan and hosted a private dinner on 24 February 1993.

  Telephone calls were made to the hon. Member's constituency office, giving notification of all the visits, at least the day before the visit.

PRIME MINISTER

  Manchester Airport
  Mr. Mans
  To ask the Prime Minister when he next intends to visit Manchester airport.

  Mr. Newton
  I have been asked to reply.

  My right hon. Friend the Prime Minister has at present no plans to do so.

  Environmental Appraisal
  Mr. Chris Smith
  To ask the Prime Minister which Government Departments have carried out an environ-mental appraisal of their policy-making and administra-tive procedures.

  The Prime Minister
  All Departments must ensure that environmental considerations are taken into account in
  502
  (v) sextuplets born in Northern Ireland in each year since 1980 and the total number of maternities in Northern Ireland in each year; and how many multiple births of each type in each year were conceived as a result of (a) in-vitro fertilisation, (b) gamete intra-fallopian transfer and (c) other forms of assisted conception.

  Mr. Hanley
  [holding answer 24 May 1993]: The information requested is set out in the table:

  developing their policies and programmes. Papers to Cabinet and ministerial committees should, where appropriate, cover any significant costs or benefits to the environment. We are firmly committed to the principle that "green issues" must be built into decision taking throughout Government.

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

  Sir Peter Tapsell
  To ask the Prime Minister if he will list his official engagements for Tuesday 25 May.

  Mr. Newton
  I have been asked to reply.

  My right hon. Friend the Prime Minister is attending the unveiling of a memorial statue to Field Marshal the Viscount Alanbrooke by Her Majesty the Queen as is, I understand, the Leader of the official Opposition.

  Smoke Alarms
  Mr. Barnes
  To ask the Prime Minister if he will make it his policy to ensure that smoke alarms are fitted in all new publicly owned dwellings and buildings.

  The Prime Minister
  It has been policy to provide smoke alarms in all new dwellings since 1 June 1992.

  Smoke alarms in other buildings—whether public or privately owned—are normally required under licensing or certification arrangements where appropriate.

  Output
  Mr. Austin Mitchell
  To ask the Prime Minister if he will publish a table showing in index form and as a percentage the growth in output between 1963 and 1973, 1973 and 1979 and 1979 to date of each of the mechanical engineering, textiles, clothing, footwear, cars, commercial
  503
  vehicles, leather, man-made fibres, metals, metal goods not elsewhere specified and shipbuilding industries, together with (i) the change in their weight as a percentage of manufacturing output and the weight of manufacturing in gross domestic product, (ii) figures of import penetration by the EEC and the rest of the world, including an estimate from the year ended June 1989 and (iii) the change in their share of exports of the main manufacturing countries.

  Mr. Heseltine
  I have been asked to reply.

  Complete information is not available. Output indices for the industries listed below are available from the central shared database (CSDB) operated by the Central Statistical Office, which can be accessed from the Library of the House.

  Indices

  Mechanical engineering (class 32)

  DVJA

  Textiles (class 43)

  DVJI

  Clothing, leather and footwear (published group 44/45)

  DVJJ

  Motor vehicles (published group 35)

  DVJC

  Man-made fibres (class 26)

  DVIX

  Metals (published group 21/22)

  DVIT

  Metal goods NES (class 31)

  DV1Z

  Other transport (class 36)

  DVJD

  The weights within manufacturing for each of the above groups and manufacturing within gross domestic product in the index base years are as follows:

  1963

  1975

  1980

  1985

  32

  15·5

  16·9

  19·6

  17·9

  43

  7·2

  5·3

  4·4

  4·5

  44/45

  4·9

  5·3

  5·1

  5·3

  35

  7·3

  7·3

  7·8

  8·0

  26

  1·2

  0·8

  0·4

  0·5

  21/22

  8·3

  6·6

  4·7

  5·5

  31

  7·5

  7·8

  8·3

  7·8

  36

  6·5

  5·6

  6·9

  7·7

  Manufacturing

  35·3

  30·0

  26·5

  23·8

  Information on import penetration from 1970 to 1979 was published in the June 1980 edition of "Economic Trends". Subsequent data up to the year ended June 1989 were published in "Business Monitor MQ12"; annual summaries are published in table 12·2 of the "Annual Abstract of Statistics". These publications are available in the Library of the House. The figures do not separate the EC from the rest of the world.

  Export statistics for Organisation for Economic Co-operation and Development countries are published in OECD series C—"Foreign Trade by Commodities", which is available in the Library of the House. To extract these on a comparable basis for the sectors required would involve disproportionate cost.

HEALTH

  Coronary Heart Disease
  Mr. Chris Smith
  To ask the Secretary of State for Health what was the total amount spent by her Department in each of the last six years in relation to(a) coronary heart disease and (b) strokes.

  Mr. Sackville
  Total expenditure on coronary heart disease (CHD) and stroke is impossible to calculate with 504
  any precision. The "Health of the Nation" White Paper contains estimates that CHD accounts for 2·5 per cent. of total national health service expenditure and stroke for 6 per cent. of total expenditure, but figures are not routinely collected. Expenditure nationally on prevention of CHD and stroke, including expenditure on risk factors such as smoking, alcohol and nutrition, exceeds £10 million a year, but this takes no account of unquantifiable expenditure on, for example, advice given to patients by health professionals.

  NHS Staff
  Ms Primarolo
  To ask the Secretary of State for Health how many whole-time equivalent employees there were in each of the last five years at(a) the Department of Health, (b) the NHS management executive and (c) each regional health authority.

  Dr. Mawhinney
  The information is shown in the table.

  Department of Health and NHS management executive 1989–93

  Whole-time equivalents as at 1 April

  Department of Health

  NHS management executive1

  1989

  8,799

  666

  1990

  5,388

  797

  1991

  4,651

  677

  1992

  4,803

  776

  1993

  4,846

  931

  1 Figures also included in overall Department of Health numbers.

  The Department has reduced in size over the last five years largely through functions not core to its business being transferred to the national health service, non-departmental public bodies, or other agencies. Some 3,200 staff in the special hospitals transferred to the Special Hospital Service Authority in 1989.

  Fluctuations in the size of the national health service management executive over time are a result of adjustments in responsibilities between the NHSME and the rest of the Department.

  I refer the hon. Member to the reply I gave her on 26 March, Official Report, columns 748–50, for information on regional health authority employees.

  Advisory Committee on NHS Drugs
  Mr. Batiste
  To ask the Secretary of State for Health if she will list the names and main appointments of each of the members of each of the selected list catetgory sub-committees which have been advising the Advisory Committee on NHS Drugs; and if she will make public the details of the advice which each of the selected list category asub-committees advising the Advisory Committee on NHS Drugs have offered to the committee.

  Dr. Mawhinney
  Sub-committee members are drawn from the membership of the Advisory Committee on National Health Service Drugs whose names and main appointments have been announced. The main committee and its sub-committees are independent and we do not intend to publish their advice.

  Drugs (Calendar Packs)
  Mr. Jon Owen Jones
  To ask the Secretary of State for Health (1) what is her estimate of how much money is lost to the NHS through doctors prescribing extra calendar packs of drugs, to make up for shortfalls because calendar packs are issued in 28 day units;

  (2) what considerations underline the policy of supplying calendar packs of drugs produced for the NHS in 28 day units rather than 30 day units.

  Dr. Mawhinney
  Pharmaceutical companies are responsible for determining what size calendar packs of drugs they produce. These are usually in 28 or 30 day units. General practitioners prescribe the amount needed by their patients by indicating, for example, the number of days, weeks or months of treatment or the number of calendar packs they wish to be supplied. There is no information to suggest that money is lost to the national health service because doctors find it necessary to prescribe extra quantities of drugs which are produced in calendar packs of 28 day units.

  German Measles
  Ms Primarolo
  To ask the Secretary of State for Health what has been the number of cases of German measles in(a) each complete year since 1980 and (b) in 1993 to date.

  Mr. Sackville
  The information is shown in the table.

  Notifications of Rubella1 (German measles) 1989–93

  Number

  1989

  24,570

  1990

  11,491

  1991

  7,174

  1992

  6,212

  1993

  24,977

  1 Rubella (German measles) only became a notifiable disease in October 1988 and therefore the first complete year for which there are statistics is 1989.

  2 Provisional figure for 1993, up to and including 7 May.

  Wellhouse Trust
  Ms Primarolo
  To ask the Secretary of State for Health what has been the total number of(a) nurses, (b) doctors and (c) laboratory technicians employed by the Wellhouse trust in each year since 1980; and what has been the total number of beds in the hospital of the trust in each such year.

  Dr. Mawhinney
  This information is not available centrally. The hon. Member may wish to contact Mr. Tony Orton, the chairman of the Wellhouse Trust, for details.

  Sight Impairment
  Mr. Callaghan
  To ask the Secretary of State for Health how many people in the North West regional health authority are registered blind; and what is the total number of people with severe sight impairment.

  Mr. Yeo
  This information is not available centrally

  Research and Development
  Mr. Evennett
  To ask the Secretary of State for Health when she will set up a pilot multidisciplinary based centre for research and development; and if she will make a statement.

  Dr. Mawhinney
  We have decided to establish a university based research and development centre in the field of primary health care. The increasing importance of this sector means that it is now opportune to develop a capacity to carry out long-term high quality research and development. The delivery of primary care is vital both to the health and well-being of the population and to the effective and efficient delivery of health care services and, increasingly, innovative forms of service delivery and new initiatives in care and treatment are emerging within this sector. Primary care leads the demand for a range of services and, at the present time, is especially significant in inner cities in general and in London in particular. In the coming years, primary care will continue to be a source of exciting developments for the health service.

  The establishment of a dedicated long-term research centre will, ensure that these developments are linked to research-based information, while taking into account likely changes in organisation and delivery of care. Both primary care and the programme of research will be defined broadly, to take into account not only the general medical service and general practice but also the flow of patients between primary and secondary care and the nature of the interface between the sectors.

  The centre will be established by selective competitive tender from universities in England and Wales. This process will be led by Professor Michael Peckham, the director of research and development. A key consideration in selecting the successful bid will be the extent to which universities show that they can harnesss a significant contribution to this research field from other funders, including the private sector. Advertisements, and letters to universities inviting expressions of interest in tendering for the centre, will be published shortly.

  Multiple Disabilities
  Mr. Alfred Morris
  To ask the Secretary of State for Health what plans she has to place a duty on social services departments to draw up a specific policy for meeting the needs of young people and adults with multiple disabilities, under the responsibility of a named officer, and to include this within community care plans and if she will make a statement.

  Mr. Yeo
  Local authorities are already required to prepare plans for the provision of community care services in their area. We expect these plans to set out how the authority intends to meet the needs of the whole of its population, including disabled people. Plans must be published and available to the public.

  Diethylstilboestrol
  Mr. Mackinlay
  To ask the Secretary of State for Health what abnormalities, other than vaginal cancer, have been identified amongst daughters of women who were prescribed the drug diethylstilboestrol; and if she will make a statement.

  Dr. Mawhinney
  Daughters of women given diethylstilboestrol (DES) in pregnancy may have a small
  507
  increased risk of developing minor benign lesions of the cervix, and of complications of pregnancy such as premature labour. Congenital abnormalities of the vagina and uteris, infertility and psychological problems have also been identified as possible complications of DES exposure.

  Mr. Mackinlay
  To ask the Secretary of State for Health what incidence of testicular cancer has been discovered among sons whose mothers were prescribed the drug diethylstilboestrol; and if she will make a statement

  Dr. Mawhinney
  Accurate information is not available. An association with testicular cancer has been claimed but not conclusively proven. Recent research on this issue is currently being evaluated by the Department.

  Mr. Mackinlay
  To ask the Secretary of State for Health what attempts have been made by her Department to track down those women, together with their sons and daughters, who were prescribed the drug diethylstilboestrol.

  Dr. Mawhinney
  I refer the hon. Member to the reply my right hon. Friend the Secretary of State gave my hon. Friend the Member for Torridge and Devon, West (Ms Nicholson) on 5 June 1990 at columns 589–90.

  Mr. Mackinlay
  To ask the Secretary of State for Health what continuing research into the long-term effects of the drug diethylstilboestrol is being carried out in the United Kingdom.

  Dr. Mawhinney
  We are not aware of any such research.

  Mr. Mackinlay
  To ask the Secretary of State for Health how many women she estimates to have been prescribed the drug diethylstilboestrol in the United Kingdom.

  Dr. Mawhinney
  It has been estimated that around 7,500 women were prescribed diethylstilboestrol (DES) during pregnancy in the United Kingdom. A small number of post-menopausal women have received oral DES for the treatment of breast cancer, and in the form of a vaginal pessary for the treatment of post-menopausal vaginitis.

  Mr. Mackinlay
  To ask the Secretary of State for Health when and for what reason the decision was taken for the drug diethylstilboestrol no longer to be made available for general prescription in the United Kingdom.

  Dr. Mawhinney
  Diethylstilboestrol (DES) may still be prescribed in the United Kingdom for certain restricted indications. DES is currently licensed for use in the management of prostatic cancer and breast cancer in post-menopausal women. A vaginal pessary containing DES is also licensed for use in the treatment of post-menopausal vaginitis due to oestrogen deficiency. DES is contra-indicated in pregnancy and pre-menopausal women.

  Mr. Mackinlay
  To ask the Secretary of State for Health what evidence of vaginal cancers have emerged among those women who were prescribed diethylstilboestrol.

  Dr. Mawhinney
  There is no evidence to suggest that women prescribed diethylstilboestrol (DES) are more likely to develop vaginal cancers. An increased risk of clear-cell adenocarcinoma of the vagina or cervix applies to the daughters of women prescribed DES during pregnancy.
  508
  Mr. Mackinlay
  To ask the Secretary of State for Health under what brand names the drug diethylstilboestrol was marketed and made available in the United Kingdom.

  Dr. Mawhinney
  Diethylstilboestrol has been marketed under the following brand names: Stilboestrol, Stilboestrol B.P., Tampovagan stilboestrol and lactic acid pessary, Honvan, Menopax, Sedestran, Merven and Pabestrol.

  Mr. Mackinlay
  To ask the Secretary of State for Health what assessment her Department has made of research carried out in other countries about the long-term effects of the drug diethylstilboestrol on those women for whom it was prescribed and on their sons and daughters.

  Dr. Mawhinney
  The United Kingdom Licensing Authority and its advisory committees carefully monitor the safety of all licensed medicines, including diethylistilboestrol (DES). Information relating to the safety of DES is monitored and assessed as and when it becomes available.

  The Licensing Authority liaises with other EC member states on this issue.

  Mr. Mackinlay
  To ask the Secretary of State for Health what information her Department has received about planned or actual litigation against the manufacturers and suppliers of the drug diethylstilboestrol(a) in the United Kingdom and (b) overseas.

  Dr. Mawhinney
  None.

  Prescriptions
  Mr. Barnes
  To ask the Secretary of State for Health how many items of prescription are dispensed each day(a) to those exempt from charges and (b) to those paying for prescriptions; and if she will make a statement.

  Dr. Mawhinney
  In 1992, an average of 1·06 million prescribed items were dispensed each day by community pharmacists and appliance contractors, of which about 858,000 went to patients exempt from charges or entitled to charge remission and some 202,000 went to patients who paid charges or held prescription prepayment certificates.

  Drugs
  Mr. Michael
  To ask the Secretary of State for Health on what date she received the research report from Durham university, prepared for her Department, on the prevalence of drug use among young people.

  Dr. Mawhinney
  The Department has not commissioned such research.

  NHS Trusts
  Mr. Redmond
  To ask the Secretary of State for Health what guidance she has given to NHS trusts on how to handle requests from hon. Members for information.

  Dr. Mawhinney
  I refer the hon. Member to the reply I gave the hon. Member for Normanton (Mr. O'Brien) on 27 April at column 350.

  Ms Harman
  To ask the Secretary of State for Health if she will publish a table showing the earnings of day
  509
  nursery assistants under the age of 19 years, day nursery assistants over the age of 19 years and staff nursery nurses and special school nurses group A in real terms at January 1993 prices for each year since 1990–91; and if she will provide estimates for the years 1993–94 and 1994–95.

  Mr. Sackville
  This information could be provided only at disproportionate cost.

  Prescriptions
  Mr. Barnes
  To ask the Secretary of State for Health if she will estimate savings to the Exchequer in a full year of ending exemptions for prescriptions for(a) pregnant women, (b) pensioners and (c) children; and if she will make a statement.

  Dr. Mawhinney
  No firm figures are available. Any savings which might accrue from ending universal charge exemption from the groups cited by the hon. Member would be abated by the cost of income-related charge remission under the national health service low-income scheme, exemption on medical grounds, and by the take-up of prescription prepayment certificates.

  Manchester and Trafford Electorates
  Mr. Kaufman
  To ask the Secretary of State for Health if she will state the total parliamentary electorates of, respectively, the City of Manchester and the borough of Trafford.

  Mr. Sackville
  There are 311,274 and 168,132 parliamentary electors on the registers, which came into use on 16 February 1993, for the City of Manchester and the borough of Trafford respectively.

DEFENCE

  Nuclear Safety Audits
  Mr. George
  To ask the Secretary of State for Defence what were the results of the most recent nuclear safety audits carried out at Rosyth and Devonport dockyards; what accreditations were given as a result of these safety audits; and what were the changes in these accreditations relative to previous nuclear safety audits carried out at the two dockyards.

  Mr. Aitken
  The most recent nuclear and radiation safety audits of the royal dockyards confirm the continuing improvement in safety standards and awareness, already very high, throughout the naval nuclear propulsion programme.

  Nuclear Submarine Refits
  Mr. George
  To ask the Secretary of State for Defence how much the Government have spent to date in assisting the preparation by contractors at(a) Rosyth and (b) Devonport dockyards of proposals for the new nuclear submarine refitting facility in respect of (i) the upgrade of existing docks and (ii) the development of new build facilities.

  Mr. Aitken
  Individual payments to contractors are commercially confidential and therefore cannot be publicly disclosed.

  Armaments and Explosives (Shipping)
  Mr. Hew Smith
  To ask the Secretary of State for Defence which ports are used by his Department for shipping abroad armaments and explosives.

  Mr. Archie Hamilton
  For routine movements the Department uses the ports or Marchwood military port, Ridham, Liverpool, Felixstowe, Poole, Hull and Colchester. During the Gulf crisis, the ports of Southampton, RNAD Crombie, Cliffe Jetty (River Thames) and Newport were also used. Cliffe Jetty and Newport are routinely used for movement of United States forces equipment, the arrangements for which are made by my Department.

  "Options for Change"
  Mr. Steen
  To ask the Secretary of State for Defence if he will list those significant buildings which have become or are likely to become redundant as a consequence of the "Options for Change" programme.

  Mr. Archie Hamilton
  I will write to my hon. Friend.

  Defence Exhibition, Abu Dhabi
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many representatives of the United Kingdom Government and of what rank, civil or military, attended the 1993 international defence exhibition in Abu Dhabi; and at what cost.

  Mr. Aitken
  Some 24 civilian and uniformed members of my Department attended some part of this important exhibition, including the Head of Defence Exports Services and myself. Officers and men from HMS Nottingham also participated. Details of the extra costs of all those attending are not held centrally and could only be provided at disproportionate cost.

  Maritime Defence Exhibition, Brighton
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence how many representatives of the United Kingdom Government and of what rank, civil or military, attended the 1993 international maritime defence exhibition and conference in Brighton; and at what cost.

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

  Letter from J. A. R. Chisholm to Mr. Menzies Campbell, dated 25 May 1993.

  In today's written answer the Minister of State for Defence Procurement informed you that I would be replying to your question about the International Maritime Defence Exhibition and Conference.

  The event which took place at Brighton between 31 March and 2 April was organised by a private company, Spearhead Exhibitions Ltd. and sponsored by the Defence Research Agency. It was intended for those with a close professional interest in current and future maritime operations and procurement related issues and attracted around 2,500 visitors from 47 countries.

  Some 350 Ministry of Defence representatives, civil and military, attended the exhibition and conference, the majority coming from those staffs concerned with maritime operations sea systems procurement and defence sales. There was no

  511
  charge for attending the exhibition but a fee of £295 was levied for attending the conference. Of the 350 MOD visitors, some 50 attended the conference although half of these were either VIP guests or speakers and consequently were not required to pay the fee. A breakdown of paying visitors by grade is set out below:

  Grades/Ranks

  Numbers

  3

  1

  5

  2

  6

  3

  7

  7

  "S"

  3

  "H"

  3

  PTO

  2

  Capt RN

  1

  Cdr RN

  2

  There were also about 150 fee paying delegates from industry attending the conference.

  I hope you will find this helpful.

  Aerospace Equipment
  Mr. Menzies Campbell
  To ask the Secretary of State for Defence, pursuant to his answer of 12 May,Official Report, column 523, to the hon. Member for South Shields (Dr. Clark) on the defence industrial base, what discussions he has held about the planned merger of the missile divisions of British Aerospace and Matra-Hachette.

  Mr. Aitken
  Representatives of British Aerospace have informed me and my officials about their discussions with Matra-Hachette on a proposed joint venture between the two companies' missile businesses.

  Helicopter Landing Platform
  Mr. Byers
  To ask the Secretary of State for Defence if the evaluation of the tender from VSEL for the LPH included a comparison of the overhead rates for the LPH contract and those for the Trident submarine contracts.

  Mr. Aitken
  Both LPH bids were assessed against our normal criteria for competitive contracts.

  Mr. Byers
  To ask the Secretary of State for Defence (1) whether the engines specified by VSEL in their tender for the LPH satisfy the captive shock requirements;

  (2) what assurances he has received that the LPH constructed according to the successful tender will satisfy the requirements for a Panama canal certificate.

  Mr. Aitken
  VSEL has contracted to meet all our requirements.

  Yugoslavia
  Mr. Home Robertson
  To ask the Secretary of State for Defence, pursuant to his statement of 20 April,Official Report, column 165, if he has decided whether to withdraw 4 Armoured Field Ambulance from Croatia; and if he will make a statement.

  Mr. Archie Hamilton
  Four armoured field ambulance will be withdrawn from UNPROFOR in Croatia on 6 June, and will be replaced by 5 Field Ambulance, which will deploy with UNPROFOR for three months.

  Defence Animal Centre
  Mr. Duncan
  To ask the Secretary of State for Defence if he will make a statement about defence agency status for the Defence Animal Centre.

  Mr. Archie Hamilton
  The Defence Animal Centre (DAC) will be launched as a defence agency on 1 June 1993. The DAC is located at Melton Mowbray in Leicestershire and employs 195 service personnel and 43 civilians. Part of the joint service dog training wing is at RAF Newton and this is also included within the boundaries of the agency, as is the subsidiary site at Syerston. The full cost budget for the DAC for 1992–93 is around £10 million.

  The role of the DAC is to procure, train and issue dogs and horses, to train personnel in their handling and care, and to provide supporting veterinary services. The high professional standards of the DAC will be maintained and agency status will provide the chief executive with new opportunities to improve the efficiency and value for money of his organisation. Colonel Paul Jepson has been appointed as the agency's chief executive. The corporate strategy of the DAC will be pursued in the context of the following first year key targets:

  1. Trained output

  Agreed numbers to be trained:

  Number

  Dogs

  380

  Horses

  50

  Dog handlers

  536

  Equine managers

  18

  2. Success rate

  To achieve trained output within in-training wastage rates of:

  Percentage

  Dogs

  39

  Horses

  10

  Dog handlers

  5

  Equine managers

  10

  3. Cost

  To achieve programmed output within budget.

  4. Efficiency

  To produce agreed costs proposals, by 1 April 1994, to reduce the cost per animal/handler through improved efficiency in the management and training of animals and personnel, and by collocation and rationalisation of resources.

  5. Management systems

  To install a financial accounting and management information system package to enable operation of a full cost accruals accounting system by 1 April 1994.

  6. Market testing

  To evaluate the impact in value-for-money terms of market testing all agency functions which do not have a direct war role; to identify in order of priority agency functions to be market tested in a programme which will begin by 1 April 1994.

  7. Customer satisfaction

  To conduct a customer satisfaction survey of quality and, by 1 April 1994, set targets for improvement.

  I have placed a copy of the framework document in the Library of the House.
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  Manadon Engineering College
  Mr. Streeter
  To ask the Secretary of State for Defence what conclusions he has reached about the future of the Royal Naval Engineering College at Manadon; and if he will make a statement.

  Mr. Archie Hamilton
  The future requirement for naval engineer officer training has been reviewed in the light of reduced future numbers of engineer officers, the need to make economies in support infrastructure and the increased availability of higher education in the civilian sector. The review has concluded that the most cost effective way to meet the Navy's future needs for engineer officers is to establish a sponsorship scheme based on a civilian university. Under this scheme, which would complement the existing direct graduate recruitment, students would study for an engineering degree, relevant to naval needs, and upon successfully completing the course would be offered a commission in the Navy. This would replace the in-service engineering degree training currently provided at Manadon.

  I have accepted this recommendation as the basis for consultation and a final decision will be taken in the light of representations made. A consultation document is being issued to interested parties and I am arranging for a copy to be placed in the Library of the House. Unless alternative uses for it could be found, Manadon would close in 1995, with consequent implications for the 175 civilian staff employed there. Manadon has a long and proud tradition and has served the Navy well. But in today's circumstances other means exist of providing high-quality training for naval engineer officers and it is right that they should be utilised.

FOREIGN AND COMMONWEALTH AFFAIRS

  Croatia
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what steps Her Majesty's Government have taken to raise the matter of minority rights in the Republic of Croatia with the Croatian Government or its representatives; and if he will make a statement.

  Mr. Douglas Hogg
  Minority rights in Croatia were a key element of the negotiations pursued by the Carrington conference in 1991–92 and of the principles agreed at the London conference on the former Yugoslavia in August 1992. The co-chairmen of the international conference on the former Yugoslavia and the chairmen of the working group on ethnic and national communities and minority working group are in regular close contact with the Croatian Government and have been mandated by the EC and United Nations to promote negotiations on this issue. We fully support the work of the co-chairmen and take every opportunity to impress on the Croatian Government the importance of co-operating with the co-chairmen to resolve the problems of minorities within Croatia.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the German Foreign Minister on German involvement in the transfer of arms to the Republic of Croatia; and if he will make a statement.

  Mr. Douglas Hogg
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has not 514
  discussed this issue with the German Foreign Minister. We continue to believe that it is vital that all countries scrupulously observe the arms embargo imposed under United Nations Security Council resolution 713.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response he has received from President General Tudjman of Croatia to the message sent by EC member states on 12 May protesting at Croatian aggression and ethnic cleansing in Mostar.

  Mr. Douglas Hogg
  President Tudjman replied on 13 May to the President of the EC Council of Ministers, Mr. Petersen. He listed initiatives taken by the Croatian Government to try to bring the situation in central Bosnia under control, and asserted that Croatia was not responsible for the aggression of the Bosnian Croats. President Tudjman repeated these points at a meeting he held with the German Foreign Minister on 14 May. Mr. Kinkel repeated the EC demand that President Tudjman should exert his influence over the Bosnian Croats in order to stop the fighting.

  Croatia (Mercenaries)
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what protests Her Majesty's Government have made to the Croatian representative in London regarding the recruitment of British mercenaries; what action Her Majesty's Government are taking to discourage British citizens from joining Croatian forces; and if he will make a statement.

  Mr. Douglas Hogg
  We have no evidence that the Croatian Government are involved in recruiting British citizens as mercenaries; no such protest has therefore been made. In certain circumstances it is an offence, under the Foreign Enlistment Act 1870, for a British citizen to enlist in the armed forces of a foreign state. The decision whether to investigate, or to prosecute, any alleged offender is a matter for the police and for the prosecuting authorities respectively. Our consular travel advice strongly advises British citizens not to travel to the regions of the conflict in the former Yugoslavia, including parts of Croatia.

  Turkey
  Mr. Gareth Wardell
  To ask the Secretary of State for Foreign and Commonwealth Affairs what plans he has to pay an official visit to Turkey.

  Mr. Garel-Jones
  My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has no plans to visit Turkey in the near future.

  Armenia
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what response the Armenian Government have given to proposals for a ceasefire and a withdrawal or Armenian troops from Azerbaijan; and if he will make a statement.

  Mr. Douglas Hogg
  The Armenian Government have responded positively to the latest trilateral initiative by the Governments of the United States, Turkey and Russia for a ceasefire and a withdrawal of troops from in and around Nagorno-Karabakh, and for a resumption of talks under the auspices of the conference on security and
  515
  co-operation in Europe. However, the Armenian Government have not yet given their formal approval to this plan. My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I will use the opportunity of our meeting with the Prime Minister and Foreign Minister of Armenia on 27 May to urge the Armenian Government to accept this latest proposal, and to use their influence with the authorities in Nagorno-Karabakh to do the same.

  Select Committee Recommendations
  Mr. Llwyd
  To ask the Secretary of State for Foreign and Commonwealth Affairs how many Select Committee recommendations have been made about, and how many accepted by, his Department since April 1989.

  Mr. Lennox-Boyd
  I refer the hon. Member to the reply I gave him on 21 May at column 352.

  Test Ban Treaty
  Mr. Cohen
  To ask the Secretary of State for Foreign and Commonwealth Affairs further to his statement of 2 April,Official Report, column 774, if he will make a statement on progress towards the attainment of a comprehensive test ban treaty.

  Mr. Garel-Jones
  Since 2 April, President Clinton and President Yeltsin have agreed to pursue negotiations towards a multilateral test ban. The United States will be consulting further with other nuclear powers, including the United Kingdom. Our concern will remain the safety of existing nuclear weapons, and to ensure that any eventual agreement is as effective as possible in contributing to non-proliferation.

  Indonesia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will raise the issue of human rights and the autonomy of nongovernmental organisations with the Indonesian authorities at the Tokyo G7 meeting and at the Paris consortium meeting on Indonesia in July.

  Mr. Goodlad
  We and our EC partners maintain a regular dialogue on human rights and related matters with the Indonesian authorities and raise these issues at meetings of the appropriate international bodies.

  Macedonia
  Mr. Worthington
  To ask the Secretary of State for Foreign and Commonwealth Affairs what is the current situation of the former Yugoslav republic of Macedonia with regard to international recognition, and qualification for assistance from know-how funds, PHARE funds, the World bank, the International Monetary Fund and European Bank for Reconstruction and Development.

  Mr. Douglas Hogg
  With respect to recognition of Macedonia by the United Kingdom, I refer the hon. Member to the answer I gave to the hon. Member for Wellingborough (Mr. Fry) on 23 April at column 243. The know-how fund does not extend to Macedonia, but the United Kingdom has committed £2 million in bilateral assistance for emergency aid to Macedonia in this financial year. Macedonia qualifies for assistance from PHARE;
  516
  45 mecu has been committed. Macedonia is a member of the IMF and the EBRD, but not yet a member of the World bank.

  Bosnia
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what specific representations Her Majesty's Government have made to(a) Bosnian-Serb leaders, (b) Bosnian-Croat leaders and (c) Bosnian-Muslim leaders over the need to observe cease-fire agreements.

  Mr. Douglas Hogg
  We take every opportunity to impress upon the Bosnian parties the urgent need to stop the fighting. We attach the highest importance to achieving a political settlement which could bring the conflict to an end, and fully support the work of the co-chairmen of the international conference on the former Yugoslavia to this end.

  St. Helena
  Mr. Cummings
  To ask the Secretary of State for Foreign arid Commonwealth Affairs when the next ministerial visit to St. Helena will take place; and how many visits to St. Helena by(a) Ministers and (b) other official delegations have taken place in the last 10 years.

  Mr. Garel-Jones
  There are at present no plans for a ministerial visit to St. Helena. There have been no such visits in the last 10 years. There have been two official delegations, both of which included Members of Parliament, over the period and various official visits by civil servants.

  China
  Mr. David Atkinson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what representation he has made to the Government of the Republic of China on the recent persecution of Christians in Shaanxi province; and if he will make a statement.

  Mr. Goodlad
  We are aware of this disturbing report through our contacts with Amnesty International and other non-government organisations. Although we have not raised this particular matter, we regularly raise human rights, including the continued persecution of religious believers, with the Chinese authorities, urging them to adhere to international standards of behaviour.

  Greek Economy
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions have been held during meetings of EC foreign ministers on the effect of sanctions against the former Yugoslavia on the Greek economy.

  Mr. Garel-Jones
  All countries can discuss the effects of sanctions with the international financial institutions, which are best placed to provide technical and, where appropriate, financial support. At the Foreign Affairs Council on 10 May, the Foreign Minister of Greece drew attention to his country's concerns about the effects of sanctions on the Greek economy. The meeting also agreed on the importance of rigorous implementation of the sanctions regime.

  Georgia
  Mr. McKelvey
  To ask the Secretary of State for Foreign and Commonwealth Affairs what assessments he has made of the policies of the Georgian Government with respect to the principles of good government and human rights; and if he will make a statement on relations between the United Kingdom and the Government of Georgia.

  Mr. Douglas Hogg
  We urge the Governments of all the countries of the former Soviet Union, including Georgia, to respect the principles of good government and human rights in line with their commitment to respect UN and CSCE principles. We are concerned about reports of human rights abuses by both sides involved in the dispute in Abkhazia. I discussed this dispute with the visiting Georgian Minister of Foreign Affairs, Mr. Chikvaidze, on 24 May. Relations between the United Kingdom and Georgia are good. We have emphasised the need for the Georgian Government to continue to work with the UN and CSCE in seeking a fair and peaceful solution to the disputes on their territory.

  Yugoslavia
  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about the numbers of British citizens fighting as mercenaries in the former Yugoslavia.

  Mr. Douglas Hogg
  We are aware of reports that British citizens have fought as mercenaries in the former Yugoslavia, but we have no information on the numbers.

  Mr. Elletson
  To ask the Secretary of State for Foreign and Commonwealth Affairs what discussions have been held with Herr Klaus Kinkel, the German Foreign Minister, following his recent visit to the Republic of Croatia; and if he will make a statement.

  Mr. Douglas Hogg
  Mr. Kinkel and my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs both attended the WEU Council meeting in Rome on 19 May which issued a declaration on the situation in the former Yugoslavia, including Croatia.

EMPLOYMENT

  Industrial Disputes
  Mr. Knox
  To ask the Secretary of State for Employment how many days were lost in the industrial disputes in the most recent 12-month period for which figures are available; and what was the comparable figure for the same 12-month period 14 years ago.

  Mr. Michael Forsyth
  Five hundred and eighty-eight thousand working days were lost compared with 14 million.

  Youth Unemployment
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what are the latest figures for youth unemployment in Coventry.

  Mr. McLoughlin
  In April 1993, unadjusted claimant unemployment amongst under 25-year-olds was 5,969 in the Coventry local authority district.
  518
  Mr. Dunn
  To ask the Secretary of State for Employment what is the percentage of people aged under 21 years out of work in Britain at the present time; and what information he has on the comparable figures for(a) France, (b) Germany, (c) Italy and (d) Spain.

  Mr. Michael Forsyth
  The percentage of people aged under 21 out of work in Britain, based on the latest autumn 1992 labour force survey, is 45·5 per cent. The latest comparable figures for the other countries in question are Cot 1991 and I shall, with permission, arrange for them to be printed in a statistical table in the Official Report.

  The following is the information:

  The latest comparable figures for the other countries are for spring 1991 and for under 20-year-olds

  Percentage

  France

  26

  West Germany

  3·3

  Italy

  33·1

  Spain

  33·7

  The rate, for the United Kingdom for the same age group and year is 15·2 per cent.

  Mr. Simon Hughes
  To ask the Secretary of State for Employment what initiatives she proposes to reduce unemployment among people under 21 years.

  Mr. McLoughlin
  Young people aged 16 or 17 who have left full-time education are guaranteed the offer of a suitable place on youth training. Youth credits are enabling more and more young people to acquire the skills businesses need. Our aim is to offer a credit to all school leavers under the age of 18 by 1996. Young people over the age of 18 are eligible for the full range of employment and training measures available through the employment service and training and enterprise councils and local enterprise companies, including the new initiatives announced by the Chancellor in his budget statement on 16 March 1993.

  Business Start-up Scheme
  Mr. Mans
  To ask the Secretary of State for Employment if she will make a statement on progress on the business start-up scheme in the north-west.

  Mr. Michael Forsyth
  Provisional statistics show that over 5,800 people entered the business start-up scheme in the north west during the 1992–93 financial year, which was close to the number planned by the training and enterprise councils in the region.

  Plans for the 1993–94 year have not yet been finalised, but the number of entrants is expected to increase to reflect the north west's share of the additional 10,000 places announced by the Chancellor in the 1993 Budget speech.

  Mr. Tredinnick
  To ask the Secretary of State for Employment if she will make a statement on progress on the business start-up scheme in the east midlands.

  Mr. Michael Forsyth
  Provisional statistics show that approximately 3,800 people entered the business start-up scheme in the east midlands during the 1992–93 financial year, which was ahead of the number planned by the training and enterprise councils in the region.
  519
  Plans for the 1993–94 year are expected to increase to approximately 4,400 entrants, reflecting the east midlands, share of the additional 10,000 places announced by the Chancellor in the 1993 Budget speech.

  Unemployed People (Schemes)
  Dr. Wright
  To ask the Secretary of State for Employment how many schemes for the unemployed have been introduced since 1979.

  Mrs. Gillian Shephard
  This information is not held centrally, and could be obtained only at disproportionate cost. At present, unemployed people are offered the greatest ever range of help—over 1·5 million employment and training opportunities in 1993–94.

  Training and Enterprise Councils
  Sir Fergus Montgomery
  To ask the Secretary of State for Employment if she will make a statement on the effectiveness of the training and enterprise councils in the north-west.

  Mr. McLoughlin
  They are doing a first-class job. They are making a real contribution to their local economies through their support for training, education and enterprise.

  Unemployment Statistics
  Mr. Dowd
  To ask the Secretary of State for Employment what plans she has to calculate the total number of people seeking work in the United Kingdom in addition to the number claiming unemployment benefit.

  Mr. McLoughlin
  These figures have been calculated and published since 1985. They are derived from the labour force survey, follow internationally standard definitions and cover the number of people in the United Kingdom without a job, who are seeking work and available to start it. Since September 1992, these figures have been published for Great Britain every quarter.

  Training for Work
  Mr. Hunter
  To ask the Secretary of State for Employment if she will make a further statement on the implementation of training for work.

  Mrs. Gillian Shephard
  Training for work now gives long-term unemployed people improved opportunities to learn new skills, improve existing ones and to gain practical experience by doing temporary work.

  Unemployment, Greenwich
  Mr. Raynsford
  To ask the Secretary of State for Employment how many people were registered as unemployed in the London borough of Greenwich at the last count; and what was the figure three years ago.

  Mr. McLoughlin
  Unadjusted claimant unemployment in the London borough of Greenwich stood at 5,135 in April 1993, and 2,604 in April 1990.

  Unemployment, Holloway
  Mr. Corbyn
  To ask the Secretary of State for Employment what is the latest available male unemploy-ment level for the Holloway travel-to-work area.
  520
  Mr. McLoughlin
  Holloway falls within the London travel-to-work area where in April 1993 unadjusted claimant unemployment for men was 327,253.

  Job Plan
  Sir Michael Neubert
  To ask the Secretary of State for Employment if she will make a statement on progress on job plan.

  Mrs. Gillian Shephard
  The new job plan programme, which I announced in the autumn statement, was launched on 29 March. Job plan workshops are one week events which help unemployed people assess their strengths, consider the employment and training options open to them and offer a priority in the application process to join other employment and training programmes.

  Workshops are now being run throughout the country by a range of organisations from the private, public and voluntary sectors contracted to the employment service. Over 5,000 people are starting each week.

  Acquired Rights Directive
  Mr. Bennett
  To ask the Secretary of State for Employment if she will make a further statement about the operation of the acquired rights directive within the EC.

  Mr. Michael Forsyth
  I have nothing to add to my answer to the hon. Gentleman of 19 January 1993, column 183.

  Unemployment, Northern Region
  Mr. Milburn
  To ask the Secretary of State for Employment for how many months since May 1979 the northern region has had the highest regional unemploy-ment in mainland Britain.

  Mr. McLoughlin
  Northern region has had the highest rate of seasonally adjusted claimant unemployment in mainland Britain in every month since May 1979.

  Information
  Mr. Eastham
  To ask the Secretary of State for Employment what plans she has to introduce regulations governing the information which employers may keep about their employees.

  Mr. Michael Forsyth
  The Government have no plans to legislate on this issue.

  Training Credits
  Mr. Simon Hughes
  To ask the Secretary of State for Employment if she will make a statement on the vocational opportunities presented by training credits.

  Mr. McLoughlin
  Youth credits are issued to young people to enable them to obtain approved training from either an employer or a specialist training provider leading to national vocational qualification level 2 or higher. Since April 1991, 49,000 young people have taken up their entitlement to a youth credit.

  Youth, Lambeth
  Mr. Fraser
  To ask the Secretary of State for Employment if she will make an estimate of(a) the number of young people leaving school and entering the

  521
  labour market in Lambeth in the last 12 months, (b) the
  percentage who obtained work on leaving school or college, (c) the numbers undergoing youth training and (d) the numbers obtaining qualifications as a result of that training during the last 12 months.

  Mr. McLoughlin
  This information is not available in the form requested.

  Youth Training
  Ms Jowell
  To ask the Secretary of State for Employment how many young people have been waiting for eight weeks or more without the offer of a place; and what steps she is taking to provide youth training places for them.

  Mr. McLoughlin
  Training and enterprise councils (TECs) are required to ensure that young people are made one or more offers of youth training within a reasonable period of time. In April—the latest date for which information is available—there were 3,436 young people in England who were covered by the YT guarantee, had been waiting for a YT place for eight or more weeks and had not previously had an offer of a place.

  The contracts with TECs provide for regular reviews of the position on the YT guarantee both currently and prospectively. This Government continue to be committed to the guarantee and that is why TECs have been asked to treat this as a top priority. I am taking a close interest in progress in its delivery.

  Job Plan Workshops
  Mr. Barnes
  To ask the Secretary of State for Employment what guidelines her Department has introduced concerning visits by hon. Members to job plan workshops; and if she will make a statement.

  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. Harry Barnes, dated 25 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 visits by honourable Members to Jobplan Workshops. This is something which falls within the responsibility she has delegated to me as Chief Executive of the Agency.

  The new Jobplan programme was launched by the Secretary of State on the 29 March. The workshops, which normally last for 5 days aim to help people who have been unemployed for a long time to compete more successfully for jobs and other training and employment opportunities.

  Jobplan Workshops are run on the Employment Service's behalf by organisations from the private, public and voluntary sectors. Over 650 contracts have been awarded following a full competitive tendering exercise. The workshops provide assessment and guidance to the standards set out in the Statement of Service established by the Training, Enterprise and Education Directorate of the Employment Department.

  Members of Parliament are welcome to visit workshops in their constituencies and guidance was issued in February to both Employment Service people and providers to ensure that visits take place as soon as possible after a request is received. I attach a copy of the guidelines which forms part of our contract with Jobplan providers.
  522
  Wherever possible we ask for advance notice of a visit so that arrangements can be made to keep disruption to the workshop to a minimum. Someone from the Employment Service will normally accompany a visitor to answer any questions that may arise about the programme.

  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.

  Access to Programme—Non Employment Service Status

  16.1 The Provider shall notify the Department in writing of proposed visits to the Programme by any person who has taken or will take no direct part in the conduct or content of the Programme (the 'Visitor'). Such persons shall include, but without limitation hereto, Representatives of Unemployment Centres and Members of the Press and Media. Notification shall be at least 7 days in advance in writing except in the event of an unforeseen visit when notification shall be by telephone as soon as possible.

  16.2 Members of Parliament shall be granted access as soon as an accompanying representative of the Department is available.

  16.3 Notification shall not include any person whose presence is related to the conduct or content of the Programme.

  16.4 In dcktermining whether any such person is a person whose visit shall be notified to the Department, as in Clause 16 the Department's view shall be sought.

  16.5 Upon receiving such notification as required by Clause 16 the Department will inform the Provider as soon as reasonably practicable of the following:

  (a) Any objection to the timing of the visit or nature of the person visiting. Upon receiving such objection the Provider shall cancel the visit or provide assurances to the satisfaction of the Department that such a visit will not be prejudicial to the conduct of the Programme.

  (b) The Department's desire to have its authorised representatives attend at the proposed visit and accompany the visitor(s) and assist the Provider in the provision of information to the visitor.

  16.6 The Department's decision shall be final.

  Manufacturing Employment
  Mr. Austin Mitchell
  To ask the Secretary of State for Employment what has been the change in the level of full-time adult employment in manufacturing since 1973.

  Mr. McLoughlin
  Between June 1973 and March 1993 there was a net fall of 3,219,000 full-time employees in employment in Great Britain.

  Conditions of Employment
  Ms Quin
  To ask the Secretary of State for Employment what plans her Department has to commission records into compliance with regulations and legislation governing the conditions of employment of(a) persons under 16 years of age and (b) persons between 16 and 18 years.

  Mr. McLoughlin
  Policy on the employment of young people above the minimum school leaving age falls within the responsibility of the Department of Employment. Legislation governing conditions of employment for this age group, where it differs from that applying to adults in the same occupations, is concerned primarily with health and safety matters.

  The Government are advised on health and safety at work by the Health and Safety Commission. Relevant statutory provisions, which also include some restrictions on the employment of children below the minimum school

  523
  leaving age, are enforced by the Health and Safety Executive and local authority inspectors under the Health and Safety at Work, etc. Act 1974.

  The Health and Safety Commission reports annually to my right hon. Friend the Secretary of State for Employment on enforcement activities under the 1974 Act. Its report for 1991–92 was published in December 1992. The Department has no plans at present to commission further information on compliance with health and safety legislation governing employment of children and young people.

  Further provisions on the employment of children below the minimum school leaving age in England and Wales are contained in the Children and Young Persons Act 1933 and the Education Act 1944, which are the responsibility of my right hon. Friends the Secretaries of State for Health and for Education. Enforcement of these provisions, and relevant local authority bye-laws, is primarily the responsibility of local education authorities.

  All local authorities with responsibility for enforcement of legislation on children's employment were consulted recently by the Government in connection with the European Commission's proposals for a directive on protection of young people at work. The Government at present have no plans to commission further information on these matters.

  Wages Councils
  Mr. Hanson
  To ask the Secretary of State for Employment, pursuant to her answer of 5 May,Official Report, column 136, how many employers and employer bodies have made written representations on wages councils (a) for or (b) against abolition.

  Mr. Michael Forsyth
  Since announcement of the Bill, we have received 140 representations from employers and employer bodies supporting abolition and 25 against.

  Employment Exchange Staff
  Mr. Gapes
  To ask the Secretary of State for Employment if she will outline the incentive scheme for employment exchange staff and its relation to the number of people in employment; and what is the total of such payments for the Ilford office for the past year.

  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. Michael Gapes, dated 25 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 to her about the incentive scheme for employment exchange staff, its relation to the number of people in employment, and incentive payments made in the Ilford office in the last year. This is something which falls within the responsibilities delegated to me as Chief Executive of the Agency.

  We do not operate an incentive scheme, and therefore no incentive payments were made last year to people working at Ilford Jobcentre. We do however make use of a Civil Service wide scheme which relates pay more generally with overall performance. In doing so, we are following the principles of the Citizen's Charter White Paper, which recognizes that the ways in which people are paid can have an effect on
  524
  performance and that pay systems in the public sector need to make a regular and direct link between a person's contribution to the standards of service provided and their reward.

  Our adoption of this approach is consistent with progress towards the more businesslike delivery of services in the public sector, which is also embodied in the Citizen's Charter White Paper. Our standards of service to clients are an important part of our overall performance. These have been clearly set out in the Jobseeker's Charter and are displayed with information about performance in local offices. The focus of the Jobseeker's Charter is standards of service, such as waiting times and the accurate and prompt payment of benefit to those who are entitled to receive it—and not target numbers.

  Whilst our activities have some impact on overall employment levels, by mobilising the potential labour force into active jobsearch, their effect is diffuse and complex and so can only be estimated rather than measured. The number of people in employment is determined primarily by the strength of the economy.

  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.

  Protection of Employment Rights
  Mr. Callaghan
  To ask the Secretary of State for Employment what proposals she has to extend the protection of employment rights of those at work.

  Mr. Michael Forsyth
  The Trade Union Reform and Employment Rights Bill, currently before Parliament, contains a number of important extensions to employment rights, including in relation to maternity, written particulars of employment, itemised pay statements, trade union membership and unfair dismissal.

  Manufacturing Unit Costs
  Mr. Peter Atkinson
  To ask the Secretary of State for Employment what were the manufacturing unit wage costs in the three months to February; and if she will make a statement.

  Mr. McLoughlin
  The manufacturing unit wage and salary costs for the three months to February 1993 are:

  Unit costs

  December 1992

  130·3

  January 1993

  129·3

  February 1993

  128·8

  These are index figures which relate to the base year of 1985. More up-to-date figures were published on 20 May. Comparing the three months ending March this year with the three months ending March 1992, manufacturing unit wage costs showed the largest percentage fall since records began in 1970.

  Training for Work
  Ms Short
  To ask the Secretary of State for Employment in what circumstances training for work participants who wish to start their own business can try out their business idea in a period of enterprise rehearsal, and then take up support under the business start-up allowance; and if she will make a statement.

  Mr. McLoughlin
  The provision of enterprise training under training for work is determined by training and
  525
  enterprise councils (TECs). Training for work leavers are immediately eligible to be considered by TECs for support under the business start-up scheme.

  Labour Statistics
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment if she will give the latest unemployment figures for(a) the west midlands and (b) Coventry, distinguishing the figures for (i) adults and (ii) women.

  Mr. McLoughlin
  In April 1993, the unadjusted level of claimant unemployment in the west midlands stood at 290,666, of whom 289,465 were aged 18 and over and 67,604 were women. The equivalent figures for Coventry local authority district were 20,846, 20,783, and 4,761 respectively.

  Creches
  Mr. Jim Cunningham
  To ask the Secretary of State for Employment what steps her Department is taking to encourage employers to provide creche facilities in the west midlands.

  Mr. McLoughlin
  The Department encourages employers throughout the country to adopt family-friendly employment policies including flexible working and help with childcare, through publications such as "The Best of Both Worlds". The new out-of-school child care grant, delivered by training and enterprise councils TECs, will create some 50,000 new child care places for school-aged children over the next three years. TECS in the west midlands will be playing their part in this initiative, with a variety of local initiatives to encourage employer involvement in child care.

  New Jobs
  Mr. Harry Greenway
  To ask the Secretary of State for Employment how many new jobs she estimates to have been created over the past 14 years; and if she will make a statement.

  Mr. McLoughlin
  Between December 1978 and December 1992, there was a net fall of 322,000 in the work force in employment in the United Kingdom.

  Travel-to-work Areas
  Mr. Milburn
  To ask the Secretary of State for Employment what is the timetable for her review of the travel-to-work areas; and when she expects to publish a new map.

  Mr. McLoughlin
  New travel-to-work area boundaries will be calculated using information on commuting patterns from the 1991 census of population special workplace statistics. These are due to be released by the Office of Population Censuses and Surveys at the end of November this year. Revised travel-to-work areas, including maps, will be circulated for comment six to nine months after this date.

  Defence Workers (South-west)
  Mr. Jamieson
  To ask the Secretary of State for Employment what action her Department is taking to facilitate the employment of those formerly working in Ministry of Defence establishments in Plymouth and the south-west of England.
  526
  Mr. McLoughlin
  The Employment Service and training and enterprise councils deliver a wide range of employment, enterprise and training progammes to facilitate the employment prospects of unemployed people. These are available to all unemployed people, including those formerly working in the Ministry of Defence establishments in Plymouth and the south-west of England.

  Economically Inactive People
  Mr. Hain
  To ask the Secretary of State for Employment what are the latest figures of economically inactive people by(a) region and (b) the whole of the United Kingdom expressed both in numbers and as a percentage of their respective populations.

  Mr. McLoughlin
  The latest estimates—not seasonally adjusted—from the labour force survey are given in the following table:

  Labour force survey (not seasonally adjusted) Economically inactive people aged 16 and over

  Region

  Number (thousands)

  As percentage of total population aged 16 and over

  Authmn 1992

  South East

  4,822

  35·0

  East Anglia

  590

  35·7

  South West

  1,412

  37·5

  West Midlands

  1,518

  36·9

  East Midlands

  1,140

  35·6

  Yorkshire and Humberside

  1,453

  37·2

  North West

  1,942

  39·0

  North

  964

  39·9

  Wales

  979

  42·7

  Scotland

  1,510

  37·9

  Great Britain

  16,331

  37·0

  Spring 1992

  Northern Ireland

  460

  40·0

  United Kingdom

  16,801

  37·2

  Unemployment Figures
  Mr. Dobson
  To ask the Secretary of State for Employment what was the figure initially given for the expected increase for unemployment for April 1993 for the purposes of seasonal adjustment at his Department's press briefing on the morning of 20 May; what revisions were subsequently made to this figure; and what were the reasons for the revision.

  Mr. McLoughlin
  A total of 2,165, which was a clerical error in the departmental press office's briefing pack, subsequently corrected at the same meeting to around "five thousand" (4,965). No re-estimation of seasonal factors was involved.

ENVIRONMENT

  Office Stock
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what recent evaluation has been undertaken by his Department of methods of assessing the environmental merits of existing office stock.

  Mr. Maclean
  My right hon. and learned Friend the Secretary of State launched a scheme at the end of last
  527
  month specifically for the evaluation of the environmental performance of existing office buildings. This is run by the Building Research Establishment (BRE) under the title BREEAM. In due course, BRE will review the impact of the scheme. Property Holdings is committed to using BREEAM both in commissioning new buildings and appraisal of existing stock whenever major refurbishment is undertaken.

  Air Conditioning Systems
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what technical guidance the Building Research Establishment has provided Owners and operators of air conditioning systems to phase out CFC-dependent systems.

  Mr. Maclean
  Since 1989 the Building Research Establishment has published two information papers, two digests and eight journal articles and conference papers containing advice and guidance for owners and operators of air conditioning systems on the phase-out of chlorofluorocarbons. These publications, which are listed, address such issues as the availability of suitable alternative refrigerants, the conversion of existing CFC-based air conditioning systems to operate on alternative refrigerants, minimisation of CFC emissions from air conditioning systems, and the health and safety aspects of new refrigerants.

  BRE Publications

  BRE Information Paper IP23/89, 'CFCs and the building industry', November 1989.

  BRE Digest 358, 'CFCs and buildings', February 1991.

  BRE Digest 358 (new edition), 'CFCs in buildings', October 1992.

  BRE Information Paper 1P8/93, 'Phase-out of CFCs: guidance for owners and operators of air conditioning systems', April 1993.

  Journal Articles:

  'Meeting the challenge—CFCs and the building industry'.

  Urethanes Technology (The Polyurethane Industry's International Journal), February/March 1990.

  'Ammonia as coolant'. Building Services, The CIBSE Journal, April 1990.

  'Preparing for a future without CFCS'. BSEE (Building Services and Environmental Engineer), June 1990.

  'Refrigeration—time to decide'. Building Services, The CIBSE Journal, December 1991.

  'Air conditioning—alternatives to CFCs and HCFCs'. Property Journal (Journal of the British Property Federation), August 1992.

  Conference Papers

  'The global environmental impact of non-domestic buildings—possibilities for the future'. Presented at IMECHE conference CFCs—the engineering solution, South Bank Polytechnic, April 1990.

  'Implications of the use of CFC alternatives on the building industry'. Presented at the CIBSE National Conference, Canterbury, April 1990.

  "Summary of trials with new refrigerants in air conditioning systems'. Presented at the Institute of Refrigeration/IM ECHE conference, CFC alternatives: user experience and update, London, November 1992.

  Council Tax
  Dr. Spink
  To ask the Secretary of State for the Environment (1) what estimate he has made of the average change in council tax bills which would result from a change of the single occupancy discount from 25 per cent. to 50 per cent.;
  528
  (2) what estimate he has made of the average change in council tax bills which would result from a change of the second home multiplier from 50 per cent. to 100 per cent.

  Mr. Robin Squire
  The changes described would not affect the average level of council tax bills, because local authorities would still require to collect the same amount of money overall from the same number of dwellings.

  Partnerships for Change Conference
  Mr. Dafis
  To ask the Secretary of State for the Environment what steps he intends to take to ensure that the partnerships for change conference to be held in Manchester in September 1993 will include on its agenda adequate time for the discussion of third world debts, international trade, the policies of the World bank and the International Monetary Fund and other global economic issues.

  Mr. Maclean
  The partnerships for change conference will focus on the practical implementation of Agenda 21, mainly through case study presentations and workshops. Discussions are likely to cover financial and economic frameworks.

  Mr. Dafis
  To ask the Secretary of State for the Environment what criteria will be employed in the selection of organisations chosen to participate in the partnerships for change conference to be held in Manchester in September 1993.

  Mr. Maclean
  Participants in the partnerships for change conference will be drawn from business and industry, environment and development groups, local authorities and communities around the world. They will have practical experience of sustainable development problems and solutions. A small number of representatives of national Governments and international bodies will also be invited.

  Environmental Issues
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment when he will next meet the Association of County Councils to discuss environmental issues.

  Mr. Maclean
  I regularly discuss issues of common concern with the chairman of the Association of County Councils, together with the Association of Metropolitan Authorities and the Association of District Councils, in the Central and Local Government Environment Forum. The next meeting of the forum is being planned for July.

  Sustainable Development Strategy
  Mr. Dafis
  To ask the Secretary of State for the Environment if he will make a statement outlining the means by which he proposes to involve Parliament in the consultation process relating to the drawing up of the first United Kingdom national sustainable development strategy.

  Mr. Maclean
  As the next stage in the preparation of a national sustainable development plan, my Department will be issuing a consultation paper in June. Copies of this document and a summary of the responses will be laid before the House in the normal way.

  Energy Use Report
  Mr. Llew Smith
  To ask the Secretary of State for the Environment what plans he has to update the report "Energy Use in United Kingdom Manufacturing Industry up to the Year 2000", published in 1984.

  Mr. Maclean
  Aggregate projections of energy use in United Kingdom industry to 2020 are given in Energy Paper 59, published by the Department of Trade and Industry in 1992.

  In addition, my Department is sponsoring an analysis of industrial energy use and greenhouse gas emissions based on an understanding of energy technologies. The methodology is comparable with that underlying energy use in United Kingdom manufacturing industry up to the year 2000 and we hope to start publishing the results, including projections to 2020 under a range of assumptions, in 1994.

  Housing association

  Total housing under management

  Total bedspaces under management

  Full time staff

  Part time staff

  Notting Hill Housing Trust

  9,197

  621

  268

  72

  Merseyside Improved Houses

  14,806

  853

  416

  196

  The Royal British Legion Housing

  11,993

  24

  519

  727

  Hanover Housing Association

  8,637

  0

  526

  271

  Anchor Housing Association

  22,380

  1,726

  2,380

  2,945

  Sanctuary Housing Association

  11,491

  789

  432

  217

  Peabody

  11,819

  6

  439

  41

  Circle Thirty Three Housing

  7,053

  1,343

  201

  61

  Northern Counties Housing

  11,168

  24

  401

  162

  The North British Housing

  21,947

  860

  699

  274

  North Housing Association Ltd.

  21,249

  307

  490

  158

  Broomleigh Housing Association

  12,318

  0

  145

  18

  The Guinness Trust

  10,335

  197

  373

  117

  The Sutton Housing Trust

  14,259

  0

  396

  149

  London and Quadrant Housing Trust

  13,628

  1,737

  303

  12

  Liverpool Housing Trust Ltd.

  7,155

  12

  162

  47

  Bradford and Northern Housing

  8,336

  294

  252

  49

  Focus Housing Association

  7,524

  601

  347

  54

  Bedfordshire Pilgrims Housing

  7,308

  0

  134

  22

  Swale Housing Association

  7,284

  287

  89

  38

  Enterprise Zones
  Mr. Win Griffiths
  To ask the Secretary of State for the Environment how many jobs have been(a) created and (b) lost in each enterprise zone on an annual basis; and how many jobs were lost in the area of each enterprise zone in each of the two years before its creation.

  Mr. Robin Squire
  (a) The total stock of jobs in each enterprise zone for the years 1981 to 1989 is available from the publications: "Monitoring of Enterprise Zones, Year Two and Year Three Reports" and the annual reports "Enterprise Zone Information", available from the library. The data for 1990 are due to be published this summer.

  (b) Data on jobs lost and gained annually in enterprise zones area are available only for 1981 to 1983 and are published in "Monitoring of Enterprise Zones, Year Two and Year Three Reports".

  No data are available on the number of jobs lost in the area of each enterprise zone in the two years before its creation.
  530

  Housing Associations
  Mr. Hendry
  To ask the Secretary of State for the Environment if he will show for each of the 20 largest housing associations the number of houses under management per employee.

  Mr. Baldry
  Housing associations provide a wide diversity of accommodation, from general family housing to homes for those with special needs, including sheltered homes for the elderly, and hostel accommodation for single homeless people. The ratio of employees to units managed varies according to the nature of the housing managed as well as the circumstances of the individual association. The latest figures available, taken from the annual statistical returns made to the Housing Corporation at 31 March 1992, for the largest 20 housing associations are as follows:

  Housing
  Sir Rhodes Boyson
  To ask the Secretary of State for the Environment if he will publish the total amount of support given by his Department to(a) the Housing Corporation, (b) other housing funding, excluding local authority credit approvals/capital allocations in (i) England, (ii) Greater London and (iii) the south-east, excluding Greater London, for each year from 1982–83 to 1992–93, estimated, distinguishing between current and capital expenditure.

  Sir George Young
  The table gives figures for the main areas of spending other than local authority capital, which also includes support to renovation grants for the private sector and housing defects expenditure. Figures for other housing programmes—including rent officers, rent assessment panels, homelessness revenue grants, housing mobility, home improvement agencies, housing research, estate action revenue, grants etc.—are either not broken down by region, or are not available on a regional basis other than at disproportionate cost. Further housing outputs are also funded through expenditure under the urban block, providing over 5,000 new units this year, and improving many more.
  531

  Housing revenue account subsidy

  Housing corporation ADP

  Housing action trusts

  1982–83

  London

  341·7

  —

  —

  South-East

  31·6

  —

  —

  England

  438·2

  755

  —

  1983–84

  London

  309·99

  —

  —

  South-East

  17·9

  —

  —

  England

  349·9

  743

  —

  1984–85

  London

  333·4

  —

  —

  South-East

  18·9

  —

  —

  England

  381·9

  697

  —

  1985–86

  London

  399·0

  —

  —

  South-East

  27·9

  —

  —

  England

  494·4

  711

  —

  1986–87

  London

  383·3

  —

  —

  South-East

  23·8

  —

  —

  England

  472·3

  715

  —

  1987–88

  London

  353·5

  —

  —

  South-East

  21·7

  —

  —

  England

  437·5

  752

  —

  1988–89

  London

  456·2

  —

  —

  South-East

  26·3

  —

  —

  England

  548·4

  777

  —

  1989–90

  London

  546·9

  —

  —

  South-East

  37·4

  —

  —

  England

  653·8

  935

  —

  1990–91

  London South-East

  836·1

  1(512·2)

  2422

  —

  South-East

  53·4

  (296·1)

  England

  1,232·5

  (2,339·4)

  1,063

  —

  1991–92

  London

  807·5

  (677·3)

  827

  0·3

  South-East

  32·9

  (330·7)

  England

  1,106·4

  (2,705·8)

  1,586

  10·1

  1992–93

  London

  760·6

  (743·0)

  1,218

  11·8

  South-East

  171

  (323·6)

  England

  1,0430

  (2,884·1)

  2,370

  26·5

  1 Figures from 1989–90 represent the housing element of Housing Revenue Account Subsidy only. The figures in brackets show the rent rebate element (the equivalent figures were previously part of DSS programmes).

  2 Housing Corporation expenditure broken down by its regions is only available from 1990–91. The figure shown in the table for London and the South-East combined represents the total for the Housing Corporation's London and Home Counties (NE), London and Home Counties (NW) and London and Home Counties (S) regions.

  Legislation Timetable
  Mr. Chris Smith
  To ask the Secretary of State for the Environment what plans he has, and under what timetable, to introduce legislation(a) to create an environmental protection agency, (b) to change administrative arrangements for national parks, and (c) to implement the provisions of the EC habitats directive.
  532
  Mr. Maclean
  [holding answer 21 May 1993]: My Department is continuing to work for the early creation of the environment agency and to change the administrative arrangements for national parks. The required legislation will be introduced as soon as the necessary parliamentary time can be found. The Government intend to meet the timetable specified by the directive for any necessary transposition of its requirements into domestic legislation.

  Local Government Reform
  Mr. Barry Jones
  To ask the Secretary of State for the Environment when he expects to make a statement on his legislative plans for new local government authorities.

  Mr. Robin Squire
  [holding answer 24 May 1993]: The Secretary of State may give effect to the Local Government Commission's recommendations by order under the Local Government Act 1992. The timing of each order is dependent on the commission's work programme and its recommendations.

  Combined Heat and Power
  Mr. Hinchliffe
  To ask the Secretary of State for the Environment what steps his Department takes to encourage research and development in joint heat and power initiatives; and if he will make a statement.

  Mr. Maclean
  The Government fully recognise the energy and environmental benefits of combined heat and power (CHP) and seek to ensure that the technology faces no unnecessary legislative or institutional barriers to its implementation. The Energy Efficiency Office promotes the wider use of the technology in all suitable applications and is working towards the target set by the Government in 1990 of doubling the present installed CHP capacity to 4000 MW by the year 2000. The best practice programme contains an element by which up to 49 per cent. support may be given to pre-competitive research under which CHP is supported.

  Local Government Commission
  Mrs. Beckett
  To ask the Secretary of State for the Environment if he will make a statement on his policy on the independence of the Local Government Commission and the weight to be given to its recommendations.

  Mr. Robin Squire
  The Local Government Commission is an independent, non-departmental public body. It is required to have regard to the policy and procedure guidance issued by the Secretary of State. Once the commission submits its final report to the Secretary of State, he may, by order, give effect to all or any of the recommendations, with or without modifications.

  Local Government Finance
  Mr. Salmond
  To ask the Secretary of State for the Environment (1) if he will give details of the number of people in England exempted from payment of the community charge on the grounds of severe mental impairment in each year of its existence;

  (2) what is his Department's assessment of the number of people in England who (a) will be in receipt of 100 per cent. council tax benefit for the property element of the tax and (b) will be exempt from payment of the personal element of the council tax on the grounds of severe mental impairment;
  533
  (3) what is his Department's forecast of the number of people in England who were previously exempted from paying the community charge on the grounds of severe mental impairment and who (a) are liable for the water charge element of the council tax, (b) are liable for all or part of the property element of the council tax or (c) will be in receipt of 100 per cent. council tax benefit for the property element.

  Mr. Robin Squire
  Some 97,000 people were exempt from the personal community charge as of 1 June 1990 on the grounds of severe mental impairment. Figures for later years of the community charge are not available.

  My Department does not collect information on the numbers of people with a severe mental impairment who are liable for the council tax, or who give rise to a discount, or who receive council tax benefit. Because, however, the council tax is a tax on dwellings, fewer people will be liable than was the case under the community charge. Water charges are not collected with the council tax in England.

  Environmental Statistics
  Mr. Chris Smith
  To ask the Secretary of State for the Environment when he expects to publish this year's "Digest of Environmental Statistics".

  Mr. Maclean
  The 15th edition of the annual "Digest of Environmental Protection and Water Statistics" will be published on 27 May 1993. Copies will be placed in the House of Commons Library.

  Radioactive Discharges
  Mr. Dafis
  To ask the Secretary of State for the Environment what assessment has been made of the impact of British Nuclear Fuels' new radioactive discharge applications for the Sellafield area on levels of discharges of radioactive pollution around the United Kingdom coastline.

  Mr. Curry
  I have been asked to reply.

  Detailed assessment of those members of the public who would potentially be the most exposed to radiation from the proposed discharges to the marine environment has confirmed that their doses would be well within nationally and internationally recommended limits and much less than doses from natural sources. It follows that the doses to the rest of the United Kingdom population would be even smaller. Full details of their assessment were included in an explanatory memorandum which accompanied the draft authorisations issued for public consultation on 16 November 1992. A copy of these documents is in the Library.

NATIONAL FINANCE

  Widows' Bereavement Allowance
  Dr. Spink
  To ask the Chancellor of the Exchequer what plans he has to extend widows' bereavement allowance to include men; and if he will make a statement on the application of section 51A of the Sex Discrimination Act 1975.

  Mr. Dorrell
  There are no plans at present to extend the widows' bereavement allowance to widowers. Section 51A 534
  of the Sex Discrimination Act 1975 has no application to the question whether widows' bereavement allowance should be extended to widowers.

  Mortgage Interest Tax Relief
  Mr. Dafis
  To ask the Chancellor of the Exchequer if he will make it his policy to treat mortgage interest tax relief as official Government expenditure.

  Mr. Dorrell
  I have no plans to change the accounting treatment of mortgage interest tax relief.

  Civil Service Pension Scheme
  Mr. Bowden
  To ask the Chancellor of the Exchequer (1) what plans he has to amend the civil service pension schemes to include as pensionable service years served by new entrants joining the service as temporary staff during the second world war, in cases where those staff became established after the war;

  (2) what would be the cost of counting as pensionable all war time service by civil servants entering the service during the second world war who became established after the end of the war;

  (3) what representations he has received on the pension arrangements applying to war-time service by home civil servants.

  Mr. Portillo
  I have no plans to amend the civil service pension scheme to allow unestablished service given before 14 July 1949, including that of temporary staff recruited during the war, to reckon in full for pension purposes. I have received no recent representations specifically about temporary staff, but do from time to time receive correspondence about unestablished service generally.

  The most recent available estimate of costs is that, even if pre-July 1949 unestablished service were to count in full in the calculation of pension benefits only, both past and future lump sums being left out of the account, the total cost over the next 25 years for the civil service alone would be of the order of £400 million.

  Empty Properties
  Mr. Dafis
  To ask the Chancellor of the Exchequer how many empty properties in the owner-occupied sector have been bought under the scheme outlined in the autumn statement by housing associations in each standard United Kingdom region; and how many such properties were repossessed homes in each instance.

  Mr. Portillo
  The information for England is provided in the following table:

  Completed units

  Repossessed units

  Northern

  584

  25

  Yorkshire and Humberside

  1,376

  89

  East Midlands

  1,376

  104

  East Anglia

  801

  33

  South East

  9,083

  547

  South West

  1,533

  127

  West Midlands

  1,583

  62

  North West

  2,094

  151

  National Total

  18,430

  1,138

  In Scotland 209 were purchased; none was a repossession.
  535
  In Wales a total of 1,198 properties were purchased, of which 95 were repossessions.

  In Northern Ireland 743 empty properties were purchased of which:

  141 were by Northern Ireland Housing Executive;

  276 were by Northern Ireland Co-Ownership housing association and;

  326 were by other housing associations.

  Regional breakdowns for Scotland, Wales and Northern Ireland, and repossession figures for Northern Ireland, are not available centrally and could be provided only at disproportionate cost. All the above figures are provisional at this stage and subject to normal end-year checking which may result in marginal adjustments to the final outturn.

  Mr. Dafis
  To ask the Chancellor of the Exchequer if he will make it his policy to extend the housing market package for the purpose of purchasing empty properties to cover the whole of the 1993–94 financial year.

  Mr. Portillo
  No; as my right hon. Friend said in his autumn statement last November, the housing market package was a time-limited measure, explicitly aimed at the overhang of empty properties in the over-occupied sector which was holding back activity in the housing market. The purchase of over 23,000 properties has achieved its desired result by providing a significant stimulus to activity.

  Relocation
  Mr. Moss
  To ask the Chancellor of the Exchequer what are the costs to the public funds of the relocation of Government employees by Government Departments over the past five years.

  Mr. Portillo
  This information is not held centrally.

  VAT (Fuel)
  Mr. Davidson
  To ask the Chancellor of the Exchequer if he will propose the introduction of a reduced rate of VAT on fuel for occupiers of public sector properties which are proven to be(a) difficult to heat and (b) located in areas in which it is colder than the British average climate.

  Mr. Dunnachie
  To ask the Chancellor of the Exchequer if he will consider a reduced rate of VAT on fuel for occupiers of public sector properties which are proven to be(a) difficult to heat and (b) in a climate colder than the British average.

  Sir John Cope
  No. Differential VAT treatment for different sectors and areas would be difficult to administer and would undermine the revenue and environmental objects of the Government's VAT charges on fuel and power. In so far as fuel and power supplies to some public sector properties are already subject to the standard rate of VAT, this proposal would also contravene agreements with our EC partners.

  Crossrail
  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer if he will list all those organisations and companies, other than the Manufacturing and Construction Industries Alliance, from which he has received recent representations concerning the crossrail project.

  Mr. Portillo
  We have received representations in recent weeks from the following organisations and companies:

  The Corporation of the City of London

  London Tourist Board and Convention Bureau

  NFC plc

  Regalian Group

  Royal Institution of Chartered Surveyors

  Thames Valley Chamber of Commerce and Industry

  Trafalgar House Developments Ltd.

  Customs and Excise
  Mr. Channon
  To ask the Chancellor of the Exchequer what plans he has to change the structure of the responsibilities of Her Majesty's Customs and Excise.

  Sir John Cope
  We have no plans to change the present structure of responsibilities of Her Majesty's Customs and Excise.

  Public Employees' Pay
  Ms Harman
  To ask the Chancellor of the Exchequer if he will list the groups of public employees that have reached pay settlements on their pay round since the autumn statement; and on what dates those settlements were reached.

  Mr. Portillo
  Settlements have been reached in respect of the following groups:

  Group

  Date settlement agreed

  Operate date of settlement

  Royal Mail middle and junior managers

  15 March 1993

  1 January 1993

  Armed Forces

  12 February 1993

  1 April

  NHS doctors and dentists

  25 March 1993

  1 April 1993

  School teachers (England and Wales)

  1 April 1993

  1 April 1993

  Civil service clerical and secretarial staff

  26 April 1993

  1 April 1993

  Civil service executive and support staff

  26 March 1993

  1 April 1993

  Teachers in Scotland

  29 March 1993

  1 April 1993

  Settlements have also been reached for a number of smaller groups.

  Ms Harman
  To ask the Chancellor of the Exchequer if he will publish a table showing the earnings of those public employees on top salaries as defined by the Pay Board Review Body by scale and group in real terms at January 1993 prices for each year since 1990–91; and if he will provide estimates for 1993–94 and 1994–95.

  Mr. Portillo
  Data on earnings, where this differs from the salaries and scales down, are not available. It is not possible to make estimates of pay rates beyond the current year. The other information requested is shown in the table.
  537

  Rates of pay at 1 April each year, at 1 January 1993 prices

  Grade

  1990

  1991

  1992

  1993

  Staff in post March 19921

  Home civil service

  Hd of HCS

  104,577

  106,642

  108,234

  109,931

  1

  PS/HMT

  97,864

  99,680

  101,259

  102,846

  1

  Grade 1

  84,129

  85,765

  87,052

  88,417

  23

  Grade 1A

  77,118

  78,803

  80,077

  81,333

  11

  Grade 2

  FR 58,886

  MIN 61,148

  MIN 62,099

  MIN 63,072

  DP 62,744

  —

  —

  —

  140

  DP 66,018

  —

  —

  —

  DP 69,876

  MAX 71,613

  MAX 72,741

  MAX 73,881

  Grade 3

  London2

  National

  London

  National

  London

  National

  London

  National

  FR 47,785

  FR 47,785

  MIN 50,125

  MIN 48,788

  MIN 50,940

  MIN 49,596

  MIN 51,738

  MIN 50,374

  DP 52,570

  DP 50,365

  —

  —

  —

  —

  —

  —

  481

  DP 55,248

  DP 53,044

  —

  —

  —

  —

  —

  —

  DP 57,828

  DP 55,623

  MAX 58,030

  MAX 56,693

  MAX 58,896

  MAX 57,552

  MAX 59,819

  MAX 58,454

  Military

  RANK

  Admiral of the Fleet Field Marshal Marshal of the RAF

  104,577

  106,661

  108,234

  109,931

  1

  Admiral General Air Chief Marshal

  84,130

  85,786

  87,050

  88,416

  21

  Vice Admiral Lieutenant General Air Marshal

  58,891

  61,593

  62,615

  63,597

  34

  Rear Admiral Major General Air Vice Marshal

  50,362

  53,979

  54,761

  55,621

  139

  Judiciary

  Group 13

  104,577

  106,663

  108,234

  109,931

  1

  Group 2

  96,673

  98,582

  100,226

  101,797

  13

  34

  92,870

  94,696

  96,093

  97,599

  39

  4

  84,107

  85,786

  87,052

  88,417

  107

  5

  62,391

  70,867

  75,686

  76,873

  26

  —

  —

  63,699

  64,646

  —

  6

  56,218

  59,107

  —

  —

  616

  —

  —

  76,126

  68,079

  —

  7

  46,022

  52,321

  52,179

  52,997

  478

  Notes:

  FR—Flat rate.

  DP—Discretionary point.

  1 Numbers in post exclude the Northern Ireland Civil Service.

  2 Excludes London allowance of £2,000 (two star officers in the armed forces receive London pay and group 7 of the judicial salary structure receive London Weighting).

  3 The composition of each group is given in Appendix H to the 15th Report on Top Salaries Cm 2015 July 1992.

  4 The Lord Justice Clerk is paid a salary lead of £1,000.

  Ms Harman
  To ask the Chancellor of the Exchequer if he will list those groups of public employees that have received pay offers in their latest pay round of less than 1·5 per cent., and if he will list those groups of public employees that have had offers of zero per cent.

  Mr. Portillo
  Negotiations and offers in respect of individual groups of public sector employees are confidential to the parties directly concerned.

  Oil Exploration
  Mr. Robert Hughes
  To ask the Chancellor of the Exchequer how many written representations he has received since 16 March seeking changes to the transitional arrangements for the abolition of exploration and appraisal relief which he announced in the Budget.

  Mr. Dorrell
  There have been a number of written representations on the transitional arrangements. both seeking changes and supporting the existing Finance Bill measures.
  538
  Mr. Robert Hughes
  To ask the Chancellor of the Exchequer how many companies and industry associations have met him or ministerial colleagues since 16 March to seek changes to the transitional arrangements for the abolition of exploration and appraisal relief which he announced in the Budget; and if he will list them.

  Mr. Dorrell
  Ministers have met a range of companies, industry associations and other interested parties who have put forward a variety of views on the transitional arrangements.

  Mr. Robert Hughes
  To ask the Chancellor of the Exchequer if he will list all companies and industry associations which have made representations to Her Majesty's Treasury since 16 March seeking changes to the transitional arrangements for the abolition of exploration and appraisal relief which he announced in the Budget.

  Mr. Dorrell
  Those companies and industry associations that have made representations and have yet to make them public are free to do so.

  Securities and Investments Board
  Mr. Tim Smith
  To ask the Chancellor of the Exchequer whether he has received the report of the chairman of the Securities and Investments Board following his review of the Financial Services Act 1986.

  Mr. Frank Field
  To ask the Chancellor of the Exchequer when he expects to receive the Securities and Investments Board report which he asked for following the loss of Maxwell pension funds.

  Mr. Lamont
  The Maxwell affair—and in particular, the weaknesses identified in the supervision of the Maxwell companies—revealed a number of important shortcomings in the way that financial regulation had been conducted under the Financial Services Act. Accordingly, on 9 July last year, at columns 292 and 293. I informed the House that I had asked Andrew Large, the new chairman of the Securities and Investments Board (SIB), to conduct his own review of how SIB carries out its regulatory responsibilities, with a view to strengthening the implementation of regulatory standards in practice. My right hon. Friend the Secretary of State for Social Security had previously announced, on 8 June, at columns 19–21, that he has set up for the Pension Law Review Committee under the chairmanship of Professor Goode to carry out a review of the framework of law and regulation for occupational pension schemes.

  Andrew Large has now presented his review. It is published today and I am placing a copy in the Library of the House. It is a thorough and professional analysis, drawing on a wide-ranging consultative exercise with providers, users and regulators of financial services, both in the United Kingdom and in other countries. I am grateful to Mr. Large and I accept his conclusions. The Government will give full support to the implementation of his recommendations. The result will be a significant improvement in investor protection—the primary objectives of any system of financial regulation.

  Effective investor protection can be delivered by a range of regulatory structures. The two-tier structure laid down in the Financial Services Act—statutory-based regulation with a strong practitioner input—is not the only option. The review also looked at a unitary—fully statutory—system, but concluded that the case has not been made for taking such an extreme step at this stage. The Government accept this conclusion—another major upheavel with all its associated costs would be unwelcome both to firms and to investors, especially as the assumed benefits of a different structure are far from guaranteed.

  But while the existing two-tier regulatory structure should be retained, investors have every right to expect effective delivery. To this end, the changes proposed by Andrew Large are significant and radical, yet evolutionary. In its early years, SIB was right to concentrate on establishing a code of regulations. But rules, regulations and procedures are only as valuable as the diligence and skill with which they are implemented. It is now time to focus on supervision and enforcement to see that appropriate standards are delivered.

  We need regulation designed to protect investors, to catch and punish fraudsters and to tackle sharp practice; while at the same time paying due attention to the costs to firms and to investors of operating the system. The review tackles head on the cost of regulation and signals a determination, including through direct control of SIB's
  540
  resources and the setting up of a cost of compliance unit, to look at the justification of all regulatory costs. I welcome Andrew Large's proposals which should deliver increasing cost effectiveness hand in hand with effective regulation.

  Reshaping regulatory effort in this way will require a partnership between SIB and all the bodies recognised under the Act. Each self-regulatory organisation, recognised investment exchange and recognised professional body has its separate and essential role to play. But the system must be driven and led by SIB as regulator of the regulators with a more active style of regulation, supervision and enforcement. I fully support the approach Andrew Large has recommended; SIB must set the standards expected of the front line regulators, supervise their delivery and ensure their enforcement. SI B's role and standing will be enhanced by its proposals for greater openness, cost effectiveness and public accountability giving investors and providers more confidence in the system.

  Change is already in hand at Investment Management Regulatory Organisation, as foreshadowed in my statement of 9 July. SIB has been working with IMRO to rectify serious weaknesses in six main areas. A risk-based approach to monitoring has been developed to sharpen its focus and effectiveness, together with a significant increase in monitoring resources. There are new procedures for co-ordinating emergency cases and improvements to IM RO's admission procedures. New occupational pension scheme rules came into force in March and a revised code of practice of board members' interests was introduced in August. With the appointment of a new chairman and chief executive, these measures represent a vigourous response to the regulatory weaknesses at SIB and IMRO exposed by the Maxwell affair.

  Improved investor protection will require full use of SIB's extensive powers, including the inherent powers derived from its powers to recognise the front-line regulators. Andrew Large believes that he will be able to achieve the major changes required within the current legislation. But in a number of areas he has indicated that if, despite expectations, SIB's powers prove inadequate to secure the required standards of investor protection when put fully to the test, he will not hesitate to seek legislative amendment.

  I share the view that full use of SIB's powers should deliver the required improvements. The chairman of SIB has the Government's full backing in the use of these powers. I will, of course, keep this area under review and I will be prepared to take whatever action is necessary if experience shows existing powers to be inadequate. But such a development would be serious indeed because it would indicate that the co-operation needed between SIB and the front-line regulators to make the two-tier structure work effectively had not materialised.

  I have asked the chairman of SIB to implement the recommendations of the review, in co-operation with the recognised bodies, and to keep me closely in touch with progress on implementation. As part of its plans for greater openness, cost effectiveness and public accountability, SIB will publish six monthly progress bulletins.

  No regulator and no system of regulation an guarantee that all fraud will be prevented or identified. Nor can regulation replace the duty on investors to consider

  541
  carefully how they invest their money. But the Government are determined that all the lessons of the Maxwell affair must be fully learnt.

  Financial Services Act 1986
  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer (1) what plans he has to bring forward proposals to repeal or reform the Financial Services Act 1986; and if he will make a statement;

  (2) what reviews Her Majesty's Government are conducting of the working of the Financial Services Act 1986; and for what purpose.

  Mr. Nelson
  [holding answer 19 May 1993]: I have no plans to change the present statutory framework. On 9 July last year, following publication of the summary of conclusions and findings of the Investment Management Regulatory Organisation's review of its regulation of Maxwell companies and the Securities and Investments Board's own assessment, my right hon. Friend the Chancellor of the Exchequer asked Andrew Large, SIB's chairman, to conduct a review of how the SIB carries out its regulatory responsibilities. My right hon. Friend's answer today to the hon. Member for Beaconsfield (Mr. Smith) reports on the delivery of the review.

  Mr. Nicholas Winterton
  To ask the Chancellor of the Exchequer what recent representations he has received about the working of the Financial Services Act 1986; and if he will make a statement.

  Mr. Nelson
  [holding answer 19 May 1993]: I received a number of such representations.

  British Telecom
  Mr. Nigel Griffiths
  To ask the Chancellor of the Exchequer if he will provide an estimate of the administrative costs of the 1993–94 sale of shares in British Telecom plc borne by class XVII, vote 1 of the March 1993 Supply estimates.

  Mr. Dorrell
  [holding answer 24 May 1993]: The administrative costs related to the 1993 sale of shares in British Telecommunications plc borne on class XVII, vote 1 in 1993–94 is estimated at £200,000.

  Insurance Policies
  Mr. Morgan
  To ask the Chancellor of the Exchequer which regulatory organisation controls the sale, in sterling, of United Kingdom insurance policies to(a) United Kingdom citizens located overseas and (b) those serving in British armed forces overseas where the claims are processed in the United Kingdom.

  Mr. Nelson
  [holding answer 24 May 1993]: In general, any direct controls on the sale of insurance policies are likely to be the responsibility of the authorities in the country where the policy is sold. However, the rules of the Life Assurance and Unit Trust Regulatory Organisation apply in certain circumstances to the sale to United Kingdom citizens—including armed forces personnel—located overseas, of investment-based life insurance policies by life offices based in the United Kingdom.

AGRICULTURE, FISHERIES AND FOOD

  Animals (Transport and Slaughter)
  Mr. Simon Hughes
  To ask the Minister of Agriculture, Fisheries and Food when he next intends to review current practices of procedure concerning the transport and slaughter of animals within the European Community.

  Mr. Soames
  Directive 91/628 lays down conditions for the transport of animals within the Community. The Commission is due to propose further detailed rules, and we are pressing it to come forward with proposals for discussion as soon as possible.

  The United Kingdom initiated discussions on EC proposals on the welfare of animals at slaughter during our presidency. Discussions are continuing and we will be seeking high welfare standards to be implemented and enforced throughout the Community.

  Integrated Administration and Control Systems
  Mr. Nigel Evans
  To ask the Minister of Agriculture, Fisheries and Food how many IACS forms his Department have returned to farmers because they were incorrectly completed; and how many completed IACS forms were returned to his Department as a percentage of those sent out.

  Mr. Curry
  Regional service centres are now undertaking detailed checks of the IACS forms, but figures are not available on the number where further information may be required to determine eligibility for aid.

  In order to ensure that every potential applicant received an information pack, my Department distributed IACS forms and explanatory booklets to all major and minor holdings on our records, comprising some 190,000 in England. We recognised that some of these would not be eligible but we were not willing to take the risk of missing any potential claimants. Of the forms distributed, 45 per cent. have been completed and returned.

  Mr. lan Bruce
  To ask the Minister of Agriculture, Fisheries and Food how many IACS applications were received in the United Kingdom by 15 May.

  Mr. Gummer
  The number of applications received in the United Kingdom by 15 May was 157,129.

  Local Authority Farmland
  Mr. David Nicholson
  To ask the Minister of Agriculture, Fisheries and Food what estimate he has of(a) the number of farms and (b) the total acreage of farmland that is owned by local authorities; and in which counties these areas are mainly concentrated.

  Mr. Curry
  The Department does not have this information. However, information on statutory smallholdings owned by local authorities is contained in the annual reports to Parliament on smallholdings in England and Wales which are available in the Library.

  European Agricultural Advisory Committees
  Mr. Ian Bruce
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the level of United Kingdom representation on the European agricultural advisory committees for(a) the oil and fats

  543
  sector, (b) the fresh and processed fruit and vegetable committee and (c) social questions affecting farmers and members of their families; and what assessment has been made of the reasons for the difference in the United Kingdom level relative to other large EC countries.

  Mr. Curry
  Members of agricultural advisory committees are appointed by the European Commission on the basis of information supplied by trade and professional bodies. Their role is to advise the Commission on its work in the various agricultural sectors. National Governments are not involved in these appointments in any way.

  Geographical Information Systems
  Mr. Llew Smith
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on geographical information systems used by his Department.

  Mr. Curry
  Geographical information systems using a variety of software products are currently employed by a number of divisions of the Ministry of Agriculture, Fisheries and Food, including emergencies and food protection, environmental protection, plant health and seeds inspectorate, fisheries, and marine environmental protection. Additional systems are used by its agencies, including the Central Science Laboratory, the Central Veterinary Laboratory and ADAS.

  Beef Premium Scheme
  Mr. Alex Carlile
  To ask the Minister of Agriculture, Fisheries and Food if the present beef premium scheme will be reviewed in 12 months' time; and if he will make a statement.

  Mr. Curry
  We have already started to look at the details of the operation of the new beef special premium scheme with industry representatives.

  EC Agri-environment Package
  Mr. Martlew
  To ask the Minister of Agriculture, Fisheries and Food what information he has about(a) the amount of money that each EC member state is expecting to spend on the agri-environment package in each of the next three years and (b) what schemes they intend to introduce; and if he will make a statement.

  Mr. Curry
  In the United Kingdom we expect to spend £45·5 million in 1993–94, £75·5 million in 1994–95 and £97 million in 1995–96 on environmentally sensitive areas, moorland schemes, the creation and improvement of a range of wildlife habitats over a 20-year period, organic farming, the encouragement of new public access on set-aside land and measures to protect groundwater catchments affected by high nitrate levels. This is in addition to expenditure on such schemes as countryside stewardship.

  Other member states are currently preparing their plans and the final contents are as yet unclear. So far, programmes for some parts of some member states have been submitted to the EC Commission but provisional details of only two national programmes have been made available. These are a French programme to encourage maintenance of extensive grazed pasture with forecast expenditure of FF630 million in 1993, FF1,050 million in
  544
  1994 and FF1,575 million in 1995, and a Dutch programme to extend their environmentally sensitive areas by 9,000 hectares, for which we do not yet have details of the cost.

WALES

  Field Identification
  Mr. Gareth Wardell
  To ask the Secretary of State for Wales by what method he intends to verify the information with respect to field identification numbers and areas submitted by individual farmers in form IACS 2A (1993): and who will carry out the verification.

  Mr. David Hunt
  Verification of the information submitted on form IACS 2A (1993) will be carried out by Welsh Office staff by means of a combination of administrative checks and site inspection visits.

  Trainees
  Mr. Ieuan Wyn Jones
  To ask the Secretary of State for Wales what information he has on the number of young females who have had their youth training placements terminated in Wales in each year from 1987; and how many such terminations resulted directly from a trainee becoming pregnant.

  Sir Wyn Roberts
  The following table shows the percentage of young women who left youth training places prior to completion of their training in each of the financial years 1987–88 to 1991–92. Figures for 1992–93 are not yet available.

  Information on the number who terminated training directly as a result of pregnancy is not available.

  Youth Training Young Women leavers in Wales

  Year

  Completers Per cent.

  Early leavers Per cent.

  Don't know Per cent.

  1987–88

  21

  79

  —

  1988–89

  26

  74

  —

  1989–90

  27

  73

  —

  1990–91

  28

  54

  118

  1991–92

  27

  53

  21

  1 Figures for 1990–91 and 1991–92 are taken from the YT leavers survey and are not directly comparable with those for earlier years which were taken from the trainee database.

  Agri-environment Scheme
  Mr. Dafis
  To ask the Secretary of State for Wales what action has been taken to date by his Department to implement European Community Regulation No. 2978/92 on the development of a multinational zonal agri-environment scheme for Wales.

  Mr. David Hunt
  I refer the hon. Gentleman to the reply given to the hon. and learned Member for Montgomery (Mr. Carlile) on 17 May 1993 at column 55.

  Mr. Dafis
  To ask the Secretary of State for Wales what plans he has to extend agri-environmental schemes currently operational in Wales to cover the Ceredigion area.

  Mr. David Hunt
  The Cambrian mountains—original and extension—environmentally sensitive areas (ESAs)
  545
  already cover part of Ceredigion. I have no plans to extend the boundaries of these ESAs. Other schemes containing agri-environmental elements, such as the farm woodland premium scheme, the farm and conservation grant scheme and hedgerow renovation scheme, are already available in Ceredigion.

  Illegal Drugs
  Mr. leuan Wyn Jones
  To ask the Secretary of State for Wales what information he has on the proportion of secondary school children in each local education authority area in Wales who have taken illegal drugs.

  Mr. Gwilym Jones
  A 1992 survey by the Health Promotion Authority for Wales reported that 36·6 per cent. of all fifth formers had used some form of drug or other substance, excluding alcohol and tobacco, during that year. That data broken down to local education authority level are too small to be significant.

  Non-departmental Public Bodies
  Mr. Llwyd
  To ask the Secretary of State for Wales how many representations he has received on the subject of non-departmental public bodies over the past year; and if he will make a statement.

  Mr. David Hunt
  The activities of non-departmental public bodies relate to many areas of my Department's work and thus the imprecise information requested is not available centrally.

  Grant-maintained schools
  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many grant-maintained schools have facilities for disabled students: and what percentage this is of grant-maintained schools.

  Sir Wyn Roberts
  All but one of the seven grant-maintained schools currently in Wales have some facilities for disabled students.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales if he will list all of the successful capital grant requests from grant-maintained schools since he began making them, stating the work to be carried out and its value; and how many of these projects enabled disabled students to have access to these schools.

  Sir Wyn Roberts
  Details of the successful named projects in 1992–93 were provided in my right hon. Friend's reply of 1 February 1993 to the hon. Member for Caerphilly (Mr. Davies)Official Report, column 29. An announcement about the 1993–94 allocations will he made shortly.

  A number of the projects included the improvement of facilities for disabled students.

  Regional Assistance
  Mr. Richards
  To ask the Secretary of State for Wales if he will list the firms in Clywd that accepted regional enterprise grants in each year in which they were available and the amount of each grant; and if he will make a statement.

  Mr. David Hunt
  Details about individual companies accepting offers of regional enterprise grants are 546
  commercially confidential. However, the following table gives the total number and value of offers accepted by companies in Clwyd for each year since the start of the scheme on 1 April 1988.

  Type of grant

  Investment

  Innovation

  Number

  Offer value (£)

  Number

  Offer value (£)

  1988–89

  41

  322,534

  10

  227,750

  1989–90

  105

  894,996

  15

  322,384

  1990–91

  67

  616,778

  23

  498,074

  1991–92

  47

  476,112

  16

  347,632

  1992–93

  27

  253,839

  20

  450,092

  Total

  287

  2,564,259

  84

  1,845,932

  Mr. Richards
  To ask the Secretary of State for Wales if he will list the firms in Clwyd that accepted offers of regional selective assistance in 1991–92 and 1992–93 and the amount of each offer; and if he will make a statement.

  Mr. David Hunt
  Details of all offers of regional selective assistance of £75,000 or more are published in the Employment Gazette following the first payment of grant. These details remain commercially confidential until that time including individual amounts of RSA associated with projects which have been publicly announced beforehand. Companies accepting offers of RSA in 1991–92 whose details have appeared in the Employment Gazette are:

  RSA Offer (£)

  Processed Timber Products Ltd.

  75,000

  Keating Gravure Systems (UK) Ltd.

  100,000

  Kronospan Ltd.

  3,000,000

  P. and R. Graphics

  100,000

  Fibrax Ltd.

  125,000

  Betts and Co.

  600,000

  Cardiff Bay Development
  Mr. Richards
  To ask the Secretary of State for Wales what estimate he has made of the effect on the south Wales economy of the construction of the Cardiff bay development; and if he will make a statement.

  Mr. David Hunt
  The latest economic appraisal estimates that the Cardiff Bay regeneration strategy, including the barrage, will attract some 23,000 new jobs and £1·2 billion of private sector investment to Cardiff bay. The wider south Wales economy will clearly benefit from activity of this magnitude, in terms of both additional jobs and changed perceptions of the region in the eyes of inward investors.

  Power Stations
  Mr. Richards
  To ask the Secretary of State for Wales what effect he expects the Hamilton Oil and Connah's Quay power station projects will have on the north Wales economy; and if he will make a statement.

  Mr. David Hunt
  I understand that the Hamilton Point of Ayr terminal and PowerGen's Connah's Quay power station projects together represent an investment of some £.1·8 billion. Up to 2,400 jobs will be created during construction, with around 110 permanent jobs at the two sites thereafter.

  Management Placement Training
  Mr. Richards
  To ask the Secretary of State for Wales how many people have found full-time positions after completing management placement training courses in Wales in each year since 1987.

  Sir Wyn Roberts
  Information on the numbers of people who have found full-time positions after completing management placement training courses in Wales is not available and could be provided only at disproportionate cost.

  Welsh Development Agency
  Mr. Wigley
  To ask the Secretary of State for Wales what was the total amount of(a) grant in aid and (b) other moneys given by his Department to the Welsh Development Agency in 1991–92 and 1992–93 expressed in (i) cash prices and (ii) at 1990–91 prices.

  Mr. David Hunt
  The information is set out in the following table:

  Total grant in aid cash £000

  Total grant in aid at 1990–91 prices £000

  1991–92

  87,167

  76,116

  1992–93

  78,359

  68,425

  No other resources were made available by the Department in this period.

  Trade Missions
  Mr. Richards
  To ask the Secretary of State for Wales if he will list the destinations of the trade missions being organised by the Welsh Office over the next three years to promote the products of small and medium-sized enterprises based in Wales; and if he will make a statement.

  Mr. David Hunt
  The programme of missions for 1993–94 is as follows:

  1993–94

  Date

  1. GERMANY AND SWITZERLAND Stuttgart/Zurich

  6–11 June 1993

  2. SINGAPORE AND MALAYSIA Singapore/Kuala Lumpur

  14–26 August 1993

  3. USA AND CANADA Seattle/Vancouver/Toronto

  11–23 September 1993

  Inward investment projects secured in Wales from 1988

  County

  Number of

  Number of jobs

  Capital

  projects

  New

  Safeguarded

  investment £ million

  1988

  Clwyd

  28

  2,377

  26

  201·0

  Dyfed

  6

  253

  0

  20·0

  Gwent

  21

  2,122

  1,299

  80·0

  Gwynedd

  7

  377

  110

  34·0

  Powys

  0

  0

  0

  0·0

  Mid Glamorgan

  20

  1,742

  200

  43·0

  South Glamorgan

  7

  3,773

  730

  764·0

  West Glamorgan

  8

  649

  30

  15·0

  1989

  548

  1993–94

  Date

  4. ARABIAN GULF Dubai, Abu Dhabi, Bahrain, Kuwait, Saudi Arabia

  1–14 October 1993

  5. BELGIUM Brussels

  14–18 February 1994

  6. SPAIN AND FRANCE Barcelona/Marseilles

  13–18 March 1994

  The programmes for the eight 1994–95 and 10 1995–96 missions have yet to be finalised. Decisions on likely target markets are made taking account of the most up-to-date information available and both programmes are under review. For 1994–95, however, the programme is likely to include destinations in North America, the middle and far east, Australasia and Europe and I will make an announcement shortly.

  Inward Investment
  Mr. Wigley
  To ask the Secretary of State for Wales what was the percentage share of foreign inward capital investment by county in Wales in each year since 1987.

  Mr. David Hunt
  The percentage share of capital investment promised by inward investment projects from overseas recorded since 1987 is shown in the following table. The figures are based on information provided at the time the projects were recorded and have not been amended to take account of any subsequent development.

  1988

  1989

  1990

  1991

  1992

  Clwyd

  17·56

  38·21

  47·00

  10·90

  5·94

  Dyfed

  1·44

  10·91

  1·92

  8·96

  7·86

  Gwent

  4·47

  6·84

  2·43

  16·27

  12·33

  Gwynedd

  2·96

  —

  —

  1·91

  1·96

  Powys

  —

  0·07

  0·10

  0·86

  7·17

  Mid Glamorgan

  2·57

  9·01

  21·97

  28·46

  44·56

  South Glamorgan

  69·55

  31·41

  6·11

  28·62

  17·93

  West Glamorgan

  1·45

  3·55

  20·47

  4·02

  2·25

  Mr. Wigley
  To ask the Secretary of State for Wales how many new inward investment projects were secured by county in Wales in each year from 1988; how many new jobs were created; how many jobs were safeguarded; and what was the total capital investment.

  Mr. David Hunt
  The information requested is shown in the following table. The figures are based on information provided by the companies at the time the projects were recorded and have not been amended to take account of any subsequent developments.
  549

  County

  Number of projects

  Number of jobs

  Capital investment £ million

  New

  Safeguarded

  Clwyd

  14

  831

  0

  190·0

  Dyfed

  10

  448

  2,280

  70·0

  Gwent

  23

  1,490

  185

  49·0

  Gwynedd

  2

  18

  0

  0·3

  Powys

  2

  35

  0

  0·5

  Mid Glamorgan

  19

  1,051

  87

  52·0

  South Glamorgan

  15

  2,140

  94

  155·0

  West Glamorgan

  15

  1,163

  700

  24·0

  1990

  Clwyd

  38

  2,204

  238

  235·0

  Dyfed

  4

  0

  948

  8·0

  Gwent

  21

  1,131

  212

  107·0

  Gwynedd

  3

  123

  0

  0·4

  Powys

  2

  42

  0

  0·5

  Mid Glamorgan

  33

  1,147

  3,670

  970

  South Glamorgan

  24

  2,273

  350

  137·0

  West Glamorgan

  17

  1,036

  2,510

  84·0

  1991

  Clwyd

  48

  2,412

  640

  121·0

  Dyfed

  8

  330

  960

  70·0

  Gwent

  45

  2,177

  1,771

  129·0

  Gwynedd

  15

  573

  1,006

  69·0

  Powys

  3

  120

  0

  6·0

  Mid Glamorgan

  31

  2,890

  1,815

  220·0

  South Glamorgan

  21

  792

  518

  216·0

  West Glamorgan

  12

  844

  212

  33·0

  1992

  Clwyd

  38

  1,496

  548

  83·0

  Dyfed

  15

  185

  875

  68·0

  Gwent

  40

  1,302

  2,043

  129·0

  Gwynedd

  27

  735

  593

  35·0

  Powys

  34

  1,052

  0

  66·0

  Mid Glamorgan

  25

  1,062

  1,726

  392·0

  South Glamorgan

  18

  654

  999

  160·0

  West Glamorgan

  9

  131

  969

  62·0

  Consultancy Initiatives
  Mr. Richards
  To ask the Secretary of State for Wales how many firms in Clwyd have been helped by consultancy initiatives in each year since 1988; and if he will make a statement.

  Mr. David Hunt
  The number of firms which have received completed consultancies under the scheme in Clwyd are as follows:

  Number

  1988–89

  124

  1989–90

  196

  1990–91

  1113

  1991–92

  1149

  1992–93

  1140

  1993–94

  29

  Total

  531

  1 Completed.

  2 Completed to date.

  These consultancy services are provided by my right hon. Friend the President of the Board of Trade and delivered in Wales on his behalf by the Welsh Development Agency.

  The scheme, as my right hon. Friend announced on 10 March, Official Report, columns 583–84, will continue at reduced rates of subsidy. This will allow the development
  550
  of a new, wider and more flexible package of support which will help a larger number of companies, within the available resources. This new package of assistance, which will still include consultancy support, will continue after 31 March 1994, when the enterprise initiative consultancy scheme was due to end.

  Training and Enterprise Councils
  Mr. Richards
  To ask the Secretary of State for Wales how many inquiries TEC-operated business information services received from businesses in Clwyd last year; and if he will make a statement.

  Sir Wyn Roberts
  Information about the numbers of inquiries received by TEC business information services is collected only on a TEC area basis. North East Wales TEC, which covers Clwyd with the exception of the boroughs of Colwyn and Rhuddlan, dealt with 1,866 inquiries through its business information service last year. The total number of inquiries received in Gwynedd and Clwyd during the same period was 5,635.

  Mr. Richards
  To ask the Secretary of State for Wales how many new and existing small businesses in Clwyd participated in counselling sessions run by TECs last year; and if he will make a statement.

  Sir Wyn Roberts
  Information about the numbers of new and existing small businesses participating in counselling sessions run by TECs is collected only on a TEC area basis. North East Wales TEC, which covers
  551
  Clwyd with the exception of Colwyn and Rhuddlan boroughs, undertook 863 counselling sessions in 1992–93. The total number of counselling sessions undertaken in Gwynedd and Clwyd for the same period was 3,040.

  Mr. Richards
  To ask the Secretary of State for Wales how many owners and managers of businesses in Clwyd received help and training from TECs last year; and if he will make a statement.

  Sir Wyn Roberts
  Information on the numbers of owners and managers of businesses in Clwyd who received help and training from TECs last year is available only on a TEC area basis. NE Wales TEC, which covers Clwyd with the exception of Colwyn and Rhuddlan boroughs, supported 876 owner-manager training activities in 1992–93. The total number of owner-manager training activities undertaken in Gwynedd and Clwyd for the same period was 2,289.

  Mr. Richards
  To ask the Secretary of State for Wales how many people in Clwyd who started their own businesses in the last financial year received help and support from TECs; and if he will make a statement.

  Sir Wyn Roberts
  Information on the numbers of people who started their own businesses in the last financial year and who received help and support from TECs is collected only on a TEC area basis. North East Wales TEC, which covers Clwyd with the exception of the boroughs of Colwyn and Rhuddlan, provided help and support for 171 people who started their own businesses in 1992–93. The total number who received such assistance in Gwynedd and Clwyd during the same period was 578.

  1988 Per cent.

  1989 Per cent.

  1990 Per cent.

  1991 Per cent.

  1992 Per cent.

  Clwyd

  18·0

  19·3

  18·8

  18·3

  18·8

  Dyfed

  3·9

  6·6

  7·4

  7·0

  6·7

  Gwent

  18·3

  19·3

  19·6

  18·9

  19·5

  Gwynedd

  2·7

  2·2

  1·9

  2·1

  1·8

  Mid Glamorgan

  27·8

  26·5

  26·4

  27·2

  27·1

  Powys

  0·3

  0·4

  0·6

  0·4

  0·3

  South Glamorgan

  11·7

  10·1

  11·0

  12·3

  12·7

  West Glamorgan

  17·3

  15·5

  14·3

  13·9

  13·1

  Total Employment in Foreign·owned Manufacturing units in Wales

  50,500

  60,600

  66,300

  67,000

  66,200

  Source: Welsh Register of Manufacturing Employment.

  Note: Totals may not add due to rounding.

  Site Protection
  Mr. Ainger
  To ask the Secretary of State for Wales what action he proposes to take to protect sites of importance for nature and landscape conservation from being destroyed prior to applications being made for planning permission; and if he will make a statement.

  Sir Wyn Roberts
  The Government encourage local authorities to adopt appropriate policies in their development plans, and to make full use of their powers under the National Parks and Access to the Countryside

  Small Firms (Awards)
  Mr. Richards
  To ask the Secretary of State for Wales if he will list the companies in Clwyd that have received a small firms merit award for research and technology(a) stage 1 and (b) stage 2 award during the past 12 months; and if he will make a statement.

  Sir Wyn Roberts
  The Government's SMART competition for small companies and start-ups is a highly successful scheme that provides support for innovation which is widely recognised as the key to company competitiveness. Over the five years that it has been operating, Wales has received 112 awards covering a wide technological range, representing 9 per cent. of the United Kingdom total. The following companies located in Clwyd have received awards over the past 12 months:

  (a) STAGE 1

  Global Specialties (UK) Ltd.

  Optokem Instruments Ltd.

  (b) STAGE 2

  Henrob Ltd.

  Quest Refrigeration Ltd.

  Some 107 applications from Welsh companies have been received for this year's stage 1 competition, representing a 55 per cent. increase on last year. This reflects an increase in confidence in Welsh industry as well as a positive interest in innovation.

  Foreign-owned Manufacturing Units
  Mr. Wigley
  To ask the Secretary of State for Wales what was the percentage share of employment by county in foreign-owned manufacturing units in Wales in each year since 1988.

  Mr. David Hunt
  The percentage share of employment by county in foreign-owned manufacturing units in Wales in each year since 1988 is in the following table:

  Act 1949, the Wildlife and Countryside Act 1981 and under planning legislation to protect sites which they recognise as sites of local ecological importance. I am satisfied that measures available to local authorities are sufficient to secure the protection of such sites.

  Child Care
  Mr. leuan Wyn Jones
  To ask the Secretary of State for Wales if he will list the applications made to date for funding under the out of school child care grant in Wales, indicating the amount allocated in each instance.
  553
  Sir Wyn Roberts
  The out of school child care scheme will be administered by the training and enterprise councils. As yet, no payments of grant have been made.

  A470
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will make a statement on plans for the improvement of the A470 Llanrwst to Conwy road at Tanlan.

  Sir Wyn Roberts
  Preparation of a scheme is in progress and a public consultation exercise is planned for later this year.

  Education
  Mr. Dafis
  To ask the Secretary of State for Wales if he will list the taster courses and other forms of pre-course support in Wales which are aimed specifically at encouraging the re-entry of women into education.

  Sir Wyn Roberts
  Six higher education institutions held eight taster courses for prospective teachers in the academic year 1991–92. The institutions concerned were UCW Aberystwyth, UCNW Bangor, UC Swansea, Cardiff institute of higher education, North Wales institute of higher education and Gwent college of higher education. UCNW Bangor will be holding a further taster course in September 1993. The taster courses provide men and women with the opportunity to learn more about teaching as a career. The courses are not aimed specifically at women but a substantial proportion of those attending have been women.

  Mr. Win Griffiths
  To ask the Secretary of State for Wales how many schools and units for emotionally and behaviourally disturbed children he and his Minister of State have visited since September 1992.

  Sir Wyn Roberts
  Neither my right hon. Friend nor I has visited any designated school or unit for such children since September 1992.

  Youth Justice
  Mr. Llwyd
  To ask the Secretary of State for Wales how many local authorities in Wales to date have established operational plans for tackling discrimination in youth justice; and what is the number that have drawn up an anti-discrimination statement relating to youth justice.

  Sir Wyn Roberts
  This information is not held centrally.

  Environmental Protection
  Mr. Dafis
  To ask the Secretary of State for Wales if he will list(a) the additional special protection areas and (b) wetlands of international importance that have been designated in Wales during the last two years; and what plans he has for further designations.

  Sir Wyn Roberts
  Since 1 April 1991, six sites in Wales have been designated as special protection areas (SPAs) under the EC Birds Directive and four sites designated under the Convention on Wetlands of International Importance (Ramsar Convention). The sites are as follows:554

  SPA/RAMSAR sites designated in Wales since 1 April 1991

  Date of designation

  SPAs

  Skokholm

  5 August 1991

  Traeth Lafan (Conway Bay)

  10 June 1992

  Ynys Feurig, Cemlyn Bay and Skerries

  10 June 1992

  Glannau Aberdaron (Aberdaron Coast) and Ynys Enlli (Bardsey Island)

  10 June 1992

  Glannau Ynys Gybi (Holy Island Coast)

  10 June 1992

  Burry Inlet1

  14 July 1992

  RAMSAR

  Llyn Tegid

  7 November 1991

  Llyn Idwal

  7 November 1991

  Burry Inlet1

  14 July 1992

  Cors Caron

  28 September 1992

  1 Joint SPA/Ramsar site.

  There are a number of other sites in Wales which are under consideration by the Countryside Council for Wales in a rolling programme of designations. The council's target is to submit six sites to the Welsh Office in 1993–94.

  Discretionary Grants
  Mr. Llwyd
  To ask the Secretary of State for Wales how many representations he has received on the subject of discretionary grants during the past 18 months; and if he will make a statement.

  Sir Wyn Roberts
  During the past 18 months, my right hon. Friend and I have received 35 representations on the subject of discretionary student awards. Such awards are the responsibility of local education authorities who can choose which students and courses to support and how much to spend.

  Business Start-ups
  Mr. Wigley
  To ask the Secretary of State for Wales how many new businesses have been started in Wales(a) in total and (b) by women in each of the last five years.

  Mr. David Hunt
  Comprehensive information on the number of new business start-ups in Wales(a) in total and (b) by women in each of the last five years is not available.

  However, VAT registration figures are available by year up to 1991 and for the period 1987–91 as a whole show a gross addition of 49,100 VAT registered businesses in Wales. The number of VAT registrations in Wales for each of the last five years is as follows:

  Year

  VAT registrations

  1987

  8,700

  1988

  10,900

  1989

  10,900

  1990

  10,200

  1991

  8,400

  1987–91

  49,100

  Integrated Administration and Control
  Mr. Llwyd
  To ask the Secretary of State for Wales how many representations he has received concerning the subject of Welsh language IACS forms; and if he will make a statement.

  Mr. David Hunt
  Several.

  Cardiff Wales Airport
  Mr. Llwyd
  To ask the Secretary of State for Wales if he will list the new passenger air routes developed during 1992 and 1993 to date, to and from Cardiff, Wales airport; and what plans there are further to expand this number.

  Sir Wyn Roberts
  During 1992, services introduced at Cardiff, Wales airport included a scheduled link to Aberdeen and charter services to Dalaman and Antalya in Turkey, Gran Canaria, Lyon, Rome, Vienna and Berlin.

  In 1993 charter services started to Paphos (Cyprus), Kos and Skiathos (Greece) and Adnan Menderes (Turkey).

  The airport management has plans for additional new services but these are commercially confidential.

  Market Testing
  Mr. Flynn
  To ask the Secretary of State for Wales by what date he wishes bids for market-testing jobs in his Department to be submitted.

  Mr. David Hunt
  Dates for submission of bids have not been fixed. They will be set out in the invitations to tender which are expected to issue during the summer.

  Mr. Flynn
  To ask the Secretary of State for Wales what advice has been given to units within his Departments on the selection of advisers they should appoint to assist them in the market-testing process.

  Mr. David Hunt
  The in-house bid managers have been given training to help them to identify the issues which they need to consider in formulating their bids. Continuing discussions are also taking place between the bid managers and the Department's efficiency unit about the selection of relevant advisers.

  Redundancies, Gwent
  Mr. Flynn
  To ask the Secretary of State for Wales if he will list all redundancy and closure announcements involving more than 10 people made by Gwent companies since April 1992.

  Mr. David Hunt
  The information is not available.

  Local Government Finance
  Mr. Salmond
  To ask the Secretary of State for Wales (1) what is his Department's forecast of the number of people in Wales who were previously exempted from paying the community charge on the grounds of severe mental impairment and who(a) are liable for the water charge element of the council tax, (b) are liable for all or part of the property element of the council tax or (c) will be in receipt of 100 per cent. council tax benefit for the property element;

  (2) what is his Department's assessment of the number of people in Wales who (a) will be in receipt of 100 per cent, council tax benefit for the property element of the tax and (b) will be exempt from payment of the personal element of the council tax on the grounds of severe mental impairment;

  (3) if he will give details of the number of people in Wales exempted from payment of the community charge on the grounds of severe mental impairment in each year of its existence.
  556
  Mr. Gwilym Jones
  The information required is not held centrally.

  NHS Joint Staff Consultative Council
  Mr. Michael
  To ask the Secretary of State for Wales when the next ministerial meeting with the members of the Joint Staff Consultative Council for the Welsh health service will take place.

  Mr. Gwilym Jones
  These meetings do not take place on a regular basis and I have not made arrangements for a further meeting.

SOCIAL SECURITY

  Benefit Claimants
  Mr. Frank Field
  To ask the Secretary of State for Social Security if he will list for each of the last five years the numbers of people receiving each social security benefit whose benefit was reviewed.

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

  Myalgic Encephalomyelitis
  Mr. McMaster
  To ask the Secretary of State for Social Security, pursuant to his answer of 14 April to the hon. Member for Blaenau Gwent (Mr. Smith),Official Report, column 667, what estimate he has made of the number of people receiving benefits in respect of myalgic encephalomyelitis.

  Mr. Scott
  The information is not available. No specific estimate of the number of people receiving benefits in respect of myalgic encephalomyelitis has been made. In general incapacity and disablement benefits are payable on the effects of an illness or disability, and not on the condition itself.

  Disability
  Mr. McMaster
  To ask the Secretary of State for Social Security if he will list the additional benefits potentially available to single, double and multiple amputees, along with the relevant eligibility criteria; and if he will make a statement.

  Mr. Scott
  A wide range of benefits is available to sick and disabled people, including amputees, provided they meet the conditions of entitlement. In general, disability benefits are payable on the basis of the effect an illness or disability has on a person's everyday life rather than the condition itself.

  There is no specific benefit provided for amputees; however, people who are born without both feet or have had both feet amputated at or above the ankle qualify automatically for the higher rate of the mobility component of disability living allowance, if they satisfy other conditions of entitlement.

  Benefits (Automatic Transfer)
  Mr. Vaz
  To ask the Secretary of State for Social Security how many representations he has received from people concerned about Government plans to make pension and benefit payments directly to bank accounts: and if he will make a statement.

  Miss Widdecombe
  We have received various representations, including a number of letters from right hon. and hon. Members. The Government's policy is to ensure that people have a choice of payment method and are aware of the choices available.

  Mr. Beggs
  To ask the Secretary of State for Social Security (1) how many benefit or pension recipients(a) collect benefit directly from a post office and (b) have benefit paid directly into (i) a bank or (ii) a building society;

  (2) how many claim forms have been issued to new pension or benefit applicants which do not provide information regarding the Post Office as a location from which allowances can be collected.

  Miss Widdecombe
  The payment of social security benefits is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member and a copy will be placed in the Library.

  Letter from Michael Bichard to Mr. Roy Beggs, dated 24 May 1993:

  As Chief Executive of the Benefits Agency, it is my responsibility to answer questions about relevant operational matters. I am, therefore, replying to your recent Parliamentary Questions to the Secretary of State for Social Security asking how many benefit or pension recipients (a) collect benefit directly from a post office and (b) have benefit paid directly into (i) a bank or (ii) a building society; and how many claim forms have been issued to new pension or benefit applicants which do not provide information regarding the Post Office as a location from which allowances can be collected.

  Although the number of beneficiaries for each benefit is known, because some individuals can receive more than one benefit, statistics on the total number of social security recipients are not available. However, at December 1992 around 4·3 m beneficiaries were paid directly into a bank or building society, while around 23·25 m were paid by a method of payment encashable at a post office. It is not possible to say, from our records, how many payments were made into bank accounts and how many into building society accounts.

  In a recent trial, three versions of the Retirement Pension (RP) claim form were piloted. One version of the form did not refer directly to the Post Office as a location where RP may be collected, but it stated that other methods of payment were available and invited customers to request further information if required. Eight thousand copies of this form were issued. I hope you find this reply helpful. A copy will appear in the Official Report. A copy will also be placed in the Library.

  Visual Handicap
  Mr. Callaghan
  To ask the Secretary of State for Social Security what information he has as to additional costs incurred by people with a visual handicap as a result of their disability.

  Mr. Scott
  Information about the additional costs incurred by visually handicapped people was included in the surveys of disability commissioned by the Government, carried out by the Office of Population 558
  Censuses and Surveys, and published in 1988. Further information is available in the Royal National Institute for the Blind survey "Blind and Partially Sighted Adults in Britain", published in 1991.

  Income Support
  Mr. Dafis
  To ask the Secretary of State for Social Security if he will publish figures indicating(a) the number of claimants for income support in respect of mortgage interest in each standardised United Kingdom region, (b) the average weekly payment and (c) the total annual payment in each year since 1988.

  Mr. Burt
  The information available for Great Britain is in the following tables. Information for Northern Ireland should be requested from my right hon. and learned Friend the Secretary of State for Northern Ireland.

  Income support recipients with mortgage interest considered in their assessment May 1989 Recipients with half mortgage interest

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  North Eastern

  5,000

  12·89

  3,600,000

  London North

  5,000

  32·45

  9,300,000

  South Western

  2,000

  22·22

  2,800,000

  Wales

  3,000

  22·24

  3,100,000

  Midlands

  4,000

  17·94

  3,700,000

  North Western

  4,000

  13·81

  3,000,000

  Scotland

  2,000

  20·20

  2,000,000

  London South

  4,000

  32·89

  6,300,000

  Great Britain

  30,000

  21·86

  33,900,000

  Income support recipients with mortgage interest considered in their assessment May 1989 Recipients with full mortgage interest

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  North Eastern

  40,000

  18·71

  38,500,000

  London North

  39,000

  33·92

  68,300,000

  South Western

  21,000

  28·55

  30,600,000

  Wales

  20,000

  18·82

  19,300,000

  Midlands

  40,000

  19·94

  41,300,000

  North Western

  48,000

  18·84

  46,700,000

  Scotland

  13,000

  25·13

  17,300,000

  London South

  32,000

  34·82

  57,000,000

  Great Britain

  251,000

  24·46

  319,200,000

  Source:

  Income support recipients with mortgage interest considered in their assessment May 1990 Recipients with half mortgage interest

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  North Eastern

  7,000

  19·32

  7,500,000

  London North

  7,000

  48·17

  16,500,000

  South Western

  3,000

  28·64

  4,200,000

  Wales

  2,000

  26·90

  2,700,000

  Midlands

  6,000

  24·72

  8,200,000

  North Western

  8,000

  26·58

  10,500,000

  Scotland

  2,000

  41·72

  4,300,000

  London South

  6,000

  57·39

  17,000,000

  Great Britain

  40,000

  33·69

  70,800,000

  559

  Income support recipients with mortgage interest considered in their assessment May 1990 Recipients with full mortgage interest

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  North Eastern

  38,000

  24·03

  46,900,000

  London North

  45,000

  47·94

  111,900,000

  South Western

  23,000

  40·34

  47,400,000

  Wales

  24,000

  23·31

  28,600,000

  Midlands

  45,000

  25·58

  60,400,000

  North Western

  42,000

  25·11

  54,900,000

  Scotland

  12,000

  31·19

  20,300,000

  London South

  41,000

  52·36

  112,200,000

  Great Britain

  270,000

  34·42

  482,600,000

  Source: Income support statistics annual enquiry May 1990.

  Income support recipients with mortgage interest considered in their assessment May 1991

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  Recipients with full mortgage interest

  North Eastern

  43,000

  31·86

  71,600,000

  London North

  63,000

  63·80

  208,000,000

  South Western

  33,000

  54·08

  91,700,000

  Wales

  24,000

  36·02

  44,000,000

  Midlands

  57,000

  36·02

  106,400,000

  North Western

  51,000

  29·20

  77,600,000

  Scotland

  14,000

  37·99

  28,400,000

  London South

  53,000

  67·21

  184,900,000

  Great Britain

  337,000

  46·34

  812,600,000

  Source: Income support statistics annual enquiry May 1991.

  Income support recipients with mortgage interest considered in their assessment May 1992

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  Recipients with half mortgage interest

  North Eastern

  7,000

  21·35

  8,100,000

  London North

  15,000

  39·93

  30,500,000

  South Western

  6,000

  31·25

  9,600,000

  Wales

  3,000

  21·47

  3,100,000

  Midlands

  10,000

  22·43

  11,900,000

  North Western

  8,000

  24·10

  10,100,000

  Scotland

  3,000

  21·49

  3,100,000

  London South

  13,000

  39·63

  25,800,000

  Great Britain

  64,000

  30·59

  102,300,000

  Housing Benefit
  Mr. Dafis
  To ask the Secretary of State for Social Security if he will make it his policy to amend housing benefit regulations to secure that any disincentive for local authorities wishing to embark on private sector leasing arrangements as opposed to bed-and-breakfast accommodation is removed provided that value-for-money criteria are met.

  Mr. Burt
  The housing benefit subsidy arrangements are designed to provide a similar level of support for authorities whether they choose bed and breakfast accommodation or short-term leased accommodation to house homeless persons.
  560

  Income support recipients with mortgage interest considered in their assessment May 1991

  Recipients with half mortgage interest

  Social security administrative region

  Number of cases

  Average amount of mortgage interest

  Annual amount of mortgage interest

  North Eastern

  9,000

  20·53

  9,600,000

  London North

  17,000

  43·44

  38,600,000

  South Western

  7,000

  39·07

  15,000,000

  Wales

  4,000

  26·62

  4,800,000

  Midlands

  12,000

  31·95

  20,300,000

  North Western

  7,000

  22·64

  8,600,000

  Scotland

  4,000

  24·69

  4,600,000

  London South

  14,000

  49·22

  35,100,000

  Great Britain

  74,000

  35·61

  136,700,000

  Benefits
  Mr. Steen
  To ask the Secretary of State for Social Security what changes he is making to the availability of benefits for disabled people; when they will come into effect; and if he will make a statement.

  Mr. Burt
  New regulations come into effect today. They will mean that the presence of a person who is registered blind is ignored for the purpose of the living alone rule when deciding whether a disabled person qualifies for the severe disability premium. This change recognises that someone who is blind should not be expected to care for a severely disabled person. It applies to income support, housing benefit and council tax benefit and will give worthwhile extra help to those who qualify.
  561

  Top-up Claims (Forecasts)
  Mr. Hinchliffe
  To ask the Secretary of State for Social Security to what extent forecasts of claimants for top-up claims were inaccurate; and what action he intends to take to ensure that future forecasting for changes in benefit schemes is improved.

  Mr. Scott
  Forecasts of claims to any new benefit scheme are subject to significant margins of error as they are dependent upon estimates of both the eligible population and their likely claiming behaviour. Estimating eligibility for disability benefits is particularly difficult as the eligible population can only be identified through surveys.

  Top-up claims to disability living allowance could be made by all those aged under 65 who were receiving either attendance allowance or mobility allowance. The forecast was that 137,000 of the eligible population would apply, the actual number to do so was 234,000. This underestimate of 97,000 was offset by an over-estimate of 61,000 for new claims so that overall, claims were within 4 per cent. of forecasts.

  For the future, the establishment of the family resources survey and the improvement in social security statistical systems should help reduce the margin of error attached to future forecasts.

  "Paying for Independence"
  Mr. Alfred Morris
  To ask the Secretary of State for Social Security what consideration his Department has given to the Policy Studies Institute's findings from a survey of disabled people entitled "Paying For Independence", a copy of which has been sent to him; what action he will be taking; and if he will make a statement.

  Mr. Scott
  I have read with interest the first findings of the research undertaken by the Policy Studies Institute, and I look forward to reading it when it is published in the autumn.

  Date

  Numbers whose UB was extinguished due to receipt of an occupational or personal pension

  Numbers whose UB was reduced due to receipt of an Occupational Or personal pension

  Men

  Women

  Total

  Men

  Women

  Total

  November 1982

  3,900

  16,300

  November 1983

  1,200

  9,500

  November 1984

  1,000

  9,700

  November 1985

  1,200

  9,100

  November 1986

  1,100

  10,700

  November 1987

  600

  8,200

  November 1988

  700

  6,700

  November 1989

  4,700

  300

  5,000

  7,700

  500

  8,200

  November 1990

  4,100

  200

  4,300

  7,600

  500

  8,100

  November 1991

  7,900

  400

  8,400

  14,400

  1,100

  15,500

  November 1992

  10,900

  900

  11,800

  16,600

  1,600

  18,200

  Notes:

  1 Source: Half-yearly analysis of unemployed claimants.

  2 No information was available for 1981 due to industrial action.

  3 The age threshold for abatement of UB by an occupational pension was reduced from age 60 to age 55 from 1 January 1989.

  4 The abatement rule was extended to include personal pensions from 9 October 1989.

  5 A separate breakdown for men and women is not available for the years up to 1988. However, the number of women in the total figure for these years is believed to be negligible as it would only have applied to the small number of women who claimed UB after the age of 60 years and who received occupational pensions of an amount in excess of the threshold.
  562

  Allowances (Processing Delays)
  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what plans he has to compensate claimants who may have suffered financial loss, resulting in delays in processing claims for(a) disability living allowance, (b) attendance allowance and (c) mobility allowance, where the delays were less than eight months or where financial loss exceeded £10 a month.

  Miss Widdecombe
  Under the Department's special payment arrangements, consideration will be given to making an ex-gratia payment to someone who has incurred extra expense or suffered actual finanical loss as a result of official error.

  Over and above these payments, compensation for loss of use of benefit can also be considered when payment of benefit is excessively delayed. A significant improvement to the arrangements, announced on 4 May means that, for a new claim, compensation can be considered if payment of the benefit is delayed by more than a period of six months plus the target clearance time for clearing the bulk of the claims—usually between 85 per cent. and 95 per cent.

  Special compensation arrangements for late payment of benefit were also announced for those people who claimed disability living allowance, attendance allowance or mobility allowance on or after 3 February 1992 who were paid before 1 April 1993 and who suffered a delay of more than eight months in the payment of their benefit. For these people, a payment of £10 per month for each month which exceeded the eight-month period is payable to compensate for the late payment of benefit. No actual financial loss has to have been incurred before payment can be made.

  Benefits (Abatement)
  Mr. Milburn
  To ask the Secretary of State for Social Security how many(a) men and (b) women have had their unemployment benefit abated due to receipt of a personal or occupational pension scheme in each year since 1981.

  Mr. Burt
  The available information is in the table.
  563
  Mr. Milburn
  To ask the Secretary of State for Social Security what is the level at current prices of the £35 abatement provision on occupational pensioners in the year it was introduced.

  Mr. Burt
  The current value of the threshold for the abatement provision on occupational and personal pensions would be £66·44 per week.

  Disability Allowances
  Mr. Flynn
  To ask the Secretary of State for Social Security how many disability living allowance appeals have been heard by disability appeal tribunals; and in how many cases the appeal succeeded wholly or in part.

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

  Letter from Michael Bichard to Mr. Paul Flynn, dated 24 May 1993:

  As Chief Executive of the Benefits Agency, it is my responsibility to answer questions about relevant operational matters. I am therefore replying to the points raised in your recent Parliamentary Question to the Secretary of State for Social Security asking how many Disability Living Allowance (DLA) appeals have been heard by Disability Appeal Tribunals (DATS) and in how many cases the appeal succeeded wholly or in part.

  For the period February 1992 to 30 April 1993 there have been a total of 319 appeals heard by the DATs. Of these some 133 succeeded in their appeal either wholly or in part.

  I hope you find this reply helpful. A copy will appear in the Official Report. A copy will also be placed in the Library.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what action he intends to take to reduce waiting times for attendance allowance, mobility allowance and disability living allowance from application to appeal hearing.

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

  Letter from Michael Bichard to Mr. David Hinchliffe, dated 24 May 1993:

  As Chief Executive of the Benefits Agency it is my responsibility to answer questions about relevant operational matters. I am therefore replying to your recent Parliamentary Question to the Secretary of State for Social Security asking
  564
  what action he intends to take to reduce waiting time for Attendance Allowance (AA), Mobility Allowance (Mob A) and Disability Living Allowance (DLA) from application for appeal to appeal hearing.

  There are a number of current initiatives that have been instigated with a view to speeding up the throughput of appeal hearings. These include:—

  The establishment of a centralised Appeals Unit to process all applications for appeal relating to DLA, MoB A, AA (under 65) and transitional AA.

  The availability of additional resources to improve the speed with which an appeal submission is prepared.

  The setting of aggressive internal targets to ensure that external performance indicators are achieved.

  The improvement of courier arrangements to ensure next day delivery to the Independent Tribunal Service (ITS)—Disability Appeal Tribunal Central Office (DATCO) of all submissions despatched from the Fylde.

  The arrangement of monthly liaison meetings with ITS to identify any problem areas and introduce operational improvements.

  The planning of a pilot scheme with the aim of streamlining the current style of submission.

  It should be noted that once appeals have been prepared and submitted by BA the actual scheduling and subsequent hearing of them falls wholly within the remit of ITS. This is an area over which BA does not have absolute control.

  I hope you find this reply helpful. A copy will appear in the Official Report. A copy will also be placed in the Library.

  Mr. Hinchliffe
  To ask the Secretary of State for Social Security what lessons have been learned from the introduction of disability living allowance which could be applied to the introduction of new benefits in the future; and if he will make a statement.

  Mr. Scott
  Changes to the social security scheme are always formally evaluated against both their policy and operational objectives. Some valuable points have already emerged which will help to inform future developments.

  Pensions
  Mr. Michael Brown
  To ask the Secretary of State for Social Security, when he intends to establish an executive agency for war pensioners.

  Mr. Lilley
  [pursuant to his reply, 9 February 1993, col. 602]: I am pleased to be able to announce that Mr. Peter Mathison has been appointed as the new chief executive for the War Pensions agency. He will take up appointment as chief executive designate on 1 June 1993 pending the launch of the Agency in April 1994. The appointment is for an initial three-year term.

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

Nuclear Missiles: Policy
Lord Mayhew Lord Mayhew asked Her Majesty's Government:
Whether they propose to increase the fire power of the strategic nuclear deterrent.
The Parliamentary Under-Secretary of State, Ministry of Defence (Viscount Cranborne): My Lords, as my colleagues and I have frequently reaffirmed, the Government remain committed to retaining only the minimum nuclear capability necessary for credible and effective deterrence.
Lord Mayhew: My Lords, does the Minister agree that the non-proliferation treaty, which accepts our possession of nuclear weapons, obliges us to disarm nuclear wise? Can it be right therefore for us— unlike the Americans and the Russians who are disarming — to increase the fire power of our deterrent, which I believe the Government have in mind? Can it also be right for the Government to continue to state that they are considering acquiring a new, additional nuclear missile system? Might not the Government be more successful in persuading other countries not to acquire nuclear weapons if they set a better example themselves?
Viscount Cranborne: My Lords, the noble Lord, Lord Mayhew, and I have often talked about sub-strategic capability, which was one of the issues to which he referred. I hope that he will forgive me if I merely refer him to the Answer which I gave a few days ago. I begin to suspect that the noble Lord and I are fundamentally at variance as regards the desirability or otherwise of maintaining a nuclear deterrent. I hope that I am wrong in suspecting that the noble Lord is not in favour of maintaining a nuclear deterrent. I have stated many times that we believe that to be the fundamental underpinning of the safety of our nation and I make no apology for that.
Baroness Park of Monmouth: My Lords, does my noble friend agree moreover that Russia is destroying obsolete nuclear submarines and obsolete long-range missiles and thus is replacing them with new ones?
Viscount Cranborne: My Lords, I am extremely grateful to my noble friend whose knowledge of these matters is universally understood. I underline what she said in informing your Lordships that we estimate that the strategic warheads which remain operational are distributed between Russia, the Ukraine, and Kazakhstan as follows approximately 7,000 for Russia, 1,500 for the Ukraine, and 1,200 for
166
Kazakhstan. Our plan is for a maximum of about 512 warheads and I am astonished at our own moderation by comparison.
Lord Craig of Radley: My Lords, does the Minister agree that the key measure by which our nuclear capability should be judged is not simply its collective fire power but its capacity at any one moment to have a high assurance of inflicting unacceptable damage and thereby deterring a potential aggressor?
Viscount Cranborne: My Lords, I must reply to the noble and gallant Lord by saying that I could not have put the issue better myself.
Lord Colnbrook: My Lords, the noble Lord, Lord Mayhew, referred to the non-proliferation treaty. Will my noble friend indicate how many countries intend to pay the smallest attention to it?
Viscount Cranborne: My Lords, my noble friend is as able to speculate as I am on matters of that kind. The non-proliferation treaty has noble and essential objectives to which we entirely subscribe. He will realise as well as I that under that treaty we are a registered nuclear power.
Lord Jenkins of Putney: My Lords, the Minister knows—or at least he should know —that the Government are committed to nuclear disarmament, which he has just repudiated. Does he totally repudiate that as a long-term measure or is he simply saying that the Government will not nuclear disarm tomorrow? Secondly, does the Minister believe that the Government can be taken seriously if they go into the non-proliferation treaty, which is due for further consideration, on the basis of intending to increase their fire power to the extent that he has described? Can the Government be taken seriously? The answer is—
Noble Lords: Order!
Lord Jenkins of Putney: My Lords, let the Minister give the answer.
Viscount Cranborne: My Lords, I assume that the noble Lord, Lord Jenkins, refers in the first part of his question to a complete test ban. He knows as well as I that for a long time Her Majesty's Government's ultimate objective has been to achieve a complete test ban treaty. There is absolutely no point in disarming before that desirable state of affairs is reached, and reached in such a way that a test ban is completely verifiable. Until then it is only prudent for us to stick to our policy of deterrence. I believe that I answered the second part of the noble Lord's question when replying to my noble friend Lord Colnbrook.
Lord Kennet: My Lords, does the Minister's previous answer imply that once a complete test ban has been reached and the necessary verifications have been carried out there will no longer be a need for nuclear deterrence on the part of this or any other country?
Viscount Cranborne: My Lords, it is perfectly clear that if we reach that state of nirvana we shall he in a different situation from that in which we are today.
Lord Hailsham of Saint Marylebone: My Lords, is not the trouble that no one can "disinvent" the nuclear bomb and that the technology is readily available? So long as that is true, would it not be sheer folly for us to abolish our own?
Viscount Cranborne: My Lords, I am, as always, grateful to my noble and learned friend. I can add nothing to what he said.
Lord Williams of Elvel: My Lords, does the Minister recall an Answer that his right honourable friend the Minister, Mr. Hamilton, made in another place on 18th May when he said:
"No decision has been made on the number of warheads that will be carried by Trident, but I suspect that it will be more than those that we are carrying on Polaris"?—[Official Report, Commons, 18/5/93; col. 147.]
Given that, unlike Polaris, the Trident warheads are independently targeted, even if we deployed the same number of warheads we could hit three times as many targets as we could hit now. Would the Minister care to elucidate on what his right honourable friend said?
Viscount Cranborne: My Lords, if the noble Lord, Lord Williams, is quoting my right honourable friend accurately, as I am sure he is, my right honourable friend seems to have summed up the matter well. He knows as well as I do that our stated number of 512 warheads is a maximum. We keep the position under review so that it is at least consistent with our policy of providing a minimum acceptable deterrent to underpin our entire strategic position.
Lord Mayhew: My Lords, the Minister suggested that we on these Benches are against a deterrent on principle. Is he not aware that we have made it clear over and over again that we support a nuclear deterrent while other countries have it but that we do not support increasing the fire power of our deterrent? When he replied today, was he not giving a different picture from that given by the Minister of State, as quoted by the noble Lord, Lord Williams? What I and those on these Benches object to is that the Government are increasing our nuclear capability when the non-proliferation treaty commits us to nuclear disarmament.
Viscount Cranborne: My Lords, the noble Lord, Lord Mayhew, accuses us consistently of increasing our capability. In view of his well— known interest in the sub— strategic capability, I suggest that he look at some of the Answers I have given him during previous exchanges in the past 12 months in which I made it clear that a large number of measures—I shall not weary your Lordships by repeating them—for reducing our nuclear capability in that field have already taken place. Perhaps I may suggest that it would be worth the noble Lord's while to take the question in the round rather than selectively.

Serbia and Montenegro: Sanctions
2.46 p.m.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn asked Her Majesty's Government:
Whether they can give assurance that they will not support the lifting of the sanctions upon Serbia until peace has been restored to the former Yugoslavia, and in particular until majority rule has been established in the former autonomous province of Kosovo.
The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley): My Lords, the sanctions imposed on Serbia and Montenegro under United Nations Security Council Resolutions 757, 787 and 820 will remain in force until the Security Council decides that the authorities in Serbia and Montenegro have taken effective measures to fulfil the requirements set out in Security Council Resolution 752 of 15th May 1992. Those requirements include an end to the fighting in Bosnia Herzegovina and an end to outside interference in that state.
Lord Renfrew of Kaimsthorn: My Lords, I am grateful to my noble friend for that Answer. Will he be so kind as to refer to Kosovo which was mentioned in my Question? I believe that Kosovo was not mentioned in the Statement repeated yesterday in this House by our noble friend. Will he confirm that the Washington communiqué includes the policy that international standards of human rights should be strongly respected in Kosovo? What will be Her Majesty's Government's policy if the Serbs once again initiate there the odious policy of ethnic cleansing?
Lord Henley: My Lords, the necessity for majority rule in Kosovo is not part of Security Council Resolution 752. We do not believe that it would be desirable to risk disturbing the existing agreement by seeking an amendment to that resolution. Nevertheless, I join my noble friend in condemning any Serbian abuse of human rights in Kosovo. The international conference is still working to press the Serbian authorities to grant Kosovo genuine autonomy with full human rights and to persuade Kosovans to accept something short of full independence. I can confirm that my noble friend is correct when he says that the Washington communiqué (paragraph 11, I think) makes it clear that we favour an increase in the international monitoring presence in Kosovo. We are sending an additional UK member to join it next week, and, resources permitting, we shall consider further requests to strengthen it in due course.
Lord Molloy: My Lords, while recognising that the grandfathers of the present Serbs made a big contribution to our endeavours in the last war, their present behaviour is worse than the fascism and Nazism of those who opposed us at that time. Does he agree that this dispute must be resolved not just by British or American forces but by world forces? Unless the United Nations gathers together the free world, its name will not mean much in the future.
Lord Henley: My Lords, I join the noble Lord in condemning the actions of the Bosnian Serbs. We are dealing with a civil war there. However much the United Nations can do—I hope that the United Nations can do a great deal—it must in the end be for the warring factions to sort these problems out themselves. It must be for them to reach an agreement. There is no way in which an agreement can be imposed upon them. There must be an agreement on the ground among the various warring factions.
The Earl of Onslow: My Lords, is my noble friend aware that Kosovo was majority Serb populated at the time of the treaty of Bucharest in 1913 which set up the Serbian boundaries? Is he also aware that since that time it has become much more Albanian populated? The Serbs seem to have fallen away as regards the population figures and the Albanians seem to have bred rather vigorously.
Taking that into account, and considering also the fact that Kosovo has a mystical effect on Serbian history—after all, in 1389 in the field that I think was called the Blackbirds the Serbian nobility was completely exterminated by the Turks—it is a much more complicated problem than practically any other in the Balkans. That must be borne in mind when dealing with the problem which is not a simple one. Is my noble friend further aware that it is an immensely complicated and very difficult problem and one which must be handled with kid gloves if we do not want the whole situation to become worse and much nastier?
Lord Henley: My Lords, I cannot confirm my noble friend's figure for the population balance in 1913. However, I can confirm that nowadays it is something of the order of 90 per cent Albanian. My noble friend is correct to say that the issue is immensely complicated. But, at present, we see no signs of widespread conflict spreading to Kosovo. Nevertheless, the Serbs have certainly been warned by the international community that we certainly would not tolerate any aggression there.
Lord Cledwyn of Penrhos: My Lords, can the Minister say whether sanctions will be lifted while the Serbs continue to occupy 70 per cent of the land of Bosnia which they have obtained by ethnic cleansing and aggression?
Lord Henley: My Lords, sanctions will continue until the resolutions set out in the Security Council Resolution 752 are met. They include the occupation of land illegally by Bosnian Serbs—or, for that matter, by Serbs—in Bosnia—Herzegovina.
The Earl of Strafford: My Lords, does the Minister agree that the situation in Bosnia is like that of Humpty—Dumpty after he had had his great fall and that all the Davids and the Cyruses cannot put Bosnia together again? Does he further agree that it is vital to ensure that the Bosnian Moslems are allowed to keep an adequate piece of their country?
Lord Henley: My Lords, I accept that there certainly is a very difficult task facing the entire world in terms, as the noble Earl put it, of putting Bosnia together again. But, in the end, it must be a matter for
170
the warring factions in that country to come to some sort of agreement themselves—with all the help that the international community and the United Nations can give them—and by those means bring peace to that troubled part of the world.
Lord Bonham—Carter: My Lords, can the Minister tell the House whether Mr. Milosevic has agreed that the borders between Serbia and Bosnia should be properly monitored to ensure that the sanctions to which he has agreed are rigorously enforced?
Lord Henley: My Lords, I can confirm that Mr. Milosevic has given a pledge that he will try to stop the traffic across that Serbian—Bosnian border. The evidence is that the traffic has certainly been reduced across that border. I would say that that is evidence that sanctions are, to some extent, having some effect on the Serbians and on Mr. Milosevic. However, we shall certainly continue to press for further international observers to monitor Mr. Milosevic's pledge.
Lord Bonham—Carter: My Lords, can the Minister tell us whether international observers are there at the present time?
Lord Henley: My Lords, I am not aware that they are there at present. Our intention is that there should be some. Our understanding is that the traffic on the border has been considerably reduced. We have a pledge from Mr. Milosevic to ensure that sanctions are maintained on that particular border. That is a matter for the Serbian authorities.
Baroness Blackstone: My Lords, I should like to pursue the matter a little further. Is the Minister aware that there have been a number of reports that the Government in Belgrade and Mr. Milosevic are refusing international monitors on the border between Serbia and Bosnia? If that is the case, and if it continues, can the Minister say what the UK Government intend to do through the UN Security Council and with our EC partners?
Lord Henley: My Lords, I am trying to make clear that it is a matter for the Serbian authorities and for Mr. Milosevic to police that border and to maintain sanctions there. Her Majesty's Government will continue to press for international observers to monitor Mr. Milosevic's pledge. I do not think that I can go much further than that.
Lord Gisborough: My Lords, can my noble friend confirm that there will be no watering down of the determination to prosecute war crimes?
Lord Henley: Yes, my Lords; I can give my noble friend that assurance.

Pensions: Payments via Post Offices
2.55 p.m.
Lord Wallace of Coslany Lord Wallace of Coslany asked Her Majesty's Government:
Whether they will continue to advise new pensioners that they may go to a post office to obtain weekly payment of their pension.
Lord Henley: My Lords, yes.
Lord Wallace of Coslany: My Lords, that is a very short and satisfactory Answer. However, is the Minister aware that it is a very serious issue? In fact, a great number of old—age pensioners rely on their national pension as their main source of income. To bring pressure upon them to collect it elsewhere would be very wrong. Is the Minister also aware that the Ministry sent to new pensioners a form which did not even mention the post office as the source of payment? Moreover, other forms stressed the alternative method of obtaining the pension at the expense of the post office.
Perhaps I may be assured that in future such forms will give a fair choice to the individual. I am not against a fair choice, but stressing one form of payment against the other is very wrong indeed and it gives many people the wrong impression.
Lord Henley: My Lords, for reasons that we have made quite clear, both in this House in a debate in March and in another place on various occasions, Her Majesty's Government are committed to extending the availability and the use of what is known as "automated credit transfer". That brings particular advantages to the taxpayer in providing a much cheaper and more secure form of payment. Nevertheless, we have made it quite clear that we will offer choice to all individual pensioners. On the new forms that we send out to new pensioners, we shall make it quite clear that they can make use of the post office.
The forms to which the noble Lord referred were merely a series of tests which we were undertaking to see whether we could, by altering the forms, encourage greater use of ACT. However, I must make it quite clear that however great the take up of ACT was, there would always be a number of people who did not have bank accounts and who would not be able to make use of that particular option. Therefore, it is in the interests of the Department of Social Security to maintain a network of post offices, so that we can continue to pay our benefits to all those who do not have suitable bank accounts. Further, I should add that it was a commitment in our manifesto—unlike any of the other parties— to maintain a full network of sub—post offices to pay benefits to all those who need to receive their benefits by that means.
Lord Boyd-Carpenter: My Lords, can my noble friend confirm that the pensioner who wants quick and speedy payments of his pension will go, sensibly, to the post office?
Lord Henley: My Lords, the pensioner who wants quick and speedy payment of his pension will go to the
172
post office or the bank, whichever he finds to be the most convenient. What I am trying to make clear is that we are offering a choice and that we shall continue to offer a choice to all those who wish to choose the post office or payment at their bank or building society.
Lord Tordoff: My Lords, on the assumption that people will take up the ACT option, what is the Government's calculation of the number of rural post offices that will close as a result?
Lord Henley: My Lords, I do not think that the noble Lord listened to my earlier answer. I was trying to make absolutely clear the fact that it is in the interests of the Department of the Social Security to maintain the rural post office network—and, for that matter, the urban post office network—that we have because there will always be a number of people without bank accounts to whom we would have no other means of paying that benefit other than through the post office network.
Lord Mason of Barnsley: My Lords, is not the Minister aware that the threat to the pensioner of losing his local post office is still very real? Does he accept that there is a drive to force the pensioner to take his benefits through banks and building societies? Pensioners want to be assured that that is not the case. Is the Minister further aware that 541 Crown post offices have closed in the past five years and that 288 sub-post offices closed in 1991 to 1992? In the light of those figures, how can the Minister categorically assure pensioners that they will continue to receive their pension from their post office?
Lord Henley: My Lords, I have given an assurance that there will continue to be choice for all pensioners to receive payment of their pensions through the post office or through bank accounts, should they so wish. Obviously no one can guarantee that no post office will ever close. Sub—post masters reach the age of retirement, retire and new ones come in. But what I have been trying to make quite clear is that whatever happens, there will always be a number of people who do not have suitable bank accounts and who have to receive their pension through the post office. It is therefore in our interest to maintain that network. The DSS is currently negotiating with Post Office Counters Ltd. to renew the contract which comes up for renewal every two or three years. It might just be not exactly coincidental that this worry has been built up because that contract is to be renewed. It might just be in the interest of Post Office Counters Ltd. to emphasise those particular problems. What I am trying to do is give an assurance that we need that network as much as individual pensioners.
Baroness Jeger: My Lords, is the Minister aware that the main disincentive to many pensioners in doing as the Government wish is that the pension is paid monthly in arrears through banks and building societies? This is a serious matter for many people. I should have thought the Government would realise what life is like managing on an old-age pension as distinct from budgeting on a salary. Will the Minister

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make it absolutely clear in any publicity that is issued that automated credit transfer will be a drawback for many pensioners?
Lord Henley: My Lords, I do not accept that it is a drawback for all pensioners. Some are quite used to receiving their money monthly, just as they have throughout their working life. But certainly we would be prepared to consider changing the periodicity of payments if we felt that that would encourage a greater take—up of automated credit transfer.
Baroness Hollis of Heigham: My Lords, how can the Minister maintain, in the words he just used, that the Government are committed to keeping a full network of post offices? Is it not the case that only 1,626 of the 19,000 sub—post offices in this country receive a fixed payment irrespective of benefit transactions? Moreover, is it not also the case that for the rest, benefit transactions provide nearly half their income? Is it not therefore inevitable that if one moves a swathe of that work to banks and building societies, those post offices must close? Will the Minister tell us how those post offices are to remain open when they lose the very business on which their survival depends?
Lord Henley: My Lords, the figures of the noble Baroness are wrong. Some 2,700 sub—post offices receive a fixed fee. What I am trying to make clear is that it will be up to Post Office Counters Ltd. to arrange suitable reimbursement of sub—post masters to make sure that enough post offices continue to flourish to pay pensioners by this means.
Noble Lords: My Lords —
The Lord Privy Seal (Lord Wakeham): My Lords, I believe we should move on.

RAF Anniversary: South African Representation
3.3 p.m.
Baroness Robson of Kiddington Baroness Robson of Kiddington asked Her Majesty's Government:
Whether the South African Air Force can be represented at the 75th anniversary of the Royal Air Force.
Viscount Cranborne: My Lords, the noble Baroness will be aware that military contact with South Africa remains restricted by UN, EC and Commonwealth agreements to which the United Kingdom is a party. We believe that attendance at the International Air Tattoo at Fairford in July by elements of the South African Air Force would constitute a breach of those guidelines.
Baroness Robson of Kiddington: My Lords, I thank the noble Viscount for that reply which I was aware of beforehand. But does he not agree that this year's International Air Tattoo is special in that it celebrates the 75th anniversary of the formation of the Royal Air Force in which Field Marshal Smuts played an important role? The Minister is also aware, no doubt, that the South African Air Force supplied 30
174
squadrons in the last war in the Middle East and Italy and played an important role at El Alamein. Would it not be the right thing to do at this moment, with the changes that are taking place in South Africa, to welcome the South African Air Force at this celebration?
Viscount Cranborne: My Lords, I have considerable sympathy with what the noble Baroness has said. I wholly accept that this year's tattoo has special significance. I equally wholly accept the remarkable and for this country in many ways life—saving role that the South African Air Force played not only in the Second World War but also in the first. I also acknowledge Field Marshal Smuts's role in setting up the Royal Air Force. However, it is our considered judgment that we should be in breach of the agreements I have referred to were we to allow participation. I look forward very much to the day when it will be possible for us to do so.
Lord Balfour of Inchrye: My Lords, is the noble Viscount aware that I was in South Africa in September 1939 when war was declared and a number of my friends lost no time in enlisting in the South African Air Force? Later I had the privilege of knowing Group Captain Malan, probably the outstanding air ace in the Battle of Britain. Is not the Government's reply to this question nothing short of an insult to those people and to all the others in the South African Air Force who flew alongside our airmen in the last war?
Viscount Cranborne: My Lords, I should be sorry if anything that I have said were taken as an insult to the memory of those brave men who helped us to win the Battle of Britain. I draw the noble Lord's attention to the fact that we have asked a representative ship to attend the 50th anniversary celebrations of the Battle of the Atlantic this week in Liverpool. That has been taken as a clear understanding of the contribution that the South African people made to the survival of our nation during the Second World War. As I said to the noble Baroness, Lady Robson, I greatly look forward to the time when these matters need no longer be discussed in your Lordships' House.
The Earl of Onslow: My Lords, why ask a representative ship and not an aeroplane?
Viscount Cranborne: My Lords, I cannot add anything further to what I have said already.
Lord Dean of Beswick: My Lords, is the Minister aware that we are not disagreeing with what he has said but we are disagreeing with the Government's action? Is the Minister not further aware that some of the people who would represent the South African Air Force have grandfathers who are buried in our soil as they died defending us in the Battle of Britain? Do the Government not understand that some of us consider that respecting their memory is a bigger priority than simply doing what the United Nations says, although we support that body on almost every other matter?
Viscount Cranborne: My Lords, I agree with the sentiments behind the noble Lord's question.

175
However, I would ask him whether during the course of his political life he supported the agreements to which I referred in the original Answer I gave to the noble Baroness. If he did, I would suggest that that is entirely inconsistent with his position at the moment.

Crofters (Scotland) Bill [H.L.]
3.6 p.m.
The Lord Advocate (Lord Rodger of Earlsferry): My Lords I beg to introduce a Bill to consolidate certain enactments relating to crofting, with amendments to give effect to recommendations of 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.— (Lord Rodger of Earlsferry.)
On Question, Bill read a first time, and to be printed.

Scottish Land Court Bill [H.L.]
Lord Rodger of Earlsferry: My Lords, I beg to introduce a Bill to consolidate certain enactments relating to the constitution and proceedings of the Scottish Land Court; and to repeal provisions of the Crofters Holdings (Scotland) Act 1886 relating to the Scottish Land Court which are no longer of practical utility. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.— (Lord Rodger of Earlsferry.)
On Question, Bill read a first time, and to be printed.

Leasehold Reform, Housing and Urban Development Bill (formerly Housing and Urban Development Bill)
3.8 p.m.
The Minister of State, Department of Transport (The Earl of Caithness): My Lords, I have it on command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that Her Majesty and His Royal Highness, having been informed of the purport of the Leasehold Reform, Housing and Urban Development Bill, have consented to place their prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Strathclyde): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Strathclyde.)
On Question, Motion agreed to; Bill read a third time.
Clause 4 [Premises excluded from right]:
Baroness Hamwee Baroness Hamwee moved Amendment No. 1:
Page 5, line 23, leave out ("10") and insert ("20").
The noble Baroness said: My Lords, with Amendment No. 1 we return to the relationship of enfranchisement and eligibility for lease extension and the qualifications for those rights. Under the Bill as drafted leaseholders in a block of flats are excluded from eligibility for collective enfranchisement if more than 10 per cent of the internal floor area of the building is in commercial use. Your Lordships have discussed how that internal floor area is to be calculated. The noble Baroness, Lady Gardner, drew attention in particular to certain oddities and difficulties which that may cause. Leaving aside the criterion for the calculation, I return to the point of whether 10 per cent is the correct percentage of the floor area in commercial use to cause a block of flats to be ineligible for enfranchisement.
The limitation on the permitted level of commercial use in a building seems to have been based on three arguments. The Minister said in Committee as long ago as 9th March:
"As far as concerns commercial premises we have tried to ensure that enfranchisement will only affect properties where the commercial use is very much ancillary to the residential use. We are concerned that the proposed legislation should apply only to properties which are predominantly residential".— [Official Report, 9/3/93; col. 1019.]
While I understand that argument I suggest to your Lordships that to change the level from 10 per cent to 20 per cent does not affect the Government's objective in that regard. Where 20 per cent of the property is in commercial use, nevertheless the property in question is still predominantly residential.
The Minister also said that the balance was right and that reserve powers were provided in the Bill to allow the Secretary of State to specify a different percentage threshold should the need arise if experience showed 10 per cent not to be the correct percentage. Since then the provision giving reserve powers to the Secretary of State has been deleted from the Bill. I do not complain about the alteration in the approach to the legislation and the removal from the Secretary of State of powers which he could have exercised to alter primary legislation without coming back to your Lordships' House. Nevertheless, the change means that the possibility of altering the threshold if experience proves 10 per cent to be wrong is not now available.
The final point is the relationship between enfranchisement and lease extension. The Bill has been amended to allow qualifying leaseholders the option of extending their leases. Another argument put forward by the Government at an earlier stage was that if the threshold was raised the cost of freehold reversion could be prohibitive and tenants would be unable to afford to buy the freehold. The Government were anxious that leaseholders might be caught in the trap of having the right to enfranchise but being unable to afford to buy and not entitled to extend their leases.
There is an argument in relation to the costs of enfranchisement, and indeed of lease extension, but that is a matter for leaseholders. They must take their own decisions and arrange financing to enable them to

177
deal with the commercial element of a property, perhaps by arranging finance on a commercial basis, to allow the lease of the commercial element to be purchased. That is perhaps a side issue.
The Government's concern was that leaseholders should not be caught without either right. That is no longer an issue because qualifying leaseholders are now to be able to extend their leases. The evidence of one's own eyes suggests that 10 per cent is not an appropriate threshold. Leaving aside the arguments as to precisely what would come within the 10 per cent, by and large it is fair to say that a block would need to be 10 storeys high with the ground floor in commercial use for that criterion to be fulfilled. I suggest to your Lordships that a block five storeys high with its ground floor in commercial use is still quite a large block and would still fulfil many of the Government's own criteria. That is more the type of block of flats one is accustomed to seeing.
At the previous stage I asked the Minister about evidence concerning the sizes of blocks of flats. He said that the threshold was chosen carefully after extensive sampling and the taking of expert advice. However, I do not believe that we have heard from the Minister any evidence, other than from the City of Westminster, as to the relevant sizes of blocks of flats and the number of people in buildings of different sizes who might be affected. Westminster may be the centre of the universe but it is not the whole of the universe. As your Lordships have said on a number of occasions, the Bill is intended to assist leaseholders outside London probably more than those in London. To take two examples, Eastbourne and Hastings are towns on the south coast where there are many flats which, were your Lordships to accept the proposed amendment, could benefit from the proposed legislation. If, however, your Lordships reject the amendment, they will remain outside the benefits of the legislation. I beg to move.
3.15 p.m.
Lord Williams of Elvel: My Lords, I support the noble Baroness, Lady Hamwee, and the amendment. One of the great victories in your Lordships' House during the course of our debates on the Bill has been the removal of the ability of the Secretary of State, originally contained in Clause 4, to change the primary legislation by order. The Minister quite properly recognised the feeling in all parts of the House that that was unacceptable. As the noble Baroness, Lady Hamwee, rightly pointed out, that lays an onus on the Government and your Lordships to include the right figure in Clause 4.
When the clause was in its original form it was perfectly possible to say, on the basis of a survey of the City of Westminster or somewhere else, that we could write in 10 per cent but if experience proved that it should be otherwise then the Secretary of State could produce an order and the amount could be changed to 20 per cent, 30 per cent, 50 per cent, or 60 percent., as the case might be. That option is no longer available. We therefore have to fix on a figure which can be changed only by primary legislation in the future.
178
I agree with the noble Baroness that we have not heard any serious evidence from the Government to support their figure of 10 per cent I do not believe that the Government have any serious evidence to support it outside London. If they have, we want to hear it. In the meantime, until we hear that evidence and until we are satisfied, we on these Benches will support the amendment of the noble Baroness.
Lord Strabolgi: My Lords, I should also like to support the amendment moved by the noble Baroness, Lady Hamwee, and supported by my noble friend Lord Williams. I agree with the noble Baroness that Westminster is not the centre of the universe. On the other hand, it is the part of London which I know, and I can only speak from my own experience.
I remember that the late Lord Ridley, when he was Secretary of State for the Environment, was very keen that domestic property should be allowed to be converted to commercial property. He was very much against those local authorities which would not allow any commercial offices in domestic buildings. That policy was altered by the then Secretary of State. It is important that the Government should continue with that policy and increase the percentage to 20 per cent in accordance with the policy of Lord Ridley. Therefore, for that additional reason, I support the amendment.
Lord Cockfield: My Lords, without wishing to interfere in these matters, was it not the position until comparatively recent times that there was a building limit of 80 feet in London? In that event the 80 feet would correspond to eight storeys. That itself would mean that the 10 per cent limit was too restrictive.
Lord Hamilton of Dalzell: My Lords, I find it very odd that the noble Baroness puts forward the view that London does not matter. We are considering some extremely important financial obligations and management problems in enfranchising valuable shops in significant parts of London. As I understand it, the Bill has been designed to improve the lot of residents. I do not believe that there was any intention of putting residents in charge of extremely complicated commercial arrangements in central London. One cannot exclude London from the Bill in favour of the south coast.
Lord Strathclyde: My Lords, I am grateful to all who have taken part in the debate. I am well aware that the reason that we find ourselves again in debate on the issue lies with the Government's decision to give the right to lease renewal to all qualifying tenants and also the removal of the power to vary the commercial threshold at the request of this House, which I accepted without a Division.
Noble Lords ask for serious evidence. The noble Baroness referred to three key arguments. I shall try to produce the evidence and refute the arguments.
The aim of the Bill is to give residential leaseholders the right to buy the freeholds of their homes. There are clear and compelling reasons for allowing this. But it is not our intention to give people the right to take

179
over commercial property. There is no case for giving them that right, and indeed to do so would give rise to many problems.
The Government's intention all along has therefore been to minimise the effect of the Bill on the commercial market, a market which is of fundamental importance to the national economy. The commercial property market has been particularly hard hit in recent years. Investors might see that change as indicating that the Government intend to interfere in the market and could harm commercial property values. Now that that market is just starting to revive we do not want to do anything that will halt that recovery.
There has been a great amount of concern from the commercial sector to see the
risks to stability in the market acknowledged, to the extent that even the threshold of 10 per cent has not escaped criticism. But we feel that it is right that where the non‐residential element is small, limited perhaps to a flower—stall or newsagent, enfranchisement should be possible.
If the threshold were to be increased to 20 per cent, a great deal of commercial property would be affected, perhaps for the benefit of only a relatively small number of residential flats. The British Property Federation and the Property Advisory Group, which advise the Secretary of State on such matters, would he most concerned about any increase.
Research carried out by Westminster City Council indicates that a maximum of around 3 per cent of all residential flats would benefit. It is not hard to think of buildings which would be brought within the scope of enfranchisement; just four floors above a shop would be enough. But we should think also about the possible effects of enfranchisement on those shops. It is not necessarily enfranchisement itself that will cause damage but merely the threat of enfranchisement in future.
The noble Baroness is right that the evidence about block sizes is limited. The only systematic data that we have is from Westminster. However, the issue is also one of principle: that is, which property should the tenants be able to enfranchise, not merely how many properties would get in under different criteria.
The British Property Federation is quite right when it says that a building must be managed with proper regard to its most valuable parts. Where the current provisions allow enfranchisement with even a small commercial clement, in many cases that small element will be worth almost as much as the residential parts even though it represents only 10 per cent of the floor area. In some cases it may well exceed the value of the residential parts.
If the threshold is raised to 20 per cent, we will be permitting the enfranchisement of buildings where the greatest part of the value is contained in the commercial premises. One example of that is a building in Oxford Street. The shop on the ground floor takes up approximately 20 per cent of the floor area of the building as a whole, but represents over 75 per cent of the value. The price paid on enfranchisement will include the open market value for the shops. At 20 per cent commercial area, that
180
could easily amount to several hundred thousand pounds. Those ratios could be replicated even outside London and could be many times greater than the price paid for the flats.
The management of commercial property is a specialised field. Great care needs to be taken in mixed—use blocks to ensure that the commercial premises maintain their competitive position in the market. That may require a degree of commitment —both financial and managerial—which residential tenants, occupying the predominant part of the building in terms of area (but not necessarily in value), may be unwilling or unable to give. And it is likely that their priorities will be different from those of the commercial tenants.
My noble friend Lord Cockfield made an interesting observation and raised the question about the 80 feet limit. That is not a reference about which I know. I suspect that it comes more under planning restrictions than under these provisions. I have tried to make the case for the threshold remaining at 10 per cent I hope that my noble friend will agree with that. I believe that the case for allowing enfranchisement with the higher commercial content is not strong when weighed against the serious risks to the commercial property markets. More tenants will be entitled to enfranchise but will they be able to afford it? Moreover, those tenants are not excluded from the benefits of the Bill because now they will have the right to extend their leases instead.
It is a serious matter. I shall not accept any alteration to the current threshold. I hope that the noble Baroness will withdraw her amendment.
Baroness Hamwee: My Lords, as regards my attitude towards London, I did not say—I hope that the Official Report will bear this out—that London does not matter. I believe that it matters greatly. I am a councillor in a London borough. However, I was suggesting to your Lordships that not everything should be viewed as though London were the only issue.
The Minister makes great play of interference in the market, if commercial property is taken over. However, I believe that we are in danger of assuming that leaseholders who proceed to enfranchisement will do so in an amateur fashion. That will not be possible. A high degree of professionalism will be required in order to manage the process of enfranchisement and the running of a block once the leaseholders have enfranchised. They will have to form a company and take all the steps required under the Bill, and all the steps required to run a property effectively. I do not believe that that will be done by a couple of people meeting on an occasional Sunday morning. A more complex arrangement is required.
The Minister also stated that the British Property Federation referred to having proper regard to the most valuable parts of a property. That begs the question of how one defines value. In whose eyes is value defined? I suggest to noble Lords that the value to leaseholders of their own home is considerable and cannot merely be dismissed against the value of the commercial elements of the property.

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Equally, I accept that the commercial elements of the property have value. In the amendment I do not propose that that value should be reduced or ignored. The Minister gave the example of a property on Oxford Street in which 20 per cent of the ground floor represents over 75 per cent of the value. Of course it does. I doubt that we are talking about examples where there are four or nine floors—if one takes the balance of the five or 10 floors—of residential property above a floor of commercial property in Oxford Street. I do not believe that that is the issue.
Indeed, if the problems are as grave as the Minister paints, I wonder that none of your Lordships has put down a manuscript amendment reducing the 5 per cent to 1 per cent or 2 per cent He paints such a black picture that, if I believed him, I would fear for the commercial owners in the 10 per cent band.
I should have drawn your Lordships' attention at the start of the debate to one final point. I refer to the rejection last week at an earlier stage of the Bill of amendments which would have given the tenants the right, where necessary, to take over the management of their own blocks. Whether a block of flats with a commercial use on the ground floor is more or less open to management abuse is probably not an issue. Blocks where there is a commercial use may, to just the same extent as other blocks, have problems with management.
Where a tenant has extended his lease, as will now be possible, he may even be worse off with regard to management because the landlord will have little interest in looking after a building once the lease is extended when perhaps only a peppercorn rent is to be paid. Again, I do not suggest that every landlord is a bad landlord, but there are bad landlords. That is one of the issues to be addressed by the Bill.
I am sad that the Government have not seen fit to accept the change in the limit or to suggest that there may be any other approach to the matter. I do not find the Minister's statements convincing and, given that this is the last opportunity when we can address the issue, I wish to test the opinion of the House.
3.30 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 86; Not—Contents, 152.

Division No. 1

CONTENTS

Addington, L.

Dormand of Easington, L.

Ardwick, L.

Eatwell, L.

Attlee, E.

Ennals, L.

Aylestone, L.

Ezra, L.

Blackstone, B.

Falkland, V.

Bonham-Carter, L.

Fisher of Rednal, B.

Boston of Faversham, L.

Fitt, L.

Bottomley, L.

Foot, L.

Brimelow, L.

Gallacher, L.

Bruce of Donington, L.

Galpern, L.

Carter, L.

Geraint, L.

Castle of Blackburn, B.

Gladwyn, L.

Cledwyn of Penrhos, L.

Glasgow, E.

Clinton-Davis, L.

Graham of Edmonton, L.

Dean of Beswick, L.

Gregson, L.

Desai, L.

Grimond, L.

Donaldson of Kingsbridge, L.

Hampton, L.

Donoughue, L.

Hamwee, B. [Teller.]

182

Hanworth, V.

Peston, L.

Harris of Greenwich, L.

Plant of Highfield, L.

Hayter, L.

Ponsonby of Shulbrede, L.

Hilton of Eggardon, B.

Redesdale, L.

Hirshfield, L.

Richard, L.

Hollis of Heigham, B.

Robson of Kiddington, B.

Howie of Troon, L.

Rochester, L.

Jeger, B.

Sainsbury, L.

Jenkins of Putney, L.

Seear, B.

John-Mackie, L.

Sefton of Garston, L.

Kirkhill, L.

Serota, B.

Listowel, E.

Shackleton, L.

Llewelyn-Davies of Hastoe, B.

Shaughnessy, L.

Lockwood, B.

Stallard, L.

Longford, E.

Strabolgi, L.

Mackie of Benshie, L.

Taylor of Gryfe, L.

Marsh, L.

Thomson of Monifieth, L.

Mason of Barnsley, L.

Tordoff, L.

Mayhew, L.

Wallace of Coslany, L.

Merlyn-Rees, L.

Whaddon, L.

Molloy, L.

White, B.

Morris of Castle Morris, L. [Teller.]

Wigoder, L.

Williams of Elvel, L.

Mulley, L.

Williams of Mostyn, L.

Nathan, L.

Winchilsea and Nottingham, E.

Parry, L.

NOT-CONTENTS

Abercorn, D.

Faithfull, B.

Aberdare, L.

Finsberg, L.

Arran, E.

Fraser of Kilmorack, L.

Astor, V.

Gainford, L.

Auckland, L.

Gilmour of Craigmillar, L.

Banbury of Southam, L.

Gisborough, L.

Barber of Tewkesbury, L.

Goschen, V.

Belhaven and Stenton, L.

Granard, E.

Beloff, L.

Haig, E.

Bessborough, E.

Hailsham of Saint Marylebone, L.

Birdwood, L.

Blatch, B.

Hamilton of Dalzell, L.

Blyth, L.

Harding of Petherton, L.

Boardman, L.

Hardinge of Penshurst, L.

Borthwick, L.

Harmar-Nicholls, L.

Boyd-Carpenter, L.

Harmsworth, L.

Brabazon of Tara, L.

Harrowby, E.

Brentford, V.

Hayhoe, L.

Brougham and Vaux, L.

Henley, L.

Bruntisfield, L.

Hertford, M.

Butterworth, L.

Hesketh, L. [Teller.]

Cadman, L.

Hood, V.

Caithness, E.

Howe, E.

Caldecote, V.

Hylton-Foster, B.

Campbell of Alloway, L.

Ilchester, E.

Campbell of Croy, L.

Johnston of Rockport, L.

Carnarvon, E.

Kimball, L.

Carnegy of Lour, B.

Kinloss, Ly.

Carnock, L.

Kinnaird, L.

Cavendish of Furness, L.

Kintore, E.

Cawley, L.

Knollys, V.

Charteris of Amisfield, L.

Lauderdale, E.

Clanwilliam, E.

Lawrence, L.

Clark of Kempston, L.

Lindsay, E.

Colnbrook, L.

Long, V.

Constantine of Stanmore, L.

Lucas of Chilworth, L.

Cranborne, V.

Lytton, E.

Crawshaw, L.

McColl of Dulwich, L.

Cullen of Ashbourne, L.

Mackay of Ardbrecknish, L.

Cumberlege, B.

Mackay of Clashfern, L. [Lord Chancellor.]

Davidson, V.

De Freyne, L.

Macleod of Borve, B.

Denton of Wakefield, B.

Macpherson of Drumochter, L.

Derwent, L.

Marlesford, L.

Dormer, L.

Merrivale, L.

Dundonald, E.

Middleton, L.

Effingham, E.

Milverton, L.

Elibank, L.

Monk Bretton, L.

Ellenborough, L.

Monson, L.

Elles, B.

Montagu of Beaulieu, L.

Elliot of Harwood, B.

Morris, L.

Erroll of Hale, L.

Mottistone, L.

183

Moyne, L.

Saint Oswald L.

Munster, E.

Saltoun of Abernethy, Ly.

Nelson, E.

Seccombem, B.

Norrie, L.

Somerset, D.

O'Cathain, B.

Stedman, B.

Oppenheim-Barnes, B.

Strafford, E.

Orkney, E.

Strathclyde, L.

Orr-Ewing, L.

Strathmore and Kinghorne, E. [Teller

Oxfuird, V.

Palmer, L.

Sudeley, L.

Park of Monmouthm, B.

Terrington, L.

Pearson of Rannoch, L.

Terrington, L.

Peel, E.

Thomas of Gwydir, L.

Pender, L.

Torrington, v.

Peyton of Yeovil, B.

Vivian, L.

Porritt, L.

Wade of Chorlton, L.

Rankillour, L.

Wakeham, L. [lord Privy Seal.]

Rawlinson of Ewll, L.

Reay, L.

Westbury, L.

Renton of Kaimsthorn, L.

Wharton, B.

Renton, L.

Whitelaw, V.

Renwick, L.

Wilberforce, L.

Rodger of Earisferry, L.

Wise, L.

Renton, L.

Whitelaw, V.

Renwick, L.

Wilberforce, L.

Rodger of Earlsferry, L.

Wise, L.

Romney, E.

Wolfson, L.

St. Davids, V.

Wynford, L.

3.39 p.m.
The Lord Chancellor (Lord Mackay of Clashfern): My Lords, before I call Amendment No. 2, I should say that it should read:
"Page 5, line 38, leave out ("four") and insert ("six").
Lord Monson Lord Monson moved Amendment No. 2:
Page 5, line 38, leave out ("four") and insert ("six").
The noble Lord said: My Lords, I beg to move this amendment. As I promised at Report stage, I return to my efforts to protect the residential landlord whose family may have lived for many years, or even many generations, in a property which they had been forced, perhaps as a result of financial difficulties, to convert into flats and into one corner of which they have retreated.
It is fair to say that there was a fair degree of theoretical support for the principle from various quarters of the House the last time round. However, the theory has not always been converted into practice. For example, when the Bill was drafted the Government set an arbitrary limit of four flats for exclusion from enfranchisement, thereby, it is true, protecting residential landlords in converted three-storey or possibly four-storey houses in London and those who happen to live in compact houses in the country, but failing to protect residential landlords who have converted five-storey houses in London, of which there are many examples, or landlords of large, rambling houses in the country.
It is important to realise that since we last discussed the matter the whole position has been transformed by the Government's acceptance in principle a week ago of Amendment No. 32A in the name of the noble Baroness, Lady Hollis—now reborn, if I understand it correctly, as Amendment No. 14. That amendment will vastly increase tenants' security. From now on, all tenants will be eligible for lease extensions whatever the status of their landlords. Nobody will risk suddenly finding himself homeless as a result of the
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expiry of a lease. So the alleged safety net provided by the Government's limit of four flats is no longer needed.
The noble Lord, Lord Strathclyde, said last week:
"We aim to allow flat owners to take collective control of their property and manage it to suit themselves, not a remote commercial landlord".—[Official Report, 18/5/93; col. 1665.]
Quite, my Lords. It is difficult to quarrel with that objective. But we are not talking here about remote commercial landlords; we are talking about landlords who live on the premises and have just as much interest as the tenants in seeing that the property is well maintained. As the noble Lord, Lord Coleraine, pointed out on 11th May in supporting my amendment on this matter—and I think it is fair to say that the noble Lord and I have not often agreed in our deliberations on the Bill—if the Bill remains unamended, there is a danger that,
"the situation will be entirely reversed so that the lessees of one moment finish up as the landlords of the previous landlord".—[Official Report, 11/5/93; col. 1231.]
I believe that the amendment will help to minimise that danger.
It may be the case that some noble Lords—I would guess, for example, the noble Baroness, Lady Hamwee —would prefer a compromise amendment in which, for example, the limit remained at four flats where the landlord had owned a property for less than, say, 10 years, but was raised to six flats when he, his parents or grandparents had owned it for more than 10 or 15 years. I would have no objection to that whatsoever. But there is no point in trying to fine tune an amendment at this late stage. Provided that the general principle is accepted, fine tuning should be left to the other place. The House of Commons nearly always alters the amendments which we send it anyway, come what may. The other place should be given a chance to rethink the matter in the light of the totally altered situation brought about by the Government's acceptance of the amendment of the noble Baroness, Lady Hollis, last week.
Lord Gisborough: My Lords, I support the amendment. There are a number of rambling old houses which have been converted into a large number of flats. Many of those houses have architectural features which are quite unlike those of houses in towns. I can foresee that, where one has a number of tenants who are looking after their own flats, when it comes to mending the expensive gargoyles each one of them will say, "We are prepared to look to spend money for our flat but we are really not going to spend money for gargoyles. We would rather wait 10 years. We shall be dead then". Without this amendment (and even with it, in the case of some houses) even more houses will become derelict because nobody will bother to repair the outsides.
3.45 p.m.
Lord Renton: My Lords, I support the amendment. As my noble friend Lord Gisborough has pointed out, there are quite a number of fair-sized houses for which people simply cannot get staff these days. There should be encouragement to bring them into the housing market. There is no doubt that there is a demand for houses and for flats. If a landlord, the

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owner of such a house, is to be threatened with leasehold enfranchisement if he takes the excellent step of turning his house into flats, then he should not he discouraged.
I would have thought that very often four flats is likely to be the more feasible number in the sort of house that one has in mind. But if it is so large that it would lend itself to being turned into as many as six flats, there is even stronger reason for not discouraging the owner. Leaving aside the gargoyles, let us take the situation of quite an ordinary house, not a great historic mansion but a spacious house built, let us say, towards the end of the last century. We ought to encourage people, not discourage them, to convert such houses. The noble Lord, Lord Monson, has done a service by putting forward this amendment.
Lord Strathclyde: My Lords, we had two separate debates on this issue at Report. We discussed the amendment tabled by the noble Lord, Lord Monson, which would widen resident landlord exclusions. We also discussed at an earlier time an amendment tabled by the noble Baroness, Lady Hamwee, which narrowed the exclusion. I said then that I could understand why on the one side there are those who wish to widen the exclusion and on the other those who wish to narrow it. It is a question of balance, as so much of this Bill has been. I believe that we have that balance about right.
Our purpose in limiting the resident landlord exclusion to premises converted into not more than four units is to limit the exclusion to blocks that may once have been, or still are, the landlord's home. I cannot see the justification for excluding premises that were purpose-built as flats or those which contain a larger number of flats or separate units.
My noble friend Lord Gisborough made a point about architectural features, particularly in country houses. But that case is equally true for city areas. There are some very good and important architectural features within urban areas that are owned by people who are not resident landlords. They will be enfranchised. There is no reason why those architectural features should suffer, particularly in view of the fact that later on we shall come to amendments dealing with estate management schemes that seek to preserve the architectural and heritage features of various buildings.
My noble friend Lord Renton said that we should encourage people, if they wanted to, to split up their houses and lease them as fiats. He is quite right. That is why we already have an exclusion of fewer than four units. Furthermore, with a house which is perhaps larger, which would lend itself to being divided into up to six homes, the landlord can limit his leases to 21 years. He can raise the necessary finance on that because enfranchisement does not take place below 21 years. Or even more, he can go to the private rented sector and let his houses in that way. We want to encourage private landlords to divide their houses if that is appropriate; and I accept the arguments of my noble friend. But we have to draw the line somewhere. I believe that we have drawn it in the right place. It is a matter of judgment. If we were to extend the restriction to premises containing six flats, we would
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not only exclude some blocks from enfranchisement but there would be pressure for perhaps seven units or maybe even 10 units to be the limit.
I consider that the balance which we have reached in Clause 4 is about right. On that basis and with the explanation that I have given, I ask the noble Lord to withdraw his amendment.
Lord Monson: My Lords, I am very grateful to the noble Lords, Lord Gisborough and Lord Renton, for their valuable support. Once again the noble Lord, Lord Strathclyde, talked about blocks and purpose-built units. I am not talking about purpose-built units; I am talking about converted houses, houses which people may have lived in for generations. Moreover, he has not taken into account the altered situation that will arise when Amendment No. 14 is agreed to later this afternoon, as it surely will be. That will give much more protection to tenants. It will allow everybody to extend their leases and I believe that it will render superfluous the present tight restrictions imposed by the Government.
The Government are being very unfair on certain individuals, particularly those who live in the country. I am glad that the noble Lords, Lord Gisborough and Lord Renton, mentioned the maintenance of gardens. If I may say so, I think that the Government are behaving in a rather unconservative manner (with a large and a small letter "c").
If I had had the support of any other quarter of the House at all, I should have been sorely tempted to press the amendment to a Division. But as things stand, unless any noble Lord disagrees, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 [Exclusion for property transferred for public benefit]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 3:
Leave out Clause 5.
The noble Lord said: My Lords, in moving this amendment I shall speak also to related amendments in the grouping list. We now come to the amendments which we wish to make. This amendment will delete Clause 5 which concerns the exemption of certain properties transferred for public benefit from enfranchisement. It will replace it with a new clause. The House will remember that Clause 5 was introduced at Report by my noble friend Lord Cavendish with the support of noble Lords in various parts of the House.
Clause 5 received exactly a two-thirds majority when voted on during Report and, given the voting requirements elsewhere in the Bill, I have to say that in this case the Government will not be seeking to reverse the amendment. However, what the Government now seek is your Lordships' agreement to replace this clause with new clauses which achieve what my noble friend intended, without the drafting defects and in a way which fits more closely into the other provisions.
I should mention that the new clause to be inserted after Clause 12 has been constructed to enable the parties to k now what is going on at all stages. That has been done not only to enable tenants to find out

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conditional exemption from inheritance tax, but also to enable tenants wanting to exercise their rights to lease renewal to find out about applications for enfranchisement. I shall refer again to this matter when dealing with the amendments that we have tabled to give individual qualifying tenants the right to lease renewal.
As no doubt the House will be aware, my honourable friend the Financial Secretary to the Treasury had earlier agreed to move an amendment to the Finance Bill to provide that enfranchisement would not automatically trigger a review of designation. He made an announcement to that effect shortly before the Report stage of this Bill.
In view of the amendment that was voted upon which resulted in new Clause 5, and in view of the improving amendments that the Government now intend to make, whilst still accepting the principle of my noble friend's amendment, it will come as no surprise that the proposed amendment to the Finance Bill will no longer be necessary.
I hope that the House will be able to accept these amendments. I beg to move.
Clause 9 [Leases at a low rent]:
Lord Carnock Lord Carnock moved Amendment No. 4:
Page 10, line 10, at end insert:
("( ) where the lease was entered into on or after 1st April 1963 but before 1st April 1973, two-thirds of the rateable value of the flat on the appropriate date;").
The noble Lord said: My Lords, in moving this amendment, I speak also to Amendments Nos. 5 and 6. All the amendments are connected and the principal amendment is Amendment No. 6. My noble friend Lord Jenkin of Roding, who added his name to these amendments, is very sorry that he is unable to be present to speak in their support. I am also authorised to say that my noble friend Lord Prior is in favour of the amendments and has so informed my noble friend on the Front Bench.
In Committee and at Report I moved amendments which had a very similar effect to these amendments. So I now address the matter for the third time. I remind your Lordships that the Bill as drawn contains a test for the purpose of determining whether the financial terms of a long lease are such as to enable transfer of the major financial interest in a flat from the freeholder to the tenant. Where the major financial interest has been transferred, the tenant is regarded by ordinary people as the owner of the flat, especially as he will have paid a substantial premium for his lease. The test is known as the "low rent test". Those who own long leasehold flats and pass that test become qualifying tenants under the Bill.
This amendment is intended to assist the owners of modest flats who do not live in the fashionable parts of London. It provides that those with flats at a rent of £300 or less in London and £75 or less elsewhere, where the leases were granted after March 1973, will pass the low rent test without more ado. I am told that those flats comprise no less than 90 per cent of all leasehold flats, so that a very large number of people would be assisted by the amendment.
These amendments differ from my earlier amendments by providing that the test is to be applied at the commencement of a lease rather than at the date of enfranchisement. It is at that time that the intentions of the parties can most readily be ascertained. Moreover, the amendments are much better drawn than the earlier ones and are more consistent with the wording of other parts of the Bill.
The low rent test as it appears in the Bill suffers from a number of anomalies, of which the most serious affects flats on which the leases commenced during the period of 17 years from 1st April 1973 to 31st March 1990. There are a very large number of flats. The test presupposes that properties will be regularly revalued for rating purposes. Noble Lords will recall that that period was one of rampant inflation and that from 1st April 1973 the policy of revaluing property every five years for rating purposes was abandoned.
The low rent test provides that a flat let during that period must be at a rent which is not more than two-thirds of the rateable value. The Retail Prices Index increased by 421 per cent during that period and rents increased by amounts not significantly different. However, rateable values remained at the level fixed by the last valuation in April 1973. In consequence, a flat which would pass the test if let at the beginning of the 17-year period might not pass the test if let on similar terms at the end of that period. The defect in the test arises as a matter of arithmetic. Ever increasing rents are compared with rateable values which remain fixed.
It has been said that the two-thirds test has stood the test of time. We all stand the test of time, in our time. But how many of us stand the test of time beyond our time? The two-thirds test has had its time. With the abandonment of rating revaluations and soaring inflation it has become unreliable as a test, giving inconsistent and perverse results.
The amendment does not remove that anomaly, as an earlier amendment that I moved on Report would have done. But in the case of flats let at rents of £300 or less in London and at £75 or less elsewhere, the amendment would render this part of the test irrelevant, as flats with those low rents would no longer be required to comply with it.
The amendment will help owners of modestly priced flats to secure the enfranchisement which the Bill intends them to have; it will streamline the low rent test, circumvent some of the anomalies and make the law more intelligible and accessible to them. It is a sensitive area as expectations have been raised by party manifestos and fringe publications. If those expectations are not, in the event, fulfilled, there will be bitter disappointment which will rebound upon the politicians held to be responsible. The amendment will do much in the area of modest homes to avoid disappointment by streamlining the test and avoiding the worst anomalies.
I should add that there are widespread complaints of bad and oppressive management on the part of some landlords. On the other hand, there are many that are very good landlords. By smoothing the path to enfranchisement the amendment will be of some

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help in addressing the problem of bad management. As with the transfer of the freehold to tenants, the latter will be able to make such arrangements for the management of their flats as they think best. I beg to move.
4 p.m.
Lord Annan: My Lords, speaking from these Benches I suffer from a constitutional disposition which I am sure that stalwart members of political parties will despise; that is, the disposition to sit on the fence.
I have been impressed much more than I thought I would be by the strength of feeling and the cogency of argument advanced by the noble Lords, Lord Peyton of Yeovil, Lord Boardman, and many others who supported them. They argued that the sanctity of contracts is a principle of profound importance, and so it is. Commerce could not be conducted without it. I can well understand the dismay that those who own the big estates in central London feel when they are threatened by legislation that seems to ignore the benefits that they confer upon all citizens by keeping up, for example, the appearance of the great squares in Belgravia and elsewhere.
The contracts into which they entered with leaseholders were negotiated; the prospective purchasers were under no compulsion to sign. Why then, they argue, should the Government interfere and support what could only be termed an act of confiscation? It is perfectly true that the enfranchised leaseholders will have to pay to obtain the freehold of their property. But still the freeholder's property has been in some sense alienated.
As I see it, the Government have taken into account the strength of feeling on the issue among their supporters. They have set their face against many of the amendments moved in Committee and on Report. It is an intensely political Bill and it is understandable that the Government should take account of the strength of feeling of their Back-Benchers. That is why the Bill has been drafted so tightly. It is also understandable that quite often the Government have chosen to stand on the principle of the sanctity of contracts.
But there are contracts and contracts. A contract between two parties, one of whom is free to sign or not to sign what the other offers, is one thing. But there are contracts in which one party has virtually no power to bargain; he must sign on the dotted line or he has no dwelling. Those who live in leasehold flats have to sign a contract in standard form.
Conservative governments have long recognised that point. They recognised in the past that contracts between unequal partners may have to be abrogated by legislation. It is to the eternal credit of the Conservative Party that a century-and-a-half ago it forced through Parliament the Factories Acts. It did so because it recognised that it was nonsensical to talk of a child of nine down a mine or in a mill freely negotiating a contract with the owners.
Lord Shaftesbury fought a long and bitter battle in Parliament to convince all sides, and he had against him two famous orators—Lord Brougham and John
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Bright, great men of their day. Also naturally against him were the academic economists, such as Nassau Senior, who, I need hardly say, with all their expertise, were on the wrong side. Those people stood for the sanctity of contract. But it is to the Conservatives that we owe the Ten Hours Bill. I should perhaps add in deference to the noble Earl, Lord Russell—who I am sad to see is not in his place—that his great grandfather supported the Ten Hours Bill most vigorously. The principle of intervention on behalf of the unequal party to a contract is an established part of Conservative policy.
The Earl of Longford: My Lords, perhaps I may interrupt the noble Lord. He is not saying that Lord Shaftesbury was a representative Tory in those days, is he?
Lord Annan: My Lords, in many senses he was a representative Tory. He was a strong Christian, if I may point that out to the noble Earl.
There is another reason for accepting the spirit of the amendment. Our constitution, indeed our political life, is full of anomalies, as the noble Lord, Lord Carnock, pointed out. Most of us are content to live with anomalies but where an anomaly becomes positively damaging, the Government ought to intervene.
The low rent test, as it now stands, is such an anomaly. Owing to the property boom, as the noble Lord, Lord Carnock, pointed out, ground rents have risen by over 300 per cent while rateable values have remained frozen since 1973. In consequence great inequities are occurring. The mass of leaseholders with flats at the middle and lower end of the property market will, in consequence, be disenfranchised. Therefore if the spirit of the amendment is accepted, 90 per cent of all leasehold flats in the poorer parts of London would qualify. But the test would not affect the high value properties on the great London estates.
If the amendment is not accepted, it is not only the leaseholders who will be damaged, but also the Government. On the eve of the last general election the Prime Minister gave a firm commitment to give 750,000 leaseholders the right to enfranchise. Their hopes have been raised. There is a serious danger that in the end they will feel badly let down and politically that may prove to be immensely damaging to the Government. It will disenfranchise many leaseholders in several constituencies around London and elsewhere. I believe that was why the noble Lord, Lord Jenkin of Roding, spoke as cogently as he did at the Report stage of the Bill.
I believe that for the most part these leaseholders are natural supporters of the Government. Among many of the letters I received was one from a lady with four children who wished to move from her flat but could find no purchaser because by a mere £10 she failed to qualify on the low rent test as it then stood, owing, of course, to the astuteness of her landlord. Many of these landlords are in no way comparable with the landlords and their agents of the great estates. The Joseph Rowntree Foundation drew up a sample of bad landlords—and very damaging that report was. It was a tale of lessees who were unable to contact

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freeholders; flats in blocks being used as brothels; bad management leading to dry and wet rot so that each lessee was required to pay a gigantic sum as a service charge; and freeholders going into receivership, with hundreds and thousands of pounds worth of repairs being left undone. I would have thought that the Government would be worldly and wise enough to lose the support of such landlords—some of whom are farmers living overseas who have no vote—if in return they could get the support of the leaseholders.
Therefore, on the grounds of self-interest, morality and Conservative principle, I implore the Government to take this amendment seriously.
Lord Palmer: My Lords, surely, all of the anomalies of this Bill need to be ironed out. In light of the overall purpose of the Bill, failure to accept this amendment would be totally illogical. I too support the amendment.
4.15 p.m.
Lord Hamilton of Dalzell: My Lords, there is much that is arbitrary about the Bill. It takes property rights away from one section of the people and gives them to another. I consider that the Government were extremely foolish to promise 750,000 leaseholders that they would be able to enfranchise their leases, but that is well known. The Bill also produces arbitrary rules. Why is 21 years thought to be a long lease? Why have freeholders under the 1967 and 1974 Acts not been allowed injurious affection or a share in the marriage value? The reason is that, according to the Conservative Party and the Government, the Bill is based on the 1967 and 1974 Acts. To start to fiddle about with the only element of certainty that is in the Bill is absolutely crazy at this stage of the proceedings. We already have tribunals set up to decide what is the price of the leasehold, freehold and marriage value. One would have another body set up which would be a kind of racing authority that one thought had died years ago and had. Perhaps it would be a souvenir but I cannot believe that it would be very practical. House prices went up and rateable values did not follow them. Since then prices have come down. In my view when this Bill is passed, prices will go down further. It will be an incessant element of argument.
My noble friend Lord Coleraine has been a great supporter of the leasehold interest. He also supports the Law Society. I am not at all surprised. The only real winners from this Bill will be the lawyers who at £250 per hour will spend week after week arguing the case on either side before these tribunals. I certainly will not vote for this amendment because it is a bad thing.
Lord Williams of Elvel: My Lords, for several reasons we will support the amendment moved by the noble Lord, Lord Carnock, and supported by the noble Lord, Lord Annan. First, in our view it is the mildest amendment on low rent that we have had in the course of the passage of the Bill. We have tried to get rid of the low rent test altogether. That has not been acceptable either to the Government or to your
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Lordships, but any fall-back position that mitigates the damage that will be done by the low rent test will be supported by us.
Secondly, it is important to bear in mind that throughout the Bill the Government have made concessions to noble Lords behind them. For instance, in the debate prior to the Division that has just taken place, the noble Baroness, Lady Hamwee, argued persuasively in favour of a measure that would have extended the right of enfranchisement. There is no doubt about the effect of the amendment. I do not believe there is any difference between the Minister and myself on the matter.
The Government have also accepted a provision now in Clause 7 for a residency test. As I said in Committee, while we welcome the prohibition on companies and other artificial persons being enabled to enfranchise—in that sense I accept that there is a qualification of the enfranchisement possibility—nevertheless the residency test per se creates a problem. I am very much more doubtful about the residency test of 12 months.
In the light of all that, it seems to me that we have to strike a fair balance, as the Minister has said throughout the whole passage of the Bill. As the noble Baroness, Lady Hamwee, and the noble Lord, Lord Carnock, reminded us, the amendment now being discussed is not one that will damage the major land-owners of London, if they are the ones whom the Government wish to protect. It is for the poorer leaseholders that this amendment is designed. The noble Lord, Lord Carnock, has quoted some figures. In our view, it will considerably extend the right of people living outside London and in the poorer parts of London, not on the Grosvenor Estate in Mayfair, to enfranchise. It seems to me that that is a worthy balance to strike given that we now have the residency test in the Bill. For those reasons, we strongly support the noble Lord, Lord Carnock, and if he wishes to test the opinion of the House I can assure him that we will be in his Lobby.
Lord Kinnaird: My Lords, when is a contract not a contract? I do not speak as a Conservative, Liberal, or Socialist but as a Member of your Lordships' House. I believe it is right to say that this House is very much respected by the public. Years do not alter principles. Many years ago I was in the City as a member of the Stock Exchange. When I first joined my firm, the senior partner said to me, "Always remember that if you strike a bargain on the floor of the house that is our"—I repeat "our"—"word, and we are responsible. That word cannot be broken unless by mutual consent". Where would we all be if we just suited ourselves? I suggest that we would be very much up the creek with no paddle. However small a landlord one might be, how would one feel if, in a house or flat on assigned lease for a given number of years, the tenant said, "I am sorry. Circumstances have altered and I cannot afford to pay"? What will the contract be worth then? That is when a contract is not a contract.
I agree with the views expressed by noble Lords opposite. I say to the noble Lord, Lord Annan, that my grandfather was a very great supporter of Lord Shaftesbury. He had very wide views (if that is the way

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to put it), but he always felt it most important that a contract was one's word. Somehow we have to find a middle way through. Contracts must be kept. There is a saying which I heard the other day. Someone said, "If you cannot stay good in this life, in the long run you stay nothing at all". I do not know whether I have said anything that is of help but it is heartfelt.
Lord Renfrew of Kaimsthorn: My Lords, this amendment harmonises with the general intention of the Bill, which is to grant enfranchisement to a very large number of people. Without the amendment the Bill, it seems to me and to noble Lords who have spoken, will suffer a very serious defect. My noble friend who has just spoken has alluded to an important principle, a principle to which the noble Lord, Lord Annan, also alluded. But we also have another principle in our national life—that when there is a manifesto commitment which is followed by a general election and the Government are elected on the strength of that commitment, that is taken seriously by both Houses of Parliament. So though I very much value the observations which my noble friend has just made, there is another principle of equal importance there which is the principle of the election of a government—in this case a Conservative Government—following a manifesto commitment. That is why I think that the amendment would most appropriately be carried. I shall support it.
Lord Gisborough: My Lords, I make no apology for returning to fundamentals at this late stage in the debate. But when certain principles established in this society over the centuries are being trampled underfoot in the name of democracy and for electoral expediency, as occurred before the last election, protests should continue to the last. Both the right to hold property or proper compensation and the sanctity of contract are under threat. The remarks of Ministers during the course of the Bill will surely be quoted in the future by other governments wishing to expropriate property. The Bill is succeeding where Marx failed in the demolition of property rights by which the owner finds his legally binding contract torn up but not to the benefit of the state but of another individual.
Ever since the last minute, vote catching inclusion of this Bill in the manifesto (which is what it was), it has been clear that the principle of the Bill would remain intact—and no amount of logic has been able to prevent that. However, now the Government wish to extend it further still. While the begging bowl is out there is never a shortage of hands jostling around for their share of a bit more. This amendment does just that. It seeks to widen the scope of enfranchisement still further by retrospective inclusion of yet more properties within the low rent definition. By raising the low rent threshold the amendment will be sweeping aside yet more contracts between two parties, signed in good faith, in an enthusiasm for extending the enforced sale of assets to many more properties. The question is why. Why should the low rent test be raised by £50?
The noble Lord, Lord Carnock, may well say that I am misinterpreting his amendment. The amendment,
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he may say, refers to flats, for which such low rent legislation linked to enfranchisement does not yet exist. He is right to a point. But the real issue is not flats but houses. He would have difficulty in persuading me that a £300 limit for flats, as proposed in the amendment, would not in time apply to houses as well. We all know that it would. It would lead to the definition of low rent rising from £250 to £300 for houses in London, with the result that many more houses in the capital would be able to be enfranchised by their leaseholders.
Yet what is the justification? When the leaseholders bought their leases, were they also naive? Were they so badly advised by their lawyers that they did not realise that their ground rents were being set at a level which took them outside the scope of the 1967 legislation? Of course not. The leaseholders went in with their eyes open. They willingly signed up to leases which they need not have done on conditions which they most certainly understood and the cost of which would most certainly have reflected the fact that they were not enfranchiseable. The freeholders thought that they, too, understood the conditions. The cost of the leases reflected the number of years the lease had to run, which in theory might otherwise have been paid yearly by annual rent. It also reflected demand, and, of course, many may historically seem to have been cheap when compared with current rents.
Retrospective application of the criminal law would rightly cause public uproar. It is all too easy to assume that, because it is property and not personal rights that we are concerned with here, such retrospection is in some way acceptable. The principle is the same. It should not be possible to disadvantage someone in law today for their actions in the past. Freeholders already face the enforced sale of substantial assets. Are we now to move the goalposts still wider, providing a windfall for unpresuming tenants and an even greater blow to unsuspecting freeholders?
Lord St. John of Bletso: My Lords, I take issue with the noble Lord, Lord Gisborough. It is not a matter of expropriation. Fair valuations will be granted to landlords. I certainly support the amendment which simply provides for a safety threshold for the low rent test. As the noble Lord, Lord Williams, mentioned, it is not a matter of doing away with the low rent test. There appears to be a major defect in the low rent test.
Clearly, the relationship which ground rents had with the rates of properties in the 1970s is totally different now where the ground rents have gone up, as the noble Lord, Lord Carnock, has mentioned, by almost 400 per cent in many cases and ground rates have remained static since 1973. I understand that almost 90 per cent of leasehold flats have ground rents of less than £300 a year. As the noble Lord also pointed out, the amendment is clearly aimed at leasehold flats at the lower and middle ends of the property market. It would greatly simplify procedures and, if not agreed, could result in many leaseholders being unjustifiably disenfranchised.
In his reply on Report to Amendment No. 17 the Minister asked the noble Lord, Lord Carnock, whether he could propose something better. I would

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say that something better has been proposed in this amendment now that it has been redrafted. For that reason I give it my support.
Lord Wolfson: My Lords, I was going to ask my noble friend Lord Kinnaird before he sat down whether he would not agree that Karl Marx was advocating state expropriation of property and not the democratisation and enfranchisement of property with adequate compensation. My noble friend Lord Carnock and the noble Lord, Lord Annan, put their case extremely well—indeed, brilliantly. The amendment removes an anomaly from the Bill that would otherwise require a further Bill in a few years' time. I support it and I hope that my noble friend the Minister will advocate doing so as well.
Lord Boardman: My Lords, I oppose this amendment for the same reason that I have opposed a number of other provisions that were brought forward in the Bill. I oppose it on the one ground that a contract entered into is something that should not be wrecked or altered by government unless there is some very real public interest to justify it.
The noble Lord, Lord Annan, quite rightly referred to a number of contracts that had been varied by government. But in each of the ones to which he referred there was a very large public interest at stake; the Factories Acts, for example. Even back at the Second Reading of this Bill, when I made the same point, I accepted that in the case of residential tenancies it could be said, although it had been found by the European Court of Human Rights rather marginally so, that the need to safeguard residents perhaps justified an intervention into the contract. But the contracts that we are talking about here do not have a public interest at stake.
This amendment refers to leasehold contracts which have been acquired since 1963. My noble friend Lord Carnock referred to the consequence of inflation which has been charged on ground rents since that date. Indeed, the noble Lord, Lord St. John, referred to a multiplication of 400 per cent Yes, indeed, my Lords, but people who have bought their flats since 1963 have had the benefit of all that inflation in the value of the asset they acquired—the flat they acquired for a set rent for a fixed period of years. No prospect was ever given to them until the last election that they would be able to enfranchise. It was a bonus that they were given at the last election. Because some have been given a bonus in the election, rightly or wrongly, why should it be said to be most unjust that the bonus should not be spread widely around? I ask noble Lords to think carefully of the consequences which will be set up if every contract entered into were to be varied by government because it seemed a little bit harsh on one party to that contract and that the other should be sacrificed in order to achieve the so-called balance.
One can think right across the board and, for example, of those who bought 31 per cent War Loan way back for a good national purpose. Over the years people have been asking whether those might be redeemed. Quite rightly, the Government said no
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because people made a bargain and they must stick by it. The same applies entirely with the leasehold contracts. There can be no merit or justification for the kind of variation proposed.
The noble Lord, Lord Annan, referred to the fact that contracts are contracts. I agree. He then went on to suggest that even though contracts are contracts, they are capable of being varied. Yes, if there is a clear public interest or social purpose for so doing. He also referred to the likelihood of the Government listening to and perhaps supporting their Back-Benchers. I welcome that. I remind my noble friend on the Front Bench of the occasion in the course of this Bill when the overwhelming majority of Back-Benchers on this side of the House voted against a particular government proposal. My noble friend did not listen to those objections on that occasion. I hope that on this occasion he will maintain the balance which he seeks to get in not accepting the amendment.
The noble Lord, Lord Williams, referred to the amendment as being one which is not damaging to the larger landlords. So be it. I have made it clear throughout on the number of occasions that I have intervened during the passage of this Bill that I am not a spokesman or speaking for a large number of landowners. Their interests will have suffered severely under the Bill. I have spoken on matters which will affect their interests just as I have made it clear that they affect the interests of small freeholders of whom there are many more up and down the country than there are landlords of the large London estates. It is their interests just as those of the larger landlords, which we should protect and their recognition of the sanctity of contract.
Reference has been made to bad managers by the noble Lord, Lord Annan, and my noble friend Lord Carnock. There are many provisions which enable tenants who have bad management of their flats to do something about it. They might believe that they will get better management by freeholders taking on the management of large blocks of flats and fighting among themselves as to who will pay for the lift to travel to the 15th floor when a person on the ground floor does not think very much of the idea. That kind of problem is nothing compared with those which will arise with management today. Much of the management is very good, but some of it is very bad. However, I do not believe that this measure is going to improve that management. I say with great sorrow that I believe in many ways that it will open up a form of Rachmanism which is to be deplored and regretted. I hope that will not happen, but there is a real danger.
I understand the motivation for this amendment. There is a wish to see fairness all round, but to do so would mean bringing an inconsistency into the Bill which applies to flats. It would bring in a separate yardstick to that which applies to houses. To draw a line somewhere may today seem fair, but tomorrow it may seem unfair. It is a measure which would be highly regrettable and I oppose the amendment.
4.30 p.m.
Lord Strabolgi: My Lords, the noble Lord, Lord Boardman, has spoken about an extra bonus with enfranchisement as if it were a present in a Christmas stocking. As a matter of fact, enfranchisement has to be at the market rent and the money has to be found for that. He also spoke about the sanctity of contract. The noble Lord has made that speech several times before during the passage of the Bill. I know that he feels strongly, as he is entitled to do. I have also made speeches about this from the other side, and I do not intend to repeat them except to say that many of the tenants were obliged to enter into long-term leases because they were forced to do so under very unfair arid very often unpleasant conditions caused by bad landlords who distorted what was the old-fashioned renting market which was working very well indeed, in order to make a lot of money for themselves in a very quick time—and many of them did so. I commend this amendment, which I fully support. It has put right many anomalies, and I believe that it will also greatly improve the Bill, which I support.
Baroness Hamwee: My Lords, I agree to this extent only with the noble Lord, Lord Hamilton of Dalzell —that is to say, legislation which gives scope for the lawyers to manipulate it is not good legislation. At an earlier stage, I referred to publicity which I had seen for a seminar for solicitors which suggested that this Bill should be called the Practice Development Bill because there is so much scope in it for lawyers to use it as they wish for their clients, whoever they might be.
On previous occasions, I have also referred to leases which appear to be widespread in London and which, for instance, provide that they fall outside the scope of the 1967 Act. That is because the rent is £1 more than the amount at any given time for the lease to fall within the scope of the Act. That is the extent to which I agree with the noble Lord.
The question of the sanctity of contract has been so well dealt with by the noble Lord, Lord Annan, that it is difficult to follow. By not repeating his arguments, I hope that the noble Lord and others will not think that those of us who share views are not supporting them. It is simply difficult to find such good words in which to express the argument. However, at the risk of repeating myself, perhaps I may make a point which I believe I made at Second Reading; namely, that to many people freeholds have simply not been available if one is trying to seek a particular property within a geographical area, and for the financial reason that the amount that one has available to spend is limited. There can be very few noble Lords who have not attempted to buy a modest property in the London area in the past 20 years or so. When I was first able to move from a weekly tenancy to something a little more ambitious, there was no hope at all of buying a freehold.
The arguments which we have heard against this amendment seem to be against the Bill and not against the amendment. We have gone back by about two months in the points which have been made today.
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The noble Lord, Lord Carnock, does not appear to me in the unlikely reincarnation of Marx. We on these Benches will be delighted to support his amendment.
Lord]Peyton of Yeovil: My Lords, I should like to express a t least a measure of agreement with the noble Baroness. I believe that many of the arguments against this amendment have been more concerned with the Bill than the amendment itself. What the noble Lord, Lord Annan, said certainly sharpened the anxiety which I feel about this amendment and the dangers inherent in opposing it. I have never concealed my dislike of the Bill. I fear that the Government too readily interfere and lack the wisdom which would justify their actions.
I also feel that they have been a little careless with such things as contracts and charities. I was also much concerned to find that on an aspect such as the main home principle they went so much further than they were obliged to by their manifesto commitment. However, that has now been done. I am concerned and worried now that if they do not accept this amendment, they then might find themselves in breach of their manifesto. They might also be creating considerable anomalies. I have not got any great enthusiasm for the amendment, but I would find it very difficult to vote against it. As I said at the beginning of my comments, I am very much impressed by what the noble Lord, Lord Annan, said about self-interest, morality and Conservative principle. I do not think that I have ever found myself in conflict with any of those three principles when voting as I have on other amendments to this Bill; but I think that there is some danger now.
Lord Finsberg: My Lords, there is a problem here. First, there is clearly nothing in the amendment that goes outside the manifesto commitment. Secondly, my noble friends Lord Gisborough and Lord Boardman have fallen into the trap of believing that that manifesto commitment was a last minute event. Had they studied the debate in the other place several months earlier, they would have known exactly what was coming. As one who took part in that debate, I can say that the Government have almost come up to expectation on this part of the Bill, but not quite. However, nothing that this amendment seeks to do would take us outside that manifesto commitment.
I spent many years in the other place fighting for the rights of tenants against bad landlords, and as a Minister I was able to make many changes to legislation to look after tenants—frequently against the advice of civil servants. I detect a slight whiff of, "Well, Minister, leave things alone. Don't go quite so far on this occasion"—just a whiff, but I have sufficient confidence in my noble friend the Minister to believe that he will be swayed by the balance of argument that he has heard here today.
It is false to say that the contracts entered into in this sort of arrangement are contracts between equal parties. I merely have to mention the name "Freshwater". Most of your Lordships will know what fairness there was in those contracts. The option for tenants was not, as my noble friend said, to take the lawyers' advice and do nothing, but to be out on

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the streets. It was as simple as that. I certainly have not spent 45 years working in the Conservative Party as a Minister and a party vice-chairman to let people down, and I do not believe that the Government want to let people down.
So why at this late stage is it necessary to do something about this matter? My honourable friend Mr. Fishburn, the Member for Kensington, who followed my friend Sir Brandon Rhys Williams in that seat, knows the London scene very well and he has said that if an amendment such as this is not passed, whole swathes of London will be disenfranchised. That will affect the people who read very simply what was said in the Evening Standard and in the manifesto and who believed that we would keep our word, as I am sure that we should do and as I am sure that we wish to do.
Why is this different? Why has this problem arisen? My noble friend Lord Carnock has already told your Lordships some of the reasons, but perhaps I may take the example of a lease that was granted in 1973. The ground rent of the flat was £50 and its rateable value was £270. For a lease granted in 1989, the ground rent for a similar flat had risen to £200, while the 1973 rateable value remained at £270. So, under the current tests, flats with leases granted in the 1970s would qualify but exactly similar flats with leases granted in the 1980s would not, and flats with rents as low as £100 or £200 per year would be disenfranchised. I cannot believe that that is the right thing to do.
Finally, certain houses were able to enfranchise as a result of the 1967 Leasehold Reform Act. It is perfectly true, as my noble friend Lord Peyton has already said, that most of the arguments have been against the principle of the Bill. That stage is over and we now want, I suggest, to see on the statute book a Bill that will be fair and will redound to the credit of this House because we have amended and improved the Bill which came from another place. Therefore, there is a history of enfranchisement and low rent tests for houses, but the enfranchisement of flats was first announced in July 1991 and the low rent test was subsequently announced in March 1992. There is therefore no history of enfranchisement or of the low rent test with regard to flats. I believe that the case is overwhelming and unanswerable. I hope very much that my noble friend will be prepared to accept the amendment or to say in the usual terms (which he, I and many others have used) that he will put it more tidily and let the draftsmen deal with it in another place but that he accepts the principle.
4.45 p.m.
Lord Clark of Kempston: My Lords, I wonder whether I might suggest to my noble friend on the Front Bench that this amendment should be resisted. Many of your Lordships have spoken about the sanctity of contract, including the noble Lord, Lord Annan, who then demolished his own argument by saying that there are unequal contracts and citing the Industries Acts. The factory Acts were not about contracts. They were Acts of Parliament against unscrupulous employers. They had nothing to do with
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the law of contract. My noble friend Lord Carnock seemed to think that all the lessees had paid huge premiums. But when they paid the premiums and signed the lease, they knew what they were signing.
I am not arguing the merits or demerits of the Bill because I think that I have already made the House well aware of my feelings on the Bill as a whole, but I think that the manifesto commitment, which has been referred to continuously, was not made in terms as specific as many people are trying to make out. In fact, it was a commitment to extend home ownership. That is what was in the manifesto. Of course, we have changed some of the provisions, such as those relating to residence (in an amendment that was moved by my noble friend Lord Boardman). However, I think that the manifesto commitment has been exaggerated. I agree very much with my noble friend Lord Hamilton that interpreting the Bill will be a lawyers' paradise. My noble friend Lord Kinnaird has also spoken about the sanctity of contract.
However, I urge my noble friend the Minister to bear in mind the tremendous amount of feeling on this matter not only here but in another place. My noble friend Lord Finsberg mentioned Dudley Fishburn, the Member for Kensington. He could also have mentioned Sir John Wheeler, who also represents part of Kensington and thus has a huge electorate of flat owners. Apart from the Minister of State and those two Members of Parliament, I find it difficult to find many of my former colleagues in the House of Commons whose hearts are really in this Bill. I hope that my noble friend will not accept the amendment because it extends the Bill as presently drafted and, while many of us do not like the Bill as presently drafted, let us not make it worse.
Viscount Bridgeman: My Lords, at this late stage perhaps I may return to the likely flawed operation of Clause 9(1) if it is left unamended. The low rent and two-thirds tests depend on the same relationship between the two as that which they bore in 1973. For reasons quite unconnected with this Bill (in particular because of the replacement of the rating system, first, by the community charge and then by the council tax) rateable values have remained unchanged since 1973, as we well know, while ground rents have risen sharply. Noble Lords have referred to the hardship which bears particularly on the lower and middle parts of the sector. It is not a problem primarily for the more expensive flats in west London where ground rent is almost invariably substantially less than two-thirds of the rateable value and where, therefore, the test does not have an effect one way or another.
This amendment would bring back into the enfranchisement net the vast majority of long leasehold flats which would otherwise be disenfranchised as the Bill now stands, including a regrettable number of badly managed properties, to which the noble Lord, Lord Annan, referred. The two-thirds test is an established yardstick in landlord and tenant legislation. The low rent test clause has remained unaltered through the course of the Bill's passage through your Lordships' House. The amendment seeks simply to rectify an unintended

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arithmetical anomaly which frustrates the proper working of the clause. I very much hope that my noble friend the Minister will feel able to accept it.
Lord Strathclyde: My Lords, yet again we come to the important issue of who should benefit from the provisions of this Bill. It is fundamental to the purposes of this Bill that enfranchisement and lease renewal rights should be limited only to those tenants who are unequivocally property owners. We are not here to give any right to buy for private-sector renting tenants. The private rented sector is an important part of housing provision for landlords and tenants, and this Government will not jeopardise its recovery.
Giving tenants of any sort the right of enfranchisement or of lease renewal against the wishes of a landlord is, as I have often acknowledged, a very serious step. It is not one which we should take lightly, and we should not be prepared to extend the criteria of eligibility without the absolute conviction that such action was both necessary and right. This is why I, perhaps surprisingly, welcome the opportunity to debate yet again the issue of the low rent test. I found the comments which your Lordships made today, in Committee and on Report of great help. In particular, I thank my noble friend Lord Carnock and the noble Lord, Lord Annan, who made an important speech today. It contained the right mix of philosophy, politics and pragmatism.
Your Lordships voted decisively in Committee to retain the low rent test. On balance, that must be right. The test ensures that rights which involve compulsory purchase are given only to those tenants who have not only received the major part of the equity of their property from the landlord but also do not benefit from the rent Act or housing Act tenancy protection regimes. This amendment, though, asks us to look again at the construction of the test to see whether it should be changed.
I explained previously my reluctance to interfere with this well-established test. It appears in roughly the same form in several important pieces of landlord and tenant legislation. Property transactions rely on legislation to give a dependable and predictable basis for the conduct of business. This predictability is vital to the stability of the property market. Where a landlord sells a lease and a lessee purchases it, they are both aware from the precedent of legislation of the nature of that lease, including an understanding of whether the effective ownership has been transferred. It is quite legitimate that some leases should be designed not to transfer ownership.
I listened with great care to arguments in favour of the amendment put forward by my noble friend Lord Carnock and other noble Lords on all sides. I understand the thrust of his argument and that of my noble friend Lord Finsberg; that the property boom of the 1980s created a price inflation in genuine ground rents which has not been reflected in rateable values as these have been fixed since the final revaluation of 1973, which was before the great inflation surges.
I still believe, however, that the low rent test should remain unamended to protect proper property transactions which were undertaken with the precedent of the test in mind. I do not feel reassured
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that leases let between 1973 and 1990 with ground rent of under £300, representing more than two thirds of the rateable value were necessarily let with the intention of transferring ownership. I find it difficult to double guess the intentions of landlord and lessees when these leases were granted. I remain committed to ensure that our provisions do not affect quite proper transactions which were undertaken with no intention to transfer the bulk of equity.
I cannot therefore agree to the addition of a new limb to a well-established test. It would unnecessarily complicate the test and disturb the workings of the well-established rules of the property market. We have never denied that the low rent test is a difficult and contentious matter. We decided on balance to retain it in its current form. Your Lordships' House and the other place have not been persuaded that we were wrong and the noble Lords moving this amendment today have not succeeded in making a case otherwise. In the light of that, I ask the noble Lord to withdraw his amendment.
Lord Carnock: My Lords, I am overwhelmed by the strength of support that has been given to my amendment. It was given with great conviction, great knowledge and great experience. There can be no question but that a Division must take place on the amendment. However, I first wish to comment on the sanctity of contract.
We are a trading community. Without trade, this country would be nothing at all. That is recognised in our law of contract and it is recognised in the City where your word is taken as your bond. But there are contracts and contracts. Mercantile contracts such as those which exist in the City are sacred. However, as regards contracts which one signs on the dotted line and in respect of which there is no antecedent negotiation, a different sanctity applies. It is a sanctity of a lower order because there is no negotiation.
I can give your Lordships a good example of that. I suggest that your Lordships refer to contracts for the supply of gas. It is recognised that gas contracts are given by a monopoly which must be controlled by a regulator. Therefore, the contractual element in the gas contract is under control. There are what are known as contracts of adhesion, and the French in particular have made advances in that area. They are contracts which one signs on the dotted line and they have no antecedent negotiation. One party is almost always in a greatly superior position to the other party.
I commend the amendment to the House.
4.56 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 131; Not-Contents, 131.
The Lord Chancellor: My Lords, there have voted Contents, 131; Not-Contents, 131. There being an equality of votes in accordance with Standing Order No.54 which provides that no proposal to amend the Bill in the form in which it is before the house shall be agreed to unless there is a majority in favoru of such amendment, I declare the amendment disagreed to.
5.6 p.m.
[Amendments Nos. 5 and 6 not moved.]
Visconut Goschen Visconut Goschen moved Amendment No. 7:
After Clause 12 insert the following new clause:
Right of qualifying tenant to obtain information about other matters
(".—(1) Any notice given by a qualifying tenant under section 12(4) shall, in addition to any other requirement imposed in accordance with that provision, require the recipient to give the tenant—

(a)the information specified in subsection (2) below; and

(b)(so far as known to the recipient) the information specified in subsection (3) below.

(2)The information referred to in subsection (1) (a) is—

(a)The whether the recipient has received in respect of any premises containing the tenants flat—

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(i)a notice under section 13 in the case of which the relevant claim is still current, or

(ii)a copy of such a notice; and

(b) if so, the date on which the notice under section 13 was given and the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to that claim.

(3) The information referred to in subsection (1) (b) is—

(a)whether the tenant's flat is comprised in any property in the case of which any of paragraphs (a) to (d) of section (Effect on initial notice of designation for inheritance tax purposes and applications for designation)(2) is applicable; and

(b)if paragraph (b) or (d) of that provision is applicable, the date of the application in question.

(4) Where—

(a) within the period of six months beginning with the date of receipt of a notice given by a tenant under section 12(4), the recipient of the notice receives in respect of any premises containing the tenant's flat—

(i)a notice under section 13, or

(ii)a copy of such a notice, and

(b) the tenant is not one of the qualifying tenants by whom the notice under section 13 is given,

the recipient shall, within the period of 28 days beginning with the date of receipt of the notice under section 13 or (as the case may be) the copy, notify the tenant of the date on which the notice was given and of the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to the relevant claim.
(5) Where—

(a)the recipient of a notice given by a tenant under section 12(4) has, in accordance with subsection (1) above, informed the tenant of any such application as is referred to in subsection (3) (b) above; and

(b)within the period of six months beginning with the date of receipt of the notice, the application is either granted or refused by the Commissioners of Inland Revenue or is withdrawn by the applicant,

the recipient shall, within the period of 28 days beginning with the date of the granting, refusal or withdrawal of the application, notify the tenant that it has been granted, refused or withdrawn.
(6) In this section "the relevant claim", in relation to a notice under section 13, means the claim in respect of which that notice is given; and for the purposes of subsection (2) above any such claim is current if—

(a)that notice continues in force in accordance with section 13(11), or

(b)a binding contract entered into in pursuance of that notice remains in force, or

(c)where an order has been made under section 24(4) (a) or (b) or 25(6) (a) or (b) with respect to any such premises as are referred to in subsection (2) (a) above, any interests which by virtue of the order fall to be vested in the nominee purchaser have yet to be so vested.").

The noble Viscount said: My Lords, the amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Clause 13 [Notice by qualifying tenants of claim to exercise right]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 8:
Page 15, line 16, leave out paragraph (b) and insert:
("(b) must be given by a number of qualifying tenants of flats contained in the premises as at the relevant date which—

(i)is not less than two-thirds of the total number of such tenants, and

(ii)is not less than one-half of the total number of flats so contained;").

The noble Lord said: My Lords, in Committee we discussed an amendment proposed by my noble friend
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Lord Renton dealing with the number of tenants needed to give the initial notice. Many noble Lords expressed anxiety that the provisions in the Bill could allow a minority of four-ninths to trigger enfranchisement. I agreed to bring back an amendment at this stage of the Bill.
The qualifying requirement remains that two-thirds of the tenants of flats in the block must be qualifying tenants; that two-thirds of those qualifying tenants must give the initial notice; and that at least half of the qualifying tenants who give the initial notice must satisfy the residence condition. The amendment is intended to prevent the situation occurring where each of the two-thirds thresholds is only just reached, making enfranchisement possible by less than half the total number of tenants of flats in the block.
The amendments to Schedule 3 are necessary consequential amendments.
I beg to move.
Lord Renton: My Lords, I thank my noble friend the Minister for the attention that he has given to what I consider to be an important matter. Under an earlier clause, only two-thirds of tenants could become qualifying tenants. Under what is now Clause 13, two-thirds of those qualifying tenants would have the last word. As two-thirds of two-thirds is four-ninths only, it became clear that a minority of tenants could rule the roost and dictate to the majority. That was plainly wrong, and noble Lords agreed with that.
Perhaps I may turn to the amendment. I see that the second two-thirds that arises under Clause 13 has been retained. The essence of the matter is in paragraph (b) (ii) which reads:
"is not less than one-half of the total number of flats so contained".
We have the essential proposition that the occupants of at least half the building must agree to leasehold enfranchisement before it can take place. That establishes an important principle. I am grateful to my noble friend. I hope that your Lordships will accept the amendment.
On Question, amendment agreed to.
Clause 21 [Reversioner's counter-notice]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 9:
Page 28, line 31, at end insert:
("( ) Schedule (Information to be furnished by reversioner about exercise of rights under Chapter II) (which imposes requirements as to the furnishing of information by the reversioner about the exercise of rights under Chapter II with respect to flats contained in the specified premises) shall have effect.").
The noble Lord said: My Lords, I shall speak also to the other amendments included in the group. The group is of course our response to my undertaking given on Report to change the Bill so that all qualifying tenants may elect to purchase a new lease, whether or not the building containing their flat is eligible for collective enfranchisement. I said then that the concept is simple but that the drafting would he complex. We needed to take account of the interaction between the individual right and the collective one. Although Amendment No. 12, which simply removes subsection (2) (c) of Clause 38, is the key one, I fear

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that we need another eight separate amendments, including a complete replacement of Clause 53 and a new schedule after Schedule 3.
I hope that the House will be relieved if I do not discuss the drafting in great detail. What we seek to achieve with the amendments is a situation where a qualifying tenant can buy a new lease at any time, subject only to the proviso that his application does not interfere with a claim regarding collective enfranchisement.
That means that a claim for a new lease will be suspended when an initial notice is given, whatever the stage it has reached. There is provision for reactivating it, within strict time limits, when the initial notice is withdrawn, ceases to have effect, or when a contract or vesting order arising from the initial notice is completed or executed. The position of the tenant—who may of course also be participating in the enfranchisement—is protected if his lease expires during the suspension of his claim.
The amendments will give effect to your Lordships' wishes to ensure that the individual right to buy a new lease is available, whether or not the collective right of enfranchisement applies to the particular block of flats. We have designed them so that the two separate rights can work smoothly together. I commend the amendment to the House. I beg to move.
Lord Strabolgi: My Lords, as I moved an amendment in Committee which sought the same aim, I should like to say how grateful I am to the Government for bringing forward the present amendment. I think that it will bring relief to a great many leaseholders who will, for various reasons, not be able to enfranchise and would have been left in a very difficult position by the end of the century. I believe that the amendment will greatly improve the Bill and that it will make it even better. I am most grateful to the noble Lord for the great interest that he has taken and for ensuring that the amendment has been given effect.
Baroness Hollis of Heigham: My Lords, perhaps I may, formally, from these Benches warmly welcome the amendments. I do not think that that will necessarily come as a surprise to the Minister. I should also like to thank him for the way that he has met the very real concern of your Lordships from all sides of the House for those who cannot enfranchise but who will also be unable to extend. We vigorously welcome the amendments. We believe, in part because of the amendments, that the Bill will leave this place in a better form than when it arrived.
On Question, amendment agreed to.
5.15 p.m.
Viscount Goschen Viscount Goschen moved Amendment No. 10:
After Clause 30, insert the following new clause:
("Effect on initial notice of designation for inheritance tax purposes and applications for designation
(".—(1) A notice given under section 13 shall be of no effect if on the relevant date the whole or any part of

(a)the specified premises, or

(b)any property specified in the notice under section 13(3) (a) (ii),

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is qualifying property.
(2) For the purposes of this section the whole or any part of the specified premises, or of any property specified as mentioned in subsection (1), is qualifying property if

(a)it has been designated under section 31(I) (b), (c) or (d) of the Inheritance Tax Act 1984 (designation and undertakings relating to conditionally exempt transfers), whether with or without any other property, and no chargeable event has subsequently occurred with respect to it; or

(b)an application to the Board for it to be so designated is pending; or

(c)it is the property of a body not established or conducted for profit and a direction has been given in relation to it under section 26 of that Act (gifts for public benefit), whether with or without any other property; or

(d)an application to the Board for a direction to be so given in relation to it is pending.

(3) For the purposes of subsection (2) an application is pending as from the time when it is made to the Board until such time as it is either granted or refused by the Board or withdrawn by the applicant; and for this purpose an application shall not be regarded as made unless and until the applicant has submitted to the Board all such information in support of the application as is required by the Board.
(4) A notice given under section 13 shall cease to have effect if, before a binding contract is entered into in pursuance of the notice, the whole or any part of—

(a)the specified premises, or

(b)any property specified in the notice under section 13(3) (a) (ii),

becomes qualifying property.
(5) Where a notice under section 13 ceases to have effect by virtue of subsection (4) above—

(a)the nominee purchaser shall not be liable for any costs under section 32; and

(b)the person who applied or is applying for designation or a direction shall be liable—

(i)to the qualifying tenants by whom the notice was given for all reasonable costs incurred by them in the preparation and giving of the notice; and

(ii)to the nominee purchaser for all reasonable costs incurred in pursuance of the notice by him or by any other person who has acted as the nominee purchaser.

(6) Where it is claimed that subsection (I) or (4) applies in relation to a notice under section 13, the person making the claim shall, at the time of making it, furnish the nominee purchaser with evidence in support of it; and if he fails to do so he shall be liable for any costs which are reasonably incurred by the nominee purchaser in consequence of the failure.
(7) In subsection (2) as it has effect for the purposes of subsection (1)—

(a)paragraphs (a) and (b) apply to designation under section 34(1) (a), (b) or (c) of the Finance Act 1975 or section 77(1) (b), (c) or (d) of the Finance Act 1976 as they apply to designation under section 31(1) (b), (c) or (d) of the Inheritance Tax Act 1984; and

(b)paragraphs (c) and (d) apply to a direction under paragraph 13 of Schedule 6 to the Finance Act 1975 as they apply to a direction under section 26 of that Act of 1984.

(8) In this section—
"the Board" means the Commissioners of Inland Revenue;
"chargeat,:e event" means—

(a) any event which in accordance with any provision of Chapter II of Part II of the Inheritance Tax Act 1984 (exempt transfers) is a chargeable event, including any such provision as applied by section 78(3) of that Act (conditionally exempt occasions); or

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(b) any event which would have been a chargeable event in the circumstances mentioned in section 79(3) of that Act (exemption from ten-yearly charge).").

The noble Viscount said: My Lords, the above amendment has already been spoken to along with Amendments Nos. 11 and 12. I beg to move.
On Question, amendment agreed to.
Clause 32 [Costs of enfranchisement]:
Viscount Goschen Viscount Goschen moved Amendment No. 11:
Page 41, line 2, leave out ("and 29(7)") and insert (", 29(7) and (Effect on initial notice of designation Jar inheritance tax purposes and applications for designation)(5)").
The noble Viscount said: My Lords, I beg to move.
On Question, amendment agreed to.
Clause 38 [Right of qualifying tenant of flat to acquire new lease]:
Viscount Goschen Viscount Goschen moved Amendment No. 12:
Page 45, line 27, leave out from ("purposes") to end of line 31.
On Question, amendment agreed to.
Viscount Goschen Viscount Goschen moved Amendment No. 13:
Page 46, line 5, leave out from ("the") to end of line 8 and insert ("purposes of this Chapter as they apply for the purposes of Chapter I; and references in this Chapter to a qualifying tenant of a flat shall accordingly be construed by reference to those provisions.").
The noble Viscount said: My Lords, in moving the above amendment I shall speak also to Amendments Nos. 30, 32, 39 and 48. The group consists of technical amendments which are needed to clarify certain provisions, correct cross-references and amend minor defects. They have been drafted on further consideration of the Bill and are needed to ensure that its provisions work effectively. I beg to move.
On Question, amendment agreed to.
Clause 40 [Right of qualifying tenant to obtain information about superior interests etc.]:
Viscount Goschen Viscount Goschen moved Amendment No. 14
Page 48, line 15, at end insert:
("(3A) Any notice given by a qualifying tenant under this section shall, in addition to any other requirement imposed in accordance with subsections (1) to (3), require the recipient to state—

(a) whether he has received in respect of any premises containing the tenant's flat—

(i) a notice under section 13 in the case of which the relevant claim under Chapter I is still current, or

(ii) a copy of such a notice; and

(b) if so, the date on which the notice under section 13 was given and the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to that claim.

(3B) For the purposes of subsection (3A)—

(a)"the relevant claim under Chapter I", in relation to a notice under section 13, means the claim in respect of which that notice is given; and

(b)any such claim is current if—

(i)that notice continues in force in accordance with section 13(11), or

(ii)a binding contract entered into in pursuance of that notice remains in force, or

(iii)where an order has been made under section 24(4) (a) or (b) or 25(6) (a) or (b) with respect to any such premises as are referred to in subsection (3A) (a) above, any interests which by virtue of the order fall to be vested in the nominee purchaser for the purposes of Chapter I have yet to be so vested.").

The noble Viscount said: My Lords, the above amendment, along with Amendments Nos. 15 to 19, has already been spoken to. I beg to move.
On Question, amendment agreed to.
Clause 41 [Notice by qualifying tenant of claim to exercise right]:
Viscount Goschen Viscount Goschen moved Amendment No. 15:
Page 49, line 39, leave out ("53(2) and (3)") and insert ("(Suspension of tenant's notice during currency of claim under Chapter I)").
On Question, amendment agreed to.
Clause 53 [Effect on tenant's notice of giving initial notice under Chapter I]:
Viscount Goschen Viscount Goschen moved Amendment No. 16:
Leave out Clause 53 and insert the following new clause:
Suspension of tenant's notice during currency of claim under Chapter I
(".—(1) If, at the time when the tenant's notice is given

(a)a notice has been given under section 13 with respect to any premises containing the tenant's flat, and

(b)the relevant claim under Chapter I is still current, the operation of the tenant's notice shall be suspended during the currency of that claim; and so long as it is so suspended no further notice shall be given, and no application shall be made, under this Chapter with a view to resisting or giving effect to the tenant's claim.

(2) If, at any time when the tenant's notice continues in force, a notice is given under section 13 with respect to any premises containing the tenant's flat, then, as from the date which is the relevant date for the purposes of Chapter I in relation to that notice under section 13, the operation of the tenant's notice shall be suspended during the currency of the relevant claim under Chapter I; and so long as it is so suspended no further notice shall be given, and no application shall be made or proceeded with, under this Chapter with a view to resisting or giving effect to the tenant's claim.
(3) Where the operation of the tenant's notice is suspended by virtue of subsection (I) or (2), the landlord shall give the tenant a notice informing him of its suspension

(a)(if it is suspended by virtue of subsection (1)) not later than the date specified in the tenant's notice in pursuance of section 41(3) (f); or

(b)(if it is suspended by virtue of subsection (2)) as soon as possible after the date referred to in that subsection;

and any such notice shall in addition inform the tenant of the date on which the notice under section 13 was given and of the name and address of the nominee purchaser for the time being appointed for the purposes of section 15 in relation to the relevant claim under Chapter I.
(4) Where—

(a)the operation of the tenant's notice is suspended by virtue of subsection (I), and

(b)as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant's notice subsequently ceases to be so suspended and the tenant's notice thereupon continues in force in accordance with section 41(8),

then, as from the date when that claim ceases to be current ("the termination date"), this Chapter shall apply as if there were substituted for the date specified in the tenant's notice in pursuance of section 41(3) (0 such date as results in the period of time intervening between the termination date and that date being equal to the period of time intervening between the relevant date and the date originally so specified.
(5) Where—

(a)the operation of the tenant's notice is suspended by virtue of subsection (2), and

(b)its suspension began in circumstances falling within subsection (6), and

(c)as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant's

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notice subsequently ceases to be so suspended and the tenant's notice thereupon continues in force in accordance with section 41(8),

any relevant period shall be deemed to have begun on the date when that claim ceases to be current.
(6) The circumstances referred to in subsection (5) (b) are that the suspension of the operation of the tenant's notice began—

(a) before the date specified in the tenant's notice in pursuance of section 41(3) (f) and before the landlord had given the tenant a counter-notice under section 44; or

(b) after the landlord had given the tenant a counter-notice under section 44 complying with the requirement set out in subsection (2) (b) or (c) of that section but—

(i) before any application had been made for an order under section 45(1) or 46(1), and

(ii) before the period for making any such application had expired; or

(c) after an order had been made under section 45(4) or 46(4) but—

(i) before the landlord had given the tenant a further counter-notice in accordance with the order, and

(ii) before the period for giving any such counter-notice had expired.

(7) Where—

(a) the operation of the tenant's notice is suspended by virtue of subsection (2), and

(b) its suspension began otherwise than in circumstances falling within subsection (6), and

(c) as a result of the relevant claim under Chapter I ceasing to be current, the operation of the tenant's notice subsequently ceases to be so suspended and the tenant's notice thereupon continues in force in accordance with section 41(8),

any relevant period shall be deemed to have begun on the date on which the tenant is given a notice under subsection (8) or, if earlier, the date on which the tenant gives the landlord a notice informing him of the circumstances by virtue of which the operation of the tenant's notice has ceased to be suspended.
(8) Where subsection (4), (5) or (7) applies, the landlord shall, as soon as possible after becoming aware of the circumstances by virtue of which the operation of the tenant's notice has ceased to be suspended as mentioned in that subsection, give the tenant a notice informing him that, as from the date when the relevant claim under Chapter I ceased to be current, the operation of his notice is no longer suspended.
(9) Subsection (8) shall not, however, require the landlord to give any such notice if he has received a notice from the tenant under subsection (7).
(10) In subsections (5) and (7) "relevant period" means any period which—

(a) is prescribed by or under this Part for the giving of any notice, or the making of any application, in connection with the tenant's notice; and

(b) was current at the time when the suspension of the operation of the tenant's notice began.

(11) For the purposes of this section—

(a) "the relevant claim under Chapter 1", in relation to a notice under section 13, means the claim in respect of which that notice is given; and

(b) any such claim is current if—

(i) that notice continues in force in accordance with section 13(11), or

(ii) a binding contract entered into in pursuance of that notice remains in force, or

(iii) where an order has been made under section 24(4) (a) or (b) or 25(6) (a) or (b) with respect to any such premises as are referred to in subsection (1) or (2) above (as the case may be), any interests which by virtue of the order fall to
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be vested in the nominee purchaser for the purposes of Chapter I have yet to be so vested.").

On Question, amendment agreed to.
Clause 58 [Further renewal or enfranchisement, but no security of tenure, after grant of new lease]:
Viscount Goschen Viscount Goschen moved Amendments Nos. 17 and 18
Page 64, line 30, leave out subsection (2).
Page 64, line 43, leave out (", however,").
On Question, amendments agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 19:
After Clause 66, insert the following new clause:
Exclusion of right in case of property transferred for public benefit etc
After section 32 of the Leasehold Reform Act 1967 there shall be inserted—
"Property transferred for public benefit etc.
32A.—(1) A notice of a person's desire to have the freehold of a house and premises under this Part shall be of no effect if at the relevant time the whole or any part of the house and premises is qualifying property and either—

(a) the tenancy was created after the commencement of Chapter III of Part I of the Leasehold Reform, Housing and Urban Development Act 1993; or

(b) (where the tenancy was created before that commencement) the tenant would not be entitled to have the freehold if either or both of sections IA and IB above were not in force.

(2) For the purposes of this section the whole or any part of the house and premises is qualifying property if

(a) it has been designated under section 31(1) (b), (c) or (d) of the Inheritance Tax Act 1984 (designation and undertakings relating to conditionally exempt transfers), whether with or without any other property, and no chargeable event has subsequently occurred with respect to it; or

(b)an application to the Board for it to be so designated is pending; or

(c)it is the property of a body not established or conducted for profit and a direction has been given in relation to it under section 26 of that Act (gifts for public benefit), whether with or without any other property; or

(d)an application to the Board for a direction to be so given in relation to it is pending.

(3) For the purposes of subsection (2) above an application is pending as from the time when it is made to the Board until such time as it is either granted or refused by the Board or withdrawn by the applicant; and for this purpose an application shall not be regarded as made unless and until the applicant has submitted to the Board all such information in support of the application as is required by the Board.
(4) A notice of a person's desire to have the freehold of a house and premises under this Part shall cease to have effect if—

(a)before completion of the conveyance in pursuance of the tenant's notice, the whole or any part of the house and premises becomes qualifying property; and

(b)the condition set out in subsection (1) (a) or (as the case may be) subsection (1) (b) above is satisfied.

(5) Where a tenant's notice ceases to have effect by virtue of subsection (4) above—

(a) section 9(4) above shall not apply to require the tenant to make any payment to the landlord in respect of costs incurred by reason of the notice; and

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(b) the person who applied or is applying for designation or a direction shall be liable to the tenant for all reasonable costs incurred by the tenant in connection with his claim to acquire the freehold of the house and premises.

(6) Where it is claimed that subsection (1) or (4) applies in relation to a tenant's notice, the person making the claim shall, at the time of making it, furnish the tenant with evidence in support of it; and if he fails to do so he shall be liable for any costs which are reasonably incurred by the tenant in consequence of the failure.
(7) In subsection (2) above as it has effect for the purposes of subsection (1) above

(a)paragraphs (a) and (b) apply to designation under section 34(1) (a), (b) or (c) of the Finance Act 1975 or section 77(1) (b), (c) or (d) of the Finance Act 1976 as they apply to designation under section 31(1) (b), (c) or (d) of the Inheritance Tax Act 1984; and

(b)paragraphs (c) and (d) apply to a direction under paragraph 13 of Schedule 6 to the Finance Act 1975 as they apply to a direction under section 26 of that Act of 1984.

(8) In this section—
"the Board" means the Commissioners of Inland Revenue;
"chargeable event" means—

(a)any event which in accordance with any provision of Chapter II of Part II of the Inheritance Tax Act 1984 (exempt transfers) is a chargeable event, including any such provision as applied by section 78(3) of that Act (conditionally exempt occasions); or

(b)any event which would have been a chargeable event in the circumstances mentioned in section 79(3) of that Act (exemption from ten-yearly charge)."").

The noble Lord said: My Lords, I understand that the text of Amendment No. 19 on the Marshalled List is incorrect and that it should be changed. I have to point out to the House that under Section 32A(1) (a) where it refers to "the Housing and Urban Development Act 1993" it should, of course, read:
"the Leasehold Reform, Housing and Urban Development Act 1993".
I beg to move.
Baroness Hollis of Heigham: My Lords, I am not actually sure about the propriety or conventions of even manuscript amendments on Third Reading, let alone verbal amendments. But it would clearly be churlish for those of us on this side of the House to resist the amendment.
On Question, amendment agreed to.
Clause 67 [Estate management schemes]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 20:
Page 73, line 8, at end insert:
("( ) Without prejudice to the generality of paragraph (b) of subsection (4), an estate management scheme may provide for the operation of any provision for transfer included in the scheme in accordance with that paragraph to be dependent—

(a)on a determination of a leasehold valuation tribunal effecting or approving the transfer;

(b)on such other circumstances as the scheme may provide.").

The noble Lord said: My Lords, in moving the amendment, I should like to speak also to Amendments Nos. 21 to 26. The group consists of the various amendments on estate management schemes which I promised to bring forward following the
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amendments that were tabled on Report by the noble Baroness opposite, and which received a good deal of cross-party support. The amendments were intended to enable English Heritage and local planning authorities to take over estate management schemes, in the public interest, where the landlord of the scheme has failed to exercise his rights and powers to the detriment of the amenity of the area.
On Report, I said that the Government were sympathetic to the amendments tabled by the noble Baroness, Lady Hollis, and they received support from my noble friend Lord Cavendish on behalf of English Heritage. I agree with the noble Baroness opposite that it would not be sensible to give English Heritage and local authorities the power to promote estate management schemes in conservation areas, but not to give them the means to ensure that existing schemes are not allowed to lapse, particularly where that is likely to affect our historic heritage.
The present amendments are aimed at ensuring that, first, estate management schemes can provide for the transfer of powers to English Heritage and local planning authorities; and, secondly, to enable such bodies to apply to a leasehold valuation tribunal to effect such a transfer where the scheme provides for this.
I should explain that Clause 67(4) now provides that all schemes must include provision for the transfer of the landlord's rights and powers, or for the transfer of those powers by the landlord, to a local authority or another body which may include a body constituted for the purpose.
It is important to bear all of that in mind when looking at our amendments to Clause 68. The present amendments have two functions: first, they provide that for a scheme located within a conservation area the "persons interested" who must be notified of the application for scheme approval include English Heritage and the local planning authority. Secondly, they expand upon the matters on which an interested person may make representations.
The House will also remember that we have already made an amendment enabling an interested person who has actually appeared before the tribunal to make representations to have the same rights of appeal against the tribunal's decision as if he were a party to the proceedings. I am sure that, with the support of the noble Baroness, the House will support the amendments. I beg to move.
Baroness Hollis of Heigham: My Lords, perhaps I may, again, on behalf of these Benches— and, indeed, also on behalf of the spirit expressed by all sides of the House—thank the Minister and his advisers for returning with a cluster of interlocked amendments which I think meet the spirit of the issues which we tried to explore. I believe that the Minister has approached the matter in a different way from the nature of our amendments, but that is fine providing that it delivers the result that we seek; namely, to ensure that, in those areas of historic interest within conservation areas we add to the powers beyond the planning powers of the public thereby ensuring that those historic, architectural and heritage features that belong to all of us are protected and properly guarded.

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On behalf of all Members of the House I thank the Minister for doing his best to ensure that we made progress in this direction.
On Question, amendment agreed to.
Clause 68 [Approval by leasehold valuation tribunal of estate management scheme]:
Lord Strathclyde Lord Strathclyde moved Amendment Nos. 21 to 25:
Page 73, line 49, leave out ("purpose of") and insert ("provision intended to be made by").
Page 74, line 1, leave out ("for or against") and insert ("about").
Page 74, line 3, at end insert:
("( ) In subsection (4) "persons interested" includes, in particular, in relation to any application for the approval of a scheme for any area ("the scheme area") within a conservation area—

(a)each local planning authority within whose area any part of the scheme area falls, and

(b)if the whole of the scheme area is in England, the Historic Buildings and Monuments Commission for England.").

Page 74, line 4, leave out from ("(5)") to ("an") in line 7 and insert ("Where representations about an application are made under subsection (4) (b), the tribunal shall afford to the persons making those representations").
Page 75, line 14, at end insert:
("(13) In this section and in section 71, "conservation area" and "local planning authority" have the same meaning as in the Planning (Listed Buildings and Conservation Areas) Act 1990; and in connection with the latter expression—

(a)the expression "the planning Acts" in the Town and Country Planning Act 1990 shall be treated as including this Act; and

(b)paragraphs 4 and 5 of Schedule 4 to the Planning (Listed Buildings and Conservation Areas) Act 1990 (further provisions as to exercise of functions by different authorities) shall apply in relation to functions under or by virtue of this section or section 71 of this Act as they apply in relation to functions under section 69 of that Act.").

On Question, amendments agreed to.
Clause 71 [Applications by certain public bodies]:
Lord Strathclyde Lord Strathclyde moved Amendment No. 26:
Page 79, line I, leave out subsection (11) and insert:
("(11) Section 68(13) applies for the purposes of this section.").
On Question, amendment agreed to.
Clause 76 [Management audits]:
The Earl of Lytton The Earl of Lytton moved Amendment No. 27:
Page 84, line 28, leave out paragraph (a) and insert:
("(a) he has the necessary qualification (within the meaning of subsection (1) of section 28 of the 1985 Act (meaning of "qualified accountant")) or is a qualified surveyor;
(aa) he is not disqualified from acting (within the meaning of that subsection); and").
The noble Earl said: My Lords, in moving Amendment No. 27 I wish to speak also to Amendment No. 28. I offer an apology to the House as I had intended to move these amendments at an earlier stage of the Bill but because I was not in my seat at the appropriate time they went by default. I declare an interest as a Fellow of the Royal Institution of Chartered Surveyors. These amendments seek to include people of that profession within the terms of those who are qualified to carry out management audits.
In Committee the Government did not accept the point that I raised. The Minister considered that this was a matter that was properly dealt with by accountants and that they could bring in lawyers and other people as they thought necessary. I said that that was not an entirely satisfactory position because it committed the tenants operating management schemes to the presence of at least two, if not three, professionals because most of the hands-on management of property, and indeed the verification of expenses and matters related to the supervision of contract work in residential properties, are dealt with by qualified surveyors of the categories that are described in Amendment No. 28. That amendment refers to,
"a fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers and Auctioneers".
Those are the two main professional bodies that are involved with these matters.
Further discussions have taken place with the Minister and members of his department. I hope therefore that these amendments may now commend themselves as being a practical way forward without seeming overtly sectarian. Although they may appear to be sectarian, I can say with a clear heart that I have no direct personal or professional involvement in this matter. I beg to move.
Viscount Goschen: My Lords, a similar but defective amendment was tabled in Committee. This time we can find no fault with the drafting. We have received strong representations from the noble Earl, Lord Lytton, and the Royal Institution of Chartered Surveyors over the past few weeks, and we are persuaded by their arguments. We are therefore happy to accept these amendments.
The Earl of Lytton: My Lords, I am delighted with the Minister's response. I do not believe that the strong representations that I have made can always have been to the liking of the Minister and his department but they have at least elicited this response, for which I am most grateful.
On Question, amendment agreed to.
The Earl of Lytton The Earl of Lytton moved Amendment No. 28:
Page 84, line 32, at end insert:
("( ) For the purposes of subsection (4) (a) above a person is a qualified surveyor if he is a fellow or professional associate of the Royal Institution of Chartered Surveyors or of the Incorporated Society of Valuers and Auctioneers or satisfies such other requirement or requirements as may be prescribed by regulations made by the Secretary of State.").
The noble Earl said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde Lord Strathclyde moved Amendment No. 29:
After Clause 86, insert the following new clause:
Avoidance of provisions preventing occupation of leasehold property by persons with mental disorders
("—(1) Piny agreement relating to a lease of any property which comprises or includes a dwelling (whether contained in the instrument creating the lease or not and whether made before the creation of the lease or not) shall be void in so far as it would otherwise have the effect of prohibiting or imposing any restriction on—

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(a)the occupation of the dwelling, or of any part of the dwelling, by persons with mental disorders (within the meaning of the Mental Health Act 1983), or

(b)the provision of accommodation within the dwelling for such persons.

(2) Subsection (I) applies to any agreement made after the coming into force of this section.").
The noble Lord said: My Lords, we return now to the issue of discriminatory covenants in leases. My noble friend Lord Renton and the noble Lord, Lord Rix, attracted much support for their amendment which aimed to prevent discrimination against the mentally ill and mentally handicapped in relation to leases on residential flats. I said that I would come back at this stage with an amendment. I hope that the House will note that we have extended the amendment so that such discriminatory agreements for both flats and houses will be made void. It would be equally unreasonable to discriminate against potential tenants of houses as against those of flats. I beg to move.
On Question, amendment agreed to.
Clause 87 [Jurisdiction of county courts]:
Viscount Goschen Viscount Goschen moved Amendment No. 30:
Page 93, line 13, leave out ("any provision of Chapter I or II") and insert ("or by virtue of any provision of Chapter I or II or this Chapter").
The noble Viscount said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Lord Peyton of Yeovil Lord Peyton of Yeovil moved Amendment No. 31:
After Clause 92, insert the following new clause:
("Property within cathedral boundary
There shall be no right under Chapter I or II to acquire any interest in or lease of any property which lies within the precinct boundary of a cathedral church, within the meaning of the Cathedrals Measure 1963.").
The noble Lord said: My Lords, I can move this amendment briefly. The matter of cathedral closes has been raised at a number of stages during the passage of the Bill but so far, to my considerable dismay, the Government have not shown much sympathy for it. In so far as I understand the Government's view on this, it is that the safeguards provided in the Bill for estate management are adequate. I do not accept that or agree with their point of view. I believe that the Government face the question here of how much our cathedrals matter. If they are important either as monuments or as places of worship, or both, I believe that the protection of their surroundings is almost as important as the maintenance of the buildings themselves.
I hope that even at this late hour my noble friend will be prepared to look at this matter more syrn pathetically than he has done so far. I entirely appreciate that it is not he who lacks sympathy in this matter but that it is some of his colleagues in another place who are unsympathetic. I hope that my noble friend will use all his skills to persuade them to change their views as I want them to take my anxieties and objections to heart.
National Trust properties are exempt from this provision, as, I understand, are the Nash Terraces in Regent's Park. It may be that other precincts and properties are exempt. They are exempt largely on the
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grounds that the public has access to them. The public has access to National Trust properties and they can at least look at the Nash Terraces. The public also has access to cathedral closes. I am glad to see the right reverend Prelate in his place as I want to make an observation as regards the Church. Right reverend Prelates may be worried lest they be suspected of prosecuting an interest of their own. I do not think that that is the case. I suggest to the House and to the right reverend Prelate that far from pursuing merely selfish and parochial interests, they would be protecting those interests which they hold as trustees.
As has been pointed out many times, many generations have found cathedral closes to be places of peace and quiet and of great beauty. I do not think that the Government would be justified in changing that position now. Nor do I think, if I may say so with great respect, that the bishops and clergy would be well advised to think that they ought not to fight to maintain what is their inheritance for the time being.
I hope that my noble friend will not rely upon the feeling which I suppose Ministers are bound to have that everything in the Bill is satisfactory. I consider that the provisions made for estate management are weak. I believe that they will not work in practice and I hope that my noble friend will say that he has been persuaded that the Government ought to do something about this matter. If he does, I shall once again feel justified in having repeated an argument.
I have always taken note of the siege of Jericho and believed that it was highly likely that a military operation would still be taking place around the walls of that city had it not been for repetition. On this occasion I hope that I have been able to satisfy the requirement of repetition and that my noble friend will be duly influenced by it. I hope that the rather flimsy walls of his argument will collapse. I beg to move.
5.30 p.m.
Lord Monson: My Lords, I warmly support the amendment, to which I have added my name, for all the reasons given by the noble Lord, Lord Peyton.
I readily concede that the previous amendment relating to cathedrals, which I had no hand in drafting but which I moved last Thursday, went rather too wide. There is no reason why property owned by cathedrals which is situated well away from the cathedral should benefit from any concession. In contrast, this amendment is extremely modest and I hope that it will receive widespread support right across the House.
Lord Williams of Elvel: My Lords, I too should like to support the amendment. As your Lordships are aware and as the noble Lord, Lord Monson, said, we discussed the matter at Report stage. I pointed out to the noble Lord, Lord Monson, at the time that I thought that the amendment which he moved was too wide and that we should not try to protect church property outside cathedral closes or the precinct boundaries.

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In his reply the Minister said that the amendment was unnecessary because there were already provisions under the estate management clauses of the Bill to cover the problem. My information is that the diocese of Rochester is seriously worried by the Minister's response and believes that there may be considerable difficulty in the close at Rochester if the Bill is passed as presently drafted. I have no knowledge of that particular area, but I do not believe that the Church is indulging in special pleading.
I believe that the noble Lord, Lord Peyton, is absolutely right. If the National Trust and the Crown Estate are to be exempted from the Bill, it seems to me to be no bad thing that these historic closes, as defined under the Cathedrals Measure 1963, should also be exempt. After all, the Church of England is the established Church of the land and therefore should have some rights in the matter. Therefore I support the noble Lord, Lord Peyton, in his amendment.
The Lord Bishop of Chichester: My Lords, I also support the amendment. I apologise for having missed the beginning of the speech of the noble Lord, Lord Peyton, but I was trying to refresh my memory on the Cathedrals Measure 1990 which I had the privilege of introducing into your Lordships' House. I speak from experience of having been dean of a cathedral for five years. I am the only bishop who has had that experience. I was also chairman of the committee which drafted the Measure which I introduced into this House.
That Measure adds a little to what is contained in the amendment in that it lays a duty on a cathedral fabric commission to prepare a plan of the cathedral precinct. Therefore, the precinct will be closely defined.
The precincts of the cathedrals with which I am familiar all contain communities of people who are in one way or another involved with the cathedral and its function. It would be a very unhappy situation and might cause a great deal of trouble if any part of those precincts were to pass out of the ultimate control of the dean and chapter. The dean and chapter have responsibility for maintaining the cathedral.
Experience shows only too clearly that cathedral precincts and areas close to them suffer a great deal of vandalism. My own house is on the edge of the precinct at Chichester. A large part of our garden has been let to the district council as a public park and we suffer intolerable vandalism which the police seem unable to control and about which we receive many complaints. There are a great many risks.
It is very important for the maintenance of the atmosphere of the cathedral and its work that all the property within a precinct remains under the ultimate control of the dean and chapter so that they can provide whatever protection they consider necessary.
I cannot believe that to allow the amendment would be a breach of any important principle. I hope that the Government will be willing to accept it.
Baroness Hamwee: My Lords, lest it be thought that those of us who have supported this part of the Bill have done so uncritically or without imagination,
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I should like to put on record the support of these Benches for this proposal. Our criticisms of previous amendments have been due to the breadth of those amendments. I believe that this amendment strikes the right balance and meets the points that have been made so forcefully on previous occasions.
Lord Cavendish of Furness: My Lords, I too should like to support the amendment. At Second Reading I expressed my concern at the fate of cathedral closes under the Bill. I believe that the amendment hardly damages the main thrust of the Bill. As has been said, the proposal would be consistent with the treatment of the National Trust in heritage terms. With those remarks I support the amendment.
Lord Strathclyde: My Lords, the noble Lord, Lord Monson, moved an amendment at Report stage which sought to exempt property owned by the capitular body of a cathedral church. We had an interesting debate during which the noble Lord, Lord Williams, said that it would be wrong to treat differently any property which happened to be owned by a capitular body, and I said that the amendment was entirely unnecessary. I challenged the noble Lord, Lord Monson, to prove that the extension of enfranchisement rights which this Bill will give would be detrimental to cathedral closes. After that the noble Lord was persuaded to withdraw his amendment.
My noble friend Lord Peyton of Yeovil has now returned with a revised version of the new clause. He has explained that the aim is unchanged, but now, instead of exemption of property on the basis of ownership by a cathedral authority, my noble friend has drafted his clause on the basis of exemption by geographical location. Thus it is narrower in scope than the amendment we debated last week.
The amendment seeks to disapply both the enfranchisement and lease renewal provision in Chapters I and II of the Bill to property which is located within the precincts of a cathedral church. Although the word "precincts" has no clear meaning in this context I assume that it is taken to mean buildings within a cathedral close.
My noble friend has explained that he believes that this is a necessary safeguard to preserve the appearance of the property around our great cathedrals. However, the clause does not exclude houses. I wonder whether he thinks that owners of flats are more likely than householders to change the appearance of their property after enfranchisement.
Sadly, I still cannot possibly accept the amendment. The case for special treatment of property within cathedral closes has not been made. Of course, much of such property is attractive and well preserved, but so are substantial parts of our built heritage throughout the country, owned by a rich variety of private and public freeholders and landlords and held under a range of tenures. Noble Lords who have spoken in favour of the new clause have not convinced me that either ownership by a capitular body or close proximity to a cathedral in themselves make particular buildings unique and deserving of positive discrimination.

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That is why I was surprised to note the support of my noble friend Lord Cavendish of Furness who has spoken so ably on behalf of heritage issues in other parts of the Bill and encouraged me to bring forward the amendments that we agreed a moment ago on estate management schemes. Ideally the capitular authority itself as landlord will apply for a scheme. However, a representative body which could be formed from among the tenants themselves could also apply. If the area is so special that it has been designated a conservation area, the local authority or English Heritage may do so instead if others have not.
Houses in cathedral closes were not exempted from the provisions of the 1967 Act. I fully agree with the sentiments expressed by my noble friend Lord Peyton and the right reverend Prelate the Bishop of St. Albans during Committee stage. They said that cathedral closes were places of peace and beauty. Quite clearly they have remained so after 25 years of enfranchisement being available to long lessees of most houses —including of course houses in cathedral closes.
Given the much better control which the new estate management schemes will be able to exert, in conjunction with a generally heightened awareness of heritage issues and control via the planning system, listing and conservation area status, I am convinced that cathedral closes will remain as jewels in our built heritage for many years to come. Changes of tenure and the exercise of rights of flat owners to take control of their own property will not affect the ambience of closes which contain buildings divided into residential flats. Any risk of the "alienation" to which the right reverend Prelate the Bishop of Guildford referred on Report can be prevented.
My noble friend Lord Peyton and the noble Lord, Lord Williams, referred in this context to the National Trust. It has been exempted from the provisions of the Bill although only where it holds land inalienably. The trust has always enjoyed special treatment for leasehold reform purposes. Trust property was specifically exempted under the 1967 Act, whereas property owned by charities or ecclesiastical landlords was not.
said on Report that there is no cause for concern about cathedral closes. I wish that I knew more about the example that the noble Lord, Lord Williams, raised. However, I very much believe that those people should not worry unduly. I have not changed my view since Report. I hope that my noble friend might just be persuaded to withdraw his amendment.
Lord Peyton of Yeovil: My Lords, the operative words in my noble friend's speech were "might just". Perhaps I may first express my gratitude to noble Lords who have supported the amendment aimed to protect cathedral closes, and then express my very profound sympathy for my noble friend, tinged even with admiration. I much admire the way that he rushed through the flimsy argument that his department put in front of him on the strength of which your Lordships are asked to reject the amendment. The amendment has been supported not only by the right reverend Prelate, to whose opinions
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I am sure we all attach very particular weight, but also by all those who have spoken from every part of your Lordships' House.
Once again I find myself affronted and very uncomfortable at what I regard—I do not refer to my noble friend's character—as the arrogant deafness of Government when they simply will not listen. They will not even say, "Since every single person who has spoken in your Lordships' House is in favour of the amendment, we will at least look at it again. I will at least ask my colleagues. I will ask the Secretary of State. I will ask the Minister for Housing whether he feels that the integrity of his proposals will be greatly outraged if I go this far and give an inch on it".
The Government appear to be saying, "We do not care about cathedral closes". I believe that their arrangements for estate management are flimsy and transparent. They will be expensive and onerous to those who have to operate them, and in the end they will not work. Either the damage which is likely to be done to cathedral closes will continue over the years; or some wiser government will have to introduce amending legislation. If my noble friend is incapable of stating now that he will at least attempt to persuade those who advise him, and very particularly the Ministerial parents of the Bill, that it is just possible that we may be right and they may be wrong, I have no alternative but to seek the opinion of the House.
5.45 p.m.
On Question, Whether the said amendment (No. 31) shall be agreed to?
Their Lordships divided: Contents, 123; Not-Contents, 107.

Division No. 3

CONTENTS

Ailesbury, M.

Falkland, V.

Aldenham, L.

Fisher of Rednal, B.

Annan, L.

Gainsborough, E.

Airedale, L.

Gallacher, L.

Alport, L.

Galpern, L.

Archer of Sandwell, L.

Gisborough, L.

Ardwick, L.

Glasgow, E.

Astor of Hever, L.

Graham of Edmonton, L.

Attlee, E.

Grey, E.

Aylestone, L.

Haig, E.

Beaumont of Whitley, L.

Halsbury, E.

Bolton, L.

Hampton, L.

Bonham-Carter, L.

Hamwee, B.

Boston of Faversham, L.

Hanworth, V.

Bottomley, L.

Harris of Greenwich, L.

Brimelow, L.

Harrowby, E.

Brooks of Tremorfa, L.

Hertford, M.

Bruce of Donington, L.

Hilton of Eggardon, B.

Cadman, L.

Hollis of Heigham, B.

Carmichael of Kelvingrove, L.

Holme of Cheltenham, L.

Carter, L.

Hood, V.

Cavendish of Furness, L.

Houghton of Sowerby, L.

Charteris of Amisfield, L.

Howell, L.

Chichester, Bp.

Hylton, L.

Cledwyn of Penrhos, L.

Hylton-Foster, B.

Clinton, L.

Jay of Paddington, B.

Clinton-Davis, L.

Jeger, B.

Cocks of Hartcliffe, L.

Judd, L.

Cudlipp, L.

Kagan, L.

Dean of Beswick, L.

Kennet, L.

Desai, L.

Kilbracken, L.

Donoughue, L.

Kirkhill, L.

Dormand of Easington, L.

Lindsay, E.

Dormer, L.

Liverpool, E.

Ennals, L.

Llewelyn-Davies of Hastoe, B.

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Longford, E.

Saint Oswald, L.

Lovell-Davis, L.

Saltoun of Abernethy, Ly.

Lytton, E.

Seear, B.

Mackie of Benshie, L.

Sefton of Garston, L.

Mason of Barnsley, L.

Shaughnessy, L.

Merlyn-Rees, L.

Skelmersdale, L.

Mersey, V.

Skidelsky, L.

Mishcon, L.

Somerset, D.

Molloy, L.

Stedman, B.

Monson, L. (Teller.]

Stoddart of Swindon, L.

Monteagle of Brandon, L.

Strabolgi, L.

Morris of Castle Morris, L.

Strafford, E.

Munster, E.

Sudeley, L.

Nicol, B.

Swinfen, L.

Norwich, Bp

Taylor of Gryfe, L.

Park of Monmouth, B.

Thurlow, L.

Parry, L.

Tordoff, L.

Pearson of Rannoch, L.

Tryon, L.

Pender, L.

Warnock, B.

Peston, L.

White, B.

Peyton of Yeovil, L. [Teller.]

Wilberforce, L.

Pitt of Hampstead, L.

Williams of Elvel, L.

Renton, L.

Williams of Mostyn, L.

Richard, L.

Winchilsea and Nottingham, E.

Romney, E.

Wyatt of Weeford, L.

St. Albans, Bp.

Wynford, L.

NOT-CONTENTS

Alexander of Tunis, E.

Hesketh, L. [Teller.]

Annaly, L.

Holderness, L.

Arran, E.

Howe, E.

Astor, V.

Ironside, L.

Auckland, L.

Kimball, L.

Belstead, L.

Lauderdale, E.

Bessborough, E.

Long, V.

Blake, L.

Lyell, L.

Blatch, B.

McColl of Dulwich, L.

Boardman, L.

Mackay of Ardbrecknish, L.

Borthwick, L.

Mackay of Clashfern, L. (Lord Chancellor.]

Boyd-Carpenter, L.

Brabazon of Tara, L.

Mancroft, L.

Braine of Wheatley, L.

Manton, L.

Bridgeman, V.

Marlesford, L.

Brigstocke, B.

Marsh, L.

Brookeborough, V.

Merrivale, L.

Brougham and Vaux, L.

Monk Bretton, L.

Bruntisfield, L.

Morris, L.

Butterworth, L.

Mottistone, L.

Caithness, E.

Mountevans, L.

Caldecote, V.

Mowbray and Stourton, L.

Campbell of Alloway, L.

Moyne, L.

Carnock, L.

Nelson, E.

Clanwilliam, E.

Norrie, L.

Clark of Kempston, L

Northesk, E.

Colnbrook, L.

O'Cathain, B.

Colwyn, L.

Orr-Ewing, L.

Constantine of Stanmore, L.

Oxfuird, V.

Cox, B.

Palmer, L.

Cranborne, V.

Perry of Southwark, B.

Cross, V.

Platt of Writtle, B.

Cumberlege, B.

Prentice, L.

Davidson, V.

Rankeillour, L.

Denham, L.

Rawlinson of Ewell, L.

Denton of Wakefield, B.

Reading, M.

Elibank, L.

Reay, L.

Elliot of Harwood, B.

Rennell, L.

Elliott of Morpeth, L.

Rippon of Hexham, L.

Fraser of Carmyllie, L.

Rodger of Earlsferry, L.

Fraser of Kilmorack, L.

St. Davids, V.

Goschen, V.

Sanderson of Bowden, L.

Granard, E.

Seccombe, B.

Gray of Contin, L.

Selborne, E.

Grimston of Westbury, L.

Selsdon, L.

Harding of Petherton, L.

Soulsby of Swaffham Prior, L.

Hardinge of Penshurst, L.

Strathclyde, L.

Harman-Nicholls, L.

Strathmore and Kinghorne, E. [Teller.]

Harvington, L.

Hayhoe, L.

Teviot, L.

Henley, L.

Thomas of Gwydir, L.

224

Ullswater, V.

Wade of Chorlton, L.

Vaux of Harrowden, L.

Walker of Worcester, L.

Vinson, L.

Windlesham, L.

Vivian, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.53 p.m.
Clause 97 [General interpretation of Part I]:
Viscount Goschen Viscount Goschen moved Amendment No. 32:
Page 103, line 21, at end insert:
("( ) For the purposes of this Part property is let with other property if the properties are let either under the same lease or under leases which, in accordance with section 8(6), are treated as a single lease.").
The noble Viscount said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
Clause 125 [Management agreements]:
Baroness Hollis of Heigham Baroness Hollis of Heigham moved Amendment No. 33:
Page 129, line 1, at beginning insert:
("( ) The Secretary of State's approval shall not be given in any case where it appears to him that a majority of the tenants of the houses to which a proposed management relates do not wish the proposal to proceed.").
The noble Baroness said: My Lords, this amendment stands in the names of myself and my noble friend Lord Williams of Elvel. It concerns compulsory competitive tendering and is the first substantial amendment which we seek to move to Part II of the Bill. Parts I and II are about housing—who owns, who manages, who decides by what tenure a home is to be held. With the full support of the Opposition, the Government have decided in Part I of the Bill to tilt the balance in favour of the occupant, the leaseholder. He can choose to extend his lease or to enfranchise it. Housing rights in Part I of the Bill are firmly located in the resident and the occupant; that is, if he is a leaseholder.
However, when we come to the second part of the Bill, the Government are pressing in exactly the opposite direction from their policies in Part I. They give council tenants extra rights: the right to purchase, the right to repair and compensation for improvement. However, on the key right —the choice, if they are not buying the property, of who manages their estate—not only are the Government not extending council tenants' rights but, on the contrary, they are removing those rights which they already have. Our most fundamental objection to the Bill is that if people have enough money to buy their rights are enlarged. But if they have only enough money to rent then even those rights that people currently enjoy will be taken away from them.
Perhaps we may, even at this late stage, persuade noble Lords to retain for the worse off the power to determine who shall manage their homes which they have so far enjoyed. When in 1985 the Government sought to remove council tenants' rights to control and determine the management of their houses, noble Lords protected that right against the government of the day. We hope that your Lordships will do the same tonight.
Why? Why does it matter? Compulsory competitive tendering means accepting the cheapest bid to manage council housing. Why are tenants so worried? After all, the entire cost of housing management is funded from rents and if cheap is such good value, why should they not support it? Council tenants, tenants' associations, housing associations and local authorities do not believe that compulsory competitive tendering is appropriate, fair or right. Council housing management is not just the property-based estate management of Chesterton's in the leafy suburbs or Belgravia estates, troubled only by the occasional plumbing problem or by the external paintwork. Council estate management is delicate, sensitive and, crucially, it must be responsive to need. Why? Because local authorities are statutorily responsible for homelessness.
One allocation out of two in my local authority at the moment goes to a homeless family; some of them are traumatised, a few are difficult; one or two have to learn how to be a good neighbour again. Nearly two-thirds of council tenants are on housing benefit because they are elderly, mentally confused or unemployed. They may be single parent families or on income support. They are occasionally illiterate and some come from the ethnic minorities. Council housing is the housing of last resort for the handicapped or those who would otherwise sleep rough.
I have chaired a housing committee of a local authority for 11 years. Local authorities spend far more time discussing issues of debt, neighbour disputes, harassment, welfare rights and the like than they do bricks and mortar. Given the resources, bricks and mortar questions are relatively easy. It is the people problems that are, properly, time consuming. Should that be done by a company, possibly a foreign property company which has won a contract merely because it offers the cheapest tender? How would such a company have won that tender? It is cheaper because the company will have lower staff costs. It will have lower staff costs because it employs fewer people, trains them less, pays them less and loses them more rapidly. At just the time when council housing is being increasingly regarded by the Government as welfare housing, are we to put that welfare into the hands of companies which win contracts on the basis of the lowest pay and the highest turnover of very casual staff?
In local government at the moment people vote for those who manage the housing stock in which they live, for which management the people, and no one else, pay. They therefore have power as both tenants and electors over their landlords; and quite right too. It is the people's rents, not government subsidy—not taxpayers' money—that pay for it. It is their lives and no one else's—not mine, not ours, not the Secretary of State's—that are intimately affected by it. Yet this service of housing management, which is crucially about welfare management and advocacy, the Government will require to be put out to CCT.
The Government do not need the Bill to introduce compulsory competitive tendering for housing management. They can already do that. They need
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this clause of the Bill for one reason only—to remove the tenants' right which they currently have to veto who should manage their estate. Your Lordships placed that veto in housing Bills in 1985 and 1986. Even though the Government tried to remove it, your Lordships protected tenants and said that tenants should be able to exercise control over the services which they pay for which intimately affect their lives. So the first worry for council tenants is that compulsory competitive tendering can be, and often is, inappropriate in areas as sensitive as housing welfare, tenants' disputes, harassment, neighbour problems and the like.
The second concern—one that is intimately associated with CCT—is about the removal of tenants' choice. In their consultation paper, the Government say that the principal consideration is the welfare of the tenant. But as the then Conservative-led Association of District Councils said, why then assume that tenants do not know best where their welfare lies? Why give instead that power to the Secretary of State?
We have deep reservations about applying CCT to housing as a service. We have even deeper reservations about requiring local authorities to tender those services when it is clear that most tenants have no wish to change their landlord or to pay for the costs of tendering—about 10 per cent of the contract costs in the first year—on their rents.
The totally independent National Consumer Council commissioned Gallup a couple of years ago (not the local authorities, the NCC) for a national sample of council tenants' attitudes. They were asked which landlords they would prefer. Seven per cent would have liked a housing association; 7 per cent would have liked a building society; 7 per cent would have liked a tenants' co-op; just 1 per cent would have liked a private company—private companies will win these tenders; 51 per cent wished to remain with the local authority; 19 per cent wanted more information; and 7 per cent did not know. The finding of that poll has been subsequently confirmed by the Audit Commission and by other polls. Tenants do not wish to change their landlords. They are not dissatisfied with them. On the contrary, by overwhelming majorities tenants wish to remain with local authority landlords. So that is bad enough—
Lord Strathclyde: My Lords, will the noble Baroness correct this point? CCT does not change the landlord. Will she admit that she has been wrong?
6 p.m.
Baroness Hollis of Heigham: My Lords, the argument that we are developing now, one which we developed both in Committee and at Report stage, is that management agreements are qualitatively different from service agreements. They therefore give a power of discretion to the managing agent to make decisions to go out to CCT, as listed in the Government's CCT document, which shows, for example, that the functions that would go out to compulsory tender run to everything from allocations and lettings to tenant management, service, the

227
arrangement of rents, the collection of default notices and the like, as well as repairs and maintenance. Under the Bill strategic policy may remain at the centre, but every practical function which requires the exercise of discretion, if it is a management agreement and not a service agreement, will go out to an independent contractor over whom the tenants will have no control. If the Minister insists that that is not an area of discretion, then will he please accept that what we are talking about should be "service agreements" and not "management agreements". I invite the Minister to make the distinction when he comes to reply.
To give an example, without doubt, under this arrangement the private contractors who win the tender will be expected to reduce rent arrears. They may do it by evictions; they may do it by debt counselling. The local authority will not be able to determine which path they follow. In such a situation there can be no quality control.
I repeat, if our first worry is about the appropriateness of CCT, our second is about the loss of democratic vote. Council tenants do not wish to see CCT applied to those services; and they do not wish to see the local authority removed as their immediate landlord exercising those services. On top of that, they are having the procedures of CCT forced upon them. Why, in that case, should tenants who pay for it not choose a management company? In private life every one of us expects to shop around and then to make an informed choice. That choice is not necessarily, or even probably, the cheapest one. We are all interested in value for money, in quality for price. Why should not the council tenants who pay for it have that same right to make that same decision?
As a result of CCT processes, tenants will be informed about costs, services and contractors. Why then should they not be able to make an informed choice about who manages their homes and much of their lives? Why cannot we treat council tenants as informed, moral adults? It is a fundamental democratic right which your Lordships have protected on previous occasions. The Government do not need this Bill to impose CCT. They need this Bill to take away from council tenants a right that they currently enjoy to veto who manages their homes.
Are we going to let it happen? All tenants' organisations, all local authorities, the National Federation of Housing Associations, even some private companies, all say that as tenants are paying and as they have the relevant information, they should be free to make that choice. It should be their decision and no one else's.
I come back to the Bill yet again. Shall we say that, if one is affluent enough to buy as a leaseholder, one has that right enforced even against a reluctant landlord, but, if one seeks to remain only as a rented tenant, not only will tenants be required to enter a CCT procedure for their management, which they do not want, at costs that they will have to meet, but they will be obliged to accept the outcome however
228
unpalatable and have the landlords who manage their estate changed over their heads? They will be powerless to veto it.
The rights awarded to leaseholders in the first part of the Bill are the very rights that are being taken away from tenants in the second part. Your Lordships protected the rights of council tenants against the Government in 1985. The Government again seek to overrule that decision and to remove those rights from council tenants.
I ask your Lordships: will you tonight again ring-fence the rights of council tenants to determine who provides the management of their estates? It is your Lordships' decision, no one else's. Your Lordships did it in 1985, against the Government and protected tenants' rights. If the right of people to determine who manages their homes has any meaning —which is what this Bill has been about—then I hope that noble Lords will support the amendment. I beg to move.
Baroness Hamwee: My Lords, I am very pleased to be able to support the amendment moved so very powerfully by the noble Baroness, Lady Hollis. Modern jargon uses the term "ownership" to mean a commitment to an idea or a piece of work, with that commitment producing a better result at the end. It is a term used very much in modern management. Ownership in this case must mean that tenants have the input and ability to influence decisions that can so drastically affect their own lives. This is not a dramatic amendment. It does not allow decisions to be taken by "loony" authorities, if I may put it in the most extreme language. It refers to the Secretary of State's approval. It is a matter for him. Where it appears to him that a majority of tenants take a particular view, there can be no question of manipulation by a local authority which, for political reasons, is perhaps running a campaign to keep control of management within the local authority. It is a matter between the tenants of an estate, indeed the tenants of particular houses. It might be easier to talk in terms of individual houses, and not just of unidentified estates where the tenants perhaps find it more difficult to identify what is going on. it is a question of people's own homes. We have spent many hours on this Bill working out what is right for people in running their own lives where their own homes are concerned. This amendment is effectively to retain the status quo. It is not an extreme status quo; merely a status quo which allows the people involved to have their own say and to have done with their own lives what they think is best.
I apologise for any discourtesy that there may be. I have to go out to make an urgent telephone call. I am sorry that I shall not be able to hear what I hope may be the Minister's arguments in support of the amendment and his efforts to persuade noble Lords to accept it. If it is other than that, then if I miss his words I will t t., ad them in Hansard. I support the amendment.
Lord Strathclyde: My Lords, given that we have already spent so much time discussing these points in

229
other parts of the Bill, I thought that the performance of the noble Baroness, Lady Hollis, on this occasion was exaggerated.
I have listened carefully to the arguments that have been put forward and sincerely understand the anxieties that have been expressed. But the Government firmly believe that the package of statutory consultation rights provided for by the Bill best serves the needs and interests of tenants in the new era of housing management that we are entering.
The Government have consistently argued that tenants should be fully involved in the process of preparing for management delegations. We expect tenants to be involved in the preparation of contract specifications, which will determine the level and standards of service to be provided; the criteria for selecting contractors and the arrangements for monitoring contracts. These detailed consultations will be an integral part of the housing management process with tenants involved from the outset and every step of the way. They will not simply be asked at the end of the process whether they agree with a package designed and agreed behind closed doors, the way that they have done in the past.
When it is proposed that there will be a transfer of ownership and where the landlord will change, we are happy to let the tenants decide whether they wish to proceed. That is why ballots are a key feature of the large-scale voluntary transfer and housing action trust programmes. But under housing management CCT there will be no transfer of ownership and no change in the terms of a tenant's tenancy agreement. In short, the council will continue to be the landlord and remain ultimately responsible for issues which are of direct interest to tenants, including, for example, setting rents and deciding policy on collecting rent arrears and the allocation of dwellings. They will continue to be responsible for the effective management and maintenance of their housing and answerable to their tenants. All that will change where a management delegation takes place is that another contractor will deliver the day-to-day element of the service. The contractor will be expected to act in line with the contract specification set by the council in consultation with its tenants. That is the key. Councils will discuss all housing issues with tenants in advance of the CCT tender exercise and the terms of the contract specifications; contractors will have to deliver their services in line with those contract specifications and tenants will also be closely involved in monitoring the contract.
Where tenants are unhappy with the services which they receive from their landlord, or if they simply want to take over the management of their homes, they will in future be able to do so. The Bill introduces a major new right for tenants—the right to manage (Clause 128). It is the most radical development in tenant participation for many years and has been widely welcomed by tenants. They will be able to take control of the management of their homes, set their own standards of service and appoint their own managers, unhindered by their local authority.
I believe that the package of measures in this part of the Bill has struck the right balance: enhancing
230
tenants' rights where they are required and where they can be effective, and at the same time preparing the way for competition in the provision of the day to day element of housing management, so as to improve quality and value for money. Tenants stand to gain substantially from this balanced twin track approach.
The noble Baroness, Lady Hollis, seeks to allow the local authority not to let go of housing management. I therefore urge the House once again to reject this most unnecessary amendment.
Baroness Hollis of Heigham: My Lords, I am very disappointed by the Minister's response. His argument seems to be of two sorts. On the one hand, he says that the tenants' veto is not necessary in this legislation because built into the Bill are adequate means of consultation for tenants to be involved in all stages of the CCT process and therefore the veto is a trivial, residual right unlike the real ones given to tenants by the Government. If the right is so trivial and redundant, why bother to remove it?
If, on the contrary, as tenants' organisations, housing associations and local authorities say, it is a deeply significant right, why are the Government removing what has to be a citizen right, such as they are committed to extend in all other facets of their policy? If the veto matters, it should be retained. If it does not matter, it might as well be retained.
The Minister spoke dismissively of the day to day delivery of services to contract specifications that the new contractors will offer. I cannot believe that the Minister has been involved in housing management at all. Those day to day services are precisely the face of management that council tenants will experience from day to day and week to week. Only very big issues go to committee. We are talking about such things as neighbourhood problems, harassment, welfare advocacy, negotiating with utilities when water is cut off, and help when needed for emergency transport to sheltered housing. Is that to be done by a foreign property company which has won the contract by having cheaper, less trained, and high turnover staff? Is that what we want?
I do not need to remind noble Lords that council tenants do not always have a lot going for them. They cannot afford to buy; that is why they are council tenants. Often they are out of work and most of them are on income support. But they had if not the ownership at least control over who managed their estates on a day to day basis and they chose the housing management. When the Government sought to invade that right in 1985, your Lordships stopped them. Noble Lords ring-fenced it then. I ask, hope and believe that noble Lords will be able to do it again tonight. I commend the amendment to the House.
6.17 p.m.
On Question, Whether the said amendment (No. 33) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 134.

Division No. 4

CONTENTS

Archer of Sandwell, L.

Aylestone, L.

Avebury, L.

Bonham-Carter, L.

231

Boston of Faversham, L.

Kirkhill, L.

Bottomley, L.

Liverpool, Bp.

Brooks of Tremorfa, L.

Lovell-Davis, L.

Carmichael of Kelvingrove, L.

Mackie of Benshie, L.

Carter, L.

Mason of Barnsley, L.

Cledwyn of Penrhos, L.

Merlyn-Rees, L.

Clinton-Davis, L.

Morris of Castle Morris, L. [Teller.]

David, B.

Dean of Beswick, L.

Moyne, L.

Desai, L.

Nicol, B.

Dormand of Easington, L.

Parry, L.

Gallacher, L.

Peston, L.

Galpern, L.

Pitt of Hampstead, L.

Geraint, L.

Prys-Davies, L.

Graham of Edmonton, L.

Richard, L.

Grey, E.

Ripon, Bp.

Hampton, L.

Rochester, L.

Hamwee, B.

Seear, B.

Harris of Greenwich, L.

Shaughnessy, L.

Hilton of Eggardon, B. [Teller.]

Stedman, B.

Hollis of Heigham, B.

Stoddart of Swindon, L.

Holme of Cheltenham, L.

Strabolgi, L.

Howell, L.

Tordoff, L.

Jay of Paddington, B.

White, B.

Jeger, B.

Williams of Elvel, L.

Judd, L.

Williams of Mostyn, L.

Kagan, L.

Winchilsea and Nottingham, E.

Kilbracken, L.

Young of Dartington, L.

NOT-CONTENTS

Aldenham, L.

Glenarthur, L.

Annaly, L.

Goschen, V.

Arran, E.

Granard, E.

Astor, V.

Grimston of Westbury, L.

Astor of Hever, L.

Haig, E.

Auckland, L.

Hardinge, V.

Belstead, L.

Hardinge of Penshurst, L.

Bessborough, E.

Harlech, L.

Blake, L.

Harmsworth, L.

Blatch, B.

Harrowby, E.

Blyth, L.

Harvington, L.

Boardman, L.

Hayhoe, L.

Bolton, L.

Henley, L.

Borthwick, L.

Hesketh, L. [Teller.]

Boyd-Carpenter, L.

Holderness, L.

Brabazon of Tara, L.

HolmPatrick, L.

Braine of Wheatley, L.

Howe, E.

Bridgeman, V.

Hylton-Foster, B.

Brigstocke, B.

Ironside, L.

Brookeborough, V.

Jeffreys, L.

Brougham and Vaux, L.

Kenilworth, L.

Bruntisfield, L.

Kimball, L.

Butterworth, L.

Kindersley, L.

Cadman, L.

Lauderdale, E.

Campbell of Alloway, L.

Liverpool, E.

Carnegy of Lour, B.

Long, V.

Cavendish of Furness, L.

Lyell, L.

Clanwilliam, E.

McColl of Dulwich, L.

Clark of Kempston, L

Mackay of Ardbrecknish, L.

Cochrane of Cults, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Colnbrook, L.

Colwyn, L.

Mancroft, L.

Cox, B.

Marsh, L.

Cranborne, V.

Merrivale, L.

Cross, V.

Milverton, L.

Cumberlege, B.

Monk-Bretton, L.

Davidson, V.

Monteagle of Brandon, L.

Denham, L.

Morris, L.

Denton of Wakefield, B.

Mottistone, L.

Derwent, L.

Mountevans, L.

Elibank, L.

Mowbray and Stourton, L.

Elles, B.

Munster, E.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Elliott of Morpeth, L.

Napier and Ettrick, L.

Elton, L.

Norrie, L.

Faithfull, B.

Northesk, E.

Ferrers, E.

Orkney, E.

Finsberg, L.

Oxfuird, V.

Fraser of Carmyllie, L.

Park of Monmouth, B.

Gisborough, L.

Pearson of Rannoch, L.

232

Pender, L.

Skidelsky, L.

Perry of Southwark, B.

Somerset, D.

Peyton of Yeovil, L.

Soulsby of Swanam Prior, L.

Platt of Writtle, B.

Stewartby, L.

Prentice, L.

Strathclyde, L.

Rankeillour, L.

Strathmore and Kinghorne, E. [Teller.]

Reay, L.

Renfrew of Kaimsthorn, L.

Sudeley, L.

Renton, L.

Tebbit, L.

Rippon of Hexham, L.

Teviot, L.

Rodger of Earlsferry, L.

Thatcher, B.

Romney, E.

Thomas of Gwydir, L.

St. Davids, V.

Ullswater, V.

Saint Oswald, L.

Vinson, L.

Saltoun of Abernethy, Ly.

Vivian, L.

Sanderson of Bowden, L.

Windlesham, L.

Selborne, E.

Wyatt of Weeford, L.

Selsdon, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.25 p.m.
[Amendment No. 34 not moved.]
Clause 155 [Objects of Agency]:
Lord Williams of Elvel Lord Williams of Elvel moved Amendment No. 35:
Page 162, line 24, at end insert:
("(5) The Agency shall, in exercising its functions, consult and co-operate with local authorities and, as appropriate, persons representative of local authorities in accordance with any regulations made by the Secretary of State as to the size, value or type of development in respect of which consultation shall be undertaken.").
The noble Lord said: My Lords, this is the only amendment from the Opposition Benches relating to the Urban Regeneration Agency. I move the amendment in my name and that of my noble friend Lady Hilton.
It is a modest amendment. We are attempting to have on the face of the Bill a provision to ensure that the agency will co-operate with local authorities. I should perhaps point out that in line 4 of the amendment as it appears on the Marshalled List there is a misprint. For the word "request" it should read "respect". The line should read, "in respect of which", rather than "in request of which". I apologise for not pointing that out earlier.
We have had many discussions both at Committee stage and on Report on the functions of the Urban Regeneration Agency and how it should work with local authorities in exercising its functions. We have tried and failed to persuade the Government that it is important not only to have those matters expressed in ministerial statements in either House, but also to have them on the face of the Bill.
The amendment is extremely modest. It fits neatly into Clause 155 as an instruction to the agency, in exercising its functions, to "consult and co-operate" with local authorities. The words "as appropriate" qualify that. It may be thought that the amendment is unnecessary and that ministerial assurances that the URA will co-operate with local authorities in doing all that it does should be sufficient. However, if it is enough to accept the words of Ministers, it is enough to have the provision on the face of the Bill.
We believe that as a mark of the Government's intentions they should accept the amendment to the Bill. Let me put it the other way round. If the Government do not accept the amendment, or your

233
Lordships decide against accepting it, then the Government and your Lordships are deciding that the agency shall not consult and co-operate with local authorities. In other words, it will be a kind of roving urban development corporation which can do more or less as it likes without having regard to the local authority structure and structural planning.
As I said in opening, it is a simple amendment, but it carries a message that the Minister has long been trying to persuade us to accept. I hope that the Minister will accept it. If the Government do not accept it, we will know precisely the value of ministerial words. I beg to move.
Baroness Hamwee: My Lords, I too support the amendment. As the noble Lord, Lord Williams, said, it is modest. However, it encapsulates many of the sentiments expressed during the debate on the Bill and in particular that of partnership. I am unable to move the amendments standing in my name and the names of the noble Lord, Lord Williams of Elvel, and the noble Baroness, Lady Hollis. There is an error in Amendment No. 36 which means that as printed it says something that I do not intend. Nevertheless, I wish to refer to comments made by the Minister when we discussed the issue of the relationship between the agency and local authorities in their capacity as planning authorities. He talked about cementing the partnership and local authorities having the opportunity to seek help from the Urban Regeneration Agency. He also talked about all sides of this House seeking to support local authorities. It is a question of put ting one's draft where one's mouth is.
Lord Renton: My Lords, obviously this amendment has to be considered in the light of Clause 167 which provides that if a designation order so provides the agency shall become the local planning authority, which otherwise will be the responsibility of a local authority. I shall be interested to hear from my noble friend Lord Strathclyde how the functions and general powers of the agency will be dovetailed with Clause 167.
I am one of those who feel that we write too much into our legislation about the ways in which various public authorities exercise their powers. The citizen has very little power by way of enforcement of what we say in our statutes about how local authorities and other public authorities are to exercise their powers. Sometimes I believe that it would be better if those things were done by ministerial direction, or even by secondary legislation. There is masses of it here. For example, if we turn to Clause 163 the sidenote describes it as:
"Guidance and directions by Secretary of State".
If we look at subsection (2) (b) of that clause we find that the Secretary of State may give directions to the agency
"for requiring it to exercise those functions in any manner specified in the directions".
There is nothing in that provision to prevent the Secretary of State from saying to the agency that in such and such a matter it must consult the local authority. In effect, he may get an official to write a letter to the agency saying that if it does not consult
234
the local authority it will be lumbered with the powers that it has as a planning authority and that may be very controversial.
This amendment cannot in my opinion be taken in isolation; it has to be regarded in the light of the various other detailed—perhaps too detailed and rather complicated—clauses in Part III of the Bill. I will be very interested to hear what my noble friend Lord Strathclyde has to say about all this.
Lord Strathclyde: My Lords, on Report noble Lords opposite cast scorn on repeated assurances from Ministers that the agency would work in close partnership with local authorities. I am sorry that they did so. But we do not have to rely solely on the Government's assurances; we should be judged by our actions as well as our words. City Challenge is a successful example—which noble Lords opposite have recognised—of this Government working in partnership with local government. Another example is the most recent UDCs in Birmingham and Plymouth which have been set up with the agreement of the local authorities involved. Noble Lords opposite have argued that these UDCs are atypical because their boards have a much higher proportion of local authority members than earlier UDCs. But they have missed the point. As I would have said in the debate on the last group of amendments, had they been moved by the noble Baroness, Lady Hamwee, greater local authority involvement reflected the improved climate in the relationship of local and central government and the attitude that those authorities had adopted. The URA will have the advantage of working in that new climate.
I am glad that noble Lords opposite have acknowledged in this amendment that consultation will not be appropriate in every case. That leaves no dispute between us on this issue. I announced on Report that we would publish our core guidance to the agency before it was established. I also announced that this guidance would specify that the agency should operate wherever possible through partnerships and develop particularly close links with local authorities. This will achieve all that the amendment seeks—and more —since it will cover every aspect of the work of the agency. Therefore, the noble Lord, Lord Williams, is wrong when he says that if the House does not agree the amendment the URA will not need to consult local authorities.
If I understood correctly what was said by my noble friend Lord Renton, I believe that he was supporting my point of view. My noble friend is correct. The whole point is that the Secretary of State can give guidance under Clause 163. As a last resort he can give a direction under Clause 163 in Part HI. I hope that it will not come to that, but the power is there. On the basis of the short debate that we have had, I hope that the noble Lord, Lord Williams, will agree that the present Bill, coupled with the guidance that we will issue to the agency, already provides an assurance that the agency will work in close consultation with local authorities, and quite rightly so.
In the light of that and the assurances that I have given throughout the progress of the Bill through this

235
House and another place, as well as outside Parliament, I hope that the noble Lord now feels comfortable about withdrawing his amendment.
Lord Williams of Elvel: My Lords, in some measure I am grateful to the Minister for his response. He quite rightly pointed out that City Challenge and the Plymouth and Birmingham Urban Development Corporations fitted into a rather special category. The special category is that they are all in combination with the local authorities. They are not like other urban development corporations, and other examples of government action, where the Government have simply overridden local authorities. The noble Lord, Lord Renton, unwittingly put his finger on the point. The noble Lord, Lord Strathclyde, claimed that he could not understand on which side the noble Lord, Lord Renton, stood. That was right. Under the provisions of the Bill the Secretary of State can give directions to the Urban Regeneration Agency to override local authorities and to pay no attention to them whatever. Furthermore, he can designate an area, and the URA will immediately become its own planning authority without any necessity to consult or work with local authorities.
The Minister is quite right to say that he has given an idea of what the core guidance (to use the buzzword of the moment)—will be, how he sees the URA working and all the rest of it. But he cannot have it both ways. If he believes that the agency should work with local authorities he should accept the amendment. I agree that it does not add anything; it is a declaratory amendment and simply says that the agency in exercising its functions shall consult and co-operate with local authorities. If the Government were serious in wishing to improve the relationship between local authorities and central government—as the Prime Minister said, to have a renaissance in the relationship between central government and local government—they would have responded in a far less frivolous manner to the amendment. I beg to move.
6.39 p.m.
On Question, Whether the said amendment (No. 35) shall be agreed to?
Their Lordships divided: Contents, 62; Not-Contents, 133.

Division No. 5

CONTENTS

Archer of Sandwell, L.

Hamwee, B.

Ardwick, L.

Hilton of Eggardon, B.

Avebury, L.

Hollis of Heigham, B.

Carmichanel of Kelvingrove, L.

Holme of Cheltenham, L.

Carter, L.

Houghton of Sowerby, L.

Cledwyn of Penrhos, L.

Howell, L. [Teller.]

Clinton-Davis, L.

Jay of Paddington, B.

Dean of Beswick, L.

Jeger, B.

Dormand of Easington, L.

Judd, L.

Falkland, V.

Kirkhill, L.

Galpern, L.

Liverpool, Bp.

Geraint, L.

Llewelyn-Davies of Hastoe, B.

Glasgow, E.

Macaulay of Bragar, L.

Graham of Edmonton, L. [Teller.]

Mackie of Benshie, L.

McNair, L.

Grey, E.

Mason of Barnsley, L.

Hampton, L.

Merlyn-Rees, L.

236

Morris of Castle Morris, L.

Shackleton, L.

Murray of Epping Forest, L.

Somerset, D.

Nicol, B.

Stedman, B.

Parry, L.

Stoddart of Swindon, L.

Perry of Walton, L.

Strabolgi, L.

Peston, L.

Tordoff, L.

Pitt of Hampstead, L.

Turner of Camden, B.

Prys-Davies, L.

Whaddon, L.

Rea, L.

White, B.

Richard, L.

Williams of Elvel, L.

Ripon, Bp.

Williams of Mostyn, L.

Rochester, L.

Winchilsea and Nottingham, E.

Seear, B.

Young of Dartington, L.

Sefton of Garston, L.

NOT-CONTENTS

Aldenham, L.

Hylton-Foster, B.

Alport, L.

Jeffreys, L.

Annaly, L.

Kimball, L.

Arran, E.

Kindersley, L.

Astor, V.

Lauderdale, E.

Auckland, L.

Liverpool, E.

Belstead, L.

Long, V.

Bessborough, E.

Lyell, L.

Blake, L.

Lytton, E.

Blatch, B.

McColl of Dulwich, L.

Blyth, L.

Mackay of Ardbrecknish, L.

Boardman, L.

Mackay of Clashfern, L. [Lord Chancellor.]

Borthwick, L.

Boyd-Carpenter, L.

Mancroft, L.

Brabazon of Tara, L.

Marlesford, L.

Braine of Wheatley, L.

Merrivale, L.

Brookeborough, V.

Mersey, V.

Bruntisfield, L.

Monk Bretton, L.

Butterworth, L.

Morris, L.

Cadman, L.

Mottistone, L.

Caithness, E.

Mountevans, L.

Carnegy of Lour, B.

Mowbray and Stourton, L.

Clanwilliam, E.

Moyne, L.

Clark of Kempston, L

Munster, E.

Cochrane of Cults, L.

Murton of Lindisfarne, L.

Colwyn, L.

Napier and Ettrick, L.

Cox, B.

Norrie, L.

Craigavon, V.

Northesk, E.

Craigmyle, L.

O'Cathain, B.

Cranborne, V.

Orkney, E.

Cross, V.

Orr-Ewing, L.

Cumberlege, B.

Oxfuird, V.

Denham, L.

Palmer, L.

Denton of Wakefield, B.

Park of Monmouth, B.

Derwent, L.

Pearson of Rannoch, L.

Digby, L.

Pender, L.

Dundonald, E.

Perry of Southwark, B.

Elibank, L.

Peyton of Yeovil, L.

Elks, B.

Platt of Writtle, B.

Elliot of Harwood, B.

Prentice, L.

Elliott of Morpeth, L.

Reay, L.

Ferrers, E.

Renfrew of Kaimsthorn, L.

Fraser of Carmyllie, L.

Renton, L.

Gainsborough, E.

Rippon of Hexham, L.

Gisborough, L.

Rodger of Earlsferry, L.

Glenarthur, L.

Romney, E.

Goschen, V.

St. Davids, V.

Granard, E.

Saint Oswald, L.

Greenway, L.

Saltoun of Abernethy, Ly.

Grimston of Westbury, L.

Sanderson of Bowden, L.

Haig, E.

Selborne, E.

Halsbury, E.

Selsdon, L.

Harmar-Nicholls, L.

Skelmersdale, L.

Harmsworth, L.

Skidelsky, L.

Harvington, L.

Soulsby of Swaffam Prior, L.

Hayhoe, L.

Stewartby, L.

Hemphill, L.

Strathclyde, L.

Henley, L.

Strathmore and Kinghorne, E. [Teller.]

Hesketh, L. [Teller.]

Holderness, L.

Sudeley, L.

HoImPatrick, L.

Tebbit, L.

Hooper, B.

Tenby, V.

Hothfield, L.

Teviot, L.

Howe, E.

Thatcher, B.

237

Thomas of Gwydir, L.

Wharton, B.

Ullswater, V.

Windlesham, L.

Vivian, L.

Wynford, L.

Wade of Choriton, L.

Resolved in the negative, and amendment disagreed to accordingly.
6.46 p.m.
Clause 166 [Power to make designation orders]:
[Amendments Nos. 36 to 38 not moved.]
Clause 184 [Short title, commencement and extent]:
Viscount Goschen Viscount Goschen moved Amendment No. 39:
Page 179, line 32, after ("in") insert ("section 80(1) of").
The noble Viscount said: My Lords, Amendments Nos. 39 to 45 have already been spoken to. I beg to move.
On Question, amendment agreed to.
Schedule 3 [The initial notice: supplementary provisions]:
Viscount Goschen Viscount Goschen moved Amendment Nos. 40 to 42:
Page 194, line 9, after C'16.") insert ("—(1)").
Page 194, line 17, leave out ("not less than two-thirds of the qualifying tenants of the") and insert ("a sufficient number of qualifying tenants of").
Page 194, line 20, at end insert:
("( ) For the purposes of sub-paragraph (I) a sufficient number is a number which—

(a)is not less than two-thirds of the total number of qualifying tenants of flats contained in the specified premises as at the relevant date, and

(b)is not less than one-half of the total number of flats so contained.").

On Question, amendments agreed to.
Viscount Goschen Viscount Goschen moved Amendment No. 43:
After Schedule 3, insert the following new schedule:
("SCHEDULE
INFORMATION TO BE FURNISHED BY REVERSIONER ABOUT EXERCISE OF RIGHTS UNDER CHAPTER II
Information to accompany counter-notice
1.—(1) This paragraph applies where before the date of the giving of a counter-notice under section 21 the reversioner or any other relevant landlord—

(a) has received—

(i)a notice given under section 41 with respect to any flat contained in the specified premises (being a notice to which section (Suspension of tenant's notice during currency of claim under Chapter1)(I) or (2) applies on that date), or

(ii)a copy of such a notice, or

(b) has given any counter-notice under section 44 in response to any such notice.

(2) A copy of every notice which, or a copy of which, has been received as mentioned in sub-paragraph (I) (a), and a copy of every counter-notice which has been given as mentioned in sub-paragraph (1) (b), shall either

(a)accompany any counter-notice given under section 21, or

(b)be given to the nominee purchaser by the reversioner as soon as possible after the date of the giving of any such counter-notice.

Continuing duty to furnish information
2.—(1) Subject to sub-paragraph (3), this paragraph applies where on or after the date of the giving of a counter-notice under section 21 the reversioner or any other relevant landlord receives—

(a) a notice given under section 41 with respect to any flat contained in the specified premises or a copy of such a notice, or

238

(b) any notice of withdrawal given under section 51 and relating to any notice under section 41 of which a copy has already been furnished to the nominee purchaser under this Schedule.

(2)A copy of every notice which, or a copy of which, is received as mentioned in sub-paragraph (1) (a) or (b) shall be given to the nominee purchaser by the reversioner as soon as possible after the time when the notice or copy is received by the reversioner or (as the case may be) the other relevant landlord.
(3)This paragraph does not apply if the notice or copy is received by the reversioner or (as the case may he) the other relevant landlord otherwise than at a time when—

(a)the initial notice continues in force, or

(b)a binding contract entered into in pursuance of that notice remains in force, or

(c)where an order has been made under section 24(4) (a) or (b) or 25(6) (a) or (b) with respect to the specified premises, any interests which by virtue of the order fall to be vested in the nominee purchaser have yet to be so vested.

Duty of other landlords to furnish copies to reversioner
3.—

(1) Without prejudice to the generality of paragraph 8(1) (a) of Schedule 1, the duty imposed by that provision shall extend to requiring any relevant landlord (other than the reversioner) who—

(a)receives a relevant notice or a copy of such a notice, or

(b)gives a relevant counter-notice,

to furnish a copy of the notice or counter-notice to the reversioner as soon as possible after the time when the notice or copy is received or (as the case may be) the counter-notice is given by the relevant landlord.

(2) In this paragraph "relevant notice" and "relevant counter-notice" mean respectively any notice of which a copy is required to be given to the nominee purchaser by the reversioner in accordance with this Schedule and any counter-notice of which a copy is required to be so given.").
On Question, amendment agreed to.
Schedule 4 [Vesting orders under sections 24 and 25]:
Viscount Goschen Viscount Goschen moved Amendments Nos. 44 and 45:
Page 195, line 25, leave out ("and").
Page 195, line 26, at end insert ("; and
( ) section (Effect on initial notice of designation for inheritance tax purposes and applications for designation) (4).").
On Question, amendments agreed to.
Schedule 5 [Purchase price payable by nominee purchaser]:
The Deputy Speaker (Lord Alport): My Lords, I call next Amendment No. 47 as there is a printing error in Amendment No. 46.
Viscount Goschen Viscount Goschen moved Amendment No. 47:
Page 197, line 3, at end insert ("(except that this shall not preclude the taking into account of a notice given under section 41 with respect to a flat contained in the specified premises where it is given by a person other than a participating tenant)").
The noble Viscount said: My Lords, this amendment has already been spoken to. I beg to move.
On Question, amendment agreed to.
The Earl of Lytton The Earl of Lytton moved Amendment No. 46:
Page 198, line 8, leave out ("acquired by the nominee purchaser") and Insert ("regarded as being (in consequence of their being acquired by the nominee purchaser) interests under the control of the participating tenants.").
The noble Earl said: My Lords, in rising to move this amendment I would explain that it arises out of

239
the complexities and the perceived lack of clarity in relation to the valuation principles relating to marriage value. I must pay tribute to the Minister, and particularly to his officials, for having listened very attentively to what I have had to say and what the Royal Institution of Chartered Surveyors has had to say about this peculiarly complex matter.
I would explain that the reason it is important to get this matter right is that it relates to what I might describe as the divisible balance that has to be split between the freeholder and the long leaseholder. But this amendment is not about the percentage to be applied to one or the other. It is a question of the overall quantum of the figure that then falls to be split. It is a pure valuation exercise.
It is fundamental that it is couched in terms which, as far as possible, are understandable both by lawyers and valuers. I feel fairly confident that there is no disagreement on the objective here or what various persons involved with this matter consider to be marriage value. It is purely a question of getting the right wording to achieve that end. That is what this amendment seeks to do.
The achievement of that involves some highly technical considerations relating to the essence of the interest that the long leaseholders acquire through the purchase of the interest superior to their own. In Schedule 5 paragraph 4(2) there is the word formula "aggregate value". Apparently even that, simple in itself, gives rise to difficulties of interpretation because it can denote an assembly of disparate pieces rather than a coalescence to create a new interest in possession.
So it is not a simple matter. I do not want to take up a great deal of the time of the House, but I feel it necessary to explain the technicalities of the matter. The Government's intention seems to be that while there is not an actual merging of the interests of freeholders together with those of intermediate leaseholders and of the tenants themselves, the basis of valuation is intended to be on a market value approach as if the merging of those interests actually takes place.
I explain that valuers, in valuing for statutory purposes, often have to adopt hypotheses of one kind or another and no less so than in this instance because we are creating a new situation which is not directly reflected in the open market. When the tenants of a block of flats buy the freehold of their block in the open market, and on the assumption of an open market approach, the marriage value calculation starts with the value of the long leasehold interest which they can obtain by buying. In other words, the leasehold interests have current control of the freehold. I feel that that point is important.
One then deducts from that the total values of all the existing interests; namely, those of the freeholders, the intermediate leaseholders and the tenants themselves. They then go together into the marriage. Deducting the aggregate of the second lot of values from the first gives the marriage value which is then available to be subdivided between the parties. I assume that that is how the Government believe that
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valuers will normally calculate the marriage value when enfranchisement takes place. I hope that is so, because that is broadly how valuers would expect to do it in practice and how they would expect to operate the Bill's provisions once it becomes law.
With that rather tortuous explanation I come to the amendment itself. The intention behind it is to make clear that the valuation is approached from the basis that the participating tenants, on acquisition, control the situation and are then able to grant themselves leases of whatever length they may wish and with freedom as to other terms, albeit that in fact a nominee purchaser is involved because that is required as part of the necessary machinery which is set in place by this Bill.
The formula of words is intended to do exactly that and to amend Schedule 5 paragraph 4(2) by reference to the words as printed on the Marshalled List. I hope that the Government will accept this as a necessary clarification of the situation which I feel that valuers and the Government alike all believe is what is intended. I beg to move.
Lord Strathclyde: My Lords, the noble Earl has argued that there may be some ambiguity in our definition of marriage value in Schedule 5. I consider that our provisions do achieve the correct calculation of marriage value, but I understand the noble Earl's concern that there should be no doubt about how the provisions should be interpreted.
The reason why we have needed to define the marriage value at all on the face of the Bill is that the interests of the participating tenants, superior leaseholders, and the freeholder never actually merge, as they would do for a house where the tenant acquires a freehold house. Instead the superior interests all come into the control of the nominee purchaser and the leases remain. However, the reality is that the nominee purchaser is chosen by, and is acting for, the participating tenants. Tenants can, therefore, arrange to grant themselves new leases after enfranchisement for little or no premium, and valuation should be calculated as if a merger occurs.
The noble Lord has given a very erudite explanation of the way in which valuers might calculate marriage value. The Government intend that a valuer should follow his usual practice when making an open market valuation. Schedule 5 defines marriage value as any increase in the aggregate value of the freehold and intermediate leasehold interests which are to be acquired before and after enfranchisement due to the ability of the participating tenants to grant themselves new leases at no premium and which would have been shared in an open market transaction.
This is what the Bill sets out. I understand that in practice one of the commonest ways, broadly, that valuers approach the assessment of marriage value is to start with the value of the long leasehold interests which the tenants can obtain, deduct the total value of all the existing interests—that is to say, those of the freeholder, intermediate leaseholders, and the tenants themselves. This will then give the marriage value which can be divided between the parties.

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I have looked very carefully at this amendment which simply makes explicit that the nominee purchaser is acting for the participating tenants. The current drafting achieves this, but if there has been some difficulty among valuers in using the schedule as drafted I do see merit in changing it so that it is more easily understood. I do not see the amendment as being strictly necessary, but it may be helpful and I am therefore happy to accept it.
The Earl of Lytton: My Lords, I am very grateful to the Minister for that reply. I am very glad that he has taken the view that if the amendment does no good, it does no harm either. I hope that it will in fact clarify things. I hope that his answer to the points which I raised will be a valuable clarification to those who have to implement this measure in practice. I thank the noble Lord very much indeed.
On Question, amendment agreed to.
Schedule 8 [Grant of leases back to former freeholder]:
Viscount Goschen Viscount Goschen moved Amendment No. 48:
Page 214, line 34, at end insert:
("( ) Sections 6, 8 and 9 shall apply for the purpose of determining whether, for the purposes of subparagraph (1) (c) above, the freeholder is a qualifying tenant of a unit other than a flat as they apply for the purpose of determining whether a person is a qualifying tenant of a flat.").
The noble Viscount said: My Lords, this amendment and Amendments Nos. 49 to 52 have already been spoken to. I beg to move.
On Question, amendment agreed to.
Schedule 20 [Minor and consequential amendments]:
Viscount Goschen Viscount Goschen moved Amendment Nos. 49 to 51:
Page 268, line 30, leave out ("on any such application") and insert ("under section 68 of that Act").
Page 272, line 10, leave out from ("functions),") to end of line 11 and insert ("for the words "powers under" there shall be substituted the words "functions under or by virtue of".").
Page 272, line 12, leave out second ("section") and insert ("sections 68 and").
On Question, amendments agreed to.
In the Title:
Viscount Goschen Viscount Goschen moved Amendment No. 52:
Line 8, after ("land;") insert ("to make provision for rendering void agreements preventing the occupation of leasehold property by persons with mental disorders;").
On Question, amendment agreed to.
Lord Rodger of Earlsferry Lord Rodger of Earlsferry moved Amendment No. 53:
Line 10, leave out ("section 248") and insert ("sections 248 and 299").
The noble Lord said: My Lords, this is a technical amendment to extend the Long Title. It is necessary because of Clause 152 which was inserted by your Lordships at Report stage. I beg to move.
On Question, amendment agreed to.
Lord Strathclyde: My Lords, I beg to move that this Bill do now pass. At Second Reading, I said that it was rare that a Bill should come before us which had already had quite so much discussion outside the House. Your Lordships' House has done justice to that understandable public interest.
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Following a lively six-hour debate on Second Reading, we spent some 33 hours in Committee, a further 15 hours on Report, and we have had another full day's debate today. We will return the Bill to another place with some 300 amendments, including 16 new clauses.
This Bill will give hundreds of thousands of leaseholders the opportunity to gain full control over their homes. It will also bring much needed improvement to the management of public sector housing, and give considerably more council tenants the opportunity of buying their home. Through the urban regeneration agency, it will play an important part in revitalising our cities.
However, it is not surprising that it is the leasehold provisions that have taken up most of your Lordships' time on this Bill. It is no light matter to require one person to sell his asset to another, and it is only right that the provisions giving effect to this policy should have been given the most careful scrutiny.
Having accepted the need for reform of the leasehold system, with enthusiasm from some noble Lords and perhaps, in honesty, with a degree of resignation from others, your Lordships have given very careful consideration to the provisions to ensure that the means to the end are also just. I am convinced that they are. We have refined and improved them to ensure that the Bill goes from this place to another in a form which more closely reflects our desire to enfranchise just those with the greatest stake in their property, which is most often their home.
Most significant in this aim, your Lordships have found a means to ensure that there is a residency test for the enfranchisement of flats. The House has agreed a test that will not disenfranchise many blocks, but will exorcise the spectre of control by an absent minority. That is a very real achievement.
Your Lordships have also ensured that the right to enfranchise will truly reflect the wishes of the majority, by agreeing that at least half of the tenants of flats in a block should sign the initial notice. Your Lordships have balanced these tighter eligibility criteria by providing for lease extension to be a universal right.
There have also been amendments pressed upon this House which we have decided are not appropriate. Thus the House has voted to ensure that the low rent test shall be retained so that only leases where the equity in a property has genuinely transferred should be able to enfranchise. Given the debate today, it is right that the vote went the way that it did. That shows the tight debate and the tight balance of the argument. The House has also decided that the valuation provisions, which follow open market practice and result in an open market price, are fair and should be retained.
The detailed scrutiny of valuation has brought us to the conclusion that one provision made for flats, that of severance compensation for the effect of enfranchisement on a landlords' other property, should also be extended to the houses newly enfranchised under this Bill. We must, in fairness, give the landlord the full price of his asset and ensure that he is not out of pocket because of the effect on his other property.

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Your Lordships decided to exclude from the right to enfranchise properties with conditional exemption from inheritance tax. I have profound sympathy for your Lordships' concern for the heritage of this country. It is a reflection of this sympathy that we have agreed to considerable amendments to estate management schemes, to ensure that heritage considerations are taken fully into account. And this afternoon the House has agreed to exempt property in cathedral closes.
Unfortunately, the opinion of the House was not properly tested on the question of an exemption for sheltered housing. The Government remain convinced that elderly people have the same rights to determine their own affairs as others. We shall therefore seek to overturn this amendment in another place.
On Report my noble friend Lord Renton and the noble Lord, Lord Rix, moved an amendment to render unenforceable any provision in a lease of a flat which prohibited the lessee from providing accommodation for a mentally handicapped or mentally ill person. Unfortunately, the drafting was not quite right, but I said that I would be happy to take it away, and I am pleased that your Lordships have today agreed the amendment I subsequently brought forward.
The leasehold provisions are important ones. They have provoked much interest and useful debate. I consider that we have improved the Bill sent to us by refining the detail, but also by changing the content to protect the interests of all parties.
Part II of the Bill takes forward our clear commitment to securing a better deal for council tenants. It introduces a new rent-to-mortgage scheme. It improves the existing right to repair, and gives tenants a new right to compensation for improvements they carry out. The Bill also sets a clear framework for the delegation of public sector housing management. On this, I understand why so much of your Lordships' time has been taken up debating the removal of the tenants' veto. However, I should have welcomed recognition from the noble Lords and Baronesses opposite that the veto is in fact of little practical benefit and that the new statutory consultation we are putting in its place will bring substantial benefits for tenants.
By contrast, I must also mention the constructive debate we had on the perennially thorny subject of the right to buy and housing for elderly people. In particular, my noble friend Lord Monk Bretton tabled on Report an amendment designed to cut down bureaucracy without prejudicing the interests of landlords or tenants. I was glad to be able to commend this to your Lordships.
Turning to Part III, noble Lords opposite made much of the need for the URA to work closely with local authorities. I was disappointed that they felt unable to accept my assurances that we are committed to the agency working in partnership with local authorities as well as other public and private sector bodies with a role in regenerating our cities. However, our actions will soon speak for themselves.
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Perhaps I may conclude by thanking all those who have helped ensure that the Bill has been thoroughly considered during each stage of its passage through your Lordships' House. I am most grateful for the support that I have received on this Front Bench from my noble and learned friends the Lord Advocate and Lord Fraser of Carmyllie and from my noble friend Lord Goschen.
The noble Lord, Lord Williams of Elvel, has led for the Opposition with his usual courtesy and eloquence, and he has of course been most ably supported by the noble Baronesses, Lady Hollis and Lady Hilton. The noble Baroness, Lady Hamwee, has contributed extensively from the Liberal Democrat Benches. To them and to all other Peers from all sides of the House who have contributed to our debates, I express my thanks for the well-argued and interesting speeches we have heard. I of course include in that, thanks to those of my noble friends who have not always felt able to support the Government view including my noble friend Lord Boardman for his unfailing courtesy and my noble friend Lord Peyton who has let nothing go past without his comments.
Finally, I pay tribute to my officials in the department, to the officers and staff of the House and to the Parliamentary Counsel for the unstinting support they have given us. I have thoroughly enjoyed taking the Bill through the House. It is a much improved Bill and shows the value of the House of Lords. There have been lots of cross arguments—I mean, cross-party arguments. The Bill is good for the Government because it shows that this truly is a listening Government. I hope that this is a subject that we shall not return to for very many years. I beg to move.
Moved, That the Bill do now pass.—(Lord Strathclyde.)
7.7 p.m.
Lord Williams of Elvel: My Lords, the House will be grateful to the Minister for the slightly humourous note on which he ended his speech in which he moved, That the Bill do now pass.
On Second Reading, I pointed out to the House that in my view there were three Bills in one—and so it has proved. In a sense, that is rather a pity because although many of your Lordships have taken a great interest in Part I for understandable reasons, there has perhaps been less enthusiasm about debating fully the provisions of Parts II and III. I would argue—and I think that we would argue from these Benches collectively—that Parts II and III are in many ways as important as Part I, and have effects as profound.
Turning to Part I, we have supported the Government on the principle of the matter, as I said that we would on Second Reading. We accept the need for leasehold reform for flats, as we accepted the need for leasehold reform for houses in 1967. We have followed the logic of that through. So, we have supported the Government even to the point—if I may say so—when the Government might perhaps have gone down on an amendment or two if it had not been for the voting support of these and the Liberal Democrat Benches. It is a sad reflection on the support

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that the Minister received from his own Back-Benches on those amendments that he had to be bailed out by the Opposition. But we did what we thought was right; and we believe, as a result of it, that we have not only protected the major principle of this part of the Bill, but that we have actually improved it. I think that it has been improved. I am particularly pleased that in the end we persuaded the Government that the renewal of leases was just as important as enfranchisement. That twin-track approach has now been adopted in the Bill and is a significant improvement made to the Bill by your Lordships.
I was sorry that the Minister indicated that in another place the Government would try to reverse the amendment, which they did not oppose in a Division. I imagined that in failing to appoint Tellers the Government had left the field and had, therefore, accepted the amendment as it stood. I am sorry because it was an important amendment. Had the Government bothered to appoint Tellers they would undoubtedly have lost the Division. They will take the matter to another place where they must argue their case.
We cannot do other than regard Part II as a further attack on local authority housing departments. It is to our great regret that time after time the Government have refused to maintain the tenants' veto on the management of their estates. There is a clear political divide between us and the Government Front Bench. We must recognise, as indeed we have, that that is the case. Such issues must be tested in a Division, and we did so. However, I still regret that we were unable to persuade the Government of our case. I regret that the failure of logic has proved decisive. The logic which gives private leaseholders the ability to enfranchise, to renew their lease and to have a say in the management of their own properties has not been extended to council tenants. That represents a failure of logic which we very much regret.
As regards Part III we believe on the whole that the Urban Regeneration Agency is a desirable concept provided—and this is the big proviso which the Minister rightly pointed out in his speech—that it works closely with local authorities. The Minister and I are at one in believing that the successful ventures of recent times—for example, City Challenge and those in Plymouth and Birmingham—have been successful precisely because they have worked with local authorities, which have been intimately involved. If the URA does that it will do good work; if it does not do that it will do bad work. The proof of the pudding will be in the eating.
I conclude by wishing the Bill partially well; I wish Parts I and III well but I have a great deal less enthusiasm for Part II. I respond to the Minister by thanking him for the courteous and efficient way in which he has handled the Bill. The whole House has been impressed by the way in which he has conducted himself during the course of our debates.
Noble Lords: Hear, hear!
Lord Williams of Elvel: My Lords, the circumstances have often been difficult because of the voices raised behind the Minister but he has conducted
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himself with unfailing good humour and a great deal of ability. I congratulate him on the way in which he has handled himself. In addition, I thank the noble and learned Lord, Lord Rodger of Earlsferry, who intervened from time to time on important matters connected not only with Scotland. He has followed the Bill throughout. I thank too the noble and learned Lord, Lord Fraser of Carmyllie, who also joined our debates from time to time, and the noble Viscount, Lord Goschen.
My thanks also go to my two Front Bench colleagues, my noble friends Lady Hollis and Lady Hilton. I believe that as an Opposition we put up a pretty good show and gave the Government a run for their money. I also thank my noble friends Lord Carmichael of Kelvingrove and Lord Macaulay of Bragar who intervened on Scottish issues. I thank the noble Baroness, Lady Hamwee, who lent us enormous support from the Liberal Democrat Benches. With her great experience of local authority she added greatly to our debates.
As the Minister said, many amendments have been passed in your Lordships' House. In wishing the Bill partially well I have a horrible feeling that amendments will come back from another place and that we have not heard the last of it yet.
7.15 p.m.
Baroness Hamwee: My Lords, it has indeed been a pleasure to work sometimes with and sometimes against the noble Lord, Lord Strathclyde. A sadness was that the Official Report could not record his facial expressions at times during the passage of the Bill. I also thank the Minister's colleagues on the Front Bench, the noble Lords on the Labour Front Bench and the many noble Lords on all sides of the House with whom we found a common cause.
Many hundreds of amendments were tabled to the Bill but in our view not all the necessary amendments found their way into it. I wish that I could have had an opportunity to read the different versions of the Minister's speech which must have been written with a view to the possible outcome of today's votes. I doubt whether we have achieved everything that is necessary to make the Bill effective. I fear that many hurdles have yet to be overcome and that, while desirable, enfranchisement, and perhaps lease extension, will not be as realisable an objective as many noble Lords would have wished.
The Minister may regard the introduction of commonhold legislation with a little apprehension. But undoubtedly from the comments made inside and outside the Chamber that will be important. It was sad to learn during the course of the Bill that the requirement for enfranchisement will be a necessary precondition to the application of commonhold; that is, unless your Lordships and Members of another place can be persuaded to be energetic in their amendments to the proposed legislation when it is received.
There was a certain element of spectator sport during the course of the Bill. I enjoyed winning a Division. I was sorry to hear today's news about sheltered housing. I take no issue with the Minister as

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regards the importance of elderly people—who, after all, are people before they are elderly—being able to take decisions about their own lives. I believe that it is a little petty minded to reverse that amendment and is paying more regard to dogma than to reality. If there were more sheltered housing stock the issue might not have arisen and I should not have made such comments.
I do not wish to detain your Lordships by making another Second Reading speech; we heard plenty of those during the whole course of the debates. However, I must make the comment that as regards the provisions of Part II, and to some extent the provisions for the Urban Regeneration Agency, it is a little odd that having concentrated so much on giving people the rights in Part I to run their own lives, there has been in other parts a loss of such rights.
The partnership with local authorities which was promised so loudly from the Government Benches must be the practice. All noble Lords will hope that local authorities too will play their part, because it is only right to say that the responsibility is shared. It is also to be hoped that the Urban Regeneration Agency will achieve regeneration for communities and will concentrate on people, not merely on land.
It may be entirely coincidental that there appeared to be a watershed on 6th May. Before that date there had been a certain resistance towards amendments but afterwards there was a greater openness. If the events of 6th May and the elections which took place on that day caused the Government not only to listen but to react, they are even more welcome than they were at the time.
Lord Renton: My Lords, I am sure that none of us on these Benches—that is, supporters of the Government—envied my noble friend Lord Strathclyde the responsibility of piloting this complicated, long and controversial Bill through your Lordships' House. We all greatly admire him. I was struck by the way in which he combined such a firm grasp of this difficult Bill with exceedingly good humour. He also displayed a mind of his own.
I know that he has not always followed the Civil Service brief. Perhaps I may let the cat out of the bag and explain that, when the noble Lord, Lord Rix, and myself wanted to prohibit mentally handicapped and mentally ill people from being prevented from going into ordinary residences, at first my noble friend wrote to me stating that that could not be done in the Bill. When he had heard the arguments produced on Report, he was openminded and firm enough to say that we must do it. For that we are all grateful, because the proposal had support on all sides of the House.
My noble friend rightly claimed that this was a listening government, but I must say that I felt at times that the Government listened better with their left ear than with their right. I wonder whether some of the more controversial results of Part I will ever occur. Compensation will have to be paid and will deter. Tenants of at least half the flats in a block of flats will now have to agree to leasehold enfranchisement. I doubt whether there are many tenants, especially of
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the kinds of property about which fears have been expressed, who will want to take advantage of the provision. Let us hope that they do not wish to take advantage of it. There may be great hesitation to take advantage of some of the Bill's provisions, and I hope sincerely that that will be the case. Having said all that, I should like to repeat how much I admire the way my noble friend the Minister has handled the matter.
The Earl of Lytton: My Lords, from these Benches I should like to add my thanks to the Minister for the skilful way in which he set out his table at the beginning of the Bill and has been prepared throughout to listen to the points raised by others. He has not always been quite so attentive as I should have liked, but on other occasions he has listened and acted resolutely. I appreciate that.
I have never taken issue with the principle of the Bill. I have been involved mainly with Part I because that happens to be where my professional disciplines lie—with the question of residential landlord and tenant and the valuation issues that arise out of that. I pay tribute to the RICS, which has beavered long and hard in a non-partisan way to try to achieve technical improvements to the Bill. I am pleased that the Government have been prepared to accept amendments in one form or another. The treatment of common areas has been greatly improved. That is critical to tenants' initial ability to acquire, in a reasonably unfettered manner, the superior interest. Again there have been amendments to existing leases under the 1987 Act which the Government agreed to accept.
Today, the Minister has accepted the principle of qualified surveyors acting as management auditors. Although I take on board the point that he made, the clarification of valuation principles is important. It is made no less so because of the discussion that took place before the formal moving of our amendment. There have been other important amendments. I should like to pay tribute to the noble Lord, Lord Palmer, on these Benches. He has been very much in the vanguard of what I call the "heritage properties" amendment. That must qualify as a high point in terms of securing what are legitimate aspirations as regards conservation without letting them be sacrificed totally to the principles the Government set out in the Bill.
I pay tribute also to the noble Lord, Lord Monson, although I have not always agreed with him. He has often given a great deal of exposure to a well known firm of estate agents and valuers. I pay tribute to him for the contribution he has made. He has stuck at it through thick and thin.
From a technical standpoint, I draw attention to the Government's amendments relating to the expansion of the general right to lease extension. That is another watershed provision which I was especially glad to see, because I was not happy about the overriding necessity in every case to go through the complexities of enfranchisement. I am glad that that matter has now been resolved.
I feel that it is now up to the industry to get it right. I hope that it will. I have reservations, in the sense that

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I believe that there is an incompatibility of objectives encapsulated in the Bill, which is why there have been difficulties over the mechanics, the valuation and competing principles involved. That is, of necessity, a result of formulating this piece of legislation in this manner. I do not take issue with that, but that is a logical consequence.
Finally, I again thank the Minister and all noble Lords who have taken part. I thank the officials in the Minister's department. They could not have been more helpful, having regard obviously to their brief and to the policy that the Government set out.
Lord Boardman: My Lords, the Bill that came to the House was not a good one, and that may be putting it mildly. The noble Lord, Lord Williams, said that it could have been three Bills. It will leave the House a much better Bill. A great deal has been done to improve it. It will still provide fertile ground for the lawyers. As the noble Baroness said earlier, the lawyers will have a field day with its 275 pages of complex provisions, plus whatever has been added today.
Like the noble Baroness, I regret that the reform of leasehold could not wait until it was incorporated with commonhold. We could then have had one go at the matter, but that was not possible. I shall avoid reference to preserving the sanctity of contract. I have commented upon that a number of times. The point remains as valid today as it was when I raised it on Second Reading. I shall do no more than just mention it.
A great deal of credit must go—we always neglect them—to the parliamentary draftsmen who mastered this document and dealt with the amendment so speedily, and, I hope, ably, but the lawyers will no doubt find reasons to question that in due course. Credit must go to the Government for making and accepting a number of amendments. It must go also to my noble friend on the Cross Benches whom I joined in pushing for some of those amendments. It must go in particular to my noble friend the Minister, who has dealt with the Bill, as has been said, with charm, humour, intelligence and understanding. He and his colleagues have done much to make what was a Bill of doubtful validity into one which I am happy to support. We owe him a great deal for the work that he has done and the understanding and good sense that he has shown.
Lord Clark of Kempston: My Lords, this is the first Bill in which I have had the privilege of taking part in this House. Despite the experience one might gain in another place, I found this experience fascinating and encouraging. As has been said, the Bill has been amended. Many of us on this side of the House now feel that it goes less against Conservative philosophy than it did. Whether the amendments will be sufficient only time will tell.
The main reason for my speaking is to congratulate m y noble friend the Minister, who has piloted the Bill through the House. As has been said, he has done so with great skill and charm and has in many cases defended the indefensible with great panache. I congratulate him on that most sincerely. Although
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many of the amendments that were moved from this side of the House were not successful in persuading the Government, nevertheless, it has all been done without rancour or ill feeling. I, for one, am most grateful to my noble friend the Minister for that fact. I am sure that the whole House would agree with me that we should be most grateful.
7.30 p.m.
Lord Peyton of Yeovil: My Lords, I should like very much to add my voice to the well-earned chorus of praise and gratitude which has been expressed in the direction of my noble friend on the Front Bench. I hope that he will not be entirely inundated or swept away by it; I hope even more that he will not be harmed by it in the eyes of his colleagues. I can only stand here some distance away from him and express the hope —it is no more than a hope because I do not believe that Ministers in another place always overflow with gratitude even when it is appropriate —that my right honourable friend the Secretary of State and his honourable friend the Minister for Housing and Planning will both take a little time off to say "Thank you very much" to my noble friend the Minister. I do not think that they will have quite appreciated the difficulties with which he has had to contend in piloting their measures through your Lordships' House.
I have one further point to make. Just now, flushed with triumph, I met one of the right reverend Prelates who had, unfortunately, not been able to be with us at the time of the Division. I took the liberty of suggesting to him that he might do something to provide me, if not with a halo (because I appreciate that that is not quite within his gift), then at least with something that comes near to a mitre. That would be most acceptable and I look forward to receiving the same.
I should like to conclude by expressing the hope that my noble friend will in due course of time show me a copy of the letter that he has received from his right honourable friend expressing the latter's gratitude.
Lord Coleraine: My Lords, I should like to crave the indulgence of the House by spending a moment or two putting forward a nonconformist view already expressed by some of my noble friends on these Benches. During the course of the Bill I have devoted most of my time to Chapters I and II of Part I of the legislation and to the series of debates in which the influence of the great London landlords has been displayed.
My noble friend the Minister has said in debates, most recently this evening, that we have a listening Government. The debates have shown just how right he is. The Government have listened to such effect that the Bill in large measure fails to meet the legitimate expectations of flat owners. I am not referring here to the flat owners of central London but to the overwhelming majority of flat owners in mansion blocks and seedy conversions situated around outer London and in the provinces.

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I know that some of my noble friends will continue to say that flat owners had no legitimate expectations from the Bill. I cannot agree. To those of my noble friends I simply offer my opinion that the social need for some readjustment of property rights, backed by payment of proper compensation, is well established. It has been accepted by the Government. Flat owners were rightly entitled to expect that the provisions of the Bill would not be more loaded against them than the most stringent provisions of the existing house enfranchisement legislation.
I fear that the balance of the Bill is wrong. I believe that the speech made by my noble friend Lord Renton demonstrates that that is the case. It is because of that fact that I found myself driven to argue the case for a more liberal Bill. Despite some personal financial interest in enfranchisements which I share with some of my noble friends, I am disinterested and broadly neutral as between the interests of the protagonists. It is impossible to practice law in the field without appreciating that there is a balance to be struck. It is for that reason that I remind the House, as I did on Second Reading, that I claim the credit for the one amendment (to the Leasehold Reform Act 1967) that has ever been made in the interests of landlords.
I turn now to one or two provisions of the Bill which still seem to me to remain unsatisfactory. I do not propose to delay matters by giving much time to the low rent test. I unsuccessfully sought to persuade the Committee that it should be abolished; and I very much regret that the House this afternoon did not accept the amendment moved by my noble friend Lord Carnock.
I propose briefly to touch upon the residency test. Here the Government have listened with considerable care and attention to ducal argument about certain words in the Conservative Party manifesto of the last election which I shall quote for the first time;
"We will introduce commonhold legislation giving residential leaseholders living in blocks of flats the right to acquire the freehold of their blocks at the market rate".
The reference to "commonhold legislation" alone makes it clear that whoever wrote that sentence did not know what was going on and ignored clear, contrary statements by Ministers and the Department of the Environment over the previous nine months.
The Government listened with such care that the legislation, as amended in this House, now excludes many residential leaseholders living in blocks of flats. That is an unambiguous disregard of the manifesto commitment and everything which had been written or said before the election. It is an area of the Bill upon which I hope the Government may yet be persuaded in another place to have further thoughts.
My main point of concern is about valuation, which most landlords will see as the most important provisions of the Bill. I shall mention but one rather arcane point. It is one that I raised on Report in connection with Amendment No. 72 which was reported in the Official Report on 18th May. The intention was to make it clear as regards marriage value that paragraph 4(2) of Schedule 5 is not intended to hobble values by an over-rigid formula but to leave people free to calculate the amount of the windfall
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profit—that is, the sum which is to be shared and which is called marriage value —and to do so according to general valuation principles.
I do not say that paragraph 4(2) of Schedule 5 can or will be interpreted in that way; but, as drafted, it appears to set out a rigid formula which could allow for unacceptable double counting. I took the point in debate on the amendment in relation to the payment of severance loss or injurious affection. Not to bring those payments into account when calculating the windfall profit appears to me and to several of the expert valuers who advised me to involve clear double counting. The logical consequence of the Minister's reply was that if you eliminate double counting you take away part of the injurious affection payment. In my view, that argument does not hold water. I suggested that it would be best if the Minister read my speech; but when I sought leave to withdraw the amendment my noble friend negatived it. It is for that reason that I briefly refer to the point tonight. Having said that, there will be many cases where the Bill will be effective and I wish it well.
On Question, Bill passed, and returned to the Commons with amendments.

Non-Domestic Rating (No. 2) Bill
7.38 p.m.
Viscount Goschen: My Lords, I beg to move that this Bill be now read a second time.
The Bill gives effect to a pledge given by the Chancellor of the Exchequer in his Budget Statement on 16th March. The provisions of the Bill give further protection for those businesses facing the largest rate increases as a result of the 1990 revaluation. It works by freezing business rates in real terms for a further year. The similar measure which we brought before the House last year was welcomed and I hope that this Bill will be equally well received.
As your Lordships will recall, while a property's valuation stays the same, annual business rate bills cannot rise by more than the rate of inflation in the previous September. The Government's success in tackling inflation means that bills will go up by no more than 3.6 per cent this year, following increases of only 4.1 per cent last year. Indeed, following the changes we made last year which allowed any gains from 1990 to come through in full this year, many businesses will be benefiting from substantial reductions in their rates bills.
However, 30 per cent of businesses are still subject to limits on upward changes under the transitional arrangements following the 1990 revaluation. Although these arrangements phase in increases gradually, some businesses would still have faced 20 per cent real rises. Last year, taking account of the effects of the recession, the Government decided not to add to the burden on businesses. The Non-Domestic Rating Act 1992 froze rates increases under the transitional arrangements in real terms for 1992–93.
The 1992 Act was intended to give one year's respite. However, although the health of the economy is now improving, a full resumption of the transitional

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arrangements—with increases in bills of up to 20 per cent in real terms—might impair the speed of the recovery. Many of the businesses which fared worst from the recession were those facing the largest increases as a result of the 1990 revaluation. The Bill therefore extends in real terms the freeze on transitional increases for a further year.
The total cost of implementing the Bill is estimated to be £350 million this year and £225 million next. This is on top of the continuing cost of last year's freeze. Approximately a quarter of a million shops and offices —mainly in the South of England—would benefit from reductions worth over £190 million. Some 85,000 factories and warehouses—mainly in the North—would also benefit from reductions to the tune of over £30 million. A further 165,000 properties would gain relief worth £120 million, and businesses in Wales would save some £14 million.
In 1995 a new revaluation will have effect based on market rents at 1st April this year. We believe that rents for many properties in the more depressed sectors of the economy will be significantly lower than they were at the time of the last revaluation. This could well mean a shift in the rates burden away from them in 1995. So, some businesses still in transition next year—the last in the life of the 1990 rating lists —may never have to face the full rate liabilities implied by their 1990 valuations. A further pause in increases this year should help to smooth any changes to bills resulting from the 1995 revaluation. We believe that this measure will provide further valuable help for many businesses and will give another welcome boost to the economic recovery. I commend it to the House.
Moved, That the Bill he now read a second time. —(Viscount Goschen.)
7.42 p.m.
Baroness Hollis of Heigham: My Lords, we on this side of the House do not object to the Bill; but we wish to emphasise that it is necessary only because of the state of the business economy. The Government must take considerable responsibility for that. Since revaluation in 1988—the effect of that came into being in 1990 for business rates—businesses have had to be protected for each of the following four years from its effects. Thus, as the noble Minister said, that will take many businesses tidily into the 1995 revaluation without ever paying the bills of the 1990 revaluation.
The cost to us all has been something like £2 billion when one takes into account the roll-up effect of previous remissions together with the additional announcements of today's Bill. This is to be set against a background of the Government's economic mismanagement which meant that in 1990 30,000 businesses collapsed. In 1991, 48,000 businesses collapsed, or nearly 1,000 a week. In 1992, by which time the Chancellor was already talking about the green shoots of recovery, 63,000 businesses collapsed. That figure was up by 31 per cent on the previous year. Alas, that level of business failure is currently being maintained at around 1,300 a week, or 4 per cent worse than this time last year.
We also note that the collapse has hit the South disproportionately hardest—the Minister is right
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about that—because the property values in the South were relatively high and inflated under the 1988 valuation. The consequence is that the national domestic rate contributed to local authority budgets to the tune of £12.4 billion in 1991 to 1992 but by only £11.6 billion in the forthcoming year. The shortfall will have to be made up by the general taxpayer as local authorities, being capped, cannot do so. Does this therefore not call into question an issue which the Minister did not raise at any point—that is, the whole concept of the national business rate as such? It is clear that the national business rate depends on valuations which are as transitory as junior Ministers. If one has a valuation and one then has to spend each of the next four years protecting oneself from the consequences of that valuation—that is necessary to introduce the NDR—that must surely put a question mark over the situation.
However, there is a deeper problem which we have regularly tried to draw to the attention of Ministers. am not sure they have yet taken this problem into account. Under the NDR, rates are collected on business rate within a local authority or district council. They are redistributed back nationally on the basis of population. That is a perverse system as it breaks the link of a local authority with its local business community. Whatever my local authority may now do to enhance business in its local community—for example, it may invest in training schemes, key worker housing, start-up units and extra infrastructure—not one penny of that money will be recycled back to the local authority in the form of an enhanced revenue rateable base. I see that the Minister is looking at his officials; but I can assure him that is the case.
For example, in 1990 the businesses in Norwich —a local authority I know well—contributed £40 million under NDR which would normally have been retained by the local authority. It receives back just £26 million on its population base. Business in the adjacent rural authority, which has done nothing for business, contributed £8 million; but, because of its population base, the authority received back £20 million. In other words, local authorities who have done nothing to enhance their business base—this is irrespective of politics as I was speaking of a Labour authority and an adjacent Conservative authority—or their business communities, are now entitled to piggy-back off those who have. To break that link between a local authority's commitment to its local business and the revenues it thereby returns is perverse; and, coming from a Tory Government, it is beyond belief.
I again refer to a local authority I know well where business and commerce would like to have security cameras installed. They would cost £100,000 in capital and £60,000 a year to run. But why should the local authority bother spending that money as it will not make a ha'p'orth of difference to the revenue it will get back in business rate? Therefore there is no incentive whatsoever to produce the partnership between local government and the local economy which we all want to see.

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The final folly of the national business rate is that it produces a heavy dependence of local government on central government funding. Only four or five years ago local authorities could expect to raise between 45 and 60 per cent of their moneys locally, depending on what contribution came from RSG. Now that has been reduced to just 15 per cent—that means every pound one wishes to raise can only fall on the residual 15 per cent—and the gearing effects are very high and produce some of the wild swings and roundabouts that we have seen both under the poll tax and under the council tax. That volatility in local authority finance has been constructed by a business rate which reduces the capacity of a local authority to spread its costs over a wider local base.
I insist that local authority revenues and the sense of community for which a local authority should be responsible would both be stronger if local business rates were truly local as that would again encourage local government to enhance local economic development. The Government nationalised the business rates at the very point the Government were destroying local business. We see here tonight in a Bill we accept is necessary a sad and sorry indictment of what the Government have done.
7.49 p.m.
Baroness Hamwee: My Lords, we too welcome this Bill—if "welcome" is the right term. It is a necessary provision to deal in some small measure with the effects of the recession. Many people in local businesses and in shops will inform noble Lords that the business rate is the straw that is breaking the camel's back. That has been so for some time and life does not become easier. I hope that if the hoped-for green shoots do not burgeon the Minister will come back to us with further measures, including national non-domestic rates, which will help businesses to survive.
Local democracy is an important issue. This Bill, which would be almost incomprehensible were it not for the Explanatory and Financial Memorandum—and I am grateful to the Minister for explaining the effects of the Bill—continues our very unsatisfactory method of raising money for local government from the business community. At recent elections we have seen that the electorate is glad to make its choice and produces a number of very different permutations. The local community as electors, also wearing their hats as business people, would like the opportunity to have greater influence on the way business rates are dealt with.
There is also the question of the application of the business rate. Perhaps I may repeat the point made in another place on 27th April by my honourable friend the Member for a Cornish seat—Bodmin, I believe —who spoke of hardship restrictions which are so narrowly drawn by many local councils that they are not used at all. By hardship restrictions I mean the facility for a local authority to apply the regulations in a way which will assist a local business if it is in trouble. I shall refer to my honourable friend's point rather than quoting him. It is not a party political
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point but a matter which is of concern to all local authorities—namely, how hardship relief can be defined so that all parties in local government can use that relief better. When I say all parties in local government perhaps I should include that new political party, if one can call it that, "No overall control".
People are interested in the application of local government and in good local government. This Bill, welcome as it is in dealing with the immediate effects of the economic situation to some extent, regrettably merely continues a tradition which is not welcome.
7.52 p.m.
Viscount Goschen: My Lords, I thank the noble Baroness, Lady Hollis of Heigham, and the noble Baroness, Lady Hamwee, for their support for the Bill, despite their general reservations. I should say in defence of the universal business rate that it means that there is more certainty for businesses now that the poundage cannot rise by more than the rate of inflation. Because of the Government's success in bringing down inflation, the poundage for 1993–94 is 41.6 pence—an increase of only 3.5 per cent on 1992–93. In addition, if the UBR had not been introduced businesses would have paid £842 million more in 1992–93 and £797 million more in 1993–94. I commend the Bill to the House.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 20th May), Bill read a third time and passed.

Licensing (Amendment) (Scotland) Bill
7.54 p.m.
Lord Mackay of Ardbrecknish: 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.—(Lord Mackay of Ardbrecknish.)
On Question, Motion agreed to.

Unfair Dismissal (Increase of Compensation Limit) Order 1993
7.55 p.m.
The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater)The Parliamentary Under-Secretary of State, Department of Employment (Viscount Ullswater) rose to move, That the draft order laid before the House on 1st April be approved [26th Report from the Joint Committee].
The noble Viscount said: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Your Lordships will know that the employment protection legislation provides that each year the Secretary of State is required to review certain limits

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used in calculating payments under employment protection legislation. She may also from time to time review the limit on the compensatory award which may form part of the award for unfair dismissal, and which also compensates for discrimination on grounds of sex or race. In practice this compensatory limit is always included in the annual review exercise.
In carrying out the statutory review, the Secretary of State must take account of the general level of earnings in Great Britain at the time of the review, the national economic situation as a whole, and any other matters she considers relevant.
As usual, the Secretary of State for Employment has consulted widely with employers and employee bodies and with others who have interest in the matter. In carrying out the review this year, the Secretary of State took account of the various comments received. She also considered very carefully the economic climate and the very low level of inflation—only 1.9 per cent in March this year. At a time when industry is beginning to succeed in its struggle against recession, it is vital that the Government do not put unnecessary obstacles in its way.
My right honourable friend considered all those matters in deciding the level of the compensatory award. She also took into account that no increase has been made in the award since 1991, together with the fact that the maximum compensation is rarely awarded by an industrial tribunal. We therefore think it right to increase the limit this time round. If it is agreed by your Lordships, the increase will come into force on 1st June.
The order before us today increases from £10,000 to E11,000 the maximum sum industrial tribunals can award in compensation for the loss suffered as a result of being unfairly dismissed. It includes compensation for loss of earnings from the date of dismissal to the date of the tribunal hearing, future loss of earnings and loss of benefits such as pension and other entitlements the individual would have enjoyed but for the dismissal.
'The limit may affect part of the award made when an employer fails to comply with an industrial tribunal's order to reinstate or re-engage an employee who has been unfairly dismissed.
The limit on compensation which we are seeking to raise also applies to compensation payable in certain cases involving sexual or racial discrimination in the workplace, unreasonable exclusion or expulsion from a trade union, unjustifiable discipline by a trade union, and refusal of employment on grounds of membership or non membership of a trade union.
I hope that your Lordships will agree that this substantial 10 per cent increase in the compensatory award is to be welcomed. I commend the order to the House.
Moved, That the draft order laid before the House on 1st April be approved [26th Report from the Joint Committee]. —(Viscount Ullswater.)
Baroness Turner of Camden: My Lords, I rise to thank the Minister for his usual clear explanation of the purpose of the order. However, I have to make some comments.
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We do not oppose orders in this House, but on the other hand it seems to me that it has been some time since the last upratings took place, and over a number of years the uprating itself has not kept pace with wage or price increases. To some degree that has undermined the effectiveness of employment rights, and the continued erosion of the value of compensation diminishes the effect of the sanction on the employer and reduces the benefits to the employee who has been wronged. I should like to emphasise that we are talking here about individuals who have suffered an employment wrong. I understand that the Law Society has said that, had upratings kept pace with average earnings, the limit on a week's pay would be around £445 a week and the maximum compensatory award for unfair dismissal would be nearly £29,000.
The Minister told us that consultations have taken place. I know that to be the case. The TUC tells me that it has been consulted. The EEF and the CBI have been consulted. Not surprisingly, the EEF and the CBI have accepted and agreed with the Government's view. On the other hand, the TUC has submitted some objections on the grounds that I have indicated.
I do not believe that we are talking about a large number of cases. Therefore, it is difficult to see whether the relatively small amounts of money involved could make a great deal of difference to businesses in the way that I understand that the CBI and the EEF have argued. As I understand it, at present there is no maximum limit to the amount of damages that an employee may recover for breach of an employment contract. The courts are able to award damages for the actual loss that the employee has suffered. If the maximum amount of compensation that may be recovered is limited by statute, there are bound to be some employees who will not be fully compensated. It might be a fairly small number of people, but the figure may well grow in the future.
There is therefore a case for not having limits. But no uprating for a number of years, and certainly no uprating in line with either price or wage increases, has meant that over the years the level of compensation able to be awarded under the terms of the orders has severely diminished. Indeed, I should be grateful if at some future time the Government would consider again the question of limits. I do not suggest that with regard to the order. But perhaps the Government will consider whether it is possible to return to the level of limits set when the legislation was first introduced.
As I said earlier, it is not our practice to oppose the order and I certainly do not intend to do so today.
8 p.m.
Lord Rochester: My Lords, I join in thanking the noble Viscount, Lord Ullswater, for the clarity of his explanation of the order. It is a delight to be talking about the subject of unfair dismissal in rather more congenial circumstances than those which have obtained on one or two occasions in the recent past.
I have some sympathy with the points made by the noble Baroness. I shall listen with interest to what the

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noble Viscount says in reply. However, I have nothing further to add. I am therefore prepared to accept the order on behalf of my noble friends.
Viscount Ullswater: My Lords, I am glad that the noble Baroness, Lady Turner, and the noble Lord, Lord Rochester, have welcomed the proposed increases in the compensatory limit, even if the argument has been that those increases have not gone far enough. I believe that we are all agreed about the importance of industrial tribunals and the valuable role they play in resolving disputes between individuals and their employers. The level of limits is clearly a matter for judgment—balancing various factors and seeking to arrive at a sensible compromise. There is a balance to be struck between the need to avoid excessive burdens on businesses and the legitimate claims of employees. On the one hand, we do not wish employers to feel inhibited from recruiting employees because they fear unreasonable penalties if a dispute arises. On the other hand, limits must be high enough to ensure that workers are adequately compensated for breach of statutory employment rights.
I believe that any decision to increase the limits must be set in the overall context of the country's economic priorities. This year our first priorities are to strengthen the economy and to avoid any unreasonable increases in the burdens on business.
The order before us now and the report which was laid in this House and in another place at the same time contribute to those aims. I commend the order to your Lordships.
On Question, Motion agreed to.

London Tourist Board
8.4 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton rose to ask Her Majesty's Government whether they are satisfied that the recently announced redundancies in the London Tourist Board are in the best interests of either London or tourism.
The noble Lord said: My Lords, I begin by quoting the words of the noble Lord, Lord Mountevans, in a debate which he initiated recently on the structure of and support for the tourist board. He stated:
"The Government are mistaken if they think that, even with the proposed grant-in-aid reductions and what increasingly seems to be an emasculated ETB, regional boards will continue to function as now. I fear that they will not be able to do so. We are faced with the danger of the tourism structure in England unravelling, not through conscious intent but as a result of this misguided reduction in funding … without the ETB, who is there working to increase the market in most general terms for domestic holidays? Regional tourist boards"—
one of which is the London Tourist Board—
"the resorts and the district councils will be competing against each other for market share in what could well be a static or declining market".
When I first heard that the London Convention Bureau was chopped in half, with its head, John Burt,
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sacked, I could not believe it; nor could many others in this country and abroad. I wrote to Mr. Robert Key for clarification. In a letter dated 29th April he stated:
"As you know, the LTB is an independent, non-statutory body. Mr. Burt is one of several LTB staff members to be made redundant recently, as part of the streamlining process which the Board announced in March. His redundancy was not connected with the recent Government review of tourism and the reductions in funding to the English Tourist Board".
I tell this Minister and others that either his ministerial colleague is naive in the extreme or that he has been grossly misled by those who advise him, or both.
When the LTB announced the redundancies, it stated:
"The cuts have been made as a result of the combination of a number of external factors.
For some years LTB has been faced with unpredictable levels of funding. The situation has been exacerbated by the recession and by the Government's tough approach to the funding of the English Tourist Board which will have a knock on effect on us".
Subsequently, the London Tourist Board and Convention Bureau has told me that,
"the history of cuts, the recession and the prospect of future cuts forced the Board to act as so many other British companies have acted".
My first charge is that it is a cruel deception and a fraud to hide behind the well-known but false premise that the London Tourist Board is an independent, non-statutory body, implying that what it does is nothing to do with government actions and that its decisions, including the redundancies, have been taken without the impact of cuts in ETB support but wholly as a result of a free-standing review of activities and structures. Who is kidding who, my Lords? If the Minister believes that, he joins a select few, all Ministers and their advisers, who are driven by a wholly wrong assumption that London can be left to private capital and to free enterprise.
A member of the London Convention Bureau, Mr. Harry Baum, stated:
"That it was 'necessary' to sacrifice a person of John's outstanding calibre on the altar of financial probity is an index, as sad as it is scandalous, of the malaise afflicting Britain's largest industry … Clearly, Government has got its priorities wrong and—having sold off the family silver—by failing to invest in it, is mortgaging our future. But the Board"
that is, the London Tourist Board—
"is determined to preserve the LCB, which is recognised as a role model for convention bureaux worldwide, and to continue John's work, which has done so much to make it such".
In the magazine Meetings and Incentive Travel, an editorial article stated:
"The news that John Burt, former head of the London Convention Bureau, has been axed together with three staff as part of a costcutting exercise by the London Tourist Board, should come as no surprise to political observers.
This latest move—to cut the LCB staff in half and then make it part of the LTB's marketing department—is a symptom of the disease affecting the British Tourism industry. After all, it is only a few weeks since the resignation of Bill Davies, chairman of the British Tourist Authority, who bemoaned the lack of strategy and investment in marketing and infrastructure".
The standing both of the convention bureau and of John Burt and his colleagues is known at home and abroad. I have here a letter to John Burt from America in which the writer states:
"It makes me wonder about how this industry is viewed from time to time in relation to dollars or pounds. From my

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observation of you and your involvement with this industry, somebody is making a terrible mistake and I hope they realise it before it's too late".
Again, I have a letter from Australia:
"John Burt and London were synonymous, and not only does the London bureau and the UK owe you a debt of gratitude, but the global meetings industry through your contribution via bodies such as IACVB and ICCA, likewise should appreciate the great contribution you have made to the global meetings market".
I could, of course, come a little nearer home. I could quote similar letters from the Cardiff International Arena, from the Greater Glasgow Tourist Board and from hotels etc. So the picture I paint is one of absolute bewilderment among those who are the real practitioners of conventions and tourism in the country—not the bureaucrats, nor those who take their orders from the bureaucrats, but the practitioners.
There is a great crisis across the whole range of bodies within the tourist industry. It seems that the privatisation of huge swathes of the functions currently carried out by many boards is the aim. However, I want the Minister to understand that many people just cannot agree with him that private is good and public is bad. If that is the theory which is practised by the ministry, surely it ought to be tempered.
There is a crying need for positive intervention. For example, why is support for tourism not made a statutory obligation instead of an optional extra? The British Resorts Association told me that in this time of recession and cutbacks the once popular seaside towns will face ruin unless the attitude of the Government changes. The uncertain financial base for the activities of the LTB has been affected not least by the demise of the GLC. Then, a larger more certain grant was made by London government to the London Tourist Board in the interests of our capital city. Now, the London Boroughs Grant Committee, with mounting competing claims, pays what it can afford—a smaller sum and an uncertain future. Surely the Minister recognises that the LTI3 needs security of funding from local government, not a squalid squabble over how much should be paid, competing with real needs for London at the time.
The events at the LTB are but symptomatic of the total lack of a tourism strategy on the part of the Government. We began with the Autumn Statement, which flagged up a switch from support for the BTA at home and for the ETB to private initiatives, plus Wales and Northern Ireland. The rationale for doing that has never been accepted and I invite the Minister and his advisers to tell us the elements and segments of the industry which feel that such a strategy is what we need.
William Davis was the chairman of the BTA and blue-eyed boy of the Government and Ministers but three years ago. We know what he said when he left the LTB earlier this year:
"The Government's attitude had made it impossible for me to continue. I have had three years of battling away, but it seems that the Government is making up tourism policy as it goes along".
William Davis was eminently respectable for what he was, what he is and what I understand he is doing. Surely the Minister and his colleagues must at least
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pause at that thought. We also know what bodies like BITOA, the British Incoming Tour Operators' Association, have said about the way the Government are handling matters. I have a letter from BITOA which says:
"You will not be surprised to learn that BITOA viewed with dismay central Government's announcement that the English Tourist Board was to have its Grant in Aid reduced and that there were no plans to increase funding to the BTA to offset this loss".
Then we have the English Tourist Board itself. It has drawn my attention not only to the reductions and redundancies that it has had to make, but the serious effect upon its activities.
Two major problems face the Government. One is unemployment and the other is the balance of payments deficit. Tourism can help to solve that nexus, not completely but it can help. Yet we see no strategy by the Government to concentrate on tourism as one of a handful of growth industries. I should be grateful if the Minister would address that.
Perhaps we should look at what other governments have done for their capital cities. The French Government not only exploits the infrastructure in Paris but also has done much in advertising in London and South-East England to get British people to go to France for their holidays. We see what the Greek Government have done. We are not talking of the odd pound or two or the odd million or two, we are talking of tens of millions of pounds. That is the size of the competition with which the London Tourist Board and other organisations have been faced.
Will the Minister tell us something about the ultimate fate of tourism in London? Six months ago, the Government announced that the LTB was to merge with the London Forum. Can the Minister flesh out who will do that, with what, and when and how? Perhaps we may look at the list of those who have been publicised as members of the London Forum; it is an impressive gathering of the great and the good who inhabit the quangos once so derided by the Government but now so loved by them. The ubiquitous chairman of the London Tourist Board, Sir Hugh Bidwell is the deputy chairman of the forum. He also serves with representatives of Grand Metropolitan, British Airways, Wembley, London Weekend Television, Charles Forte, Clifford Chance, Allied Entertainments, Regalian Properties, Coley Porter Bell, the Evening Standard, Coopers & Lybrand, Marks and Spencer, Pearce Signs, Richard Ellis, High-Point PLC, Saatchi and Saatchi—that is a surprise—S.G. Warburg and WWA Limited. Those names represent a gathering of entrepreneurial, successful men who have great empires to run. I want the Minister to tell me what are the structure and strategy by means of which those people, leading busy lives and making money successfully, will do what London needs in the realm of tourism.
Can the Minister tell us whether he and his colleagues are satisfied that the London Forum and the new arrangements—and we shall be told what they are—are, at least in their minds, capable not only of doing what the LTB and the London Conventions Bureau have done, but of doing it even better. We need to do better than in the past. What plans does the

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Minister know of? How will they be carried out? Can he tell us the reaction of the industry, the boards, the businesses, hotels and restaurants who help to contribute the money? Can he tell us what consultation has taken place with them?
My understanding is that no consultation whatever has taken place with the members of the London Tourist Board. Decisions are made in the LTB and sometimes redundancies of senior personnel are decided on without the individuals directly above them knowing that they were taking place. The manner in which the redundancies were effected at the LTB was nothing short of scandalous. Employees with many years of unblemished service were told to clear their desks, with half an hour in which to do it. They were not criminals, not failures, just good public servants, unlucky enough to face the axe of a frightened management, unable or unwilling to tell the Minister that he was wrong. Nor did they treat their axed employees with compassion and understanding. Anyone who knows the nitty gritty of how it happened, not only why it happened, would cry with shame that public servants have been treated in that way.
The LTB was driven to making redundancies which can only be justified on the strict criteria of accountants Coopers & Lybrand, who questioned everything in the books but utterly failed to take into account affairs of the heart or of the head. I advise the Minister that this approach may keep the Treasury happy but may see London sliding down the league of world capitals as a city to be visited.
This is all about getting the people of the world wanting to come to Britain, and to London—a task fulfilled with superb skill and success by John Burt and his team at the London Convention Bureau, now up for grabs in a mish-mash of realigned responsibilities and, I suspect, in some cases no responsibility at all. I expect the Minister to put a gloss on the reality of Britain's failure to assemble a coherent strategy for tourism. It cries out for both leadership and insight. I still hope that the Minister can tell me tonight that I am utterly wrong. I tell him that I will recant and say that I was wrong, and with him enjoy seeing London swamped with tourists this summer.
8.21 p.m.
Lord Mountevans: My Lords, at the outset, as. I always have to do, I declare an interest in this context. Having done that, I should like to thank the noble Lord, Lord Graham of Edmonton, for giving us another opportunity to debate tourism. This debate is our second in four months. It may not have escaped your Lordships' notice that it was recently admitted in another place that they only discuss this topic once every five years.
The noble Lord has made much of the redundancies in the London Convention Bureau. While not going into the personalities in the depths that he did, I agree with him that redundancies are always distressing. In this case, I find them doubly distressing because, as the noble Lord said, the London Convention Bureau is a key player in world
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conference markets. London is a premier league destination in world conference markets. We must not forget that conference and incentive travel visitors are a particularly high-rated traffic. They make an exceptionally large contribution to employment creation.
Perhaps I may broaden the debate a little by looking more at the London Tourist Board. I remind noble Lords that foreign visitors have perceptions of Britain, and that those perceptions are largely perceptions of London. Let me give some examples. I think of Big Ben. I think of Tower Bridge and St. Paul's. There is the double-decker bus. A London double-decker bus means something abroad. I have to say that a Glasgow double-decker rates with a milk float in Paris. We have the London bobby—he is a "London bobby"; he is never the "British bobby". We have the military ceremonial; we have the Changing of the Guard. We have Piccadilly Circus. And en passant, whether the Department of National Heritage was or was not involved in the restoration of Eros, which I read about today, I urge noble Lords to go to Piccadilly Circus as soon as possible. With Eros back, it is the first time I can remember when there has been no scaffolding anywhere in Piccadilly—which is one of our major tourist cliches.
All those clichés are unique marketing assets which Paris, New York and Amsterdam, or anywhere else one cares to think of, envy hugely. They are unique assets in terms of selling into customer perception rather than trying to change those perceptions. They are unique in terms of attracting the first-time visitor, who, if he is satisfied and enjoys his first visit to London, comes back and then helps us to achieve the very desirable objective of visiting other parts of Britain. I believe that selling into people's perceptions is particularly important when, as I think we are all agreed, funds are limited.
LTB's funds are limited. Although government funds which flow through ETB have not been cut this year, as the noble Lord, Lord Graham, reminded us, the ETB's budget for 1994–95 and subsequent years is extremely vulnerable. The LTB has had the additional problem of raising funds from local authorities. The noble Lord touched on that point. The commercial sector has also proved more difficult as a source of finance.
The LTB's funds will become more limited if ETB's grant is cut and thus the flow-through funds which go via thai body are reduced. That is an anxiety for tonight. But when one thinks of it in those terms, it becomes a very much bigger anxiety for the future.
What can we do? First, I should like to echo the urging by the noble Lord, Lord Graham, that Her Majesty's Government reconsider ETB's grant, in particular for 1994–95 and 1995–96. Again I pick up a point made by the noble Lord: we must finally by one means or another grasp the nettle of local authority funding for the London Tourist Board. That has often previously been referred to. The London Boroughs Grant Committee is not, never was and never will be, the right vehicle for that particular source of finance. I can see a particular problem for some of the members of the London Boroughs Grant Committee.

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It sees few visitors, but, alas, perhaps also overlooks just how much visitors elsewhere in London contribute to local employment patterns.
We must recognise (if it were ever in doubt) London's status as the crown jewel of our tourism product and resolve the confusion between the London Tourist Board, the London Forum and London First.
We must remember—for London it is quite often easy to overlook—the fact that a revision of the assisted areas map is in train at the moment. It is not for me to speculate on the outcome, let alone what views the European Commission might eventually take when it is asked to bless the revised assisted areas map. But I feel that London may very well become, partially or wholly, an assisted area, not least because of its unemployment problems.
We must remember the Government's directive to ETB, that funds allocated to regional tourist boards should be targeted towards areas of economic need and tourism potential. That to a certain extent wraps up most of what I have said and a considerable amount of what the noble Lord, Lord Graham, said. London is increasingly an area of economic need. I am certain that we all appreciate London's tourism potential. Economic need and tourism potential sit well together there. Hence, I re-emphasise the importance of grant flowing via ETB to the regions. I re-emphasise the importance of adequate grant-in-aid for ETB, and especially the importance of the London Tourist Board getting its share of that grant-in-aid.
Last week, in a Written Answer my right honourable friend the Prime Minister laid down the Government's policy objectives for London, which were immaculately and tersely put:
"to maintain and enhance London's position as a thriving national capital and a leading world city".
I do not believe that any of us can argue with that particular policy. But I feel—and I am sure that other noble Lords will join me in stressing—that the London Tourist Board has a role to play in the achievement thereof.
8.28 p.m.
Lord Pitt of Hampstead: My Lords, I must begin by apologising to the noble Lord, Lord Graham, and the House for the fact that I was not in my place when he asked his Question. I also need to declare an interest in that I am the vicepresident of the London Tourist Board and chairman of the policy committee of the London Convention Bureau. But I speak for myself, not for the board. In fact, I do not believe that the board would like this debate. When all is said and done, the board has members and the members need to be satisfied that the board can carry out the obligations that it has undertaken.
The board has had to restructure. We have had two debates on the funding of the London Tourist Board. The Government have continued to adopt a cavalier attitude to the matter. The London Tourist Board cannot adopt a cavalier attitude. Like all businesses, its expenditure cannot exceed its income. Its income
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having been severely reduced, and with the threat of further reduction, it has been forced into the action that it has taken.
The question I want to ask the Minister is this: why do the Government adopt such a cavalier attitude to one of their most important industries? The tourism industry is a valuable contributor to Britain's balance of payments. It is particularly important in London. Tourism earned an estimated £4,000 million for London in 1991. That represents 4 to 5 per cent of London's GDP. It is London's third most important economic activity after financial services and the public sector. Some 200,000 Londoners—7 per cent of the working population—are employed in tourism. What is more, it is estimated that tourism will create an extra 50,000 London jobs by the end of the century. Tourist spending supports further jobs in manufacturing and construction.
London is the most important gateway for visitors coming to the United Kingdom, with some 80 per cent of visitors arriving in the capital, and just over half of them stay in London. Some 80 per cent of tourist spending in London is in foreign exchange. The tourist industry makes a vital contribution to the success of London as a commercial and financial centre, providing hotels, conferences and exhibition facilities for the business community. Business travellers account for 25 per cent of visitors and 33 per cent of spending. So the Government's often declared interest in business should make them concerned about the role that London plays in the tourist industry if only because of the contribution that those visitors make to business.
Tourism encourages investment. In 1991 between July and December some £400 million was invested in tourism projects under construction. Projects completed accounted for a further £180 million. Many construction jobs depend on that activity.
The LTB's objectives are enshrined in the Tourism Strategy for London, guided by the Joint London Tourism Forum. Those objectives are to target markets which bring maximum economic benefit and to encourage seasonal and geographical spread. What is the Government's strategy for tourism? It is necessary for us to know. The Government must have a strategy for such an important industry.
It is not only London that is having its funding cut. The English Tourist Board, whose funding was £15.2 million in 1992–93, is set to have that funding reduced to £13.9 million in 1993–94, further reduced to £10.8 million in 1994–95 and still further reduced to £9 million in 1995–96. We are told that the grants which the English Tourist Board makes to the regions will be ring-fenced. But the English Tourist Board's present grants to the regions amount to £7 million. So if they are ring-fenced, in 1995–96 the English Tourist Board will have only £2 million. It is quite obvious that ring-fencing is not possible. The Government need to begin to think a little more than they appear to be doing.
We are talking about London. The London Tourist Board receives some of its funding from the English Tourist Board. If the English Tourist Board's funding is reduced, as I just said, the London Tourist Board's

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funding will be reduced even further. 1 cannot believe that the Government can be so nonchalant about an industry that is so important to the country. I hope that when the Minister replies he will be able to remove some of my depression.
8.37 p.m.
Viscount Astor: My Lords, I am glad to have the opportunity this evening to talk about the valuable work of the London Tourist Board and the initiatives that the Government are taking to ensure that London continues to be a worldclass capital city recognised internationally as a centre for business, culture and tourism.
We are not nonchalant about the tourist industry. Indeed, I have direct experience of the work of the London Tourist Board. Last October, during a visit to New York, I had the privilege of launching the board's ambitious three-year US marketing campaign. That campaign is an excellent example of collaboration on a large scale between the private and public sectors. The London Tourist Board is in the lead, backed by five major sponsors: American Express, British Airways, Forte, the British Tourist Authority and the English Tourist Board. In all, there are about 40 private and public sector sponsors contributing over £2 million to the first phase of the campaign.
An imaginative feature of the campaign is that the marketing is being supported by a programme of training for some 3,000 tourist industry employees. It is too early to draw definite conclusions about the effect that the campaign is having, but current estimates are that it could generate over 50,000 additional visits to the capital, producing revenue of some £65 million. Given that some hoteliers report increases of over 20 per cent in bookings from the USA in the first quarter of 1993, all the indications are that the London Tourist Board campaign is ideally timed to tap into a healthy and growing market.
As we were reminded by my noble friend Lord Mountevans, who has great experience in tourism and the BTA, and the noble Lord, Lord Pitt, who also has great experience in the London Tourist Board, over 80 per cent of overseas visitors to this country arrive in London and just over half stay in London. For the past four years London has attracted annually over 17 million overnight visitors as well as some 68 million day visitors. Tourism supports 200,000 jobs-7 per cent of London's employment.
Her Majesty's decision to open Buckingham Palace to the public during July and August has undoubtedly greatly increased London's appeal as a tourist destination. I am sure that both tourists from overseas and our own residents will be keen to take advantage of this unique opportunity and that the opening of this new attraction, if I may call it that, will bring new visitors to London and hence to Britain. Thus the LTB's efforts are contributing significantly not just to tourism in the capital itself but because of London's gateway position to tourism nationally.
Before going on to talk about government support for the tourist boards, I am sure that noble Lords will join me in welcoming the appointment of Adele Biss as
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the new chairman of the British Tourist Authority and the English Tourist Board. She brings to the appointment considerable business experience and marketing expertise which will be invaluable in seeking to persuade more of our residents to explore what this country has to offer, as well as attracting visitors from abroad.
Through the English Tourist Board, the Government give support to the regional tourist boards, including the London Tourist Board. The contribution to the LTB stood at £829,100 in the 1991–92 financial year. That was 25 per cent of the total. If one looks at those figures, the commercial membership produced £624,000, the local authority produced £246,000 and commercial revenue £1,612,000; in total, £3,311,000.
My department's review of government support for tourism concluded that the English Tourist Board should increasingly concentrate on its strategic, co-ordinating role rather than on large-scale central operations. Following that review, the English Tourist Board recently announced that some of the funds which it devolves to the regional boards will be allocated to projects in specific areas with tourism potential which the industry is not able to exploit fully without assistance. The regional boards will submit projects for consideration by the English Tourist Board under that new scheme. The overall total of funding for all 11 regions has been maintained at 1992–93 levels.
In relation to the following years, the English Tourist Board is currently reviewing all its programmes and activities, including its support for the regions. That exercise will feed into the board's three-year corporate plan, to be completed this summer. I must emphasise that the Government value the work of the regional boards and want to see them continue to operate effectively. The boards have recently been very successful in building up non-government revenue, particularly during the last decade, and I have no doubt that there is scope for them to make further progress.
The London Tourist Board, like all the other regional boards, is an independent, non-statutory organisation which has the status of a company limited by guarantee. Therefore its staffing policy is entirely a matter for the board and its members, and it would be quite inappropriate for the Government to intervene in or comment on decisions taken by the LTB regarding staffing levels.
I understand that the 13 redundancies announced in March were part of an internal efficiency review by the board which led to some streamlining of the organisation. I understand also that the LTB is pressing ahead with its full range of activities, including the major American campaign I referred to earlier. London is still the most important gateway to Britain, and I see no reason to suspect that the LTB will not be able to continue to attract both holiday and business travellers to the capital.
I am confident also that the effectiveness of the LTB will be enhanced through its links with the London Forum, and more specifically with London Visitors, one of the two bodies which will implement the

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forum's strategy. Sir Hugh Bidwell, the LTB chairman, is also deputy chairman of the forum and chairman of London Visitors, so there are already close working relationships. Those organisations will mutually gain from the expertise each can bring and that will he to the benefit of London and to tourism. I know that both the LTB and the London Forum see the way forward as a close partnership between the private sector and local government.
The London Forum held its first board meeting last week. It is now engaged in setting up its two London companies—London Inward and London Visitors. In drawing up business plans for their promotional activities, progress is being made in setting up the first-stop shop—an advice centre for incoming investment to London. London Inward is also enlisting the services of business people travelling overseas to act as ambassadors to London. They will sell the benefits of London as a business and commercial centre.
The London Forum is a direct result of the Government's manifesto commitment to convene a new body to promote London internationally. A formidable group of leading Londoners whose backgrounds include tourism, finance, local government, advertising and the media have been recruited to sit on the forum's board. The board will use its expertise to give London a powerful new boost, helping to enhance its position as an international business and tourism centre, and to encourage job-creating businesses to base themselves in London.
The convening of the forum sits well with other government initiatives aimed at consolidating London's status internationally. We have established a Cabinet sub-committee on London, chaired by my right honourable friend the Secretary of State for the Environment, to look at matters affecting London at the highest possible level, to ensure that policies affecting London are well co-ordinated and to ensure that things get done. The setting-up of the Transport Working Group for London, led by a transport Minister, also illustrates that commitment, and the LTB's chief executive sits on the working group.
The forum is an independent organisation and is riot accountable to government. The Secretary of State for the Environment consulted on the membership of the forum, but it is for the forum to decide who will be appointed and who its membership will be.
I appreciate the difficulties that the London Tourist Board has experienced in securing local authority funding. However, that must remain a matter for negotiation between the board and its local authority members, as is the case with all other regional tourist boards. The London Tourist Board has in the past sought top-slicing for tourism from other service blocks of local authority funding. But that removes discretion from the boroughs. Perhaps like other regional boards, the London Tourist Board should explore the possibility of approaching boroughs individually in order to raise awareness of the benefits of tourism. The London Boroughs Grants Committee has many demands on its limited resources and your Lordships will be aware that its grant to the London
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Tourist Board has reduced in real terms over the years, though it is still highly valued by the London Tourist Board.
Lord Graham of Edmonton: My Lords, perhaps the noble Viscount will allow me to intervene. I rise on the point in relation to the London boroughs and the nexus under which local government gives grant aid to the London Tourist Board. That arises directly out of the demise of the GLC and the substitution for the GLC in this context of an Act of Parliament.
This House passed an Act of Parliament which created the grants committee, and that is the nexus. Local government is presently under severe strain. Does not the Minister realise that when hard-pressed councils of all political persuasions are looking at their stretched budgets, with competing claims from the homeless, the elderly, meals-on-wheels and tourism, tourism is not likely to be the first call upon their public money?
I realise the limits of a debate, but perhaps the Minister could ask his colleagues not merely to leave the London Tourist Board to knock on doors with its begging bowl asking for more money; there needs to be statutory provision. I remind the Minister that the resort bodies have been in touch with me and asked me specifically to say that, where there is non-statutory obligation, far too often they are denied income. If the obligation were made statutory, the income would be forthcoming.
I should be grateful if the Minister would say something about whether the department is aware of the debilitating effect upon the morale of those who work currently in the LTB and in the other bodies. The Minister may say that when redundancies take place it is nothing to do with the Government; it is to do with management. But the next time it happens and they say it is nothing to do with them, and in the intervening period there have been cuts in grants, people will worry. Individuals who have given many years service are being treated unfairly by the system.
Viscount Astor: My Lords, in any situation where redundancies occur it is regrettable for those who are made redundant; but at the end of the day that is a function of management and it is a function that the management of the London Tourist Board has to carry out. I understand the arguments put forward by the noble Lord, Lord Graham, about statutory funding. Those arguments are put to my department on a number of issues, whether it be funding for arts, libraries or sport, by local authorities. As the noble Lord will appreciate, my department covers those areas. He is quite right to say that when local authorities look for cuts, they often look at the easiest places in which to make them. It is right to say that we have to fight our corner to make sure that local authorities are able through their standard spending assessments to continue to fund those important areas. I take very seriously the points that the noble Lord makes.
Lord Pitt of Hampstead: My Lords, the issue that we are talking about in relation to the London Tourist Board has everything to do with the unified business

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rate. I was vice-chairman of policy and resources in County Hall. We gave the London Tourist Board a good grant because the businesses of London were paying us rates. The tourist board was their organisation and they were entitled to some of the rates in order to further their organisations. The Government now take the unified business rate. Why can the Government not give the LTB the same kind of grant that it used to get under the GLC? What is the problem?
Viscount Astor: My Lords, the simple problem in all these situations is money and resources. We must work within the money and resources available. I have carefully described how we are looking at the new role that we want the English Tourist Board to carry out. We want it to be more of a co-ordinating and strategic body as opposed to carrying out what may be called large scale operations on its own. But we are clear about the importance of funding regional boards. We want the money to flow through the English Tourist Board to the regional boards.
The position is always difficult in the tourist industry because it is a high profile industry. We are satisfied that the arrangements that we have to support the tourist industry at national and regional levels are in the best interests of tourism and the economy as a whole. I have set out tonight the thinking behind those arrangements. We have had
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debates recently in this House and in another place on this topic. We fully accept that there is still a case for assisting the industry to promote Britain overseas and to develop potential areas of tourism. Tourism is a core area and a crucial part of the Department of National Heritage. It is an area that binds together all the other activities that we have. All the reasons why people come to this country are because of our heritage.
But we are also convinced that this is a successful and increasingly self-reliant sector. Further support for that view is given by early estimates that overseas visitors were up by 9 per cent in the first two months of this year, building on last year's all-time record figure. The picture on the domestic front is also encouraging, with operators such as Madame Tussauds and Rank announcing significant increases in business and advance bookings. Similarly in London, while the Government will continue to take forward the various initiatives that I have mentioned this evening, the main impetus must come, and is already coming, from the private sector which is taking the lead in the London Forum. The London Tourist Board is already playing a full part in the exciting developments that are taking place and is well placed to build on its fine record to bring visitors to this first-class capital.
House adjourned at six minutes before nine o'clock.

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